Summit State Bank reports 2023 earnings fell 38%, Q4 dropped 58% from year ago

Summit State Bank (Nasdaq: SSBI) on Tuesday reported fourth-quarter net income dropped 58% and full-year earnings fell 38%.

The Santa Rosa-based community bank reported net income of $1.9 million in the fourth quarter, ending Dec. 31, and $10.8 million for the year.

“We closed out the year with solid operating results despite the challenges across the entire banking industry,” said Brian Reed, president and CEO, in the news release. “The persistently high interest rate environment continued to impact net interest income growth with higher interest expense on deposits and borrowings, which affected our operating performance for the fourth quarter and the full year 2023.

“However, we continue to see steady loan demand in our markets, and total deposit balances have increased compared to a year ago. Further, our capital levels and excess liquidity positions remain strong, and together with revenue generation we have a solid foundation upon which to continue to grow in the year ahead.”

The loan portfolio grew 2.7% in 2023, to $938.6 million, and was up 0.69% from the third quarter. Assets totaled $1.12 billion at year-end.

“Identifying and resolving problem credits and maintaining an adequate reserve balance remains a top priority,” said Reed.

Loans with persistently missed payments at year-end totaled $44.2 million, or 3.94% of total assets, up from 3.09% in the third quarter and 0.34% a year before. The bank said many of the 18 currently nonperforming loans are sufficiently collateralized.

Deposits increased 5% last year, to $1.01 billion, but were down 2% from the third quarter.

Summit said it remained categorized as “well-capitalized,” with a ratio of tangible equity to tangible assets of 8.38% at year end, up from 8.24% on Sept. 30 and 8.10% a year before.