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Summit Financial Group Reports Fourth Quarter 2021 EPS of $0.95 on Continued Loan Growth and Record Net Interest Income, Total Revenue and Net Income

·24-min read
GlobeNewswire Inc.

MOOREFIELD, W.Va., Jan. 27, 2022 (GLOBE NEWSWIRE) -- Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported continued strong financial results for the fourth quarter of 2021, including growth in earnings, net interest income, revenue, and commercial and total loans to new record levels, while maintaining sustained asset quality strength and expense discipline.

The Company, which serves commercial and individual clients across West Virginia, the Washington metropolitan area, Virginia and Kentucky through Summit Community Bank, Inc., grew fourth quarter 2021 net income applicable to common shares to $12.4 million, or $0.95 per diluted share. Earnings increased 2.8 percent from $12.0 million, or $0.92 per diluted share, in the third quarter of 2021 and 20.5 percent from $10.3 million, or $0.79 per share, in the fourth quarter of 2020. For the year ended December 31, 2021, Summit grew earnings by 44.1 percent to $45.1 million, or $3.47 per share, from $31.3 million, or $2.41 per share in 2020.

“We believe we have some of the best bankers in the markets we serve, which has been key to our ability to accelerate organic loan growth through the fourth quarter and position us well with significant commercial new business pipelines heading into 2022,” said H. Charles Maddy, III, President and Chief Executive Officer. “We also continued to manage the balance sheet to maximize profitability while maintaining our low operating expense advantage relative to peers.”

Highlights for Q4 2021

  • Total loans, excluding mortgage warehouse lines of credit and Paycheck Protection Program (“PPP”) lending, increased 6.4 percent, or 25.7 percent annualized, during the quarter and 20.9 percent during the year.

  • Commercial loans excluding PPP lending increased 8.6 percent (34.4 percent annualized) during the quarter and 34.3 percent during 2021.

  • Net interest income increased 2.8 percent from the linked quarter and 10.0 percent from the year-ago period, primarily due to loan growth and lower funding costs.

  • Net interest margin (“NIM”) increased 2 basis points to 3.49 percent from the linked quarter, as yield on interest earning assets increased 3 basis points while the cost of funds increased 1 basis point. Summit remains strategically well positioned for a rising rate environment.

  • Revenue from net interest income and noninterest income, excluding gains and losses on debt securities and equity investments, grew 6.2 percent from the linked quarter and 11.7 percent from the year-ago quarter.

  • Incurred $1.5 million provision for credit losses in the quarter compared to none in the linked quarter and $3.0 million in the year-ago quarter; period-end allowance for loan credit losses equaled $32.3 million, or 1.17 percent of total loans and 254.4 percent of nonperforming loans.

  • Grew pre-tax, pre-provision earnings 10.5 percent from the linked quarter and 9.6 percent from the year-ago quarter.

  • Achieved an efficiency ratio of 49.04 percent and annualized non-interest expense of 2.02 percent of average assets.

  • Reduced property held for sale by 20.8 percent during the quarter and 36.8 percent from December 31, 2020.

  • Reduced nonperforming assets (“NPAs”) to 0.63 percent of total assets, excluding restructured assets, down 4 basis points during the quarter and 53 basis points from December 31, 2020.

  • Issued $75 million of growth capital through the private placement of 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031.

Results from Operations

Net interest income grew to $28.8 million in the fourth quarter of 2021, an increase of 2.8 percent from the linked quarter and 10.0 percent from the prior-year fourth quarter. NIM for fourth quarter of 2021 was 3.49 percent compared to 3.47 percent for the linked quarter and 3.76 percent for the year-ago quarter. Excluding the impact of accretion and amortization of fair value acquisition accounting adjustments, Summit’s net interest margin would have been 3.45 percent for the fourth quarter of 2021, 3.41 percent for the linked quarter and 3.70 percent for the year-ago period.

Noninterest income, consisting primarily of service fee income from community banking activities and trust and wealth management fees, for fourth quarter 2021 was $6.0 million compared to $4.6 million for the linked quarter and $5.8 million for the comparable period of 2020. The Company recorded realized securities losses on debt securities of $109,000 and $68,000 in the fourth quarter and linked quarter of 2021, respectively, and gains of $912,000 in the year-ago quarter. In addition, we recognized a gain on equity investments of $202,000 in Q4 2021.

Mortgage origination revenue was $1.4 million in the fourth quarter of 2021, including an $879,000 increase in the fair value of mortgage servicing rights, compared to $742,000 for the linked quarter and $1.2 million for the year-ago period, including a positive $284,000 mortgage servicing rights fair value adjustment. Year-to-date, mortgage origination revenue grew to $4.0 million, increasing 42.9 percent from 2020.

Excluding gains and losses on debt securities and equity investments and mortgage servicing rights fair value adjustments, noninterest income was $5.0 million in fourth quarter 2021 compared to $4.6 million in the linked quarter and $4.6 million in the year-ago quarter.

Revenue from net interest income and noninterest income, excluding gains and losses on debt securities and equity investments and mortgage servicing rights fair value adjustments, grew to $33.8 million, up 3.5 percent from $32.7 million in the linked quarter and 9.8 percent from $30.8 million in the year-ago quarter. Revenue, excluding gains and losses on debt securities and equity investments and mortgage servicing rights fair value adjustments, for the full year 2021, grew to $128.6 million, up 15.0 percent from 2020 and outpacing the 10.3 percent noninterest expense increase.

Total noninterest expense increased to $17.9 million in the fourth quarter of 2021, up 3.3 percent from $17.3 million in the linked quarter and 8.0 percent from $16.6 million for the prior-year fourth quarter, reflecting acquisition-related expenses primarily from Summit’s recently completed branch acquisitions, as well as ongoing operating costs for its December 2020 purchase of Kentucky’s WinFirst Bank.

Salary and benefit expenses of $9.0 million in the fourth quarter of 2021 increased from $8.7 million in the linked quarter, while acquisitions closed in December 2020 and July 2021 contributed to an increase from $8.3 million in the year-ago period.

Additionally, other significant factors contributing to the changes in total noninterest expense in the fourth quarter of 2021 were: equipment expense of $1.9 million compared to $1.9 million for the linked quarter and $1.5 million for the year-ago period, foreclosed properties expense of $403,000 compared to $370,000 in the linked quarter and $676,000 in the year-ago period, as well as other expenses of $3.3 million compared to $2.7 million for the linked quarter and $3.1 million in the year-ago period. The changes in these other expenses include:

  • Fraud and robbery losses of $190,000 during Q4 2021 compared to $36,000 and $86,000 in the linked and year-ago quarters, respectively;

  • Virginia franchise tax of $228,000 during Q4 2021 compared to $137,000 and $95,000 in the linked and year-ago quarters, respectively;

  • Debit card processing expenses of $340,000 during Q4 2021 compared to $343,000 and $259,000 in the linked and year-ago quarters, respectively; and

  • Internet banking expenses of $322,000 during Q4 2021 compared to $306,000 and $279,000 in the linked and year-ago quarters, respectively.

Summit’s efficiency ratio was 49.04 percent in the fourth quarter of 2021 compared to 49.53 percent in the linked quarter and 48.93 percent for the year-ago period. Non-interest expense was 2.02 percent of average assets in the fourth quarter of 2021, compared to 2.01 percent during the linked quarter and 2.22 percent in the year-ago period.

Balance Sheet

At December 31, 2021, total assets were $3.58 billion, an increase of $67.8 million, or 1.9 percent, during the fourth quarter and $470.3 million, or 15.1 percent since December 31, 2020.

Total loans net of unearned fees grew to $2.76 billion on December 31, 2021, increasing 8.1 percent during the fourth quarter and 14.5 percent year-to-date. Excluding PPP and mortgage warehouse lending, total loans grew to $2.52 billion on December 31, 2021, increasing 6.4 percent during the fourth quarter and 20.9 percent year-to-date.

Total commercial loans, including commercial and industrial (C&I) and commercial real estate (CRE) and excluding PPP lending, grew to $1.7 billion on December 31, 2021, increasing 8.6 percent during the fourth quarter and 34.3 percent year-to-date. Residential real estate and consumer lending totaled $567.9 million on December 31, 2021, down 0.5 percent during the fourth quarter and 7.7 percent year-to-date.

PPP balances paid down to $12.8 million on December 31, 2021 from a peak of $98.5 million on September 30, 2020. Mortgage warehouse lines of credit, sourced solely from a participation arrangement with a large regional bank, were $227.9 million on December 31, 2021 compared to a peak of $252.5 million on June 30, 2020.

As Summit deployed excess liquidity to enhance profitability and fund continued loan growth, it lowered total deposits to $2.94 billion on December 31, 2021, down 0.4 percent during the fourth quarter. Total deposits grew 13.4 percent year-to-date. Core deposits decreased to $2.85 billion on December 31, 2021 compared to the linked quarter, decreasing 0.4 percent during the fourth quarter and grew 15.9 percent year-to-date.

Total shareholders’ equity was $327.5 million as of December 31, 2021 compared to $323.3 million at September 30, 2021 and $281.6 million at December 31, 2020. During the fourth quarter of 2021, Summit raised $75 million of growth capital through the private placement of 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031.

Tangible book value per common share increased to $19.54 as of December 31, 2021 compared to $18.83 at September 30, 2021 and $17.50 at December 31, 2020. Summit had 12,743,125 outstanding common shares at the end of the fourth quarter of 2021 compared to 12,976,693 at the end of the linked quarter and 12,942,004 at year-end 2020.

As announced in the first quarter of 2020, the Board of Directors authorized the open market repurchase of up to 750,000 shares of the issued and outstanding shares of Summit's common stock. The timing and quantity of stock purchases under this repurchase plan are at the discretion of management. During the fourth quarter of 2021, 248,244 shares of Summit’s common stock were repurchased under the Plan at an average price of $26.95 per share.

Asset Quality

Net loan charge-offs (“NCOs”) were $193,000, or 0.03 percent of average loans annualized, in the fourth quarter of 2021. NCOs of $370,000 represented 0.06 percent of average loans annualized in the linked quarter, and $239,000 or 0.04 percent of average loans annualized for fourth quarter 2020.

Summit recorded $1.5 million provision for credit losses in the fourth quarter of 2021, reflecting reserve build to support our substantial growth in both loans and unfunded loan commitments, partially offset by reserve reductions due to improving forecasted economic factors. The provision for credit losses was zero and $3.0 million for the linked and year-ago quarters, respectively.

Summit’s allowance for loan credit losses and allowance for credit losses on unfunded loan commitments were $32.3 million and $7.28 million, respectively, as of December 31, 2021, compared to $32.4 million and $5.86 million, respectively, at the end of the linked quarter. The allowance for loan credit losses declined just slightly in Q4 2021 as the impact of improving forecasted economic factors served to offset fully the additional provisions for credit losses resulting from the significant volumes of new loans. The allowance for credit losses on unfunded loan commitments increased $1.42 million during the most recent quarter, principally as result of the recent strong volumes of construction loan commitments having a higher historical loss ratio than do our other loans as a whole.

The allowance for loan credit losses stood at 1.17 percent of total loans at year-end 2021 compared to1.27 percent at September 30, 2021 and 1.34 percent at December 31, 2020.

As of December 31, 2021, NPAs consisting of nonperforming loans, foreclosed properties and repossessed assets, totaled $22.6 million, or 0.63 percent of assets, compared to $23.6 million, or 0.67 percent of assets at the linked quarter-end and $35.9 million, or 1.16 percent of assets at the end 2020. During January 2022, we closed on the sale of a foreclosed residential land development project carried on the balance sheet at $2.00 million in property held for sale at year-end 2021 and realized a gain of $201,000 as a result of the sale.

About the Company

Summit Financial Group, Inc. is the $3.58 billion financial holding company for Summit Community Bank, Inc. Its talented bankers serve commercial and individual clients throughout West Virginia, the Washington, D.C. metropolitan area, Virginia, and Kentucky. Summit’s focus on in-market commercial lending and providing other business banking services in dynamic markets is designed to leverage its highly efficient operations and core deposits in strong legacy locations. Residential and consumer lending, trust and wealth management, and other retail financial services are offered through convenient digital and mobile banking platforms, including MySummit.Bank, and 45 full-service branch locations. More information on Summit Financial Group, Inc. (NASDAQ: SMMF), headquartered in West Virginia’s Eastern Panhandle in Moorefield, is available at SummitFGI.com.

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: the effect of the COVID-19 pandemic, including the negative impacts and disruptions on the communities we serve, and the domestic and global economy, which may have an adverse effect on our business; current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth; fiscal and monetary policies of the Federal Reserve; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; the successful integration of operations of our acquisitions; 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 (unaudited)

Q4 2021 vs Q4 2020

For the Quarter Ended

Percent

Dollars in thousands

12/31/2021

12/31/2020

Change

Statements of Income

Interest income

Loans, including fees

$

28,979

$

27,897

3.9

%

Securities

2,763

2,228

24.0

%

Other

75

51

47.1

%

Total interest income

31,817

30,176

5.4

%

Interest expense

Deposits

1,718

2,956

-41.9

%

Borrowings

1,267

1,014

25.0

%

Total interest expense

2,985

3,970

-24.8

%

Net interest income

28,832

26,206

10.0

%

Provision for credit losses

1,500

3,000

n/m

Net interest income after provision

for credit losses

27,332

23,206

17.8

%

Noninterest income

Trust and wealth management fees

847

626

35.3

%

Mortgage origination revenue

1,361

1,163

17.0

%

Service charges on deposit accounts

1,501

1,305

15.0

%

Bank card revenue

1,528

1,237

23.5

%

Gains on equity investments

202

-

n/a

Realized gains/(losses) on debt securities, net

(109

)

912

-112.0

%

Bank owned life insurance and annuity income

293

233

25.8

%

Other income

330

301

9.6

%

Total noninterest income

5,953

5,777

3.0

%

Noninterest expense

Salaries and employee benefits

8,977

8,250

8.8

%

Net occupancy expense

1,265

1,046

20.9

%

Equipment expense

1,902

1,502

26.6

%

Professional fees

438

370

18.4

%

Advertising and public relations

216

207

4.3

%

Amortization of intangibles

387

409

-5.4

%

FDIC premiums

330

261

26.4

%

Bank card expense

703

573

22.7

%

Foreclosed properties expense, net

403

676

-40.4

%

Acquisition-related expense

57

218

-73.9

%

Other expenses

3,250

3,094

5.0

%

Total noninterest expense

17,928

16,606

8.0

%

Income before income taxes

15,357

12,377

24.1

%

Income taxes

2,777

2,126

30.6

%

Net income

12,580

10,251

22.7

%

Preferred stock dividends

225

-

n/a

Net income applicable to common shares

$

12,355

$

10,251

20.5

%


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Quarterly Performance Summary (unaudited)

Q4 2021 vs Q4 2020

For the Quarter Ended

Percent

12/31/2021

12/31/2020

Change

Per Share Data

Earnings per common share

Basic

$

0.96

$

0.79

21.5

%

Diluted

$

0.95

$

0.79

20.3

%

Cash dividends per common share

$

0.18

$

0.17

5.9

%

Common stock dividend payout ratio

18.3%

21.5%

-15.1

%

Average common shares outstanding

Basic

12,916,555

12,932,768

-0.1

%

Diluted

12,976,181

12,980,041

-0.0

%

Common shares outstanding at period end

12,743,125

12,942,004

-1.5

%

Performance Ratios

Return on average equity

15.48%

14.90%

3.9

%

Return on average tangible equity (C)

19.72%

18.70%

5.5

%

Return on average tangible common equity (D)

20.91%

18.70%

11.8

%

Return on average assets

1.42%

1.37%

3.6

%

Net interest margin (A)

3.49%

3.76%

-7.2

%

Efficiency ratio (B)

49.04%

48.93%

0.2

%

NOTES

(A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.

(B) – Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.

(C) – Return on average tangible equity = (Net income – Amortization of intangibles [after-tax]) / (Average shareholders’ equity – Average intangible assets).

(D) – Return on average tangible common equity = (Net income – Amortization of intangibles [after-tax]) / (Average common shareholders’ equity – Average intangible assets).

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Annual Performance Summary (unaudited)

2021 vs 2020

For the Year Ended

Percent

Dollars in thousands

12/31/2021

12/31/2020

Change

Statements of Income

Interest income

Loans, including fees

$

112,630

$

105,564

6.7

%

Securities

9,470

9,173

3.2

%

Other

316

266

18.8

%

Total interest income

122,416

115,003

6.4

%

Interest expense

Deposits

8,182

16,044

-49.0

%

Borrowings

4,302

3,477

23.7

%

Total interest expense

12,484

19,521

-36.0

%

Net interest income

109,932

95,482

15.1

%

Provision for credit losses

4,000

14,500

n/m

Net interest income after provision

for credit losses

105,932

80,982

30.8

%

Noninterest income

Trust and wealth management fees

2,886

2,495

15.7

%

Mortgage origination revenue

3,999

2,799

42.9

%

Service charges on deposit accounts

5,032

4,588

9.7

%

Bank card revenue

5,896

4,494

31.2

%

Gains on equity investments

202

-

n/a

Realized gains on debt securities, net

425

3,472

-87.8

%

Bank owned life insurance and annuity income

1,026

1,567

-34.5

%

Other income

742

668

11.1

%

Total noninterest income

20,208

20,083

0.6

%

Noninterest expense

Salaries and employee benefits

34,386

32,211

6.8

%

Net occupancy expense

4,824

3,963

21.7

%

Equipment expense

6,990

5,765

21.2

%

Professional fees

1,578

1,538

2.6

%

Advertising and public relations

697

596

16.9

%

Amortization of intangibles

1,563

1,659

-5.8

%

FDIC premiums

1,449

856

69.3

%

Bank card expense

2,668

2,225

19.9

%

Foreclosed properties expense, net

1,745

2,490

-29.9

%

Acquisition-related expense

1,224

1,671

-26.8

%

Other expenses

11,615

9,337

24.4

%

Total noninterest expense

68,739

62,311

10.3

%

Income before income taxes

57,401

38,754

48.1

%

Income taxes

11,663

7,428

57.0

%

Net income

45,738

31,326

46.0

%

Preferred stock dividends

589

-

n/a

Net income applicable to common shares

$

45,149

$

31,326

44.1

%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Annual Performance Summary (unaudited)

2021 vs 2020

For the Year Ended

Percent

12/31/2021

12/31/20020

Change

Per Share Data

Earnings per common share

Basic

$

3.49

$

2.42

44.2

%

Diluted

$

3.47

$

2.41

44.0

%

Cash dividends per common share

$

0.70

$

0.68

2.9

%

Common stock dividend payout ratio

19.9%

28.2%

-29.6

%

Average common shares outstanding

Basic

12,943,883

12,935,430

0.1

%

Diluted

13,003,428

12,975,385

0.2

%

Common shares outstanding at period end

12,743,125

12,942,004

-1.5

%

Performance Ratios

Return on average equity

14.76%

11.80%

25.1

%

Return on average tangible equity (C)

18.71%

14.73%

27.0

%

Return on average tangible common equity (D)

19.51%

14.73%

32.5

%

Return on average assets

1.36%

1.13%

20.4

%

Net interest margin (A)

3.54%

3.71%

-4.6

%

Efficiency ratio (B)

49.22%

50.00%

-1.6

%

NOTES

(A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.

(B) – Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.

(C) – Return on average tangible equity = (Net income – Amortization of intangibles [after-tax]) / (Average shareholders’ equity – Average intangible assets).

(D) – Return on average tangible common equity = (Net income – Amortization of intangibles [after-tax]) / (Average common shareholders’ equity – Average intangible assets).

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Five Quarter Performance Summary (unaudited)

For the Quarter Ended

Dollars in thousands

12/31/2021

9/30/2021

6/30/2021

3/31/2021

12/31/2020

Statements of Income

Interest income

Loans, including fees

$

28,979

$

28,416

$

27,697

$

27,538

$

27,897

Securities

2,763

2,348

2,202

2,157

2,228

Other

75

118

56

67

51

Total interest income

31,817

30,882

29,955

29,762

30,176

Interest expense

Deposits

1,718

1,832

2,136

2,496

2,956

Borrowings

1,267

1,013

1,008

1,014

1,014

Total interest expense

2,985

2,845

3,144

3,510

3,970

Net interest income

28,832

28,037

26,811

26,252

26,206

Provision for credit losses

1,500

-

1,000

1,500

3,000

Net interest income after provision

for credit losses

27,332

28,037

25,811

24,752

23,206

Noninterest income

Trust and wealth management fees

847

718

683

638

626

Mortgage origination revenue

1,361

742

898

998

1,163

Service charges on deposit accounts

1,501

1,338

1,093

1,100

1,305

Bank card revenue

1,528

1,509

1,519

1,341

1,237

Gains on equity investments

202

-

-

-

-

Realized gains/(losses) on debt securities, net

(109

)

(68

)

127

476

912

Bank owned life insurance and annuity income

293

160

275

298

233

Other income

330

168

120

123

301

Total noninterest income

5,953

4,567

4,715

4,974

5,777

Noninterest expense

Salaries and employee benefits

8,977

8,745

8,230

8,435

8,250

Net occupancy expense

1,265

1,254

1,131

1,174

1,046

Equipment expense

1,902

1,908

1,598

1,581

1,502

Professional fees

438

374

428

338

370

Advertising and public relations

216

254

138

90

207

Amortization of intangibles

387

390

382

405

409

FDIC premiums

330

354

488

277

261

Bank card expense

703

705

685

573

573

Foreclosed properties expense, net

403

370

746

227

676

Acquisition-related expenses

57

273

454

440

218

Other expenses

3,250

2,716

2,756

2,893

3,094

Total noninterest expense

17,928

17,343

17,036

16,433

16,606

Income before income taxes

15,357

15,261

13,490

13,293

12,377

Income tax expense

2,777

3,023

2,930

2,933

2,126

Net income

12,580

12,238

10,560

10,360

10,251

Preferred stock dividends

225

225

139

-

-

Net income applicable to common shares

$

12,355

$

12,013

$

10,421

$

10,360

$

10,251


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Five Quarter Performance Summary (unaudited)

For the Quarter Ended

12/31/2021

9/30/2021

6/30/2021

3/31/2021

12/31/2020

Per Share Data

Earnings per common share

Basic

$

0.96

$

0.93

$

0.80

$

0.80

$

0.79

Diluted

$

0.95

$

0.92

$

0.80

$

0.80

$

0.79

Cash dividends per common share

$

0.18

$

0.18

$

0.17

$

0.17

$

0.17

Common stock dividend payout ratio

18.5%

19.1%

21.2%

20.6%

21.5%

Average common shares outstanding

Basic

12,916,555

12,964,575

12,952,357

12,942,099

12,932,768

Diluted

12,976,181

13,018,672

13,013,714

13,002,062

12,980,041

Common shares outstanding at period end

12,743,125

12,976,693

12,963,057

12,950,714

12,942,004

Performance Ratios

Return on average equity

15.48%

15.30%

13.67%

14.51%

14.90%

Return on average tangible equity (C)

19.72%

19.51%

17.03%

18.49%

18.70%

Return on average tangible common equity (D)

20.91%

20.71%

17.59%

18.49%

18.70%

Return on average assets

1.42%

1.42%

1.29%

1.31%

1.37%

Net interest margin (A)

3.49%

3.47%

3.55%

3.65%

3.76%

Efficiency ratio (B)

49.04%

49.53%

48.82%

49.50%

48.93%

NOTES

(A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.

(B) – Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.

(C) – Return on average tangible equity = (Net income – Amortization of intangibles [after-tax]) / (Average shareholders’ equity – Average intangible assets).

(D) – Return on average tangible common equity = (Net income – Amortization of intangibles [after-tax]) / (Average common shareholders’ equity – Average intangible assets).

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Selected Balance Sheet Data (unaudited)

Dollars in thousands, except per share amounts

12/31/2021

9/30/2021

6/30/2021

3/31/2021

12/31/2020

Assets

Cash and due from banks

$

21,006

$

21,247

$

18,707

$

20,732

$

19,522

Interest bearing deposits other banks

57,452

189,862

176,282

155,865

80,265

Debt securities, available for sale

401,103

424,741

345,742

311,384

286,127

Debt securities, held to maturity

98,060

98,528

98,995

99,457

99,914

Equity investments

20,202

-

-

-

-

Other investments

11,304

10,649

10,661

10,776

14,185

Loans, net

2,729,093

2,521,704

2,395,885

2,418,029

2,379,907

Property held for sale

9,858

12,450

13,170

13,918

15,588

Premises and equipment, net

56,371

56,818

53,104

53,289

52,537

Goodwill and other intangible assets

63,590

63,977

53,858

54,239

55,123

Cash surrender value of life insurance policies and annuities

60,613

60,241

60,087

59,740

59,438

Other assets

48,067

48,734

46,042

50,706

43,778

Total assets

$

3,576,719

$

3,508,951

$

3,272,533

$

3,248,135

$

3,106,384

Liabilities and Shareholders' Equity

Deposits

$

2,943,089

$

2,955,940

$

2,729,205

$

2,725,010

$

2,595,651

Short-term borrowings

140,146

140,146

140,146

140,145

140,146

Long-term borrowings and

subordinated debentures

123,159

49,739

49,710

49,681

49,652

Other liabilities

42,852

39,837

38,265

39,854

39,355

Shareholders' equity - preferred

14,920

14,920

14,920

-

-

Shareholders' equity - common

312,553

308,369

300,287

293,445

281,580

Total liabilities and shareholders' equity

$

3,576,719

$

3,508,951

$

3,272,533

$

3,248,135

$

3,106,384

Book value per common share

$

24.53

$

23.76

$

23.16

$

22.66

$

21.76

Tangible book value per common share (A)

$

19.54

$

18.83

$

19.01

$

18.47

$

17.50

Tangible common equity to tangible assets (B)

7.1%

7.1%

7.7%

7.5%

7.4%

NOTES
(A) – Tangible book value per share = (Common shareholders’ equity – Intangible assets) / Common shares outstanding.
(B) – Tangible common equity to tangible assets = (Common shareholders’ equity – Intangible assets) / (Total assets – Intangible assets).

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)

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