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Summit Financial Group Reports Fourth Quarter 2014 Results

MOOREFIELD, W.Va., Jan. 28, 2015 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. ("Company" or "Summit") (Nasdaq:SMMF) today reported fourth quarter 2014 net income applicable to common shares of $3.01 million, or $0.32 per diluted share, compared to $2.59 million, or $0.29 per diluted share, for the fourth quarter of 2013, representing an increase of 16.0 percent, or 10.3 percent per diluted share. Q4 2014 earnings compared to Q4 2013 were positively impacted by a $948,000 increase in net interest income and a $1.0 million decline in provision for loan losses, but were negatively impacted by a $686,000 increase in noninterest expense, which included a fraud loss of $461,000.

Excluding from fourth quarter 2014 (on a pre-tax basis) realized securities gains of $149,000, losses on sales of foreclosed properties of $628,000, write-downs of foreclosed properties of $300,000 and the $461,000 fraud loss, Q4 2014 core earnings approximated $3.79 million, or $0.40 per diluted share. Excluding from Q4 2013 (on a pre-tax basis) realized securities gains of $124,000, gains on sales of foreclosed properties of $28,000, and write-downs of foreclosed properties of $644,000, Q4 2013 core earnings approximated $2.90 million, or $0.32 per diluted share.

For the year ended December 31, 2014, Summit recorded net income applicable to common shares of $10.59 million, or $1.17 per diluted share, compared with $7.29 million, or $0.84 per diluted share, for 2013, representing an increase of 45.1%, or 39.3% per diluted share.

Excluding from the full-year 2014 nonrecurring items (on a pre-tax basis) comprised of realized securities gains of $213,000, losses on sales of foreclosed properties of $827,000, OTTI charges of $1,000 and write-downs of foreclosed properties of $3.77 million, and from the 2013 full year realized securities gains of $240,000, losses on sale of foreclosed properties of $518,000, OTTI charges of $118,000 and write-downs of foreclosed properties of $3.72 million, core earnings for full-year 2014 were approximately $13.64 million, or $1.50 per diluted share, compared to $9.89 million, or $1.12 per diluted share, for full-year 2013.

Highlights for Q4 2014 include:

  • Nonperforming assets declined for the twelfth consecutive quarter. Compared to the linked quarter, nonperforming assets as a percentage of total assets declined from 4.10 percent to 3.48 percent, reaching its lowest level since Q2 2008; foreclosed properties are at the lowest level since Q3 2009.
  • Net interest margin declined 5 basis points compared to the linked quarter, but has increased 18 basis points since Q4 2013.
  • Achieved loan growth of $26.6 million, or 2.7 percent (non-annualized) during Q4 2014, and $81.3 million, or 8.6 percent during 2014.
  • Recorded charges of $300,000 to write-down foreclosed properties compared to $1.58 million in Q3 2014 and $644,000 in Q4 2013.
  • Summit's regulatory capital ratios are at the highest levels in fourteen years.

H. Charles Maddy III, President and Chief Executive Officer of Summit, commented, "The year just concluded marked a milestone of Summit's recovery from the effects of the economic downturn of the last decade. Our earnings improvements, growing loan portfolio, increasing revenues, improved net interest earnings, strengthened capital, reductions in our portfolio of problem assets and the recent lifting of regulatory memorandum, all serve as evidence of achievement of this goal. Further, we are very pleased to end 2014 with another quarter of solid performance, which gives us optimism as we look forward to 2015 and beyond."

Results from Operations

Total revenue for fourth quarter 2014, consisting of net interest income and noninterest income, grew 6.8 percent to $13.8 million compared to $12.9 million for the fourth quarter 2013. For the year-to-date period ended December 31, 2014, total revenue was $53.6 million compared to $50.0 million for 2013, representing a 7.2 percent increase.

Total core revenue (excluding nonrecurring items, enumerated above) was $13.6 million for fourth quarter 2014 compared to $12.8 million for the same prior-year quarter, an increase of 6.6 percent. For full-year 2014, total core revenue (excluding nonrecurring items) was $53.4 million compared to $49.9 million for full-year 2013, a 7.0 percent improvement.

For the fourth quarter of 2014, net interest income was $11.0 million, an increase of 9.5 percent from the $10.0 million reported in the prior-year fourth quarter and decreased $126,000 compared to the linked quarter. The net interest margin for fourth quarter 2014 was 3.42 percent compared to 3.24 percent for the year-ago quarter, and 3.47 percent for the linked quarter.

Noninterest income, consisting primarily of insurance commissions from Summit's insurance agency subsidiary and service fee income from community banking activities, for fourth quarter 2014 was $2.82 million compared to $2.90 million for the comparable period of 2013. Excluding realized securities gains/losses and OTTI of securities, noninterest income was $2.67 million for fourth quarter 2014, compared to $2.77 million reported for fourth quarter 2013.

Summit recognized no provision for loan losses in fourth quarter 2014, compared to $250,000 for the linked quarter and $1.0 million for the year-ago quarter.

Core noninterest expense continues to be well-controlled. Total noninterest expense increased 8.1% to $9.11 million compared to $8.42 million for the prior-year fourth quarter. Excluding from noninterest expense (on a pre-tax basis) losses on sales of foreclosed properties of $628,000 in Q4 2014 and gains of $28,000 in Q4 2013, write-downs of foreclosed properties of $300,000 in Q4 2014 and $644,000 in Q4 2013, and a fraud loss in Q4 2014 of $461,000, noninterest expense would have approximated $7.72 million for Q4 2014 compared to $7.81 million for the comparable period of 2013. Noninterest expense for the full-year 2014 increased 1.6% compared to 2013.

Balance Sheet

At December 31, 2014, total assets were $1.44 billion, an increase of $57.3 million, or 4.1 percent since December 31, 2013. Total loans, net of unearned fees and allowance for loan losses, were $1.02 billion at December 31, 2014, up $82.8 million, or 8.8 percent, from the $937.1 million reported at year-end 2013.

At December 31, 2014, deposits were $1.06 billion, an increase of $57.5 million, or 5.7 percent, since year end 2013. During 2014, checking and savings grew by $40.0 million and $60.1 million, respectively, or 14.3 percent and 31.1 percent, respectively. Long-term borrowings and subordinated debentures declined by 43.0 percent since year end 2013, as the Company paid down $86.0 million in maturing borrowings, which was funded by growth in checking and savings deposits and short-term borrowings.

Asset Quality

As of December 31, 2014, nonperforming assets ("NPAs"), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $50.2 million, or 3.48 percent of assets. This compares to $58.5 million, or 4.10 percent of assets at the linked quarter, and $72.3 million, or 5.22 percent of assets, at fourth quarter 2013.

Fourth quarter 2014 net loan recoveries were $126,000, or 0.05 percent of average loans annualized. The allowance for loan losses stood at $11.2 million, or 1.08 percent of total loans at December 31, 2014, compared to 1.33 percent at year-end 2013.

Capital Adequacy

Shareholders' equity was $131.6 million as of December 31, 2014 compared to $111.1 million December 31, 2013. Tangible book value per common share increased to $12.78 at December 31, 2014 compared to $10.72 at December 31, 2013.

Summit's depository institution, Summit Community Bank, Inc. (the "Bank"), is well in excess of regulatory requirements for a "well capitalized" institution at December 31, 2014. The Bank's total risk-based capital ratio was 15.3 percent at December 31, 2014 compared to 15.7 percent at December 31, 2013, while its Tier 1 leverage capital ratio improved to 10.6 percent from the 10.4 percent reported at December 31, 2013.

About the Company

Summit Financial Group, Inc. is a $1.44 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 assets, and write-downs of foreclosed properties to estimated fair value included in its Statements of Income. Management deems believes presentations of financial measures excluding the impact of these items provide useful supplemental information that is important for a proper understanding of the operating results of Summit's core business. 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 -- Q4 2014 vs Q4 2013
For the Quarter Ended Percent
Dollars in thousands 12/31/2014 12/31/2013 Change
Condensed Statements of Income
Interest income
Loans, including fees $ 12,666 $ 12,507 1.3%
Securities 1,784 1,850 -3.6%
Other 2 2 0.0%
Total interest income 14,452 14,359 0.6%
Interest expense
Deposits 2,130 2,317 -8.1%
Borrowings 1,371 2,039 -32.8%
Total interest expense 3,501 4,356 -19.6%
Net interest income 10,951 10,003 9.5%
Provision for loan losses - 1,000 -100.0%
Net interest income after provision for loan losses 10,951 9,003 21.6%
Noninterest income
Insurance commissions 1,023 1,056 -3.1%
Service fees related to deposit accounts 1,113 1,124 -1.0%
Realized securities gains (losses) 149 124 20.2%
Other-than-temporary impairment of securities - - n/a
Other income 537 592 -9.3%
Total noninterest income 2,822 2,896 -2.6%
Noninterest expense
Salaries and employee benefits 4,133 4,024 2.7%
Net occupancy expense 495 466 6.2%
Equipment expense 487 580 -16.0%
Professional fees 452 295 53.2%
FDIC premiums 315 502 -37.3%
Foreclosed properties expense 239 209 14.4%
Loss (gain) on sales of foreclosed properties 628 (28) -2342.9%
Write-downs of foreclosed properties 300 644 -53.4%
Other expenses 2,061 1,732 19.0%
Total noninterest expense 9,110 8,424 8.1%
Income before income taxes 4,663 3,475 34.2%
Income taxes 1,464 687 113.1%
Net income 3,199 2,788 14.7%
Preferred stock dividends 191 194 -1.5%
Net income applicable to common shares $ 3,008 $ 2,594 16.0%
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q4 2014 vs Q4 2013
For the Quarter Ended Percent
12/31/2014 12/31/2013 Change
Per Share Data
Earnings per common share
Basic $ 0.39 $ 0.35 11.4%
Diluted $ 0.32 $ 0.29 10.3%
Average shares outstanding
Basic 7,796,508 7,450,379 4.6%
Diluted 9,963,214 9,624,312 3.5%
Performance Ratios
Return on average equity (A) 10.10% 10.15% -0.5%
Return on average assets 0.89% 0.80% 11.3%
Net interest margin 3.42% 3.24% 5.6%
Efficiency ratio (B) 53.07% 57.31% -7.4%
NOTE (A) – Net income divided by total 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)
Annual Performance Summary -- 2014 vs 2013
For the Years Ended Percent
Dollars in thousands 12/31/2014 12/31/2013 Change
Condensed Statements of Income
Interest income
Loans, including fees $ 50,430 $ 50,741 -0.6%
Securities 7,188 6,534 10.0%
Other 8 5 60.0%
Total interest income 57,626 57,280 0.6%
Interest expense
Deposits 8,995 10,392 -13.4%
Borrowings 6,246 8,085 -22.7%
Total interest expense 15,241 18,477 -17.5%
Net interest income 42,385 38,803 9.2%
Provision for loan losses 2,250 4,500 -50.0%
Net interest income after provision for loan losses 40,135 34,303 17.0%
Noninterest income
Insurance commissions 4,400 4,429 -0.7%
Service fees related to deposit accounts 4,405 4,325 1.8%
Realized securities gains 213 240 -11.3%
Other-than-temporary impairment of securities (1) (118) -99.2%
Other income 2,206 2,333 -5.4%
Total noninterest income 11,223 11,209 0.1%
Noninterest expense
Salaries and employee benefits 16,185 16,178 0.0%
Net occupancy expense 2,023 1,853 9.2%
Equipment expense 2,086 2,303 -9.4%
Professional fees 1,429 1,181 21.0%
FDIC premiums 1,792 2,060 -13.0%
Foreclosed properties expense 1,020 1,045 -2.4%
Loss (gain) on sales of foreclosed properties 827 518 59.7%
Write-downs of foreclosed properties 3,771 3,722 1.3%
Other expenses 6,191 5,896 5.0%
Total noninterest expense 35,324 34,756 1.6%
Income before income taxes 16,034 10,756 49.1%
Income taxes 4,678 2,688 74.0%
Net income 11,356 8,068 40.8%
Preferred stock dividends 771 775 -0.5%
Net income applicable to common shares $ 10,585 $ 7,293 45.1%
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Annual Performance Summary -- 2014 vs 2013
For the Years Ended Percent
12/31/2014 12/31/2013 Change
Per Share Data
Earnings per common share
Basic $ 1.40 $ 0.98 42.9%
Diluted $ 1.17 $ 0.84 39.3%
Average shares outstanding
Basic 7,539,444 7,442,689 1.3%
Diluted 9,711,561 9,621,504 0.9%
Performance Ratios
Return on average equity (A) 9.54% 7.38% 29.3%
Return on average assets 0.80% 0.58% 37.9%
Net interest margin 3.39% 3.22% 5.3%
Efficiency ratio (B) 52.78% 56.48% -6.6%
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 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013
Condensed Statements of Income
Interest income
Loans, including fees $ 12,666 $ 13,033 $ 12,515 $ 12,216 $ 12,507
Securities 1,784 1,724 1,827 1,852 1,850
Other 2 3 2 2 2
Total interest income 14,452 14,760 14,344 14,070 14,359
Interest expense
Deposits 2,130 2,288 2,335 2,241 2,317
Borrowings 1,371 1,395 1,689 1,791 2,039
Total interest expense 3,501 3,683 4,024 4,032 4,356
Net interest income 10,951 11,077 10,320 10,038 10,003
Provision for loan losses - 250 1,000 1,000 1,000
Net interest income after provision for loan losses 10,951 10,827 9,320 9,038 9,003
Noninterest income
Insurance commissions 1,023 1,105 1,091 1,181 1,056
Service fees related to deposit accounts 1,113 1,177 1,101 1,043 1,124
Realized securities gains (losses) 149 128 (43) (22) 124
Other-than-temporary impairment of securities - - (1) - -
Other income 537 503 557 581 592
Total noninterest income 2,822 2,913 2,705 2,783 2,896
Noninterest expense
Salaries and employee benefits 4,133 4,026 4,045 3,980 4,024
Net occupancy expense 495 482 505 541 466
Equipment expense 487 520 513 566 580
Professional fees 452 380 282 316 295
FDIC premiums 315 480 495 502 502
Foreclosed properties expense 239 298 229 254 209
Loss (gain) on sale of foreclosed properties 628 70 54 75 (28)
Write-downs of foreclosed properties 300 1,580 962 928 644
Other expenses 2,061 1,350 1,445 1,336 1,732
Total noninterest expense 9,110 9,186 8,530 8,498 8,424
Income before income taxes 4,663 4,554 3,495 3,323 3,475
Income taxes 1,464 1,218 1,063 934 687
Net income 3,199 3,336 2,432 2,389 2,788
Preferred stock dividends 191 193 193 194 194
Net income applicable to common shares $ 3,008 $ 3,143 $ 2,239 $ 2,195 $ 2,594
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary
For the Quarter Ended
12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013
Per Share Data
Earnings per common share
Basic $ 0.39 $ 0.42 $ 0.30 $ 0.29 $ 0.35
Diluted $ 0.32 $ 0.35 $ 0.25 $ 0.25 $ 0.29
Average shares outstanding
Basic 7,796,508 7,457,222 7,457,222 7,453,370 7,450,379
Diluted 9,963,214 9,630,293 9,630,699 9,628,927 9,624,312
Performance Ratios
Return on average equity (A) 10.10% 11.13% 8.37% 8.46% 10.15%
Return on average assets 0.89% 0.93% 0.69% 0.69% 0.80%
Net interest margin 3.42% 3.47% 3.32% 3.33% 3.24%
Efficiency ratio - (B) 53.07% 51.19% 52.86% 54.13% 57.31%
NOTE (A) – Net income divided by average total 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 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013
Assets
Cash and due from banks $ 3,728 $ 3,933 $ 3,749 $ 3,827 $ 3,442
Interest bearing deposits other banks 8,783 9,300 9,970 13,424 8,340
Securities 282,834 282,401 287,883 281,865 288,780
Loans, net 1,019,842 993,347 992,816 962,714 937,070
Property held for sale 37,529 47,252 48,783 52,241 53,392
Premises and equipment, net 20,060 20,132 20,301 20,457 20,623
Intangible assets 7,698 7,748 7,798 7,861 7,949
Cash surrender value of life insurance policies 36,700 36,417 36,151 35,881 35,611
Other assets 26,394 28,139 28,507 27,847 31,020
Total assets $ 1,443,568 $ 1,428,669 $ 1,435,958 $ 1,406,117 $ 1,386,227
Liabilities and Shareholders' Equity
Deposits $ 1,061,314 $ 1,054,454 $ 1,057,795 $ 1,052,630 $ 1,003,812
Short-term borrowings 123,633 127,432 91,729 68,974 62,769
Long-term borrowings and subordinated debentures 113,879 114,855 158,331 159,881 199,905
Other liabilities 13,098 10,566 10,638 10,105 8,669
Shareholders' equity 131,644 121,362 117,465 114,527 111,072
Total liabilities and shareholders' equity $ 1,443,568 $ 1,428,669 $ 1,435,958 $ 1,406,117 $ 1,386,227
Book value per common share (A) $ 13.57 $ 12.62 $ 12.21 $ 11.91 $ 11.55
Tangible book value per common share (A) $ 12.78 $ 11.81 $ 11.40 $ 11.09 $ 10.72
Tangible equity / Tangible assets 8.6% 8.0% 7.7% 7.6% 7.5%
NOTE (A) – Assumes conversion of convertible preferred stock
SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios
12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013
Summit Financial Group, Inc.
Total Risk Based Capital 14.9% 14.3% 14.2% 14.2% 14.5%
Tier 1 Risk-based Capital 13.3% 12.5% 12.4% 12.4% 12.4%
Tier 1 Leverage Ratio 9.9% 9.2% 9.0% 9.0% 8.9%
Summit Community Bank, Inc.
Total Risk Based Capital 15.3% 15.5% 15.6% 15.6% 15.7%
Tier 1 Risk-based Capital 14.2% 14.4% 14.5% 14.5% 14.5%
Tier 1 Leverage Ratio 10.6% 10.5% 10.6% 10.6% 10.4%
SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition
Dollars in thousands 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013
Commercial $ 88,590 $ 83,762 $ 90,096 $ 93,517 $ 88,352
Commercial real estate
Owner occupied 157,783 156,765 154,260 150,025 149,618
Non-owner occupied 317,136 314,577 314,439 297,197 280,790
Construction and development
Land and development 67,881 61,088 64,246 67,342 71,453
Construction 28,591 27,239 20,902 18,327 15,155
Residential real estate
Non-jumbo 220,071 218,125 219,569 215,665 212,946
Jumbo 52,879 51,917 52,487 51,406 53,406
Home equity 67,115 64,256 61,248 56,161 54,844
Consumer 19,456 19,906 19,777 19,106 19,889
Other 11,507 6,753 6,798 5,037 3,276
Total loans, net of unearned fees 1,031,009 1,004,388 1,003,822 973,783 949,729
Less allowance for loan losses 11,167 11,041 11,006 11,069 12,659
Loans, net $ 1,019,842 $ 993,347 $ 992,816 $ 962,714 $ 937,070
SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition
Dollars in thousands 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013
Non interest bearing checking $ 115,427 $ 104,442 $ 106,134 $ 99,445 $ 92,837
Interest bearing checking 204,030 195,183 187,855 195,898 186,578
Savings 253,578 255,880 243,323 228,854 193,446
Time deposits 488,279 498,949 520,483 528,433 530,951
Total deposits $ 1,061,314 $ 1,054,454 $ 1,057,795 $ 1,052,630 $ 1,003,812
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Asset Quality Information
For the Quarter Ended
Dollars in thousands 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013
Gross loan charge-offs $ 362 $ 297 $ 1,312 $ 2,862 $ 1,669
Gross loan recoveries (488) (82) (249) (272) (289)
Net loan charge-offs $ (126) $ 215 $ 1,063 $ 2,590 $ 1,380
Net loan charge-offs to average loans (annualized) -0.05% 0.09% 0.43% 1.08% 0.58%
Allowance for loan losses $ 11,167 $ 11,041 $ 11,006 $ 11,069 $ 12,659
Allowance for loan losses as a percentage of period end loans 1.08% 1.10% 1.10% 1.14% 1.33%
Nonperforming assets:
Nonperforming loans
Commercial $ 392 $ 309 $ 415 $ 866 $ 1,224
Commercial real estate 1,844 936 1,537 2,834 2,318
Commercial construction and development - - 3,601 3,653 3,782
Residential construction and development 4,619 4,592 5,248 6,599 9,048
Residential real estate 5,556 5,257 3,289 2,890 2,446
Consumer 83 146 129 73 128
Total nonperforming loans 12,494 11,240 14,219 16,915 18,946
Foreclosed properties
Commercial 110 110 110 - -
Commercial real estate 5,204 5,815 5,762 8,523 9,903
Commercial construction and development 10,179 10,178 10,363 11,097 11,125
Residential construction and development 19,267 20,431 20,557 20,640 20,485
Residential real estate 2,769 10,718 11,991 11,981 11,879
Total foreclosed properties 37,529 47,252 48,783 52,241 53,392
Other repossessed assets 221 34 - 28 8
Total nonperforming assets $ 50,244 $ 58,526 $ 63,002 $ 69,184 $ 72,346
Nonperforming loans to period end loans 1.21% 1.12% 1.42% 1.74% 1.99%
Nonperforming assets to period end assets 3.48% 4.10% 4.39% 4.92% 5.22%
Loans Past Due 30-89 Days
For the Quarter Ended
In thousands 12/31/2014 9/30/2014 6/30/2014 3/31/2014 12/31/2013
Commercial $ 382 $ 253 $ 376 $ 52 $ 74
Commercial real estate 266 1,094 1,032 1,310 1,809
Construction and development 2,278 324 156 754 1,628
Residential real estate 7,413 5,087 5,775 3,847 4,332
Consumer 269 427 585 219 292
Other 14 18 - - -
Total $ 10,622 $ 7,203 $ 7,924 $ 6,182 $ 8,135
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q4 2014 vs Q4 2013
Q4 2014 Q4 2013
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 $ 1,006,641 $ 12,562 4.95% $ 950,162 $ 12,450 5.20%
Tax-exempt 9,488 158 6.61% 5,084 89 6.95%
Securities
Taxable 207,577 1,127 2.15% 226,710 1,273 2.23%
Tax-exempt 83,729 995 4.71% 74,777 871 4.62%
Interest bearing deposits other banks and Federal funds sold 8,102 2 0.10% 8,156 1 0.05%
Total interest earning assets 1,315,537 14,844 4.48% 1,264,889 14,684 4.61%
Noninterest earning assets
Cash & due from banks 3,654 4,279
Premises & equipment 20,149 20,689
Other assets 107,467 109,534
Allowance for loan losses (11,239) (13,449)
Total assets $ 1,435,568 $ 1,385,942
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing demand deposits $ 199,932 $ 60 0.12% $ 188,839 $ 63 0.13%
Savings deposits 254,986 443 0.69% 193,889 277 0.57%
Time deposits 489,884 1,627 1.32% 528,370 1,977 1.48%
Short-term borrowings 124,001 97 0.31% 59,378 45 0.30%
Long-term borrowings and subordinated debentures 114,533 1,274 4.41% 199,917 1,993 3.96%
Total interest bearing liabilities 1,183,336 3,501 1.17% 1,170,393 4,355 1.48%
Noninterest bearing liabilities
Demand deposits 113,926 97,371
Other liabilities 11,633 8,286
Total liabilities 1,308,895 1,276,050
Shareholders' equity - preferred 9,249 9,295
Shareholders' equity - common 117,424 100,597
Total liabilities and shareholders' equity $ 1,435,568 $ 1,385,942
NET INTEREST EARNINGS $ 11,343 $ 10,329
NET INTEREST MARGIN 3.42% 3.24%
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
YTD 2014 vs YTD 2013
YTD 2014 YTD 2013
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 $ 984,723 $ 50,078 5.09% $ 949,616 $ 50,505 5.32%
Tax-exempt 7,823 533 6.81% 5,440 388 7.13%
Securities
Taxable 211,700 4,692 2.22% 208,588 4,131 1.98%
Tax-exempt 81,549 3,780 4.64% 75,707 3,647 4.82%
Interest bearing deposits other banks and Federal funds sold 9,325 8 0.09% 7,821 5 0.06%
Total interest earning assets 1,295,120 59,091 4.56% 1,247,172 58,676 4.70%
Noninterest earning assets
Cash & due from banks 3,756 4,381
Premises & equipment 20,346 20,926
Other assets 112,504 125,629
Allowance for loan losses (11,724) (15,152)
Total assets $ 1,420,002 $ 1,382,956
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing demand deposits $ 192,190 $ 222 0.12% $ 181,413 $ 255 0.14%
Savings deposits 238,340 1,580 0.66% 195,398 1,152 0.59%
Time deposits 513,110 7,193 1.40% 556,644 8,985 1.61%
Short-term borrowings 100,786 306 0.30% 34,098 95 0.28%
Long-term borrowings and subordinated debentures 142,213 5,939 4.18% 202,237 7,991 3.95%
1,186,639 15,240 1.28% 1,169,790 18,478 1.58%
Noninterest bearing liabilities
Demand deposits 104,262 94,943
Other liabilities 10,119 8,951
Total liabilities 1,301,020 1,273,684
Shareholders' equity - preferred 9,276 9,313
Shareholders' equity - common 109,706 99,959
Total liabilities and shareholders' equity $ 1,420,002 $ 1,382,956
NET INTEREST EARNINGS $ 43,851 $ 40,198
NET INTEREST MARGIN 3.39% 3.22%
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
For the Quarter Ended For the Years Ended
Dollars in thousands 12/31/2014 9/30/2014 12/31/2013 12/31/2014 12/31/2013
Core earnings applicable to common shares $ 3,789 $ 4,101 $ 2,904 $ 13,639 $ 9,887
Realized securities gains (losses) 149 128 124 213 240
Applicable income tax effect (55) (47) (46) (79) (89)
Gain (loss) on sale of foreclosed properties (628) (70) 28 (827) (518)
Applicable income tax effect 232 26 (10) 306 192
Other-than-temporary impairment of securities - - - (1) (118)
Applicable income tax effect - - - - 44
Fraud loss (461) - - (461) -
Applicable income tax effect 171 - - 171 -
Write-downs foreclosed properties (300) (1,580) (644) (3,771) (3,722)
Applicable income tax effect 111 585 238 1,395 1,377
(781) (958) (310) (3,054) (2,594)
GAAP net income applicable to common shares $ 3,008 $ 3,143 $ 2,594 $ 10,585 $ 7,293
Core diluted earnings per common share $ 0.40 $ 0.45 $ 0.32 $ 1.50 $ 1.12
Realized securities gains (losses) 0.01 0.01 0.01 0.02 0.02
Applicable income tax effect - - - (0.01) (0.01)
Gain (loss) on sale of foreclosed properties (0.06) (0.01) - (0.09) (0.05)
Applicable income tax effect 0.02 - - 0.03 0.02
Other-than-temporary impairment of securities - - - - (0.01)
Applicable income tax effect - - - - -
Fraud loss (0.05) (0.01) - (0.05) -
Applicable income tax effect 0.02 - - 0.02 -
Write-downs of foreclosed properties (0.03) (0.16) (0.07) (0.39) (0.39)
Applicable income tax effect 0.01 0.06 0.03 0.14 0.14
(0.08) (0.11) (0.03) (0.33) (0.28)
GAAP diluted earnings per common share $ 0.32 $ 0.34 $ 0.29 $ 1.17 $ 0.84
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
For the Quarter Ended For the Years Ended
Dollars in thousands 12/31/2014 9/30/2014 12/31/2013 12/31/2014 12/31/2013
Total core revenue $ 13,624 $ 13,862 $ 12,775 $ 53,396 $ 49,890
Realized securities gains/(losses) 149 128 124 213 240
Other-than-temporary impairment of securities - - - (1) (118)
149 128 124 212 122
GAAP total revenue $ 13,773 $ 13,990 $ 12,899 $ 53,608 $ 50,012
Total core noninterest income $ 2,673 $ 2,785 $ 2,772 $ 11,011 $ 11,087
Realized securities gains/(losses) 149 128 124 213 240
Other-than-temporary impairment of securities - - - (1) (118)
149 128 124 212 122
GAAP total noninterest income $ 2,822 $ 2,913 $ 2,896 $ 11,223 $ 11,209
Total core noninterest expense $ 7,721 $ 7,535 $ 7,809 $ 30,726 $ 30,516
Fraud loss 461 - - 461 -
(Gains)/losses on sales of foreclosed properties 628 70 (28) 827 518
Write-downs of foreclosed properties 300 1,580 644 3,771 3,722
1,389 1,650 616 5,059 4,240
GAAP total noninterest expense $ 9,110 $ 9,185 $ 8,425 $ 35,785 $ 34,756

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

Source:Summit Financial Group, Inc.