EX-99.1 2 a4686060ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Summit Financial Group Announces Record Q2 2004 Earnings; Diluted EPS Increases 31.6% to $0.75 MOOREFIELD, W.Va.--(BUSINESS WIRE)--July 21, 2004--SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) today reported second quarter 2004 net income of $2.7 million, or $0.75 per diluted share, up 31.6 percent on an earnings per share basis from the $2.0 million, or $0.57 per diluted share, reported in the second quarter of 2003. These record quarterly earnings reflect strong loan growth and fee income from mortgage banking. Net income for the second quarter of 2004 generated an annualized return on average shareholders' equity (ROE) of 17.96 percent and an annualized return on average assets (ROA) of 1.29 percent compared with second quarter 2003 ratios of 14.62 percent and 1.12 percent, respectively. For the first six months of 2004, the Company reported net income of $5.1 million, or $1.44 per diluted share, up 30.9 percent on an earnings per share basis from $3.9 million, or $1.10 per diluted share, reported in the prior-year period. Net income for the first six months of 2004 generated an ROE of 17.31 percent and an ROA of 1.26 percent compared with 14.42 percent and 1.11 percent, respectively, for the prior-year period. H. Charles Maddy III, President and Chief Executive Officer commented, "We are pleased to report record quarterly earnings, driven by a combination of strong balance sheet and fee income growth and excellent asset quality. Our strategies to expand into high growth or under-served markets, and to diversify our revenue stream, are serving us well. Loan and deposit growth are both strong as customers in our new and existing markets continue to respond favorably to the customized banking solutions and expanded product lines offered by our three community banks." "This quarter, we announced the planned merger of our Charleston, WV-based Capital State Bank, Inc. into Summit Community Bank. This consolidation will accelerate improvements in balance sheet fundamentals of the Company and enhance shareholder value over time. We expect to complete this merger by year end; at that time, Summit Community will have a total of eight offices in West Virginia." Revenue for the second quarter of 2004, consisting of net interest income plus non-interest income, was $14.2 million, an increase of 119.0 percent over the prior-period quarter. Net interest income increased 19.2 percent to $6.8 million, reflecting 16.0 percent growth in average earning assets in combination with a ten basis point increase in the net interest margin to 3.64 percent. Mr. Maddy noted the Company's success at managing its net interest margin across a variety of interest rate environments. Non-interest income for the second quarter of 2004 was $7.4 million compared to $0.8 million for the prior-year period. The $6.6 million quarter-over-quarter increase resulted primarily from revenue derived from the Company's new mortgage banking unit, Summit Financial, LLC, which commenced operations during the third quarter of 2003 and originates primarily debt consolidation second mortgage loans to borrowers nationwide. Excluding this business, non-interest income increased 33.4 percent, reflecting strong growth in service fees and other income. Mr. Maddy commented, "We are extremely pleased with the performance of this new venture. This is a high-volume, lower-margin business, which represents a significant opportunity for our shareholders." Net of expenses associated with this business, Summit Financial, LLC contributed $0.5 million to consolidated net income for the second quarter of 2004 compared with $0.2 million in the first quarter of this year. The Company originated $74.3 million in loans during the second quarter, and sold $68.0 million. This compares with $44.9 million originated in the first quarter, and sales of $41.4 million. Non-interest expense for the second quarter of 2004 was $10.2 million, a $6.8 million or 195.7 percent increase over the $3.4 million reported for the prior-year period. Excluding expenses associated with Summit Financial, LLC, non-interest expense was $4.2 million, a 22.6 percent increase above the 2003 second quarter. Mortgage operations significantly affected the efficiency ratio, which increased to 69.61 percent from 50.84 percent. Excluding the impact of mortgage banking, Summit's efficiency ratio was 53.61 percent compared with last year's efficiency ratio of 50.96 percent. Mr. Maddy commented that the Company continues to maintain its hallmark excellent asset quality. Nonperforming assets were 0.29 percent of period-end assets at June 30, 2004 compared with 0.29 percent for the linked quarter and 0.28 percent twelve months ago. Annualized net charge-offs were 0.00 percent of average loans in second quarter of 2004, down from 0.15 percent for the first quarter of 2004 and 0.06 percent for the second quarter of 2003. At period-end, loan loss reserves were 0.88 percent of loans. Assets at June 30, 2004 were $849.6 million, an increase of 18.6 percent over the last twelve months. The increase was driven by loan growth of $109.9 million, up 24.1 percent from last year's second quarter, to $564.8 million; the increase was derived primarily from commercial real estate loans, up 34.1 percent, and residential mortgage loans, up 22.2 percent. Loan growth was funded primarily by deposit growth of $63.3 million or 13.4 percent, to $536.6 million, as well as a $47.1 million increase in short-term borrowings, to $71.4 million. About the Company Summit Financial Group, Inc., a financial holding company with total assets of $850 million, operates twelve banking locations through its three wholly-owned community banks: Summit Community Bank, headquartered in Moorefield, West Virginia; Capital State Bank, Inc., headquartered in Charleston, West Virginia; and Shenandoah Valley National Bank in Winchester, Virginia. Summit also operates Summit Financial, LLC, a residential mortgage loan originator located in Herndon, Virginia. Forward-Looking Statements This press release contains forward-looking statements as defined by federal securities laws. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current projections. Please refer to Summit's filings with the Securities and Exchange Commission for a summary of important factors that could affect Summit's forward-looking statements. Summit undertakes no obligation to revise these statements following the date of this press release. SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Quarterly Performance Summary -- Q2 2004 vs Q2 2003 For the Quarter Ended -------------------------- Dollars in thousands, except per Percent share amounts 6/30/2004 6/30/2003 Change ---------------------------------------------------------------------- Condensed Statements of Income Interest income Loans, including fees $8,744 $7,697 13.6% Securities 2,316 2,426 -4.5% Other 32 46 -30.4% -------------------------- Total interest income 11,092 10,169 9.1% -------------------------- Interest expense Deposits 2,390 2,516 -5.0% Borrowings 1,904 1,952 -2.5% -------------------------- Total interest expense 4,294 4,468 -3.9% -------------------------- Net interest income 6,798 5,701 19.2% Provision for loan losses 233 233 0.0% -------------------------- Net interest income after provision for loan losses 6,565 5,468 20.1% -------------------------- Noninterest income Service fee income 562 388 44.8% Mortgage origination revenue 6,614 184 3494.6% Securities gains (losses) 17 66 -74.2% Other income 239 159 50.3% -------------------------- Total noninterest income 7,432 797 832.5% -------------------------- Noninterest expense Salaries and employee benefits 4,740 1,880 152.1% Net occupancy expense 386 210 83.8% Equipment expense 441 311 41.8% Postage expense 1,435 49 2828.6% Advertising 1,304 63 1969.8% Other expenses 1,862 926 101.1% -------------------------- Total noninterest expense 10,168 3,439 195.7% -------------------------- Income before income taxes 3,829 2,826 35.5% Income taxes 1,155 818 41.2% -------------------------- Net income $2,674 $2,008 33.2% ========================== Per Share Data Basic earnings $0.76 $0.57 33.3% Diluted earnings $0.75 $0.57 31.6% Average shares outstanding Basic 3,510,784 3,504,358 0.2% Diluted 3,563,410 3,534,643 0.8% Performance Ratios Return on average equity 17.96% 14.62% 22.8% Return on average assets 1.29% 1.12% 15.2% Net yield on earning assets - taxable equivalent 3.64% 3.54% 2.8% Efficiency ratio consolidated(A) 69.61% 50.84% 36.9% Efficiency ratio excluding mortgage banking (A) 53.61% 50.96% 5.6% NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles. SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Six Month Performance Summary -- 2004 vs. 2003 For the Six Months Ended ---------------------------- Dollars in thousands, except per Percent share amounts 6/30/2004 6/30/2003 Change ---------------------------------------------------------------------- Condensed Statements of Income Interest income Loans, including fees $17,058 $15,193 12.3% Securities 4,842 5,016 -3.5% Other 64 91 -29.7% ---------------------------- Total interest income 21,964 20,300 8.2% ---------------------------- Interest expense Deposits 4,804 5,142 -6.6% Borrowings 3,761 3,789 -0.7% ---------------------------- Total interest expense 8,565 8,931 -4.1% ---------------------------- Net interest income 13,399 11,369 17.9% Provision for loan losses 465 450 3.3% ---------------------------- Net interest income after provision for loan losses 12,934 10,919 18.5% ---------------------------- Noninterest income Service fee income 1,072 728 47.3% Mortgage origination revenue 10,933 323 3284.8% Securities gains (losses) 37 106 -65.1% Other income 332 213 55.9% ---------------------------- Total noninterest income 12,374 1,370 803.2% ---------------------------- Noninterest expense Salaries and employee benefits 8,426 3,799 121.8% Net occupancy expense 690 405 70.4% Equipment expense 870 611 42.4% Postage expense 2,788 101 2660.4% Advertising 2,265 112 1922.3% Other expenses 2,968 1,752 69.4% ---------------------------- Total noninterest expense 18,007 6,780 165.6% ---------------------------- Income before income taxes 7,301 5,509 32.5% Income taxes 2,176 1,637 32.9% ---------------------------- Net income $5,125 $3,872 32.4% ============================ Per Share Data Basic earnings $1.46 $1.11 31.5% Diluted earnings $1.44 $1.10 30.9% Average shares outstanding Basic 3,510,423 3,504,145 0.2% Diluted 3,551,566 3,530,236 0.6% Performance Ratios Return on average equity 17.31% 14.42% 20.0% Return on average assets 1.26% 1.11% 13.5% Net yield on earning assets - taxable equivalent 3.66% 3.60% 1.7% Efficiency ratio consolidated(A) 67.92% 50.83% 33.6% Efficiency ratio excluding mortgage banking (A) 52.07% 50.80% 2.5% NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles. SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Five Quarter Performance Summary For the Quarter Ended ---------------------------------------------------- Dollars in thousands, except per share amounts 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03 ---------------------------------------------------------------------- Condensed Statements of Income Interest income Loans, including fees $8,744 $8,314 $8,096 $7,877 $7,697 Securities 2,316 2,527 2,501 2,375 2,426 Other 32 32 37 42 46 ---------------------------------------------------- Total interest income 11,092 10,873 10,634 10,294 10,169 ---------------------------------------------------- Interest expense Deposits 2,390 2,414 2,390 2,467 2,516 Borrowings 1,904 1,857 1,862 1,885 1,952 ---------------------------------------------------- Total interest expense 4,294 4,271 4,252 4,352 4,468 ---------------------------------------------------- Net interest income 6,798 6,602 6,382 5,942 5,701 Provision for loan losses 233 233 232 232 233 ---------------------------------------------------- Net interest income after provision for loan losses 6,565 6,369 6,150 5,710 5,468 ---------------------------------------------------- Noninterest income Service fee income 562 509 455 403 388 Mortgage origination revenue 6,614 4,319 2,604 211 184 Securities gains (losses) 17 20 105 - 66 Other income 239 94 480 196 159 ---------------------------------------------------- Total noninterest income 7,432 4,942 3,644 810 797 ---------------------------------------------------- Noninterest expense Salaries and employee benefits 4,740 3,686 3,064 2,142 1,880 Net occupancy expense 386 304 240 223 210 Equipment expense 441 429 383 326 311 Postage expense 1,435 1,353 781 103 49 Advertising 1,304 962 571 89 63 Other expenses 1,862 1,105 1,268 914 926 ---------------------------------------------------- Total noninterest expense 10,168 7,839 6,307 3,797 3,439 ---------------------------------------------------- Income before income taxes 3,829 3,472 3,487 2,723 2,826 Income taxes 1,155 1,021 994 880 818 ---------------------------------------------------- Net income $2,674 $2,451 $2,493 $1,843 $2,008 ==================================================== Per Share Data Basic earnings $0.76 $0.70 $0.71 $0.53 $0.57 Diluted earnings $0.75 $0.69 $0.70 $0.52 $0.57 Average shares outstanding Basic 3,510,784 3,510,063 3,506,874 3,504,820 3,504,358 Diluted 3,563,410 3,553,392 3,541,296 3,554,700 3,534,643 Performance Ratios Return on average equity 17.96% 16.77% 17.66% 13.36% 14.62% Return on average assets 1.29% 1.23% 1.30% 1.02% 1.12% Net yield on earning assets - taxable equivalent 3.64% 3.67% 3.69% 3.62% 3.54% Efficiency ratio consolidated (A) 69.61% 65.84% 61.85% 53.50% 50.84% Efficiency ratio excluding mortgage banking (A) 53.61% 50.45% 49.23% 50.31% 50.96% NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles. SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Segment Information For the Quarter Ended June 30, 2004 Parent Dollars in thousands Community Mortgage and Banking Banking Other Eliminations Total ---------------------------------------------------------------------- Condensed Statements of Income Interest income $10,941 $301 $3 $(153) $11,092 Interest expense 4,185 153 109 (153) 4,294 ------------------------------------------------ Net interest income 6,756 148 (106) - 6,798 Provision for loan losses 233 - - - 233 ------------------------------------------------ Net interest income after provision for loan losses 6,523 148 (106) - 6,565 ------------------------------------------------ Noninterest income 743 6,614 995 (920) 7,432 Noninterest expense 3,824 5,953 1,311 (920) 10,168 ------------------------------------------------ Income before income taxes 3,442 809 (422) - 3,829 Income taxes 1,050 277 (172) - 1,155 ------------------------------------------------ Net income $2,392 $532 $(250) $- $2,674 ================================================ Average assets $804,831 $16,512 $73,221 $(63,837)$830,727 ================================================ SUMMIT FINANCIAL GROUP, INC.(OTCBB: SMMF) Segment Information For the Quarter Ended June 30, 2003 Parent Dollars in Community Mortgage and thousands Banking Banking Other Eliminations Total ---------------------------------------------------------------------- Condensed Statements of Income Interest income $10,170 $- $2 $(3) $10,169 Interest expense 4,418 - 53 (3) 4,468 -------------------------------------------------- Net interest income 5,752 - (51) - 5,701 Provision for loan losses 233 - - - 233 -------------------------------------------------- Net interest income after provision for loan losses 5,519 - (51) - 5,468 -------------------------------------------------- Noninterest income 613 184 818 (818) 797 Noninterest expense 3,252 85 920 (818) 3,439 -------------------------------------------------- Income before income taxes 2,880 99 (153) - 2,826 Income taxes 849 34 (65) - 818 -------------------------------------------------- Net income $2,031 $65 $(88) $- $2,008 ================================================== Average assets $706,915 $3,672 $59,046 $(55,429)$714,204 ================================================== SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Segment Information For the Six Months Ended June 30, 2004 Parent Dollars in thousands Community Mortgage and Banking Banking Other Eliminations Total ---------------------------------------------------------------------- Condensed Statements of Income Interest income $21,696 $508 $6 $(246) $21,964 Interest expense 8,355 242 214 (246) 8,565 ------------------------------------------------ Net interest income 13,341 266 (208) - 13,399 Provision for loan losses 465 - - - 465 ------------------------------------------------ Net interest income after provision for loan losses 12,876 266 (208) - 12,934 ------------------------------------------------ Noninterest income 1,366 10,932 1,885 (1,809) 12,374 Noninterest expense 7,418 10,015 2,383 (1,809) 18,007 ------------------------------------------------ Income before income taxes 6,824 1,183 (706) - 7,301 Income taxes 2,049 407 (280) - 2,176 ------------------------------------------------ Net income $4,775 $776 $(426) $- $5,125 ================================================ Average assets $792,605 $12,946 $71,112 $(62,591)$814,072 ================================================ SUMMIT FINANCIAL GROUP, INC.(OTCBB: SMMF) Segment Information For the Six Months Ended June 30, 2003 Parent Dollars in thousands Community Mortgage and Banking Banking Other Eliminations Total ---------------------------------------------------------------------- Condensed Statements of Income Interest income $20,304 $- $4 $(8) $20,300 Interest expense 8,833 - 106 (8) 8,931 ------------------------------------------------ Net interest income 11,471 - (102) - 11,369 Provision for loan losses 450 - - - 450 ------------------------------------------------ Net interest income after provision for loan losses 11,021 - (102) - 10,919 ------------------------------------------------ Noninterest income 1,067 323 1,600 (1,620) 1,370 Noninterest expense 6,420 168 1,812 (1,620) 6,780 ------------------------------------------------ Income before income taxes 5,668 155 (314) - 5,509 Income taxes 1,702 53 (118) - 1,637 ------------------------------------------------ Net income $3,966 $102 $(196) $- $3,872 ================================================ Average assets $693,888 $3,030 $57,691 $(54,416)$700,193 ================================================ SUMMIT FINANCIAL GROUP, INC.(OTCBB: SMMF) Selected Balance Sheet Data For the Quarter Ended --------------------------------------------------- Dollars in thousands, except per share amounts 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03 ---------------------------------------------------------------------- Assets $849,555 $809,216 $791,465 $740,645 $716,274 Securities 213,644 215,732 235,409 223,607 217,538 Loans held for sale, net 15,607 9,596 6,353 709 5,573 Loans, net 559,869 532,855 498,340 473,779 450,669 Intangible assets 3,574 3,612 3,050 3,088 3,126 Deposits 536,589 530,372 511,801 474,955 473,255 Short-term borrowings 71,350 42,547 49,714 41,049 24,220 Long-term borrowings and subordinated debentures 176,248 169,608 168,255 165,526 159,369 Shareholders' equity 58,975 60,674 57,188 55,502 55,873 Book value per share $16.80 $17.28 $16.30 $15.84 $15.94 SUMMIT FINANCIAL GROUP INC. (OTCBB: SMMF) Loan Composition Dollars in thousands 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03 ---------------------------------------------------------------------- Commercial $49,294 $47,178 $46,860 $43,887 $44,995 Commercial real estate 250,562 235,565 209,391 201,011 186,864 Residential construction 2,665 2,698 2,369 4,042 4,137 Residential mortgage 212,371 203,225 196,135 183,142 173,782 Consumer 41,787 41,060 41,112 40,846 39,970 Other 9,316 8,968 8,223 6,331 6,101 --------------------------------------------- Total loans 565,995 538,694 504,090 479,259 455,849 Less unearned fees and interest 1,173 1,118 1,069 996 882 --------------------------------------------- Total loans net of unearned fees and interest 564,822 537,576 503,021 478,263 454,967 Less allowance for loan losses 4,953 4,721 4,681 4,484 4,298 --------------------------------------------- Loans, net $559,869 $532,855 $498,340 $473,779 $450,669 ============================================= SUMMIT FINANCIAL GROUP INC. (OTCBB: SMMF) Mortgage Banking Segment Loan Activity For the Quarter Ended --------------------------------------------------- Dollars in thousands 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03 ---------------------------------------------------------------------- Loans originated Amount $74,333 $44,935 $32,413 $11,655 $11,004 Number 1,461 931 724 88 77 Loans sold Amount $68,013 $41,376 $26,261 $16,928 $8,421 Number 1,364 861 603 112 67 SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Asset Quality Information For the Quarter Ended ------------------------------------------- Dollars in thousands 6/30/04 3/31/04 12/31/03 9/30/03 6/30/03 ---------------------------------------------------------------------- Net loan charge-off's $1 $192 $37 $46 $63 Net loan charge-off's to average loans(annualized) 0.00% 0.15% 0.03% 0.04% 0.06% Allowance for loan losses $4,953 $4,721 $4,681 $4,484 $4,298 Allowance for loan losses as a percentage of period end loans 0.88% 0.88% 0.93% 0.94% 0.94% Nonperforming assets: Nonperforming loans $1,577 $1,448 $1,356 $604 $1,056 Foreclosed properties 475 475 480 560 546 Nonaccrual securities 384 389 396 399 405 ------------------------------------------- Total $2,436 $2,312 $2,232 $1,563 $2,007 =========================================== Nonperforming loans to period end loans and other real estate 0.36% 0.36% 0.36% 0.24% 0.35% =========================================== Nonperforming assets to period end assets 0.29% 0.29% 0.28% 0.21% 0.28% =========================================== SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Average Balance Sheet, Interest Earnings & Expenses and Average Rates Q2 2004 vs Q2 2003 Q2 2004 Q2 2003 ------------------------ ------------------------ Dollars in Average Earnings/ Yield/ Average Earnings/ Yield/ thousands Balances Expense Rate Balances Expense Rate --------------------------------------------- ------------------------ ASSETS Interest earning assets Loans, net of unearned interest Taxable $556,669 $8,635 6.20% $443,990 $7,618 6.86% Tax-exempt 8,774 166 7.57% 5,742 118 8.22% Securities Taxable 166,018 1,763 4.25% 178,158 1,944 4.36% Tax-exempt 48,620 826 6.80% 41,306 719 6.96% Interest bearing deposits other banks and Federal funds sold 3,410 32 3.99% 6,133 46 3.00% --------- -------- ----- --------- -------- ----- Total interest earning assets 783,491 11,422 5.83% 675,329 10,445 6.19% Noninterest earning assets Cash & due from banks 14,083 8,999 Premises & equipment 20,087 12,406 Other assets 17,912 21,703 Allowance for loan losses (4,846) (4,233) --------- --------- Total assets $830,727 $714,204 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Interest bearing liabilities Interest bearing demand deposits $119,845 $278 0.93% $96,319 $198 0.82% Savings deposits 48,726 55 0.45% 46,828 72 0.62% Time deposits 310,195 2,057 2.65% 281,224 2,246 3.19% Short-term borrowings 62,383 203 1.30% 26,619 93 1.40% Long-term borrowings and subordinated debentures 171,205 1,701 3.97% 158,098 1,859 4.70% --------- -------- ----- --------- -------- ----- 712,354 4,294 2.41% 609,088 4,468 2.93% Noninterest bearing liabilities Demand deposits 53,719 44,941 Other liabilities 5,116 5,249 --------- --------- Total liabilities 771,189 659,278 Shareholders' equity 59,538 54,926 --------- --------- Total liabilities and shareholders' equity $830,727 $714,204 ========= ========= NET INTEREST EARNINGS $7,128 $5,977 ======== ======== NET INTEREST YIELD ON EARNING ASSETS 3.64% 3.54% ===== ===== SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Average Balance Sheet, Interest Earnings & Expenses and Average Rates YTD 2004 vs YTD 2003 For the Six Months Ended June 30, ----------------------------------------------------- 2004 2003 ---------------------------- ------------------------ Dollars in Average Earnings/ Yield/ Average Earnings/ Yield/ thousands Balances Expense Rate Balances Expense Rate --------------------------------------------- ------------------------ ASSETS Interest earning assets Loans, net of unearned interest Taxable $539,338 $16,852 6.25% $433,533 $15,030 6.93% Tax-exempt 8,202 313 7.63% 5,973 245 8.20% Securities Taxable 169,208 3,738 4.42% 176,437 4,061 4.60% Tax-exempt 48,454 1,651 6.81% 40,262 1,429 7.10% Interest bearing deposits other banks and Federal funds sold 3,491 64 3.67% 6,013 91 3.03% ------------- -------- ----- --------- -------- ----- Total interest earning assets 768,693 22,618 5.88% 662,218 20,856 6.30% Noninterest earning assets Cash & due from banks 12,005 8,565 Premises & equipment 19,432 12,585 Other assets 18,752 20,988 Allowance for loan losses (4,810) (4,163) ------------- --------- Total assets $814,072 $700,193 ============= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Interest bearing liabilities Interest bearing demand deposits $117,539 $531 0.90% $97,793 $427 0.87% Savings deposits 48,390 111 0.46% 46,465 145 0.62% Time deposits 305,785 4,162 2.72% 277,417 4,570 3.29% Short-term borrowings 58,283 375 1.29% 21,922 173 1.58% Long-term borrowings and subordinated debentures 168,336 3,386 4.02% 153,093 3,616 4.72% ------------- -------- ----- --------- -------- ----- 698,333 8,565 2.45% 596,690 8,931 2.99% Noninterest bearing liabilities Demand deposits 51,059 44,581 Other liabilities 5,461 5,201 ------------- --------- Total liabilities 754,853 646,472 Shareholders' equity 59,219 53,721 ------------- --------- Total liabilities and shareholders' equity $814,072 $700,193 ============= ========= NET INTEREST EARNINGS $14,053 $11,925 ======== ======== NET INTEREST YIELD ON EARNING ASSETS 3.66% 3.60% ===== ===== CONTACT: Summit Financial Group, Inc. Robert S. Tissue, 304-530-0552 rtissue@SummitFGI.com