SANTA ROSA, Calif., April 28, 2026 (GLOBE NEWSWIRE) -- Summit State Bank (the “Bank”) (Nasdaq: SSBI) today reported net income of $1,674,000, or $0.25 per diluted share for the first quarter ended March 31, 2026, compared to net income of $2,494,000, or $0.37 per diluted share for the first quarter ended March 31, 2025. Pre-tax, pre-provision income was $3,320,000 for the quarter ended March 31, 2026, compared to $2,471,000 for the quarter ended March 31 2025 and $1,827,000 for the quarter ended December 31, 2025.
“Our first quarter results reflect our team's continued commitment to executing on our strategic priorities,” said Brian Reed, President and CEO. “While first quarter net income came in below the prior year, pre-tax, pre-provision income1 improved meaningfully, driven by expansion in our net interest margin, disciplined expense management and stronger non-interest income. At our core, we are a community bank that exists to serve local businesses and families, and that mission continues to guide every decision we make. With margins improving and continued focus on credit quality, we are well positioned. We are proud of the progress our team has made and confident in our ability to build on it as we move forward.”
First quarter 2026 Financial Highlights (at or for the three months ended March 31, 2026)
- Net income was $1,674,000, or $0.25 per diluted share, compared to $2,494,000, or $0.37 per diluted share, for the quarter ended March 31, 2025 and net income of $1,067,000, or $0.16 per diluted share for the quarter ended December 31, 2025.
- Pre-tax, pre-provision income1 was $3,320,000 for the quarter ended March 31, 2026, compared to $2,471,000 for the quarter ended March 31, 2025 and $1,827,000 for the quarter ended December 31, 2025.
- Net interest margin was 3.77% in the first quarter of 2026 compared to 3.19% in the first quarter of 2025 and 3.62% in the fourth quarter of 2025.
- Non-performing assets were $35,170,000 at March 31, 2026 compared to $21,884,000 at March 31, 2025 and $34,133,000 at December 31, 2025.
- The Bank’s Tier 1 Leverage ratio increased to 10.67% at March 31, 2026 compared to 9.45% at March 31, 2025.
- Annualized return on average assets and annualized return on average equity for the first quarter of 2026 were 0.68% and 6.56%, respectively. This compared to annualized return on average assets and annualized return on average equity for the first quarter of 2025 of 0.95% and 10.80%, respectively.
- The allowance for credit losses to total loans was 1.96% at March 31, 2026 compared to 1.53% at March 31, 2025 and 1.71% at December 31, 2025.
- The Bank maintained total liquidity of $477,313,000, or 47.9% of total assets as of March 31, 2026. This includes on balance sheet liquidity (cash and equivalents and unpledged available-for-sale securities) of $179,177,000 or 18.0% of total assets, plus available borrowing capacity of $298,136,000 or 29.9% 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 decreased 12% to $776,109,000 at March 31, 2026, compared to $877,354,000 at March 31, 2025 and decreased 7% compared to $831,793,000 at December 31, 2025.
- Total deposits decreased 8% to $879,259,000 at March 31, 2026, compared to $957,065,000 at March 31, 2025, and decreased 1% when compared to $891,111,000 at December 31, 2025.
- Book value was $15.16 per share at March 31, 2026, compared to $14.07 at March 31, 2025 and $14.94 at December 31, 2025.
Operating Results
For the first quarter of 2026, the annualized return on average assets was 0.68% and the annualized return on average equity was 6.56%. This compared to an annualized return on average assets of 0.95% and an annualized return on average equity of 10.80%, respectively, for the first quarter of 2025.
“Our net interest margin expanded 58 basis points during the first quarter, compared to the year ago quarter, driven by meaningful progress on two fronts – a more efficient liability structure and the continued repricing of our loan portfolio. Together, these dynamics are translating into stronger earnings capacity and we remain focused on sustaining that trajectory,” said Reed. The Bank’s net interest margin was 3.77% in the first quarter of 2026 compared to 3.19% in the first quarter of 2025 and 3.62% in the fourth quarter of 2025.
Interest and dividend income decreased 3.4% to $14,044,000 in the first quarter of 2026 compared to $14,542,000 in the first quarter of 2025. The decrease in interest income is attributable to lower loan portfolio volume, which reduced interest and fees on loans by $1,040,000; lower investment securities holdings, which decreased interest income by $47,000, offset by an increase in interest on deposits with banks of $421,000 and an increase in dividends received on FHLB stock of $168,000 due to a special cash dividend received.
Interest expense decreased 22.7% to $4,998,000 in the first quarter of 2026 compared to $6,464,000 in the first quarter of 2025. The cost of deposits also decreased to 2.23% in the first quarter of 2026 compared to 2.68% in the first quarter of 2025. The decrease in interest expense is primarily attributable to a $1,417,000 decrease in interest expense on deposits resulting from lower cost of funds and lower volume of deposits.
Noninterest income increased in the first quarter of 2026 to $1,012,000 compared to income of $646,000 in the first quarter of 2025. The increase is primarily attributed to the Bank recognizing $497,000 in gains on sales of SBA guaranteed loan balances in the first quarter of 2026 compared to $22,000 in gains on sales of SBA guaranteed loan balances in the first quarter of 2025.
Operating expenses increased in the first quarter of 2026 to $6,738,000 compared to $6,253,000 in the first quarter of 2025. The increase was primarily due to an increase in employee-related benefits.
“Our commitment to operational efficiency is a strategic priority that runs throughout every corner of the Bank, not by compromising the quality of service our customers have come to expect, but by finding smarter, more disciplined ways to deliver it,” said Reed.
Balance Sheet Review
During the first 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 decreased 12% to $776,109,000, and total deposits decreased 8% to $879,259,000 as of March 31, 2026 compared to March 31, 2025.
Net loans were $776,109,000 at March 31, 2026 compared to $877,354,000 at March 31, 2025, and decreased 7% compared to December 31, 2025. 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 8% of the loan portfolio. Of the commercial real estate total, approximately 33% or $206,376,000 are owner occupied, and the remaining 67% or $422,023,000 are non-owner occupied. The Bank’s entire loan portfolio is well diversified between industries and product type. Office space loans total $142,535,000, representing 18% of the total loan portfolio, of which $58,660,000 or 41% are owner occupied and $83,875,000 or 59% are non-owner occupied.
Total deposits were $879,259,000 at March 31, 2026 compared to $957,065,000 at March 31, 2025, and decreased 1% compared to the prior quarter end. At March 31, 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 increased 2% compared to a year ago and represented 51% of total deposits, and CDs decreased 25% compared to a year ago and comprised 27% of total deposits.
Shareholders’ equity was $102,661,000 at March 31, 2026 compared to $95,341,000 at March 31, 2025 and $101,171,000 at December 31, 2025. The increase in shareholders’ equity compared to a year ago was primarily due to an increase in retained earnings and a $1,134,000 decrease in accumulated other comprehensive loss. The increase in shareholders’ equity compared to three months earlier was primarily due to higher retained earnings resulting from $1,674,000 in net income earned during the quarter and a $241,000 decrease in accumulated other comprehensive loss. At March 31, 2026, book value increased to $15.16 per share, compared to $14.94 three months earlier, and $14.07 at March 31, 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 first quarter of 2026 was 10.67%, an increase compared to 9.45% for the first quarter of 2025.
Credit Quality
Non-performing assets were $35,170,000, or 3.53% of total assets, at March 31, 2026. This compared to $34,133,000 in non-performing assets at December 31, 2025, and $21,884,000 in non-performing assets at March 31, 2025. The increase from the prior quarter was due to the addition of two non-accrual loans totaling $1,316,000. The increase compared to a year ago was primarily driven by the addition of several non-accrual loans totaling $22,650,000, of which $21,024,000 related to three borrower relationships, offset by the resolution of one large relationship totaling approximately $8,000,000 and a $2,143,000 valuation adjustment on other real estate owned. Non-performing assets include $2,294,000 for one other real estate owned property at March 31, 2026 and December 31, 2025 compared to $4,437,000 for one other real estate owned property at March 31, 2025.
“While we have made meaningful progress in credit quality over the past year through the resolution of certain problem credits and improved performance across the broader portfolio, non-performing loans increased modestly during the quarter, which we are monitoring closely,” said Reed. “Just under 50% of the nonaccrual portfolio were current based on contractual payment status as of quarter-end. We are currently in contract to sell $13,000,000 of substandard loans which will be subject to customary closing conditions. The increase in non-performing loans this quarter is driven by two relationships totaling $1,316,000, representing 4.0% of total non-performing loans at quarter-end. We remain proactive in our approach to managing these credits and are encouraged that the broader loan portfolio continues to perform well outside of these isolated situations, with past due loans at 0.41% of total loans at March 31, 2026 compared to 0.13% of total loans at March 31, 2025. Most of past due loans are matured loans in process of being renewed. Restoring consistent improvement in our credit metrics remains a top priority, and we are confident in our team’s ability to work through these challenges responsibly.”
There were no net charge-offs during the three months ended March 31, 2026, compared to no net charge-offs during the three months ended December 31, 2025 and $509,000 in net recoveries during the three months ended March 31, 2025.
For the first quarter of 2026, the Bank recorded a provision for credit loss on loans of $1,057,000, a $9,000 reversal of credit losses for unfunded loan commitments and a $1,000 reversal of credit losses on investments. This compared to a $577,000 reversal of credit losses on loans, a $38,000 reversal of credit losses on unfunded loan commitments and a $13,000 reversal of credit losses on investments in the first quarter of 2025.
The allowance for credit losses to total loans increased to 1.96% on March 31, 2026, compared to 1.53% on March 31, 2025, driven by changes in portfolio composition and updates to CECL model assumptions, including qualitative factors and forward-looking economic conditions. The higher allowance reflects management's conservative stance in response to the portfolio's evolving risk profile.
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 $996 million and total equity of $103 million as of March 31, 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 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 audited financial results and other disclosures will be reported in Summit State Bank’s quarterly report on Form 10-Q for the period ended March 31, 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.
Contact: Brian Reed, President and CEO, Summit State Bank (707) 568-4908
December 31, 2025
March 31, 2025(In thousands) Reconciliation of non-GAAP pre-tax, pre-provision income Net income$1,674 $1,067 $2,494 Excluding provision for (reversal of) credit losses 1,047 476 (628)Excluding provision for income tax expense 599 284 605 Pre-tax, pre-provision income (non-GAAP)$3,320 $1,827 $2,471