• SB Financial Group Announces Third Quarter 2022 Results

    Source: Nasdaq GlobeNewswire / 01 Nov 2022 16:15:02   America/New_York

    DEFIANCE, Ohio, Nov. 01, 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 third quarter and nine months ended September 30, 2022.

    Third quarter 2022 highlights:

    • Net income of $3.3 million; diluted earnings per share (“EPS”) of $0.47 or a 19.0 percent decrease compared to the prior year third quarter as increased Net Interest Income was offset by Noninterest Income headwinds
    • Noninterest expense of $10.4 million declined 3.9 percent from the linked quarter
    • Loan growth of $29.6 million from the linked quarter, or 13.2 percent annualized
    • Deposit growth of $14.1 million from the linked quarter, or 5.3 percent annualized
    • Margin expansion of 8.7 percent from the linked quarter
    • Strong asset quality with Nonperforming assets at 40 basis points and net recoveries in the quarter

    Nine months ended September 30, 2022, highlights over prior-year nine months include:

    • Net income of $9.0 million and diluted EPS of $1.27, compared to $14.9 million, or $2.08 per share or a 38.9 percent decrease

    Third quarter 2022 trailing twelve-month highlights include:

    • Loans excluding Paycheck Protection Program (“PPP”) loans, increased $81.5 million, or 9.6 percent from the prior year
    • Deposits decreased by $25.8 million, or 2.3 percent to $1.09 billion
    • Mortgage origination volume of $388.0 million; servicing portfolio of $1.36 billion up 1.6 percent
             
    HighlightsThree Months Ended  Nine Months Ended
    ($ in thousands, except per share & ratios)Sep. 2022Sep. 2021% Change  Sep. 2022Sep. 2021% Change
    Operating revenue$14,473 $16,673 -13.2%  $43,017 $52,914 -18.7%
    Interest income 11,764  11,033 6.6%   31,632  31,901 -0.8%
    Interest expense 1,334  1,009 32.2%   3,133  3,095 1.2%
    Net interest income 10,430  10,024 4.1%   28,499  28,806 -1.1%
    Provision for loan losses -  300 0.0%   -  1,050 -100.0%
    Noninterest income 4,043  6,649 -39.2%   14,518  24,108 -39.8%
    Noninterest expense 10,384  11,256 -7.7%   32,046  33,241 -3.6%
    Net income 3,342  4,103 -18.5%   8,988  14,945 -39.9%
    Earnings per diluted share 0.47  0.58 -19.0%   1.27  2.08 -38.9%
    Return on average assets 1.03% 1.23%-16.3%   0.91% 1.51%-39.7%
    Return on average equity 10.89% 11.35%-4.1%   9.21% 13.84%-33.5%
             
    Non-GAAP Measures        
    Adjusted net income$3,291 $3,565 -7.7%  $8,046 $12,690 -36.6%
    Adjusted diluted EPS 0.47  0.56 -16.1%   1.13  1.77 -36.2%
    Adjusted return on average assets 1.01% 1.17%-13.7%   0.84% 1.34%-37.3%
    Adjusted pre-tax, pre-provision income 4,023  4,869 -17.4%   9,778  15,769 -38.0%
             

    “In the third quarter of 2022 we achieved another strong loan origination performance as loans grew $30 million, or 3.3 percent from the second quarter of 2022, or 13.2 percent annualized” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “Compared to prior year, net of PPP, organic loan growth was up $81.5 million or 9.6 percent. Strong loan growth and the increase in loan yields led to net interest margin expansion which partially offset the decline in mortgage revenue. Deposit balances stabilized during the quarter, however as short-term rates continue to rapidly increase our funding costs are beginning to rise.”

    RESULTS OF OPERATIONS

    Consolidated Revenue

    Total operating revenue, consisting of net interest income and noninterest income, up 1.5% from the linked quarter and down 13.2 percent from the third quarter of 2021. Operating revenue was negatively impacted by the expected decline in mortgage banking revenue.

    • Net interest income was up 8.7 percent from the linked quarter and up 4.1 percent from the year ago quarter.
    • Net interest margin on a fully taxable equivalent basis (FTE) was up from both the linked and year-ago quarters by 30 and 25 basis points, respectively, primarily from the increase in loan balances of $29.6 million from the linked quarter. Net of PPP, net interest margin is higher by 55 basis points compared to the prior year.   
    • Noninterest income was down 13 and 39 percent from the linked and year ago quarters, respectively, due to lower mortgage volume and OMSR recapture.      

    Mortgage Loan Business

    Mortgage loan originations for the third quarter of 2022 were $68.6 million, down $84.1 million, or 55.1 percent, from the year-ago quarter; likewise, total sales of originated loans were $39.2 million, down $83.9 million, or 68.2 percent.   For the first nine months of 2022, SB Financial had total volume of $261.4 million, of which $202.5 million (77.5 percent) was new purchase/construction lending, $39.0 million was external refinance (14.9 percent), and the remaining $19.9 million (7.6 percent) was internal refinance.

    Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.4 million for the third quarter of 2022, compared to $4.1 million for the year-ago quarter. The mortgage servicing valuation adjustment for the third quarter of 2022 was a positive $0.1 million, compared to a positive adjustment of $0.2 million for the third quarter of 2021. For the first nine months of 2022, the recapture of servicing rights was $1.2 million compared to a recapture of $2.9 million for the prior year nine months. The aggregate servicing valuation impairment ended the quarter at $0.3 million.   The servicing portfolio at September 30, 2022, was $1.36 billion, up $0.02 billion, or 1.6 percent, from $1.34 billion at September 30, 2021.

    Mr. Klein noted, “Refinance activity declined to just 10.9 percent of mortgage originations in the quarter from 52.0 percent in the prior year as higher rates continue to significantly impact our Residential mortgage business line. We continue to believe that this business segment offers us the opportunity to drive new households as a number of our competitors have begun to abandon the residential market.”  

             
    Mortgage Banking        
    ($ in thousands)Sep. 2022Jun. 2022Mar. 2022Dec. 2021Sep. 2021 Annual
    Growth    		 
    Mortgage originations$68,557 $95,454 $97,394 $126,611 $152,623  $(84,066) 
    Mortgage sales 39,176  49,915  72,154  110,543  123,083   (83,907) 
    Mortgage servicing portfolio 1,362,666  1,369,732  1,375,554  1,362,962  1,341,439   21,227  
    Mortgage servicing rights 13,473  13,408  13,135  12,034  11,194   2,279  
             
             
    Mortgage servicing revenue        
    Loan servicing fees 858  863  861  850  850   8  
    OMSR amortization (396) (496) (547) (807) (943)  547  
    Net administrative fees 462  367  314  43  (93)  555  
    OMSR valuation adjustment 65  239  890  581  248   (183) 
    Net loan servicing fees 527  606  1,204  624  155   372  
    Gain on sale of mortgages 876  1,196  1,676  3,194  3,947   (3,071) 
    Mortgage banking revenue, net$ 1,403 $ 1,802 $ 2,880 $ 3,818 $ 4,102  $ (2,699) 
             

    Noninterest Income and Noninterest Expense

    SB Financial’s noninterest income for the quarter was down from the prior year and the linked quarter by 39 and 13 percent, respectively. Gain on sale yields on mortgage loans were down nearly 100 basis points from the prior year and the total dollars of sales were down nearly $84 million. Wealth management revenue was down slightly from the prior year as market declines have had an adverse effect on the market value of assets under management. SB Financial’s title agency, Peak Title, was down just 6 percent from the prior year, as commercial transaction volume increased despite the residential mortgage slowdown.  

    For the third quarter of 2022, noninterest expense of $10.4 million was down $0.9 million or 7.7 percent compared to the prior year.

    Reduced expenses due to lower mortgage volume, has offset higher equipment expense related to technology improvements.

    Mr. Klein stated, “We executed on a number of FTE reductions in our residential mortgage business line in the third quarter as we thoughtfully right sized resources to combat lower volume. We continue to believe that fee income across all of our other business lines remains strong and has reduced our reliance on mortgage sale gains.”

            
    Noninterest Income / Noninterest Expense       
    ($ in thousands, except ratios)Sep. 2022Jun. 2022Mar. 2022Dec. 2021Sep. 2021 Annual
    Growth
    Noninterest Income (NII)$4,043 $4,673 $5,802 $6,589 $6,649  $(2,606)
    NII / Total Revenue 27.9% 32.8% 40.6% 42.1% 39.9%  -12.0%
    NII / Average Assets 1.2% 1.4% 1.7% 2.0% 2.0%  -0.8%
    Total Revenue Growth -13.2% -9.1% -46.9% -13.7% -15.3%  2.1%
            
    Noninterest Expense (NIE)$10,384 $10,802 $10,859 $11,567 $11,256  $(872)
    Efficiency Ratio 71.6% 75.6% 75.9% 73.7% 67.4%  4.2%
    NIE / Average Assets 3.2% 3.3% 3.2% 3.5% 3.4%  -0.2%
    Net Noninterest Expense/Avg. Assets -2.0% -1.9% -1.5% -1.5% -1.4%  -0.6%
    Total Expense Growth -7.7% -2.5% -0.5% 8.3% -0.7%  -7.0%
            

    Balance Sheet

    Total assets as of September 30, 2022, were $1.3 billion, or down 2.0 percent from the year ago quarter primarily due to the decrease in the investment portfolio. Total shareholders’ equity as of September 30, 2022, was $114.6 million, down 20.6 percent from a year ago due to the valuation adjustment on the Company’s bond portfolio, which has increased $32.7 million. Absent that negative impact, equity increased $3.1 million or 2.1 percent. SB Financial bought back 77,326 shares of our stock in the quarter at an average price of $17.27 or 132.1 percent of tangible book value per share.  

    The investment portfolio of $248.5 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 19.1 percent of assets at September 30, 2022, and was down 2.2 percent from the year-ago period. Compared to the linked quarter, the investment portfolio was down $23.0 million as the amortization cash flow was used to fund higher margin loan growth.

    Total loans held for investment were $925.2 million at September 30, 2022, up $78.7 million, or 9.3 percent, from September 30, 2021. Excluding PPP activity from both years, loan balances were up $81.5 million, or 9.6 percent.

    Deposit balances of $1.09 billion at September 30, 2022, decreased by $0.03 billion, or 2.3 percent, since September 30, 2021. Deposits grew $14.1 million from the linked quarter.  

    Mr. Klein continued, “The loan growth from closing deals from our strong pipelines improved the mix of our balance sheet as we also reduced the investment portfolio and funded additional growth with higher cost deposits. Our ability to grow interest bearing liabilities in the quarter was a positive while increasing those rates by just 19 bps from the linked quarter. We continue to see solid asset quality and are on pace to achieve zero net charge-offs for the full year of 2022.”

           
    Loan Balances      
    ($ in thousands, except ratios)Sep. 2022Jun. 2022Mar. 2022Dec. 2021Sep. 2021Annual
    Growth
    Commercial$128,565 $127,711 $124,857 $122,373 $138,085 $(9,520)
    % of Total 13.9% 14.3% 14.7% 14.9% 16.3% -6.9%
    Commercial RE 404,710  404,260  400,101  381,387  387,858  16,852 
    % of Total 43.7% 45.1% 47.0% 46.4% 45.8% 4.3%
    Agriculture 60,522  60,586  55,741  57,473  57,374  3,148 
    % of Total 6.5% 6.8% 6.6% 7.0% 6.8% 5.5%
    Residential RE 267,135  241,614  214,015  206,324  207,571  59,564 
    % of Total 28.9% 27.0% 25.2% 25.1% 24.5% 28.7%
    Consumer & Other 64,317  61,440  55,957  55,157  55,660  8,657 
    % of Total 7.0% 6.9% 6.6% 6.7% 6.6% 15.6%
    Total Loans$ 925,249 $ 895,611 $ 850,671 $ 822,714 $ 846,548 $ 78,701 
    Total Growth Percentage        9.3%
           
           
    Deposit Balances      
    ($ in thousands, except ratios)Sep. 2022Jun. 2022Mar. 2022Dec. 2021Sep. 2021Annual
    Growth
    Non-Int DDA$250,791 $239,676 $252,273 $247,044 $258,857 $(8,066)
    % of Total 23.1% 22.4% 22.2% 22.2% 23.3% -3.1%
    Interest DDA 199,523  198,286  211,152  195,464  189,130  10,393 
    % of Total 18.4% 18.5% 18.6% 17.6% 17.0% 5.5%
    Savings 201,402  215,285  236,394  237,571  246,414  (45,012)
    % of Total 18.5% 20.1% 20.8% 21.3% 22.2% -18.3%
    Money Market 258,975  276,274  289,699  276,462  258,741  234 
    % of Total 23.8% 25.8% 25.5% 24.8% 23.3% 0.1%
    Time Deposits 175,202  142,258  148,553  156,504  158,518  16,684 
    % of Total 16.1% 13.3% 13.1% 14.1% 14.3% 10.5%
    Total Deposits$ 1,085,893 $ 1,071,779 $ 1,138,071 $ 1,113,045 $ 1,111,660 $ (25,767)
    Total Growth Percentage        -2.3%
           

    Asset Quality

    SB Financial reported nonperforming assets of $5.2 million as of September 30, 2022, down $0.4 million or 7.6 percent from the year-ago quarter. The Company had net recoveries in the quarter, and for the year-to-date, the Company had $19,000 in net recoveries. The coverage ratio of problem loans to the loan loss allowance was at 313.3 percent at September 30, 2022.

           
    Nonperforming Assets        
    ($ in thousands, except ratios)Sep. 2022Jun. 2022Mar. 2022Dec. 2021Sep. 2021Annual
    Change
    Commercial & Agriculture$114 $140 $142 $143 $144 $(30)
    % of Total Com./Ag. loans 0.06% 0.07% 0.08% 0.08% 0.07% -20.8%
    Commercial RE 223  359  544  554  566  (343)
    % of Total CRE loans 0.06% 0.09% 0.14% 0.15% 0.15% -60.6%
    Residential RE 3,129  3,176  3,198  2,484  2,056  1,073 
    % of Total Res. RE loans 1.17% 1.31% 1.49% 1.20% 0.99% 52.2%
    Consumer & Other 280  323  409  471  422  (142)
    % of Total Con./Oth. loans 0.44% 0.53% 0.73% 0.85% 0.76% -33.6%
    Total Nonaccruing Loans 3,746  3,998  4,293  3,652  3,188  558 
    % of Total loans 0.40% 0.45% 0.50% 0.44% 0.38% 17.5%
    Accruing Restructured Loans 668  683  762  725  805  (137)
    Total Change (%)      -17.0%
    Total Nonaccruing & Restructured Loans 4,414  4,681  5,055  4,377  3,993  421 
    % of Total loans 0.48% 0.52% 0.59% 0.53% 0.47% 10.5%
    Foreclosed Assets and Other Assets 756  730  527  2,104  1,601  (845)
    Total Change (%)      -52.8%
    Total Nonperforming Assets$5,170 $5,411 $5,582 $6,481 $5,594 $(424)
    % of Total assets 0.40% 0.42% 0.42% 0.49% 0.42% -7.6%
           

    Webcast and Conference Call

    The Company will hold the third quarter 2022 earnings conference call and webcast on November 2, 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 with the ticker 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)
              
     September June March December September
    ($ in thousands) 2022   2022   2022   2021   2021 
              
    ASSETS         
    Cash and due from banks$27,934  $29,567  $130,003  $149,511  $138,015 
    Interest bearing time deposits 2,134   1,691   1,894   2,643   2,651 
    Available-for-sale securities 243,233   266,162   265,311   263,259   248,815 
    Loans held for sale 2,979   4,242   4,737   7,472   10,335 
    Loans, net of unearned income 925,249   895,611   850,671   822,714   846,548 
    Allowance for loan losses (13,824)  (13,801)  (13,804)  (13,805)  (13,812)
    Premises and equipment, net 22,842   23,122   23,039   23,212   23,874 
    Federal Reserve and FHLB Stock, at cost 5,230   5,303   5,303   5,303   5,303 
    Foreclosed assets and other assets 756   730   527   2,104   1,601 
    Interest receivable 3,556   3,256   2,815   2,920   2,954 
    Goodwill 23,239   23,239   23,239   23,191   22,091 
    Cash value of life insurance 28,713   28,556   17,932   17,867   17,795 
    Mortgage servicing rights 13,473   13,408   13,135   12,034   11,194 
    Other assets 17,863   12,886   10,328   12,430   12,361 
              
    Total assets$1,303,377  $1,293,972  $1,335,130  $1,330,855  $1,329,725 
              
              
              
    LIABILITIES AND SHAREHOLDERS' EQUITY         
    Deposits         
    Non interest bearing demand$250,791  $239,676  $252,273  $247,044  $258,857 
    Interest bearing demand 199,523   198,286   211,152   195,464   189,130 
    Savings 201,402   215,285   236,394   237,571   246,414 
    Money market 258,975   276,274   289,699   276,462   258,741 
    Time deposits 175,202   142,258   148,553   156,504   158,518 
              
    Total deposits 1,085,893   1,071,779   1,138,071   1,113,045   1,111,660 
              
    Short-term borrowings 19,754   30,772   19,035   15,320   20,771 
    Federal Home Loan Bank advances 35,000   25,000   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 19,582   19,570   19,558   19,546   19,534 
    Interest payable 623   307   536   299   576 
    Other liabilities 17,587   11,678   9,483   21,906   17,082 
              
    Total liabilities 1,188,749   1,169,416   1,202,493   1,185,926   1,185,433 
              
    Shareholders' Equity         
    Common stock 61,319   61,319   61,319   54,463   54,463 
    Additional paid-in capital 15,000   15,069   14,872   14,944   14,875 
    Retained earnings 99,309   96,809   94,833   99,716   97,183 
    Accumulated other comprehensive income (loss) (33,426)  (22,210)  (13,659)  (1,845)  (699)
    Treasury stock (27,574)  (26,431)  (24,728)  (22,349)  (21,530)
              
    Total shareholders' equity 114,628   124,556   132,637   144,929   144,292 
              
    Total liabilities and shareholders' equity$1,303,377  $1,293,972  $1,335,130  $1,330,855  $1,329,725 
              


    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 2022   2022  2022  2021  2021  2022  2021
     Loans             
     Taxable$10,084  $8,880 $8,052 $8,889 $9,948 $27,016 $29,070
     Tax exempt 92   73  61  59  52  226  147
     Securities             
     Taxable 1,536   1,469  1,235  969  939  4,239  2,417
     Tax exempt 52   52  47  86  94  151  267
                    
      Total interest income 11,764   10,474  9,395  10,003  11,033  31,632  31,901
                    
    Interest expense             
     Deposits 852   567  618  640  709  2,037  2,489
     Repurchase agreements & other 8   11  13  7  12  32  35
     Federal Home Loan Bank advances 180   38  39  41  40  257  147
     Trust preferred securities 99   71  53  49  49  223  150
     Subordinated debt 195   194  195  188  199  584  274
                    
      Total interest expense 1,334   881  918  925  1,009  3,133  3,095
                    
                    
    Net interest income 10,430   9,593  8,477  9,078  10,024  28,499  28,806
                    
     Provision for loan losses -   -  -  -  300  -  1,050
                    
    Net interest income after provision             
      for loan losses 10,430   9,593  8,477  9,078  9,724  28,499  27,756
                    
    Noninterest income             
     Wealth management fees 930   936  955  988  959  2,821  2,826
     Customer service fees 844   860  794  827  812  2,498  2,390
     Gain on sale of mtg. loans & OMSR 876   1,196  1,676  3,194  3,947  3,748  14,061
     Mortgage loan servicing fees, net 527   606  1,204  624  155  2,337  2,316
     Gain on sale of non-mortgage loans 125   167  169  44  52  461  114
     Title insurance revenue 476   697  602  528  508  1,775  1,561
     Gain (loss) on sale of assets (12)  -  55  1  1  43  1
     Other 277   211  347  383  215  835  839
                    
      Total noninterest income 4,043   4,673  5,802  6,589  6,649  14,518  24,108
                    
    Noninterest expense             
     Salaries and employee benefits 5,858   6,418  6,189  6,648  6,689  18,465  20,190
     Net occupancy expense 769   719  742  846  714  2,230  2,202
     Equipment expense 918   827  854  899  872  2,599  2,382
     Data processing fees 664   643  576  721  671  1,883  1,858
     Professional fees 766   760  950  872  817  2,476  2,155
     Marketing expense 200   222  231  228  201  653  556
     Telephone and communication expense 134   105  111  148  140  350  433
     Postage and delivery expense 75   110  116  106  100  301  308
     State, local and other taxes 250   277  278  288  286  805  887
     Employee expense 145   175  136  163  186  456  500
     Other expenses 605   546  676  648  580  1,828  1,770
                    
      Total noninterest expense 10,384   10,802  10,859  11,567  11,256  32,046  33,241
                    
                    
    Income before income tax expense 4,088   3,464  3,420  4,100  5,117  10,971  18,623
                    
     Income tax expense 746   630  607  768  1,014  1,983  3,678
                    
    Net income $3,342  $2,834 $2,813 $3,332 $4,103 $8,988 $14,945
                    
    Common share data:             
     Basic earnings per common share$0.48  $0.40 $0.40 $0.49 $0.59 $1.28 $2.09
                    
     Diluted earnings per common share$0.47  $0.40 $0.40 $0.49 $0.58 $1.27 $2.08
                    
    Average shares outstanding (in thousands):             
     Basic: 6,968   7,075  7,035  6,906  6,966  7,026  7,142
     Diluted: 7,033   7,149  7,100  6,970  7,017  7,098  7,167
                    


    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 2022   2022   2022   2021   2021   2022   2021 
                  
    Net interest income$10,430  $9,593  $8,477  $9,078  $10,024  $28,499  $28,806 
    Tax-equivalent adjustment 38   33   29   39   39   100   110 
    Tax-equivalent net interest income 10,468   9,626   8,506   9,117   10,063   28,599   28,916 
    Provision for loan loss -   -   -   -   300   -   1,050 
    Noninterest income 4,043   4,673   5,802   6,589   6,649   14,518   24,108 
    Total operating revenue 14,473   14,266   14,279   15,667   16,673   43,017   52,914 
    Noninterest expense 10,384   10,802   10,859   11,567   11,256   32,045   33,241 
    Pre-tax pre-provision income 4,089   3,464   3,420   4,100   5,417   10,972   19,673 
    Pretax income 4,089   3,464   3,420   4,100   5,117   10,972   18,623 
    Net income 3,342   2,834   2,813   3,332   4,103   8,988   14,945 
                  
    PER SHARE INFORMATION:             
    Basic earnings per share (EPS) 0.48   0.40   0.40   0.49   0.59   1.28   2.09 
    Diluted earnings per share 0.47   0.40   0.40   0.49   0.58   1.27   2.08 
    Common dividends 0.120   0.120   0.115   0.115   0.110   0.355   0.325 
    Book value per common share 16.49   17.75   18.65   21.05   20.83   16.49   20.83 
    Tangible book value per common share (TBV) 13.07   14.36   15.31   17.60   17.55   13.07   17.55 
    Market price per common share 16.85   17.26   19.91   19.67   18.18   16.85   18.18 
    Market price to TBV 128.9%  120.2%  130.1%  111.8%  103.6%  128.9%  103.6%
    Market price to trailing 12 month EPS 9.6   9.3   10.0   7.7   6.5   9.6   6.5 
                  
    PERFORMANCE RATIOS:             
    Return on average assets (ROAA) 1.03%  0.87%  0.83%  0.99%  1.23%  0.91%  1.51%
    Pre-tax pre-provision ROAA 1.26%  1.06%  1.01%  1.22%  1.63%  1.19%  2.12%
    Return on average equity 10.89%  8.89%  8.08%  9.21%  11.35%  9.21%  13.84%
    Return on average tangible equity 13.51%  10.93%  9.75%  10.92%  13.47%  11.28%  16.43%
    Efficiency ratio 71.63%  75.60%  75.93%  73.72%  67.40%  74.38%  62.72%
    Earning asset yield 3.89%  3.45%  2.96%  3.17%  3.25%  3.42%  3.44%
    Cost of interest bearing liabilities 0.58%  0.39%  0.39%  0.40%  0.44%  0.45%  0.46%
    Net interest margin 3.45%  3.15%  2.67%  2.87%  3.20%  3.08%  3.11%
    Tax equivalent effect 0.01%  0.01%  0.01%  0.02%  0.01%  0.01%  0.01%
    Net interest margin, tax equivalent 3.46%  3.16%  2.68%  2.89%  3.21%  3.09%  3.12%
    Non interest income/Average assets 1.24%  1.43%  1.72%  1.96%  1.99%  1.47%  2.44%
    Non interest expense/Average assets 3.19%  3.31%  3.22%  3.45%  3.38%  3.24%  3.37%
    Net noninterest expense/Average assets -1.95%  -1.88%  -1.50%  -1.48%  -1.38%  -1.77%  -0.93%
                  
    ASSET QUALITY RATIOS:             
    Gross charge-offs 9   9   9   34   24   27   102 
    Recoveries 32   6   8   27   230   46   290 
    Net charge-offs (23)  3   1   7   (206)  (19)  (188)
    Nonaccruing loans/Total loans 0.40%  0.45%  0.50%  0.44%  0.38%  0.40%  0.38%
    Nonperforming loans/Total loans 0.48%  0.52%  0.59%  0.53%  0.47%  0.48%  0.47%
    Nonperforming assets/Loans & OREO 0.56%  0.60%  0.66%  0.79%  0.66%  0.56%  0.66%
    Nonperforming assets/Total assets 0.40%  0.42%  0.42%  0.49%  0.42%  0.40%  0.42%
    Allowance for loan loss/Nonperforming loans 313.26%  294.83%  273.08%  315.40%  345.91%  313.26%  345.91%
    Allowance for loan loss/Total loans 1.49%  1.54%  1.62%  1.68%  1.63%  1.49%  1.63%
    Net loan charge-offs/Average loans (ann.) (0.01%)  0.00%  0.00%  0.00%  (0.10%)  (0.00%)  (0.03%)
                  
    CAPITAL & LIQUIDITY RATIOS:             
    Loans/ Deposits 85.21%  83.56%  74.75%  73.92%  76.15%  85.21%  76.15%
    Equity/ Assets 8.79%  9.63%  9.93%  10.89%  10.85%  8.79%  10.85%
    Tangible equity/Tangible assets 7.10%  7.93%  8.30%  9.27%  9.30%  7.10%  9.30%
    Common equity tier 1 ratio (Bank) 13.23%  13.21%  13.71%  13.94%  13.23%  13.21%  13.23%
                  
    END OF PERIOD BALANCES             
    Total assets 1,303,377   1,293,972   1,335,130   1,330,855   1,329,725   1,303,377   1,329,725 
    Total loans 925,249   895,611   850,671   822,714   846,548   925,249   846,548 
    Deposits 1,085,893   1,071,779   1,138,071   1,113,045   1,111,660   1,085,893   1,111,660 
    Stockholders equity 114,628   124,556   132,637   144,929   144,292   114,628   144,292 
    Goodwill and intangibles 23,770   23,787   23,804   23,774   22,692   23,770   22,692 
    Tangible equity 90,858   100,769   108,833   121,155   121,600   90,858   121,600 
    Mortgage servicing portfolio 1,362,666   1,369,732   1,375,554   1,362,962   1,341,439   1,362,666   1,341,439 
    Wealth/Brokerage assets under care 480,947   500,487   560,698   618,279   588,319   480,947   588,319 
    Total assets under care 3,146,990   3,164,191   3,271,382   3,312,096   3,259,483   3,146,990   3,259,483 
    Full-time equivalent employees 271   267   256   269   264   271   264 
    Period end common shares outstanding 6,950   7,017   7,111   6,884   6,927   6,950   6,927 
    Market capitalization (all) 117,113   121,105   141,575   135,415   125,935   117,113   125,935 
                  
    AVERAGE BALANCES             
    Total assets 1,302,297   1,305,815   1,350,982   1,342,202   1,333,369   1,319,668   1,315,521 
    Total earning assets 1,209,958   1,216,124   1,270,218   1,263,431   1,253,722   1,231,865   1,236,227 
    Total loans 909,909   870,439   832,825   845,078   856,486   871,340   857,703 
    Deposits 1,085,821   1,108,890   1,134,234   1,123,843   1,109,491   1,109,345   1,099,892 
    Stockholders equity 122,738   127,519   139,214   144,749   144,565   130,069   144,020 
    Goodwill and intangibles 23,778   23,796   23,801   22,701   22,701   23,791   22,718 
    Tangible equity 98,960   103,723   115,413   122,048   121,864   106,278   121,302 
    Average basic shares outstanding 6,968   7,075   7,035   6,906   6,966   7,026   7,142 
    Average diluted shares outstanding 7,033   7,149   7,100   6,970   7,017   7,098   7,167 
                  


    SB FINANCIAL GROUP, INC.
     Rate Volume Analysis - (Unaudited)
     For the Three and Nine Months Ended Sep. 30, 2022 and 2021
         
     ($ in thousands)Three Months Ended Sep. 30, 2022 Three Months Ended Sep. 30, 2021
      Average Average Average Average
    AssetsBalanceInterestRate BalanceInterestRate
             
     Taxable securities/cash$291,712 $1,5362.11% $388,800 $9390.97%
     Nontaxable securities 8,337  522.49%  8,436  944.46%
     Loans, net 909,909  10,1764.47%  856,486  10,0004.67%
             
     Total earning assets 1,209,958  11,7643.89%  1,253,722  11,0333.52%
             
     Cash and due from banks 6,782     6,975   
     Allowance for loan losses (13,802)    (13,475)  
     Premises and equipment 23,762     25,820   
     Other assets 75,597     60,327   
             
     Total assets$1,302,297    $1,333,369   
             
    Liabilities       
     Savings, MMDA and interest bearing demand$681,209 $5420.32% $695,801 $4410.25%
     Time deposits 155,979  3100.79%  164,432  2680.65%
     Repurchase agreements & other 20,160  80.16%  24,672  120.19%
     Advances from Federal Home Loan Bank 26,739  1802.69%  5,500  402.91%
     Trust preferred securities 10,310  993.84%  10,310  491.90%
     Subordinated debt 19,576  1953.98%  19,528  1994.08%
             
     Total interest bearing liabilities 913,973  1,3340.58%  920,243  1,0090.44%
             
     Non interest bearing demand 248,633  -   249,258  - 
             
     Total funding 1,162,606  0.46%  1,169,501  0.35%
             
     Other liabilities 16,952     19,303   
             
     Total liabilities 1,179,558     1,188,804   
             
     Equity 122,738     144,565   
             
     Total liabilities and equity$1,302,296    $1,333,369   
             
     Net interest income $10,430   $10,024 
             
     Net interest income as a percent of average interest-earning assets - GAAP measure  3.45%   3.20%
             
     Net interest income as a percent of average interest-earning assets - non GAAP3.46%   3.21%
     - Computed on a fully tax equivalent (FTE) basis      
             
      Nine Months Ended Sep. 30, 2022 Nine Months Ended Sep. 30, 2021
      Average Average Average Average
    AssetsBalanceInterestRate BalanceInterestRate
             
     Taxable securities/cash$352,405 $4,2391.60% $370,743 $2,4170.87%
     Nontaxable securities 8,120  1512.48%  7,781  2674.58%
     Loans, net 871,340  27,2424.17%  857,703  29,2174.54%
             
     Total earning assets 1,231,865  31,6323.42%  1,236,227  31,9013.44%
             
     Cash and due from banks 7,331     7,554   
     Allowance for loan losses (13,804)    (13,297)  
     Premises and equipment 24,265     24,442   
     Other assets 70,011     60,595   
             
     Total assets$1,319,668    $1,315,521   
             
    Liabilities       
     Savings, MMDA and interest bearing demand$709,033 $1,2930.24% $661,433 $1,4130.28%
     Time deposits 152,230  7440.65%  184,668  1,0760.78%
     Repurchase agreements & Other 21,298  320.20%  24,139  350.19%
     Advances from Federal Home Loan Bank 12,154  2572.82%  6,846  1472.86%
     Trust preferred securities 10,310  2232.88%  10,310  1501.94%
     Subordinated debt 19,564  5843.98%  9,811  2743.72%
             
     Total interest bearing liabilities 924,589  3,1330.45%  897,207  3,0950.46%
             
     Non interest bearing demand 248,082  0.36%  253,791  0.36%
             
     Total funding 1,172,671     1,150,998   
             
     Other liabilities 16,928     20,503   
             
     Total liabilities 1,189,599     1,171,501   
             
     Equity 130,069     144,020   
             
     Total liabilities and equity$1,319,668    $1,315,521   
             
     Net interest income $28,499   $28,806 
             
     Net interest income as a percent of average interest-earning assets - GAAP measure  3.08%   3.11%
             
     Net interest income as a percent of average interest-earning assets - non GAAP3.09%   3.12%
     - Computed on a fully tax equivalent (FTE) basis      
             


    Non-GAAP reconciliationThree Months Ended Nine Months Ended
            
    ($ in thousands, except per share & ratios)Sep. 30, 2022 Sep. 30, 2021 Sep. 30, 2022 Sep. 30, 2021
            
    Total Operating Revenue$14,473  $16,673  $43,017  $52,914 
     Adjustment to (deduct)/add OMSR recapture/impairment* (65)  (248)  (1,193)  (2,854)
            
    Adjusted Total Operating Revenue 14,408   16,425   41,824   50,060 
            
            
    Income before Income Taxes 4,088   5,117   10,971   18,623 
     Adjustment for OMSR (65)  (248)  (1,193)  (2,854)
            
    Adjusted Income before Income Taxes 4,023   4,869   9,778   15,769 
            
            
    Provision for Income Taxes 746   1,014   1,983   3,678 
     Adjustment for OMSR ** (14)  (52)  (251)  (599)
            
    Adjusted Provision for Income Taxes 732   962   1,732   3,080 
            
            
    Net Income 3,342   3,761   8,988   14,945 
     Adjustment for OMSR (51)  (196)  (942)  (2,255)
            
    Adjusted Net Income 3,291   3,565   8,046   12,690 
            
            
    Diluted Earnings per Share 0.47   0.58   1.27   2.08 
     Adjustment for OMSR (0.01)  (0.03)  (0.13)  (0.31)
            
    Adjusted Diluted Earnings per Share$0.47  $0.55  $1.13  $1.77 
            
            
    Return on Average Assets 1.03%  1.23%  0.91%  1.51%
     Adjustment for OMSR -0.02%  -0.06%  -0.07%  -0.17%
            
    Adjusted Return on Average Assets 1.01%  1.17%  0.84%  1.34%
            
    *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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