• SB Financial Group Announces Second Quarter 2022 Results

    Source: Nasdaq GlobeNewswire / 25 Jul 2022 15:15:02   America/Chicago

    DEFIANCE, Ohio, July 25, 2022 (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 second quarter and six months ended June 30, 2022.

    Second quarter 2022 highlights over prior-year second quarter include:

    • Net income of $2.8 million; diluted earnings per share (“EPS”) of $0.40 or a 23.1 percent decrease
    • Adjusted net income, excluding the impact of the Originated Mortgage Servicing Rights (“OMSR”) recapture of $0.2 million was $2.6 million, with EPS of $0.37
    • Mortgage origination volume of $95.5 million, reflects a decrease of $69.4 million, or 42.1 percent

    Six months ended June 30, 2022, highlights over prior-year six months include:

    • Net income of $5.6 million and diluted EPS of $0.79, compared to $10.8 million, or $1.49 per share or a 47.0 percent decrease
    • Adjusted net income, excluding the impact of OMSR activity of $4.8 million, down $4.0 million or 45.9 percent

    Second quarter 2022 trailing twelve-month highlights include:

    • Loans excluding Paycheck Protection Program (“PPP”) loans, increased $79.3 million, or 9.7 percent from the prior year
    • Deposits decreased by $19.3 million, or 1.8 percent to $1.07 billion at quarter end
    • Mortgage origination volume of $472.1 million; servicing portfolio of $1.37 billion, which is up $0.05 billion, or 3.5 percent
    HighlightsThree Months Ended  Six Months Ended
    ($ in thousands, except per share & ratios)Jun. 2022Jun. 2021% Change  Jun. 2022Jun. 2021% Change
    Operating revenue$14,266 $15,694 -9.1%  $28,545 $36,241 -21.2%
    Interest income 10,474  10,163 3.1%   19,869  20,868 -4.8%
    Interest expense 881  1,006 -12.4%   1,799  2,086 -13.8%
    Net interest income 9,593  9,157 4.8%   18,070  18,782 -3.8%
    Provision for loan losses -  - 0.0%   -  750 -100.0%
    Noninterest income 4,673  6,537 -28.5%   10,475  17,459 -40.0%
    Noninterest expense 10,802  11,076 -2.5%   21,661  21,985 -1.5%
    Net income 2,834  3,761 -24.6%   5,647  10,842 -47.9%
    Earnings per diluted share 0.40  0.52 -23.1%   0.79  1.49 -47.0%
    Return on average assets 0.87% 1.13%-23.0%   0.85% 1.66%-48.8%
    Return on average equity 8.88% 10.42%-14.8%   8.46% 15.09%-43.9%
             
    Non-GAAP Measures        
    Adjusted net income$2,643 $3,840 -31.2%  $4,754 $8,783 -45.9%
    Adjusted diluted EPS 0.37  0.53 -30.2%   0.67  1.21 -44.6%
    Adjusted return on average assets 0.81% 1.16%-30.2%   0.78% 1.50%-48.0%
    Adjusted pre-tax, pre-provision income 3,223  4,717 -31.7%   5,754  10,900 -47.2%
             

    “We had very strong loan growth this quarter of $45 million, which is in addition to the $28 million in growth we achieved in Q1,” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “For the first half of 2022 we have grown our loan balances by 8.9 percent over 2021 year end. This growth was across all categories and we had positive growth from nearly all of our regions. The prime rate increases coupled with the loan growth resulted in interest income increasing over 11 percent from the linked quarter.”

    RESULTS OF OPERATIONS

    Consolidated Revenue

    Total operating revenue, consisting of net interest income and noninterest income, was down 9.1 percent from the second quarter of 2021, and flat from the linked quarter.

    • Net interest income was up from the year-ago quarter by 4.8 percent, and up 13.2 percent from the linked quarter.
    • Net interest margin on a fully taxable equivalent basis (FTE) was up from both year-ago and linked quarters by 23 and 49 basis points, respectively, as loan balances were up $44.9 million from the linked quarter. Net of PPP, our net interest margin is higher by 34 basis points compared to the prior year.   
    • Noninterest income was down 29 and 19 percent from the year ago and linked quarters, respectively, due to lower mortgage volume and OMSR recapture. 

    Mortgage Loan Business

    Mortgage loan originations for the second quarter of 2022 were $95.5 million, down $69.4 million, or 42.1 percent, from the year-ago quarter; likewise, total sales of originated loans were $49.9 million, down $69.1 million, or 58.1 percent.   For the first six months of 2022, SB Financial had total volume of $192.8 million, of which $141.4 million (73 percent) was new purchase/construction lending, $33.0 million was external refinance (17 percent), and the remaining $18.4 million (10 percent) was internal refinance.

    Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.8 million for the second quarter of 2022, compared to $4.0 million for the year-ago quarter. The mortgage servicing valuation adjustment for the second quarter of 2022 was a positive $0.2 million, compared to a negative adjustment of $0.1 million for the second quarter of 2021. For the first six months of 2022, the recapture of servicing rights was $1.1 million compared to a recapture of $2.6 million for the prior year six months. The aggregate servicing valuation impairment ended the quarter at $0.3 million.   The servicing portfolio at June 30, 2022, was $1.37 billion, up $0.05 billion, or 3.5 percent, from $1.32 billion at June 30, 2021.

    Mr. Klein noted, “With fixed rate saleable mortgage rates above 5 percent for most of the quarter, we have continued to be flexible by originating more portfolio product with a special emphasis on the Private Client segment. We continue to look for ways to improve our efficiency in the mortgage business line and are committed to adding additional originators to capture market share and balance the entire business-line ecosystem.”

    Mortgage Banking     
    ($ in thousands)Jun. 2022Mar. 2022Dec. 2021Sep. 2021Jun. 2021
    Mortgage originations$95,454 $97,394 $126,611 $152,623 $164,883 
    Mortgage sales 49,915  72,154  110,543  123,083  119,064 
    Mortgage servicing portfolio 1,369,732  1,375,554  1,362,962  1,341,439  1,323,804 
    Mortgage servicing rights 13,408  13,135  12,034  11,194  10,678 
          
          
    Mortgage servicing revenue     
    Loan servicing fees 863  861  850  850  830 
    OMSR amortization (496) (547) (807) (943) (948)
    Net administrative fees 367  314  43  (93) (118)
    OMSR valuation adjustment 239  890  581  248  (99)
    Net loan servicing fees 606  1,204  624  155  (217)
    Gain on sale of mortgages 1,196  1,676  3,194  3,947  4,255 
    Mortgage banking revenue, net$ 1,802 $ 2,880 $ 3,818 $ 4,102 $ 4,038 
          

    Noninterest Income and Noninterest Expense

    SB Financial’s noninterest income for the quarter was down from the prior year and the linked quarter by 29 and 19 percent, respectively. Gain on sale yields on mortgage loan sales were down over 100 basis points from the prior year and the total dollars of sales were down over $69 million. Wealth management revenue was flat from the prior year as our retention efforts and new sales offset general market declines. SB Financial’s title agency, Peak Title, continued to transition to serving all of the Company’s needs by increasing commercial volume and with our new market expansions; as a result, revenue was up 31 percent compared to the prior year.  

    For the second quarter of 2022, noninterest expense of $10.8 million was down $0.3 million or 2.5 percent compared to the prior year. Decreased mortgage volume has been the main driver of lower operating expenses.

    Mr. Klein stated, “We are committed to lowering our operating costs in both the Mortgage and Retail business lines to reflect not only lower volumes but also the change in consumer behavior of a more robust adoption of digital banking solutions.”

    Noninterest Income / Noninterest Expense     
    ($ in thousands, except ratios)Jun. 2022Mar. 2022Dec. 2021Sep. 2021Jun. 2021
    Noninterest Income (NII)$4,673 $5,802 $6,589 $6,649 $6,537 
    NII / Total Revenue 32.8% 40.6% 42.1% 39.9% 41.7%
    NII / Average Assets 1.4% 1.7% 2.0% 2.0% 2.0%
    Total Revenue Growth -9.1% -46.9% -13.7% -15.3% -10.3%
          
    Noninterest Expense (NIE)$10,802 $10,859 $11,567 $11,256 $11,076 
    Efficiency Ratio 75.6% 75.9% 73.7% 67.4% 70.5%
    NIE / Average Assets 3.3% 3.2% 3.5% 3.4% 3.3%
    Net Noninterest Expense/Avg. Assets -1.9% -1.5% -1.5% -1.4% -1.4%
    Total Expense Growth -2.5% -0.5% 8.3% -0.7% -5.0%
          

    Balance Sheet

    Total assets as of June 30, 2022, were $1.29 billion, down $0.02 billion, or 1.4 percent, from the year ago quarter due to declining deposit levels as the consumer began to put their excess liquidity to use in the economy. Total shareholders’ equity as of June 30, 2022, was $124.6 million, down 13.5 percent from a year ago due to the valuation adjustment on the Company’s bond portfolio. Absent that negative impact, equity increased $3.2 million or 2.3 percent. SB Financial bought back 94,211 shares of our stock in the quarter at an average price of $18.08 or 122 percent of tangible book value.  

    Total loans held for investment were $895.6 million at June 30, 2022, up $45.1 million, or 5.3 percent, from June 30, 2021. Excluding PPP activity from both years, loan balances were up $79.3 million, or 9.7 percent.

    The investment portfolio of $271.5 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 21.0 percent of assets at June 30, 2022, and was up 25.1 percent from the year-ago period. Deposit balances of $1.07 billion at June 30, 2022, decreased by $0.02 billion, or 1.8 percent, since June 30, 2021.

    Mr. Klein continued, “Loan growth from the linked quarter met and exceeded our expectations and we remain very positive about the loan pipelines in all of our markets.   The consumer and our small business clients began to utilize their liquidity as we saw deposit and cash levels decline this quarter.”

    Loan Balances      
    ($ in thousands, except ratios)Jun. 2022Mar. 2022Dec. 2021Sep. 2021Jun. 2021Annual
    Growth
    Commercial$127,711 $124,857 $122,373 $138,085 $149,998 $(22,287)
    % of Total 14.3% 14.7% 14.9% 16.3% 17.6% -14.9%
    Commercial RE 404,260  400,101  381,387  387,858  389,287  14,973 
    % of Total 45.1% 47.0% 46.4% 45.8% 45.8% 3.8%
    Agriculture 60,586  55,741  57,473  57,374  50,895  9,691 
    % of Total 6.8% 6.6% 7.0% 6.8% 6.0% 19.0%
    Residential RE 241,614  214,015  206,324  207,571  203,294  38,320 
    % of Total 27.0% 25.2% 25.1% 24.5% 23.9% 18.8%
    Consumer & Other 61,440  55,957  55,157  55,660  57,039  4,401 
    % of Total 6.9% 6.6% 6.7% 6.6% 6.7% 7.7%
    Total Loans$ 895,611 $ 850,671 $ 822,714 $ 846,548 $ 850,513 $ 45,098 
    Total Growth Percentage     5.3%
           
           
    Deposit Balances      
    ($ in thousands, except ratios)Jun. 2022Mar. 2022Dec. 2021Sep. 2021Jun. 2021Annual
    Growth
    Non-Int DDA$239,676 $252,273 $247,044 $258,857 $240,572 $(896)
    % of Total 22.4% 22.2% 22.2% 23.3% 22.0% -0.4%
    Interest DDA 198,286  211,152  195,464  189,130  187,023  11,263 
    % of Total 18.5% 18.6% 17.6% 17.0% 17.1% 6.0%
    Savings 215,285  236,394  237,571  246,414  235,231  (19,946)
    % of Total 20.1% 20.8% 21.3% 22.2% 21.6% -8.5%
    Money Market 276,274  289,699  276,462  258,741  255,512  20,762 
    % of Total 25.8% 25.5% 24.8% 23.3% 23.4% 8.1%
    Time Deposits 142,258  148,553  156,504  158,518  172,696  (30,438)
    % of Total 13.3% 13.1% 14.1% 14.3% 15.8% -17.6%
    Total Deposits$ 1,071,779 $ 1,138,071 $ 1,113,045 $ 1,111,660 $ 1,091,034 $ (19,255)
    Total Growth Percentage     -1.8%
           

    Asset Quality

    SB Financial reported nonperforming assets of $5.4 million as of June 30, 2022, down $0.6 million or 9.5 percent from the year-ago quarter. The Company took minimal charge-offs in the quarter, and for the year, had just $4,000 in net charge-offs. The coverage of problem loans by the loan loss allowance was at 290 percent at June 30, 2022.

    Nonperforming Assets
    ($ in thousands, except ratios)    		Jun. 2022Mar. 2022Dec. 2021Sep. 2021Jun. 2021Annual
    Change
    Commercial & Agriculture$140 $142 $143 $144 $375 $(235)
    % of Total Com./Ag. loans 0.07% 0.08% 0.08% 0.07% 0.19% -62.7%
    Commercial RE 359  544  554  566  1,026  (667)
    % of Total CRE loans 0.09% 0.14% 0.15% 0.15% 0.26% -65.0%
    Residential RE 3,176  3,198  2,484  2,056  1,751  1,425 
    % of Total Res. RE loans 1.31% 1.49% 1.20% 0.99% 0.86% 81.4%
    Consumer & Other 323  409  471  422  463  (140)
    % of Total Con./Oth. loans 0.53% 0.73% 0.85% 0.76% 0.81% -30.2%
    Total Nonaccruing Loans 3,998  4,293  3,652  3,188  3,615  383 
    % of Total loans 0.45% 0.50% 0.44% 0.38% 0.43% 10.6%
    Accruing Restructured Loans 683  762  725  805  758  (75)
    Total Change (%)      -9.9%
    Total Nonaccruing & Restructured Loans 4,681  5,055  4,377  3,993  4,373  308 
    % of Total loans 0.52% 0.59% 0.53% 0.47% 0.51% 7.0%
    Foreclosed Assets and Other Assets 730  527  2,104  1,601  1,603  (873)
    Total Change (%)      -54.5%
    Total Nonperforming Assets$5,411 $5,582 $6,481 $5,594 $5,976 $(565)
    % of Total assets 0.42% 0.42% 0.49% 0.42% 0.46% -9.5%
           

    Webcast and Conference Call

    The Company will hold a related conference call and webcast on July 26, 2022, 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 24 full-service ATMs. State Bank has five 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 under the symbol “SBFG”.

    In April 2022, SB Financial was named to the Keefe, Bruyette & Woods, Inc. “Bank Honor Roll” of superior performers that consistently reported increases in earnings per share over the last decade. The honor roll review determined that just 17 banks in the U.S., including SB Financial, or five percent of all banks screened, qualified for inclusion.

    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, the duration and scope of the COVID-19 outbreak in the United States and the market areas in which SB Financial and its subsidiaries operate, including the impact to the state and local economies of prolonged shelter in place orders and the pandemic generally, 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 non-GAAP items of OMSR impairment and merger related costs from net income to report an 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
            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)
                  
         June March December September June
       ($ in thousands)  2022   2022   2021   2021   2021 
                  
    ASSETS          
     Cash and due from banks $29,567  $130,003  $149,511  $138,015  $154,993 
     Interest bearing time deposits  1,691   1,894   2,643   2,651   2,906 
     Available-for-sale securities  266,162   265,311   263,259   248,815   211,756 
     Loans held for sale  4,242   4,737   7,472   10,335   8,731 
     Loans, net of unearned income  895,611   850,671   822,714   846,548   850,513 
     Allowance for loan losses  (13,801)  (13,804)  (13,805)  (13,812)  (13,306)
     Premises and equipment, net  23,122   23,039   23,212   23,874   24,343 
     Federal Reserve and FHLB Stock, at cost  5,303   5,303   5,303   5,303   5,303 
     Foreclosed assets and other assets  730   527   2,104   1,601   1,603 
     Interest receivable  3,256   2,815   2,920   2,954   3,000 
     Goodwill  23,239   23,239   23,191   22,091   22,091 
     Cash value of life insurance  28,556   17,932   17,867   17,795   17,721 
     Mortgage servicing rights  13,408   13,135   12,034   11,194   10,678 
     Other assets  12,886   10,328   12,430   12,361   12,175 
                  
       Total assets $1,293,972  $1,335,130  $1,330,855  $1,329,725  $1,312,507 
                  
                  
                  
    LIABILITIES AND SHAREHOLDERS' EQUITY          
     Deposits          
      Non interest bearing demand $239,676  $252,273  $247,044  $258,857  $240,572 
      Interest bearing demand  198,286   211,152   195,464   189,130   187,023 
      Savings  215,285   236,394   237,571   246,414   235,231 
      Money market  276,274   289,699   276,462   258,741   255,512 
      Time deposits  142,258   148,553   156,504   158,518   172,696 
                  
       Total deposits  1,071,779   1,138,071   1,113,045   1,111,660   1,091,034 
                  
     Short-term borrowings  30,772   19,035   15,320   20,771   25,096 
     Federal Home Loan Bank advances  25,000   5,500   5,500   5,500   5,500 
     Trust preferred securities  10,310   10,310   10,310   10,310   10,310 
     Subordinated debt net of issuance costs  19,570   19,558   19,546   19,534   19,522 
     Interest payable  307   536   299   576   417 
     Other liabilities  11,678   9,483   21,906   17,082   16,611 
                  
       Total liabilities  1,169,416   1,202,493   1,185,926   1,185,433   1,168,490 
                  
     Shareholders' Equity          
      Common stock  61,319   61,319   54,463   54,463   54,463 
      Additional paid-in capital  15,069   14,872   14,944   14,875   14,906 
      Retained earnings  96,809   94,833   99,716   97,183   93,851 
      Accumulated other comprehensive income (loss)  (22,210)  (13,659)  (1,845)  (699)  499 
      Treasury stock  (26,431)  (24,728)  (22,349)  (21,530)  (19,702)
                  
       Total shareholders' equity  124,556   132,637   144,929   144,292   144,017 
                  
       Total liabilities and shareholders' equity$1,293,972  $1,335,130  $1,330,855  $1,329,725  $1,312,507 
                  



    SB FINANCIAL GROUP, INC.
    CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
                     
    ($ in thousands, except per share & ratios) At and for the Three Months Ended Six Months Ended
                     
        June March December September June June June
    Interest income   2022   2022   2021   2021   2021   2022   2021 
     Loans              
     Taxable $8,880  $8,052  $8,889  $9,948  $9,196  $16,932  $19,122 
     Tax exempt  73   61   59   52   47   134   95 
     Securities              
     Taxable  1,469   1,235   969   939   835   2,704   1,478 
     Tax exempt  52   47   86   94   85   99   173 
      Total interest income  10,474   9,395   10,003   11,033   10,163   19,869   20,868 
                     
    Interest expense              
     Deposits  567   618   640   709   818   1,185   1,780 
     Repurchase agreements & other  11   13   7   12   12   24   23 
     Federal Home Loan Bank advances 38   39   41   40   51   77   107 
     Trust preferred securities  71   53   49   49   50   124   101 
     Subordinated debt  194   195   188   199   75   389   75 
      Total interest expense  881   918   925   1,009   1,006   1,799   2,086 
                     
    Net interest income  9,593   8,477   9,078   10,024   9,157   18,070   18,782 
     Provision for loan losses  -   -   -   300   -   -   750 
                     
    Net interest income after provision for loan losses
    		  9,593   8,477   9,078   9,724   9,157   18,070   18,032 
                     
    Noninterest income              
     Wealth management fees  936   955   988   959   955   1,891   1,867 
     Customer service fees  860   794   827   812   820   1,654   1,578 
     Gain on sale of mtg. loans & OMSR 1,196   1,676   3,194   3,947   4,255   2,872   10,114 
     Mortgage loan servicing fees, net  606   1,204   624   155   (217)  1,810   2,161 
     Gain on sale of non-mortgage loans 167   169   44   52   45   336   62 
     Title insurance revenue  697   602   528   508   532   1,299   1,053 
     Gain (loss) on sale of assets  -   55   1   1   2   55   - 
     Other  211   347   383   215   145   558   624 
      Total noninterest income  4,673   5,802   6,589   6,649   6,537   10,475   17,459 
                     
    Noninterest expense              
     Salaries and employee benefits  6,418   6,189   6,648   6,689   6,881   12,607   13,501 
     Net occupancy expense  719   742   846   714   748   1,461   1,488 
     Equipment expense  827   854   899   872   778   1,681   1,510 
     Data processing fees  643   576   721   671   653   1,219   1,187 
     Professional fees  760   950   872   817   574   1,710   1,338 
     Marketing expense  222   231   228   201   220   453   355 
     Telephone and communication expense  105   111   148   140   139   216   293 
     Postage and delivery expense  110   116   106   100   97   226   208 
     State, local and other taxes  277   278   288   286   278   555   601 
     Employee expense  175   136   163   186   161   311   314 
     Other expenses  546   676   648   580   547   1,222   1,190 
      Total noninterest expense  10,802   10,859   11,567   11,256   11,076   21,661   21,985 
                     
                     
    Income before income tax expense  3,464   3,420   4,100   5,117   4,618   6,884   13,506 
     Income tax expense  630   607   768   1,014   857   1,237   2,664 
                     
    Net income  $2,834  $2,813  $3,332  $4,103  $3,761  $5,647  $10,842 
                     
    Common share data:              
     Basic earnings per common share $0.40  $0.40  $0.49  $0.59  $0.53  $0.80  $1.50 
     Diluted earnings per common share$0.40  $0.40  $0.49  $0.58  $0.52  $0.79  $1.49 
                     
    Average shares outstanding (in thousands):              
     Basic:  7,075   7,035   6,906   6,966   7,148   7,055   7,232 
     Diluted:  7,149   7,100   6,970   7,017   7,200   7,116   7,256 
                     



    SB FINANCIAL GROUP, INC.
    CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
                   
    ($ in thousands, except per share & ratios)At and for the Three Months Ended Six Months Ended
      June March December September June June June
    SUMMARY OF OPERATIONS  2022   2022   2021   2021   2021   2022   2021 
                   
    Net interest income $9,593  $8,477  $9,078  $10,024  $9,157  $18,070  $18,782 
    Tax-equivalent adjustment  33   29   39   39   35   62   71 
    Tax-equivalent net interest income  9,626   8,506   9,117   10,063   9,192   18,132   18,853 
    Provision for loan loss  -   -   -   300   -   -   750 
    Noninterest income  4,673   5,802   6,589   6,649   6,537   10,475   17,459 
    Total operating revenue  14,266   14,279   15,667   16,673   15,694   28,545   36,241 
    Noninterest expense  10,802   10,859   11,567   11,256   11,076   21,661   21,985 
    Pre-tax pre-provision income  3,464   3,420   4,100   5,417   4,618   6,884   14,256 
    Pretax income  3,464   3,420   4,100   5,117   4,618   6,884   13,506 
    Net income  2,834   2,813   3,332   4,103   3,761   5,647   10,842 
                   
    PER SHARE INFORMATION:              
    Basic earnings per share (EPS)  0.40   0.40   0.49   0.59   0.53   0.80   1.50 
    Diluted earnings per share  0.40   0.40   0.49   0.58   0.52   0.79   1.49 
    Common dividends  0.120   0.115   0.115   0.110   0.110   0.235   0.215 
    Book value per common share  17.75   18.65   21.05   20.83   20.49   17.75   20.49 
    Tangible book value per common share (TBV)  14.36   15.31   17.60   17.55   17.25   14.36   17.25 
    Market price per common share  17.26   19.91   19.67   18.18   18.50   17.26   18.50 
    Market price to TBV  120.2%  130.1%  111.8%  103.6%  107.2%  120.2%  107.2%
    Market price to trailing 12 month EPS  9.3   10.0   7.7   6.7   6.5   9.3   6.5 
                   
    PERFORMANCE RATIOS:              
    Return on average assets (ROAA)  0.87%  0.83%  0.99%  1.23%  1.13%  0.85%  1.66%
    Pre-tax pre-provision ROAA  1.06%  1.01%  1.22%  1.63%  1.39%  1.11%  2.32%
    Return on average equity  8.89%  8.08%  9.21%  11.35%  10.42%  8.46%  15.09%
    Return on average tangible equity  10.93%  9.75%  10.92%  13.47%  12.37%  10.30%  17.92%
    Efficiency ratio  75.60%  75.93%  73.72%  67.40%  70.46%  75.76%  60.56%
    Earning asset yield  3.45%  2.96%  3.17%  3.25%  3.56%  3.20%  3.40%
    Cost of interest bearing liabilities  0.39%  0.39%  0.40%  0.44%  0.44%  0.38%  0.47%
    Net interest margin  3.15%  2.67%  2.87%  3.20%  2.93%  2.91%  3.06%
    Tax equivalent effect  0.01%  0.01%  0.02%  0.01%  0.01%  0.01%  0.01%
    Net interest margin, tax equivalent  3.16%  2.68%  2.89%  3.21%  2.94%  2.92%  3.07%
    Non interest income/Average assets  1.43%  1.72%  1.96%  1.99%  1.97%  1.58%  2.67%
    Non interest expense/Average assets  3.31%  3.22%  3.45%  3.38%  3.33%  3.26%  3.37%
    Net noninterest expense/Average assets  -1.88%  -1.50%  -1.48%  -1.38%  -1.37%  -1.68%  -0.70%
                   
    ASSET QUALITY RATIOS:              
    Gross charge-offs  9   9   34   24   26   18   78 
    Recoveries  6   8   27   230   6   14   60 
    Net charge-offs  3   1   7   (206)  20   4   18 
    Nonaccruing loans/Total loans  0.45%  0.50%  0.44%  0.38%  0.43%  0.45%  0.43%
    Nonperforming loans/Total loans  0.52%  0.59%  0.53%  0.47%  0.51%  0.52%  0.51%
    Nonperforming assets/Loans & OREO  0.60%  0.66%  0.79%  0.66%  0.70%  0.60%  0.70%
    Nonperforming assets/Total assets  0.42%  0.42%  0.49%  0.42%  0.46%  0.42%  0.46%
    Allowance for loan loss/Nonperforming loans 294.83%  273.08%  315.40%  345.91%  304.28%  294.83%  304.28%
    Allowance for loan loss/Total loans  1.54%  1.62%  1.68%  1.63%  1.56%  1.54%  1.56%
    Net loan charge-offs/Average loans (ann.)  0.00%  0.00%  0.00%  (0.10%)  0.01%  0.00%  0.00%
                   
    CAPITAL & LIQUIDITY RATIOS:              
    Loans/ Deposits  83.56%  74.75%  73.92%  76.15%  77.95%  83.56%  77.95%
    Equity/ Assets  9.63%  9.93%  10.89%  10.85%  10.97%  9.63%  10.97%
    Tangible equity/Tangible assets  7.93%  8.30%  9.27%  9.30%  9.41%  7.93%  9.41%
    Common equity tier 1 ratio (Bank)  14.08%  13.71%  13.94%  13.23%  13.11%  14.08%  13.11%
                   
    END OF PERIOD BALANCES              
    Total assets  1,293,972   1,335,130   1,330,855   1,329,725   1,312,507   1,293,972   1,312,507 
    Total loans  895,611   850,671   822,714   846,548   850,513   895,611   850,513 
    Deposits  1,071,779   1,138,071   1,113,045   1,111,660   1,091,034   1,071,779   1,091,034 
    Stockholders equity  124,556   132,637   144,929   144,292   144,017   124,556   144,017 
    Goodwill and intangibles  23,804   23,804   23,774   22,692   22,710   23,804   22,710 
    Tangible equity  100,752   108,833   121,155   121,600   121,307   100,752   121,307 
    Mortgage servicing portfolio  1,369,732   1,375,554   1,362,962   1,341,439   1,323,804   1,369,732   1,323,804 
    Wealth/Brokerage assets under care  500,487   560,698   618,279   588,319   600,904   500,487   600,904 
    Total assets under care  3,164,191   3,271,382   3,312,096   3,259,483   3,237,215   3,164,191   3,237,215 
    Full-time equivalent employees  267   256   269   264   256   267   256 
    Period end common shares outstanding  7,017   7,111   6,884   6,927   7,027   7,017   7,027 
    Market capitalization (all)  121,105   141,575   135,415   125,935   130,000   121,105   130,000 
                   
    AVERAGE BALANCES              
    Total assets  1,305,815   1,350,982   1,342,202   1,333,369   1,329,348   1,328,216   1,306,355 
    Total earning assets  1,216,124   1,270,218   1,263,431   1,253,722   1,251,213   1,243,017   1,227,359 
    Total loans  870,439   832,825   845,078   856,486   853,794   851,736   858,321 
    Deposits  1,108,890   1,134,234   1,123,843   1,109,491   1,115,186   1,121,373   1,094,269 
    Stockholders equity  127,519   139,214   144,749   144,565   144,315   133,471   143,709 
    Goodwill and intangibles  23,796   23,801   22,701   22,701   22,718   23,798   22,727 
    Tangible equity  103,723   115,413   122,048   121,864   121,597   109,673   120,982 
    Average basic shares outstanding  7,075   7,035   6,906   6,966   7,148   7,055   7,232 
    Average diluted shares outstanding  7,149   7,100   6,970   7,017   7,200   7,116   7,256 
                   


    SB FINANCIAL GROUP, INC. 
     Rate Volume Analysis - (Unaudited) 
     For the Three and Six Months Ended June 30, 2022 and 2021 
            
     ($ in thousands) Three Months Ended Jun. 30, 2022  Three Months Ended Jun. 30, 2021 
       Average Average  Average Average 
    Assets BalanceInterestRate  BalanceInterestRate 
                
     Taxable securities/cash $337,226 $1,4691.74%  $390,036 $8350.86% 
     Nontaxable securities  8,459  522.46%   7,383  854.61% 
     Loans, net  870,439  8,9534.11%   853,794  9,2434.33% 
                
     Total earning assets  1,216,124  10,4743.45%   1,251,213  10,1633.25% 
                
     Cash and due from banks  7,177      6,992    
     Allowance for loan losses  (13,803)     (13,565)   
     Premises and equipment  23,741      23,988    
     Other assets  72,576      60,720    
                
     Total assets $1,305,815     $1,329,348    
                
    Liabilities          
     Savings, MMDA and interest bearing demand$713,367 $3530.20%  $672,803 $4640.28% 
     Time deposits  145,694  2140.59%   183,138  3540.77% 
     Repurchase agreements & other  18,671  110.24%   23,607  120.20% 
     Advances from Federal Home Loan Bank  3,989  383.81%   7,066  512.89% 
     Trust preferred securities  10,310  712.75%   10,310  501.94% 
     Subordinated debt  19,564  1943.97%   9,880  750.00% 
                
     Total interest bearing liabilities  911,595  8810.39%   906,804  1,0060.44% 
                
     Non interest bearing demand  249,829  -    259,245  -  
                
     Total funding  1,161,424  0.30%   1,166,049  0.35% 
                
     Other liabilities  16,872      18,984    
                
     Total liabilities  1,178,296      1,185,033    
                
     Equity  127,519      144,315    
                
     Total liabilities and equity $1,305,815     $1,329,348    
                
     Net interest income  $9,593    $9,157  
                
     Net interest income as a percent of average interest-earning assets - GAAP measure   3.155%    2.93% 
                
     Net interest income as a percent of average interest-earning assets - non GAAP3.164%    2.94% 
     - Computed on a fully tax equivalent (FTE) basis        
                
       Six Months Ended Jun. 30, 2022  Six Months Ended Jun. 30, 2021 
       Average Average  Average Average 
    Assets BalanceInterestRate  BalanceInterestRate 
                
     Taxable securities/cash $383,272 $2,7041.41%  $361,566 $1,4780.82% 
     Nontaxable securities  8,009  992.47%   7,472  1734.63% 
     Loans, net  851,736  17,0664.01%   858,321  19,2174.48% 
                
     Total earning assets  1,243,017  19,8693.20%   1,227,359  20,8683.40% 
                
     Cash and due from banks  7,593      7,769    
     Allowance for loan losses  (13,805)     (13,206)   
     Premises and equipment  24,522      23,743    
     Other assets  66,889      60,690    
                
     Total assets $1,328,216     $1,306,355    
                
    Liabilities          
     Savings, MMDA and interest bearing demand$723,176 $7510.21%  $643,962 $9720.30% 
     Time deposits  156,268  4350.56%   194,955  8080.83% 
     Repurchase agreements & Other  21,876  240.22%   23,869  230.19% 
     Advances from Federal Home Loan Bank  4,740  773.25%   7,530  1072.84% 
     Trust preferred securities  10,310  1242.41%   10,310  1011.96% 
     Subordinated debt  19,558  3893.98%   5,646  752.66% 
                
     Total interest bearing liabilities  935,928  1,7990.38%   886,272  2,0860.47% 
                
     Non interest bearing demand  241,929  0.31%   255,352  0.37% 
                
     Total funding  1,177,857      1,141,624    
                
     Other liabilities  16,888      21,022    
                
     Total liabilities  1,194,745      1,162,646    
                
     Equity  133,471      143,709    
                
     Total liabilities and equity $1,328,216     $1,306,355    
                
     Net interest income  $18,070    $18,782  
                
     Net interest income as a percent of average interest-earning assets - GAAP measure   2.91%    3.06% 
                
     Net interest income as a percent of average interest-earning assets - non GAAP2.92%    3.07% 
     - Computed on a fully tax equivalent (FTE) basis        
                


    Non-GAAP reconciliation Three Months Ended Six Months Ended
             
    ($ in thousands, except per share & ratios) Jun. 30, 2022 Jun. 30, 2021 Jun. 30, 2022 Jun. 30, 2021
             
    Total Operating Revenue $14,266  $15,694  $28,545  $36,241 
    Adjustment to (deduct)/add OMSR recapture/impairment* (239)  99   (1,128)  (2,606)
    Adjusted Total Operating Revenue  14,027   15,793   27,417   33,635 
             
    Income before Income Taxes  3,464   4,618   6,884   13,506 
    Adjustment for OMSR  (239)  99   (1,128)  (2,606)
    Adjusted Income before Income Taxes  3,225   4,717   5,756   10,900 
             
    Provision for Income Taxes  630   857   1,237   2,664 
    Adjustment for OMSR **  (50)  21   (237)  (547)
    Adjusted Provision for Income Taxes  580   878   1,000   2,118 
             
    Net Income  2,834   3,761   5,647   10,842 
    Adjustment for OMSR  (189)  79   (891)  (2,059)
    Adjusted Net Income  2,645   3,840   4,756   8,783 
             
    Diluted Earnings per Share  0.40   0.52   0.79   1.49 
    Adjustment for OMSR  (0.03)  0.01   (0.13)  (0.28)
    Adjusted Diluted Earnings per Share $0.37  $0.53  $0.67  $1.21 
             
    Return on Average Assets  0.87%  1.13%  0.85%  1.66%
    Adjustment for OMSR  -0.06%  0.02%  -0.07%  -0.16%
    Adjusted Return on Average Assets  0.81%  1.15%  0.78%  1.50%
             
    *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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