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

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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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