8-K

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): July 27, 2017

Summit Financial Group, Inc.

(Exact name of registrant as specified in its charter)

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

300 North Main Street, Moorefield, West Virginia 26836

(Address of principal executive offices)          (Zip Code)

Registrant’s telephone number, including area code: (304) 530-1000

Not Applicable

(Former name or former 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))

Section 2 - Financial Information

ITEM 2.02.Results of Operations and Financial Condition.

On July 27, 2017, Summit Financial Group, Inc. (“Summit”) issued a News Release announcing its earnings for the three months and six months ended June 30, 2017. This News Release is furnished as Exhibit 99 and is incorporated herein by reference.

Section 9 - Financial Statements and Exhibits

ITEM 9.01.    Financial Statements and Exhibits

(d)	Exhibits
	99	News Release issued on July 27, 2017

SIGNATURES

Pursuant to the requirements of the Securities and 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:   July 27, 2017	By:  /s/  Julie R. Markwood
	Julie R. Markwood
	Vice President &
	Chief Accounting Officer

2

EX-99

EXHIBIT 99

FOR RELEASE 6:00 AM ET, July 27, 2017

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

Telephone:(304) 530-0552

Email:rtissue@summitfgi.com

SUMMIT FINANCIAL GROUP REPORTS SECOND QUARTER AND FIRST HALF 2017 RESULTS

Q2 2017 Diluted EPS of $0.43 compared to $0.40 for Q2 2016 and Diluted Loss Per Share of $0.15 for Q1 2017

MOOREFIELD, WV - July 27, 2017 (GLOBE NEWSWIRE) - Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported second quarter 2017 net income of $5.28 million, or $0.43 per diluted share, compared to $4.24 million, or $0.40 per diluted share, for the second quarter of 2016, representing an increase of 24.4 percent, or 7.5 percent per diluted share.

For the six months ended June 30, 2017, Summit recorded net income of $3.66 million, or $0.32 per diluted share, compared with $8.31 million, or $0.78 per diluted share, for the comparable 2016 six-month period, representing a decrease of 55.9 percent or 59.0 percent per diluted share. The decrease in first half 2017 earnings is principally attributable to a legal settlement during first quarter which reduced earnings by $0.54 per diluted share.

Highlights for Q2 2017 include:

• Summit completed its acquisition of First Century Bankshares, Inc. (“FCB”) and its subsidiary, First Century Bank, headquartered in Bluefield, West Virginia on April 1, 2017, and converted substantially all its data processing systems to that of Summit’s effective April 21, 2017; accordingly, merger-related expenses of $1.46 million were incurred during Q2 2017 compared to $153,000 during Q2 2016;

• Total revenues increased 34.3 percent compared to the linked-quarter and 47.3 percent compared to the year ago quarter, principally as result of the acquisition of FCB;

• Net interest margin increased 41 basis points compared to Q2 2016, and 27 basis points compared to the linked quarter, reflecting FCB’s higher yielding loan portfolio, the impact of increasing short-term interest rates as result of recent FOMC activity and relatively stable funding costs;

• Loans, excluding mortgage warehouse lines of credit and FCB’s purchased loan portfolio, grew $11.9 million during the quarter, or 3.7 percent (on an annualized basis), and have grown $52.8 million, or 8.6 percent (annualized), year-to-date;

• Nonperforming assets declined for the nineteenth consecutive quarter. Compared to the linked quarter, nonperforming assets as a percentage of total assets declined from 2.16 percent to 1.78 percent, reaching its lowest level since Q2 2008;

• Recorded charges of $29,000 to write-down foreclosed properties compared to $259,000 in Q2 2016 and $418,000 in Q1 2017.

H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, “I am very pleased to report Summit achieved another quarter of solid core operating results highlighted by improvement in our net interest margin and core loan growth. Further, despite the quarter’s challenges of integrating FCB’s banking operations with that of Summit’s, we nonetheless maintained an efficiency ratio well below that of most of our peers. We are demonstrating our ability to successfully execute on a disciplined M&A growth strategy, which we believe will continue to present us with significant opportunities going forward as we seek to be a consistent, high-performing community banking institution.”

FCB Acquisition

On April 1, 2017, Summit completed its acquisition of FCB. Accordingly, FCB’s results of operations are included in Summit’s consolidated results of operation from the date of acquisition, and therefore Summit’s second quarter and first half 2017 results reflect increased levels of average balances, income and expense compared to its second quarter and first half 2016 results.

At consummation, FCB had total assets of $404.8 million, loans of $229.0 million, and deposits of $350.0 million. In addition, our merger-related expenses totaled $1.56 million during first half 2017, with $1.46 million of those expenses incurred during second quarter 2017. Summit recognized net accretion income totaling $285,000 in Q2 2017 related to FCB’s loan fair value acquisition accounting adjustments.

HCB Acquisition

On October 1, 2016, Summit completed its acquisition of Highland County Bankshares, Inc. (“HCB”) and its subsidiary, First & Citizens Bank, headquartered in Monterey, Virginia. Accordingly, HCB’s results of operations are included in Summit’s consolidated results of operation from the date of acquisition, and therefore Summit’s three and six months ended June 30, 2017 results reflect increased levels of average balances, income and expense as compared to the same periods of 2016 results.

At consummation, HCB had total assets of $122.8 million, loans of $60.8 million, and deposits of $106.9 million. Summit recognized net accretion income totaling $59,000 in Q2 2017 and $203,000 in the first half of 2017 related to HCB’s loan fair value acquisition accounting adjustments.

Results from Operations

Total revenue for second quarter 2017 consisting of net interest income and noninterest income, grew 47.3 percent to $21.8 million, principally as result of the FCB and HCB acquisitions, compared to $14.8 million for the second quarter 2016. For the year-to-date period ended June 30, 2017, total revenue was $38.0 million compared to $29.4 million for the same period of 2016, representing a 29.3 percent increase.

For the second quarter of 2017, net interest income was $17.8 million, an increase of 52.1 percent from the $11.7 million reported in the prior-year second quarter and increased $4.2 million compared to the linked quarter. The net interest margin for second quarter 2017 was 3.81 percent compared to 3.40 percent for the year-ago quarter, and 3.54 percent for the linked quarter. Excluding the impact of accretion and amortization of fair value acquisition accounting adjustments related to the interest earning assets and interest bearing liabilities acquired from

FCB and HCB, Summit’s net interest margin was 3.72 percent for Q2 2017 and 3.62 percent for first half of 2017.

Noninterest income, consisting primarily of insurance commissions from Summit's insurance agency subsidiary, trust and wealth management fees and service fee income from community banking activities, for second quarter 2017 was $3.92 million compared to $3.05 million for the comparable period of 2016. Excluding realized securities gains, noninterest income was $3.83 million for second quarter 2017, compared to $2.67 million reported for second quarter 2016 and $2.64 million for the linked quarter.

We recorded a $250,000 provision for loan losses during second quarters 2017 and 2016.

Q2 2017 total noninterest expense increased 65.2% to $13.94 million compared to $8.44 million for the prior-year second quarter principally due to the acquisitions of FCB and HCB. Noninterest expense for the first half of 2017 increased 93.9% compared to the first half of 2016. Summit recorded a $9.9 million charge to resolve fully all litigation with Residential Funding Company, LLC and ResCap Liquidating Trust (collectively “ResCap”) during Q1 2017. Excluding the impact of the ResCap litigation settlement charge, noninterest expense for first half of 2017 increased 35.7 percent to $23.1 million compared to $17.0 million for the first half of 2016, principally as result of the acquisitions of HCB and FCB.

Balance Sheet

At June 30, 2017, total assets were $2.10 billion, an increase of $336.7 million, or 19.1 percent since December 31, 2016. Total loans, net of unearned fees and allowance for loan losses, were $1.54 billion at June 30, 2017, up $230.2 million, or 17.6 percent, from the $1.31 billion reported at year-end 2016. Loans, excluding mortgage warehouse lines of credit and FCB’s purchased loan portfolio, grew $11.9 million during the quarter, or 3.7 percent (on an annualized basis), and have grown $52.8 million, or 8.6 percent (annualized) since year-end 2016.

At June 30, 2017, deposits were $1.61 billion, an increase of $318.4 million, or 24.6 percent, since year end 2016. During first half 2017, checking deposits increased $194.2 million or 47.1 percent, time deposits grew by $88.1 million or 16.1 percent and savings deposits increased $36.1 million or 10.7 percent.

Shareholders’ equity was $193.1 million as of June 30, 2017 compared to $155.4 million at December 31, 2016 and $150.7 million at June 30, 2016. In conjunction with the acquisition of FCB on April 1, 2017, Summit issued 1,537,912 shares of common stock valued at $33.1 million to the former FCB shareholders.

Tangible book value per common share increased to $13.41 at June 30, 2017 compared to $13.20 at December 31, 2016 and $13.40 at June 30, 2016. Summit had 12,299,726 outstanding common shares at Q2 2017 quarter end compared to 10,736,970 at year end 2016.

Asset Quality

As of June 30, 2016, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $37.4 million, or 1.78 percent of assets. This compares to $38.4 million, or 2.16 percent of assets at the linked quarter-end, and $38.7 million, or 2.47 percent of assets, at second quarter-end 2016.

Second quarter 2017 net loan recoveries were $364,000, or 0.09 percent of average loans annualized; while adding $250,000 to the allowance for loan losses through the provision for loan losses. The allowance for loan losses stood at 0.79 percent of total loans at June 30, 2017, compared to 0.88 percent at year-end 2016. If the acquired FCB and HCB loans are excluded, the allowance for loan losses to total loans ratio at June 30, 2017 and December 31, 2016 would have been 0.95 percent and 0.92 percent, respectively.

About the Company

Summit Financial Group, Inc. is a $2.10 billion financial holding company headquartered in Moorefield, West Virginia. Summit provides community banking services primarily in the Eastern Panhandle and Southern regions of West Virginia and the Northern, Shenandoah Valley and Southwestern regions of Virginia, through its bank subsidiary, Summit Community Bank, Inc., which operates thirty banking locations. Summit also operates Summit Insurance Services, LLC in Moorefield, West Virginia and Leesburg, 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 economies. We undertake no obligation to revise these statements following the date of this press release.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q2 2017 vs Q2 2016
	For the Quarter Ended					Percent
Dollars in thousands	6/30/2017		6/30/2016			Change
Condensed Statements of Income
Interest income
Loans, including fees	$	19,717	$	13,622		44.7	%
Securities	2,349		1,656			41.8	%
Other	165		5			n/m
Total interest income	22,231		15,283			45.5	%
Interest expense
Deposits	2,634		2,154			22.3	%
Borrowings	1,749		1,395			25.4	%
Total interest expense	4,383		3,549			23.5	%
Net interest income	17,848		11,734			52.1	%
Provision for loan losses	250		250			—	%
Net interest income after provision for loan losses	17,598		11,484			53.2	%
Noninterest income
Insurance commissions	988		1,090			-9.4	%
Trust and wealth management fees	595		116			412.9	%
Service fees related to deposit accounts	1,706		1,059			61.1	%
Realized securities gains	90		383			-76.5	%
Other income	537		397			35.3	%
Total noninterest income	3,916		3,045			28.6	%
Noninterest expense
Salaries and employee benefits	6,758		4,764			41.9	%
Net occupancy expense	826		512			61.3	%
Equipment expense	1,031		686			50.3	%
Professional fees	354		429			-17.5	%
Amortization of intangibles	429		50			758.0	%
FDIC premiums	295		300			-1.7	%
Merger-related expense	1,455		153			851.0	%
Foreclosed properties expense	122		93			31.2	%
Loss (gain) on sales of foreclosed properties	73		(276		)	-126.4	%
Write-downs of foreclosed properties	29		259			-88.8	%
Other expenses	2,564		1,467			74.8	%
Total noninterest expense	13,936		8,437			65.2	%
Income before income taxes	7,578		6,092			24.4	%
Income tax expense	2,300		1,849			24.4	%
Net income	$	5,278	$	4,243		24.4	%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q2 2017 vs Q2 2016
	For the Quarter Ended						Percent
	6/30/2017			6/30/2016			Change
Per Share Data
Earnings per common share
Basic	$	0.43		$	0.40		7.5	%
Diluted	$	0.43		$	0.40		7.5	%
Cash dividends	$	0.11		$	0.10		10.0	%
Average common shares outstanding
Basic	12,288,514			10,681,995			15.0	%
Diluted	12,299,187			10,701,017			14.9	%
Common shares outstanding at period end	12,299,726			10,692,320			15.0	%
Performance Ratios
Return on average equity	11.10		%	11.49		%	-3.4	%
Return on average tangible equity	12.95		%	12.10		%	7.0	%
Return on average assets	1.01		%	1.10		%	-8.2	%
Net interest margin	3.81		%	3.40		%	12.1	%
Efficiency ratio (A)	53.00		%	55.35		%	-4.2	%
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 -- 2017 vs 2016
	For the Six Months Ended						Percent
Dollars in thousands	6/30/2017			6/30/2016			Change
Condensed Statements of Income
Interest income
Loans, including fees	$	35,388		$	27,059		30.8	%
Securities	4,200			3,382			24.2	%
Other	317			7			n/m
Total interest income	39,905			30,448			31.1	%
Interest expense
Deposits	5,024			4,324			16.2	%
Borrowings	3,404			2,611			30.4	%
Total interest expense	8,428			6,935			21.5	%
Net interest income	31,477			23,513			33.9	%
Provision for loan losses	500			500			—	%
Net interest income after provision for loan losses	30,977			23,013			34.6	%
Noninterest income
Insurance commissions	1,957			2,013			-2.8	%
Trust and wealth management fees	695			232			199.6	%
Service fees related to deposit accounts	2,874			2,038			41.0	%
Realized securities gains	32			775			-95.9	%
Other income	938			794			18.1	%
Total noninterest income	6,496			5,852			11.0	%
Noninterest expense
Salaries and employee benefits	11,945			9,446			26.5	%
Net occupancy expense	1,393			1,051			32.5	%
Equipment expense	1,766			1,343			31.5	%
Professional fees	639			901			-29.1	%
Amortization of intangibles	526			100			426.0	%
FDIC premiums	505			600			-15.8	%
Merger-related expense	1,564			264			492.4	%
Foreclosed properties expense	226			217			4.1	%
Gain on sales of foreclosed properties	(83		)	(282		)	-70.6	%
Write-downs of foreclosed properties	447			369			21.1	%
Litigation settlement	9,900			—			n/a
Other expenses	4,125			2,982			38.3	%
Total noninterest expense	32,953			16,991			93.9	%
Income before income taxes	4,520			11,874			-61.9	%
Income tax expense	858			3,569			-76.0	%
Net income	$	3,662		$	8,305		-55.9	%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Six Month Performance Summary -- 2017 vs 2016
	For the Six Months Ended						Percent
	6/30/2017			6/30/2016			Change
Per Share Data
Earnings per common share
Basic	$	0.32		$	0.78		-59.0	%
Diluted	$	0.32		$	0.78		-59.0	%
Cash dividends	$	0.22		$	0.20		10.0	%
Average common shares outstanding
Basic	11,517,721			10,676,925			7.9	%
Diluted	11,559,990			10,685,290			8.2	%
Common shares outstanding at period end	12,299,726			10,692,320			15.0	%
Performance Ratios
Return on average equity	4.22		%	11.29		%	-62.6	%
Return on average tangible equity	4.78		%	11.90		%	-59.8	%
Return on average assets	0.38		%	1.09		%	-65.1	%
Net interest margin	3.69		%	3.45		%	7.0	%
Efficiency ratio (A)	52.21		%	55.63		%	-6.1	%
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	6/30/2017		3/31/2017			12/31/2016			9/30/2016			6/30/2016
Condensed Statements of Income (unaudited)
Interest income
Loans, including fees	$	19,717	$	15,671		$	15,780		$	14,142		$	13,622
Securities	2,349		1,851			1,796			1,759			1,656
Other	165		152			161			5			5
Total interest income	22,231		17,674			17,737			15,906			15,283
Interest expense
Deposits	2,634		2,390			2,430			2,209			2,154
Borrowings	1,749		1,654			1,850			1,659			1,395
Total interest expense	4,383		4,044			4,280			3,868			3,549
Net interest income	17,848		13,630			13,457			12,038			11,734
Provision for loan losses	250		250			—			—			250
Net interest income after provision for loan losses	17,598		13,380			13,457			12,038			11,484
Noninterest income
Insurance commissions	988		968			992			1,016			1,090
Trust and wealth management fees	595		100			111			252			116
Service fees related to deposit accounts	1,706		1,168			1,194			1,138			1,059
Realized securities gains (losses)	90		(58		)	291			61			383
Other income	537		401			410			282			397
Total noninterest income	3,916		2,579			2,998			2,749			3,045
Noninterest expense
Salaries and employee benefits	6,758		5,187			5,308			4,819			4,764
Net occupancy expense	826		567			522			525			512
Equipment expense	1,031		735			700			716			686
Professional fees	354		285			344			270			429
Amortization of intangibles	429		97			97			50			50
FDIC premiums	295		210			75			200			300
Merger-related expenses	1,455		109			588			80			153
Foreclosed properties expense	122		104			97			100			93
Loss (gain) on sales of foreclosed properties	73		(156		)	(465		)	(168		)	(276		)
Write-downs of foreclosed properties	29		418			165			134			259
Litigation settlement	—		9,900			—			—			—
Other expenses	2,564		1,560			1,961			1,693			1,467
Total noninterest expense	13,936		19,016			9,392			8,419			8,437
Income (loss) before income taxes	7,578		(3,057		)	7,063			6,368			6,092
Income tax expense (benefit)	2,300		(1,441		)	2,353			2,087			1,849
Net income (loss)	$	5,278	$	(1,616	)	$	4,710		$	4,281		$	4,243

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary
	For the Quarter Ended
	6/30/2017			3/31/2017			12/31/2016			9/30/2016			6/30/2016
Per Share Data
Earnings per common share
Basic	$	0.43		$	-0.15		$	0.44		$	0.40		$	0.40
Diluted	$	0.43		$	-0.15		$	0.44		$	0.40		$	0.40
Cash dividends	$	0.11		$	0.11		$	0.10		$	0.10		$	0.10
Average common shares outstanding
Basic	12,288,514			10,738,365			10,710,164			10,692,423			10,681,995
Diluted	12,299,187			10,738,365			10,762,445			10,727,140			10,701,017
Common shares outstanding at period end	12,299,726			10,750,477			10,736,970			10,701,841			10,692,320
Performance Ratios
Return on average equity	11.10		%	-4.11		%	12.22		%	11.29		%	11.49		%
Return on average tangible equity	12.95		%	-4.51		%	13.42		%	11.86		%	12.10		%
Return on average assets	1.01		%	-0.37		%	1.07		%	1.08		%	1.10		%
Net interest margin	3.81		%	3.54		%	3.34		%	3.32		%	3.40		%
Efficiency ratio - (A)	53.00		%	51.16		%	56.67		%	53.30		%	55.35		%
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 (unaudited)
Dollars in thousands, except per share amounts	6/30/2017			3/31/2017			12/31/2016			9/30/2016			6/30/2016
Assets
Cash and due from banks	$	9,294		$	19,326		$	4,262		$	25,067		$	4,161
Interest bearing deposits other banks	44,242			38,895			42,354			9,432			8,897
Securities	336,811			282,028			266,542			262,102			261,633
Loans, net	1,538,083			1,292,915			1,307,862			1,234,605			1,166,723
Property held for sale	23,592			23,491			24,504			24,767			23,425
Premises and equipment, net	33,234			26,377			23,737			21,802			21,405
Goodwill and other intangible assets	28,214			13,587			13,652			7,348			7,398
Cash surrender value of life insurance policies	41,189			39,412			39,143			38,504			38,246
Other assets	40,641			40,411			36,591			34,009			33,293
Total assets	$	2,095,300		$	1,776,442		$	1,758,647		$	1,657,636		$	1,565,181
Liabilities and Shareholders' Equity
Deposits	$	1,613,919		$	1,301,241		$	1,295,519		$	1,156,785		$	1,096,545
Short-term borrowings	205,728			228,868			224,461			234,657			205,552
Long-term borrowings and      subordinated debentures	65,348			65,804			66,259			93,735			94,214
Other liabilities	17,173			26,910			17,048			18,640			18,201
Shareholders' equity	193,132			153,619			155,360			153,819			150,669
Total liabilities and shareholders' equity	$	2,095,300		$	1,776,442		$	1,758,647		$	1,657,636		$	1,565,181
Book value per common share	$	15.70		$	14.29		$	14.47		$	14.37		$	14.09
Tangible book value per common share	$	13.41		$	13.03		$	13.20		$	13.69		$	13.40
Tangible common equity to tangible assets	8.0		%	7.9		%	8.1		%	8.9		%	9.2		%

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios
	6/30/2017		3/31/2017		12/31/2016		9/30/2016		6/30/2016
Summit Financial Group, Inc.
CET1 Risk-based Capital	10.5	%	10.3	%	10.5	%	11.1	%	11.5	%
Tier 1 Risk-based Capital	11.7	%	11.5	%	11.8	%	12.4	%	12.9	%
Total Risk Based Capital	12.4	%	12.3	%	12.6	%	13.3	%	13.8	%
Tier 1 Leverage Ratio	9.2	%	9.4	%	9.4	%	10.4	%	10.5	%
Summit Community Bank, Inc.
CET1 Risk-based Capital	11.6	%	11.6	%	11.9	%	12.5	%	13.0	%
Tier 1 Risk-based Capital	11.6	%	11.6	%	11.9	%	12.5	%	13.0	%
Total Risk Based Capital	12.4	%	12.4	%	12.7	%	13.4	%	13.9	%
Tier 1 Leverage Ratio	9.2	%	9.4	%	9.5	%	10.5	%	10.6	%

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition
Dollars in thousands	6/30/2017		3/31/2017		12/31/2016		9/30/2016		6/30/2016
Commercial	$	176,362	$	134,808	$	119,088	$	110,466	$	101,521
Mortgage warehouse lines	35,068		30,217		85,966		108,983		80,282
Commercial real estate
Owner occupied	239,108		217,733		203,047		192,254		190,534
Non-owner occupied	455,439		401,795		381,921		367,196		348,099
Construction and development
Land and development	74,155		68,079		72,042		65,430		65,702
Construction	22,967		16,511		16,584		11,276		8,506
Residential real estate
Non-jumbo	355,546		266,140		265,641		228,777		225,919
Jumbo	63,899		60,780		65,628		57,276		52,105
Home equity	81,192		75,299		74,596		75,161		75,904
Consumer	37,630		24,440		25,534		19,756		19,520
Other	9,049		8,831		9,489		9,649		10,008
Total loans, net of unearned fees	1,550,415		1,304,633		1,319,536		1,246,224		1,178,100
Less allowance for loan losses	12,332		11,718		11,674		11,619		11,377
Loans, net	$	1,538,083	$	1,292,915	$	1,307,862	$	1,234,605	$	1,166,723

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition
Dollars in thousands	6/30/2017		3/31/2017		12/31/2016		9/30/2016		6/30/2016
Non interest bearing checking	$	234,173	$	152,086	$	149,737	$	122,652	$	120,845
Interest bearing checking	372,327		275,678		262,591		212,172		205,095
Savings	373,439		342,548		337,348		321,563		306,785
Time deposits	633,980		530,929		545,843		500,398		463,820
Total deposits	$	1,613,919	$	1,301,241	$	1,295,519	$	1,156,785	$	1,096,545

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Asset Quality Information
	For the Quarter Ended
Dollars in thousands	6/30/2017			3/31/2017			12/31/2016			9/30/2016			6/30/2016
Gross loan charge-offs	$	114		$	315		$	400		$	331		$	263
Gross loan recoveries	(478		)	(108		)	(456		)	(573		)	(75		)
Net loan charge-offs (recoveries)	$	(364	)	$	207		$	(56	)	$	(242	)	$	188
Net loan charge-offs to average loans (annualized)	-0.09		%	0.06		%	-0.02		%	-0.09		%	0.07		%
Allowance for loan losses	$	12,332		$	11,718		$	11,674		$	11,619		$	11,377
Allowance for loan losses as a percentage     of period end loans	0.79		%	0.90		%	0.88		%	0.93		%	0.97		%
Nonperforming assets:
Nonperforming loans
Commercial	$	786		$	226		$	298		$	846		$	399
Commercial real estate	2,051			4,734			4,844			4,867			5,773
Residential construction and development	3,613			3,936			4,465			4,360			5,400
Residential real estate	6,860			5,886			4,815			4,174			3,531
Consumer	391			162			152			169			91
Total nonperforming loans	13,701			14,944			14,574			14,416			15,194
Foreclosed properties
Commercial real estate	2,126			1,749			1,749			1,749			976
Commercial construction and development	7,527			8,276			8,610			8,664			8,708
Residential construction and development	12,402			12,635			13,265			13,741			12,989
Residential real estate	1,537			831			880			613			752
Total foreclosed properties	23,592			23,491			24,504			24,767			23,425
Other repossessed assets	57			12			12			12			38
Total nonperforming assets	$	37,350		$	38,447		$	39,090		$	39,195		$	38,657
Nonperforming loans to period end loans	0.88		%	1.15		%	1.10		%	1.16		%	1.29		%
Nonperforming assets to period end assets	1.78		%	2.16		%	2.22		%	2.36		%	2.47		%
Troubled debt restructurings
Performing	$	26,472		$	28,183		$	28,066		$	28,287		$	27,750
Nonperforming	464			719			564			863			2,133
Total troubled debt restructurings	$	26,936		$	28,902		$	28,630		$	29,150		$	29,883

Loans Past Due 30-89 Days
	For the Quarter Ended
In thousands	6/30/2017		3/31/2017		12/31/2016		9/30/2016		6/30/2016
Commercial	$	470	$	162	$	175	$	405	$	422
Commercial real estate	976		2,758		434		626		214
Construction and development	308		291		552		235		520
Residential real estate	6,943		2,924		5,517		2,941		4,763
Consumer	548		155		375		144		177
Other	49		17		14		13		12
Total	$	9,294	$	6,307	$	7,067	$	4,364	$	6,108

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q2 2017 vs Q2 2016
	Q2 2017							Q2 2016
	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	$	1,537,317		$	19,550	5.10	%	$	1,126,519		$	13,488	4.82	%
Tax-exempt	13,030			257		7.91	%	14,554			203		5.61	%
Securities
Taxable	214,601			1,330		2.49	%	211,624			1,062		2.02	%
Tax-exempt	133,130			1,568		4.72	%	71,649			900		5.05	%
Interest bearing deposits other banks    and Federal funds sold	47,937			165		1.38	%	9,152			4		0.18	%
Total interest earning assets	1,946,015			22,870		4.71	%	1,433,498			15,657		4.39	%
Noninterest earning assets
Cash & due from banks	10,101							3,752
Premises & equipment	34,441							21,517
Other assets	115,728							89,773
Allowance for loan losses	(11,966		)					(11,420		)
Total assets	$	2,094,319						$	1,537,120
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits	$	378,350		$	252	0.27	%	$	205,242		$	79	0.15	%
Savings deposits	389,847			616		0.63	%	295,402			550		0.75	%
Time deposits	628,358			1,766		1.13	%	471,343			1,526		1.30	%
Short-term borrowings	200,209			1,079		2.16	%	183,673			419		0.92	%
Long-term borrowings and      subordinated debentures	65,692			670		4.09	%	94,568			975		4.15	%
Total interest bearing liabilities	1,662,456			4,383		1.06	%	1,250,228			3,549		1.14	%
Noninterest bearing liabilities
Demand deposits	221,245							120,118
Other liabilities	20,490							19,044
Total liabilities	1,904,191							1,389,390
Shareholders' equity - common	190,128							147,730
Total liabilities and   shareholders' equity	$	2,094,319						$	1,537,120
NET INTEREST EARNINGS				$	18,487						$	12,108
NET INTEREST MARGIN						3.81	%						3.40	%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
YTD 2017 vs YTD 2016
	YTD 2017							YTD 2016
	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	$	1,408,566		$	35,100	5.03	%	$	1,107,801		$	26,778	4.86	%
Tax-exempt	13,161			443		6.79	%	15,189			424		5.61	%
Securities
Taxable	200,544			2,459		2.47	%	210,494			2,146		2.05	%
Tax-exempt	114,320			2,678		4.72	%	75,482			1,873		4.99	%
Interest bearing deposits other banks    and Federal funds sold	44,338			317		1.44	%	8,621			7		0.16	%
Total interest earning assets	1,780,929			40,997		4.64	%	1,417,587			31,228		4.43	%
Noninterest earning assets
Cash & due from banks	7,298							3,757
Premises & equipment	29,500							21,556
Other assets	106,440							89,708
Allowance for loan losses	(11,864		)					(11,491		)
Total assets	$	1,912,303						$	1,521,117
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits	$	320,918		$	399	0.25	%	$	207,487		$	162	0.16	%
Savings deposits	365,026			1,242		0.69	%	286,399			1,055		0.74	%
Time deposits	584,767			3,383		1.17	%	471,470			3,106		1.32	%
Short-term borrowings	198,587			2,073		2.11	%	176,111			659		0.75	%
Long-term borrowings and      subordinated debentures	65,918			1,331		4.07	%	94,811			1,952		4.14	%
Total interest bearing liabilities	1,535,216			8,428		1.11	%	1,236,278			6,934		1.13	%
Noninterest bearing liabilities
Demand deposits	184,968							120,291
Other liabilities	18,454							17,485
Total liabilities	1,738,638							1,374,054
Shareholders' equity - common	173,665							147,063
Total liabilities and   shareholders' equity	$	1,912,303						$	1,521,117
NET INTEREST EARNINGS				$	32,569						$	24,294
NET INTEREST MARGIN						3.69	%						3.45	%