Summit State Bank Reports Second Quarter 2026 Financial Results

Rhea-AI Summary

Summit State Bank (Nasdaq: SSBI) reported a second-quarter 2026 net loss of $1.3 million, or $0.19 per diluted share, versus net income of $2.4 million, or $0.36 per share, a year earlier. The loss was mainly driven by a $5.9 million provision for credit losses on loans, tied to charge-offs and loan sales from a review of higher-risk credits.

Despite the loss, pre-tax, pre-provision income rose to $4.0 million from $3.2 million a year ago, and net interest margin improved to 3.95% from 3.66%. Non-performing assets were $20.8 million, down about 44% from March 31, 2026, but higher than $13.8 million a year earlier. Net loans held for investment fell 12% year-over-year to $746.1 million and deposits declined 8% to $846.1 million as the bank continued to shrink its balance sheet to manage risk. Tier 1 leverage ratio increased to 10.84% from 9.84% and total liquidity was $456.6 million, or 47.6% of total assets. Book value per share was $14.98 at June 30, 2026, up from $14.49 a year earlier.

Positive

• Pre-tax, pre-provision income up to $3.96M in Q2 2026
• Net interest margin improved to 3.95% from 3.66% year-over-year
• Non-performing assets reduced about 44% sequentially to $20.76M
• Tier 1 leverage ratio increased to 10.84% from 9.84% year-over-year
• Total liquidity of $456.57M, or 47.6% of total assets
• Operating expenses held flat at about $6.31M versus Q2 2025

Negative

• Q2 2026 net loss of $1.31M versus $2.42M profit a year ago
• Provision for credit losses on loans of $5.92M in Q2 2026
• Net charge-offs of $8.66M in Q2 2026 versus $0 in Q1
• Non-performing assets up year-over-year to $20.76M from $13.76M
• Net loans down 12% and deposits down 8% year-over-year
• Annualized return on average equity turned to a 5.03% loss

News Explained

Credit remediation reduced reported problem assets, but June 30 classifications still left affected loans under active credit assessment.

Summit State Bank’s June 30 second-quarter report records credit actions already taken: four notes totaling $9,031,000 were sold from one relationship, and $5,087,000 was partially charged off on one relationship, reducing non-performing assets.

The release also reports $8,655,000 in net charge-offs during the quarter, while the allowance for credit losses as a share of loans fell to 1.69% from 1.96% at March 31 after the reduction in non-performing loans.

At quarter-end, 88% of the non-performing portfolio was current under contractual payment status, but those loans remained classified as non-performing based on management’s credit assessment.

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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 BANK
STATEMENTS 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 BANK
STATEMENTS 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

FAQ

What were Summit State Bank (SSBI) second-quarter 2026 earnings results?

Summit State Bank reported a Q2 2026 net loss of $1.3 million, or $0.19 per diluted share. According to the bank, this compares with net income of $2.4 million, or $0.36 per share, in the second quarter of 2025, mainly due to higher credit provisions.

Why did Summit State Bank (SSBI) report a net loss in Q2 2026?

The bank’s Q2 2026 net loss was primarily driven by a $5.9 million provision for credit losses on loans. According to Summit State Bank, this stemmed from charge-offs and loan sales taken after a review of higher-risk credits, despite stronger pre-tax, pre-provision income.

How did Summit State Bank’s credit quality change in Q2 2026?

Non-performing assets were $20.8 million at June 30, 2026, down from $35.2 million at March 31, 2026. According to the bank, the decline came from selling four notes and partial charge-offs, though non-performing assets remained above the $13.8 million level a year earlier.

What was Summit State Bank’s net interest margin in Q2 2026?

Summit State Bank’s net interest margin reached 3.95% in Q2 2026, up from 3.66% a year earlier and 3.77% in Q1 2026. According to the bank, this reflected lower funding costs, loan repricing, and reduced non-performing loans, partially offset by lower loan balances.

How strong were Summit State Bank’s capital ratios and liquidity at June 30, 2026?

At June 30, 2026, the bank’s Tier 1 leverage ratio was 10.84%, above the 5% well-capitalized threshold. According to Summit State Bank, total liquidity was $456.6 million, or 47.6% of total assets, combining on-balance-sheet liquidity and available borrowing capacity.

How did loans and deposits trend at Summit State Bank (SSBI) in Q2 2026?

Net loans held for investment fell to $746.1 million, down 12% year-over-year, while deposits decreased 8% to $846.1 million. According to the bank, these declines reflect deliberate balance sheet management to reduce risk and improve capital and liquidity metrics.

What was Summit State Bank’s book value per share as of June 30, 2026?

Book value per share was $14.98 at June 30, 2026, compared with $14.49 a year earlier and $15.16 at March 31, 2026. According to Summit State Bank, the year-over-year increase primarily reflects higher retained earnings and lower accumulated other comprehensive loss.