Santa Rosa-based Summit State Bank sees net income decline

Summit State Bank (Nasdaq: SSBI) on Wednesday reported third-quarter net income down more than 32% to $626,000 compared to the previous three months.

The leading financial barometer also accounted for about a third of 2023’s earnings in the third quarter.

Net interest income, which is the difference between income from interest-bearing assets and the cost of liabilities, came in at $7.7 million last quarter, before taking into account a $1.3 million provision to reverse loan losses. After that balance sheet expense on credit issues, revenue was $5.97 million — down 15 percent from Q2 results and nearly $200,000 less than Q3 2023.

Net borrowing also fell by $14.83 million to $917.36 million for the same period in 2023. But loan amounts increased when placed next to the second quarter’s $913.51 million.

Non-interest income, derived from fees, presented another mixed bag in the third quarter, with $1 million taken into the Santa Rosa bank. It was $801,000 in the previous quarter and $1.49 million when comparing the figure to the third quarter of 2023.

Noninterest expense for the third quarter of 2024, ended Sept. 30, was $6.81 million, down more than 6% from last quarter’s expense. Last quarter’s figure was nearly $800,000 less than in the third quarter of 2023.

Total deposits fell 3 percent to $1 billion, but were up from $966.58 million in the second quarter.

Banks have endured more than a year of challenges with a national environment of high interest rates and a departure from a pandemic period when the government pumped $9 trillion into the economy. That collective infusion of cash was deposited into individual and business accounts nationwide.

After the second quarter, Summit State Bank posted results amounting to a 68% decline in earnings.

President and CEO Brian Reed, on behalf of the board, committed to working through a period of rebuilding with an eye to the future.

“During this period of economic uncertainty, the board is focused on balancing commitment to shareholders while building capital, increasing liquidity and positioning the bank to create long-term value,” Reed said in a statement. “As such, the bank is not announcing a dividend for the third quarter of 2024.”

The statement follows last quarter’s Dividend of 4 cents per share payment in the amount of one-third of what was paid from the opening quarter of 2024.

Founded in 1982, Summit State Bank reported $1.1 billion in assets at the end of the quarter, up about $30 million from the previous three-month period.

Susan Wood covers law, cannabis, manufacturing, transport, agriculture, as well as banking and finance. She can be reached at 530-545-8662 or [email protected]