Summit Bank (OTC Pink: SBKO) reported net income for the third quarter of $2.06 million or 35 cents fully diluted share. Earnings for the comparable period one year ago were $1.65 million or 32 cents per fully diluted share. Year-to-date earnings were $4.44 million or 79 cents per fully diluted share, compared to $4.24 million or 81 cents that the Bank earned during the first nine months of 2019. The solid earnings for the third quarter were achieved despite increased provision for future loan losses resulting from the ongoing impact of the COVID-19 pandemic. “We are pleased with the Bank’s growth over the summer given the economic conditions associated with the pandemic that our community and nation are facing,” said Craig Wanichek, CEO and president. “As an Oregon-based business bank, we continued to grow this quarter because of our close relationships and consistent communication with both longtime and new clients.”
Earnings per fully diluted share (EPS) for the trailing four quarters ended September 30 were $1.05 compared to $1.19 for the four-quarter period ended September 30 2019. The Bank completed a successful capital offering in the second quarter of 2020, which increased average total shares outstanding for the year to date by 7.7 percent, which was the primary driver of the lower earnings per share relative to the previous year. Net interest income for the nine-month period exceeded the similar period last year by $2.7 million, an increase of 15.5 percent as the Bank’s core operations remain robust despite the challenging economic environment. “We’d like to acknowledge the bank’s dedicated staff,” said Wanichek. “As we continue to navigate through this pandemic, our team comes into the office every day to provide our clients with the best service and client experience possible. Thank you to Summit Bank’s dedicated colleagues for continuing to work hard on behalf of our clients.”
Summit’s balance sheet remains significantly expanded at the end of the third quarter as all $119 million of the Bank’s Small Business Administration’s Paycheck Protection Program (PPP) loans, which we originated to help our clients mitigate the impact of the COVID-19 pandemic, remain outstanding. Earlier this year, Summit Bank announced that it was able to help 440 small businesses and nonprofits across Oregon under the U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP).
Most recently, Summit Bank committed to donating $150,000 of its CARES Act PPP SBA loan income to make microloans to underserved members of the community in all three of its markets including minority-owned businesses, women-owned businesses, service-disabled veteran-owned businesses and emerging small businesses, particularly those operating in low-income areas of the state. The bank will partner with Community LendingWorks, a Community Development Financial Institution (CDFI) based in Springfield, Oregon to help underwrite, disburse and service the loans.
Summit has continued to achieve strong loan growth over the year-to-date, and the last 12 months with total net loans (excluding PPP loans) increasing by $64.4 million or 15.4 percent since September 30, 2019 and by $44.6 million or 10.2 percent during the first nine months of 2020. The Bank’s deposit base continues to grow as well with $38.5 million or 6.6 percent growth achieved during the third quarter and $186.3 million or 42.3 percent over the last 12 months.
The Bank continues to hold extremely high levels of available liquidity during this period of uncertainty with $142.7 million of cash and short-term investments in securities as of September 30 2020. This is more than twice the total of $67.5 million in similar assets held at September 30 2019. Non-performing assets have increased somewhat during the quarter with total non-performing assets at September 30, 2020, representing just 0.95 percent of total assets, an increase from 0.23 percent as of September 30, 2019.
Summit Bank is also pleased to report that our shareholders voted on and approved the formation of Summit Bank Group, Inc., a bank holding company. All regulatory information and documentation for the Holding Company has been approved, making Summit Bank a wholly owned subsidiary of Summit Bank Group, Inc. As a result, effective immediately, Summit Bank shareholders became 100 percent owners of the holding company.
With offices in Eugene, Bend 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.
