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Summit Bank Group Reports 2024 3rd Quarter Earnings

Summit Bank Group (OTC Pink: SBKO)

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20241023226992/en/

Summit Bank Group Reports 2024 3rd Quarter Earnings (Graphic: Business Wire)

Summit Bank Group Reports 2024 3rd Quarter Earnings (Graphic: Business Wire)

  • Q3 2024 Net Income - $3.17 million or $0.41 per fully diluted share, up 29.7 percent over Q3 2023.
  • 2024 Year to Date Net Income - $8.30 million or $1.06 per fully diluted share, an increase of $1.05 million or $0.13 per share and 14.0 percent over the similar period in 2023.
  • Cash and securities total $225.3 million – 17.7 percent of assets.
  • Year over year Net Loan Growth - $143.8 million or 16.4 percent.
  • Year over year Deposit Growth - $229.1 million or 25.2 percent.

Summit Bank Group reported net income for the third quarter of $3.17 million or 41 cents per fully diluted share. Third quarter net income was $727 thousand or 9 cents per fully diluted share higher than the similar period in 2023, representing 29.7 and 29.2 percent improvements over the third quarter of 2023, respectively. The strong third quarter results increased the Company’s improvement in year to date earnings and earnings per share compared to 2023, which were higher by $1.05 million or 13 cents per share; an improvement of 14.0 percent. Year to date earnings improvement over 2023 includes a non-recurring gain on retirement of subordinated debt during the second quarter that increased earnings by $0.04 per share.

Lower provision for loan losses during the third quarter was the primary driver of the improved earnings compared to 2023 with total provision expense lower by $897 thousand or 39 percent compared to the third quarter of 2023. Provision for loan loss expense for the year to date was improved over 2023 by $799 thousand or 13 percent. “Our small commercial equipment finance unit continues to show gradual improvement in portfolio performance thus far in 2024 thanks to a disciplined approach to risk management. This improved performance, in conjunction with continued strong credit quality metrics and risk mitigation in our overall portfolio and the transition of acquisition, development and construction loans into permanent financing lowered the calculated reserve based on the risk profile of those portfolios,” said Wanichek.

Strong deposit growth during the quarter of $115.3 million improved the Bank’s previously highly liquid balance sheet with cash and Available for Sale (AFS) short-term securities increasing to $225.3 million, which represents 17.7 percent of total assets as of September 30, 2024. This total increased by $103.1 million from the $121.9 million total as of June 30, 2024. The Bank maintains secured borrowing commitments from the Federal Home Loan Bank and the Federal Reserve Bank with total available borrowing capacity as of September 30, 2024, of $333 million, increased from its December 31, 2023, total available of $253 million. Combined, the Bank’s cash and available secured borrowing as of September 30, 2024, total $501 million. This total is 39.0 percent of total assets and 122 percent of total estimated uninsured deposits as of September 30, 2024.

Total net loans as of September 30, 2024, were $1.02 billion representing a 16.4 percent year over year increase. Loan growth has slowed as expected, compared to previous years. A planned decline in acquisition, development and construction loan activity during the second and third quarters of 2024 was the primary driver of the slower loan growth pace as of the end of the third quarter. Total deposits year over year are up $229.1 million or 25.2 percent which includes the $115.3 million increase in deposits during the third quarter compared to the previous quarter.

“We are excited to see strong deposit growth this quarter, driven by the continued trust of our longtime clients and the addition of new relationships in all of the Oregon markets we serve,” said Wanichek. “This growth reflects the confidence our community has in Summit Bank’s personalized approach to banking. We are committed to maintaining a high level of service that has earned us this support and trust. While the landscape for deposits continues to be very competitive, we are pleased with our overall growth of deposits and are grateful to our longtime and new clients for their support.”

Return on average equity for the third quarter and the trailing four quarters was 12.3 percent and 10.1 percent respectively. Total shareholders’ equity ended the third quarter at $105.6 million, an increase of $13.0 million or 14.1 percent since September 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 21.9 percent.

Total non-performing assets as of September 30, 2024, declined slightly during the third quarter to 0.24 percent of total assets after ending the second quarter of 2024 at 0.27 percent. Total non-performing assets are increased over the 0.13 percent figure as of September 30, 2023, with the entirety of the increase resulting from a single SBA guaranteed loan relationship currently in non-accrual status. An individual allowance for expected credit loss equal to the unguaranteed portion of this loan is included in the September 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. Refinance and interest rate risk is limited as only 18 percent of the portfolio matures prior to 2027.

“As we reflect on Summit Bank Group’s performance this quarter, we sincerely appreciate the hard work and dedication of our banking team. We are grateful for the loyalty of our clients and for the support of our Board and local shareholders. The achievements made this quarter are a direct result of collaboration across all units,” said Wanichek.

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” and a “Top 100 Green Company” 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 – September 30th 2024

(in thousands except per share data) Unaudited Unaudited Unaudited
As of As of As of
Summary Statements of Condition Sep. 30, 2024 Dec. 31, 2023 Sep. 30, 2023
Cash and short term investments

$

168,888

 

$

71,265

 

$

96,222

 

Securities

 

56,422

 

 

63,637

 

 

67,047

 

Loans:
Commercial

 

306,615

 

 

283,870

 

 

260,634

 

Commercial real estate

 

648,733

 

 

580,801

 

 

551,049

 

Other

 

74,521

 

 

61,002

 

 

73,408

 

Loan loss reserve and unearned income

 

(10,619

)

 

(10,511

)

 

(9,615

)

Total net loans

 

1,019,251

 

 

915,162

 

 

875,475

 

Property and other assets

 

28,438

 

 

27,634

 

 

26,366

 

Repossessed property

 

688

 

 

672

 

 

1,009

 

Total assets

$

1,273,686

 

$

1,078,370

 

$

1,066,120

 

 
Deposits:
Noninterest-bearing demand

$

185,145

 

$

175,717

 

$

183,329

 

Interest-bearing demand

 

830,276

 

 

687,863

 

 

683,258

 

Certificates of deposit

 

121,648

 

 

53,363

 

 

41,417

 

Total deposits

 

1,137,069

 

 

916,943

 

 

908,004

 

Subordinated debt

 

18,474

 

 

19,675

 

 

19,665

 

Other liabilities

 

12,581

 

 

46,097

 

 

45,900

 

Shareholders' equity

 

105,563

 

 

95,655

 

 

92,551

 

Total liabilities and shareholders' equity

$

1,273,686

 

$

1,078,370

 

$

1,066,120

 

 
Book value per share

$

13.68

 

$

12.46

 

$

12.05

 

 
Unaudited Unaudited Unaudited Unaudited
For the nine

months ended
For the nine

months ended
For the three

months ended
For the three

months ended
Summary Statements of Income Sep. 30, 2024 Sep. 30, 2023 Sep. 30, 2024 Sep. 30, 2023
Interest income

$

57,461

 

$

47,603

 

$

20,452

 

$

16,890

 

Interest expense

 

(20,158

)

 

(13,413

)

 

(7,490

)

 

(4,879

)

Net interest income

 

37,303

 

 

34,190

 

 

12,962

 

 

12,011

 

Provision for loan losses

 

(5,283

)

 

(6,082

)

 

(1,431

)

 

(2,328

)

Noninterest income

 

923

 

 

770

 

 

92

 

 

207

 

Noninterest expense

 

(21,672

)

 

(19,065

)

 

(7,316

)

 

(6,586

)

Net income before income taxes

 

11,271

 

 

9,813

 

 

4,307

 

 

3,305

 

Provision for income taxes

 

(2,977

)

 

(2,572

)

 

(1,135

)

 

(861

)

Net income

$

8,293

 

$

7,241

 

$

3,171

 

$

2,444

 

 
Net income per share, basic

$

1.08

 

$

0.94

 

$

0.41

 

$

0.32

 

Net income per share, fully diluted

$

1.06

 

$

0.93

 

$

0.41

 

$

0.32

 

 

Contacts

Craig Wanichek, President & Chief Executive Officer 541-684-7500

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