Summit State Bank · NASDAQ:SSBI
Summit State Bank — Q3 2023 Earnings Presentation
28 slides from Summit State Bank's earnings presentation, Dec 18, 2023
Slide 1: Form 8-K Current Report
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): December 18, 2023 Summit State Bank (Exact Name of Registrant as Specified in Charter) Californi
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 December 18, 2023 using the slide presentation included as Exhibit 99.1 of this report. The information in this report (inc
Slide 3: Item 9.01 Financial Statements and Exhibits
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
Slide 4: Signature
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. Dated: December 18, 2023 SUMMIT STATE BANK By: /s/__Camille Kazarian____ Camille Kazarian Executive Vice
Slide 5: Exhibit Index
Exhibit Index Exhibit Description Number 99.1 Presentation slides as of December 18, 2023 5
Slide 6: 99.1 Presentation slides as of December 18, 2023
99.1 Presentation slides as of December 18, 2023 6
Slide 7: Investor Presentation Q3 2023
Investor Presentation Q3 2023 1
Slide 8: Company Overview
Company Overview Summit State Bank is a commercial bank headquartered in Santa Rosa, CA with $1.14 billion in assets, 5 branch locations and more than 120 employees Bank formed in 1982 Listed on NASDAQ in 2006 under the ticker symbol “SSBI” Summit Way Service Standards -Dedicated to serving
Slide 9: 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 HQ in Roseville, CA 3
Slide 10: Market Area Highlights
Market Area Highlights Northern California Concentrated in Sonoma County Commercial Property Investment Inventory Remains Low due to limited construction over the past ten years. Diverse and Strong Economy: Healthcare, Manufacturing, Construction and Wholesale Trade Comprise > 40% of the Count
Slide 11: 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 EVP & Chief Credit Officer 38 Years in the Industry 32 Years in the Industry 28 Years in the Industry 2
Slide 12: Financial Trends
Financial Trends Rate increases combined with our strategy to significantly increase liquidity have put downward pressure on Net Interest Margin ultimately resulting in reduced Return on Average Assets Non-interest Income decreased to $4.9MM YTD Q3 2023 from $5.4MM YTD Q3 2022. This is due to:
Slide 13: Loan Growth & Asset Quality
Loan Growth & Asset Quality Loan Growth has declined from prior periods due to higher rates Strong Reserves (Allowance for Loans & Lease Losses – ACL) ACL is 1.69% without PPP Loans, which Carry a Zero-Risk Weighting and excluding unsold guaranteed portion of SBA loans Elevated Non-Performin
Slide 14: Interest Income & Interest Expense Management
Interest Income & Interest Expense Management NIM compression and Net Interest Income decline observed due to planned deposit growth, increased interest rates, and lower Loan to Deposit ratio NIM and Net Interest Income are compressing as deposits reprice faster than the loan portfolio 8
Slide 15: Maintaining the Infrastructure to Deliver Results
Maintaining the Infrastructure to Deliver Results Efficiency Ratio increased due to lower Net Operating Income as discussed on previous slide Focused on maintaining Portfolio Credit Quality and Loan Yield resulting in lower Loan Originations impacting the Efficiency Ratio in 2023 9
Slide 16: Assets Trends
Assets Trends Focused Growth on Conventional CRE and SBA Guaranteed Loans with Targeted Yield at 7.50% Portfolio Loan Yield as of 2023Q3 at 5.70% Elevated Cash trend related to our Strategy to increase liquidity while growing our Balance Sheet Focused on Organic Loan Growth through Strong Re
Slide 17: Loan Composition
Loan Composition CRE Loan Portfolio Concentration: Total Loan Portfolio Investment & Owner Occupied Diversified Portfolio with Manageable Risk Total Portfolio LTV 46% (ex C&I); CRE LTV 45.6% CRE Portfolio: Investment 68%, DSCR 1.90x; Owner Occupied 32%, DSCR 2.29x CRE LTV 49% for Property Ty
Slide 18: SBA Loan Program
SBA Loan Program Dedicated Small Business Lending Group Created in 2017 Floating Rate Yields ~ 11.3% (October 2023 adjustment) Decrease in Non-interest Income through: Lower SBA Loan Sales Volume and Premiums Offset by increasing Servicing income Decreased Retained Balance driven by sell
Slide 19: Liabilities Trends
Liabilities Trends Continued Focus on Managing Local Non-Maturity Deposit Growth to match Loan Growth 3Q2023 Average Cost of Funds at 2.22% Deposit growth from 2018 to 3Q2023: Local Non-Maturity Deposits went from 57% to 64% of Total Deposits Total Local Deposits went from 89% to 96% of To
Slide 20: Deposit Composition
Deposit Composition Organic Deposit Growth through Strong Relationship Practices Focused Local Deposit Growth 3Q2023 Average Cost of Deposits at 2.23% 14
Slide 21: Focus on Liquidity and Quality as of Q3 2023
Focus on Liquidity and Quality as of Q3 2023 $160MM of Available Primary Liquidity Including Cash and Investments Available for Sale Primary Liquidity is 14% $350MM of Available Secondary Lines Including FHLB, Federal Reserve Bank, and Fed Funds lines Secondary Liquidity is 31% $205MM
Slide 22: Consistently Delivering Strong Stock Value
Consistently Delivering 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 Stock V
Slide 23: Consistent Dividend Return
Consistent 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
Slide 24: Stock Total Return Outperforms Bank Indices
Stock Total Return Outperforms Bank Indices Total Return vs Bank Indices as of Q3 2023 18
Slide 25: 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 26: 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 Strong Total Return to Shareholders Compared to I
Slide 27: 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
Slide 28: 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