SSBI - Summit State Bank Reports 77% Increase in Net Income for 2018 and Declaration of Dividend

SANTA ROSA, Calif., Jan. 29, 2019 (GLOBE NEWSWIRE) -- Summit State Bank (NASDAQ: SSBI) today reported net income for the year ended December 31, 2018, of $5,827,000 and diluted earnings per share of $0.96.  A quarterly dividend of $0.12 per share was declared for common shareholders.

Dividend

The Board of Directors declared a $0.12 per share quarterly dividend to be paid on February 26, 2019 to shareholders of record on February 19, 2019.

Net Income and Results of Operations

“We are in the third year of implementing Summit State Bank’s strategy to increase core deposits and loan volume and enhance earnings performance,” said Jim Brush, President and CEO.  “We continue to invest in highly qualified staff and this has allowed Summit to remain well poised for deliberate growth of our business in key areas. We are not growing just for the sake of growth, we are growing our business with the future in mind and making measured decisions that yield results that have a positive, lasting effect.”

Following are several key accomplishments in 2018:

• Net loans increased 15.3% for 2018 compared to 2017.
   
• Net Interest Margin increased to 3.75% in 2018, up 20 basis points from 2017.
   
• Efficiency Ratio of 64.24% in 2018, an improvement of 425 basis points from 2017.

Net income was $5,827,000 and $0.96 diluted earnings per share for the year ended December 31, 2018, compared to net income of $3,292,000 and $0.54 diluted earnings per share for the year ended December 31, 2017, a 77% increase in net income and diluted earnings per share.

For the quarter ended December 31, 2018, Summit State Bank (“Summit”) had net income of $1,121,000 and diluted earnings per share of $0.18 compared to $478,000 of net income and $0.08 diluted earnings per share, for the same period in 2017, a 135% increase in net income and a 125% increase diluted earnings per share.

Summit experienced a 4.8% increase in gross loans during the fourth quarter 2018 and a 15.3% increase for 2018. Summit recorded a provision for loan loss that was relatively flat to the prior year; $530,000 in 2018 versus $520,000 in 2017. This was due to improved credit quality mitigating some of the impact of the loan growth on the provision for loan loss.

Summit has minimized the impact a rising interest rate environment has had by increasing total loans as a percent of assets. In 2018 Summit’s net interest income increased by 16.4%, up to $21,622,000 in 2018 from $18,572,000 in 2017.

“As projected, the bank began seeing positive impacts on net interest income starting in the fourth quarter of 2017 and this trend continued through 2018,” according to Mr. Brush. “We are able to improve net interest income by increasing loans as a percentage of the Bank’s assets and responding to the rising interest rate environment by creating a balanced offering of deposits and loans at competitive rates.”

Summit’s return on average assets yielded a positive increase, up to 0.99% for 2018 compared to 0.62% for 2017. Its return on average common equity was also up to 9.66% for 2018 compared to 5.49% for 2017.

Total assets were $622,104,000 at December 31, 2018, up 1.8% when compared to December 31, 2017 and up a total of 21.1% when compared to December 31, 2016. The growth in 2018 was subdued by a one-time deposit of approximately $55 million made prior to December 31, 2017 and partially withdrawn after year end.

Summit’s balance sheet is liability sensitive and with economists projecting a continued rising rate environment Summit has stated it will maintain a balance between growing its high-quality loan portfolio with a core deposit portfolio that is competitive and meets its customer’s needs.

“Staying true to our commitment of improving long-term shareholder value as well as caring for our employees, customers and community we serve is at the center of our strategic focus. I am optimistic about the trajectory we are on to build sustainable growth,” said Mr. Brush.

About Summit State Bank

Summit State Bank, a local community bank, has total assets of $622 million and total equity of $62 million at December 31, 2018. 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, 82% of management are women and minorities with 60% 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 Statements

Except 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: Jim Brush, President and CEO, Summit State Bank (707) 568-4920