MOOREFIELD, W.V., April 19, 2007 (PRIME NEWSWIRE) -- Summit Financial Group, Inc. (Nasdaq:SMMF) today reported the first quarter 2007 results of its consolidated operations and its continuing operations which excludes from income substantially all business activities of Summit Mortgage, its residential mortgage loan origination unit, which ceased operations in January 2007.
Income from continuing operations for the first quarter of 2007 was $2.8 million, or $0.39 per diluted share, up 8.0 percent and 8.3 percent, respectively, compared with $2.6 million, or $0.36 per diluted share, reported for the prior-year period. Consolidated net income was $2.6 million, or $0.36 per diluted share, compared with $3.0 million, or $0.41 per diluted share reported for the first quarter of 2006. First quarter 2007 results reflect solid asset growth and well-controlled expenses. For the first quarter of 2007, the returns on average shareholders' equity and average assets from continuing operations were 13.67 percent and 0.90 percent, respectively, compared with prior-year ratios of 13.59 percent and 0.92 percent.
H. Charles Maddy, III, President and Chief Executive Officer, commented, "The first quarter of 2007 marks a return to our focus on community banking. We look forward to concentrating our energies and our capital to expand market share in some of the best markets in the country. These markets continue to provide us with excellent opportunities for loan and deposit growth, including the new markets in Northern Virginia and Montgomery County, Maryland that we plan to enter when we complete our acquisition of Greater Atlantic Financial Corp. in the fourth quarter of this year. After we close this acquisition, 50 percent of our assets will be located in high-growth Virginia and Maryland markets."
For the first quarter of 2007, total revenue increased 7.0 percent to $10.0 million compared with $9.4 million for the year-earlier quarter. Net interest income was $9.0 million compared with $8.4 million in the prior-year first quarter, an increase of 7.7 percent. The increase reflected 11.5 percent growth in average earning assets, partially offset by a 19 basis point decline in the net interest margin to 3.20 percent. Non-interest income, which consists primarily of insurance commissions and service fees, was $1.0 million for the current quarter, and was basically unchanged at that level for the four preceding quarters.
Non-interest expense has remained relatively stable over the past four quarters as well; revenue growth has slightly outpaced growth in operating expenses. Non-interest expense for the quarter was $5.6 million compared with $5.4 million for the prior year first quarter, up 5.4 percent. The efficiency ratio (for continuing operations) was 53.86 percent compared with 54.72 percent for the prior-year quarter.
Asset quality remains sound overall. Nonperforming loans increased by $3.9 million during the fourth quarter of 2006, primarily from one single customer relationship. However, the loan is well-collateralized, and adequate reserves are in place. At March 31, 2007, nonperforming assets totaled $4.5 million, or 0.36 percent of assets, compared with $5.4 million, or 0.43 percent at 2006 year-end, and $1.7 million, or 0.15 percent for the year-ago quarter. Net charge-offs have traditionally been low. For the current quarter, the Company had net charge-offs of $119,000, or 0.05 percent of average loans annualized, compared with $263,000, or 0.11 percent annualized for the linked quarter, and virtually zero for the year earlier period. At March 31, 2007, the allowance for loan losses was 0.83 percent of loans outstanding.
Assets at March 31, 2007 were $1.25 billion, an increase of $116.2 million, or 10.2 percent over the last twelve months. Loans, net of unearned income, were $938.6 million at period end, up $107.8 million or 13.0 percent year-over-year. Commercial real estate and construction/development were the largest contributors to loan growth, up $53.7 million (19.5 percent) and $55.4 million (33.6 percent), respectively, since March 31, 2006. Together, these two categories comprise 58.5 percent of the loan portfolio, with residential mortgages accounting for an additional 29.7 percent.
Deposits at March 31, 2007 were $877.2 million, an increase of $146.5 million, or 20.0 percent above prior year-end levels. Retail deposits accounted for $623.4 million of the total, growing $62.9 million or 11.2 percent from year-ago levels. Brokered deposits increased $83.6 million, or 49.1 percent, compared to the prior year, ending the quarter at $253.8 million.
Shareholders' equity at March 31, 2007 was $82.9 million, an increase of 9.4 percent over the last twelve months. Common shares outstanding totaled 7,084,980 at quarter-end.
ABOUT THE COMPANY
Summit Financial Group, Inc., a financial holding company with total assets of $1.25 billion, operates fifteen banking locations through its two wholly-owned community banks: Summit Community Bank, headquartered in Moorefield, West Virginia; and Shenandoah Valley National Bank in Winchester, Virginia. Summit also operates Summit Insurance Services, LLC in Moorefield, West Virginia.
The Summit Financial Group, Inc. logo is available at http://www.primezone.com/newsroom/prs/?pkgid=2990
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 economy. We undertake no obligation to revise these statements following the date of this press release.
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)
Quarterly Performance Summary -- Q1 2007 vs Q1 2006
For the Quarter Ended
------------------------ Percent
Dollars in thousands 3/31/2007 3/31/2006 Change
---------------------------------------------------------------------
Condensed Statements of
Income
Interest income
Loans, including fees $ 18,712 $15,240 22.8%
Securities 3,124 2,647 18.0%
Other 6 24 -75.0%
-------- -------
Total interest income 21,842 17,911 21.9%
-------- -------
Interest expense
Deposits 9,028 5,153 75.2%
Borrowings 3,790 4,379 -13.5%
-------- -------
Total interest expense 12,818 9,532 34.5%
-------- -------
Net interest income 9,024 8,379 7.7%
Provision for loan
losses 390 325 20.0%
-------- -------
Net interest income after
provision for loan losses 8,634 8,054 7.2%
-------- -------
Noninterest income
Insurance commissions 206 230 -10.4%
Service fee income 617 631 -2.2%
Securities gains
(losses) -- -- --
Other income 189 142 33.1%
-------- -------
Total noninterest
income 1,012 1,003 0.9%
-------- -------
Noninterest expense
Salaries and employee
benefits 3,226 3,055 5.6%
Net occupancy expense 418 401 4.2%
Equipment expense 446 450 -0.9%
Professional fees 174 207 -15.9%
Other expenses 1,385 1,248 11.0%
-------- -------
Total noninterest
expense 5,649 5,361 5.4%
-------- -------
Income from continuing
operations before
income taxes 3,997 3,696 8.1%
Income taxes 1,201 1,108 8.4%
-------- -------
Income from continuing
operations 2,796 2,588 8.0%
-------- -------
Discontinued operations
Exit costs and
impairment of
long-lived assets 80 -- n/a
Operating income (loss) (372) 609 -161.1%
-------- -------
Income (loss) from
discontinued
operations before
income taxes (292) 609 -147.9%
Income taxes (97) 226 -142.9%
-------- -------
Income (loss) from
discontinued
operations (195) 383 -150.9%
-------- -------
Net Income $ 2,601 $ 2,971 -12.5%
======== =======
SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q1 2007 vs Q1 2006
For the Quarter Ended
------------------------- Percent
3/31/2007 3/31/2006 Change
---------------------------------------------------------------------
Per Share Data
Earnings per share from
continuing operations
Basic $ 0.40 $ 0.36 11.1%
Diluted $ 0.39 $ 0.36 8.3%
Earnings per share
from discontinued
operations
Basic $(0.03) $ 0.06 -150.0%
Diluted $(0.03) $ 0.05 -160.0%
Earnings per share
Basic $ 0.37 $ 0.42 -11.9%
Diluted $ 0.36 $ 0.41 -12.2%
Average shares
outstanding
Basic 7,084,980 7,128,076 -0.6%
Diluted 7,147,170 7,189,063 -0.6%
Performance Ratios
Return on average equity 12.72% 15.60% -18.5%
Return on average equity
- continuing operations 13.67% 13.59% 0.6%
Return on average assets 0.83% 1.05% -21.0%
Return on average assets
- continuing operations 0.90% 0.92% -2.2%
Net interest margin 3.20% 3.39% -5.6%
Efficiency ratio (A) 58.07% 69.29% -16.2%
Efficiency ratio -
continuing operations (A) 53.86% 54.72% -1.6%
NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring
income and expense items and amortization of intangibles.
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)
Five Quarter Performance Summary
For the Quarter Ended
----------------------------------------------------
Dollars in 3/31/ 12/31/ 9/30/ 6/30/ 3/31/
thousands 2007 2006 2006 2006 2006
---------------------------------------------------------------------
Condensed Statements of Income
Interest income
Loans,
including
fees $18,712 $18,746 $18,060 $16,609 $15,240
Securities 3,124 3,131 2,998 2,787 2,647
Other 6 7 16 13 24
------- ------- ------- ------- -------
Total
interest
income 21,842 21,884 21,074 19,409 17,911
------- ------- ------- ------- -------
Interest expense
Deposits 9,028 8,990 7,761 6,408 5,153
Borrowings 3,790 3,705 4,239 4,348 4,379
------- ------- ------- ------- -------
Total
interest
expense 12,818 12,695 12,000 10,756 9,532
------- ------- ------- ------- -------
Net interest
income 9,024 9,189 9,074 8,653 8,379
Provision for
loan losses 390 930 260 330 325
------- ------- ------- ------- -------
Net interest
income after
provision
for loan
losses 8,634 8,259 8,814 8,323 8,054
------- ------- ------- ------- -------
Noninterest income
Insurance
commissions 206 228 219 247 230
Service fee
income 617 702 700 726 631
Securities
gains
(losses) -- -- -- -- --
Other
income 189 162 131 136 142
------- ------- ------- ------- -------
Total
noninterest
income 1,012 1,092 1,050 1,109 1,003
------- ------- ------- ------- -------
Noninterest expense
Salaries and
employee
benefits 3,226 2,899 2,817 3,049 3,055
Net occupancy
expense 418 378 387 390 401
Equipment
expense 446 480 476 496 450
Professional
fees 174 252 188 245 207
Other
expenses 1,385 1,291 1,409 1,492 1,248
------- ------- ------- ------- -------
Total
noninterest
expense 5,649 5,300 5,277 5,672 5,361
------- ------- ------- ------- -------
Income before
income taxes 3,997 4,051 4,587 3,760 3,696
Income taxes 1,201 1,328 1,421 1,167 1,108
------- ------- ------- ------- -------
Income from
continuing
operations 2,796 2,723 3,166 2,593 2,588
------- ------- ------- ------- -------
Discontinued operations
Exit costs
and
impairment
of long-lived
assets 80 (2,480) -- -- --
Operating
income
(loss) (372) (1,373) (1,059) 74 609
------- ------- ------- ------- -------
Income (loss)
from
discontinued
operations
before income
taxes (292) (3,853) (1,059) 74 609
Income taxes (97) (1,311) (374) 33 226
------- ------- ------- ------- -------
Income (loss)
from
discontinued
operations (195) (2,542) (685) 41 383
------- ------- ------- ------- -------
Net Income $ 2,601 $ 181 $ 2,481 $ 2,634 $ 2,971
======= ======= ======= ======= =======
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)
Five Quarter Performance Summary
For the Quarter Ended
----------------------------------------------------
3/31/ 12/31/ 9/30/ 6/30/ 3/31/
2007 2006 2006 2006 2006
---------------------------------------------------------------------
Per Share Data
Earnings per
share from
continuing
operations
Basic $ 0.40 $ 0.39 $ 0.45 $ 0.36 $ 0.36
Diluted $ 0.39 $ 0.39 $ 0.45 $ 0.36 $ 0.36
Earnings per
share from
discontinued
operations
Basic $ (0.03) $ (0.36) $ (0.10) $ 0.01 $ 0.06
Diluted $ (0.03) $ (0.36) $ (0.10) $ 0.01 $ 0.05
Earnings per
share
Basic $ 0.37 $ 0.03 $ 0.35 $ 0.37 $ 0.42
Diluted $ 0.36 $ 0.03 $ 0.35 $ 0.37 $ 0.41
Average
shares
outstanding
Basic 7,084,980 7,092,531 7,127,650 7,135,107 7,128,076
Diluted 7,147,170 7,151,378 7,187,274 7,193,407 7,189,063
Performance
Ratios
Return on
average
equity 12.72% 0.88% 12.46% 13.53% 15.60%
Return on
average
equity -
continuing
operations 13.67% 13.24% 15.90% 13.32% 13.59%
Return on
average
assets 0.83% 0.06% 0.83% 0.91% 1.05%
Return on
average
assets -
continuing
operations 0.90% 0.89% 1.06% 0.89% 0.92%
Net interest
margin 3.20% 3.25% 3.33% 3.32% 3.39%
Efficiency
ratio (A) 58.07% 69.20% 70.57% 70.69% 69.29%
Efficiency
ratio -
continuing
operations(A) 53.86% 48.85% 49.38% 54.33% 54.72%
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, For the Quarter Ended
except per ---------------------------------------------
share amounts 3/31/2007 12/31/2006 9/30/2006
---------------------------------------------------------------------
Assets $1,253,925 $1,234,831 $1,210,491
Securities 258,173 247,874 246,332
Loans, net 930,769 916,045 894,836
Intangible assets 3,159 3,197 3,234
Assets related to
discontinued
operations 2,170 9,715 8,369
Retail deposits 623,431 609,064 598,293
Brokered time
deposits 253,794 279,623 266,769
Short-term
borrowings 79,886 60,428 90,422
Long-term borrowings
and subordinated
debentures 201,814 193,881 163,864
Shareholders'
equity 82,935 79,875 80,630
Book value
per share $ 11.71 $ 11.27 $ 11.35
Dollars in
thousands, For the Quarter Ended
except per ---------------------------
share amounts 6/30/2006 3/31/2006
---------------------------------------------------
Assets $1,179,648 $1,137,692
Securities 238,382 233,805
Loans, net 866,170 824,359
Intangible
assets 3,272 3,310
Assets
related to
discontinued
operations 11,633 14,577
Retail
deposits 570,731 560,551
Brokered
time
deposits 190,832 170,185
Short-term
borrowings 164,185 136,483
Long-term
borrowings
and
subordinated
debentures 167,168 183,136
Shareholders'
equity 76,559 75,816
Book value
per share $ 10.73 $ 10.63
SUMMIT FINANCIAL GROUP INC. (NASDAQ:SMMF)
Loan Composition
Dollars in 3/31/ 12/31/ 9/30/ 6/30/ 3/31/
thousands 2007 2006 2006 2006 2006
---------------------------------------------------------------------
Commercial $ 69,700 $ 69,470 $ 67,352 $ 64,342 $ 66,564
Commercial
real estate 329,561 314,199 300,676 296,680 275,896
Construction
and
development 220,430 215,820 207,545 182,000 165,026
Residential
real estate 279,564 282,512 283,943 288,316 281,301
Consumer 33,845 36,455 36,885 37,040 37,356
Other 7,209 6,968 7,086 6,188 6,382
-------- -------- -------- -------- --------
Total loans 940,309 925,424 903,487 874,566 832,525
Less unearned
fees and
interest 1,757 1,868 1,806 1,767 1,731
-------- -------- -------- -------- --------
Total loans
net of
unearned
fees and
interest 938,552 923,556 901,681 872,799 830,794
Less
allowance
for loan
losses 7,783 7,511 6,845 6,629 6,435
-------- -------- -------- -------- --------
Loans, net $930,769 $916,045 $894,836 $866,170 $824,359
======== ======== ======== ======== ========
SUMMIT FINANCIAL GROUP INC. (NASDAQ:SMMF)
Retail Deposit Composition
Dollars in 3/31/ 12/31/ 9/30/ 6/30/ 3/31/
thousands 2007 2006 2006 2006 2006
---------------------------------------------------------------------
Non interest
bearing
checking $ 60,645 $ 62,591 $ 64,751 $66,071 $ 62,860
Interest
bearing
checking 230,634 220,167 223,992 214,279 214,572
Savings 44,713 47,984 44,980 38,737 39,474
Time
deposits 287,439 278,322 264,570 251,644 243,645
-------- -------- -------- -------- ---------
Total
retail
deposits $623,431 $609,064 $598,293 $570,731 $560,551
======== ========= ======== ======== ========
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)
Asset Quality Information - Continuing Operations
For the Quarter Ended
-------------------------------------------------
Dollars in 3/31/ 12/31/ 9/30/ 6/30/ 3/31/
thousands 2007 2006 2006 2006 2006
---------------------------------------------------------------------
Net loan
charge-off's $ 119 $ 263 $ 45 $ 135 $ 2
Net loan
charge-off's
to average
loans
(annualized) 0.05% 0.11% 0.02% 0.06% 0.00%
Allowance
for loan
losses $ 7,783 $ 7,511 $ 6,845 $ 6,629 $ 6,435
Allowance
for loan
losses as a
percentage
of period
end loans 0.83% 0.81% 0.76% 0.76% 0.77%
Nonperforming
assets:
Nonperforming
loans $ 4,474 $ 5,276 $ 1,273 $ 987 $ 1,447
Foreclosed
properties
and other
repossessed
assets 43 77 180 298 271
------- ------- ------- ------- -------
Total $ 4,517 $ 5,353 $ 1,453 $ 1,285 $ 1,718
======= ======= ======= ======= =======
Nonperforming
loans to
period end
loans 0.48% 0.57% 0.14% 0.11% 0.17%
======= ======= ======= ======= =======
Nonperforming
assets to
period
end assets 0.36% 0.43% 0.12% 0.11% 0.15%
======= ======= ======= ======= =======
SUMMIT FINANCIAL GROUP, INC. (NASDAQ:SMMF)
Consolidated Average Balance Sheet, Interest Earnings & Expenses and
Average Rates
Q1 2007 vs Q1 2006
Q1 2007 Q1 2006
Dollars -------------------------- -------------------------
in Average Earnings/ Yield/ Average Earnings/ Yield/
thousands Balances Expense Rate Balances Expense Rate
---------------------------------------------------------------------
ASSETS
Interest earning
assets
Loans, net
of unearned
interest
Taxable $ 928,979 $18,665 8.15% $ 829,381 $15,392 7.53%
Tax-exempt 8,917 173 7.87% 8,244 150 7.38%
Securities
Taxable 208,315 2,577 5.02% 186,586 2,135 4.64%
Tax-exempt 47,289 814 6.98% 44,077 767 7.06%
Interest
bearing deposits
other banks and
Federal
funds
sold 446 5 4.55% 2,294 24 4.24%
--------- ------ ---- ---------- ------ -----
Total interest
earning
assets 1,193,946 22,234 7.55% 1,070,582 18,468 7.00%
Noninterest
earning
assets
Cash &
due from
banks 13,099 14,449
Premises
& equipment 22,332 23,361
Other
assets 26,993 24,659
Allowance
for loan
losses (8,135) (6,338)
----------- -----------
Total
assets $ 1,248,235 $ 1,126,713
=========== ===========
LIABILITIES AND SHAREHOLDERS
EQUITY
Liabilities
Interest bearing
liabilities
Interest
bearing
demand
deposits $ 221,924 $ 2,067 3.78% $ 204,161 $ 1,543 3.07%
Savings
deposits 46,407 217 1.90% 43,067 73 0.69%
Time
deposits 556,525 6,745 4.92% 374,170 3,537 3.83%
Short-term
borrowings 72,415 956 5.35% 172,380 1,964 4.62%
Long-term
borrowings
and
subordinated
deben-
tures 196,005 2,832 5.86% 184,051 2,415 5.32%
--------- ------ ---- ---------- ------ -----
1,093,276 12,817 4.75% 977,829 9,532 3.95%
Noninterest
bearing
liabilities
Demand
deposits 61,288 63,308
Other
liabil-
ities 11,881 9,395
----------- ----------
Total
liabil-
ities 1,166,445 1,050,532
Shareholders'
equity 81,790 76,181
----------- ----------
Total
liabilities
and
shareholders'
equity $ 1,248,235 $ 1,126,713
=========== ===========
NET INTEREST
EARNINGS $ 9,417 $ 8,936
======= =======
NET INTEREST
MARGIN 3.20% 3.39%
==== ====