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Summit Financial Group Reports Fourth Quarter and Full Year 2016 Results

Q4 2016 Diluted EPS $0.44 compared to $0.39 for Q4 2015 and $0.40 for Q3 2016; Full year 2016 Diluted EPS $1.61 compared to $1.50 for 2015

MOOREFIELD, W. Va., Jan. 30, 2017 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ:SMMF) today reported fourth quarter 2016 net income of $4.71 million, or $0.44 per diluted share, compared to $4.15 million, or $0.39 per diluted share, for the fourth quarter of 2015, representing an increase of 13.6 percent, or 12.8 percent per diluted share.

For the year ended December 31, 2016, Summit recorded net income of $17.30 million, or $1.61 per diluted share, compared with $16.10 million, or $1.50 per diluted share for 2015, representing an increase of 7.4 percent, or 7.3 percent per diluted share.

On October 1, 2016, Summit completed its acquisition of Highland County Bankshares, Inc. (“HCB”) and its subsidiary, First & Citizens Bank, headquartered in Monterey, Virginia. Accordingly, HCB’s results of operations are included in Summit’s consolidated results of operation from the date of acquisition, and therefore Summit’s fourth quarter and full-year 2016 results reflect increased levels of average balances, income and expense compared to its fourth quarter and full-year 2015 results. At consummation, HCB had total assets of $122.8 million, loans of $60.8 million, and deposits of $106.9 million. In addition, our merger related expenses totaled $933,000 in 2016, with $588,000 of those expenses incurred during fourth quarter 2016.

Q4 2016 versus Q4 2015

  • Net interest earnings increased $1.72 million, or 14.7 percent;
  • Gains realized on sales of securities declined from $421,000 in Q4 2015 to $291,000 in Q4 2016;
  • Write-downs of foreclosed properties were $165,000 in Q4 2016 compared to $636,000 during Q4 2015;
  • Personnel costs increased 17.2 percent, or $778,000 in Q4 2016;
  • Recognized $487,000 net gain on insurance proceeds in excess of related flood losses during Q4 2016; and
  • Merger related expenses of $588,000 were incurred during Q4 2016, while there were none in Q4 2015.

FY 2016 versus FY 2015

  • Net interest earnings increased 6.5 percent, or $2.99 million;
  • Provision for loan losses declined to $500,000 for 2016 compared to $1.25 million during 2015;
  • Higher personnel costs, reaching $19.57 million during 2016 compared to $17.64 million for 2015;
  • Merger related expenses of $933,000 were incurred during 2016, while none were recognized in 2015;
  • Recognized $320,000 net gain on insurance proceeds in excess of related flood losses in 2016;
  • Gains on sales of foreclosed properties totaled $916,000 during 2016 compared to $26,000 during 2015; and
  • Write-downs of foreclosed properties declined to $668,000 for 2016 compared to $2.42 million for 2015.

Fourth Quarter 2016 Highlights

  • Summit completed its acquisition of HCB on October 1, 2016, and converted substantially its data processing systems to that of Summit’s effective December 5, 2016;
  • Our pending acquisition of First Century Bankshares, Inc. (“FCB”) was approved by FCB’s shareholders on December 6, 2016. All requisite regulatory approvals relative to this transaction were previously received, and it is expected to close at the beginning of second quarter 2017;
  • Total revenues increased 11.3 percent compared to the linked quarter and 12.7 percent compared to the year ago quarter;
  • Loans, excluding mortgage warehouse lines of credit and HCB’s purchased loan portfolio, grew $35.5 million during the quarter, or 12.5 percent (on an annualized basis), and grew $81.9 million, or 7.5 percent in 2016;
  • Nonperforming assets as a percentage of total assets declined for the seventeenth consecutive quarter to 2.22 percent compared to 2.36 percent for the linked quarter, reaching its lowest level since Q2 2008;
  • Net interest margin declined 17 basis points since Q4 2015, but increased 2 basis points compared to the linked quarter; and
  • Recorded charges of $165,000 to write-down foreclosed properties compared to $134,000 in Q3 2016 and $636,000 in Q4 2015.

H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, “I am very pleased to report that Summit achieved record quarterly earnings in the quarter just ended and record annual earnings in 2016. Further, I am particularly gratified by our revenue growth during 2016 which resulted principally from our continued robust lending activity and our recent acquisition of Highland County Bankshares. Our pending acquisition of First Century Bankshares has received all approvals and is expected to close in early Q2 2017. This acquisition combined with our recent Highland County purchase – that is already positively impacting our bottom line -- represent significant opportunities for us. The combination of Summit and these two financially strong institutions which have similar cultures and core values as ours should contribute significantly towards our goal of being a consistent, high-performing community banking institution and gives us optimism as we look forward to 2017 and beyond.”

Results from Operations

Total revenue for fourth quarter 2016, consisting of net interest income and noninterest income, grew 12.7 percent to $16.5 million compared to $14.6 million for the fourth quarter 2015. For the annual period ended December 31, 2016, total revenue was $60.6 million compared to $57.9 million for 2015, representing a 4.7 percent increase.

For the fourth quarter of 2016, net interest income was $13.5 million, an increase of 14.7 percent from the $11.7 million reported in the prior-year fourth quarter and increased $1.4 million compared to the linked quarter. The net interest margin for fourth quarter 2016 was 3.34 percent compared to 3.51 percent for the year-ago quarter, and 3.32 percent for the linked quarter. Summit recognized net accretion income totaling $66,000 in Q4 2016 related to HCB’s loan fair value acquisition accounting adjustments.

Noninterest income, consisting primarily of insurance commissions from Summit's insurance agency subsidiary and service fee income from community banking activities, for fourth quarter 2016 was $3.00 million compared to $2.87 million for the comparable period of 2015. Excluding realized securities gains, noninterest income was $2.71 million for fourth quarter 2016, compared to $2.45 million reported for fourth quarter 2015.

We recorded no provision for loan losses during fourth quarter 2016, compared to $250,000 for the year-ago quarter.

Noninterest expense continues to be well-controlled. Total noninterest expense increased 10.6 percent to $9.39 million compared to $8.49 million for the prior-year fourth quarter. Noninterest expense for the year 2016 increased 3.5 percent compared to 2015.

Balance Sheet

At December 31, 2016, total assets were $1.76 billion, an increase of $266.2 million, or 17.8 percent since December 31, 2015. Total loans, net of unearned fees and allowance for loan losses, were $1.31 billion at December 31, 2016, up $228.5 million, or 21.2 percent, from the $1.08 billion reported at year-end 2015. Excluding mortgage warehouse lines of credit, net loans increased $142.6 million or 13.2 percent since year-end 2015.

At December 31, 2016, deposits were $1.30 billion, an increase of $228.8 million, or 21.5 percent, since year end 2015. During 2016, checking deposits increased by $77.6 million or 23.2 percent, time deposits increased by $80.7 million or 17.3 percent, and savings deposits increased by $70.5 million or 26.4 percent.

Asset Quality

As of December 31, 2016, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $39.1 million, or 2.22 percent of assets. This compares to $39.2 million, or 2.36 percent of assets at the linked quarter, and $41.3 million, or 2.77 percent of assets, at fourth quarter 2015.

Fourth quarter 2016 net loan charge-off recoveries were $56,000, or 0.02 percent of average loans annualized; with no provision for loan losses. The allowance for loan losses stood at $11.7 million, or 0.88 percent of total loans at December 31, 2016, compared to 1.05 percent at year-end 2015.

Capital Adequacy

Shareholders’ equity was $155.4 million as of December 31, 2016 compared to $143.7 million at December 31, 2015. Tangible book value per common share increased to $13.20 at December 31, 2016 compared to $12.78 at December 31, 2015. Summit had 10,736,970 outstanding common shares at year end 2016 compared to 10,671,744 at year end 2015.

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, 2016. The Bank’s total risk-based capital ratio was 12.7 percent at December 31, 2016 compared to 14.5 percent at December 31, 2015, while its Tier 1 leverage capital ratio was 9.5 percent at December 31, 2016 compared to the 10.8 percent reported at December 31, 2015.

About the Company

Summit Financial Group, Inc. is a $1.76 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 eighteen 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 -- Q4 2016 vs Q4 2015
For the Quarter Ended Percent
Dollars in thousands 12/31/201612/31/2015 Change
Condensed Statements of Income
Interest income
Loans, including fees$15,780 $13,265 19.0%
Securities 1,796 1,685 6.6%
Other 161 1 n/a
Total interest income 17,737 14,951 18.6%
Interest expense
Deposits 2,430 2,085 16.5%
Borrowings 1,850 1,133 63.3%
Total interest expense 4,280 3,218 33.0%
Net interest income 13,457 11,733 14.7%
Provision for loan losses - 250 -100.0%
Net interest income after provision
for loan losses 13,457 11,483 17.2%
Noninterest income
Insurance commissions 992 851 16.6%
Service fees related to deposit accounts 1,194 1,126 6.0%
Realized securities gains 291 421 -30.9%
Other income 521 471 10.6%
Total noninterest income 2,998 2,869 4.5%
Noninterest expense
Salaries and employee benefits 5,308 4,530 17.2%
Net occupancy expense 522 481 8.5%
Equipment expense 700 617 13.5%
Professional fees 344 507 -32.1%
Amortization of intangibles 97 50 94.0%
FDIC premiums 75 270 -72.2%
Merger expense 588 - n/a
Foreclosed properties expense 97 150 -35.3%
Loss (gain) on sales of foreclosed properties (465) (314)48.1%
Write-downs of foreclosed properties 165 636 -74.1%
Other expenses 1,961 1,567 25.1%
Total noninterest expense 9,392 8,494 10.6%
Income before income taxes 7,063 5,858 20.6%
Income taxes 2,353 1,712 37.4%
Net income$4,710 $4,146 13.6%


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q4 2016 vs Q4 2015
For the Quarter Ended Percent
12/31/201612/31/2015 Change
Per Share Data
Earnings per common share
Basic$0.44 $0.39 12.8%
Diluted$0.44 $0.39 12.8%
Cash dividends$0.10 $0.08 25.0%
Average common shares outstanding
Basic 10,710,164 10,661,700 0.5%
Diluted 10,762,445 10,669,192 0.9%
Common shares outstanding at period end 10,736,970 10,671,744 0.6%
Performance Ratios
Return on average equity 12.22% 11.66%4.8%
Return on average tangible equity 13.42% 12.31%9.0%
Return on average assets 1.07% 1.12%-4.5%
Net interest margin 3.34% 3.51%-4.8%
Efficiency ratio (A) 56.67% 54.46%4.1%

NOTE (A) – 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 -- 2016 vs 2015
For the Year Ended Percent
Dollars in thousands 12/31/201612/31/2015 Change
Condensed Statements of Income
Interest income
Loans, including fees$56,980 $52,068 9.4%
Securities 6,938 6,808 1.9%
Other 173 7 n/a
Total interest income 64,091 58,883 8.8%
Interest expense
Deposits 8,964 8,336 7.5%
Borrowings 6,120 4,531 35.1%
Total interest expense 15,084 12,867 17.2%
Net interest income 49,007 46,016 6.5%
Provision for loan losses 500 1,250 -60.0%
Net interest income after provision
for loan losses 48,507 44,766 8.4%
Noninterest income
Insurance commissions 4,022 4,042 -0.5%
Service fees related to deposit accounts 4,370 4,285 2.0%
Realized securities gains 1,127 1,444 -22.0%
Other income 2,081 2,090 -0.4%
Total noninterest income 11,600 11,861 -2.2%
Noninterest expense
Salaries and employee benefits 19,573 17,638 11.0%
Net occupancy expense 2,098 1,964 6.8%
Equipment expense 2,759 2,294 20.3%
Amortization of intangibles 247 200 23.5%
Professional fees 1,515 1,616 -6.3%
FDIC premiums 875 1,220 -28.3%
Merger expense 933 - n/a
Foreclosed properties expense 414 684 -39.5%
Loss (gain) on sales of foreclosed properties (916) (26)n/a
Write-downs of foreclosed properties 668 2,415 -72.3%
Other expenses 6,636 5,627 17.9%
Total noninterest expense 34,802 33,632 3.5%
Income before income taxes 25,305 22,995 10.0%
Income taxes 8,008 6,893 16.2%
Net income$17,297 $16,102 7.4%


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Annual Performance Summary -- 2016 vs 2015
For the Year Ended Percent
12/31/201612/31/2015 Change
Per Share Data
Earnings per common share
Basic$1.62 $1.56 3.8%
Diluted$1.61 $1.50 7.3%
Cash dividends$0.40 $0.32 25.0%
Average common shares outstanding
Basic 10,689,224 10,295,434 3.8%
Diluted 10,716,871 10,715,275 0.0%
Common shares outstanding at period end 10,736,970 10,671,744 0.6%
Performance Ratios
Return on average equity 11.53% 11.62%-0.8%
Return on average tangible equity 12.27% 12.29%-0.2%
Return on average assets 1.08% 1.10%-1.8%
Net interest margin 3.39% 3.50%-3.1%
Efficiency ratio (A) 55.34% 52.17%6.1%

NOTE (A) – 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 12/31/20169/30/20166/30/20163/31/201612/31/2015
Condensed Statements of Income
Interest income
Loans, including fees $15,780 $14,142 $13,622 $13,436 $13,265
Securities 1,796 1,759 1,656 1,726 1,685
Other 161 5 5 3 1
Total interest income 17,737 15,906 15,283 15,165 14,951
Interest expense
Deposits 2,430 2,209 2,154 2,170 2,085
Borrowings 1,850 1,659 1,395 1,216 1,133
Total interest expense 4,280 3,868 3,549 3,386 3,218
Net interest income 13,457 12,038 11,734 11,779 11,733
Provision for loan losses - - 250 250 250
Net interest income after provision
for loan losses 13,457 12,038 11,484 11,529 11,483
Noninterest income
Insurance commissions 992 1,016 1,090 924 851
Service fees related to deposit accounts 1,194 1,138 1,059 978 1,126
Realized securities gains 291 61 383 393 421
Other income 521 534 513 511 471
Total noninterest income 2,998 2,749 3,045 2,806 2,869
Noninterest expense
Salaries and employee benefits 5,308 4,819 4,764 4,682 4,530
Net occupancy expense 522 525 512 540 481
Equipment expense 700 716 686 656 617
Professional fees 344 270 429 472 507
Amortization of intangibles 97 50 50 50 50
FDIC premiums 75 200 300 300 270
Merger expense 588 80 153 112 -
Foreclosed properties expense 97 100 93 124 150
Loss (gain) on sales of foreclosed properties (465) (168) (276) (6) (314)
Write-downs of foreclosed properties 165 134 259 109 636
Other expenses 1,961 1,693 1,467 1,515 1,567
Total noninterest expense 9,392 8,419 8,437 8,554 8,494
Income before income taxes 7,063 6,368 6,092 5,781 5,858
Income taxes 2,353 2,087 1,849 1,719 1,712
Net income $4,710 $4,281 $4,243 $4,062 $4,146

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary
For the Quarter Ended
12/31/20169/30/20166/30/20163/31/201612/31/2015
Per Share Data
Earnings per common share
Basic$0.44 $0.40 $0.40 $0.38 $0.39
Diluted$0.44 $0.40 $0.40 $0.38 $0.39
Cash dividends$0.10 $0.10 $0.10 $0.10 $0.08
Average common shares outstanding
Basic 10,710,164 10,692,423 10,681,995 10,671,856 10,661,700
Diluted 10,762,445 10,727,140 10,701,017 10,679,301 10,669,192
Common shares outstanding at period end 10,736,970 10,701,841 10,692,320 10,681,880 10,671,744
Performance Ratios
Return on average equity 12.22% 11.29% 11.49% 11.10% 11.66%
Return on average tangible equity 13.42% 11.86% 12.10% 11.70% 12.31%
Return on average assets 1.07% 1.08% 1.10% 1.08% 1.12%
Net interest margin 3.34% 3.32% 3.40% 3.50% 3.51%
Efficiency ratio (A) 56.67% 53.30% 55.35% 55.93% 54.46%

NOTE (A) – 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
Dollars in thousands, except per share amounts 12/31/20169/30/20166/30/20163/31/201612/31/2015
Assets
Cash and due from banks$ 4,262 $ 25,067 $ 4,161 $ 4,005 $ 3,625
Interest bearing deposits other banks 42,354 9,432 8,897 12,655 5,862
Securities 266,542 262,102 261,633 271,515 280,792
Loans, net 1,307,862 1,234,605 1,166,723 1,096,790 1,079,331
Property held for sale 24,504 24,767 23,425 24,684 25,567
Premises and equipment, net 23,737 21,802 21,405 21,589 21,572
Intangible assets 13,652 7,348 7,398 7,448 7,498
Cash surrender value of life insurance policies 39,143 38,504 38,246 37,989 37,732
Other assets 36,591 34,009 33,293 31,893 30,450
Total assets$ 1,758,647 $ 1,657,636 $ 1,565,181 $ 1,508,568 $ 1,492,429
Liabilities and Shareholders' Equity
Deposits$ 1,295,519 $ 1,156,785 $ 1,096,545 $ 1,094,544 $ 1,066,709
Short-term borrowings 224,461 234,657 205,552 153,448 171,394
Long-term borrowings and
subordinated debentures 66,259 93,735 94,214 94,692 95,170
Other liabilities 17,048 18,640 18,201 19,755 15,412
Shareholders' equity 155,360 153,819 150,669 146,129 143,744
Total liabilities and shareholders' equity$ 1,758,647 $ 1,657,636 $ 1,565,181 $ 1,508,568 $ 1,492,429
Book value per common share$ 14.47 $ 14.37 $ 14.09 $ 13.68 $ 13.48
Tangible book value per common share$ 13.20 $ 13.69 $ 13.40 $ 12.98 $ 12.78
Tangible common equity to tangible assets 8.1% 8.9% 9.2% 9.2% 9.2%


SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios
12/31/20169/30/2016 6/30/2016
3/31/2016
12/31/2015
Summit Financial Group, Inc.
CET1 Risk-based Capital10.5%11.1% 11.5% 11.9% 11.8%
Tier 1 Risk-based Capital11.8%12.4% 12.9% 13.5% 13.4%
Total Risk-based Capital12.6%13.3% 13.8% 14.5% 14.4%
Tier 1 Leverage Ratio9.4%10.4% 10.5% 10.7% 10.7%
Summit Community Bank, Inc.
CET1 Risk-based Capital11.9%12.5% 13.0% 13.6% 13.6%
Tier 1 Risk-based Capital11.9%12.5% 13.0% 13.6% 13.6%
Total Risk-based Capital12.7%13.4% 13.9% 14.5% 14.5%
Tier 1 Leverage Ratio9.5%10.5% 10.6% 10.7% 10.8%

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition
Dollars in thousands12/31/20169/30/20166/30/20163/31/201612/31/2015
Commercial $ 119,088 $ 110,466 $ 101,521 $ 101,743 $ 97,201
Mortgage warehouse lines 85,966 108,983 80,282 - -
Commercial real estate
Owner occupied 203,047 192,254 190,534 202,680 203,555
Non-owner occupied 381,921 367,196 348,099 353,350 337,295
Construction and development
Land and development 72,042 65,430 65,702 66,483 65,500
Construction 16,584 11,276 8,506 7,997 9,970
Residential real estate
Non-jumbo 265,641 228,777 225,919 221,368 221,749
Jumbo 65,628 57,276 52,105 50,057 50,313
Home equity 74,596 75,161 75,904 74,097 74,300
Consumer 25,534 19,756 19,520 19,095 19,251
Other 9,489 9,649 10,008 11,235 11,669
Total loans, net of unearned fees 1,319,536 1,246,224 1,178,100 1,108,105 1,090,803
Less allowance for loan losses 11,674 11,619 11,377 11,315 11,472
Loans, net$ 1,307,862 $ 1,234,605 $ 1,166,723 $ 1,096,790 $ 1,079,331

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition
Dollars in thousands 12/31/20169/30/20166/30/20163/31/201612/31/2015
Non interest bearing checking$ 149,737 $ 122,652 $ 120,845 $ 122,378 $ 119,010
Interest bearing checking 262,591 212,172 205,095 210,878 215,721
Savings 337,348 321,563 306,785 286,695 266,825
Time deposits 545,843 500,398 463,820 474,593 465,153
Total deposits$ 1,295,519 $ 1,156,785 $ 1,096,545 $ 1,094,544 $ 1,066,709

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Asset Quality Information
For the Quarter Ended
Dollars in thousands 12/31/20169/30/20166/30/20163/31/201612/31/2015
Gross loan charge-offs $ 400 $ 331 $ 263 $ 561 $ 132
Gross loan recoveries (456) (573) (75) (154) (126)
Net loan charge-offs (recoveries) $ (56) $ (242) $ 188 $ 407 $ 6
Net loan charge-offs to average loans (annualized) -0.02% -0.09% 0.07% 0.15% 0.00%
Allowance for loan losses $ 11,674 $ 11,619 $ 11,377 $ 11,315 $ 11,472
Allowance for loan losses as a percentage
of period end loans 0.88% 0.93% 0.97% 1.02% 1.05%
Nonperforming assets:
Nonperforming loans
Commercial $ 298 $ 846 $ 399 $ 430 $ 853
Commercial real estate 4,844 4,867 5,773 6,140 5,955
Residential construction and development 4,465 4,360 5,400 5,467 5,623
Residential real estate 4,815 4,174 3,531 3,248 3,245
Consumer 152 169 91 121 92
Total nonperforming loans 14,574 14,416 15,194 15,406 15,768
Foreclosed properties
Commercial real estate 1,749 1,749 976 976 1,300
Commercial construction and development 8,610 8,664 8,708 8,717 8,717
Residential construction and development 13,265 13,741 12,989 13,808 14,068
Residential real estate 880 613 752 1,183 1,482
Total foreclosed properties 24,504 24,767 23,425 24,684 25,567
Other repossessed assets 12 12 38 - 5
Total nonperforming assets $ 39,090 $ 39,195 $ 38,657 $ 40,090 $ 41,340
Nonperforming loans to period end loans 1.10% 1.16% 1.29% 1.39% 1.45%
Nonperforming assets to period end assets 2.22% 2.36% 2.47% 2.66% 2.77%
Troubled debt restructurings
Performing $ 28,066 $ 28,287 $ 27,750 $ 29,452 $ 29,473
Nonperforming 564 863 2,133 897 1,051
Total troubled debt restructurings $ 28,630 $ 29,150 $ 29,883 $ 30,349 $ 30,524


Loans Past Due 30-89 Days
For the Quarter Ended
In thousands 12/31/20169/30/20166/30/20163/31/201612/31/2015
Commercial $ 175 $ 405 $ 422 $ 465 $ 339
Commercial real estate 434 626 214 920 543
Construction and development 552 235 520 218 1,182
Residential real estate 5,517 2,941 4,763 3,055 4,442
Consumer 375 144 177 73 186
Other 14 13 12 14 9
Total $ 7,067 $ 4,364 $ 6,108 $ 4,745 $ 6,701


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q4 2016 vs Q4 2015
Q4 2016 Q4 2015
AverageEarnings /Yield / AverageEarnings /Yield /
Dollars in thousandsBalancesExpenseRate BalancesExpenseRate
ASSETS
Interest earning assets
Loans, net of unearned interest
Taxable$ 1,308,418 $ 15,650 4.76% $ 1,064,491 $ 13,111 4.89%
Tax-exempt 13,845 195 5.60% 16,393 232 5.61%
Securities
Taxable 191,951 1,111 2.30% 202,417 1,027 2.01%
Tax-exempt 89,745 1,039 4.61% 82,013 997 4.82%
Interest bearing deposits other banks
and Federal funds sold 49,341 161 1.30% 7,345 1 0.05%
Total interest earning assets 1,653,300 18,156 4.37% 1,372,659 15,368 4.44%
Noninterest earning assets
Cash & due from banks 4,650 3,828
Premises & equipment 23,616 21,701
Other assets 96,165 91,596
Allowance for loan losses (11,905) (11,370)
Total assets$ 1,765,826 $ 1,478,414
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits$ 256,307 $ 128 0.20% $ 215,315 $ 72 0.13%
Savings deposits 335,658 633 0.75% 262,557 474 0.72%
Time deposits 542,602 1,669 1.22% 469,249 1,539 1.30%
Short-term borrowings 221,200 954 1.72% 156,812 156 0.39%
Long-term borrowings and
subordinated debentures 85,699 896 4.16% 95,531 977 4.06%
Total interest bearing liabilities 1,441,466 4,280 1.18% 1,199,464 3,218 1.06%
Noninterest bearing liabilities
Demand deposits 150,318 119,785
Other liabilities 19,902 16,970
Total liabilities 1,611,686 1,336,219
Shareholders' equity - common 154,140 142,195
Total liabilities and
shareholders' equity$ 1,765,826 $ 1,478,414
NET INTEREST EARNINGS $ 13,876 $ 12,150
NET INTEREST MARGIN 3.34% 3.51%


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
YTD 2016 vs YTD 2015
YTD 2016 YTD 2015
AverageEarnings /Yield / AverageEarnings /Yield /
Dollars in thousandsBalancesExpenseRate BalancesExpenseRate
ASSETS
Interest earning assets
Loans, net of unearned interest
Taxable$1,177,445 $56,439 4.79% $1,049,172 $51,554 4.91%
Tax-exempt 14,628 820 5.61% 13,706 779 5.68%
Securities
Taxable 202,795 4,395 2.17% 209,316 4,328 2.07%
Tax-exempt 79,571 3,853 4.84% 77,280 3,756 4.86%
Interest bearing deposits other banks
and Federal funds sold 19,211 173 0.90% 8,878 8 0.09%
Total interest earning assets 1,493,650 65,680 4.40% 1,358,352 60,425 4.45%
Noninterest earning assets
Cash & due from banks 3,968 3,839
Premises & equipment 21,858 20,707
Other assets 90,957 94,996
Allowance for loan losses (10,836) (11,307)
Total assets$1,599,597 $1,466,587
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits$220,708 $376 0.17% $208,160 $251 0.12%
Savings deposits 306,312 2,296 0.75% 255,186 1,781 0.70%
Time deposits 491,652 6,292 1.28% 481,732 6,304 1.31%
Short-term borrowings 190,876 2,288 1.20% 151,102 525 0.35%
Long-term borrowings and
subordinated debentures 92,343 3,832 4.15% 99,805 4,007 4.01%
1,301,891 15,084 1.16% 1,195,985 12,868 1.08%
Noninterest bearing liabilities
Demand deposits 128,894 116,995
Other liabilities 18,795 15,024
Total liabilities 1,449,580 1,328,004
Shareholders' equity - preferred - 1,786
Shareholders' equity - common 150,017 136,797
Total liabilities and
shareholders' equity$1,599,597 $1,466,587
NET INTEREST EARNINGS $50,596 $47,557
NET INTEREST MARGIN 3.39% 3.50%


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

Source:Summit Financial Group, Inc.