The Board of Directors declared a quarterly cash dividend of
"Our second quarter results reflected solid net interest income generation, fueled by strong loan growth,” said
Second Quarter 2023 Financial Highlights (at or for the three months ended
- Net income was
$2,985,000 , or$0.45 per diluted share, compared to$4,501,000 , or$0.67 per diluted share, in the second quarter of 2022 and$4,116,000 , or$0.62 per diluted share, for the quarter endedMarch 31, 2023 . - Provision for credit losses was
$35,000 , compared to$998,000 in the second quarter a year ago. - Net interest margin was 3.44%, compared to 3.69% in the preceding quarter and 4.36% in the second quarter a year ago.
- Second quarter revenues (net interest income plus noninterest income) decreased 12.2% to
$11,113,000 , compared to$12,656,000 in the second quarter a year ago. - Annualized return on average assets was 1.03%, compared to 1.85% in the second quarter of 2022.
- Annualized return on average equity was 12.69%, compared to 21.26% in the second quarter a year ago.
- Net loans increased
$86,541,000 to$924,806,000 atJune 30, 2023 , compared to$838,265,000 one year earlier. - Net loans increased
$17,183,000 during the quarter to$924,806,000 atJune 30, 2023 , compared to$907,623,000 three months earlier. - Total deposits increased 28% to
$1,048,316,000 atJune 30, 2023 compared to$819,932,000 atJune 30, 2022 and increased 3% when compared to the prior quarter end. Deposit growth during the quarter consisted primarily of increases in NOW and money market accounts gathered from the Bank’s existing five-branch network. - The Bank maintains loan loss reserves at the high-end when compared to peers due to increases in nonperforming loans. This is exhibited by loans to gross loans increasing to 2.65% at
June 30, 2023 compared to 1.13% atMarch 31, 2023 and 0.07% atJune 30, 2022 . Additionally, nonperforming assets to total assets increased to 2.14%, atJune 30, 2023 compared to 0.91% atMarch 31, 2023 and 0.06% atJune 30, 2022 . - Tangible book value was
$13.92 per share, compared to$12.66 per share a year ago. - Declared a quarterly cash dividend of
$0.12 per share for the three months endedJune 30, 2023 ,March 31, 2023 andJune 30, 2022 .
Operating Results
For the second quarter of 2023, the annualized return on average assets was 1.03% and the annualized return on average equity was 12.69%. This compared to an annualized return on average assets of 1.85% and an annualized return on average equity of 21.26%, respectively, for the second quarter of 2022. These results were above the average 0.97% return on average assets and 10.92% return on average equity posted by the 157 bank index peers that make up the
Summit’s net interest margin was 3.44% in the second quarter of 2023, compared to 3.69% in the preceding quarter and 4.36% in the second quarter of 2022. “The rising cost of funds outpaced earning asset yields during the quarter, resulting in net interest margin contraction compared to the prior quarter. The cost of deposits in the second quarter was 2.26% as the rapid rate increases have driven customers to switch to higher yielding deposit accounts,” said Reed.
Interest and dividend income increased 38% to
Non-interest income decreased in the second quarter of 2023 to
Operating expenses increased in the second quarter of 2023 to
Balance Sheet Review
Net loans increased 10% to
Total deposits increased 28% to
Shareholders’ equity was
Credit Quality
Nonperforming assets were
Due to strong loan production when compared to the second quarter of 2022 and increases in expected losses, the Bank recorded a
“As we enter the second half of the year, we remain focused on being a reliable source of capital for our customers through all economic cycles,” said Reed. “Although economic uncertainty persists, and unusual challenges presented to us by rapidly rising interest rates continue, we believe that with our strong deposit franchise, solid capital levels, and good credit quality we are well positioned to grow and prosper.”
About
Founded in 1982 and headquartered in
*As of
Forward-looking Statements
The financial results in this release are preliminary. Final financial results and other disclosures will be reported in Summit State Bank’s quarterly report on Form 10-Q for the period ended
Except for historical information contained herein, the statements contained in this news release, are forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, and competition within the business areas in which the Bank will be conducting its operations, including the real estate market in
Contact:
STATEMENTS OF INCOME | |||||||||||||||
(In thousands except earnings per share data) | |||||||||||||||
Three Months Ended | |||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Interest and dividend income: | |||||||||||||||
Interest and fees on loans | $ | 13,381 | $ | 12,939 | $ | 10,774 | |||||||||
Interest on deposits with banks | 1,449 | 906 | 61 | ||||||||||||
Interest on investment securities | 715 | 719 | 442 | ||||||||||||
Dividends on FHLB stock | 80 | 84 | 69 | ||||||||||||
Total interest income | 15,625 | 14,648 | 11,346 | ||||||||||||
Interest expense: | |||||||||||||||
Deposits | 5,819 | 4,400 | 750 | ||||||||||||
48 | 119 | 200 | |||||||||||||
Junior subordinated debt | 94 | 94 | 94 | ||||||||||||
Total interest expense | 5,961 | 4,613 | 1,044 | ||||||||||||
Net interest income before provision for credit losses | 9,664 | 10,035 | 10,302 | ||||||||||||
Provision for credit losses on loans | - | 400 | 988 | ||||||||||||
Provision for (reversal of) credit losses on unfunded loan commitments | 35 | (33 | ) | 10 | |||||||||||
Net interest income after provision for (reversal of) credit | |||||||||||||||
losses on loans and unfunded loan commitments | 9,629 | 9,668 | 9,304 | ||||||||||||
Non-interest income: | |||||||||||||||
Service charges on deposit accounts | 215 | 208 | 213 | ||||||||||||
Rental income | 39 | 39 | 45 | ||||||||||||
Net gain on loan sales | - | 1,435 | 1,953 | ||||||||||||
Other income | 1,195 | 279 | 143 | ||||||||||||
Total non-interest income | 1,449 | 1,961 | 2,354 | ||||||||||||
Non-interest expense: | |||||||||||||||
Salaries and employee benefits | 4,199 | 3,793 | 3,311 | ||||||||||||
Occupancy and equipment | 442 | 452 | 416 | ||||||||||||
Other expenses | 2,181 | 1,573 | 1,571 | ||||||||||||
Total non-interest expense | 6,822 | 5,818 | 5,298 | ||||||||||||
Income before provision for income taxes | 4,256 | 5,811 | 6,360 | ||||||||||||
Provision for income taxes | 1,271 | 1,695 | 1,859 | ||||||||||||
Net income | $ | 2,985 | $ | 4,116 | $ | 4,501 | |||||||||
Basic earnings per common share | $ | 0.45 | $ | 0.62 | $ | 0.67 | |||||||||
Diluted earnings per common share | $ | 0.45 | $ | 0.62 | $ | 0.67 | |||||||||
Basic weighted average shares of common stock outstanding | 6,697 | 6,688 | 6,687 | ||||||||||||
Diluted weighted average shares of common stock outstanding | 6,700 | 6,688 | 6,687 | ||||||||||||
STATEMENTS OF INCOME | |||||||||||
(In thousands except earnings per share data) | |||||||||||
Six Months Ended | |||||||||||
(Unaudited) | (Unaudited) | ||||||||||
Interest and dividend income: | |||||||||||
Interest and fees on loans | $ | 26,321 | $ | 21,193 | |||||||
Interest on deposits with banks | 2,355 | 73 | |||||||||
Interest on investment securities | 1,434 | 826 | |||||||||
Dividends on FHLB stock | 164 | 134 | |||||||||
Total interest income | 30,274 | 22,226 | |||||||||
Interest expense: | |||||||||||
Deposits | 10,219 | 1,460 | |||||||||
167 | 393 | ||||||||||
Junior Subordinated Debt | 187 | 187 | |||||||||
Total interest expense | 10,573 | 2,040 | |||||||||
Net interest income before provision for credit losses | 19,701 | 20,186 | |||||||||
Provision for credit losses on loans | 400 | 1,123 | |||||||||
Provision for (reversal of) credit losses on unfunded loan commitments | 2 | (14 | ) | ||||||||
Net interest income after provision for (reversal of) credit | |||||||||||
losses on loans and unfunded loan commitments | 19,299 | 19,077 | |||||||||
Non-interest income: | |||||||||||
Service charges on deposit accounts | 422 | 422 | |||||||||
Rental income | 79 | 123 | |||||||||
Net gain on loan sales | 1,435 | 3,499 | |||||||||
Net gain on securities | - | 6 | |||||||||
Other income | 1,473 | 258 | |||||||||
Total non-interest income | 3,409 | 4,308 | |||||||||
Non-interest expense: | |||||||||||
Salaries and employee benefits | 7,992 | 7,275 | |||||||||
Occupancy and equipment | 894 | 826 | |||||||||
Other expenses | 3,755 | 3,484 | |||||||||
Total non-interest expense | 12,641 | 11,585 | |||||||||
Income before provision for income taxes | 10,067 | 11,800 | |||||||||
Provision for income taxes | 2,966 | 3,364 | |||||||||
Net income | $ | 7,101 | $ | 8,436 | |||||||
Basic earnings per common share | $ | 1.06 | $ | 1.26 | |||||||
Diluted earnings per common share | $ | 1.06 | $ | 1.26 | |||||||
Basic weighted average shares of common stock outstanding | 6,689 | 6,686 | |||||||||
Diluted weighted average shares of common stock outstanding | 6,690 | 6,686 | |||||||||
BALANCE SHEETS | ||||||||||||||
(In thousands except share data) | ||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
ASSETS | ||||||||||||||
Cash and due from banks | $ | 112,412 | $ | 116,569 | $ | 36,616 | ||||||||
Total cash and cash equivalents | 112,412 | 116,569 | 36,616 | |||||||||||
Investment securities: | ||||||||||||||
Available-for-sale (at fair value; amortized cost of | ||||||||||||||
83,593 | 84,841 | 69,926 | ||||||||||||
Loans, less allowance for credit losses of | 924,806 | 907,623 | 838,265 | |||||||||||
Bank premises and equipment, net | 5,426 | 5,507 | 5,540 | |||||||||||
Investment in | 5,541 | 4,737 | 4,737 | |||||||||||
4,119 | 4,119 | 4,119 | ||||||||||||
Affordable housing tax credit investments | 8,586 | 8,773 | 9,050 | |||||||||||
Accrued interest receivable and other assets | 16,926 | 14,854 | 12,532 | |||||||||||
Total assets | $ | 1,161,409 | $ | 1,147,023 | $ | 980,785 | ||||||||
LIABILITIES AND | ||||||||||||||
SHAREHOLDERS' EQUITY | ||||||||||||||
Deposits: | ||||||||||||||
Demand - non interest-bearing | $ | 212,489 | $ | 232,825 | $ | 239,813 | ||||||||
Demand - interest-bearing | 194,596 | 153,214 | 139,765 | |||||||||||
Savings | 57,003 | 63,895 | 66,938 | |||||||||||
Money market | 176,616 | 148,433 | 167,761 | |||||||||||
Time deposits that meet or exceed the | 175,810 | 84,800 | 31,062 | |||||||||||
Other time deposits | 231,802 | 332,485 | 174,593 | |||||||||||
Total deposits | 1,048,316 | 1,015,652 | 819,932 | |||||||||||
- | 23,000 | 58,600 | ||||||||||||
Junior subordinated debt | 5,913 | 5,909 | 5,898 | |||||||||||
Affordable housing commitment | 4,435 | 4,435 | 5,998 | |||||||||||
Accrued interest payable and other liabilities | 8,310 | 5,362 | 5,693 | |||||||||||
Total liabilities | 1,066,974 | 1,054,358 | 896,121 | |||||||||||
Shareholders' equity | ||||||||||||||
Preferred stock, no par value; 20,000,000 shares authorized; | ||||||||||||||
no shares issued and outstanding | - | - | - | |||||||||||
Common stock, no par value; shares authorized - 30,000,000 shares; | ||||||||||||||
issued and outstanding 6,784,099, 6,732,699 and 6,687,959 | 37,301 | 37,217 | 37,014 | |||||||||||
Retained earnings | 66,844 | 64,678 | 54,470 | |||||||||||
Accumulated other comprehensive loss, net | (9,710 | ) | (9,230 | ) | (6,820 | ) | ||||||||
Total shareholders' equity | 94,435 | 92,665 | 84,664 | |||||||||||
Total liabilities and shareholders' equity | $ | 1,161,409 | $ | 1,147,023 | $ | 980,785 | ||||||||
Financial Summary | ||||||||||||
(Dollars in thousands except per share data) | ||||||||||||
As of and for the | ||||||||||||
Three Months Ended | ||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
Statement of Income Data: | ||||||||||||
Net interest income | $ | 9,664 | $ | 10,035 | $ | 10,302 | ||||||
Provision for credit losses on loans | - | 400 | 988 | |||||||||
Provision for (reversal of) credit losses on unfunded loan commitments | 35 | (33 | ) | 10 | ||||||||
Non-interest income | 1,449 | 1,961 | 2,354 | |||||||||
Non-interest expense | 6,822 | 5,818 | 5,298 | |||||||||
Provision for income taxes | 1,271 | 1,695 | 1,859 | |||||||||
Net income | $ | 2,985 | $ | 4,116 | $ | 4,501 | ||||||
Selected per Common Share Data: | ||||||||||||
Basic earnings per common share | $ | 0.45 | $ | 0.62 | $ | 0.67 | ||||||
Diluted earnings per common share | $ | 0.45 | $ | 0.62 | $ | 0.67 | ||||||
Dividend per share | $ | 0.12 | $ | 0.12 | $ | 0.12 | ||||||
Book value per common share (1) | $ | 13.92 | $ | 13.76 | $ | 12.66 | ||||||
Selected Balance Sheet Data: | ||||||||||||
Assets | $ | 1,161,409 | $ | 1,147,023 | $ | 980,785 | ||||||
Loans, net | 924,806 | 907,623 | 838,265 | |||||||||
Deposits | 1,048,316 | 1,015,652 | 819,932 | |||||||||
Average assets | 1,157,193 | 1,135,912 | 975,422 | |||||||||
Average earning assets | 1,125,327 | 1,104,134 | 948,762 | |||||||||
Average shareholders' equity | 94,340 | 90,814 | 84,906 | |||||||||
Nonperforming loans | 24,908 | 10,411 | 570 | |||||||||
Total nonperforming assets | 24,908 | 10,411 | 570 | |||||||||
Selected Ratios: | ||||||||||||
Return on average assets (2) | 1.03 | % | 1.47 | % | 1.85 | % | ||||||
Return on average common shareholders' equity (2) | 12.69 | % | 18.38 | % | 21.26 | % | ||||||
Efficiency ratio (3) | 61.39 | % | 48.50 | % | 41.86 | % | ||||||
Net interest margin (2) | 3.44 | % | 3.69 | % | 4.36 | % | ||||||
Common equity tier 1 capital ratio | 9.61 | % | 9.58 | % | 9.58 | % | ||||||
Tier 1 capital ratio | 9.61 | % | 9.58 | % | 9.58 | % | ||||||
Total capital ratio | 11.46 | % | 11.44 | % | 11.44 | % | ||||||
Tier 1 leverage ratio | 8.36 | % | 8.30 | % | 8.30 | % | ||||||
Common dividend payout ratio (4) | 27.40 | % | 20.04 | % | 17.95 | % | ||||||
Average shareholders' equity to average assets | 8.15 | % | 7.99 | % | 8.70 | % | ||||||
Nonperforming loans to total loans | 2.65 | % | 1.13 | % | 0.07 | % | ||||||
Nonperforming assets to total assets | 2.14 | % | 0.91 | % | 0.06 | % | ||||||
Allowance for credit losses to total loans | 1.62 | % | 1.65 | % | 1.58 | % | ||||||
Allowance for credit losses to nonperforming loans | 61.27 | % | 146.49 | % | 2360.36 | % | ||||||
(1) Total shareholders' equity divided by total common shares outstanding. | ||||||||||||
(2) Annualized. | ||||||||||||
(3) Non-interest expenses to net interest and non-interest income, net of securities gains. | ||||||||||||
(4) Common dividends divided by net income available for common shareholders. |
Financial Summary | ||||||||
(Dollars in thousands except per share data) | ||||||||
As of and for the | ||||||||
Six Months Ended | ||||||||
(Unaudited) | (Unaudited) | |||||||
Statement of Income Data: | ||||||||
Net interest income | $ | 19,701 | $ | 20,186 | ||||
Provision for credit losses on loans | 400 | 1,123 | ||||||
Provision for (reversal of) credit losses on unfunded loan commitments | 2 | (14 | ) | |||||
Non-interest income | 3,409 | 4,308 | ||||||
Non-interest expense | 12,641 | 11,585 | ||||||
Provision for income taxes | 2,966 | 3,364 | ||||||
Net income | $ | 7,101 | $ | 8,436 | ||||
Selected per Common Share Data: | ||||||||
Basic earnings per common share | $ | 1.06 | $ | 1.26 | ||||
Diluted earnings per common share | $ | 1.06 | $ | 1.26 | ||||
Dividend per share | $ | 0.24 | $ | 0.24 | ||||
Book value per common share (1) | $ | 13.92 | $ | 12.66 | ||||
Selected Balance Sheet Data: | ||||||||
Assets | $ | 1,161,409 | $ | 980,785 | ||||
Loans, net | 924,806 | 838,265 | ||||||
Deposits | 1,048,316 | 819,932 | ||||||
Average assets | 1,146,612 | 967,308 | ||||||
Average earning assets | 1,114,790 | 942,286 | ||||||
Average shareholders' equity | 92,587 | 85,154 | ||||||
Nonperforming loans | 24,908 | 570 | ||||||
Total nonperforming assets | 24,908 | 570 | ||||||
Selected Ratios: | ||||||||
Return on average assets (2) | 1.25 | % | 1.76 | % | ||||
Return on average common shareholders' equity (2) | 15.47 | % | 19.98 | % | ||||
Efficiency ratio (3) | 54.70 | % | 47.31 | % | ||||
Net interest margin (2) | 3.56 | % | 4.32 | % | ||||
Common equity tier 1 capital ratio | 9.61 | % | 9.83 | % | ||||
Tier 1 capital ratio | 9.61 | % | 9.83 | % | ||||
Total capital ratio | 11.46 | % | 11.77 | % | ||||
Tier 1 leverage ratio | 8.36 | % | 8.74 | % | ||||
Common dividend payout ratio (4) | 23.14 | % | 19.08 | % | ||||
Average shareholders' equity to average assets | 8.07 | % | 8.80 | % | ||||
Nonperforming loans to total loans | 2.65 | % | 0.07 | % | ||||
Nonperforming assets to total assets | 2.14 | % | 0.06 | % | ||||
Allowance for credit losses to total loans | 1.62 | % | 1.58 | % | ||||
Allowance for credit losses to nonperforming loans | 61.27 | % | 2360.36 | % | ||||
(1) Total shareholders' equity divided by total common shares outstanding. | ||||||||
(2) Annualized. | ||||||||
(3) Non-interest expenses to net interest and non-interest income, net of securities gains. | ||||||||
(4) Common dividends divided by net income available for common shareholders. |
Source:
2023 GlobeNewswire, Inc., source