1ST SUMMIT BANCORP R… · 1ST SummiT Bancorp & SuBSidiarieS . 2016 FINANCIAL HIGHLIGHTS . 1ST SUMMIT BANCORP of Johnstown, Inc., is an independent holding company headquartered in

1ST SUMMIT BANCORP

2016 AnnuAl RepoRt

Financial Highlights Page 1

Shareholdersrsquo Message Page 2

Rewarding our Shareholders Page 3

Rewarding our Customers Page 4

Rewarding our Communities Page 5

Rewarding our Professionals Page 6

Board and Officer Listings Page 7-10

Report of Independent Accountants Page 11

Managementrsquos Discussion amp Analysis Page 33

Summary of Quarterly Financial Data Page 39

Selected Financial Data Page 40

Shareholder Information Page 41

Subsidiaries Page 41

Table of conTenTs

-- -- -- -- -- -- --

1ST SummiT Bancorp amp SuBSidiarieS

2016 FINANCIAL HIGHLIGHTS

1ST SUMMIT BANCORP of Johnstown Inc is an independent holding company headquartered in Johnstown Pennsylvania

The company provides a wide range of banking trust financial and investment services to individuals and businesses through its

subsidiaries 1ST SUMMIT BANK and Cambria Thrift Consumer Discount Company There are 20 offices located throughout

Cambria Somerset Indiana Blair and Westmoreland Counties

(In thousands except per share data)

Year Ended December 31 2016 2015 2014 Change Over Prior Year

Net Income $ 10136 $ 9910 $ 9570 + 2 Cash Dividends 2627 2449 2163 + 7

Per Share Net Income $ 922 + 2 Cash Dividends 239 + 7 Book Value 8036 + 6 Market Value 10400 + 8

Financial Position Assets $996919 + 5 Deposits 867066 + 6 Net Loans 492012 + 5 Investment Securities 448897 + 3 Trust and Investment Assets 270947 + 8 Shareholdersrsquo Equity 88330 + 6 Allowance for Loan Losses 6328 + 3

Selected Financial Ratios Return on Average Assets 104 107 108 Return on Average Equity 1153 1225 1339 Return on Adjusted Equity 1187 1272 1357 Equity Capital to Total Assets 886 880 858 Tier 1 Capital to Total Assets 953 922 877 Allowance for

Loan Losses to Loans 127 130 127 Non-performing Assets

to Total Assets 024 020 054

$ 902 $ 871 223 197

7600 7110 9600 9200

$948636 $910585 816022 797090 468570 448488 437253 425113 250481 239799 83467 78089 6149 5768

SHAREHOLDER MESSAGE

2016 was another successful year for 1ST SUMMIT BANCORP We experienced solid gains for loans deposits capital and income Besides the strong financial performance the year was complemented by the opening of the Companyrsquos 20th location the addition of some innovative new services and technology advances

This year marked the ninth straight year of record earnings Since 2007 net income has increased $61 million or 153 Also this year the Company achieved a milestone as consolidated net income exceeded $10 million for the first time in its history Net income was $101 million or $922 a share up 22 Despite a challenging interest rate environment and intense competition income from operations improved significantly The gross interest margin was up $334 thousand and other income excluding securities gains grew by $248 thousand which offset an increase in operating expense In addition the Company managed its tax position quite well through increased activity in tax exempt loans to municipalities and municipal bonds Income tax liability actually decreased $33 thousand for an effective tax rate of 227

This year marked the ninth straight year of record earnings Since 2007 net income has increased $61 million or 153

We continued to refine and enhance our enterprise risk management system In 2016 we developed additional models to calculate inherent risk throughout the organization to ensure applicable controls are in place One of the reasons for our success is our ability to mitigate risk throughout the company

Asset quality was a bright spot again in 2016 Non-performing assets were 24 of total assets a very strong ratio Net charge-offs of loans were a low 11 of outstanding loans The company has had excellent asset quality for many years That is one of the reasons why earnings have been so strong since 2007

1ST SUMMIT BANK expanded its market presence with the May opening of its 16th office in Ebensburg This state of the art facility has opened to rave reviews for its beauty and functionality and has been well received by customers and the Ebensburg community The office has performed above expectations each month since it opened

Banking is rapidly changing as customers continue to expect banking services that will allow them to bank anywhere and anytime We have previously added new features to online and mobile banking In 2016 we introduced Digital Wallet which allows customers to use their mobile devices to complete secure and convenient point of sale transactions Each year we spend considerable sums to enhance speed and efficiency to our delivery systems

We continued to add more fraud protection features for customers as this is a growing problem To keep criminals from creating duplicate cards we previously added EMV chips for credit cards and are now adding the chips to our debit cards Since the addition of EMV chips card fraud is down 54 nationwide We also enhanced our cybersecurity infrastructure to fortify and protect customer information and privacy

We continued to improve our technology infrastructure during the year There was a company-wide upgrade to the telephone system which will save money and increase efficiency and ease of calling The Company replaced its core processing system to increase speed and capacity which improved overall productivity and efficiency

The Company received numerous awards and recognition for its financial performance community involvement customer service and treatment of its professionals These accomplishments are detailed on the following pages and emphasize our commitment to being the best we can be as an organization

REWARDING OUR SHAREHOLDERS

Rewarding shareholders has always been a main objective of 1ST SUMMIT BANCORP We are keenly aware of our commitment to providing long-term value to shareholders and doing so without taking undue risk

The financial results for 2016 were encouraging Net income was $101 million or $922 an increase of 22 This marked the ninth straight year of record earnings Since 2007 net income has increased $61 million or 153 This was not an easy accomplishment as this coincided with the financial crisis and the Great Recession Because we did not purchase risky assets or get caught up in the inflated asset bubble we were able to grow without having any major asset problems The Board and Management have a philosophy of managing risk by not stretching for yield or chasing unproven opportunities that seem too good to be true We know we are stewards of your money

Total shareholder return (price appreciation plus dividend yield) was 1072 a solid return The stock price moved from $9600 at the beginning of the year to $10400 at year-end In 2016 the cash dividend was increased for the 40th straight year a record that only a handful of banks nationwide can claim The dividend was raised $16 a share to $239 up 7 In the past five years the dividend has increased $89 a share or 59 Because of strong earnings the dividend did not reduce the overall capital ratios or net worth of the Company Stockholdersrsquo equity has increased $327 million in the past five years

1ST SUMMIT BANK was once again recognized by American Banker magazine as one of the most profitable community banks in the US for its three-year return on equity (ROE) Our ranking was 22 out of approximately 2000 community banks which are publicly traded The Board of Directors and Management have always been focused on return on equity as the best measure to determine how well the Company is doing in providing shareholder value

In the first quarter of 2016 1ST SUMMIT BANK was rated the 1 Bank in Pennsylvania by the FMC Report

Another measure of financial performance was the Bankrsquos ranking in the FMC Report a quarterly review of all Pennsylvania financial institutions This report ranks each bank in eight different categories They include earnings interest rate spread operating efficiency credit quality etc to provide a comprehensive indicator of overall performance In the first quarter of 2016 1ST SUMMIT BANK was the 1 rated bank in Pennsylvania For the four quarters of 2016 our lowest ranking was 4 which showed consistently strong performance for the entire year

06 07 08 09 10 11 12 13 14 15 16

NET INCOME

41 40 45

96 99 101

REWARDING OUR CUSTOMERS

We recognize that providing innovative products that customers want and delivering services in the best way possible is key to our success But having great products is not enough

In a world that is so competitive and impersonal a companyrsquos brand identification has to stand out Our Mission is to be the premier financial relationship provider in our markets Our professionals live that mission every day Customers identify with our brand and know that we work to be their bank for all of their financial needs

Our Professionals continually develop their knowledge and expertise to provide the finest relationship banking possible

When other financial institutions neglected customers during the financial crisis and the subsequent years of a slow growth economy we embraced customers by providing credit to them and paying better rates for their deposits We did not abandon them instead we helped them That is what we always do We believe the more a customer does with us the better financial experience they will have

1ST SUMMIT BANK opened its 16th Community Office in May 2016 in Ebensburg This state of the art facility has opened to rave reviews

Besides the personal attention we continue to add products and services that allow customers to bank whenever and wherever they choose Our online and mobile banking services continue to grow at a rapid pace Digital Wallet which conveniently lets customers use mobile devices at point of sale locations is one of our newest features

Each year we spend significant amounts of money to enhance the delivery channels we offer so customers have the best services available By providing these services along with the personal attention that customers want we believe the customer experience at 1ST SUMMIT BANK is extraordinary

REWARDING OUR COMMUNITIES

Everyone at the Company knows how important it is to have vibrant communities in which to live work and play Our commitment shows up in many ways

The Professionals who work here along with our board members give countless hours to volunteering serving on various civic and community boards and participating in many events in our communities They respond to community needs throughout our market area They do this not only because it is good business but because it is the right thing to do

This participation is not limited to charitable causes Our Professionals go into numerous schools to mentor students on the value of managing money ldquoTeach Children to Saverdquo and ldquoGet Smart About Creditrdquo are nationwide education programs created by the American Bankers Association 1ST SUMMIT BANK has offered these programs for many years and has increased the number of school districts participating to more than 20 schools in our five-county market area

Also we provide loans to numerous non-profit agencies cultural institutions and municipalities Our Professionals continue to find creative ways to lend money to these institutions so they can provide programs recreation and entertainment to residents thus making our communities better places to live When community banks do their jobs right the communities they serve can grow and the quality of life improves

The Company is usually one of the first businesses called upon when there is a capital campaign a charitable event or a fund drive of any kind We are one of the top 10 financial contributors in our primary market to support these worthwhile causes In fact we have a goal of increasing our charitable donations every year

There is a commitment to serve our communities in many ways so they can grow and prosper

We received some recognition during the year for our commitment to make our communities better places to live and work 1ST SUMMIT BANK was selected as one of the Top 100 Organizations in the 23-county circulation area of PA Business Central newspaper a wonderful endorsement of our efforts

It is evident that everyone associated with 1ST SUMMIT BANCORP has a desire to help each community in which we do business There is a commitment to serve our communities in many ways so they can grow and prosper We believe 1ST SUMMIT is not simply a bank but a community asset That is what a community bank is all about

06 07 08 09 10 11 12 13 14 15 16

Total Assets

448 478

819 866

911 949

REWARDING OUR PROFESSIONALS

There is a marketing theory that says happy employees make for happy customers We operate from this concept and strive to make the Company an ldquoemployer of choicerdquo Customers notice how pleasant our Professionals are and how eager they are to to serve them They often comment about the energy and engagement present when they come into any Community Office

We work hard to have an engaged motivated and cheerful staff of Professionals We have a goal of improving the work environment each and every year while providing challenging and rewarding career opportunities An example of this is the annual Best Places to Work in PA competition that is sponsored by Central Penn Business Journal

1ST SUMMIT BANK was recognized as one of the Best Places to Work in PA for the 16th consecutive year the only company in Pennsylvania to claim that honor

Each year companies submit ways they engage and reward their employees along with employee opinion surveys provided by Best Places Institute These components make up the overall ratings for the companies In 2016 1ST SUMMIT BANK was recognized as one of the Best Places to Work in PA for the 16th consecutive year the only company in Pennsylvania to claim that honor

In addition the Bank participated in the country-wide ldquoBest Banks to Work Forrdquo competition by American Banker magazine Using much of the same criteria as the Pennsylvania competition 1ST SUMMIT BANK was ranked 26 out of only 60 banks of all sizes selected for 2016

We are a performance driven company and look to hire develop and retain high achievers This approach is beneficial to everyone associated with the Company ndash the Shareholders Customers Communities and Staff We operate from aldquoShared Sense of Missionrdquo that rewards the staff for meeting the needs of all of these constituents Our staff continues to be rewarded with merit pay bonuses and other rewards at a pace that far exceeds the typical company

It is important to continually develop our Professionals in this rapidly changing work environment We have individual and group mentoring programs for all employees that cover a wide array of topics to help each Professional succeed These sessions are stimulating and help prepare our Professionals for their various work assignments and their interactions with both customers and employees In fact our mentoring program was recently featured in a national publication

As this report shows all of us at 1ST SUMMIT BANCORP are committed to rewarding shareholders and providing value each year

We thank you for your support and look forward to a rewarding 2017

Joseph R Kondisko Elmer C Laslo Chairman President and CEO

BOARD OF DIRECTORS

Joseph R Kondisko Chairman 1ST SUMMIT BANCORP amp 1ST SUMMIT BANK President K Management Group

Elmer C Laslo President amp CEO 1ST SUMMIT BANCORP amp 1ST SUMMIT BANK

Rex W McQuaide Esq Vice President amp Corporate Counsel WC McQuaide Inc

William F McQuaide

Dominic A Bellvia

John W McCall Vice President McCall Motors Inc

Stephen G Zamias Vice Chairman Zamias Services Inc

Edward J Sheehan Jr President amp CEO Concurrent Technologies Corp

DIRECTORS EMERITI

Robert P Gardill

Michael E Ondesko Jr President Dunlo Transfer Co Inc

Robert P Gardill II President General American Resources

Jacqueline M Martella Co-Owner Martellarsquos Pharmacies amp President amp CEO Boswell PrescriptionBoswell

Pharmacy Services LLC

Serves on 1ST SUMMIT BANK Board only

William G McKelvey

Barry M Alberter

Board of Directors (seated) Jacqueline Martella Joseph Kondisko Elmer Laslo (standing) Stephen Zamias Rex McQuaide Edward Sheehan Jr Michael Ondesko Jr John McCall (not pictured) Robert Gardill II

1ST SUMMIT BANCORP CORPORATE OFFICERS

Joseph R Kondisko Jeffry D Cramer Donald F Yeager Chairman of the Board Executive Vice President Senior Vice President

Elmer C Laslo President amp Chief Executive Officer Carol A Myers Polly A Previte

Executive Vice President and Treasurer Senior Vice President

Timothy W Smith Michael Seigh Senior Vice President amp Secretary Senior Vice President and Assistant Treasurer

1ST SUMMIT BANk LEADERSHIP TEAM

Elmer C Laslo Carol A Myers Donald F Yeager President amp Executive Vice President Sr Vice President amp Chief Executive Officer Treasurer amp Chief Financial Officer Retail Banking Group Head

Jeffry D Cramer Timothy W Smith Polly A Previte Executive Vice President amp Sr Vice President Secretary amp Sr Vice President amp Chief Lending Officer Information Systems Officer Operations Officer

1ST SUMMIT BANK LEADERSHIP TEAM (left to right) Timothy Smith Carol Myers Elmer Laslo Donald Yeager Jeffry Cramer Polly Previte

1ST SUMMIT BANk OPERATING OFFICERS

Elmer C Laslo President amp Chief Executive Officer

Jeffry D Cramer Executive Vice President amp Chief Lending Officer

Carol A Myers Executive Vice President Treasurer amp Chief Financial Officer

Timothy W Smith Sr Vice President Secretary amp Information Systems Officer

Donald F Yeager Sr Vice President amp Retail Banking Group Head

Polly A Previte Sr Vice President amp Operations Officer

Michael Seigh Sr Vice President of Finance

Robert J Salerno Sr Vice President of Business Development

Domenic M Cagliuso Vice President amp Sr Trust and Investment Services Department Head

Russell E Gillman Vice President amp Sr Commercial Loan Department Head

Sean P Lewis Vice President amp Sr Corporate Business Development Officer

Susan K Stem Vice President amp Customer Service Coordinator

John E Kubinsky Vice President amp Loan Group Business Development Officer (hired 2117)

Kenneth R Szczur Vice President amp Sr Business Development Officer-Western Region

Leeann K Wyland Vice President amp Executive Assistant to the CEO

Julie A Edwards Vice President amp General Auditor

Lori R Baumgardner Vice President amp Sr Marketing Director

Scott A Magnetti Vice President amp Sr Business Development Officer-Northern Region

Gary L Bentz Vice President amp Sr Business Development Officer-Southern Region

Paul M Kundrod Assistant Vice President amp Consumer Loan Department Head

Leslie N Morgenstern Assistant Vice President amp Credit Administration Department Head

Stacy L Martin Assistant Vice President amp Mortgage Loan Department Head

J Ilene Boughner Assistant Vice President Regional Lender amp Sr Personal Banking Officer-Indiana

Richard F Chimelewski Assistant Vice President amp Wealth Management Business Development Officer

Jerry F Updyke Assistant Vice President amp Sr Loan Officer

Kathy J DePra Assistant Vice President amp Sr Loan Officer

Connie L Weyandt Assistant Vice President amp Sr Bankwide Auditor

Kathleen L Burkett Assistant Vice President amp Sr Technology Officer

Jeannine M Goncher Assistant Vice President amp Human Resources Officer

Pamela H Carroll Assistant Vice President amp Community Reinvestment Officer

Ramona Licastro Assistant Vice President amp Credit Quality Officer

Susan J McQuillen Assistant Vice President amp Bookkeeping Operations Officer

Christine R Serre Assistant Vice President amp Sr Personal Banking Officer-Sidman

Christina L Hines Assistant Vice President amp Sr Personal Banking Officer-Ebensburg

Tonya M Kelly Assistant Vice President amp Sr Personal Banking Officer-Downtown Johnstown

Eleanore B Bucchi Assistant Vice President amp Regional Personal Banking Officer-Westmoreland Co

Susan A Martin Assistant Vice President amp Sr Personal Banking Officer-Westmont

Mary E Woy Assistant Vice President amp Sr Personal Banking Officer-Somerset

Gregory D Petrilla Assistant Vice President amp Sr Personal Banking Officer-Portage

Lawrence Albertelli Assistant Vice President amp Sr Credit Administration Officer

Jane O Yeager Assistant Secretary amp Personal Banking Officer-Altoona Walmart

Kelly L Goncher Assistant Secretary amp Consumer Loan Officer

Brian W Britton Assistant Treasurer amp Sr Data Center Officer

Julie A Mikolich Assistant Secretary amp Personal Banking Officer-Parkhill

Sarah A Zajdel Assistant Secretary amp Personal Banking Officer-Salix

Jennifer L Swinger Assistant Treasurer amp Assistant Controller

Jason R Miller Assistant Secretary amp Customer Service Officer-Cresson

Elliott T Sumner Assistant Secretary amp Network Engineer (hired 1117)

Jessica M Fleegle Assistant Secretary Operational Officer amp Compliance Officer

1ST SUMMIT BANk AREA BOARDS

NORTHERN AREA

George E Letcher Jr CPA Associate Professor Emeritus University of Pittsburgh at Johnstown

Anthony F Pacifico Partner A amp M Pacific Associates President Pacific Hospitality

Paul J Calandra Vice President amp General Manager Cresson SteelJennmar Corp

Jeffrey R Holtz Broker Holtz amp Associates Real Estate

Marie E Polinsky Retired Chief Executive Officer Choices People Supporting People Inc

Michael J Bellvia OwnerOperations Manager Pro Disposal Inc

Gerald M Moschgat PharmacistOwner Mainline Pharmacy Co-Owner Mainline Vision and Eyewear

SOUTHERN AREA WESTERN AREA

Charles F Erickson Jr Joseph R Green CEO Allegheny Logistics Center Attorney at Law

Leah Spangler Stephen W Osborne CEO The Learning Lamp Professor of Management amp Ignite Education Solutions Director Small Business Institute

F Nicholas Jacobs Indiana University of Pennsylvania

International Director Eric E Bononi CPA Esquire Sunstone Management Resources Bononi and Company PC

Mark J Duray David S Gehlman President amp Chief Operating Officer President Roxberry Creamery Inc Citizensrsquo Cemetery Association

Ronald M Devine Mark R Tercek Senior Vice President Consulting Services President LCT Energy CBIZ Insurance Services

Edward L Wian Douglas R McIlwain President President McIlwain Charters Tri-County Motor Sales Inc

Steven L Remaley Chief Operating Officer President and Managing Director Roy amp Associates PC

CAMBRIA THRIFT CONSUMER DISCOUNT COMPANY

O F F I C E R S

Elmer C Laslo Chairman amp Chief Executive Officer

Jeffry D Cramer President amp Treasurer

Connie B Hobbs Senior Vice President Secretary amp Assistant Treasurer

Elmer C Laslo President amp Chief Executive Officer 1ST SUMMIT BANK

Jeffry D Cramer Executive Vice President amp Chief Lending Officer 1ST SUMMIT BANK

Joseph R Kondisko President K Management Group Inc

D I R E C T O R S

Rex W McQuaide Esq Stephen G Zamias Vice President and Vice Chairman Corporate Counsel Zamias Services Inc WC McQuaide Inc

Edward J Sheehan Jr John W McCall President amp Chief Executive Officer Vice President Concurrent Technologies Corp McCall Motors Inc

independent auditorrsquos report

Board of Directors and Stockholders 1ST SUMMIT BANCORP of Johnstown Inc Johnstown Pennsylvania

Report on the Financial Statements We have audited the accompanying consolidated financial statements of 1ST SUMMIT BANCORP of Johnstown Inc and subsidiaries which comprise the consolidated balance sheet as of December 31 2016 and 2015 the related consolidated statements of income comprehensive income changes in stockholdersrsquo equity and cash flows for the years then ended and the related notes to the consolidated financial statements

Managementrsquos Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America This includes the design implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement whether due to fraud or error

Auditorrsquos Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits We conducted our audits in accorshydance with auditing standards generally accepted in the United States of America Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements The procedures selected depend on the auditorrsquos judgment including the assessment of the risks of material misstatement of the consolidated financial statements whether due to fraud or error In making those risk assessments the auditor considers internal control relevant to the entityrsquos preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entityrsquos internal control Accordingly we express no such opinion An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management as well as evaluating the overall presentation of the consolidated financial statements

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion

Opinion In our opinion the consolidated financial statements referred to above present fairly in all material respects the financial position of 1ST SUMMIT BANCORP of Johnstown Inc and subsidiaries as of December 31 2016 and 2015 and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America

Wexford Pennsylvania February 28 2017

SR Snodgrass PC

2100 Corporate Drive Suite 400 Wexford PA 15090-8399 Phone 724-934-0344 Facsimile 724-934-0345

1 S T S u m m i T B a n c o r p amp S u B S i d i a r i e S 11

consolidated balance sheet

December 31 2016 2015

ASSETS Cash and due from banks $ 9486921 $ 8715380 Interest-bearing deposits in banks 11333865 69469

Cash and cash equivalents 20820786 8784849

Investment securities available for sale 195854089 215387313 Investment securities held to maturity (fair value

of $248858489 and $225295618) 253043379 221865843 Loans 498340600 474719053 Less allowance for loan losses 6328227 6148590

Net loans 492012373 468570463

Premises and equipment net 9894569 8804306 Goodwill 388768 388768 Bank-owned life insurance 11945882 11284744 Accrued interest receivable 3053715 2949573 Federal Home Loan Bank stock 1488800 2052200 Other assets 8416812 8548271

TOTAL ASSETS $996919173 $ 948636330

LIABILITIES Deposits

Non-interest-bearing checking $ 61260725 $ 56244856 Interest-bearing checking 176267749 150019741 Money market 128949902 126167826 Savings 139069499 137392102 Time 361518537 346197063

Total deposits 867066412 816021588 Short-term borrowings - 10136000 Other borrowed funds 35393256 33119517 Accrued interest payable and other liabilities 6129153 5892113

TOTAL LIABILITIES 908588821 865169218

STOCKHOLDERSrsquo EQUITY Preferred stock no par value 300000 shares authorized

none issued - -Common stock $5 par value 4800000 shares authorized

1101519 issued 5507595 5507595 Capital surplus 5728212 5716697 Retained earnings 78368951 70859861 Accumulated other comprehensive (loss) income (1018792) 1646219 Treasury stock at cost (2636 shares and 2855 shares)

TOTAL STOCKHOLDERSrsquo EQUITY

(255614

88330352

) (263260

83467112

TOTAL LIABILITIES AND STOCKHOLDERSrsquo EQUITY $996919173 $ 948636330

See accompanying notes to the consolidated financial statements

consolidated statement of income

Year Ended December 31 2016 2015

INTEREST AND DIVIDEND INCOME Interest and fees on loans $ 23402541 $ 22579414 Interest and dividends on investment securities

Taxable 7748998 8383717 Exempt from federal income tax 3931751 3671713

Other interest 114279 135860

Total interest and dividend income 35197569 34770704

INTEREST EXPENSE Deposits 7210771 7170917 Short-term borrowings 29374 16055 Other borrowed funds 959718 920205

Total interest expense 8199863 8107177

NET INTEREST INCOME 26997706 26663527

PROVISION FOR LOAN LOSSES 751150 1702000

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 26246556 24961527

OTHER INCOME Service charges on deposit accounts 1706589 1640726 Investment securities gains net 1665532 2714124 Wealth management income 947366 863837 Earnings on bank-owned life insurance 390427 354195 Bank card income 1235766 1176486 Other income 519735 516341

Total other income 6465415 7265709

OTHER EXPENSE Salaries and employee benefits 11134326 10454318 Occupancy expense 1598085 1548954 Equipment expense 1303117 1230118 Federal deposit insurance expense 395300 456000 Data processing expense 677194 626295 Shares tax expense 726789 685341 Donations expense 234067 755748 Other expense 3532373 3552020

Total other expense 19601251 19308794

INCOME BEFORE INCOME TAXES 13110720 12918442 Income tax expense 2974511 3008283

NET INCOME $ 10136209 $ 9910159

EARNINGS PER SHARE $ 922 $ 902

AVERAGE SHARES OUTSTANDING 1099177 1098277

consolidated statement of comprehensiVe income

NET INCOME $ 10136209 $ 9910159 COMPONENTS OF OTHER COMPREHENSIVE LOSS

Unrealized loss on available-for-sale securities (2372363) (615459) Tax effect 806603 209256

Reclassification adjustment for gains realized in income (1665532) (2714124)

Tax effect 566281 922802

TOTAL OTHER COMPREHENSIVE LOSS (2665011) (2197525)

TOTAL COMPREHENSIVE INCOME $ 7471198 $ 7712634

consolidated statement of chanGes in stocKholdersrsquo eQuitY

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Other Comprehensive Income (Loss)

Treasury Stock

Total Stockholdersrsquo

Equity

Balance December 31 2014 1097438 $ 5507595 $ 5697012 $ 63399054 $ 3843744 $ ( 358671) $ 78088734

Net income Other comprehensive loss Cash dividends ($223 per share) Purchase of treasury stockSale of treasury stock

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

Balance December 31 2015 1098664 5507595 5716697 70859861 1646219 (263260) 83467112

Net income Other comprehensive loss Cash dividends ($239 per share) Purchase of treasury stock Sale of treasury stock

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

Balance December 31 2016 1098883 $ 5507595 $ 5728212 $ 78368951 $ (1018792) $ (255614) $ 88330352

consolidated statement of cash flows

OPERATING ACTIVITIES Net income $ 10136209 $ 9910159 Adjustments to reconcile net income to net cash provided

by operating activities Provision for loan losses 751150 1702000 Depreciation and amortization 2996507 2900809 Investment securities gains net (1665532) (2714124) Deferred income taxes (47068) 1209494 Earnings on bank-owned life insurance (390427) (354195) Increase in accrued interest receivable (104142) (55641) Increase (decrease) in accrued interest payable 27190 (3074) Income Tax Payable 1702085 -Other net 225060 (749058)

Net cash provided by operating activities 13631032 11846370

INVESTING ACTIVITIES Investment securities available for sale

Proceeds from sales 36886194 10356122 Proceeds from maturities and paydowns 34558820 29127015 Purchases (55747213) (33661542)

Investment securities held to maturity Proceeds from sales 5422627 3394743 Proceeds from maturities and paydowns 41717657 30157791 Purchases (79195081) (54404518)

Net increase in loans (24423076) (22074475) Purchases of premises and equipment (1934685) (952617) Purchases of bank-owned life insurance (380900) (2449904) Proceeds from sale of real estate owned 362557 263329 Redemption of regulatory stock 4960600 4535400 Purchase of regulatory stock (4397200) (5465400)

Net cash used for investing activities (42169700) (41174056)

FINANCING ACTIVITIES Net increase in deposits 51044824 18931159 Net change in short-term borrowings (10136000) 7631200 Proceeds from other borrowed funds 8773739 11343519 Repayments of other borrowed funds (6500000) (6000000) Dividends paid on common stock (2627119) (2449352) Purchases of treasury stock (132047) (87604) Proceeds from sales of treasury stock 151208 202700

Net cash provided by financing activities 40574605 29571622

Increase in cash and cash equivalents 12035937 243936

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 8784849 8540913

CASH AND CASH EQUIVALENTS AT END OF YEAR $ 20820786 $ 8784849

notes to consolidated financial statements

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting and reporting policies applied in the presentation of the accompanying financial statements follows

Nature of Operations and Basis of Presentation The consolidated financial statements include the accounts of 1ST SUMMIT BANCORP of Johnstown Inc (the ldquoCompanyrdquo) and its wholly owned subsidiaries 1ST SUMMIT BANK (the ldquoBankrdquo) and Cambria Thrift Consumer Discount Company (ldquoCambriardquo) All significant intercompany transactions have been eliminated in consolidation The investment in subsidiaries on the parent company financial statements is carried in the parent companyrsquos equity and equals the underlying net assets of the subsidiaries The Company is a Pennsylvania company organized to become the holdshying company of the Bank The Bank is a state-chartered bank located in Pennsylvania Cambria is a Pennsylvania-chartered consumer finance company The Companyrsquos principal sources of revenue emanate from its portfolio of residential real estate commercial mortgage commercial and consumer loans its investment portfolio as well as trust and a variety of deposit services to its customers through 16 Bank and 4 Cambria locashytions The Company is supervised by the Board of Governors of the Federal Reserve System while the Bank is subject to regulation and supervision by the Federal Deposit Insurance Corporation Both the Bank and Cambria are regulated by the Pennsylvania Department of Banking The financial statements have been prepared in conformity with US genershyally accepted accounting principles (ldquoGAAPrdquo) In preparing the financial statements management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the Consolishydated Balance Sheet date and reported amounts of revenues and expenses for the period Actual results could differ from those estimates

Investment Securities Investment securities are classified at the time of purchase based on managementrsquos intention and ability as securities held to maturity or securishyties available for sale Debt securities acquired with the intent and ability to hold to maturity are stated at cost adjusted for amortization of premium and accretion of discount which are computed using the interest method and recognized as adjustments of interest income Certain other debt securities have been classified as available for sale to serve principally as a source of liquidity Unrealized holding gains and losses for available-for-sale securities are reported as a separate component of stockholdersrsquo equity net of tax until realized Realized security gains and losses are computed using the specific identification method for debt securities and the average cost method for marketable equity securities Interest and dividends on investment securities are recognized as income when earned Securities are evaluated on at least a quarterly basis and more frequently when economic or market conditions warrant such an evaluation to detershymine whether a decline in their value is other than temporary For debt securishyties management considers whether the present value of cash flows expected to be collected are less than the securityrsquos amortized cost basis (the difference defined as the credit loss) the magnitude and duration of the decline the reasons underlying the decline and the Companyrsquos intent to sell the security or whether it is more likely than not that the Company would be required to sell the security before its anticipated recovery in market value to determine whether the loss in value is other than temporary Once a decline in value is determined to be other than temporary if the investor does not intend to sell the security and it is more likely than not that it will not be required to sell the security before recovery of the securityrsquos amortized cost basis the charge to earnings is limited to the amount of credit loss Any remaining difference between fair value and amortized cost (the difference defined as the noncredit portion) is recognized in other comprehensive income net of applicable taxes Otherwise the entire difference between fair value and amortized

cost is charged to earnings Similarly for equity securities management considers various factors including the underlying financial performance of the Company and the trends in the stock price in the recent history typically a period of 12 months as well as the Companyrsquos intent and ability to hold the equity security for a period of time sufficient for recovery to cost Where management lacks that intent or ability the securityrsquos decline in fair value is deemed to be other than temporary and is recorded in earnings

Investment in Federal Home Loan Bank (ldquoFHLBrdquo) Stock The Bank is a member of the FHLB of Pittsburgh and as such is required to maintain a minimum investment in stock of the FHLB that varies with the level of advances outstanding with the FHLB The stock is bought from and sold to the FHLB based upon its $100 par value The stock does not have a readily determinable fair value and as such is classified as restricted stock carried at cost and evaluated for impairment The stockrsquos value is determined by the ultimate recoverability of the par value rather than by recognizing temshyporary declines The determination of whether the par value will ultimately be recovered is influenced by criteria such as the following (a) the significance of the decline in net assets of the FHLB as compared with the capital stock amount and the length of time this situation has persisted (b) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance (c) the impact of legislative and regulatory changes on the customer base of the FHLB and (d) the liquidity position of the FHLB There was no impairment of the FHLB stock as of December 31 2016 or 2015

Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff generally are reported at their outstanding principal amount net of unearned income Interest from installment loans is recognized in income based on the simple-interest method actuarial method or sum-of-the-monthrsquos-digits method depending on which entity originated the loans All three methods result in approximate level rates of return over the terms of the loans Interest on real estate mortgages and comshymercial loans is recognized as income when earned on the accrual method Generally the policy has been to stop accruing interest on loans when it is determined that a reasonable doubt exists as to the collectability of additional interest Interest previously accrued but deemed uncollectible is deducted from current interest income Payments received on nonaccrual loans are either applied to principal or reported as interest income according to manshyagementrsquos judgment as to the collectability of principal Loans are returned to accrual status when past due interest is collected and the collection of principal is probable Loan origination fees and certain direct loan origination costs are being deferred and the net amount amortized as an adjustment of the related loanrsquos yield Management is amortizing these amounts over the contractual life of the related loans

Allowance for Loan Losses The allowance for loan losses represents the amount which management estimates is adequate to provide for probable losses inherent in its loan portfolio as of the Consolidated Balance Sheet date The allowance method is used in providing for loan losses Accordingly all loan losses are charged to the allowance and all recoveries are credited to it The allowance for loan losses is established through a provision for loan losses charged to operations The provision for loan losses is based on managementrsquos monthly evaluation of individual loans economic factors past loan loss experience changes in the composition and volume of the portfolio and other relevant factors The estimates used in determining the adequacy of the allowance for loan losses including the amounts and timing of future cash flows expected on impaired loans are particularly susceptible to change in the near-term

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contrsquod)

Premises and Equipment Land is carried at cost Premises and equipment are stated at cost less accumulated depreciation Depreciation is principally computed on the straight-line method over the estimated useful lives of the related assets which range from 3 to 10 years for furniture fixtures and equipment and 25 to 40 years for building premises Leasehold improvements are amortized over the shorter of their estimated useful lives or their respective lease terms which range from 7 to 15 years Expenditures for maintenance and repairs are charged against income as incurred Costs of major additions and improveshyments are capitalized

Goodwill The Company accounts for goodwill using an annual impairment analysis of goodwill that includes a qualitative assessment in order to determine if the two-step process of measuring impairment is necessary on at least an annual basis This approach could cause more volatility in the Companyrsquos reported net income because impairment losses if any could occur irregushylarly and in varying amounts No impairment of goodwill was recognized in any of the periods presented

Bank-Owned Life Insurance (ldquoBOLIrdquo) The Bank purchased life insurance policies on certain key employees and directors BOLI is recorded at its cash surrender value or the amount that can be realized and is shown on the Consolidated Balance Sheet Any increases in the cash surrender value are recorded as other income on the Consolidated Statement of Income while administrative expenses are recorded as other expense and recorded as a reduction of the cash surshyrender value

Trust Department Trust department assets (other than cash deposits) held by the Bank in fiduciary or agency capacities for its customers are not included in the acshycompanying Consolidated Balance Sheet since such items are not assets of the Bank Trust fees for services performed by the Bank in a fiduciary capacity are reported on a cash basis The annual results would not be materially different if such income was accrued

Advertising Costs Advertising costs are expensed as incurred

Income Taxes The Company the Bank and Cambria file a consolidated federal income tax return Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled As changes in tax laws or rates are enacted deferred tax assets and liabilities are adjusted through the provision for income taxes

Earnings Per Share The Company currently maintains a simple capital structure thus there are no dilutive effects on earnings per share Earnings per share is calcushylated by dividing net income by the weighted-average number of shares outstanding for the period

Comprehensive Income The Company is required to present comprehensive income in a full set of general-purpose financial statements for all periods presented Other comprehensive income is comprised of unrealized holding gains (losses) on the available-for-sale securities portfolio and reclassification adjustment for realized gains recognized in income

Statement of Cash Flows For purposes of reporting cash flows cash and cash equivalents include cash and due from banks and interest-bearing deposits at banks with origishynal maturities of 90 days or less Cash payments for interest in 2016 and 2015 were $8172673 and $8110251 respectively Income tax payments totaled $1351460 in 2016 and $3343000 in 2015

Reclassification of Comparative Amounts Certain comparative amounts for the prior year have been reclassified to conform to current-year classifications Such reclassifications had no effect on net income or stockholdersrsquo equity

2 INVESTMENT SECURITIES

The amortized cost and fair value of investment securities as of December 31 are summarized as follows

2016 Gross Gross

Amortized Unrealized Unrealized Fair Cost Gains Losses Value

AVAILABLE FOR SALE Obligations of states and political subdivisions $ 60978669 $ 363934 $ (1625184) $ 59717419

Mortgage-backed securities in government-sponsored entities 128813530 469485 (3251257) 126031758 Corporate bonds 1000000 - - 1000000

Total debt securities 190792199 833419 (4876441) 186749177 Mutual fund 500000 - (13851) 486149 Equity securities shyfinancial institutions 6105514 2524973 (11724) 8618763

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

AVAILABLE FOR SALE US government agency securities $ 2000000 $ 10560 $ - $ 2010560 Obligations of states and political subdivisions 55929756 1148698 (43330) 57035124

Mortgage-backed securities in government-sponsored entities 146829631 1568158 (1345562) 147052227 Corporate bonds 1497290 2525 - 1499815

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

HELD TO MATURITY US government

agency securities $ 14220876 $ 343084 $ (116500) $ 14447460 Obligations of states

and political subdivisions 76659184 698211 (2710478) 74646917

Mortgage-backed securities in

government-sponsored entities 162163319 689248 (3088455) 159764112

Total $ 253043379 $1730543 $ (5915433) $ 248858489

2 INVESTMENT SECURITIES2 INVESTMENT SECURITIES (Contrsquod)(Contrsquod) 20152015

GrossGross GrossGross AmortizedAmortized UnrealizedUnrealized UnrealizedUnrealized FairFair

CostCost GainsGains LossesLosses VValuealue HELD TO MAHELD TO MATURITYTURITY USUS governmentgovernment agencyagency securitiessecurities $$ 1423996114239961 $$ 483177483177 $$ (55804(55804)) $$ 1466733414667334

ObligationsObligations ofof statesstates andand political subdivisionspolitical subdivisions 5984462659844626 17612891761289 (39816(39816)) 6156609961566099 Mortgage-backed securities inMortgage-backed securities in government-sponsoredgovernment-sponsored entitiesentities 147781256147781256 21254702125470 (844541(844541)) 149062185149062185

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

The following table shows the CompanyrsquoThe following table shows the Companyrsquos gross unrealized losses and fair values gross unrealized losses and fair value aggregated by investment categoraggregated by investment category and length of time that the individual securitiesy and length of time that the individual securities have been in a continuous unrealized loss position at December 31have been in a continuous unrealized loss position at December 31

20162016 Less than TLess than Twelve Monthswelve Months TTwelve Months or Greaterwelve Months or Greater TTotalotal

GrossGross GrossGross GrossGross FairFair UnrealizedUnrealized FairFair UnrealizedUnrealized FairFair UnrealizedUnrealized

VValuealue LossesLosses VValuealue LossesLosses VValuealue LossesLosses US governmentUS government agency securitiesagency securities $$ 18835001883500 $$ (116500(116500)) $$ -- $$ -- $$ 18835001883500 $$ (116500(116500))

Obligations ofObligations of states andstates and politicalpolitical subdivisionssubdivisions 7997271979972719 (4335662(4335662)) -- -- 7997271979972719 (4335662(4335662)) Mortgage-backedMortgage-backed securitiessecurities inin government-governmentshysponsoredsponsored entitiesentities 231668824231668824 (6339712)(6339712) -- -- 231668824231668824 (6339712(6339712)) TTotal debtotal debt securitiessecurities 313525043313525043 (10791874)(10791874) -- -- 313525043313525043 (10791874(10791874))

Mutual fundMutual fund 486149486149 (13851(13851)) -- -- 486149486149 (13851(13851)) Equity securitiesEquity securities - financial- financial institutionsinstitutions 133255133255 (1793(1793)) 202700202700 (9931(9931)) 335955335955 (11724(11724))

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

VValuealue LossesLosses VValuealue LossesLosses VValuealue LossesLosses US governmentUS government aaggeennccyy sseeccuurriittiieess $$ 10957541095754 $$ (1776)(1776) $$ 19420201942020 $$ (54028)(54028) $$ 30377743037774 $$ (55804(55804)) Obligations ofObligations of states andstates and politicalpolitical subdivisionssubdivisions 33741243374124 (20231)(20231) 45238974523897 (62915)(62915) 78980217898021 (83146(83146)) Mortgage-backedMortgage-backed securitiessecurities inin government-governmentshysponsoredsponsored entitiesentities 127865807127865807 (1305302)(1305302) 4278712942787129 (884801(884801)) 170652936170652936 (2190103(2190103)) TTotalotal debtdebt sseeccuurriittiieess 132335685132335685 (1327309)(1327309) 4925304649253046 (( 10017441001744)) 181588731181588731 (2329053(2329053))

MutualMutual fundfund 494459494459 (5541(5541)) -- -- 494459494459 (5541(5541)) Equity securities-Equity securitiesshyfinancialfinancial institutionsinstitutions 665623665623 (34982(34982)) 267050267050 (32160(32160)) 932673932673 (67142(67142)) TTotalotal $$133495767133495767 $ (1367832)$ (1367832) $$ 4952009649520096 $$ (1033904)(1033904) $$ 183015863183015863 $$ (2401736(2401736))

The Company reviews its position quarterly and has asserted that at December 31 2016The Company reviews its position quarterly and has asserted that at December 31 2016 the declines outlined in the above table represent temporarthe declines outlined in the above table represent temporary declines and the Companyy declines and the Company does not intend to sell and does not believe it will be required to sell these securitiesdoes not intend to sell and does not believe it will be required to sell these securities before recoverbefore recovery of its cost basis which may be at maturityy of its cost basis which may be at maturity There were 425 positions that There were 425 positions that were temporarily impaired at December 31 2016were temporarily impaired at December 31 2016

During 2016 the Company had no investment in pooled trust preferred securitiesDuring 2016 the Company had no investment in pooled trust preferred securities During 2015 the Company recorded a $2034609 gain (before tax) on its sale ofDuring 2015 the Company recorded a $2034609 gain (before tax) on its sale of investments in all of its pooled trust preferred securities through earningsinvestments in all of its pooled trust preferred securities through earnings The Company conducts periodic reviews to identify and evaluate each investmentThe Company conducts periodic reviews to identify and evaluate each investment that has an unrealized loss An unrealized loss exists when the current fair value ofthat has an unrealized loss An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis Unrealized losses thatan individual security is less than its amortized cost basis Unrealized losses that are determined to be temporarare determined to be temporary in nature are recorded net of tax iny in nature are recorded net of tax in AccumulatedAccumulated Other Comprehensive IncomeOther Comprehensive Income (ldquoAOCIrdquo) for available-for(ldquoAOCIrdquo) for available-for-sale securities while such-sale securities while such losses related to held-to-maturity securities are not recorded as these investmentslosses related to held-to-maturity securities are not recorded as these investments are carried at their amortized costare carried at their amortized cost Regardless of the classification of the securities as available for sale or held toRegardless of the classification of the securities as available for sale or held to maturitymaturity the Company has assessed each position for credit impairment the Company has assessed each position for credit impairment Factors considered in determining whether a loss is temporarFactors considered in determining whether a loss is temporary includey include

bullbull the length of time and the extent to which fair value has been below costthe length of time and the extent to which fair value has been below cost bullbull the severity of the impairmentthe severity of the impairment bullbull the cause of the impairment and the financial condition and nearthe cause of the impairment and the financial condition and near-term-term

prospects of the issuerprospects of the issuer bullbullEcircactivity in the market of the issuer which may indicate adverse credit conditionsactivity in the market of the issuer which may indicate adverse credit conditions bullbull if the Company intends to sell the investmentif the Company intends to sell the investment bullbull if itrsquoif itrsquos more likely than not the Company will be required to sell thes more likely than not the Company will be required to sell the

investment before recovering its amortized cost basis andinvestment before recovering its amortized cost basis and bullbull if the Company does not expect to recover the investmentrsquoif the Company does not expect to recover the investmentrsquos entire amortizeds entire amortized

cost basis (even if the Company does not intend to sell the security)cost basis (even if the Company does not intend to sell the security)

The CompanyrsquoThe Companyrsquos review for impairment generally entailss review for impairment generally entails bullbullEcirc identification and evaluation of investments that have indications ofidentification and evaluation of investments that have indications of

possible impairmentpossible impairment bullbull analysis of individual investments that have fair values less than amortizedanalysis of individual investments that have fair values less than amortized

cost including consideration of the length of time the investment has beencost including consideration of the length of time the investment has been in an unrealized loss position and the expected recoverin an unrealized loss position and the expected recovery periody period

bullbull discussion of evidential matterdiscussion of evidential matter including an evaluation of factors or triggers including an evaluation of factors or triggers that could cause individual investments to qualify as having otherthat could cause individual investments to qualify as having other-than--thanshytemporartemporary impairment and those that would not support othery impairment and those that would not support other-than-temporar-than-temporaryy impairment andimpairment and

bullbull documentation of the results of these analyses as required underdocumentation of the results of these analyses as required under business policiesbusiness policies

For debt securities that are not deemed to be credit impaired managementFor debt securities that are not deemed to be credit impaired management performs additional analysis to assess whether it intends to sell or wouldperforms additional analysis to assess whether it intends to sell or would more likely than not be required to sell the investment before the expectedmore likely than not be required to sell the investment before the expected recoverrecovery of the amortized cost basis Similarlyy of the amortized cost basis Similarly for equity securities for equity securities management considers the various factors described above including itsmanagement considers the various factors described above including its intent and ability to hold the equity security for a period of time sufficientintent and ability to hold the equity security for a period of time sufficient for recoverfor recovery to amortized cost Management has asserted that it has noy to amortized cost Management has asserted that it has no intent to sell and that it believes it is more likely than not that it will not beintent to sell and that it believes it is more likely than not that it will not be required to sell the investment before recoverrequired to sell the investment before recovery of its amortized cost basisy of its amortized cost basis

1 S T S u m m i1 S T S u m m i TT B a n c o r p amp S uB a n c o r p amp S u B SB S i d i a r i ei d i a r i e SS 18

2 INVESTMENT SECURITIES (Contrsquod)

The Company has concluded that the unrealized losses disclosed in the table above are not other than temporary but are the result of interest rate changes sector credit ratings changes or Company-specific ratings changes that are not expected to result in the noncollection of principal and interest during the period For debt securities a critical component of the evaluation for other-than-temshyporary impairment is the identification of credit impaired securities where manshyagement does not receive cash flows sufficient to recover the entire amortized cost basis of the security Where management deems the security to be othershythan-temporarily impaired based upon the above factors and the duration and extent to which the market value has been less than cost the inability to forecast a recovery in market value and other factors concerning the issuers in the pooled security the decline is recorded in earnings Changes in credit losses during 2015 associated with investment securities for which other-than-temporary impairment losses have been previously recognized in both earnings and other comprehensive income as of December 31 are as follows

2015 Estimated credit losses - beginning balance $ 3967000 Additions for credit losses not previously recognized -Reductions for securities sold during the period (3967000 ) Reductions for amount recognized in earnings

for securities that will be sold -Additional increases on previously

recorded credit losses -Reductions for increases in cash flows -

Estimated credit losses - ending balance $ -

The amortized cost and fair values of debt securities at December 31 2016 by contractual maturity are shown below The Companyrsquos mortgage-backed securities have contractual maturities ranging from 2 to 20 years Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties

AVAILABLE FOR SALE HELD-TO-MATURITY Amortized Fair Amortized Fair

Cost Value Cost Value Due in one year or less $ 155 $ 155 $ 1134217 $ 1135188

Due after one year through five years 6586 6778 10129233 10417672

Due after five years through ten years 20752351 20504109 28607845 28655617

Due after ten years 170033107 166238135 213172084 208650012 Total $ 190792199 $ 186749177 $ 253043379 $ 248858489

Proceeds from sales of investment securities during 2016 and 2015 were $42308821 and $13750865 respectively The company sold $5422627 and $3394743 of held-to-maturity securities during 2016 and 2015 respectively These securities were sold under ASC 320 safe harbor rules so as not to taint the remaining held-to-maturity securities These securities had amortized down to below 15 of the original purchase par balance These sales resulted in gains of $392682 and $196755 respectively The Company recorded gross gains of $1682377 and $2757581 in 2016 and 2015 respectively The Company recorded gross losses of $16845 and $43457 in 2016 and 2015 respectively Included in the above during 2016 and 2015 the Company recorded gross gains of $91018 and $55160 respectively and gross losses of $5459 and $0 respectively resulting from a business combination where the Company received the common stock of the acquirer in a non-monetary exchange Investment securities with a carrying value of $159758009 and $152403316 at December 31 2016 and 2015 respectively were pledged to secure public deposits borrowings and for other purposes as required by law

3 LOANS

Major classifications of loans are summarized as follows 2016 2015

Consumer $ 34219718 $ 34033181 Residential real estate 236761121 226982269 Construction 20730757 16992547 Commercial and industrial 88580505 83991802 Commercial real estate - nonowner occupied 31943721 28845684 Commercial real estate - all other 86104778 83873570

498340600 474719053

Less allowance for loan losses 6328227 6148590 Net loans $ 492012373 $ 468570463

Gross loan balances at December 31 2016 and 2015 are net of unearned income including net deferred loan fees of $1059690 and $1515057 respectively The Company had nonaccrual loans as follows

2016 2015 Interest Interest Income Income

Balance Foregone Balance Foregone

Consumer $ 141119 $ 1961 $ 162426 $ 1782 Residential real estate 218790 3729 311307 12599 Construction - - - -Commercial and industrial - - 134401 36697 Commercial real estate shy

nonowner occupied - shy - -Commercial real estate - all other 68497 128 - -

Total nonaccrual loans $ 428406 $ 5818 $ 608134 $ 51078

In the normal course of business loans are extended to directors executive officers and their associates A summary of loan activity for those direcshytors executive officers and their associates with loan balances in excess of $60000 for the year ended December 31 2016 is as follows

2015 Additions Repayments 2016

$ 17524713 $ 11889909 $ 11474630 $ 17939992

The Companyrsquos primary business activity is with customers located within its local trade area Commercial residential personal and agricultural loans are granted The Company also selectively purchases and funds commercial and residential loans originated outside its trade area provided such loans meet the Companyrsquos credit policy guidelines Although the Company has a diversified loan portfolio at December 31 2016 and 2015 the repayment of the loans outstanding to individuals and businesses is dependent upon the local economic conditions in its immediate trade area

4 COMMITMENTS

In the normal course of business there are various outstanding commitments and contingent liabilities which are not reflected in the accompanying consolidated financial statements These commitments comprised the following at December 31

2016 2015 Commercial loan commitments $ 42836480 $ 42695738 One-to-four family commitments 26649122 27524809 Other commitments 14890879 14334799 Standby letters of credit and financial guarantees 2920615 3410930

Total $ 87297096 $ 87966276

4 COMMITMENTS (Contrsquod)

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract In the normal course of business the Company makes various commitments which are not reflected in the accompanying financial statements These instruments involve to varying degrees elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Balance Sheet The Companyrsquos exposure to credit loss in the event of nonperformance by the other parties to the financial instruments is represented by the contractual amounts as disclosed The Company minimizes its exposure to credit loss under these commitments by subjecting them to credit approval and review procedures and collateral requirements as deemed necessary Commitments generally have fixed expiration dates within one year of their origination Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party Performance letters of credit represent conditional commitments issued by the Bank to guarantee the performance of a customer to a third party These instruments are issued primarily to support bid- or performance-related contracts The coverage period for these instruments is typically a one-year period with an annual renewal option subject to prior approval by management Fees earned from the issuance of these letters are recognized over the coverage period For secured letters of credit the collateral is typically Bank deposit instruments or customer business assets

5 ALLOWANCE FOR LOAN LOSSES

Management establishes the allowance for loan losses based upon its evaluation of the pertinent factors underlying the types and quality of loans in the portfolio Commercial loans and commercial real estate loans are reviewed on a regular basis with a focus on larger loans along with loans which have experienced past due payments or financial deficiencies Commercial loans and commercial real estate loans which are 90 days or more past due are selected for impairment testing These loans are analyzed to determine if they are ldquoimpairedrdquo which means that it is probable that all amounts will not be collected according to the

contractual terms of the loan agreement All loans that are delinquent 90 days and are placed on nonaccrual status are classified on an individual basis Resishydential loans 90 days past due which are still accruing interest are classified as Substandard as per the Companyrsquos asset classification policy The remaining loans are evaluated and classified as groups of loans with similar risk charshyacteristics The Company allocates allowances based on the factors described below which conform to the Companyrsquos asset classification policy In reviewing risk within the Bankrsquos loan portfolio management has determined there to be several different risk categories or portfolio segments within the loan portfolio The allowance for loan losses consists of the following portfolio segments (i) the consumer loan portfolio (ii) the residential real estate loan portfolio (iii) the construction loan portfolio (iv) the commercial and industrial loan portfolio (v) the commercial real estate ndash nonowner occupied loan portfolio (vi) the commercial real estate ndash all other loan portfolio and (vii) the unalloshycated portion Factors considered in this process included general loan terms collateral and availability of historical data to support the analysis Historical loss percentages for each risk category are calculated and used as the basis for calculating allowance allocations Certain qualitative factors are then added to the historical allocation percentage to get the adjusted factor to be applied to nonclassified loans The following qualitative factors are analyzed

bull Levels of and trends in delinquencies and nonaccruals bull Trends in volume and terms bull Changes in lending policies and procedures bull Volatility of losses within each risk category bull Loans and lending staff acquired through acquisition bull Economic trends bull Concentrations of credit bull Experience depth and ability of management

The Company also maintains an unallocated allowance to account for any factors or conditions that may cause a potential loss but are not specifically addressed in the process described above The Company analyzes its loan portfolio each month to determine the appropriateness of its allowance for loan losses

Changes in the allowance for loan losses for the years ended December 31 are as follows

Commercial Commercial Real Estate - Commerical

Residential and Nonowner Real Estate shyConsumer Real Estate Construction Industrial Occupied All Other Unallocated Total

Balance December 31 2014 $ 441031 $ 2041890 $ 240442 $ 966581 $ 528098 $ 1129870 $ 420165 $ 5768077 Add

Provision for loan losses 307473 190727 (15508 ) 269120 (137517 ) 755649 332056 1702000

Recoveries 63239 11057 - - - - - 74296

Less loans charged-off 317471 132255 - 192260 - 753797 - 1395783

Balance December 31 2015 494272 2111419 224934 1043441 390581 1131722 752221 6148590

Add Provision for loan losses 369789 (169979) 116649 237161 294730 191695 (288895) 751150

Recoveries 71515 3459 - 53 10000 - - 85027 Less loans charged-off 393234 111261 - 152045 - - - 656540 Balance December 31 2016 $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

During 2016 the reserves for consumer loans increased slightly due to an in- percentage of the loan balance primarily due to an increase in the historical crease in the historical loss percentage for loans in that portfolio segment The loss percentage on this portfolio segment The increase in the reserves for reserves for residential real estate loans declined during the year as a percent- both commercial real estate segments was driven by the increases in specific age of the loan balance due to declines in the qualitative factors for loan growth reserves for impaired loans which increased by $558000 between these as the growth in this portfolio segment was less than 5 percent for the year segments during the year as well as by increased loans rated special men-The reserves for commercial and industrial loans increased during 2016 as a tion at year-end compared to the prior year

5 ALLOWANCE FOR LOAN LOSSES (Contrsquod)

In addition to these specific changes within the reserves management de- reduced loan growth The increase in the commercial and industrial portfolio creased the factor related to general economic conditions for all loan portfolio segment of the allowance was due to an increase in loans charged off The segments due to the sustained overall economic improvement over the past reserve for commercial real estate-all other as a percent of the portfolio several years In 2015 the reductions in the construction and commercial real segment declined during the year primarily due to a significant decline in the estate-nonowner occupied portfolio segments of the allowance were caused by delinquency of that loan portfolio segment

Loans receivable and the related allowance for loan losses at December 31 2016 and 2015 as well as the method the Company uses to evaluate these loans within their allowance for loan losses are summarized by portfolio segment as follows

December 31 2016 Allowance for loan losses Ending balance collectively

evaluated for impairment $ 542342 $ 1833638 $ 241583 $ 1128610 $ 385311 $ 1175417 $ 463326 $ 5770227 Ending balance individually evaluated for impairment - - 100000 - 310000 148000 - 558000

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Loans Ending balance collectively evaluated for impairment $ 34219718 $236757921 $ 19322302 $ 88580505 $ 30178670 $ 84516619 $ - $ 493575735

Ending balance individually evaluated for impairment - 3200 1408455 - 1765051 1588159 - 4764865 Ending balance $ 34219718 $236761121 $ 20730757 $ 88580505 $ 31943721 $ 86104778 $ - $ 498340600

Consumer Residential Real Estate Construction

Commercial and

Industrial

Commercial Real Estate -Nonowner Occupied

Commerical Real Estate shy

All Other Unallocated Total

December 31 2015 Allowance for loan losses

Ending balance collectively

evaluated for impairment

Ending balance individually evaluated for impairment

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance collectively evaluated for impairment

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Impaired loans are commercial and commercial real estate loans for which it is probable the Company will not be able to collect all amounts due according to the contractual terms of the loan agreement Also any loan modified in a trouble debt restructuring is also considered to be impaired The Company individually evaluates such loans for impairment and does not aggregate loans by major risk classifications The definition of ldquoimpaired loansrdquo is not the same as the definition of ldquononaccrual loansrdquo although the two categories overlap The Company may choose to place a loan on nonaccrual status due to payment delinquency or unshycertain collectability while not classifying the loan as impaired provided the loan

is not a commercial or commercial real estate classification Factors considered by management in determining impairment include payment status and colshylateral value The amount of impairment for these types of loans is determined by the difference between the present value of the expected cash flows related to the loan using the original interest rate and its recorded value or as a practishycal expedient in the case of collateralized loans the difference between the fair value of the collateral and the recorded amount of the loans When foreclosure is probable impairment is measured based on the fair value of the collateral

Impaired Loans with Specific Allowance

Impaired Loans with No Specific Allowance Total Impaired Loans

Recorded Investment

Related Allowance

Recorded Investment

Unpaid Principal Balance

Average Recorded

Investment

Interest Income

Recognized

December 31 2016 Consumer Residential real estate Construction Commercial and industrial Commercial real estate - nonowner occupied

Commercial real estate - all other

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Total impaired loans $ 3727251 $ 558000 $ 1037614 $ 4764865 $ 5403849 $ 3022332 $ 95005

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total impaired loans $ shy $ shy $ 1693947 $ 1693947 $ 2812931 $ 1868151 $ 5909

5 ALLOWANCE FOR LOAN LOSSES (Contrsquod) classified as impaired Management determines the significance of payment delays on a case-by-case basis taking into consideration all circumstancesMortgage loans secured by one-to-four family properties and all consumer concerning the loan the creditworthiness and payment history of the loans are large groups of smaller-balance homogenous loans and are borrower the length of the payment delay and the amount of shortfall in measured for impairment collectively Loans that experience insignificant relation to the principal and interest owedpayment delays which are defined as 89 days or less generally are not

90 Days + 30-89 Days 90 Days + Total Past Due

December 31 2016 Current Past Due Past Due Past Due Total Loans Still Accruing

Consumer $ 33361284 $ 545443 $ 312991 $ 858434 $ 34219718 $ 171873 Residential real estate 233845606 1820232 1095283 2915515 236761121 876493 Construction 20709516 - 21241 21241 20730757 21241 Commercial and industrial 88471463 109042 - 109042 88580505 shyCommercial real estate - nonowner occupied 31853283 90438 - 90438 31943721 shy

Commercial real estate - all other 85257984 - 846794 846794 86104778 778297 Total $493499136 $ 2565155 $ 2276309 $ 4841464 $498340600 $ 1847904

Consumer $ 32915638 $ 679043 $ 438500 $ 1117543 $ 34033181 $ 276074 Residential real estate 224363802 1625955 992512 2618467 226982269 681206 Construction 16968590 23957 - 23957 16992547 shyCommercial and industrial 83312416 527792 151594 679386 83991802 17193 Commercial real estate - nonowner occupied 28835568 10116 - 10116 28845684 shy

Commercial real estate - all other 83548275 310111 15184 325295 83873570 15184

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

Management uses a six-point internal risk rating system to monitor the facts conditions and values highly questionable or improbable Any credit quality of the overall loan portfolioThe first two categories are portion of a loan deemed uncollectable is placed in the Loss category considered not criticized and are aggregated as ldquoPassrdquo rated The criticized The nonperforming classification is based solely on delinquency levelsrating categories utilized by management generally follow bank regulatory It is the policy of the Company that consumer loans are generally fullydefinitions The Special Mention category includes assets that are currently or partially charged down to the fair value of collateral securing the assetprotected but are potentially weak resulting in an undue and unwarranted when the loan is 120 days past due for open-end loans 90 days pastcredit risk but not to the point of justifying a Substandard classification due for unsecured open-end loans and 90 days past due for closed-endAll loans greater than 90 days past due are considered Substandard loans unless the loan is well secured and in the process of collection TheBalances in the Substandard category are characterized by the distinct outstanding balance of any residential mortgage loan that exceeds 90 dayspossibility that the Company will sustain some loss if the deficiencies are past due is transferred to nonaccrual status and subsequently evaluated tonot corrected Balances in the Doubtful category have all the deficiencies determine the fair value of the collateral less selling costs A charge downinherent in the Substandard category with the added characteristics that is recorded for any deficiency determined from the collateral evaluationthe deficiencies make collection in full on the basis of currently existing

Special Pass Mention Substandard Doubtful Total

December 31 2016 Construction $ 19176457 $ - $ 1454300 $ 100000 $ 20730757 Commercial and industrial 87611405 916100 53000 - 88580505 Commercial real estate - nonowner occupied 28557821 2021600 1364300 - 31943721

Commercial real estate - all other 82812578 1522300 1621900 148000 86104778 Total $ 218158261 $ 4460000 $ 4493500 $ 248000 $ 227359761

Performing Nonperforming Total December 31 2016 Consumer $ 33906727 $ 312991 $ 34219718 Residential real estate 235665838 1095283 236761121

$ 269572565 $ 1408274 $ 270980839

December 31 2015 Construction $ 15788647 $ 130000 $ 1073900 $ - $ 16992547 Commercial and industrial 83021002 737000 233800 - 83991802 Commercial real estate - nonowner occupied 26959984 454500 1431200 - 28845684

Commercial real estate - all other 81677570 535300 1660700 - 83873570

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

Foreclosed Assets Held For Sale completed during the year ended December 31 2015 The pre-modification Foreclosed assets acquired in settlement of loans are carried at fair value less es- balance of the loan was $1724283 and the post modification balance was timated costs to sell and are included in other assets on the Consolidated Balance $1455190 The modification included a change in the interest rate maturity date Sheet As of December 31 2016 and December 31 2015 a total of $144748 extension as well as a reduction in the amount of principal outstanding on the and $266906 respectively of foreclosed assets were included with other assets loan of $638984 a portion of which was participated to other institutions While As of December 31 2016 and December 31 2015 included within foreclosed these TDRs are considered impaired loans and have increased the reserve as assets is $110908 and $228066 respectively of consumer residential mortgages $248000 has been specifically allocated within the loan loss reserve no TDRs that were foreclosed on or received via a deed in lieu transaction prior to the have subsequently defaulted period end As of December 31 2016 and December 31 2015 the Company had initiated formal foreclosure procedures on $868674 and $403275 of consumer 6 PREMISES AND EQUIPMENT residential mortgages respectively Major classifications of premises and equipment are summarized as follows

Troubled Debt Restructuring 2016 2015 Consistent with accounting and regulatory guidance the Company recognizes Land $ 2870790 $ 2368055 a troubled debt restructuring (ldquoTDRrdquo) when the Company for economic or legal Buildings 9617223 8246920reasons related to a borrowerrsquos financial difficulties grants a concession to the Furniture fixtures and equipment 8142686 7440943borrower that would not normally be considered Regardless of the form of Leasehold improvements 1715521 1704020concession granted the Companyrsquos objective in offering a TDR is to increase the

Construction in process - 651596probability of repayment of the borrowerrsquos loan To be considered a TDR the borshy22346220 20411534rower must be experiencing financial difficulties and the Company for economic

Less accumulated depreciation and amortization 12451651 11607228or legal reasons related to the borrowerrsquos financial difficulties grants a concession to the borrower that would not otherwise be considered Total $ 9894569 $ 8804306 The Company had two loan modifications that were considered TDRs during

Depreciation and amortization charged to operations was $844423 in 2016the year ended December 31 2016 The pre-modification and post-modification and $798400 in 2015balance of the loans was $1408545 The modifications included maturity date

extensions The Company had one loan modification that was considered a TDR 1 S T S u m m i T B a n c o r p amp S u B S i d i a r i e S 24

7 GOODWILL

For each of the years ended December 31 2016 and 2015 goodwill has a net carrying amount of $388768 The gross carrying amount of goodwill is tested for impairment in the fourth quarter after the annual forecasting process Based on fair value of the reporting unit estimated using the expected present value of future cash flowsno goodwill impairment loss was recognized in 2016 or 2015

8 TIME DEPOSITS

The scheduled maturities of time deposits are as follows

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

The aggregate of all time deposit accounts of $250000 or more amounted to $48263463 and $45045713 at December 31 2016 and 2015 respectively

9 OTHER BORROWED FUNDS

Maturities of other borrowed funds at December 31 2015 are as follows

Year Ending Weighted-December 31 Amount Average Rate

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

All borrowings from the FHLB are secured by a blanket lien on qualified collateral defined principally as investment securities and mortgage loans which are owned by the Bank free and clear of any liens or encumbrances The advances are collateralized by FHLB stock obligations of US governshyment corporations and agencies mortgage-backed securities and first

The following table sets forth information concerning other borrowed funds

Weighted-Maturity Range Average

Description From To Interest Rate

Fixed rate 012017 053119 123 Subordinated capital debt 090119 122923 487 Long-term notes payable 042433 040634 388

mortgage loans During 2016 the Bank had a borrowing limit of approxishymately $248934450 with a variable rate of interest based on the FHLBrsquos cost of funds

Subordinated capital debt consists of variable rate and fixed rate obligashytions with maturity dates ranging from September 1 2019 through Deshycember 29 2023 This is comprised of $2000000 of notes issued by the Bank and $7207256 of notes issued by Cambria The Company fully and unconditionally guarantees these notes and they are subordinate in right of payments to the depositors and all claims of creditors Interest on fixed rate notes is computed at 50 percent Interest on variable notes is computed at 15 percent above the Federal Reserve discount rate or 1 percent below the prime rate Subordinated capital notes of $3288601 $3918655 and $2000000 mature in 2019 2020 and 2023 respectively The Company formed a special purpose entity (ldquoEntity 1rdquo) to issue $3000000 of floating rate obligated mandatorily redeemable securities and $93000 in common securities as part of a pooled offering with a maturity date of April 24 2033 The rate is determined quarterly and floats based on the three-month LIBOR plus 325 percent At December 31 2016 the rate was 414 percent The Entity 1 may redeem them in whole or in part at face value on a quarterly basis with proper notice The Company borrowed the proceeds of the issuance from the Entity 1 in April 2003 in the form of a $3093000 note payable which is included in the liabilities section of the Companyrsquos Consolidated Balance Sheet The Company formed an additional special purpose entity (ldquoEntity 2rdquo) to issue $3000000 of floating rate obligated mandatorily redeemable securishyties and $93000 in common securities as part of a pooled offering with a maturity date of April 6 2034 The rate is determined quarterly and floats based on the three-month LIBOR plus 275 percent At December 31 2016 the rate was 363 percent The Entity 2 may redeem them in whole or in part at face value on a quarterly basis with proper notice The Company borrowed the proceeds of the issuance from the Entity 2 in March 2004 in the form of a $3093000 note payable which is included in the liabilities section of the Companyrsquos Consolidated Balance Sheet Under current accounting rules the Companyrsquos minority interest in both Entity 1 and Entity 2 was recorded at the initial investment amount and is included in the other assets section of the Consolidated Balance Sheet Neither Entity 1 nor Entity 2 is consolidated as part of the Companyrsquos consolidated financial statements

Stated Interest Rate Range

From To At December 31

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

10 SHORT-TERM BORROWINGS

Short-term borrowings consist of overnight borrowings from the FHLB Average amounts outstanding during the year represent daily average balances and average interest rates represent interest expense divided by the related average balance The outstanding balances and related information for short-term borrowings at or for the years ended December 31 are summarized as follows

2016 2015

Balance at year-end $ - $ 10136000 Average balance outstanding

during the year 4995739 3915276 Maximum amount outstanding

at any month-end 16402800 13573000 Weighted-average interest rate at year-end - 051 Average interest rate during the year 059 041

11 DIRECTOR OFFICER AND EMPLOYEE BENEFITS

Savings Plan The Company maintains a trusteed Section 401(k) plan with contributions matching those by eligible employees to a maximum of 25 percent of employee contributions annually to a maximum of 5 percent of base salary The Company may also make an elective contribution annually All employees who work over 1000 hours per year are eligible to participate in the plan The Companyrsquos contribution to this plan was $191554 and $183773 in 2016 and 2015 respectively The plan assets include 80953 shares of the Companyrsquos common stock that is valued at $8419112 One hundred percent of that amount was purchased directly from the Company

Deferred Compensation Plan The Company has a deferred directorrsquos compensation plan whereby participating direcshytors elected to forego directorsrsquo fees To fund benefits under the deferred compensation plan the Company established a rabbi trust The Company guarantees a return equal to the average New York prime rate of interest to plan participants with a floor of 6 percent The Company carried a liability of $2437247 in 2016 and $2413456 in 2015

Performance Unit Plan On January 17 2012 the Board of Directors approved the 2012 Performance Unit Plan which is intended to serve as a successor program to the Companyrsquos 2007 Pershyformance Unit Plan The plan may award annual grants to executive management and directors equal in value to the appreciation on a share of stock between the date the performance unit becomes vested and the date of award Since January 17 2012 at the beginning of each succeeding year a participant may elect to receive full payment in cash of allocated performance units as of the preceding year end During 2016 $180600 in expense was recognized under the plan while $125000 in expense was recognized during 2015 The Company carried a liability of $459000 in 2016 and $305000 in 2015

12 INCOME TAXES

Federal income tax expense consists of the following

2016 2015 Currently payable $ 3021579 $ 1798789 Deferred (47068) 1209494

Total $ 2974511 $ 3008283

The components of the net deferred tax assets at December 31 are as follows

2016 2015

Deferred tax assets Allowance for loan losses $ 2156472 $ 2095531 Deferred directorsrsquo fees 589597 586413 Deferred performance plan 156060 103700 Other-than-temporary impairment losses 29170 29171 Net unrealized loss on securities 524832 -Other 63340 110078

Total 3519471 2924893 Deferred tax liabilities

Premises and equipment 218359 192845 Deferred loan origination costs net 373801 337980 Investment discount accretion 57206 52066 Net unrealized gain on securities - 848052 Unrealized gain - merger 96325 140122

Total 745691 1571065 Net deferred tax assets $ 2773780 $ 1353828

No valuation allowance was established at December 31 2016 and 2015 in view of the Companyrsquos ability to carryback taxes paid in previous years and certain tax strategies coupled with the anticipated future taxable income as evidenced by the Companyrsquos earnings potential

The reconciliation of the statutory rate and the effective income tax rate is as follows

Amount

2016 of

Pretax Income Amount

2015 of

Pretax Income

Computed at statutory rate $ 4457645 340 $ 4392270 340 Effect of tax-free interest income (1520604) (116) (1409907 ) (109) BOLI earnings 76683 06 69151 05 Nondeductible interest to

carry tax-exempt assets (132745) (10 ) (120426 ) (09) Other 93532 07 77195 04 Income tax expense and

effective rate $ 2974511 227 $ 3008283 231

The Company prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all relevant information A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met There is currently no liability for uncertain tax positions and no known unrecogshynized tax benefits The Bank recognizes when applicable interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Consolidated Statement of Income The Bankrsquos federal and PA shares tax returns for taxable years through 2012 have been closed for purposes of examination by the Internal Revenue Service and the Pennsylvania Department of Revenue

13 LEASE COMMITMENTS

At December 31 2016 the Bank was committed under noncancelable lease agreements for minimum rental payments to lessors as follows

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

Rental expense on leased premises and equipment totaled $566989 in 2016 and $556407 in 2015

14 REGULATORY RESTRICTIONS

The Companyrsquos wholly owned subsidiary the Bank is subject to the Pennsylvania Banking Code which restricts the availability of surplus for dividend purposes At December 31 2016 surplus funds of $9363126 were not available for dividends Included in ldquoCash and due from banksrdquo are required federal reserves of $1129000 and $692000 at December 31 2016 and 2015 respectively for facilitating the implementation of monetary policy by the Federal Reserve System The required reserves are computed by applying prescribed ratios to the classes of average deposit balances These are held in the form of vault cash and a depository amount held with the Federal Reserve Bank Federal law prohibits the Company from borrowing from the Bank unless the loans are secured by specific collateral Further such secured loans are limited in amount to 10 percent of the Bankrsquos capital surplus

15 REGULATORY CAPITAL REQUIREMENTS

Federal regulations require the Company and the Bank to maintain minishymum amounts of capital Specifically each is required to maintain certain

minimum dollar amounts and ratios of Total and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average total assets In addition to the capital requirements the Federal Deposit Insurance Corporation (ldquoFDICrdquo) Improvement Act established five capital categories ranging from ldquowell capitalizedrdquo to ldquocritically undercapitalizedrdquo Should any institution fail to meet the requirements to be considered ldquoadequately capitalizedrdquo it would become subject to a series of increasingly restrictive regulatory actions The Company is subject to various capital requirements administered by the federal banking agencies Under capital adequacy guidelines and the regulatory framework for prompt corrective action the company must meet specific capital guidelines that involve quantitative measures of the companyrsquos assets liabilities and certain off-balance sheet items as calculated under regulatory accounting practices The companyrsquos capital amounts and classification are also subject to qualitative judgements by the regulators about components risk weightings and other factors Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that if undertaken could have a direct material effect on the Companyrsquos consolidated financial statements Quantitative measures established by regulation to ensure capital adequacy require the company to maintain minimum amounts and ratios (set forth in the table below) of Total and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average assets For December 31 2016 and December 31 2015 the final Basel III rules require the company to maintain minimum amounts of ratios of Common equity tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) Additionally under Basel III rules the decision was made to opt-out of including accumulated other comprehensive income in regulatory capital As of December 31 2016 and 2015 the FDIC categorized the Company and the Bank as well capitalized under the regulatory framework for prompt corrective action To be classishyfied as a well capitalized financial institution the Company must maintain minimum Total capital Common equity tier 1 capital Tier 1 capital and Tier 1 leverage capital ratios as set forth in the table

The Companyrsquos actual capital ratios are presented in the following table which shows the Company met all regulatory capital requirements The capital position of the Bank does not differ significantly from the Companyrsquos

Actual For Capital Adequacy Purposes To Be Well Capitalized

Amount Ratio Amount Ratio Amount Ratio

Total capital (to risk-weighted assets) $104413332 1870 $ 44674720 800 $ 55843400 1000

Common equity tier 1 capital (to riskshy $ 88960376 1593 $ 25129530 450 $ 36298210 650 weighted assets)

Tier 1 capital (to risk-weighted assets) $ 94960376 1700 $ 33506040 600 $ 44674720 800

Tier 1 capital (to average assets) $ 94960376 977 $ 38868240 400 $ 48585300 500

Total capital (to risk-weighted assets) $ 94099665 1763 $ 42709200 800 $ 53386500 1000

Common equity tier 1 capital (to riskshy $ 81432125 1525 $ 24023925 450 $ 34701225 650

weighted assets)

16 FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date The following three levels show the fair value hierarchy that prioritizes the use of inputs used in valuation methodologies Level I Inputs to the valuation methodology are unadjusted quoted prices for

identical assets or liabilities in active markets A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available A contractually binding sales price also provides reliable evidence of fair value

Level II Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active or inputs to the valuation methodology that utilize model-based techniques for which all significant assumptions are observable in the market

Level III Inputs to the valuation methodology are unobservable and significant to the fair value measurement inputs to the valuation methodology that utilize model-based techniques for which significant assumptions are not observable in the market or inputs to the valuation methodology that require significant management judgment or estimation some of which may be internally developed

Management maximizes the use of observable inputs and minimizes the use of unobservable inputs when determining fair value measurements Management reviews and updates the fair value hierarchy classifications of the Companyrsquos assets and liabilities on a quarterly basis The following tables present the assets reported on the Consolidated Balance Sheet at their fair value as of December 31 2016 and 2015 by level within the fair value hierarchy Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement

December 31 2016

Level I Level II Level III Total

Assets Investment securities available-for-sale Obligations of states and

political subdivisions $ - $ 59717419 $ - $ 59717419 Mortgage-backed securities

in government-sponsored entities - 126031758 - 126031758

Corporate bonds - 1000000 - 1000000 Mutual fund 486149 - - 486149 Equity securities shy

financial institutions 8618763 - - 8618763 Total $ 9104912 $ 186749177 $ - $195854089

December 31 2015

Assets Investment securities available for sale US government agency

securities $ Obligations of states and

political subdivisions Mortgage-backed securities

in government-sponsored entities

Corporate bondsMutual fund Equity securities shy

financial institutions

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

Financial instruments are considered Level III when their values are detershymined using pricing models and discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable In addition to these unobservable inputs the valuation models for Level III financial instruments typically also rely on a number of inputs that are readily observable either directly or indirectly Level III financial instruments also include those for which the determination of fair value requires significant management judgment or estimation The Comshypany had no recurring Level III measurements during 2016 The following table presents the changes in the Level III fair value category for the years ended December 31 2015

Investment Securities Available-for-Sale

Balance December 31 2014 $ 3828915

Total gains or losses (realizedunrealized) Included in earnings 2034609 Included in other comprehensive income (1603412)

Purchases -Issuances -Settlements (4260112) Transfers in andor out of Level III -

Balance December 31 2015 $ -

SampP provides monthly market valuations for the Bankrsquos trust preferred holdings Because the Dodd-Frank Act effectively eliminated the Tier 1 capital treatment of any newly issued trust preferred securities there has been no new issuance in this sector and secondary activity has remained generally inactive For this reason long periods of time can elapse with no trades in a given trust preferred issue To estimate value SampP uses the Intex Model and makes certain assumptions about future defaults recoveries and prepayments The resulting cash flows are then discounted at a market-derived rate The assumptions are based on both the specific historical performance of a given security to date as well as general expectations about industry performance moving forward

16 FAIR VALUE MEASUREMENTS (Contrsquod)

The following tables present the assets measured on a nonrecurring basis on the Consolidated Balance Sheet at their fair value as of December 31 2016 and 2015 by level within the fair value hierarchy

December 31 2016 Level I Level II Level III Total

Assets Other real estate owned $ - $ - $ 54848 $ 54848 Impaired loans - - 1757200 1757200

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Other real estate owned (ldquoOREOrdquo) is carried at the lower of cost or fair value which is measured at the foreclosure date If the fair value of the collateral exceeds the carrying amount of the loan no charge-off or adjustment is necesshysary the loan is not considered to be carried at fair value and is therefore not included in the table above If the fair value of the collateral is less than the carrying amount of the loan management will charge the loan down to its estimated realizable value The fair value of OREO is based on the appraised

value of the property which is generally unadjusted by management and is based on comparable sales for similar properties in the same geographic region as the subject property and is included in the above table as a Level II measurement In some cases management may adjust the appraised value due to the age of the appraisal changes in market conditions or observable deterioration of the property since the appraisal was completed In these cases the loans are categorized in the above table as Level III measurement since these adjustments are considered to be unobservable inputs Income and expenses from operations and further declines in the fair value of the collateral subsequent to foreclosure are included in net expenses from OREO The Company has measured impairment on impaired loans generally based on the fair value of the loanrsquos collateral Fair value is generally determined based upon independent third-party appraisals of the properties In some cases management may adjust the appraised value due to the age of the appraisal changes in market conditions or observable deterioration of the property since the appraisal was completed Additionally management makes estimates about expected costs to sell the property which are also included in the net realizable value If the fair value of the collateral dependent loan is less than the carrying amount of the loan a specific reserve for the loan is made in the allowance for loan losses or a charge-off is taken to reduce the loan to the fair value of the collateral (less estimated selling costs) and the loan is included in the table above as a Level III measurement If the fair value of the collateral exceeds the carrying amount of the loan then the loan is not included in the table above as it is not currently being carried at its fair value At December 31 2016 and 2015 the fair values shown above exclude estimated selling costs of $43000 and $18500

The following tables present additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Company uses Level III inputs to determine fair value

December 31 2016 Quantitative Information About Level III Fair Value Measurements

Valuation

Assets Other real estate owned

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Appraisal of collateral (1)

Fair value of collateral (1)

Unobservable Input

Appraisal adjustments (2)

Liquidation expenses (2)

21 to 75 0 to 250 to 55 0 to 1

Valuation Estimate Techniques Unobservable Input Range

Assets Other real estate owned $ 173068 Appraisal of Appraisal adjustments (2) 0 to 29

collateral (1) Liquidation expenses (2) 0 to 25 Impaired loans $ 1585032 Fair value of Appraisal adjustments (2) 0 to 25

collateral (1) Liquidation expenses (2) 0 to 1

(1) Fair value is generally determined through independent appraisals of the underlying collateral which generally include various Level III inputs which are not identifiable

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal

17 FAIR VALUE DISCLOSURE

The fair value of the Companyrsquos financial instruments as of December 31 is as follows

Carrying Value

Fair Value Level I Level II Level III

Financial assets Cash and due from banks $ 9486921 Interest-bearing deposits

in banks 11333865 Investment securities

available for sale 195854089 Investment securities

held to maturity 253043379 Net loans 492012373 Accrued interest receivable 3053715 FHLB stock 1488800 Bank-owned life insurance 11945882

Financial liabilities Deposits $ 867066412 Other borrowed funds 35393256 Accrued interest payable 1229945

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

Carrying Fair Value Value

Financial assets Cash and due from banks $ 8784849 $ 8784849 Investment securities

available for sale 215387313 215387313 Investment securities

held to maturity 221865843 225295618 Net loans 468570463 470004854 Accrued interest receivable 2949573 2949573 FHLB stock 2052200 2052200 Bank-owned life insurance 11284744 11284744

Financial liabilities Deposits $ 816021588 $ 814787866 Short-term borrowings 10136000 10136000 Other borrowed funds 33119517 33119517 Accrued interest payable 1202755 1202755

Financial instruments are defined as cash evidence of ownership interest in an entity or a contract which creates an obligation or right to receive or deliver cash or another financial instrument fromto a second entity on potentially favorable or unfavorable terms Fair value is defined as the amount at which a financial instrument could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale If a quoted market price is available for a financial instrument the estimated fair value would be calculated based upon the market price per trading unit of the instrument If no readily available market exists the fair value estimates for financial instruments should be based upon managementrsquos judgment regarding current economic condishytions interest rate risk expected cash flows future estimated losses and other factors as determined through various option pricing formulas As many of these assumptions result from judgments made by management based upon estimates which are inherently uncertain the resulting estimated fair values may not be indicative of the amount realizshyable in the sale of a particular financial instrument In addition changes in assumptions on which the estimated fair values are based may have a significant impact on the resultshying estimated fair values As certain assets such as deferred tax assets and premises and equipment are not considered financial instruments the estimated fair value of financial instruments would not represent the full value of the Company

Level I Level II Level III

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

The Company employed simulation modeling in determining the estimated fair value of financial instruments for which quoted market prices were not available based upon the following assumptions

Cash and Due From Banks Accrued Interest Receivable FHLB Stock Short-term Borrowings and Accrued Interest Payable The fair value is equal to the current carrying value due to the relatively short time between the origination of the instrument and its expected realization

Investment Securities The fair value of investment securities is equal to the available quoted market price If no quoted market price is available fair value is estimated using the quoted market price for similar securities Fair value for most trust-preferred securities was determined utilizing discounted cash flow models due to the abshysence of a current market to provide reliable market quotes for the instruments

17 FAIR VALUE DISCLOSURE (Contrsquod) Commitments to Extend Credit These financial instruments are generally not subject to sale and estimated

Net Loans fair values are not readily available The fair value of loans was estimated by discounting the expected future The carrying value represented by the net deferred fee arising from the cash flows using the current interest rates at which similar loans would be unrecognized commitment or letter of credit and the fair value determined by made to borrowers with similar credit ratings and for the same remaining discounting the remaining contractual fee over the term of the commitmentmaturities with the exception of impaired loans as discussed in Note 16 using fees currently charged to enter into similar agreements with similarLoans were first segregated by type such as commercial real estate and credit risk are not considered material for disclosure The contractual home equity and were then further segmented into fixed and variable rate amounts of unfunded commitments and letters of credit are presented inand loan quality categories Expected future cash flows were projected Note 4 based on contractual cash flows adjusted for estimated prepayments

18 SUBSEQUENT EVENTS Bank-Owned Life Insurance

Management has reviewed events occurring through February 28 2017 the date The fair value is equal to the cash surrender value of life insurance policies the financial statements were issued and no subsequent events occurred requiring accrual or disclosureDeposits and Other Borrowed Funds

The fair values of certificates of deposit and other borrowed funds are based on the discounted value of contractual cash flows The discount rates are estimated using rates currently offered for similar instruments with similar remaining maturities Demand savings and money market deposit accounts are valued at the amount payable on demand as of year-end

19 ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table presents the significant amounts reclassified out of accumulated other comprehensive income and the changes in accumushylated other comprehensive income (loss) by component for the years ended December 31 2016 and 2015

2016 2015

Net Unrealized Gains (Losses) on

Investment Securities

Affected Line on the Consolidated

Statement of Income

Accumulated other comprehensive income beginning of year $ 1646219 $ 3843744

Unrealized gain (loss) on available-for- sale securities

Tax effect Net unrealized gain (loss) on

available-for-sale securities

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

Reclassification adjustment for gain realized in income

Tax effect (1665532)

566281 (2714124 )

922802 Investment securities gains netIncome tax expense

Reclassification adjustment for gain realized in income after tax (1099251 ) (1791322 )

Accumulated other comprehensive income end of year $(1018792 ) $ 1646219

20 PARENT COMPANY CONDENSED STATEMENT OF CASH FLOWS

Year Ended December 31 Following are condensed financial statements for the parent company 2016 2015

CONDENSED BALANCE SHEET OPERATING ACTIVITIES December 31 Net income $ 10136209 $ 9910159

2016 2015 Adjustments to reconcile net income to

ASSETS Cash in bank subsidiary Investment securities available for sale Investment in bank subsidiary Investment in non-bank subsidiaries

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

net cash provided by operating activities Equity in undistributed net income

of subsidiaries Investment securities gains net Other net

(7043475) (69951) 215034

(6903349) (86620) 130483

Premises and equipment net 469833 475139 Net cash provided by Other assets 995382 1050888 operating activities 3237817 3050673

TOTAL ASSETS $ 96020551 $ 90858736 INVESTING ACTIVITIES

LIABILITIES Purchases of investment securities (909496) (1318771) Long-term note payable Other liabilities

$ 6186000 1504199

$ 6186000 1205624

Proceeds from maturities and paydowns Proceeds from sales of investment securities

344440 415596

245212 444111

TOTAL LIABILITIES 7690199 7391624 Purchases of premises and equipment (1692) (1306)

STOCKHOLDERSrsquo EQUITY 88330352 83467112 Net cash used for

TOTAL LIABILITIES AND investing activities (151152) (630754)

STOCKHOLDERSrsquo EQUITY $ 96020551 $ 90858736 FINANCING ACTIVITIES Dividends paid (2627119) (2449352) Purchases of treasury stock (132047) (87604) Proceeds from sales of treasury stock 151208 202700

Net cash used for financing activities (2607958) (2334256)

CONDENSED STATEMENT OF INCOME AND COMPREHENSIVE INCOME Increase in cash 478707 85663

Year Ended December 31 CASH AT BEGINNING OF YEAR 195328 109665

2016 2015 CASH AT END OF YEAR $ 674035 $ 195328

INCOME Dividends from bank subsidiary $ 3277439 $ 3167173 Dividends from non-bank subsidiary 79000 60000 Interest and dividends on investment securities 125349 123280 Investment securities gains net 69951 86620

Total income 3551739 3437073

EXPENSES Interest expense 232164 205962 Operating expenses 394206 365710 Income before income tax benefit 2925369 2865401 Income tax benefit (167365) (141409) Income before equity in undistributed

net income of subsidiaries 3092734 3006810 Equity in undistributed net income

of subsidiaries 7043475 6903349

NET INCOME $10136209 $ 9910159

COMPREHENSIVE INCOME $ 7471198 $ 7712634

manaGementrsquos discussion and analYsis

IntroductIon Managementrsquos discussion and analysis and related financial data are presented to assist in the understanding and evaluation of the finanshycial condition and results of operations of 1ST SUMMIT BANCORP of Johnstown Inc (the ldquoCompanyrdquo) and its main subsidiaries 1ST SUMMIT BANK (the ldquoBankrdquo) and Cambria Thrift Consumer Discount Company (ldquoCambriardquo) for the years ended December 31 2016 and 2015 This section should be read in conjunction with the consolishydated financial statements and related footnotes

Sections of this financial review as well as the notes to the consolishydated financial statements contain certain forward-looking stateshyments which reflect managementrsquos beliefs and expectations based on information currently available and may contain the words ldquoexpectrdquo ldquoestimaterdquo ldquoanticipaterdquo ldquoshouldrdquo ldquointendrdquo ldquoprobabilityrdquo ldquoriskrdquo ldquotargetrdquo ldquoobjectiverdquo and similar expressions or variations on such expressions These forward-looking statements are inherently subject to significant risks and uncertainties which could cause actual results to differ materially from those projected Those risks and uncertainshyties include changes in interest rates economic conditions costs of opening new offices and the ability to control costs and expenses You should not place undue reliance on our forward-looking stateshyments Forward-looking statements speak only as of the date on which they were made The Company undertakes no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof

results of operatIons - summary

Net income for the year was $10136209 compared to $9910159 for the year 2015 This represents an increase of $226050 or 23 from the prior year Earnings per share for 2016 were $922 increasing from $902 in 2015 The return on average assets for the year ended December 31 2016 was 104 and 107 for the year ended December 31 2015 The return on average equity for 2016 was 1153 and 1225 for 2015

The increase in earnings was principally attributable to an improved net interest margin higher non-interest income excluding securities gains and lower tax expense Net interest income totaled $26997706 compared to $26663527 in 2015 Net interest income increased as a result of there being approximately $427 million more in average earning assets during 2016 The net interest margin on a fully tax equivalent basis for 2016 was 318 compared to 323 in 2015

Other income for 2016 excluding net securities gains of $1665532 was $4799883 an increase of $248298 or 55 over 2015 This category of income increased due to higher wealth management income service charges on deposit accounts bank-owned life insurance income and bank card interchange income Net securities gains were $1665532 compared to $2714124 in 2015 a decrease of $1048592 This decrease was primarily the result of selling nonperforming trust preferred securities in 2015 that had been written down in previous years Selling that group of securities alone resulted in a gain of over $2 million in 2015 Total other income represented 155 of total revenues in 2016 compared to 173 in 2015

Other expenses totaled $19601251 in 2016 compared to $19308794 in 2015 an increase of $292457 or 15 The higher expenses were principally due to higher salaries and benefits costs for additional hiring higher occupancy equipment and data processing expense along with the opening of a new office in Ebensburg

fInancIal condItIon Total Assets Total assets at December 31 2016 were $9969 million compared to $9486 million at December 31 2015 an increase of $483 million or 51 Net loans increased $234 million while investment securishyties increased by $116 million cash and equivalents were up $121 million and all other assets combined were up $12 million This significant asset growth was driven by strong deposit growth of $510 million for the year

Loans Receivable The Company grants credit to commercial consumer and real estate customers with the view of serving the communityrsquos credit needs Loan growth was broad based with residential real estate loans showing the greatest increase as well as commercial commercial real estate and consumer loans contributing to growth Total loans receivable represented the most significant percentage of the Comshypanyrsquos assets at 500 of total assets This includes loans at both the Bank and Cambria At December 31 2016 total loans receivable were $4983 million compared to $4747 million at December 31 2015 an increase of $236 million or 50

Residential real estate which includes home equity lending totaled $2368 million at December 31 2016 compared to $2270 million at December 31 2015 This increase of $98 million was net of payshyments and refinancing activity In 2016 fixed rate mortgage products were preferred by customers and accounted for the majority of the lending activity

Commercial loans consist principally of loans made to small and meshydium sized businesses within the Companyrsquos market and are usually secured by real estate and other assets of the borrower Commercial and commercial real estate loans grew to $2066 million at December 31 2016 from $1967 million in 2015 an increase of $99 million or 50

Non-Performing Assets and Allowance for Loan and Lease Losses Non-performing assets consist of non-performing loans (non-accrual and credits delinquent 90 days and over) real estate acquired through foreclosure and non-performing investment securities Commercial real estate and consumer loans are generally placed on non-accrual status when interest is 90 days delinquent or when management ascertains that an obligorrsquos financial condition renders collection of interest doubtful

The Companyrsquos emphasis on asset quality as a key objective continshyued in 2016 Non-performing assets totaled $24 million representshying 024 of total assets at year-end 2016 compared to $19 million and 020 of assets at December 31 2015 Non-performing assets include loans of $23 million and foreclosed real estate of $01 million at December 31 2016 compared to $16 million and $03 million respectively at December 31 2015

Non-Performing Assets and Allowance for Loan and Lease Losses (Contrsquod) The allowance for loan and lease losses (ldquoallowancerdquo) is a reserve to provide for possible loan portfolio losses The allowance increased to $63 million representing 127 of total loans at December 31 2016 and totaled $61 million or 130 of total loans at December 31 2015 The provision for loan losses (ldquoprovisionrdquo) is an expense charged to earnings to fund the allowance The provision of $751150 or 015 of loans at December 31 2016 compares with $1702000 or 036 of loans at December 31 2015 Net loan charge-offs in 2016 were $571513 or 012 of average loans Net loan charge-offs were $1321487 or 029 of average loans in 2015

Allowance for Loan and Lease Losses

Allowance balance January 1 Charge-offs

Consumer Residential real estate Commercial and all other

Total charge-offs Recoveries

Total recoveries Provisions Allowance balance December 31 Allowance for loan losses as a percent of

total loans outstanding Net loans charged-off as a percent of

average loans outstanding

Adequacy of the allowance for loan and lease losses is evaluated on a monthly basis The evaluation includes but is not restricted to the composition of risks inherent in the loan portfolio the analysis of imshypaired loans and a historical review of loans The current allowance of $63 million at December 31 2016 is deemed adequate and at 127 of loans represents a favorable ratio The reserve has increased 258 over the past five years

The following table sets forth information relative to the Companyrsquos allowance for loan and lease losses on the indicated dates

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

The following table sets forth information relative to non-accrual loans non-performing loans and non-performing assets on the indicated dates

December 31 (In thousands)

Non-Performing Assets 2016 2015 2014 2013 2012

Non-accrual loans Consumer $ 141 $ 162 $ 34 $ 47 $ 72 Residential real estate 218 311 502 110 51 Commercial and all other 69 135 829 424 527

Total non-accrual loans 428 608 1365 581 650 Accruing loans which are contractually

past due 90 days or more 1848 990 1271 1143 678 Total non-performing loans 2276 1598 2636 1724 1328 Foreclosed real estate 145 267 82 164 130 Non-performing investments - - 2232 999 670 Total non-performing assets $2421 $1865 $4950 $2887 $2128

Non-performing loans to total loans 046 034 058 039 033 Non-performing loans to total assets 023 017 029 020 016 Non-performing assets to total assets 024 020 054 033 026

Securities The securities portfolio consists principally of issues of United States Government agencies including mortgage-backed securities municipal obligations corporate debt and equity securities of other financial institutions The Company classifies its investments in two categories at the time of purchase as held to maturity (ldquoHTMrdquo) and available for sale (ldquoAFSrdquo) The Company does not have a trading account Securities classified as HTM are those in which the Company has the ability and intent to hold the security until contractual maturity At December 31 2016 the HTM portfolio totaled $2530 million and consisted of longer-term municipal obligations US Government agencies and mortgage-backed securities Securities classified as AFS are eligible to be sold due to liquidity needs or interest rate risk management These securities are adjusted to and carried at their fair value with any unrealized gains or losses net of tax recorded in the equity section of the consolidated balance sheet as accumulated other comprehensive income (loss) At December 31 2016 $1959 million in securities were so classified and carried at their fair value with unrealized losses net of tax of $10 million included in accumulated other comprehensive income (loss) in stockholdersrsquo equity

At December 31 2016 the average life of the portfolio was 47 years compared to 46 years at the prior year end The increase was princishypally due to the purchase of longer-term amortizing securities coupled with natural amortization in the portfolio Total purchases for the year were $1349 million securities matured or called with cash flows of $763 million and securities sales of $423 million The purchases were funded principally by cash flow from the portfolio and deposit growth

At December 31 2016 the Companyrsquos securities portfolio (HTM and AFS) totaled $4489 million with the mix as follows US Government agencies 32 mortgage-backed securities 642 municipal obligashytions 304 corporate obligations equity securities of other financial institutions and mutual funds combined 22 The portfolio contained no structured notes step-up bonds and no off-balance sheet derivashytives were in use The portfolio totaled $4373 million at December 31 2015

Deposits The Company provides a complete range of deposit products to its customers through the Bankrsquos sixteen community offices These products include interest-bearing and non-interest-bearing demand deposit accounts statement savings and money market accounts Time deposits consist of certificates of deposit with terms of up to ten years and include individual retirement accounts

Deposits the main source of funding for the Company grew $510 million or 63 to a year-end total of $8671 million In 2016 the interest-bearing checking category showed the most significant growth As of December 31 2016 the Companyrsquos interest-bearing checking accounts increased $262 million or 175 to $1763 million Time deposits increased $153 million or 44 to $3615 million Time deposits of $250000 or more which include public funds were $483 million at December 31 2016 compared with $450 million at year end 2015 These deposits are usually subject to competitive bids and the Company bases its bids on current interest rates loan demand and the relative cost of other funding sources Money market deposits totaled $1289 million increasing $28 million from the prior year In addition

non-interest-bearing checking deposits totaled $613 million increasing $50 million from the prior year while savings accounts totaled $1391 million increasing $17 million from the prior year

Interest Rate Risk Interest rate sensitivity and market risk of assets and liabilities are manshyaged by the Asset and Liability Management Committee The principal objective of the committee is to maximize net interest income within acceptable levels of risk which are established by policy Interest rate risk is monitored and managed by using financial modeling techniques to measure the impact of changes in interest rates

Net interest income which is the primary source of the Companyrsquos earnshyings is impacted by changes in interest rates To manage the impact of interest rate changes the balance sheet must be structured so that repricing opportunities exist for both assets and liabilities at approxishymately the same time intervals An imbalance in repricing opportunities at a given point in time reflects interest rate sensitivity gaps measured as the difference between rate-sensitive assets and rate-sensitive liabilities These are static gap measurements used as early indicashytors of potential interest rate risk exposures over specific intervals At December 31 2016 the rate sensitivity gaps for specific intervals were within the Companyrsquos policy limits

The Company also uses net interest income simulation to assist in interest rate risk management The process includes simulating various interest rate scenarios and their respective impact on net interest inshycome It is assumed that a change in rates is instantaneous and that all rates move in a parallel manner Assumptions are also made concernshying prepayment speeds on loans and securities While management believes such assumptions to be reasonable there can be no assurshyance that modeled results will approximate actual results The analysis and model used to quantify the sensitivity of our net interest income also becomes less reliable in a decreasing scenario given the current unprecedented low interest rate environment The following is a rate shock for a twelve-month period assuming a static balance sheet as of December 31 2016

Parallel rate shock in basis points -100 +100 +200 +300

Net interest income change (in thousands)

Percentage change from static

$(142)

At December 31 2016 the level of net interest income at risk in all scenarios was within the Companyrsquos policy limit

The Company also projects future cash flows from assets and liabilities over a long-term horizon and then discounts these cash flows using instantaneous parallel shocks to interest rates The aggregation of these discounted cash flows is the Economic Value of Equity (ldquoEVErdquo) At December 31 2016 the EVE at risk in all scenarios was within the Companyrsquos policy limit

Liquidity Liquidity can be viewed as the ability to fund customersrsquo borrowing needs and withdrawal requests while supporting asset growth The Companyrsquos primary sources of liquidity include deposit generation and cash flow from asset maturities and securities repayments

At December 31 2016 the Company had cash and cash equivalents of $208 million in the form of cash due from banks and short-term intershyest-bearing deposits with other institutions In addition the Company had securities available for sale of $1959 million which could be used for liquidity needs Cash and securities available for sale totaled $2167 million and represented 217 of total assets compared to 236 of total assets at December 31 2015 The Company also monitors other liquidity measures all of which were well within the Companyrsquos policy guidelines at December 31 2016 The Company believes its liquidity position is adequate

The Company maintains established lines of credit with the Federal Home Loan Bank (ldquoFHLBrdquo) of Pittsburgh and other correspondent banks which support liquidity needs The approximate borrowing capacity from the FHLB was $2489 million At December 31 2016 the Company had $200 million in borrowings from the FHLB which is $81 million lower than at December 31 2015

Contractual Obligations

Off-Balance Sheet Arrangements The Companyrsquos financial statements do not reflect various commitments that are made in the normal course of business which may involve some liquidity risk These commitments consist primarily of unfunded loans standby letters of credit and financial guarantees made under the same standards as on-balance sheet instruments Unused commitshyments at December 31 2016 totaled $873 million and consisted of $844 million of unfunded loans and $29 million in standby letters of credit and financial guarantees Since these instruments generally have fixed expiration dates within one year of their original origination and because many of them will expire without being drawn upon they do not present significant liquidity risk

Management believes any amounts actually drawn upon can be funded in the normal course of operations The Company has no investment in or financial relationship with any unconsolidated entities that are reasonably likely to have a material effect on liquidity or the availability of capital resources

The following table represents the aggregate on- and off-balance sheet contractual obligations to make future payments

December 31 2016 (In thousands)

Less Than Over 1 Year 1-3 Years 4-5 Years 5 Years Total

Time deposits $ 170387 $144660 $ 46011 $ 461 $361519 Short- and long-term debt 8000 15289 3918 8186 35393 Operating leases 548 889 148 - 1585

$ 178935 $160838 $ 50077 $ 8647 $398497

The Company is not aware of any known trends demands commitments events or uncertainties which would result in any material increase or decrease in liquidity

results of operatIons

Net Interest Income Net interest income is the difference between income earned on loans and securities and interest paid on deposits and borrowshyings For the year ended December 31 2016 net interest income was $26997706 an increase of $334179 or 13 over 2015 The resulting interest spread on a fully tax equivalent basis for 2016 was 318 compared to 323 in 2015

Interest income for the year ended December 31 2016 totaled $35197569 compared to $34770704 in 2015 The increase of $426865 was principally due to a significantly higher level of earnshying assets during the year On average loans represented 521 of earning assets compared to 518 in 2015 Investment securities represented 477 of average earning assets in 2016 compared to 480 in 2015 Average federal funds sold and interest bearing balshyances represented 02 in 2016 and 03 in 2015

Interest income earned on loans totaled $23402541 in 2016 with a yield of 487 on a fully tax equivalent basis increasing from $22579414 in 2015 with a yield of 495 on a fully tax equivalent basis The decrease in yield was applicable to lower reinvestment rates on loans for the year with an average prime rate of 351 in 2016 and 326 2015 Loans averaged $4863 million in 2016 compared to $4612 million in 2015

Securities averaged $4453 million in 2016 with interest income of $11680749 and a fully tax equivalent yield of 310 compared to $4275 million $12055430 and 329 respectively in 2015 The decrease in yield was principally due to lower long-term interest rates in 2016 with more investment income from tax exempt municipal obligations Principal cash flow from securities was reinvested in mortgage-backed securities US Government agency securities and tax exempt municipal obligations

Interest expense for the year ended December 31 2016 totaled $8199863 decreasing from $8107177 in 2015 The average cost of interest-bearing liabilities in 2016 was 094 a decrease of nine basis points from 103 in 2015 The Companyrsquos cost of interest-bearing deposits decreased to 086 from 095 in 2015

Other Income Other income totaled $6465415 in 2016 a decrease of $800294 from $7265709 in 2015 Other income is revenue derived from sources othshyer than interest and dividends Excluding net securities gains of $1665532 in 2016 and $2714124 in 2015 other income for the year was $4799883 compared to $4551585 an increase of $248298 or 55

Service charge income and fees on deposit accounts were $1706589 in 2016 and $1640726 in 2015 Deposit accounts include Consumer ldquoClubrdquo and ldquoNOWrdquo accounts No Frills checking Regular checking PrimeTimersrsquo checking Business Regular checking and Business interest-bearing checking accounts The increase in income was a result of more customers using our special overdraft privilege service

Wealth management income of $947366 in 2016 was a 97 increase from $863837 in 2015 This includes trust department income mutual fund fees and discount brokerage fees Income from trust department

activities was $579460 in 2016 compared to $545579 in 2015 with the increase principally due to more assets under management in 2016 Commissions on sales of annuities and mutual funds were $367710 on sales of $136 million in 2016 increasing from revenues of $317886 on sales of $93 million in 2015 Brokerage fees were not significant in 2016 or 2015

Income on bank-owned life insurance was $390427 in 2016 and $354195 in 2015 The Bank implemented this program in the second quarter of 2004 where key officers are granted life insurance covershyage with the Bank and the officersrsquo beneficiaries to receive insurance proceeds through these split dollar policies

Debit card income was $795036 in 2016 an increase of $59739 or 81 compared with $735297 in 2015 This revenue source was a result of customers transacting business with VISA merchants

Credit card fees decreased slightly to $440730 from $441189 in 2015 a 01 decrease attributed to reduced merchant activity

The balance of other income $519735 up from $516341 or 07 was comprised primarily of revenues received from title insurance ATM use credit lifeaccident and health insurance stop payments safe deposit box rents and secondary market activity

The Company had net gains on sales of securities of $1665532 compared to $2714124 in 2016 This revenue was from the sale of seshylected equity holdings of other financial institutions and selected bonds from the investment portfolio The decrease was primarily the result of selling nonperforming trust preferred securities in 2015 that had been written down in previous years Selling that group of securities alone resulted in a gain of over $2 million

The Company had no impairment losses in 2016 or 2015 Securities are evaluated quarterly to determine if a decline in value is other than temporary Once a decline in value is determined to be other than temshyporary the amount of credit loss is charged to earnings Any remaining difference between fair value and amortized cost is recognized in other comprehensive income

The following table shows other income by selected categories

Year Ended December 31 (In thousands)

Other Income 2016 2015 Service charges and fees on deposit accounts $ 1707 $ 1641 Fiduciary activities 579 546 Mutual funds and annuities 368 318 Bank-owned life insurance income 390 354 Debitcheck card income 795 736 Credit card income 441 441 Other income 519 516

Subtotal 4799 4552 Net realized gains on securities 1666 2714

Total $ 6465 $ 7266

Other Expense Other expense totaled $19601251 in 2016 an increase of $292457 or 15 over $19308794 in 2015 Salaries and employee benshyefit costs which represented 568 of total other expense were $11134326 for 2016 an increase of $680008 or 65 Occupancy expense also increased $49131 or 32 in 2016 Equipment expense increased $72999 or 59 in 2016 Federal depository insurance expense decreased 133 to $395300 in 2016 Data processing expense was up 81 to $677194 in 2016 Pennsylvania shares tax expense a tax levied on the book value of shares of stock in banks and trust companies that conduct business in Pennsylvania increased $41448 or 60 in 2016 to $726789 Donations expense decreased $521681 to $234067 due to a significant five year comshymitment made and expensed during 2015 Other operating expense was $3532373 for 2016 a decrease of $19647 or 06

The following table shows other expense by selected categories

Other Expense 2016 2015 Salaries and employee benefits $ 11134 $ 10454 Occupancy expense 1598 1549 Equipment expense 1303 1230 Federal depository insurance expense 395 456 Data processing expense 677 626 Pennsylvania shares tax expense 727 686 Donations expense 234 756 Other operating expense 3533 3552 Total $ 19601 $ 19309

Ratios At December 31 2016

Total capital to risk-weighted assets 1870 1000 800 Common equity tier 1 capital to risk-weighted assets 1593 650 450 Tier 1 capital to risk-weighted assets 1700 800 600 Tier 1 leverage ratio 977 500 400

At December 31 2015

Income Taxes Federal income tax expense in 2016 was $2974511 with an effecshytive tax rate of 227 compared to expense of $3008283 with an effective tax rate of 231 in 2015 The decrease in the effective tax rate was applicable to higher levels of taxable interest income more than proportionally offset by higher tax-free income from municipal obligations and bank-owned life insurance The Company continued to take advantage of tax-free income to minimize its tax rate without incurring alternative minimum tax

Stockholdersrsquo Equity Total stockholdersrsquo equity at December 31 2016 was $88330352 compared to $83467112 at December 31 2015 Excluding accumushylated other comprehensive (loss) income total stockholdersrsquo equity was $89349144 in 2016 and $81820893 in 2015 a 92 increase

Book value of the common stock was $8036 per share at December 31 2016 compared to $7600 per share at December 31 2015 At year-end 2016 the market price was $10400 per share compared to $9600 at December 31 2015

At December 31 2016 the Company had a Total risk-based capital ratio of 1870 Common equity tier 1 risk-based capital ratio of 1593 Tier 1 risk-based capital ratio of 1700 and Tier 1 leverage capital ratio of 977 compared to a Total risk-based capital ratio of 1763 Common equity tier 1 risk-based capital ratio of 1525 Tier 1 risk-based capital ratio of 1638 and Tier 1 leverage capital ratio of 945 for 2015 The Bank was considered well capitalized under the regulatory framework for prompt corrective action To be considered well capitalized the Bank must maintain minimum Total risk-based capital Common equity tier 1 risk-based capital Tier 1 risk-based capital and Tier 1 leverage ratios as set forth in the table below

To Be Considered Minimum Actual Well Capitalized Required

summarY of QuarterlY financial data

Unaudited quarterly results

(In thousands except per share data) First Second Third Fourth

2016 CONDENSED INCOME STATEMENT

Interest income $ 8915 $ 8779 $ 8752 $ 8752 Interest expense 2046 1994 2054 2106 Net interest income 6869 6785 6698 6646 Provision for loan and lease losses 200 179 182 190 Net interest income after provision 6669 6606 6516 6456 Other income 1173 1185 1263 1178 Securities gains and impairment losses net 322 434 451 459 Noninterest expense 4843 4936 4904 4918 Income before income taxes 3321 3289 3326 3175 Applicable income taxes 767 760 756 692 Net income $ 2554 $ 2529 $ 2570 $ 2483

PER COMMON SHARE Net income $ 232 $ 230 $ 234 $ 226 Dividends paid $ 058 $ 059 $ 060 $ 062 Market price $ 9800 $ 10100 $ 10300 $ 10400

selected financial data

BALANCE SHEET 2016 2015 2014 2013 2012 2011

ASSETS Cash and cash equivalents $ 20821 $ 8785 $ 8541 $ 8856 $ 19862 $ 18130 Investment securities 448897 437253 425113 389641 372758 318898 Loans 498340 474719 454256 440280 402594 379554 Allowance for loan losses 6328 6149 5768 5612 5254 5031

Net loans 492012 468570 448488 434668 397340 374523 Fixed assets 9895 8804 8650 8724 8342 7666 Other assets 25294 25224 19793 23834 20908 21761

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

LIABILITIES AND STOCKHOLDERSrsquo EQUITY

Deposits $867066 $ 816022 $ 797090 $ 762559 $ 723061 $ 652249 Borrowed funds 35393 43256 30281 33683 28223 28059 Other liabilities 6130 5891 5125 5015 4948 5061 Total stockholdersrsquo equity 88330 83467 78089 64466 62978 55609

TOTAL LIABILITIES AND STOCKHOLDERSrsquo EQUITY $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

STATEMENT OF INCOME 2016 2015 2014 2013 2012 2011

Total interest income $35198 $ 34771 $ 34805 $ 33492 $ 33463 $ 33204 Total interest expense 8200 8107 8205 8817 9871 10481

Net interest income 26998 26664 26600 24675 23592 22723 Provision for loan losses 751 1702 984 904 508 957

Net interest income after provision 26247 24962 25616 23771 23084 21766 Other income 4799 4551 4349 4158 4108 3835 Securities gains and impairment losses net 1666 2714 421 677 (354) (782) Noninterest expense 19601 19309 17955 16880 15637 14973

Income before income taxes 13111 12918 12431 11726 11201 9846 Income tax expense 2975 3008 2861 2666 2689 2440

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

Net income $ 922 $ 902 $ 871 $ 825 $ 775 $ 675 Cash dividend $ 239 $ 223 $ 197 $ 181 $ 170 $ 150 Book value $ 8036 $ 7600 $ 7110 $ 5869 $ 5737 $ 5066 Market value $10400 $ 9600 $ 9200 $ 8600 $ 8200 $ 7700

Average shares outstanding 1099177 1098277 1098256 1098331 1097717 1097697

ShAREhOLDER INFORMATION

ANNUAL MEETING

The Annual Meeting of the Shareholders of 1ST SUMMIT BANCORP of Johnstown Inc will be held at 300 pm on Wednesday April 19 2017 at Sunnehanna Country Club Sunnehanna Drive Johnstown PA We encourage your attendance and look forward to sharing our continued success with you

Call Leeann Wyland at 814-262-4141 for reservations

STOCK INFORMATION

Our common stock is traded locally If you are interested in buying or selling stock we provide a free service of matching buyers and sellers on a bid basis without any commission charge Requests for information or assistance should be directed to

Leeann Wyland at 814-262-4141 or by mail to Shareholder Relations 1ST SUMMIT BANCORP PO Box 5480 Johnstown PA 15904

DIVIDEND CALENDAR

If 1ST SUMMIT BANCORP issues a quarterly dividend payment it will be paid on or about March 15 June 15 September 15 and December 15

TRANSFER AGENT

1ST SUMMIT BANK Trust Department PO Box 5480 Johnstown PA 15904 | 814-262-4043 or 814-262-4141

ACKNOWLEDGMENTS

A special thanks to the following professionals who assisted in the production of this report Carol Myers Leeann Wyland Lori Baumgardner CambriArts Advertising

SUbSIDIARIES

MAIN OFFICE

125 Donald Lane PO Box 5480 Johnstown Pennsylvania 15904 814-262-4010 | 888-262-4010 | www1stsummitcom

16 COMMUNITY OFFICES

Serving Cambria Somerset Indiana Blair and Westmoreland counties

MAIN OFFICE

123 West High Street Ebensburg Pennsylvania 15931 814-472-9300 | wwwloansforallreasonscom

4 COMMUNITY OFFICES

Serving Cambria and Indiana counties

Licensed by the PA Department of Banking 21976 41

125 Donald Lane

PO Box 5480

Johnstown Pennsylvania 15904

www1stsummitcom

AR Cover 170206 C WEB

AR 2016 Inside F Cover 170206 WEB

AR 2016 1-10 170206 WEB

AR Financials 11-40 170206 WEB

AR 2016 Inside B Cover 170206 WEB

AR Cover 170206 BC WEB

Financial Highlights Page 1

Shareholdersrsquo Message Page 2

Rewarding our Shareholders Page 3

Rewarding our Customers Page 4

Rewarding our Communities Page 5

Rewarding our Professionals Page 6

Board and Officer Listings Page 7-10

Report of Independent Accountants Page 11

Managementrsquos Discussion amp Analysis Page 33

Summary of Quarterly Financial Data Page 39

Selected Financial Data Page 40

Shareholder Information Page 41

Subsidiaries Page 41

Table of conTenTs

-- -- -- -- -- -- --

$ 902 $ 871 223 197

7600 7110 9600 9200

$948636 $910585 816022 797090 468570 448488 437253 425113 250481 239799 83467 78089 6149 5768

SHAREHOLDER MESSAGE

06 07 08 09 10 11 12 13 14 15 16

NET INCOME

41 40 45

96 99 101

06 07 08 09 10 11 12 13 14 15 16

Total Assets

448 478

819 866

911 949

BOARD OF DIRECTORS

William F McQuaide

Dominic A Bellvia

DIRECTORS EMERITI

Robert P Gardill

William G McKelvey

Barry M Alberter

NORTHERN AREA

O F F I C E R S

D I R E C T O R S

SR Snodgrass PC

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

-- -- -- -- -- -- --

$ 902 $ 871 223 197

7600 7110 9600 9200

$948636 $910585 816022 797090 468570 448488 437253 425113 250481 239799 83467 78089 6149 5768

SHAREHOLDER MESSAGE

06 07 08 09 10 11 12 13 14 15 16

NET INCOME

41 40 45

96 99 101

06 07 08 09 10 11 12 13 14 15 16

Total Assets

448 478

819 866

911 949

BOARD OF DIRECTORS

William F McQuaide

Dominic A Bellvia

DIRECTORS EMERITI

Robert P Gardill

William G McKelvey

Barry M Alberter

NORTHERN AREA

O F F I C E R S

D I R E C T O R S

SR Snodgrass PC

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

SHAREHOLDER MESSAGE

06 07 08 09 10 11 12 13 14 15 16

NET INCOME

41 40 45

96 99 101

06 07 08 09 10 11 12 13 14 15 16

Total Assets

448 478

819 866

911 949

BOARD OF DIRECTORS

William F McQuaide

Dominic A Bellvia

DIRECTORS EMERITI

Robert P Gardill

William G McKelvey

Barry M Alberter

NORTHERN AREA

O F F I C E R S

D I R E C T O R S

SR Snodgrass PC

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

06 07 08 09 10 11 12 13 14 15 16

NET INCOME

41 40 45

96 99 101

06 07 08 09 10 11 12 13 14 15 16

Total Assets

448 478

819 866

911 949

BOARD OF DIRECTORS

William F McQuaide

Dominic A Bellvia

DIRECTORS EMERITI

Robert P Gardill

William G McKelvey

Barry M Alberter

NORTHERN AREA

O F F I C E R S

D I R E C T O R S

SR Snodgrass PC

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

06 07 08 09 10 11 12 13 14 15 16

Total Assets

448 478

819 866

911 949

BOARD OF DIRECTORS

William F McQuaide

Dominic A Bellvia

DIRECTORS EMERITI

Robert P Gardill

William G McKelvey

Barry M Alberter

NORTHERN AREA

O F F I C E R S

D I R E C T O R S

SR Snodgrass PC

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

06 07 08 09 10 11 12 13 14 15 16

Total Assets

448 478

819 866

911 949

BOARD OF DIRECTORS

William F McQuaide

Dominic A Bellvia

DIRECTORS EMERITI

Robert P Gardill

William G McKelvey

Barry M Alberter

NORTHERN AREA

O F F I C E R S

D I R E C T O R S

SR Snodgrass PC

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

BOARD OF DIRECTORS

William F McQuaide

Dominic A Bellvia

DIRECTORS EMERITI

Robert P Gardill

William G McKelvey

Barry M Alberter

NORTHERN AREA

O F F I C E R S

D I R E C T O R S

SR Snodgrass PC

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

BOARD OF DIRECTORS

William F McQuaide

Dominic A Bellvia

DIRECTORS EMERITI

Robert P Gardill

William G McKelvey

Barry M Alberter

NORTHERN AREA

O F F I C E R S

D I R E C T O R S

SR Snodgrass PC

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

NORTHERN AREA

O F F I C E R S

D I R E C T O R S

SR Snodgrass PC

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

NORTHERN AREA

O F F I C E R S

D I R E C T O R S

SR Snodgrass PC

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

NORTHERN AREA

O F F I C E R S

D I R E C T O R S

SR Snodgrass PC

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

SR Snodgrass PC

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

December 31 2016 2015

Net loans 492012373 468570463

TOTAL ASSETS $996919173 $ 948636330

(255614

88330352

) (263260

83467112

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

NET INCOME $ 10136209 $ 9910159

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

Tax effect 566281 922802

Accumulated

Outstanding Shares

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Equity

(924) 2150 19685

9910159

(2449352) (2197525 )

( 87604 ) 183015

9910159 ( 2197525) (2449352)

(87604) 202700

( 1319) 1538 11515

10136209

(2627119) (2665011)

(132047) 139693

10136209 (2665011) (2627119)

(132047) 151208

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

2016 Gross Gross

Total $197397713 $ 3358392 $ (4902016) $195854089

2015 Gross Gross

Total $ 212893042 $ 3955846 $ (1461575) $ 215387313

2016 Gross Gross

Total $ 253043379 $1730543 $ (5915433) $ 248858489

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

TTotalotal $$ 221865843221865843 $$ 43699364369936 $$ (940161(940161)) $$ 225295618225295618

TTotalotal $$314144447314144447 $(10807518)$(10807518) $$ 202700202700 $$ (9931(9931)) $$ 314347147314347147 $$ (10817449(10817449))

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

3 LOANS

498340600 474719053

$ 17524713 $ 11889909 $ 11474630 $ 17939992

4 COMMITMENTS

Total $ 87297096 $ 87966276

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

Recoveries 63239 11057 - - - - - 74296

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

Ending balance $ 542342 $ 1833638 $ 341583 $ 1128610 $ 695311 $ 1323417 $ 463326 $ 6328227

Commercial and

Industrial

Ending balance

$ 494272

$ 2111419

$ 224934

$ 1043441

$ 390581

$ 1131722

$ 752221

6148590

Ending balance

$ 34033181

$ 226910292

$ 226982269

$ 16992547

$ 83840207

151595

$ 83991802

$ 28845684

$ 82403195

1470375

$ 83873570

473025106

1693947

474719053

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

569673 -

1765051 1392527

100000 -

310000 148000

$ -3200

838782 -

-195632

$ - $ - $ - $ 3200 3200 35890

1408455 1408455 821651 - - 112393

1765051 1765051 590820 1588159 2227143 1461578

19205 2882

28495 42460

Recorded Investment

Related Allowance

Recorded Investment

Average Recorded

Investment

Interest Income

Recognized

$ ----

$ -71977

-151595

-1470375

$ - $ 71977

-151595

-1470375

- $ 71977

-631595

-2109359

- $ 119701

-293547

-1454903

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

Total $ 469944289 $ 3176974 $ 1597790 $ 4774764 $ 474719053 $ 989657

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

$ 269572565 $ 1408274 $ 270980839

Total $ 207447203 $ 1856800 $ 4399600 $ - $ 213703603

$ 259584437 $ 1431013 $ 261015450

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

7 GOODWILL

8 TIME DEPOSITS

2017 $ 170387487 2018 93438006 2019 51221907 2020 19945596 2021 26064791 Thereafter 460750

Total $ 361518537

2017 $ 8000000 106 2018 7000000 139 2019 8288601 274 2020 3918655 497 2021 - shyThereafter 8186000 403

Total $ 35393256 264

2016 2015

094 400 363

164 500 414

$ 20000000 9207256 6186000

$ 18000000 8933517 6186000

$ 35393256 $ 33119517

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

2016 2015

12 INCOME TAXES

Total $ 2974511 $ 3008283

2016 2015

Amount

2016 of

2015 of

Pretax Income

effective rate $ 2974511 227 $ 3008283 231

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

Lease Payments

2017 $ 547864 2018 520799 2019 368040 2020 108281 2021 39600 Thereafter -

Total $1584584

weighted assets)

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

December 31 2016

December 31 2015

Total $

494459

7295128

7789587

2010560

57035124

147052227 1499815

207597726

$ 2010560

57035124

147052227 1499815

494459

7295128

$ 215387313

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

$ - $ - $ 1812048 $ 1812048

December 31 2015

$ - $ - $ 1758100 $ 1758100

Valuation

Impaired loans

Estimate

$ 54848

$1757200

Techniques

Unobservable Input

21 to 75 0 to 250 to 55 0 to 1

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

Carrying Value

$ 9486921

11333865

195854089

248858489 489614814

3053715 1488800

11945882

$ 864103941 35320256

1229945

$ 9486921

11333865

9104912

3053715 1488800

11945882

$ 505547875 -

1229945

186749177

248858489 ----

-489614814

358556066 35320256

$ 8784849 $ - $ shy

7789587 207597726 shy

- 225295618 shy- - 470004854

2949573 - shy2052200 - shy

11284744 - shy

$ 469824525 $ - $ 344963341 10136000 - shy

- - 33119517 1202755 - shy

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

2016 2015

Statement of Income

(2372363) 806603

(1565760)

(615459 ) 209256

(406203 )

566281 (2714124 )

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

$ 674035 5367569

86883909 1629823

$ 195328 4696811

82839609 1600961

(7043475) (69951) 215034

(6903349) (86620) 130483

$ 6186000 1504199

$ 6186000 1205624

344440 415596

245212 444111

Total income 3551739 3437073

NET INCOME $10136209 $ 9910159

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

(In thousands)

2016 2015 2014 2013 2012

$ 6149 $5768 $5612 $5254 $5031

(393) (112) (152)

(317) (132) (946)

(290) (79 )

(538 )

(265 ) (87 )

(294 )

(209) (44 )

(181 )

(657) (1395) (907) (646 ) (434 )

46 12 42

48 101

85 751

$ 6328

74 1702

79 984

100 904

149 508

127 130 127 127 131

012 029 019 013 007

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

$(142)

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

$ 178935 $160838 $ 50077 $ 8647 $398497

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

Total $ 6465 $ 7266

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

At December 31 2015

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

BALANCE SHEET 2016 2015 2014 2013 2012 2011

TOTAL ASSETS $996919 $ 948636 $ 910585 $ 865723 $ 819210 $ 740978

NET INCOME $10136 $ 9910 $ 9570 $ 9060 $ 8512 $ 7406

PER SHARE DATA

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

ANNUAL MEETING

STOCK INFORMATION

DIVIDEND CALENDAR

TRANSFER AGENT

ACKNOWLEDGMENTS

SUbSIDIARIES

MAIN OFFICE

4 COMMUNITY OFFICES

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

125 Donald Lane

PO Box 5480

www1stsummitcom

AR 2016 1-10 170206 WEB

Documents

1ST SUMMIT BANCORP R… · 1ST SummiT Bancorp & SuBSidiarieS . 2016 FINANCIAL HIGHLIGHTS . 1ST SUMMIT BANCORP of Johnstown, Inc., is an independent holding company headquartered in