-----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, WROZWbLvqidFWzqqKriqtCBnX7WvjEGI9+vZDgD+1WRjbtdTw88WJQzEO9hQ0fD2 DME2f2SO/HKvNwhvZ5HSzg== 0001157523-05-006414.txt : 20050721 0001157523-05-006414.hdr.sgml : 20050721 20050721172659 ACCESSION NUMBER: 0001157523-05-006414 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050720 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050721 DATE AS OF CHANGE: 20050721 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: 05967047 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 a4936047.txt SUMMIT FINANCIAL GROUP UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 20, 2005 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 July 20, 2005, Summit Financial Group, Inc. ("Summit") issued a News Release announcing its earnings for the second quarter and first six months of 2005. 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 July 20, 2005 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: July 21, 2005 By: Julie R. Cook ------------------------------- Julie R. Cook Vice President and Chief Accounting Officer EX-99 2 a4936047ex99.txt EXHIBIT 99 Exhibit 99.1 Summit Financial Group Reports 16.5% Increase in Q2 Net Income MOOREFIELD, W.Va.--(BUSINESS WIRE)--July 20, 2005--Summit Financial Group, Inc. (NASDAQ: SMMF) today reported second quarter 2005 net income of $3.1 million, an increase of 16.5 percent from the $2.7 million reported for the second quarter of 2004. Diluted earnings per share were $0.43 compared with $0.38 for the prior-year quarter, up 13.2 percent. The increase reflects solid growth in revenue, both from community banking and mortgage banking activities, as well as controlled expense growth. For the second quarter of 2005, the returns on average shareholders' equity and average assets were 18.21 percent 1.34 percent, respectively, compared with prior-year period ratios of 17.96 percent and 1.29 percent. For the six months ended June 30, 2005, Summit reported net income of $5.5 million, an increase of 7.8 percent from the $5.1 million reported for the first six months of 2004. Diluted earnings per share were $0.77 compared with $0.72 for the prior-year period, up 6.9 percent. The increase reflects strong revenue growth, both from community banking and mortgage banking activities, partially offset by higher costs associated with expansion activities. For the first six months of 2005, the returns on average shareholders' equity and average assets were 16.41 percent and 1.21 percent, respectively, compared with prior-year period ratios of 17.31 percent and 1.26 percent. H. Charles Maddy, III, President and Chief Executive Officer, commented, "We are pleased to report strong growth in net income on both a year-over-year and a sequential quarter basis. Both segments of our business are generating strong revenue growth. Community banking is growing at a solid pace, mainly from the recent investments we have made to expand our Virginia franchise. We recently opened our sixth branch in Virginia, and we are quite optimistic about opportunities going forward. We are experiencing very strong commercial loan production from a combination of the robust Virginia economy and the success of the talented bankers that we have placed in key positions. "We have been more proactive in terms of deposit growth, and the results have been gratifying. As a result of retail campaigns to promote our high yield interest-bearing checking product, we are experiencing stronger deposit growth than in 2004, which has helped to control funding costs. We are pleased that our net interest margin has remained within a tight 10 basis point band throughout the past 12 months. Non-interest expenses have also remained under control. SECOND QUARTER 2005 CONSOLIDATED RESULTS Total revenue for the second quarter of 2005, consisting of net interest income plus non-interest income, was $15.8 million, an increase of 11.2 percent over the second quarter of 2004. Net interest income for the quarter increased 11.9 percent above the prior-year second quarter, to $7.6 million, reflecting 12.5 percent growth in average earning assets, partially offset by a 3 basis point drop in the net interest margin to 3.61 percent. Compared with first quarter 2005, the net interest margin improved 2 basis points. Non-interest income for the second quarter of 2005 was $8.2 million compared with $7.4 million for the prior-year period, an increase of 10.5 percent, reflecting improvement in all categories. The majority of the increase reflects a $0.5 million or 7.5 percent improvement in mortgage origination revenue from the Company's mortgage banking unit, Summit Mortgage (formerly known as Summit Financial, LLC), which is discussed below. Service fees and "other income" also demonstrated strong growth, up 15.8 percent and 86.6 percent, respectively, above last year's second quarter. Non-interest expense for the second quarter of 2005 was $10.9 million, a 7.0 percent increase over the $10.2 million reported for the second quarter of 2004. Salaries and employee benefits represented the largest category of expense growth, up $654 thousand or 13.8 percent. The efficiency ratio was 66.98 percent for the second quarter of 2005 compared with 69.61 percent for the prior-year period. (The efficiency ratio for the Company's Community Banking Segment, shown below, is a more accurate indicator of its performance compared with other community banks.) Asset quality remains strong. Charge-offs were $44,000 for the second quarter of 2005, equivalent to an annualized 0.03 percent of average loans. Nonperforming assets were $2.2 million or 0.23 percent of assets at June 30, 2005, down from $2.4 million or 0.29 percent at June 30, 2004. At period-end, loan loss reserves were 0.83 percent of loans. Assets at June 30, 2005 were $946.5 million, an increase of 11.4 percent over the last twelve months. The increase was driven by portfolio loan growth of $100.0 million, up 17.9 percent to $659.9 million. Commercial real estate loans, up $77.5 million or 30.9 percent, were the largest contributors to this growth. Deposits at June 30, 2005 were $565.2 million, an increase of $28.6 million, or 5.3 percent from prior-year second quarter levels. Year-to-date, deposits grew $40.6 million, or 7.7 percent, with total demand deposits up $31.1 million or 17.5 percent. For the 2005 six-month period, noninterest-bearing deposits rose $7.8 million, or 14.1 percent, while interest-bearing demand deposits rose $23.3 million, or 19.0%. The growth in demand deposits improved the deposit mix, with demand deposits now accounting for 37.0 percent of total deposits compared with 33.9 percent at year-end 2004. Growth in lower-cost demand deposits helped to limit the growth of short-term borrowings in the first half of 2004, and mitigate their cost. Over the past twelve months, short-term borrowings grew by $56.6 million to $128.0 million; of that total, only $7.3 million occurred in the first half of this year. Shareholders' equity at period end was $69.8 million, an increase of 18.4 percent over the last twelve months. Common shares outstanding totaled 7,123,820 at June 30, 2005. SECOND QUARTER 2005 OPERATING SEGMENT RESULTS Community Banking Financial Performance Net income for the second quarter of 2005 was $2.6 million, an increase of 7.4% from the prior-year quarter. Total revenue increased 13.5% to $8.5 million, while non-interest expense increased 14.4 percent to $4.4 million due to staff additions and the recently-opened Harrisonburg, Virginia branch. The Community Banking segment's efficiency ratio was 54.15 percent compared with 53.61 percent for the prior-year second quarter. Mortgage Banking Financial Performance The Company's mortgage banking unit, Summit Mortgage, commenced operations during the third quarter of 2003. This segment originates first mortgages in the Company's community banking markets and debt consolidation second mortgage loans for borrowers nationwide. Loan originations in the second quarter of 2005 were $83.6 million, up 21.3 percent above first quarter and up 12.5 percent above last year's second quarter. Loan sales were $81.4 million, up 21.9 percent above first quarter and 19.7 percent from the 2004 second quarter. Net income for the second quarter of 2005 was $755,000, an increase of 41.9 percent over the prior-year quarter. Revenue totaled $7.3 million, up 8.0 percent over the prior-year period, while non-interest expense increased 1.7 percent to $6.1 million. ABOUT THE COMPANY Summit Financial Group, Inc., a financial holding company with total assets of $946 million, operates fourteen banking locations through its two wholly-owned community banks: Summit Community Bank, headquartered in Moorefield, West Virginia; and Shenandoah Valley National Bank in Winchester, Virginia. Summit also operates Summit Mortgage, a residential mortgage loan originator located in Herndon, Virginia and Summit Insurance Services, LLC in Moorefield, West 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. (NASDAQ: SMMF) Quarterly Performance Summary -- Q2 2005 vs Q2 2004 For the Quarter Ended Dollars in thousands, except per ---------------------- Percent share amounts 6/30/2005 6/30/2004 Chamge - -------------------------------------- ---------- -------------------- Condensed Statements of Income Interest income Loans, including fees $ 11,205 $ 8,744 28.1% Securities 2,291 2,316 -1.1% Other 28 32 -12.5% ---------- ---------- Total interest income 13,524 11,092 21.9% ---------- ---------- Interest expense Deposits 2,926 2,390 22.4% Borrowings 2,994 1,904 57.2% ---------- ---------- Total interest expense 5,920 4,294 37.9% ---------- ---------- Net interest income 7,604 6,798 11.9% Provision for loan losses 425 233 82.4% ---------- ---------- Net interest income after provision for loan losses 7,179 6,565 9.4% ---------- ---------- Noninterest income Service fee income 651 562 15.8% Mortgage origination revenue 7,113 6,614 7.5% Securities gains (losses) 5 17 -70.6% Other income 446 239 86.6% ---------- ---------- Total noninterest income 8,215 7,432 10.5% ---------- ---------- Noninterest expense Salaries and employee benefits 5,394 4,740 13.8% Net occupancy expense 463 386 19.9% Equipment expense 483 441 9.5% Postage expense 1,458 1,435 1.6% Advertising 1,222 1,304 -6.3% Other expenses 1,855 1,862 -0.4% ---------- ---------- Total noninterest expense 10,875 10,168 7.0% ---------- ---------- Income before income taxes 4,519 3,829 18.0% Income taxes 1,403 1,155 21.5% ---------- ---------- Net income $ 3,116 $ 2,674 16.5% ========== ========== Per Share Data Basic earnings $ 0.44 $ 0.38 15.8% Diluted earnings $ 0.43 $ 0.38 13.2% Average shares outstanding Basic 7,081,044 7,021,567 0.8% Diluted 7,205,377 7,126,817 1.1% Performance Ratios Return on average equity 18.21% 17.96% 1.4% Return on average assets 1.34% 1.29% 3.9% Net yield on earning assets - taxable equivalent 3.61% 3.64% -0.8% Efficiency ratio consolidated(A) 66.98% 69.61% -3.8% Efficiency ratio excluding mortgage banking (A) 54.15% 53.61% 1.0% NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles. SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) Six Month Performance Summary -- 2005 vs 2004 For the Six Months Ended Dollars in thousands, except per ------------------------ Percent share amounts 6/30/2005 6/30/2004 Change - ------------------------------------ ----------- -------------------- Condensed Statements of Income Interest income Loans, including fees $ 21,215 $ 17,058 24.4% Securities 4,549 4,842 -6.1% Other 53 64 -17.2% ----------- ---------- Total interest income 25,817 21,964 17.5% ----------- ---------- Interest expense Deposits 5,443 4,804 13.3% Borrowings 5,615 3,761 49.3% ----------- ---------- Total interest expense 11,058 8,565 29.1% ----------- ---------- Net interest income 14,759 13,399 10.2% Provision for loan losses 755 465 62.4% ----------- ---------- Net interest income after provision for loan losses 14,004 12,934 8.3% ----------- ---------- Noninterest income Service fee income 1,198 1,072 11.8% Mortgage origination revenue 12,969 10,933 18.6% Securities gains (losses) 5 37 -86.5% Other income 710 332 113.9% ----------- ---------- Total noninterest income 14,882 12,374 20.3% ----------- ---------- Noninterest expense Salaries and employee benefits 9,936 8,426 17.9% Net occupancy expense 892 690 29.3% Equipment expense 976 870 12.2% Postage expense 3,025 2,788 8.5% Advertising 2,547 2,265 12.5% Other expenses 3,554 2,968 19.7% ----------- ---------- Total noninterest expense 20,930 18,007 16.2% ----------- ---------- Income before income taxes 7,956 7,301 9.0% Income taxes 2,429 2,176 11.6% ----------- ---------- Net income $ 5,527 $ 5,125 7.8% =========== ========== Per Share Data Basic earnings $ 0.78 $ 0.73 6.8% Diluted earnings $ 0.77 $ 0.72 6.9% Average shares outstanding Basic 7,060,529 7,020,847 0.6% Diluted 7,206,181 7,105,583 1.4% Performance Ratios Return on average equity 16.41% 17.31% -5.2% Return on average assets 1.21% 1.26% -4.0% Net yield on earning assets - taxable equivalent 3.60% 3.66% -1.6% Efficiency ratio consolidated(A) 68.51% 67.92% 0.9% Efficiency ratio excluding mortgage banking (A) 53.55% 52.07% 2.8% NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles. SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) Five Quarter Performance Summary For the Quarter Ended ---------------------------------------------------- Dollars in thousands, except per share amounts 6/30/2005 3/31/2005 12/31/2004 9/30/2004 6/30/2004 - ---------------------------------------------------------------------- Condensed Statements of Income Interest income Loans, including fees $11,205 $10,010 $9,814 $9,334 $8,744 Securities 2,291 2,258 2,294 2,267 2,316 Other 28 25 30 33 32 ---------------------------------------------------- Total interest income 13,524 12,293 12,138 11,634 11,092 ---------------------------------------------------- Interest expense Deposits 2,926 2,516 2,456 2,451 2,390 Borrowings 2,994 2,622 2,366 2,122 1,904 ---------------------------------------------------- Total interest expense 5,920 5,138 4,822 4,573 4,294 ---------------------------------------------------- Net interest income 7,604 7,155 7,316 7,061 6,798 Provision for loan losses 425 330 292 293 233 ---------------------------------------------------- Net interest income after provision for loan losses 7,179 6,825 7,024 6,768 6,565 ---------------------------------------------------- Noninterest income Service fee income 651 547 592 575 562 Mortgage origination revenue 7,113 5,856 5,423 7,732 6,614 Securities gains (losses) 5 - 32 (35) 17 Other income 446 264 287 273 239 ---------------------------------------------------- Total noninterest income 8,215 6,667 6,334 8,545 7,432 ---------------------------------------------------- Noninterest expense Salaries and employee benefits 5,394 4,542 4,607 5,055 4,740 Net occupancy expense 463 429 404 408 386 Equipment expense 483 493 473 433 441 Postage expense 1,458 1,567 1,361 1,703 1,435 Advertising 1,222 1,325 1,231 1,229 1,304 Other expenses 1,855 1,699 1,939 1,939 1,862 ---------------------------------------------------- Total noninterest expense 10,875 10,055 10,015 10,767 10,168 ---------------------------------------------------- Income before income taxes 4,519 3,437 3,343 4,546 3,829 Income taxes 1,403 1,026 986 1,420 1,155 ---------------------------------------------------- Net income $3,116 $2,411 $2,357 $3,126 $2,674 ==================================================== Per Share Data Basic earnings $0.44 $0.34 $0.34 $0.44 $0.38 Diluted earnings $0.43 $0.34 $0.33 $0.43 $0.38 Average shares outstanding Basic 7,081,044 7,039,784 7,032,512 7,026,173 7,021,567 Diluted 7,205,377 7,171,099 7,187,711 7,174,859 7,126,817 Performance Ratios Return on average equity 18.21% 14.53% 14.33% 20.06% 17.96% Return on average assets 1.34% 1.08% 1.07% 1.46% 1.29% Net yield on earning assets - taxable equivalent 3.61% 3.59% 3.69% 3.65% 3.64% Efficiency ratio consolidated (A) 66.98% 70.26% 70.50% 67.11% 69.61% Efficiency ratio excluding mortgage banking (A) 54.15% 52.90% 52.70% 51.68% 53.61% NOTE: (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles. SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) Segment Information For the Quarter Ended June 30, 2005 Parent Community Mortgage and Dollars in thousands Banking Banking Other Eliminations Total - ---------------------------------------------------------------------- Condensed Statements of Income Interest income $13,328 $485 $6 $(295) $13,524 Interest expense 5,725 294 196 (295) 5,920 ------------------------------------------------ Net interest income 7,603 191 (190) - 7,604 Provision for loan losses 345 80 - - 425 ------------------------------------------------ Net interest income after provision for loan losses 7,258 111 (190) - 7,179 ------------------------------------------------ Noninterest income 905 7,113 1,380 (1,183) 8,215 Noninterest expense 4,374 6,055 1,629 (1,183) 10,875 ------------------------------------------------ Income before income taxes 3,789 1,169 (439) - 4,519 Income taxes 1,221 414 (232) - 1,403 ------------------------------------------------ Net income $2,568 $755 $(207) $- $3,116 ================================================ Intersegment revenue (expense) $(820) $(355) $1,175 $- $- ================================================ Average assets $921,770 $23,838 $82,103 $(95,937)$931,774 ================================================ SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) Segment Information For the Quarter Ended June 30, 2004 Parent Community Mortgage and Dollars in thousands 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 ================================================ Intersegment revenue (expense) $(715) $(198) $913 $- $- ================================================ Average assets $804,831 $16,512 $73,221 $(63,837)$830,727 ================================================ SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) Segment Information For the Six Months Ended June 30, 2005 Parent Community Mortgage and Dollars in thousands Banking Banking Other Eliminations Total - ---------------------------------------------------------------------- Condensed Statements of Income Interest income $ 25,532 $ 788 $ 12 $ (515)$ 25,817 Interest expense 10,695 513 365 (515) 11,058 --------- -------- ------- ----------- -------- Net interest income 14,837 275 (353) - 14,759 Provision for loan losses 675 80 - - 755 --------- -------- ------- ----------- -------- Net interest income after provision for loan losses 14,162 195 (353) - 14,004 --------- -------- ------- ----------- -------- Noninterest income 1,593 12,969 2,679 (2,359) 14,882 Noninterest expense 8,571 11,652 3,066 (2,359) 20,930 --------- -------- ------- ----------- -------- Income before income taxes 7,184 1,512 (740) - 7,956 Income taxes 2,250 530 (351) - 2,429 --------- -------- ------- ----------- -------- Net income $ 4,934 $ 982 $ (389)$ - $ 5,527 ========= ======== ======= =========== ======== Intersegment revenue (expense) $ (1,726)$ (618)$ 2,344 $ - $ - ========= ======== ======= =========== ======== Average assets $ 902,753 $ 21,625 $80,699 $ (92,887)$912,190 ========= ======== ======= =========== ======== SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) Segment Information For the Six Months Ended June 30, 2004 Parent Community Mortgage and Dollars in thousands 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 ================================================ Intersegment revenue (expense) $(1,474) $(327) $1,801 $- $- ================================================ Average assets $792,605 $12,946 $71,112 $(62,591)$814,072 ================================================ SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) Selected Balance Sheet Data Dollars in thousands, except per share amounts 6/30/2005 3/31/2005 12/31/2004 9/30/2004 6/30/2004 - ---------------------------------------------------------------------- Assets $946,487 $907,264 $889,489 $862,246 $849,555 Securities 209,561 209,223 211,362 209,702 213,644 Loans held for sale 16,994 15,766 14,274 12,097 15,607 Loans, net 659,792 623,863 602,728 586,201 559,869 Intangible assets 3,423 3,461 3,499 3,537 3,574 Deposits 565,167 537,412 524,614 535,822 536,589 Short-term borrowings 127,974 129,697 120,629 77,518 71,350 Long-term borrowings and subordinated debentures 176,796 165,384 172,201 178,334 176,248 Shareholders' equity 69,838 66,400 65,708 65,289 58,975 Book value per share $9.80 $9.43 $9.33 $9.29 $8.40 SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) Portfolio Loan Composition Dollars in thousands 6/30/2005 3/31/2005 12/31/2004 9/30/2004 6/30/2004 - ---------------------------------------------------------------------- Commercial $59,067 $56,394 $53,226 $49,630 $49,294 Commercial real estate 328,071 296,911 279,631 271,097 250,562 Residential construction 3,815 3,806 3,916 3,351 2,665 Residential mortgage 229,769 226,866 223,689 218,118 212,371 Consumer 36,993 37,066 38,948 40,559 41,787 Other 9,233 9,458 9,605 9,784 9,316 --------------------------------------------------- Total loans 666,948 630,501 609,015 592,539 565,995 Less unearned fees and interest 1,459 1,322 1,214 1,200 1,173 --------------------------------------------------- Total loans net of unearned fees and interest 665,489 629,179 607,801 591,339 564,822 Less allowance for loan losses 5,697 5,316 5,073 5,138 4,953 --------------------------------------------------- Loans, net $659,792 $623,863 $602,728 $586,201 $559,869 =================================================== SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) Mortgage Banking Segment Loan Activity For the Quarter Ended ----------------------------------------------------- Dollars in thousands 6/30/2005 3/31/2005 12/31/2004 9/30/2004 6/30/2004 - ---------------------------------------------------------------------- Loans originated Amount $83,616 $68,929 $65,983 $75,791 $74,333 Number 1,578 1,308 1,182 1,532 1,461 Loans sold Amount $81,422 $66,761 $62,043 $79,927 $68,013 Number 1,549 1,295 1,148 1,610 1,364 SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) Asset Quality Information For the Quarter Ended ----------------------------------- Dollars in thousands 6/30/2005 3/31/2005 12/31/2004 - ----------------------------------- ---------- ---------- ----------- Net loan charge-off's $ 44 $ 87 $ 357 Net loan charge-off's to average loans (annualized) 0.03% 0.05% 0.25% Allowance for loan losses $ 5,697 $ 5,316 $ 5,073 Allowance for loan losses as a percentage of period end loans 0.83% 0.82% 0.82% Nonperforming assets: Nonperforming loans $ 911 $ 836 $ 672 Foreclosed properties and repossessed assets 949 608 646 Nonaccrual securities 326 334 349 ---------- ---------- ----------- Total $ 2,186 $ 1,778 $ 1,667 ========== ========== =========== Nonperforming loans to period end loans 0.13% 0.13% 0.11% ========== ========== =========== Nonperforming assets to period end assets 0.23% 0.20% 0.19% ========== ========== =========== SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) Asset Quality Information For the Quarter Ended ------------------------------- Dollars in thousands 9/30/2004 6/30/2004 3/31/2004 - ------------------------------------ ---------- ---------- ---------- Net loan charge-off's $ 107 $ 1 $ 192 Net loan charge-off's to average loans (annualized) 0.08% 0.00% 0.15% Allowance for loan losses $ 5,138 $ 4,953 $ 4,721 Allowance for loan losses as a percentage of period end loans 0.85% 0.85% 0.88% Nonperforming assets: Nonperforming loans $ 1,465 $ 1,577 $ 1,448 Foreclosed properties and repossessed assets 809 482 489 Nonaccrual securities 363 384 389 ---------- ---------- ---------- Total $ 2,637 $ 2,443 $ 2,326 ========== ========== ========== Nonperforming loans to period end loans 0.24% 0.27% 0.27% ========== ========== ========== Nonperforming assets to period end assets 0.31% 0.29% 0.29% ========== ========== ========== SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) Average Balance Sheet, Interest Earnings & Expenses and Average Rates Q2 2005 vs Q2 2004 Q2 2005 Q2 2004 -------------------------------------------------- Average Earnings/Yield / Average Earnings/Yield/ Dollars in thousands Balances Expense Rate Balances Expense Rate - ---------------------------------------------------------------------- ASSETS Interest earning assets Loans, net of unearned interest Taxable $659,150 $ 11,096 6.75%$556,669 $ 8,635 6.20% Tax-exempt 8,976 164 7.33% 8,774 166 7.57% Securities Taxable 161,831 1,749 4.33% 166,018 1,763 4.25% Tax-exempt 48,326 811 6.73% 48,620 826 6.80% Interest bearing deposits other banks and Federal funds sold 2,846 27 3.81% 3,410 32 3.75% -------- ---------------- -------- -------------- Total interest earning assets 881,129 13,847 6.30% 783,491 11,422 5.83% Noninterest earning assets Cash & due from banks 16,058 14,083 Premises & equipment 20,686 20,087 Other assets 19,412 17,912 Allowance for loan losses (5,511) (4,846) -------- -------- Total assets $931,774 $830,727 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Interest bearing liabilities Interest bearing demand deposits $141,902 $ 600 1.70%$119,845 $ 278 0.93% Savings deposits 49,191 79 0.64% 48,726 55 0.45% Time deposits 305,538 2,247 2.95% 310,195 2,057 2.65% Short-term borrowings 135,016 1,055 3.13% 62,383 203 1.30% Long-term borrowings and subordinated debentures 165,157 1,939 4.71% 171,205 1,701 3.97% -------- ---------------- -------- -------------- 796,804 5,920 2.98% 712,354 4,294 2.41% Noninterest bearing liabilities Demand deposits 59,073 53,719 Other liabilities 7,451 5,116 -------- -------- Total liabilities 863,328 771,189 Shareholders' equity 68,446 59,538 -------- -------- Total liabilities and shareholders' equity $931,774 $830,727 ======== ======== NET INTEREST EARNINGS $ 7,927 $ 7,128 ======== ======== NET INTEREST YIELD ON EARNING ASSETS 3.61% 3.64% ======== ====== SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) Average Balance Sheet, Interest Earnings & Expenses and Average Rates YTD 2005 vs YTD 2004 For the Six Months Ended June 30, ------------------------------------------------ 2005 2004 ----------------------- ----------------------- Average Earnings/Yield/ Average Earnings/Yield/ Dollars in thousands Balances Expense Rate Balances Expense Rate - ---------------------------------------------------------------------- ASSETS Interest earning assets Loans, net of unearned interest Taxable $641,631 $ 20,998 6.60%$539,338 $16,852 6.25% Tax-exempt 9,041 328 7.32% 8,202 313 7.63% Securities Taxable 162,072 3,478 4.33% 169,208 3,738 4.42% Tax-exempt 48,102 1,604 6.72% 48,454 1,651 6.81% Interest bearing deposits other banks and Federal funds sold 2,788 53 3.83% 3,491 64 3.67% -------- -------------- -------- ------------- Total interest earning assets 863,634 26,461 6.18% 768,693 22,618 5.88% Noninterest earning assets Cash & due from banks 15,294 12,005 Premises & equipment 20,714 19,432 Other assets 17,883 18,752 Allowance for loan losses (5,335) (4,810) -------- -------- Total assets $912,190 $814,072 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Interest bearing liabilities Interest bearing demand deposits $134,987 $ 1,025 1.53%$117,539 $ 531 0.90% Savings deposits 49,954 158 0.64% 48,390 111 0.46% Time deposits 302,046 4,260 2.84% 305,785 4,162 2.72% Short-term borrowings 126,006 1,809 2.90% 58,283 375 1.29% Long-term borrowings and subordinated debentures 167,814 3,806 4.57% 168,336 3,386 4.02% -------- -------------- -------- ------------- 780,807 11,058 2.86% 698,333 8,565 2.45% Noninterest bearing liabilities Demand deposits 57,610 51,059 Other liabilities 6,393 5,461 -------- -------- Total liabilities 844,810 754,853 Shareholders' equity 67,380 59,219 -------- -------- Total liabilities and shareholders' equity $912,190 $814,072 ======== ======== NET INTEREST EARNINGS $ 15,403 $14,053 ======== ======= NET INTEREST YIELD ON EARNING ASSETS 3.60% 3.66% ====== ====== CONTACT: Summit Financial Group, Inc. Robert S. Tissue, 304-530-0552 Email: rtissue@SummitFGI.com -----END PRIVACY-ENHANCED MESSAGE-----