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Q1 2009 Earnings Release

April 20, 2009

Summit Bank continues to chart its way carefully through these difficult times and recorded another quarter of solid growth and performance. Total assets increased 19% to $104.5 million over March 2008’s total of $87.2 million, with net loans increasing by $15 million or 21 percent. Deposit growth over the last 12 months has continued to be strong with an increase of $18 million or 25 percent from Q1 2008 through Q1 2009.
Summit continues to respond to the uncertain economic climate by reserving for possible future losses. “We added $67,000 to our provision for loan losses, bringing the total allowance to $1.21million or 1.37 percent of gross loans outstanding at quarter-end,” said Ann Marie Mehlum, CEO and President. “Additionally, the Bank proactively wrote down the carrying value of its sole parcel of foreclosed real estate by $100,000. Even with a significant negative impact on earnings from these two actions, Summit’s net income for the quarter exceeded last year’s first quarter net income.” Net income for the quarter was $99,000 or 10 cents per fully diluted share compared to $95,000 or 9 cents per fully diluted share for the same period last year.
“The Bank’s loan portfolio is holding up comparatively well as Summit’s clients are successfully addressing economic challenges,” Mehlum said. “The total amount of foreclosed real estate, non-performing loans, and past due loans is higher than we would normally like to see. Yet, as a percentage of equity, Summit’s ratio is significantly less than Oregon and national peer averages. We will continue to work closely with clients to help them weather this recession.”
Summit’s Board of Directors decided not to participate in the United States Treasury’s Capital Purchase Program (CPP). In January, the Bank was notified that it had been granted preliminary approval to receive $2.7 million, confirming Summit’s status as a strong financial institution.
“Summit does not have immediate need for additional capital, and our Board determined that the cost of the government program, together with the uncertainty regarding the terms of the agreement, made this an unattractive source of capital for the Bank. We’re a profitable bank with money to lend and look forward to being part of our community’s recovery,” Mehlum said.
Summit Bank is quoted on the NASDAQ Over-the-Counter Bulletin Board as SBKO. The Bank received its charter and began operations in February 2004 as Eugene/Springfield’s first new bank in more than 25 years. The Bank, headquartered in Eugene at 96 E. Broadway, specializes in providing high-level service to professionals, medium-sized businesses and their owners.