Summit State Bank · NASDAQ:SSBI
Summit State Bank — Q1 2025 Earnings Presentation
40 slides from Summit State Bank's earnings presentation, 2025
Slide 1: That's Our Business.
5 0 © oO Gg A SUMMIT A Better Sonoma County. se ee That's Our Business. Member FDIC
Slide 2: About
About Brian J. Reed, President & CEO Brian has over 40 years of community banking experience, with over 30 in Sonoma County. 2020 - Selected as President and CEO of Summit State Bank 2016 - Joined Summit State Bank as Chief Credit Officer 2006 – Served as EVP Chief Credit Officer of First Community
Slide 3: Core Values
Core Values Mission Statement Summit State Bank's mission is 1. Greet customers, colleagues and community with courtesy and enthusiasm to hire and invest in 2. Treat everyone you encounter with respect – they are important exceptional people, provide 3. Offer your service and solutions, look for way
Slide 4: Guiding Principles
Guiding Principles “ To be a successful community bank, we must be significant in the lives of those we touch - our employees, customers and community. Significance is the legacy that is left behind long after a leader leaves an organization. Their influences on values, attitudes and culture will en
Slide 5: Company Overview
Company Overview • Commercial Bank, headquartered in Santa Rosa, CA • $1.1 billion in assets • 5 branch locations • 107 employees • Founded in 1982 • Listed on NASDAQ in 2006 under the ticker “SSBI” Summit State Bank Locations • Santa Rosa Main, Headquarters • Healdsburg • Montgomery Village, Santa
Slide 6: Executive Leadership
Executive Leadership Genie Del Secco, Camille Kazarian, Michael Floyd, Brandy Seppi EVP and EVP and EVP and EVP and Chief Operating Officer Chief Financial Officer Chief Credit Officer Chief Lending Officer Genie has 35 years of community Camille has 26 years of industry Michael has over 40 years of
Slide 7: 40 years and $1B in Assets
40 years and $1B in Assets 2022 $1B Assets and 40th Anniversary 2020 2017 $135MM PPP Loans 2016 Brand Refresh 500MM in Assets 2006 Reached Listed on NASDAQ 2009 Healdsburg Branch 2007 1982 2003 Petaluma Branch Opens Bicentennial Branch Opens Bank Opened 1990 Opens 1985 Windsor Branch Montgomery Vill
Slide 8: Opportunities & Challenges
Opportunities & Challenges Historically, community banks have competed in three primary areas: price, product and convenience. Summit focuses on customer service as its niche. Opportunities: • Community Engagement: The bank's strong commitment to local communities through volunteerism and charitable
Slide 9: Competitive Advantages
Competitive Advantages What Makes Summit State Bank Unique? What sets us apart from our competitors is our ability to deliver personalized solutions and service with excellent customer service along with providing access to local decision-makers. We strive to develop long-term relationships with our
Slide 10: Making a Difference
Making a Difference Nonprofit Partner Program Results
Slide 11: Nonprofit Partner Program Results
• We augmented the Nonprofit Partner Program with an annual North Bay Nonprofit Event (NBNE). • The half-day event includes local nonprofit experts who share valuable information with the attendees. • The purpose of the event is to deepen the relationships with our existing Nonprofit Partners by pro
Slide 12: Giving Back
Giving Back Honoring Community • As part of giving back to the nonprofit community, we select several of our Nonprofit Partners to highlight throughout the year by featuring them in print, digital and video advertising. • It is a partnership that elevates our nonprofit support and provides a platfor
Slide 13: Awards & Accolades
Awards & Accolades Best Places to Work - Hall of Fame NorthBay Biz Magazine Corporate Philanthropy Award San Francisco Business Times Best Places to Work North Bay Business Journal Diversity in Business North Bay Business Journal Top Performing Bank American Banker Raymond James Award
Slide 14: Market Area Highlights
Northern California Concentrated in Sonoma County Market Area Highlights Commercial Property Investment Inventory Remains Low due to limited construction over the past ten years. Diverse and Resilient Economy: Healthcare, Manufacturing, Construction and Wholesale Trade Comprise > 40% of the Co
Slide 15: Financial Trends
Financial Trends 2020 - 2022: Strong growth from continued low and stable rate environment resulting in robust loan production and healthy NIM, and strong non- interest income. 2023: Fed raised rates 5.00% between Mar 2022 - July 2023. Rapid and sustained rate increases compressed NIM and slow
Slide 16: Drivers of Performance
Drivers of Performance Credit Quality Net Interest Margin and Net Interest Income Non-Interest Income Expense Management
Slide 17: Loan Growth & Asset Quality
Loan Growth & Asset Quality 2024 and YTD 2025 Loan production slowed due to focusing on quality and appropriate rate in an uncertain economic environment Strong Reserves at 1.55% (Allowance for Loans & Lease Losses – ACL) sufficiently cover the risk in the portfolio Elevated Non-Performing Loa
Slide 18: Non-Performing Loans and Loan Loss Reserve
Non-Performing Loans and Loan Loss Reserve Non-Performing Loans: 3 specific relationships make up 92% of non-performing loans as of Q1 2025 $2MM of specific reserves set aside for all Impaired loans General pool reserves remain at 1.32% (excluding specific relationships) Historically, actual
Slide 19: Non-Performing Loans
Non-Performing Loans Bank Balance % of Non- Industry Specific Expected Status at Q1 ($000) Performing Loans Reserve at Q1 Resolution 2025 2025 ($000) In Contract to Winery Credit #1 $33 0% $0 Q2 2025 Sell Agriculture Credit #2 $8,031 46% $205 TBD In Bankruptcy Agriculture In Contract to Credit #3 $8
Slide 20: Portfolio Delinquency Trends
Portfolio Delinquency Trends Delinquency Trends: Delinquency metrics of the performing portfolio have been declining in recent periods Past Due segment is currently <0.25% of the portfolio *excludes Non-Accrual loans
Slide 21: Interest Income & Interest Expense Management
Interest Income & Interest Expense Management NIM compression and Net Interest Income declined due to elevated cost of funds, lower volume of new higher priced loans and existing loans that have repriced slower than deposits Net Interest Income increased from $7.7MM Q4 2024 to $8.1MM Q1 2025 S
Slide 22: Yield on Earning Assets vs Cost of Liabilities
Yield on Earning Assets vs Cost of Liabilities Cost of Liabilities has risen faster than the Yield on Earning Assets Cost of Liabilities peaked in Q3 2024
Slide 23: Deposits & Loans Repricing by Maturity
Deposits & Loans Repricing by Maturity Majority of Interest-bearing Deposits may reprice within 1 year Only 24% of the Loan Portfolio contractually reprices within 1 year Reprices Immediately Reprices quarterly Reprices in 1 month to 1 year Reprices 1 year to 8 years Fixed Rate
Slide 24: Treasury Indexed CRE – Contracted Rate Resets
Treasury Indexed CRE – Contracted Rate Resets Most Treasury Indexed CRE Loans reprice every 5 years based on the corresponding Constant Maturity Treasury index Repriced rates reflect a snapshot of market rates as of 3/31/2025; Actual repricing rates can differ depending on market rates at the ti
Slide 25: Government Guaranteed Loan Programs
Government Guaranteed Loan Programs Dedicated Small Business Lending Group Created in 2017 Floating Rate Yields ~ 9.4% (Apr 2025 adjustment) Decrease in Non-Interest Income through: Lower SBA Loan Sales Volume and Premiums Offset by increasing Servicing income Non-Interest Income decreas
Slide 26: Managing Infrastructure Costs in an Inflationary Environment
Managing Infrastructure Costs in an Inflationary Environment Operating expenses in Q1 2024 were higher at $6.4MM vs $6.3MM is Q1 2025, despite increases in non-controllable expenses of $1.1MM Cost cutting efforts employed in Q4 2024 will impact future quarters beginning Q1 2025 Note: One-time go
Slide 27: Net Operating Income
Net Operating Income Net Operating Income = Net Income before loss provision and taxes (excluding Goodwill write-down) Net Operating Income has been improving from its lowest level in Q2 2024 due to improved net interest margin, increased SBA loan sales, and implementing operational Note: expens
Slide 28: Assets Trends
Assets Trends Focused Growth on Owner Occupied Conventional CRE and C&I Loans with Targeted Yield at 7.35% Focus on SBA Guaranteed Loans with Targeted Yield at 9.40% Portfolio Loan Yield as of 2025Q1 at 5.97% $449MM of Treasury based loans are scheduled to reprice in the next 3 yrs at a diff
Slide 29: Loan Portfolio Composition
Loan Portfolio Composition Portfolio Product Types, % Commercial Real Estate - Invest ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬● 49.7% Commercial Real Estate - Owner Occupied ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬● 24.9% Total Farm ▬▬▬▬▬▬▬▬● 8.2% Loan Commercial C&I ▬▬▬▬▬▬● 6.6% Diversified Portfolio with
Slide 30: Loan Composition
Loan Composition Total Loan Portfolio CRE Loan Portfolio Concentration: Investment & Owner Occupied
Slide 31: Liabilities Trends
Liabilities Trends Continued Focus on Managing Local Non-Maturity Deposit Growth to match Loan Growth Deposit growth from 2020 to 1Q2025: Local Non-Maturity Deposits increased from 64% to 67% of Total Deposits Total Local Deposits increased from 80% to 97% of Total Deposits
Slide 32: Deposit Composition
Deposit Composition Organic Deposit Growth through Strong Relationship Practices Focused Local Deposit Growth 1Q2025 Average Cost of Deposits at 2.65%
Slide 33: Focus on Liquidity and Quality as of Q1 2025
Focus on Liquidity and Quality as of Q1 2025 $141MM of Available Primary Liquidity Includes Cash and Investments Available for Sale Primary Liquidity is 13.3% $327MM of Available Secondary Lines Includes FHLB, Federal Reserve Bank, and Fed Funds lines Total Liquidity (Primary + Secondary
Slide 34: Tangible Book Value Growth
Tangible Book Value Growth Tangible Book Value has improved 32% since 2020, or 8% annualized growth Tangible Book Value growth has solely been driven by retention of earnings As of March 31, 2025, the Bank’s stock price was trading at 0.6x of Book Value ($13.70/share) Note: [1]Tangible Book Va
Slide 35: Shareholder Value
Shareholder 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 Stock Value increased 10% since
Slide 36: Why Summit State Bank?
Why Summit State Bank? Experienced Executive & Management Team Commitment to a Culture of Success Focus on Organic Growth and Driving Core Customer Deposits Lending Platform Positioned to Deliver Results Significant Growth in Tangible Book Value of shares in last 5 years Experienced and
Slide 37: Thank you for your time and attention. Questions?
Thank you for your time and attention. Questions? “In community banking, success isn’t measured by size—it’s measured by significance. When we make a lasting difference in the lives of our employees, customers and community, long-term growth naturally follows.”
Slide 38: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995, including forward-looking statements regarding our expectations and beliefs about our future financial performa
Slide 39: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains non-GAAP (Generally Accepted Accounting Principles) financial measures in addition to the results presented in accordance with GAAP. These Non-GAAP financial measures include pre-tax, pre-provision net operating income before goodwill, pre-tax,
Slide 40: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 (In thousands) Reconciliation of non-GAAP pre-tax, pre-provision income net of goodwill