FOR RELEASE 6:00 AM ET, July 30, 2014
Contact: Robert S. Tissue, Sr. Vice President & CFO
Telephone: (304) 530-0552
Email: rtissue@summitfgi.com
SUMMIT FINANCIAL GROUP REPORTS SECOND QUARTER 2014 RESULTS
Q2 2014 Diluted EPS $0.25 compared to $0.13 for Q2 2013 and $0.25 for Q1 2014; Quarterly core revenues grow 6.3 percent year-over-year
MOOREFIELD, WV – July 30, 2014 (GLOBE NEWSWIRE) – Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported second quarter 2014 net income applicable to common shares of $2.24 million, or $0.25 per diluted share, compared to $1.02 million, or $0.13 per diluted share, for the second quarter of 2013, representing an increase of 118.9 percent, or 92.3 percent per diluted share. Q2 2014 earnings compared to Q2 2013 were positively impacted by a $532,000 decline in write-downs of foreclosed properties and an $816,000 increase in net interest income.
Excluding from second quarter 2014 (on a pre-tax basis) realized securities losses of $43,000, losses on sales of foreclosed properties of $54,000, $1,000 in other-than-temporary impairment of securities (“OTTI”) and write-downs of foreclosed properties of $962,000, Q2 2014 core earnings approximated $2.91 million, or $0.32 per diluted share. Excluding from Q2 2013 (on a pre-tax basis) realized securities losses of $57,000, losses on sales of foreclosed properties of $523,000, OTTI charges of $27,000 and write-downs of foreclosed properties of $1.49 million, Q2 2013 core earnings approximated $2.35 million, or $0.27 per diluted share.
For the six months ended June 30, 2014, Summit recorded net income applicable to common shares of $4.44 million, or $0.50 per diluted share, compared with $2.62 million, or $0.31 per diluted share, for the comparable 2013 six-month period, representing an increase of 69.5%, or 61.3 % per diluted share.
Excluding from the six month period ended June 30, 2014 nonrecurring items (on a pre-tax basis) comprised of realized securities losses of $64,000, losses on sales of assets of $129,000, OTTI charges of $1,000 and write-downs of foreclosed properties of $1.89 million, and from the 2013 first six-month period realized securities losses of $16,000, losses on sale of foreclosed properties of $563,000, OTTI charges of $80,000 and write-downs of foreclosed properties of $2.42 million, core earnings for first six months of 2014 were approximately $5.75 million, or $0.65 per diluted share, compared to $4.56 million, or $0.52 per diluted share, for the 2013 six month period.
Highlights for Q2 2014 include:
| · | Nonperforming assets declined for the tenth consecutive quarter, reaching its lowest level since Q4 2008; foreclosed properties are at the lowest level since Q4 2009. |
| · | Net interest margin has increased 20 basis points since Q2 2013, although it declined 1 basis point compared to Q1 2014. |
| · | Achieved loan growth of $30.0 million, or 3.1 percent (non-annualized) during the quarter, and $54.1 million, or 5.7 percent (non-annualized) year-to-date. |
| · | Core revenues increased for the fourth consecutive quarter. |
| · | Recorded charges of $962,000 to write-down foreclosed properties compared to $928,000 in Q1 2014 and $1.49 million in Q2 2013. |
| · | Noninterest expenses remained well-controlled decreasing almost 10.6 percent compared to Q2 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 am very pleased to report another quarter of solid performance improvements. We continued to enhance earnings, grow the loan portfolio, increase revenues, enhance net interest earnings, strengthen capital and reduce the portfolio of problem assets. Reducing our portfolio of problem assets remains an important priority, and we are very pleased to have reduced nonperforming assets for ten consecutive quarters. While we anticipate earnings may continue to fluctuate from quarter-to-quarter in the short term as our foreclosed properties are re-appraised and written-down to estimated fair values on an ongoing basis, continuing revenue growth driven by an improving net interest margin and the recent uptick in lending is expected to positively impact earnings in the near term.”
Results from Operations
Total revenue for second quarter 2014, consisting of net interest income and noninterest income, grew 6.7 percent to $13.0 million compared to $12.2 million for the second quarter 2013. For the year-to-date period ended June 30, 2014, total revenue was $25.8 million compared to $24.7 million for the same period of 2013, representing a 4.4 percent increase.
Total core revenue (excluding nonrecurring items, enumerated above) was $13.1 million for second quarter 2014 compared to $12.3 million for the same prior-year quarter, an increase of 6.3 percent. For the first half of 2014, total core revenue (excluding nonrecurring items) was $25.9 million compared to $24.8 million for the first half of 2013, a 4.4 percent improvement.
For the second quarter of 2014, net interest income was $10.3 million, an increase of 8.6 percent from the $9.5 million reported in the prior-year second quarter and increased $282,000 compared to the linked quarter. The net interest margin for second quarter 2014 was 3.32 percent compared to 3.12 percent for the year-ago quarter, and 3.33 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 second quarter 2014 was $2.71 million compared to $2.70 million for the comparable period of 2014. Excluding realized securities gains/losses and OTTI of securities, noninterest income was $2.75 million for second quarter 2014, compared to $2.79 million reported for second quarter 2013.
The second quarter 2014 provision for loan losses of $1.0 million remained unchanged compared to the linked quarter and the year-ago quarter.
Noninterest expense continues to be well-controlled. Total noninterest expense decreased 10.6% to $8.53 million compared to $9.54 million for the prior-year second quarter. Excluding from noninterest expense (on a pre-tax basis) losses on sales of foreclosed properties of $54,000 in Q2 2014 and $523,000 in Q2 2013 and write-downs of foreclosed properties of $962,000 in Q2 2014 and $1.49 million in Q2 2013, noninterest expense would have approximated $7.51 million for Q2 2014 compared to $7.52 million for the comparable period of 2013. Noninterest expense for the first half of 2014 decreased 5.9% compared to the first half of 2013.
Balance Sheet
At June 30, 2014, total assets were $1.44 billion, an increase of $49.7 million, or 3.6 percent since December 31, 2013. Total loans, net of unearned fees and allowance for loan losses, were $992.8 million at June 30, 2014, up $55.7 million, or 5.9 percent, from the $937.1 million reported at year-end 2013.
At June 30, 2014, deposits were $1.06 billion, an increase of $54.0 million, or 5.4 percent, since year end 2013. During first half 2014, checking and savings grew by $14.6 million and $49.9 million, respectively, or 5.2 percent and 25.8 percent, respectively. Long-term borrowings and subordinated debentures declined by 20.8 percent since year end 2013, as the Company paid down $41.6 million in maturing borrowings, which was funded by growth in checking and savings deposits.
Asset Quality
As of June 30, 2014, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $63.0 million, or 4.39 percent of assets. This compares to $69.2 million, or 4.92 percent of assets at the linked quarter, and $78.2 million, or 5.70 percent of assets, at second quarter 2013.
Second quarter 2014 net loan charge-offs were $1.06 million, or 0.43 percent of average loans annualized; while adding $1.00 million to the allowance for loan losses. The allowance for loan losses stood at $11.0 million, or 1.10 percent of total loans at June 30, 2014, compared to 1.33 percent at year-end 2013.
Capital Adequacy
Shareholders’ equity was $117.5 million as of June 30, 2014 compared to $111.1 million December 31, 2013 and $107.2 million at June 30, 2013. Tangible book value per common share increased to $11.40 at June 30, 2014 compared to $10.72 at December 31, 2013 and $10.31 at June 30, 2013.
Summit's depository institution, Summit Community Bank, Inc. (the “Bank”), remains well in excess of regulatory requirements for a "well capitalized" institution at June 30, 2014. The Bank’s total risk-based capital ratio was 15.6 percent at June 30, 2014 compared to 15.7 percent at December 31, 2013, while its Tier 1 leverage capital ratio improved to 10.6 percent from the 10.4 percent reported at December 31, 2013.
About the Company
Summit Financial Group, Inc. is a $1.44 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 -- Q2 2014 vs Q2 2013 | | | | |
| | | | | | |
| | | | |
| | For the Quarter Ended | | Percent |
| Dollars in thousands | 6/30/2014 | | 6/30/2013 | | Change |
| Condensed Statements of Income | | | | | |
| Interest income | | | | | |
| Loans, including fees | $ | 12,515 | | $ | 12,799 | | -2.2% |
| Securities | | 1,827 | | | 1,507 | | 21.2% |
| Other | | 2 | | | 2 | | 0.0% |
| Total interest income | | 14,344 | | | 14,308 | | 0.3% |
| Interest expense | | | | | | | |
| Deposits | | 2,335 | | | 2,820 | | -17.2% |
| Borrowings | | 1,689 | | | 1,984 | | -14.9% |
| Total interest expense | | 4,024 | | | 4,804 | | -16.2% |
| Net interest income | | 10,320 | | | 9,504 | | 8.6% |
| Provision for loan losses | | 1,000 | | | 1,000 | | 0.0% |
| Net interest income after provision | | | | | | | |
| for loan losses | | 9,320 | | | 8,504 | | 9.6% |
| | | | | | | | |
| Noninterest income | | | | | | | |
| Insurance commissions | | 1,091 | | | 1,132 | | -3.6% |
| Service fees related to deposit accounts | | 1,101 | | | 1,085 | | 1.5% |
| Realized securities gains (losses) | | (43 | ) | | (57 | ) | -24.6% |
| Other-than-temporary impairment of securities | | (1 | ) | | (27 | ) | -96.3% |
| Other income | | 557 | | | 570 | | -2.3% |
| Total noninterest income | | 2,705 | | | 2,703 | | 0.1% |
| Noninterest expense | | | | | | | |
| Salaries and employee benefits | | 4,045 | | | 3,987 | | 1.5% |
| Net occupancy expense | | 505 | | | 476 | | 6.1% |
| Equipment expense | | 513 | | | 559 | | -8.2% |
| Professional fees | | 282 | | | 360 | | -21.7% |
| FDIC premiums | | 495 | | | 515 | | -3.9% |
| Foreclosed properties expense | | 229 | | | 295 | | -22.4% |
| Loss (gain) on sales of foreclosed properties | | 54 | | | 523 | | -89.7% |
| Write-downs of foreclosed properties | | 962 | | | 1,494 | | -35.6% |
| Other expenses | | 1,445 | | | 1,329 | | 8.7% |
| Total noninterest expense | | 8,530 | | | 9,538 | | -10.6% |
| Income before income taxes | | 3,495 | | | 1,669 | | 109.4% |
| Income taxes | | 1,063 | | | 452 | | 135.2% |
| Net income | | 2,432 | | | 1,217 | | 99.8% |
| Preferred stock dividends | | 193 | | | 194 | | -0.5% |
| | | | | | | | |
| Net income applicable to common shares | $ | 2,239 | | $ | 1,023 | | 118.9% |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | | | | |
| Quarterly Performance Summary -- Q2 2014 vs Q2 2013 | | | | |
| | | | |
| | For the Quarter Ended | | Percent |
| | 6/30/2014 | | 6/30/2013 | | Change |
| Per Share Data | | | | | |
| Earnings per common share | | | | | |
| Basic | $ | 0.30 | | $ | 0.14 | | 114.3% |
| Diluted | $ | 0.25 | | $ | 0.13 | | 92.3% |
| | | | | | | | |
| Average shares outstanding | | | | | | | |
| Basic | | 7,457,222 | | | 7,438,401 | | 0.3% |
| Diluted | | 9,630,699 | | | 9,619,585 | | 0.1% |
| | | | | | | | |
| Performance Ratios | | | | | | | |
| Return on average equity (A) | | 8.37 | % | | 4.40 | % | 90.2% |
| Return on average assets | | 0.69 | % | | 0.35 | % | 97.1% |
| Net interest margin | | 3.32 | % | | 3.12 | % | 6.4% |
| Efficiency ratio (B) | | 52.86 | % | | 56.52 | % | -6.5% |
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) | | | | |
| Six Month Performance Summary -- 2014 vs 2013 | | | | | |
| | | | | | |
| | | | | | |
| | For the Six Months Ended | | Percent |
| Dollars in thousands | 6/30/2014 | | 6/30/2013 | | Change |
| Condensed Statements of Income | | | | | |
| Interest income | | | | | |
| Loans, including fees | $ | 24,731 | | $ | 25,703 | | -3.8% |
| Securities | | 3,679 | | | 3,171 | | 16.0% |
| Other | | 4 | | | 3 | | 33.3% |
| Total interest income | | 28,414 | | | 28,877 | | -1.6% |
| Interest expense | | | | | | | |
| Deposits | | 4,576 | | | 5,588 | | -18.1% |
| Borrowings | | 3,480 | | | 4,027 | | -13.6% |
| Total interest expense | | 8,056 | | | 9,615 | | -16.2% |
| Net interest income | | 20,358 | | | 19,262 | | 5.7% |
| Provision for loan losses | | 2,000 | | | 2,500 | | -20.0% |
| Net interest income after provision | | | | | | | |
| for loan losses | | 18,358 | | | 16,762 | | 9.5% |
| | | | | | | | |
| Noninterest income | | | | | | | |
| Insurance commissions | | 2,273 | | | 2,316 | | -1.9% |
| Service fees related to deposit accounts | | 2,144 | | | 2,096 | | 2.3% |
| Realized securities gains | | (64 | ) | | (16 | ) | 300.0% |
| Other-than-temporary impairment of securities | | (1 | ) | | (80 | ) | -98.8% |
| Other income | | 1,137 | | | 1,134 | | 0.3% |
| Total noninterest income | | 5,489 | | | 5,450 | | 0.7% |
| Noninterest expense | | | | | | | |
| Salaries and employee benefits | | 8,026 | | | 8,105 | | -1.0% |
| Net occupancy expense | | 1,046 | | | 932 | | 12.2% |
| Equipment expense | | 1,079 | | | 1,157 | | -6.7% |
| Professional fees | | 598 | | | 611 | | -2.1% |
| FDIC premiums | | 997 | | | 1,055 | | -5.5% |
| Foreclosed properties expense | | 482 | | | 575 | | -16.2% |
| Loss (gain) on sales of foreclosed properties | | 129 | | | 563 | | -77.1% |
| Write-downs of foreclosed properties | | 1,891 | | | 2,423 | | -22.0% |
| Other expenses | | 2,780 | | | 2,679 | | 3.8% |
| Total noninterest expense | | 17,028 | | | 18,100 | | -5.9% |
| Income before income taxes | | 6,819 | | | 4,112 | | 65.8% |
| Income taxes | | 1,997 | | | 1,102 | | 81.2% |
| Net income | | 4,822 | | | 3,010 | | 60.2% |
| Preferred stock dividends | | 387 | | | 388 | | -0.3% |
| | | | | | | | |
| Net income applicable to common shares | $ | 4,435 | | $ | 2,622 | | 69.1% |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | | | | |
| Six Month Performance Summary -- 2014 vs 2013 | | | | | |
| | | | |
| | For the Six Months Ended | | Percent |
| | 6/30/2014 | | 6/30/2013 | | Change |
| Per Share Data | | | | | |
| Earnings per common share | | | | | |
| Basic | $ | 0.59 | | $ | 0.35 | | 68.6% |
| Diluted | $ | 0.50 | | $ | 0.31 | | 61.3% |
| | | | | | | | |
| Average shares outstanding | | | | | | | |
| Basic | | 7,455,307 | | | 7,435,344 | | 0.3% |
| Diluted | | 9,629,830 | | | 9,616,918 | | 0.1% |
| | | | | | | | |
| Performance Ratios | | | | | | | |
| Return on average equity (A) | | 8.42 | % | | 5.47 | % | 53.9% |
| Return on average assets | | 0.69 | % | | 0.43 | % | 60.5% |
| Net interest margin | | 3.32 | % | | 3.18 | % | 4.4% |
| Efficiency ratio (B) | | 53.49 | % | | 56.24 | % | -4.9% |
NOTE (A) – Net income divided by total average 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 | 6/30/2014 | | 3/31/2014 | | 12/31/2013 | | 9/30/2013 | | 6/30/2013 |
| Condensed Statements of Income | | | | | | | | | |
| Interest income | | | | | | | | | |
| Loans, including fees | $ | 12,515 | | $ | 12,216 | | $ | 12,507 | | $ | 12,532 | | $ | 12,799 |
| Securities | | 1,827 | | | 1,852 | | | 1,850 | | | 1,512 | | | 1,507 |
| Other | | 2 | | | 2 | | | 2 | | | 1 | | | 2 |
| Total interest income | | 14,344 | | | 14,070 | | | 14,359 | | | 14,045 | | | 14,308 |
| Interest expense | | | | | | | | | | | | | | |
| Deposits | | 2,335 | | | 2,241 | | | 2,317 | | | 2,487 | | | 2,820 |
| Borrowings | | 1,689 | | | 1,791 | | | 2,039 | | | 2,020 | | | 1,984 |
| Total interest expense | | 4,024 | | | 4,032 | | | 4,356 | | | 4,507 | | | 4,804 |
| Net interest income | | 10,320 | | | 10,038 | | | 10,003 | | | 9,538 | | | 9,504 |
| Provision for loan losses | | 1,000 | | | 1,000 | | | 1,000 | | | 1,000 | | | 1,000 |
| Net interest income after provision | | | | | | | | | | | | | | |
| for loan losses | | 9,320 | | | 9,038 | | | 9,003 | | | 8,538 | | | 8,504 |
| | | | | | | | | | | | | | | |
| Noninterest income | | | | | | | | | | | | | | |
| Insurance commissions | | 1,091 | | | 1,181 | | | 1,056 | | | 1,057 | | | 1,132 |
| Service fees related to deposit accounts | | 1,101 | | | 1,043 | | | 1,124 | | | 1,106 | | | 1,085 |
| Realized securities gains (losses) | | (43 | ) | | (22 | ) | | 124 | | | 132 | | | (57) |
| Other-than-temporary impairment of securities | | (1 | ) | | - | | | - | | | (38 | ) | | (27) |
| Other income | | 557 | | | 581 | | | 592 | | | 606 | | | 570 |
| Total noninterest income | | 2,705 | | | 2,783 | | | 2,896 | | | 2,863 | | | 2,703 |
| Noninterest expense | | | | | | | | | | | | | | |
| Salaries and employee benefits | | 4,045 | | | 3,980 | | | 4,024 | | | 4,050 | | | 3,987 |
| Net occupancy expense | | 505 | | | 541 | | | 466 | | | 454 | | | 476 |
| Equipment expense | | 513 | | | 566 | | | 580 | | | 578 | | | 559 |
| Professional fees | | 282 | | | 316 | | | 295 | | | 263 | | | 360 |
| FDIC premiums | | 495 | | | 502 | | | 502 | | | 503 | | | 515 |
| Foreclosed properties expense | | 229 | | | 254 | | | 209 | | | 262 | | | 295 |
| Loss (gain) on sale of foreclosed properties | | 54 | | | 75 | | | (28 | ) | | (17 | ) | | 523 |
| Write-downs of foreclosed properties | | 962 | | | 928 | | | 644 | | | 654 | | | 1,494 |
| Other expenses | | 1,445 | | | 1,336 | | | 1,732 | | | 1,484 | | | 1,329 |
| Total noninterest expense | | 8,530 | | | 8,498 | | | 8,424 | | | 8,231 | | | 9,538 |
| Income before income taxes | | 3,495 | | | 3,323 | | | 3,475 | | | 3,170 | | | 1,669 |
| Income taxes | | 1,063 | | | 934 | | | 687 | | | 898 | | | 452 |
| Net income | | 2,432 | | | 2,389 | | | 2,788 | | | 2,272 | | | 1,217 |
| Preferred stock dividends | | 193 | | | 193 | | | 194 | | | 194 | | | 194 |
| Net income applicable to common shares | $ | 2,239 | | $ | 2,196 | | $ | 2,594 | | $ | 2,078 | | $ | 1,023 |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | | | | | | | | | |
| Five Quarter Performance Summary | | | | | | | | | |
| | | | | | | | |
| | For the Quarter Ended |
| | 6/30/2014 | | 3/31/2014 | | 12/31/2013 | | 9/30/2013 | | 6/30/2013 |
| Per Share Data | | | | | | | | | |
| Earnings per common share | | | | | | | | | |
| Basic | $ | 0.30 | | $ | 0.29 | | $ | 0.35 | | $ | 0.28 | | $ | 0.14 |
| Diluted | $ | 0.25 | | $ | 0.25 | | $ | 0.29 | | $ | 0.24 | | $ | 0.13 |
| | | | | | | | | | | | | | | |
| Average shares outstanding | | | | | | | | | | | | | | |
| Basic | | 7,457,222 | | | 7,453,370 | | | 7,450,379 | | | 7,443,865 | | | 7,438,401 |
| Diluted | | 9,630,699 | | | 9,628,927 | | | 9,624,312 | | | 9,621,957 | | | 9,619,585 |
| | | | | | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | | | | | |
| Return on average equity (A) | | 8.37 | % | | 8.46 | % | | 10.15 | % | | 8.49 | % | | 4.40% |
| Return on average assets | | 0.69 | % | | 0.69 | % | | 0.80 | % | | 0.67 | % | | 0.35% |
| Net interest margin | | 3.32 | % | | 3.33 | % | | 3.24 | % | | 3.15 | % | | 3.12% |
| Efficiency ratio - (B) | | 52.86 | % | | 54.13 | % | | 57.31 | % | | 56.22 | % | | 56.52% |
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 | 6/30/2014 | | 3/31/2014 | | 12/31/2013 | | 9/30/2013 | | 6/30/2013 |
| | | | | | | | | | |
| Assets | | | | | | | | | |
| Cash and due from banks | $ | 3,749 | | $ | 3,827 | | $ | 3,442 | | $ | 4,571 | | $ | 4,336 |
| Interest bearing deposits other banks | | 9,970 | | | 13,424 | | | 8,340 | | | 11,532 | | | 7,971 |
| Securities | | 287,883 | | | 281,865 | | | 288,780 | | | 291,258 | | | 291,180 |
| Loans, net | | 992,816 | | | 962,714 | | | 937,070 | | | 939,169 | | | 925,979 |
| Property held for sale | | 48,783 | | | 52,241 | | | 53,392 | | | 45,303 | | | 47,258 |
| Premises and equipment, net | | 20,301 | | | 20,457 | | | 20,623 | | | 20,780 | | | 20,936 |
| Intangible assets | | 7,798 | | | 7,861 | | | 7,949 | | | 8,036 | | | 8,124 |
| Cash surrender value of life insurance policies | | 36,151 | | | 35,881 | | | 35,611 | | | 35,257 | | | 30,027 |
| Other assets | | 28,507 | | | 27,847 | | | 31,020 | | | 31,881 | | | 34,159 |
| Total assets | $ | 1,435,958 | | $ | 1,406,117 | | $ | 1,386,227 | | $ | 1,387,787 | | $ | 1,369,970 |
| | | | | | | | | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | | | | | | | | |
| Deposits | $ | 1,057,795 | | $ | 1,052,630 | | $ | 1,003,812 | | $ | 1,016,735 | | $ | 1,038,163 |
| Short-term borrowings | | 91,729 | | | 68,974 | | | 62,769 | | | 54,163 | | | 16,762 |
| Long-term borrowings and | | | | | | | | | | | | | | |
| subordinated debentures | | 158,331 | | | 159,881 | | | 199,905 | | | 199,929 | | | 199,954 |
| Other liabilities | | 10,638 | | | 10,105 | | | 8,669 | | | 8,155 | | | 7,880 |
| Shareholders' equity | | 117,465 | | | 114,527 | | | 111,072 | | | 108,805 | | | 107,211 |
| Total liabilities and shareholders' equity | $ | 1,435,958 | | $ | 1,406,117 | | $ | 1,386,227 | | $ | 1,387,787 | | $ | 1,369,970 |
| | | | | | | | | | | | | | | |
| Book value per common share (A) | $ | 12.21 | | $ | 11.91 | | $ | 11.55 | | $ | 11.32 | | $ | 11.15 |
| Tangible book value per common share (A) | $ | 11.40 | | $ | 11.09 | | $ | 10.72 | | $ | 10.48 | | $ | 10.31 |
| Tangible equity / Tangible assets | | 7.7 | % | | 7.6 | % | | 7.5 | % | | 7.3 | % | | 7.3% |
NOTE (A) – Assumes conversion of convertible preferred stock
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | | | | | | | | |
| Regulatory Capital Ratios | | | | | | | | | |
| | | | | | | | | | |
| | 6/30/2014 | | 3/31/2014 | | 12/31/2013 | | 9/30/2013 | | 6/30/2013 |
| Summit Financial Group, Inc. | | | | | | | | | |
| Total Risk Based Capital | 14.2 | % | 14.2 | % | 14.5 | % | 14.5 | % | 14.4% |
| Tier 1 Risk-based Capital | 12.4 | % | 12.4 | % | 12.4 | % | 12.1 | % | 12.1% |
| Tier 1 Leverage Ratio | 9.0 | % | 9.0 | % | 8.9 | % | 8.9 | % | 8.6% |
| | | | | | | | | | |
| Summit Community Bank, Inc. | | | | | | | | | |
| Total Risk Based Capital | 15.6 | % | 15.6 | % | 15.7 | % | 15.5 | % | 15.6% |
| Tier 1 Risk-based Capital | 14.5 | % | 14.5 | % | 14.5 | % | 14.3 | % | 14.3% |
| Tier 1 Leverage Ratio | 10.6 | % | 10.6 | % | 10.4 | % | 10.4 | % | 10.2% |
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | | | | | | |
| Loan Composition | | | | | | | | | |
| | | | | | | | | | |
| Dollars in thousands | 6/30/2014 | | 3/31/2014 | | 12/31/2013 | | 9/30/2013 | | 6/30/2013 |
| | | | | | | | | | |
| Commercial | $ | 90,096 | | $ | 93,517 | | $ | 88,352 | | $ | 83,844 | | $ | 78,964 |
| Commercial real estate | | | | | | | | | | | | | | |
| Owner occupied | | 154,260 | | | 150,025 | | | 149,618 | | | 151,261 | | | 149,660 |
| Non-owner occupied | | 314,439 | | | 297,197 | | | 280,790 | | | 279,412 | | | 277,773 |
| Construction and development | | | | | | | | | | | | | | |
| Land and development | | 64,246 | | | 67,342 | | | 71,453 | | | 73,089 | | | 73,426 |
| Construction | | 20,902 | | | 18,327 | | | 15,155 | | | 12,323 | | | 7,634 |
| Residential real estate | | | | | | | | | | | | | | |
| Non-jumbo | | 219,569 | | | 215,665 | | | 212,946 | | | 215,058 | | | 216,759 |
| Jumbo | | 52,487 | | | 51,406 | | | 53,406 | | | 59,701 | | | 58,567 |
| Home equity | | 61,248 | | | 56,161 | | | 54,844 | | | 53,674 | | | 53,774 |
| Consumer | | 19,777 | | | 19,106 | | | 19,889 | | | 20,472 | | | 20,147 |
| Other | | 6,798 | | | 5,037 | | | 3,276 | | | 3,374 | | | 3,397 |
| Total loans, net of unearned fees | | 1,003,822 | | | 973,783 | | | 949,729 | | | 952,208 | | | 940,101 |
| Less allowance for loan losses | | 11,006 | | | 11,069 | | | 12,659 | | | 13,039 | | | 14,122 |
| Loans, net | $ | 992,816 | | $ | 962,714 | | $ | 937,070 | | $ | 939,169 | | $ | 925,979 |
| SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF) | | | | | | |
| Deposit Composition | | | | | | | | | |
| | | | | | | | | | |
| Dollars in thousands | 6/30/2014 | | 3/31/2014 | | 12/31/2013 | | 9/30/2013 | | 6/30/2013 |
| Non interest bearing checking | $ | 106,134 | | $ | 99,445 | | $ | 92,837 | | $ | 99,109 | | $ | 92,147 |
| Interest bearing checking | | 187,855 | | | 195,898 | | | 186,578 | | | 186,702 | | | 187,244 |
| Savings | | 243,323 | | | 228,854 | | | 193,446 | | | 193,285 | | | 196,069 |
| Time deposits | | 520,483 | | | 528,433 | | | 530,951 | | | 537,639 | | | 562,703 |
| Total deposits | $ | 1,057,795 | | $ | 1,052,630 | | $ | 1,003,812 | | $ | 1,016,735 | | $ | 1,038,163 |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | | | | | | | | |
| Asset Quality Information | | | | | | | | | |
| | | | | | | | | | |
| | For the Quarter Ended |
| Dollars in thousands | 6/30/2014 | | 3/31/2014 | | 12/31/2013 | | 9/30/2013 | | 6/30/2013 |
| | | | | | | | | | |
| Gross loan charge-offs | $ | 1,312 | | $ | 2,862 | | $ | 1,669 | | $ | 2,825 | | $ | 3,968 |
| Gross loan recoveries | | (249 | ) | | (272 | ) | | (289 | ) | | (742 | ) | | (70) |
| Net loan charge-offs | $ | 1,063 | | $ | 2,590 | | $ | 1,380 | | $ | 2,083 | | $ | 3,898 |
| | | | | | | | | | | | | | | |
| Net loan charge-offs to average loans (annualized) | | 0.43 | % | | 1.08 | % | | 0.58 | % | | 0.89 | % | | 1.63% |
| Allowance for loan losses | $ | 11,006 | | $ | 11,069 | | $ | 12,659 | | $ | 13,039 | | $ | 14,122 |
| Allowance for loan losses as a percentage | | | | | | | | | | | | | | |
| of period end loans | | 1.10 | % | | 1.14 | % | | 1.33 | % | | 1.37 | % | | 1.50% |
| Nonperforming assets: | | | | | | | | | | | | | | |
| Nonperforming loans | | | | | | | | | | | | | | |
| Commercial | $ | 415 | | $ | 866 | | $ | 1,224 | | $ | 2,557 | | $ | 3,996 |
| Commercial real estate | | 1,537 | | | 2,834 | | | 2,318 | | | 3,795 | | | 1,695 |
| Commercial construction and development | | 3,601 | | | 3,653 | | | 3,782 | | | 3,761 | | | - |
| Residential construction and development | | 5,248 | | | 6,599 | | | 9,048 | | | 9,128 | | | 11,505 |
| Residential real estate | | 3,289 | | | 2,890 | | | 2,446 | | | 12,385 | | | 13,605 |
| Consumer | | 129 | | | 73 | | | 128 | | | 145 | | | 91 |
| Total nonperforming loans | | 14,219 | | | 16,915 | | | 18,946 | | | 31,771 | | | 30,892 |
| Foreclosed properties | | | | | | | | | | | | | | |
| Commercial | | 110 | | | - | | | - | | | - | | | - |
| Commercial real estate | | 5,762 | | | 8,523 | | | 9,903 | | | 9,961 | | | 10,310 |
| Commercial construction and development | | 10,363 | | | 11,097 | | | 11,125 | | | 11,161 | | | 11,492 |
| Residential construction and development | | 20,557 | | | 20,640 | | | 20,485 | | | 20,585 | | | 21,591 |
| Residential real estate | | 11,991 | | | 11,981 | | | 11,879 | | | 3,596 | | | 3,865 |
| Total foreclosed properties | | 48,783 | | | 52,241 | | | 53,392 | | | 45,303 | | | 47,258 |
| Other repossessed assets | | - | | | 28 | | | 8 | | | - | | | 2 |
| Total nonperforming assets | $ | 63,002 | | $ | 69,184 | | $ | 72,346 | | $ | 77,074 | | $ | 78,152 |
| | | | | | | | | | | | | | | |
| Nonperforming loans to period end loans | | 1.42 | % | | 1.74 | % | | 1.99 | % | | 3.34 | % | | 3.29% |
| Nonperforming assets to period end assets | | 4.39 | % | | 4.92 | % | | 5.22 | % | | 5.55 | % | | 5.70% |
| Loans Past Due 30-89 Days | | | | | | | | | |
| | For the Quarter Ended |
| In thousands | 6/30/2014 | | 3/31/2014 | | 12/31/2013 | | 9/30/2013 | | 6/30/2013 |
| | | | | | | | | | |
| Commercial | $ | 376 | | $ | 52 | | $ | 74 | | $ | 30 | | $ | 199 |
| Commercial real estate | | 1,032 | | | 1,310 | | | 1,809 | | | 1,757 | | | 626 |
| Construction and development | | 156 | | | 754 | | | 1,628 | | | 154 | | | 698 |
| Residential real estate | | 5,775 | | | 3,847 | | | 4,332 | | | 4,697 | | | 4,479 |
| Consumer | | 585 | | | 219 | | | 292 | | | 229 | | | 286 |
| Other | | - | | | - | | | - | | | 50 | | | 53 |
| Total | $ | 7,924 | | $ | 6,182 | | $ | 8,135 | | $ | 6,917 | | $ | 6,341 |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | | | | | | | | | |
| Average Balance Sheet, Interest Earnings & Expenses and Average Rates | | | | | | | |
| Q2 2014 vs Q2 2013 | | | | | | | | | | | | |
| | Q2 2014 | | | Q2 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 | $ | 978,842 | | $ | 12,428 | | 5.09% | | | $ | 950,397 | | $ | 12,735 | | 5.37% |
| Tax-exempt | | 7,597 | | | 133 | | 7.02% | | | | 5,466 | | | 98 | | 7.19% |
| Securities | | | | | | | | | | | | | | | | |
| Taxable | | 213,560 | | | 1,198 | | 2.25% | | | | 227,629 | | | 926 | | 1.63% |
| Tax-exempt | | 82,958 | | | 952 | | 4.60% | | | | 71,489 | | | 874 | | 4.90% |
| Interest bearing deposits other banks | | | | | | | | | | | | | | | | |
| and Federal funds sold | | 8,413 | | | 2 | | 0.10% | | | | 8,533 | | | 2 | | 0.09% |
| Total interest earning assets | | 1,291,370 | | | 14,713 | | 4.57% | | | | 1,263,514 | | | 14,635 | | 4.65% |
| | | | | | | | | | | | | | | | | |
| Noninterest earning assets | | | | | | | | | | | | | | | | |
| Cash & due from banks | | 3,785 | | | | | | | | | 4,525 | | | | | |
| Premises & equipment | | 20,433 | | | | | | | | | 21,018 | | | | | |
| Other assets | | 114,917 | | | | | | | | | 111,981 | | | | | |
| Allowance for loan losses | | (11,440 | ) | | | | | | | | (15,702 | ) | | | | |
| Total assets | $ | 1,419,065 | | | | | | | | $ | 1,385,336 | | | | | |
| | | | | | | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | | |
| Interest bearing liabilities | | | | | | | | | | | | | | | | |
| Interest bearing | | | | | | | | | | | | | | | | |
| demand deposits | $ | 190,146 | | $ | 54 | | 0.11% | | | $ | 178,875 | | $ | 62 | | 0.14% |
| Savings deposits | | 237,789 | | | 388 | | 0.65% | | | | 197,362 | | | 287 | | 0.58% |
| Time deposits | | 524,111 | | | 1,894 | | 1.45% | | | | 580,760 | | | 2,471 | | 1.71% |
| Short-term borrowings | | 79,687 | | | 59 | | 0.30% | | | | 13,985 | | | 9 | | 0.26% |
| Long-term borrowings and | | | | | | | | | | | | | | | | |
| subordinated debentures | | 159,550 | | | 1,629 | | 4.10% | | | | 199,963 | | | 1,975 | | 3.96% |
| Total interest bearing liabilities | | 1,191,283 | | | 4,024 | | 1.35% | | | | 1,170,945 | | | 4,804 | | 1.65% |
| | | | | | | | | | | | | | | | | |
| Noninterest bearing liabilities | | | | | | | | | | | | | | | | |
| Demand deposits | | 101,874 | | | | | | | | | 96,059 | | | | | |
| Other liabilities | | 9,694 | | | | | | | | | 7,616 | | | | | |
| Total liabilities | | 1,302,851 | | | | | | | | | 1,274,620 | | | | | |
| | | | | | | | | | | | | | | | | |
| Shareholders' equity - preferred | | 9,283 | | | | | | | | | 9,322 | | | | | |
| Shareholders' equity - common | | 106,931 | | | | | | | | | 101,394 | | | | | |
| Total liabilities and | | | | | | | | | | | | | | | | |
| shareholders' equity | $ | 1,419,065 | | | | | | | | $ | 1,385,336 | | | | | |
| | | | | | | | | | | | | | | | | |
| NET INTEREST EARNINGS | | | | $ | 10,689 | | | | | | | | $ | 9,831 | | |
| | | | | | | | | | | | | | | | | |
| NET INTEREST MARGIN | | | | | | | 3.32% | | | | | | | | | 3.12% |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | | | | | | | | | |
| Average Balance Sheet, Interest Earnings & Expenses and Average Rates | | | | | | | |
| YTD 2014 vs YTD 2013 | | | | | | | | | | | | |
| | |
| | YTD 2014 | | | YTD 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 | $ | 968,221 | | $ | 24,572 | | 5.12% | | | $ | 955,425 | | $ | 25,569 | | 5.40% |
| Tax-exempt | | 6,719 | | | 241 | | 7.23% | | | | 5,714 | | | 203 | | 7.16% |
| Securities | | | | | | | | | | | | | | | | |
| Taxable | | 215,220 | | | 2,481 | | 2.32% | | | | 221,998 | | | 1,955 | | 1.78% |
| Tax-exempt | | 79,218 | | | 1,815 | | 4.62% | | | | 75,297 | | | 1,842 | | 4.93% |
| Interest bearing deposits other banks | | | | | | | | | | | | | | |
| and Federal funds sold | | 8,666 | | | 3 | | 0.07% | | | | 8,023 | | | 3 | | 0.08% |
| Total interest earning assets | | 1,278,044 | | | 29,112 | | 4.59% | | | | 1,266,457 | | | 29,572 | | 4.71% |
| | | | | | | | | | | | | | | | | |
| Noninterest earning assets | | | | | | | | | | | | | | | | |
| Cash & due from banks | | 3,841 | | | | | | | | | 4,384 | | | | | |
| Premises & equipment | | 20,506 | | | | | | | | | 21,059 | | | | | |
| Other assets | | 115,454 | | | | | | | | | 113,334 | | | | | |
| Allowance for loan losses | | (12,200 | ) | | | | | | | | (16,632 | ) | | | | |
| Total assets | $ | 1,405,645 | | | | | | | | $ | 1,388,602 | | | | | |
| | | | | | | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | | |
| Interest bearing liabilities | | | | | | | | | | | | | | | | |
| Interest bearing | | | | | | | | | | | | | | | | |
| demand deposits | $ | 188,573 | | $ | 106 | | 0.11% | | | $ | 176,811 | | $ | 132 | | 0.15% |
| Savings deposits | | 223,240 | | | 707 | | 0.64% | | | | 196,464 | | | 597 | | 0.61% |
| Time deposits | | 527,097 | | | 3,763 | | 1.44% | | | | 577,669 | | | 4,859 | | 1.70% |
| Short-term borrowings | | 77,444 | | | 111 | | 0.29% | | | | 20,872 | | | 26 | | 0.25% |
| Long-term borrowings and | | | | | | | | | | | | | | | | |
| subordinated debentures | | 167,013 | | | 3,368 | | 4.07% | | | | 204,584 | | | 4,001 | | 3.94% |
| | | 1,183,367 | | | 8,055 | | 1.37% | | | | 1,176,400 | | | 9,615 | | 1.65% |
| Noninterest bearing liabilities | | | | | | | | | | | | | | | | |
| Demand deposits | | 98,525 | | | | | | | | | 94,501 | | | | | |
| Other liabilities | | 9,155 | | | | | | | | | 7,632 | | | | | |
| Total liabilities | | 1,291,047 | | | | | | | | | 1,278,533 | | | | | |
| | | | | | | | | | | | | | | | | |
| Shareholders' equity - preferred | | 9,287 | | | | | | | | | 9,324 | | | | | |
| Shareholders' equity - common | | 105,311 | | | | | | | | | 100,745 | | | | | |
| Total liabilities and | | | | | | | | | | | | | | | | |
| shareholders' equity | $ | 1,405,645 | | | | | | | | $ | 1,388,602 | | | | | |
| | | | | | | | | | | | | | | | | |
| NET INTEREST EARNINGS | | | | $ | 21,057 | | | | | | | | $ | 19,957 | | |
| | | | | | | | | | | | | | | | | |
| NET INTEREST MARGIN | | | | | | | 3.32% | | | | | | | | | 3.18% |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | | | | | | | | | | |
| Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures | | | | | | | |
| | | | | | | | | | | |
| | For the Quarter Ended | | | For the Six Months Ended |
| Dollars in thousands | 6/30/2014 | | 3/31/2014 | | 6/30/2013 | | | 6/30/2014 | | 6/30/2013 |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Core earnings applicable to common shares | $ | 2,907 | | $ | 2,842 | | $ | 2,347 | | | $ | 5,749 | | $ | 4,564 |
| | | | | | | | | | | | | | | | |
| Realized securities gains (losses) | | (43 | ) | | (22 | ) | | (57 | ) | | | (64 | ) | | (16) |
| Applicable income tax effect | | 16 | | | 8 | | | 21 | | | | 24 | | | 6 |
| Gain (loss) on sale of foreclosed properties | | (54 | ) | | (75 | ) | | (523 | ) | | | (129 | ) | | (563) |
| Applicable income tax effect | | 20 | | | 28 | | | 194 | | | | 48 | | | 208 |
| Other-than-temporary impairment of securities | | (1 | ) | | - | | | (27 | ) | | | (1 | ) | | (80) |
| Applicable income tax effect | | 0 | | | - | | | 10 | | | | 0 | | | 30 |
| Write-downs foreclosed properties | | (962 | ) | | (928 | ) | | (1,494 | ) | | | (1,891 | ) | | (2,423) |
| Applicable income tax effect | | 356 | | | 343 | | | 553 | | | | 700 | | | 897 |
| | | (668 | ) | | (646 | ) | | (1,324 | ) | | | (1,314 | ) | | (1,942) |
| GAAP net income applicable to common shares | $ | 2,239 | | $ | 2,196 | | $ | 1,023 | | | $ | 4,435 | | $ | 2,622 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Core diluted earnings per common share | $ | 0.32 | | $ | 0.32 | | $ | 0.27 | | | $ | 0.65 | | $ | 0.52 |
| | | | | | | | | | | | | | | | |
| Realized securities gains (losses) | | - | | | - | | | (0.01 | ) | | | (0.01 | ) | | - |
| Applicable income tax effect | | - | | | - | | | - | | | | - | | | - |
| Gain (loss) on sale of foreclosed properties | | (0.01 | ) | | (0.01 | ) | | (0.05 | ) | | | (0.01 | ) | | (0.06) |
| Applicable income tax effect | | - | | | - | | | 0.02 | | | | - | | | 0.02 |
| Other-than-temporary impairment of securities | | - | | | - | | | - | | | | - | | | (0.01) |
| Applicable income tax effect | | - | | | - | | | - | | | | - | | | - |
| Write-downs of foreclosed properties | | (0.10 | ) | | (0.10 | ) | | (0.16 | ) | | | (0.20 | ) | | (0.25) |
| Applicable income tax effect | | 0.04 | | | 0.04 | | | 0.06 | | | | 0.07 | | | 0.09 |
| | | (0.07 | ) | | (0.07 | ) | | (0.14 | ) | | | (0.15 | ) | | (0.21) |
| GAAP diluted earnings per common share | $ | 0.25 | | $ | 0.25 | | $ | 0.13 | | | $ | 0.50 | | $ | 0.31 |
| SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF) | | | | | | | | | |
| Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures | | | | | | | |
| | | | | | | | | | | |
| | For the Quarter Ended | | | For the Six Months Ended |
| Dollars in thousands | 6/30/2014 | | 3/31/2014 | | 6/30/2013 | | | 6/30/2014 | | 6/30/2013 |
| | | | | | | | | | | |
| Total core revenue | $ | 13,069 | | $ | 12,843 | | $ | 12,291 | | | $ | 25,911 | | $ | 24,809 |
| | | | | | | | | | | | | | | | |
| Realized securities gains/(losses) | | (43 | ) | | (22 | ) | | (57 | ) | | | (64 | ) | | (16) |
| Other-than-temporary impairment of securities | | (1 | ) | | - | | | (27 | ) | | | (1 | ) | | (80) |
| | | (44 | ) | | (22 | ) | | (84 | ) | | | (65 | ) | | (96) |
| GAAP total revenue | $ | 13,025 | | $ | 12,821 | | $ | 12,207 | | | $ | 25,846 | | $ | 24,713 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Total core noninterest income | $ | 2,749 | | $ | 2,805 | | $ | 2,787 | | | $ | 5,553 | | $ | 5,547 |
| | | | | | | | | | | | | | | | |
| Realized securities gains/(losses) | | (43 | ) | | (22 | ) | | (57 | ) | | | (64 | ) | | (16) |
| Other-than-temporary impairment of securities | | (1 | ) | | - | | | (27 | ) | | | (1 | ) | | (80) |
| | | (44 | ) | | (22 | ) | | (84 | ) | | | (65 | ) | | (96) |
| GAAP total noninterest income | $ | 2,705 | | $ | 2,783 | | $ | 2,703 | | | $ | 5,488 | | $ | 5,451 |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Total core noninterest expense | $ | 7,514 | | $ | 7,495 | | $ | 7,521 | | | $ | 15,008 | | $ | 15,114 |
| | | | | | | | | | | | | | | | |
| (Gains)/losses on sales of foreclosed properties | | 54 | | | 75 | | | 523 | | | | 129 | | | 563 |
| Write-downs of foreclosed properties | | 962 | | | 928 | | | 1,494 | | | | 1,891 | | | 2,423 |
| | | 1,016 | | | 1,003 | | | 2,017 | | | | 2,020 | | | 2,986 |
| GAAP total noninterest expense | $ | 8,530 | | $ | 8,498 | | $ | 9,538 | | | $ | 17,028 | | $ | 18,100 |
