1ST SUMMIT BANCORP of Johnstown : 2022 2nd Quarter

BOARD OF

D I R E C T O R S

John W. McCall	Edward J. Sheehan, Jr.
Chairman	Michael E. Ondesko, Jr.
Elmer C. Laslo
Robert P. Gardill, II
President & CEO
J. Eric Renner	Jacqueline M. Martella
Rex W. McQuaide, Esq.	Jennifer H. Lunden*
	*Serves on
	1ST SUMMIT BANK board only.

1ST SUMMIT BANCORP

CO R P O R AT E O F F I C E R S

Elmer C. Laslo	Michael J. Paulman
President & CEO	SVP
J. Eric Renner	Polly A. Previte
EVP & COO	SVP
Carol A. Myers	Karen M. Mento
EVP & Treasurer	SVP
Timothy W. Smith	Michael Seigh
SVP & Secretary	SVP & Assistant Treasurer

1ST SUMMIT BANK

L E A D E R S H I P T E A M

J. Eric Renner

President & CEO

Carol A. Myers	Michael J. Paulman
EVP &	SVP & Chief Lending Officer
Sr. Chief Financial Officer	Domenic M. Cagliuso
Timothy W. Smith
SVP - Trust & Investment
SVP &	Services Manager
Chief Information Officer	Joseph P. Kelly
Polly A. Previte
SVP & Chief Credit Officer
SVP & Head of Retail Banking	Jocelyn A. Sauter
Karen M. Mento
VP & Human Resources
SVP &	Manager
Chief Administrative Officer

PERMIT NO. 1715

PITTSBURGH PA

PAID

US POSTAGE

FIRST CLASS MAIL

125 Donald Lane Post Office Box 5480 Johnstown, Pennsylvania 15904

1stsummit.bank

TO OUR SHAREHOLDERS & FRIENDS:

1ST SUMMIT BANCORP experienced solid loan growth in the second quarter, despite rising interest rates and inflationary pressures impacting the economy. Net loans exceeded $708 million, up 7% or $46 million compared to the same period in 2021. Loan growth and rising rates have fueled a significant increase in interest income while non- interest income has also grown during the first six months of 2022.

Net income, excluding the change in fair value of equity securities, net of tax, was $3.3 million for the second quarter and $6.3 million for the first six months, up 18% from the prior year. This increase in income was offset by the change in fair value of equity securities, net of tax. We hold a robust equity portfolio that has been highly profitable for many years. The change in fair value of these equity securities is required to be posted against income but is not a reflection of our earnings power. When this portfolio rebounds, it will have a positive impact on income.

1ST SUMMIT BANCORP completed a two-for-one stock split which was paid on April 19, 2022, in the form of a 100% stock dividend to shareholders of record as of April 18, 2022. This doubled the number of shares each shareholder owns. For this reason, all per share information is adjusted for comparability. In June, the quarterly cash dividend was raised to $.43 per share and is on track for $1.71 per share in 2022, compared to $1.66 per share in 2021. As a result of the stock split, each dividend increase will have double the impact to shareholders.

The continued increases in interest rates by the Federal Reserve may cause issues in the economy and has already put pressure on funding costs. We will be vigilant as we manage the cost of funds, while at the same time, work to provide competitive deposit rates for our customers. We have already increased our deposit rates and will continue to do what is necessary to grow and prosper in these trying times.

Asset quality at the bank remains strong with nonperforming assets at just 0.17% of total assets. The allowance for loan losses also remains strong at 1.06% of total loans.

As always, we appreciate your continued support and investment in 1ST SUMMIT BANCORP.

John W. McCall	Elmer C. Laslo
Chairman of the Board	President and CEO

QUARTER ENDING JUNE 30, 2022

Financial Highlights

(in thousands except per share data)

NET INCOME			2022				2021
Interest income ..........................	$	10,822		$	9,948
Interest expense ........................			1,328				1,773
.....................Net interest income			9,494				8,175
Provision for loan losses ...........			101.			355
Net Interest Income After
Provision .............................			9,393				7,820
Other income:			473
Service fees .............................						364
Gain on sale of securities..........			-				-
Wealth management income.....			545.				492
Other income ..........................			689.				711
................Total Other Income			1,707.				1,567
Other expense:			4,232
Salaries and benefits ................						3,628
Premises and equipment .........			1,098				951
FDIC insurance..........................			88				83
Other expense ...........................			1,800				1,708
................Total Other Expense			7,218				6,370
Income Before Taxes ...............			3,882				3,017
Income tax expense ...................			549				360
*Income before change in	$	3,333		$
fair value of equity securities		2,657
*Change in fair value of
		(768).
equity securities.......................						107
*Income tax (benefit) expense
on change in fair value of			(161)
equity securities......................					22
NET INCOME ...........................	$	2,726		$	2,742
PER SHARE DATA**			2022				2021
*Adjusted Net Income .................	$	1.52		$	1.22
Net Income ................................	$	1.25		$	1.25
Cash Dividends ........................	$	0.43		$	0.42
Book Value ................................	$	45.53		$	58.06
Market Value .............................	$	70.00		$	66.75
			June 30,
BALANCE SHEET			2022				2021
Total assets .................................	$	1,348,212		$	1,326,533
Net loans .....................................			708,957.			662,529
Investment securities................			571,682				606,713
Deposits......................................			1,162,357				1,129,942
Average assets............................			1,340,247				1,219,255
Borrowed funds...........................			76,995				58,440
Shareholders' equity....................			99,683				127,154
Allowance for loan and	$	7,625		$
lease losses ..............................		6,891

(Unaudited)

SIX MONTHS ENDING JUNE 30, 2022

Financial Highlights

(in thousands except per share data)

NET INCOME			2022					2021
Interest income ..........................	$	21,009		$	20,228
Interest expense ........................			2,633					3,812
.....................Net interest income			18,376					16,416
Provision for loan losses ...........			237					736
Net Interest Income After
Provision ............................			18,139					15,680
Other income:			915
Service fees .............................							719
Gain on sale of securities..........			-					-
Wealth management income.....			993					887
Other income ..........................			1,322					1,321
................Total Other Income			3,230					2,927
Other expense:			8,315
Salaries and benefits ................							7,247
Premises and equipment .........			2,170					1,900
FDIC insurance..........................			176					165
Other expense ...........................			3,489					3,284
................Total Other Expense			14,150					12,596
Income Before Taxes ...............			7,219					6,011
Income tax expense ...................			956					711
*Income before change in	$	6,263		$
fair value of equity securities			5,300
*Change in fair value of
		(1,020)
equity securities.......................						1,150
*Income tax (benefit) expense
on change in fair value of			(214)
equity securities......................						242
NET INCOME ...........................	$	5,457		$	6,208
PER SHARE DATA**			2022					2021
*Adjusted Net Income .................	$	2.86		$	2.42
Net Income ................................	$	2.49		$	2.83
Cash Dividends ........................	$	0.85		$	0.83
Book Value ................................	$	45.53		$	5 8.06
Market Value .............................	$	70.00		$	6 6.75
PERFORMANCE RATIOS			2022				2021
Return on average assets..............			0.81 %				0.96%
Return on average equity..............			9.54 %				9.87 %
Net interest margin........................			2.97 %				2.76 %
Allowance for loan losses to			1.06 %
total loans.....................................					1.03%
Non-performing loans to total loans			0.32 %				0.36%
Non-performing assets to			0.17 %
total assets...................................						0.18 %
Net overhead to average assets....			2.11 %				1.95%
Tier 1 capital ratio..........................			9.90 %				9.55%

(Unaudited)

*This calculation is a non-GAAP measure which adjusts for the impact of the Financial Instruments Rule ASU 2016-01 which requires mark to market accounting through earnings on equity securities. **Restated for comparative purposes to reflect 100% stock dividend in April 2022.