Summit State Bank Reports Second Quarter 2026 Financial Results

SANTA ROSA, Calif., July 28, 2026 (GLOBE NEWSWIRE) -- Summit State Bank (the “Bank”) (Nasdaq: SSBI) today reported a net loss of $1,307,000, or $0.19 loss per diluted share for the second quarter ended June 30, 2026, compared to net income of $2,417,000, or $0.36 per diluted share for the second quarter ended June 30, 2025. Pre-tax, pre-provision income1 was $3,957,000 for the quarter ended June 30, 2026, compared to $3,187,000 for the quarter ended June 30 2025, and $3,320,000 for the quarter ended March 31, 2026. The current quarter's results were impacted by a $5,924,000 provision for credit losses on loans. During the second quarter of 2026, the Bank recognized significant charge-offs and recorded additional provisions for credit losses as part of a comprehensive review of certain higher-risk credits. The result was a reduction of non-performing loans by ~44% compared to the prior quarter. These actions reflect the Board's and management's ongoing efforts to address identified credit risks, and pursue appropriate resolution strategies.

"Our second quarter results reflect deliberate actions to address identified credit risks within the loan portfolio," said Brian Reed, President and Chief Executive Officer. "While pretax, pre-provision income improved meaningfully during the quarter, driven by net interest margin expansion and disciplined expense management, our reported net loss was primarily attributable to the increased provision for credit losses. Throughout the quarter, the Board and management evaluated a range of alternatives for resolving certain problem credits and took decisive actions, including loan sales, to reduce risk and strengthen the balance sheet. Our capital and liquidity positions remain strong, which positions us well to support our customers and communities going forward. We remain confident in the underlying strength of our core business and our long-term strategy.”

Second Quarter 2026 Financial Highlights (at or for the three months ended June 30, 2026)

• Net loss was $1,307,000, or $0.19 loss per diluted share, compared to net income of $2,417,000, or $0.36 per diluted share, for the quarter ended June 30, 2025, and net income of $1,674,000, or $0.25 per diluted share for the quarter ended March 31, 2026.
• Pre-tax, pre-provision income was $3,957,000 for the quarter ended June 30, 2026, compared to $3,187,000 for the quarter ended June 30, 2025, and $3,320,000 for the quarter ended March 31, 2026.  
• Net interest margin was 3.95% in the second quarter of 2026 compared to 3.66% in the second quarter of 2025 and 3.77% in the first quarter of 2026.
• Non-performing assets were $20,757,000 at June 30, 2026, compared to $13,762,000 at June 30, 2025, and $35,170,000 at March 31, 2026.
• The Bank’s Tier 1 Leverage ratio increased to 10.84% at June 30, 2026, compared to 9.84% at June 30, 2025, and 10.67% at March 31, 2026.
• Annualized loss on average assets and annualized loss on average equity for the second quarter of 2026 was 0.54% and 5.03%, respectively. This compared to annualized return on average assets and annualized return on average equity for the second quarter of 2025 of 0.93% and 9.98%, respectively.
• The allowance for credit losses to total loans held for investment was 1.69% at June 30, 2026, compared to 1.52% at June 30, 2025, and 1.96% at March 31, 2026.
• The Bank maintained total liquidity of $456,570,000, or 47.6% of total assets as of June 30, 2026. This includes on balance sheet liquidity (cash and equivalents and unpledged available-for-sale securities) of $175,096,000 or 18.2% of total assets, plus available borrowing capacity of $281,474,000 or 29.3% of total assets.
• The Bank has been strategically managing its loan and deposit portfolios to reduce balance sheet risk and improve capital ratios, successfully reducing the overall size of its balance sheet as detailed below:
  • Net loans held for investment decreased 12% to $746,099,000 at June 30, 2026, compared to $851,309,000 at June 30, 2025, and decreased 4% compared to $776,109,000 at March 31, 2026.
  • Total deposits decreased 8% to $846,129,000 at June 30, 2026, compared to $922,609,000 at June 30, 2025, and decreased 4% when compared to $879,259,000 at March 31, 2026.
• Book value was $14.98 per share at June 30, 2026, compared to $14.49 at June 30, 2025, and $15.16 at March 31, 2026.

Operating Results

The Bank’s net interest margin was 3.95% in the second quarter of 2026 compared to 3.66% in the second quarter of 2025 and 3.77% in the first quarter of 2026. “Our net interest margin expanded 29 basis points during the second quarter, from the year ago quarter, supported by reduced cost of the funding base, the continued repricing of our loan portfolio and the significant reductions of non-performing loans. Offsetting this is the overall reduction in loan balances.

Interest and dividend income decreased 7.6% to $14,067,000 in the second quarter of 2026 compared to $15,230,000 in the second quarter of 2025. The decrease in interest income is attributable to lower loan portfolio volume, which reduced interest and fees on loans by $1,268,000 and lower investment securities holdings, which decreased interest income by $64,000. This was offset by an increase in interest on deposits with banks of $286,000.

Interest expense decreased 21.3% to $4,725,000 in the second quarter of 2026 compared to $6,001,000 in the second quarter of 2025. The cost of deposits also decreased to 2.16% in the second quarter of 2026 compared to 2.51% in the second quarter of 2025. The decrease in interest expense is primarily attributable to a $1,267,000 decrease in interest expense on deposits resulting from lower cost of funds and lower volume of deposits.

Noninterest income increased in the second quarter of 2026 to $924,000 compared to income of $263,000 in the second quarter of 2025. The increase is primarily attributed to the Bank recognizing $308,000 in gains on sales of SBA guaranteed loan balances in the second quarter of 2026 compared to $29,000 in gains on sales of SBA guaranteed loan balances in the second quarter of 2025 and a $331,000 increase in other income related to the accelerated amortization of originated servicing rights for the early payoff on sold SBA loans in the second quarter of 2025.

Operating expenses remained relatively flat in the second quarter of 2026 at $6,309,000 compared to $6,305,000 in the second quarter of 2025. “Improving operational efficiency continues to be a strategic priority across the organization. We remained disciplined in managing our expense base during the quarter, holding expenses relatively flat compared to the year ago quarter. This reflects deliberate, structural choices rather than short-term measures, and importantly, it has been achieved without compromising the quality of service our customers expect. We believe continued expense discipline represents an important measure for driving long-term shareholder value,” said Reed.

Balance Sheet Review

During the second quarter of 2026, the Bank continued to strategically manage its loan and deposit portfolios to reduce balance sheet risk and improve liquidity and capital ratios. As a result, net loans held for investment decreased 12% to $746,099,000, and total deposits decreased 8% to $846,129,000 as of June 30, 2026, compared to June 30, 2025.

Net loans held for investment were $746,099,000 at June 30, 2026, compared to $851,309,000 at June 30, 2025, and decreased 4% compared to March 31, 2026. The Bank’s largest loan types are commercial real estate loans which comprise 79% of the portfolio and loans secured by farmland which make up 7% of the loan portfolio. Of the commercial real estate total, approximately 33% or $199,556,000 are owner occupied, and the remaining 67% or $402,072,000 are non-owner occupied. The Bank’s entire loan portfolio is well diversified between industries and product type. Office space loans total $142,317,000, representing 19% of the total loan portfolio, of which $59,999,000 or 42% are owner occupied and $82,318,000 or 58% are non-owner occupied.

Total deposits were $846,129,000 at June 30, 2026, compared to $922,609,000 at June 30, 2025, and decreased 4% compared to the prior quarter end. At June 30, 2026, noninterest bearing demand deposit accounts decreased 4% compared to a year ago and represented 22% of total deposits; savings, NOW and money market accounts remained relatively flat compared to a year ago and represented 53% of total deposits, and CDs decreased 25% compared to a year ago and comprised 25% of total deposits.

Shareholders’ equity was $101,357,000 at June 30, 2026 compared to $98,108,000 at June 30, 2025, and $102,661,000 at March 31, 2026. The increase in shareholders’ equity compared to a year ago was primarily due to higher retained earnings and a $797,000 decrease in accumulated other comprehensive loss. The decrease in shareholders’ equity compared to three months earlier was primarily due to reduction in retained earnings. At June 30, 2026, book value was $14.98 per share, compared to $15.16 three months earlier, and $14.49 at June 30, 2025.

The Bank’s Tier 1 Leverage ratio continues to exceed the minimum of 5% necessary to be categorized as “well-capitalized” for regulatory capital purposes. The Tier-1 leverage ratio for the second quarter of 2026 was 10.84%, an increase compared to 9.84% for the second quarter of 2025.

Credit Quality

Non-performing assets were $20,757,000, or 2.16% of total assets, at June 30, 2026. This compared to $35,170,000 in non-performing assets at March 31, 2026, and $13,762,000 in non-performing assets at June 30, 2025. The decrease from the prior quarter was due to a sale of four notes on one relationship totaling $9,031,000 and the partial charge-off of $5,087,000 on one relationship. Non-performing assets include $2,294,000 for one other real estate owned property at June 30, 2026, and March 31, 2026, compared to $4,437,000 for one other real estate owned property at June 30, 2025.

“Credit quality metrics for the second quarter are concentrated in several large relationships, rather than broad-based deterioration across the portfolio. Of the non-performing portfolio, 88% are current based on contractual payment status, although these loans remained classified as non-performing based on management’s’ credit assessment as of quarter-end. We are actively managing these credits, and the rest of the loan portfolio is performing without significant issues outside of these isolated situations. Past due loans stood at 0.13% of total loans at June 30, 2026, compared to no past due loans at June 30, 2025,” said Reed.

There was $8,655,000 in net charge-offs during the three months ended June 30, 2026, compared to no net charge-offs during the three months ended March 31, 2026 and $492,000 in net charge-offs during the three months ended June 30, 2025.

For the second quarter of 2026, the Bank recorded a provision for credit loss on loans held for investment of $5,924,000, a $20,000 reversal of credit losses for unfunded loan commitments and a $2,000 reversal of credit losses on investments. This compared to no provision for credit losses on loans, a $55,000 reversal of credit losses on unfunded loan commitments and no provision for credit losses on investments in the second quarter of 2025.

The allowance for credit losses to total loans held for investment was 1.69% on June 30, 2026, compared to 1.96% on March 31, 2026, and 1.52% on June 30, 2025. The reserves are changing based on levels of non-performing loans and the portfolio size in general. The decrease from March 31, 2026 to June 30, 2026 is attributable to a significant reduction in non-performing loans and reduced overall risk in the portfolio. The decrease is due to $8,655,000 in loan charge-offs offset by a provision for credit losses on loans of $5,924,000, a $20,000 reversal of credit losses on unfunded loan commitments and $2,000 reversal of credit losses on investments.

About Summit State Bank

Founded in 1982 and headquartered in Sonoma County, Summit State Bank is an award-winning community bank serving the North Bay. The Bank serves small businesses, nonprofits, and the community, with total assets of $960 million and total equity of $101 million as of June 30, 2026. The Bank has built its reputation over the past 40 years by specializing in providing exceptional customer service and customized financial solutions to aid in the success of its customers.

Summit State Bank is committed to embracing the diverse backgrounds, cultures, and talents of its employees to create high performance and support the evolving needs of its customers and the community it serves. Through the engagement of its team, Summit State Bank has received many esteemed awards including: Top Performing Community Bank by American Banker, Best Places to Work in the North Bay and Diversity in Business by North Bay Business Journal, Corporate Philanthropy Award by the San Francisco Business Times, and Hall of Fame by North Bay Biz Magazine. Summit State Bank’s stock is traded on the Nasdaq Global Market under the symbol SSBI. Further information can be found at www.summitstatebank.com.

Cautionary Note Regarding Preliminary Financial Results and Forward-looking Statements

The financial results in this release are preliminary and unaudited. Final financial results and other disclosures will be reported in Summit State Bank’s quarterly report on Form 10-Q for the period ended June 30, 2026, and may differ materially from the results and disclosures in this release due to, among other things, the completion of final review procedures, the occurrence of subsequent events or the discovery of additional information.

Except for historical information, the statements contained in this release are forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are non-historical statements regarding management’s expectations and beliefs about the Bank’s future financial performance and financial condition and trends in its business and markets. Words such as “expects,” “anticipates,” “believes,” “estimates” and similar expressions or future or conditional verbs such as “will,” “should,” “would” and “could” are intended to identify such forward-looking statements. Examples of forward-looking statements include but are not limited to statements regarding future operating results, operating improvements, loans sales and resolutions, cost savings, insurance recoveries, and dividends. The forward-looking statements in this release are based on current information and on assumptions about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond the Bank’s control. As a result of those risks and uncertainties, the Bank’s actual future results and outcomes could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this release. Those risks and uncertainties include, but are not limited to, the risk of incurring credit losses; the quality and quantity of deposits; the market for deposits, adverse developments in the financial services industry and any related impact on depositor behavior or investor sentiment; risks related to the sufficiency of the Bank’s liquidity; fluctuations in interest rates; governmental regulation and supervision; the risk that the Bank will not maintain growth at historic rates or at all; general economic conditions, either nationally or locally in the areas in which the Bank conducts its business; the impacts of conflict in the Middle East on the national and local economy; risks associated with changes in interest rates, which could adversely affect future operating results; the risk that some or all of the loans under contract for sale may not be sold as or when expected; the risk that customers or counterparties may not perform in accordance with the terms of credit documents or other agreements due to a decline in credit worthiness, business conditions or other reasons; adverse conditions in real estate markets; and the inherent uncertainty of expectations regarding litigation, insurance claims and the performance or resolution of loans. Additional information regarding these and other risks and uncertainties to which the Bank’s business and future financial performance are subject is contained in the Bank’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and other documents the Bank files with the FDIC from time to time. Readers should not place undue reliance on the forward-looking statements, which reflect management’s views only as of the date of this release. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

1 Non-GAAP Financial Measures

This release contains a non-GAAP (Generally Accepted Accounting Principles) financial measure in addition to the results presented in accordance with GAAP. The non-GAAP financial measure is pre-tax, pre-provision income. We believe the presentation of this non-GAAP financial measure provides useful information to assess our consolidated financial condition and consolidated results of operations and to assist investors in evaluating our financial results relative to our historical results and those of our peers.

Not all companies use identical calculations or the same definitions of pre-tax, pre-provision income, so the presentation of this non-GAAP financial measure may not be comparable to other similarly titled measures used by other companies. This non-GAAP financial measure has inherent limitations, is not required to be uniformly applied, and is not audited. This non-GAAP financial measure should be taken together with the corresponding GAAP measure and should not be considered a substitute for the GAAP measure. A reconciliation of the most directly comparable GAAP measure to this non-GAAP financial measure is presented below.

    Three Months Ended             June 30, 2026 March 31, 2026 June 30, 2025(In thousands)        Reconciliation of non-GAAP pre-tax, pre-provision income             Net (loss) income   $(1,307) $1,674 $2,417 Excluding provision for (reversal of) credit losses   5,902   1,047  (55)Excluding provision for income tax (benefit) expense (638)  599  825 Pre-tax, pre-provision income (non-GAAP)$3,957  $3,320 $3,187          

SUMMIT STATE BANKSTATEMENTS OF INCOME(In thousands except earnings per share data)               Three Months Ended     June 30, 2026 March 31, 2026 June 30, 2025     (Unaudited) (Unaudited) (Unaudited)          Interest and dividend income:      Interest and fees on loans$12,691  $12,380  $13,959  Interest on deposits with banks 926   898   640  Interest on investment securities 439   468   503  Dividends on FHLB stock 11   298   128    Total interest and dividend income 14,067   14,044   15,230 Interest expense:      Deposits 4,608   4,871   5,875  Federal Home Loan Bank advances -   5   -  Junior subordinated debt 117   122   126    Total interest expense 4,725   4,998   6,001    Net interest income before provision for (reversal of) credit losses 9,342   9,046   9,229 Provision for credit losses on loans 5,924   1,057   - Reversal of credit losses on unfunded loan commitments (20)  (9)  (55)Reversal of credit losses on investments (2)  (1)  -    Net interest income after provision for (reversal of) credit        losses on loans, unfunded loan commitments and investments 3,440   7,999   9,284 Non-interest income:      Service charges on deposit accounts 267   255   218  Rental income 54   54   57  Net gain on loan sales 308   497   29  Net loss on securities -   -   (5) Other income (loss) 295   206   (36)   Total non-interest income 924   1,012   263 Non-interest expense:      Salaries and employee benefits 3,752   4,242   3,902  Occupancy and equipment 358   356   467  Other expenses 2,199   2,140   1,936    Total non-interest expense 6,309   6,738   6,305    (Loss) income before provision for income taxes (1,945)  2,273   3,242 Provision for income tax (benefit) expense (638)  599   825    Net (loss) income$(1,307) $1,674  $2,417           Basic (loss) earnings per common share$(0.19) $0.25  $0.36 Diluted (loss) earnings per common share$(0.19) $0.25  $0.36           Basic weighted average shares of common stock outstanding 6,747,496   6,734,158   6,733,823 Diluted weighted average shares of common stock outstanding 6,747,496   6,734,158   6,733,823           

         SUMMIT STATE BANKSTATEMENTS OF INCOME(In thousands except earnings per share data)              Six Months Ended     June 30, 2026  June 30, 2025     (Unaudited)  (Unaudited)         Interest and dividend income:     Interest and fees on loans$25,072   $27,379  Interest on deposits with banks 1,824    1,117  Interest on investment securities 907    1,018  Dividends on FHLB stock 309    258    Total interest and dividend income 28,112    29,772 Interest expense:     Deposits 9,480    12,163  Federal Home Loan Bank advances 5    40  Junior Subordinated Debt 239    262    Total interest expense 9,724    12,465    Net interest income before provision for (reversal of) credit losses 18,388    17,307 Provision for (reversal of) credit losses on loans 6,981    (577)Reversal of credit losses on unfunded loan commitments (29)   (93)Reversal of credit losses on investments (3)   (13)   Net interest income after provision for (reversal of) credit       losses on loans, unfunded loan commitments and investments 11,439    17,990 Non-interest income:     Service charges on deposit accounts 522    443  Rental income 108    114  Net gain on loan sales 805    51  Net loss on securities -    (5) Other income 501    306    Total non-interest income 1,936    909 Non-interest expense:     Salaries and employee benefits 7,994    7,629  Occupancy and equipment 714    888  Other expenses 4,339    4,040    Total non-interest expense 13,047    12,557    Income before provision for income taxes 328    6,342 Provision for income tax (benefit) expense (39)   1,430    Net income$367   $4,912          Basic earnings per common share$0.05   $0.73 Diluted earnings per common share$0.05   $0.73          Basic weighted average shares of common stock outstanding 6,740,864    6,726,516 Diluted weighted average shares of common stock outstanding 6,740,864    6,726,516          

SUMMIT STATE BANK BALANCE SHEETS (In thousands except share data)                         June 30, 2026 March 31, 2026 June 30, 2025     (Unaudited) (Audited) (Unaudited)           ASSETS                Cash and due from banks$112,553  $115,456  $66,410     Total cash and cash equivalents 112,553   115,456   66,410            Investment securities:       Available-for-sale, less allowance for credit losses of $1, $3 and $23       (at fair value; amortized cost of $71,989, $73,127 and $78,015)
 62,543   63,721   67,378            Loans held for sale -   -   3,760  Loans held for investment, less allowance for       credit losses of $12,813, $15,544 and $13,133 746,099   776,109   851,309  Bank premises and equipment, net 4,820   4,734   4,974  Investment in Federal Home Loan Bank stock (FHLB), at cost 5,889   5,889   5,889  Other Real Estate Owned 2,294   2,294   4,437  Affordable housing tax credit investments 6,055   6,268   6,925  Accrued interest receivable and other assets 19,530   21,451   21,390               Total assets$959,783  $995,922  $1,032,472            LIABILITIES AND      SHAREHOLDERS' EQUITY                Deposits:
       Demand - non interest-bearing$186,424  $190,769  $193,390   Demand - interest-bearing 222,261   215,660   207,176   Savings 41,299   39,571   39,875   Money market 184,116   198,515   200,320   Time deposits that meet or exceed the FDIC insurance limit 65,310   68,741   93,325   Other time deposits 146,719   166,003   188,523     Total deposits 846,129   879,259   922,609            Junior subordinated debt 5,956   5,953   5,942  Affordable housing commitment 458   458   511  Accrued interest payable and other liabilities 5,883   7,591   5,302               Total liabilities 858,426   893,261   934,364            Shareholders' equity       Preferred stock, no par value; 20,000,000 shares authorized;       no shares issued and outstanding
 -   -   -   Common stock, no par value; shares authorized - 30,000,000 shares;       issued and outstanding 6,766,616, 6,771,526 and 6,771,526
 38,039   38,011   37,843   Retained earnings
 70,038   71,342   67,782   Accumulated other comprehensive loss, net (6,720)  (6,692)  (7,517)              Total shareholders' equity 101,357   102,661   98,108               Total liabilities and shareholders' equity$959,783  $995,922  $1,032,472            

Financial Summary(Dollars in thousands except per share data)         Three Months Ended  June 30, 2026 March 31, 2026 June 30, 2025  (Unaudited) (Unaudited) (Unaudited)Statement of Income Data:      Net interest income $9,342  $9,046  $9,229 Provision for credit losses on loans  5,924   1,057   - Reversal of credit losses on unfunded loan commitments  (20)  (9)  (55)Reversal of credit losses on investments  (2)  (1)  - Non-interest income  924   1,012   263 Non-interest expense  6,309   6,738   6,305 Provision for income tax (benefit) expense  (638)  599   825 Net (loss) income $(1,307) $1,674  $2,417        Selected per Common Share Data:      Basic (loss) earnings per common share $(0.19) $0.25  $0.36 Diluted (loss) earnings per common share $(0.19) $0.25  $0.36 Book value per common share (1) $14.98  $15.16  $14.49        Selected Balance Sheet Data:      Assets $959,783  $995,922  $1,032,472 Loans held for sale  -   -   3,760 Loans held for investment, net  746,099   776,109   851,309 Deposits  846,129   879,259   922,609 Average assets  974,347   1,002,042   1,046,914 Average earning assets  948,059   973,787   1,012,346 Average shareholders' equity  104,317   103,569   97,139 Nonperforming loans  18,463   32,876   9,325 Net loans charged-off  (8,655)  -   (492)Other real estate owned  2,294   2,294   4,437 Total nonperforming assets  20,757   35,170   13,762        Selected Ratios:      (Loss) return on average assets (2)  (0.54)%  0.68%  0.93%(Loss) return on average common shareholders' equity (2) (5.03)%  6.56%  9.98%Efficiency ratio (3)  61.46%  66.99%  66.39%Net interest margin (2)  3.95%  3.77%  3.66%Common equity tier 1 capital ratio  13.21%  12.91%  11.17%Tier 1 capital ratio  13.21%  12.91%  11.17%Total capital ratio  14.91%  14.60%  12.94%Tier 1 leverage ratio  10.84%  10.67%  9.84%Average shareholders' equity to average assets  10.71%  10.34%  9.28%Nonperforming loans to total loans held for investment 2.43%  4.15%  1.08%Nonperforming assets to total assets  2.16%  3.53%  1.33%Allowance for credit losses to total loans held for investment 1.69%  1.96%  1.52%Allowance for credit losses to nonperforming loans  69.40%  47.28%  140.84%   (1) Total shareholders' equity divided by total common shares outstanding.  (2) Annualized.  (3) Non-interest expenses to net interest and non-interest income, net of securities gains.           

Financial Summary(Dollars in thousands except per share data)        As of and for the  Six Months Ended  June 30, 2026  June 30, 2025  (Unaudited)  (Unaudited)Statement of Income Data:     Net interest income $18,388   $17,307 Provision for (reversal of) credit losses on loans  6,981    (577)Reversal of credit losses on unfunded loan commitments (29)   (93)Reversal of credit losses on investments  (3)   (13)Non-interest income  1,936    909 Non-interest expense  13,047    12,557 Provision for income tax (benefit) expense  (39)   1,430 Net income $367   $4,912       Selected per Common Share Data:     Basic earnings per common share $0.05   $0.73 Diluted earnings per common share $0.05   $0.73 Book value per common share (1) $14.98   $14.49       Selected Balance Sheet Data:     Assets $959,783   $1,032,472 Loans held for sale  -    3,760 Loans held for investment, net  746,099    851,309 Deposits  846,129    922,609 Average assets  988,118    1,053,372 Average earning assets  960,851    1,020,410 Average shareholders' equity  103,945    95,389 Nonperforming loans  18,463    9,325 Net loans (charged-off) recovered  (8,655)   17 Other real estate owned  2,294    4,437 Total nonperforming assets  20,757    13,762       Selected Ratios:     Return on average assets (2)  0.07%   0.94%Return on average common shareholders' equity (2)  0.71%   10.38%Efficiency ratio (3)  64.20%   68.91%Net interest margin (2)  3.86%   3.42%Common equity tier 1 capital ratio  13.21%   11.17%Tier 1 capital ratio  13.21%   11.17%Total capital ratio  14.91%   12.94%Tier 1 leverage ratio  10.84%   9.84%Average shareholders' equity to average assets  10.52%   9.06%Nonperforming loans to total loans held for investment 2.43%   1.08%Nonperforming assets to total assets  2.16%   1.33%Allowance for credit losses to total loans held for investment 1.69%   1.52%Allowance for credit losses to nonperforming loans  69.40%   140.84%   (1) Total shareholders' equity divided by total common shares outstanding.  (2) Annualized.  (3) Non-interest expenses to net interest and non-interest income, net of securities gains.         

Contact: Brian Reed, President and CEO, Summit State Bank (707) 568-4908