EX-99.1 3 f8k103ex.txt SFG EARNINGS Exhibit 99.1 [SUMMIT FINANCIAL GROUP, INC. LETTERHEAD] FOR RELEASE 6:00 PM EDT, WEDNESDAY, APRIL 16, 2003 April 16, 2003 Contact: Robert S. Tissue, Sr. Vice President & CFO Telephone: (304) 538-7233, Ext. 152 Email: rtissue@SummitFGI.com SUMMIT FINANCIAL GROUP ANNOUNCES Q1 2003 EARNINGS GAAP Basis Diluted EPS Grows 15% SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) today reported first quarter 2003 GAAP net income of $1,864,000 or $0.53 per diluted share, up 15.2 percent on an earnings per share basis from the $1,631,000, or $0.46 per diluted share, reported in the first quarter of 2002. Net income for the first quarter of 2003 generated an annualized return on average shareholders' equity of 14.33% and an annualized return on average assets of 1.09% compared to first quarter ratios of 14.75% and 1.10%, respectively, in the prior year. Operating earnings, which exclude the impact of nonrecurring income and expense items, for first quarter 2003 were $1,851,000 or $0.52 per diluted share, up 13.0 percent on an earnings per share basis compared to operating earnings of $1,609,000 or $0.46 per diluted share for first quarter 2002. Summit's first quarter 2003 results, excluding nonrecurring items, produced an annualized return on average shareholders' equity of 14.23% and an annualized return on average assets of 1.08%, compared to prior year ratios of 14.55% and 1.08%, respectively. Nonrecurring items consisted principally of gains and losses realized on securities transactions and other significant transactional gains and losses. "I am pleased to announce solid first quarter earnings, particularly given the continued weakness in overall economic conditions," said H. Charles Maddy, III, President and Chief Executive Officer. "Notwithstanding these economic challenges, our Company has maintained healthy earnings momentum, while our asset quality continues to compare favorably with the industry." Summit Financial Group, Inc. is a financial holding company with total assets of $711 million. Summit operates thirteen banking locations through its three wholly owned subsidiary banks, Summit Community Bank headquartered in Moorefield, West Virginia, Capital State Bank, Inc. in Charleston, West Virginia, and Shenandoah Valley National Bank in Winchester, Virginia. This press release contains forward-looking statements as defined by federal securities laws. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current projections. Please refer to Summit's filings with the Securities and Exchange Commission for a summary of important factors that could affect Summit's forward-looking statements. Summit undertakes no obligation to revise these statements following the date of this press release.
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Quarterly Performance Summary -- Q1 2003 vs Q1 2002 GAAP Basis For the Quarter Ended Percent --------------------------- Dollars in thousands, except per share amounts 3/31/03 3/31/02 Change ----------------------------------------------------------------------------------------------------- Condensed Statements of Income -- GAAP Basis Interest income - taxable equivalent $ 10,408 $ 10,072 3.3% Interest expense 4,461 4,655 -4.2% ---------- ---------- Net interest income - taxable equivalent 5,947 5,417 9.8% Less: taxable equivalent adjustment 278 237 17.3% ---------- ---------- Net interest income 5,669 5,180 9.4% Provision for loan losses 218 293 -25.6% ---------- ---------- Net interest income after provision for loan losses 5,451 4,887 11.5% Noninterest income 573 362 58.3% Noninterest expense 3,340 2,977 12.2% ---------- ---------- Income before income taxes 2,684 2,272 18.1% Income taxes 820 641 27.9% ---------- ---------- Net income $ 1,864 $ 1,631 14.3% ========== ========== Per Share Data -- GAAP Basis Basic earnings $ 0.53 $ 0.46 15.2% Diluted earnings $ 0.53 $ 0.46 15.2% Average shares outstanding Basic 3,503,930 3,508,620 -0.1% Diluted 3,529,886 3,532,402 -0.1% Performance Ratios -- GAAP Basis Return on average equity 14.33% 14.75% -2.8% Return on average assets 1.09% 1.10% -0.9% Net yield on earning assets - taxable equivalent 3.66% 3.86% -5.2% Efficiency ratio (A) 53.09% 53.40% -0.6%
NOTE: (A) - Excludes nonrecurring income and expense items and amortization of intangibles.
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Quarterly Performance Summary -- Q1 2003 vs Q1 2002 Excluding Nonrecurring Items For the Quarter Ended Percent --------------------------- Dollars in thousands, except per share amounts 3/31/03 3/31/02 Change ----------------------------------------------------------------------------------------------------- Condensed Statements of Income -- Excluding Nonrecurring Items Interest income - taxable equivalent $ 10,408 $ 10,072 3.3% Interest expense 4,461 4,655 -4.2% ---------- ---------- Net interest income - taxable equivalent 5,947 5,417 9.8% Less: taxable equivalent adjustment 278 237 17.3% ---------- ---------- Net interest income 5,669 5,180 9.4% Provision for loan losses 218 293 -25.6% ---------- ---------- Net interest income after provision for loan losses 5,451 4,887 11.5% Noninterest income 552 326 69.3% Noninterest expense 3,340 2,977 12.2% ---------- ---------- Income before income taxes 2,663 2,236 19.1% Income taxes 812 627 29.5% ---------- ---------- Net income excluding nonrecurring items $ 1,851 $ 1,609 15.0% ========== ========== Per Share Data -- Excluding Nonrecurring Items Basic earnings $ 0.53 $ 0.46 15.2% Diluted earnings $ 0.52 $ 0.46 13.0% Average shares outstanding Basic 3,503,930 3,508,620 -0.1% Diluted 3,529,886 3,532,402 -0.1% Performance Ratios -- Excluding Nonrecurring Items Return on average equity 14.23% 14.55% -2.2% Return on average assets 1.08% 1.08% 0.0% Net yield on earning assets - taxable equivalent 3.66% 3.86% -5.2% Efficiency ratio (A) 53.09% 53.40% -0.6%
NOTE: (A) - Excludes nonrecurring income and expense items and amortization of intangibles.
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Five Quarter Performance Summary GAAP Basis For the Quarter Ended ------------------------------------------------------------------ Dollars in thousands, except per share amounts 3/31/03 12/31/02 9/30/02 6/30/02 3/31/02 -------------------------------------------------------------------------------------------------------------------------- Condensed Statements of Income -- GAAP Basis Interest income - taxable equivalent $ 10,408 $ 10,738 $ 10,586 $ 10,290 $ 10,072 Interest expense 4,461 4,694 4,803 4,690 4,655 ---------- ---------- ---------- ---------- ---------- Net interest income - taxable equivalent 5,947 6,044 5,783 5,600 5,417 Less: taxable equivalent adjustment 278 272 241 247 237 ---------- ---------- ---------- ---------- ---------- Net interest income 5,669 5,772 5,542 5,353 5,180 Provision for loan losses 218 308 307 307 293 ---------- ---------- ---------- ---------- ---------- Net interest income after provision for loan losses 5,451 5,464 5,235 5,046 4,887 Noninterest income 573 407 601 575 362 Noninterest expense 3,340 3,227 3,115 3,288 2,977 ---------- ---------- ---------- ---------- ---------- Income before income taxes 2,684 2,644 2,721 2,333 2,272 Income taxes 820 600 798 693 641 ---------- ---------- ---------- ---------- ---------- Net income $ 1,864 $ 2,044 $ 1,923 $ 1,640 $ 1,631 ========== ========== ========== ========== ========== Per Share Data -- GAAP Basis Basic earnings $ 0.53 $ 0.58 $ 0.55 $ 0.47 $ 0.46 Diluted earnings $ 0.53 $ 0.58 $ 0.54 $ 0.46 $ 0.46 Average shares outstanding Basic 3,503,930 3,506,073 3,508,566 3,508,620 3,508,620 Diluted 3,529,886 3,525,115 3,536,220 3,535,900 3,532,402 Performance Ratios -- GAAP Basis Return on average equity 14.33% 15.74% 15.62% 14.49% 14.75% Return on average assets 1.09% 1.22% 1.20% 1.07% 1.10% Net yield on earning assets - taxable equivalent 3.66% 3.83% 3.80% 3.86% 3.86% Efficiency ratio (A) 53.09% 49.97% 50.15% 54.91% 53.40%
NOTE: (A) - Excludes nonrecurring income and expense items and amortization of intangibles.
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Five Quarter Performance Summary Excluding Nonrecurring Items For the Quarter Ended ------------------------------------------------------------------ Dollars in thousands, except per share amounts 3/31/03 12/31/02 9/30/02 6/30/02 3/31/02 -------------------------------------------------------------------------------------------------------------------------- Condensed Statements of Income -- Excluding Nonrecurring Items Interest income - taxable equivalent $ 10,408 $ 10,738 $ 10,586 $ 10,290 $ 10,072 Interest expense 4,461 4,694 4,803 4,690 4,655 ---------- ---------- ---------- ---------- ---------- Net interest income - taxable equivalent 5,947 6,044 5,783 5,600 5,417 Less: taxable equivalent adjustment 278 272 241 247 237 ---------- ---------- ---------- ---------- ---------- Net interest income 5,669 5,772 5,542 5,353 5,180 Provision for loan losses 218 308 307 307 293 ---------- ---------- ---------- ---------- ---------- Net interest income after provision for loan losses 5,451 5,464 5,235 5,046 4,887 Noninterest income 552 610 592 565 326 Noninterest expense 3,340 3,227 3,115 3,288 2,977 ---------- ---------- ---------- ---------- ---------- Income before income taxes 2,663 2,847 2,712 2,323 2,236 Income taxes 812 917 795 690 627 ---------- ---------- ---------- ---------- ---------- Net income $ 1,851 $ 1,930 $ 1,917 $ 1,633 $ 1,609 ========== ========== ========== ========== ========== Per Share Data -- Excluding Nonrecurring Items Basic earnings $ 0.53 $ 0.55 $ 0.55 $ 0.47 $ 0.46 Diluted earnings $ 0.52 $ 0.55 $ 0.54 $ 0.46 $ 0.46 Average shares outstanding Basic 3,503,930 3,506,073 3,508,566 3,508,620 3,508,620 Diluted 3,529,886 3,525,115 3,536,220 3,535,900 3,532,402 Performance Ratios -- Excluding Nonrecurring Items Return on average equity 14.23% 14.86% 15.56% 14.42% 14.55% Return on average assets 1.08% 1.15% 1.19% 1.07% 1.08% Net yield on earning assets - taxable equivalent 3.66% 3.83% 3.80% 3.86% 3.86% Efficiency ratio (A) 53.09% 49.97% 50.15% 54.91% 53.40%
NOTE: (A) - Excludes nonrecurring income and expense items and amortization of intangibles.
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Reconciliation of Operating Earnings to GAAP Net Income For the Quarter Ended ----------------------------------------------------------- Dollars in thousands 3/31/03 12/31/02 9/30/02 6/30/02 3/31/02 ----------------------------------------------------------------------------------------------------- Operating earnings $ 1,851 $ 1,930 $ 1,917 $ 1,633 $ 1,609 Securities gains (losses): Gross gains (losses) 41 (214) 9 12 53 Applicable income tax effect (16) 82 (3) (3) (21) ------- ------- ------- ------- ------- 25 (132) 6 9 32 Other gains (losses): Gross gains (losses) (20) 10 - (3) (16) Applicable income tax effect 8 (4) - 1 6 ------- ------- ------- ------- ------- (12) 6 - (2) (10) Purchased State income tax credits - 240 - - - ------- ------- ------- ------- ------- GAAP net income $ 1,864 $ 2,044 $ 1,923 $ 1,640 $ 1,631 ======= ======= ======= ======= =======
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Selected Balance Sheet Data As of Percent -------------------------- Dollars in thousands, except per share amounts 3/31/03 3/31/02 Change ------------------------------------------------------------------------------- Assets $ 710,794 $ 603,289 17.8% Securities 231,560 206,446 12.2% Loans, net 436,020 358,967 21.5% Intangible assets 3,163 3,314 -4.6% Deposits 468,842 399,752 17.3% Short-term borrowings 28,029 18,861 48.6% Long-term borrowings 152,713 133,813 14.1% Shareholders' equity 53,399 45,023 18.6% Book value per share $ 15.22 $ 12.83 18.6%
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Asset Quality Information For the Quarter Ended --------------------------------------------------------------- Dollars in thousands 3/31/03 12/31/02 9/30/02 6/30/02 3/31/02 --------------------------------------------------------------------------------------------------------------------- Net loan charge-off's $ 142 $ 173 $ 29 $ 59 $ 11 Net loan charge-off's to average loans (annualized) 0.13% 0.18% 0.03% 0.07% 0.01% Allowance for loan losses $4,129 $4,053 $3,919 $3,640 $3,392 Allowance for loan losses as a percentage of period end loans 0.9% 1.0% 1.0% 1.0% 0.9% Nonperforming assets: Nonperforming loans $ 715 $1,491 $ 975 $ 806 $ 864 Foreclosed properties 677 81 81 119 81 Nonaccrual securities 412 421 - - - ------ ------ ------ ------ ------ Total $1,804 $1,993 $1,056 $ 925 $ 945 ====== ====== ====== ====== ====== Nonperforming loans to period end loans and other real estate 0.3% 0.4% 0.3% 0.2% 0.3% === === === === === Nonperforming assets to period end assets 0.3% 0.3% 0.2% 0.1% 0.2% === === === === ===
SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Average Balance Sheet, Interest Earnings & Expenses and Average Rates Q1 2003 vs Q1 2002 Q1 2003 Q1 2002 ----------------------------------- ----------------------------------- Average Earnings / Yield / Average Earnings / Yield / Dollars in thousands Balances Expense Rate Balances Expense Rate ------------------------------------------------------------------------------- ----------------------------------- ASSETS Interest earning assets Loans, net of unearned interest Taxable $ 422,953 $ 7,412 7.01% $ 346,877 $ 6,714 7.74% Tax-exempt 6,208 127 8.18% 5,775 124 8.59% Securities Taxable 174,478 2,114 4.85% 171,374 2,601 6.07% Tax-exempt 39,209 710 7.24% 32,325 599 7.41% Interest bearing deposits other banks and Federal funds sold 6,724 45 2.68% 5,175 34 2.63% --------- ------- ---- --------- ------- ---- Total interest earning assets 649,572 10,408 6.41% 561,526 10,072 7.17% Noninterest earning assets Cash & due from banks 8,168 8,174 Premises & equipment 12,765 12,975 Other assets 19,895 13,870 Allowance for loan losses (4,091) (3,233) ------ --------- Total assets $ 686,309 $ 593,312 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Interest bearing liabilities Interest bearing demand deposits $ 99,283 $ 229 0.92% $ 82,414 $ 296 1.44% Savings deposits 46,098 73 0.63% 44,612 141 1.26% Time deposits 273,566 2,323 3.40% 233,648 2,454 4.20% Short-term borrowings 21,337 80 1.50% 16,930 87 2.06% Long-term borrowings and capital trust securities 144,639 1,756 4.86% 130,758 1,677 5.13% --------- ------- ---- --------- ------- ---- 584,923 4,461 3.05% 508,362 4,655 3.66% Noninterest bearing liabilities Demand deposits 44,217 36,237 Other liabilities 5,152 4,488 --------- --------- Total liabilities 634,292 549,087 Shareholders' equity 52,017 44,225 --------- --------- Total liabilities and shareholders' equity $ 686,309 $ 593,312 ========= ========= NET INTEREST EARNINGS $ 5,947 $ 5,417 ======= ======= NET INTEREST YIELD ON EARNING ASSETS 3.66% 3.86% ==== ====