Summit Financial (SMMF) 8-K Summit Financial Group Reports Third Quarter and First Nine Months 2016 Results

EXHIBIT 99

FOR RELEASE 6:00 AM ET, October 24, 2016

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

Telephone:(304) 530-0552

Email:rtissue@summitfgi.com

SUMMIT FINANCIAL GROUP REPORTS THIRD QUARTER AND FIRST NINE MONTHS 2016 RESULTS

Q3 2016 Diluted EPS $0.40 compared to $0.34 for Q3 2015 and $0.40 for Q2 2016

MOOREFIELD, WV - October 24, 2016 (GLOBE NEWSWIRE) - Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported third quarter 2016 net income of $4.28 million, or $0.40 per diluted share, compared to $3.66 million, or $0.34 per diluted share, for the third quarter of 2015, representing an increase of 16.9 percent, or 17.6 percent per diluted share. Q3 2016 earnings compared to Q3 2015 and Q2 2016 were positively impacted by increased net interest earnings and reduced write-downs of foreclosed properties, which were partially offset by increased personnel costs and smaller gains realized on sales of securities.

Excluding from third quarter 2016 one-time items of income, gain, expense and loss, Q3 2016 core earnings approximated $4.38 million, or $0.41 per diluted share compared to Q3 2015 core earnings of $4.11 million, or $0.38 per diluted share, and to Q2 2016 core earnings of $4.09 million, or $0.37 per diluted share.

For the nine months ended September 30, 2016, Summit recorded net income of $12.59 million, or $1.18 per diluted share, compared with $11.96 million, or $1.12 per diluted share, for the comparable 2015 nine-month period, representing an increase of 5.3 percent, or 5.4 percent per diluted share.

Excluding from the nine-month period ended September 30, 2016 one-time items of income, gain, expense and loss, core earnings approximated $12.42 million, or $1.16 per diluted share compared to core earnings of $12.50 million, or $1.18 per diluted share, for the same period of 2015.

Highlights for Q3 2016 include:

• Core revenues increased 9.2 percent (on an annualized basis) compared to the linked quarter, and 5.8 percent compared to the year ago quarter.

• Loans, excluding mortgage warehouse lines of credit, grew $39.4 million during the quarter, or 14.4 percent (on an annualized basis), and have grown $46.4 million, or 5.7 percent (annualized), year-to-date.

• Nonperforming assets as a percentage of total assets declined for the sixteenth consecutive quarter to 2.36 percent, compared to 2.47 percent for the linked quarter, reaching its lowest level since Q2 2008.

• Net interest margin declined 9 basis points compared to Q3 2015, and 8 basis points compared to the linked quarter.

• Recorded charges of $134,000 to write-down foreclosed properties compared to $259,000 in Q2 2016 and $1,046,000 in Q3 2015.

H. Charles Maddy, III, President and Chief Executive Officer of Summit, commented, “I am very pleased to report Summit achieved solid operating results in third quarter 2016. I am particularly gratified by the growth in core revenues which principally resulted from a substantial increase in this past quarter’s lending activity. Further, we closed our acquisition of Highland County Bankshares on October 1, 2016, and our pending acquisition of First Century Bankshares has now received all requisite regulatory approvals and is expected to close in early 2017. The opportunities for us represented by these two acquisitions are significant. They combine Summit with two financially strong banks that have similar cultures, core values and guiding principles as ours, and share the same commitment to build long-term client relationships by providing service beyond expectations.”

Results from Operations

Total revenue for third quarter 2016, consisting of net interest income and noninterest income, grew 3.4 percent to $14.8 million compared to $14.3 million for the third quarter 2015. For the year-to-date period ended September 30, 2016, total revenue was $44.2 million compared to $43.3 million for the same period of 2015, representing a 2.0 percent increase.

Total core revenue, excluding nonrecurring items, described above, was $14.7 million for third quarter 2016 compared to $13.9 million for the same prior-year quarter, an increase of 5.8 percent. For the first nine months of 2016, total core revenue (excluding nonrecurring items) was $43.3 million compared to $42.1 million for the first nine months of 2015, a 2.9 percent improvement.

For the third quarter of 2016, net interest income was $12.0 million, an increase of 6.5 percent from the $11.3 million reported in the prior-year third quarter and increased $304,000 compared to the linked quarter. The net interest margin for third quarter 2016 was 3.32 percent compared to 3.41 percent for the year-ago quarter, and 3.40 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 third quarter 2016 was $2.75 million compared to $2.99 million for the comparable period of 2015. Excluding realized securities gains, noninterest income was $2.69 million for third quarter 2016, compared to $2.62 million reported for third quarter 2015.

We recorded no provision for loan losses during third quarter 2016, compared to $250,000 for both the linked quarter and year-ago quarter.

Noninterest expense continues to be well-controlled. Total noninterest expense decreased 5.1 percent to $8.42 million compared to $8.87 million for the prior-year third quarter. Excluding from noninterest expense (on a pre-tax basis) merger expenses, flood losses, gains/losses on sales of foreclosed properties, and write-downs of foreclosed properties, noninterest expense would have approximated $8.21 million for Q3 2016 compared to $7.79 million for the comparable

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period of 2015. Noninterest expense for the first nine months of 2016 increased 1.1 percent compared to the first nine months of 2015.

Balance Sheet

At September 30, 2016, total assets were $1.66 billion, an increase of $165.2 million, or 11.1 percent since December 31, 2015. Total loans, net of unearned fees and allowance for loan losses, were $1.23 billion at September 30, 2016, up $155.3 million, or 14.4 percent, from the $1.08 billion reported at year-end 2015. Excluding mortgage warehouse lines of credit, net loans increased $46.3 million or 4.3 percent from year-end 2015.

At September 30, 2016, deposits were $1.16 billion, an increase of $90.1 million, or 8.4 percent, since year end 2015. During first nine months of 2016, checking deposits remained relatively unchanged at $334.8 million, while time deposits and savings deposits increased by $35.2 million and $54.7 million, respectively, or 7.6 percent and 20.5 percent, respectively.

Asset Quality

As of September 30, 2016, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $39.2 million, or 2.36 percent of assets. This compares to $38.7 million, or 2.47 percent of assets at the linked quarter, and $45.2 million, or 3.07 percent of assets, at third quarter 2015.

Third quarter 2016 net loan charge-off recoveries were $242,000, or 0.09 percent of average loans annualized; with no provision for loan losses. The allowance for loan losses stood at $11.6 million, or 0.93 percent of total loans at September 30, 2016, compared to 1.05 percent at year-end 2015.

Capital Adequacy

Shareholders’ equity was $153.8 million as of September 30, 2016 compared to $143.7 million December 31, 2015 and $140.3 million at September 30, 2015. Tangible book value per common share increased to $13.69 at September 30, 2016 compared to $12.78 at December 31, 2015 and $12.45 at September 30, 2015. Summit had 10,701,841 outstanding common shares at Q3 2016 quarter end compared to 10,671,744 at year end 2015.

Summit's depository institution, Summit Community Bank, Inc. (the “Bank”), is well in excess of regulatory requirements for a "well capitalized" institution at September 30, 2016. The Bank’s total risk-based capital ratio was 13.4 percent at September 30, 2016 compared to 14.5 percent at December 31, 2015, while its Tier 1 leverage capital ratio was 10.5 percent at September 30, 2016 compared to the 10.8 percent reported at December 31, 2015.

About the Company

Summit Financial Group, Inc. is a $1.66 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 eighteen banking locations. Summit also operates Summit Insurance Services, LLC in Moorefield, West Virginia and Leesburg, Virginia.

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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.

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SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q3 2016 vs Q3 2015
	For the Quarter Ended					Percent
Dollars in thousands	9/30/2016			9/30/2015		Change
Condensed Statements of Income
Interest income
Loans, including fees	$	14,142		$	12,983	8.9	%
Securities	1,759			1,543		14.0	%
Other	5			5		—	%
Total interest income	15,906			14,531		9.5	%
Interest expense
Deposits	2,209			2,106		4.9	%
Borrowings	1,659			1,120		48.1	%
Total interest expense	3,868			3,226		19.9	%
Net interest income	12,038			11,305		6.5	%
Provision for loan losses	—			250		-100.0	%
Net interest income after provision for loan losses	12,038			11,055		8.9	%
Noninterest income
Insurance commissions	1,016			983		3.4	%
Service fees related to deposit accounts	1,138			1,111		2.4	%
Realized securities gains	61			372		-83.6	%
Other income	534			527		1.3	%
Total noninterest income	2,749			2,993		-8.2	%
Noninterest expense
Salaries and employee benefits	4,819			4,479		7.6	%
Net occupancy expense	525			496		5.8	%
Equipment expense	716			582		23.0	%
Professional fees	270			402		-32.8	%
FDIC premiums	200			300		-33.3	%
Merger expense	80			—		n/a
Foreclosed properties expense	100			168		-40.5	%
Loss (gain) on sales of foreclosed properties	(168		)	35		n/a
Write-downs of foreclosed properties	134			1,046		-87.2	%
Other expenses	1,743			1,364		27.8	%
Total noninterest expense	8,419			8,872		-5.1	%
Income before income taxes	6,368			5,176		23.0	%
Income taxes	2,087			1,515		37.8	%
Net income	$	4,281		$	3,661	16.9	%

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SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q3 2016 vs Q3 2015
	For the Quarter Ended						Percent
	9/30/2016			9/30/2015			Change
Per Share Data
Earnings per common share
Basic	$	0.40		$	0.34		17.6	%
Diluted	$	0.40		$	0.34		17.6	%
Cash dividends	$	0.10		$	0.08		25.0	%
Average common shares outstanding
Basic	10,692,423			10,703,526			-0.1	%
Diluted	10,727,140			10,712,203			0.1	%
Common shares outstanding at period end	10,701,841			10,658,199			0.4	%
Performance Ratios
Return on average equity	11.29		%	10.42		%	8.3	%
Return on average tangible equity	11.86		%	11.01		%	7.7	%
Return on average assets	1.08		%	1.00		%	8.0	%
Net interest margin	3.32		%	3.41		%	-2.6	%
Efficiency ratio (A)	53.30		%	52.93		%	0.7	%
NOTE (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.

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SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Nine Month Performance Summary -- 2016 vs 2015
	For the Nine Months Ended					Percent
Dollars in thousands	9/30/2016			9/30/2015		Change
Condensed Statements of Income
Interest income
Loans, including fees	$	41,200		$	38,804	6.2	%
Securities	5,141			5,122		0.4	%
Other	13			7		85.7	%
Total interest income	46,354			43,933		5.5	%
Interest expense
Deposits	6,533			6,251		4.5	%
Borrowings	4,271			3,399		25.7	%
Total interest expense	10,804			9,650		12.0	%
Net interest income	35,550			34,283		3.7	%
Provision for loan losses	500			1,000		-50.0	%
Net interest income after provision for loan losses	35,050			33,283		5.3	%
Noninterest income
Insurance commissions	3,030			3,191		-5.0	%
Service fees related to deposit accounts	3,175			3,159		0.5	%
Realized securities gains	836			1,023		-18.3	%
Other income	1,560			1,619		-3.6	%
Total noninterest income	8,601			8,992		-4.3	%
Noninterest expense
Salaries and employee benefits	14,265			13,107		8.8	%
Net occupancy expense	1,576			1,483		6.3	%
Equipment expense	2,059			1,677		22.8	%
Professional fees	1,171			1,109		5.6	%
FDIC premiums	800			950		-15.8	%
Merger expense	345			—		n/a
Foreclosed properties expense	317			534		-40.6	%
Loss (gain) on sales of foreclosed properties	(451		)	288		-256.6	%
Write-downs of foreclosed properties	503			1,779		-71.7	%
Other expenses	4,825			4,211		14.6	%
Total noninterest expense	25,410			25,138		1.1	%
Income before income taxes	18,241			17,137		6.4	%
Income taxes	5,655			5,181		9.1	%
Net income	$	12,586		$	11,956	5.3	%

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SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Nine Month Performance Summary -- 2016 vs 2015
	For the Nine Months Ended						Percent
	9/30/2016			9/30/2015			Change
Per Share Data
Earnings per common share
Basic	$	1.18		$	1.19		-0.8	%
Diluted	$	1.18		$	1.12		5.4	%
Cash dividends	$	0.30		$	0.24		25.0	%
Average common shares outstanding
Basic	10,682,129			10,069,374			6.1	%
Diluted	10,692,346			10,628,139			0.6	%
Common shares outstanding at period end	10,701,841			10,658,199			0.4	%
Performance Ratios
Return on average equity	11.29		%	11.61		%	-2.8	%
Return on average tangible equity	11.88		%	12.29		%	-3.3	%
Return on average assets	1.09		%	1.09		%	—	%
Net interest margin	3.40		%	3.50		%	-2.9	%
Efficiency ratio (A)	54.84		%	51.40		%	6.7	%
NOTE (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.

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SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary
	For the Quarter Ended
Dollars in thousands	9/30/2016			6/30/2016			3/31/2016			12/31/2015			9/30/2015
Condensed Statements of Income
Interest income
Loans, including fees	$	14,142		$	13,622		$	13,436		$	13,265		$	12,983
Securities	1,759			1,656			1,726			1,685			1,543
Other	5			5			3			1			5
Total interest income	15,906			15,283			15,165			14,951			14,531
Interest expense
Deposits	2,209			2,154			2,170			2,085			2,106
Borrowings	1,659			1,395			1,216			1,133			1,120
Total interest expense	3,868			3,549			3,386			3,218			3,226
Net interest income	12,038			11,734			11,779			11,733			11,305
Provision for loan losses	—			250			250			250			250
Net interest income after provision for loan losses	12,038			11,484			11,529			11,483			11,055
Noninterest income
Insurance commissions	1,016			1,090			924			851			983
Service fees related to deposit accounts	1,138			1,059			978			1,126			1,111
Realized securities gains	61			383			393			421			372
Other income	534			513			511			471			527
Total noninterest income	2,749			3,045			2,806			2,869			2,993
Noninterest expense
Salaries and employee benefits	4,819			4,764			4,682			4,530			4,479
Net occupancy expense	525			512			540			481			496
Equipment expense	716			686			656			617			582
Professional fees	270			429			472			507			402
FDIC premiums	200			300			300			270			300
Merger expense	80			153			112			—			—
Foreclosed properties expense	100			93			124			150			168
Loss (gain) on sales of foreclosed properties	(168		)	(276		)	(6		)	(314		)	35
Write-downs of foreclosed properties	134			259			109			636			1,046
Other expenses	1,743			1,517			1,565			1,617			1,364
Total noninterest expense	8,419			8,437			8,554			8,494			8,872
Income before income taxes	6,368			6,092			5,781			5,858			5,176
Income taxes	2,087			1,849			1,719			1,712			1,515
Net income	$	4,281		$	4,243		$	4,062		$	4,146		$	3,661

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SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary
	For the Quarter Ended
	9/30/2016			6/30/2016			3/31/2016			12/31/2015			9/30/2015
Per Share Data
Earnings per common share
Basic	$	0.40		$	0.40		$	0.38		$	0.39		$	0.34
Diluted	$	0.40		$	0.40		$	0.38		$	0.39		$	0.34
Cash dividends	$	0.10		$	0.10		$	0.10		$	0.08		$	0.08
Average common shares outstanding
Basic	10,692,423			10,681,995			10,671,856			10,661,700			10,703,526
Diluted	10,727,140			10,701,017			10,679,301			10,669,192			10,712,203
Common shares outstanding at period end	10,701,841			10,692,320			10,681,880			10,671,744			10,658,199
Performance Ratios
Return on average equity	11.29		%	11.49		%	11.10		%	11.66		%	10.42		%
Return on average tangible equity	11.86		%	12.10		%	11.70		%	12.31		%	11.01		%
Return on average assets	1.08		%	1.10		%	1.08		%	1.12		%	1.00		%
Net interest margin	3.32		%	3.40		%	3.50		%	3.51		%	3.41		%
Efficiency ratio - (A)	53.30		%	55.35		%	55.93		%	54.46		%	52.93		%
NOTE (A) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.

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SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Selected Balance Sheet Data
	For the Quarter Ended
Dollars in thousands, except per share amounts	9/30/2016			6/30/2016			3/31/2016			12/31/2015			9/30/2015
Assets
Cash and due from banks	$	25,067		$	4,161		$	4,005		$	3,625		$	4,232
Interest bearing deposits other banks	9,432			8,897			12,655			5,862			8,057
Securities	262,102			261,633			271,515			280,792			272,127
Loans, net	1,234,605			1,166,723			1,096,790			1,079,331			1,062,348
Property held for sale	24,767			23,425			24,684			25,567			29,713
Premises and equipment, net	21,802			21,405			21,589			21,572			20,457
Intangible assets	7,348			7,398			7,448			7,498			7,548
Cash surrender value of life insurance policies	38,504			38,246			37,989			37,732			37,482
Other assets	34,009			33,293			31,893			30,450			27,340
Total assets	$	1,657,636		$	1,565,181		$	1,508,568		$	1,492,429		$	1,469,304
Liabilities and Shareholders' Equity
Deposits	$	1,156,785		$	1,096,545		$	1,094,544		$	1,066,709		$	1,072,091
Short-term borrowings	234,657			205,552			153,448			171,394			145,291
Long-term borrowings and      subordinated debentures	93,735			94,214			94,692			95,170			95,648
Other liabilities	18,640			18,201			19,755			15,412			15,985
Shareholders' equity	153,819			150,669			146,129			143,744			140,289
Total liabilities and shareholders' equity	$	1,657,636		$	1,565,181		$	1,508,568		$	1,492,429		$	1,469,304
Book value per common share	$	14.37		$	14.09		$	13.68		$	13.48		$	13.16
Tangible book value per common share	$	13.69		$	13.40		$	12.98		$	12.78		$	12.45
Tangible equity to tangible assets	8.9		%	9.2		%	9.2		%	9.2		%	9.1		%
Tangible common equity to tangible assets	8.9		%	9.2		%	9.2		%	9.2		%	9.1		%

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios (A)
	9/30/2016		6/30/2016		3/31/2016		12/31/2015		9/30/2015
Summit Financial Group, Inc.
CET1 Risk-based Capital	11.1	%	11.5	%	11.9	%	11.8	%	11.7	%
Tier 1 Risk-based Capital	12.4	%	12.9	%	13.5	%	13.4	%	13.4	%
Total Risk Based Capital	13.3	%	13.8	%	14.5	%	14.4	%	14.4	%
Tier 1 Leverage Ratio	10.4	%	10.5	%	10.7	%	10.7	%	10.5	%
Summit Community Bank, Inc.
CET1 Risk-based Capital	12.5	%	13.0	%	13.6	%	13.6	%	13.6	%
Tier 1 Risk-based Capital	12.5	%	13.0	%	13.6	%	13.6	%	13.6	%
Total Risk Based Capital	13.4	%	13.9	%	14.5	%	14.5	%	14.6	%
Tier 1 Leverage Ratio	10.5	%	10.6	%	10.7	%	10.8	%	10.7	%
NOTE (A) - Computed in accordance with Basel III regulatory capital guidelines beginning January 1, 2015

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SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition
Dollars in thousands	9/30/2016		6/30/2016		3/31/2016		12/31/2015		9/30/2015
Commercial	$	110,466	$	101,521	$	101,743	$	97,201	$	89,250
Mortgage warehouse lines	108,983		80,282		—		—		—
Commercial real estate
Owner occupied	192,254		190,534		202,680		203,555		199,068
Non-owner occupied	367,196		348,099		353,350		337,295		336,550
Construction and development
Land and development	65,430		65,702		66,483		65,500		66,164
Construction	11,276		8,506		7,997		9,970		8,419
Residential real estate
Non-jumbo	228,777		225,919		221,368		221,749		222,739
Jumbo	57,276		52,105		50,057		50,313		46,092
Home equity	75,161		75,904		74,097		74,300		73,652
Consumer	19,756		19,520		19,095		19,251		19,124
Other	9,649		10,008		11,235		11,669		12,518
Total loans, net of unearned fees	1,246,224		1,178,100		1,108,105		1,090,803		1,073,576
Less allowance for loan losses	11,619		11,377		11,315		11,472		11,228
Loans, net	$	1,234,605	$	1,166,723	$	1,096,790	$	1,079,331	$	1,062,348

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition
Dollars in thousands	9/30/2016		6/30/2016		3/31/2016		12/31/2015		9/30/2015
Non interest bearing checking	$	122,652	$	120,845	$	122,378	$	119,010	$	118,887
Interest bearing checking	212,172		205,095		210,878		215,721		217,242
Savings	321,563		306,785		286,695		266,825		259,185
Time deposits	500,398		463,820		474,593		465,153		476,777
Total deposits	$	1,156,785	$	1,096,545	$	1,094,544	$	1,066,709	$	1,072,091

12

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Asset Quality Information
	For the Quarter Ended
Dollars in thousands	9/30/2016			6/30/2016			3/31/2016			12/31/2015			9/30/2015
Gross loan charge-offs	$	331		$	263		$	561		$	132		$	774
Gross loan recoveries	(573		)	(75		)	(154		)	(126		)	(481		)
Net loan charge-offs (recoveries)	$	(242	)	$	188		$	407		$	6		$	293
Net loan charge-offs to average loans (annualized)	-0.09		%	0.07		%	0.15		%	—		%	0.11		%
Allowance for loan losses	$	11,619		$	11,377		$	11,315		$	11,472		$	11,228
Allowance for loan losses as a percentage     of period end loans	0.93		%	0.97		%	1.02		%	1.05		%	1.05		%
Nonperforming assets:
Nonperforming loans
Commercial	$	846		$	399		$	430		$	853		$	884
Commercial real estate	4,867			5,773			6,140			5,955			5,294
Residential construction and development	4,360			5,400			5,467			5,623			5,345
Residential real estate	4,174			3,531			3,248			3,245			3,881
Consumer	169			91			121			92			53
Total nonperforming loans	14,416			15,194			15,406			15,768			15,457
Foreclosed properties
Commercial real estate	1,749			976			976			1,300			3,209
Commercial construction and development	8,664			8,708			8,717			8,717			9,328
Residential construction and development	13,741			12,989			13,808			14,068			14,965
Residential real estate	613			752			1,183			1,482			2,211
Total foreclosed properties	24,767			23,425			24,684			25,567			29,713
Other repossessed assets	12			38			—			5			—
Total nonperforming assets	$	39,195		$	38,657		$	40,090		$	41,340		$	45,170
Nonperforming loans to period end loans	1.16		%	1.29		%	1.39		%	1.45		%	1.44		%
Nonperforming assets to period end assets	2.36		%	2.47		%	2.66		%	2.77		%	3.07		%
Troubled debt restructurings
Performing	$	28,287		$	27,750		$	29,452		$	29,473		$	29,748
Nonperforming	863			2,133			897			1,051			1,294
Total troubled debt restructurings	$	29,150		$	29,883		$	30,349		$	30,524		$	31,042

13

Loans Past Due 30-89 Days
	For the Quarter Ended
In thousands	9/30/2016		6/30/2016		3/31/2016		12/31/2015		9/30/2015
Commercial	$	405	$	422	$	465	$	339	$	42
Commercial real estate	626		214		920		543		1,926
Construction and development	235		520		218		1,182		39
Residential real estate	2,941		4,763		3,055		4,442		3,888
Consumer	144		177		73		186		216
Other	13		12		14		9		9
Total	$	4,364	$	6,108	$	4,745	$	6,701	$	6,120

14

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q3 2016 vs Q3 2015
	Q3 2016							Q3 2015
	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	$	1,187,205		$	14,008	4.69	%	$	1,050,058		$	12,855	4.86	%
Tax-exempt	14,300			202		5.62	%	13,360			194		5.76	%
Securities
Taxable	198,411			1,139		2.28	%	208,473			933		1.78	%
Tax-exempt	77,489			941		4.83	%	75,571			924		4.85	%
Interest bearing deposits other banks    and Federal funds sold	10,029			5		0.20	%	13,116			5		0.15	%
Total interest earning assets	1,487,434			16,295		4.36	%	1,360,578			14,911		4.35	%
Noninterest earning assets
Cash & due from banks	3,938							3,871
Premises & equipment	21,613							20,502
Other assets	87,636							93,563
Allowance for loan losses	(11,567		)					(11,521		)
Total assets	$	1,589,054						$	1,466,993
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits	$	211,264		$	85	0.16	%	$	210,691		$	61	0.11	%
Savings deposits	316,358			608		0.76	%	251,932			450		0.71	%
Time deposits	481,060			1,516		1.25	%	485,453			1,595		1.30	%
Short-term borrowings	189,760			675		1.42	%	148,012			130		0.35	%
Long-term borrowings and      subordinated debentures	94,106			985		4.16	%	97,500			990		4.03	%
Total interest bearing liabilities	1,292,548			3,869		1.19	%	1,193,588			3,226		1.07	%
Noninterest bearing liabilities
Demand deposits	124,490							118,603
Other liabilities	20,280							14,242
Total liabilities	1,437,318							1,326,433
Shareholders' equity - preferred	—							—
Shareholders' equity - common	151,736							140,560
Total liabilities and   shareholders' equity	$	1,589,054						$	1,466,993
NET INTEREST EARNINGS				$	12,426						$	11,685
NET INTEREST MARGIN						3.32	%						3.41	%

15

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
YTD 2016 vs YTD 2015
	YTD 2016							YTD 2015
	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	$	1,134,463		$	40,788	4.80	%	$	1,044,010		$	38,443	4.92	%
Tax-exempt	14,890			624		5.60	%	12,801			547		5.71	%
Securities
Taxable	206,437			3,284		2.12	%	211,642			3,302		2.09	%
Tax-exempt	76,155			2,814		4.94	%	75,685			2,759		4.87	%
Interest bearing deposits other banks    and Federal funds sold	9,093			13		0.19	%	9,395			6		0.09	%
Total interest earning assets	1,441,038			47,523		4.41	%	1,353,533			45,057		4.45	%
Noninterest earning assets
Cash & due from banks	3,819							3,842
Premises & equipment	21,575							20,373
Other assets	89,013							96,142
Allowance for loan losses	(11,517		)					(11,285		)
Total assets	$	1,543,928						$	1,462,605
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits	$	208,755		$	248	0.16	%	$	205,749		$	179	0.12	%
Savings deposits	296,458			1,663		0.75	%	252,701			1,307		0.69	%
Time deposits	474,691			4,622		1.30	%	485,939			4,765		1.31	%
Short-term borrowings	180,694			1,334		0.99	%	149,177			368		0.33	%
Long-term borrowings and      subordinated debentures	94,574			2,937		4.15	%	101,245			3,030		4.00	%
Total interest bearing liabilities	1,255,172			10,804		1.15	%	1,194,811			9,649		1.08	%
Noninterest bearing liabilities
Demand deposits	121,701							116,057
Other liabilities	18,423							14,371
Total liabilities	1,395,296							1,325,239
Shareholders' equity - preferred	—							2,388
Shareholders' equity - common	148,632							134,978
Total liabilities and   shareholders' equity	$	1,543,928						$	1,462,605
NET INTEREST EARNINGS				$	36,719						$	35,408
NET INTEREST MARGIN						3.40	%						3.50	%

16

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
	For the Quarter Ended									For the Nine Months Ended
Dollars in thousands	9/30/2016			6/30/2016			9/30/2015			9/30/2016			9/30/2015
Core earnings applicable to common shares	$	4,376		$	4,087		$	4,108		$	12,415		$	12,503
FHLB special dividend	—			—			—			—			176
Applicable income tax effect	—			—			—			—			(65		)
Realized securities gains	61			383			372			836			1,023
Applicable income tax effect	(23		)	(142		)	(138		)	(309		)	(379		)
Merger expense	(80		)	(153		)	—			(345		)	—
Applicable income tax effect	30			57			—			128			—
Flood losses	(167		)	—			—			(167		)	—
Applicable income tax effect	62			—			—			62			—
Gain (loss) on sales of foreclosed properties	169			276			(35		)	451			(288		)
Applicable income tax effect	(63		)	(102		)	13			(167		)	107
Write-downs foreclosed properties	(134		)	(259		)	(1,046		)	(503		)	(1,779		)
Applicable income tax effect	50			96			387			186			658
	(95		)	156			(447		)	171			(547		)
GAAP net income applicable to common shares	$	4,281		$	4,243		$	3,661		$	12,586		$	11,956
Core diluted earnings per common share	$	0.41		$	0.37		$	0.38		$	1.16		$	1.18
FHLB special dividend	—			—			—			—			0.02
Applicable income tax effect	—			—			—			—			(0.01		)
Realized securities gains	0.01			0.04			0.03			0.08			0.10
Applicable income tax effect	—			(0.01		)	(0.01		)	(0.03		)	(0.04		)
Merger expense	(0.01		)	(0.01		)	—			(0.03		)	—
Applicable income tax effect	—			—			—			0.01			—
Flood losses	(0.02		)	—			—			(0.02		)	—
Applicable income tax effect	0.01			—			—			0.01			—
Gain (loss) on sales of foreclosed properties	0.02			0.03			—			0.04			(0.03		)
Applicable income tax effect	(0.01		)	(0.01		)	—			(0.01		)	0.01
Write-downs of foreclosed properties	(0.01		)	(0.02		)	(0.10		)	(0.05		)	(0.17		)
Applicable income tax effect	—			0.01			0.04			0.02			0.06
	(0.01		)	0.03			(0.04		)	0.02			(0.06		)
GAAP diluted earnings per common share	$	0.40		$	0.40		$	0.34		$	1.18		$	1.12

17

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
	For the Quarter Ended								For the Nine Months Ended
Dollars in thousands	9/30/2016			6/30/2016			9/30/2015		9/30/2016			9/30/2015
Total core revenue	$	14,727		$	14,396		$	13,926	$	43,315		$	42,076
FHLB special dividend	—			—			—		—			176
Realized securities gains	60			383			372		836			1,023
	60			$	383		372		836			1,199
GAAP total revenue	$	14,787		$	14,779		$	14,298	$	44,151		$	43,275
Total core noninterest income	$	2,688		$	2,662		$	2,621	$	7,765		$	7,969
Realized securities gains	61			383			372		836			1,023
	61			383			372		836			1,023
GAAP total noninterest income	$	2,749		$	3,045		$	2,993	$	8,601		$	8,992
Total core noninterest expense	$	8,207		$	8,301		$	7,791	$	24,846		$	23,161
Merger expense	80			153			—		345			—
Flood losses	167			—			—		167			—
(Gains)/losses on sales of foreclosed properties	(169		)	(276		)	35		(451		)	198
Write-downs of foreclosed properties	134			259			1,046		503			1,779
	212			136			1,081		564			1,977
GAAP total noninterest expense	$	8,419		$	8,437		$	8,872	$	25,410		$	25,138

18