EUGENE, Ore.--(BUSINESS WIRE)--Summit Bank Group (OTC Pink: SBKO)
- Q2 2024 Net Income - $2.7 million or $0.35 per fully diluted share, an increase of $223 thousand or $0.03 per share over the same period in 2023
- 2024 Year to Date Net Income - $5.1MM or $0.66 per fully diluted share, an increase of $325 thousand or $0.04 per share over the same period in 2023.
- Non-recurring gain on retirement of subordinated debt during Q2 2024 increased Net Income by $277 thousand or $0.036 per fully diluted share.
- Cash and securities total $122.0 million - 10.6 percent of assets.
- Year over year Net Loan Growth - $180.0 million or 21.9 percent.
- Year over year Deposit Growth - $154.6 million or 17.8 percent.
Summit Bank Group reported net income for the second quarter of $2.7 million or 35 cents per fully diluted share. The Company recognized a one time after tax gain of $277 thousand on retirement of a subordinated note which increased earnings per share by $0.036 for the quarter. Earnings per share for the second quarter and the year to date, improved over first quarter of 2024 and June 30, 2023 year to date by $0.04.
The Company continues to maintain a highly liquid balance sheet with cash and available for sale short-term securities of $122.0 million, which represents 10.6 percent of total assets as of June 30, 2024. This total decreased by $27.9 million from the $149.9 million total as of March 31, 2024 as the Company funded $29.6 million in net new loans during the second quarter. The Company maintains secured borrowing commitments from the Federal Home Loan Bank and the Federal Reserve Bank with total available borrowing capacity as of June 30, 2024 of $326 million, an increase from its December 31 2023 total available of $253 million. Combined, the Company’s cash and available secured borrowing as of June 30, 2024 total $392 million. This total is 34.0 percent of total assets and 121 percent of total estimated uninsured deposits as of June 30, 2024.
Total net loans reached $1 billion as of June 30, 2024 after total second quarter net loan growth of $29.6 million, bringing the trailing 12 month net loan growth total to $180.0 million for an increase of 21.9 percent over June 30, 2023. The second quarter marks the 10th consecutive quarter for year over year net loan growth in excess of 20.0 percent. Total deposits year over year are up $154.6 million or 17.8 percent with excess cash balances held at June 30, 2023 deployed to fund the remainder of the increase in net loans during the most recent 12 months. Total wholesale funding remained level during the second quarter.
Return on average equity for the second quarter and the trailing four quarters was 10.3 percent and 10.2 percent respectively. Total shareholders’ equity ended the second quarter at $101.5 million, an increase of $11.3 million or 12.5 percent since June 30, 2023. The Company has produced greater than 10.0 percent return on equity during all but three quarters over the last eleven years while growing total net loans at a compounded annual growth rate of 21.8 percent.
Total non-performing assets as of June 30, 2024 have increased slightly during the second quarter to 0.27 percent of total assets after ending 2023 and the first quarter of 2024 at 0.22 and 0.20 percent respectively. The majority of the increase in total non-performing assets over the December 31, 2023 figure consists of a single SBA guaranteed loan relationship currently in non-accrual status. An individual allowance for expected credit loss equal to the amount of the unguaranteed portion of this loan is included in the June 30, 2024 allowance for credit losses and was charged to expense during 2024.
“The Bank’s commercial real estate portfolio has continued to perform well, with multifamily and industrial loans comprising nearly half of a balanced mix of property types in the portfolio. Refinance and interest rate risk is limited as only 18 percent of the portfolio matures prior to 2027,” said Craig Wanichek, President and CEO. The office segment, which totals $45 million or just 4.5 percent of total loans, includes no loans secured by properties in downtown Portland and no loans carry an adverse risk rating.
The Bank continues to grow loans and deposits in this dynamic rate environment. “I am grateful for our clients, shareholders, colleagues and to all of our new clients we have welcomed to Summit Bank over the first half of the year,” said Wanichek. “Our goal is to be the business bank of choice in the communities we serve and we appreciate the growing list of clients who have moved their banking relationships to Summit.”
Summit Bank received recognition during the second quarter as being one of the top-performing banks in the nation by the American Banker, securing the 63rd spot on the list of the 100 Top Performing Banks. There are 4,049 commercial banks and 565 savings and loan associations in the U.S. that are insured by the Federal Deposit Insurance Corporation (FDIC). “Our ranking among the nation’s most esteemed financial institutions is a testament to the hard work and dedication of our team” said Wanichek. The Bank made the Oregon Business Magazine list of the Top 100 Green Businesses in Oregon, for the third year in a row.
About Summit Bank Group, Inc.
Summit Bank Group Inc., through its wholly-owned subsidiary Summit Bank, maintains offices in Eugene, Central Oregon, and Portland, specializing in providing high-level service to professionals and medium-sized businesses and their owners. The Bank was voted for the fourth year in a row as one of Oregon’s “Top 100 Companies to Work For,” according to Oregon Business Magazine. In 2023, Summit Bank was honored as “Favorite Bank” in the Eugene Register-Guard’s annual Reader’s Choice Awards and “Best Bank” by Central Oregon’s Bend Bulletin. Summit Bank Group Inc. is quoted on the OTCPK under the symbol 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 – June 30th 2024
| (in thousands except per share data) | Unaudited | Unaudited | Unaudited | |||||||||
| As of | As of | As of | ||||||||||
| Summary Statements of Condition | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | |||||||||
| Cash and short term investments | $ |
65,857 |
|
$ |
71,265 |
|
$ |
113,913 |
|
|||
| Securities |
|
56,096 |
|
|
63,637 |
|
|
68,197 |
|
|||
| Loans: | ||||||||||||
| Commercial |
|
311,540 |
|
|
283,870 |
|
|
263,759 |
|
|||
| Commercial real estate |
|
608,581 |
|
|
580,801 |
|
|
495,941 |
|
|||
| Other |
|
90,672 |
|
|
61,002 |
|
|
69,278 |
|
|||
| Loan loss reserve and unearned income |
|
(10,654 |
) |
|
(10,511 |
) |
|
(8,828 |
) |
|||
| Total net loans |
|
1,000,140 |
|
|
915,162 |
|
|
820,149 |
|
|||
| Property and other assets |
|
28,163 |
|
|
27,634 |
|
|
25,696 |
|
|||
| Repossessed property |
|
958 |
|
|
672 |
|
|
690 |
|
|||
| Total assets | $ |
1,151,213 |
|
$ |
1,078,370 |
|
$ |
1,028,646 |
|
|||
| Deposits: | ||||||||||||
| Noninterest-bearing demand | $ |
156,954 |
|
$ |
175,717 |
|
$ |
171,349 |
|
|||
| Interest-bearing demand |
|
724,928 |
|
|
687,863 |
|
|
643,023 |
|
|||
| Certificates of deposit |
|
139,877 |
|
|
53,363 |
|
|
52,826 |
|
|||
| Total deposits |
|
1,021,759 |
|
|
916,943 |
|
|
867,197 |
|
|||
| Subordinated debt |
|
18,464 |
|
|
19,675 |
|
|
19,654 |
|
|||
| Other liabilities |
|
9,522 |
|
|
46,097 |
|
|
51,623 |
|
|||
| Shareholders' equity |
|
101,469 |
|
|
95,655 |
|
|
90,172 |
|
|||
| Total liabilities and shareholders' equity | $ |
1,151,213 |
|
$ |
1,078,370 |
|
$ |
1,028,646 |
|
|||
| Book value per share | $ |
13.15 |
|
$ |
12.46 |
|
$ |
11.75 |
|
|||
| Unaudited | Unaudited | Unaudited | Unaudited | |||||||||||||
| For the six months ended | For the six months ended | For the three months ended | For the three months ended | |||||||||||||
| Summary Statements of Income | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | ||||||||||||
| Interest income | $ |
37,009 |
|
$ |
30,713 |
|
$ |
19,014 |
|
$ |
15,894 |
|
||||
| Interest expense |
|
(12,668 |
) |
|
(8,535 |
) |
|
(6,772 |
) |
|
(4,658 |
) |
||||
| Net interest income |
|
24,341 |
|
|
22,178 |
|
|
12,242 |
|
|
11,236 |
|
||||
| Provision for loan losses |
|
(3,852 |
) |
|
(3,754 |
) |
|
(1,835 |
) |
|
(1,781 |
) |
||||
| Noninterest income |
|
831 |
|
|
563 |
|
|
633 |
|
|
134 |
|
||||
| Noninterest expense |
|
(14,356 |
) |
|
(12,479 |
) |
|
(7,358 |
) |
|
(6,225 |
) |
||||
| Net income before income taxes |
|
6,964 |
|
|
6,508 |
|
|
3,682 |
|
|
3,365 |
|
||||
| Provision for income taxes |
|
(1,841 |
) |
|
(1,711 |
) |
|
(980 |
) |
|
(887 |
) |
||||
| Net income | $ |
5,122 |
|
$ |
4,797 |
|
$ |
2,701 |
|
$ |
2,478 |
|
||||
| Net income per share, basic | $ |
0.67 |
|
$ |
0.63 |
|
$ |
0.35 |
|
$ |
0.32 |
|
||||
| Net income per share, fully diluted | $ |
0.66 |
|
$ |
0.62 |
|
$ |
0.35 |
|
$ |
0.32 |
|
||||
