Summit State Bank · NASDAQ:SSBI

Summit State Bank — Q1 2023 Earnings Presentation

22 slides from Summit State Bank's earnings presentation, 2023

  1. Slide 1: Investor Presentation Q1 2023

    Investor Presentation Q1 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 Locations

    Summit State Bank Locations 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  Rate increases have put downward pressure on Return on Average Assets and Net Interest Income  Consistent Non-interest Income Growth since 2017 due to:  SBA Loan Sales, and  SBA Servicing Income  Loan Sales Outlook potentially constrained due to current rate environment 6

  7. Slide 7: Loan Growth & Asset Quality

    Loan Growth & Asset Quality  Loan Growth without PPP Loans has declined (0.4%) due to $23MM of loan sales in March 2023  Average Loan Balance (QoQ) increased $7MM from Q4 2022  Strong Reserves (Allowance for Loans & Lease Losses – ACL)  ACL is 1.67% without PPP Loans, which Carry a Zero-Risk Wei

  8. Slide 8: Interest Income & Interest Expense Management

    Interest Income & Interest Expense Management  NIM compression observed due to planned deposit growth and increased interest rates  Most recent 3 years show continued improvement in:  Net Interest Income Growth  Increased Profitability  While NIM is declining it still remains strong 8

  9. Slide 9: Building the Infrastructure to Deliver Results

    Building the Infrastructure to Deliver 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 2023Q1 at 5.59%  Focused on Organic Loan Growth through Strong Relationship Practices  Asset growth in Q1 2023 is driven by growth in Cash 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 49.2%  CRE LTV 48.8% for Property Types with Higher Risk  Pandemic Risks: Wineries, Hotels, Restaurants, and Retail at ~34.7% 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 driven by selling majority of guarante

  13. Slide 13: Liabilities Trends

    Liabilities Trends  Focus on Local Deposit Growth and Increasing Market Share  1Q2023 Average Cost of Funds at 1.77%  Deposit growth from 2018 to 1Q2023:  Local Non-Maturity Deposits went from 57% to 58% of Total Deposits  Total Local Deposits went from 89% to 92% of Total Deposits 13

  14. Slide 14: Deposit Composition

    Deposit Composition  Organic Deposit Growth through Strong Relationship Practices  Focused Local Deposit Growth  1Q2023 Average Cost of Deposits at 1.77% 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 & Efficiency Ratio  California Peer

  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 Performing Banks 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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