Summit Bank (OTC Pink: SBKO) reported net income for the fiscal year ended December 31, 2017 of $3.28 million, or a 15% increase in earnings over $2.86 million in 2016. 2017 earnings per fully diluted share of $0.83 represented a $0.03 per fully diluted share increase over fiscal 2016 earnings of $0.80 per share. Earnings per share increase was impacted as a result of 447,000 new shares offered in the successful $6 million capital raise in the first quarter of 2017.

Earnings for the 4th quarter were negatively affected by $0.08 per share in additional federal income tax expense associated with the passage of the Tax Cuts and Jobs Act of 2017 which became effective in December 2017. As a result, earnings for Q4 2017 were $605 thousand or $0.15 per fully diluted share compared to Q4 2016 earnings of $759 thousand or $0.21 per fully diluted share.

“Like many other banks across the nation, the Tax Cuts and Jobs Act of 2017 had a negative impact in 4th quarter of 2017; however, we anticipate the Act will reduce our marginal tax rate in 2018 to 28% from 38%,” said Craig Wanichek, President and CEO. “The additional benefit from the Act will also result in a greater capacity to continue to make economic investments in our two primary markets of Eugene/Springfield and Central Oregon.”

Summit achieved its fifth consecutive year of annual loan growth in excess of 20% during 2017. Total net loans as of December 31, 2017, were $276.5 million, representing a 21.8% increase over the fiscal 2016 total of $227.0 million. Total assets at the end of the year were $336 million, an increase of 19.0% over total assets of $282 million at the end of 2016. Deposit growth was similarly strong, with total deposits increasing by $44.9 million or 17.7% over the previous year.

“Our clients’ growth this past year added significantly to our progress in 2017,” said Wanichek. “But, the addition of key new relationships helped us achieve the loan growth in excess of 20%. Our strong balance sheet position has also allowed us to increase rates for our depositors twice over the last seven months.”

The Bank reported $47.0 million of cash & short-term investments in securities at the end of 2017. This is a 9.3% increase over $43.2 million held in cash & short-term investments in securities at the end of 2016. The Bank continues to hold very low levels of non-performing assets. Total non-performing assets at December 31, 2017 consisted primarily of one parcel of other real estate owned and represented just 0.4 percent of total assets, a reduction from 0.5 percent at December 31, 2016.

With offices in Eugene and Bend, 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. Summit is the number one community bank lender in Oregon for SBA Financing. Summit Bank was designated this year as a 100 Best Company to Work for in Oregon, according to Oregon Business Magazine.

 

QUARTERLY FINANCIAL REPORT – DECEMBER 2017

 
(in thousands except per share data)       Unaudited     Unaudited        
As of As of
Summary Statements of Condition Dec. 31, 2017 Dec. 31, 2016
Cash and short term investments $ 40,965 $ 36,649
Securities 6,242 6,557
Loans:
Commercial 87,304 72,005
Commercial real estate 161,846 129,315
Other 32,285 29,765
Loan loss reserve and unearned income   (4,933 )   (4,117 )
Total net loans 276,502 226,968
Property and other assets 10,949 10,807
Repossessed property   1,031     1,016  
Total assets $ 335,689   $ 281,997  
 
Deposits:
Noninterest-bearing demand $ 86,498 $ 89,511
Interest-bearing demand 185,882 136,743
Certificates of deposit   26,233     27,455  
Total deposits 298,613 253,709
Other liabilities 2,543 3,395
Shareholders' equity   34,534     24,892  
Total liabilities and shareholders' equity $ 335,689   $ 281,997  
 
Book value per share $ 8.43 $ 7.01
 
Unaudited Unaudited Unaudited Unaudited
For the twelve For the twelve For the three For the three
months ending months ending months ending months ending
Summary Statements of Income Dec. 31, 2017 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2016
Interest income $ 16,368 $ 12,681 $ 4,469 $ 3,409
Interest expense   (677 )   (414 )   (209 )   (108 )
Net interest income 15,691 12,268 4,260 3,301
Provision for loan losses (2,280 ) (1,381 ) (512 ) (411 )
Noninterest income 1,358 1,103 302 306
Noninterest expense   (8,847 )   (7,391 )   (2,515 )   (1,969 )
Net income before income taxes   5,922     4,599     1,535     1,227  
Provision for income taxes (2,638 ) (1,745 ) (930 ) (468 )
Net income $ 3,283   $ 2,855   $ 605   $ 759  
 
Net income per share, basic $ 0.84 $ 0.81 $ 0.15 $ 0.21
Net income per share, fully diluted $ 0.83 $ 0.80 $ 0.15 $ 0.21