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SB Financial Group Announces Third Quarter 2023 Results

DEFIANCE, Ohio, Oct. 30, 2023 (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 third quarter ended September 30, 2023.

Third quarter 2023 highlights over the third quarter prior year include:

  • Net income of $2.7 million decreased 19.6 percent with diluted earnings per share (“EPS”) of $0.39 and down to the linked quarter by 12.6 percent
  • Asset quality remained stable, with 30 basis points of non-performing assets and net charge-offs of just $5 thousand in the quarter
  • Coverage of our non-performing loans by the allowance improved by 29 percent to 474 percent
  • Loans were higher from both the prior year and linked quarters and the portfolio has now grown for 7 consecutive quarters

Nine months ended September 30, 2023, highlights over prior-year nine months include:

  • Net income of $8.2 million, down 8.6 percent
  • Adjusted for OMSR recapture, net income is higher by 2.4 percent
  • Noninterest expense of $31.6 million declined 1.4 percent
  • Total net charge-offs year-to-date of just $88 thousand or 0.01 percent of total loans

Third quarter 2023 trailing twelve-month highlights include:

  • Loan growth of $63.8 million, or 6.9 percent
  • Deposit growth remained steady compared to the prior year but increased over the linked quarter by $14.2 million. Deposit costs have increased from the prior year by $8.3 million with the deposit cost of funds reaching 1.53 percent 
Earnings HighlightsThree Months Ended  Nine Months Ended
($ in thousands, except per share & ratios)Sep. 2023Sep. 2022% Change  Sep. 2023Sep. 2022% Change
Operating revenue$13,699 $14,473 -5.3%  $41,879 $43,017 -2.6%
Interest income 14,796  11,764 25.8%   43,026  31,632 36.0%
Interest expense 5,260  1,334 294.3%   13,337  3,133 325.7%
Net interest income 9,536  10,430 -8.6%   29,689  28,499 4.2%
Provision for credit losses (6) - 0.0%   389  - 0.0%
Noninterest income 4,163  4,043 3.0%   12,190  14,518 -16.0%
Noninterest expense 10,481  10,384 0.9%   31,593  32,046 -1.4%
Net income 2,687  3,343 -19.6%   8,212  8,988 -8.6%
Earnings per diluted share 0.39  0.47 -17.0%   1.18  1.27 -7.1%
Return on average assets 0.80%  1.03% -22.3%   0.81%  0.91% -11.0%
Return on average equity 8.73%  10.89% -19.8%   8.72%  9.21% -5.3%
         

“Funding costs continued to be headwinds for us in the quarter, however we are pleased that we were still able to grow our deposit base from the linked quarter, despite that higher cost” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “Our asset quality continued to be peer leading and our allowance percentage at 1.60 percent provides critical stability and strength as we move forward into a potentially tougher economic environment.”

RESULTS OF OPERATIONS

Consolidated Revenue

Total interest income for the third quarter was up $3.0 million or 25.8 percent from the prior year and from the linked quarter was up nearly 11 percent on an annualized basis, as the yield on earning assets increased 89 basis points to 4.78 percent.   However, deposit and other funding costs have risen at a faster pace, reducing net interest margin to 3.08 percent, down 37 basis points compared to the prior year and 7 basis points compared to the linked quarter.

Noninterest income was up from the prior year but down compared to the linked quarter, reflecting higher margins from gain on sale and relative growth in the mortgage sector, offset by weakness in our SBA volume and gain on sale. Wealth management revenues are under pressure from weaker equity markets and a reduction in client assets. For the full year, adjusting for the OMSR recapture, total noninterest income decreased $1.1 million or 8.2 percent due to our mortgage origination and sale volume being lower by 32.7 and 20.7 percent, respectively.

Mortgage Loan Business

Mortgage loan originations for the third quarter of 2023 were $61.2 million, down $7.4 million, or 10.7 percent, from the prior year quarter. Total sales of originated loans increased compared to the prior year, reaching $54.1 million, up $14.9 million, or 38.1 percent as we adjusted pricing and reduced duration risk in order to transition from portfolio production.  

Net mortgage banking revenue, comprising gains on the sale of mortgage loans and net loan servicing fees, totaled $1.6 million for the third quarter, up from $1.4 million for the prior year quarter and slightly higher from the linked quarter. The mortgage servicing valuation adjustment was a negative $0.1 million, compared to a positive adjustment of $0.1 million for the prior year quarter. The servicing portfolio at September 30, 2023, was $1.37 billion, an increase of $4.5 million compared to the prior year.

Mr. Klein noted, “Our mortgage volume has remained below historical levels as we adjust to a much higher interest rate environment and limited movement of housing inventory and resulting mortgage activity. Historically, we have seen 20 to 30 percent of our volume from refinance transactions, which is down this year to just 9 percent, further impacting production levels.”  

Mortgage Banking       
($ in thousands)Sep. 2023Jun. 2023Mar. 2023Dec. 2022Sep. 2022 Annual
Growth
Mortgage originations$61,200 $65,387 $49,366 $51,219 $68,557  $(7,357)
Mortgage sales 54,085  47,933  25,803  23,590  39,176   14,909 
Mortgage servicing portfolio 1,367,209  1,353,904  1,344,158  1,352,016  1,362,666   4,543 
Mortgage servicing rights 13,893  13,723  13,548  13,503  13,473   420 
        
        
Mortgage servicing revenue       
Loan servicing fees 850  844  844  851  858   (8)
OMSR amortization (334) (334) (292) (310) (396)  62 
Net administrative fees 516  510  552  541  462   54 
OMSR valuation adjustment (78) (16) 56  86  65   (143)
Net loan servicing fees 438  494  608  627  527   (89)
Gain on sale of mortgages 1,207  1,056  599  550  876   331 
Mortgage banking revenue, net$ 1,645 $ 1,550 $ 1,207 $ 1,177 $ 1,403  $ 242 
        

Noninterest Income and Noninterest Expense

Noninterest income for the quarter increased from the prior year quarter by 3.0 percent and was just slightly below the linked quarter. Gain-on-sale from mortgage loans, was up $0.3 million or 37.8 percent from the prior year. Our sale percentage of originated volume returned to more historical levels with the 88 percent achieved for the quarter marking our highest since early 2020.

For the third quarter of 2023, noninterest expense of $10.5 million was slightly higher than both the prior year and linked quarters. We encountered some one-time expenses in the quarter related to check fraud, which elevated expense levels above our current run rate.  

Mr. Klein stated, “As revenue levels have declined, we have been focused on reducing resources and controllable expenses throughout the Company. Our total headcount is down over 7 percent and expenses have declined 1.4 percent for the nine months compared to the prior nine month period.”

Noninterest Income/Noninterest Expense       
($ in thousands, except ratios) Sep. 2023Jun. 2023Mar. 2023Dec. 2022Sep. 2022 Annual
Growth
Noninterest Income (NII) $4,163 $4,361 $3,666 $3,713 $4,043  $120 
NII / Total Revenue  30.4%  30.7%  26.2%  25.4%  27.9%   2.5% 
NII / Average Assets  1.2%  1.3%  1.1%  1.1%  1.2%   0.0% 
Total Revenue Growth  -5.3%  -0.5%  -2.0%  -6.7%  -13.2%   -5.3% 
         
Noninterest Expense (NIE) $10,481 $10,339 $10,773 $10,269 $10,384  $97 
Efficiency Ratio  76.4%  72.7%  76.9%  70.2%  71.6%   4.8% 
NIE / Average Assets  3.1%  3.1%  3.2%  3.1%  3.2%   -0.1% 
Net Noninterest Expense/Avg. Assets -1.9%  -1.8%  -2.1%  -2.0%  -2.0%   0.1% 
Total Expense Growth  0.9%  -4.3%  -0.8%  -11.2%  -7.7%   0.9% 
         

Balance Sheet

As of September 30, 2023, total assets were $1.33 billion, a slight decrease from the linked quarter, and 1.8 percent higher compared to the prior year. Total shareholders’ equity at September 30, 2023, was $112.3 million. Excluding the impact of the investment portfolio net unrealized losses, equity rose to $151.9 million, reflecting a 2.6 percent increase. During the quarter, we repurchased 43,814 shares of our Company stock and we have declared cash dividends of $0.39 per share for the nine-month period, an 8.5 percent increase from the prior period.   The investment portfolio of $212.8 million was down $30.5 million or 12.5 percent from a year ago and now constitutes 16.0 percent of total assets.

Total loans held for investment were up $63.8 million or 6.9 percent compared to the prior year. The Allowance for Credit Losses ended the quarter at $15.8 million or 1.60 percent of total loans. The reserve is higher by $2.0 million, or 14.2 percent compared to the prior year due to CECL and negligible charge-offs in the current year. Deposit balances of $1.09 billion at September 30, 2023, were level to the prior year, but were higher compared to the linked quarter by $14.2 million.

Mr. Klein continued, “Loan balances were higher compared to the linked quarter, and we have now grown loans quarter over quarter for seven consecutive quarters.   Our commercial pipelines of $44 million remain under pressure in most of our markets, but we continue to aggressively call to expand relationships from both internal and external clients. Asset quality continues to remain stable, and our coverage of non-performing loans has increased to nearly five times at quarter end.”

Loan Balances      
($ in thousands, except ratios)Sep. 2023Jun. 2023Mar. 2023Dec. 2022Sep. 2022Annual
Growth
Commercial$120,325 $123,226 $126,066 $128,393 $128,565 $(8,240)
% of Total 12.2%  12.5%  12.9%  13.3%  13.9%  -6.4% 
Commercial RE 421,736  417,412  419,024  412,809  404,710  17,026 
% of Total 42.6%  42.4%  42.9%  42.9%  43.7%  4.2% 
Agriculture 60,928  58,222  57,761  64,505  60,522  406 
% of Total 6.2%  5.9%  5.9%  6.7%  6.5%  0.7% 
Residential RE 320,306  321,365  309,684  291,368  267,135  53,171 
% of Total 32.4%  32.6%  31.7%  30.3%  28.9%  19.9% 
Consumer & Other 65,726  64,599  63,777  65,000  64,317  1,409 
% of Total 6.6%  6.6%  6.5%  6.8%  7.0%  2.2% 
Total Loans$ 989,021 $ 984,824 $ 976,312 $ 962,075 $ 925,249 $ 63,772 
Total Growth Percentage        6.9% 
       
       
Deposit Balances      
($ in thousands, except ratios)Sep. 2023Jun. 2023Mar. 2023Dec. 2022Sep. 2022Annual
Growth
Non-Int DDA$224,182 $218,411 $237,175 $256,799 $250,791 $(26,609)
% of Total 20.7%  20.4%  21.4%  23.6%  23.1%  -10.6% 
Interest DDA 174,729  170,282  188,497  191,719  199,523  (24,794)
% of Total 16.1%  15.9%  17.0%  17.6%  18.4%  -12.4% 
Savings 226,077  225,065  227,974  191,272  201,402  24,675 
% of Total 20.8%  21.0%  20.5%  17.6%  18.5%  12.3% 
Money Market 216,565  217,681  222,203  255,995  258,975  (42,410)
% of Total 20.0%  20.3%  20.0%  23.6%  23.8%  -16.4% 
Time Deposits 243,766  239,717  234,295  190,880  175,202  68,564 
% of Total 22.5%  22.4%  21.1%  17.6%  16.1%  39.1% 
Total Deposits$ 1,085,319 $ 1,071,156 $ 1,110,144 $ 1,086,665 $ 1,085,893 $ (574)
Total Growth Percentage        -0.1% 
       

Asset Quality

SB Financial reported nonperforming assets totaling $4.0 million as of September 30, 2023, marking a decrease of $0.5 million or 12.1 percent from the same quarter last year, despite a slight increase from the linked quarter. The coverage ratio for problem loans, has notably strengthened, improving nearly 100 basis points from the previous year. The enhancement is attributed to both the expansion of the allowance, following a CECL adjustment of $1.4 million, and a concurrent reduction in problem loans.

Nonperforming Assets
($ in thousands, except ratios)Sep. 2023Jun. 2023Mar. 2023Dec. 2022Sep. 2022Annual
Change
Commercial & Agriculture$717 $170 $185 $114 $114 $603 
% of Total Com./Ag. loans 0.40%  0.09%  0.10%  0.06%  0.06%  528.9% 
Commercial RE 222  192  199  210  223  (1)
% of Total CRE loans 0.05%  0.05%  0.05%  0.05%  0.06%  -0.4% 
Residential RE 2,182  2,266  2,742  3,020  3,129  (947)
% of Total Res. RE loans 0.68%  0.71%  0.89%  1.04%  1.17%  -30.3% 
Consumer & Other 208  282  270  338  280  (72)
% of Total Con./Oth. loans 0.32%  0.44%  0.42%  0.52%  0.44%  -25.7% 
Total Nonaccruing Loans 3,329  2,910  3,396  3,682  3,746  (417)
% of Total loans 0.34%  0.30%  0.35%  0.38%  0.40%  -11.1% 
Foreclosed Assets and Other Assets 629  625  650  777  756  (127)
Total Change (%)      -16.8% 
Total Nonperforming Assets$3,958 $3,535 $4,046 $4,459 $4,502 $(544)
% of Total assets 0.30%  0.26%  0.30%  0.33%  0.35%  -12.08% 
       

Webcast and Conference Call

The Company will hold the third quarter 2023 earnings conference call and webcast on October 31, 2023, 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 impairment from both net income and non-interest income to report non-GAAP adjusted levels. 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
        Mark.Klein@YourStateBank.com

Anthony V. Cosentino
        Executive Vice President and
        Chief Financial Officer
        Tony.Cosentino@YourStateBank.com


   
  SB FINANCIAL GROUP, INC.
  CONSOLIDATED BALANCE SHEETS - (Unaudited)
              
     September June March December September
   ($ in thousands)  2023   2023   2023   2022   2022 
              
ASSETS          
 Cash and due from banks $19,049  $20,993  $21,625  $27,817  $27,934 
 Interest bearing time deposits  1,180   1,180   1,380   2,131   2,134 
 Available-for-sale securities  212,768   227,996   237,607   238,780   243,233 
 Loans held for sale  3,206   5,684   5,592   2,073   2,979 
 Loans, net of unearned income  989,021   984,824   976,312   962,075   925,249 
 Allowance for credit losses  (15,790)  (15,795)  (15,442)  (13,818)  (13,824)
 Premises and equipment, net  21,934   22,230   22,621   22,829   22,842 
 Federal Reserve and FHLB Stock, at cost  6,261   7,634   6,054   6,326   5,230 
 Foreclosed assets and other assets  629   625   650   777   756 
 Interest receivable  4,457   4,079   3,926   4,091   3,556 
 Goodwill  23,239   23,239   23,239   23,239   23,239 
 Cash value of life insurance  29,291   29,183   29,024   28,870   28,713 
 Mortgage servicing rights  13,893   13,723   13,548   13,503   13,473 
 Other assets  17,336   15,840   15,157   16,940   17,863 
              
   Total assets $1,326,474  $1,341,435  $1,341,293  $1,335,633  $1,303,377 
              
              
              
LIABILITIES AND SHAREHOLDERS' EQUITY          
 Deposits          
  Non interest bearing demand $224,182  $218,411  $237,175  $256,799  $250,791 
  Interest bearing demand  174,729   170,282   188,497   191,719   199,523 
  Savings  226,077   225,065   227,974   191,272   201,402 
  Money market  216,565   217,681   222,203   255,995   258,975 
  Time deposits  243,766   239,717   234,295   190,880   175,202 
              
   Total deposits  1,085,319   1,071,156   1,110,144   1,086,665   1,085,893 
              
 Short-term borrowings  16,519   21,118   15,998   14,923   19,754 
 Federal Home Loan Bank advances  59,500   81,300   44,500   60,000   35,000 
 Trust preferred securities  10,310   10,310   10,310   10,310   10,310 
 Subordinated debt net of issuance costs  19,630   19,618   19,606   19,594   19,582 
 Interest payable  2,216   1,866   1,441   769   623 
 Other liabilities  20,632   18,401   19,535   24,944   17,587 
              
   Total liabilities  1,214,126   1,223,769   1,221,534   1,217,205   1,188,749 
              
 Shareholders' Equity          
  Common stock  61,319   61,319   61,319   61,319   61,319 
  Additional paid-in capital  15,037   15,154   14,953   15,087   15,000 
  Retained earnings  105,521   103,725   101,548   101,966   99,309 
  Accumulated other comprehensive loss  (39,517)  (32,894)  (29,671)  (32,120)  (33,426)
  Treasury stock  (30,012)  (29,638)  (28,390)  (27,824)  (27,574)
              
   Total shareholders' equity  112,348   117,666   119,759   118,428   114,628 
              
   Total liabilities and shareholders' equity$1,326,474  $1,341,435  $1,341,293  $1,335,633  $1,303,377 
              



SB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
                 
($ in thousands, except per share & ratios) At and for the Three Months Ended Nine Months Ended
                 
    September June March December September September September
Interest income  2023   2023   2023   2022   2022   2023   2022 
 Loans              
 Taxable $13,128  $12,715  $12,126  $11,222  $10,084  $37,969  $27,016 
 Tax exempt  122   121   116   109   92   359   226 
 Securities              
 Taxable  1,507   1,524   1,535   1,559   1,536   4,566   4,239 
 Tax exempt  39   46   47   47   52   132   151 
                 
  Total interest income  14,796   14,406   13,824   12,937   11,764   43,026   31,632 
                 
Interest expense              
 Deposits  4,194   3,538   2,578   1,440   852   10,310   2,037 
 Repurchase agreements & other  16   9   10   7   8   35   32 
 Federal Home Loan Bank advances 666   664   553   258   180   1,883   257 
 Trust preferred securities  189   172   164   138   99   525   223 
 Subordinated debt  195   194   195   194   195   584   584 
                 
  Total interest expense  5,260   4,577   3,500   2,037   1,334   13,337   3,133 
                 
                 
Net interest income  9,536   9,829   10,324   10,900   10,430   29,689   28,499 
                 
 Provision for credit losses  (6)  145   250   -   -   389   - 
                 
Net interest income after provision              
  for loan losses  9,542   9,684   10,074   10,900   10,430   29,300   28,499 
                 
Noninterest income              
 Wealth management fees  837   940   917   907   930   2,694   2,821 
 Customer service fees  863   871   825   880   844   2,559   2,498 
 Gain on sale of mtg. loans & OMSR 1,207   1,056   599   550   876   2,862   3,748 
 Mortgage loan servicing fees, net  438   494   608   627   527   1,540   2,337 
 Gain on sale of non-mortgage loans 10   218   24   105   125   252   461 
 Title insurance revenue  429   455   373   454   476   1,257   1,775 
 Gain (loss) on sale of assets  -   15   (11)  18   (12)  4   43 
 Other  379   312   331   172   277   1,022   835 
                 
  Total noninterest income  4,163   4,361   3,666   3,713   4,043   12,190   14,518 
                 
Noninterest expense              
 Salaries and employee benefits  5,491   5,721   5,913   5,677   5,858   17,125   18,465 
 Net occupancy expense  764   802   784   763   769   2,350   2,230 
 Equipment expense  1,068   1,002   981   1,017   918   3,051   2,599 
 Data processing fees  648   685   646   627   664   1,979   1,883 
 Professional fees  623   612   863   738   766   2,098   2,476 
 Marketing expense  189   213   198   258   200   600   653 
 Telephone and communication expense  124   124   121   124   134   369   350 
 Postage and delivery expense  100   78   87   121   75   265   301 
 State, local and other taxes  218   218   228   277   250   664   805 
 Employee expense  141   156   188   157   145   485   456 
 Other expenses  1,115   728   764   510   605   2,607   1,828 
                 
  Total noninterest expense  10,481   10,339   10,773   10,269   10,384   31,593   32,046 
                 
                 
Income before income tax expense  3,224   3,706   2,967   4,344   4,089   9,897   10,971 
                 
 Income tax expense  537   631   517   811   746   1,685   1,983 
                 
Net income  $2,687  $3,075  $2,450  $3,533  $3,343  $8,212  $8,988 
                 
Common share data:              
 Basic earnings per common share $0.40  $0.45  $0.35  $0.51  $0.48  $1.20  $1.28 
                 
 Diluted earnings per common share$0.39  $0.44  $0.35  $0.50  $0.47  $1.18  $1.27 
                 
Average shares outstanding (in thousands):              
 Basic:  6,791   6,847   6,933   6,945   6,968   6,857   7,026 
 Diluted:  6,878   6,910   7,008   7,021   7,033   6,944   7,098 
                 



SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
               
($ in thousands, except per share & ratios)At and for the Three Months Ended Nine Months Ended
               
  September June March December September September September
SUMMARY OF OPERATIONS  2023   2023   2023   2022   2022   2023   2022 
               
Net interest income $9,536  $9,829  $10,324  $10,900  $10,430  $29,689  $28,499 
Tax-equivalent adjustment  43   44   43   41   38   131   100 
Tax-equivalent net interest income  9,579   9,873   10,367   10,941   10,468   29,820   28,599 
Provision for credit loss  (6)  145   250   -   -   389   - 
Noninterest income  4,163   4,361   3,666   3,713   4,043   12,190   14,518 
Total operating revenue  13,699   14,190   13,990   14,613   14,473   41,879   43,017 
Noninterest expense  10,481   10,339   10,773   10,269   10,384   31,593   32,046 
Pre-tax pre-provision income  3,218   3,851   3,217   4,344   4,088   10,286   10,971 
Pretax income  3,224   3,706   2,967   4,344   4,088   9,897   10,971 
Net income  2,687   3,075   2,450   3,533   3,343   8,212   8,988 
               
PER SHARE INFORMATION:              
Basic earnings per share (EPS)  0.40   0.45   0.35   0.51   0.48   1.20   1.28 
Diluted earnings per share  0.39   0.44   0.35   0.50   0.47   1.18   1.27 
Common dividends  0.130   0.130   0.125   0.125   0.120   0.385   0.355 
Book value per common share  16.59   17.30   17.37   17.08   16.49   16.59   16.49 
Tangible book value per common share (TBV)  13.09   13.81   13.93   13.65   13.07   13.09   13.07 
Market price per common share  13.50   12.62   14.13   16.95   16.85   13.50   16.85 
Market price to TBV  103.1%   91.4%   101.4%   124.2%   128.9%   103.1%   128.9% 
Market price to trailing 12 month EPS  8.0   7.1   8.2   9.6   9.6   8.0   9.6 
               
PERFORMANCE RATIOS:              
Return on average assets (ROAA)  0.80%   0.91%   0.73%   1.08%   1.03%   0.81%   0.91% 
Pre-tax pre-provision ROAA  0.96%   1.14%   0.96%   1.32%   1.26%   1.10%   1.19% 
Return on average equity  8.73%   10.01%   8.37%   12.17%   10.89%   8.72%   9.21% 
Return on average tangible equity  10.82%   12.40%   10.50%   15.30%   13.51%   10.75%   11.28% 
Efficiency ratio  76.34%   72.71%   76.85%   70.16%   71.63%   75.28%   74.38% 
Earning asset yield  4.78%   4.61%   4.49%   4.27%   3.89%   4.61%   3.42% 
Cost of interest bearing liabilities  2.18%   1.90%   1.46%   0.90%   0.58%   1.85%   0.45% 
Net interest margin  3.08%   3.15%   3.35%   3.60%   3.45%   3.18%   3.08% 
Tax equivalent effect  0.01%   0.01%   0.02%   0.01%   0.01%   0.02%   0.01% 
Net interest margin, tax equivalent  3.09%   3.16%   3.37%   3.61%   3.46%   3.20%   3.09% 
Non interest income/Average assets  1.24%   1.30%   1.10%   1.13%   1.24%   1.21%   1.47% 
Non interest expense/Average assets  3.13%   3.07%   3.23%   3.13%   3.19%   3.13%   3.24% 
Net noninterest expense/Average assets  -1.89%   -1.78%   -2.13%   -2.00%   -1.95%   -1.92%   -1.77% 
               
ASSET QUALITY RATIOS:              
Gross charge-offs  12   32   69   7   9   113   27 
Recoveries  7   10   8   1   32   25   46 
Net charge-offs  5   22   61   6   (23)  88   (19)
Nonperforming loans/Total loans  0.34%   0.30%   0.35%   0.38%   0.40%   0.34%   0.40% 
Nonperforming assets/Loans & OREO  0.40%   0.36%   0.41%   0.46%   0.49%   0.40%   0.49% 
Nonperforming assets/Total assets  0.30%   0.26%   0.30%   0.33%   0.35%   0.30%   0.35% 
Allowance for credit loss/Nonperforming loans  474.32%   542.78%   454.71%   375.29%   369.03%   474.32%   369.03% 
Allowance for credit loss/Total loans  1.60%   1.60%   1.58%   1.44%   1.49%   1.60%   1.49% 
Net loan charge-offs/Average loans (ann.)  0.00%   0.01%   0.03%   0.00%   (0.01%)  0.01%   (0.00%)
               
CAPITAL & LIQUIDITY RATIOS:              
Loans/ Deposits  91.13%   91.94%   87.94%   88.53%   85.21%   91.13%   85.21% 
Equity/ Assets  8.47%   8.77%   8.93%   8.87%   8.79%   8.47%   8.79% 
Tangible equity/Tangible assets  6.81%   7.13%   7.29%   7.22%   7.10%   6.81%   7.10% 
Common equity tier 1 ratio (Bank)  13.56%   13.18%   13.44%   13.42%   13.23%   13.56%   13.23% 
               
END OF PERIOD BALANCES              
Total assets  1,326,474   1,341,435   1,341,293   1,335,633   1,303,377   1,326,474   1,303,377 
Total loans  989,021   984,824   976,312   962,075   925,249   989,021   925,249 
Deposits  1,085,319   1,071,156   1,110,144   1,086,665   1,085,893   1,085,319   1,085,893 
Stockholders equity  112,348   117,666   119,759   118,428   114,628   112,348   114,628 
Goodwill and intangibles  23,687   23,710   23,732   23,753   23,770   23,687   23,770 
Tangible equity  88,661   93,956   96,027   94,675   90,858   88,661   90,858 
Mortgage servicing portfolio  1,367,209   1,353,904   1,344,158   1,352,016   1,362,666   1,367,209   1,362,666 
Wealth/Brokerage assets under care  478,236   499,255   518,009   507,093   480,947   478,236   480,947 
Total assets under care  3,171,919   3,194,594   3,203,460   3,194,742   3,146,990   3,171,919   3,146,990 
Full-time equivalent employees  252   253   255   268   271   252   271 
Period end common shares outstanding  6,773   6,803   6,894   6,935   6,950   6,773   6,950 
Market capitalization (all)  91,437   85,857   97,419   117,556   117,113   91,437   117,113 
               
AVERAGE BALANCES              
Total assets  1,339,870   1,346,010   1,335,056   1,314,419   1,302,297   1,344,467   1,319,668 
Total earning assets  1,239,145   1,248,813   1,232,018   1,211,674   1,209,958   1,243,094   1,231,865 
Total loans  989,089   988,348   970,813   937,898   909,909   982,817   871,340 
Deposits  1,095,414   1,100,344   1,098,935   1,094,491   1,085,821   1,098,593   1,109,345 
Stockholders equity  123,070   122,886   117,071   116,114   122,738   125,580   130,069 
Goodwill and intangibles  23,698   23,721   23,743   23,761   23,778   23,720   23,791 
Tangible equity  99,372   99,165   93,328   92,353   98,960   101,860   106,278 
Average basic shares outstanding  6,791   6,847   6,933   6,945   6,968   6,857   7,026 
Average diluted shares outstanding  6,878   6,910   7,008   7,021   7,033   6,944   7,098 
               
Tangible equity/Tangible assets - No AOCI  9.84%   9.63%   9.54%   9.67%   9.71%     
               



SB FINANCIAL GROUP, INC.
 Rate Volume Analysis - (Unaudited)
 For the Three Months Ended Sep. 30, 2023 and 2022
       
 ($ in thousands) Three Months Ended Sep. 30, 2023  Three Months Ended Sep. 30, 2022
   Average Average  Average Average
Assets BalanceInterestRate  BalanceInterestRate
           
 Taxable securities/cash $243,261 $1,507 2.48%  $291,712 $1,536 2.11%
 Nontaxable securities  6,795  39 2.30%   8,337  52 2.49%
 Loans, net  989,089  13,250 5.36%   909,909  10,176 4.47%
           
 Total earning assets  1,239,145  14,796 4.78%   1,209,958  11,764 3.89%
           
 Cash and due from banks  4,022      6,782   
 Allowance for loan losses  (15,791)     (13,802)  
 Premises and equipment  22,120      23,762   
 Other assets  90,374      75,597   
           
 Total assets $1,339,870     $1,302,297   
           
Liabilities         
 Savings, MMDA and interest bearing demand$620,092 $2,232 1.44%  $681,209 $542 0.32%
 Time deposits  244,289  1,962 3.21%   155,979  310 0.79%
 Repurchase agreements & other  16,319  16 0.39%   20,160  8 0.16%
 Advances from Federal Home Loan Bank  55,073  666 4.84%   26,739  180 2.69%
 Trust preferred securities  10,310  189 7.33%   10,310  99 3.84%
 Subordinated debt  19,622  195 3.98%   19,576  195 3.98%
           
 Total interest bearing liabilities  965,705  5,260 2.18%   913,973  1,334 0.58%
           
 Non interest bearing demand  231,033  -     248,633  -  
           
 Total funding  1,196,738  1.76%   1,162,606  0.46%
           
 Other liabilities  20,062      16,952   
           
 Total liabilities  1,216,800      1,179,558   
           
 Equity  123,070      122,738   
           
 Total liabilities and equity $1,339,870     $1,302,296   
           
 Net interest income  $9,536     $10,430  
           
 Net interest income as a percent of average interest-earning assets - GAAP measure3.08%    3.45%
           
 Net interest income as a percent of average interest-earning assets - non GAAP3.09%    3.46%
 - Computed on a fully tax equivalent (FTE) basis      
           
   Nine Months Ended Sep. 30, 2023  Nine Months Ended Sep. 30, 2022
   Average Average  Average Average
Assets BalanceInterestRate  BalanceInterestRate
           
 Taxable securities/cash $252,908 $4,566 2.41%  $352,405 $4,239 1.60%
 Nontaxable securities  7,369  132 2.39%   8,120  151 2.48%
 Loans, net  982,817  38,328 5.20%   871,340  27,242 4.17%
           
 Total earning assets  1,243,094  43,026 4.61%   1,231,865  31,632 3.42%
           
 Cash and due from banks  4,020      7,331   
 Allowance for loan losses  (15,374)     (13,804)  
 Premises and equipment  22,500      24,265   
 Other assets  90,227      70,011   
           
 Total assets $1,344,467     $1,319,668   
           
Liabilities         
 Savings, MMDA and interest bearing demand$627,074 $5,367 1.14%  $709,033 $1,293 0.24%
 Time deposits  233,054  4,943 2.83%   152,230  744 0.65%
 Repurchase agreements & Other  16,576  35 0.28%   21,298  32 0.20%
 Advances from Federal Home Loan Bank  53,936  1,883 4.65%   12,154  257 2.82%
 Trust preferred securities  10,310  525 6.79%   10,310  223 2.88%
 Subordinated debt  19,610  584 3.97%   19,564  584 3.98%
           
 Total interest bearing liabilities  960,560  13,337 1.85%   924,589  3,132 0.45%
           
 Non interest bearing demand  238,465  1.48%   248,082  0.36%
           
 Total funding  1,199,025      1,172,671   
           
 Other liabilities  19,862      16,928   
           
 Total liabilities  1,218,887      1,189,599   
           
 Equity  125,580      130,069   
           
 Total liabilities and equity $1,344,467     $1,319,668   
           
 Net interest income  $29,689     $28,500  
           
 Net interest income as a percent of average interest-earning assets - GAAP measure3.18%    3.08%
           
 Net interest income as a percent of average interest-earning assets - non GAAP3.20%    3.09%
 - Computed on a fully tax equivalent (FTE) basis      
           



Non-GAAP reconciliation Three Months Ended Nine Months Ended