Summit State Bank · NASDAQ:SSBI

Summit State Bank — Q1 2025 Earnings Presentation

45 slides from Summit State Bank's earnings presentation, May 2, 2025

  1. Slide 1: Form 8-K Current Report – Summit State Bank

    FEDERAL DEPOSIT INSURANCE CORPORATION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 12 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): May 2, 2025 Summit State Bank (Exact Name of Registrant as Specified in Charter) California 3220

  2. Slide 2: Item 7.01 Regulation FD Disclosure

    Item 7.01. Regulation FD Disclosure The Chief Executive Officer of Summit State Bank (the “Bank”) will make a presentation to institutional investors available online beginning May 2, 2025 using the slide presentation included as Exhibit 99.1 of this report. The information in this report (including

  3. Slide 3: Exhibits and Signature

    recent Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation (“FDIC”) and those in any other public filing we may make with the FDIC. Item 9.01. Financial Statements and Exhibits (d) Exhibits: The exhibit list called for by this item is incorporated by reference to the Exhi

  4. Slide 4: Exhibit Index

    Exhibit Index Exhibit Description Number 99.1 Presentation slides as of May 2, 2025 4

  5. Slide 5: 99.1 Presentation slides as of May 2, 2025

    99.1 Presentation slides as of May 2, 2025 5

  6. Slide 6: That's Our Business. A Better Sonoma County.

    5 0 © oO Gg A SUMMIT A Better Sonoma County. se ee That's Our Business. Member FDIC

  7. Slide 7: About Brian J. Reed, President & CEO

    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

  8. Slide 8: 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

  9. Slide 9: 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

  10. Slide 10: 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

  11. Slide 11: 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

  12. Slide 12: 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

  13. Slide 13: 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

  14. Slide 14: 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

  15. Slide 15: Making a Difference

    Making a Difference Nonprofit Partner Program Results

  16. Slide 16: Nonprofit Partner Program Event

    • 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

  17. Slide 17: 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

  18. Slide 18: 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

  19. Slide 19: 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

  20. Slide 20: 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

  21. Slide 21: Drivers of Performance

    Drivers of Performance  Credit Quality  Net Interest Margin and Net Interest Income  Non-Interest Income  Expense Management

  22. Slide 22: 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

  23. Slide 23: 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

  24. Slide 24: 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

  25. Slide 25: 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

  26. Slide 26: 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

  27. Slide 27: 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

  28. Slide 28: 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

  29. Slide 29: 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

  30. Slide 30: 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

  31. Slide 31: 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

  32. Slide 32: Net Operating Income

    Net Operating Income  Net Operating Income = Net Income before loss provision and taxes (excluding Goodwill write-down)  Net Operating Income declined in Q1 2025 compared with Q4 2024 despite the expense management and improved net interest margin, due to minimal premiums from SBA loan Note: sales

  33. Slide 33: 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

  34. Slide 34: 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

  35. Slide 35: Loan Composition

    Loan Composition Total Loan Portfolio CRE Loan Portfolio Concentration: Investment & Owner Occupied

  36. Slide 36: 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

  37. Slide 37: Deposit Composition

    Deposit Composition  Organic Deposit Growth through Strong Relationship Practices  Focused Local Deposit Growth  1Q2025 Average Cost of Deposits at 2.65%

  38. Slide 38: 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

  39. Slide 39: 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

  40. Slide 40: 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

  41. Slide 41: 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

  42. Slide 42: 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.”

  43. Slide 43: 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

  44. Slide 44: 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,

  45. Slide 45: 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

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