The Board of Directors declared the Bank’s eighty second consecutive quarterly cash dividend for common shareholders of
“First quarter earnings were impacted by current challenges facing the entire banking industry. We are implementing steps to reverse declines in net income and remain focused on continuing to improve financial performance,” said
First Quarter 2024 Financial Highlights (at or for the three months ended
- Net income was
$1,395,000 , or$0.21 per diluted share, compared to$4,116,000 , or$0.62 per diluted share, in the first quarter of 2023 and$1,901,000 , or$0.28 per diluted share, for the quarter endedDecember 31, 2023 . - Reversal of credit losses on loans was
$15,000 , compared to a provision for credit losses on loans of$400,000 in the first quarter a year ago and a reversal of credit losses on loans of$31,000 in the preceding quarter. - Net interest margin was 2.81%, compared to 3.69% in the first quarter a year ago and 2.85% in the preceding quarter.
- First quarter revenues (interest income plus noninterest income) decreased 7.1% to
$15,425,000 , compared to$16,609,000 in the first quarter a year ago and increased 0.6% compared to$15,333,000 in the preceding quarter. - Annualized return on average assets was 0.51%, compared to 1.47% in the first quarter of 2023 and 0.67% in the preceding quarter.
- Annualized return on average equity was 5.74%, compared to 18.38% in the first quarter a year ago and 8.02% in the preceding quarter.
- Net loans increased
$10,062,000 to$917,685,000 atMarch 31, 2024 , compared to$907,623,000 one year earlier and decreased$20,941,000 compared to$938,626,000 three months earlier. - Total deposits decreased 8% to
$939,202,000 atMarch 31, 2024 , compared to$1,015,652,000 atMarch 31, 2023 , and decreased 7% when compared to the prior quarter end of$1,009,693,000 . - The Bank’s nonperforming loans to gross loans were 4.45% and nonperforming assets to total assets were 3.85%, at
March 31, 2024 . This is compared to nonperforming loans to gross loans of 1.13% and nonperforming assets to total assets of 0.91% atMarch 31, 2023 , and nonperforming loans to gross loans of 4.63% and nonperforming assets to total assets of 3.94% atDecember 31, 2023 . - Book value was
$14.43 per share, compared to$13.76 per share a year ago and$14.40 in the preceding quarter. - Declared its 82nd consecutive quarterly cash dividend, this being
$0.12 per share for the three months endedMarch 31, 2024 .
Operating Results
For the first quarter of 2024, the annualized return on average assets was 0.51% and the annualized return on average equity was 5.74%. This compared to an annualized return on average assets of 1.47% and an annualized return on average equity of 18.38%, respectively, for the first quarter of 2023.
“Our net interest margin contracted four basis points during the quarter, as the increase in loan yields was more than offset by higher funding costs. The cost of deposits in the first quarter was 2.83% as customers continue to seek higher rates,” said Reed. Summit’s net interest margin was 2.81% in the first quarter of 2024, compared to 2.85% in the preceding quarter and 3.69% in the first quarter of 2023.
Interest and dividend income decreased 1.0% to
Noninterest income decreased in the first quarter of 2024 to
Operating expenses increased in the first quarter of 2024 to
Balance Sheet Review
Net loans increased 1% to
Total deposits decreased 8% to
Shareholders’ equity was
Credit Quality
“We are closely monitoring asset quality, and nonperforming loans declined from the immediate prior quarter while there were no charge offs during the first quarter. Despite the challenging operating outlook and the ‘higher for longer’ interest rate environment that’s impacting the entire banking industry, our asset quality remains within manageable levels, with our commercial, owner occupied commercial real estate, and non-owner occupied commercial real estate portfolios all performing well.”
Nonperforming assets were
Net recoveries were
For the first quarter of 2024, consistent with factors within the allowance for credit losses, the Bank recorded a
The real estate non-owner occupied portfolio, which accounts for a majority of the Bank’s loan portfolio, had an average loan-to-value of 49% and a debt service coverage ratio of 1.96 as of
About
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
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 | $ | 13,274 | $ | 13,409 | $ | 12,939 | |||||||||
Interest on deposits with banks | 362 | 792 | 906 | ||||||||||||
Interest on investment securities | 712 | 712 | 719 | ||||||||||||
Dividends on FHLB stock | 129 | 123 | 84 | ||||||||||||
Total interest and dividend income | 14,477 | 15,036 | 14,648 | ||||||||||||
Interest expense: | |||||||||||||||
Deposits | 6,786 | 7,113 | 4,400 | ||||||||||||
190 | - | 119 | |||||||||||||
Junior subordinated debt | 94 | 94 | 94 | ||||||||||||
Total interest expense | 7,070 | 7,207 | 4,613 | ||||||||||||
Net interest income before provision for credit losses | 7,407 | 7,829 | 10,035 | ||||||||||||
(Reversal of) provision for credit losses on loans | (15 | ) | (31 | ) | 400 | ||||||||||
(Reversal of) provision for credit losses on unfunded loan commitments | (65 | ) | (65 | ) | (33 | ) | |||||||||
(Reversal of) provision for credit losses on investments | (5 | ) | 31 | - | |||||||||||
Net interest income after provision for (reversal of) credit | |||||||||||||||
losses on loans, unfunded loan commitments and investments | 7,492 | 7,894 | 9,668 | ||||||||||||
Non-interest income: | |||||||||||||||
Service charges on deposit accounts | 233 | 219 | 208 | ||||||||||||
Rental income | 60 | 54 | 39 | ||||||||||||
Net gain on loan sales | 514 | - | 1,435 | ||||||||||||
Other income | 141 | 24 | 279 | ||||||||||||
Total non-interest income | 948 | 297 | 1,961 | ||||||||||||
Non-interest expense: | |||||||||||||||
Salaries and employee benefits | 4,182 | 3,044 | 3,793 | ||||||||||||
Occupancy and equipment | 485 | 386 | 452 | ||||||||||||
Other expenses | 1,733 | 2,053 | 1,573 | ||||||||||||
Total non-interest expense | 6,400 | 5,483 | 5,818 | ||||||||||||
Income before provision for income taxes | 2,040 | 2,708 | 5,811 | ||||||||||||
Provision for income taxes | 645 | 807 | 1,695 | ||||||||||||
Net income | $ | 1,395 | $ | 1,901 | $ | 4,116 | |||||||||
Basic earnings per common share | $ | 0.21 | $ | 0.28 | $ | 0.62 | |||||||||
Diluted earnings per common share | $ | 0.21 | $ | 0.28 | $ | 0.62 | |||||||||
Basic weighted average shares of common stock outstanding | 6,698 | 6,698 | 6,688 | ||||||||||||
Diluted weighted average shares of common stock outstanding | 6,698 | 6,698 | 6,688 | ||||||||||||
BALANCE SHEETS | ||||||||||||||
(In thousands except share data) | ||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
ASSETS | ||||||||||||||
Cash and due from banks | $ | 37,712 | $ | 57,789 | $ | 116,569 | ||||||||
Total cash and cash equivalents | 37,712 | 57,789 | 116,569 | |||||||||||
Investment securities: | ||||||||||||||
Available-for-sale, less allowance for credit losses of | ||||||||||||||
(at fair value; amortized cost of | 83,832 | 84,546 | 84,841 | |||||||||||
Loans, less allowance for credit losses of | 917,685 | 938,626 | 907,623 | |||||||||||
Bank premises and equipment, net | 5,287 | 5,316 | 5,507 | |||||||||||
Investment in | 5,541 | 5,541 | 4,737 | |||||||||||
4,119 | 4,119 | 4,119 | ||||||||||||
Affordable housing tax credit investments | 8,165 | 8,405 | 8,773 | |||||||||||
Accrued interest receivable and other assets | 17,850 | 18,166 | 14,854 | |||||||||||
Total assets | $ | 1,080,191 | $ | 1,122,508 | $ | 1,147,023 | ||||||||
LIABILITIES AND | ||||||||||||||
SHAREHOLDERS' EQUITY | ||||||||||||||
Deposits: | ||||||||||||||
Demand - non interest-bearing | $ | 179,328 | $ | 201,909 | $ | 232,825 | ||||||||
Demand - interest-bearing | 222,313 | 244,748 | 153,214 | |||||||||||
Savings | 48,214 | 54,352 | 63,895 | |||||||||||
Money market | 222,153 | 212,278 | 148,433 | |||||||||||
Time deposits that meet or exceed the | 65,763 | 63,159 | 84,800 | |||||||||||
Other time deposits | 201,431 | 233,247 | 332,485 | |||||||||||
Total deposits | 939,202 | 1,009,693 | 1,015,652 | |||||||||||
28,600 | - | 23,000 | ||||||||||||
Junior subordinated debt | 5,924 | 5,920 | 5,909 | |||||||||||
Affordable housing commitment | 4,094 | 4,094 | 4,435 | |||||||||||
Accrued interest payable and other liabilities | 4,493 | 5,123 | 5,362 | |||||||||||
Total liabilities | 982,313 | 1,024,830 | 1,054,358 | |||||||||||
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, 6,784,099 and 6,732,699 | 37,552 | 37,471 | 37,217 | |||||||||||
Retained earnings | 69,539 | 68,957 | 64,678 | |||||||||||
Accumulated other comprehensive loss, net | (9,213 | ) | (8,750 | ) | (9,230 | ) | ||||||||
Total shareholders' equity | 97,878 | 97,678 | 92,665 | |||||||||||
Total liabilities and shareholders' equity | $ | 1,080,191 | $ | 1,122,508 | $ | 1,147,023 | ||||||||
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 | $ | 7,407 | $ | 7,829 | $ | 10,035 | ||||||
(Reversal of) provision for credit losses on loans | (15 | ) | (31 | ) | 400 | |||||||
(Reversal of) provision for credit losses on unfunded loan commitments | (65 | ) | (65 | ) | (33 | ) | ||||||
(Reversal of) provision for credit losses on investments | (5 | ) | 31 | - | ||||||||
Non-interest income | 948 | 297 | 1,961 | |||||||||
Non-interest expense | 6,400 | 5,483 | 5,818 | |||||||||
Provision for income taxes | 645 | 807 | 1,695 | |||||||||
Net income | $ | 1,395 | $ | 1,901 | $ | 4,116 | ||||||
Selected per Common Share Data: | ||||||||||||
Basic earnings per common share | $ | 0.21 | $ | 0.28 | $ | 0.62 | ||||||
Diluted earnings per common share | $ | 0.21 | $ | 0.28 | $ | 0.62 | ||||||
Dividend per share | $ | 0.12 | $ | 0.12 | $ | 0.12 | ||||||
Book value per common share (1) | $ | 14.43 | $ | 14.40 | $ | 13.76 | ||||||
Selected Balance Sheet Data: | ||||||||||||
Assets | $ | 1,080,191 | $ | 1,122,508 | $ | 1,147,023 | ||||||
Loans, net | 917,685 | 938,626 | 907,623 | |||||||||
Deposits | 939,202 | 1,009,693 | 1,015,652 | |||||||||
Average assets | 1,087,960 | 1,123,057 | 1,135,912 | |||||||||
Average earning assets | 1,057,338 | 1,089,808 | 1,104,134 | |||||||||
Average shareholders' equity | 97,471 | 94,096 | 90,814 | |||||||||
Nonperforming loans | 41,548 | 44,206 | 10,411 | |||||||||
Net loans recovered | 281 | 40 | 13 | |||||||||
Total nonperforming assets | 41,548 | 44,206 | 10,411 | |||||||||
Selected Ratios: | ||||||||||||
Return on average assets (2) | 0.51 | % | 0.67 | % | 1.47 | % | ||||||
Return on average common shareholders' equity (2) | 5.74 | % | 8.02 | % | 18.38 | % | ||||||
Efficiency ratio (3) | 76.60 | % | 67.47 | % | 48.50 | % | ||||||
Net interest margin (2) | 2.81 | % | 2.85 | % | 3.69 | % | ||||||
Common equity tier 1 capital ratio | 10.40 | % | 9.90 | % | 9.58 | % | ||||||
Tier 1 capital ratio | 10.40 | % | 9.90 | % | 9.58 | % | ||||||
Total capital ratio | 12.27 | % | 11.75 | % | 11.44 | % | ||||||
Tier 1 leverage ratio | 9.21 | % | 8.85 | % | 8.30 | % | ||||||
Common dividend payout ratio (4) | 58.27 | % | 42.63 | % | 20.04 | % | ||||||
Average shareholders' equity to average assets | 8.96 | % | 8.38 | % | 7.99 | % | ||||||
Nonperforming loans to total loans | 4.45 | % | 4.63 | % | 1.13 | % | ||||||
Nonperforming assets to total assets | 3.85 | % | 3.94 | % | 0.91 | % | ||||||
Allowance for credit losses to total loans | 1.66 | % | 1.60 | % | 1.65 | % | ||||||
Allowance for credit losses to nonperforming loans | 37.27 | % | 34.43 | % | 146.49 | % | ||||||
(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. | ||||||||||||
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Source:
2024 GlobeNewswire, Inc., source