SB Financial Group Announces First Quarter 2024 Results

DEFIANCE, Ohio, April 18, 2024 (GLOBE NEWSWIRE) — SB Financial Group, Inc. (NASDAQ: SBFG) (“SB Financial” or the “Company”), a diversified financial services company providing full-service community banking, mortgage banking, wealth management, private client and title insurance services today reported earnings for the first quarter and ended March 31, 2024.

First Quarter 2024 Highlights Over the First Quarter Prior Year Include:

  • Net income of $2.4 million down 3.3 percent from $2.5 million in the same quarter last year. Diluted Earnings Per Share (“EPS”) remained steady at $0.35.
  • Net interest income totaled $9.2 million, a 11.1 percent decrease from the $10.3 million reported in the first quarter of the prior year.
  • Loan growth saw an increase to $991.6 million, up by $15.2 million or 1.6 percent from the $976.3 million in the first quarter of the previous year.
  • Nonperforming assets improved to 0.22 percent of total assets, down from 0.30 percent in the same quarter of the prior year.

Trailing Twelve Months Ended March 31, 2024 Highlights Compared to the Prior Year Include:

  • EPS was $1.75 for the twelve months ended March 2024, an increase of 1.7 percent from the prior twelve months of $1.72.
  • Total deposits were $1.112 billion at the end of March 2024, representing a marginal increase of 0.2 percent from $1.110 billion at the end of March 2023.
  • Mortgage origination volume was $209.1 million for the trailing twelve months, with a servicing portfolio of $1.37 billion, which increased by 2.1 percent from the prior year.
Earnings Highlights Three Months Ended
($ in thousands, except per share & ratios) Mar. 2024   Mar. 2023   % Change
Operating revenue $ 13,131     $ 13,990     -6.1 %
Interest income 15,300     13,824     10.7 %
Interest expense 6,120     3,500     74.9 %
Net interest income 9,180     10,324     -11.1 %
Provision for credit losses     250     -100.0 %
Noninterest income 3,951     3,666     7.8 %
Noninterest expense 10,282     10,773     -4.6 %
Net income 2,368     2,450     -3.3 %
Earnings per diluted share 0.35     0.35     0.0 %
Return on average assets 0.71 %   0.73 %   -2.7 %
Return on average equity 7.70 %   8.22 %   -6.3 %
                 

“SB Financial Group has demonstrated operational resilience and a keen strategic focus amid the challenging economic conditions during the quarter ended March 31, 2024,” stated Mark A. Klein, Chairman, President, and CEO. “Despite a marginal decline in net income from $2.5 million last year to $2.4 million, our operational adaptability ensured solid profitability, with diluted earnings per share consistently at $0.35. This consistency reflects our unwavering commitment to shareholder value even as we navigate through economic headwinds.”

“Our loan portfolio expanded to $991.6 million, an increase of $15.2 million, underscoring our disciplined approach to growth and the deep trust our clients place in us. Despite broader market challenges, our deposit base remained stable at $1.11 billion, showcasing our effective management and the enduring strength of our customer relationships. We maintained a conservative risk profile, with notable improvements in asset quality and no significant charge-offs,” Mr. Klein noted.

RESULTS OF OPERATIONS

Consolidated Revenue

In the first quarter of 2024, SB Financial Group’s total operating revenue, encompassing net interest income before provision for credit losses and noninterest income, faced significant economic headwinds. Our operating revenue saw a decline of 6.1 percent from the prior year quarter and 13.1 percent from the linked quarter. Although robust, net interest income decreased by 11.1 percent compared to the same period last year, primarily due to increased deposit and funding costs. This also contributed to a 38 basis-point reduction in our net interest margin 1Q 2024 compared to 1Q2023.

Noninterest income, however, showed a positive trajectory, increasing by 7.8 percent from the same quarter last year. This growth was significantly bolstered by a 30.4 percent increase in gains from the sale of mortgages and OMSR. Additionally, mortgage loan servicing fees saw a substantial increase of 25.5 percent. These gains, along with steady customer service fees, built a solid revenue foundation. Despite these strengths, we observed a downturn in revenues from wealth management and title insurance, illustrating the varied performance across our noninterest income streams.

Amid these variances, our strategic focus remains firm. We are dedicated to maintaining a balanced revenue portfolio and dynamically adjusting our strategies to effectively respond to the economic environment. This approach is vital for continuing to create value for our clients and shareholders and demonstrates our commitment to navigating cyclical economic challenges with resilience and foresight.

Mortgage Loan Business

Mortgage loan originations for the first quarter of 2024 totaled $42.9 million, experiencing a contraction from the $49.4 million recorded in the same quarter of the previous year. This downturn reflects the cooling trends within the housing market, indicative of broader economic shifts. Despite this challenging environment, SB Financial Group’s strategic agility was evident, with mortgage sales climbing to $36.6 million, or 85 percent of production. This represents an increase of $10.8 million, or approximately 41.9 percent, from the $25.8 million recorded in the prior year quarter, showcasing our ability to capitalize on opportunities within the purchase market.

For this quarter, our mortgage banking net revenue stood at $1.5 million, demonstrating solid performance and an improvement of $0.2 million, or 20.3 percent, from the prior year. This growth, indicative of the robustness of our mortgage servicing operations, is further underscored by the consistent expansion of our servicing portfolio, which grew by 2.0 percent compared to the prior year period, reaching $1.37 billion.

“In a period marked by variable interest rates and a cautious market, SB Financial Group’s mortgage banking sector has continued to demonstrate resilience,” said Mr. Klein. “The upward trend in mortgage sales, despite a decrease in originations, attests to our team’s market presence and strong brand. Our increased net mortgage banking revenue and the expansion of our servicing portfolio reflect our ongoing commitment to this business line.”

Mortgage Banking                                  
($ in thousands) Mar. 2024   Dec. 2023   Sep. 2023   Jun. 2023   Mar. 2023   Prior Year Growth
Mortgage originations $ 42,912     $ 39,566     $ 61,200     $ 65,387     $ 49,366     $ (6,454 )
Mortgage sales 36,623     33,362     54,085     47,933     25,803     10,820  
Mortgage servicing portfolio 1,371,713     1,366,667     1,367,209     1,353,904     1,344,158     27,555  
Mortgage servicing rights 14,191     13,906     13,893     13,723     13,548     643  
                                   
                                   
Revenue                                  
Loan servicing fees 763     855     850     844     844     (81 )
OMSR amortization (273 )   (282 )   (334 )   (334 )   (292 )   19  
Net administrative fees 490     573     516     510     552     (62 )
OMSR valuation adjustment 181     (12 )   (78 )   (16 )   56     125  
Net loan servicing fees 671     561     438     494     608     63  
Gain on sale of mortgages 781     747     1,207     1,056     599     182  
Mortgage banking revenue, net $           1,452     $           1,308     $           1,645     $           1,550     $           1,207     $             245  
                                   

Noninterest Income and Noninterest Expense

For the first quarter of 2024, noninterest income at SB Financial Group surged to $4.0 million, marking a 7.8% increase from the $3.7 million recorded in the prior year quarter. This notable growth is primarily attributable to our strategic initiatives, including enhanced gain-on-sale yields from mortgage loans and higher recapture of servicing rights, which significantly contributed to our financial performance. Additionally, customer service fees rose by $55,000, or 6.7 percent, further reinforcing our strategic focus in this area.

Noninterest expenses for the first quarter were reported at $10.3 million, a reduction of 4.6 percent from the previous year’s $10.8 million. This decrease demonstrates our commitment to reducing costs and enhancing operational efficiency, even in a complex and challenging economic environment.

“Our noninterest income has shown consistent growth compared to the same period last year.” commented Mr. Klein. “The gains from both mortgage and mortgage servicing fees have been significant, reflecting our agility and expertise in capitalizing on favorable market conditions. On the expense front, we continued to reduce our noninterest expenses, reflecting a diligent and calculated approach to cost management. Our ongoing efforts are focused on maintaining an efficient operational structure, paramount in delivering sustained value to our stakeholders.”

Noninterest Income/Noninterest Expense                                   
($ in thousands, except ratios) Mar. 2024   Dec. 2023   Sep. 2023   Jun. 2023   Mar. 2023   Prior Year Growth
Noninterest Income (NII) $ 3,951     $ 5,531     $ 4,163     $ 4,361     $ 3,666     $ 285  
NII / Total Revenue 30.1 %   36.6 %   30.4 %   30.7 %   26.2 %   3.9 %
NII / Average Assets 1.2 %   1.7 %   1.2 %   1.3 %   1.1 %   0.1 %
Total Revenue Growth -6.1 %   3.4 %   -5.3 %   -0.5 %   -2.0 %   -6.1 %
                                   
Noninterest Expense (NIE) $ 10,282     $ 10,369     $ 10,481     $ 10,339     $ 10,773     $ (491 )
Efficiency Ratio 78.2 %   68.4 %   76.4 %   72.7 %   76.9 %   1.3 %
NIE / Average Assets 3.1 %   3.1 %   3.1 %   3.1 %   3.2 %   -0.1 %
Net Noninterest Expense/Avg. Assets -1.9 %   -1.4 %   -1.9 %   -1.8 %   -2.1 %   0.2 %
Total Expense Growth -4.6 %   1.0 %   0.9 %   -4.3 %   -0.8 %   -4.6 %
                                   

Balance Sheet

As of March 31, 2024, SB Financial Group has continued to exhibit financial stability, with total assets amounting to $1.34 billion, reflecting a marginal year-over-year decrease of 0.39 percent. Our loan portfolio, which notably surpassed the $1 billion mark in the linked quarter, adjusted to $991.6 million for the first quarter of 2024. Despite this slight retraction, the total loans have increased by $15.2 million, or 1.6 percent compared to the prior year, demonstrating our commitment to prudent lending and strategic asset management amid evolving economic conditions. Additionally, our cash and cash equivalents have been increasing, providing enhanced liquidity and further stabilizing our financial base.

Shareholders’ equity has slightly contracted by 0.5 percent to $123.7 million compared to the linked quarter. However, the 3.3% growth, year-over-year, is a positive testament to our ongoing efforts to enhance value for our shareholders.

Mark Klein, remarked, “As we navigate the first quarter of 2024, SB Financial Group remains committed to a disciplined approach to growth, ensuring robust asset quality and maintaining a formidable loan portfolio. Despite a competitive landscape, our loan portfolio has demonstrated resilience, underlining the effectiveness of our relationship-driven lending strategy. This performance is anchored by our dedication to our shareholders, as evidenced by the annual increase in our dividend payout. We are poised to continue capitalizing on strategic opportunities to further strengthen our financial position and deliver sustained shareholder value.”

Loan Balances                                              
($ in thousands, except ratios) Mar. 2024   Dec. 2023   Sep. 2023   Jun. 2023   Mar. 2023   Annual Growth
Commercial $ 120,016     $ 126,716     $ 120,325     $ 123,226     $ 126,066     $ (6,050 )
% of Total 12.1 %   12.7 %   12.2 %   12.5 %   12.9 %   -4.8 %
Commercial RE 429,362     424,041     421,736     417,412     419,024     10,338  
% of Total 43.3 %   42.4 %   42.6 %   42.4 %   42.9 %   2.5 %
Agriculture 62,365     65,659     60,928     58,222     57,761     4,604  
% of Total 6.3 %   6.6 %   6.2 %   5.9 %   5.9 %   8.0 %
Residential RE 314,668     318,123     320,306     321,365     309,684     4,984  
% of Total 31.7 %   31.8 %   32.4 %   32.6 %   31.7 %   1.6 %
Consumer & Other 65,141     65,673     65,726     64,599     63,777     1,364  
% of Total 6.6 %   6.6 %   6.6 %   6.6 %   6.5 %   2.1 %
Total Loans $ 991,552     $ 1,000,212     $ 989,021     $ 984,824     $ 976,312     $ 15,240  
Total Growth Percentage                               1.6 %
                                   
                                   
Deposit Balances                                  
($ in thousands, except ratios) Mar. 2024   Dec. 2023   Sep. 2023   Jun. 2023   Mar. 2023   Annual Growth
Non-Int DDA $ 219,395     $ 228,713     $ 224,182     $ 218,411     $ 237,175     $ (17,780 )
% of Total 19.7 %   21.4 %   20.7 %   20.4 %   21.4 %   -7.5 %
Interest DDA 169,171     166,413     174,729     170,282     188,497     (19,326 )
% of Total 15.2 %   15.5 %   16.1 %   15.9 %   17.0 %   -10.3 %
Savings 244,157     216,965     226,077     225,065     227,974     16,183  
% of Total 21.9 %   20.3 %   20.8 %   21.0 %   20.5 %   7.1 %
Money Market 221,362     202,605     216,565     217,681     222,203     (841 )
% of Total 19.9 %   18.9 %   20.0 %   20.3 %   20.0 %   -0.4 %
Time Deposits 258,257     255,509     243,766     239,717     234,295     23,962  
% of Total 23.2 %   23.9 %   22.5 %   22.4 %   21.1 %   10.2 %
Total Deposits $ 1,112,342     $ 1,070,205     $ 1,085,319     $ 1,071,156     $ 1,110,144     $ 2,198  
Total Growth Percentage                               0.2 %
                                   

Asset Quality

SB Financial Group has consistently prioritized exceptional asset quality, a commitment that has remained steadfast through the first quarter of 2024. As of March 2024, our reports showcase a robust position, with nonperforming loans constituting a mere 0.25% of total loans—a clear testament to the enduring strength and soundness of our lending practices. This represents a significant improvement, with a 10 basis point reduction from the previous year, which reported nonperforming loans at 0.35% of total loans.

Significantly, the allowance for credit losses to nonperforming loans ratio has reached a strong 643 percent. This not only emphasizes our proactive and preemptive measures in managing asset quality but also exceeds the performance benchmark set in the previous year. This ratio reflects our structured approach to risk management, which is aligned with the Current Expected Credit Loss (CECL) methodology, ensuring we remain well-prepared for any contingencies.

Furthermore, the net loan charge-offs to average loans ratio, annualized at 0.02%, underlines our effective handling of loan repayments and the high quality of our credit portfolio. With such solid metrics, we continue to uphold our strong reputation for risk management and credit excellence.

Mark A. Klein, Chairman, President, and CEO of SB Financial, noted, “Our commitment to asset quality is unwavering and clearly evident in our first-quarter performance. The strength of our loan portfolio is reflected in the low percentage of nonperforming loans and a substantial allowance for potential credit losses, demonstrating our vigilant approach to asset management and our resilience in the face of economic variables.”

Nonperforming Assets                                  
($ in thousands, except ratios) Mar. 2024   Dec. 2023   Sep. 2023   Jun. 2023   Mar. 2023   Annual Change
Commercial & Agriculture $ 897     $ 748     $ 717     $ 170     $ 185     $ 712  
% of Total Com./Ag. loans 0.49 %   0.39 %   0.40 %   0.09 %   0.10 %   384.9 %
Commercial RE 49     168     222     192     199     (150 )
% of Total CRE loans 0.01 %   0.04 %   0.05 %   0.05 %   0.05 %   -75.4 %
Residential RE 1,295     1,690     2,182     2,266     2,742     (1,447 )
% of Total Res. RE loans 0.41 %   0.53 %   0.68 %   0.71 %   0.89 %   -52.8 %
Consumer & Other 193     212     208     282     270     (77 )
% of Total Con./Oth. loans 0.30 %   0.32 %   0.32 %   0.44 %   0.42 %   -28.5 %
Total Nonaccruing Loans 2,434     2,818     3,329     2,910     3,396     (962 )
% of Total loans 0.25 %   0.28 %   0.34 %   0.30 %   0.35 %   -28.3 %
Foreclosed Assets and Other Assets 510     511     629     625     650     (140 )
Total Change (%)                               -21.5 %
Total Nonperforming Assets $ 2,944     $ 3,329     $ 3,958     $ 3,535     $ 4,046     $ (1,102 )
% of Total assets 0.22 %   0.25 %   0.30 %   0.26 %   0.30 %   -27.24 %
                                   

Webcast and Conference Call

The Company will hold the first quarter 2024 earnings conference call and webcast on April 19, 2024, at 11:00 a.m. EDT. Interested parties may access the conference call by dialing 1-888-338-9469. The webcast can be accessed at ir.yourstatebank.com. An audio replay of the call will be available on the Company’s website.

About SB Financial Group

Headquartered in Defiance, Ohio, SB Financial is a diversified financial services holding company for the State Bank & Trust Company (State Bank) and SBFG Title, LLC dba Peak Title (Peak Title). State Bank provides a full range of financial services for consumers and small businesses, including wealth management, private client services, mortgage banking and commercial and agricultural lending, operating through a total of 23 offices: 22 in nine Ohio counties and one in Fort Wayne, Indiana, and 23 ATMs. State Bank has six loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. Peak Title provides title insurance and title opinions throughout the Tri-State region. SB Financial’s common stock is listed on the NASDAQ Capital Market with the ticker symbol “SBFG”.

In May 2023, SB Financial was valued #163 on the American Banker Magazine’s list of top 200 publicly traded Community Bank and Thrifts based on three-year average return on equity.

Forward-Looking Statements

Certain statements within this document, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, and actual results may differ materially from those predicted by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties inherent in the national and regional banking industry, changes in economic conditions in the market areas in which SB Financial and its subsidiaries operate, changes in policies by regulatory agencies, changes in accounting standards and policies, changes in tax laws, fluctuations in interest rates, demand for loans in the market areas in SB Financial and its subsidiaries operate, increases in FDIC insurance premiums, changes in the competitive environment, losses of significant customers, geopolitical events, the loss of key personnel and other risks identified in SB Financial’s Annual Report on Form 10-K and documents subsequently filed by SB Financial with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made, and SB Financial undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, except as required by law. All subsequent written and oral forward-looking statements attributable to SB Financial or any person acting on its behalf are qualified by these cautionary statements.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures, specifically pre-tax, pre-provision income, tangible common equity, tangible assets, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common equity, total interest income – FTE, net interest income – FTE and net interest margin – FTE are used by the Company’s management to measure the strength of its capital and analyze profitability, including its ability to generate earnings on tangible capital invested by its shareholders. In addition, the Company excludes the OMSR valuation adjustment from net income to report a non-GAAP adjusted net income level. Although management believes these non-GAAP measures are useful to investors by providing a greater understanding of its business, they should not be considered a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Investor Contact Information:

Mark A. Klein
Chairman, President and
Chief Executive Officer
[email protected]

Anthony V. Cosentino
Executive Vice President and
Chief Financial Officer
[email protected]

                             
 SB FINANCIAL GROUP, INC.
 CONSOLIDATED BALANCE SHEETS – (Unaudited)
                             
  March   December   September   June   March
($ in thousands) 2024   2023   2023   2023   2023
                             
ASSETS                            
Cash and due from banks $ 26,602     $ 22,965     $ 19,049     $ 20,993     $ 21,625  
Interest bearing time deposits 2,417     1,535     1,180     1,180     1,380  
Available-for-sale securities 213,239     219,708     212,768     227,996     237,607  
Loans held for sale 4,730     2,525     3,206     5,684     5,592  
Loans, net of unearned income 991,552     1,000,212     989,021     984,824     976,312  
Allowance for credit losses (15,643 )   (15,786 )   (15,790 )   (15,795 )   (15,442 )
Premises and equipment, net 20,985     21,378     21,934     22,230     22,621  
Federal Reserve and FHLB Stock, at cost 6,512     7,279     6,261     7,634     6,054  
Foreclosed assets and other assets 510     511     629     625     650  
Interest receivable 4,584     4,657     4,457     4,079     3,926  
Goodwill 23,239     23,239     23,239     23,239     23,239  
Cash value of life insurance 30,103     29,121     29,291     29,183     29,024  
Mortgage servicing rights 14,191     13,906     13,893     13,723     13,548  
Other assets 12,991     11,999     17,336     15,840     15,157  
Total assets $ 1,336,012     $ 1,343,249     $ 1,326,474     $ 1,341,435     $ 1,341,293  
                             
LIABILITIES AND SHAREHOLDERS’ EQUITY                            
Deposits                            
Non interest bearing demand $ 219,395     $ 228,713     $ 224,182     $ 218,411     $ 237,175  
Interest bearing demand 169,171     166,413     174,729     170,282     188,497  
Savings 244,157     216,965     226,077     225,065     227,974  
Money market 221,362     202,605     216,565     217,681     222,203  
Time deposits 258,257     255,509     243,766     239,717     234,295  
Total deposits 1,112,342     1,070,205     1,085,319     1,071,156     1,110,144  
                             
Short-term borrowings 12,916     13,387     16,519     21,118     15,998  
Federal Home Loan Bank advances 35,000     83,600     59,500     81,300     44,500  
Trust preferred securities 10,310     10,310     10,310     10,310     10,310  
Subordinated debt net of issuance costs 19,654     19,642     19,630     19,618     19,606  
Interest payable 2,772     2,443     2,216     1,866     1,441  
Other liabilities 19,295     19,320     20,632     18,401     19,535  
Total liabilities 1,212,289     1,218,907     1,214,126     1,223,769     1,221,534  
                             
Shareholders’ Equity                            
Common stock 61,319     61,319     61,319     61,319     61,319  
Additional paid-in capital 14,978     15,124     15,037     15,154     14,953  
Retained earnings 109,938     108,486     105,521     103,725     101,548  
Accumulated other comprehensive loss (31,547 )   (29,831 )   (39,517 )   (32,894 )   (29,671 )
Treasury stock (30,965 )   (30,756 )   (30,012 )   (29,638 )   (28,390 )
Total shareholders’ equity 123,723     124,342     112,348     117,666     119,759  
Total liabilities and shareholders’ equity $ 1,336,012     $ 1,343,249     $ 1,326,474     $ 1,341,435     $ 1,341,293  
                             

 

SB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME – (Unaudited)
                               
($ in thousands, except per share & ratios)
At and for the Three Months Ended
                               
    March   December   September   June   March
Interest income 2024   2023   2023   2023   2023
  Loans                            
  Taxable $ 13,547     $ 13,438     $ 13,128     $ 12,715     $ 12,126  
  Tax exempt 123     124     122     121     116  
  Securities                            
  Taxable 1,593     1,526     1,507     1,524     1,535  
  Tax exempt 37     38     39     46     47  
  Total interest income 15,300     15,126     14,796     14,406     13,824  
                               
Interest expense                            
  Deposits 5,090     4,398     4,194     3,538     2,578  
  Repurchase agreements & other 34     39     16     9     10  
  Federal Home Loan Bank advances 613     720     666     664     553  
  Trust preferred securities 188     191     189     172     164  
  Subordinated debt 195     194     195     194     195  
  Total interest expense 6,120     5,542     5,260     4,577     3,500  
                               
Net interest income
9,180     9,584     9,536     9,829     10,324  
  Provision for credit losses     (74 )   (6 )   145     250  
                               
Net interest income after provision for loan losses 9,180     9,658     9,542     9,684     10,074  
                               
Noninterest income                            
  Wealth management fees 865     838     837     940     917  
  Customer service fees 880     844     863     871     825  
  Gain on sale of mtg. loans & OMSR 781     747     1,207     1,056     599  
  Mortgage loan servicing fees, net 671     561     438     494     608  
  Gain on sale of non-mortgage loans 10     177     10     218     24  
  Title insurance revenue 266     378     429     455     373  
  Net gain on sales of securities     1,453              
  Gain (loss) on sale of assets     16         15     (11 )
  Other 478     517     379     312     331  
  Total noninterest income 3,951     5,531     4,163     4,361     3,666  
                               
Noninterest expense                            
  Salaries and employee benefits 5,352     5,652     5,491     5,721     5,913  
  Net occupancy expense 769     746     764     802     784  
  Equipment expense 1,077     1,027     1,068     1,002     981  
  Data processing fees 769     680     648     685     646  
  Professional fees 758     926     623     612     863  
  Marketing expense 197     182     189     213     198  
  Telephone and communication expense 105     132     124     124     121  
  Postage and delivery expense 97     167     100     78     87  
  State, local and other taxes 245     285     218     218     228  
  Employee expense 178     146     141     156     188  
  Other expenses 735     426     1,115     728     764  
  Total noninterest expense 10,282     10,369     10,481     10,339     10,773  
                               
                               
Income before income tax expense
2,849     4,820     3,224     3,706     2,967  
  Income tax expense 481     937     537     631     517  
                               
Net income  $ 2,368     $ 3,883     $ 2,687     $ 3,075     $ 2,450  
                               
Common share data:
                           
  Basic earnings per common share $ 0.35     $ 0.58     $ 0.40     $ 0.45     $ 0.35  
  Diluted earnings per common share $ 0.35     $ 0.57     $ 0.39     $ 0.44     $ 0.35  
                               
Average shares outstanding (in thousands):
                           
  Basic: 6,715     6,748     6,791     6,847     6,933  
  Diluted: 6,723     6,851     6,878     6,910     7,008  
                               
SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS – (Unaudited)
                               
($ in thousands, except per share & ratios)   At and for the Three Months Ended
                               
    March   December   September   June   March
SUMMARY OF OPERATIONS   2024   2023   2023   2023   2023
                               
Net interest income   $         9,180     $         9,584     $         9,536     $         9,829     $      10,324  
Tax-equivalent adjustment   43     43     43     44     43  
Tax-equivalent net interest income   9,223     9,627     9,579     9,873     10,367  
Provision for credit loss       (74 )   (6 )   145     250  
Noninterest income   3,951     5,531     4,163     4,361     3,666  
Total operating revenue   13,131     15,115     13,699     14,190     13,990  
Noninterest expense   10,282     10,369     10,481     10,339     10,773  
Pre-tax pre-provision income   2,849     4,746     3,218     3,851     3,217  
Pretax income   2,849     4,820     3,224     3,706     2,967  
Net income   2,368     3,883     2,687     3,075     2,450  
                               
PER SHARE INFORMATION:                              
Basic earnings per share (EPS)   0.35     0.58     0.40     0.45     0.35  
Diluted earnings per share   0.35     0.57     0.39     0.44     0.35  
Common dividends   0.135     0.135     0.130     0.130     0.125  
Book value per common share   18.46     18.50     16.59     17.30     17.37  
Tangible book value per common share (TBV)   14.93     14.98     13.09     13.81     13.93  
Market price per common share   13.78     15.35     13.50     12.62     14.13  
Market price to TBV   92.3 %   102.5 %   103.1 %   91.4 %   101.4 %
Market price to trailing 12 month EPS   7.9     8.8     8.0     7.1     8.2  
                               
PERFORMANCE RATIOS:                              
Return on average assets (ROAA)   0.71 %   1.17 %   0.80 %   0.91 %   0.73 %
Pre-tax pre-provision ROAA   0.85 %   1.43 %   0.96 %   1.14 %   0.96 %
Return on average equity   7.70 %   13.23 %   9.25 %   10.32 %   8.22 %
Return on average tangible equity   9.53 %   16.57 %   11.62 %   12.89 %   10.26 %
Efficiency ratio   78.17 %   68.44 %   76.34 %   72.71 %   76.85 %
Earning asset yield   4.97 %   4.89 %   4.78 %   4.61 %   4.49 %
Cost of interest bearing liabilities   2.55 %   2.33 %   2.18 %   1.90 %   1.46 %
Net interest margin   2.98 %   3.10 %   3.08 %   3.15 %   3.35 %
Tax equivalent effect   0.01 %   0.01 %   0.01 %   0.01 %   0.02 %
Net interest margin, tax equivalent   2.99 %   3.11 %   3.09 %   3.16 %   3.37 %
Non interest income/Average assets   1.19 %   1.67 %   1.24 %   1.30 %   1.10 %
Non interest expense/Average assets   3.08 %   3.12 %   3.13 %   3.07 %   3.23 %
Net noninterest expense/Average assets   -1.90 %   -1.46 %   -1.89 %   -1.78 %   -2.13 %
                               
ASSET QUALITY RATIOS:                              
Gross charge-offs   66     5     12     32     69  
Recoveries   9     1     7     10     8  
Net charge-offs   57     4     5     22     61  
Nonperforming loans/Total loans   0.25 %   0.28 %   0.34 %   0.30 %   0.35 %
Nonperforming assets/Loans & OREO   0.30 %   0.33 %   0.40 %   0.36 %   0.41 %
Nonperforming assets/Total assets   0.22 %   0.25 %   0.30 %   0.26 %   0.30 %
Allowance for credit loss/Nonperforming loans   642.69 %   560.18 %   474.32 %   542.78 %   454.71 %
Allowance for credit loss/Total loans   1.58 %   1.58 %   1.60 %   1.60 %   1.58 %
Net loan charge-offs/Average loans (ann.)   0.02 %   0.00 %   0.00 %   0.01 %   0.03 %
                               
CAPITAL & LIQUIDITY RATIOS:                              
Loans/ Deposits   89.14 %   93.46 %   91.13 %   91.94 %   87.94 %
Equity/ Assets   9.26 %   9.26 %   8.47 %   8.77 %   8.93 %
Tangible equity/Tangible assets   7.63 %   7.63 %   6.81 %   7.13 %   7.29 %
Common equity tier 1 ratio (Bank)   13.63 %   13.42 %   13.56 %   13.18 %   13.44 %
                               
END OF PERIOD BALANCES                              
Total assets   1,336,012     1,343,249     1,326,474     1,341,435     1,341,293  
Total loans   991,552     1,000,212     989,021     984,824     976,312  
Deposits   1,112,342     1,070,205     1,085,319     1,071,156     1,110,144  
Shareholders equity   123,723     124,342     112,348     117,666     119,759  
Goodwill and intangibles   23,646     23,662     23,687     23,710     23,732  
Tangible equity   100,077     100,680     88,661     93,956     96,027  
Mortgage servicing portfolio   1,371,713     1,366,667     1,367,209     1,353,904     1,344,158  
Wealth/Brokerage assets under care   525,517     501,829     478,236     499,255     518,009  
Total assets under care   3,233,242     3,211,745     3,171,919     3,194,594     3,203,460  
Full-time equivalent employees   245     251     252     253     255  
Period end common shares outstanding   6,702     6,720     6,773     6,803     6,894  
Market capitalization (all)   92,359     103,147     91,437     85,857     97,419  
                               
AVERAGE BALANCES                              
Total assets   1,333,236     1,327,415     1,339,870     1,346,010     1,335,056  
Total earning assets   1,230,736     1,236,165     1,239,145     1,248,813     1,232,018  
Total loans   993,310     992,337     989,089     988,348     970,813  
Deposits   1,091,803     1,084,939     1,095,414     1,100,344     1,098,935  
Shareholders equity   123,058     117,397     116,165     119,177     119,237  
Goodwill and intangibles   23,654     23,675     23,698     23,721     23,743  
Tangible equity   99,404     93,722     92,467     95,456     95,494  
Average basic shares outstanding   6,715     6,748     6,791     6,847     6,933  
Average diluted shares outstanding   6,723     6,851     6,878     6,910     7,008  
                               
SB FINANCIAL GROUP, INC.
Rate Volume Analysis – (Unaudited)
For the Three Months Ended Mar. 31, 2024 and 2023
                       
($ in thousands) Three Months Ended Mar. 31, 2024
  Three Months Ended Mar. 31, 2023
  Average   Average   Average   Average
Assets Balance Interest Rate   Balance Interest Rate
Taxable securities/cash $ 230,981   $ 1,593 2.76 %   $ 253,449   $ 1,535 2.42 %
Nontaxable securities 6,445   37 2.30 %   7,756   47 2.42 %
Loans, net 993,310   13,670 5.50 %   970,813   12,242 5.04 %
Total earning assets 1,230,736   15,300 4.97 %   1,232,018   13,824 4.49 %
Cash and due from banks 4,512           11,067        
Allowance for loan losses (15,830 )         (14,763 )      
Premises and equipment 21,281           22,858        
Other assets 92,537           83,876        
Total assets $ 1,333,236           $ 1,335,056        
                       
Liabilities                      
Savings, MMDA and interest bearing demand $ 605,243   $ 2,525 1.67 %   $ 643,081   $ 1,285 0.80 %
Time deposits 258,592   2,565 3.97 %   214,978   1,293 2.41 %
Repurchase agreements & other 15,993   34 0.85 %   18,618   10 0.21 %
Advances from Federal Home Loan Bank 51,030   613 4.81 %   49,177   553 4.50 %
Trust preferred securities 10,310   188 7.29 %   10,310   164 6.36 %
Subordinated debt 19,646   195 3.97 %   19,598   195 3.98 %
Total interest bearing liabilities 960,814   6,120 2.55 %   955,762   3,500 1.46 %
Non interest bearing demand 227,968         240,876      
Total funding 1,188,782     2.06 %   1,196,638     1.17 %
Other liabilities 21,396           21,347        
Total liabilities 1,210,178           1,217,985        
Equity 123,058           117,071        
Total liabilities and equity $ 1,333,236           $ 1,335,056        
                       
Net interest income     $ 9,180           $ 10,324    
                       
Net interest income as a percent of average interest-earning assets – GAAP measure       2.98 %         3.35 %
                       
Net interest income as a percent of average interest-earning assets – non GAAP       2.99 %         3.37 %
– Computed on a fully tax equivalent (FTE) basis                      
Non-GAAP reconciliation  Three Months Ended 
($ in thousands, except per share & ratios) Mar. 31, 2024   Mar. 31, 2023
Total Operating Revenue $ 13,131     $ 13,990  
Adjustment to (deduct)/add OMSR recapture/impairment * (181 )   (56 )
Adjusted Total Operating Revenue 12,950     13,934  
           
Income before Income Taxes 2,849     2,967  
Adjustment for OMSR * (181 )   (56 )
Adjusted Income before Income Taxes 2,668     2,911  
           
Provision for Income Taxes 481     517  
Adjustment for OMSR ** (38 )   (12 )
Adjusted Provision for Income Taxes 443     505  
           
Net Income 2,368     2,450  
Adjustment for OMSR * (143 )   (44 )
Adjusted Net Income 2,225     2,406  
           
Diluted Earnings per Share 0.35     0.35  
Adjustment for OMSR * (0.02 )   (0.01 )
Adjusted Diluted Earnings per Share $ 0.33     $ 0.34  
           
Return on Average Assets 0.71 %   0.73 %
Adjustment for OMSR * -0.04 %   -0.01 %
Adjusted Return on Average Assets 0.67 %   0.72 %
           
*valuation adjustment to the Company’s mortgage servicing rights        
           
**tax effect is calculated using a 21% statutory federal corporate income tax rate        


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