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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

Date of Report (Date of earliest event reported): April 25, 2019

 397656303_sfglogousethisone.jpg

Summit Financial Group, Inc.
(Exact name of registrant as specified in its charter)

West Virginia
 
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)
 
(Zip Code)

Registrant’s telephone number, including area code: (304) 530-1000

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 25, 2019, Summit Financial Group, Inc. (“Summit”) issued a News Release announcing its earnings for the three months ended March 31, 2019. 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 25, 2019
 
By: /s/ Julie R. Markwood          
 
 
Julie R. Markwood
 
 
Vice President & Chief Accounting Officer


    


2
(Back To Top)

Section 2: EX-99 (EXHIBIT 99)

Exhibit


EXHIBIT 99
397656303_sfglogousethisone.jpg
FOR RELEASE 6:00 AM ET, April 25, 2019

Contact:    Robert S. Tissue, Sr. Vice President & CFO
Telephone:    (304) 530-0552
Email:        [email protected]

SUMMIT FINANCIAL GROUP REPORTS FIRST QUARTER 2019 RESULTS
Q1 2019 Diluted EPS $0.56, compared to $0.60 for Q4 2018 and $0.60 for Q1 2018
MOOREFIELD, WV - April 25, 2019 (GLOBE NEWSWIRE) - Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported quarterly net income of $7.09 million for first quarter 2019, or $0.56 per diluted share. In comparison, earnings for fourth quarter 2018 were $7.45 million, or $0.60 per diluted share, and for first quarter 2018, $7.44 million, or $0.60 per diluted share.
Summit completed its acquisition of Peoples Bankshares, Inc. (“PBI”) and its subsidiary, First Peoples Bank, headquartered in Mullens, West Virginia on January 1, 2019 and will convert substantially all of its data processing systems to that of Summit’s effective April 27, 2019; accordingly, PBI’s results of operations are included in Summit’s consolidated results of operations from the date of acquisition, and therefore Summit’s first quarter 2019 results reflect increased levels of average balances, income and expenses compared to its first quarter 2018 and fourth quarter 2018 results. At consummation, PBI had total assets of $133.1 million, loans of $42.4 million, and deposits of $112.9 million. In addition, our merger-related expenses totaled $63,000 in Q1 2019 versus $59,000 in the prior quarter.
Highlights for Q1 2019
Net interest margin for the quarter increased 5 basis points to 3.66 percent compared to Q4 2018 and is 8 basis points higher compared to Q1 2018;

Provision for loan losses totaled $250,000 compared to $500,000 for the prior quarter and for the year-ago quarter;

Efficiency ratio was 56.50 percent compared to 51.02 percent for the linked quarter as result of higher noninterest expenses due to the PBI acquisition and outsized deferred director compensation plan expense as result of exceptionally robust stock market performance during Q1 2019;

Realized securities losses of $3,000 in Q1 2019 compared to $205,000 in Q4 2018; the Company realized securities gains of $732,000 in Q1 2018;

Write-downs of foreclosed properties were $249,000 in Q1 2019 compared to $318,000 in Q4 2018, while the net loss on sales of foreclosed properties decreased to $1,000 in Q1 2019 from $70,000 in Q4 2018; and

Nonperforming assets as a percentage of total assets declined to 1.53 percent compared to 1.66 percent for the linked quarter and to 1.73 percent a year-ago.




H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, “I am very pleased to report Summit achieved another quarter of solid core operating results highlighted by the improvement in our net interest margin. Further, despite the quarter’s challenges of integrating PBI’s banking operations with that of Summit’s, we nonetheless maintained a core efficiency ratio well below that of most of our peers. We have again demonstrated our ability to successfully execute on a disciplined M&A strategy, which we believe will continue to present us with significant opportunities going forward as we seek to be a consistently growing, high-performing community banking institution.”
Results from Operations
Total revenue for first quarter 2019, consisting of net interest income and noninterest income, increased 3.0 percent to $22.8 million compared to $22.1 million for the first quarter 2018.
For the first quarter of 2019, net interest income increased 7.6 percent to $18.6 million compared to $17.3 million for the prior-year first quarter and grew 2.9 percent compared to the linked quarter principally as a result of $51.6 million in growth in average loans and 7 basis point improvement in average loan yields during the quarter. The net interest margin for first quarter 2019 was 3.66 percent compared to 3.58 percent for the same year-ago quarter, and 3.61 percent for the linked quarter. Excluding the impact of accretion and amortization of fair value acquisition accounting adjustments related to acquired interest earning assets and interest bearing liabilities, Summit’s net interest margin was 3.64 percent for Q1 2019.
Noninterest income, consisting primarily of insurance commissions from Summit's insurance agency subsidiary, trust and wealth management fees and service fee income from community banking activities, for first quarter 2019 was $4.23 million compared to $4.88 million for the comparable period of 2018. Excluding realized securities gains and losses, noninterest income was $4.23 million for first quarter 2019, compared to $4.14 million reported for first quarter 2018 and $4.39 million for the linked quarter.
We recorded a $250,000 provision for loan losses during first quarter 2019 and $500,000 during Q1 2018. The decreased need for loan loss provisioning in Q1 2019 is directionally consistent with changes in the credit quality in our loan portfolio (fewer charge-offs) and our modest loan growth.
Q1 2019 total noninterest expense increased 12.6 percent to $13.86 million compared to $12.31 million for the prior-year first quarter and increased 11.2 percent compared to $12.47 million for the linked quarter. Our increased noninterest expense is principally due to expenses associated with the acquired PBI operations and to an outsized deferred director compensation plan expense of $484,000 recognized in Q1 2019 compared to deferred director compensation plan benefits of ($25,000) and ($354,000) recorded in Q1 2018 and Q4 2018, respectively. Under our director deferred compensation plans, directors optionally elect to defer their director fees into a "phantom" investment plan whereby the Company recognizes expense or benefit relative to the phantom returns or losses of such investments. As result of the stock market’s exceptionally robust performance during Q1 2019, we recognized significantly greater quarterly deferred director compensation expense this quarter than we have ever recognized previously.
Balance Sheet
At March 31, 2019, total assets were $2.25 billion, an increase of $49.1 million, or 8.9 percent (on an annualized basis) since December 31, 2018. Total loans, net of unearned fees and allowance for loan losses, were $1.73 billion at March 31, 2019, up $43.1 million, or 10.2 percent (on an annualized basis), from the $1.68 billion reported at year-end 2018. Loans, excluding mortgage warehouse lines of credit and acquired PBI loans, decreased $9.5 million during the quarter, or 2.3 percent (on an annualized basis).
At March 31, 2019, deposits were $1.79 billion, an increase of $154.2 million, or 9.4 percent, since year end 2018. During Q1 2019, checking deposits increased $77.3 million or 10.4




percent, time deposits increased by $53.6 million or 8.9 percent and savings deposits grew $26.5 million or 9.3 percent.
Shareholders’ equity was $233.6 million as of March 31, 2019 compared to $219.8 million at December 31, 2018. In conjunction with the acquisition of PBI on January 1, 2019, Summit issued 465,931 shares of common stock valued at $9.0 million to the former PBI shareholders.
Tangible book value per common share increased to $16.13 at March 31, 2019 compared to $14.36 at the end of first quarter 2018 and $15.75 at year end 2018. Summit had 12,661,528 outstanding common shares at March 31, 2019 compared to 12,312,933 at year end 2018.
As announced in Q3 2018, the Board of Directors authorized the open market repurchase of up to 500,000 shares of the issued and outstanding shares of Summit's common stock. The timing and quantity of stock purchases under this repurchase plan are at the discretion of management. The plan will expire December 31, 2019, but may be discontinued, suspended, or restarted at any time at the Company's discretion. During Q1 2019, 125,200 shares of our common stock were repurchased under the Plan at an average price of $22.95 per share. Through March 31, 2019, the Company has repurchased 207,623 shares under the Plan since its inception at an average price of $21.96 per share.
Asset Quality
As of March 31, 2019, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $34.4 million, or 1.53 percent of assets. This compares to $36.5 million, or 1.66 percent of assets at the linked quarter-end, and $36.9 million, or 1.73 percent of assets, at first quarter-end 2018 as result of our continuing emphasis on improving our overall asset quality.
First quarter 2019 net loan charge-offs were $165,000, or 0.04 percent of average loans annualized; while adding $250,000 to the allowance for loan losses through the provision for loan losses. The allowance for loan losses stood at 0.76 percent of total loans at March 31, 2019, compared to 0.77 percent at year-end 2018.
About the Company
Summit Financial Group, Inc. is a $2.25 billion financial holding company headquartered in Moorefield, West Virginia. Summit provides community banking services primarily in the Eastern Panhandle and Southern regions of West Virginia and the Northern, Shenandoah Valley and Southwestern regions of Virginia, through its bank subsidiary, Summit Community Bank, Inc., which operates thirty-three banking locations. Summit also operates Summit Insurance Services, LLC in Moorefield, West Virginia and Leesburg, Virginia.
FORWARD-LOOKING STATEMENTS
This press release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Words such as “expects”, “anticipates”, “believes”, “estimates” and other similar expressions or future or conditional verbs such as “will”, “should”, “would” and “could” are intended to identify such forward-looking statements.
Although we believe the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking laws and regulations; changes in tax laws; the impact of technological advances; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; and changes in the national and local economies. We undertake no obligation to revise these statements following the date of this press release.







SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
 
 
 
 
 
Quarterly Performance Summary (unaudited) -- Q1 2019 vs Q1 2018
 
 
 
 
 
 
 For the Quarter Ended
 
 Percent
Dollars in thousands
3/31/2019
 
3/31/2018
 
 Change
Statements of Income
 
 
 
 
 
 Interest income
 
 
 
 
 
    Loans, including fees
$
23,051

 
$
20,366

 
13.2
 %
    Securities
2,586

 
2,391

 
8.2
 %
    Other
231

 
140

 
65.0
 %
 Total interest income
25,868

 
22,897

 
13.0
 %
 Interest expense
 
 
 
 
 
    Deposits
5,564

 
3,549

 
56.8
 %
    Borrowings
1,731

 
2,091

 
-17.2
 %
 Total interest expense
7,295

 
5,640

 
29.3
 %
 
 
 
 
 
 
 Net interest income
18,573

 
17,257

 
7.6
 %
 Provision for loan losses
250

 
500

 
-50.0
 %
 Net interest income after provision for loan losses
18,323

 
16,757

 
9.3
 %
 
 
 
 
 
 
 Noninterest income
 
 
 
 
 
    Insurance commissions
1,174

 
1,113

 
5.5
 %
    Trust and wealth management fees
586

 
667

 
-12.1
 %
    Service charges on deposit accounts
1,180

 
1,091

 
8.2
 %
    Bank card revenue
814

 
749

 
8.7
 %
    Realized securities (losses) gains
(3
)
 
732

 
n/a

    Bank owned life insurance income
238

 
275

 
-13.5
 %
    Other income
241

 
249

 
-3.2
 %
Total noninterest income
4,230

 
4,876

 
-13.2
 %
 Noninterest expense
 
 
 
 
 
    Salaries and employee benefits
7,347

 
6,821

 
7.7
 %
    Net occupancy expense
924

 
832

 
11.1
 %
    Equipment expense
1,179

 
1,083

 
8.9
 %
    Professional fees
403

 
333

 
21.0
 %
    Advertising and public relations
153

 
103

 
48.5
 %
    Amortization of intangibles
476

 
436

 
9.2
 %
    FDIC premiums

 
240

 
n/a

    Bank card expense
439

 
335

 
31.0
 %
    Foreclosed properties expense, net of losses
384

 
325

 
18.2
 %
    Merger-related expense
63

 

 
n/a

    Other expenses
2,492

 
1,806

 
38.0
 %
Total noninterest expense
13,860

 
12,314

 
12.6
 %
 Income before income taxes
8,693

 
9,319

 
-6.7
 %
 Income tax expense
1,601

 
1,876

 
-14.7
 %
 Net income
$
7,092

 
$
7,443

 
-4.7
 %





SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
 
 
 
 
 
Quarterly Performance Summary (unaudited) -- Q1 2019 vs Q1 2018
 
 
 
 
 
 
 
 
 
 
 
 
 For the Quarter Ended
 
 Percent
 
3/31/2019
 
3/31/2018
 
 Change
 Per Share Data
 
 
 
 
 
 Earnings per common share
 
 
 
 
 
    Basic
$
0.56

 
$
0.60

 
-6.7
 %
    Diluted
$
0.56

 
$
0.60

 
-6.7
 %
 
 
 
 
 
 
 Cash dividends
$
0.14

 
$
0.13

 
7.7
 %
 
 
 
 
 
 
 Average common shares outstanding
 
 
 
 
 
    Basic
12,717,501

 
12,358,849

 
2.9
 %
    Diluted
12,778,644

 
12,383,757

 
3.2
 %
 
 
 
 
 
 
 Common shares outstanding at period end
12,661,528

 
12,366,360

 
2.4
 %
 
 
 
 
 
 
 Performance Ratios
 
 
 
 
 
 Return on average equity
12.28
%
 
14.73
%
 
-16.6
 %
 Return on average tangible equity
14.80
%
 
17.04
%
 
-13.1
 %
 Return on average assets
1.27
%
 
1.40
%
 
-9.3
 %
 Net interest margin (A)
3.66
%
 
3.58
%
 
2.2
 %
 Efficiency ratio (B)
56.50
%
 
53.84
%
 
4.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
NOTE (A) - Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
 
 
 
 
 
 
NOTE (B) - Computed on a tax equivalent basis excluding gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.





SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary (unaudited)
 
 
 
 
 
 
 
 
 
 
 
For the Quarter Ended
 Dollars in thousands
3/31/2019
 
12/31/2018
 
9/30/2018
 
6/30/2018
 
3/31/2018
Statements of Income
 
 
 
 
 
 
 
 
 
 Interest income
 
 
 
 
 
 
 
 
 
    Loans, including fees
$
23,051

 
$
22,659

 
$
21,295

 
$
20,962

 
$
20,366

    Securities
2,586

 
2,527

 
2,367

 
2,303

 
2,391

    Other
231

 
127

 
138

 
134

 
140

 Total interest income
25,868

 
25,313

 
23,800

 
23,399

 
22,897

 Interest expense
 
 
 
 
 
 
 
 
 
    Deposits
5,564

 
5,103

 
4,714

 
4,309

 
3,549

    Borrowings
1,731

 
2,158

 
1,873

 
1,815

 
2,091

 Total interest expense
7,295

 
7,261

 
6,587

 
6,124

 
5,640

 
 
 
 
 
 
 
 
 
 
    Net interest income
18,573

 
18,052

 
17,213

 
17,275

 
17,257

 Provision for loan losses
250

 
500

 
500

 
750

 
500

 Net interest income after provision for loan losses
18,323

 
17,552

 
16,713

 
16,525

 
16,757

 
 
 
 
 
 
 
 
 
 
 Noninterest income
 
 
 
 
 
 
 
 
 
    Insurance commissions
1,174

 
1,132

 
1,062

 
1,013

 
1,113

    Trust and wealth management fees
586

 
627

 
687

 
672

 
667

    Service charges on deposit accounts
1,180

 
1,209

 
1,215

 
1,116

 
1,091

    Bank card revenue
814

 
809

 
793

 
801

 
749

    Realized securities (losses) gains
(3
)
 
(205
)
 
8

 
87

 
732

    Bank owned life insurance income
238

 
248

 
250

 
249

 
275

    Other income
241

 
367

 
196

 
210

 
249

Total noninterest income
4,230

 
4,187

 
4,211

 
4,148

 
4,876

 Noninterest expense
 
 
 
 
 
 
 
 
 
   Salaries and employee benefits
7,347

 
6,928

 
6,806

 
6,922

 
6,821

   Net occupancy expense
924

 
836

 
856

 
840

 
832

   Equipment expense
1,179

 
1,139

 
1,118

 
1,071

 
1,083

   Professional fees
403

 
385

 
503

 
385

 
333

   Advertising and public relations
153

 
193

 
170

 
188

 
103

   Amortization of intangibles
476

 
410

 
413

 
413

 
436

   FDIC premiums

 
140

 
210

 
240

 
240

   Bank card expense
439

 
395

 
384

 
361

 
335

   Foreclosed properties expense, net of losses
384

 
507

 
169

 
350

 
325

   Merger-related expense
63

 
59

 
86

 

 

   Other expenses
2,492

 
1,474

 
1,643

 
1,965

 
1,806

Total noninterest expense
13,860

 
12,466

 
12,358

 
12,735


12,314

 Income before income taxes
8,693

 
9,273

 
8,566

 
7,938

 
9,319

 Income tax expense
1,601

 
1,823

 
1,667

 
1,658

 
1,876

 Net income
$
7,092

 
$
7,450

 
$
6,899

 
$
6,280

 
$
7,443






SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
 
 
 
 
Five Quarter Performance Summary (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Quarter Ended
 
3/31/2019
 
12/31/2018
 
9/30/2018
 
6/30/2018
 
3/31/2018
 Per Share Data
 
 
 
 
 
 
 
 
 
 Earnings per common share
 
 
 
 
 
 
 
 
 
    Basic
$
0.56

 
$
0.60

 
$
0.56

 
$
0.51

 
$
0.60

    Diluted
$
0.56

 
$
0.60

 
$
0.55

 
$
0.51

 
$
0.60

 
 
 
 
 
 
 
 
 
 
Cash dividends
$
0.14

 
$
0.14

 
$
0.13

 
$
0.13

 
$
0.13

 
 
 
 
 
 
 
 
 
 
 Average common shares outstanding
 
 
 
 
 
 
 
 
 
    Basic
12,717,501

 
12,358,104

 
12,374,350

 
12,366,522

 
12,358,849

    Diluted
12,778,644

 
12,407,678

 
12,439,051

 
12,431,984

 
12,383,757

 
 
 
 
 
 
 
 
 
 
Common shares outstanding at period end
12,661,528

 
12,312,933

 
12,382,450

 
12,373,747

 
12,366,360

 
 
 
 
 
 
 
 
 
 
 Performance Ratios
 
 
 
 
 
 
 
 
 
 Return on average equity
12.28
%
 
13.85
%
 
13.00
%
 
12.16
%
 
14.73
%
 Return on average tangible equity
14.80
%
 
16.41
%
 
15.53
%
 
14.68
%
 
17.80
%
 Return on average assets
1.27
%
 
1.38
%
 
1.31
%
 
1.19
%
 
1.40
%
 Net interest margin (A)
3.66
%
 
3.61
%
 
3.53
%
 
3.58
%
 
3.58
%
 Efficiency ratio (B)
56.50
%
 
51.02
%
 
54.25
%
 
55.88
%
 
53.84
%
 
 
 
 
 
 
 
 
 
 
NOTE (A) - Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
 
 
 
 
 
 
 
 
 
 
NOTE (B) - Computed on a tax equivalent basis excluding gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.






SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Selected Balance Sheet Data (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Dollars in thousands, except per share amounts
3/31/2019
 
12/31/2018
 
9/30/2018
 
6/30/2018
 
3/31/2018
 
 
 
 
 
 
 
 
 
 
 Assets
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
14,265

 
$
23,061

 
$
9,382

 
$
8,314

 
$
9,042

Interest bearing deposits other banks
43,689

 
36,479

 
44,452

 
38,097

 
38,365

Securities
297,126

 
293,284

 
288,040

 
283,221

 
296,890

Loans, net
1,725,064

 
1,682,005

 
1,632,747

 
1,617,373

 
1,631,150

Property held for sale
24,393

 
21,432

 
22,017

 
21,606

 
21,442

Premises and equipment, net
39,345

 
37,553

 
36,888

 
36,017

 
35,554

Goodwill and other intangible assets
29,349

 
25,842

 
26,252

 
26,665

 
27,077

Cash surrender value of life insurance policies
42,714

 
42,420

 
42,208

 
41,932

 
41,668

Other assets
33,696

 
38,510

 
36,741

 
34,427

 
33,707

   Total assets
$
2,249,641

 
$
2,200,586

 
$
2,138,727

 
$
2,107,652

 
$
2,134,895

 
 
 
 
 
 
 
 
 
 
 Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 
 
Deposits
$
1,789,032

 
$
1,634,826

 
$
1,651,064

 
$
1,639,996

 
$
1,654,523

Short-term borrowings
186,292

 
309,084

 
238,403

 
202,429

 
193,513

Long-term borrowings and
     subordinated debentures
20,319

 
20,324

 
20,328

 
40,332

 
65,336

Other liabilities
20,368

 
16,522

 
15,376

 
15,016

 
16,514

Shareholders' equity
233,630

 
219,830

 
213,556

 
209,879

 
205,009

   Total liabilities and shareholders' equity
$
2,249,641

 
$
2,200,586

 
$
2,138,727

 
$
2,107,652

 
$
2,134,895

 
 
 
 
 
 
 
 
 
 
Book value per common share
$
18.45

 
$
17.85

 
$
17.25

 
$
16.96

 
$
16.55

Tangible book value per common share
$
16.13

 
$
15.75

 
$
15.13

 
$
14.81

 
$
14.36

Tangible common equity to tangible assets
9.2
%
 
8.9
%
 
8.9
%
 
8.8
%
 
8.4
%

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
3/31/2019
 
12/31/2018
 
9/30/2018
 
6/30/2018
 
3/31/2018
Summit Financial Group, Inc.
 
 
 
 
 
 
 
 
 
CET1 Risk-based Capital
11.4
%
 
11.1
%
 
11.1
%
 
11.0
%
 
10.7
%
Tier 1 Risk-based Capital
12.5
%
 
12.2
%
 
12.2
%
 
12.1
%
 
11.8
%
Total Risk Based Capital
13.2
%
 
12.9
%
 
12.9
%
 
12.8
%
 
12.5
%
Tier 1 Leverage Ratio
10.2
%
 
10.1
%
 
10.1
%
 
9.9
%
 
9.5
%
 
 
 
 
 
 
 
 
 
 
Summit Community Bank, Inc.
 
 
 
 
 
 
 
 
 
CET1 Risk-based Capital
12.3
%
 
12.0
%
 
12.0
%
 
12.0
%
 
11.7
%
Tier 1 Risk-based Capital
12.3
%
 
12.0
%
 
12.0
%
 
12.0
%
 
11.7
%
Total Risk Based Capital
13.0
%
 
12.8
%
 
12.7
%
 
12.8
%
 
12.5
%
Tier 1 Leverage Ratio
10.0
%
 
10.0
%
 
9.9
%
 
9.8
%
 
9.5
%





SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dollars in thousands
3/31/2019
 
12/31/2018
 
9/30/2018
 
6/30/2018
 
3/31/2018
 
 
 
 
 
 
 
 
 
 
Commercial
$
189,248

 
$
194,315

 
$
167,972

 
$
171,410

 
$
189,586

Mortgage warehouse lines
49,355

 
39,140

 
35,910

 
54,332

 
45,702

Commercial real estate
 
 
 
 
 
 
 
 
 
     Owner occupied
272,088

 
266,362

 
272,475

 
262,174

 
265,075

     Non-owner occupied
570,392

 
564,826

 
530,568

 
503,047

 
498,445

Construction and development
 
 
 
 
 
 
 
 
 
     Land and development
64,192

 
68,833

 
71,819

 
74,018

 
66,841

     Construction
36,040

 
24,731

 
25,703

 
25,711

 
33,327

Residential real estate
 
 
 
 
 
 
 
 
 
     Non-jumbo
359,107

 
336,977

 
340,783

 
343,044

 
346,477

     Jumbo
69,313

 
73,599

 
72,327

 
66,831

 
67,169

     Home equity
80,370

 
80,910

 
82,018

 
82,409

 
83,382

Consumer
36,046

 
32,460

 
33,664

 
34,249

 
34,825

Other
12,045

 
12,899

 
12,452

 
12,728

 
12,578

Total loans, net of unearned fees
1,738,196

 
1,695,052

 
1,645,691

 
1,629,953

 
1,643,407

Less allowance for loan losses
13,132

 
13,047

 
12,944

 
12,580

 
12,257

Loans, net
$
1,725,064

 
$
1,682,005

 
$
1,632,747

 
$
1,617,373

 
$
1,631,150


SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition (unaudited)
 
 
 
 
 
 
 
 
 
 
Dollars in thousands
3/31/2019
 
12/31/2018
 
9/30/2018
 
6/30/2018
 
3/31/2018
Core deposits
 
 
 
 
 
 
 
 
 
Non interest bearing checking
$
258,679

 
$
222,120

 
$
232,697

 
$
217,134

 
$
219,293

Interest bearing checking
560,800

 
523,257

 
505,411

 
472,041

 
447,172

Savings
310,646

 
284,173

 
301,269

 
322,940

 
346,962

Time deposits
359,141

 
316,914

 
316,941

 
322,801

 
318,556

Total core deposits
1,489,266

 
1,346,464

 
1,356,318

 
1,334,916

 
1,331,983

 
 
 
 
 
 
 
 
 
 
Brokered deposits
218,913

 
220,497

 
227,312

 
238,662

 
242,049

Other non-core time deposits
80,852

 
67,866

 
67,434

 
66,418

 
80,491

Total deposits
$
1,789,031

 
$
1,634,827

 
$
1,651,064

 
$
1,639,996

 
$
1,654,523






SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
 
 
 
 
Asset Quality Information (unaudited)
 
 
 
 
 
 
 
 
 
 
 For the Quarter Ended
 Dollars in thousands
3/31/2019
 
12/31/2018
 
9/30/2018
 
6/30/2018
 
3/31/2018
 
 
 
 
 
 
 
 
 
 
Gross loan charge-offs
$
414

 
$
705

 
$
413

 
$
525

 
$
960

Gross loan recoveries
(249
)
 
(307
)
 
(278
)
 
(97
)
 
(153
)
Net loan charge-offs (recoveries)
$
165

 
$
398

 
$
135

 
$
428

 
$
807

 
 
 
 
 
 
 
 
 
 
Net loan charge-offs to average loans (annualized)
0.04
%
 
0.10
%
 
0.03
%
 
0.10
%
 
0.20
%
Allowance for loan losses
$
13,132

 
$
13,047

 
$
12,944

 
$
12,580

 
$
12,257

Allowance for loan losses as a percentage
    of period end loans
0.76
%
 
0.77
%
 
0.79
%
 
0.77
%
 
0.75
%
 
 
 
 
 
 
 
 
 
 
Nonperforming assets:
 
 
 
 
 
 
 
 
 
   Nonperforming loans
 
 
 
 
 
 
 
 
 
       Commercial
$
729

 
$
935

 
$
801

 
$
954

 
$
734

       Commercial real estate
2,981

 
3,239

 
5,090

 
3,238

 
3,400

       Residential construction and development
24

 
3,198

 
3,200

 
3,233

 
3,642

       Residential real estate
5,928

 
7,506

 
7,760

 
8,241

 
7,521

       Consumer
182

 
147

 
118

 
110

 
160

       Other
130

 

 

 

 

Total nonperforming loans
9,974

 
15,025

 
16,969

 
15,776

 
15,457

   Foreclosed properties
 
 
 
 
 
 
 
 
 
       Commercial real estate
1,841

 
1,762

 
1,762

 
1,818

 
1,875

       Commercial construction and development
6,326

 
6,479

 
6,790

 
6,815

 
7,140

       Residential construction and development
14,347

 
11,543

 
11,614

 
11,517

 
11,053

       Residential real estate
1,879

 
1,648

 
1,851

 
1,456

 
1,374

Total foreclosed properties
24,393

 
21,432

 
22,017

 
21,606

 
21,442

  Other repossessed assets
34

 
5

 
5

 
12

 
18

Total nonperforming assets
$
34,401

 
$
36,462

 
$
38,991

 
$
37,394

 
$
36,917

 
 
 
 
 
 
 
 
 
 
Nonperforming loans to period end loans
0.57
%
 
0.89
%
 
1.03
%
 
0.97
%
 
0.94
%
Nonperforming assets to period end assets
1.53
%
 
1.66
%
 
1.82
%
 
1.77
%
 
1.73
%
 
 
 
 
 
 
 
 
 
 
Troubled debt restructurings
 
 
 
 
 
 
 
 
 
Performing
$
27,845

 
$
26,609

 
$
27,441

 
$
27,559

 
$
27,408

Nonperforming

 
388

 
113

 
281

 
76

Total troubled debt restructurings
$
27,845

 
$
26,997

 
$
27,554

 
$
27,840

 
$
27,484






Loans Past Due 30-89 Days (unaudited)
 
 For the Quarter Ended
 Dollars in thousands
3/31/2019
 
12/31/2018
 
9/30/2018
 
6/30/2018
 
3/31/2018
 
 
 
 
 
 
 
 
 
 
Commercial
$
264

 
$
219

 
$
607

 
$
319

 
$
539

Commercial real estate
4,128

 
161

 
988

 
546

 
601

Construction and development
179

 
194

 
393

 
264

 
174

Residential real estate
2,944

 
6,249

 
5,513

 
4,125

 
5,218

Consumer
432

 
593

 
345

 
337

 
425

Other
52

 
38

 
11

 
8

 
15

Total
$
7,999

 
$
7,454

 
$
7,857

 
$
5,599

 
$
6,972





SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
 
 
 
 
 
 
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
 
 
 
 
Q1 2019 vs Q4 2018 vs Q1 2018 (unaudited)
 
 
 
 
 
 
 
 
 
 
 
Q1 2019
 
Q4 2018
 
Q1 2018
 
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
$
1,712,286

 
$
22,907

 
5.43
%
 
$
1,660,250

 
$
22,519

 
5.38
%
 
$
1,611,813

 
$
20,223

 
5.09
%
    Tax-exempt (2)
14,907

 
184

 
5.01
%
 
15,322

 
177

 
4.58
%
 
16,307

 
182

 
4.53
%
  Securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Taxable
195,932

 
1,687

 
3.49
%
 
176,059

 
1,502

 
3.38
%
 
191,713

 
1,372

 
2.90
%
    Tax-exempt (2)
114,831

 
1,139

 
4.02
%
 
132,088

 
1,296

 
3.89
%
 
132,306

 
1,290

 
3.95
%
Interest bearing deposits other banks
   and Federal funds sold
51,187

 
230

 
1.82
%
 
35,402

 
127

 
1.42
%
 
39,656

 
140

 
1.43
%
Total interest earning assets
2,089,143

 
26,147

 
5.08
%
 
2,019,121

 
25,621

 
5.03
%
 
1,991,795

 
23,207

 
4.73
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest earning assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Cash & due from banks
12,825

 
 
 
 
 
9,686

 
 
 
 
 
9,962

 
 
 
 
  Premises & equipment
38,834

 
 
 
 
 
37,224

 
 
 
 
 
34,586

 
 
 
 
  Other assets
112,910

 
 
 
 
 
109,228

 
 
 
 
 
107,125

 
 
 
 
  Allowance for loan losses
(13,309
)
 
 
 
 
 
(13,172
)
 
 
 
 
 
(12,737
)
 
 
 
 
    Total assets
$
2,240,403

 
 
 
 
 
$
2,162,087

 
 
 
 
 
$
2,130,731

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Interest bearing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    demand deposits
$
556,766

 
$
1,663

 
1.21
%
 
$
519,465

 
$
1,504

 
1.15
%
 
$
423,095

 
$
632

 
0.61
%
  Savings deposits
310,848

 
898

 
1.17
%
 
289,809

 
861

 
1.18
%
 
346,358

 
717

 
0.84
%
  Time deposits
654,404

 
3,003

 
1.86
%
 
607,037

 
2,738

 
1.79
%
 
622,543

 
2,200

 
1.43
%
  Short-term borrowings
200,297

 
1,472

 
2.98
%
 
270,092

 
1,909

 
2.80
%
 
243,686

 
1,405

 
2.34
%
Long-term borrowings and
     subordinated debentures
20,321

 
259

 
5.17
%
 
20,326

 
249

 
4.86
%
 
65,338

 
686

 
4.26
%
Total interest bearing liabilities
1,742,636

 
7,295

 
1.70
%
 
1,706,729

 
7,261

 
1.69
%
 
1,701,020

 
5,640

 
1.34
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Demand deposits
248,354

 
 
 
 
 
223,999

 
 
 
 
 
210,883

 
 
 
 
  Other liabilities
18,322

 
 
 
 
 
16,138

 
 
 
 
 
16,771

 
 
 
 
    Total liabilities
2,009,312

 
 
 
 
 
1,946,866

 
 
 
 
 
1,928,674

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders' equity - common
231,091

 
 
 
 
 
215,221

 
 
 
 
 
202,057

 
 
 
 
Total liabilities and
  shareholders' equity
$
2,240,403

 
 
 
 
 
$
2,162,087

 
 
 
 
 
$
2,130,731

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INTEREST EARNINGS
 
 
$
18,852

 
 
 
 
 
$
18,360

 
 
 
 
 
$
17,567

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INTEREST MARGIN
 
 
 
 
3.66
%
 
 
 
 
 
3.61
%
 
 
 
 
 
3.58
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) For purposes of this table, nonaccrual loans are included in average loan balances.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2) For purposes of this table, interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21%. The taxable equivalent adjustment results in an increase in interest income of $279,000, $309,000 and $310,000 for Q1 2019, Q4 2018 and Q1 2018, respectively.

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