SMMF Summit Financial Group Inc

Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported financial results for the first quarter of 2024, revealing a strong earnings performance marked by growth in loans. The Company’s continued success underscores its position as an exceptional community bank, reflecting a sound strategy and solid operational execution.

The Company, which serves commercial and individual clients across West Virginia, the Washington D.C. metropolitan area, Virginia, Kentucky, the Eastern Shore of Maryland and Delaware through Summit Community Bank, Inc., reported net income applicable to common shares of $16.8 million, or $1.14 per diluted share, for the first quarter of 2024, as compared to $16.4 million, or $1.11 per diluted share, for the fourth quarter of 2023 and $13.9 million, or $1.08 per diluted share, for the first quarter of 2023.

“We had a strong start to the year highlighted by solid earnings, a stable top quartile peer net interest margin, an enviable efficiency ratio and best-in-class return on tangible common equity” noted H. Charles Maddy, III, President and Chief Executive Officer. “Now as we look forward to the consummation of our strategic partnership with Burke & Herbert, which brings together two organizations dedicated to a community banking model that places an emphasis on service and dedication to the people who live and work among us, I could not be more excited by the combined organization’s prospects for robust growth and for enhancing shareholder value.”

Key Highlights for the First Quarter of 2024

• Our pending merger of equals with Burke & Herbert Financial Services Corp. (“Burke & Herbert”) has received all required regulatory approvals or waivers and is expected to close May 3, 2024.
• Tangible Book Value Per Common Share (“TBVPCS”) increased by $1.02 to $24.91 during the first quarter of 2024, representing a 4.3 percent increase. This increase was primarily due to net retained earnings.
• Our net interest margin (“NIM”) decreased 1 basis point to 3.75 percent from the linked quarter.
• The first quarter saw a modest increase in total loans, excluding mortgage warehouse lines of credit and acquired loans, registering an increase of 0.48 percent (1.93 percent annualized). This performance was further underscored by year-over-year growth of 6.7 percent.
• Summit's core deposits likewise experienced a modest increase in the first quarter of 2024, up 0.91 percent (3.63 percent annualized) from the linked quarter.
• The Company recorded no provision for credit losses in the first quarter of 2024 compared to $1.50 million in the linked quarter.
• Summit’s efficiency ratio was 48.29 percent compared to 47.33 percent in the linked quarter, indicating optimized use of resources.

Results from Operations

Net interest income totaled $39.9 million in the first quarter of 2024, an increase of 16.8 percent from the prior-year first quarter, and a decrease of 2.1 percent from the linked quarter. NIM for the first quarter 2024 was 3.75 percent compared to 3.76 percent for the linked quarter and 3.83 percent for the prior-year quarter.

Summit recorded no provision for credit losses in the first quarter of 2024 compared to $1.50 million in both the linked quarter and the year ago quarter.

Noninterest income, consisting primarily of service fee income from community banking activities and trust and wealth management fees, for first quarter 2024 was $5.08 million compared to $5.80 million for the linked quarter and $4.39 million for the comparable period of 2023. The Company recorded realized securities losses on available for sale debt securities of $94,000 in the first quarter of 2024 and gains of $15,000 in the linked quarter. In addition, the Company recognized net gains on equity investments of $40,000 in the first quarter 2024 compared to $365,000 in the linked quarter.

Total noninterest expense decreased to $23.0 million in the first quarter of 2024, down 4.0 percent from $23.9 million in the linked quarter and up 18.3 percent from $19.4 million for the prior-year first quarter.

Salary and benefit expenses of $12.1 million in the first quarter of 2024 increased from $11.4 million for the linked quarter and $10.8 million from the prior-year first quarter. The year over year increase was primarily due to the PSB acquisition and higher group health insurance premiums.

Acquisition-related expenses were $53,000 for Q1 2024 compared to $839,000 for the linked quarter and $331,000 for Q1 2023.

Other expenses were very controlled at $3.44 million for Q1 2024 compared to $4.35 million for the linked quarter and $2.97 million in the year-ago period.

Summit’s efficiency ratio was 48.29 percent in the first quarter of 2024, up from 48.00 percent for the first quarter of 2023 and marginally higher compared to 47.33 percent in the linked quarter. Non-interest expense to average assets was 1.99 percent in first quarter of 2024 compared to 2.05 percent in the linked quarter and 1.97 percent in the year-ago quarter.

Balance Sheet

As of March 31, 2024, total assets were $4.6 billion, an increase of $8.56 million, or 0.2 percent since December 31, 2023.

Total loans net of unearned fees increased 0.4 percent (1.7 percent annualized) to $3.70 billion as of March 31, 2024, from $3.68 billion at December 31, 2023. Total loans, excluding those related to mortgage warehouse lending and acquired loans, reached $3.2 billion as of March 31, 2024. This represents an increase of 0.48 percent (or 1.93 percent when annualized) during the quarter just ended.

Deposits totaled $3.7 billion on March 31, 2024, a 0.9 percent (or 3.6 percent annualized) increase during the first quarter. Core deposits increased 0.9 percent (3.6 percent annualized) during the first quarter 2024 to $3.7 billion. Adjusted uninsured deposits (excluding uninsured public deposits otherwise secured or collateralized as required by law) were 34.4 percent of total deposits at March 31, 2024 compared to 34.8 percent at year-end 2023 and 29.3 percent at the year-ago period end.

Total shareholders’ equity was $454.3 million as of March 31, 2024, compared to $440.2 million at December 31, 2023. Summit paid a quarterly common dividend of $0.22 per share in the first quarter of 2024.

During the first quarter 2024, TBVPCS increased $1.02 to $24.91. In addition to the positive impact of retained earnings, TBVPCS was positively impacted by unrealized net gains on interest rate caps and swaps held as hedges against higher interest rates totaling $0.20 per common share (net of deferred income taxes) recorded in accumulated other comprehensive loss. However, these gains were nearly offset by unrealized net losses on AFS debt securities of $0.18 per common share (net of deferred income taxes), also recorded in accumulated other comprehensive loss, in the same period.

Summit had 14,686,738 outstanding common shares at March 31, 2024, compared to 14,683,457 at year-end 2023.

Asset Quality

The Company recorded net loan recoveries of $93,000 during first quarter 2024 compared to net loan recoveries of $188,000 in the fourth quarter of 2023 and $63,000 in the year-ago period.

Summit recorded no provision for credit losses in the first quarter of 2024. The provision for credit losses was $1.50 million for both the linked quarter and the first quarter of 2023.

Summit’s allowance for loan credit losses was $49.2 million on March 31, 2024, $48.1 million at the end of the linked quarter, and $40.8 million on March 31, 2023.

The allowance for loan credit losses stood at 1.33 percent of total loans at March 31, 2024 compared to 1.31 percent at December 31, 2023. The allowance was 227.6 percent of nonperforming loans at March 31, 2024, compared to 388.2 percent at year-end 2023.

Summit’s allowance for credit losses on unfunded loan commitments was $6.69 million as of March 31, 2024, compared to $7.74 million at the end of the linked quarter. The allowance for credit losses on unfunded loan commitments decreased $1.05 million during the most recent quarter, principally as a result of a change in the mix of unfunded commitments. Construction loan commitments, which on average have a higher historical loss ratio than do other loans, decreased, while commercial unfunded lines of credit, which carry a lower loss factor and lower utilization rates, increased.

As of March 31, 2024, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, totaled $25.1 million, or 0.54 percent of assets, compared to NPAs of $16.2 million, or 0.35 percent of assets at year-end 2023.

About the Company

Summit Financial Group, Inc. is the $4.6 billion financial holding company for Summit Community Bank, Inc. Its talented bankers serve commercial and individual clients throughout West Virginia, the Washington, D.C. metropolitan area, Virginia, Kentucky, Eastern Shore of Maryland and Delaware. Summit’s focus on in-market commercial lending and providing other business banking services in dynamic markets is designed to leverage its highly efficient operations and core deposits in strong legacy locations. Residential and consumer lending, trust and wealth management, and other retail financial services are offered through convenient digital and mobile banking platforms, including MySummitBank.com and 54 full-service branch locations. More information on Summit Financial Group, Inc. (NASDAQ: SMMF), headquartered in West Virginia’s Eastern Panhandle in Moorefield, is available at SummitFGI.com.

Non-GAAP Financial Measures

In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), Summit’s management uses, and this press release contains or references, certain non-GAAP financial measures, such as tangible common equity/tangible assets; efficiency ratio; return on average tangible equity and return on average tangible common equity. Summit believes these financial measures provide information useful to investors in understanding our operational performance and business and performance trends which facilitate comparisons with the performance of others in the financial services industry. Although Summit believes that these non-GAAP financial measures enhance investors' understanding of Summit’s business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP.

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: the effect of the COVID-19 pandemic, including the negative impacts and disruptions on the communities we serve, and the domestic and global economy, which may have an adverse effect on our business; current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth; fiscal and monetary policies of the Federal Reserve; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; the successful integration of operations of our acquisitions; 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.

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary (unaudited)
Q1 2024 vs Q1 2023
		For the Quarter Ended						Percent
Dollars in thousands		3/31/2024			3/31/2023			Change
Statements of Income
	Interest income
	Loans, including fees	$	59,249		$	45,485		30.3	%
	Securities		6,141			4,819		27.4	%
	Other		132			171		-22.8	%
	Total interest income		65,522			50,475		29.8	%
	Interest expense
	Deposits		21,430			14,000		53.1	%
	Borrowings		4,169			2,286		82.4	%
	Total interest expense		25,599			16,286		57.2	%
	Net interest income		39,923			34,189		16.8	%
	Provision for credit losses		-			1,500		-100.0	%
	Net interest income after provision
	for credit losses		39,923			32,689		22.1	%
	Noninterest income
	Trust and wealth management fees		847			811		4.4	%
	Mortgage origination revenue		154			171		-9.9	%
	Service charges on deposit accounts		1,723			1,392		23.8	%
	Bank card revenue		1,833			1,568		16.9	%
	Net gains on equity investments		40			45		-11.1	%
	Net realized losses on debt securities		(94	)		(59	)	59.3	%
	Bank owned life insurance and annuity income		463			336		37.8	%
	Other income		112			122		-8.2	%
	Total noninterest income		5,078			4,386		15.8	%
	Noninterest expense
	Salaries and employee benefits		12,058			10,807		11.6	%
	Net occupancy expense		1,695			1,333		27.2	%
	Equipment expense		2,508			2,030		23.5	%
	Professional fees		385			376		2.4	%
	Advertising and public relations		272			170		60.0	%
	Amortization of intangibles		987			343		187.8	%
	FDIC premiums		717			330		117.3	%
	Bank card expense		832			696		19.5	%
	Foreclosed properties expense, net of (gains)/losses		12			15		-20.0	%
	Acquisition-related expense		53			331		-84.0	%
	Other expenses		3,439			2,968		15.9	%
	Total noninterest expense		22,958			19,399		18.3	%
	Income before income taxes		22,043			17,676		24.7	%
	Income taxes		4,996			3,575		39.7	%
	Net income		17,047			14,101		20.9	%
	Preferred stock dividends		225			225		n/a
	Net income applicable to common shares	$	16,822		$	13,876		21.2	%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary (unaudited)
Q1 2024 vs Q1 2023
		For the Quarter Ended						Percent
		3/31/2024			3/31/2023			Change
Per Share Data
	Earnings per common share
	Basic	$	1.15		$	1.09		5.5	%
	Diluted	$	1.14		$	1.08		5.6	%
	Cash dividends per common share	$	0.22		$	0.20		10.0	%
	Common stock dividend payout ratio		19.0	%		18.1	%	5.0	%
	Average common shares outstanding
	Basic		14,683,596			12,783,851		14.9	%
	Diluted		14,750,052			12,830,102		15.0	%
	Common shares outstanding at period end		14,686,738			12,786,404		14.9	%
Performance Ratios
	Return on average equity		15.37	%		15.55	%	-1.2	%
	Return on average tangible equity (C)		19.27	%		19.10	%	0.9	%
	Return on average tangible common equity (D)		20.08	%		20.10	%	-0.1	%
	Return on average assets		1.47	%		1.43	%	2.8	%
	Net interest margin (A)		3.75	%		3.83	%	-2.1	%
	Efficiency ratio (B)		48.29	%		48.00	%	0.6	%
NOTES(A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.(B) – Non-GAAP financial measure computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.(C) – Non-GAAP financial measure that equals: (Net income + Amortization of intangibles [after-tax]) / (Average shareholders’ equity – Average intangible assets).(D) – Non-GAAP financial measure that equals: (Net income + Amortization of intangibles [after-tax]) / (Average common shareholders’ equity – Average intangible assets).

    

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary (unaudited)
		For the Quarter Ended
Dollars in thousands		3/31/2024			12/31/2023			9/30/2023			6/30/2023			3/31/2023
Statements of Income
	Interest income
	Loans, including fees	$	59,249		$	59,856		$	58,102		$	54,413		$	45,485
	Securities		6,141			6,538			6,357			6,247			4,819
	Other		132			122			235			203			171
	Total interest income		65,522			66,516			64,694			60,863			50,475
	Interest expense
	Deposits		21,430			21,417			19,924			17,851			14,000
	Borrowings		4,169			4,306			3,497			2,699			2,286
	Total interest expense		25,599			25,723			23,421			20,550			16,286
	Net interest income		39,923			40,793			41,273			40,313			34,189
	Provision for credit losses		-			1,500			1,250			8,000			1,500
	Net interest income after provision
	for credit losses		39,923			39,293			40,023			32,313			32,689
	Noninterest income
	Trust and wealth management fees		847			952			819			854			811
	Mortgage origination revenue		154			65			172			169			171
	Service charges on deposit accounts		1,723			1,866			1,775			1,943			1,392
	Bank card revenue		1,833			1,837			1,907			1,987			1,568
	Net gains on equity investments		40			365			180			150			45
	Net realized gains/(losses) on debt securities		(94	)		15			(12	)		(211	)		(59	)
	Bank owned life insurance and annuity income		463			499			311			431			336
	Other income		112			202			113			100			122
	Total noninterest income		5,078			5,801			5,265			5,423			4,386
	Noninterest expense
	Salaries and employee benefits		12,058			11,374			11,959			12,156			10,807
	Net occupancy expense		1,695			1,554			1,436			1,528			1,333
	Equipment expense		2,508			2,342			2,361			2,361			2,030
	Professional fees		385			529			400			471			376
	Advertising and public relations		272			432			247			264			170
	Amortization of intangibles		987			995			998			999			343
	FDIC premiums		717			670			716			742			330
	Bank card expense		832			809			972			951			696
	Foreclosed properties expense, net of (gains)/losses		12			16			10			48			15
	Acquisition-related expenses		53			839			1,110			4,163			331
	Other expenses		3,439			4,347			3,953			3,641			2,968
	Total noninterest expense		22,958			23,907			24,162			27,324			19,399
	Income before income taxes		22,043			21,187			21,126			10,412			17,676
	Income tax expense		4,996			4,590			4,794			2,203			3,575
	Net income		17,047			16,597			16,332			8,209			14,101
	Preferred stock dividends		225			225			225			225			225
	Net income applicable to common shares	$	16,822		$	16,372		$	16,107		$	7,984		$	13,876

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary (unaudited)
		For the Quarter Ended
		3/31/2024			12/31/2023			9/30/2023			6/30/2023			3/31/2023
Per Share Data
	Earnings per common share
	Basic	$	1.15		$	1.12		$	1.10		$	0.54		$	1.09
	Diluted	$	1.14		$	1.11		$	1.09		$	0.54		$	1.08
	Cash dividends per common share	$	0.22		$	0.22		$	0.22		$	0.20		$	0.20
	Common stock dividend payout ratio		19.0	%		19.5	%		19.8	%		36.7	%		18.1	%
	Average common shares outstanding
	Basic		14,683,596			14,676,383			14,672,176			14,668,923			12,783,851
	Diluted		14,750,052			14,718,790			14,714,211			14,703,636			12,830,102
	Common shares outstanding at period end		14,686,738			14,683,457			14,674,852			14,672,147			12,786,404
Performance Ratios
	Return on average equity		15.37	%		15.74	%		15.66	%		7.99	%		15.55	%
	Return on average tangible equity (C)		19.27	%		20.01	%		20.03	%		10.86	%		19.10	%
	Return on average tangible common equity (D)		20.08	%		20.91	%		20.95	%		11.37	%		20.10	%
	Return on average assets		1.47	%		1.42	%		1.42	%		0.73	%		1.43	%
	Net interest margin (A)		3.75	%		3.76	%		3.88	%		3.89	%		3.83	%
	Efficiency ratio (B)		48.29	%		47.33	%		47.15	%		47.90	%		48.00	%
NOTES(A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.(B) – Non-GAAP financial measure computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.(C) – Non-GAAP financial measure that equals: (Net income + Amortization of intangibles [after-tax]) / (Average shareholders’ equity – Average intangible assets).(D) – Non-GAAP financial measure that equals: (Net income applicable to common shares + Amortization of intangibles [after-tax]) / (Average common shareholders’ equity – Average intangible assets).

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Selected Balance Sheet Data (unaudited)
Dollars in thousands, except per share amounts		3/31/2024			12/31/2023			9/30/2023			6/30/2023			3/31/2023
Assets
	Cash and due from banks	$	23,706		$	21,834		$	23,159		$	23,341		$	16,488
	Interest bearing deposits other banks		31,950			30,398			36,398			39,902			54,328
	Debt securities, available for sale		490,271			502,762			511,403			512,038			431,933
	Debt securities, held to maturity		93,737			94,227			94,715			95,200			95,682
	Equity investments		11,571			10,958			31,241			30,818			29,867
	Other investments		21,842			21,130			19,579			16,014			12,696
	Loans, net		3,647,810			3,633,522			3,551,686			3,506,880			3,059,099
	Property held for sale		3,432			3,729			4,505			4,742			5,128
	Premises and equipment, net		62,293			63,038			62,721			60,967			54,491
	Goodwill and other intangible assets, net		73,443			74,430			75,425			76,423			61,807
	Cash surrender value of life insurance policies and annuities		86,230			85,679			85,076			84,790			72,019
	Derivative financial instruments		36,803			33,145			44,527			39,951			34,758
	Other assets		59,796			59,470			63,773			61,204			49,111
	Total assets	$	4,642,884		$	4,634,322		$	4,604,208		$	4,552,270		$	3,977,407
Liabilities and Shareholders' Equity
	Deposits	$	3,748,415		$	3,715,148		$	3,754,495		$	3,735,034		$	3,299,846
	Short-term borrowings		262,359			302,957			258,054			232,150			140,150
	Long-term borrowings and
	subordinated debentures, net		124,123			124,008			123,892			123,776			123,660
	Other liabilities		53,706			52,001			51,315			48,136			44,205
	Total liabilities		4,188,603			4,194,114			4,187,756			4,139,096			3,607,861
	Preferred stock and related surplus		14,920			14,920			14,920			14,920			14,920
	Common stock and related surplus		130,235			129,990			130,508			130,227			90,939
	Retained earnings		316,375			302,783			289,641			276,762			271,712
	Accumulated other comprehensive loss		(7,249	)		(7,485	)		(18,617	)		(8,735	)		(8,025	)
	Total shareholders' equity		454,281			440,208			416,452			413,174			369,546
	Total liabilities and shareholders' equity	$	4,642,884		$	4,634,322		$	4,604,208		$	4,552,270		$	3,977,407
	Book value per common share	$	29.92		$	28.96		$	27.36		$	27.14		$	27.73
	Tangible book value per common share (A)	$	24.91		$	23.89		$	22.22		$	21.93		$	22.90
	Tangible common equity to tangible assets (B)		8.0	%		7.7	%		7.2	%		7.2	%		7.5	%
NOTES(A)   – Tangible book value per share = (Common stock and related surplus plus Retained earnings plus Accumulated other comprehensive income/loss – Intangible assets) / Common shares outstanding.(B)   – Tangible common equity to tangible assets = (Common stock and related surplus plus Retained earnings plus Accumulated other comprehensive income/loss – Intangible assets) / (Total assets – Intangible assets).

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition (unaudited)
Dollars in thousands		3/31/2024			12/31/2023			9/30/2023			6/30/2023			3/31/2023
Commercial		$	533,214		$	503,842		$	511,951		$	511,457		$	498,268
Mortgage warehouse lines			108,858			108,848			114,734			118,785			86,240
Commercial real estate
Owner occupied			569,407			545,108			547,886			566,447			469,560
Non-owner occupied			1,280,948			1,254,337			1,217,029			1,193,927			1,036,358
Construction and development
Land and development			105,425			145,258			114,354			117,371			102,351
Construction			341,727			374,026			349,049			309,709			290,556
Residential real estate
Conventional			507,599			505,398			497,076			483,998			395,312
Jumbo			123,132			116,614			113,837			117,219			111,475
Home equity			80,027			81,126			81,967			86,050			70,167
Consumer			43,107			43,756			44,288			44,429			36,531
Other			3,598			3,299			6,748			3,169			3,117
Total loans, net of unearned fees			3,697,042			3,681,612			3,598,919			3,552,561			3,099,935
Less allowance for loan credit losses			49,232			48,090			47,233			45,681			40,836
Loans, net		$	3,647,810		$	3,633,522		$	3,551,686		$	3,506,880		$	3,059,099
Unfunded loan commitments		$	911,132		$	950,001		$	943,508		$	957,278		$	907,757

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition (unaudited)
Dollars in thousands		3/31/2024			12/31/2023			9/30/2023			6/30/2023			3/31/2023
Core deposits
Non-interest bearing checking		$	605,509		$	593,576		$	630,055		$	679,139		$	552,716
Interest bearing checking			2,145,824			2,164,522			2,144,737			2,024,341			1,886,011
Savings			438,451			450,526			477,348			512,129			462,631
Time deposits			525,932			473,687			469,530			465,026			327,037
Total core deposits			3,715,716			3,682,311			3,721,670			3,680,635			3,228,395
Brokered time deposits			32,699			32,837			32,825			54,399			71,451
Total deposits		$	3,748,415		$	3,715,148		$	3,754,495		$	3,735,034		$	3,299,846
Estimated uninsured deposits (A)		$	1,288,845		$	1,291,467		$	1,283,610		$	1,189,908		$	933,703
(A) - Excludes uninsured public funds otherwise secured or collateralized as required by law.

SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios (unaudited)
		3/31/2024		12/31/2023		9/30/2023		6/30/2023		3/31/2023
Summit Financial Group, Inc.
	CET1 Risk-based Capital	9.4	%	9.1	%	8.9	%	8.7	%	8.9	%
	Tier 1 Risk-based Capital	10.2	%	9.9	%	9.7	%	9.5	%	9.8	%
	Total Risk-based Capital	14.0	%	13.7	%	13.5	%	13.3	%	14.0	%
	Tier 1 Leverage	9.0	%	8.7	%	8.5	%	8.4	%	8.7	%
Summit Community Bank, Inc.
	CET1 Risk-based Capital	12.0	%	11.7	%	11.6	%	11.3	%	11.9	%
	Tier 1 Risk-based Capital	12.0	%	11.7	%	11.6	%	11.3	%	11.9	%
	Total Risk-based Capital	13.3	%	12.9	%	12.7	%	12.5	%	13.1	%
	Tier 1 Leverage	10.6	%	10.2	%	10.1	%	9.9	%	10.6	%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Asset Quality Information (unaudited)
		For the Quarter Ended
Dollars in thousands		3/31/2024			12/31/2023			9/30/2023			6/30/2023			3/31/2023
	Gross loan charge-offs	$	776		$	444		$	227		$	4,009		$	164
	Gross loan recoveries		(869	)		(632	)		(108	)		(118	)		(227	)
	Net loan charge-offs (recoveries)	$	(93	)	$	(188	)	$	119		$	3,891		$	(63	)
	Net loan charge-offs (recoveries) to average loans (annualized)		-0.01	%		-0.02	%		0.01	%		0.44	%		-0.01	%
	Allowance for loan credit losses	$	49,232		$	48,090		$	47,233		$	45,681		$	40,836
	Allowance for loan credit losses as a percentage
	of period end loans		1.33	%		1.31	%		1.31	%		1.29	%		1.32	%
	Allowance for credit losses on
	unfunded loan commitments ("ULC")	$	6,692		$	7,742		$	6,912		$	7,332		$	6,572
	Allowance for credit losses on ULC
	as a percentage of period end ULC		0.73	%		0.81	%		0.73	%		0.81	%		0.72	%
	Nonperforming assets:
	Nonperforming loans
	Commercial	$	7,827		$	1,088		$	783		$	254		$	402
	Commercial real estate		8,378			5,675			6,402			5,970			1,700
	Residential construction and development		891			708			750			772			813
	Residential real estate		4,436			4,831			4,787			4,298			4,322
	Consumer		95			137			124			46			65
	Total nonperforming loans		21,627			12,439			12,846			11,340			7,302
	Foreclosed properties
	Commercial real estate		-			297			297			297			297
	Commercial construction and development		1,253			1,253			2,187			2,187			2,187
	Residential construction and development		1,924			1,924			1,924			2,161			2,293
	Residential real estate		255			255			97			97			351
	Total foreclosed properties		3,432			3,729			4,505			4,742			5,128
	Total nonperforming assets	$	25,059		$	16,168		$	17,351		$	16,082		$	12,430
	Nonperforming loans to period end loans		0.58	%		0.34	%		0.36	%		0.32	%		0.24	%
	Nonperforming assets to period end assets		0.54	%		0.35	%		0.38	%		0.35	%		0.31	%

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Loans Past Due 30-89 Days (unaudited)
Dollars in thousands		3/31/2024			12/31/2023			9/30/2023			6/30/2023			3/31/2023
	Commercial	$	183		$	1,152		$	3,300		$	1,006		$	463
	Commercial real estate		281			1,711			781			513			1,000
	Construction and development		-			570			793			161			3,459
	Residential real estate		4,570			6,114			4,620			4,933			2,311
	Consumer		379			401			440			389			252
	Other		10			43			37			17			13
	Total	$	5,423		$	9,991		$	9,971		$	7,019		$	7,498

SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q1 2024 vs Q4 2023 vs Q1 2023 (unaudited)
	Q1 2024									Q4 2023									Q1 2023
	Average			Earnings /			Yield /			Average			Earnings /			Yield /			Average			Earnings /			Yield /
Dollars in thousands	Balances			Expense			Rate			Balances			Expense			Rate			Balances			Expense			Rate
ASSETS
Interest earning assets
Loans, net of unearned interest (1)
Taxable	$	3,686,788		$	59,204		6.46	%		$	3,688,505		$	59,802		6.43	%		$	3,087,068		$	45,421		5.97	%
Tax-exempt (2)		4,427			57		5.18	%			4,357			68		6.19	%			6,086			81		5.40	%
Securities
Taxable		413,656			5,025		4.89	%			410,211			5,129		4.96	%			314,004			3,412		4.41	%
Tax-exempt (2)		184,810			1,413		3.08	%			206,375			1,784		3.43	%			216,430			1,781		3.34	%
Interest bearing deposits other banks
and Federal funds sold		29,287			132		1.81	%			31,053			122		1.56	%			34,330			171		2.02	%
Total interest earning assets		4,318,968			65,831		6.13	%			4,340,501			66,905		6.12	%			3,657,918			50,866		5.64	%
Noninterest earning assets
Cash & due from banks		24,037									22,485									17,387
Premises & equipment		62,773									63,298									54,112
Intangible assets		74,057									75,043									62,024
Other assets		194,694									215,821									190,533
Allowance for loan credit losses		(48,897	)								(47,834	)								(39,507	)
Total assets	$	4,625,632								$	4,669,314								$	3,942,467
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest bearing liabilities
Interest bearing
demand deposits		2,126,722			15,480		2.93	%			2,170,953			16,196		2.96	%			1,819,505			10,796		2.41	%
Savings deposits		442,122			1,822		1.66	%			459,277			1,986		1.72	%			480,207			1,917		1.62	%
Time deposits		531,125			4,128		3.13	%			508,383			3,235		2.52	%			389,252			1,287		1.34	%
Short-term borrowings		298,325			2,661		3.59	%			309,657			2,791		3.58	%			166,365			824		2.01	%
Long-term borrowings and
subordinated debentures		124,060			1,508		4.89	%			123,954			1,515		4.85	%			123,599			1,462		4.80	%
Total interest bearing liabilities		3,522,354			25,599		2.92	%			3,572,224			25,723		2.86	%			2,978,928			16,286		2.22	%
Noninterest bearing liabilities
Demand deposits		605,190									621,082									557,209
Other liabilities		54,513									54,160									43,508
Total liabilities		4,182,057									4,247,466									3,579,645
Shareholders' equity - preferred		14,920									14,920									14,920
Shareholders' equity - common		428,655									406,928									347,902
Total liabilities and
shareholders' equity	$	4,625,632								$	4,669,314								$	3,942,467
NET INTEREST EARNINGS				$	40,232								$	41,182								$	34,580
NET INTEREST MARGIN							3.75	%								3.76	%								3.83	%
(1) - For purposes of this table, nonaccrual loans are included in average loan balances.
(2) - Interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21% for all periods presented.
The tax equivalent adjustment resulted in an increase in interest income of $309,000, $389,000, and $391,000 for Q1 2024,
Q4 2023 and Q1 2023, respectively.

Contact:		Robert S. Tissue, Executive Vice President & CFO
Telephone:		(304) 530-0552
Email:		rtissue@summitfgi.com