SUMMIT FINANCIAL GROUP, INC. - FORM 8-K - EX-99 - EXHIBIT 99

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8-K - 8-K - SUMMIT FINANCIAL GROUP, INC.	form8kearnings1stquarter20.htm
EX-10.1 - EXHIBIT 10.1 - SUMMIT FINANCIAL GROUP, INC.	exhibit101summitfinancialg.htm

Exhibit 99

FOR RELEASE 6:00 AM ET, April 27, 2015

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

Telephone: (304) 530-0552

Email: rtissue@summitfgi.com

SUMMIT FINANCIAL GROUP REPORTS FIRST QUARTER 2015 RESULTS

Q1 2015 Diluted EPS $0.41 compared to $0.25 for Q1 2014

MOOREFIELD, WV - April 27, 2015 (GLOBE NEWSWIRE) - Summit Financial Group, Inc. (“Company” or “Summit”) (NASDAQ: SMMF) today reported first quarter 2015 net income applicable to common shares of $4.29 million, or $0.41 per diluted share, compared to $2.20 million, or $0.25 per diluted share, for the first quarter of 2014, representing an increase of 95.1 percent, or 64.0 percent per diluted share. Q1 2015 earnings compared to Q1 2014 were positively impacted by a $1.48 million increase in net interest income and a $750,000 decline in provision for loan losses.

Excluding from first quarter 2015 (on a pre-tax basis) realized securities gains of $480,000, losses on sales of foreclosed properties of $150,000, and write-downs of foreclosed properties of $572,000, Q1 2015 core earnings approximated $4.44 million, or $0.42 per diluted share. Excluding from Q1 2014 (on a pre-tax basis) realized securities losses of $22,000, losses on sales of foreclosed properties of $75,000, and write-downs of foreclosed properties of $928,000, Q1 2014 core earnings approximated $2.84 million, or $0.32 per diluted share.

Highlights for Q1 2015 include:


•	Net interest margin increased 17 basis points compared to the linked quarter and 26 basis points since Q1 2014.


•	Achieved loan growth of $19.5 million or 1.9 percent (non-annualized) in Q1 2015. Loans have grown $76.7 million or 7.9 percent since Q1 2014.


•	Core revenue increased $555,000 or 4.1 percent (non-annualized) compared to Q4 2014, and $1.3 million or 10.4 percent compared to Q1 2014.


•	Nonperforming assets declined for the thirteenth consecutive quarter. Compared to the linked quarter, nonperforming assets as a percentage of total assets declined from 3.48 percent to 3.18 percent, reaching its lowest level since Q2 2008; foreclosed properties are at the lowest level since Q3 2009.


•	Recorded charges of $572,000 to write-down foreclosed properties compared to $300,000 in Q4 2014 and $928,000 in Q1 2014.

H. Charles Maddy III, President and Chief Executive Officer of Summit, commented, “We are particularly pleased to report our Q1 2015 operating results. Our strong core earnings, growing loan portfolio, increasing revenues, improving net interest margin, strengthened capital and reductions in our portfolio of problem assets during the quarter are all very gratifying to note; but perhaps more importantly, these results represent a continuation of recent similar trends, giving us optimism as we look forward to the remainder of 2015 and beyond.”

Results from Operations

Total revenue for first quarter 2015, consisting of net interest income and noninterest income, grew 14.3 percent to $14.7 million compared to $12.8 million for the first quarter 2014.

Total core revenue (excluding nonrecurring items, enumerated above) was $14.2 million for first quarter 2015 compared to $12.8 million for the same prior-year quarter, an increase of 10.4 percent.

For the first quarter of 2015, net interest income was $11.5 million, an increase of 14.8 percent from the $10.0 million reported in the prior-year first quarter and increased $569,000 compared to the linked quarter. The net interest margin for first quarter 2015 was 3.59 percent compared to 3.33 percent for the year-ago quarter, and 3.42 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 first quarter 2015 was $3.14 million compared to $2.78 million for the comparable period of 2014. Excluding realized securities gains, noninterest income was $2.66 million for first quarter 2015, compared to $2.81 million reported for first quarter 2014.

Summit recognized $250,000 provision for loan losses in first quarter 2015, compared to none for the linked quarter and $1.0 million for the year-ago quarter.

Core noninterest expense continues to be well-controlled. Total noninterest expense decreased 3.5% to $8.20 million compared to $8.50 million for the prior-year first quarter. Excluding from noninterest expense (on a pre-tax basis) losses on sales of foreclosed properties of $150,000 in Q1 2015 and $75,000 in Q1 2014 and write-downs of foreclosed properties of $572,000 in Q1 2015 and $928,000 in Q1 2014, noninterest expense would have approximated $7.48 million for Q1 2015 compared to $7.50 million for the comparable period of 2014.

Balance Sheet

At March 31, 2015, total assets were $1.46 billion, an increase of $16.9 million, or 1.2 percent since December 31, 2014. Total loans, net of unearned fees and allowance for loan losses, were $1.04 billion at March 31, 2015, up $19.8 million, or 1.9 percent, from the $1.02 billion reported at year-end 2014.

At March 31, 2015, deposits were $1.06 billion, a decrease of $3.0 million, or 0.3 percent, since year end 2014. During Q1 2015, checking declined by $5.8 million or 1.8 percent while savings increased $4.1 million, or 1.6 percent. Long-term borrowings and subordinated debentures declined by 10.8 percent since year end 2014, as the Company prepaid $11.8 million in subordinated debentures, which was funded by short-term borrowings.

Asset Quality

As of March 31, 2015, nonperforming assets (“NPAs”), consisting of nonperforming loans, foreclosed properties, and repossessed assets, were $46.4 million, or 3.18 percent of assets. This compares to $50.2 million, or 3.48 percent of assets at the linked quarter, and $69.2 million, or 4.92 percent of assets, at first quarter 2014.

First quarter 2015 net loan charge-offs were $590,000, or 0.23 percent of average loans on an annualized basis. The allowance for loan losses stood at $10.8 million, or 1.03 percent of total loans at March 31, 2015, compared to 1.08 percent at year-end 2014.

Capital Adequacy

Shareholders’ equity was $135.9 million as of March 31, 2015 compared to $131.6 million December 31, 2014. Tangible book value per common share increased to $12.23 at March 31, 2015 compared to $11.86 at December 31, 2014. Summit had 10,586,242 outstanding common shares at March 31, 2015.

At March 31, 2015, Summit’s and its depository institution’s, Summit Community Bank, Inc.’s (the “Bank’s”), regulatory risk-based capital ratios computed in accordance with the new Basel III regulatory capital guidelines effective January 1, 2015, were each well in excess of the regulatory minimum required ratio relative to each plus the respective applicable capital conservation buffer on a fully phased-in basis. Respectively, the Company’s and Bank’s Tier 1 leverage capital ratios were 10.1 percent and 10.5 percent at March 31, 2015 compared to 9.9 percent and 10.6 percent reported at December 31, 2014.

About the Company

Summit Financial Group, Inc. is a $1.46 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 fifteen banking locations. Summit also operates Summit Insurance Services, LLC in Moorefield, West Virginia and Leesburg, Virginia.

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 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.



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q1 2015 vs Q1 2014
	For the Quarter Ended					Percent
Dollars in thousands	3/31/2015		3/31/2014			Change
Condensed Statements of Income
Interest income
Loans, including fees	$	12,848	$	12,216		5.2	%
Securities	1,894		1,852			2.3	%
Other	1		2			-50.0	%
Total interest income	14,743		14,070			4.8	%
Interest expense
Deposits	2,071		2,241			-7.6	%
Borrowings	1,152		1,791			-35.7	%
Total interest expense	3,223		4,032			-20.1	%
Net interest income	11,520		10,038			14.8	%
Provision for loan losses	250		1,000			-75.0	%
Net interest income after provision for loan losses	11,270		9,038			24.7	%

Noninterest income
Insurance commissions	1,128		1,181			-4.5	%
Service fees related to deposit accounts	976		1,043			-6.4	%
Realized securities gains (losses)	480		(22		)	n/m
Other income	555		581			-4.5	%
Total noninterest income	3,139		2,783			12.8	%
Noninterest expense
Salaries and employee benefits	4,187		3,980			5.2	%
Net occupancy expense	498		541			-7.9	%
Equipment expense	535		566			-5.5	%
Professional fees	335		316			6.0	%
FDIC premiums	330		502			-34.3	%
Foreclosed properties expense	208		254			-18.1	%
Loss on sales of foreclosed properties	150		75			100.0	%
Write-downs of foreclosed properties	572		928			-38.4	%
Other expenses	1,389		1,336			4.0	%
Total noninterest expense	8,204		8,498			-3.5	%
Income before income taxes	6,205		3,323			86.7	%
Income taxes	1,920		934			105.6	%
Net income	4,285		2,389			79.4	%
Preferred stock dividends	—		193			n/m

Net income applicable to common shares	$	4,285	$	2,196		95.1	%



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Quarterly Performance Summary -- Q1 2015 vs Q1 2014

	For the Quarter Ended						Percent
	3/31/2015			3/31/2014			Change
Per Share Data
Earnings per common share
Basic	$	0.49		$	0.29		69.0	%
Diluted	$	0.41		$	0.25		64.0	%

Average shares outstanding
Basic	8,815,961			7,453,370			18.3	%
Diluted	10,493,323			9,628,927			9.0	%

Performance Ratios
Return on average equity (A)	12.79		%	8.46		%	51.2	%
Return on average assets	1.18		%	0.69		%	71.0	%
Net interest margin	3.59		%	3.33		%	7.8	%
Efficiency ratio (B)	49.27		%	54.13		%	-9.0	%

NOTE (A) - Net income divided by average total shareholders' equity.

NOTE (B) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary

	For the Quarter Ended
Dollars in thousands	3/31/2015		12/31/2014		9/30/2014		6/30/2014			3/31/2014
Condensed Statements of Income
Interest income
Loans, including fees	$	12,848	$	12,666	$	13,033	$	12,515		$	12,216
Securities	1,894		1,784		1,724		1,827			1,852
Other	1		2		3		2			2
Total interest income	14,743		14,452		14,760		14,344			14,070
Interest expense
Deposits	2,071		2,130		2,288		2,335			2,241
Borrowings	1,152		1,371		1,395		1,689			1,791
Total interest expense	3,223		3,501		3,683		4,024			4,032
Net interest income	11,520		10,951		11,077		10,320			10,038
Provision for loan losses	250		—		250		1,000			1,000
Net interest income after provision for loan losses	11,270		10,951		10,827		9,320			9,038

Noninterest income
Insurance commissions	1,128		1,023		1,105		1,091			1,181
Service fees related to deposit accounts	976		1,113		1,177		1,101			1,043
Realized securities gains (losses)	480		149		128		(43		)	(22		)
Other-than-temporary impairment of securities	—		—		—		(1		)	—
Other income	555		537		503		557			581
Total noninterest income	3,139		2,822		2,913		2,705			2,783
Noninterest expense
Salaries and employee benefits	4,187		4,133		4,026		4,045			3,980
Net occupancy expense	498		495		482		505			541
Equipment expense	535		487		520		513			566
Professional fees	335		452		380		282			316
FDIC premiums	330		315		480		495			502
Foreclosed properties expense	208		239		298		229			254
Loss on sale of foreclosed properties	150		628		70		54			75
Write-downs of foreclosed properties	572		300		1,580		962			928
Other expenses	1,389		2,061		1,350		1,445			1,336
Total noninterest expense	8,204		9,110		9,186		8,530			8,498
Income before income taxes	6,205		4,663		4,554		3,495			3,323
Income taxes	1,920		1,464		1,218		1,063			934
Net income	4,285		3,199		3,336		2,432			2,389
Preferred stock dividends	—		191		193		193			193
Net income applicable to common shares	$	4,285	$	3,008	$	3,143	$	2,239		$	2,196



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Five Quarter Performance Summary

	For the Quarter Ended
	3/31/2015			12/31/2014			9/30/2014			6/30/2014			3/31/2014
Per Share Data
Earnings per common share
Basic	$	0.49		$	0.39		$	0.42		$	0.30		$	0.29
Diluted	$	0.41		$	0.32		$	0.35		$	0.25		$	0.25

Average shares outstanding
Basic	8,815,961			7,796,508			7,457,222			7,457,222			7,453,370
Diluted	10,493,323			9,963,214			9,630,293			9,630,699			9,628,927

Performance Ratios
Return on average equity (A)	12.79		%	10.10		%	11.13		%	8.37		%	8.46		%
Return on average assets	1.18		%	0.89		%	0.93		%	0.69		%	0.69		%
Net interest margin	3.59		%	3.42		%	3.47		%	3.32		%	3.33		%
Efficiency ratio - (B)	49.27		%	53.07		%	51.19		%	52.86		%	54.13		%

NOTE (A) - Net income divided by average total shareholders’ equity.

NOTE (B) - Computed on a tax equivalent basis excluding nonrecurring income and expense items and amortization of intangibles.



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Selected Balance Sheet Data

	For the Quarter Ended
Dollars in thousands, except per share amounts	3/31/2015			12/31/2014			9/30/2014			6/30/2014			3/31/2014

Assets
Cash and due from banks	$	3,850		$	3,728		$	3,933		$	3,749		$	3,827
Interest bearing deposits other banks	8,437			8,783			9,300			9,970			13,424
Securities	282,135			282,834			282,401			287,883			281,865
Loans, net	1,039,669			1,019,842			993,347			992,816			962,714
Property held for sale	34,368			37,529			47,252			48,783			52,241
Premises and equipment, net	20,208			20,060			20,132			20,301			20,457
Intangible assets	7,648			7,698			7,748			7,798			7,861
Cash surrender value of life insurance policies	36,961			36,700			36,417			36,151			35,881
Other assets	27,216			26,394			28,139			28,507			27,847
Total assets	$	1,460,492		$	1,443,568		$	1,428,669		$	1,435,958		$	1,406,117

Liabilities and Shareholders' Equity
Deposits	$	1,058,308		$	1,061,314		$	1,054,454		$	1,057,795		$	1,052,630
Short-term borrowings	148,985			123,633			127,432			91,729			68,974
Long-term borrowings and subordinated debentures	101,602			113,879			114,855			158,331			159,881
Other liabilities	15,708			13,098			10,566			10,638			10,105
Shareholders' equity	135,889			131,644			121,362			117,465			114,527
Total liabilities and shareholders' equity	$	1,460,492		$	1,443,568		$	1,428,669		$	1,435,958		$	1,406,117

Book value per common share (A)	$	12.84		$	12.60		$	12.62		$	12.21		$	11.91
Tangible book value per common share (A)	$	12.11		$	11.86		$	11.81		$	11.40		$	11.09
Tangible equity to tangible assets	8.8		%	8.6		%	8.0		%	7.7		%	7.6		%
Tangible common equity to tangible assets	8.8		%	8.0		%	7.3		%	7.0		%	7.0		%

NOTE (A) - Computed on a fully-diluted basis assuming conversion of convertible preferred stock



SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Regulatory Capital Ratios (A)
	3/31/2015		12/31/2014		9/30/2014		6/30/2014		3/31/2014
Summit Financial Group, Inc.
CET1 Risk-based Capital	11.3	%	n/a		n/a		n/a		n/a
Tier 1 Risk-based Capital	13.0	%	13.3	%	12.5	%	12.4	%	12.4	%
Total Risk Based Capital	14.0	%	14.9	%	14.3	%	14.2	%	14.2	%
Tier 1 Leverage Ratio	10.1	%	9.9	%	9.2	%	9.0	%	9.0	%

Summit Community Bank, Inc.
CET1 Risk-based Capital	13.5	%	n/a		n/a		n/a		n/a
Tier 1 Risk-based Capital	13.5	%	14.2	%	14.4	%	14.5	%	14.5	%
Total Risk Based Capital	14.5	%	15.3	%	15.5	%	15.6	%	15.6	%
Tier 1 Leverage Ratio	10.5	%	10.6	%	10.5	%	10.6	%	10.6	%

NOTE (A) - Computed in accordance with Basel III regulatory capital guidelines beginning January 1, 2015



SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Loan Composition

Dollars in thousands	3/31/2015		12/31/2014		9/30/2014		6/30/2014		3/31/2014

Commercial	$	89,928	$	88,590	$	83,762	$	90,096	$	93,517
Commercial real estate
Owner occupied	180,269		157,783		156,765		154,260		150,025
Non-owner occupied	325,764		317,136		314,577		314,439		297,197
Construction and development
Land and development	66,558		67,881		61,088		64,246		67,342
Construction	19,094		28,591		27,239		20,902		18,327
Residential real estate
Non-jumbo	219,938		220,071		218,125		219,569		215,665
Jumbo	50,492		52,879		51,917		52,487		51,406
Home equity	68,894		67,115		64,256		61,248		56,161
Consumer	18,485		19,456		19,906		19,777		19,106
Other	11,074		11,507		6,753		6,798		5,037
Total loans, net of unearned fees	1,050,496		1,031,009		1,004,388		1,003,822		973,783
Less allowance for loan losses	10,827		11,167		11,041		11,006		11,069
Loans, net	$	1,039,669	$	1,019,842	$	993,347	$	992,816	$	962,714



SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)
Deposit Composition

Dollars in thousands	3/31/2015		12/31/2014		9/30/2014		6/30/2014		3/31/2014
Non interest bearing checking	$	117,049	$	115,427	$	104,442	$	106,134	$	99,445
Interest bearing checking	196,606		204,030		195,183		187,855		195,898
Savings	257,687		253,578		255,880		243,323		228,854
Time deposits	486,966		488,279		498,949		520,483		528,433
Total deposits	$	1,058,308	$	1,061,314	$	1,054,454	$	1,057,795	$	1,052,630



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Asset Quality Information
	For the Quarter Ended
Dollars in thousands	3/31/2015			12/31/2014			9/30/2014			6/30/2014			3/31/2014

Gross loan charge-offs	$	782		$	362		$	297		$	1,312		$	2,862
Gross loan recoveries	(192		)	(488		)	(82		)	(249		)	(272		)
Net loan charge-offs	$	590		$	(126	)	$	215		$	1,063		$	2,590

Net loan charge-offs to average loans (annualized)	0.23		%	-0.05		%	0.09		%	0.43		%	1.08		%
Allowance for loan losses	$	10,827		$	11,167		$	11,041		$	11,006		$	11,069
Allowance for loan losses as a percentage of period end loans	1.03		%	1.08		%	1.10		%	1.10		%	1.14		%

Nonperforming assets:
Nonperforming loans
Commercial	$	788		$	392		$	309		$	415		$	866
Commercial real estate	1,340			1,844			936			1,537			2,834
Commercial construction and development	—			—			—			3,601			3,653
Residential construction and development	5,333			4,619			4,592			5,248			6,599
Residential real estate	4,491			5,556			5,257			3,289			2,890
Consumer	65			83			146			129			73
Total nonperforming loans	12,017			12,494			11,240			14,219			16,915
Foreclosed properties
Commercial	110			110			110			110			—
Commercial real estate	3,657			5,204			5,815			5,762			8,523
Commercial construction and development	10,191			10,179			10,178			10,363			11,097
Residential construction and development	17,590			19,267			20,431			20,557			20,640
Residential real estate	2,819			2,769			10,718			11,991			11,981
Total foreclosed properties	34,367			37,529			47,252			48,783			52,241
Other repossessed assets	55			221			34			—			28
Total nonperforming assets	$	46,439		$	50,244		$	58,526		$	63,002		$	69,184

Nonperforming loans to period end loans	1.14		%	1.21		%	1.12		%	1.42		%	1.74		%
Nonperforming assets to period end assets	3.18		%	3.48		%	4.10		%	4.39		%	4.92		%



Loans Past Due 30-89 Days
	For the Quarter Ended
In thousands	3/31/2015		12/31/2014		9/30/2014		6/30/2014		3/31/2014

Commercial	$	387	$	382	$	253	$	376	$	52
Commercial real estate	783		266		1,094		1,032		1,310
Construction and development	2,735		2,278		324		156		754
Residential real estate	3,614		7,413		5,087		5,775		3,847
Consumer	148		269		427		585		219
Other	18		14		18		—		—
Total	$	7,685	$	10,622	$	7,203	$	7,924	$	6,182



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Average Balance Sheet, Interest Earnings & Expenses and Average Rates
Q1 2015 vs Q1 2014
	Q1 2015							Q1 2014
	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	$	1,035,610		$	12,734	4.99	%	$	957,482		$	12,145	5.14	%
Tax-exempt	12,567			174		5.62	%	5,830			108		7.51	%
Securities
Taxable	211,471			1,281		2.46	%	216,900			1,281		2.40	%
Tax-exempt	76,012			927		4.95	%	75,437			864		4.64	%
Interest bearing deposits other banks and Federal funds sold	7,081			1		0.06	%	8,923			2		0.09	%
Total interest earning assets	1,342,741			15,117		4.57	%	1,264,572			14,400		4.62	%

Noninterest earning assets
Cash & due from banks	3,679							3,897
Premises & equipment	20,203							20,582
Other assets	98,685							116,421
Allowance for loan losses	(11,237		)					(12,969		)
Total assets	$	1,454,071						$	1,392,503

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities
Interest bearing liabilities
Interest bearing
demand deposits	$	199,840		$	58	0.12	%	$	186,982		$	52	0.11	%
Savings deposits	254,398			428		0.68	%	208,529			319		0.62	%
Time deposits	485,975			1,585		1.32	%	530,117			1,870		1.43	%
Short-term borrowings	144,779			112		0.31	%	75,177			52		0.28	%
Long-term borrowings and subordinated debentures	105,741			1,040		3.99	%	174,559			1,739		4.04	%
Total interest bearing liabilities	1,190,733			3,223		1.10	%	1,175,364			4,032		1.39	%

Noninterest bearing liabilities
Demand deposits	115,198							95,138
Other liabilities	14,096							9,037
Total liabilities	1,320,027							1,279,539

Shareholders' equity - preferred	7,244							9,291
Shareholders' equity - common	126,800							103,673
Total liabilities and shareholders' equity	$	1,454,071						$	1,392,503

NET INTEREST EARNINGS				$	11,894						$	10,368

NET INTEREST MARGIN						3.59	%						3.33	%



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

	For the Quarter Ended
Dollars in thousands	3/31/2015			12/31/2014			3/31/2014

Core earnings applicable to common shares	$	4,437		$	3,789		$	2,842

Realized securities gains (losses)	480			149			(22		)
Applicable income tax effect	(178		)	(55		)	8
Gain (loss) on sale of foreclosed properties	(150		)	(628		)	(75		)
Applicable income tax effect	56			232			28
Fraud loss	—			(461		)	—
Applicable income tax effect	—			171			—
Write-downs foreclosed properties	(572		)	(300		)	(928		)
Applicable income tax effect	212			111			343
	(152		)	(781		)	(646		)
GAAP net income applicable to common shares	$	4,285		$	3,008		$	2,196


Core diluted earnings per common share	$	0.42		$	0.40		$	0.32

Realized securities gains (losses)	0.05			0.01			—
Applicable income tax effect	(0.02		)	—			—
Gain (loss) on sale of foreclosed properties	(0.01		)	(0.06		)	(0.01		)
Applicable income tax effect	—			0.02			—
Fraud loss	—			(0.05		)	—
Applicable income tax effect	—			0.02			—
Write-downs of foreclosed properties	(0.05		)	(0.03		)	(0.10		)
Applicable income tax effect	0.02			0.01			0.04
	(0.01		)	(0.08		)	(0.07		)
GAAP diluted earnings per common share	$	0.41		$	0.32		$	0.25



SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

	For the Quarter Ended
Dollars in thousands	3/31/2015		12/31/2014		3/31/2014

Total core revenue	$	14,179	$	13,624	$	12,843

Realized securities gains/(losses)	480		149		(22		)
GAAP total revenue	$	14,659	$	13,773	$	12,821


Total core noninterest income	$	2,659	$	2,673	$	2,805

Realized securities gains/(losses)	480		149		(22		)
GAAP total noninterest income	$	3,139	$	2,822	$	2,783


Total core noninterest expense	$	7,482	$	7,721	$	7,495

Fraud loss	—		461		—
(Gains)/losses on sales of foreclosed properties	150		628		75
Write-downs of foreclosed properties	572		300		928
	722		1,389		1,003
GAAP total noninterest expense	$	8,204	$	9,110	$	8,498

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SUMMIT FINANCIAL GROUP, INC. Reports