SUMMIT FINANCIAL GROUP, INC. - FORM 8-K - EX-99.1 - April 23, 2021

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EX-99.2 - EX-99.2 - SUMMIT FINANCIAL GROUP, INC.exhibit992.htm
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EXHIBIT 99.1
image_01.jpg

FOR RELEASE 6:00 AM ET, April 22, 2021

Contact:    Robert S. Tissue, Executive Vice President & CFO
Telephone:    (304) 530-0552
Email:        rtissue@summitfgi.com
SUMMIT FINANCIAL GROUP REPORTS RECORD QUARTERLY EPS AND NET INCOME
Q1 2021 Diluted EPS $0.80 compared to $0.79 for Q4 2020 and $0.35 for Q1 2020
MOOREFIELD, WV – April 22, 2021 (GLOBE NEWSWIRE) – Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported first quarter 2021 net income of $10.4 million, or $0.80 per diluted share, both representing a quarterly record. In comparison, earnings for fourth quarter 2020 were $10.3 million, or $0.79 per diluted share, and for first quarter 2020 were $4.51 million, or $0.35 per diluted share.
H. Charles Maddy, III, President and Chief Executive Officer commented, “For the second consecutive quarter, Summit achieved both record quarterly earnings per share and net income in Q1 2021. I am particularly pleased by our continued strong core operating performance, highlighted by our strong year-over-year growth in revenue, all while maintaining a relatively stable net interest margin and well-controlled noninterest expenses. Such results serve to validate not only our core growth strategies, but our ability to remain disciplined despite somewhat challenging economic conditions. I am inspired by our gaining momentum towards our goal to be a consistently growing, high-performing community banking institution.”

Highlights for Q1 2021
•Net interest income was nearly unchanged compared to Q4 2020, despite Q1 2021 having two less days than Q4 2020, and increased 22.4 percent year over year, primarily due to loan growth and lower funding costs.
•Net interest margin in Q1 2021 decreased 11 basis points to 3.65 percent as compared to the linked quarter, as yield on interest earning assets decreased 20 basis points while the cost of deposits and other funding declined 10 basis points.
•Excluding mortgage warehouse lines of credit and PPP loans, loan balances increased a net $135.8 million during the quarter.
•Recorded provision for credit losses of $1.50 million in Q1 2021 compared to $3.00 million in Q4 2020 and $5.25 million in Q1 2020; our increased credit provisions in 2020 were principally due to the estimated potential future economic impact of the COVID-19 crisis.


•Efficiency ratio was 49.79 percent compared to 49.38 percent in the linked quarter and 51.41 percent for Q1 2020.
•Net foreclosed properties expenses decreased to $227,000 in Q1 2021 compared to $676,000 in Q4 2020, as net losses on sales of foreclosed properties in Q1 2021 totaled $113,000 compared to $489,000 in Q4 2020, and write downs of foreclosed properties to estimated fair values totaled $23,000 in Q1 2021 compared to $64,000 in Q4 2020. During Q1 2020, such write downs totaled $946,000 and realized net gains were $61,000.
•Realized $476,000 securities gains in Q1 2021 compared to $912,000 in the linked quarter and $1.04 million in Q1 2020.
•Nonperforming assets as a percentage of total assets increased slightly to 1.21 percent compared to 1.16 percent for the linked quarter and 1.16 percent at first quarter end 2020.
Results from Operations
Total revenue for first quarter 2021, consisting of net interest income and noninterest income, increased 20.4 percent to $31.2 million, which included $476,000 in realized securities gains, compared to $25.9 million for first quarter 2020.
For the first quarter of 2021, net interest income was $26.3 million, an increase of 22.4 percent from the $21.4 million reported in the prior-year first quarter and remained nearly unchanged compared to the linked quarter. The net interest margin for first quarter 2021 was 3.65 percent compared to 3.76 percent for both the linked quarter and 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 3.60 percent for Q1 2021, 3.70 percent for Q4 2020 and 3.70 percent for Q1 2020.
Noninterest income, consisting primarily of service fee income from community banking activities and trust and wealth management fees, for first quarter 2021 was $4.97 million compared to $5.78 million for the linked quarter and $4.50 million for the comparable period of 2020, which included realized securities gains of $476,000 in Q1 2021, $912,000 in the linked quarter and $1.04 million in Q1 2020. Excluding realized securities gains, noninterest income was $4.50 million for first quarter 2021 and $3.46 million for first quarter 2020. Mortgage origination revenue was $998,000 in Q1 2021 compared to $1.16 million for Q4 2020 and $214,000 in Q1 2020 due to higher volumes of secondary market loans driven primarily by historically low interest rates.



We recorded a $1.50 million provision for credit losses during first quarter 2021 compared to $3.00 million for the linked quarter and $5.25 million in Q1 2020.
Q1 2021 total noninterest expense decreased 1.0 percent to $16.4 million compared to the linked quarter and increased 9.6 percent compared to $15.0 million for the prior-year first quarter. This year-over-year increase resulted primarily due to the acquisition of Cornerstone, MVB Bank branches and WinFirst during 2020. Additionally, other significant factors contributing to the changes in total noninterest expense period over period are as follows: decreased write downs of foreclosed properties to estimated fair values totaling $23,000 in Q1 2021 compared to $64,000 in Q4 2020 and $946,000 in Q1 2020, net losses on sales of foreclosed properties in Q1 2021 of $113,000 compared to $489,000 in Q4 2020 and net gains of $61,000 during Q1 2020 and deferred director compensation expense totaling $236,000 in Q1 2021, compared to $571,000 in Q4 2020 and income of $483,000 in Q1 2020.
Balance Sheet
At March 31, 2021, total assets were $3.25 billion, an increase of $141.8 million, or 4.6 percent since December 31, 2020. Total loans, net of unearned fees and allowance for loan losses, were $2.42 billion at March 31, 2021, up $38.1 million, or 1.6 percent, from the $2.38 billion reported at year-end 2020. Loans, excluding mortgage warehouse lines of credit and PPP loans, increased $135.8 million during the quarter, or 26.0 percent (annualized), while net mortgage warehouse lines and PPP loans decreased $83.2 million and $12.6 million, respectively.
At March 31, 2021, core deposits were $2.61 billion, an increase of $149.8 million, or 6.1 percent, since year end 2020. During Q1 2021, checking deposits increased $118.5 million or 8.6 percent, core time deposits declined by $4.0 million or 0.9 percent and savings deposits increased $35.3 million or 5.7 percent.
Shareholders’ equity was $293.4 million as of March 31, 2021 compared to $281.6 million at December 31, 2020.
Tangible book value per common share increased to $18.47 as of March 31, 2021 compared to $17.50 at December 31, 2020 and $17.17 at March 31, 2020. Summit had 12,950,714 outstanding common shares at Q1 2021 quarter end compared to 12,942,004 at year end 2020.
As announced in Q1 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 Q1 2021, no shares of our common stock were repurchased under the Plan.



Asset Quality
We incurred net loan charge-offs of $189,000 in first quarter 2021 (0.03 percent of average loans annualized), compared to fourth quarter 2020 net loan charge-offs of $239,000 while $1.99 million and $2.34 million were added to the allowance for loan credit losses through the provision for credit losses during Q1 2021 and Q4 2020, respectively. The allowance for loan credit losses stood at 1.39 percent of total loans as of March 31, 2021, compared to 1.34 percent at year-end 2020.
During Q1 2021, we decreased our allowance for credit losses on unfunded loan commitments $485,000 primarily due to an improved economic forecast and during Q4 2020, we added $665,000 through the provision for credit losses.
As of March 31, 2021, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties and repossessed assets, totaled $39.3 million, or 1.21 percent of assets, which included a $3.3 million downgraded client relationship in the hospitality industry, compared to NPAs of $35.9 million, or 1.16 percent of assets at the linked quarter-end and $29.1 million, or 1.16 percent of assets at the end first quarter 2020. The Q1 2021 increase was partially offset by sales of $1.67 million of foreclosed properties during the quarter.
The following tables summarize the aggregate balances of loans the Company has modified as result of the COVID-19 pandemic as of March 31, 2021 and December 31, 2020 classified by types of loans and impacted borrowers.


Loan Balances Modified Due to COVID-19 as of 3/31/2021
Dollars in thousandsTotal Loan Balance as of 3/31/2021Loans Modified to Interest Only PaymentsLoans Modified to Payment DeferralTotal Loans ModifiedPercentage
 of Loans
 Modified
Hospitality Industry$123,829 $14,546 $9,154 $23,700 19.1 %
Non-Owner Occupied Retail Stores146,837 7,223 — 7,223 4.9 %
Owner-Occupied Retail Stores143,246 — — — — %
Restaurants8,192 — — — — %
Oil & Gas Industry16,831 — — — — %
Other Commercial Loans1,235,204 — 581 581 — %
Total Commercial Loans1,674,139 21,769 9,735 31,504 1.9 %
Residential 1-4 Family Personal292,846 12 2,282 2,294 0.8 %
Residential 1-4 Family Rentals184,108 — — — — %
Home Equity Loans77,684 — — — — %
Total Residential Real Estate Loans554,638 12 2,282 2,294 0.4 %
Consumer Loans32,924 — 76 76 0.2 %
Mortgage Warehouse Loans187,995 — — — — %
Credit Cards and Overdrafts2,375 — — — — %
Total Loans$2,452,071 $21,781 $12,093 $33,874 1.4 %
Loan Balances Modified Due to COVID-19 as of 12/31/2020
Dollars in thousandsTotal Loan Balance as of 12/31/2020Loans Modified to Interest Only PaymentsLoans Modified to Payment DeferralTotal Loans ModifiedPercentage of Loans Modified
Hospitality Industry$121,502 $40,513 $12,930 $53,443 44.0 %
Non-Owner Occupied Retail Stores135,405 7,223 447 7,670 5.7 %
Owner-Occupied Retail Stores126,451 2,317 1,246 3,563 2.8 %
Restaurants7,481 — — — — %
Oil & Gas Industry17,152 — — — — %
Other Commercial Loans1,134,759 12,006 286 12,292 1.1 %
Total Commercial Loans1,542,750 62,059 14,909 76,968 5.0 %
Residential 1-4 Family Personal305,093 159 1,754 1,913 0.6 %
Residential 1-4 Family Rentals194,612 148 73 221 0.1 %
Home Equity Loans81,588 — — — — %
Total Residential Real Estate Loans581,293 307 1,827 2,134 0.4 %
Consumer Loans33,906 48 143 191 0.6 %
Mortgage Warehouse Loans251,810 — — — — %
Credit Cards and Overdrafts2,394 — — — — %
Total Loans$2,412,153 $62,414 $16,879 $79,293 3.3 %


About the Company
Summit Financial Group, Inc. is a $3.25 billion financial holding company headquartered in Moorefield, West Virginia. Summit provides community banking services primarily in the Eastern Panhandle, Southern and North Central regions of West Virginia, the Northern, Shenandoah Valley and Southwestern regions of Virginia and the central region of Kentucky, through its bank subsidiary, Summit Community Bank, Inc., which operates 43 banking locations.
FORWARD-LOOKING STATEMENTS
image_31.jpgThis 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) -- Q1 2021 vs Q1 2020
 For the Quarter Ended  Percent
Dollars in thousands3/31/20213/31/2020 Change
Statements of Income
 Interest income
    Loans, including fees $27,538 $25,235 9.1 %
    Securities 2,157 2,310 -6.6 %
    Other 67 98 -31.6 %
 Total interest income 29,762 27,643 7.7 %
 Interest expense
    Deposits 2,496 5,351 -53.4 %
    Borrowings 1,014 849 19.4 %
 Total interest expense 3,510 6,200 -43.4 %
 Net interest income 26,252 21,443 22.4 %
 Provision for credit losses1,500 5,250 n/m
 Net interest income after provision for credit losses24,752 16,193 52.9 %
 Noninterest income
    Trust and wealth management fees638 665 -4.1 %
    Mortgage origination revenue998 214 366.4 %
    Service charges on deposit accounts1,100 1,263 -12.9 %
    Bank card revenue1,341 933 43.7 %
    Realized securities gains476 1,038 -54.1 %
    Bank owned life insurance and annuity income298 264 12.9 %
    Other income 123 125 -1.6 %
Total noninterest income4,974 4,502 10.5 %
 Noninterest expense
    Salaries and employee benefits9,004 7,672 17.4 %
    Net occupancy expense1,174 883 33.0 %
    Equipment expense1,581 1,429 10.6 %
    Professional fees338 387 -12.7 %
    Advertising and public relations90 152 -40.8 %
    Amortization of intangibles405 429 -5.6 %
    FDIC premiums277 165 67.9 %
    Bank card expense573 503 13.9 %
    Foreclosed properties expense, net227 966 -76.5 %
    Merger-related expenses440 788 -44.2 %
    Other expenses2,324 1,625 43.0 %
Total noninterest expense16,433 14,999 9.6 %
 Income before income taxes13,293 5,696 133.4 %
 Income tax expense2,933 1,190 146.5 %
 Net income$10,360 $4,506 129.9 %



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary (unaudited) -- Q1 2021 vs Q1 2020
 For the Quarter Ended  Percent
 3/31/20213/31/2020 Change
 Per Share Data
 Earnings per common share
    Basic$0.80 $0.35 128.6 %
    Diluted$0.80 $0.35 128.6 %
 Cash dividends$0.17 $0.17 — %
 Dividend payout ratio20.6 %49.1 %-58.0 %
 Average common shares outstanding
    Basic12,942,099 12,975,429 -0.3 %
    Diluted13,002,062 13,028,409 -0.2 %
 Common shares outstanding at period end12,950,714 12,920,244 0.2 %
 Performance Ratios
 Return on average equity14.51 %6.92 %109.7 %
 Return on average tangible equity18.49 %8.55 %116.3 %
 Return on average assets1.31 %0.73 %79.5 %
 Net interest margin (A)3.65 %3.76 %-2.9 %
 Efficiency ratio (B)49.79 %51.41 %-3.2 %
NOTE (A) - Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
NOTE (B) - Computed on a tax equivalent basis excluding merger-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary (unaudited)
For the Quarter Ended
 Dollars in thousands3/31/202112/31/20209/30/20206/30/20203/31/2020
Statements of Income
 Interest income
    Loans, including fees $27,538 $27,897 $26,807 $25,624 $25,235 
    Securities 2,157 2,228 2,382 2,253 2,310 
    Other 67 51 57 60 98 
 Total interest income 29,762 30,176 29,246 27,937 27,643 
 Interest expense
    Deposits 2,496 2,956 3,552 4,186 5,351 
    Borrowings 1,014 1,014 928 685 849 
 Total interest expense 3,510 3,970 4,480 4,871 6,200 
    Net interest income26,252 26,206 24,766 23,066 21,443 
 Provision for credit losses1,500 3,000 3,250 3,000 5,250 
 Net interest income after provision for credit losses24,752 23,206 21,516 20,066 16,193 
 Noninterest income
    Trust and wealth management fees638 626 622 582 665 
    Mortgage origination revenue998 1,163 780 641 214 
    Service charges on deposit accounts1,100 1,305 1,138 882 1,263 
    Bank card revenue1,341 1,237 1,237 1,087 933 
    Realized securities gains476 912 1,522 — 1,038 
    Bank owned life insurance and annuity income298 233 795 275 264 
    Other income 123 301 113 131 125 
Total noninterest income4,974 5,777 6,207 3,598 4,502 
 Noninterest expense
   Salaries and employee benefits9,004 8,501 8,108 7,930 7,672 
   Net occupancy expense1,174 1,046 1,057 977 883 
   Equipment expense1,581 1,502 1,474 1,360 1,429 
   Professional fees338 370 364 417 387 
   Advertising and public relations90 207 145 93 152 
   Amortization of intangibles405 409 412 410 429 
   FDIC premiums277 261 320 110 165 
   Bank card expense573 573 589 560 503 
   Foreclosed properties expense, net227 676 607 240 966 
   Merger-related expenses440 218 28 637 788 
   Other expenses2,324 2,843 2,405 2,463 1,625 
Total noninterest expense16,433 16,606 15,509 15,197 14,999 
 Income before income taxes13,293 12,377 12,214 8,467 5,696 
 Income tax expense2,933 2,126 2,594 1,518 1,190 
 Net income$10,360 $10,251 $9,620 $6,949 $4,506 



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary (unaudited)
For the Quarter Ended
 3/31/202112/31/20209/30/20206/30/20203/31/2020
 Per Share Data
 Earnings per common share
    Basic $0.80 $0.79 $0.74 $0.54 $0.35 
    Diluted $0.80 $0.79 $0.74 $0.54 $0.35 
Cash dividends$0.17 $0.17 $0.17 $0.17 $0.17 
Dividend payout ratio20.6 %21.5 %22.9 %31.7 %49.1 %
 Average common shares outstanding
    Basic 12,942,099 12,932,768 12,922,158 12,911,979 12,975,429 
    Diluted 13,002,062 12,980,041 12,949,584 12,943,804 13,028,409 
Common shares outstanding at period end12,950,714 12,942,004 12,932,415 12,922,045 12,920,244 
 Performance Ratios
 Return on average equity14.51 %14.90 %14.38 %10.75 %6.92 %
 Return on average tangible equity 18.49 %18.70 %18.12 %13.57 %8.55 %
 Return on average assets 1.31 %1.37 %1.31 %1.02 %0.73 %
 Net interest margin (A)3.65 %3.76 %3.64 %3.68 %3.76 %
 Efficiency ratio (B)49.79 %49.38 %48.95 %51.97 %51.41 %
NOTE (A) - Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
NOTE (B) - Computed on a tax equivalent basis excluding merger-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.




SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Selected Balance Sheet Data (unaudited)
 Dollars in thousands, except per share amounts3/31/202112/31/20209/30/20206/30/20203/31/2020
 Assets
Cash and due from banks$20,732 $19,522 $16,257 $16,572 $18,633 
Interest bearing deposits other banks155,865 80,265 92,729 26,218 22,821 
Securities available for sale311,384 286,127 297,989 322,539 305,045 
Securities held to maturity99,457 99,914 91,600 80,497 — 
Loans, net2,418,029 2,379,907 2,222,450 2,192,541 1,982,661 
Property held for sale13,918 15,588 17,831 17,954 18,287 
Premises and equipment, net53,289 52,537 52,880 51,847 47,078 
Goodwill and other intangible assets54,239 55,123 48,101 48,513 34,132 
Cash surrender value of life insurance
     policies and annuities		59,740 59,438 57,029 55,315 46,497 
Other assets61,482 57,963 49,996 49,355 38,168 
   Total assets$3,248,135 $3,106,384 $2,946,862 $2,861,351 $2,513,322 
 Liabilities and Shareholders' Equity
Deposits$2,725,010 $2,595,651 $2,451,891 $2,451,769 $2,044,914 
Short-term borrowings140,145 140,146 140,145 90,945 161,745 
Long-term borrowings and
     subordinated debentures		49,681 49,652 50,292 20,297 20,301 
Other liabilities39,854 39,355 32,571 34,909 30,337 
Shareholders' equity293,445 281,580 271,963 263,431 256,025 
   Total liabilities and shareholders' equity$3,248,135 $3,106,384 $2,946,862 $2,861,351 $2,513,322 
Book value per common share$22.66 $21.76 $21.03 $20.39 $19.82 
Tangible book value per common share$18.47 $17.50 $17.31 $16.63 $17.17 
Tangible common equity to tangible assets7.5 %7.4 %7.7 %7.6 %9.0 %

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios (unaudited)
 3/31/202112/31/20209/30/20206/30/20203/31/2020
Summit Financial Group, Inc.
CET1 Risk-based Capital9.3 %9.3 %9.9 %9.7 %10.8 %
Tier 1 Risk-based Capital10.1 %10.0 %10.7 %10.5 %11.7 %
Total Risk Based Capital12.1 %12.1 %12.9 %11.3 %12.5 %
Tier 1 Leverage8.5 %8.6 %8.7 %9.0 %10.2 %
Summit Community Bank, Inc.
CET1 Risk-based Capital11.1 %11.1 %11.8 %10.5 %11.7 %
Tier 1 Risk-based Capital11.1 %11.1 %11.8 %10.5 %11.7 %
Total Risk Based Capital12.0 %12.0 %12.7 %11.4 %12.5 %
Tier 1 Leverage9.3 %9.5 %9.6 %9.0 %10.2 %



SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition (unaudited)
Dollars in thousands3/31/202112/31/20209/30/20206/30/20203/31/2020
Commercial$358,971 $296,832 $338,685 $311,755 $224,659 
Mortgage warehouse lines168,582 251,815 243,730 252,472 166,826 
Commercial real estate
     Owner occupied358,200 351,859 312,502 336,143 331,486 
     Non-owner occupied735,594 685,563 618,624 593,168 580,619 
Construction and development
     Land and development106,312 107,342 97,343 92,706 92,332 
     Construction126,011 91,100 66,878 48,115 43,121 
Residential real estate
     Conventional411,103 425,520 368,008 371,225 378,540 
     Jumbo65,851 74,185 73,836 76,360 64,944 
     Home equity77,684 81,588 82,991 88,929 75,170 
Consumer34,083 35,269 35,905 35,781 36,611 
Other9,680 11,080 13,302 13,053 12,961 
Total loans, net of unearned fees2,452,071 2,412,153 2,251,804 2,219,707 2,007,269 
Less allowance for credit losses34,042 32,246 29,354 27,166 24,608 
Loans, net$2,418,029 $2,379,907 $2,222,450 $2,192,541 $1,982,661 

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition (unaudited)
Dollars in thousands3/31/202112/31/20209/30/20206/30/20203/31/2020
Core deposits
Non interest bearing checking
$505,264 $440,819 $420,070 $443,190 $337,446 
Interest bearing checking
988,204 934,185 867,442 830,258 648,214 
Savings
656,514 621,168 598,564 561,029 457,010 
Time deposits
456,431 460,443 414,542 422,286 384,062 
Total core deposits2,606,413 2,456,615 2,300,618 2,256,763 1,826,732 
Brokered deposits
39,125 55,454 64,120 90,279 111,156 
Other non-core time deposits
79,472 83,582 87,153 104,727 107,026 
Total deposits$2,725,010 $2,595,651 $2,451,891 $2,451,769 $2,044,914 



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Asset Quality Information (unaudited)
For the Quarter Ended
 Dollars in thousands3/31/202112/31/20209/30/20206/30/20203/31/2020
Gross loan charge-offs$354 $434 $1,259 $218 $698 
Gross loan recoveries(165)(195)(245)(269)(197)
Net loan charge-offs/(recoveries)$189 $239 $1,014 $(51)$501 
Net loan charge-offs to average loans (annualized)0.03 %0.04 %0.18 %-0.01 %0.10 %
Allowance for loan credit losses$34,042 $32,246 $29,354 $27,166 $24,608 
Allowance for loan credit losses as a percentage
    of period end loans		1.39 %1.34 %1.30 %1.22 %1.23 %
Allowance for credit losses on unfunded loan
     commitments		$3,705 $4,190 $3.525 $3,477 $2,984 
Nonperforming assets:
   Nonperforming loans
       Commercial$848 $525 $553 $754 $560 
       Commercial real estate17,137 14,237 4,313 5,822 5,644 
       Residential construction and development626 235 2 14 11 
       Residential real estate6,667 5,264 5,104 5,873 4,343 
       Consumer54 74 31 29 65 
       Other— — — 35 100 
Total nonperforming loans25,332 20,335 10,003 12,527 10,723 
   Foreclosed properties
       Commercial real estate2,281 2,581 2,500 1,774 1,866 
       Commercial construction and development3,884 4,154 4,154 4,511 4,511 
       Residential construction and development7,129 7,791 10,330 10,645 10,774 
       Residential real estate624 1,062 847 1,024 1,136 
Total foreclosed properties13,918 15,588 17,831 17,954 18,287 
  Other repossessed assets— — — — 49 
Total nonperforming assets$39,250 $35,923 $27,834 $30,481 $29,059 
Nonperforming loans to period end loans1.03 %0.84 %0.44 %0.56 %0.53 %
Nonperforming assets to period end assets1.21 %1.16 %0.94 %1.07 %1.16 %
Troubled debt restructurings
Performing
$20,462 $21,375 $22,232 $22,117 $22,966 
Nonperforming
3,828 3,127 2,988 3,003 2,831 
Total troubled debt restructurings
$24,290 $24,502 $25,220 $25,120 $25,797 



Loans Past Due 30-89 Days (unaudited)
For the Quarter Ended
 Dollars in thousands 3/31/202112/31/20209/30/20206/30/20203/31/2020
Commercial$335 $1 $147 $196 $160 
Commercial real estate508 274 1,740 1,231 2,106 
Construction and development330 47 422 8 53 
Residential real estate2,146 4,405 4,464 2,763 5,178 
Consumer96 233 160 164 222 
Other3 5 2 3 7 
Total$3,418 $4,965 $6,935 $4,365 $7,726 


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q1 2021 vs Q4 2020 vs Q1 2020 (unaudited)
Q1 2021Q4 2020Q1 2020
Average Earnings/Yield/AverageEarnings /Yield /AverageEarnings /Yield /
Dollars in thousandsBalancesExpenseRateBalancesExpenseRateBalancesExpenseRate
ASSETS
Interest earning assets
  Loans, net of unearned interest (1)
    Taxable$2,355,705 $27,419 4.72 %$2,292,797 $27,774 4.82 %$1,935,473 $25,089 5.21 %
    Tax-exempt (2)12,679 151 4.83 %13,062 156 4.75 %14,873 185 5.00 %
  Securities
    Taxable266,289 1,295 1.97 %258,594 1,341 2.06 %258,889 1,757 2.73 %
    Tax-exempt (2)144,880 1,091 3.05 %147,979 1,122 3.02 %70,239 699 4.00 %
Interest bearing deposits other banks and Federal funds sold166,531 67 0.16 %87,151 51 0.23 %35,648 98 1.11 %
Total interest earning assets2,946,084 30,023 4.13 %2,799,583 30,444 4.33 %2,315,122 27,828 4.83 %
Noninterest earning assets
  Cash & due from banks17,961 16,846 14,422 
  Premises & equipment53,317 52,688 46,151 
  Other assets167,343 157,436 120,846 
  Allowance for credit losses(32,706)(30,778)(20,452)
    Total assets$3,151,999 $2,995,775 $2,476,089 
 LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
  Interest bearing
    demand deposits$960,190 $394 0.17 %$895,325 $357 0.16 %$643,955 $1,081 0.68 %
  Savings deposits642,241 645 0.41 %607,481 716 0.47 %449,021 1,337 1.20 %
  Time deposits583,723 1,457 1.01 %566,917 1,883 1.32 %615,102 2,933 1.92 %
  Short-term borrowings140,146 469 1.36 %140,243 467 1.32 %119,607 630 2.12 %
Long-term borrowings and
     subordinated debentures		49,664 545 4.45 %49,637 547 4.38 %20,304 219 4.34 %
Total interest bearing liabilities2,375,964 3,510 0.60 %2,259,603 3,970 0.70 %1,847,989 6,200 1.35 %
Noninterest bearing liabilities
  Demand deposits451,957 426,441 339,340 
  Other liabilities38,393 34,558 28,400 
    Total liabilities2,866,314 2,720,602 2,215,729 
Shareholders' equity - common285,685 275,173 260,360 
Total liabilities and
  shareholders' equity
$3,151,999 $2,995,775 $2,476,089 
NET INTEREST EARNINGS$26,513 $26,474 $21,628 
NET INTEREST MARGIN3.65 %3.76 %3.76 %
(1) For purposes of this table, nonaccrual loans are included in average loan balances.
(2) Interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21% for all periods presented. The tax equivalent adjustment resulted in an increase in interest income of $260,000, $268,000 and $185,000 for Q1 2021, Q4 2020 and Q1 2020, respectively.

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SUMMIT FINANCIAL GROUP, INC. Reports