Q4 2015 Diluted EPS $0.39 Compared to $0.32 for Q4 2014; Full Year 2015 Diluted EPS $1.50 Compared to $1.17 for 2014

MOOREFIELD, W. Va., Jan. 25, 2016 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ:SMMF) today reported fourth quarter 2015 net income applicable to common shares of $4.15 million, or $0.39 per diluted share, compared to $3.01 million, or $0.32 per diluted share, for the fourth quarter of 2014, representing an increase of 37.8 percent, or 21.9 percent per diluted share. Q4 2015 earnings compared to Q4 2014 were positively impacted by a $782,000 increase in net interest income and a $314,000 gain on sale of foreclosed properties, but were negatively impacted by a $336,000 increase in write-downs of foreclosed properties and a $250,000 provision for loan losses compared to zero for Q4 2014.

Excluding from fourth quarter 2015 (on a pre-tax basis) realized securities gains of $421,000, gains on sales of foreclosed properties of $314,000, write-downs of foreclosed properties of $636,000, Q4 2015 core earnings approximated $4.08 million, or $0.38 per diluted share. Excluding from Q4 2014 (on a pre-tax basis) realized securities gains of $149,000, losses on sales of foreclosed properties of $628,000, a $461,000 fraud loss, and write-downs of foreclosed properties of $300,000, Q4 2014 core earnings approximated $3.79 million, or $0.40 per diluted share.  Increased common shares outstanding resulting from common stock issuances during the past year accounted for the $0.02 decline in quarterly year-over-year core diluted earnings per share, despite the increase in earnings.

For the year ended December 31, 2015, Summit recorded net income applicable to common shares of $16.10 million, or $1.50 per diluted share, compared with $10.59 million, or $1.17 per diluted share, for 2014, representing an increase of 52.1%, or 28.2% per diluted share.

Excluding from the full-year 2015 nonrecurring items (on a pre-tax basis) comprised of realized securities gains of $1.44 million, gains on sales of foreclosed properties of $26,000, and write-downs of foreclosed properties of $2.42 million, and from the 2014 full year realized securities gains of $213,000, losses on sale of foreclosed properties of $827,000, a $461,000 fraud loss, and write-downs of foreclosed properties of $3.77 million, core earnings for full-year 2015 were approximately $16.70 million, or $1.56 per diluted share, compared to $13.64 million, or $1.50 per diluted share, for full-year 2014.

Highlights for Q4 2015 include:

• 2015 was the most profitable year in Summit’s history, with net income of $16.10 million, or $1.50 per diluted share. 
• Net interest margin increased 10 basis points compared to the linked quarter, and is 9 basis points higher than Q4 2014.
• Core revenues increased $255,000, or 1.8 percent (non-annualized) during Q4 2015, and $3.04 million, or 5.7 percent during 2015.
• Loan portfolio grew $17.2 million, or 1.6 percent (non-annualized) during Q4 2015, and $59.8 million, or 5.8 percent during 2015.
• Nonperforming assets as a percentage of total assets declined to 2.77 percent compared to 3.07 percent for the linked quarter, and 3.48 percent at year end 2014; foreclosed properties are at the lowest level since Q2 2009.
• Recorded charges of $636,000 to write-down foreclosed properties compared to $1.05 million in Q3 2015 and $300,000 in Q4 2014.

H. Charles Maddy III, President and Chief Executive Officer of Summit, commented, “The year just concluded marked a significant milestone towards Summit’s goal of being a consistent, high-performing community banking institution. Our improved earnings performance, increased return on assets and equity, growing loan portfolio, increasing revenues, improved net interest margin, strengthened capital, and continuing reductions in the portfolio of problem assets, all serve as evidence towards achievement of this goal. Further, we are very pleased to end 2015 with another exceptional quarter of solid performance, which gives us optimism as we look forward to 2016 and beyond.”

Results from Operations

Total revenue for fourth quarter 2015, consisting of net interest income and noninterest income, grew 6.0 percent to $14.6 million compared to $13.8 million for the fourth quarter 2014. For the year-to-date period ended December 31, 2015, total revenue was $57.9 million compared to $53.6 million for 2014, representing a 8.0 percent increase.

Total core revenue (excluding nonrecurring items, enumerated above) was $14.2 million for fourth quarter 2015 compared to $13.6 million for the same prior-year quarter, an increase of 4.1 percent.  For full-year 2015, total core revenue (excluding nonrecurring items) was $56.4 million compared to $53.4 million for full-year 2014, a 5.7 percent improvement.

For the fourth quarter of 2015, net interest income was $11.7 million, an increase of 7.1 percent from the $11.0 million reported in the prior-year fourth quarter and 3.8 percent or $428,000 more than the linked quarter. The net interest margin for fourth quarter 2015 was 3.51 percent compared to 3.42 percent for the year-ago quarter, and 3.41 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 2015 was $2.87 million compared to $2.82 million for the comparable period of 2014. Excluding realized securities gains/losses, noninterest income was $2.45 million for fourth quarter 2015, compared to $2.67 million reported for fourth quarter 2014.

Summit recognized $250,000 provision for loan losses in both the fourth quarter 2015, and the linked quarter, compared to none for the year-ago quarter.

Core noninterest expense continues to be well-controlled. Total noninterest expense decreased 6.8% to $8.49 million compared to $9.11 million for the prior-year fourth quarter. Excluding from noninterest expense (on a pre-tax basis) gains on sales of foreclosed properties of $314,000 in Q4 2015 and losses of $628,000 in Q4 2014, write-downs of foreclosed properties of $636,000 in Q4 2015 and $300,000 in Q4 2014, and a fraud loss in Q4 2014 of $461,000, noninterest expense would have approximated $8.17 million for Q4 2015 compared to $7.72 million for the comparable period of 2014.  Noninterest expense for the full-year 2015 decreased 4.8% compared to 2014.

Balance Sheet

At December 31, 2015, total assets were $1.49 billion, an increase of $48.9 million, or 3.4 percent since December 31, 2014. Total loans, net of unearned fees and allowance for loan losses, were $1.08 billion at December 31, 2015, up $59.5 million, or 5.8 percent, from the $1.02 billion reported at year-end 2014.

At December 31, 2015, deposits were $1.07 billion, an increase of $5.4 million, or 0.5 percent, since year end 2014. During 2015, checking and savings grew by $15.3 million and $13.2 million, respectively, or 4.8 percent and 5.2 percent, respectively. Long-term borrowings and subordinated debentures declined by 16.4 percent since year end 2014, as the Company prepaid $16.8 million in subordinated debentures, which was funded primarily by short-term borrowings.

Asset Quality

As of December 31, 2015, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $41.3 million, or 2.77 percent of assets. This compares to $45.2 million, or 3.07 percent of assets at the linked quarter, and $50.2 million, or 3.48 percent of assets, at fourth quarter 2014.

Fourth quarter 2014 net loan charge-offs were $6,000, or 0.00 percent of average loans annualized. The allowance for loan losses stood at $11.5 million, or 1.05 percent of total loans at December 31, 2015, compared to 1.08 percent at year-end 2014.

Capital Adequacy

Shareholders’ equity was $143.7 million as of December 31, 2015 compared to $131.6 million December 31, 2014. Tangible book value per common share increased to $12.78 at December 31, 2015 compared to $11.86 at December 31, 2014.

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, 2015. The Bank’s total risk-based capital ratio was 14.5 percent at December 31, 2015 compared to 15.3 percent at December 31, 2014, while its Tier 1 leverage capital ratio improved to 10.8 percent from the 10.6 percent reported at December 31, 2014.

About the Company

Summit Financial Group, Inc. is a $1.49 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 2015 vs Q4 2014
		For the Quarter Ended						Percent
Dollars in thousands		12/31/2015			12/31/2014			Change
Condensed Statements of Income
	Interest income
	Loans, including fees	$	13,265		$	12,666			4.7	%
	Securities		1,685			1,784			-5.5	%
	Other		1			2			-50.0	%
	Total interest income		14,951			14,452			3.5	%
	Interest expense
	Deposits		2,085			2,130			-2.1	%
	Borrowings		1,133			1,371			-17.4	%
	Total interest expense		3,218			3,501			-8.1	%
	Net interest income		11,733			10,951			7.1	%
	Provision for loan losses		250			-		n/a
	Net interest income after provision
	for loan losses		11,483			10,951			4.9	%
	Noninterest income
	Insurance commissions		851			1,023			-16.8	%
	Service fees related to deposit accounts		1,126			1,113			1.2	%
	Realized securities gains (losses)		421			149			182.6	%
	Other income		471			537			-12.3	%
	Total noninterest income		2,869			2,822			1.7	%
	Noninterest expense
	Salaries and employee benefits		4,530			4,133			9.6	%
	Net occupancy expense		481			495			-2.8	%
	Equipment expense		617			487			26.7	%
	Professional fees		507			452			12.2	%
	FDIC premiums		270			315			-14.3	%
	Foreclosed properties expense		150			239			-37.2	%
	Loss (gain) on sales of foreclosed properties		(314	)		628			-150.0	%
	Write-downs of foreclosed properties		636			300			112.0	%
	Other expenses		1,617			2,061			-21.5	%
	Total noninterest expense		8,494			9,110			-6.8	%
	Income before income taxes		5,858			4,663			25.6	%
	Income taxes		1,712			1,464			16.9	%
	Net income		4,146			3,199			29.6	%
	Preferred stock dividends		-			191			-100.0	%
	Net income applicable to common shares	$	4,146		$	3,008			37.8	%

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)
Quarterly Performance Summary -- Q4 2015 vs Q4 2014
		For the Quarter Ended						Percent
		12/31/2015			12/31/2014			Change
Per Share Data
	Earnings per common share
	Basic	$	0.39		$	0.39			0.0	%
	Diluted	$	0.39		$	0.32			21.9	%
	Cash dividends	$	0.08		$	-		n/a
	Average common shares outstanding
	Basic		10,661,700			7,796,508			36.7	%
	Diluted		10,669,192			9,963,214			7.1	%
	Common shares outstanding at period end		10,671,744			8,301,746			28.5	%
Performance Ratios
	Return on average equity		11.66	%		10.10	%		15.4	%
	Return on average tangible equity		12.31	%		10.76	%		14.4	%
	Return on average assets		1.12	%		0.89	%		25.8	%
	Net interest margin		3.51	%		3.42	%		2.6	%
	Efficiency ratio (A)		54.46	%		53.07	%		2.6	%

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 -- 2015 vs 2014
		For the Years Ended						Percent
Dollars in thousands		12/31/2015			12/31/2014			Change
Condensed Statements of Income
	Interest income
	Loans, including fees	$	52,068		$	50,430			3.2	%
	Securities		6,808			7,188			-5.3	%
	Other		7			8			-12.5	%
	Total interest income		58,883			57,626			2.2	%
	Interest expense
	Deposits		8,336			8,995			-7.3	%
	Borrowings		4,531			6,246			-27.5	%
	Total interest expense		12,867			15,241			-15.6	%
	Net interest income		46,016			42,385			8.6	%
	Provision for loan losses		1,250			2,250			-44.4	%
	Net interest income after provision
	for loan losses		44,766			40,135			11.5	%
	Noninterest income
	Insurance commissions		4,042			4,400			-8.1	%
	Service fees related to deposit accounts		4,285			4,405			-2.7	%
	Realized securities gains		1,444			213			577.9	%
	Other-than-temporary impairment of securities		-			(1	)		-100.0	%
	Other income		2,090			2,206			-5.3	%
	Total noninterest income		11,861			11,223			5.7	%
	Noninterest expense
	Salaries and employee benefits		17,638			16,185			9.0	%
	Net occupancy expense		1,964			2,023			-2.9	%
	Equipment expense		2,294			2,086			10.0	%
	Professional fees		1,616			1,429			13.1	%
	FDIC premiums		1,220			1,792			-31.9	%
	Foreclosed properties expense		684			1,020			-32.9	%
	Loss (gain) on sales of foreclosed properties		(26	)		827			-103.1	%
	Write-downs of foreclosed properties		2,415			3,771			-36.0	%
	Other expenses		5,827			6,191			-5.9	%
	Total noninterest expense		33,632			35,324			-4.8	%
	Income before income taxes		22,995			16,034			43.4	%
	Income taxes		6,893			4,678			47.3	%
	Net income		16,102			11,356			41.8	%
	Preferred stock dividends		-			771			-100.0	%
	Net income applicable to common shares	$	16,102		$	10,585			52.1	%

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)
Annual Performance Summary -- 2015 vs 2014
		For the Years Ended						Percent
		12/31/2015			12/31/2014			Change
Per Share Data
	Earnings per common share
	Basic	$	1.56		$	1.40			11.4	%
	Diluted	$	1.50		$	1.17			28.2	%
	Cash dividends	$	0.32		$	-		n/a
	Average common shares outstanding
	Basic		10,295,434			7,539,444			36.6	%
	Diluted		10,715,275			9,711,561			10.3	%
	Common shares outstanding at period end		10,671,744			8,301,746			28.5	%
Performance Ratios
	Return on average equity		11.62	%		9.54	%		21.8	%
	Return on average tangible equity		12.29	%		10.22	%		20.3	%
	Return on average assets		1.10	%		0.80	%		37.5	%
	Net interest margin		3.50	%		3.39	%		3.2	%
	Efficiency ratio (A)		52.17	%		52.78	%		-1.2	%

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		12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Condensed Statements of Income
	Interest income
	Loans, including fees	$	13,265		$	12,983		$	12,972		$	12,848		$	12,666
	Securities		1,685			1,543			1,685			1,894			1,784
	Other		1			5			1			1			2
	Total interest income		14,951			14,531			14,658			14,743			14,452
	Interest expense
	Deposits		2,085			2,106			2,074			2,071			2,130
	Borrowings		1,133			1,120			1,126			1,152			1,371
	Total interest expense		3,218			3,226			3,200			3,223			3,501
	Net interest income		11,733			11,305			11,458			11,520			10,951
	Provision for loan losses		250			250			500			250			-
	Net interest income after provision
	for loan losses		11,483			11,055			10,958			11,270			10,951
	Noninterest income
	Insurance commissions		851			983			1,080			1,128			1,023
	Service fees related to deposit accounts		1,126			1,111			1,072			976			1,113
	Realized securities gains (losses)		421			372			170			480			149
	Other income		471			527			538			555			537
	Total noninterest income		2,869			2,993			2,860			3,139			2,822
	Noninterest expense
	Salaries and employee benefits		4,530			4,479			4,442			4,187			4,133
	Net occupancy expense		481			496			489			498			495
	Equipment expense		617			582			560			535			487
	Professional fees		507			402			372			335			452
	FDIC premiums		270			300			320			330			315
	Foreclosed properties expense		150			168			158			208			239
	Loss (gain) on sales of foreclosed properties		(314	)		35			103			150			628
	Write-downs of foreclosed properties		636			1,046			160			572			300
	Other expenses		1,617			1,364			1,457			1,389			2,061
	Total noninterest expense		8,494			8,872			8,061			8,204			9,110
	Income before income taxes		5,858			5,176			5,757			6,205			4,663
	Income taxes		1,712			1,515			1,747			1,920			1,464
	Net income		4,146			3,661			4,010			4,285			3,199
	Preferred stock dividends		-			-			-			-			191
	Net income applicable to common shares	$	4,146		$	3,661		$	4,010		$	4,285		$	3,008

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)
Five Quarter Performance Summary
		For the Quarter Ended
		12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Per Share Data
	Earnings per common share
	Basic	$	0.39		$	0.34		$	0.38		$	0.49		$	0.39
	Diluted	$	0.39		$	0.34		$	0.38		$	0.41		$	0.32
	Cash dividends	$	0.08		$	0.08		$	0.08		$	0.08		$	-
	Average common shares outstanding
	Basic		10,661,700			10,703,526			10,667,892			8,815,961			7,796,508
	Diluted		10,669,192			10,712,203			10,676,474			10,493,323			9,963,214
	Common shares outstanding at period end		10,671,744			10,658,199			10,843,676			10,586,242			8,301,746
Performance Ratios
	Return on average equity		11.66	%		10.42	%		11.67	%		12.79	%		10.10	%
	Return on average tangible equity		12.31	%		11.01	%		12.36	%		13.56	%		10.76	%
	Return on average assets		1.12	%		1.00	%		1.09	%		1.18	%		0.89	%
	Net interest margin		3.51	%		3.41	%		3.49	%		3.59	%		3.42	%
	Efficiency ratio (A)		54.46	%		52.93	%		52.05	%		49.27	%		53.07	%

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
		For the Quarter Ended
Dollars in thousands, except per share amounts		12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Assets
	Cash and due from banks	$	3,625		$	4,232		$	3,988		$	3,850		$	3,728
	Interest bearing deposits other banks		5,862			8,057			9,274			8,437			8,783
	Securities		280,792			272,127			276,661			282,135			282,834
	Loans, net		1,079,331			1,062,348			1,064,472			1,039,669			1,019,842
	Property held for sale		25,567			29,713			31,500			34,368			37,529
	Premises and equipment, net		21,572			20,457			20,490			20,208			20,060
	Intangible assets		7,498			7,548			7,598			7,648			7,698
	Cash surrender value of life insurance policies		37,732			37,482			37,222			36,961			36,700
	Other assets		30,450			27,340			28,764			27,216			26,394
	Total assets	$	1,492,429		$	1,469,304		$	1,479,969		$	1,460,492		$	1,443,568
Liabilities and Shareholders' Equity
	Deposits	$	1,066,709		$	1,072,091		$	1,053,310		$	1,058,308		$	1,061,314
	Short-term borrowings		171,394			145,291			174,599			148,985			123,633
	Long-term borrowings and
	subordinated debentures		95,170			95,648			98,625			101,602			113,879
	Other liabilities		15,412			15,985			13,363			15,708			13,098
	Shareholders' equity		143,744			140,289			140,072			135,889			131,644
	Total liabilities and shareholders' equity	$	1,492,429		$	1,469,304		$	1,479,969		$	1,460,492		$	1,443,568
	Book value per common share (A)	$	13.48		$	13.16		$	12.92		$	12.84		$	12.60
	Tangible book value per common share (A)	$	12.78		$	12.45		$	12.22		$	12.11		$	11.86
	Tangible equity to tangible assets		9.2	%		9.1	%		9.0	%		8.8	%		8.6	%
	Tangible common equity to tangible assets		9.2	%		9.1	%		9.0	%		8.8	%		8.0	%

NOTE (A) – Assumes conversion of convertible preferred stock

SUMMIT FINANCIAL GROUP INC. (NASDAQ:SMMF)
Regulatory Capital Ratios (A)
		12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Summit Financial Group, Inc.
	CET1 Risk-based Capital		11.8	%		11.7	%		11.6	%		11.3	%	n/a
	Tier 1 Risk-based Capital		13.4	%		13.4	%		13.2	%		13.0	%		13.3	%
	Total Risk-based Capital		14.4	%		14.4	%		14.2	%		14.0	%		14.9	%
	Tier 1 Leverage Ratio		10.7	%		10.5	%		10.4	%		10.1	%		9.9	%
Summit Community Bank, Inc.
	CET1 Risk-based Capital		13.6	%		13.6	%		13.4	%		13.5	%	n/a
	Tier 1 Risk-based Capital		13.6	%		13.6	%		13.4	%		13.5	%		14.2	%
	Total Risk-based Capital		14.5	%		14.6	%		14.4	%		14.5	%		15.3	%
	Tier 1 Leverage Ratio		10.8	%		10.7	%		10.6	%		10.5	%		10.6	%

 

NOTE (A) – Computed in accordance with Basel III regulatory capital guidelines beginning January 1, 2015

SUMMIT FINANCIAL GROUP INC. (NASDAQ:SMMF)
Loan Composition
Dollars in thousands		12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Commercial		$	97,201		$	89,250		$	97,284		$	89,928		$	88,590
Commercial real estate
Owner occupied			203,555			199,068			191,743			180,269			157,783
Non-owner occupied			337,295			336,550			331,056			325,764			317,136
Construction and development
Land and development			65,500			66,164			64,435			66,558			67,881
Construction			9,970			8,419			18,214			19,094			28,591
Residential real estate
Non-jumbo			221,749			222,739			220,199			219,938			220,071
Jumbo			50,313			46,092			49,203			50,492			52,879
Home equity			74,300			73,652			72,504			68,894			67,115
Consumer			19,251			19,124			18,683			18,485			19,456
Other			11,669			12,518			12,423			11,074			11,507
Total loans, net of unearned fees			1,090,803			1,073,576			1,075,744			1,050,496			1,031,009
Less allowance for loan losses			11,472			11,228			11,272			10,827			11,167
Loans, net		$	1,079,331		$	1,062,348		$	1,064,472		$	1,039,669		$	1,019,842

SUMMIT FINANCIAL GROUP INC. (NASDAQ:SMMF)
Deposit Composition
Dollars in thousands		12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
Non interest bearing checking		$	119,010		$	118,887		$	113,256		$	117,049		$	115,427
Interest bearing checking			215,721			217,242			202,957			196,606			204,030
Savings			266,825			259,185			246,949			257,687			253,578
Time deposits			465,153			476,777			490,148			486,966			488,279
Total deposits		$	1,066,709		$	1,072,091		$	1,053,310		$	1,058,308		$	1,061,314

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)
Asset Quality Information
		For the Quarter Ended
Dollars in thousands		12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
	Gross loan charge-offs	$	132		$	774		$	463		$	782		$	362
	Gross loan recoveries		(126	)		(481	)		(407	)		(192	)		(488	)
	Net loan charge-offs	$	6		$	293		$	56		$	590		$	(126	)
	Net loan charge-offs to average loans (annualized)		0.00	%		0.11	%		0.02	%		0.23	%		-0.05	%
	Allowance for loan losses	$	11,472		$	11,228		$	11,272		$	10,827		$	11,167
	Allowance for loan losses as a percentage
	of period end loans		1.05	%		1.05	%		1.05	%		1.03	%		1.08	%
	Nonperforming assets:
	Nonperforming loans
	Commercial	$	853		$	884		$	1,065		$	788		$	392
	Commercial real estate		5,955			5,294			2,421			1,340			1,844
	Commercial construction and development		-			-			-			-			-
	Residential construction and development		5,623			5,345			5,627			5,333			4,619
	Residential real estate		3,245			3,881			4,433			4,491			5,556
	Consumer		92			53			45			65			83
	Total nonperforming loans		15,768			15,457			13,591			12,017			12,494
	Foreclosed properties
	Commercial		-			-			-			110			110
	Commercial real estate		1,300			3,209			3,279			3,657			5,204
	Commercial construction and development		8,717			9,328			10,178			10,191			10,179
	Residential construction and development		14,068			14,965			15,839			17,590			19,267
	Residential real estate		1,482			2,211			2,204			2,819			2,769
	Total foreclosed properties		25,567			29,713			31,500			34,367			37,529
	Other repossessed assets		5			-			55			55			221
	Total nonperforming assets	$	41,340		$	45,170		$	45,146		$	46,439		$	50,244
	Nonperforming loans to period end loans		1.45	%		1.44	%		1.26	%		1.14	%		1.21	%
	Nonperforming assets to period end assets		2.77	%		3.07	%		3.05	%		3.18	%		3.48	%

 

Loans Past Due 30-89 Days
		For the Quarter Ended
In thousands		12/31/2015			9/30/2015			6/30/2015			3/31/2015			12/31/2014
	Commercial	$	339		$	42		$	344		$	387		$	382
	Commercial real estate		543			1,926			4,945			783			266
	Construction and development		1,182			39			21			2,735			2,278
	Residential real estate		4,442			3,888			3,932			3,614			7,413
	Consumer		186			216			211			148			269
	Other		9			9			7			18			14
	Total	$	6,701		$	6,120		$	9,460		$	7,685		$	10,622

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q4 2015 vs Q4 2014
	Q4 2015										Q4 2014
	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	$	1,064,491		$	13,111			4.89	%		$	1,006,641		$	12,562			4.95	%
Tax-exempt		16,393			232			5.61	%			9,488			158			6.61	%
Securities
Taxable		202,417			1,027			2.01	%			207,577			1,127			2.15	%
Tax-exempt		82,013			997			4.82	%			83,729			995			4.71	%
Interest bearing deposits other banks
and Federal funds sold		7,345			1			0.05	%			8,102			2			0.10	%
Total interest earning assets		1,372,659			15,368			4.44	%			1,315,537			14,844			4.48	%
Noninterest earning assets
Cash & due from banks		3,828										3,654
Premises & equipment		21,701										20,149
Other assets		91,596										107,467
Allowance for loan losses		(11,370	)									(11,239	)
Total assets	$	1,478,414									$	1,435,568
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits	$	215,315		$	72			0.13	%		$	199,932		$	60			0.12	%
Savings deposits		262,557			474			0.72	%			254,986			443			0.69	%
Time deposits		469,249			1,539			1.30	%			489,884			1,627			1.32	%
Short-term borrowings		156,812			156			0.39	%			124,001			97			0.31	%
Long-term borrowings and
subordinated debentures		95,531			977			4.06	%			114,533			1,274			4.41	%
Total interest bearing liabilities		1,199,464			3,218			1.06	%			1,183,336			3,501			1.17	%
Noninterest bearing liabilities
Demand deposits		119,785										113,926
Other liabilities		16,970										11,633
Total liabilities		1,336,219										1,308,895
Shareholders' equity - preferred		-										9,249
Shareholders' equity - common		142,195										117,424
Total liabilities and
shareholders' equity	$	1,478,414									$	1,435,568
NET INTEREST EARNINGS				$	12,150									$	11,343
NET INTEREST MARGIN								3.51	%									3.42	%

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
YTD 2015 vs YTD 2014
	YTD 2015										YTD 2014
	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	$	1,049,172		$	51,554			4.91	%		$	984,723		$	50,078			5.09	%
Tax-exempt		13,706			779			5.68	%			7,823			533			6.81	%
Securities
Taxable		209,316			4,328			2.07	%			211,700			4,692			2.22	%
Tax-exempt		77,280			3,756			4.86	%			81,549			3,780			4.64	%
Interest bearing deposits other banks
and Federal funds sold		8,878			8			0.09	%			9,325			8			0.09	%
Total interest earning assets		1,358,352			60,425			4.45	%			1,295,120			59,091			4.56	%
Noninterest earning assets
Cash & due from banks		3,839										3,756
Premises & equipment		20,707										20,346
Other assets		94,996										112,504
Allowance for loan losses		(11,307	)									(11,724	)
Total assets	$	1,466,587									$	1,420,002
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits	$	208,160		$	251			0.12	%		$	192,190		$	222			0.12	%
Savings deposits		255,186			1,781			0.70	%			238,340			1,580			0.66	%
Time deposits		481,732			6,304			1.31	%			513,110			7,193			1.40	%
Short-term borrowings		151,102			525			0.35	%			100,786			306			0.30	%
Long-term borrowings and
subordinated debentures		99,805			4,007			4.01	%			142,213			5,939			4.18	%
		1,195,985			12,868			1.08	%			1,186,639			15,240			1.28	%
Noninterest bearing liabilities
Demand deposits		116,995										104,262
Other liabilities		15,024										10,119
Total liabilities		1,328,004										1,301,020
Shareholders' equity - preferred		1,786										9,276
Shareholders' equity - common		136,797										109,706
Total liabilities and
shareholders' equity	$	1,466,587									$	1,420,002
NET INTEREST EARNINGS				$	47,557									$	43,851
NET INTEREST MARGIN								3.50	%									3.39	%

 

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	12/31/2015			9/30/2015			12/31/2014				12/31/2015			12/31/2014
Core earnings applicable to common shares	$	4,084		$	4,108		$	3,789			$	16,697		$	13,638
Realized securities gains (losses)		421			372			149				1,444			213
Applicable income tax effect		(156	)		(138	)		(55	)			(534	)		(79	)
Gain (loss) on sale of foreclosed properties		314			(35	)		(628	)			26			(827	)
Applicable income tax effect		(116	)		13			232				(10	)		306
Fraud loss		-			-			(461	)			-			(461	)
Applicable income tax effect		-			-			171				-			171
Write-downs foreclosed properties		(636	)		(1,046	)		(300	)			(2,415	)		(3,771	)
Applicable income tax effect		235			387			111				894			1,395
		62			(447	)		(781	)			(595	)		(3,053	)
GAAP net income applicable to common shares	$	4,146		$	3,661		$	3,008			$	16,102		$	10,585
Core diluted earnings per common share	$	0.38		$	0.38		$	0.40			$	1.56		$	1.50
Realized securities gains (losses)		0.04			-			0.01				0.13			0.02
Applicable income tax effect		(0.01	)		-			-				(0.05	)		(0.01	)
Gain (loss) on sale of foreclosed properties		0.03			0.03			(0.06	)			-			(0.09	)
Applicable income tax effect		(0.01	)		(0.01	)		0.02				-			0.03
Fraud loss		-			-			(0.05	)			-			(0.05	)
Applicable income tax effect		-			-			0.02				-			0.02
Write-downs of foreclosed properties		(0.06	)		(0.10	)		(0.03	)			(0.23	)		(0.39	)
Applicable income tax effect		0.02			0.04			0.01				0.09			0.14
		0.01			(0.04	)		(0.08	)			(0.06	)		(0.33	)
GAAP diluted earnings per common share	$	0.39		$	0.34		$	0.32			$	1.50		$	1.17

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	12/31/2015			9/30/2015			12/31/2014				12/31/2015			12/31/2014
Total core revenue	$	14,181		$	13,926		$	13,624			$	56,433		$	53,395
FHLB special dividend		-			-			-				176			-
Realized securities gains/(losses)		421			372			149				1,444			213
		421			372			149				1,444			213
GAAP total revenue	$	14,602		$	14,298		$	13,773			$	57,877		$	53,608
Total core noninterest income	$	2,448		$	2,621		$	2,673			$	10,417		$	11,010
Realized securities gains/(losses)		421			372			149				1,444			213
		421			372			149				1,444			213
GAAP total noninterest income	$	2,869		$	2,993		$	2,822			$	11,861		$	11,223
Total core noninterest expense	$	8,172		$	7,791		$	7,721			$	31,243		$	30,265
Fraud loss		-			-			461				-			461
(Gains)/losses on sales of foreclosed properties		(314	)		35			628				(26	)		827
Write-downs of foreclosed properties		636			1,046			300				2,415			3,771
		322			1,081			1,389				2,389			5,059
GAAP total noninterest expense	$	8,494		$	8,872		$	9,110			$	33,632		$	35,324

 

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

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