On July 22, 2020, Summit Bank (OTC Pink: SBKO) reported net income for the second quarter of $1.41 million or 25 cents per fully diluted share. Earnings for the comparable period one year ago were $1.35 million or 26 cents per fully diluted share. Year-to-date earnings were $2.38 million or 44 cents per fully diluted share, compared to $2.59 million or 49 cents that the Bank earned during the first six months of 2019. Increased average number of shares from our successful $8.0 million capital raise in the first quarter impacted earnings per share for the quarter and year-to-date.
The Bank was able to grow earnings despite elevated loan-related losses in the Bank’s small-business commercial equipment finance portfolio as well as increased provision for future loan losses resulting from the ongoing impact of the COVID-19 pandemic. The focus of the SBA division on the Paycheck Protection Program (PPP) led to a decline in non-interest income for the quarter, as the Bank has historically booked and sold a portion of its traditional SBA loans in the secondary market. Net-interest income for the six-month period, excluding PPP activity, exceeded the similar period last year by $1.45 million, an increase of 13.1 percent as the Bank’s core operations remain robust despite the challenging economic environment.
The Bank responded to the Federal SBA PPP during the second quarter by originating $114.2 million in loans to help our clients mitigate the impact of the COVID-19 pandemic. This lending activity, combined with robust growth in deposits from existing and new clients, expanded Summit’s balance sheet significantly during the quarter with total loans increasing by $121.4 million or 26.1 percent during the quarter and $195.9 million or 50.3 percent over the previous year, and total deposits increasing by $88.2 million or 17.6 percent during the quarter and $179.0 million or 43.8 percent over the previous year. The Bank completed a successful common stock offering during the second quarter, raising nearly $8 million in new capital that will be used to support the Bank’s continued loan balance sheet growth.
“The effort by the entire team to get us through the PPP and support our communities was tremendous,” said Craig Wanichek, President and CEO. “We are also very humbled by the confidence our communities have in Summit Bank by bringing nearly $8 million in new capital in one day.”
The Bank’s available liquidity was extremely strong during this period of uncertainty with $119.4 million of cash and short-term investments in securities as of June 30, 2020. This is more than twice the total of $58.5 million in similar assets held on June 30, 2019. Non-performing assets remain low with total non-performing assets on June 30, 2020 representing just 0.24 percent of total assets, a decrease from 0.28 percent on June 30, 2019.
“As a technology-focused bank,” said Wanichek, “Summit was able to come together for the benefit of our clients and communities this quarter. As an essential business, Summit remained open throughout the pandemic and helped find ways to ease the financial burdens of our clients. Our bankers worked closely with business owners and nonprofit executives to understand their needs and tailor services accordingly. Our investment in technology including accessible remote and online banking enabled us to be “pandemic ready,” which allowed our bank to continue to serve all of our clients during lockdown.”
With offices in Eugene, Central Oregon and downtown Portland, Summit Bank is a business bank that specializes in providing high-level service to professionals and medium-sized businesses and their owners. Summit Bank is quoted on the NASDAQ Over-the-Counter Bulletin Board as SBKO.
QUARTERLY FINANCIAL REPORT – JUNE 2020
