# EDGAR Filing Document

**Accession Number:** 0000811808
**File Stem:** 0001437749-23-001861
**Filing Date:** 2023-1
**Character Count:** 56766
**Document Hash:** 79fee40b4498d69adab3f1a09526cb3e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-23-001861.hdr.sgml**: 20230126

**ACCESSION NUMBER**: 0001437749-23-001861

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20230126

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230126

**DATE AS OF CHANGE**: 20230126

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SUMMIT FINANCIAL GROUP, INC.
- **CENTRAL INDEX KEY:** 0000811808
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **IRS NUMBER:** 550672148
- **STATE OF INCORPORATION:** WV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-16587
- **FILM NUMBER:** 23556010

**BUSINESS ADDRESS:**
- **STREET 1:** 300 NORTH MAIN ST
- **CITY:** MOOREFIELD
- **STATE:** WV
- **ZIP:** 26836
- **BUSINESS PHONE:** 3045301000

**MAIL ADDRESS:**
- **STREET 1:** 300 NORTH MAIN ST
- **CITY:** MOOREFIELD
- **STATE:** WV
- **ZIP:** 26836

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SUMMIT FINANCIAL GROUP INC
- **DATE OF NAME CHANGE:** 20000330

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SOUTH BRANCH VALLEY BANCORP INC
- **DATE OF NAME CHANGE:** 19920703

smmf20230126_8k.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM **8-K**

**CURRENT REPORT**

**Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): **January 26, 2023**

![logo.jpg](logo.jpg)

**Summit Financial Group, Inc.**

**(Exact name of registrant as specified in its charter)**

---

| | | |
|:---|:---|:---|
| **West Virginia** | **0-16587** | **55-0672148** |
| (State or other jurisdiction of | (Commission File Number) | (IRS Employer |
| incorporation or organization) |  | Identification No.) |

---

---

| | |
|:---|:---|
| **300 North Main Street** |  |
| **Moorefield West Virginia** | **26836** |
| (Address of principal executive offices) | (Zip Code) |

---

**(**304**)**530-1000**

(Registrant's telephone number, including area code)

**Not Applicable**

(Former name or address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, Par Value $2.50 per share | SMMF | NASDAQ Global Select Market |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Section 2** – **Financial Information**

**Item 2.02. Results of Operations and Financial Condition.** 

On January 26, 2023, Summit Financial Group, Inc. ("Summit") issued a News Release announcing its earnings for the three months and year ended December 31, 2022. This News Release is furnished as Exhibit 99.1 and is incorporated herein by reference.

**Item 9.01 Financial Statements and Exhibits**

&nbsp;&nbsp;&nbsp;&nbsp;(d) Exhibits

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| **99.1** | [News Release issued on January 26, 2023](ex_468438.htm) |
| **104** | Cover Page Interactive Data File (Embedded within the Inline XBRL document) |

---

------

**SIGNATURES**

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.

---

| | |
|:---|:---|
|  | SUMMIT FINANCIAL GROUP, INC. |
| Date: January 26, 2023 | By: <u>/s/ Julie R. Markwood</u>  |
|  | Julie R. Markwood |
|  | Executive Vice President and Chief Accounting Officer |

---

## Exhibit 99.1

**EXHIBIT 99.1**

![logo2.jpg](logo2.jpg)

**FOR RELEASE 6:00 AM ET, January 26, 2023**

Contact: Robert S. Tissue, Executive Vice President & CFO

Telephone: (304) 530-0552

Email: rtissue@summitfgi.com

**SUMMIT FINANCIAL GROUP REPORTS RECORD Q4 2022 EPS OF $1.16 ON CONTINUED STRONG LOAN GROWTH RESULTING IN 19.5 PERCENT ANNUALIZED INCREASE IN TBVPS** 

MOOREFIELD, WV – January 26, 2023 (GLOBE NEWSWIRE) – Summit Financial Group, Inc. ("Company" or "Summit") (NASDAQ: SMMF) today reported financial results for the fourth quarter of 2022, including continued strong earnings on growth in loans and total revenue.

The Company, which serves commercial and individual clients across West Virginia, the Washington D.C. metropolitan area, Virginia and Kentucky through Summit Community Bank, Inc., reported net income applicable to common shares of $14.9 million, or $1.16 per diluted share, for the fourth quarter of 2022, as compared to $14.2 million, or $1.11 per diluted share, for the third quarter of 2022 and $12.4 million, or $0.95 per diluted share, for the fourth quarter of 2021.

"In the fourth quarter and full year of 2022, our team continued expanding existing customer relationships and cultivating new relationships from our strong commercial pipelines to continue to deliver annualized double-digit loan growth, strong deposit growth, increased revenue and earnings," said H. Charles Maddy, III, President and Chief Executive Officer. "Our disciplined underwriting standards consistently provide stable asset quality metrics and improved in the fourth quarter and for year-end. Given the challenging interest rate environment, the sequential increase in our tangible book value per common share differentiates us from our peers. Our tremendous operating results in 2022, pending merger with PSB Holding Corp. and the strength of our balance sheet well-positions us for continued growth in 2023."

**Highlights for Q4 2022**

&nbsp;&nbsp;&nbsp;&nbsp;● Total loans, excluding mortgage warehouse lines of credit and Paycheck Protection Program ("PPP") lending, increased 2.6 percent (10.3 percent annualized) during the quarter and 17.1 percent since December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;● Deposits increased 2.0 percent (8.0 percent annualized) during the fourth quarter and 7.7 percent for full year 2022.

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&nbsp;&nbsp;&nbsp;&nbsp;● Tangible book value per common share ("TBVPS") increased $1.01 (4.9 percent or 19.5 percent annualized) to $21.70 during the quarter, which included unrealized net gains on debt securities available for sale ("AFS") of $0.09 per common share (net of deferred income taxes) recorded in Other Comprehensive Income ("OCI"), partially offset by decreases in the fair values of derivative financial instruments hedging against higher interest rates totaling $0.08 per common share (net of deferred income taxes) also recorded in OCI. For full year 2022, Summit's TBVPS increased 11.1 percent, while for the vast majority of our peers' TBVPS declined, and in some cases significantly so, during the same period.

&nbsp;&nbsp;&nbsp;&nbsp;● Net interest margin ("NIM") decreased 4 basis points to 3.80 percent from the linked quarter and increased 31 basis points from the year-ago quarter, as increased yields on interest earning assets were offset by increased cost of deposits and other funding.

&nbsp;&nbsp;&nbsp;&nbsp;● Total noninterest expense decreased 1.9 percent to $18.8 million in the quarter, primarily due to deferred director compensation income of $316,000 in Q4 compared to $830,000 deferred director compensation expense in the linked quarter and up 5.1 percent from the year-ago quarter primarily due to higher salary and benefits expenses.

&nbsp;&nbsp;&nbsp;&nbsp;● Annualized non-interest expense decreased to 1.92 percent of average assets compared to 2.01 percent of average assets for the linked quarter and 2.02 for the year-ago period.

&nbsp;&nbsp;&nbsp;&nbsp;● Achieved an efficiency ratio of 46.40 percent compared to 47.95 percent in Q3 2022 and 48.85 percent in the year-ago quarter.

&nbsp;&nbsp;&nbsp;&nbsp;● Incurred $1.50 million provision for credit losses in the quarter increasing period-end allowance for loan credit losses to $38.9 million, or 1.26 percent of total loans and 497.2 percent of nonperforming loans.

&nbsp;&nbsp;&nbsp;&nbsp;● Foreclosed property held for sale declined by 2.4 percent during the quarter and 48.6 percent from the year-ago quarter to $5.07 million or 0.13 percent of assets at period end.

&nbsp;&nbsp;&nbsp;&nbsp;● Nonperforming assets ("NPAs") improved to 0.33 percent of total assets at period end, excluding restructured assets, down 4 basis points during the quarter and 30 basis points from December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;● Announced expansion of our footprint into Eastern Shore of Maryland and Delaware by entering into a definitive merger agreement to acquire PSB Holding Corp. and its bank subsidiary, Provident State Bank, Inc. headquartered in Preston, Maryland.

**Results from Operations**

Net interest income grew to $34.4 million in the fourth quarter of 2022, an increase of 0.7 percent from the linked quarter and 19.1 percent from the prior-year fourth quarter. NIM for fourth quarter 2022 was 3.80 percent compared to 3.84 percent for the linked quarter and 3.49 percent for the year-ago quarter. Excluding the impact of accretion and amortization of fair value acquisition accounting adjustments, Summit's net interest margin would have been 3.78 percent for the fourth quarter of 2022, 3.81 percent for the linked quarter and 3.45 percent for the year-ago period.

------

Noninterest income, consisting primarily of service fee income from community banking activities and trust and wealth management fees, for fourth quarter 2022 was $4.87 million compared to $4.89 million for the linked quarter and $5.95 million for the comparable period of 2021. The Company recorded realized securities losses on debt securities of $24,000 in the fourth quarter of 2022 and $242,000 in the linked quarter. In addition, the Company recognized net gains on equity investments of $280,000 in fourth quarter 2022 compared to $283,000 in the linked quarter.

Mortgage origination revenue decreased to $286,000 in the fourth quarter of 2022 compared to $538,000 in the linked quarter and $1.36 million for the year-ago period reflecting continuing negative impact of higher interest rates on demand for new mortgage loans. Mortgage origination revenue includes an increase in the fair value of mortgage servicing rights of $140,000 for fourth quarter 2022, $318,000 during the linked quarter and $879,000 for the year-ago period.

Excluding gains and losses on debt securities and equity investments, noninterest income was $4.61 million for fourth quarter 2022 compared to $4.85 million for Q3 2022 and $5.86 million in the year-ago quarter, down primarily as result of lower mortgage origination revenue.

Revenue from net interest income and noninterest income, excluding gains and losses on debt securities and equity investments, remained unchanged compared to the linked quarter at $39.0 million, and up 12.3 percent from $34.7 million in the year-ago quarter, while for the year 2022, it grew to $147.6 million, up 14.0 percent from 2021, outpacing the 6.0 percent noninterest expense increase recorded.

Total noninterest expense decreased to $18.8 million in the fourth quarter of 2022, down 1.9 percent from $19.2 million in the linked quarter and was up 5.1 percent from $17.9 million for the prior-year fourth quarter. The sequential-quarter decrease in total noninterest expense, primarily on higher salary and benefits expenses offset by deferred director compensation income, reflected modest fluctuations in most other categories of operating costs.

Salary and benefit expenses of $10.5 million in the fourth quarter of 2022 increased from $10.2 million for the linked quarter and $9.0 million during the year-ago period. Higher group health insurance premiums and increased accruals for anticipated 2022 performance bonuses account for the primary reasons for the increases.

Net losses and expenses on foreclosed properties were $159,000 during fourth quarter 2022 compared to $26,000 in the linked quarter and $403,000 in the year-ago period.

------

Other expenses were $2.93 million for Q4 2022 compared to $3.83 million for the linked quarter and $3.25 million in the year-ago period. The decrease in other expenses was primarily from an increase in deferred director compensation plan-related income to $316,000 during the fourth quarter of 2022 compared to $850,000 plan-related expense during the third quarter of 2022 and $227,000 in the year-ago quarter. For full-year 2022, deferred director compensation plan-related income totaled $612,000 compared to plan related expense of $725,000 for full-year 2021. During Q3 2022, we purchased investments to hedge the changes in the Plan participants' phantom investments which should serve to significantly reduce the period-to-period volatility of the Plan's impact on the Company's statements of income.

Summit's efficiency ratio was 46.40 percent in the fourth quarter of 2022 compared to 47.95 percent in the linked quarter and 48.85 percent for the year-ago period. Non-interest expense to average assets was 1.92 percent in fourth quarter of 2022 compared to 2.01 percent in the linked quarter and 2.02 percent in the year-ago quarter.

**Balance Sheet**

As of December 31, 2022, total assets were $3.9 billion, an increase of $340.0 million, or 9.5 percent since December 31, 2021.

Total loans net of unearned fees grew to $3.1 billion on December 31, 2022, up 0.3 percent (or 1.0 percent annualized) during the quarter, and up 11.6 percent from December 31, 2021. Excluding PPP and mortgage warehouse lending, total loans grew to $3.0 billion on December 31, 2022, up 2.6 percent (or 10.3 percent annualized) during the fourth quarter and up 17.1 percent year-to-date.

Total commercial loans, including commercial and industrial (C&I) and commercial real estate (CRE) but excluding PPP lending, grew to $2.0 billion on December 31, 2022, up 1.5 percent (5.9 percent annualized) during the fourth quarter and 15.9 percent year-to-date.

Residential real estate and consumer lending totaled $586.3 million on December 31, 2022, up 1.5 percent (6.1 percent annualized) during the fourth quarter and 3.2 percent year-to-date.

As of December 31, 2022, PPP balances were paid down to $8,000 and mortgage warehouse lines of credit, sourced solely from a participation arrangement with a large regional bank, totaled $130.4 million compared to $194.7 million at September 30, 2022 and $227.9 million at the year-ago period end.

Deposits totaled $3.2 billion on December 31, 2022, a 2.0 percent (or 8.0 percent annualized) increase during the fourth quarter and a 7.7 percent increase year-to-date. Core deposits increased 2.4 percent (9.5 percent annualized) during fourth quarter 2022 to $3.1 billion and increased 8.5 percent in 2022. Changes in core deposits by category are as follows:

------

&nbsp;&nbsp;&nbsp;&nbsp;● Non-interest bearing deposit accounts decreased $65.5 million or 10.6 percent in the fourth quarter of 2022 and $15.4 million or 2.7 percent since December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;● Interest bearing checking accounts grew $267.7 million or 18.1 percent in the fourth quarter of 2022 and $616.0 million or 54.6 percent since December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;● Savings accounts declined $86.2 million or 14.8 percent in the fourth quarter of 2022 and $201.4 million or 28.8 percent since December 31, 2021.

&nbsp;&nbsp;&nbsp;&nbsp;● Core time deposits declined $44.0 million or 13.0 percent in the fourth quarter of 2022 and $157.1 million or 34.8 percent since December 31, 2021.

Total shareholders' equity was $354.5 million as of December 31, 2022 compared to $327.5 million at December 31, 2021. Summit paid a quarterly common dividend of $0.20 per share in Q4 2022.

For the year 2022, TBVPS increased $2.16 to $21.70. TBVPS was negatively impacted during 2022 by unrealized net losses on AFS debt securities of $3.11 per common share (net of deferred income taxes) recorded in OCI. However, these losses were partially offset by increased fair values of interest rate caps and swaps (also recorded in OCI) held as hedges against higher interest rates totaling $1.78 per common share (net of deferred income taxes), in the same period.

Summit had 12,783,646 outstanding common shares at the end of 2022 compared to 12,743,125 at year-end 2021.

As announced in the first quarter of 2020, the Board of Directors authorized the open market repurchase of up to 750,000 shares of the issued and outstanding shares of Summit's common stock, of which 323,577 shares have been repurchased to date. The timing and quantity of stock purchases under this repurchase plan are at the discretion of management. During the fourth quarter of 2022, no shares of Summit's common stock were repurchased under the Plan.

**Asset Quality**

Net loan charge-offs ("NCOs") declined to $1,000 in the fourth quarter of 2022. NCOs of $193,000 represented 0.03 percent of average loans annualized in the year-ago period.

Summit recorded a $1.50 million provision for credit losses in the fourth quarter of 2022, reflecting reserve build to support the Company's significant loan growth and increasing forecasted economic uncertainty. The provision for credit losses was $1.50 million for the linked quarter and the year-ago quarter.

Summit's allowance for loan credit losses was $38.9 million on December 31, 2022, $36.8 million at the end of the linked quarter, and $32.3 million on December 31, 2021.

The allowance for loan credit losses stood at 1.26 percent of total loans at December 31, 2022 compared to 1.19 percent at the end of the linked quarter, and 1.17 percent at December 31, 2021. The allowance was 497.2 percent of nonperforming loans at December 31, 2022, compared to 254.4 percent at year-end 2021.

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Summit's allowance for credit losses on unfunded loan commitments was $6.95 million on December 31, 2022, $7.60 million at the end of the linked quarter and $7.28 million on December 31, 2021. The allowance for credit losses on unfunded loan commitments decreased $650,000 during the most recent quarter, principally as result of a change in mix of unfunded commitments. Construction loan commitments, which on average have a higher historical loss ratio than do other loans, decreased, while commercial unfunded lines of credit, which carry a lower loss factor and lower utilization rates, increased.

As of December 31, 2022, nonperforming assets ("NPAs"), consisting of nonperforming loans, foreclosed properties and repossessed assets, totaled $12.9 million, or 0.33 percent of assets, compared to NPAs of $14.4 million, or 0.37 percent of assets at the linked quarter-end and $22.6 million or 0.63 percent of assets at year-end 2021.

**About the Company**

Summit Financial Group, Inc. is the $3.9 billion financial holding company for Summit Community Bank, Inc. Its talented bankers serve commercial and individual clients throughout West Virginia, the Washington, D.C. metropolitan area, Virginia, and Kentucky. Summit's focus on in-market commercial lending and providing other business banking services in dynamic markets is designed to leverage its highly efficient operations and core deposits in strong legacy locations. Residential and consumer lending, trust and wealth management, and other retail financial services are offered through convenient digital and mobile banking platforms, including MySummitBank.com and 44 full-service branch locations. More information on Summit Financial Group, Inc. (NASDAQ: SMMF), headquartered in West Virginia's Eastern Panhandle in Moorefield, is available at SummitFGI.com.

**FORWARD-LOOKING STATEMENTS**

*This press release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Words such as* "*expects*"*,* "*anticipates*"*,* "*believes*"*,* "*estimates*" *and other similar expressions or future or conditional verbs such as* "*will*"*,* "*should*"*,* "*would*" *and* "*could*" *are intended to identify such forward-looking statements.*

*Although we believe the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially. Factors that might cause such a difference include: the effect of the COVID-19 pandemic, including the negative impacts and disruptions on the communities we serve, and the domestic and global economy, which may have an adverse effect on our business; current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth; fiscal and monetary policies of the Federal Reserve; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; the successful integration of operations of our acquisitions; changes in banking laws and regulations; changes in tax laws; the impact of technological advances; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; and changes in the national and local economies. We undertake no obligation to revise these statements following the date of this press release.*

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**SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)**

**Quarterly Performance Summary (unaudited) -- Q4 2022 vs Q4 2021**

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| | | | |
|:---|:---|:---|:---|
| | **For the Quarter Ended** | **For the Quarter Ended** | |
| <br>*Dollars in thousands* | **12/31/2022** | **12/31/2021** | **Percent**<br>**Change** |
| **Statements of Income** |  |  |  |
| Interest income |  |  |  |
| Loans, including fees | $43589 | $28979 | 50.4% |
| Securities | 4181 | 2763 | 51.3% |
| Other | 70 | 75 | -6.7% |
| Total interest income | 47840 | 31817 | 50.4% |
| Interest expense |  |  |  |
| Deposits | 10194 | 1718 | 493.4% |
| Borrowings | 3293 | 1267 | 159.9% |
| Total interest expense | 13487 | 2985 | 351.8% |
| Net interest income | 34353 | 28832 | 19.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 1500 | 1500 | 0.0% |
| Net interest income after provision for credit losses | 32853 | 27332 | 20.2% |
| Noninterest income |  |  |  |
| Trust and wealth management fees | 750 | 847 | -11.5% |
| Mortgage origination revenue | 286 | 1361 | -79.0% |
| Service charges on deposit accounts | 1526 | 1501 | 1.7% |
| Bank card revenue | 1513 | 1528 | -1.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net gains on equity investments | 280 | 202 | 38.6% |
| Net realized losses on debt securities | (24) | (109) | -78.0% |
| Bank owned life insurance and annuity income | 367 | 293 | 25.3% |
| Other income | 167 | 330 | -49.4% |
| Total noninterest income | 4865 | 5953 | -18.3% |
| Noninterest expense |  |  |  |
| Salaries and employee benefits | 10532 | 8977 | 17.3% |
| Net occupancy expense | 1328 | 1265 | 5.0% |
| Equipment expense | 1769 | 1902 | -7.0% |
| Professional fees | 386 | 438 | -11.9% |
| Advertising and public relations | 280 | 216 | 29.6% |
| Amortization of intangibles | 351 | 387 | -9.3% |
| FDIC premiums | 352 | 330 | 6.7% |
| Bank card expense | 679 | 703 | -3.4% |
| Foreclosed properties expense, net of (gains)/losses | 159 | 403 | -60.5% |
| Acquisition-related expenses | 81 | 57 | 42.1% |
| Other expenses | 2932 | 3250 | -9.8% |
| Total noninterest expense | 18849 | 17928 | 5.1% |
| Income before income taxes | 18869 | 15357 | 22.9% |
| Income taxes | 3783 | 2777 | 36.2% |
| Net income | 15086 | 12580 | 19.9% |
| Preferred stock dividends | 225 | 225 | 0.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income applicable to common shares | $14861 | $12355 | 20.3% |

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**SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)**

**Quarterly Performance Summary (unaudited) -- Q4 2022 vs Q4 2021**

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| | | | |
|:---|:---|:---|:---|
|  | **For the Quarter Ended** | **For the Quarter Ended** | |
| | **12/31/2022** | **12/31/2021** | **Percent**<br>**Change** |
| **Per Share Data** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earnings per common share |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | $1.16 | $0.96 | 20.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | $1.16 | $0.95 | 22.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash dividends per common share | $0.20 | $0.18 | 11.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common stock dividend payout ratio | 16.9% | 18.3% | -7.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average common shares outstanding |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | 12775703 | 12916555 | -1.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | 12837637 | 12976181 | -1.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common shares outstanding at period end | 12783646 | 12743125 | 0.3% |
| **Performance Ratios** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on average equity | 17.50% | 15.48% | 13.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on average tangible equity (C) | 21.75% | 19.72% | 10.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on average tangible common equity (D) | 22.96% | 20.91% | 9.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on average assets | 1.54% | 1.42% | 8.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net interest margin (A) | 3.80% | 3.49% | 8.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Efficiency ratio (B) | 46.40% | 48.85% | -5.0% |

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| |
|:---|
| NOTES |
| (A) - Presented on a tax-equivalent basis assuming a federal tax rate of 21%. |
| (B) - Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles. |
| (C) - Return on average tangible equity = (Net income + Amortization of intangibles [after-tax]) / (Average shareholders' equity - Average intangible assets). |
| (D) - Return on average tangible common equity = (Net income + Amortization of intangibles [after-tax]) / (Average common shareholders' equity - Average intangible assets). |

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| |
|:---|
| **SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)** |
| **Annual Performance Summary (unaudited) -- 2022 vs 2021** |

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| | | | |
|:---|:---|:---|:---|
| | **For the Year Ended** | **For the Year Ended** | |
| <br>*Dollars in thousands* | **12/31/2022** | **12/31/2021** | **Percent**<br>**Change** |
| **Statements of Income** |  |  |  |
| Interest income |  |  |  |
| Loans, including fees | $145364 | $112630 | 29.1% |
| Securities | 13052 | 9470 | 37.8% |
| Other | 331 | 316 | 4.7% |
| Total interest income | 158747 | 122416 | 29.7% |
| Interest expense |  |  |  |
| Deposits | 20683 | 8182 | 152.8% |
| Borrowings | 9078 | 4302 | 111.0% |
| Total interest expense | 29761 | 12484 | 138.4% |
| Net interest income | 128986 | 109932 | 17.3% |
| Provision for credit losses | 6950 | 4000 | 73.8% |
| Net interest income after provision for credit losses | 122036 | 105932 | 15.2% |
| Noninterest income |  |  |  |
| Trust and wealth management fees | 2978 | 2886 | 3.2% |
| Mortgage origination revenue | 1480 | 3999 | -63.0% |
| Service charges on deposit accounts | 6150 | 5032 | 22.2% |
| Bank card revenue | 6261 | 5896 | 6.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net gains on equity investments | 265 | 202 | 31.2% |
| Net realized (losses)/gains on debt securities | (708) | 425 | -266.6% |
| Bank owned life insurance and annuity income | 1211 | 1026 | 18.0% |
| Other income | 516 | 742 | -30.5% |
| Total noninterest income | 18153 | 20208 | -10.2% |
| Noninterest expense |  |  |  |
| Salaries and employee benefits | 40452 | 34386 | 17.6% |
| Net occupancy expense | 5128 | 4824 | 6.3% |
| Equipment expense | 7253 | 6990 | 3.8% |
| Professional fees | 1628 | 1578 | 3.2% |
| Advertising and public relations | 893 | 697 | 28.1% |
| Amortization of intangibles | 1440 | 1563 | -7.9% |
| FDIC premiums | 1224 | 1449 | -15.5% |
| Bank card expense | 2928 | 2668 | 9.7% |
| Foreclosed properties expense, net of (gains)/losses | 236 | 1745 | -86.5% |
| Acquisition-related expenses | 114 | 1224 | -90.7% |
| Other expenses | 11583 | 11615 | -0.3% |
| Total noninterest expense | 72879 | 68739 | 6.0% |
| Income before income taxes | 67310 | 57401 | 17.3% |
| Income taxes | 14094 | 11663 | 20.8% |
| Net income | 53216 | 45738 | 16.3% |
| Preferred stock dividends | 900 | 589 | 52.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income applicable to common shares | $52316 | $45149 | 15.9% |

---

------

---

| |
|:---|
| **SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)** |
| **Annual Performance Summary (unaudited) -- 2022 vs 2021** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Year Ended** | **For the Year Ended** | |
| | **12/31/2022** | **12/31/2021** | **Percent**<br>**Change** |
| **Per Share Data** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earnings per common share |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | $4.10 | $3.49 | 17.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | $4.08 | $3.47 | 17.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash dividends per common share | $0.76 | $0.70 | 8.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common stock dividend payout ratio | 18.2% | 19.9% | -8.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average common shares outstanding |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | 12760649 | 12943883 | -1.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | 12821533 | 13003428 | -1.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common shares outstanding at period end | 12783646 | 12743125 | 0.3% |
| **Performance Ratios** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on average equity | 15.83% | 14.76% | 7.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on average tangible equity (C) | 19.88% | 18.71% | 6.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on average tangible common equity (D) | 21.03% | 19.51% | 7.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return on average assets | 1.42% | 1.36% | 4.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net interest margin (A) | 3.73% | 3.54% | 5.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Efficiency ratio (B) | 47.76% | 49.22% | -3.0% |

---

---

| |
|:---|
| NOTES |
| (A) - Presented on a tax-equivalent basis assuming a federal tax rate of 21%. |
| (B) - Computed on a tax equivalent basis excluding acquisition-related expenses gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles. |
| (C) - Return on average tangible equity = (Net income + Amortization of intangibles [after-tax]) / (Average shareholders' equity - Average intangible assets). |
| (D) - Return on average tangible common equity = (Net income + Amortization of intangibles [after-tax]) / (Average common shareholders' equity - Average intangible assets). |

---

------

---

| |
|:---|
| **SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)** |
| **Five Quarter Performance Summary (unaudited)** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** |
| <br>*Dollars in thousands* | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| **Statements of Income** |  |  |  |  |  |
| Interest income |  |  |  |  |  |
| Loans, including fees | $43589 | $38784 | $32766 | $30224 | $28979 |
| Securities | 4181 | 3497 | 2752 | 2623 | 2763 |
| Other | 70 | 170 | 45 | 46 | 75 |
| Total interest income | 47840 | 42451 | 35563 | 32893 | 31817 |
| Interest expense |  |  |  |  |  |
| Deposits | 10194 | 6140 | 2622 | 1727 | 1718 |
| Borrowings | 3293 | 2198 | 1976 | 1612 | 1267 |
| Total interest expense | 13487 | 8338 | 4598 | 3339 | 2985 |
| Net interest income | 34353 | 34113 | 30965 | 29554 | 28832 |
| Provision for credit losses | 1500 | 1500 | 2000 | 1950 | 1500 |
| Net interest income after provision for credit losses | 32853 | 32613 | 28965 | 27604 | 27332 |
| Noninterest income |  |  |  |  |  |
| Trust and wealth management fees | 750 | 725 | 745 | 757 | 847 |
| Mortgage origination revenue | 286 | 538 | 317 | 339 | 1361 |
| Service charges on deposit accounts | 1526 | 1550 | 1674 | 1401 | 1501 |
| Bank card revenue | 1513 | 1639 | 1618 | 1491 | 1528 |
| Net gains/(losses) on equity investments | 280 | 283 | (669) | 372 | 202 |
| Net realized losses on debt securities | (24) | (242) | (289) | (152) | (109) |
| Bank owned life insurance and annuity income | 367 | 229 | 331 | 283 | 293 |
| Other income | 167 | 165 | 129 | 54 | 330 |
| Total noninterest income | 4865 | 4887 | 3856 | 4545 | 5953 |
| Noninterest expense |  |  |  |  |  |
| Salaries and employee benefits | 10532 | 10189 | 10030 | 9700 | 8977 |
| Net occupancy expense | 1328 | 1301 | 1258 | 1242 | 1265 |
| Equipment expense | 1769 | 1851 | 1791 | 1843 | 1902 |
| Professional fees | 386 | 372 | 507 | 362 | 438 |
| Advertising and public relations | 280 | 276 | 165 | 172 | 216 |
| Amortization of intangibles | 351 | 354 | 355 | 378 | 387 |
| FDIC premiums | 352 | 292 | 190 | 390 | 330 |
| Bank card expense | 679 | 726 | 810 | 714 | 703 |
| Foreclosed properties expense, net of (gains)/losses | 159 | 26 | 141 | (90) | 403 |
| Acquisition-related expenses | 81 |  | 4 | 29 | 57 |
| Other expenses | 2932 | 3834 | 2358 | 2459 | 3250 |
| Total noninterest expense | 18849 | 19221 | 17609 | 17199 | 17928 |
| Income before income taxes | 18869 | 18279 | 15212 | 14950 | 15357 |
| Income tax expense | 3783 | 3856 | 3198 | 3257 | 2777 |
| Net income | 15086 | 14423 | 12014 | 11693 | 12580 |
| Preferred stock dividends | 225 | 225 | 225 | 225 | 225 |
| Net income applicable to common shares | $14861 | $14198 | $11789 | $11468 | $12355 |

---

------

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| |
|:---|
| **SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)** |
| **Five Quarter Performance Summary (unaudited)** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** |
| | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| **Per Share Data** |  |  |  |  |  |
| Earnings per common share |  |  |  |  |  |
| Basic | $1.16 | $1.11 | $0.92 | $0.90 | $0.96 |
| Diluted | $1.16 | $1.11 | $0.92 | $0.90 | $0.95 |
| Cash dividends per common share | $0.20 | $0.20 | $0.18 | $0.18 | $0.18 |
| Common stock dividend payout ratio | 16.9% | 17.7% | 19.1% | 19.7% | 18.5% |
| Average common shares outstanding |  |  |  |  |  |
| Basic | 12775703 | 12766473 | 12754724 | 12745297 | 12916555 |
| Diluted | 12837637 | 12835670 | 12810174 | 12801903 | 12976181 |
| Common shares outstanding at period end | 12783646 | 12774645 | 12763422 | 12753094 | 12743125 |
| **Performance Ratios** |  |  |  |  |  |
| Return on average equity | 17.50% | 17.05% | 14.48% | 14.20% | 15.48% |
| Return on average tangible equity (C) | 21.75% | 21.33% | 18.28% | 18.02% | 19.72% |
| Return on average tangible common equity (D) | 22.96% | 22.20% | 19.00% | 18.74% | 20.55% |
| Return on average assets | 1.54% | 1.51% | 1.30% | 1.30% | 1.42% |
| Net interest margin (A) | 3.80% | 3.84% | 3.66% | 3.61% | 3.49% |
| Efficiency ratio (B) | 46.40% | 47.95% | 47.45% | 49.44% | 48.85% |

---

---

| |
|:---|
| NOTES |
| (A) - Presented on a tax-equivalent basis assuming a federal tax rate of 21%. |
| (B) - Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles. |
| (C) - Return on average tangible equity = (Net income + Amortization of intangibles [after-tax]) / (Average shareholders' equity - Average intangible assets). |
| (D) - Return on average tangible common equity = (Net income + Amortization of intangibles [after-tax]) / (Average common shareholders' equity - Average intangible assets). |

---

------

---

| |
|:---|
| **SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)** |
| **Selected Balance Sheet Data (unaudited)** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *Dollars in thousands, except per share amounts* | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| &nbsp;&nbsp;&nbsp; **Assets** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and due from banks | $16469 | $16141 | $17921 | $18404 | $21006 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest bearing deposits other banks | 28248 | 29510 | 31680 | 42853 | 57452 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Debt securities, available for sale | 405201 | 383965 | 368049 | 374855 | 401103 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Debt securities, held to maturity | 96163 | 96640 | 97116 | 97589 | 98060 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equity investments | 29494 | 20314 | 19905 | 20574 | 20202 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other investments | 16029 | 18105 | 18329 | 10974 | 11304 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans, net | 3043919 | 3038377 | 2941813 | 2817998 | 2729093 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property held for sale | 5067 | 5193 | 5319 | 6900 | 9858 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Premises and equipment, net | 53981 | 54628 | 55034 | 55713 | 56371 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goodwill and other intangible assets | 62150 | 62502 | 62856 | 63212 | 63590 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash surrender value of life insurance policies and annuities | 71640 | 71216 | 71073 | 70825 | 60613 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivative financial instruments | 40506 | 42179 | 31452 | 24455 | 11187 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other assets | 47825 | 48529 | 42252 | 39339 | 36880 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $3916692 | $3887299 | $3762799 | $3643691 | $3576719 |
| &nbsp;&nbsp;&nbsp; **Liabilities and Shareholders' Equity** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deposits | $3169879 | $3108072 | $2975304 | $3008063 | $2943089 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short-term borrowings | 225999 | 273148 | 291447 | 140146 | 140146 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-term borrowings and subordinated debentures, net | 123543 | 123427 | 123311 | 123260 | 123159 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other liabilities | 42741 | 40978 | 38846 | 41756 | 42852 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 3562162 | 3545625 | 3428908 | 3313225 | 3249246 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Preferred stock and related surplus | 14920 | 14920 | 14920 | 14920 | 14920 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common stock and related surplus | 90696 | 90345 | 90008 | 89675 | 89301 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings | 260393 | 248084 | 236438 | 226944 | 217770 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive income (loss) | (11479) | (11675) | (7475) | (1073) | 5482 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity | 354530 | 341674 | 333891 | 330466 | 327473 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and shareholders' equity | $3916692 | $3887299 | $3762799 | $3643691 | $3576719 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Book value per common share | $26.57 | $25.58 | $24.99 | $24.74 | $24.53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tangible book value per common share (A) | $21.70 | $20.69 | $20.07 | $19.79 | $19.54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tangible common equity to tangible assets (B) | 7.2% | 6.9% | 6.9% | 7.0% | 7.1% |

---

---

| |
|:---|
| NOTES |
| (A) - Tangible book value per share = (Common stock and related surplus plus Retained earnings plus Accumulated other comprehensive income/loss - Intangible assets) / Common shares outstanding. |
| (B) - Tangible common equity to tangible assets = (Common stock and related surplus plus Retained earnings plus Accumulated other comprehensive income/loss - Intangible assets) / (Total assets - Intangible assets). |

---

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| |
|:---|
| **SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)** |
| **Regulatory Capital Ratios (unaudited)** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| **Summit Financial Group, Inc.** |  |  |  |  |  |
| CET1 Risk-based Capital | 8.6% | 8.2% | 8.2% | 8.3% | 8.4% |
| Tier 1 Risk-based Capital | 9.5% | 9.2% | 9.2% | 9.3% | 9.5% |
| Total Risk Based Capital | 13.5% | 13.1% | 13.3% | 13.5% | 13.8% |
| Tier 1 Leverage | 8.5% | 8.4% | 8.4% | 8.4% | 8.3% |
| **Summit Community Bank, Inc.** |  |  |  |  |  |
| CET1 Risk-based Capital | 11.6% | 11.3% | 11.4% | 11.6% | 11.9% |
| Tier 1 Risk-based Capital | 11.6% | 11.3% | 11.4% | 11.6% | 11.9% |
| Total Risk Based Capital | 12.6% | 12.2% | 12.4% | 12.5% | 12.8% |
| Tier 1 Leverage | 10.4% | 10.3% | 10.4% | 10.5% | 10.4% |

---

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| |
|:---|
| **SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)** |
| **Loan Composition (unaudited)** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *Dollars in thousands* | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| Commercial | $501844 | $512771 | $455202 | $447482 | $365301 |
| Mortgage warehouse lines | 130390 | 194740 | 171399 | 164895 | 227869 |
| Commercial real estate |  |  |  |  |  |
| Owner occupied | 467050 | 473298 | 502152 | 491059 | 484708 |
| Non-owner occupied | 1004368 | 960627 | 963646 | 910174 | 866031 |
| Construction and development |  |  |  |  |  |
| Land and development | 106362 | 104437 | 106840 | 103203 | 100805 |
| Construction | 282935 | 248564 | 211955 | 171383 | 146038 |
| Residential real estate |  |  |  |  |  |
| Conventional | 386874 | 382203 | 377980 | 375240 | 384794 |
| Jumbo | 92103 | 87449 | 79803 | 81443 | 79108 |
| Home equity | 71986 | 72756 | 71136 | 70770 | 72112 |
| Consumer | 35372 | 35116 | 33816 | 32095 | 31923 |
| Other | 3534 | 3166 | 2947 | 2877 | 2702 |
| Total loans, net of unearned fees | 3082818 | 3075127 | 2976876 | 2850621 | 2761391 |
| Less allowance for loan credit losses | 38899 | 36750 | 35063 | 32623 | 32298 |
| Loans, net | $3043919 | $3038377 | $2941813 | $2817998 | $2729093 |
| Unfunded loan commitments | $925657 | $889854 | $876157 | $840705 | $688493 |

---

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| |
|:---|
| **SUMMIT FINANCIAL GROUP INC. (NASDAQ: SMMF)** |
| **Deposit Composition (unaudited)** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *Dollars in thousands* | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| Core deposits |  |  |  |  |  |
| Non interest bearing checking | $553616 | $619067 | $600791 | $629002 | $568986 |
| Interest bearing checking | 1743299 | 1475643 | 1238368 | 1134964 | 1127298 |
| Savings | 496751 | 582922 | 645099 | 702069 | 698156 |
| Time deposits | 294630 | 338668 | 386562 | 427076 | 451713 |
| Total core deposits | 3088296 | 3016300 | 2870820 | 2893111 | 2846153 |
| Brokered deposits | 32790 | 32778 | 32767 | 32755 | 14677 |
| Other non-core time deposits | 48793 | 58994 | 71717 | 82197 | 82259 |
| Total deposits | $3169879 | $3108072 | $2975304 | $3008063 | $2943089 |

---

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| |
|:---|
| **SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)** |
| **Asset Quality Information (unaudited)** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** | **For the Quarter Ended** |
| <br>*Dollars in thousands* | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| Gross loan charge-offs | $250 | $265 | $306 | $618 | $282 |
| Gross loan recoveries | (249) | (257) | (147) | (109) | (89) |
| Net loan charge-offs | $1 | $8 | $159 | $509 | $193 |
| Net loan charge-offs to average loans (annualized) | 0.00% | 0.00% | 0.02% | 0.07% | 0.03% |
| Allowance for loan credit losses | $38899 | $36750 | $35063 | $32623 | $32298 |
| Allowance for loan credit losses as a percentage of period end loans | 1.26% | 1.19% | 1.18% | 1.14% | 1.17% |
| Allowance for credit losses on unfunded loan commitments ("ULC'") | $6947 | $7597 | $7792 | $8392 | $7275 |
| Allowance for credit losses on ULC as a percentage of period end ULC | 0.75% | 0.85% | 0.89% | 1.00% | 1.06% |
| Nonperforming assets: |  |  |  |  |  |
| Nonperforming loans |  |  |  |  |  |
| Commercial | $93 | $347 | $345 | $433 | $740 |
| Commercial real estate | 1750 | 1860 | 2703 | 4765 | 4603 |
| Residential construction and development | 851 | 902 | 1053 | 968 | 1560 |
| Residential real estate | 5117 | 6083 | 6799 | 5549 | 5772 |
| Consumer | 12 | 8 | 37 | 20 | 21 |
| Total nonperforming loans | 7823 | 9200 | 10937 | 11735 | 12696 |
| Foreclosed properties |  |  |  |  |  |
| Commercial real estate | 297 | 297 | 440 | 1251 | 1389 |
| Commercial construction and development | 2187 | 2332 | 2332 | 2332 | 2332 |
| Residential construction and development | 2293 | 2293 | 2293 | 3018 | 5561 |
| Residential real estate | 290 | 271 | 254 | 299 | 576 |
| Total foreclosed properties | 5067 | 5193 | 5319 | 6900 | 9858 |
| Other repossessed assets |  |  |  |  |  |
| Total nonperforming assets | $12890 | $14393 | $16256 | $18635 | $22554 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Nonperforming loans to period end loans | 0.25% | 0.30% | 0.37% | 0.41% | 0.46% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Nonperforming assets to period end assets | 0.33% | 0.37% | 0.43% | 0.51% | 0.63% |
| Troubled debt restructurings |  |  |  |  |  |
| Performing | $18966 | $18206 | $18657 | $18971 | $18887 |
| Nonperforming | 1648 | 1920 | 2236 | 1822 | 2039 |
| Total troubled debt restructurings | $20614 | $20126 | $20893 | $20793 | $20926 |

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**SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)**

**Loans Past Due 30-89 Days (unaudited)**<br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *Dollars in thousands* | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| Commercial | $3168 | $1329 | $989 | $388 | $751 |
| Commercial real estate | 641 | 1550 | 4084 | 1446 | 683 |
| Construction and development | 317 | 236 | 821 | 645 | 45 |
| Residential real estate | 6231 | 2824 | 3452 | 3407 | 3552 |
| Consumer | 253 | 216 | 196 | 69 | 190 |
| Other | 22 | 4 | 14 | 28 | 22 |
| Total | $10632 | $6159 | $9556 | $5983 | $5243 |

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**SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)**

**Average Balance Sheet, Interest Earnings & Expenses and Average Rates**

**Q4 2022 vs Q3 2022 vs Q4 2021 (unaudited)**

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Q4 2022** | **Q4 2022** | **Q4 2022** | **Q3 2022** | **Q3 2022** | **Q3 2022** | **Q4 2021** | **Q4 2021** | **Q4 2021** |
|  | **Average** | **Earnings/** | **Yield/** | **Average** | **Earnings /** | **Yield /** | **Average** | **Earnings /** | **Yield /** |
| *Dollars in thousands* | **Balances** | **Expense** | **Rate** | **Balances** | **Expense** | **Rate** | **Balances** | **Expense** | **Rate** |
| **ASSETS** |  |  |  |  |  |  |  |  |  |
| Interest earning assets |  |  |  |  |  |  |  |  |  |
| Loans, net of unearned interest (1) |  |  |  |  |  |  |  |  |  |
| Taxable | $3100595 | $43549 | 5.57% | $3018219 | $38741 | 5.09% | $2640975 | $28916 | 4.34% |
| Tax-exempt (2) | 4525 | 52 | 4.56% | 4834 | 54 | 4.43% | 6888 | 81 | 4.67% |
| Securities |  |  |  |  |  |  |  |  |  |
| Taxable | 280114 | 2747 | 3.89% | 283645 | 2273 | 3.18% | 349541 | 1806 | 2.05% |
| Tax-exempt (2) | 219245 | 1813 | 3.28% | 203951 | 1549 | 3.01% | 177757 | 1212 | 2.71% |
| Interest bearing deposits other banks and Federal funds sold | 25785 | 70 | 1.08% | 49048 | 170 | 1.38% | 132471 | 75 | 0.22% |
| Total interest earning assets | 3630264 | 48231 | 5.27% | 3559697 | 42787 | 4.77% | 3307632 | 32090 | 3.85% |
| Noninterest earning assets |  |  |  |  |  |  |  |  |  |
| Cash & due from banks | 16892 |  |  | 17455 |  |  | 21037 |  |  |
| Premises & equipment | 54431 |  |  | 54976 |  |  | 56566 |  |  |
| Intangible assets | 62336 |  |  | 62705 |  |  | 63810 |  |  |
| Other assets | 191926 |  |  | 171409 |  |  | 126635 |  |  |
| Allowance for credit losses | (37377) |  |  | (35381) |  |  | (32691) |  |  |
| Total assets | $3918472 |  |  | $3830861 |  |  | $3542989 |  |  |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** | **LIABILITIES AND SHAREHOLDERS' EQUITY** | **LIABILITIES AND SHAREHOLDERS' EQUITY** | **LIABILITIES AND SHAREHOLDERS' EQUITY** | **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |  |  |
| Liabilities |  |  |  |  |  |  |  |  |  |
| Interest bearing liabilities |  |  |  |  |  |  |  |  |  |
| Interest bearing demand deposits | $1615275 | $7848 | 1.93% | $1454815 | $4276 | 1.17% | $1128637 | $319 | 0.11% |
| Savings deposits | 529039 | 1651 | 1.24% | 611075 | 1243 | 0.81% | 692893 | 590 | 0.34% |
| Time deposits | 399101 | 695 | 0.69% | 461134 | 621 | 0.53% | 560140 | 809 | 0.57% |
| Short-term borrowings | 276823 | 1868 | 2.68% | 191421 | 850 | 1.76% | 140146 | 365 | 1.03% |
| Long-term borrowings and subordinated debentures | 123488 | 1425 | 4.58% | 123368 | 1348 | 4.34% | 86509 | 902 | 4.14% |
| Total interest bearing liabilities | 2943726 | 13487 | 1.82% | 2841813 | 8338 | 1.16% | 2608325 | 2985 | 0.45% |
| Noninterest bearing liabilities |  |  |  |  |  |  |  |  |  |
| Demand deposits | 586617 |  |  | 609424 |  |  | 568764 |  |  |
| Other liabilities | 43378 |  |  | 41339 |  |  | 40905 |  |  |
| Total liabilities | 3573721 |  |  | 3492576 |  |  | 3217994 |  |  |
| Shareholders' equity - preferred | 14920 |  |  | 14920 |  |  | 14920 |  |  |
| Shareholders' equity - common | 329831 |  |  | 323365 |  |  | 310075 |  |  |
| Total liabilities and shareholders' equity | $3918472 |  |  | $3830861 |  |  | $3542989 |  |  |
| **NET INTEREST EARNINGS** |  | $34744 |  |  | $34449 |  |  | $29105 |  |
| **NET INTEREST MARGIN** |  |  | 3.80% |  |  | 3.84% |  |  | 3.49% |

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| |
|:---|
| (1) For purposes of this table, nonaccrual loans are included in average loan balances. |
| (2) Interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21% for all periods presented. The tax equivalent adjustment resulted in an increase in interest income of $391,000, $336,000 and $273,000 for Q4 2022, Q3 2022 and Q4 2021, respectively. |

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|:---|
| **SUMMIT FINANCIAL GROUP, INC. (NASDAQ: SMMF)** |
| **Average Balance Sheet, Interest Earnings & Expenses and Average Rates** |
| **YTD 2022 vs YTD 2021 (unaudited)** |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **YTD 2022** | **YTD 2022** | **YTD 2022** | **YTD 2021** | **YTD 2021** | **YTD 2021** |
|  | **Average** | **Earnings /** | **Yield /** | **Average** | **Earnings /** | **Yield /** |
| *Dollars in thousands* | **Balances** | **Expense** | **Rate** | **Balances** | **Expense** | **Rate** |
| **ASSETS** |  |  |  |  |  |  |
| Interest earning assets |  |  |  |  |  |  |
| Loans, net of unearned interest (1) |  |  |  |  |  |  |
| Taxable | $2949350 | $145189 | 4.92% | $2487885 | $112269 | 4.51% |
| Tax-exempt (2) | 4961 | 222 | 4.47% | 9681 | 458 | 4.73% |
| Securities |  |  |  |  |  |  |
| Taxable | 295264 | 8442 | 2.86% | 301446 | 5883 | 1.95% |
| Tax-exempt (2) | 195558 | 5836 | 2.98% | 159266 | 4541 | 2.85% |
| Interest bearing deposits other banks and Federal funds sold | 46248 | 331 | 0.72% | 175615 | 315 | 0.18% |
| Total interest earning assets | 3491381 | 160020 | 4.58% | 3133893 | 123466 | 3.94% |
| Noninterest earning assets |  |  |  |  |  |  |
| Cash & due from banks | 17473 |  |  | 19582 |  |  |
| Premises & equipment | 55219 |  |  | 54762 |  |  |
| Intangible assets | 62878 |  |  | 58973 |  |  |
| Other assets | 167982 |  |  | 119562 |  |  |
| Allowance for loan losses | (34630) |  |  | (33491) |  |  |
| Total assets | $3760303 |  |  | $3353281 |  |  |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** | **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |  |  |
| Liabilities |  |  |  |  |  |  |
| Interest bearing liabilities |  |  |  |  |  |  |
| Interest bearing demand deposits | $1350227 | $13863 | 1.03% | $1044817 | $1409 | 0.13% |
| Savings deposits | 627630 | 4155 | 0.66% | 673259 | 2471 | 0.37% |
| Time deposits | 479545 | 2665 | 0.56% | 569420 | 4302 | 0.76% |
| Short-term borrowings | 204265 | 3786 | 1.85% | 140146 | 1768 | 1.26% |
| Long-term borrowings and subordinated debentures | 123331 | 5292 | 4.29% | 58974 | 2534 | 4.30% |
| Total interest bearing liabilities | 2784998 | 29761 | 1.07% | 2486616 | 12484 | 0.50% |
| Noninterest bearing liabilities |  |  |  |  |  |  |
| Demand deposits | 597199 |  |  | 518311 |  |  |
| Other liabilities | 42005 |  |  | 38545 |  |  |
| Total liabilities | 3424202 |  |  | 3043472 |  |  |
| Shareholders' equity - preferred | 14920 |  |  | 10327 |  |  |
| Shareholders' equity - common | 321181 |  |  | 299482 |  |  |
| Total liabilities and shareholders' equity | $3760303 |  |  | $3353281 |  |  |
| **NET INTEREST EARNINGS** |  | $130259 |  |  | $110982 |  |
| **NET INTEREST MARGIN** |  |  | 3.73% |  |  | 3.54% |

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| |
|:---|
| (1) For purposes of this table, nonaccrual loans are included in average loan balances. |
| (2) Interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21%. The tax equivalent adjustment resulted in an increase in interest income of $1,273,000 and $1,050,000 for the YTD 2022 and YTD 2021, respectively. |

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