Summit Financial (SMMF) 8-K Summit Financial Group Reports First Quarter 2014 Results

Exhibit 99

FOR RELEASE 6:00 AM ET, April 30, 2014

Contact:                      Robert S. Tissue, Sr. Vice President & CFO

Telephone:                 (304) 530-0552

Email:                           rtissue@summitfgi.com

SUMMIT FINANCIAL GROUP REPORTS FIRST QUARTER 2014 RESULTS

Q1 2014 Diluted EPS up 31.6% to $0.25 compared to $0.19 in Q1 2013

MOOREFIELD, WV – April 30, 2014 (GLOBE NEWSWIRE) – Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported first quarter 2014 net income applicable to common shares of $2.20 million, or $0.25 per diluted share, compared to $1.60 million, or $0.19 per diluted share, for the first quarter of 2013, representing an increase of 37.3%, or 31.6% per diluted share. Q1 2014 earnings compared to Q1 2013 were positively impacted by a $500,000 decrease in provision for loan losses and a $280,000 increase in net interest income.

Excluding from first quarter 2014 (on a pre-tax basis) realized securities losses of $22,000, losses on sales of foreclosed properties of $75,000, and write-downs of foreclosed properties of $928,000, Q1 2014 earnings would have approximated $2.84 million, or $0.32 per diluted share.  Excluding from Q1 2013 (on a pre-tax basis) realized securities gains of $42,000, losses on sales of foreclosed properties of $40,000, charges for other-than-temporary impairment (“OTTI”) of securities of $54,000 and write-downs of foreclosed properties of $929,000, Q1 2013 earnings would have approximated $2.22 million, or $0.26 per diluted share.

Highlights for Q1 2014 include:

·   Nonperforming assets declined for the eighth consecutive quarter, reaching its lowest level since Q4 2008; foreclosed properties are at the lowest level since Q4 2009.

·   Net interest margin increased 9 basis points quarter over quarter and 10 basis points compared to Q1 2013.

·   Achieved $24.1 million in loan growth.

·   Recorded charges of $928,000 to write-down foreclosed properties compared to $644,000 in Q4 2013 and $929,000 in Q1 2013.

·   Noninterest expenses remained well-controlled decreasing nearly 1% compared to Q1 2013.

·   Summit’s regulatory capital ratios are at the highest levels in fourteen years.

H. Charles Maddy III, President and Chief Executive Officer of Summit, commented, “I was very pleased by our performance this past quarter. We improved our earnings markedly, grew our loan portfolio, increased our revenues, enhanced our net interest margin, strengthened our capital levels and reduced our portfolio of problem assets. Reducing our portfolio of problem assets remains an important priority, and we are very pleased to have reduced nonperforming assets in each of the six most recent quarters. While our disposal of foreclosed properties is still not at the pace we would like, we are encouraged to observe modest improvement in local real estate market conditions.  We anticipate earnings may continue to fluctuate from quarter-to-quarter in the near term as our foreclosed properties are re-appraised and written-down to estimated fair values on an ongoing basis.”

Results from Operations

Total revenue for first quarter 2014, consisting of net interest income and noninterest income, grew 2.5 percent to $12.8 million compared to $12.5 million for the first quarter 2013. Total revenue excluding realized securities losses of $22,000 for Q1 2014 and excluding $42,000 in realized securities gains and $54,000 OTTI of securities from Q1 2013 was $12.8 million for first quarter 2014 compared to $12.5 million in the prior-year quarter.

For the first quarter of 2014, net interest income was $10.0 million, an increase of 2.9 percent from the $9.8 million reported in the prior-year first quarter and increased $35,000 compared to the linked quarter. The net interest margin for first quarter 2014 was 3.33 percent compared to 3.23 percent for the year-ago quarter, and 3.24 percent for the linked quarter.

Noninterest income, consisting primarily of insurance commissions from Summit's insurance agency subsidiary and service fee income from community banking activities, for first quarter 2014 was $2.78 million compared to $2.75 million for the comparable period of 2013. Excluding realized securities gains/losses and OTTI of securities, noninterest income was $2.81 million for first quarter 2014, compared to $2.76 million reported for first quarter 2013.

The first quarter 2014 provision for loan losses remained unchanged compared to the linked quarter at $1.00 million, and decreased from the $1.50 million for the year-ago quarter.

Noninterest expense continues to be well-controlled. Total noninterest expense decreased 0.7% to $8.50 million compared to $8.56 million for the prior-year first quarter.  Excluding from noninterest expense (on a pre-tax basis) losses on sales of foreclosed properties of $75,000 in Q1 2014 and $40,000 in Q1 2013 and write-downs of foreclosed properties of $928,000 in Q1 2014 and $929,000 in Q1 2013, noninterest expense would have approximated $7.50 million for Q1 2014 compared to $7.59 million for the comparable period of 2013.

Balance Sheet

At March 31, 2014, total assets were $1.41 billion, an increase of $19.9 million, or 1.4 percent since December 31, 2013. Total loans, net of unearned fees and allowance for loan losses, were $962.7 million at March 31, 2014, up $25.6 million, or 2.7 percent, from the $937.1 million reported at year-end 2013.

At March 31, 2014, deposits were $1.05 billion, an increase of $48.8 million, or 4.9 percent, since year end 2013. During first quarter 2014, checking and savings grew by $15.9 million and $35.4 million, respectively, or 5.7 percent and 18.3 percent, respectively. Long-term borrowings and subordinated debentures declined by 20.0 percent since year end 2013, as the Company paid down $40.0 million in maturing borrowings, which was funded by checking and savings deposits.

Asset Quality

As of March 31, 2014, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $69.2 million, or 4.92 percent of assets. This compares to $72.3 million, or 5.22 percent of assets at the linked quarter, and $90.9 million, or 6.54 percent of assets, at first quarter 2013.

First quarter 2014 net loan charge-offs were $2.59 million, or 1.08 percent of average loans annualized; while adding $1.00 million to the allowance for loan losses. The allowance for loan losses stood at $11.1 million, or 1.14 percent of total loans at March 31, 2014, compared to 1.33 percent at year-end 2013.

Capital Adequacy

Shareholders’ equity was $114.5 million as of March 31, 2014 compared to $111.1 million December 31, 2013.

Summit's depository institution, Summit Community Bank, Inc. (the “Bank”), remains well in excess of regulatory requirements for a "well capitalized" institution at March 31, 2014. The Bank’s total risk-based capital ratio improved to 15.6 percent at March 31, 2014 compared to 15.7 percent at December 31, 2013, while its Tier 1 leverage capital ratio improved to 10.6 from the 10.4 percent reported at December 31, 2013.

About the Company

Summit Financial Group, Inc. is a $1.41 billion financial holding company headquartered in Moorefield, West Virginia. Summit provides community banking services primarily in the Eastern Panhandle and South Central regions of West Virginia and the Northern and Shenandoah Valley regions of Virginia, through its bank subsidiary, Summit Community Bank, Inc., which operates fifteen banking locations. Summit also operates Summit Insurance Services, LLC in Moorefield, West Virginia and Leesburg, Virginia.

FORWARD-LOOKING STATEMENTS

This press release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Words such as “expects”, “anticipates”, “believes”, “estimates” and other similar expressions or future or conditional verbs such as “will”, “should”, “would” and “could” are intended to identify such forward-looking statements.

Although we believe the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially.  Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking laws and regulations; changes in tax laws; the impact of technological advances; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; and changes in the national and local economies.  We undertake no obligation to revise these statements following the date of this press release.

NON-GAAP FINANCIAL MEASURES

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America ("GAAP").  Specifically, Summit adjusted GAAP performance measures to exclude the effects of realized and unrealized securities gains and losses, gains/losses on sales of assets, and write-downs of foreclosed properties to estimated fair value included in its Statements of Income.  Management deems believes presentations of financial measures excluding the impact of these items provide useful supplemental information that is important for a proper understanding of the operating results of Summit's core business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q1 2014 vs Q1 2013
	For the Quarter Ended						Percent
Dollars in thousands	3/31/2014			3/31/2013			Change
Condensed Statements of Income
Interest income
Loans, including fees	$	12,216		$	12,904		-5.3%
Securities		1,852			1,664		11.3%
Other		2			1		100.0%
Total interest income		14,070			14,569		-3.4%
Interest expense
Deposits		2,241			2,768		-19.0%
Borrowings		1,791			2,043		-12.3%
Total interest expense		4,032			4,811		-16.2%
Net interest income		10,038			9,758		2.9%
Provision for loan losses		1,000			1,500		-33.3%
Net interest income after provision
for loan losses		9,038			8,258		9.4%
Noninterest income
Insurance commissions		1,181			1,184		-0.3%
Service fees related to deposit accounts		1,043			1,012		3.1%
Realized securities gains (losses)		(22	)		42		-152.4%
Other-than-temporary impairment of securities		-			(54	)	-100.0%
Other income		581			564		3.0%
Total noninterest income		2,783			2,748		1.3%
Noninterest expense
Salaries and employee benefits		3,980			4,117		-3.3%
Net occupancy expense		541			457		18.4%
Equipment expense		566			598		-5.4%
Professional fees		316			251		25.9%
FDIC premiums		502			540		-7.0%
Foreclosed properties expense		254			279		-9.0%
Loss (gain) on sale of foreclosed properties		75			40		87.5%
Write-downs of foreclosed properties		928			929		-0.1%
Other expenses		1,336			1,351		-1.1%
Total noninterest expense		8,498			8,562		-0.7%
Income before income taxes		3,323			2,444		36.0%
Income taxes		934			651		43.5%
Net income		2,389			1,793		33.2%
Preferred stock dividends		193			194		-0.5%
Net income applicable to common shares	$	2,196		$	1,599		37.3%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q1 2014 vs Q1 2013
	For the Quarter Ended						Percent
	3/31/2014			3/31/2013			Change
Per Share Data
Earnings per common share
Basic	$	0.29		$	0.22		31.8%
Diluted	$	0.25		$	0.19		31.6%
Average shares outstanding
Basic		7,453,370			7,432,254		0.3%
Diluted		9,628,927			9,613,886		0.2%
Performance Ratios
Return on average equity (A)		8.46	%		6.55	%	29.2%
Return on average assets		0.69	%		0.52	%	32.7%
Net interest margin		3.33	%		3.23	%	3.1%
Efficiency ratio (B)		54.13	%		56.00	%	-3.3%

                                                                                    NOTE (A) – Net income divided by total shareholders’ equity.

                                                                                    NOTE (B) – 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	3/31/2014			12/31/2013			9/30/2013			6/30/2013			3/31/2013
Condensed Statements of Income
Interest income
Loans, including fees	$	12,216		$	12,507		$	12,532		$	12,799		$	12,904
Securities		1,852			1,850			1,512			1,507			1,664
Other		2			2			1			2			1
Total interest income		14,070			14,359			14,045			14,308			14,569
Interest expense
Deposits		2,241			2,317			2,487			2,820			2,768
Borrowings		1,791			2,039			2,020			1,984			2,043
Total interest expense		4,032			4,356			4,507			4,804			4,811
Net interest income		10,038			10,003			9,538			9,504			9,758
Provision for loan losses		1,000			1,000			1,000			1,000			1,500
Net interest income after provision
for loan losses		9,038			9,003			8,538			8,504			8,258
Noninterest income
Insurance commissions		1,181			1,056			1,057			1,132			1,184
Service fees related to deposit accounts		1,043			1,124			1,106			1,085			1,012
Realized securities gains (losses)		(22	)		124			132			(57	)		42
Other-than-temporary impairment of securities		-			-			(38	)		(27	)		(54)
Other income		581			592			606			570			564
Total noninterest income		2,783			2,896			2,863			2,703			2,748
Noninterest expense
Salaries and employee benefits		3,980			4,024			4,050			3,987			4,117
Net occupancy expense		541			466			454			476			457
Equipment expense		566			580			578			559			598
Professional fees		316			295			263			360			251
FDIC premiums		502			502			503			515			540
Foreclosed properties expense		254			209			262			295			279
Loss (gain) on sale of foreclosed properties		75			(28	)		(17	)		523			40
Write-downs of foreclosed properties		928			644			654			1,494			929
Other expenses		1,336			1,732			1,484			1,329			1,351
Total noninterest expense		8,498			8,424			8,231			9,538			8,562
Income before income taxes		3,323			3,475			3,170			1,669			2,444
Income taxes		934			687			898			452			651
Net income		2,389			2,788			2,272			1,217			1,793
Preferred stock dividends		193			194			194			194			194
Net income applicable to common shares	$	2,196		$	2,594		$	2,078		$	1,023		$	1,599

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)
Five Quarter Performance Summary
	For the Quarter Ended
	3/31/2014			12/31/2013			9/30/2013			6/30/2013			3/31/2013
Per Share Data
Earnings per common share
Basic	$	0.29		$	0.35		$	0.28		$	0.14		$	0.22
Diluted	$	0.25		$	0.29		$	0.24		$	0.13		$	0.19
Average shares outstanding
Basic		7,453,370			7,450,379			7,443,865			7,438,401			7,432,254
Diluted		9,628,927			9,624,312			9,621,957			9,619,585			9,613,886
Performance Ratios
Return on average equity (A)		8.46	%		10.15	%		8.49	%		4.40	%		6.55%
Return on average assets		0.69	%		0.80	%		0.67	%		0.35	%		0.52%
Net interest margin		3.33	%		3.24	%		3.15	%		3.12	%		3.23%
Efficiency ratio - (B)		54.13	%		57.31	%		56.22	%		56.52	%		56.00%

                                                              NOTE (A) – Net income divided by average total shareholders’ equity.

                                                              NOTE (B) – Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Selected Balance Sheet Data
	For the Quarter Ended
Dollars in thousands, except per share amounts	3/31/2014			12/31/2013			9/30/2013			6/30/2013			3/31/2013
Assets
Cash and due from banks	$	3,827		$	3,442		$	4,571		$	4,336		$	3,906
Interest bearing deposits other banks		13,424			8,340			11,532			7,971			7,915
Securities		281,865			288,780			291,258			291,180			283,054
Loans, net		962,714			937,070			939,169			925,979			945,741
Property held for sale		52,241			53,392			45,303			47,258			54,625
Premises and equipment, net		20,457			20,623			20,780			20,936			21,023
Intangible assets		7,861			7,949			8,036			8,124			8,212
Cash surrender value of life insurance policies		35,881			35,611			35,257			30,027			29,791
Other assets		27,847			31,020			31,881			34,159			35,931
Total assets	$	1,406,117		$	1,386,227		$	1,387,787		$	1,369,970		$	1,390,198
Liabilities and Shareholders' Equity
Deposits	$	1,052,630		$	1,003,812		$	1,016,735		$	1,038,163		$	1,066,318
Short-term borrowings		68,974			62,769			54,163			16,762			5,960
Long-term borrowings and
subordinated debentures		159,881			199,905			199,929			199,954			199,977
Other liabilities		10,105			8,669			8,155			7,880			7,928
Shareholders' equity		114,527			111,072			108,805			107,211			110,015
Total liabilities and shareholders' equity	$	1,406,117		$	1,386,227		$	1,387,787		$	1,369,970		$	1,390,198
Book value per common share (A)	$	11.91		$	11.55		$	11.32		$	11.15		$	11.45
Tangible book value per common share (A)	$	11.09		$	10.72		$	10.48		$	10.31		$	10.60
Tangible equity / Tangible assets		7.6	%		7.5	%		7.3	%		7.3	%		7.4%

                                         NOTE (A) – Assumes conversion of convertible preferred stock

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios
	3/31/2014		12/31/2013		9/30/2013		6/30/2013		3/31/2013
Summit Financial Group, Inc.
Total Risk Based Capital	14.2	%	14.5	%	14.5	%	14.4	%	14.1%
Tier 1 Risk-based Capital	12.4	%	12.4	%	12.1	%	12.1	%	11.8%
Tier 1 Leverage Ratio	9.0	%	8.9	%	8.9	%	8.6	%	8.4%
Summit Community Bank, Inc.
Total Risk Based Capital	15.6	%	15.7	%	15.5	%	15.6	%	15.2%
Tier 1 Risk-based Capital	14.5	%	14.5	%	14.3	%	14.3	%	13.9%
Tier 1 Leverage Ratio	10.6	%	10.4	%	10.4	%	10.2	%	10.0%

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition
Dollars in thousands	3/31/2014		12/31/2013		9/30/2013		6/30/2013		3/31/2013
Commercial	$	93,517	$	88,352	$	83,844	$	78,964	$	86,877
Commercial real estate
Owner occupied		150,025		149,618		151,261		149,660		151,942
Non-owner occupied		297,197		280,790		279,412		277,773		288,475
Construction and development
Land and development		67,342		71,453		73,089		73,426		76,277
Construction		18,327		15,155		12,323		7,634		5,782
Residential real estate
Non-jumbo		215,665		212,946		215,058		216,759		213,965
Jumbo		51,406		53,406		59,701		58,567		62,849
Home equity		56,161		54,844		53,674		53,774		53,765
Consumer		19,106		19,889		20,472		20,147		19,638
Other		5,037		3,276		3,374		3,397		3,191
Total loans, net of unearned fees		973,783		949,729		952,208		940,101		962,761
Less allowance for loan losses		11,069		12,659		13,039		14,122		17,020
Loans, net	$	962,714	$	937,070	$	939,169	$	925,979	$	945,741

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition
Dollars in thousands	3/31/2014		12/31/2013		9/30/2013		6/30/2013		3/31/2013
Non interest bearing checking	$	99,445	$	92,837	$	99,109	$	92,147	$	93,125
Interest bearing checking		195,898		186,578		186,702		187,244		181,327
Savings		228,854		193,446		193,285		196,069		197,587
Time deposits		528,433		530,951		537,639		562,703		594,279
Total deposits	$	1,052,630	$	1,003,812	$	1,016,735	$	1,038,163	$	1,066,318

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Asset Quality Information
	For the Quarter Ended
Dollars in thousands	3/31/2014			12/31/2013			9/30/2013			6/30/2013			3/31/2013
Gross loan charge-offs	$	2,862		$	1,669		$	2,825		$	3,968		$	2,497
Gross loan recoveries		(272	)		(289	)		(742	)		(70	)		(84)
Net loan charge-offs	$	2,590		$	1,380		$	2,083		$	3,898		$	2,413
Net loan charge-offs to average loans (annualized)		1.08	%		0.58	%		0.89	%		1.63	%		1.00%
Allowance for loan losses	$	11,069		$	12,659		$	13,039		$	14,122		$	17,020
Allowance for loan losses as a percentage
of period end loans		1.14	%		1.33	%		1.37	%		1.50	%		1.77%
Nonperforming assets:
Nonperforming loans
Commercial	$	866		$	1,224		$	2,557		$	3,996		$	4,763
Commercial real estate		2,834			2,318			3,795			1,695			1,525
Commercial construction and development		3,653			3,782			3,761			-			-
Residential construction and development		6,599			9,048			9,128			11,505			13,076
Residential real estate		2,890			2,446			12,385			13,605			16,869
Consumer		73			128			145			91			72
Total nonperforming loans		16,915			18,946			31,771			30,892			36,305
Foreclosed properties
Commercial		-			-			-			-			-
Commercial real estate		8,523			9,903			9,961			10,310			11,779
Commercial construction and development		11,097			11,125			11,161			11,492			16,670
Residential construction and development		20,640			20,485			20,585			21,591			21,929
Residential real estate		11,981			11,879			3,596			3,865			4,247
Total foreclosed properties		52,241			53,392			45,303			47,258			54,625
Other repossessed assets		28			8			-			2			19
Total nonperforming assets	$	69,184		$	72,346		$	77,074		$	78,152		$	90,949
Nonperforming loans to period end loans		1.74	%		1.99	%		3.34	%		3.29	%		3.77%
Nonperforming assets to period end assets		4.92	%		5.22	%		5.55	%		5.70	%		6.54%

Loans Past Due 30-89 Days
	For the Quarter Ended
In thousands	3/31/2014		12/31/2013		9/30/2013		6/30/2013		3/31/2013
Commercial	$	52	$	74	$	30	$	199	$	27
Commercial real estate		1,310		1,809		1,757		626		2,161
Construction and development		754		1,628		154		698		64
Residential real estate		3,847		4,332		4,697		4,479		4,522
Consumer		219		292		229		286		277
Other		-		-		50		53		-
Total	$	6,182	$	8,135	$	6,917	$	6,341	$	7,051

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q1 2014 vs Q1 2013
	Q1 2014							Q1 2013
	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	$	957,482		$	12,145	5.14	%	$	960,509		$	12,833	5.42%
Tax-exempt		5,830			108	7.51	%		5,965			106	7.21%
Securities
Taxable		216,900			1,281	2.40	%		216,306			1,030	1.93%
Tax-exempt		75,437			864	4.64	%		79,147			961	4.92%
Interest bearing deposits other banks
and Federal funds sold		8,923			2	0.09	%		7,510			1	0.05%
Total interest earning assets		1,264,572			14,400	4.62	%		1,269,437			14,931	4.77%
Noninterest earning assets
Cash & due from banks		3,897							4,240
Premises & equipment		20,582							21,101
Other assets		116,421							114,701
Allowance for loan losses		(12,969	)						(17,572	)
Total assets	$	1,392,503						$	1,391,907
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits	$	186,982		$	52	0.11	%	$	174,724		$	70	0.16%
Savings deposits		208,529			319	0.62	%		195,556			309	0.64%
Time deposits		530,117			1,870	1.43	%		574,545			2,388	1.69%
Short-term borrowings		75,177			52	0.28	%		27,834			17	0.25%
Long-term borrowings and
subordinated debentures		174,559			1,739	4.04	%		209,255			2,027	3.93%
Total interest bearing liabilities		1,175,364			4,032	1.39	%		1,181,914			4,811	1.65%
Noninterest bearing liabilities
Demand deposits		95,138							92,926
Other liabilities		9,037							7,653
Total liabilities		1,279,539							1,282,493
Shareholders' equity - preferred		9,291							9,325
Shareholders' equity - common		103,673							100,089
Total liabilities and
shareholders' equity	$	1,392,503						$	1,391,907
NET INTEREST EARNINGS				$	10,368						$	10,120
NET INTEREST MARGIN						3.33	%						3.23%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ:  SMMF)
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
	For the Quarter Ended
Dollars in thousands	3/31/2014			3/31/2013			12/31/2013
Net income applicable to common shares - excluding
realized securities gains, gains/losses on sales of assets,
other-than-temporary impairment of securities and
write-downs of foreclosed properties	$	2,842		$	2,217		$	2,904
Realized securities gains (losses)		(22	)		42			124
Applicable income tax effect		8			(16	)		(46)
Gain (loss) on sale of foreclosed properties		(75	)		(40	)		28
Applicable income tax effect		28			15			(10)
Other-than-temporary impairment of securities		-			(54	)		-
Applicable income tax effect		-			20			-
Write-downs foreclosed properties		(928	)		(929	)		(644)
Applicable income tax effect		343			344			238
		(646	)		(618	)		(310)
GAAP net income applicable to common shares	$	2,196		$	1,599		$	2,594
Diluted earnings per common share - excluding realized
securities gains, gains/losses on sales of assets,
other-than-temporary impairment of securities and
write-downs of foreclosed properties	$	0.32		$	0.26		$	0.32
Realized securities gains (losses)		-			-			0.01
Applicable income tax effect		-			-			-
Gain (loss) on sale of foreclosed properties		(0.01	)		-			-
Applicable income tax effect		-			-			-
Other-than-temporary impairment of securities		-			(0.01	)		-
Applicable income tax effect		-			-			-
Write-downs of foreclosed properties		(0.10	)		(0.10	)		(0.07)
Applicable income tax effect		0.04			0.04			0.03
		(0.07	)		(0.07	)		(0.03)
GAAP diluted earnings per common share	$	0.25		$	0.19		$	0.29

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
	For the Quarter Ended
Dollars in thousands	3/31/2014			3/31/2013			12/31/2013
Total revenue - excluding realized securities gains and
other-than-temporary impairment of securities	$	12,843		$	12,518		$	12,775
Realized securities gains/(losses)		(22	)		42			124
Other-than-temporary impairment of securities		-			(54	)		-
		(22	)		(12	)		124
GAAP total revenue	$	12,821		$	12,506		$	12,899
Total noninterest income - excluding realized securities gains
and other-than-temporary impairment of securities	$	2,805		$	2,760		$	2,772
Realized securities gains/(losses)		(22	)		42			124
Other-than-temporary impairment of securities		-			(54	)		-
		(22	)		(12	)		124
GAAP total noninterest income	$	2,783		$	2,748		$	2,896
Total noninterest expense - excluding gains/losses
on sales of foreclosed properties and write-downs
of foreclosed properties	$	7,495		$	7,593		$	7,808
(Gains)/losses on sales of foreclosed properties		75			40			(28)
Write-downs of foreclosed properties		928			929			644
		1,003			969			616
GAAP total noninterest expense	$	8,498		$	8,562		$	8,424