-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Gje9cBtAUaWX+oo4bThmwQaEYos2ArPqWqdZ0tdhe3b3xg/jaN+1SlQPa6cac/HC u/oyNohXzkUSxsyS7IYlAg== 0001157523-04-009696.txt : 20041022 0001157523-04-009696.hdr.sgml : 20041022 20041022100731 ACCESSION NUMBER: 0001157523-04-009696 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041020 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041022 DATE AS OF CHANGE: 20041022 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUMMIT FINANCIAL GROUP INC CENTRAL INDEX KEY: 0000811808 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 550672148 STATE OF INCORPORATION: WV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16587 FILM NUMBER: 041090868 BUSINESS ADDRESS: STREET 1: 300 NORTH MAIN ST CITY: MOOREFIELD STATE: WV ZIP: 26836 BUSINESS PHONE: 3045381000 MAIL ADDRESS: STREET 1: 300 NORTH MAIN ST CITY: MOOREFIELD STATE: WV ZIP: 26836 FORMER COMPANY: FORMER CONFORMED NAME: SOUTH BRANCH VALLEY BANCORP INC DATE OF NAME CHANGE: 19920703 8-K 1 a4746651.txt SUMMIT FINANCIAL GROUP 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): October 20, 2004 Summit Financial Group, Inc. (Exact name of registrant as specified in its charter) West Virginia 0-16587 55-0672148 (State or Other (Commission (I.R.S. Employer Jurisdiction) File Number) Identification) 300 North Main Street Moorefield, WV 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 October 20, 2004, Summit Financial Group, Inc. ("Summit") issued a News Release announcing its earnings for the third quarter and first nine months of 2004. 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 (c) Exhibits 99 News Release issued on October 20, 2004 SIGNATURE 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: October 22, 2004 By: /s/ Robert S. Tissue ---------------------------------- Robert S. Tissue Senior Vice President and Chief Financial Officer EX-99 2 a4746651ex991.txt PRESS RELEASE EXHIBIT 99 Summit Financial Group Reports Record Quarterly Earnings; Q3 2004 EPS Increases 67.3% to $0.87 MOOREFIELD, W.Va.--(BUSINESS WIRE)--Oct. 20, 2004--Summit Financial Group, Inc. (OTCBB: SMMF) today reported third quarter 2004 net income of $3.1 million, or $0.87 per diluted share, up 67.3 percent on an earnings per share basis from the $1.8 million, or $0.52 per diluted share, reported in the third quarter of 2003. These record quarterly earnings reflect strong revenue growth in both its community banking and mortgage banking segments. Net income for the third quarter of 2004 generated an annualized return on average shareholders' equity (ROE) of 20.06 percent and an annualized return on average assets (ROA) of 1.46 percent compared with third quarter 2003 ratios of 13.36 percent and 1.02 percent, respectively. For the first nine months of 2004, the Company reported net income of $8.3 million, or $2.30 per diluted share, up 42.9 percent on an earnings per share basis from $5.7 million, or $1.61 per diluted share, reported in the prior-year period. Net income for the first nine months of 2004 generated an ROE of 18.31 percent and an ROA of 1.33 percent compared with 14.06 percent and 1.08 percent, respectively, for the prior-year period. H. Charles Maddy III, President and Chief Executive Officer commented, "Once again we are pleased to report record quarterly earnings. Our strong earnings performance validates the strategies we have embarked on to expand into high growth or under-served markets and to diversify our revenue stream. Both segments of our business - community banking and mortgage banking - continue to perform well. Summit continues to prove itself as an attractive investment opportunity; our planned listing on the Nasdaq SmallCap market within the next couple months will further strengthen our investment appeal." Revenue for the third quarter of 2004, consisting of net interest income plus non-interest income, was $15.6 million, an increase of 131.1 percent over the prior-period quarter. Net interest income increased 18.8 percent to $7.1 million, reflecting 17.8 percent growth in average earning assets in combination with a three basis point increase in the net interest margin to 3.65 percent. Mr. Maddy noted that the Company has maintained a stable net interest margin over the last twelve months, despite the challenges of a changing interest rate environment. Non-interest income for the third quarter of 2004 was $8.5 million compared with $0.8 million for the prior-year period. The $7.7 million improvement resulted primarily from revenue derived from the Company's new mortgage banking unit, Summit Financial, LLC, which primarily originates debt consolidation second mortgage loans for borrowers nationwide and commenced operations during the third quarter of 2003. Excluding this business, non-interest income increased 35.7 percent, reflecting strong growth in service fees and other income. Mr. Maddy commented, "We've enjoyed strong earnings momentum from Summit Financial, LLC since we began this business one year ago. Long-term, we continue to see opportunities for growth, although the near-term may be tempered by seasonal factors." Summit Financial, LLC contributed $0.9 million to consolidated net income for the third quarter of 2004 compared with $0.5 million in the previous quarter of this year. The Company originated $75.8 million in loans during the third quarter, and sold $79.9 million. This compares with originations of $74.3 million in the second quarter, and sales of $68.0 million. Non-interest expense for the third quarter of 2004 was $10.8 million, a $7.0 million or 183.6 percent increase over the $3.8 million reported for the prior-year period. Excluding expenses associated with Summit Financial, LLC, non-interest expense was $4.2 million, a 20.7 percent increase above the 2003 third quarter. Mortgage operations significantly affected the efficiency ratio, which for third quarter 2004 increased to 67.11 percent as compared to 53.50 percent for third quarter 2003. Excluding the impact of mortgage banking, Summit's efficiency ratio was 51.68 percent compared with last year's efficiency ratio of 50.31 percent. Mr. Maddy noted that asset quality remains strong, with a continued low level of net charge-offs. Nonperforming assets were 0.30 percent of period-end assets at September 30, 2004 compared with 0.29 percent for the linked quarter and 0.21 percent twelve months ago. Annualized net charge-offs were 0.08 percent of average loans in the third quarter of 2004, up from 0.00 percent for the second quarter of 2004 and 0.04 percent for the third quarter of 2003. At period-end, loan loss reserves were 0.87 percent of loans. Assets at September 30, 2004 were $862.2 million, an increase of 16.4 percent over the last twelve months. The increase was driven by loan growth of $113.0 million, up 23.6 percent from last year's third quarter, to $591.3 million; the increase was derived primarily from commercial real estate loans, up 34.9 percent, and residential mortgage loans, up 19.1 percent. Loan growth was funded primarily by deposit growth of $60.8 million, up 12.8 percent to $535.8 million, as well as a $36.5 million increase in short-term borrowings, which totaled $77.5 million at period-end. About the Company Summit Financial Group, Inc., a financial holding company with total assets of $862 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 -- Q3 2004 vs Q3 2003 For the Quarter Ended ---------------------- Dollars in thousands, except per Percent share amounts 9/30/2004 9/30/2003 Change - ---------------------------------------------------------------------- Condensed Statements of Income Interest income Loans, including fees $9,334 $7,877 18.5% Securities 2,267 2,375 -4.5% Other 33 42 -21.4% ------------------------ Total interest income 11,634 10,294 13.0% ------------------------ Interest expense Deposits 2,451 2,467 -0.6% Borrowings 2,122 1,885 12.6% ------------------------ Total interest expense 4,573 4,352 5.1% ------------------------ Net interest income 7,061 5,942 18.8% Provision for loan losses 293 232 26.3% ------------------------ Net interest income after provision for loan losses 6,768 5,710 18.5% ------------------------ Noninterest income Service fee income 575 403 42.7% Mortgage origination revenue 7,732 211 3564.5% Securities gains (losses) (35) - - Other income 273 196 39.3% ------------------------ Total noninterest income 8,545 810 954.9% ------------------------ Noninterest expense Salaries and employee benefits 5,055 2,142 136.0% Net occupancy expense 408 223 83.0% Equipment expense 433 326 32.8% Postage expense 1,703 103 1553.4% Advertising 1,229 89 1280.9% Other expenses 1,939 914 112.1% ------------------------ Total noninterest expense 10,767 3,797 183.6% ------------------------ Income before income taxes 4,546 2,723 66.9% Income taxes 1,420 880 61.4% ------------------------ Net income $3,126 $1,843 69.6% ======================== Per Share Data Basic earnings $0.89 $0.53 67.9% Diluted earnings $0.87 $0.52 67.3% Average shares outstanding Basic 3,513,086 3,504,820 0.2% Diluted 3,606,290 3,554,700 1.5% Performance Ratios Return on average equity 20.06% 13.36% 50.1% Return on average assets 1.46% 1.02% 43.1% Net yield on earning assets - taxable equivalent 3.65% 3.62% 0.8% Efficiency ratio consolidated(A) 67.11% 53.50% 25.4% Efficiency ratio excluding mortgage banking (A) 51.68% 50.31% 2.7% NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles. SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Nine Month Performance Summary -- 2004 vs. 2003 For the Nine Months Ended Dollars in thousands, except per -------------------------- Percent share amounts 9/30/2004 9/30/2003 Change - ---------------------------------------------------------------------- Condensed Statements of Income Interest income Loans, including fees $26,393 $23,070 14.4% Securities 7,109 7,391 -3.8% Other 97 133 -27.1% -------------------------- Total interest income 33,599 30,594 9.8% -------------------------- Interest expense Deposits 7,254 7,609 -4.7% Borrowings 5,884 5,673 3.7% -------------------------- Total interest expense 13,138 13,282 -1.1% -------------------------- Net interest income 20,461 17,312 18.2% Provision for loan losses 758 683 11.0% -------------------------- Net interest income after provision for loan losses 19,703 16,629 18.5% -------------------------- Noninterest income Service fee income 1,647 1,131 45.6% Mortgage origination revenue 18,666 534 3395.5% Securities gains (losses) 1 106 -99.1% Other income 605 409 47.9% -------------------------- Total noninterest income 20,919 2,180 859.6% -------------------------- Noninterest expense Salaries and employee benefits 13,481 5,940 127.0% Net occupancy expense 1,099 628 75.0% Equipment expense 1,303 937 39.1% Postage expense 4,491 204 2101.5% Advertising 3,494 201 1638.3% Other expenses 4,907 2,666 84.1% -------------------------- Total noninterest expense 28,775 10,576 172.1% -------------------------- Income before income taxes 11,847 8,233 43.9% Income taxes 3,596 2,517 42.9% -------------------------- Net income $8,251 $5,716 44.3% ========================== Per Share Data Basic earnings $2.35 $1.63 44.2% Diluted earnings $2.30 $1.61 42.9% Average shares outstanding Basic 3,511,317 3,504,373 0.2% Diluted 3,581,763 3,549,988 0.9% Performance Ratios Return on average equity 18.31% 14.06% 30.2% Return on average assets 1.33% 1.08% 23.1% Net yield on earning assets - taxable equivalent 3.65% 3.61% 1.1% Efficiency ratio consolidated (A) 67.61% 51.76% 30.6% Efficiency ratio excluding mortgage banking (A) 51.93% 50.63% 2.6% NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles. SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Five Quarter Performance Summary Dollars in thousands, For the Quarter Ended except per share -------------------------------------------------- amounts 9/30/04 6/30/04 3/31/04 12/31/03 9/30/03 - ---------------------------------------------------------------------- Condensed Statements of Income Interest income Loans, including fees $9,334 $8,744 $8,314 $8,096 $7,877 Securities 2,267 2,316 2,527 2,501 2,375 Other 33 32 32 37 42 -------------------------------------------------- Total interest income 11,634 11,092 10,873 10,634 10,294 -------------------------------------------------- Interest expense Deposits 2,451 2,390 2,414 2,390 2,467 Borrowings 2,122 1,904 1,857 1,862 1,885 -------------------------------------------------- Total interest expense 4,573 4,294 4,271 4,252 4,352 -------------------------------------------------- Net interest income 7,061 6,798 6,602 6,382 5,942 Provision for loan losses 293 233 233 232 232 -------------------------------------------------- Net interest income after provision for loan losses 6,768 6,565 6,369 6,150 5,710 -------------------------------------------------- Noninterest income Service fee income 575 562 509 455 403 Mortgage origination revenue 7,732 6,614 4,319 2,604 211 Securities gains (losses) (35) 17 20 105 - Other income 273 239 94 480 196 -------------------------------------------------- Total noninterest income 8,545 7,432 4,942 3,644 810 -------------------------------------------------- Noninterest expense Salaries and employee benefits 5,055 4,740 3,686 3,064 2,142 Net occupancy expense 408 386 304 240 223 Equipment expense 433 441 429 383 326 Postage expense 1,703 1,435 1,353 781 103 Advertising 1,229 1,304 962 571 89 Other expenses 1,939 1,862 1,105 1,268 914 -------------------------------------------------- Total noninterest expense 10,767 10,168 7,839 6,307 3,797 -------------------------------------------------- Income before income taxes 4,546 3,829 3,472 3,487 2,723 Income taxes 1,420 1,155 1,021 994 880 -------------------------------------------------- Net income $3,126 $2,674 $2,451 $2,493 $1,843 ================================================== Per Share Data Basic earnings $0.89 $0.76 $0.70 $0.71 $0.53 Diluted earnings $0.87 $0.75 $0.69 $0.70 $0.52 Average shares outstanding Basic 3,513,086 3,510,784 3,510,063 3,506,874 3,504,820 Diluted 3,606,290 3,563,410 3,553,392 3,541,296 3,554,700 Performance Ratios Return on average equity 20.06% 17.96% 16.77% 17.66% 13.36% Return on average assets 1.46% 1.29% 1.23% 1.30% 1.02% Net yield on earning assets - taxable equivalent 3.65% 3.64% 3.67% 3.69% 3.62% Efficiency ratio consolidated (A) 67.11% 69.61% 65.84% 61.85% 53.50% Efficiency ratio excluding mortgage banking (A) 51.68% 53.61% 50.45% 49.23% 50.31% 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 September 30, 2004 Parent Community Mortgage and Dollars in thousands Banking Banking Other Eliminations Total - ---------------------------------------------------------------------- Condensed Statements of Income Interest income $11,399 $421 $5 $(191) $11,634 Interest expense 4,436 189 139 (191) 4,573 ------------------------------------------------ Net interest income 6,963 232 (134) - 7,061 Provision for loan losses 293 - - - 293 ------------------------------------------------ Net interest income after provision for loan losses 6,670 232 (134) - 6,768 ------------------------------------------------ Noninterest income 700 7,732 1,147 (1,034) 8,545 Noninterest expense 3,880 6,585 1,336 (1,034) 10,767 ------------------------------------------------ Income before income taxes 3,490 1,379 (323) - 4,546 Income taxes 1,064 479 (123) - 1,420 ------------------------------------------------ Net income $2,426 $900 $(200) $- $3,126 ================================================ Average assets $829,522 $20,185 $75,311 $(67,515) $857,503 ================================================ SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Segment Information For the Quarter Ended September 30, 2003 Parent Community Mortgage and Dollars in thousands Banking Banking Other Eliminations Total - ---------------------------------------------------------------------- Condensed Statements of Income Interest income $10,298 $- $2 $(6) $10,294 Interest expense 4,292 - 66 (6) 4,352 -------------------------------------------- Net interest income 6,006 - (64) - 5,942 Provision for loan losses 232 - - - 232 -------------------------------------------- Net interest income after provision for loan losses 5,774 - (64) - 5,710 -------------------------------------------- Noninterest income 599 211 844 (844) 810 Noninterest expense 3,390 331 920 (844) 3,797 -------------------------------------------- Income before income taxes 2,983 (120) (140) - 2,723 Income taxes 938 (41) (17) - 880 -------------------------------------------- Net income $2,045 $(79) $(123) $- $1,843 ============================================ Average assets $719,738 $3,994 $60,940 $(58,962) $725,710 ============================================ SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Segment Information For the Nine Months Ended September 30, 2004 Parent Community Mortgage and Dollars in thousands Banking Banking Other Eliminations Total - ---------------------------------------------------------------------- Condensed Statements of Income Interest income $33,095 $930 $11 $(437) $33,599 Interest expense 12,790 432 353 (437) 13,138 ----------------------------------------------- Net interest income 20,305 498 (342) - 20,461 Provision for loan losses 758 - - - 758 ----------------------------------------------- Net interest income after provision for loan losses 19,547 498 (342) - 19,703 ----------------------------------------------- Noninterest income 2,065 18,664 3,032 (2,842) 20,919 Noninterest expense 11,299 16,600 3,718 (2,842) 28,775 ----------------------------------------------- Income before income taxes 10,313 2,562 (1,028) - 11,847 Income taxes 3,114 885 (403) - 3,596 ----------------------------------------------- Net income $7,199 $1,677 $(625) $- $8,251 =============================================== Average assets $805,533 $15,376 $72,352 $(64,724) $828,537 =============================================== SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Segment Information For the Nine Months Ended September 30, 2003 Parent Community Mortgage and Dollars in thousands Banking Banking Other Eliminations Total - ---------------------------------------------------------------------- Condensed Statements of Income Interest income $30,603 $- $6 $(15) $30,594 Interest expense 13,125 - 172 (15) 13,282 -------------------------------------------- Net interest income 17,478 - (166) - 17,312 Provision for loan losses 683 - - - 683 -------------------------------------------- Net interest income after provision for loan losses 16,795 - (166) - 16,629 -------------------------------------------- Noninterest income 1,666 534 2,444 (2,464) 2,180 Noninterest expense 9,810 498 2,732 (2,464) 10,576 -------------------------------------------- Income before income taxes 8,651 36 (454) - 8,233 Income taxes 2,640 12 (135) - 2,517 -------------------------------------------- Net income $6,011 $24 $(319) $- $5,716 ============================================ Average assets $703,576 $3,280 $58,786 $(56,918) $708,724 ============================================ SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Selected Balance Sheet Data Dollars in thousands, For the Quarter Ended except per share ----------------------------------------------- amounts 9/30/04 6/30/04 3/31/04 12/31/03 9/30/03 - ---------------------------------------------------------------------- Assets $862,246 $849,555 $809,216 $791,465 $740,645 Securities 209,702 213,644 215,732 235,409 223,607 Loans held for sale, net 12,097 15,607 9,596 6,353 709 Loans, net 586,201 559,869 532,855 498,340 473,779 Intangible assets 3,537 3,574 3,612 3,050 3,088 Deposits 535,822 536,589 530,372 511,801 474,955 Short-term borrowings 77,518 71,350 42,547 49,714 41,049 Long-term borrowings and subordinated debentures 178,334 176,248 169,608 168,255 165,526 Shareholders' equity 65,289 58,975 60,674 57,188 55,502 Book value per share $18.58 $16.80 $17.28 $16.30 $15.84 SUMMIT FINANCIAL GROUP INC. (OTCBB: SMMF) Loan Composition Dollars in thousands 9/30/04 6/30/04 3/31/04 12/31/03 9/30/03 - ---------------------------------------------------------------------- Commercial $49,630 $49,294 $47,178 $46,860 $43,887 Commercial real estate 271,097 250,562 235,565 209,391 201,011 Residential construction 3,351 2,665 2,698 2,369 4,042 Residential mortgage 218,118 212,371 203,225 196,135 183,142 Consumer 40,559 41,787 41,060 41,112 40,846 Other 9,784 9,316 8,968 8,223 6,331 ------------------------------------------------ Total loans 592,539 565,995 538,694 504,090 479,259 Less unearned fees and interest 1,200 1,173 1,118 1,069 996 ------------------------------------------------ Total loans net of unearned fees and interest 591,339 564,822 537,576 503,021 478,263 Less allowance for loan losses 5,138 4,953 4,721 4,681 4,484 ------------------------------------------------ Loans, net $586,201 $559,869 $532,855 $498,340 $473,779 ================================================ SUMMIT FINANCIAL GROUP INC. (OTCBB: SMMF) Mortgage Banking Segment Loan Activity For the Quarter Ended --------------------------------------------------- Dollars in thousands 9/30/04 6/30/04 3/31/04 12/31/03 9/30/03 - ---------------------------------------------------------------------- Loans originated Amount $75,791 $74,333 $44,935 $32,413 $11,655 Number 1,532 1,461 931 724 88 Loans sold Amount $79,927 $68,013 $41,376 $26,261 $16,928 Number 1,610 1,364 861 603 112 SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Asset Quality Information For the Quarter Ended ----------------------------------------------- Dollars in thousands 9/30/04 6/30/04 3/31/04 12/31/03 9/30/03 - ---------------------------------------------------------------------- Net loan charge-off's $107 $1 $192 $37 $46 Net loan charge-off's to average loans (annualized) 0.08% 0.00% 0.15% 0.03% 0.04% Allowance for loan losses $5,138 $4,953 $4,721 $4,681 $4,484 Allowance for loan losses as a percentage of period end loans 0.87% 0.88% 0.88% 0.93% 0.94% Nonperforming assets: Nonperforming loans $1,464 $1,577 $1,448 $1,356 $604 Foreclosed properties 756 475 475 480 560 Nonaccrual securities 363 384 389 396 399 --------------------------------------------- Total $2,583 $2,436 $2,312 $2,232 $1,563 ============================================= Nonperforming loans to period end loans and other real estate 0.37% 0.36% 0.36% 0.36% 0.24% ============================================= Nonperforming assets to period end assets 0.30% 0.29% 0.29% 0.28% 0.21% ============================================= SUMMIT FINANCIAL GROUP, INC. (OTCBB: SMMF) Average Balance Sheet, Interest Earnings & Expenses and Average Rates Q3 2004 vs Q3 2003 Q3 2004 Q3 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 $585,400 $9,217 6.30% $463,496 $7,793 6.73% Tax-exempt 9,472 176 7.43% 5,846 122 8.35% Securities Taxable 163,866 1,721 4.20% 171,064 1,887 4.41% Tax-exempt 48,131 817 6.79% 42,254 726 6.87% Interest bearing deposits other banks and Federal funds sold 3,718 33 3.55% 5,586 44 3.15% --------- -------- ----- --------- -------- ----- Total interest earning assets 810,587 11,964 5.90% 688,246 10,572 6.14% Noninterest earning assets Cash & due from banks 15,675 8,761 Premises & equipment 20,539 14,084 Other assets 15,756 19,010 Allowance for loan losses (5,054) (4,391) --------- --------- Total assets $857,503 $725,710 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Interest bearing liabilities Interest bearing demand deposits $123,092 $309 1.00% $98,084 $163 0.66% Savings deposits 50,904 63 0.50% 47,522 57 0.48% Time deposits 310,398 2,079 2.68% 281,071 2,247 3.20% Short-term borrowings 72,666 317 1.74% 32,000 113 1.41% Long-term borrowings and subordinated debentures 177,188 1,805 4.07% 160,349 1,772 4.42% --------- -------- ----- --------- -------- ----- 734,248 4,573 2.49% 619,026 4,352 2.81% Noninterest bearing liabilities Demand deposits 55,737 46,994 Other liabilities 5,189 4,501 --------- --------- Total liabilities 795,174 670,521 Shareholders' equity 62,329 55,189 --------- --------- Total liabilities and shareholders' equity $857,503 $725,710 ========= ========= NET INTEREST EARNINGS $7,391 $6,220 ======== ======== NET INTEREST YIELD ON EARNING ASSETS 3.65% 3.61% ===== ===== SUMMIT FINANCIAL GROUP, INC. (OTCBB:SMMF) Average Balance Sheet, Interest Earnings & Expenses and Average Rates YTD 2004 vs YTD 2003 For the Nine Months Ended September 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 $554,819 $26,069 6.26% $443,628 $22,827 6.86% Tax-exempt 8,628 489 7.56% 5,931 367 8.25% Securities Taxable 167,446 5,459 4.35% 174,554 5,945 4.54% Tax-exempt 48,344 2,468 6.81% 40,934 2,151 7.01% Interest bearing deposits other banks and Federal funds sold 3,543 97 3.65% 5,860 133 3.03% --------- -------- ----- --------- -------- ----- Total interest earning assets 782,780 34,582 5.89% 670,907 31,423 6.24% Noninterest earning assets Cash & due from banks 13,269 8,645 Premises & equipment 19,803 13,091 Other assets 17,577 20,321 Allowance for loan losses (4,892) (4,240) --------- --------- Total assets $828,537 $708,724 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Interest bearing liabilities Interest bearing demand deposits $119,403 $841 0.94% $97,891 $590 0.80% Savings deposits 49,234 174 0.47% 46,821 202 0.58% Time deposits 307,334 6,239 2.71% 278,648 6,817 3.26% Short-term borrowings 63,120 692 1.46% 26,407 286 1.44% Long-term borrowings and subordinated debentures 171,350 5,192 4.04% 154,382 5,387 4.65% --------- -------- ----- --------- -------- ----- 710,441 13,138 2.47% 604,149 13,282 2.93% Noninterest bearing liabilities Demand deposits 52,631 45,394 Other liabilities 5,372 4,965 --------- --------- Total liabilities 768,444 654,508 Shareholders' equity 60,093 54,216 --------- --------- Total liabilities and shareholders' equity $828,537 $708,724 ========= ========= NET INTEREST EARNINGS $21,444 $18,141 ======== ======== NET INTEREST YIELD ON EARNING ASSETS 3.65% 3.61% ===== ===== CONTACT: Summit Financial Group, Inc. Robert S. Tissue, 304-530-0552 rtissue@SummitFGI.com -----END PRIVACY-ENHANCED MESSAGE-----