SANTA ROSA, Calif., July 28, 2020 (GLOBE NEWSWIRE) — Summit State Bank (Nasdaq: SSBI) today reported net income for the quarter ended June 30, 2020 of $2,218,000 and diluted earnings per share of $0.37. This compares to net income of $1,172,000 and diluted earnings per share of $0.19 for the same quarter in 2019. Additionally, a quarterly dividend of $0.12 per share was declared for common shareholders.
DividendThe Board of Directors declared a $0.12 per share quarterly dividend on July 27, 2020 to be paid on August 21, 2020 to shareholders of record on August 14, 2020.Net Income and Results of OperationsNet income increased $1,046,000 or 89% the second quarter of 2020 compared to second quarter of 2019. Net income increased $2,037,000 or 78% in the first six months of 2020 compared to the first six months of 2019.Net interest income increased to $7,174,000 in the second quarter of 2020 compared to $5,499,000 in the second quarter of 2019. The increase in net interest income is primarily attributable to increases in loan balances with a lesser portion of this increase driven by the Paycheck Protection Program (“PPP”) loans.“The Bank is pleased to announce four consecutive quarters of strong earnings totaling $8,514,000 or $1.40 per share,” said Brian Reed, President and CEO. “Three and a half years ago, we implemented a strategic plan to restructure and grow the Bank’s balance sheet and this plan is now showing consistently strong earnings and balance sheet growth.”“The COVID-19 pandemic presents a number of economic challenges and we continue to actively support our customers and local businesses in these unprecedented times,” said Reed. “To date we funded over $95,000,000 of PPP loans representing 13.5% of the June 30, 2020 loan portfolio. In these uncertain times we feel fortunate to be a position to help our customers and community. We stand ready to be a continue source of support for them going forward.”Nonperforming assets were $410,000 or 0.05% of total assets at June 30, 2020 compared to $715,000 or 0.11% at June 30, 2019. Nonperforming assets at June 30, 2020 consist of loans which are predominantly secured by real property. The Bank had a provision expense of $500,000 in the second quarter of 2020. At June 30, 2020 the allowance for loan losses to total loans including SBA-guaranteed PPP loans was 1.11% at June 30, 2020 and 1.17% at June 30, 2019. Excluding $95,534,000 of PPP loans increases the ratio of allowance for loans losses to 1.28% at June 30, 2020.In the second quarter of 2020 the Bank deferred payments on over $142,000,000 or 20% of loans in its portfolio. The deferral process increases the total balance due on the loan and re-amortizes the monthly payment through the original maturity date. As of June 30, 2020, approximately $54,000,000 or 9% of the loan portfolio excluding PPP loans were in deferral.“The Bank has deliberately built its balance sheet growth around strong-performing loans,” notes Reed. “At the onset of the pandemic and continuing through today, the Bank has experienced minimal credit problems. We are actively monitoring our portfolio, assisting our customers through this economic downturn, and ensuring we maintain sufficient loan loss reserves.”Reed further explains “The Bank will continue monitoring this fluid situation. We are watching trends in high-risk industries including retail, restaurants, and lodging. These high-risk industries comprise approximately 14% of our portfolio and we are increasing our loan loss reserves due to the increased risk of loss.”Non-interest income increased in the second quarter of 2020 to $693,000 compared to $340,000 in the second quarter of 2019. The Bank recognized $320,000 in gains on sales of SBA guaranteed loan balances in the second quarter of 2020 compared to $0 in gains on sales of SBA guaranteed loans balances in the second quarter of 2019.Total loans and deposits also increased when comparing the second quarter of 2020 to second quarter of 2019; loans were $701,808,000 in 2020 (includes $95,534,000 of PPP loans) compared to $536,674,000 in 2019 and deposits were $709,473,000 in 2020 compared to $532,257,000 in 2019. The net interest margin increased to 3.71% for the second quarter of 2020 compared to 3.64% for the second quarter of 2019.Annualized return on average assets for the second quarter of 2020 was 1.12%, annualized return on average equity was 12.71% and the efficiency ratio was 53.59%. The second quarter of 2019 had an annualized return on average assets of 0.75%, annualized return on average equity of 7.36% and efficiency ratio of 68.34%.There was a $221,000 or 6% increase in operating expenses in the second quarter of 2020 compared to the second quarter of 2019. The increase in expenses is primarily due to an increase in employee expenses and occupancy costs. The Bank is leveling off of a growth trend in operating expenses since the middle of 2019 resulting in an improvement in the efficiency ratio by 14.75% when comparing second quarter of 2020 to second quarter of 2019.About Summit State BankSummit State Bank, a local community bank, has total assets of $850 million and total equity of $71 million at June 30, 2020. Headquartered in Sonoma County, the Bank specializes in providing exceptional customer service and customized financial solutions to aid in the success of local small businesses and nonprofits throughout Sonoma County.Summit State Bank is committed to embracing the diverse backgrounds, cultures and talents of its employees to create high performance and support the evolving needs of its customers and community it serves. At the center of diversity is inclusion, collaboration, and a shared vision for delivering superior service and results for shareholders. Presently, 73% of management are women and minorities with 75% represented on the Executive Management Team. Through the engagement of its team, Summit State Bank has received many esteemed awards including: Best Business Bank, Corporate Philanthropy Award and Best Places to Work in the North Bay. Summit State Bank’s stock is traded on the Nasdaq Global Market under the symbol SSBI. Further information can be found at www.summitstatebank.com.Forward-looking StatementsExcept for historical information contained herein, the statements contained in this news release, are forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, and competition within the business areas in which the Bank will be conducting its operations, including the real estate market in California and other factors beyond the Bank’s control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. You should not place undue reliance on the forward-looking statements, which reflect management’s view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.Contact: Brian Reed, President and CEO, Summit State Bank (707) 568-4908




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