Earnings release
Page 1
News Release For Immediate Release Contact: Brian Reed, President and CEO, Summit State Bank (707) 568-4908 Summit State Bank Earns $818,000, or $0.12 Per Diluted Share, in Third Quarter 2025 SANTA ROSA, CA – (October 29, 2025) – Summit State Bank (the “Bank”) (Nasdaq: SSBI) today reported net income of $ 818,000, or $0. 12 per diluted share for the third quarter ended September 30, 2025 , compared to net income of $ 626,000, or $ 0.09 per diluted share for the third quarter ended September 30, 2024. “The Bank delivered steady operating results in the third quarter of 2025, marking our third consecutive quarter of solid earnings,” said Brian Reed, President and CEO. “Our operating performance was supported by higher net interest income and continued ma rgin expansion compared to the same period last year. While we’ve made significant headway in resolving the problem loans that impacted our 2024 results, we still have some work to do to lower nonperforming assets. However, we are encouraged by the strength of our team and the positive momentum in our earnings outlook. Despite ongoing volatility in the broader financial sector, we remain focused on disciplined balance sheet management and executing our strategy with consistency.” “In light of ongoing market conditions, we are taking decisive steps to reinforce our financial foundation,” continued Reed. “To support this goal, we continue to proactively manag e our balance sheet and have made the strategic choice to suspend cash dividends for the third quarter of 2025. This step will help us bolster our capital base, improve liquidity, and better position the Bank to create long-term value for our shareholders.” Third Quarter 2025 Financial Highlights (at or for the three months ended September 30, 2025) • Net income was $818,000, or $ 0.12 per diluted share, compared to $ 626,000, or $0. 09 per diluted share, in the third quarter of 2024 and $2,417,000, or $0.36 per diluted share for the second quarter ended June 30, 2025. • Net interest margin was 3.51% in the third quarter of 2025 compared to 2.71% in the third quarter of 2024 and 3.66% in the second quarter of 2025. • Non-performing asse ts were $27,978,000 at September 30, 2025 compared to $41,971,000 in non-performing assets at September 30, 2024 and $13,762,000 at June 30, 2025. • The Bank’s Tier 1 Leverage ratio increased to 10.24% at September 30, 2025 compared to 9.18% at September 30, 2024.
Page 2
• Annualized return on average assets and annualized return on average equity for the third quarter of 2025 was 0.32% and 3.25%, respectively. This compared to annualized return on average assets and annualized return on average equity for the third quarter of 2024 of 0.23% and 2.48%, respectively. • The allowance for credit losses to total loans held for investment was 1.65% at September 30, 2025 compared to 1.66% one year earlier and 1.52% in the preceding quarter. • The Bank maintained strong total liquidity of $425,706,000, or 42.3% of total assets as of September 30, 2025. This includes on balance sheet liquidity (cash and equivalents and unpledged available -for-sale securities) of $124,640,000 or 12.4% of total assets, plus available borrowing capacity of $301,066,000 or 29.9% of total assets. • The Bank has been strategically managing its loan and deposit portfolios to reduce risk in the balance sheet and improve capital ratios. The Bank has been successful in reducing the size of its balance sheet as noted below: o Net loans held for investment decreased 9% to $838,402,000 at September 30, 2025, compared to $917,367,000 one year earlier and decreased 2% compared to $851,309,000 in the second quarter of 2025. o Total deposits decreased 11% to $888,784,000 at September 30, 2025, compared to $1,002,770,000 at September 30, 2024, and decreased 4% when compared to the second quarter of 2025, at $922,609,000. • Book value was $14.73 per share, compared to $14.85 per share a year ago and $14.49 in the second quarter of 2025. Operating Results For the third quarter of 202 5, the annualized return on average assets was 0. 32% and the annualized return on average equity was 3.25%. This compared to an annualized return on average assets of 0 .23% and an annualized r eturn on average equity of 2.48 %, respectively, for the third quarter of 2024. “During the third quarter of 2025, our net interest margin expanded by 80 basis points compared to the third quarter of 2024, primarily driven by a favorable shift in the funding mix and continued asset repricing, particularly within the loan portfolio,” said Reed. The Bank’s net interest margin was 3.51% in the third quarter of 2025 compared to 2.71% in the third quarter of 2024 and 3.66% in the second quarter of 202 5. The higher net interest margin in the second quarter of 2025 reflected elevated prepayment fees, which were lower in the third quarter of 2025. Interest and dividend income decreased 5.0% to $ 14,220,000 in the third quarter of 202 5 compared to $ 14,977,000 in the third quarter of 202 4. The decrease in interest income is attributable to a $527,000 decrease in interest and fees on loans from an overall decrease in the loan portfolio volume, a decrease of $179,000 in interest on investment securities due to lower volume of investments held and a decrease of $53,000 in interest on deposits with banks. Interest expense decreased 28% to $ 5,554,000 in the third quarter of 2025 compared to $7,705,000 in the third quarter of 2024. The cost of deposits also decreased to 2.38% in the third quarter of 2025 compared to 3.05% in the third quarter of 2024. The decrease in interest expense
Page 3
is primarily attributable to a $2,190,000 decrease in interest expense on deposits resulting from lower cost of funds and lower volume of deposits. Noninterest income decreased in the third quarter of 2025 to $887,000 compared to $1,030,000 in the third quarter of 2024. The de crease is primarily attributed to the Bank recognizing $308,000 in gains on sales of SBA guaranteed loan balances in the third quarter of 2025 compared to $474,000 in gains on sales of SBA guaranteed loan balances in the third quarter of 2024. “We remain focused on streamlining operations and managing costs responsibly across the Bank. By improving internal processes and prioritizing efficiency, we are lowering expenses without compromising the level of service our clients rely on,” said Reed. Operating expense s decreased in the third quarter of 2025 to $ 5,545,000 compared to $6,181,000 in the third quarter of 2024. The savings were primarily due to a decrease of $270,000 in commission expense due to lower loan and deposit production, a $250,000 reduction in FDIC insurance expense accruals, and a $242,000 reduction in salaries, bonus, and employee benefits due to a cost saving reduction in force initiative implemented in the fourth quarter of 2024. Balance Sheet Review During the third quarter of 2025, the Bank strategically managed 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 9% to $ 838,402,000, and total deposits decreased 11% to $888,784,000 as of September 30, 2025 compared to September 30, 2024. Net loan s held for investment wer e $838,402,000 at September 30, 2025 compared to $917,367,000 at September 30, 2024, and decreased 2% compared to June 30, 2025. The Bank’s largest loan types are commercial real estate loans which make up 80% of the portfolio and loans secured by farmland totaling 7 % of the portfolio. Of the commercial real estate total, approximately 32% or $216,673,000 is owner occupied, and the remaining 68% or $461,388,000 is non-owner occupied. The Bank’s entire loan portfolio is well diversified between industries and product type. The office space product type totals $ 148,802,000 or 18% of the total loan portfolio; of this total owner occupied is $ 59,277,000 or 40% and non -owner occupied is $89,525,000 or 60%. Total deposits were $888,784,000 at September 30, 2025 compared to $ 1,002,770,000 at September 30, 2024 , and decreased 4% compared to the prior quarter end. At September 30, 2025, noninterest bearing demand deposit accounts decreased 4% compared to a year ago and represented 21% of total deposits; savings, NOW and money market accounts decreased 4% compared to a year ago and represented 51 % of total deposits, and CDs decreased 26% compared to a year ago and comprised 28% of total deposits. Shareholders’ equity was $ 99,728,000 at September 30, 2025 compared to $ 100,662,000 one year earlier and $ 98,108,000 three months earlier. The slight decrease in shareholders’ equity compared to a year ago was primarily due to a decrease in retained earnings, reflecting a loss of $1,413,000 in net i ncome over the past twelve months , a $256,000 decrease in accumulated
Page 4
other comprehensive income , and a $219,000 increase in capital stock . The increase in shareholders’ equity compared to three months earlier was primarily due to higher retained earnings resulting from $818,000 in net income earned during the quarter and a $746,000 decrease in accumulated other comprehensive loss . At September 30, 2025 book value was $14.73 per share, compared to $14.49 three months earlier, and $14.85 at September 30, 2024. 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 third quarter of 2025 was 10.24%, an increase compared to 9.18% for the third quarter of 2024. Credit Quality Non-performing assets were $27,978,000, or 2.78% of total assets, at September 30, 2025. This compared to $ 13,762,000 in non-performing assets at June 30 , 2025, and $ 41,971,000 in non- performing assets at September 30, 2024. The increase from the prior quarter was due to three commercial real estate loans from two borrowers that were placed on non-accrual. The decrease from a year ago was related to the final resolution of a number of non -accrual loans totaling $27,300,000 of which $27,100,000 was center ed in three relationships . Non-performing assets include $4,437,000 for one other real estate owned property at September 30, 2025 and June 30, 2025, compared to $5,130,000 for one other real estate owned property at September 30, 2024. “We are encouraged by the year-over-year improvement in credit quality, but we know there is still work to do,” said Reed. “Non -performing loans increased from the prior quarter, primarily due to three real estate loans from two borrowers placed on non-accrual. We continue to focus on carefully managing asset quality and reducing risk across the portfolio. As of quarter- end, three relationships represent $22,600,000 and 96% of non-performing loans. Outside of our non- performing loans, our portfolios are performing well, with past due loans at a mere 0.11% of total loans at September 30, 2025 compared to 0% three months earlier and 0.30% for the third quarter 2024.” There was $1,800,000 in net charge-offs during the three months ended September 30, 2025 , compared to $492,000 in net charge-offs during the three months ended June 30, 2025 and no net charge-offs during the three months ended September 30, 2024. For the third quarter of 2025, the Bank recorded a provision for credit loss on loans of $2,709,000, a $49,000 provision for credit losses for unfunded loan commitments and a $21,000 reversal of credit losses on investments. This compared to a $1,320,000 provision for credit losses on loans, a $8,000 reversal of credit losses on unfunded loan commitments and a $19,000 reversal of credit losses on investments in the third quarter of 202 4. The provision expense in Q3 was almost entirely driven by one substantial loan secured by real property which was also placed on non - accrual and charged down to fair value based on a current appraisal. The allowance for credit losses to total loans held for investment was 1.65% on September 30, 2025 and 1.66% September 30, 2024.
Page 5
On October 24, 2025, the Bank closed its Montgomery Village Branch located at 2300 Midway Drive in Santa Rosa, California. “After four decades of serving the community at this location, the Bank carefully evaluated all available options and , based on a significant increase in rents , determined that not renewing the lease was the most prudent decision for the long-term benefit of our customers and the Bank ,” said Reed. “This change reflects our ongoing commitment to invest in branch locations that enhance co nvenience and service for our customers. Team members from our Montgomery Village Branch have been reassigned to nearby locations, ensuring continuity of care for the customers they serve. The Bank continues to actively evaluate potential new branch opportunities to support future growth and maintain its strong presence in the community.” Summit State Bank continues to serve the community through its other four Sonoma County branch locations as well as robust online and mobile banking channels. 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 $1.0 billion and total equity of $100 million as of September 30, 2025. The Bank has built its reputation over the past 40 years by speci alizing 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 Ba nk 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 Ti mes, 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 annual report on Form 10 -Q for the period ended September 30, 2025, 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 Excha nge 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 a s “expects,” “anticipates,” “believes,”
Page 6
“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; risks associated with changes in interest rates, which could adversely affect future operating results; the risk that customers or counterparties may not performance in accordance with the terms of credit documents or other agreements due 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 pe rformance 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, 2024 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.
Page 7
September 30, 2025 June 30, 2025 September 30, 2024 (Unaudited) (Unaudited) (Unaudited) Interest and dividend income: Interest and fees on loans 13,067$ 13,959$ 13,594$ Interest on deposits with banks 539 640 592 Interest on investment securities 484 503 663 Dividends on FHLB stock 130 128 128 Total interest and dividend income 14,220 15,230 14,977 Interest expense: Deposits 5,373 5,875 7,563 Federal Home Loan Bank advances 54 - 4 Junior subordinated debt 127 126 138 Total interest expense 5,554 6,001 7,705 Net interest income before provision for (reversal of) credit losses 8,666 9,229 7,272 Provision for credit losses on loans 2,709 - 1,320 Provision for (reversal of) credit losses on unfunded loan commitments 49 (55) (8) Reversal of credit losses on investments (21) - (19) Net interest income after provision for (reversal of) credit losses on loans, unfunded loan commitments and investments 5,929 9,284 5,979 Non-interest income: Service charges on deposit accounts 238 218 241 Rental income 45 57 60 Net gain on loan sales 308 29 474 Net loss on securities (7) (5) - Other income (loss) 303 (36) 255 Total non-interest income 887 263 1,030 Non-interest expense: Salaries and employee benefits 3,476 3,902 3,988 Occupancy and equipment 435 467 420 Other expenses 1,634 1,936 1,773 Total non-interest expense 5,545 6,305 6,181 Income before provision for income taxes 1,271 3,242 828 Provision for income tax expense 453 825 202 Net income 818$ 2,417$ 626$ Basic earnings per common share 0.12$ 0.36$ 0.09$ Diluted earnings per common share 0.12$ 0.36$ 0.09$ Basic weighted average shares of common stock outstanding 6,734,158 6,733,823 6,719,127 Diluted weighted average shares of common stock outstanding 6,734,158 6,733,823 6,719,127 SUMMIT STATE BANK STATEMENTS OF INCOME (In thousands except earnings per share data) Three Months Ended
Page 8
September 30, 2025 September 30, 2024 (Unaudited) (Unaudited) Interest and dividend income: Interest and fees on loans 40,446$ 39,952$ Interest on deposits with banks 1,656 1,405 Interest on investment securities 1,502 2,084 Dividends on FHLB stock 388 386 Total interest and dividend income 43,992 43,827 Interest expense: Deposits 17,533 21,396 Federal Home Loan Bank advances 94 332 Junior Subordinated Debt 389 325 Total interest expense 18,016 22,053 Net interest income before provision for (reversal of) credit losses 25,976 21,774 Provision for credit losses on loans 2,132 1,311 (Reversal of) credit losses on unfunded loan commitments (44) (99) (Reversal of) credit losses on investments (33) (20) Net interest income after provision for (reversal of) credit losses on loans, unfunded loan commitments and investments 23,921 20,582 Non-interest income: Service charges on deposit accounts 678 701 Rental income 159 180 Net gain on loan sales 360 1,257 Net loss on securities (12) - Other income 609 641 Total non-interest income 1,794 2,779 Non-interest expense: Salaries and employee benefits 11,104 12,210 Occupancy and equipment 1,323 1,348 Other expenses 5,676 5,651 Total non-interest expense 18,103 19,209 Income before provision for income taxes 7,612 4,152 Provision for income tax expense 1,883 1,203 Net income 5,729$ 2,949$ Basic earnings per common share 0.85$ 0.44$ Diluted earnings per common share 0.85$ 0.44$ Basic weighted average shares of common stock outstanding 6,719,127 6,711,803 Diluted weighted average shares of common stock outstanding 6,719,127 6,711,803 SUMMIT STATE BANK STATEMENTS OF INCOME (In thousands except earnings per share data) Nine Months Ended
Page 9
September 30, 2025 June 30, 2025 September 30, 2024 (Unaudited) (Audited) (Unaudited) Cash and due from banks 57,952$ 66,410$ 80,928$ Total cash and cash equivalents 57,952 66,410 80,928 Investment securities: Available-for-sale, less allowance for credit losses of $3, $23 and $38 (at fair value; amortized cost of $76,211, $78,015 and $86,225) 66,688 67,378 76,205 Loans held for sale - 3,760 - Loans held for investment, less allowance for credit losses of $14,042, $13,133 and $15,466 838,402 851,309 917,367 Bank premises and equipment, net 4,893 4,974 5,251 Investment in Federal Home Loan Bank stock (FHLB), at cost 5,889 5,889 5,889 Goodwill - - 4,119 Other Real Estate Owned 4,437 4,437 5,130 Affordable housing tax credit investments 6,713 6,925 7,698 Accrued interest receivable and other assets 21,548 21,390 16,204 Total assets 1,006,522$ 1,032,472$ 1,118,791$ Deposits: Demand - non interest-bearing 185,258$ 193,390$ 192,371$ Demand - interest-bearing 215,522 207,176 212,214 Savings 39,659 39,875 45,845 Money market 203,126 200,320 219,593 Time deposits that meet or exceed the FDIC insurance limit 73,162 93,325 80,801 Other time deposits 172,057 188,523 251,946 Total deposits 888,784 922,609 1,002,770 Federal Home Loan Bank advances 5,500 - - Junior subordinated debt 5,945 5,942 5,931 Affordable housing commitment 511 511 4,061 Accrued interest payable and other liabilities 6,054 5,302 5,367 Total liabilities 906,794 934,364 1,018,129 Shareholders' equity Preferred stock, no par value; 20,000,000 shares authorized; - - - Common stock, no par value; shares authorized - 30,000,000 shares; issued and outstanding 6,771,526, 6,771,526 and 6,776,563 37,897 37,843 37,677 Retained earnings 68,602 67,782 70,012 Accumulated other comprehensive loss, net (6,771) (7,517) (7,027) Total shareholders' equity 99,728 98,108 100,662 Total liabilities and shareholders' equity 1,006,522$ 1,032,472$ 1,118,791$ no shares issued and outstanding SUMMIT STATE BANK BALANCE SHEETS (In thousands except share data) LIABILITIES AND SHAREHOLDERS' EQUITY ASSETS
Page 10
September 30, 2025 June 30, 2025 September 30, 2024 (Unaudited) (Unaudited) (Unaudited) Statement of Income Data: Net interest income 8,666$ 9,229$ 7,272$ Provision for credit losses on loans 2,709 - 1,320 Provision for (reversal of) credit losses on unfunded loan commitments 49 (55) (8) Reversal of credit losses on investments (21) - (19) Non-interest income 887 263 1,030 Non-interest expense 5,545 6,305 6,181 Provision for income tax expense 453 825 202 Net income 818$ 2,417$ 626$ Selected per Common Share Data: Basic earnings per common share 0.12$ 0.36$ 0.09$ Diluted earnings per common share 0.12$ 0.36$ 0.09$ Dividend per share -$ -$ 0.04$ Book value per common share (1) 14.73$ 14.49$ 14.85$ Selected Balance Sheet Data: Assets 1,006,522$ 1,032,472$ 1,118,791$ Loans held for sale - 3,760 - Loans held for investment, net 838,402 851,309 917,367 Deposits 888,784 922,609 1,002,770 Average assets 1,014,576 1,046,914 1,098,469 Average earning assets 980,157 1,012,346 1,063,476 Average shareholders' equity 99,829 97,139 99,962 Nonperforming loans 23,541 9,325 36,841 Net loans charged-off (1,800) (492) - Other real estate owned 4,437 4,437 5,130 Total nonperforming assets 27,978 13,762 41,971 Selected Ratios: Return on average assets (2) 0.32% 0.93% 0.23% Return on average common shareholders' equity (2) 3.25% 9.98% 2.48% Efficiency ratio (3) 58.00% 66.39% 74.45% Net interest margin (2) 3.51% 3.66% 2.71% Common equity tier 1 capital ratio 11.56% 11.17% 10.39% Tier 1 capital ratio 11.56% 11.17% 10.39% Total capital ratio 13.21% 12.94% 12.13% Tier 1 leverage ratio 10.24% 9.84% 9.18% Common dividend payout ratio (4) 0.00% 0.00% 42.34% Average shareholders' equity to average assets 9.84% 9.28% 9.10% Nonperforming loans to total loans held for investment 2.76% 1.08% 3.95% Nonperforming assets to total assets 2.78% 1.33% 3.75% Allowance for credit losses to total loans held for investment 1.65% 1.52% 1.66% Allowance for credit losses to nonperforming loans 59.65% 140.84% 41.98% (3) Non-interest expenses to net interest and non-interest income, net of securities gains. (4) Common dividends divided by net income available for common shareholders. Financial Summary (Dollars in thousands except per share data) As of and for the Three Months Ended (1) Total shareholders' equity divided by total common shares outstanding. (2) Annualized.
Page 11
September 30, 2025 September 30, 2024 (Unaudited) (Unaudited) Statement of Income Data: Net interest income 25,976$ 21,774$ Provision for credit losses on loans 2,132 1,311 Reversal of credit losses on unfunded loan commitments (44) (99) Reversal of credit losses on investments (33) (20) Non-interest income 1,794 2,779 Non-interest expense 18,103 19,209 Provision for income tax expense 1,883 1,203 Net income 5,729$ 2,949$ Selected per Common Share Data: Basic earnings per common share 0.85$ 0.44$ Diluted earnings per common share 0.85$ 0.44$ Dividend per share -$ 0.28$ Book value per common share (1) 14.73$ 14.85$ Selected Balance Sheet Data: Assets 1,006,522$ 1,118,791$ Loans held for investment, net 838,402 917,367 Deposits 888,784 1,002,770 Average assets 1,040,298 1,088,413 Average earning assets 1,006,845 1,056,714 Average shareholders' equity 96,885 98,333 Nonperforming loans 23,541 36,841 Net loans charged-off (1,783) (1,066) Other real estate owned 4,437 5,130 Total nonperforming assets 27,978 41,971 Selected Ratios: Return on average assets (2) 0.74% 0.36% Return on average common shareholders' equity (2) 7.91% 4.00% Efficiency ratio (3) 65.16% 78.23% Net interest margin (2) 3.45% 2.74% Common equity tier 1 capital ratio 11.56% 10.39% Tier 1 capital ratio 11.56% 10.39% Total capital ratio 13.21% 12.13% Tier 1 leverage ratio 10.24% 9.18% Common dividend payout ratio (4) 0.00% 64.23% Average shareholders' equity to average assets 9.31% 9.03% Nonperforming loans to total loans held for investment 2.76% 3.95% Nonperforming assets to total assets 2.78% 3.75% Allowance for credit losses to total loans held for investment 1.65% 1.66% Allowance for credit losses to nonperforming loans 59.65% 41.98% (3) Non-interest expenses to net interest and non-interest income, net of securities gains. (2) Annualized. (4) Common dividends divided by net income available for common shareholders. (1) Total shareholders' equity divided by total common shares outstanding. Financial Summary (Dollars in thousands except per share data) As of and for the Nine Months Ended