2023
Annual Report
Charting the Course
Over the past year, the banking industry has faced some unique challenges and
transformative change. As a community bank, we were able to navigate these complexities
and nimbly adapt using our core values as the cornerstone of our decision making. Our strong
beliefs in building customer relationships, increasing value for our shareholders and enriching
the lives of our employees and community, help us maintain our focus and persevere through
adversity.
Our shared values, attitudes, and high standards will continue to build our strong company
culture. With an emphasis on open communication, mutual respect, and shared goals our
commitment to the organization is unwavering which will help us chart the course in our
pursuit of excellence.
- Brian Reed, President and CEO
Mission Statement
Summit State Bank's mission is to hire
and invest in exceptional people,
provide superior service and solutions
for our customers, increase value for
our shareholders, and continuously
support and enrich the communities in
which we serve.
Vision Statement
To be the community bank leader
committed to providing superior
ser vice and enriching the
communities we serve, today and
into the future.
Core Values
Our core values support our vision
and shape our company culture. The
guiding principles that drive our
attitudes, actions, and decision-
making are:
Integrity
Collaboration
Respect
Adaptable
Can-Do Attitude
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Letter to the Shareholders
Letter to our Shareholders, Employees, Customers and Community
We are pleased to announce that we concluded 2023 with solid operating results despite the
challenges across the entire banking industry, generating net income of $10.822 million, or $1.62
per diluted share. The persistently high interest rate environment continued to impact net interest
income growth with higher interest expense on deposits which affected our operating
performance for the fourth quarter.
Loan demand continues to be strong in our markets with net loans increasing 3% compared to a
year ago, while total deposit balances increased 5% over the same period. Most of the deposit
growth year-over-year was due to the Bank’s ongoing focus on growing local deposits organically.
Following the unprecedented rise in funding costs that has affected the entire banking industry
over the past year, our net interest margin started to stabilize during the fourth quarter; expanding
five basis points compared to the prior quarter.
We remain committed to our guiding principles in our Mission Statement, Vision Statement and
Core Values. We are steadfast in our efforts to attract and retain local deposits and develop long-
term relationships. While deposit pricing pressure persists, we continue to benefit from new loan
growth as well as existing loans repricing at higher rates.
Our team takes great pride in giving back to the community, and we are pleased to share that
since the inception of our Nonprofit Partner Program, now in its fifteenth year, the Bank has
contributed over $5.8 million to the nonprofit community. In 2023, we gave over $875,000 to over
270 local nonprofit organizations who provide critical support services that improve the health and
wellbeing of our neighbors, friends and family. We believe it is important to give back and reinvest
our dollars for the betterment of the communities we serve.
On behalf of the Board of Directors and our executive management team, we thank you for your
support and continued investment in Summit State Bank.
Josh C. Cox, Jr.
Chairman of the Board
Brian J. Reed
President and CEO
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Executive Leadership
Our experienced Executive Leadership Team continues to lead the Bank as a high performing
financial institution. This year was challenging for financial institutions as several north bay
institutions failed, and the Federal Reserve continued to increase interest rates, creating a
volatile interest rate environment. Drawing on the foundation and synergy developed during the
pandemic and previous economic downturns, the Executive Leadership Team led by conducting
regular staff meetings to update, educate and address concerns expressed by customers and
the community. We continue to be nimble, and focused on the Bank’s core values which guides
our attitudes, actions, and decision-making.
As a community bank, our Executive Leadership Team is engaged in the community by
volunteering, sitting on nonprofit boards and providing their financial expertise. Each member
brings diverse knowledge and experience, in and out of the banking industry, and complement
each other to create a versatile Executive Leadership Team.
Executive Team volunteering with our Nonprofit Partner, Our Village Closet (OVC).
Lefthand image: Nicole Tufly, SVP & Controller, sorting clothes with Brian Reed, EVP & CEO
Righthand image: Genie Del Secco, EVP & COO & OVC Board Member with Brandy Seppi, EVP & CLO
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Executive Leadership
Brian Reed
President and Chief Executive Officer
Brian has 4 decades of experience in the industry.
8 years at Summit State Bank.
Brian serves on the Board of Directors of Free to Be,
Children & Family Circle and is a Rotarian.
Genie Del Secco
Executive Vice President and Chief Operating Officer
Genie has 34 years of experience in the industry.
9 years at Summit State Bank.
Genie serves as Vice President of the Board of Directors of
Our Village Closet.
Brandy Seppi
Executive Vice President and Chief Lending Officer
Brandy has 30 years of experience in the industry.
9 years at Summit State Bank.
Brandy is a member of the North Bay Angels, St. John the
Baptist Catholic Church and the Italian Catholic Federation in
Healdsburg.
Camille Kazarian
Executive Vice President and Chief Financial Officer
Camille has 25 years of experience in the industry.
6 years at Summit State Bank.
Camille serves on the Board of Directors for Committee
on the Shelterless (COTS).
Michael Castlio
Executive Vice President and Chief Credit Officer
Michael has 29 years of experience in the industry.
6 years at Summit State Bank.
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Board of Directors
Our board members are chosen not only for their expertise and business knowledge but also for
their strong ethical values and integrity. These qualities help them make informed decisions that
reflect the Bank’s mission statement and core values. Each member brings a unique
perspective, insight, and skillset to reach our business objectives. Their diverse viewpoints and
commitment are key factors in the success of our organization.
Josh C. Cox, Jr.
Chairman of the Board
Banking Consultant
Josh Cox & Associates
Brian J. Reed
President and CEO
Summit State Bank
Jeff B. Allen
President and
Founder Allen Land Design
Todd R. Fry
Chief Accounting Officer
Installed Building Products, Inc.
Belinda S. Guadarrama
President and CEO
GC Micro
Douglas V. Reynolds
President and CEO
Energy Services of America
Marshall T. Reynolds
Chairman of the Board
Champion Industries, Inc.
Nick J. Rado
President
Rado Consulting
6
Board of Directors
Dawn M. Ross
Former Managing Partner
Carle, Mackie, Power & Ross LLP
John W. Wright
Business Consultant
Sharon S. Wright
Governmental Affairs and
Public Relations Consultant
Richard E. Pope joined our Board of Directors in 2013
and most recently served as Chairman of the Board.
Sadly, on September 1st, Richard passed away. He was
an Environmental Planner and Development Consultant
for SOMO Living, LLC in Northern California. Richard
was also the Co-Founder of BrightHaven, a nonprofit
animal sanctuary, and was awarded the Jefferson Award
for Public Service in 2013.
We are grateful for his years of leadership and service.
In Memorium
Richard E. Pope
Board of Director
2013 - 2023
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Personal and Leadership Development
Our steadfast dedication to cultivate our company culture and
adhere to our mission statement, vision and core values has earned
us several prestigious awards.
North Bay Business Journal’s HR Professional Award
Amy Wakayama, Vice President and Director of Human Resources,
received this award which was presented to outstanding HR
professionals that have created a positive impact in workplaces
within the North Bay.
North Bay Business Journal’s Best Places to Work
This annual award is based on an employee survey which provides
feedback and comments on how the Bank appreciates and
recognizes them throughout the year. For 14 consecutive years our
employees have voted Summit State Bank one of the Best Places to
Work in the North Bay.
North Bay Business Journal’s Diversity in Business Award
Founded in 2021, the DEI Committee was formed to provide
strategic guidance and direction promoting awareness around
Diversity, Equity, and Inclusion to better serve our employees and
the Bank as a whole. Based on their hard work and dedication, the
committee was awarded the inaugural Diversity in Business Award.
San Francisco Business Times’ Corporate Philanthropy Award
This award celebrates the Bay Area’s most generous corporate
citizens and acknowledges those companies that give their time,
talent, and resources.
Employee Activity Committee
The Employee Activity Committee (EAC) was created to develop
and support a work environment that promotes employee
engagement and teamwork, as well as a culture of caring,
celebration and fun. This committee is responsible for organizing
and coordinating employee activities to include holiday celebrations,
employee recognition events, social, networking and team building
activities and outings.
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Personal and Leadership Development
Our Executive Leadership Team invests in our team and
creates opportunities for employees to participate in
leadership programs designed for personal and
professional growth, career satisfaction, retention, and
engagement of our workforce.
Mentorship Program
For several years, the Executive Leadership Team has
assumed the responsibility of mentoring junior staff
members to maximize their career development. Our goal
is for employees to become as accomplished, productive,
and successful in their careers as they desire. This
program promotes the development of self-confidence
and professional achievement, to ultimately enhance the
Bank’s stability and continuity.
Continuing Education
Among the robust benefits offered by the Bank is the
Education Reimbursement Program for employees who
want to continue to enrich their lives through education.
The Bank offers financial support for reimbursement of
tuition, fees, books, supplies, and equipment for college
level courses.
On-Going Training
The Bank offers a variety of training opportunities, not
only to stay abreast of regulatory laws, but also for
personal and career development. This year we also
sponsored a course on Cardiopulmonary Resuscitation
(CPR) and the use of an Automated External Defibrillator
(AED) for employees who wanted to participate.
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Devoted to Community
Giving back to the community is a natural extension of the guiding
principles for how we manage our business. We encourage our
employees and bank officers to provide their time and banking
expertise to local nonprofits. Below are some highlights and
examples of our 2023 support.
Summit Day of Service
Through this program, every employee receives one paid workday
a year to volunteer their time with a non-profit organization of their
choice within our community.
Nonprofit Partner Program
Summit State Bank’s Nonprofit Partner Program provides an
annual cash donation to its nonprofit customers based on average
annual account balances. In 2023, the Bank delivered 217
donation checks for a total of $677,361.
North Bay Nonprofit Event
We hosted our third annual North Bay Nonprofit Event (NBNE) to
deepen the relationships with our existing nonprofit partners by
providing education, resources, support, and fellowship. This year
we also extended the invitation to other nonprofit professionals
and awarded $5,000 to a deserving nonprofit that provides
exceptional service to the community. This years’ winner was
Ceres Community Project who supports individuals dealing with
serious illness with free or low-cost meals delivered to their
homes.
Community Involvement
During 2023, Summit State Bank Officers and employees
contributed to local community organizations by serving as board
directors or committee members. Our staff provided a total of 895
volunteer hours throughout the year.
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Community Commitment
For the seventh consecutive year, the Bank has been the
Presenting and Founding Sponsor of the Women in
Conversation (WIC) speaker series in collaboration with
the Press Democrat, a local media company.
WIC has earned brand recognition for presenting events
covering current topics of interest presented by women in
leadership roles. The program strives to build a stronger
community of women who can support and inspire each
other and spark important conversations; connecting,
empowering, and supporting women of all ages.
The Spring event featured New York Times bestselling
author, Jasmin Darznik, who wrote The Bohemians, The
Good Daugher: A memoir of My Mother’s Hidden Life and
Song of a Captive Bird.
In the Fall, the event featured Petaluma-born Nicole
Mann, NASA astronaut and first Native American Women
in space. The event was unique in that it was free to the
public and included youth and adults. The conversation
included clips from NASA of her time in space serving as
the captain of her crew.
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Financials at a glance (in thousands)
Total Average Loans
Net Income
12
------ Financials at a glance (in thousands)
Total Average Deposits
Non - Interest Income
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Selected Financial Data
(in thousands except per share data)
Statement of Income Data
2023
2022
2021
2020
Net interest income
$35,462 $42,427
$37,606
$30,261
Provision for credit losses
332
2,541
1,294
2,100
Non-interest income
5,201
7,495
4,901
4,448
Non-interest expense
Provision for income taxes
25,050
23,511
20,333
17,671
4,459
6,902
6,182
4,421
Net income
$10,822
$16,968
$14,698
$10,517
Balance sheet data:
Assets
Loans, net
Deposits
Average earning assets
Average shareholders' equity
Nonperforming loans
Selected per common share data:
Basic earnings per common share (5)
Diluted earnings per common share (5)
Common shares outstanding at year end (5)
Dividend per share (5)
$1,122,508
$1,115,343
$958,080
$865,854
938,626
1,009,693
1,110,801
93,621
44,206
$1.62
$1.62
6,784
$0.48
913,707
962,654
978,169
86,038
3,756
$2.54
$2.54
6,733
$0.48
820,987
811,600
878,258
79,538
487
$2.20
$2.20
6,685
$0.44
745,939
726,295
774,037
71,637
264
$1.58
$1.57
6,677
$0.44
Book value per common share (1)(5)
$14.40
$13.15
$12.61
$11.33
Selected ratios:
Return on average assets (2)
Return on average common shareholders' equity (2)
Efficiency ratio (3)
Net interest margin (2)
Common dividend payout ratio (4)
Tier 1 leverage ratio
Nonperforming loans to total loans
Allowance for credit losses to total loans (6)
0.95%
11.56%
61.60%
3.19%
30.05%
8.85%
4.63%
1.60%
1.69%
19.72%
47.10%
4.34%
19.01%
8.53%
0.40%
1.60%
1.64%
18.48%
47.91%
4.28%
20.33%
8.65%
0.06%
1.48%
1.33%
14.68%
52.23%
3.91%
27.70%
8.15%
0.03%
1.18%
(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.
(4) Common dividends divided by net income available for common shareholders.
(5) Adjusted for 10% stock dividend declared: effective October 29, 2021.
(6) Allowance beginning 2021 are reported using current expected credit loss ("CECL") method, all 2020 and prior periods' allowance
are reported in accordance with previous GAAP using the incurred loss method.
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Information about Summit State Bank
Summit State Bank (the “Bank”) is a state-chartered commercial bank operating a traditional
community banking business within our primary service area of Sonoma County in California.
We operate through five depository offices located in Santa Rosa, Rohnert Park, Healdsburg
and Petaluma. The Bank also has a loan production office in Roseville, California. The Bank
was incorporated on December 20, 1982 and commenced operations as a California state-
chartered saving and loan. On January 15, 1999, the Bank received authority to convert its
charter to a California state-charted Bank. On July 13, 2006, the Bank completed an
underwritten initial public offering and listed its stock on the Nasdaq Global Market under the
symbol SSBI. The Bank’s deposits are insured by the FDIC in accordance with the Federal
Deposit Insurance Act and related regulations of the FDIC.
We provide a broad array of financial services to small to medium-size businesses and their
owners and employees, entrepreneurs, families, foundations, estates, and individual
consumers. We believe that our principal competitive advantages are personal service,
flexibility, and responsiveness to customers’ needs. Our lending activities are primarily focused
on commercial real estate, construction, and business loans to our targeted clientele. We
emphasize relationship banking, and believe we offer our customers many of the management
capabilities of a larger financial institution, together with the resourcefulness and superior
customer service of a community bank. Through our branches and the use of technology, we
offer a broad array of deposit products and services for both commercial and consumer
customers, including digital banking, cash management services and bill payment. We provide
a comprehensive set of loan products, such as commercial loans and leases, lines of credit,
commercial real estate loans, Small Business Administration, or SBA, loans, and construction
loans. We believe that local decision-making ensures that our lending process is fast, efficient,
and focused on maintaining our high credit quality and underwriting standards.
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. At the center of diversity is inclusion, collaboration, and a shared
vision for delivering superior service and results for shareholders. Presently, 57% of
management are women and minorities with 60% represented on the Executive Management
Team.
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Summit State Bank Branch Leaders (left to right): Don Cliver, Alex Aivaliklis, Kathy Moore, Marbin Morales and Matt Lewis
Company Contact Information
Nasdaq: SSBI
Summit State Bank
500 Bicentennial Way
Santa Rosa, CA 95403
707-568-6000
Corporate Secretary: Barbara Gradman
Transfer Agent
Computershare
P.O. Box 43006
Providence, RI 02940-3006
Investor Information:
See "Investor Relations "on our website:
SummitStateBank.com
Bicentennial
500 Bicentennial Way
Santa Rosa, CA 95403 707-568-6100
Healdsburg
1001 Vine Street
Healdsburg, CA 95448 707-433-5959
Montgomery Village
2300 Midway Drive
Santa Rosa, CA 95405 707-568-4975
Petaluma
100 Petaluma Blvd. S., Suite A
Petaluma, CA 94952 707-283-1120
Rohnert Park
10 Raley's Towne Centre
Rohnert Park, CA 94928 707-568-4955