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): April 28, 2022

Summit Financial Group, Inc.

(Exact name of registrant as specified in its charter)

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

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

(304)530-1000

(Registrant's telephone number, including area code)

Not Applicable

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

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

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

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

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

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

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

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

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

Emerging growth company ☐

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

Section 2 – Financial Information

Item 2.02. Results of Operations and Financial Condition.

On April 28, 2022, Summit Financial Group, Inc. (“Summit”) issued a News Release announcing its earnings for the three months ended March 31, 2022. This News Release is furnished as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

    (d)Exhibits

Exhibit Number	Description
99.1	News Release issued on April 28, 2022

SIGNATURES

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

	SUMMIT FINANCIAL GROUP, INC.
Date: April 28, 2022	By: /s/ Julie R. Markwood
	Julie R. Markwood
	Senior Vice President and Chief Accounting Officer

EX-99.1

EXHIBIT 99.1

FOR RELEASE 6:00 AM ET, April 28, 2022

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

Telephone:    (304) 530-0552

Email:        rtissue@summitfgi.com

SUMMIT FINANCIAL GROUP REPORTS FIRST QUARTER 2022 EPS OF $0.90 ON ANNUALIZED DOUBLE-DIGIT LOAN GROWTH AND RECORD NET INTEREST INCOME

MOOREFIELD, WV – April 28, 2022 (GLOBE NEWSWIRE) – Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported continued strong financial results for the first quarter of 2022, including double-digit annualized growth in loans, record net interest income, sequential net interest margin (“NIM”) expansion, improving asset quality and low operating expenses.

The Company, which serves commercial and individual clients across West Virginia, the Washington metropolitan area, Virginia and Kentucky through Summit Community Bank, Inc., reported net income applicable to common shares of $11.5 million, or $0.90 per diluted share, for the first quarter of 2022, $12.4 million, or $0.95 per diluted share, for the fourth quarter of 2021 and $10.4 million, or $0.80 per share, for the first quarter of 2021.

“Summit’s growth markets and talented producers allowed us to efficiently deploy the bank’s ample liquidity, with sequential quarter net interest margin expansion and continued double-digit annual growth in commercial and total loans,” said H. Charles Maddy, III, President and Chief Executive Officer. “We remain confident in our ability to continue Summit’s record of execution with proven operating expense discipline, continued credit quality improvement, excellent in-market loan growth opportunities and a very strong commercial pipeline.”

Highlights for Q1 2022

•Total loans of $2.68 billion, excluding mortgage warehouse lines of credit and Paycheck Protection Program (“PPP”) lending, increased 6.2 percent, or 24.9 percent annualized, during the quarter and 21.6 percent since March 31, 2021.

•Commercial loans excluding PPP lending increased 8.1 percent, or 32.3 percent annualized, during the quarter.

•Net interest margin (“NIM”) increased 12 basis points to 3.61 percent from the linked quarter, as Summit remains strategically well positioned for a rising rate environment.

•Net interest income increased 2.5 percent from the linked quarter and 12.6 percent from the year-ago period, primarily due to loan growth and lower funding costs.

•Total noninterest expense decreased to $17.2 million in the quarter, down 4.1 percent from the linked quarter and up 4.7 percent from the year-ago quarter, as salary and benefits increases were largely offset by disciplined management of other operating costs.

•Reduced annualized non-interest expense to 1.91 percent of average assets, down 11 basis points from the linked quarter and 18 basis points from the year-ago period.

•Incurred $1.95 million provision for credit losses in the quarter increasing period-end allowance for loan credit losses to $32.6 million, or 1.14 percent of total loans and 278.0 percent of nonperforming loans.

•Reduced foreclosed property held for sale by 30.0 percent during the quarter and 50.4 percent from the year-ago quarter to $6.9 million or 0.19 percent of assets at period end.

•Reduced nonperforming assets (“NPAs”) to 0.51 percent of total assets at period end, excluding restructured assets, down 12 basis points during the quarter and 70 basis points from March 31, 2021.

•Increased tangible book value per common share $0.25 during the quarter, despite unrealized net losses on debt securities available for sale (“AFS”) of $1.34 per common share (net of deferred income taxes) recorded in Other Comprehensive Income (“OCI”) partially offset by increases in the fair values of derivative financial instruments hedging against higher interest rates totaling $0.83 per common share (net of deferred income taxes) also recorded in OCI.

Results from Operations

Net interest income grew to a record $29.6 million in the first quarter of 2022, an increase of 2.5 percent from the linked quarter and 12.6 percent from the prior-year first quarter. NIM for first quarter of 2022 was 3.61 percent compared to 3.49 percent for the linked quarter and 3.65 percent for the year-ago quarter. Excluding the impact of accretion and amortization of fair value acquisition accounting adjustments, Summit’s net interest margin would have been 3.57 percent for the first quarter of 2022, 3.45 percent for the linked quarter and 3.60 percent for the year-ago period.

Noninterest income, consisting primarily of service fee income from community banking activities and trust and wealth management fees, for first quarter 2022 was $4.5 million compared to $6.0 million for the linked quarter and $5.0 million for the comparable period of 2021. The Company recorded realized securities losses on debt securities of $152,000 and $109,000 in the first quarter of 2022 and linked quarter, respectively, and gains of $476,000 in the year-ago quarter. In addition, the Company recognized a gain on equity investments of $372,000 in first quarter 2022 compared to $202,000 in the linked quarter.

Mortgage origination revenue was $339,000 in the first quarter of 2022 compared to $482,000, excluding an $879,000 increase in the fair value of mortgage servicing rights, in the linked quarter. Mortgage origination revenue was $998,000 for the year-ago period.

Excluding gains and losses on debt securities and equity investments and mortgage servicing rights fair value adjustments, noninterest income was $4.33 million in first quarter 2022 compared to $4.98 million in the linked quarter and $4.50 million in the year-ago quarter.

Revenue from net interest income and noninterest income, excluding gains and losses on debt securities and equity investments and mortgage servicing rights fair value adjustments, grew 0.2 percent to $33.9 million for first quarter 2022 compared to $33.8 million for the linked quarter and increased 10.2 percent from $30.8 million in the year-ago quarter.

Total noninterest expense decreased to $17.4 million in the first quarter of 2022, down 2.8 percent from $17.9 million in the linked quarter and up 6.0 percent from $16.4 million for the prior-year first quarter.

Salary and benefit expenses of $9.7 million in the first quarter of 2022 increased from $9.0 million for the linked quarter and $8.4 million during the year-ago period. Higher group health insurance premiums and increased accruals for anticipated 2022 performance bonuses account for the primary reasons for the increases.

The sequential-quarter reduction in total noninterest expense, on higher salary and benefits expenses, reflected reductions in most other categories of operating costs. Equipment expense of $1.84 million compared to $1.90 million for the linked quarter and $1.58 million for the year-ago period. Net occupancy expense of $1.24 million compared to $1.27 million for the linked quarter and $1.17 million for the year-ago period. Net gains in excess of expenses on foreclosed properties were $90,000 compared to net losses and expenses on foreclosed properties of $403,000 in the linked quarter and $227,000 in the year-ago period. Other expenses of $2.46 million compared to $3.25 million for the linked quarter and $2.89 million in the year-ago period.The changes in these other expenses include:

•Fraud and robbery losses of $90,000 during the first quarter of 2022 compared to $190,000 and $117,000 in the linked and year-ago quarters, respectively;

•Virginia franchise tax of $148,000 during the first quarter of 2022 compared to $228,000 and $90,000 in the linked and year-ago quarters, respectively;

•Internet banking expenses of $342,000 during the first quarter of 2022 compared to $322,000 and $278,000 in the linked and year-ago quarters, respectively; and

•Deferred director compensation plan-related income of $400,000 during the first quarter of 2022 compared to plan-related expense of $227,000 and $236,000 in the linked and year-ago quarters, respectively.

Summit’s efficiency ratio was 49.44 percent in the first quarter of 2022 compared to 48.85 percent in the linked quarter and 49.54 percent for the year-ago period. Non-interest expense was 1.91 percent of average assets in the first quarter of 2022, compared to 2.02 percent during the linked quarter and 2.09 percent in the year-ago period.

Balance Sheet

At March 31, 2022, total assets were $3.64 billion, an increase of $67.0 million, or 1.9 percent, during the first quarter and $395.6 million, or 12.2 percent from March 31, 2021.

Total loans net of unearned fees grew to $2.85 billion on March 31, 2022, increasing 3.2 percent during the quarter and 16.3 percent from March 31, 2021. Excluding PPP and mortgage warehouse lending, total loans grew to $2.68 billion on March 31, 2022, increasing 6.2 percent during the first quarter and 21.6 percent from March 31, 2021.

Total commercial loans, including commercial and industrial (C&I) and commercial real estate (CRE) and excluding PPP lending, grew to $1.8 billion on March 31, 2022, increasing 8.1 percent during the first quarter and 33.3 percent from March 31, 2021.

Residential real estate and consumer lending totaled $559.5 million on March 31, 2022, down 1.5 percent during the first quarter and 4.8 percent from March 31, 2021.

PPP balances paid down to $7.9 million on March 31, 2022 from a peak of $98.5 million on September 30, 2020. Mortgage warehouse lines of credit, sourced solely from a participation arrangement with a large regional bank, were $164.9 million on March 31, 2022 compared to a peak of $252.5 million on June 30, 2020.

Total deposits increased to $3.01 billion on March 31, 2022, up 2.2 percent during the first quarter and 10.4 percent from March 31, 2021.Core deposits increased to $2.89 billion on March 31, 2022, up 1.6 percent during the first quarter and 11.0 percent from March 31, 2021.Non-interest bearing deposit accounts grew $60.0 million or 10.5 percent in the first quarter of 2022 and $123.7 million or 24.5 percent since March 31, 2021.Interest bearing checking accounts grew $7.67 million or 0.7 percent in the first quarter of 2022 and $146.8 million or 14.9 percent since March 31, 2021.Savings accounts grew $3.91 million or 0.6 percent in the first quarter of 2022 and $45.6 million or 6.9 percent since March 31, 2021.Core time deposits declined $24.6 million or 5.5 percent in the first quarter of 2022 and $29.4 million or 6.4 percent since March 31, 2021.

Total shareholders’ equity was $330.3 million as of March 31, 2022 compared to $293.4 million at March 31, 2021 and $327.5 million at December 31, 2021.

Tangible book value per common share (“TBVPS”) increased to $19.79 as of March 31, 2022 from $19.54 at December 31, 2021. Unrealized net losses on debt securities AFS of $1.34 per common share (net of deferred income taxes) recorded in OCI during the quarter resulting from increased market interest rates negatively impacted TBVPS, but were partially offset by increased fair values of interest rate caps and swaps held as hedges against higher interest rates totaling $0.83 per common share (net of deferred income taxes), also recorded in OCI.

Summit had 12,753,094 outstanding common shares at the end of the first quarter of 2022 compared to 12,743,125 at year-end 2021.

As announced in the first quarter of 2020, the Board of Directors authorized the open market repurchase of up to 750,000 shares of the issued and outstanding shares of Summit's common stock, of which 323,577 shares have been repurchased to date. The timing and quantity of stock purchases under this repurchase plan are at the discretion of management. During the first quarter of 2022, no shares of Summit’s common stock were repurchased under the Plan.

Asset Quality

Net loan charge-offs (“NCOs”) were $509,000, or 0.07 percent of average loans annualized, in the first quarter of 2022. NCOs of $193,000 represented 0.03 percent of average loans annualized in the linked quarter, and $189,000 or 0.03 percent of average loans annualized for first quarter 2021.

Summit recorded a $1.95 million provision for credit losses in the first quarter of 2022, reflecting reserve build to support our substantial growth in both loans and unfunded loan commitments, partially offset by reserve reductions due to improving forecasted economic factors. The provision for credit losses was $1.50 million for both the linked and year-ago quarters.

Summit’s allowance for loan credit losses was $32.6 million on March 31, 2022, $32.3 million at the end of the linked quarter and $34.0 million on March 31, 2021. The allowance increased $325,000 as the impact of improving forecasted economic factors and improved loss experience served to substantially offset the additional provisions for credit losses resulting from the significant volumes of new loans.

Summit’s allowance for credit losses on unfunded loan commitments was $8.39 million on March 31, 2022, $7.28 million at the end of the linked quarter, and $3.71 million on March 31, 2021. The allowance for credit losses on unfunded loan commitments increased $1.12 million during the most recent quarter, principally as result of the recent strong volumes of construction loan commitments having a higher historical loss ratio than do our other loans as a whole.

The allowance for loan credit losses stood at 1.14 percent of total loans at March 31, 2022 compared to 1.17 percent at year-end 2021 and 1.39 percent at March 31, 2021. The allowance was 278.0 percent of nonperforming loans at March 31, 2022, compared to 254.4 percent at year-end 2021 and 134.4 percent at March 31, 2021.

As of March 31, 2022, NPAs consisting of nonperforming loans, foreclosed properties and repossessed assets, totaled $18.6 million, or 0.51 percent of assets, compared to $22.6 million, or 0.63 percent of assets at the end 2021 and $39.3 million or 1.21 percent of assets on March 31, 2021.

About the Company

Summit Financial Group, Inc. is the $3.64 billion financial holding company for Summit Community Bank, Inc. Its talented bankers serve commercial and individual clients throughout West Virginia, the Washington, D.C. metropolitan area, Virginia, and Kentucky. Summit’s focus on in-market commercial lending and providing other business banking services in dynamic markets is designed to leverage its highly efficient operations and core deposits in strong legacy locations. Residential and consumer lending, trust and wealth management, and other retail financial services are offered through convenient digital and mobile banking platforms, including MySummitBank.com and 45 full-service branch locations. More information on Summit Financial Group, Inc. (NASDAQ: SMMF), headquartered in West Virginia’s Eastern Panhandle in Moorefield, is available at SummitFGI.com.

FORWARD-LOOKING STATEMENTS

This press release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Words such as “expects”, “anticipates”, “believes”, “estimates” and other similar expressions or future or conditional verbs such as “will”, “should”, “would” and “could” are intended to identify such forward-looking statements.

Although we believe the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially. Factors that might cause such a difference include: the effect of the COVID-19 pandemic, including the negative impacts and disruptions on the communities we serve, and the domestic and global economy, which may have an adverse effect on our business; current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth; fiscal and monetary policies of the Federal Reserve; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; the successful integration of operations of our acquisitions; changes in banking laws and regulations; changes in tax laws; the impact of technological advances; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; 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 (unaudited) -- Q1 2022 vs Q1 2021
	For the Quarter Ended				Percent
Dollars in thousands	3/31/2022		3/31/2021		Change
Statements of Income
Interest income
Loans, including fees	$	30,224	$	27,538	9.8	%
Securities	2,623		2,157		21.6	%
Other	46		67		-31.3	%
Total interest income	32,893		29,762		10.5	%
Interest expense
Deposits	1,727		2,496		-30.8	%
Borrowings	1,612		1,014		59.0	%
Total interest expense	3,339		3,510		-4.9	%
Net interest income	29,554		26,252		12.6	%
Provision for credit losses	1,950		1,500		30.0	%
Net interest income after provision for credit losses	27,604		24,752		11.5	%
Noninterest income
Trust and wealth management fees	757		638		18.7	%
Mortgage origination revenue	339		998		-66.0	%
Service charges on deposit accounts	1,401		1,100		27.4	%
Bank card revenue	1,491		1,341		11.2	%
Gains on equity investments	372		—		n/a
Realized gains/(losses) on debt securities	(152)		476		-131.9	%
Bank owned life insurance and annuity income	283		298		-5.0	%
Other income	54		123		-56.1	%
Total noninterest income	4,545		4,974		-8.6	%
Noninterest expense
Salaries and employee benefits	9,700		8,435		15.0	%
Net occupancy expense	1,242		1,174		5.8	%
Equipment expense	1,843		1,581		16.6	%
Professional fees	362		338		7.1	%
Advertising and public relations	172		90		91.1	%
Amortization of intangibles	378		405		-6.7	%
FDIC premiums	390		277		40.8	%
Bank card expense	714		573		24.6	%
Foreclosed properties expense, net of (gains)/losses	(90)		227		-139.6	%
Acquisition-related expenses	29		440		-93.4	%
Other expenses	2,459		2,893		-15.0	%
Total noninterest expense	17,199		16,433		4.7	%
Income before income taxes	14,950		13,293		12.5	%
Income tax expense	3,257		2,933		11.0	%
Net income	11,693		10,360		12.9	%
Preferred stock dividends	225		—		n/a
Net income applicable to common shares	$	11,468	$	10,360	10.7	%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary (unaudited) -- Q1 2022 vs Q1 2021
	For the Quarter Ended						Percent
	3/31/2022			3/31/2021			Change
Per Share Data
Earnings per common share
Basic	$	0.90		$	0.80		12.5	%
Diluted	$	0.90		$	0.80		12.5	%
Cash dividends per common share	$	0.18		$	0.17		5.9	%
Common stock dividend payout ratio	19.7		%	20.6		%	-4.8	%
Average common shares outstanding
Basic	12,745,297			12,942,099			-1.5	%
Diluted	12,801,903			13,002,062			-1.5	%
Common shares outstanding at period end	12,753,094			12,950,714			-1.5	%
Performance Ratios
Return on average equity	14.20		%	14.51		%	-2.1	%
Return on average tangible equity (C)	18.02		%	18.49		%	-2.5	%
Return on average tangible common equity (D)	18.74		%	18.49		%	1.4	%
Return on average assets	1.30		%	1.31		%	-0.8	%
Net interest margin (A)	3.61		%	3.65		%	-1.1	%
Efficiency ratio (B)	49.44		%	49.54		%	-0.2	%
NOTES
(A) - Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
(B) - Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
(C) - Return on average tangible equity = (Net income - Amortization of intangibles [after-tax]) / (Average shareholders' equity - Average intangible assets).
(D) - Return on average tangible common equity = (Net income - Amortization of intangibles [after-tax]) / (Average common shareholders' equity - Average intangible assets).

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary (unaudited)
	For the Quarter Ended
Dollars in thousands	3/31/2022		12/31/2021		9/30/2021		6/30/2021		3/31/2021
Statements of Income
Interest income
Loans, including fees	$	30,224	$	28,979	$	28,416	$	27,697	$	27,538
Securities	2,623		2,763		2,348		2,202		2,157
Other	46		75		118		56		67
Total interest income	32,893		31,817		30,882		29,955		29,762
Interest expense
Deposits	1,727		1,718		1,832		2,136		2,496
Borrowings	1,612		1,267		1,013		1,008		1,014
Total interest expense	3,339		2,985		2,845		3,144		3,510
Net interest income	29,554		28,832		28,037		26,811		26,252
Provision for credit losses	1,950		1,500		—		1,000		1,500
Net interest income after provision for credit losses	27,604		27,332		28,037		25,811		24,752
Noninterest income
Trust and wealth management fees	757		847		718		683		638
Mortgage origination revenue	339		1,361		742		898		998
Service charges on deposit accounts	1,401		1,501		1,338		1,093		1,100
Bank card revenue	1,491		1,528		1,509		1,519		1,341
Gains on equity investments	372		202		—		—		—
Realized gains/(losses) on debt securities, net	(152)		(109)		(68)		127		476
Bank owned life insurance and annuity income	283		293		160		275		298
Other income	54		330		168		120		123
Total noninterest income	4,545		5,953		4,567		4,715		4,974
Noninterest expense
Salaries and employee benefits	9,700		8,977		8,745		8,230		8,435
Net occupancy expense	1,242		1,265		1,254		1,131		1,174
Equipment expense	1,843		1,902		1,908		1,598		1,581
Professional fees	362		438		374		428		338
Advertising and public relations	172		216		254		138		90
Amortization of intangibles	378		387		390		382		405
FDIC premiums	390		330		354		488		277
Bank card expense	714		703		705		685		573
Foreclosed properties expense, net of (gains)/losses	(90)		403		370		746		227
Acquisition-related expenses	29		57		273		454		440
Other expenses	2,459		3,250		2,716		2,756		2,893
Total noninterest expense	17,199		17,928		17,343		17,036		16,433
Income before income taxes	14,950		15,357		15,261		13,490		13,293
Income tax expense	3,257		2,777		3,023		2,930		2,933
Net income	11,693		12,580		12,238		10,560		10,360
Preferred stock dividends	225		225		225		139		—
Net income applicable to common shares	$	11,468	$	12,355	$	12,013	$	10,421	$	10,360

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary (unaudited)
	For the Quarter Ended
	3/31/2022			12/31/2021			9/30/2021			6/30/2021			3/31/2021
Per Share Data
Earnings per common share
Basic	$	0.90		$	0.96		$	0.93		$	0.80		$	0.80
Diluted	$	0.90		$	0.95		$	0.92		$	0.80		$	0.80
Cash dividends per common share	$	0.18		$	0.18		$	0.18		$	0.17		$	0.17
Common stock dividend payout ratio	19.7		%	18.5		%	19.1		%	21.2		%	20.6		%
Average common shares outstanding
Basic	12,745,297			12,916,555			12,964,575			12,952,357			12,942,099
Diluted	12,801,903			12,976,181			13,018,672			13,013,714			13,002,062
Common shares outstanding at period end	12,753,094			12,743,125			12,976,693			12,963,057			12,950,714
Performance Ratios
Return on average equity	14.20		%	15.48		%	15.30		%	13.67		%	14.51		%
Return on average tangible equity (C)	18.02		%	19.72		%	19.51		%	17.03		%	18.49		%
Return on average tangible common equity (D)	18.74		%	20.91		%	20.71		%	17.59		%	18.49		%
Return on average assets	1.30		%	1.42		%	1.42		%	1.29		%	1.31		%
Net interest margin (A)	3.61		%	3.49		%	3.47		%	3.55		%	3.65		%
Efficiency ratio (B)	49.44		%	48.85		%	49.52		%	48.82		%	49.54		%
NOTES
(A) - Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
(B) - Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
(C) - Return on average tangible equity = (Net income - Amortization of intangibles [after-tax]) / (Average shareholders' equity - Average intangible assets).
(D) - Return on average tangible common equity = (Net income - Amortization of intangibles [after-tax]) / (Average common shareholders' equity - Average intangible assets).

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Selected Balance Sheet Data (unaudited)
Dollars in thousands, except per share amounts	3/31/2022			12/31/2021			9/30/2021			6/30/2021			3/31/2021
Assets
Cash and due from banks	$	18,404		$	21,006		$	21,247		$	18,707		$	20,732
Interest bearing deposits other banks	42,853			57,452			189,862			176,282			155,865
Debt securities, available for sale	374,855			401,103			424,741			345,742			311,384
Debt securities, held to maturity	97,589			98,060			98,528			98,995			99,457
Equity investments	20,574			20,202			—			—			—
Other investments	10,974			11,304			10,649			10,661			10,776
Loans, net	2,817,998			2,729,093			2,521,704			2,395,885			2,418,029
Property held for sale	6,900			9,858			12,450			13,170			13,918
Premises and equipment, net	55,713			56,371			56,818			53,104			53,289
Goodwill and other intangible assets	63,212			63,590			63,977			53,858			54,239
Cash surrender value of life insurance      policies and annuities	70,825			60,613			60,241			60,087			59,740
Derivative financial instruments	24,455			11,187			10,380			9,885			13,923
Other assets	39,339			36,880			38,354			36,157			36,783
Total assets	$	3,643,691		$	3,576,719		$	3,508,951		$	3,272,533		$	3,248,135
Liabilities and Shareholders' Equity
Deposits	$	3,008,063		$	2,943,089		$	2,955,940		$	2,729,205		$	2,725,010
Short-term borrowings	140,146			140,146			140,146			140,146			140,145
Long-term borrowings and      subordinated debentures	123,260			123,159			49,739			49,710			49,681
Other liabilities	41,756			42,852			39,837			38,265			39,854
Shareholders' equity - preferred	14,920			14,920			14,920			14,920			—
Shareholders' equity - common	315,546			312,553			308,369			300,287			293,445
Total liabilities and shareholders' equity	$	3,643,691		$	3,576,719		$	3,508,951		$	3,272,533		$	3,248,135
Book value per common share	$	24.74		$	24.53		$	23.76		$	23.16		$	22.66
Tangible book value per common share (A)	$	19.79		$	19.54		$	18.83		$	19.01		$	18.47
Tangible common equity to tangible assets (B)	7.0		%	7.1		%	7.1		%	7.7		%	7.5		%
NOTES
(A) - Tangible book value per share = (Common shareholders' equity - Intangible assets) / Common shares outstanding.
(B) - Tangible common equity to tangible assets = (Common shareholder's equity - Intangible assets) / (Total assets - Intangible assets).

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios (unaudited)
	3/31/2022		12/31/2021		9/30/2021		6/30/2021		3/31/2021
Summit Financial Group, Inc.
CET1 Risk-based Capital	8.3	%	8.4	%	9.0	%	9.6	%	9.3	%
Tier 1 Risk-based Capital	9.3	%	9.5	%	10.2	%	10.9	%	10.1	%
Total Risk Based Capital	13.5	%	13.8	%	12.1	%	13.0	%	12.1	%
Tier 1 Leverage	8.4	%	8.3	%	8.4	%	8.9	%	8.5	%
Summit Community Bank, Inc.
CET1 Risk-based Capital	11.6	%	11.9	%	11.2	%	11.9	%	11.1	%
Tier 1 Risk-based Capital	11.6	%	11.9	%	11.2	%	11.9	%	11.1	%
Total Risk Based Capital	12.5	%	12.8	%	12.1	%	12.9	%	12.0	%
Tier 1 Leverage	10.5	%	10.4	%	9.2	%	9.7	%	9.3	%

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition (unaudited)
Dollars in thousands	3/31/2022		12/31/2021		9/30/2021		6/30/2021		3/31/2021
Commercial	$	447,482	$	365,301	$	317,855	$	326,468	$	348,022
Mortgage warehouse lines	164,895		227,869		161,628		105,288		187,995
Commercial real estate
Owner occupied	491,059		484,708		439,202		392,164		358,200
Non-owner occupied	910,174		866,031		835,071		784,415		735,594
Construction and development
Land and development	103,203		100,805		99,718		102,670		106,312
Construction	171,383		146,038		127,432		140,788		126,011
Residential real estate
Conventional	375,240		384,794		394,889		398,239		411,103
Jumbo	81,443		79,108		71,977		71,694		65,851
Home equity	70,770		72,112		71,496		72,956		77,684
Consumer	32,095		31,923		32,284		32,732		32,924
Other	2,877		2,702		2,558		2,356		2,375
Total loans, net of unearned fees	2,850,621		2,761,391		2,554,110		2,429,770		2,452,071
Less allowance for credit losses	32,623		32,298		32,406		33,885		34,042
Loans, net	$	2,817,998	$	2,729,093	$	2,521,704	$	2,395,885	$	2,418,029
Unfunded loan commitments	$	840,705	$	688,493	$	627,461	$	535,587	$	556,910

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition (unaudited)
Dollars in thousands	3/31/2022		12/31/2021		9/30/2021		6/30/2021		3/31/2021
Core deposits
Non interest bearing checking	$	629,002	$	568,986	$	575,542	$	503,097	$	505,264
Interest bearing checking	1,134,964		1,127,298		1,121,028		1,005,725		988,204
Savings	702,069		698,156		693,686		677,000		656,514
Time deposits	427,076		451,713		467,024		441,139		456,431
Total core deposits	2,893,111		2,846,153		2,857,280		2,626,961		2,606,413
Brokered deposits	32,755		14,677		14,671		23,521		39,125
Other non-core time deposits	82,197		82,259		83,989		78,723		79,472
Total deposits	$	3,008,063	$	2,943,089	$	2,955,940	$	2,729,205	$	2,725,010

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Asset Quality Information (unaudited)
	For the Quarter Ended
Dollars in thousands	3/31/2022			12/31/2021			9/30/2021			6/30/2021			3/31/2021
Gross loan charge-offs	$	618		$	282		$	528		$	343		$	354
Gross loan recoveries	(109)			(89)			(158)			(141)			(165)
Net loan charge-offs	$	509		$	193		$	370		$	202		$	189
Net loan charge-offs to average loans (annualized)	0.07		%	0.03		%	0.06		%	0.03		%	0.03		%
Allowance for loan credit losses	$	32,623		$	32,298		$	32,406		$	33,885		$	34,042
Allowance for loan credit losses as a percentage     of period end loans	1.14		%	1.17		%	1.27		%	1.39		%	1.39		%
Allowance for credit losses on unfunded loan      commitments ("ULC'")	$	8,392		$	7,275		$	5,860		$	4,660		$	3,705
Allowance for credit losses on ULC as a percentage      of period end ULC	1.00		%	1.06		%	0.93		%	0.87		%	0.67		%
Nonperforming assets:
Nonperforming loans
Commercial	$	433		$	740		$	459		$	968		$	848
Commercial real estate	4,765			4,603			4,643			14,430			17,137
Residential construction and development	968			1,560			448			621			626
Residential real estate	5,549			5,772			5,514			6,800			6,667
Consumer	20			21			48			38			54
Total nonperforming loans	11,735			12,696			11,112			22,857			25,332
Foreclosed properties
Commercial real estate	1,251			1,389			2,192			2,281			2,281
Commercial construction and development	2,332			2,332			2,925			3,146			3,884
Residential construction and development	3,018			5,561			6,712			6,859			7,129
Residential real estate	299			576			621			884			624
Total foreclosed properties	6,900			9,858			12,450			13,170			13,918
Other repossessed assets	—			—			—			—			—
Total nonperforming assets	$	18,635		$	22,554		$	23,562		$	36,027		$	39,250
Nonperforming loans to period end loans	0.41		%	0.46		%	0.44		%	0.94		%	1.03		%
Nonperforming assets to period end assets	0.51		%	0.63		%	0.67		%	1.10		%	1.21		%
Troubled debt restructurings
Performing	$	18,971		$	18,887		$	20,535		$	20,799		$	20,462
Nonperforming	1,822			2,039			1,141			1,235			3,828
Total troubled debt restructurings	$	20,793		$	20,926		$	21,676		$	22,034		$	24,290

Loans Past Due 30-89 Days (unaudited)
Dollars in thousands	3/31/2022		12/31/2021		9/30/2021		6/30/2021		3/31/2021
Commercial	$	388	$	751	$	304	$	414	$	335
Commercial real estate	1,446		683		281		733		508
Construction and development	645		45		1,215		1,911		330
Residential real estate	3,407		3,552		2,643		3,594		2,146
Consumer	69		190		193		404		96
Other	28		22		1		—		3
Total	$	5,983	$	5,243	$	4,637	$	7,056	$	3,418

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q1 2022 vs Q4 2021 vs Q1 2021 (unaudited)
	Q1 2022						Q4 2021						Q1 2021
	Average		Earnings/		Yield/		Average		Earnings /		Yield /		Average		Earnings /		Yield /
Dollars in thousands	Balances		Expense		Rate		Balances		Expense		Rate		Balances		Expense		Rate
ASSETS
Interest earning assets
Loans, net of unearned interest (1)
Taxable	$	2,771,842	$	30,178	4.42	%	$	2,640,975	$	28,916	4.34	%	$	2,355,705	$	27,419	4.72	%
Tax-exempt (2)	5,369		58		4.38	%	6,888		81		4.67	%	12,679		151		4.83	%
Securities
Taxable	320,170		1,657		2.10	%	349,541		1,806		2.05	%	266,289		1,295		1.97	%
Tax-exempt (2)	180,473		1,223		2.75	%	177,757		1,212		2.71	%	144,880		1,091		3.05	%
Interest bearing deposits other banks and Federal funds sold	72,883		46		0.26	%	132,471		75		0.22	%	166,531		67		0.16	%
Total interest earning assets	3,350,737		33,162		4.01	%	3,307,632		32,090		3.85	%	2,946,084		30,023		4.13	%
Noninterest earning assets
Cash & due from banks	19,226						21,037						17,961
Premises & equipment	56,043						56,566						53,317
Intangible assets	63,429						63,810						54,926
Other assets	142,719						126,635						112,417
Allowance for credit losses	(32,462)						(32,691)						(32,706)
Total assets	$	3,599,692					$	3,542,989					$	3,151,999
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits	$	1,135,068	$	465	0.17	%	$	1,128,637	$	319	0.11	%	$	960,190	$	394	0.17	%
Savings deposits	700,115		573		0.33	%	692,893		590		0.34	%	642,241		645		0.41	%
Time deposits	542,360		689		0.52	%	560,140		809		0.57	%	583,723		1,457		1.01	%
Short-term borrowings	140,230		373		1.08	%	140,146		365		1.03	%	140,146		469		1.36	%
Long-term borrowings and      subordinated debentures	123,203		1,239		4.08	%	86,509		902		4.14	%	49,664		545		4.45	%
Total interest bearing liabilities	2,640,976		3,339		0.51	%	2,608,325		2,985		0.45	%	2,375,964		3,510		0.60	%
Noninterest bearing liabilities
Demand deposits	586,903						568,764						451,957
Other liabilities	42,493						40,905						38,393
Total liabilities	3,270,372						3,217,994						2,866,314
Shareholders' equity - preferred	14,921						14,920						—
Shareholders' equity - common	314,399						310,075						285,685
Total liabilities and   shareholders' equity	$	3,599,692					$	3,542,989					$	3,151,999
NET INTEREST EARNINGS			$	29,823					$	29,105					$	26,513
NET INTEREST MARGIN					3.61	%					3.49	%					3.65	%
(1) For purposes of this table, nonaccrual loans are included in average loan balances.
(2) Interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21% for all periods presented. The tax equivalent adjustment resulted in an increase in interest income of $269,000, $273,000 and $260,000 for Q1 2022, Q4 2021 and Q1 2021, respectively.

XML

Document and Entity Information Document	Apr. 28, 2022
Cover [Abstract]
Document Type	8-K
Document Period End Date	Apr. 28, 2022
Entity Registrant Name	Summit Financial Group, Inc.
Entity Central Index Key	0000811808
Amendment Flag	false
Entity Incorporation, State or Country Code	WV
Entity File Number	0-16587
Entity Tax Identification Number	55-0672148
Entity Address, Address Line One	300 North Main Street
Entity Address, City or Town	Moorefield
Entity Address, State or Province	WV
Entity Address, Postal Zip Code	26836
City Area Code	304
Local Phone Number	530-1000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, Par Value $2.50 per share
Trading Symbol	SMMF
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false