×

Summit Financial Group Reports Third Quarter 2013 Results

company logo

MOOREFIELD, W.Va., Oct. 30, 2013 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. ("Company" or "Summit") (Nasdaq:SMMF) today reported third quarter 2013 net income applicable to common shares of $2.08 million, or $0.24 per diluted share, compared with $803,000, or $0.10 per diluted share, for the third quarter of 2012. Third quarter 2013 results, as compared to the same period in 2012, were positively impacted primarily by a lower provision for loan losses and lower write-downs of foreclosed properties.

Excluding from third quarter 2013 (on a pre-tax basis) realized securities gains of $132,000, gains on sales of foreclosed properties of $17,000, charges for other-than-temporary impairment ("OTTI") of securities of $38,000 and write-downs of foreclosed properties of $654,000, and from third quarter 2012 realized securities gains of $760,000, gains on sales of foreclosed properties of $16,000, charges for other-than-temporary impairment ("OTTI") of securities of $39,000 and write-downs of foreclosed properties of $2.57 million, third quarter 2013 earnings would have approximated $2.42 million, or $0.27 per diluted share, compared to $1.96 million, or $0.22 per diluted share, for the year-ago period.

For the nine months ended September 30, 2013, Summit recorded net income applicable to common shares of $4.70 million, or $0.55 per diluted share, compared with $3.03 million, or $0.38 per diluted share, for the comparable 2012 nine-month period.

Excluding from the nine month period ended September 30, 2013 (on a pre-tax basis) realized securities gains of $116,000, losses on sales of foreclosed properties of $546,000, OTTI charges of $118,000 and write-downs of foreclosed properties of $3.08 million, and from the 2012 first nine-month period realized securities gains of $2.25 million, losses on sale of foreclosed properties of $583,000, OTTI charges of $375,000 and write-downs of foreclosed properties of $6.11 million, earnings for the first nine months of 2013 would have approximated $6.98 million, or $0.79 per diluted share, compared to $6.07 million, or $0.71 per diluted share, for the 2012 nine month period.

Highlights for Q3 2013 include:

  • Best quarter's earnings per diluted share since Q4 2008.
  • Tenth consecutive quarter of positive quarterly earnings.
  • Nonperforming assets declined for the seventh consecutive quarter, reaching its lowest level since Q4 2008; OREO is at its lowest level since Q4 2009.
  • The provision for loan losses remained unchanged compared to the $1.00 million recorded in Q2 2013, and was half the amount recorded in Q3 2012.
  • Recorded charges to write-down foreclosed properties of $654,000, compared to $1.49 million in Q2 2013 and $2.57 million in Q3 2012.
  • Net interest margin increased 3 basis points compared to Q2 2013, but decreased 2 basis points compared to Q3 2012.
  • Loans grew a modest 1.3 percent.
  • Summit's regulatory capital ratios are at the highest levels in thirteen years.

H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, "We are pleased to report this past quarter's continued progress toward: improving our earnings performance, reducing our portfolio of problem assets, and strengthening our capital levels. Our problem assets remain top priority, and we are encouraged by the 23 percent reduction in our nonperforming assets over the past 12 months. However, dispositions of foreclosed properties remain challenging -- particularly with respect to commercial and residential development properties. Further, we anticipate our near term quarterly earnings may continue to fluctuate as foreclosed properties are re-appraised and adjusted to estimated fair values on an ongoing basis."

Results from Operations

Total revenue for the third quarter 2013, consisting of net interest income and noninterest income, was $12.4 million compared to $13.3 million for the third quarter 2012. For the year-to-date period ended September 30, 2013, total revenue was $37.1 million compared to $40.0 million for the same period in 2012.

Total revenue excluding realized securities gains of $132,000 and OTTI of securities of $38,000 was $12.3 million for third quarter 2013 compared to $12.6 million for the same prior-year quarter, a decrease of 2.1 percent. For the first nine months of 2013, total revenue excluding these same items was $37.1 million compared to $38.1 million for the first nine months of 2012.

For the third quarter of 2013, net interest income decreased to $9.5 million, compared to $9.9 million reported in the prior-year third quarter and was relatively unchanged compared to the linked quarter. The net interest margin for third quarter 2013 was 3.15 percent compared to 3.12 percent for the linked quarter, and 3.17 percent for the year-ago quarter.

Noninterest income, consisting primarily of insurance commissions from Summit's insurance agency subsidiary and service fee income from community banking activities, for third quarter 2013 was $2.9 million compared to $3.4 million for the comparable period of 2012. Excluding realized securities gains and OTTI of securities, noninterest income was $2.77 million for third quarter 2013, compared to the $2.64 million reported for third quarter 2012.

The provision for loan losses was $1.0 million for the third quarter and linked quarter of 2013 compared to $2.0 million for the year-ago quarter.

Noninterest expenses continue to be well-controlled. Total noninterest expense decreased 17.9% for the quarter to $8.2 million from the $10.0 million reported in third quarter 2012. Excluding from third quarter 2013 noninterest expense (on a pre-tax basis) gains on sales of foreclosed properties of $17,000 and write-downs of foreclosed properties of $654,000 and from third quarter 2012 gains on sales of foreclosed properties of $16,000 and write-downs of foreclosed properties of $2.6 million, noninterest expense would have approximated $7.6 million for third quarter 2013 compared to $7.5 million for third quarter 2012.

Noninterest expense for the first nine months of 2013 decreased 9.2% compared to the first nine months of 2012. Excluding from the nine month period ended September 30, 2013 noninterest expense (on a pre-tax basis) losses on sales of foreclosed properties of $546,000 and write-downs of foreclosed properties of $3.1 million and from 2012 first nine-month period losses on sales of foreclosed properties of $583,000 and write-downs of foreclosed properties of $6.1 million, noninterest expense would have approximated $22.7 million for nine months ended September 30, 2013, compared to $22.3 million for the comparable period of 2012.

Balance Sheet

At September 30, 2013, total assets were $1.39 billion, an increase of $683,000, or 0.1 percent, and a decrease of $16.3 million, or 1.2 percent, since December 31, 2012 and September 30, 2012, respectively. Total loans, net of unearned fees and allowance for loan losses, were $939.2 million at September 30, 2013, up $2.0 million, or 0.2 percent, from the $937.2 million reported at year end 2012.

At September 30, 2013, deposits were $1.02 billion, a decrease of $10.4 million, or 1.0 percent, since year end 2012. During the first nine months of 2013, interest bearing checking deposits grew $11.0 million, or 6.3 percent, to $186.7 million, while time deposits decreased by $20.1 million, or 3.6 percent. Long-term borrowings and subordinated debentures declined by 16.6 percent since year end 2012, as the Company paid down $39.7 million in maturing borrowings during this period.

Asset Quality

As of September 30, 2013, nonperforming assets ("NPAs"), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $77.1 million, or 5.55 percent of assets. This compares to $78.2 million, or 5.70 percent of assets at the linked quarter, and $99.8 million, or 7.11 percent of assets at September 30, 2012.

Third quarter 2013 net loan charge-offs were $2.1 million, or 0.89 percent of average loans annualized, while adding $1.0 million to the allowance for loan losses. The allowance for loan losses stood at $13.0 million, or 1.37 percent of total loans at September 30, 2013, compared to 1.88 percent at December 31, 2012.

Capital Adequacy

Shareholders' equity was $108.8 million as of September 30, 2013 compared to $108.6 million at December 31, 2012.

Summit's regulatory total risk-based capital ratio increased modestly to 14.5 percent at September 30, 2013, compared to 14.4 percent at June 30, 2013 and 14.0 percent at December 31, 2012. The Company's September 30, 2013 Tier 1 leverage capital ratio of 8.9 percent is up from 8.6 percent at June 30, 2013 and 8.3 percent at December 30, 2012.

Summit's depository institution, Summit Community Bank, Inc. (the "Bank"), is well in excess of regulatory requirements for a "well capitalized" institution at September 30, 2013. The Bank's total risk-based capital ratio was 15.5 percent at September 30, 2013 compared to 15.6 percent at June 30, 2013 and 15.0 percent at December 31, 2012, while its Tier 1 leverage capital ratio improved to 10.4 percent from the 10.2 percent and 9.8 percent reported at June 30, 2013 and December 31, 2012, respectively. The Bank received regulatory approval for and paid an upstream dividend of $1.00 million to Summit during third quarter 2013, representing the first such dividend since second quarter 2008.

Total common shares outstanding as of September 30, 2013 were 7,448,422 compared to 7,425,472 shares as of December 31, 2012.

About the Company

Summit Financial Group, Inc. is a $1.39 billion financial holding company headquartered in Moorefield, West Virginia. Summit provides community banking services primarily in the Eastern Panhandle and South Central regions of West Virginia and the Northern and Shenandoah Valley regions of Virginia, through its bank subsidiary, Summit Community Bank, Inc., which operates fifteen 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.

NON-GAAP FINANCIAL MEASURES

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America ("GAAP"). Specifically, Summit adjusted GAAP performance measures to exclude the effects of realized and unrealized securities gains and losses, gains/losses on sales of foreclosed properties, and write-downs of foreclosed properties to estimated fair values included in its Consolidated Statements of Income. Management believes presentations of financial measures excluding the impact of these items provide useful supplemental information that is important for a proper understanding of Summit's results of operations for the following reasons: (1) the trading of securities is not deemed a core business activity of Summit; and (2) prior to the financial crisis in 2008, the recognition of material unrealized securities losses, gains/losses on sales of foreclosed properties, and write-downs of foreclosed properties were infrequent, and results excluding their impact will be beneficial to readers, if our levels of nonperforming assets return to historical levels. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q3 2013 vs Q3 2012
For the Quarter Ended Percent
Dollars in thousands 9/30/2013 9/30/2012 Change
Condensed Statements of Income
Interest income
Loans, including fees $ 12,532 $ 13,648 -8.2%
Securities 1,512 1,934 -21.8%
Other 1 7 -85.7%
Total interest income 14,045 15,589 -9.9%
Interest expense
Deposits 2,487 3,067 -18.9%
Borrowings 2,020 2,587 -21.9%
Total interest expense 4,507 5,654 -20.3%
Net interest income 9,538 9,935 -4.0%
Provision for loan losses 1,000 2,000 -50.0%
Net interest income after provision for loan losses 8,538 7,935 7.6%
Noninterest income
Insurance commissions 1,057 1,052 0.5%
Service fees related to deposit accounts 1,106 1,074 3.0%
Realized securities gains 132 760 -82.6%
Other-than-temporary impairment of securities (38) (39) -2.6%
Other income 606 514 17.9%
Total noninterest income 2,863 3,361 -14.8%
Noninterest expense
Salaries and employee benefits 4,050 3,940 2.8%
Net occupancy expense 454 476 -4.6%
Equipment expense 578 573 0.9%
Professional fees 263 292 -9.9%
FDIC premiums 503 510 -1.4%
Foreclosed properties expense 262 356 -26.4%
(Gain) on sale of foreclosed properties (17) (16) 6.3%
Write-downs of foreclosed properties 654 2,571 -74.6%
Other expenses 1,484 1,325 12.0%
Total noninterest expense 8,231 10,027 -17.9%
Income before income taxes 3,170 1,269 149.8%
Income taxes 898 272 230.1%
Net income 2,272 997 127.9%
Preferred stock dividends 194 194 0.0%
Net income applicable to common shares $ 2,078 $ 803 158.8%
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q3 2013 vs Q3 2012
For the Quarter Ended Percent
9/30/2013 9/30/2012 Change
Per Share Data
Earnings per common share
Basic $ 0.28 $ 0.11 154.5%
Diluted $ 0.24 $ 0.10 140.0%
Average shares outstanding
Basic 7,443,865 7,425,472 0.2%
Diluted 9,621,957 9,601,278 0.2%
Performance Ratios
Return on average equity (A) 8.49% 3.71% 128.8%
Return on average assets 0.67% 0.28% 139.3%
Net interest margin 3.15% 3.17% -0.6%
Efficiency ratio (B) 56.22% 54.38% 3.4%
NOTE (A) – Net income divided by total average shareholders' equity.
NOTE (B) – Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Nine Month Performance Summary -- 2013 vs 2012
For the Nine Months Ended Percent
Dollars in thousands 9/30/2013 9/30/2012 Change
Condensed Statements of Income
Interest income
Loans, including fees $ 38,234 $ 42,055 -9.1%
Securities 4,684 6,579 -28.8%
Other 4 30 -86.7%
Total interest income 42,922 48,664 -11.8%
Interest expense
Deposits 8,074 10,140 -20.4%
Borrowings 6,047 8,600 -29.7%
Total interest expense 14,121 18,740 -24.6%
Net interest income 28,801 29,924 -3.8%
Provision for loan losses 3,500 6,002 -41.7%
Net interest income after provision for loan losses 25,301 23,922 5.8%
Noninterest income
Insurance commissions 3,373 3,352 0.6%
Service fees related to deposit accounts 3,202 3,163 1.2%
Realized securities gains 116 2,245 -94.8%
Other-than-temporary impairment of securities (118) (375) -68.5%
Other income 1,741 1,649 5.6%
Total noninterest income 8,314 10,034 -17.1%
Noninterest expense
Salaries and employee benefits 12,155 11,733 3.6%
Net occupancy expense 1,387 1,445 -4.0%
Equipment expense 1,724 1,777 -3.0%
Professional fees 885 872 1.5%
FDIC premiums 1,557 1,532 1.6%
Foreclosed properties expense 836 935 -10.6%
Loss on sale of foreclosed properties 546 583 -6.3%
Write-downs of foreclosed properties 3,078 6,114 -49.7%
Other expenses 4,164 4,012 3.8%
Total noninterest expense 26,332 29,003 -9.2%
Income before income taxes 7,283 4,953 47.0%
Income taxes 2,001 1,345 48.8%
Net income 5,282 3,608 46.4%
Preferred stock dividends 582 583 -0.2%
Net income applicable to common shares $ 4,700 $ 3,025 55.4%
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Nine Month Performance Summary -- 2013 vs 2012
For the Nine Months Ended Percent
9/30/2013 9/30/2012 Change
Per Share Data
Earnings per common share
Basic $ 0.63 $ 0.41 53.7%
Diluted $ 0.55 $ 0.38 44.7%
Average shares outstanding
Basic 7,438,216 7,425,472 0.2%
Diluted 9,618,328 9,601,098 0.2%
Performance Ratios
Return on average equity (A) 6.46% 4.54% 42.3%
Return on average assets 0.51% 0.34% 50.0%
Net interest margin 3.17% 3.19% -0.6%
Efficiency ratio (B) 56.24% 53.75% 4.6%
NOTE (A) – Net income divided by total average shareholders' equity.
NOTE (B) – Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary
For the Quarter Ended
Dollars in thousands 9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
Condensed Statements of Income
Interest income
Loans, including fees $ 12,532 $ 12,799 $ 12,904 $ 13,512 $ 13,648
Securities 1,512 1,507 1,664 1,703 1,934
Other 1 2 1 5 7
Total interest income 14,045 14,308 14,569 15,220 15,589
Interest expense
Deposits 2,487 2,820 2,768 3,017 3,067
Borrowings 2,020 1,984 2,043 2,307 2,587
Total interest expense 4,507 4,804 4,811 5,324 5,654
Net interest income 9,538 9,504 9,758 9,896 9,935
Provision for loan losses 1,000 1,000 1,500 2,498 2,000
Net interest income after provision for loan losses 8,538 8,504 8,258 7,398 7,935
Noninterest income
Insurance commissions 1,057 1,132 1,184 1,082 1,052
Service fees related to deposit accounts 1,106 1,085 1,012 1,092 1,074
Realized securities gains 132 (57) 42 103 760
Other-than-temporary impairment of securities (38) (27) (54) (76) (39)
Other income 606 570 564 644 514
Total noninterest income 2,863 2,703 2,748 2,845 3,361
Noninterest expense
Salaries and employee benefits 4,050 3,987 4,117 3,799 3,940
Net occupancy expense 454 476 457 495 476
Equipment expense 578 559 598 577 573
Professional fees 263 360 251 314 292
FDIC premiums 503 515 540 535 510
Foreclosed properties expense 262 295 279 269 356
(Gain) loss on sale of foreclosed properties (17) 523 40 94 (16)
Write-downs of foreclosed properties 654 1,494 929 748 2,571
Other expenses 1,484 1,329 1,351 1,433 1,325
Total noninterest expense 8,231 9,538 8,562 8,264 10,027
Income before income taxes 3,170 1,669 2,444 1,979 1,269
Income taxes 898 452 651 (126) 272
Net income 2,272 1,217 1,793 2,105 997
Preferred stock dividends 194 194 194 194 194
Net income applicable to common shares $ 2,078 $ 1,023 $ 1,599 $ 1,911 $ 803
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary
For the Quarter Ended
9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
Per Share Data
Earnings per common share
Basic $ 0.28 $ 0.14 $ 0.22 $ 0.26 $ 0.11
Diluted $ 0.24 $ 0.13 $ 0.19 $ 0.22 $ 0.10
Average shares outstanding
Basic 7,443,865 7,438,401 7,432,254 7,425,472 7,425,472
Diluted 9,621,957 9,619,585 9,613,886 9,601,435 9,601,278
Performance Ratios
Return on average equity (A) 8.49% 4.40% 6.55% 7.76% 3.71%
Return on average assets 0.67% 0.35% 0.52% 0.60% 0.28%
Net interest margin 3.15% 3.12% 3.23% 3.19% 3.17%
Efficiency ratio - (B) 56.22% 56.52% 56.00% 53.88% 54.38%
NOTE (A) – Net income divided by total average shareholders' equity.
NOTE (B) – Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Selected Balance Sheet Data
For the Quarter Ended
Dollars in thousands, except per share amounts 9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
Assets
Cash and due from banks $ 4,571 $ 4,336 $ 3,906 $ 3,833 $ 3,752
Interest bearing deposits other banks 11,532 7,971 7,915 10,969 13,441
Securities 291,258 291,180 283,054 281,539 291,992
Loans, net 939,169 925,979 945,741 937,168 940,933
Property held for sale 45,303 47,258 54,625 56,172 56,033
Premises and equipment, net 20,780 20,936 21,023 21,129 21,265
Intangible assets 8,036 8,124 8,212 8,300 8,387
Cash surrender value of life insurance policies 35,257 30,027 29,791 29,553 30,065
Other assets 31,881 34,159 35,931 38,441 38,218
Total assets $ 1,387,787 $ 1,369,970 $ 1,390,198 $ 1,387,104 $ 1,404,086
Liabilities and Shareholders' Equity
Deposits $ 1,016,735 $ 1,038,163 $ 1,066,318 $ 1,027,125 $ 1,027,307
Short-term borrowings 54,163 16,762 5,960 3,958 20,957
Long-term borrowings and subordinated debentures 199,929 199,954 199,977 239,657 240,133
Other liabilities 8,155 7,880 7,928 7,809 8,361
Shareholders' equity 108,805 107,211 110,015 108,555 107,328
Total liabilities and shareholders' equity $ 1,387,787 $ 1,369,970 $ 1,390,198 $ 1,387,104 $ 1,404,086
Book value per common share (A) $ 11.32 $ 11.15 $ 11.45 $ 11.31 $ 11.20
Tangible book value per common share (A) $ 10.48 $ 10.31 $ 10.60 $ 10.44 $ 10.33
Tangible equity / Tangible assets 7.3% 7.3% 7.4% 7.3% 7.1%
NOTE (A) – Assumes the conversion to common stock of all outstanding shares of convertible preferred stock.
SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios
9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
Summit Financial Group, Inc.
Total Risk Based Capital 14.5% 14.4% 14.1% 14.0% 13.8%
Tier 1 Risk-based Capital 12.1% 12.1% 11.8% 11.6% 11.3%
Tier 1 Leverage Ratio 8.9% 8.6% 8.4% 8.3% 8.0%
Summit Community Bank, Inc.
Total Risk Based Capital 15.5% 15.6% 15.2% 15.0% 14.6%
Tier 1 Risk-based Capital 14.3% 14.3% 13.9% 13.7% 13.3%
Tier 1 Leverage Ratio 10.4% 10.2% 10.0% 9.8% 9.5%
SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition
Dollars in thousands 9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
Commercial $ 83,844 $ 78,964 $ 86,877 $ 85,829 $ 88,997
Commercial real estate
Owner occupied 151,261 149,660 151,942 154,252 150,090
Non-owner occupied 279,412 277,773 288,475 276,082 279,132
Construction and development
Land and development 73,089 73,426 76,277 79,335 82,857
Construction 12,323 7,634 5,782 3,772 2,087
Residential real estate
Non-jumbo 215,058 216,759 213,965 216,714 215,584
Jumbo 59,701 58,567 62,849 61,567 62,748
Home equity 53,674 53,774 53,765 53,263 53,455
Consumer 20,472 20,147 19,638 20,586 21,290
Other 3,374 3,397 3,191 3,701 2,513
Total loans, net of unearned fees 952,208 940,101 962,761 955,101 958,753
Less allowance for loan losses 13,039 14,122 17,020 17,933 17,820
Loans, net $ 939,169 $ 925,979 $ 945,741 $ 937,168 $ 940,933
SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition
Dollars in thousands 9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
Non interest bearing checking $ 99,109 $ 92,147 $ 93,125 $ 100,592 $ 96,764
Interest bearing checking 186,702 187,244 181,327 175,706 177,236
Savings 193,285 196,069 197,587 193,039 197,610
Time deposits 537,639 562,703 594,279 557,788 555,697
Total deposits $ 1,016,735 $ 1,038,163 $ 1,066,318 $ 1,027,125 $ 1,027,307
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Asset Quality Information
For the Quarter Ended
Dollars in thousands 9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
Gross loan charge-offs $ 2,825 $ 3,968 $ 2,497 $ 2,545 $ 2,142
Gross loan recoveries (742) (70) (84) (160) (73)
Net loan charge-offs $ 2,083 $ 3,898 $ 2,413 $ 2,385 $ 2,069
Net loan charge-offs to average loans (annualized) 0.89% 1.63% 1.00% 0.99% 0.86%
Allowance for loan losses $ 13,039 $ 14,122 $ 17,020 $ 17,933 $ 17,820
Allowance for loan losses as a percentage of period end loans 1.37% 1.50% 1.77% 1.88% 1.86%
Nonperforming assets:
Nonperforming loans
Commercial $ 2,557 $ 3,996 $ 4,763 $ 5,002 $ 5,343
Commercial real estate 3,795 1,695 1,525 2,556 2,803
Commercial construction and development 3,761 -- -- -- 428
Residential construction and development 9,128 11,505 13,076 13,641 16,333
Residential real estate 12,385 13,605 16,869 16,522 18,809
Consumer 145 91 72 55 88
Total nonperforming loans 31,771 30,892 36,305 37,776 43,804
Foreclosed properties
Commercial -- -- -- -- --
Commercial real estate 9,961 10,310 11,779 11,835 11,802
Commercial construction and development 11,161 11,492 16,670 17,597 17,683
Residential construction and development 20,585 21,591 21,929 23,074 23,769
Residential real estate 3,596 3,865 4,247 3,666 2,779
Total foreclosed properties 45,303 47,258 54,625 56,172 56,033
Other repossessed assets -- 2 19 6 --
Total nonperforming assets $ 77,074 $ 78,152 $ 90,949 $ 93,954 $ 99,837
Nonperforming loans to period end loans 3.34% 3.29% 3.77% 3.96% 4.57%
Nonperforming assets to period end assets 5.55% 5.70% 6.54% 6.77% 7.11%
Loans Past Due 30-89 Days
For the Quarter Ended
In thousands 9/30/2013 6/30/2013 3/31/2013 12/31/2012 9/30/2012
Commercial $ 30 $ 199 $ 27 $ 180 $ 874
Commercial real estate 1,757 626 2,161 437 1,264
Construction and development 154 698 64 -- 56
Residential real estate 4,697 4,479 4,522 6,170 4,346
Consumer 229 286 277 326 313
Other 50 53 -- -- --
Total $ 6,917 $ 6,341 $ 7,051 $ 7,113 $ 6,853
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q3 2013 vs Q3 2012
Q3 2013 Q3 2012
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 $ 935,975 $ 12,468 5.28% $ 955,849 $ 13,572 5.65%
Tax-exempt 5,258 95 7.17% 6,267 115 7.30%
Securities
Taxable 218,054 895 1.63% 238,458 1,341 2.24%
Tax-exempt 77,445 935 4.79% 69,636 890 5.08%
Interest bearing deposits other banks and Federal funds sold 7,081 1 0.06% 19,690 7 0.14%
Total interest earning assets 1,243,813 14,394 4.59% 1,289,900 15,925 4.91%
Noninterest earning assets
Cash & due from banks 4,524 4,247
Premises & equipment 20,900 21,422
Other assets 109,219 117,354
Allowance for loan losses (13,945) (17,825)
Total assets $ 1,364,511 $ 1,415,098
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing demand deposits $ 183,042 $ 61 0.13% $ 176,974 $ 83 0.19%
Savings deposits 194,810 278 0.57% 200,865 321 0.64%
Time deposits 543,552 2,147 1.57% 548,983 2,663 1.93%
Short-term borrowings 34,839 24 0.27% 12,479 8 0.26%
Long-term borrowings and subordinated debentures 199,940 1,996 3.96% 264,315 2,579 3.88%
Total interest bearing liabilities 1,156,183 4,506 1.55% 1,203,616 5,654 1.87%
Noninterest bearing liabilities
Demand deposits 93,424 96,048
Other liabilities 7,831 8,015
Total liabilities 1,257,438 1,307,679
Shareholders' equity - preferred 9,309 9,326
Shareholders' equity - common 97,764 98,093
Total liabilities and shareholders' equity $ 1,364,511 $ 1,415,098
NET INTEREST EARNINGS $ 9,888 $ 10,271
NET INTEREST MARGIN 3.15% 3.17%
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
YTD 2013 vs YTD 2012
YTD 2013 YTD 2012
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 $ 948,870 $ 38,038 5.36% $ 965,227 $ 41,811 5.79%
Tax-exempt 5,560 298 7.17% 6,776 368 7.25%
Securities
Taxable 220,669 2,851 1.73% 235,885 4,592 2.60%
Tax-exempt 76,021 2,776 4.88% 70,753 3,009 5.68%
Interest bearing deposits other banks and Federal funds sold 7,706 4 0.07% 22,737 31 0.18%
Total interest earning assets 1,258,826 43,967 4.67% 1,301,378 49,811 5.11%
Noninterest earning assets
Cash & due from banks 4,430 4,195
Premises & equipment 21,006 21,684
Other assets 111,948 120,041
Allowance for loan losses (15,726) (18,191)
Total assets $ 1,380,484 $ 1,429,107
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing demand deposits $ 178,911 $ 193 0.14% $ 167,843 $ 247 0.20%
Savings deposits 195,907 875 0.60% 206,953 1,054 0.68%
Time deposits 566,172 7,007 1.65% 545,121 8,839 2.17%
Short-term borrowings 25,579 50 0.26% 14,250 25 0.23%
Long-term borrowings and subordinated debentures 203,019 5,997 3.95% 288,305 8,575 3.97%
1,169,588 14,122 1.61% 1,222,472 18,740 2.05%
Noninterest bearing liabilities
Demand deposits 94,139 92,362
Other liabilities 7,698 8,273
Total liabilities 1,271,425 1,323,107
Shareholders' equity - preferred 9,319 9,326
Shareholders' equity - common 99,740 96,674
Total liabilities and shareholders' equity $ 1,380,484 $ 1,429,107
NET INTEREST EARNINGS $ 29,845 $ 31,071
NET INTEREST MARGIN 3.17% 3.19%
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
For the Quarter Ended For the Nine Months Ended
Dollars in thousands 9/30/2013 9/30/2012 9/30/2013 9/30/2012
Net income applicable to common shares - excluding realized securities gains, gains/(losses) on sales of foreclosed properties, other-than-temporary impairment of securities and write-downs of foreclosed properties $ 2,420 $ 1,959 $ 6,984 $ 6,066
Realized securities gains/(losses) 132 760 116 2,245
Applicable income tax effect (49) (281) (43) (831)
Gains/(losses) on sales of foreclosed properties 17 16 (546) (583)
Applicable income tax effect (6) (6) 202 216
Other-than-temporary impairment of securities (38) (39) (118) (375)
Applicable income tax effect 14 14 44 139
Write-downs foreclosed properties (654) (2,571) (3,078) (6,114)
Applicable income tax effect 242 951 1,139 2,262
(342) (1,156) (2,284) (3,041)
GAAP net income applicable to common shares $ 2,078 $ 803 $ 4,700 $ 3,025
Diluted earnings per common share - excluding realized securities gains, gains/(losses) on sales of foreclosed properties, other-than-temporary impairment of securities and write-downs of foreclosed properties $ 0.27 $ 0.22 $ 0.79 $ 0.71
Realized securities gains/(losses) 0.01 0.08 0.01 0.23
Applicable income tax effect -- (0.03) -- (0.09)
Gains/(losses) on sales of foreclosed properties -- -- (0.06) (0.06)
Applicable income tax effect -- -- 0.02 0.02
Other-than-temporary impairment of securities -- -- (0.01) (0.04)
Applicable income tax effect -- -- -- 0.01
Write-downs of foreclosed properties (0.07) (0.27) (0.32) (0.64)
Applicable income tax effect 0.03 0.10 0.12 0.24
(0.03) (0.12) (0.24) (0.33)
GAAP diluted earnings per common share $ 0.24 $ 0.10 $ 0.55 $ 0.38
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
For the Quarter Ended For the Nine Months Ended
Dollars in thousands 9/30/2013 9/30/2012 9/30/2013 9/30/2012
Total revenue - excluding realized securities gains and other-than-temporary impairment of securities $ 12,307 $ 12,575 $ 37,117 $ 38,088
Realized securities gains/(losses) 132 760 116 2,245
Other-than-temporary impairment of securities (38) (39) (118) (375)
94 721 (2) 1,870
GAAP total revenue $ 12,401 $ 13,296 $ 37,115 $ 39,958
Total noninterest income - excluding realized securities gains and other-than-temporary impairment of securities $ 2,769 $ 2,640 $ 8,316 $ 8,164
Realized securities gains/(losses) 132 760 116 2,245
Other-than-temporary impairment of securities (38) (39) (118) (375)
94 721 (2) 1,870
GAAP total noninterest income $ 2,863 $ 3,361 $ 8,314 $ 10,034
Total noninterest expense - excluding gains/losses on sales of foreclosed properties and write-downs of foreclosed properties $7,594 $7,472 $22,708 $22,306
(Gains)/losses on sales of foreclosed properties (17) (16) 546 583
Write-downs of foreclosed properties 654 2,571 3,078 6,114
637 2,555 3,624 6,697
GAAP total noninterest expense $8,231 $10,027 $26,332 $29,003

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

Source:Summit Financial Group, Inc.

More From Press Releases