EX-99 2 earnpressrel207.htm SFG EARNINGS PRESS RELEASE earnpressrel207.htm

 
Exhibit 99

 
 
 

FOR RELEASE 6:00 PM EDT, THURSDAY, JULY 26, 2007

Contact:               Robert S. Tissue, Sr. Vice President & CFO
Telephone:           (304) 530-0552
Email:                    rtissue@SummitFGI.com

 
SUMMIT FINANCIAL GROUP REPORTS SECOND QUARTER 2007 EARNINGS
 
 
EPS from Continuing Operations Grows 22.2 Percent
 
 
MOOREFIELD, W.Va.--July 26, 2007--Summit Financial Group, Inc. (NASDAQ: SMMF) today reported second quarter 2007 net income of its consolidated operations and its continuing operations which excludes from income substantially all business activities of Summit Mortgage, its residential mortgage loan origination unit, which ceased operations in January 2007. 
 
 
Income from continuing operations for second quarter 2007 was $3.2 million, or $0.44 per diluted share, up 21.6 percent and 22.2 percent, respectively, compared with $2.6 million, or $0.36 per diluted share, reported for the prior-year period.  Consolidated net income was $3.0 million, or $0.42 per diluted share, compared with $2.6 million, or $0.37 per diluted share reported for the second quarter of 2006.  Second quarter 2007 results reflect solid asset growth, stable operating expenses, and a slight improvement in the net interest margin.  For the second quarter of 2007, the returns on average shareholders' equity and average assets from continuing operations were 14.96 percent and 1.00 percent, respectively, compared with prior-year ratios of 13.32 percent and 0.89 percent.
 
 
For the six months ended June 30, 2007, income from continuing operations was $5.9 million, or $0.83 per diluted share, up 14.8 percent and 15.3 percent, respectively, compared with $5.2 million, or $0.72 per diluted share, reported for the prior-year period. Consolidated net income for the first half of 2007 was $5.6 million, or $0.79 per diluted share, compared with $5.6 million, or $0.78 per diluted share reported for the 2006 six-month period.  For the first six months of 2007, the returns on average shareholders' equity and average assets from continuing operations were 14.28 percent and 0.95 percent, respectively, compared with prior-year ratios of 13.60 percent and 0.91 percent.
 
 
H. Charles Maddy, III, president and chief executive officer, commented, “Second quarter results demonstrate the strength of our community banking franchise.  Our success in maintaining loan growth despite a slowdown in construction and development lending shows our ability to react to market dynamics, as reflected in our higher levels of commercial and commercial real estate loans this quarter.  Further, our net interest margin and our return on equity (from continuing operations) have remained remarkably steady throughout this very challenging period.  We look forward to concentrating our energies and our capital to expand our market share in some of the best markets in the country, including the new markets in Northern Virginia and Montgomery County, Maryland that we plan to enter when we complete our acquisition of Greater Atlantic Financial Corp. in the fourth quarter of this year.”
 
 
For the second quarter of 2007, total revenue increased 7.6 percent to $10.5 million compared with $9.8 million for the year-earlier quarter.  Net interest income was $9.3 million compared with $8.7 million in the prior-year first quarter, an increase of 8.0 percent.  The increase reflected 9.5 percent growth in average earning assets, partially offset by a 10 basis point decline in the net interest margin to 3.22 percent.  Non-interest income, which consists of insurance commissions and service fees, was $1.2 million for the current quarter, an increase of $44,000 or 4.0 percent from the prior-year quarter. Non-interest income accounted for 11.0 percent of total revenue, in line with its contribution in previous quarters.
 
 
Summit’s operating expenses remain exceptionally well controlled; second quarter 2007 non-interest expense was $5.7 million, up a nominal 0.8 percent from the year-ago quarter, and up 1.2 percent from the prior quarter.  Reflecting the combination of growing revenue and stable expenses, the efficiency ratio (for continuing operations) improved to 51.47 percent compared with 54.33 percent for the prior-year quarter.
 
 
At June 30, 2007, nonperforming assets were $8.2 million, or 0.64 percent of total assets, compared with $4.5 million, or 0.36 percent for the linked quarter and $1.3 million, or 0.11 percent for the year-ago quarter.  Relationships with three developers comprise in excess of 50 percent of total nonperforming assets.  Each of these loans is well-collateralized and adequate reserves are in place.  For the current quarter, the Company had net charge-offs of $96,000, or an annualized 0.04 percent of average loans, compared with $119,000, or an annualized 0.05 percent for the linked quarter, and $135,000, or 0.06 percent annualized for the year earlier period. At June 30, 2007, loan loss reserves were 0.91 percent of loans outstanding.
 
 
Assets at June 30, 2007 were $1.28 billion, an increase of $100.1 million, or 8.5 percent over the last twelve months. Loans, net of unearned income, were $949.2 million at period end, up $83.0 million, or 9.6 percent, year-over-year.  Commercial real estate was the largest contributor to loan growth, up $58.2 million, or 19.6 percent over the past twelve months.  Commercial real estate remains the largest component of Summit’s loan portfolio at 37.0 percent of total loans, with residential mortgages accounting for an additional 29.6 percent.  Construction and development loans, the third largest component of the portfolio, increased $16.7 million year over year, but experienced a significant reduction from the first quarter of 2007, declining $21.7 million, or 9.8 percent.
 
 
Deposits at June 30, 2007 were $850.4 million, an increase of $88.8 million, or 11.7 percent from the $761.6 million reported for the prior-year quarter.  However, compared with the linked quarter, deposits decreased $26.8 million, or 3.1 percent, reflecting a $30.0 million reduction in brokered time deposits.  Retail deposits totaled $626.6 million at quarter end, and accounted for 73.7 percent of total deposits, with non-interest bearing deposits growing $3.7 million, or 6.1 percent, compared with the linked quarter.
 
 
Shareholders' equity at June 30, 2007 was $83.1 million, an increase of 8.5 percent over the last twelve months. Common shares outstanding totaled 7,084,980 at year-end.
 
 
ABOUT THE COMPANY
 
 
Summit Financial Group, Inc., a financial holding company with total assets of $1.28 billion, operates fifteen banking locations through its wholly-owned community bank, Summit Community Bank, headquartered in Moorefield, West Virginia. Summit also operates Summit Insurance Services, LLC headquartered in Moorefield, West Virginia.
 
 
FORWARD-LOOKING STATEMENTS
 
 
This press release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Act of 1995) that are based on current expectations that involve a number of risks and uncertainties.  Words such as “expects”, “anticipates”, “believes”, “estimates” and other similar expressions or future or conditional verbs such as “will”, “should”, “would” and “could” are intended to identify such forward-looking statements.
 
 
Although we believe the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially.  Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking laws and regulations; changes in tax laws; the impact of technological advances; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; and changes in the national and local economy.  We undertake no obligation to revise these statements following the date of this press release.
 
 

 


 

                     SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)
                     Quarterly Performance Summary -- Q2 2007 vs Q2 2006
                   
   
For the Quarter Ended
    
Percent
  
 Dollars in thousands
  
6/30/07
    
6/30/06
    
Change
  
 Condensed Statements of Income
                  
 Interest income
                  
    Loans, including fees
   $
19,079
     $
16,609
       14.9 %
    Securities
    
3,263
      
2,787
       17.1 %
    Other
    
27
      
13
       107.7 %
 Total interest income
    
22,369
      
19,409
       15.3 %
 Interest expense
                        
    Deposits
    
8,882
      
6,408
       38.6 %
    Borrowings
    
4,140
      
4,348
       -4.8 %
 Total interest expense
    
13,022
      
10,756
       21.1 %
 Net interest income
    
9,347
      
8,653
       8.0 %
 Provision for loan losses
    
390
      
330
       18.2 %
 Net interest income after provision
                        
     for loan losses
    
8,957
      
8,323
       7.6 %
 Noninterest income
                        
    Insurance commissions
    
209
      
247
       -15.4 %
    Service fee income
    
735
      
726
       1.2 %
    Securities gains (losses)
    
-
      
-
      
-
  
    Other income
    
209
      
136
       53.7 %
Total noninterest income
    
1,153
      
1,109
       4.0 %
 Noninterest expense
                        
   Salaries and employee benefits
    
3,238
      
3,049
       6.2 %
   Net occupancy expense
    
408
      
390
       4.6 %
   Equipment expense
    
493
      
496
       -0.6 %
   Professional fees
    
193
      
245
       -21.2 %
   Other expenses
    
1,386
      
1,492
       -7.1 %
Total noninterest expense
    
5,718
      
5,672
       0.8 %
 Income from continuing operations before income taxes
    
4,392
      
3,760
       16.8 %
 Income taxes
    
1,240
      
1,167
       6.3 %
 Income from continuing operations
    
3,152
      
2,593
       21.6 %
 Discontinued operations
                        
    Exit costs and impairment of long-lived assets
    
43
      
-
      
n/a
  
    Operating income (loss)
     (227 )    
74
       -406.8 %
 Income (loss) from discontinued operations
                        
      before income taxes
     (184 )    
74
       -348.6 %
 Income taxes
     (66 )    
33
       -300.0 %
  Income (loss) from discontinued operations
     (118 )    
41
       -387.8 %
                         
 Net Income
   $
3,034
     $
2,634
       15.2 %
                         





SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
              
Quarterly Performance Summary -- Q2 2007 vs Q2 2006
              
             
   
For the Quarter Ended
    
Percent
  
 
  
6/30/2007
    
6/30/2006
    
Change
  
 Per Share Data
                  
 Earnings per share from continuing operations
                  
    Basic
   $
0.45
     $
0.36
       25.0 %
    Diluted
   $
0.44
     $
0.36
       22.2 %
 Earnings per share from discontinued operations
                        
    Basic
   $ (0.02 )   $
0.01
       -300.0 %
    Diluted
   $ (0.02 )   $
0.01
       -300.0 %
 Earnings per share
                        
    Basic
   $
0.43
     $
0.37
       16.2 %
    Diluted
   $
0.42
     $
0.37
       13.5 %
                         
 Average shares outstanding
                        
    Basic
    
7,084,980
      
7,135,107
       -0.7 %
    Diluted
    
7,148,241
      
7,189,644
       -0.6 %
                         
 Performance Ratios
                        
 Return on average equity
     14.40 %     13.53 %     6.4 %
 Return on average equity - continuing operations
     14.96 %     13.32 %     12.3 %
 Return on average assets
     0.96 %     0.91 %     5.5 %
 Return on average assets - continuing operations
     1.00 %     0.89 %     12.4 %
 Net interest margin
     3.22 %     3.32 %     -3.0 %
 Efficiency ratio (A)
     53.71 %     70.69 %     -24.0 %
 Efficiency ratio - continuing operations (A)
     51.47 %     54.33 %     -5.3 %

NOTE:  (A) – Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.
 



SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)
                  
Six Month Performance Summary -- 2007 vs 2006
                  
                   
             
   
For the Six Months Ended
    
Percent
  
 Dollars in thousands
  
6/30/2007
    
6/30/2006
    
Change
  
 Condensed Statements of Income
                  
 Interest income
                  
    Loans, including fees
   $
37,792
     $
31,850
       18.7 %
    Securities
    
6,386
      
5,434
       17.5 %
    Other
    
34
      
36
       -5.6 %
 Total interest income
    
44,212
      
37,320
       18.5 %
 Interest expense
                        
    Deposits
    
17,910
      
11,561
       54.9 %
    Borrowings
    
7,931
      
8,727
       -9.1 %
 Total interest expense
    
25,841
      
20,288
       27.4 %
 Net interest income
    
18,371
      
17,032
       7.9 %
 Provision for loan losses
    
780
      
655
       19.1 %
 Net interest income after provision
                        
     for loan losses
    
17,591
      
16,377
       7.4 %
 Noninterest income
                        
    Insurance commissions
    
415
      
477
       -13.0 %
    Service fee income
    
1,353
      
1,356
       -0.2 %
    Securities gains (losses)
    
-
      
-
      
-
  
    Other income
    
397
      
279
       42.3 %
Total noninterest income
    
2,165
      
2,112
       2.5 %
 Noninterest expense
                        
   Salaries and employee benefits
    
6,463
      
6,104
       5.9 %
   Net occupancy expense
    
826
      
792
       4.3 %
   Equipment expense
    
940
      
946
       -0.6 %
   Professional fees
    
367
      
452
       -18.8 %
   Other expenses
    
2,772
      
2,739
       1.2 %
Total noninterest expense
    
11,368
      
11,033
       3.0 %
 Income from continuing operations before income taxes
    
8,388
      
7,456
       12.5 %
 Income taxes
    
2,441
      
2,275
       7.3 %
 Income from continuing operations
    
5,947
      
5,181
       14.8 %
 Discontinued operations
                        
    Exit costs and impairment of long-lived assets
    
123
      
-
      
n/a
  
    Operating income (loss)
     (599 )    
683
       -187.7 %
 Income (loss) from discontinued operations
                        
      before income taxes
     (476 )    
683
       -169.7 %
 Income taxes
     (163 )    
259
       -162.9 %
  Income (loss) from discontinued operations
     (313 )    
424
       -173.8 %
                         
 Net Income
   $
5,634
     $
5,605
       0.5 %

 



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
              
Six Month Performance Summary -- 2007 vs 2006
                  
             
   
For the Six Months Ended
    
Percent
  
 
  
6/30/2007
    
6/30/2006
    
Change
  
 Per Share Data
                  
 Earnings per share from continuing operations
                  
    Basic
   $
0.84
     $
0.73
       15.1 %
    Diluted
   $
0.83
     $
0.72
       15.3 %
 Earnings per share from discontinued operations
                        
    Basic
   $ (0.04 )   $
0.06
       -166.7 %
    Diluted
   $ (0.04 )   $
0.06
       -166.7 %
 Earnings per share
                        
    Basic
   $
0.80
     $
0.79
       1.3 %
    Diluted
   $
0.79
     $
0.78
       1.3 %
                         
 Average shares outstanding
                        
    Basic
    
7,084,980
      
7,131,611
       -0.7 %
    Diluted
    
7,147,784
      
7,189,383
       -0.6 %
                         
 Performance Ratios
                        
 Return on average equity
     13.53 %     14.53 %     -6.9 %
 Return on average equity - continuing operations
     14.28 %     13.60 %     5.0 %
 Return on average assets
     0.90 %     0.98 %     -8.2 %
 Return on average assets - continuing operations
     0.95 %     0.91 %     4.4 %
 Net interest margin
     3.21 %     3.35 %     -4.2 %
 Efficiency ratio (A)
     55.74 %     69.92 %     -20.3 %
 Efficiency ratio - continuing operations (A)
     52.46 %     54.05 %     -2.9 %


NOTE:  (A) – Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.

 




SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
                          
Five Quarter Performance Summary
                              
                         
   
For the Quarter Ended
  
 Dollars in thousands
  
6/30/2007
    
3/31/2007
    
12/31/2006
    
9/30/2006
    
6/30/2006
  
 Condensed Statements of Income
                              
 Interest income
                              
    Loans, including fees
   $
19,079
     $
18,712
     $
18,746
     $
18,060
     $
16,609
  
    Securities
    
3,263
      
3,124
      
3,131
      
2,998
      
2,787
  
    Other
    
27
      
6
      
7
      
16
      
13
  
 Total interest income
    
22,369
      
21,842
      
21,884
      
21,074
      
19,409
  
 Interest expense
                                        
    Deposits
    
8,882
      
9,028
      
8,990
      
7,761
      
6,408
  
    Borrowings
    
4,140
      
3,790
      
3,705
      
4,239
      
4,348
  
 Total interest expense
    
13,022
      
12,818
      
12,695
      
12,000
      
10,756
  
 Net interest income
    
9,347
      
9,024
      
9,189
      
9,074
      
8,653
  
 Provision for loan losses
    
390
      
390
      
930
      
260
      
330
  
 Net interest income after provision
                                        
     for loan losses
    
8,957
      
8,634
      
8,259
      
8,814
      
8,323
  
 Noninterest income
                                        
    Insurance commissions
    
209
      
206
      
228
      
219
      
247
  
    Service fee income
    
735
      
617
      
702
      
700
      
726
  
    Securities gains (losses)
    
-
      
-
      
-
      
-
      
-
  
    Other income
    
209
      
189
      
162
      
131
      
136
  
Total noninterest income
    
1,153
      
1,012
      
1,092
      
1,050
      
1,109
  
 Noninterest expense
                                        
   Salaries and employee benefits
    
3,238
      
3,226
      
2,899
      
2,817
      
3,049
  
   Net occupancy expense
    
408
      
418
      
378
      
387
      
390
  
   Equipment expense
    
493
      
446
      
480
      
476
      
496
  
   Professional fees
    
193
      
174
      
252
      
188
      
245
  
   Other expenses
    
1,386
      
1,385
      
1,291
      
1,409
      
1,492
  
Total noninterest expense
    
5,718
      
5,649
      
5,300
      
5,277
      
5,672
  
 Income before income taxes
    
4,392
      
3,997
      
4,051
      
4,587
      
3,760
  
 Income taxes
    
1,240
      
1,201
      
1,328
      
1,421
      
1,167
  
 Income from continuing operations
    
3,152
      
2,796
      
2,723
      
3,166
      
2,593
  
 Discontinued operations
                                        
    Exit costs and impairment of long-lived assets
    
43
      
80
       (2,480 )    
-
      
-
  
    Operating income (loss)
     (227 )     (372 )     (1,373 )     (1,059 )    
74
  
 Income (loss) from discontinued operations
                                        
      before income taxes
     (184 )     (292 )     (3,853 )     (1,059 )    
74
  
 Income taxes
     (66 )     (97 )     (1,311 )     (374 )    
33
  
 Income (loss) from discontinued operations
     (118 )     (195 )     (2,542 )     (685 )    
41
  
                                         
 Net Income
   $
3,034
     $
2,601
     $
181
     $
2,481
     $
2,634
  




SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)
                              
Five Quarter Performance Summary
                              
                         
   
For the Quarter Ended
  
 
  
6/30/2007
    
3/31/2007
    
12/31/2006
    
9/30/2006
    
6/30/2006
  
 Per Share Data
                              
 Earnings per share from continuing operations
                              
    Basic
   $
0.45
     $
0.40
     $
0.39
     $
0.45
     $
0.36
  
    Diluted
   $
0.44
     $
0.39
     $
0.39
     $
0.45
     $
0.36
  
 Earnings per share from discontinued operations
                                        
    Basic
   $ (0.02 )   $ (0.03 )   $ (0.36 )   $ (0.10 )   $
0.01
  
    Diluted
   $ (0.02 )   $ (0.03 )   $ (0.36 )   $ (0.10 )   $
0.01
  
 Earnings per share
                                        
    Basic
   $
0.43
     $
0.37
     $
0.03
     $
0.35
     $
0.37
  
    Diluted
   $
0.42
     $
0.36
     $
0.03
     $
0.35
     $
0.37
  
                                         
 Average shares outstanding
                                        
    Basic
    
7,084,980
      
7,084,980
      
7,092,531
      
7,127,650
      
7,135,107
  
    Diluted
    
7,148,241
      
7,147,170
      
7,151,378
      
7,187,274
      
7,189,644
  
                                         
 Performance Ratios
                                        
 Return on average equity
     14.40 %     12.72 %     0.88 %     12.46 %     13.53 %
 Return on average equity - continuing operations
     14.96 %     13.67 %     13.24 %     15.90 %     13.32 %
 Return on average assets
     0.96 %     0.83 %     0.06 %     0.83 %     0.91 %
 Return on average assets - continuing operations
     1.00 %     0.90 %     0.89 %     1.06 %     0.89 %
 Net interest margin
     3.22 %     3.20 %     3.25 %     3.33 %     3.32 %
 Efficiency ratio (A)
     53.71 %     58.07 %     69.20 %     70.57 %     70.69 %
 Efficiency ratio - continuing operations (A)
     51.47 %     53.86 %     48.85 %     49.38 %     54.33 %

NOTE:  (A) – Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.

 
 


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
                          
Selected Balance Sheet Data
                              
                               
                               
   
For the Quarter Ended
  
 Dollars in thousands, except per share amounts
  
6/30/2007
    
3/31/2007
    
12/31/2006
    
9/30/2006
    
6/30/2006
  
                               
 Assets
   $
1,279,720
     $
1,253,925
     $
1,234,831
     $
1,210,491
     $
1,179,648
  
 Securities
    
259,526
      
258,173
      
247,874
      
246,332
      
238,382
  
 Loans, net
    
949,175
      
930,769
      
916,045
      
894,836
      
866,170
  
 Intangible assets
    
3,121
      
3,159
      
3,197
      
3,234
      
3,272
  
 Retail deposits
    
626,617
      
623,431
      
609,064
      
598,293
      
570,731
  
 Brokered time deposits
    
223,771
      
253,794
      
279,623
      
266,769
      
190,832
  
 Short-term borrowings
    
100,901
      
79,886
      
60,428
      
90,422
      
164,185
  
 Long-term borrowings and
                                        
     subordinated debentures
    
234,476
      
201,814
      
193,881
      
163,864
      
167,168
  
 Shareholders' equity
    
83,067
      
82,935
      
79,875
      
80,630
      
76,559
  
                                         
Book value per share
   $
11.72
     $
11.71
     $
11.27
     $
11.35
     $
10.73
  

 
 

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
                          
Loan Composition
                              
                               
Dollars in thousands
  
6/30/2007
    
3/31/2007
    
12/31/2006
    
9/30/2006
    
6/30/2006
  
                               
Commercial
   $
81,292
     $
69,700
     $
69,470
     $
67,352
     $
64,342
  
Commercial real estate
    
354,833
      
329,561
      
314,199
      
300,676
      
296,680
  
Construction and development
    
198,721
      
220,430
      
215,820
      
207,545
      
182,000
  
Residential real estate
    
283,821
      
279,564
      
282,512
      
283,943
      
288,316
  
Consumer
    
33,937
      
33,845
      
36,455
      
36,885
      
37,040
  
Other
    
7,111
      
7,209
      
6,968
      
7,086
      
6,188
  
Total loans
    
959,715
      
940,309
      
925,424
      
903,487
      
874,566
  
Less unearned fees and interest
    
1,772
      
1,757
      
1,868
      
1,806
      
1,767
  
Total loans net of unearned fees and interest
    
957,943
      
938,552
      
923,556
      
901,681
      
872,799
  
Less allowance for loan losses
    
8,768
      
7,783
      
7,511
      
6,845
      
6,629
  
Loans, net
   $
949,175
     $
930,769
     $
916,045
     $
894,836
     $
866,170
  

 


SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
                    
Retail Deposit Composition
                              
                               
Dollars in thousands
  
6/30/2007
    
3/31/2007
    
12/31/2006
    
9/30/2006
    
6/30/2006
  
                               
Non interest bearing checking
   $
64,373
     $
60,645
     $
62,591
     $
64,751
     $
66,071
  
Interest bearing checking
    
230,509
      
230,634
      
220,167
      
223,992
      
214,279
  
Savings
    
41,910
      
44,713
      
47,984
      
44,980
      
38,737
  
Time deposits
    
289,825
      
287,439
      
278,322
      
264,570
      
251,644
  
Total retail deposits
   $
626,617
     $
623,431
     $
609,064
     $
598,293
     $
570,731
  



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
                          
Asset Quality Information
                              
                               
   
For the Quarter Ended
  
 Dollars in thousands
  
6/30/2007
    
3/31/2007
    
12/31/2006
    
9/30/2006
    
6/30/2006
  
                               
Net loan charge-off's
   $
96
     $
119
     $
263
     $
45
     $
135
  
Net loan charge-off's to average loans (annualized)
     0.04 %     0.05 %     0.11 %     0.02 %     0.06 %
Allowance for loan losses
   $
8,768
     $
7,783
     $
7,511
     $
6,845
     $
6,629
  
Allowance for loan losses as a percentage
                                        
    of period end loans
     0.91 %     0.83 %     0.81 %     0.76 %     0.76 %
Nonperforming assets:
                                        
   Nonperforming loans
   $
7,307
     $
4,474
     $
5,276
     $
1,273
     $
987
  
   Foreclosed properties and
                                        
      other repossessed assets
    
851
      
43
      
77
      
180
      
298
  
Total
   $
8,158
     $
4,517
     $
5,353
     $
1,453
     $
1,285
  
                                         
Nonperforming loans to period end loans
     0.76 %     0.48 %     0.57 %     0.14 %     0.11 %
Nonperforming assets to period end assets
     0.64 %     0.36 %     0.43 %     0.12 %     0.11 %


SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
                                
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
                    
Q2 2007 vs Q2 2006
                                    
   
Q2 2007
    
Q2 2006
  
   
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
   $
939,998
     $
18,980
       8.10 %   $
858,645
     $
16,685
       7.79 %
    Tax-exempt
    
9,374
      
184
       7.87 %    
8,240
      
155
       7.54 %
  Securities
                                                
    Taxable
    
211,592
      
2,739
       5.19 %    
190,214
      
2,250
       4.74 %
    Tax-exempt
    
45,587
      
783
       6.89 %    
45,890
      
801
       7.00 %
   Interest bearing deposits other banks
                                                
        and Federal funds sold
    
2,459
      
29
       4.73 %    
986
      
14
       5.70 %
Total interest earning assets
    
1,209,010
      
22,715
       7.54 %    
1,103,975
      
19,905
       7.23 %
                                                 
Noninterest earning assets
                                                
  Cash & due from banks
    
14,525
                      
14,059
                  
  Premises & equipment
    
22,190
                      
23,586
                  
  Other assets
    
27,390
                      
26,846
                  
  Allowance for loan losses
     (8,611 )                     (6,711 )                
    Total assets
   $
1,264,504
                     $
1,161,755
                  
                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                                          
                                                 
Liabilities
                                                
Interest bearing liabilities
                                                
  Interest bearing
                                                
    demand deposits
   $
229,444
     $
2,084
       3.64 %   $
214,908
     $
1,823
       3.40 %
  Savings deposits
    
43,252
      
181
       1.68 %    
37,381
      
74
       0.79 %
  Time deposits
    
536,852
      
6,617
       4.94 %    
430,360
      
4,511
       4.20 %
  Short-term borrowings
    
71,451
      
960
       5.39 %    
144,502
      
1,831
       5.08 %
  Long-term borrowings and
                                                
     subordinated debentures
    
223,021
      
3,181
       5.72 %    
179,913
      
2,518
       5.61 %
     
1,104,020
      
13,023
       4.73 %    
1,007,064
      
10,757
       4.28 %
Noninterest bearing liabilities
                                                
  Demand deposits
    
64,665
                      
66,496
                  
  Other liabilities
    
11,551
                      
10,298
                  
    Total liabilities
    
1,180,236
                      
1,083,858
                  
                                                 
Shareholders' equity
    
84,268
                      
77,897
                  
  Total liabilities and
                                                
    shareholders' equity
   $
1,264,504
                     $
1,161,755
                  
                                                 
NET INTEREST EARNINGS
           $
9,692
                     $
9,148
          
                                                 
NET INTEREST YIELD ON EARNING ASSETS
               3.22 %                     3.32 %




Average Balance Sheet, Interest Earnings & Expenses and Average Rates
                    
YTD 2007 vs YTD 2006
                                    
   
For the Six Months Ended June 30,
    
For the Six Months Ended June 30,
  
   
2007
    
2006
  
   
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
   $
934,513
     $
37,645
       8.12 %   $
844,093
     $
32,077
       7.66 %
    Tax-exempt
    
9,147
      
358
       7.89 %    
8,242
      
305
       7.46 %
  Securities
                                                
    Taxable
    
209,965
      
5,316
       5.11 %    
188,414
      
4,385
       4.69 %
    Tax-exempt
    
46,433
      
1,597
       6.94 %    
44,988
      
1,568
       7.03 %
   Interest bearing deposits other banks
                                                
        and Federal funds sold
    
1,458
      
33
       4.56 %    
1,629
      
37
       4.58 %
Total interest earning assets
    
1,201,516
      
44,949
       7.54 %    
1,087,366
      
38,372
       7.12 %
                                                 
Noninterest earning assets
                                                
  Cash & due from banks
    
13,821
                      
14,259
                  
  Premises & equipment
    
22,260
                      
23,475
                  
  Other assets
    
27,452
                      
25,890
                  
  Allowance for loan losses
     (8,376 )                     (6,525 )                
    Total assets
   $
1,256,673
                     $
1,144,465
                  
                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY
                                          
                                                 
Liabilities
                                                
Interest bearing liabilities
                                                
  Interest bearing
                                                
    demand deposits
   $
225,705
     $
4,150
       3.71 %   $
209,565
     $
3,366
       3.24 %
  Savings deposits
    
44,820
      
398
       1.79 %    
40,209
      
147
       0.74 %
  Time deposits
    
546,634
      
13,362
       4.93 %    
402,422
      
8,048
       4.03 %
  Short-term borrowings
    
71,930
      
1,918
       5.38 %    
158,365
      
3,795
       4.83 %
  Long-term borrowings and
                                                
     subordinated debentures
    
209,588
      
6,013
       5.79 %    
181,971
      
4,932
       5.47 %
     
1,098,677
      
25,841
       4.74 %    
992,532
      
20,288
       4.12 %
Noninterest bearing liabilities
                                                
  Demand deposits
    
62,986
                      
64,906
                  
  Other liabilities
    
11,722
                      
9,850
                  
    Total liabilities
    
1,173,385
                      
1,067,288
                  
                                                 
Shareholders' equity
    
83,288
                      
77,177
                  
  Total liabilities and
                                                
    shareholders' equity
   $
1,256,673
                     $
1,144,465
                  
                                                 
NET INTEREST EARNINGS
           $
19,108
                     $
18,084
          
                                                 
NET INTEREST YIELD ON EARNING ASSETS
               3.21 %                     3.35 %