SMMF Summit Financial Group Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  October 26, 2023

 

Summit Financial Group, Inc.

(Exact name of registrant as specified in its charter)

West Virginia	0-16587	55-0672148
(State or other jurisdiction of	(Commission File Number)	(IRS Employer
incorporation or organization)		Identification No.)

 

300 North Main Street
Moorefield West Virginia		26836
(Address of principal executive offices)		(Zip Code)

 

(304)530-1000

(Registrant's telephone number, including area code)

 

Not Applicable

(Former name or address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, Par Value $2.50 per share			SMMF			NASDAQ Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On October 26, 2023, Summit Financial Group, Inc. (“Summit”) issued a News Release announcing its earnings for the three and nine months ended September 30, 2023. This News Release is furnished as Exhibit 99.1 and is incorporated herein by reference.

 

 

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit Number	Description
99.1	News Release issued on October 26, 2023
104	Cover Page Interactive Data File (Embedded within the Inline XBRL document)

 

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	SUMMIT FINANCIAL GROUP, INC.
Date: October 27, 2023	By: /s/ Julie R. Markwood
	Julie R. Markwood
	Executive Vice President and Chief Accounting Officer

 

EXHIBIT 99.1

 

 

FOR RELEASE 6:00 AM ET, October 26, 2023

 

Contact:    Robert S. Tissue, Executive Vice President & CFO

Telephone:    (304) 530-0552

Email:        rtissue@summitfgi.com

 

SUMMIT FINANCIAL GROUP REPORTS EARNINGS OF $1.09 PER SHARE FOR THIRD QUARTER 2023

 

MOOREFIELD, WV – October 26, 2023 (GLOBE NEWSWIRE) – Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported financial results for the third quarter of 2023, highlighting robust core operating performance marked by continued notable strength in its net interest margin. The Company’s continued success underscores its position as an exceptional community bank, reflecting a sound strategy and solid operational execution.

 

The Company, which serves commercial and individual clients across West Virginia, the Washington D.C. metropolitan area, Virginia, Kentucky, the Eastern Shore of Maryland and Delaware through Summit Community Bank, Inc., reported net income applicable to common shares of $16.1 million, or $1.09 per diluted share, for the third quarter of 2023, as compared to $7.98 million, or $0.54 per diluted share, for the second quarter of 2023 and $14.2 million, or $1.11 per diluted share, for the third quarter of 2022. Higher earnings in Q3 2023 were driven primarily by lower provision for credit losses and acquisition-related expenses compared to Q2 2023 as Q2 included significant acquisition-related expenses attributable to the acquisition of PSB Holding Corp. and its bank subsidiary, Provident State Bank, Inc. (“PSB”) and higher provision for credit losses recorded on purchased non-credit deteriorated (“non-PCD”) loans from PSB and on a nonperforming commercial real estate participation loan. 

 

"We are extremely encouraged by our achievements in the third quarter of 2023, as our strategic initiatives have continued to bear fruit in several critical areas," stated H. Charles Maddy III, President and Chief Executive Officer of Summit Financial Group. "Our core operational performance was robust, demonstrated by favorable net interest margin and a marked growth in our core deposits, reflecting the strong confidence our customers place in us."

 

Mr. Maddy continued, "A pivotal highlight of this quarter was the announcement of our merger of peers with Burke & Herbert Financial Services Corp. (“Burke & Herbert”) headquartered in Alexandria, Virginia, a renowned financial institution located in one of the best banking markets in the U.S. This significant step forward is not just a growth strategy but a commitment to expanding our service excellence and community impact. We anticipate this consolidation to be a cornerstone event in our history, positioning us for substantial opportunities in 2024 and beyond. Mr. Maddy concluded, "Looking ahead as we edge closer to the culmination of our strategic merger with Burke & Herbert, we remain committed to enhancing shareholder value, driven by our foundational strengths and synergistic growth plans. With our dedicated team, resilient strategies and community trust, we are optimistic and geared up for the opportunities and challenges ahead."

 

 

Key Highlights for the Third Quarter of 2023

 

●

Summit Financial Group, Inc. entered into an Agreement and Plan of Reorganization with Burke & Herbert pursuant to which Summit will merge with and into Burke & Herbert, with Burke & Herbert as the surviving entity. Immediately following the Merger, Summit Community Bank, Inc., Summit’s wholly owned banking subsidiary, will be merged with  Burke & Herbert’s wholly-owned banking subsidiary, Burke & Herbert Bank & Trust Company, with B&H Bank the surviving bank. The transaction is expected to close in Q1 2024.

 

●	Our net interest margin (“NIM”) decreased 1 basis point to 3.88 percent from the linked quarter and increased by 4 basis points from the prior-year quarter.

 

●	Summit's core deposits experienced modest growth in the third quarter of 2023, up 1.1 percent from the linked quarter, showcasing customer confidence and a robust deposit base.

 

●

The third quarter saw a modest increase in total loans, excluding mortgage warehouse lines of credit and acquired loans, registering an increase of 1.47 percent (5.87 percent annualized). This performance was further underscored by a year-over-year growth of 4.87 percent, a testament to our successful lending approach and effective customer acquisition.

 

●

The Company’s provision for credit losses totaled $1.25 million in the third quarter of 2023 compared to $8.00 million in the linked quarter. Included in the Company’s Q2 2023 provision for credit losses was $3.01 million to establish an allowance on non-PCD loans acquired from PSB in accordance with the Current Expected Credit Loss accounting standard and $3.66 million to recognize an allowance on a nonperforming commercial real estate loan participation.

 

●	Summit achieved an efficiency ratio of 47.15 percent, a marked improvement from 47.90 percent in the linked quarter, indicating optimized use of resources.

 

●

Annualized non-interest expense ratio decreased to 2.10 percent of average assets from 2.41 percent in the previous quarter and increased from 2.01 percent in the same quarter last year.  Excluding acquisition-related expenses, annualized non-interest expense would have been 2.01 percent of average assets in Q3 2023 and 2.05 percent of average assets for Q2 2023.

 

Results from Operations

 

Net interest income totaled $41.3 million in the third quarter of 2023, marking an increase of 21.0 percent from the prior-year third quarter and 2.4 percent from the linked quarter. This robust growth is attributable primarily to our strategic expansion of the loan portfolio and optimizations in investment allocations. NIM for the third quarter 2023 was 3.88 percent compared to 3.89 percent for the linked quarter and 3.84 percent for the prior-year quarter, representing a stable margin performance despite volatile interest rates.

 

Summit recorded a $1.25 million provision for credit losses in the third quarter of 2023.  The provision for credit losses was $8.0 million for the linked quarter, which included $3.01 million to establish an allowance on non-PCD loans acquired from PSB in accordance with the CECL accounting standard and $3.66 million, an allowance for a nonperforming loan participation with a regional bank secured by a shopping complex at the fair value of its collateral. The provision for credit losses was $1.5 million in the third quarter of 2022.

 

 

Noninterest income, consisting primarily of service fee income from community banking activities and trust and wealth management fees, for third quarter 2023 was $5.27 million compared to $5.42 million for the linked quarter and $4.89 million for the comparable period of 2022. The Company recorded realized securities losses on debt securities of $12,000 in the third quarter of 2023 and $211,000 in the linked quarter. In addition, the Company recognized net gains on equity investments of $180,000 in the third quarter 2023 compared to $150,000 in the linked quarter. Excluding gains and losses from debt securities and equity investments, the combined revenue from net interest income and non-interest income for Q3 2023 rose to $46.4 million. This represents an increase of 1.3 percent from $45.8 million in the linked quarter and a substantial 19.0 percent growth from $39.0 million recorded in the third quarter of 2022.

 

Total noninterest expense decreased to $24.2 million in the third quarter of 2023, down 11.6 percent from $27.3 million in the linked quarter primarily due to fewer acquisition-related expenses in the third quarter. Conversely, there was a 25.7 percent hike from $19.2 million for the same quarter in the prior year, attributed mainly to the assimilation of operational costs from the newly integrated PSB operations.

 

Salary and benefit expenses were $12.0 million in the third quarter of 2023, a nominal decrease from $12.2 million in the preceding quarter but up from $10.2 million in the same period last year. The year-over-year increase was primarily due to the PSB acquisition and higher group health insurance premiums.

 

Acquisition-related expenses were $1.11 million for Q3 2023, representing legal, due diligence and fairness opinion costs relative to the Burke & Herbert merger, compared to $4.16 million for the linked quarter, consisting of contract termination costs, executive and employee severance benefits and legal and consulting fees associated with the PSB acquisition, and none during Q3 2022.

 

Summit’s efficiency ratio improved, registering 47.15 percent in the third quarter of 2023, a decrease from 47.95 percent in the third quarter of 2022, and marginally better than the 47.90 percent in the linked quarter. Concurrently, the non-interest expense to average assets ratio was optimized to 2.10 percent, compared to 2.41 percent in the previous quarter, indicating enhanced operational efficiency despite the expanded asset base post-PSB acquisition.

 

Balance Sheet

 

As of September 30, 2023, total assets were $4.6 billion, an increase of $687.5 million, or 17.6 percent since December 31, 2022.  Excluding acquired PSB assets, total assets increased by $119.2 million, or 3.0 percent since December 31, 2022.

 

Total loans net of unearned fees increased to $3.6 billion as of September 30, 2023, from $3.1 billion at December 31, 2022, and increased 17.0 percent from the third quarter of 2022. Total loans, excluding those related to mortgage warehouse lending and acquired loans, reached $3.1 billion on September 30, 2023. This represents an increase of 1.65 percent (or 6.59 percent when annualized) during the quarter just ended.

 

 

Total commercial loans, including commercial and industrial (C&I) and commercial real estate (CRE), increased 0.3 percent (1.1 percent annualized) during the third quarter to $2.3 billion as of September 30, 2023.

 

Residential real estate and consumer lending totaled $737.2 million on September 30, 2023, reflecting an increase of 0.75 percent (3.0 percent annualized) during the third quarter.

 

As of September 30, 2023, mortgage warehouse lines of credit, sourced solely from a participation arrangement with a large regional bank, totaled $114.7 million compared to $130.4 million as of December 31, 2022, and $194.7 million at the year-ago period end.

 

Deposits totaled $3.8 billion on September 30, 2023, a 0.5 percent increase during the third quarter. Core deposits increased 1.1 percent during the third quarter 2023 to $3.7 billion.  Adjusted uninsured deposits (excluding uninsured public deposits otherwise secured or collateralized as required by law) were 34.2 percent of total deposits at September 30, 2023 compared to 29.8 percent at year-end 2022 and 24.4 percent at the year-ago period end.

 

Total shareholders’ equity was $416.5 million as of September 30, 2023, compared to $354.5 million at December 31, 2022. Summit paid a quarterly common dividend of $0.22 per share in the third quarter of 2023.

 

Tangible Book Value Per Share (“TBVPS”) increased by $0.29 to $22.22 during the third quarter of 2023, representing a 1.3 percent increase. This increase was primarily due to retained earnings which more than offset the decline in the fair value of available for sale securities reflected in accumulated other comprehensive loss. Summit had 14,674,852 outstanding common shares at September 30, 2023, compared to 12,783,646 at year-end 2022. 

 

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, of which 323,577 shares have been repurchased to date. The timing and quantity of stock purchases under this repurchase plan are at the discretion of management. During the third quarter of 2023, no shares of Summit’s common stock were repurchased under the Plan.

 

Asset Quality

 

The Company recorded net loan charge-offs (“NCOs”) of $118,000 during the third quarter 2023, representing 0.01 percent of average loans annualized, compared to $3.8 million, representing 0.44 percent of average loans annualized, in the linked quarter. NCOs of $8,000 represented 0.0 percent of average loans annualized in the year-ago period.

 

Summit’s allowance for loan credit losses was $47.2 million on September 30, 2023, $45.7 million at the end of the linked quarter, and $36.8 million on September 30, 2022. As of September 30, 2023, the allowance for loan credit losses stood at 1.31 percent of total loans, reflecting a slight increase compared to the rate of 1.26 percent recorded as of December 31, 2022.  In terms of the allowance's coverage, it represented 367.7 percent of nonperforming loans at September 30, 2023, in contrast to the figure of 497.2 percent at December 31, 2022.

 

 

Summit’s allowance for credit losses on unfunded loan commitments was $6.91 million as of September 30, 2023, compared to $7.33 million at the end of the linked quarter. During the most recent quarter, the allowance for credit losses on unfunded loan commitments decreased by $420,000, primarily due to a reduction in unfunded loan balances.

 

As of September 30, 2023, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, totaled $17.4 million, or 0.38 percent of assets, compared to NPAs of $12.9 million, or 0.33 percent of assets at year-end 2022.

 

About the Company

 

Summit Financial Group, Inc. is the $4.6 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, Kentucky, Eastern Shore of Maryland and Delaware. 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 MySummitBank.com and 54 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.

 

 

Non-GAAP Financial Measures

 

In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), Summit’s management uses, and this press release contains or references, certain non-GAAP financial measures, such as tangible common equity/tangible assets; efficiency ratio; return on average tangible equity and return on average tangible common equity. Summit believes these financial measures provide information useful to investors in understanding our operational performance and business and performance trends which facilitate comparisons with the performance of others in the financial services industry. Although Summit believes that these non-GAAP financial measures enhance investors' understanding of Summit’s business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP or are they necessarily comparable to non-GAAP performance measures presented by other companies.

 

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  pandemics, 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; changes in the national and local economies, the impact of natural disasters, extreme weather events, military conflict (including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences), terrorism or other geopolitical events; delays in completing the pending merger of Summit and Burke & Herbert, the failure to obtain necessary regulatory approvals and shareholder approvals or to satisfy any of the other conditions to the merger on a timely basis or at all, the possibility that the anticipated benefits of the merger are not realized when expected or at all, corporate strategies or objectives, including the impact of certain actions and initiatives, anticipated trends in Summit's business, regulatory developments, estimated synergies, cost savings and financial benefits of completed transactions, growth strategies, the inability to realize cost savings or improved revenues or to implement integration plans and other consequences associated with the proposed merger; and the other factors discussed in the “Risk Factors” section of Summit’s Annual Report on Form 10–K for the year ended December 31, 2022, in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of Summit’s Quarterly Report on Form 10–Q for the quarters ended March 31, 2023 and June 30, 2023, and other reports Summit files with the SEC. We undertake no obligation to revise these statements following the date of this press release.

 

Additional Information and Where to Find It

 

In connection with the proposed transaction, Burke & Herbert filed a registration statement on Form S-4 with the SEC on October 2, 2023. The registration statement includes a joint proxy statement of Burke & Herbert and Summit, which also constitutes a prospectus of Burke & Herbert, that was declared effective by the SEC on October 16, 2023.  A copy of the joint proxy statement/prospectus has been sent to shareholders of Burke & Herbert and shareholders of Summit seeking certain approvals related to the proposed transaction.

 

The information contained herein does not constitute an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. INVESTORS AND SHAREHOLDERS OF BURKE & HERBERT AND SUMMIT AND THEIR RESPECTIVE AFFILIATES ARE URGED TO READ, THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT BURKE & HERBERT, SUMMIT AND THE PROPOSED TRANSACTION. Investors and shareholders will be able to obtain a free copy of the registration statement, including the joint proxy statement/prospectus, as well as other relevant documents filed with the SEC containing information about Burke & Herbert and Summit, without charge, at the SEC’s website www.sec.gov. Copies of documents filed with the SEC by Burke & Herbert will be made available free of charge in the “Investor Relations” section of Burke & Herbert’s website, www.burkeandherbertbank.com, under the heading “Financials.” Copies of documents filed with the SEC by Summit will be made available free of charge in the “News” section of Summit’s website, www.summitfgi.com, under the heading “News / Presentations and Events” link.

 

Participants in Solicitation

 

Burke & Herbert, Summit, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction under the rules of the SEC. Information regarding Burke & Herbert’s directors and executive officers is available in its Registration Statement on Form 10, as amended and as ordered effective by the SEC on April 21, 2023. Information regarding Summit’s directors and executive officers is available in its definitive proxy statement, which was filed with the SEC on March 31, 2023, and certain other documents filed by Summit with the SEC. Other information regarding the participants in the solicitation of proxies in respect of the proposed transaction and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC. Free copies of these documents, when available, may be obtained as described in the preceding paragraph.

 

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Quarterly Performance Summary (unaudited) -- Q3 2023 vs Q3 2022

 

		For the Quarter Ended								Percent
Dollars in thousands		9/30/2023				9/30/2022				Change
Statements of Income
Interest income
Loans, including fees		$	58,102			$	38,784				49.8	%
Securities			6,357				3,497				81.8	%
Other			235				170				38.2	%
Total interest income			64,694				42,451				52.4	%
Interest expense
Deposits			19,924				6,140				224.5	%
Borrowings			3,497				2,198				59.1	%
Total interest expense			23,421				8,338				180.9	%
Net interest income			41,273				34,113				21.0	%
Provision for credit losses			1,250				1,500				-16.7	%
Net interest income after provision for credit losses			40,023				32,613				22.7	%
Noninterest income
Trust and wealth management fees			819				725				13.0	%
Mortgage origination revenue			172				538				-68.0	%
Service charges on deposit accounts			1,775				1,550				14.5	%
Bank card revenue			1,907				1,639				16.4	%
Net gains on equity investments			180				283				-36.4	%
Net realized losses on debt securities			(12	)			(242	)			-95.0	%
Bank owned life insurance and annuity income			311				229				35.8	%
Other income			113				165				-31.5	%
Total noninterest income			5,265				4,887				7.7	%
Noninterest expense
Salaries and employee benefits			11,959				10,189				17.4	%
Net occupancy expense			1,436				1,301				10.4	%
Equipment expense			2,361				1,851				27.6	%
Professional fees			400				372				7.5	%
Advertising and public relations			247				276				-10.5	%
Amortization of intangibles			998				354				181.9	%
FDIC premiums			716				292				145.2	%
Bank card expense			972				726				33.9	%
Foreclosed properties expense, net of (gains)/losses			10				26				-61.5	%
Acquisition-related expense		1,110				—				n/m
Other expenses			3,953				3,834				3.1	%
Total noninterest expense			24,162				19,221				25.7	%
Income before income taxes			21,126				18,279				15.6	%
Income tax expense			4,794				3,856				24.3	%
Net income			16,332				14,423				13.2	%
Preferred stock dividends		225				225				n/a
Net income applicable to common shares		$	16,107			$	14,198				13.4	%

 

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Quarterly Performance Summary (unaudited) -- Q3 2023 vs Q3 2022

 

		For the Quarter Ended								Percent
		9/30/2023				9/30/2022				Change
Per Share Data
Earnings per common share
Basic		$	1.10			$	1.11				-0.9	%
Diluted		$	1.09			$	1.11				-1.8	%
Cash dividends per common share		$	0.22			$	0.20				10.0	%
Common stock dividend payout ratio		19.8		%			17.7	%			11.5	%
Average common shares outstanding
Basic			14,672,176				12,766,473				14.9	%
Diluted			14,714,211				12,835,670				14.6	%
Common shares outstanding at period end			14,674,852				12,774,645				14.9	%
Performance Ratios
Return on average equity			15.66	%			17.05	%			-8.2	%
Return on average tangible equity (C)(E)			20.03	%			21.33	%			-6.1	%
Return on average tangible common equity (D)(E)			20.95	%			22.20	%			-5.6	%
Return on average assets			1.42	%			1.51	%			-6.0	%
Net interest margin (A)			3.88	%			3.84	%			1.0	%
Efficiency ratio (B)			47.15	%			47.95	%			-1.7	%

 

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).

(E) - See Non-GAAP Financial Measures for additional information relating to the calculation of this item.

 

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Nine Month Performance Summary (unaudited) -- 2023 vs 2022

 

		For the Nine Months Ended								Percent
Dollars in thousands		9/30/2023				9/30/2022				Change
Statements of Income
Interest income
Loans, including fees		$	157,999			$	101,774				55.2	%
Securities			17,423				8,871				96.4	%
Other			610				262				132.8	%
Total interest income			176,032				110,907				58.7	%
Interest expense
Deposits			51,775				10,489				393.6	%
Borrowings			8,481				5,785				46.6	%
Total interest expense			60,256				16,274				270.3	%
Net interest income			115,776				94,633				22.3	%
Provision for credit losses			10,750				5,450				97.2	%
Net interest income after provision for credit losses			105,026				89,183				17.8	%
Noninterest income
Trust and wealth management fees			2,484				2,228				11.5	%
Mortgage origination revenue			513				1,194				-57.0	%
Service charges on deposit accounts			5,110				4,625				10.5	%
Bank card revenue			5,462				4,748				15.0	%
Net gains/(losses) on equity investments		375				(14		)		n/m
Net realized losses on debt securities, net			(282	)			(684	)			-58.8	%
Bank owned life insurance and annuity income			1,078				843				27.9	%
Other income			334				348				-4.0	%
Total noninterest income			15,074				13,288				13.4	%
Noninterest expense
Salaries and employee benefits			34,922				29,920				16.7	%
Net occupancy expense			4,297				3,801				13.0	%
Equipment expense			6,752				5,484				23.1	%
Professional fees			1,246				1,242				0.3	%
Advertising and public relations			681				613				11.1	%
Amortization of intangibles			2,340				1,088				115.1	%
FDIC premiums			1,788				872				105.0	%
Bank card expense			2,620				2,249				16.5	%
Foreclosed properties expense, net of (gains)/losses			73				77				-5.2	%
Acquisition-related expense		5,604				33				n/m
Other expenses			10,563				8,651				22.1	%
Total noninterest expense			70,886				54,030				31.2	%
Income before income taxes			49,214				48,441				1.6	%
Income tax expense			10,572				10,311				2.5	%
Net income			38,642				38,130				1.3	%
Preferred stock dividends			675				675				0.0	%
Net income applicable to common shares		$	37,967			$	37,455				1.4	%

 

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Nine Month Performance Summary (unaudited) -- 2023 vs 2022

 

		For the Nine Months Ended								Percent
		9/30/2023				9/30/2022				Change
Per Share Data
Earnings per common share
Basic		$	2.70			$	2.94				-8.2	%
Diluted		$	2.69			$	2.92				-7.9	%
Cash dividends per common share		$	0.62			$	0.56				10.7	%
Common stock dividend payout ratio			22.6	%			18.7	%			20.7	%
Average common shares outstanding
Basic			14,048,567				12,755,576				10.1	%
Diluted			14,090,796				12,815,365				10.0	%
Common shares outstanding at period end			14,674,852				12,774,645				14.9	%
Performance Ratios
Return on average equity			12.97	%			15.26	%			-15.0	%
Return on average tangible equity (C)(E)			17.60	%			19.23	%			-8.5	%
Return on average tangible common equity (D)(E)			17.42	%			20.00	%			-12.9	%
Return on average assets			1.18	%			1.37	%			-13.9	%
Net interest margin (A)			3.87	%			3.71	%			4.3	%
Efficiency ratio (B)			47.66	%			48.25	%			-1.2	%

 

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).

(E) - See Non-GAAP Financial Measures for additional information relating to the calculation of this item.

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Five Quarter Performance Summary (unaudited)

 

		For the Quarter Ended
Dollars in thousands		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
Statements of Income
Interest income
Loans, including fees		$	58,102			$	54,413			$	45,485			$	43,589			$	38,784
Securities			6,357				6,247				4,819				4,181				3,497
Other			235				203				171				70				170
Total interest income			64,694				60,863				50,475				47,840				42,451
Interest expense
Deposits			19,924				17,851				14,000				10,194				6,140
Borrowings			3,497				2,699				2,286				3,293				2,198
Total interest expense			23,421				20,550				16,286				13,487				8,338
Net interest income			41,273				40,313				34,189				34,353				34,113
Provision for credit losses			1,250				8,000				1,500				1,500				1,500
Net interest income after provision for credit losses			40,023				32,313				32,689				32,853				32,613
Noninterest income
Trust and wealth management fees			819				854				811				750				725
Mortgage origination revenue			172				169				171				286				538
Service charges on deposit accounts			1,775				1,943				1,392				1,526				1,550
Bank card revenue			1,907				1,987				1,568				1,513				1,639
Net gains on equity investments			180				150				45				280				283
Net realized losses on debt securities			(12	)			(211	)			(59	)			(24	)			(242	)
Bank owned life insurance and annuity income			311				431				336				367				229
Other income			113				100				122				167				165
Total noninterest income			5,265				5,423				4,386				4,865				4,887
Noninterest expense
Salaries and employee benefits			11,959				12,156				10,807				10,532				10,189
Net occupancy expense			1,436				1,528				1,333				1,328				1,301
Equipment expense			2,361				2,361				2,030				1,769				1,851
Professional fees			400				471				376				386				372
Advertising and public relations			247				264				170				280				276
Amortization of intangibles			998				999				343				351				354
FDIC premiums			716				742				330				352				292
Bank card expense			972				951				696				679				726
Foreclosed properties expense, net of (gains)/losses			10				48				15				159				26
Acquisition-related expenses			1,110				4,163				331				81				—
Other expenses			3,953				3,641				2,968				2,932				3,834
Total noninterest expense			24,162				27,324				19,399				18,849				19,221
Income before income taxes			21,126				10,412				17,676				18,869				18,279
Income tax expense			4,794				2,203				3,575				3,783				3,856
Net income			16,332				8,209				14,101				15,086				14,423
Preferred stock dividends			225				225				225				225				225
Net income applicable to common shares		$	16,107			$	7,984			$	13,876			$	14,861			$	14,198

 

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Five Quarter Performance Summary (unaudited)

 

		For the Quarter Ended
		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
Per Share Data
Earnings per common share
Basic		$	1.10			$	0.54			$	1.09			$	1.16			$	1.11
Diluted		$	1.09			$	0.54			$	1.08			$	1.16			$	1.11
Cash dividends per common share		$	0.22			$	0.20			$	0.20			$	0.20			$	0.20
Common stock dividend payout ratio			19.8	%			36.7	%			18.1	%			16.9	%			17.7	%
Average common shares outstanding
Basic			14,672,176				14,668,923				12,783,851				12,775,703				12,766,473
Diluted			14,714,211				14,703,636				12,830,102				12,837,637				12,835,670
Common shares outstanding at period end			14,674,852				14,672,147				12,786,404				12,783,646				12,774,645
Performance Ratios
Return on average equity			15.66	%			7.99	%			15.55	%			17.50	%			17.05	%
Return on average tangible equity (C)(E)			20.03	%			10.86	%			19.10	%			21.75	%			21.33	%
Return on average tangible common equity (D)(E)			20.95	%			11.37	%			20.10	%			22.96	%			22.20	%
Return on average assets			1.42	%			0.73	%			1.43	%			1.54	%			1.51	%
Net interest margin (A)			3.88	%			3.89	%			3.83	%			3.80	%			3.84	%
Efficiency ratio (B)			47.15	%			47.90	%			48.00	%			46.40	%			47.95	%

 

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).

(E) - See Non-GAAP Financial Measures for additional information relating to the calculation of this item.

 

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Selected Balance Sheet Data (unaudited)

 

Dollars in thousands, except per share amounts		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
Assets
Cash and due from banks		$	23,159			$	23,341			$	16,488			$	16,469			$	16,141
Interest bearing deposits other banks			36,398				39,902				54,328				28,248				29,510
Debt securities, available for sale			511,403				512,038				431,933				405,201				383,965
Debt securities, held to maturity			94,715				95,200				95,682				96,163				96,640
Equity investments			31,241				30,818				29,867				29,494				20,314
Other investments			19,579				16,014				12,696				16,029				18,105
Loans, net			3,551,686				3,506,880				3,059,099				3,043,919				3,038,377
Property held for sale			4,505				4,742				5,128				5,067				5,193
Premises and equipment, net			62,721				60,967				54,491				53,981				54,628
Goodwill and other intangible assets, net			75,425				76,423				61,807				62,150				62,502
Cash surrender value of life insurance policies and annuities			85,076				84,790				72,019				71,640				71,216
Derivative financial instruments			44,527				39,951				34,758				40,506				42,179
Other assets			63,773				61,204				49,111				47,825				48,529
Total assets		$	4,604,208			$	4,552,270			$	3,977,407			$	3,916,692			$	3,887,299
Liabilities and Shareholders' Equity
Deposits		$	3,754,495			$	3,735,034			$	3,299,846			$	3,169,879			$	3,108,072
Short-term borrowings			258,054				232,150				140,150				225,999				273,148
Long-term borrowings and subordinated debentures, net			123,892				123,776				123,660				123,543				123,427
Other liabilities			51,315				48,136				44,205				42,741				40,978
Total liabilities			4,187,756				4,139,096				3,607,861				3,562,162				3,545,625
Preferred stock and related surplus			14,920				14,920				14,920				14,920				14,920
Common stock and related surplus			130,508				130,227				90,939				90,696				90,345
Retained earnings			289,641				276,762				271,712				260,393				248,084
Accumulated other comprehensive income (loss)			(18,617	)			(8,735	)			(8,025	)			(11,479	)			(11,675	)
Total shareholders' equity			416,452				413,174				369,546				354,530				341,674
Total liabilities and shareholders' equity		$	4,604,208			$	4,552,270			$	3,977,407			$	3,916,692			$	3,887,299
Book value per common share		$	27.36			$	27.14			$	27.73			$	26.57			$	25.58
Tangible book value per common share (A)(C)		$	22.22			$	21.93			$	22.90			$	21.70			$	20.69
Tangible common equity to tangible assets (B)(C)			7.2	%			7.2	%			7.5	%			7.2	%			6.9	%

 

NOTES

(A) - Tangible book value per share = (Common stock and related surplus plus Retained earnings plus Accumulated other comprehensive income/loss - Intangible assets) / Common shares outstanding.

(B) - Tangible common equity to tangible assets = (Common stock and related surplus plus Retained earnings plus Accumulated other comprehensive income/loss - Intangible assets) / (Total assets - Intangible assets).

(C) - See Non-GAAP Financial Measures for additional information relating to the calculaton of this item.

 

 

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)

Loan Composition (unaudited)

 

Dollars in thousands		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
Commercial		$	511,951			$	511,457			$	498,268			$	501,844			$	512,771
Mortgage warehouse lines			114,734				118,785				86,240				130,390				194,740
Commercial real estate
Owner occupied			547,886				566,447				469,560				467,050				473,298
Non-owner occupied			1,217,029				1,193,927				1,036,358				1,004,368				960,627
Construction and development
Land and development			114,354				117,371				102,351				106,362				104,437
Construction			349,049				309,709				290,556				282,935				248,564
Residential real estate
Conventional			497,076				483,998				395,312				386,874				382,203
Jumbo			113,837				117,219				111,475				92,103				87,449
Home equity			81,967				86,050				70,167				71,986				72,756
Consumer			44,288				44,429				36,531				35,372				35,116
Other			6,748				3,169				3,117				3,534				3,166
Total loans, net of unearned fees			3,598,919				3,552,561				3,099,935				3,082,818				3,075,127
Less allowance for loan credit losses			47,233				45,681				40,836				38,899				36,750
Loans, net		$	3,551,686			$	3,506,880			$	3,059,099			$	3,043,919			$	3,038,377
Unfunded loan commitments		$	943,508			$	957,278			$	907,757			$	925,657			$	889,854

 

 

 

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)

Deposit Composition (unaudited)

 

Dollars in thousands		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
Core deposits
Non interest bearing checking		$	630,055			$	679,139			$	552,716			$	553,616			$	619,067
Interest bearing checking			2,144,737				2,024,341				1,886,011				1,743,299				1,475,643
Savings			477,348				512,129				462,631				496,751				582,922
Time deposits			469,530				465,026				327,037				343,423				397,662
Total core deposits			3,721,670				3,680,635				3,228,395				3,137,089				3,075,294
Brokered deposits			32,825				54,399				71,451				32,790				32,778
Total deposits		$	3,754,495			$	3,735,034			$	3,299,846			$	3,169,879			$	3,108,072
Estimated uninsured deposits (A)		$	1,283,610			$	1,189,908			$	933,703			$	946,188			$	757,038

 

(A) - Excludes uninsured public funds otherwise secured or collateralized as required by law

 

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)

Regulatory Capital Ratios (unaudited)

 

		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
Summit Financial Group, Inc.
CET1 Risk-based Capital			8.9	%			8.7	%			8.9	%			8.6	%			8.2	%
Tier 1 Risk-based Capital			9.7	%			9.5	%			9.8	%			9.5	%			9.2	%
Total Risk Based Capital			13.5	%			13.3	%			14.0	%			13.5	%			13.1	%
Tier 1 Leverage			8.5	%			8.4	%			8.7	%			8.5	%			8.4	%
Summit Community Bank, Inc.
CET1 Risk-based Capital			11.6	%			11.3	%			11.9	%			11.6	%			11.3	%
Tier 1 Risk-based Capital			11.6	%			11.3	%			11.9	%			11.6	%			11.3	%
Total Risk Based Capital			12.7	%			12.5	%			13.1	%			12.6	%			12.2	%
Tier 1 Leverage			10.1	%			9.9	%			10.6	%			10.4	%			10.3	%

 

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Asset Quality Information (unaudited)

 

		For the Quarter Ended
Dollars in thousands		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
Gross loan charge-offs		$	226			$	4,009			$	164			$	250			$	265
Gross loan recoveries			(108	)			(118	)			(227	)			(249	)			(257	)
Net loan charge-offs		$	118			$	3,891			$	(63	)		$	1			$	8
Net loan charge-offs to average loans (annualized)			0.01	%			0.44	%			-0.01	%			0.00	%			0.00	%
Allowance for loan credit losses		$	47,233			$	45,681			$	40,836			$	38,899			$	36,750
Allowance for loan credit losses as a percentage of period end loans			1.31	%			1.29	%			1.32	%			1.26	%			1.19	%
Allowance for credit losses on unfunded loan commitments ("ULC'")		$	6,912			$	7,332			$	6,572			$	6,947			$	7,597
Allowance for credit losses on ULC as a percentage of period end ULC			0.73	%			0.81	%			0.72	%			0.75	%			0.85	%
Nonperforming assets:
Nonperforming loans
Commercial		$	783			$	254			$	402			$	93			$	347
Commercial real estate			6,402				5,970				1,700				1,750				1,860
Residential construction and development			750				772				813				851				902
Residential real estate			4,787				4,298				4,322				5,117				6,083
Consumer			124				46				65				12				8
Total nonperforming loans			12,846				11,340				7,302				7,823				9,200
Foreclosed properties
Commercial real estate			297				297				297				297				297
Commercial construction and development			2,187				2,187				2,187				2,187				2,332
Residential construction and development			1,924				2,161				2,293				2,293				2,293
Residential real estate			97				97				351				290				271
Total foreclosed properties			4,505				4,742				5,128				5,067				5,193
Total nonperforming assets		$	17,351			$	16,082			$	12,430			$	12,890			$	14,393
Nonperforming loans to period end loans			0.36	%			0.32	%			0.24	%			0.25	%			0.30	%
Nonperforming assets to period end assets			0.38	%			0.35	%			0.31	%			0.33	%			0.37	%

 

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Loans Past Due 30-89 Days (unaudited)

 

Dollars in thousands		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
Commercial		$	3,300			$	1,006			$	463			$	3,168			$	1,329
Commercial real estate			781				513				1,000				641				1,550
Construction and development			793				161				3,459				317				236
Residential real estate			4,620				4,933				2,311				6,231				2,824
Consumer			440				389				252				253				216
Other			37				17				13				22				4
Total		$	9,971			$	7,019			$	7,498			$	10,632			$	6,159

 

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Average Balance Sheet, Interest Earnings & Expenses and Average Rates

Q3 2023 vs Q2 2023 vs Q3 2022 (unaudited)

 

		Q3 2023												Q2 2023												Q3 2022
		Average				Earnings/				Yield/				Average				Earnings /				Yield /				Average				Earnings /				Yield /
Dollars in thousands		Balances				Expense				Rate				Balances				Expense				Rate				Balances				Expense				Rate
ASSETS
Interest earning assets
Loans, net of unearned interest (1)
Taxable		$	3,591,583			$	58,040				6.41	%		$	3,516,306			$	54,374				6.20	%		$	3,018,219			$	38,741				5.09	%
Tax-exempt (2)			3,911				78				7.91	%			4,144				49				4.74	%			4,834				54				4.43	%
Securities
Taxable			417,299				4,972				4.73	%			428,039				4,900				4.59	%			283,645				2,273				3.18	%
Tax-exempt (2)			211,150				1,754				3.30	%			209,931				1,705				3.26	%			203,951				1,549				3.01	%
Interest bearing deposits other banks and Federal funds sold			39,200				235				2.38	%			35,218				203				2.31	%			49,048				170				1.38	%
Total interest earning assets			4,263,143				65,079				6.06	%			4,193,638				61,231				5.86	%			3,559,697				42,787				4.77	%
Noninterest earning assets
Cash & due from banks			24,229												23,588												17,455
Premises & equipment			62,085												60,872												54,976
Intangible assets			76,037												80,445												62,705
Other assets			219,150												212,104												171,409
Allowance for loan credit losses			(46,498	)											(44,312	)											(35,381	)
Total assets		$	4,598,146											$	4,526,335											$	3,830,861
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing demand deposits		$	2,057,035			$	15,053				2.90	%		$	1,985,134			$	13,423				2.71	%		$	1,454,815			$	4,276				1.17	%
Savings deposits			493,565				2,035				1.64	%			528,694				2,000				1.52	%			611,075				1,243				0.81	%
Time deposits			505,824				2,836				2.22	%			513,236				2,428				1.90	%			461,134				621				0.53	%
Short-term borrowings			267,935				1,988				2.94	%			207,418				1,212				2.34	%			191,421				850				1.76	%
Long-term borrowings and subordinated debentures			123,839				1,509				4.83	%			123,843				1,487				4.82	%			123,368				1,348				4.34	%
Total interest bearing liabilities			3,448,198				23,421				2.69	%			3,358,325				20,550				2.45	%			2,841,813				8,338				1.16	%
Noninterest bearing liabilities
Demand deposits			681,035												706,391												609,424
Other liabilities			51,669												50,863												41,339
Total liabilities			4,180,902												4,115,579												3,492,576
Shareholders' equity - preferred			14,920												14,920												14,920
Shareholders' equity - common			402,324												395,836												323,365
Total liabilities and shareholders' equity		$	4,598,146											$	4,526,335											$	3,830,861
NET INTEREST EARNINGS						$	41,658											$	40,681											$	34,449
NET INTEREST MARGIN											3.88	%											3.89	%											3.84	%

(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 $385,000, $368,000 and $336,000 for Q3 2023, Q2 2023 and Q3 2022, respectively.

 

 

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)

Average Balance Sheet, Interest Earnings & Expenses and Average Rates

YTD 2023 vs YTD 2022 (unaudited)

 

		YTD 2023												YTD 2022
		Average				Earnings /				Yield /				Average				Earnings /				Yield /
Dollars in thousands		Balances				Expense				Rate				Balances				Expense				Rate
ASSETS
Interest earning assets
Loans, net of unearned interest (1)
Taxable		$	3,400,167			$	157,813				6.21	%		$	2,898,380			$	101,640				4.69	%
Tax-exempt (2)			4,706				235				6.68	%			5,108				170				4.45	%
Securities
Taxable			386,825				13,283				4.59	%			300,371				5,695				2.53	%
Tax-exempt (2)			212,484				5,241				3.30	%			187,575				4,021				2.87	%
Interest bearing deposits other banks and Federal funds sold			36,261				610				2.25	%			53,142				262				0.66	%
Total interest earning assets			4,040,443				177,182				5.86	%			3,444,576				111,788				4.34	%
Noninterest earning assets
Cash & due from banks			21,766												17,671
Premises & equipment			59,053												55,486
Intangible assets			72,887												63,061
Other assets			207,111												159,912
Allowance for loan losses			(43,466	)											(33,705	)
Total assets		$	4,357,794											$	3,707,001
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing demand deposits		$	1,954,761			$	39,276				2.69	%		$	1,260,907			$	6,015				0.64	%
Savings deposits			500,647				5,949				1.59	%			660,855				2,505				0.51	%
Time deposits			469,864				6,550				1.86	%			506,654				1,969				0.52	%
Short-term borrowings			214,322				4,024				2.51	%			179,813				1,918				1.43	%
Long-term borrowings and subordinated debentures			123,717				4,457				4.82	%			123,279				3,867				4.19	%
Total interest bearing liabilities			3,263,311				60,256				2.47	%			2,731,508				16,274				0.80	%
Noninterest bearing liabilities
Demand deposits			648,789												600,766
Other liabilities			48,554												41,541
Total liabilities			3,960,654												3,373,815
Shareholders' equity - preferred			14,920												14,920
Shareholders' equity - common			382,220												318,266
Total liabilities and shareholders' equity		$	4,357,794											$	3,707,001
NET INTEREST EARNINGS						$	116,926											$	95,514
NET INTEREST MARGIN											3.87	%											3.71	%

 

 

(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 $1,150,000 and $881,000 for YTD 2023 and YTD 2022 periods, respectively.

 

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