Summit State Bank · NASDAQ:SSBI
Summit State Bank — Q1 2024 Earnings Presentation
27 slides from Summit State Bank's earnings presentation, 2024
Slide 1: Investor Presentation Q1 2024
Investor P re se n t a t io n Q 1 20 24 1
Slide 2: Company Overview
Company Overview Su m m it St a t e Ba n k is a c o m m e rc ia l b a n k h e a d q u a rt e re d in Sa n t a Ro sa , CA w it h $ 1.0 8 b illio n in a sse t s, 5 b ra n c h lo c a t io n s a n d m o re t h a n 115 e m p lo ye e s Ba n k fo rm e d in 19 8 2 List e d o n NASDAQ in 20 0 6 u n d e
Slide 3: Summit State Bank Locations
Summit State Bank Locations He a d q u a rt e re d in Sa n t a Ro sa , CA Bra n c h Lo c a t io n s Sa n t a Ro sa Ma in He a ld sb u rg Sa n t a Ro sa Mo n t g o m e ry Villa g e Ro h n e rt P a rk P e t a lu m a Re g io n a l Sm a ll Bu sin e ss Le n d in g Gro u p HQ in Ro se ville ,
Slide 4: Market Area Highlights
Ma rke t Are a Hig h lig h t s Northern California Concentrated in Sonoma Co u n t y Co m m e rc ia l P ro p e rt y In ve st m e n t In ve n t o ry Re m a in s Lo w d u e t o lim it e d c o n st ru c t io n o ve r t h e p a st t e n ye a rs. Dive rse a n d St ro n g Ec o n o m y: He a lt h c a
Slide 5: Our Leadership Team
Our Leadership Team Br ia n Re e d Ge n ie De l Se cco Br a n d y Se p p i Ca m ille Ka za r ia n Mich a e l Flo yd President & CEO EVP & Chief Operating Officer EVP & Chief Lending Officer EVP & Chief Financial Officer EVP & Chief Credit Officer 39 Years in the Industry 33 Years in the Industry 30
Slide 6: Financial Trends
Financial Trends Ra t e in c re a se s c o m b in e d w it h o u r st ra t e g y t o sig n ific a n t ly in c re a se liq u id it y h a ve p u t d o w n w a rd p re ssu re o n Ne t In t e re st Ma rg in u lt im a t e ly re su lt in g in re d u c e d Re t u rn o n Ave ra g e Asse t s No n -in t e
Slide 7: Loan Growth & Asset Quality
Loan Growth & Asset Quality Lo a n Gro w t h h a s d e c lin e d fro m p rio r p e rio d s d u e t o e le va t e d risk in t h e m a rke t p a rt ia lly a t t rib u t a b le t o h ig h e r in t e re st ra t e s St ro n g Re se rve s (Allo w a n c e fo r Lo a n s & Le a se Lo sse s – ACL) ACL i
Slide 8: Non-Performing Assets and Loan Loss Reserve
Non -P e rfo rm in g Asse t s a n d Lo a n Lo ss Re se rve No n -P e rfo rm in g Lo a n s: 4 sp e c ific re la t io n sh ip s m a ke u p 9 2% o f n o n -p e rfo rm in g a sse t s a s o f Q 1 20 24 $ 3.6 MM o f sp e c ific re se rve s se t a sid e fo r a ll No n -P e rfo rm in g a sse t s Ge n
Slide 9: Interest Income & Interest Expense Management
Interest Income & Interest Expense Management NIM c o m p re ssio n a n d Ne t In t e re st In c o m e d e c lin e d u e t o e le va t e d c o st o f fu n d s a n d lo w e r vo lu m e o f n e w h ig h e r p ric e d lo a n s NIM a n d Ne t In t e re st In c o m e c o m p re ssio n is slo w in g a
Slide 10: Yield on Earning Assets vs Cost of Liabilities
Yield on Earning Assets vs Cost of Liabilities Co st o f Lia b ilit ie s h a s rise n fa st e r t h a n t h e Yie ld o n Ea rn in g Asse t s Co st o f Lia b ilit ie s h a s b e e n st a b ilizin g in t h e p a st t w o q u a rt e rs 10
Slide 11: Treasury Indexed CRE – Contracted Rate Resets
Treasury Indexed CRE – Co n t ra c t e d Ra t e Re se t s Mo st Tre a su ry In d e xe d CRE Lo a n s re p ric e e ve ry 5 ye a rs b a se d o n t h e c o rre sp o n d in g Co n st a n t Ma t u rit y Tre a su ry in d e x Re p ric e d ra t e s re fle c t a sn a p sh o t o f m a rke t ra t e s a s o
Slide 12: Managing Infrastructure Costs in an Inflationary Environment
Managing Infrastructure Costs in an Inflationary Environment Exp e n se s a s a % o f To t a l Asse t s h a s se e n m o d e st in c re a se s sin c e t h e P a n d e m ic Exp e n se s a re a c t ive ly m a n a g e d ye t a re in c re a sin g d u e t o in fla t io n a ry p re ssu re s In c re
Slide 13: Assets Trends
Assets Trends Fo c u se d Gro w t h o n Co n ve n t io n a l CRE a n d SBA Gu a ra n t e e d Lo a n s w it h Ta rg e t e d Yie ld a t 7.35% P o rt fo lio Lo a n Yie ld a s o f 20 24 Q 1 a t 5.8 3% Fo c u se d o n Org a n ic Lo a n Gro w t h a m id c h a lle n g in g m a rke t c o n d it io n s
Slide 14: Loan Portfolio Composition
Loan Portfolio Composition To t a l Lo a n Dive rsifie d P o rt fo lio w it h Ma n a g e a b le Risk P o rt fo lio To t a l P o rt fo lio LTV 4 5% (e x C&I) CRE Se g m e n t LTV 49 % Co m m e rc ia l Re a l Est a t e (CRE) P o rt fo lio : In ve st m e n t : 6 8 % o f se g m e n t , DSCR 1.9 2x
Slide 15: Loan Composition
Loan Composition To t a l Lo a n P o rt fo lio CRE Lo a n P o rt fo lio Co n c e n t ra t io n : In ve st m e n t & Ow n e r Oc c u p ie d 15
Slide 16: SBA Loan Program
SBA Loan Program De d ic a t e d Sm a ll Bu sin e ss Le n d in g Gro u p Cre a t e d in 20 17 Flo a t in g Ra t e Yie ld s ~ 11.4 % (Ap ril 20 24 a d ju st m e n t ) De c re a se in No n -In t e re st In c o m e t h ro u g h : Lo w e r SBA Lo a n Sa le s Vo lu m e a n d P re m iu m s Offse
Slide 17: Liabilities Trends
Liabilities Trends Co n t in u e d Fo c u s o n Ma n a g in g Lo c a l No n -Ma t u rit y De p o sit Gro w t h t o m a t c h Lo a n Gro w t h 1Q 20 24 Ave ra g e Co st o f Fu n d s a t 2.8 6 % De p o sit g ro w t h fro m 20 18 t o 1Q 20 24 : Lo c a l No n -Ma t u rit y De p o sit s w e n t f
Slide 18: Deposit Composition
Deposit Composition Org a n ic De p o sit Gro w t h t h ro u g h St ro n g Re la t io n sh ip P ra c t ic e s Fo c u se d Lo c a l De p o sit Gro w t h 1Q 20 24 Ave ra g e Co st o f De p o sit s a t 2.8 2% 18
Slide 19: Focus on Liquidity and Quality as of Q1 2024
Focus on Liquidity and Quality as of Q1 2024 113MM o f Ava ila b le P rim a ry Liq u id it y In c lu d in g Ca sh a n d In ve st m e n t s Ava ila b le fo r Sa le P rim a ry Liq u id it y is 11% $ 30 5MM o f Ava ila b le Se c o n d a ry Lin e s In c lu d in g FHLB, Fe d e ra l Re se rve Ba
Slide 20: Tangible Book Value Growth
Tangible Book Value Growth Ta n g ib le Bo o k Va lu e h a s im p ro ve d 58 % sin c e 20 18 , o r 11% a n n u a lize d g ro w t h Ta n g ib le Bo o k Va lu e g ro w t h h a s so le ly b e e n d rive n b y re t e n t io n o f e a rn in g s 20
Slide 21: Consistently Delivering Strong Stock Value
Consistently Delivering Strong Stock Value Graph illustrates investment in 1 share of stock beginning in 2016 20 16 : On e sh a re o f st o c k p u rc h a se d 20 17: A five -fo r-fo u r st o c k sp lit re su lt s in 1.25 sh a re s o u t st a n d in g 20 21: A o n e t im e 10 % st o c k d ivid
Slide 22: Consistent Dividend Return
Consistent Dividend Return Gra p h illu st ra t e s in ve st m e n t in 1 sh a re o f st o c k b e g in n in g in 20 16 Divid e n d o n In it ia l In ve st m e n t re la t e s t o t h e o rig in a l p u rc h a se o f 1 sh a re Ad d it io n a l Divid e n d Re t u rn o f 37.5% is a re su lt o f:
Slide 23: Stock Total Return Versus Bank Indices
Stock Total Return Versus Bank Indices Total 5-year Return vs Bank Indices as of Q1 2024 23
Slide 24: 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 Corporate Philanthropy Award SF Busines
Slide 25: 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 Strategic Lending Platform Positioned to Deliver Results Stable Dividend Strategy Consistent Total Return to Shareholders Experie
Slide 26: Forward-Looking Statements
Fo rw a rd -Lo o k in g St a t e m e n t s This presentation includes forward -lo o kin g st a t e m e n t s w it h in t h e m e a n in g o f t h e “sa fe -h a rb o r” p ro visio n s o f t h e P riva t e Se c u rit ie s Lit ig a t io n Re fo rm Ac t o f 19 9 5, in c lu d in g fo rw a rd -lo o kin g
Slide 27: Mailing Address Contact
MAILING ADDRESS 500 Bicentennial Way Santa Rosa, CA 95403 C O N TACT Barbara Gradman VP, Corporate Secretary bgradman@summitstatebank.com (707) 568 6000 27