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Summit Bank Group Reports 2024 1st Quarter Earnings
Q1 2024 Net Income - $2.4 million or $0.31 per fully diluted share. Q1 2024 Net Income increased from $0.30 per share for Q1 2023 and $0.22 per share for Q4 2023. Cash and Securities totaled $149.9 million - 13.0 percent of assets. Year over year Net Loan Growth - $208.0 million or 27.3 percent. Year over year Deposit Growth - $84.1 million or 9.0 percent over March 31st 2023.
Summit Bank Group reported net income for the first quarter of $2.4 million or 31 cents per fully diluted share. Comparable earnings for the quarter ended December 31, 2023 were $1.68 million or 22 cents per fully diluted share, representing an increase of 41 percent or 9 cents to earnings and earnings per fully diluted share, respectively. First quarter provision for loan loss expense declined by $655 thousand from the previous quarter, which was the result of the continued decline in total balances in the Bank's small commercial equipment finance portfolio and credit quality improvements.
Net income and earnings per share for the first quarter of 2024 increased from the first quarter of 2023 by $102 thousand or one cent per share (31 cents versus 30 cents per share) with higher net interest income offset by higher growth-related increases to non-interest expense.
"We are pleased to announce we opened our new Redmond, Oregon office located at 538 Southwest Highland Ave on Friday April 22nd," said Craig Wanichek, President and CEO. "We believe this will add to our new client and deposit growth in the robust Redmond market and surrounding areas. Loan growth continued in Q1, which partially offset margin pressure. Additionally, a stabilization of the equipment lending unit led to improved quarterly results."
The Company continues to maintain a highly liquid balance sheet with cash and available for sale short-term securities of $149.9 million, which represents 13.0 percent of total assets as of March 31, 2024, an increase from $134.9 million or 12.5 percent of assets as of December 31, 2023. Additionally, the Bank maintains secured borrowing commitments from the Federal Home Loan Bank and the Federal Reserve Bank with total available borrowing capacity as of March 31, 2024 of $330 million, increased from its December 31, 2023 total available of $253 million. Combined, the Company's cash and available secured borrowing as of March 31, 2024 total $393 million. This total is 36.5 percent of total assets and 130 percent of total estimated uninsured deposits as of March 31, 2024.
"Summit continues to maintain significant balance sheet strength," said Wanichek. "The increase in certificate of deposit balances was primarily wholesale funding, which was used to retire all FHLB borrowings, support strong growth in our markets and bolster cash reserves."
Loan growth continued to be extremely strong during the first quarter with total net loan growth of $55.4 million, bringing the trailing twelve-month net loan growth total to $208.0 million for an increase of 27.3 percent over March 31, 2023. Total deposits year over year are up $84.1 million, or 9.0 percent, with excess cash balances held on March 31, 2023 deployed to fund the increase in net loans during the most recent twelve months.
"Strong loan growth primarily resulted from conservatively underwritten construction loans in the process of completion," said Wanichek. "In first quarter we began to see a slowdown in loan activity and pipelines attributable to the increased rate environment and at the same time saw increased activity in deposit pipelines as a result of our business development activities."
Return on average equity for the first quarter and the trailing twelve months was 9.9 percent and 9.7 percent, respectively. Total shareholders' equity ended the first quarter at $98.2 million, an increase of $10.3 million, or 11.7 percent, since March 31, 2023. As the Company begins its 21st year of operations, capital levels remain very strong, supporting the asset growth with consistently strong retained earnings which have totaled $42.8 million over the last four years.
Total non-performing assets as of March 31, 2024 have declined slightly during the first quarter to 0.20 percent of total assets after ending 2023 at 0.22 percent. Total non-performing assets have increased compared to the March 31, 2023 figure of 0.12 percent, with the entirety of the year-over-year increase attributable to a single SBA guaranteed loan relationship currently in non-accrual status. The Bank's commercial real estate portfolio continues to perform well. The portfolio does not have any non-owner occupied office loans in downtown Portland.
About Summit Bank Group, Inc.
Summit Bank Group Inc., through its wholly owned subsidiary Summit Bank, maintains offices in Eugene, Bend and Portland and specializes in providing high-level service to professionals and medium-sized businesses and their owners. The Bank was voted for the third year in a row as one of Oregon's "Top 100 Companies to Work For," according to Oregon Business Magazine. The Bank was voted in 2023 as "Favorite Bank" in the Eugene Register-Guard's annual Reader's Choice Awards and "Best Bank" by Central Oregon's Bend Bulletin. Summit's Chief Operating Officer, Chris Hemmings, was named an Executive of the Year last week by the Portland Business Journal. Summit Bank Group Inc. is quoted on the OTCPK as SBKO.
Forward Looking Statements
This press release contains certain forward-looking statements about the Company and the Bank. Forward-looking statements include statements regarding anticipated future events or results and can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, inflation, changes in the interest rate environment, general economic conditions or conditions within the securities markets, potential recessionary conditions, changes in asset quality, charge-offs and credit loss provisions, changes in demand for our products and services, availability of low-cost funding, legislative, accounting, tax and regulatory changes, including changes in the monetary and fiscal policies of the Board of Governors of the Federal Reserve System, political developments, uncertainties or instability, catastrophic events, acts of war or terrorism, natural disasters or breach of our operational or security systems or infrastructure, including cyberattacks that could adversely affect the Company's financial condition and results of operations and the business in which the Company and the Bank are engaged.
Accordingly, you should not place undue reliance on forward-looking statements. The Company undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.
QUARTERLY FINANCIAL REPORT - March 31, 2024
(in thousands except per share data) Unaudited Unaudited Unaudited
As of As of As of As of
Summary Statements of Condition Mar. 31, 2024 Mar. 31, 2023 Mar. 31, 2023
Cash and short term investments $ 88,521 $ $ 221,724
Securities 61,388 69,666
Loans:
Commercial 308,259 248,481
Commercial real estate 595,437 463,005
Other 77,337 59,738
Loan loss reserve and unearned income (10,449 ) (8,593 )
-------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
Total net loans 970,585 762,631
Property and other assets 27,635 25,154
Repossessed property 981 841
-------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
Total assets $ 1,149,110 $ $ 1,080,015
-------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
Deposits:
Noninterest-bearing demand $ 178,040 $ $ 188,350
Interest-bearing demand 700,850 661,640
Certificates of deposit 143,662 88,416
-------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
Total deposits 1,022,552 938,405
Subordinated debt 19,685 19,644
Other liabilities 8,639 34,032
Shareholders' equity 98,234 87,934
-------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
Total liabilities and shareholders' equity $ 1,149,110 $ $ 1,080,015
-------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
For the three months ended For the three months ended For the three months ended For the three months ended For the three months ended For the three months ended
Summary Statements of Income Mar. 31, 2024 Mar. 31, 2023 Mar. 31, 2023 Dec. 31, 2023 Dec. 31, 2023
Interest income $ 17,995 $ $ 14,819 $ $ 17,619
Interest expense (5,896 ) (3,877 ) (5,335 )
-------------------- -------- -------------------- -------------------------- -------------------- -------- -------------------- -------------------------- -------------------- -------- --------------------
Net interest income 12,099 10,942 12,284
Provision for loan losses (2,017 ) (1,973 ) (2,672 )
Noninterest income 198 429 (262 )
Noninterest expense (6,998 ) (6,254 ) (6,943 )
-------------------- -------- -------------------- -------------------------- -------------------- -------- -------------------- -------------------------- -------------------- -------- --------------------
Net income before income taxes 3,282 3,143 2,407
-------------------- -------- -------------------- -------------------------- -------------------- -------- -------------------- -------------------------- -------------------- -------- --------------------
Provision for income taxes (861 ) (824 ) (728 )
Net income $ 2,421 $ $ 2,319 $ $ 1,679
-------------------- -------- -------------------- -------------------------- -------------------- -------- -------------------- -------------------------- -------------------- -------- --------------------
Net income per share, basic $ 0.31 $ $ 0.30 $ $ 0.22
View source version on businesswire.com: https://www.businesswire.com/news/home/20240424242444/en/
SOURCE: Summit Bank Group
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Craig Wanichek President & Chief Executive Officer 541-684-7500
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