Summit State Bank Reports Net Income for First Quarter 2016 and Declaration of Dividend

SANTA ROSA, Calif., April 26, 2016 (GLOBE NEWSWIRE) -- Summit State Bank (Nasdaq:SSBI) today reported net income for the quarter ended March 31, 2016 of $1,328,000 and diluted earnings per share of $0.27. A quarterly dividend of $0.12 per share was declared for common shareholders.


The Board of Directors declared a $0.12 per share quarterly dividend to be paid on May 24, 2016 to shareholders of record on May 18, 2016.

Net Income and Results of Operations

“We continue to generate strong performance as a result of the high quality of our community banking team and their deep care of our local Sonoma County community. We are continuing to attract and expand full banking relationships by our hard earned reputation for providing the best customer service experience through The Summit Way brand of community banking. This has resulted in Summit being named The Best Company to do Business with in Sonoma County – Gold Medal Winner by the readers of Northbay Biz magazine,” said James Brush, President and CEO.

For the quarter ended March 31, 2016, Summit State Bank had net income available for common stockholders of $1,328,000 and diluted earnings per share of $0.27 compared to $1,688,000 in net income available for common stockholders, or $0.35 diluted earnings per share, for the same quarter in 2015.

The first quarter of 2016 included net securities gains of $133,000 which were realized when bonds in the Bank’s portfolio received early calls. The first quarter of 2015 included a gain on sale of foreclosed property of $1,125,000.

Annualized return on average assets for the first quarter of 2016 was 1.02% and annualized return on average equity was 9.2%. The Bank’s efficiency ratio was 57.7% and the net interest margin was 3.68% during the first quarter of 2016. The first quarter of 2015, with the benefit of the $1,125,000 gain on foreclosed property, had an annualized return on average assets of 1.51%, annualized return on average equity of 12.6%, efficiency ratio of 48.6% and net interest margin of 3.75%.

Net interest income increased 13% between the quarters to $4,703,000 in 2016 compared to $4,155,000 in the first quarter of 2015. The increase was primarily due to higher volume of loans which offset the decline in the net interest margin. Net loans increased to $360 million at March 31, 2016 compared to $292 million at March 31, 2015.

“We are experiencing nice loan activity in line with 2015 growth. This is due to our strong team’s well established reputation for providing excellent customer service with prompt turnaround to our expanding client base through our Summit Way culture and the current vibrant economy in Sonoma County. We are deeply committed to our local Sonoma County community and look forward to another great year of helping it flourish,” said Brandy Seppi, Chief Credit Officer and Executive Vice President.

Deposits increased 11% between March 31, 2016 and 2015, with the increase primarily in demand deposit accounts which increased 19% at March 31, 2016 over March 31, 2015.

Nonperforming assets increased to $2,690,000 and represented 0.52% of assets at March 31, 2016 compared to $1,631,000 or 0.34% at March 31, 2015. The increase was due to three loans added to nonperforming during the first quarter of 2016 which are secured by real property with adequate values.

Total assets at March 31, 2016 were $522 million, a 10% increase over the $474 million on March 31, 2015.

About Summit State Bank

Summit State Bank, a local community bank, has total assets of $522 million and total equity of $59 million at March 31, 2016. Headquartered in Sonoma County, the Bank specializes in providing exceptional customer service and customized financial solutions to aid in the success of local small businesses and nonprofits throughout Sonoma, Napa, San Francisco, and Marin Counties.

Summit State Bank’s workforce resembles the diverse community it serves. Presently, 80% of management are women and minorities with 50% represented on the Executive Management Team. Through the inclusion and engagement of its workforce, Summit State Bank has earned many prestigious awards including: Best Company to do Business with in Sonoma County by the Northbay Biz magazine; Best Places to Work in the North Bay by the North Bay Business Journal; Super Performing Bank by Findley Reports; and Top 75 Corporate Philanthropists in the San Francisco Bay Area by the San Francisco Business Times. Summit State Bank’s stock is traded on the Nasdaq Global Market under the symbol SSBI. Further information can be found at

Forward-looking Statements

Except for historical information contained herein, the statements contained in this news release, are forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, and competition within the business areas in which the Bank will be conducting its operations, including the real estate market in California and other factors beyond the Bank’s control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. You should not place undue reliance on the forward-looking statements, which reflect management’s view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

(In thousands except earnings per share data)
Three Months Ended
March 31, 2016 March 31, 2015
(Unaudited) (Unaudited)
Interest income:
Interest and fees on loans$4,111 $3,373
Interest on federal funds sold 2 1
Interest on investment securities and deposits in banks 867 956
Dividends on FHLB stock 54 48
Total interest income 5,034 4,378
Interest expense:
Deposits 239 179
FHLB advances 92 44
Total interest expense 331 223
Net interest income before provision for loan losses 4,703 4,155
Provision for loan losses - -
Net interest income after provision for loan losses 4,703 4,155
Non-interest income:
Service charges on deposit accounts 182 157
Rental income 138 133
Net securities gain 133 -
Net gain on other real estate owned - 1,125
Loan servicing, net 1 2
Other income - 126
Total non-interest income 454 1,543
Non-interest expense:
Salaries and employee benefits 1,587 1,412
Occupancy and equipment 265 309
Other expenses 1,046 1,047
Total non-interest expense 2,898 2,768
Income before provision for income taxes 2,259 2,930
Provision for income taxes 931 1,208
Net income$1,328 $1,722
Less: preferred dividends - 34
Net income available for common stockholders$1,328 $1,688
Basic earnings per common share$0.28 $0.35
Diluted earnings per common share$0.27 $0.35
Basic weighted average shares of common stock outstanding 4,784 4,782
Diluted weighted average shares of common stock outstanding 4,831 4,838

(In thousands except share and per share data)
March 31, 2016 December 31, 2015 March 31, 2015
(Unaudited) (Unaudited)
Cash and due from banks$21,127 $15,583 $22,421
Federal funds sold 2,000 2,000 2,000
Total cash and cash equivalents 23,127 17,583 24,421
Time deposits with banks 744 744 1,240
Investment securities:
Held-to-maturity, at amortized cost 5,989 5,988 6,981
Available-for-sale (at fair market value; amortized cost of $115,088,
$127,735 and $130,875) 116,966 128,599 133,483
Total investment securities 122,955 134,587 140,464
Loans, less allowance for loan losses of $4,735, $4,731 and 5,270 359,553 343,217 292,277
Bank premises and equipment, net 5,613 5,498 5,744
Investment in Federal Home Loan Bank stock, at cost 2,701 2,701 2,701
Goodwill 4,119 4,119 4,119
Other Real Estate Owned - - -
Accrued interest receivable and other assets 3,370 4,916 3,409
Total assets$522,182 $513,365 $474,375
Demand - non interest-bearing$110,193 $98,062 $72,987
Demand - interest-bearing 55,082 56,281 65,529
Savings 27,298 27,644 26,705
Money market 59,018 59,445 62,908
Time deposits that meet or exceed the FDIC insurance limit 52,793 53,953 54,160
Other time deposits 102,717 101,861 83,923
Total deposits 407,101 397,246 366,212
Federal Home Loan Bank advances 53,800 55,800 37,000
Accrued interest payable and other liabilities 2,703 2,994 1,627
Total liabilities 463,604 456,040 404,839
Shareholders' equity
Preferred stock, no par value; 20,000,000 shares authorized;
Series B shares issued and outstanding 0, 0 and 13,750;
per share redemption of $1,000 for total liquidation preference of $13,750 - - 13,666
Common stock, no par value; shares authorized - 30,000,000 shares; issued
and outstanding 4,793,061, 4,783,170 and 4,782,770 36,711 36,704 36,683
Retained earnings 20,874 20,120 17,674
Accumulated other comprehensive income 993 501 1,513
Total shareholders' equity 58,578 57,325 69,536
Total liabilities and shareholders' equity$522,182 $513,365 $474,375

Financial Summary
(In thousands except per share data)
At or for the
Three Months Ended
March 31, 2016 March 31, 2015
(Unaudited) (Unaudited)
Statement of Income Data:
Net interest income $4,703 $4,155
Provision for loan losses - -
Non-interest income 454 1,543
Non-interest expense 2,898 2,768
Provision for income taxes 931 1,208
Net income $1,328 $1,722
Less: preferred dividends - 34
Net income available for common stockholders $1,328 $1,688
Selected per Common Share Data:
Basic earnings per common share $0.28 $0.35
Diluted earnings per common share $0.27 $0.35
Dividend per share $0.12 $0.12
Book value per common share (2)(3) $12.22 $11.68
Selected Balance Sheet Data:
Assets $522,182 $474,375
Loans, net 359,553 292,277
Deposits 407,101 366,212
Average assets 522,255 463,475
Average earning assets 513,647 449,989
Average shareholders' equity 58,140 67,890
Average common shareholders' equity 58,140 54,224
Nonperforming loans 2,690 1,631
Other real estate owned - -
Total nonperforming assets 2,690 1,631
Troubled debt restructures (accruing) 3,491 3,562
Selected Ratios:
Return on average assets (1) 1.02% 1.51%
Return on average common equity (1) 9.19% 12.62%
Efficiency ratio (4) 57.68% 48.58%
Net interest margin (1) 3.68% 3.75%
Common equity tier 1 capital ratio 13.1% 14.3%
Tier 1 capital ratio 13.1% 18.2%
Total capital ratio 14.3% 19.4%
Tier 1 leverage ratio 10.3% 13.9%
Common dividend payout ratio (5) 43.22% 34.00%
Average equity to average assets 11.13% 14.65%
Nonperforming loans to total loans (2) 0.74% 0.55%
Nonperforming assets to total assets (2) 0.52% 0.34%
Allowance for loan losses to total loans (2) 1.30% 1.77%
Allowance for loan losses to nonperforming loans (2) 176.02% 323.16%

(1) Annualized
(2) As of period end
(3) Total shareholders' equity, less preferred stock, divided by total common shares outstanding
(4) Non-interest expenses to net interest and non-interest income, net of securities gains
(5) Common dividends divided by net income available for common stockholders

Contact: James Brush, President and CEO, Summit State Bank (707) 568-4920

Source:Summit State Bank