Business Services Industry
Summit Financial Group Announces Record Q2 2004 Earnings; Diluted EPS Increases 31.6% to $0.75
Business Wire, July 21, 2004
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Quarterly Performance Summary -- Q2 2004 vs Q2 2003
For the Quarter Ended
--------------------------
Dollars in thousands, except per Percent
share amounts 6/30/2004 6/30/2003 Change
----------------------------------------------------------------------
Condensed Statements of Income
Interest income
Loans, including fees $8,744 $7,697 13.6%
Securities 2,316 2,426 -4.5%
Other 32 46 -30.4%
--------------------------
Total interest income 11,092 10,169 9.1%
--------------------------
Interest expense
Deposits 2,390 2,516 -5.0%
Borrowings 1,904 1,952 -2.5%
--------------------------
Total interest expense 4,294 4,468 -3.9%
--------------------------
Net interest income 6,798 5,701 19.2%
Provision for loan losses 233 233 0.0%
--------------------------
Net interest income after
provision
for loan losses 6,565 5,468 20.1%
--------------------------
Noninterest income
Service fee income 562 388 44.8%
Mortgage origination revenue 6,614 184 3494.6%
Securities gains (losses) 17 66 -74.2%
Other income 239 159 50.3%
--------------------------
Total noninterest income 7,432 797 832.5%
--------------------------
Noninterest expense
Salaries and employee benefits 4,740 1,880 152.1%
Net occupancy expense 386 210 83.8%
Equipment expense 441 311 41.8%
Postage expense 1,435 49 2828.6%
Advertising 1,304 63 1969.8%
Other expenses 1,862 926 101.1%
--------------------------
Total noninterest expense 10,168 3,439 195.7%
--------------------------
Income before income taxes 3,829 2,826 35.5%
Income taxes 1,155 818 41.2%
--------------------------
Net income $2,674 $2,008 33.2%
==========================
Per Share Data
Basic earnings $0.76 $0.57 33.3%
Diluted earnings $0.75 $0.57 31.6%
Average shares outstanding
Basic 3,510,784 3,504,358 0.2%
Diluted 3,563,410 3,534,643 0.8%
Performance Ratios
Return on average equity 17.96% 14.62% 22.8%
Return on average assets 1.29% 1.12% 15.2%
Net yield on earning assets -
taxable equivalent 3.64% 3.54% 2.8%
Efficiency ratio consolidated(A) 69.59% 50.83% 36.9%
Efficiency ratio excluding
mortgage banking (A) 53.60% 50.77% 5.6%
NOTE: (A) - Computed on a tax equivalent basis excluding
nonrecurring income and expense items and amortization of
intangibles.
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Six Month Performance Summary -- 2004 vs. 2003
For the Six Months Ended
----------------------------
Dollars in thousands, except per Percent
share amounts 6/30/2004 6/30/2003 Change
----------------------------------------------------------------------
Condensed Statements of Income
Interest income
Loans, including fees $17,058 $15,193 12.3%
Securities 4,842 5,016 -3.5%
Other 64 91 -29.7%
----------------------------
Total interest income 21,964 20,300 8.2%
----------------------------
Interest expense
Deposits 4,804 5,142 -6.6%
Borrowings 3,761 3,789 -0.7%
----------------------------
Total interest expense 8,565 8,931 -4.1%
----------------------------
Net interest income 13,399 11,369 17.9%
Provision for loan losses 465 450 3.3%
----------------------------
Net interest income after
provision
for loan losses 12,934 10,919 18.5%
----------------------------
Noninterest income
Service fee income 1,072 728 47.3%
Mortgage origination revenue 10,933 323 3284.8%
Securities gains (losses) 37 106 -65.1%
Other income 332 213 55.9%
----------------------------
Total noninterest income 12,374 1,370 803.2%
----------------------------
Noninterest expense
Salaries and employee
benefits 8,426 3,799 121.8%
Net occupancy expense 690 405 70.4%
Equipment expense 870 611 42.4%
Postage expense 2,788 101 2660.4%
Advertising 2,265 112 1922.3%
Other expenses 2,968 1,752 69.4%
----------------------------
Total noninterest expense 18,007 6,780 165.6%
----------------------------
Income before income taxes 7,301 5,509 32.5%
Income taxes 2,176 1,637 32.9%
----------------------------
Net income $5,125 $3,872 32.4%
============================
Per Share Data
Basic earnings $1.46 $1.11 31.5%
Diluted earnings $1.44 $1.10 30.9%
Average shares outstanding
Basic 3,510,423 3,504,145 0.2%
Diluted 3,551,566 3,530,236 0.6%
Performance Ratios
Return on average equity 17.31% 14.42% 20.0%
Return on average assets 1.26% 1.11% 13.5%
Net yield on earning assets -
taxable equivalent 3.66% 3.60% 1.7%
Efficiency ratio consolidated(A) 67.91% 50.82% 33.6%
Efficiency ratio excluding
mortgage banking (A) 52.07% 50.80% 2.5%
NOTE: (A) - Computed on a tax equivalent basis excluding
nonrecurring income and expense items and amortization of
intangibles.
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Five Quarter Performance Summary
For the Quarter Ended
----------------------------------------------------
Dollars in
thousands,
except per share
amounts 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03
----------------------------------------------------------------------
Condensed
Statements of
Income
Interest income
Loans,
including fees $8,744 $8,314 $8,096 $7,877 $7,697
Securities 2,316 2,527 2,501 2,375 2,426
Other 32 32 37 42 46
----------------------------------------------------
Total interest
income 11,092 10,873 10,634 10,294 10,169
----------------------------------------------------
Interest expense
Deposits 2,390 2,414 2,390 2,467 2,516
Borrowings 1,904 1,857 1,862 1,885 1,952
----------------------------------------------------
Total interest
expense 4,294 4,271 4,252 4,352 4,468
----------------------------------------------------
Net interest
income 6,798 6,602 6,382 5,942 5,701
Provision for
loan losses 233 233 232 232 233
----------------------------------------------------
Net interest
income after
provision for
loan losses 6,565 6,369 6,150 5,710 5,468
----------------------------------------------------
Noninterest income
Service fee
income 562 509 455 403 388
Mortgage
origination
revenue 6,614 4,319 2,604 211 184
Securities
gains (losses) 17 20 105 - 66
Other income 239 94 480 196 159
----------------------------------------------------
Total noninterest
income 7,432 4,942 3,644 810 797
----------------------------------------------------
Noninterest expense
Salaries and
employee
benefits 4,740 3,686 3,064 2,142 1,880
Net occupancy
expense 386 304 240 223 210
Equipment
expense 441 429 383 326 311
Postage
expense 1,435 1,353 781 103 49
Advertising 1,304 962 571 89 63
Other expenses 1,862 1,105 1,268 914 926
----------------------------------------------------
Total noninterest
expense 10,168 7,839 6,307 3,797 3,439
----------------------------------------------------
Income before
income taxes 3,829 3,472 3,487 2,723 2,826
Income taxes 1,155 1,021 994 880 818
----------------------------------------------------
Net income $2,674 $2,451 $2,493 $1,843 $2,008
====================================================
Per Share Data
Basic earnings $0.76 $0.70 $0.71 $0.53 $0.57
Diluted earnings $0.75 $0.69 $0.70 $0.52 $0.57
Average shares
outstanding
Basic 3,510,784 3,510,063 3,506,874 3,504,820 3,504,358
Diluted 3,563,410 3,553,392 3,541,296 3,554,700 3,534,643
Performance Ratios
Return on
average equity 17.96% 16.77% 17.66% 13.36% 14.62%
Return on
average assets 1.29% 1.23% 1.30% 1.02% 1.12%
Net yield on
earning assets
- taxable
equivalent 3.64% 3.67% 3.69% 3.62% 3.54%
Efficiency ratio
consolidated (A) 69.59% 65.83% 61.84% 53.47% 50.83%
Efficiency ratio
excluding mortgage
banking (A) 53.60% 50.45% 49.23% 50.31% 50.77%
NOTE: (A) - Computed on a tax equivalent basis excluding
nonrecurring income and expense items and amortization of
intangibles.
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Segment Information
For the Quarter Ended June 30, 2004
Parent
Dollars in thousands Community Mortgage and
Banking Banking Other Eliminations Total
----------------------------------------------------------------------
Condensed Statements
of Income
Interest income $10,941 $301 $3 $(153) $11,092
Interest expense 4,185 153 109 (153) 4,294
------------------------------------------------
Net interest income 6,756 148 (106) - 6,798
Provision for loan
losses 233 - - - 233
------------------------------------------------
Net interest income
after provision
for loan losses 6,523 148 (106) - 6,565
------------------------------------------------
Noninterest income 743 6,614 995 (920) 7,432
Noninterest expense 3,824 5,953 1,311 (920) 10,168
------------------------------------------------
Income before
income taxes 3,442 809 (422) - 3,829
Income taxes 1,050 277 (172) - 1,155
------------------------------------------------
Net income $2,392 $532 $(250) $- $2,674
================================================
Average assets $804,831 $16,512 $73,221 $(63,837)$830,727
================================================
SUMMIT FINANCIAL GROUP, INC.(OTCBB: SMMF)
Segment Information
For the Quarter Ended June 30, 2003
Parent
Dollars in Community Mortgage and
thousands Banking Banking Other Eliminations Total
----------------------------------------------------------------------
Condensed
Statements of
Income
Interest income $10,170 $- $2 $(3) $10,169
Interest expense 4,418 - 53 (3) 4,468
--------------------------------------------------
Net interest
income 5,752 - (51) - 5,701
Provision for loan
losses 233 - - - 233
--------------------------------------------------
Net interest
income after
provision
for loan
losses 5,519 - (51) - 5,468
--------------------------------------------------
Noninterest income 613 184 818 (818) 797
Noninterest
expense 3,252 85 920 (818) 3,439
--------------------------------------------------
Income before
income taxes 2,880 99 (153) - 2,826
Income taxes 849 34 (65) - 818
--------------------------------------------------
Net income $2,031 $65 $(88) $- $2,008
==================================================
Average assets $706,915 $3,672 $59,046 $(55,429)$714,204
==================================================
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Segment Information
For the Six Months Ended June 30, 2004
Parent
Dollars in thousands Community Mortgage and
Banking Banking Other Eliminations Total
----------------------------------------------------------------------
Condensed Statements
of Income
Interest income $21,696 $508 $6 $(246) $21,964
Interest expense 8,355 242 214 (246) 8,565
------------------------------------------------
Net interest income 13,341 266 (208) - 13,399
Provision for loan
losses 465 - - - 465
------------------------------------------------
Net interest income
after provision
for loan losses 12,876 266 (208) - 12,934
------------------------------------------------
Noninterest income 1,366 10,932 1,885 (1,809) 12,374
Noninterest expense 7,418 10,015 2,383 (1,809) 18,007
------------------------------------------------
Income before
income taxes 6,824 1,183 (706) - 7,301
Income taxes 2,049 407 (280) - 2,176
------------------------------------------------
Net income $4,775 $776 $(426) $- $5,125
================================================
Average assets $792,605 $12,946 $71,112 $(62,591)$814,072
================================================
SUMMIT FINANCIAL GROUP, INC.(OTCBB: SMMF)
Segment Information
For the Six Months Ended June 30, 2003
Parent
Dollars in thousands Community Mortgage and
Banking Banking Other Eliminations Total
----------------------------------------------------------------------
Condensed Statements
of Income
Interest income $20,304 $- $4 $(8) $20,300
Interest expense 8,833 - 106 (8) 8,931
------------------------------------------------
Net interest income 11,471 - (102) - 11,369
Provision for loan
losses 450 - - - 450
------------------------------------------------
Net interest income
after provision
for loan losses 11,021 - (102) - 10,919
------------------------------------------------
Noninterest income 1,067 323 1,600 (1,620) 1,370
Noninterest expense 6,420 168 1,812 (1,620) 6,780
------------------------------------------------
Income before
income taxes 5,668 155 (314) - 5,509
Income taxes 1,702 53 (118) - 1,637
------------------------------------------------
Net income $3,966 $102 $(196) $- $3,872
================================================
Average assets $693,888 $3,030 $57,691 $(54,416)$700,193
================================================
SUMMIT FINANCIAL GROUP, INC.(OTCBB: SMMF)
Selected Balance Sheet Data
For the Quarter
Ended
---------------------------------------------------
Dollars in
thousands, except
per share amounts 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03
----------------------------------------------------------------------
Assets $849,555 $809,216 $791,465 $740,645 $716,274
Securities 213,644 215,732 235,409 223,607 217,538
Loans held for
sale, net 15,607 9,596 6,353 709 5,573
Loans, net 559,869 532,855 498,340 473,779 450,669
Intangible
assets 3,574 3,612 3,050 3,088 3,126
Deposits 536,589 530,372 511,801 474,955 473,255
Short-term
borrowings 71,350 42,547 49,714 41,049 24,220
Long-term
borrowings and
subordinated
debentures 176,248 169,608 168,255 165,526 159,369
Shareholders'
equity 58,975 60,674 57,188 55,502 55,873
Book value per
share $16.80 $17.28 $16.30 $15.84 $15.94
SUMMIT FINANCIAL GROUP INC.
(OTCBB: SMMF)
Loan Composition
Dollars in thousands 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03
----------------------------------------------------------------------
Commercial $49,294 $47,178 $46,860 $43,887 $44,995
Commercial real estate 250,562 235,565 209,391 201,011 186,864
Residential construction 2,665 2,698 2,369 4,042 4,137
Residential mortgage 212,371 203,225 196,135 183,142 173,782
Consumer 41,787 41,060 41,112 40,846 39,970
Other 9,316 8,968 8,223 6,331 6,101
---------------------------------------------
Total loans 565,995 538,694 504,090 479,259 455,849
Less unearned fees and
interest 1,173 1,118 1,069 996 882
---------------------------------------------
Total loans net of
unearned fees and
interest 564,822 537,576 503,021 478,263 454,967
Less allowance for loan
losses 4,953 4,721 4,681 4,484 4,298
---------------------------------------------
Loans, net $559,869 $532,855 $498,340 $473,779 $450,669
=============================================
SUMMIT FINANCIAL GROUP INC. (OTCBB: SMMF)
Mortgage Banking Segment Loan Activity
For the Quarter Ended
---------------------------------------------------
Dollars in
thousands 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03
----------------------------------------------------------------------
Loans originated
Amount $74,333 $44,935 $32,413 $11,655 $11,004
Number 1,461 931 724 88 77
Loans sold
Amount $68,013 $41,376 $26,261 $16,928 $8,421
Number 1,364 861 603 112 67
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Asset Quality Information
For the Quarter Ended
-------------------------------------------
Dollars in thousands 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03
----------------------------------------------------------------------
Net loan charge-off's $1 $192 $37 $46 $63
Net loan charge-off's to
average loans(annualized) 0.00% 0.15% 0.03% 0.04% 0.06%
Allowance for loan losses $4,953 $4,721 $4,681 $4,484 $4,298
Allowance for loan losses
as a percentage
of period end loans 0.88% 0.88% 0.93% 0.94% 0.94%
Nonperforming assets:
Nonperforming loans $1,577 $1,448 $1,356 $604 $1,056
Foreclosed properties 475 475 480 560 546
Nonaccrual securities 384 389 396 399 405
-------------------------------------------
Total $2,436 $2,312 $2,232 $1,563 $2,007
===========================================
Nonperforming loans to
period end loans
and other real estate 0.36% 0.36% 0.36% 0.24% 0.35%
===========================================
Nonperforming assets to
period end assets 0.29% 0.29% 0.28% 0.21% 0.28%
===========================================
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Average Balance Sheet, Interest Earnings &
Expenses and Average Rates Q2 2004 vs Q2 2003
Q2 2004 Q2 2003
------------------------ ------------------------
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 $556,669 $8,635 6.20% $443,990 $7,618 6.86%
Tax-exempt 8,774 166 7.57% 5,742 118 8.22%
Securities
Taxable 166,018 1,763 4.25% 178,158 1,944 4.36%
Tax-exempt 48,620 826 6.80% 41,306 719 6.96%
Interest bearing
deposits other
banks
and Federal
funds sold 3,410 34 3.99% 6,133 46 3.00%
--------- -------- ----- --------- -------- -----
Total interest
earning assets 783,491 11,424 5.83% 675,329 10,445 6.19%
Noninterest earning
assets
Cash & due from
banks 14,083 8,999
Premises &
equipment 20,087 12,406
Other assets 17,912 21,703
Allowance for loan
losses (4,846) (4,233)
--------- ---------
Total assets $830,727 $714,204
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing
liabilities
Interest bearing
demand deposits $119,845 $278 0.93% $96,319 $198 0.82%
Savings deposits 48,726 55 0.45% 46,828 72 0.62%
Time deposits 310,195 2,057 2.65% 281,224 2,246 3.19%
Short-term
borrowings 62,383 203 1.30% 26,619 93 1.40%
Long-term
borrowings and
subordinated
debentures 171,205 1,701 3.97% 158,098 1,859 4.70%
--------- -------- ----- --------- -------- -----
712,354 4,294 2.41% 609,088 4,468 2.93%
Noninterest bearing
liabilities
Demand deposits 53,719 44,941
Other liabilities 5,116 5,249
--------- ---------
Total liabilities 771,189 659,278
Shareholders' equity 59,538 54,926
--------- ---------
Total liabilities
and shareholders'
equity $830,727 $714,204
========= =========
NET INTEREST EARNINGS $7,130 $5,977
======== ========
NET INTEREST YIELD ON EARNING
ASSETS 3.64% 3.54%
===== =====
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF)
Average Balance Sheet, Interest Earnings &
Expenses and Average Rates YTD 2004 vs YTD 2003
For the Six Months Ended June 30,
-----------------------------------------------------
2004 2003
---------------------------- ------------------------
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 $539,338 $16,852 6.25% $433,533 $15,030 6.93%
Tax-exempt 8,202 313 7.63% 5,973 245 8.20%
Securities
Taxable 169,208 3,738 4.42% 176,437 4,061 4.60%
Tax-exempt 48,454 1,651 6.81% 40,262 1,429 7.10%
Interest bearing
deposits
other banks
and Federal funds
sold 3,491 64 3.67% 6,013 91 3.03%
------------- -------- ----- --------- -------- -----
Total interest
earning assets 768,693 22,618 5.88% 662,218 20,856 6.30%
Noninterest
earning assets
Cash & due from
banks 12,005 8,565
Premises &
equipment 19,432 12,585
Other assets 18,752 20,988
Allowance for
loan losses (4,810) (4,163)
------------- ---------
Total assets $814,072 $700,193
============= =========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits $117,539 $531 0.90% $97,793 $427 0.87%
Savings deposits 48,390 111 0.46% 46,465 145 0.62%
Time deposits 305,785 4,162 2.72% 277,417 4,570 3.29%
Short-term
borrowings 58,283 375 1.29% 21,922 173 1.58%
Long-term
borrowings and
subordinated
debentures 168,336 3,386 4.02% 153,093 3,616 4.72%
------------- -------- ----- --------- -------- -----
698,333 8,565 2.45% 596,690 8,931 2.99%
Noninterest bearing
liabilities
Demand deposits 51,059 44,581
Other liabilities 5,461 5,201
------------- ---------
Total
liabilities 754,853 646,472
Shareholders'
equity 59,219 53,721
------------- ---------
Total liabilities
and shareholders'
equity $814,072 $700,193
============= =========
NET INTEREST
EARNINGS $14,053 $11,925
======== ========
NET INTEREST YIELD ON EARNING
ASSETS 3.66% 3.60%
===== =====
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