Summit State Bank · NASDAQ:SSBI

Summit State Bank — Investor Presentation (May 2023)

22 slides from Summit State Bank's investor presentation, May 22, 2023

  1. Slide 1: Shareholder Presentation

    Shareholder Presentation May 22, 2023 1

  2. Slide 2: Company Overview

    Company Overview  Summit State Bank is a commercial bank headquartered in Santa Rosa, CA with $1.1 billion in assets, 5 branch locations and more than 116 employees  Bank formed in 1982  Listed on NASDAQ in 2006 under the ticker symbol “SSBI”  Summit Way Service Standards -Dedicated to serving a

  3. Slide 3: Summit State Bank - NASDAQ: SSBI

    Summit State Bank-NASDAQ: SSBI Headquartered in Santa Rosa, CA Branch Locations  Santa Rosa Main  Healdsburg  Santa Rosa Montgomery Village  Rohnert Park  Petaluma Regional Small Business Lending Group  Roseville, CA 3

  4. Slide 4: Market Area Highlights

    Market Area Highlights Northern California Concentrated in Sonoma County  Commercial Property Investment Inventory Remains Low  Diverse and Strong Economy:  Healthcare, Manufacturing, Construction and Wholesale Trade Comprise > 40% of the County’s Earnings  Consistently Low Unemployment and High

  5. Slide 5: Our Leadership Team

    Our Leadership Team Brian Reed Genie Del Secco Brandy Seppi Camille Kazarian Michael Castlio President & CEO EVP & Chief Operating Officer EVP & Chief Lending Officer EVP & Chief Financial Officer SVP & Chief Credit Officer 38 Years in the Industry 32 Years in the Industry 28 Years in the Industry 2

  6. Slide 6: Financial Trends

    Financial Trends  Strong Net Interest Income Growth  Consistent Non-interest Income Growth since 2017 due to:  SBA Loan Sales, and  SBA Servicing Income  Increasing Return on Average Assets 6

  7. Slide 7: Loan Growth & Asset Quality

    Loan Growth & Asset Quality  Loan Growth (YoY) without PPP Loans at 13.3%  Strong Reserves (Allowance for Loans & Lease Losses – ALLL)  ALLL is 1.59% without PPP Loans, which Carry a Zero-Risk Weighting and excluding unsold guaranteed portion of SBA loans  CECL Conversion as of January 1, 2021 7

  8. Slide 8: Interest Income & Interest Expense Management

    Interest Income & Interest Expense Management  Strong Net Interest Margin Compared to CA Peer Group  NIM compression observed due to increasing deposit costs  Most recent 3 years show continued improvement in:  Net Interest Income Growth  Increased Profitability 8

  9. Slide 9: Building the Infrastructure to Deliver Results

    Building the Infrastructure to Deliver Results  In 2017 the Bank Designed a 5- year Growth Plan to Deliver Strategic Results  Strong Performance in Efficiency with Consistent Gains through:  Income Growth, and  Expense Management  Continually Reviewing Technology for Enhancements 9

  10. Slide 10: Assets Trends

    Assets Trends  Focused Growth on Conventional CRE and SBA Guaranteed Loans with Targeted Yield at 7.25%  Portfolio Loan Yield as of 2022Q4 at 5.43%  Organic Loan Growth through Strong Relationship Practices 10

  11. Slide 11: Loan Composition

    Loan Composition CRE Loan Portfolio Total Loan Portfolio Concentration  Diversified Portfolio with Manageable Risk  Total Portfolio LTV 47% (ex C&I); CRE LTV 49.5%  CRE LTV 48.6% for Property Types with Higher Risk  Pandemic Risks: Wineries, Hotels, Restaurants, and Retail at ~34.8% of CRE Portf

  12. Slide 12: SBA Loan Program

    SBA Loan Program  Dedicated Small Business Lending Group Created in 2017  Floating Rate Yields ~ 11.7% (January 2023 adjustment)  Increase in Non-interest Income through:  Consistent SBA Loan Sales  Growing SBA Servicing Income  Decreased Retained Balance in Q4 2022 driven by selling all guara

  13. Slide 13: Liabilities Trends

    Liabilities Trends  4Q2022 Average Cost of Funds at 0.71%  Deposit growth from 2016 to 4Q2022:  Local Non-Maturity Deposits went from 56% to 60% of Total Deposits  Total Local Deposits went from 70% to 89% of Total Deposits  Focus on Local Deposit Growth  Managed & Disciplined Use of Brokered

  14. Slide 14: Deposit Composition

    Deposit Composition  Organic Deposit Growth through Strong Relationship Practices  Focused Local Deposit Growth  FY2022 Average Cost of Deposits at 0.58% 14

  15. Slide 15: Focus on Liquidity and Quality as of Q1 2023

    Focus on Liquidity and Quality as of Q1 2023  $194MM of Available Liquidity  Including Cash and Investments Available for Sale  Primary Liquidity is 17%  $330MM of Off-Balance Sheet Liquidity Sources  Including FHLB, Federal Reserve Bank, and Fed Funds lines  Secondary Liquidity is 29%  $207M

  16. Slide 16: Consistently Delivers Strong Stock Value

    Consistently Delivers Strong Stock Value Graph illustrates investment in 1 share of stock beginning in 2016  2016: One share of stock purchased  2017: A five-for-four stock split results in 1.25 shares outstanding  2021: A one time 10% stock dividend results in 1.38 shares outstanding Note: Value

  17. Slide 17: Strong Dividend Return

    Strong Dividend Return Graph illustrates investment in 1 share of stock beginning in 2016  Dividend on Initial Investment relates to the original purchase of 1 share  Additional Dividend Return of 37.5% is a result of:  5-for-4 stock split (2017)  one time 10% stock dividend (2021) 17

  18. Slide 18: Stock Total Return Outperforms Bank Indices

    Stock Total Return Outperforms Bank Indices Total Return vs Bank Indices as of Q1 2023 18

  19. Slide 19: Why Summit State Bank?

    Why Summit State Bank?  Experienced Executive & Management Team  Commitment to a Culture of Success  Focused on Organic Growth  Strategic Lending Platform Positioned to Deliver Results  High Credit Quality with a Low Risk Profile  Strong Net Interest Margin & Improved Efficiency Ratio  Califo

  20. Slide 20: Awards and Accolades

    Awards and Accolades Best Places to Work North Bay Business Journal Best Business Bank North Bay biz magazine Top Community Bank Loan Producer ICBA Raymond James Bankers Cup Raymond James Super Premier Performance Findley Reports Bank & Thrift Sm - All Stars Piper Sandler 20

  21. Slide 21: Private Securities Litigation Reform Act of 1995

    Private Securities Litigation Reform Act of 1995 Statements made during this presentation and in response to questions may constitute Forward Looking Statements within the meaning of the Private Securities Litigation Reform Act of 1995 and any such statements are subject to risks and uncertainties t

  22. Slide 22: Mailing Address and Contact

    MAILING ADDRESS 500 Bicentennial Way Santa Rosa, CA 95403 CONTACT Barbara Gradman VP, Corporate Secretary bgradman@summitstatebank.com (707) 568 6000 22

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