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Posted May 2, 2009 | Copyright © The Northern Virginia Daily
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Summit Financial sees drop in earnings
MOOREFIELD, W.Va. — Summit Financial Group saw a 52 percent drop in earnings in the first quarter, primarily due to a higher allowance for losses from construction and development loans.
The holding company for Winchester-based Summit Community Bank reported earnings for the quarter of $1.8 million, or 24 cents a share, down from $3.8 million, or 51 cents a share, in the 2008 first quarter.
Summit recorded a $4 million provision for loan losses for the most recent quarter, which was $3 million more than the same period last year. Nonperforming, or past-due, loans as of March 31 total $79.6 million, or 6.5 percent of total Summit loans.
The bank’s commercial construction and development loans were modestly lower during the first quarter, the company said, offsetting parallel growth in less risky residential mortgages.
“The economy, and more specifically, the condition of real estate in our local markets, has dictated that we shift gears, focusing less on growth and more on bottom-line profitability,” Summit President and CEO H. Charles Maddy III said in a statement.
Maddy said Summit is continuing to develop strategies to deal with newly soured loans. The bank’s core banking activities, meanwhile, including interest income and expense control, are holding up well, he said.
Summit called off a planned acquisition of Reston-based Greater Atlantic Bank last year.
“Since year-end 2008, we’ve been in a zero-growth mode,” Maddy said.
— Daily Staff Report
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