EX-99.1 2 f8k101818aex99-1_sbfin.htm NEWS RELEASE ISSUED BY SB FINANCIAL GROUP, INC. ON OCTOBER 18, 2018, REPORTING FINANCIAL RESULTS FOR THE THIRD QUARTER 2018

Exhibit 99.1

 

 

Investor Contact Information:

 

Anthony V. Cosentino

Executive Vice President and

Chief Financial Officer

Tony.Cosentino@YourStateBank.com

 

SB Financial Group, Inc. Announces Third-Quarter and Nine-Month 2018 Results

 

Year-over-year third-quarter net income growth of 14% and trailing twelve-month loan growth of 14%

 

DEFIANCE, Ohio, October 18, 2018 -- SB Financial Group, Inc. (NASDAQ: SBFG) (“SB Financial” or the “Company”), a diversified financial services company providing full-service community banking, mortgage banking and wealth management, today reported earnings for the third-quarter and nine months ended September 30, 2018.

 

Third-quarter 2018 highlights over prior-year third quarter include:

 

Net income of $3.1 million, an increase of 14.5 percent

 

Operating revenue of $12.7 million, up $0.6 million, or 5.0 percent
   
Return on average assets of 1.30 percent, up 3 basis points, or 2.4 percent
   
Diluted earnings per share (EPS) of $0.39, a decrease of $0.04 per share, or 9.3 percent
   
Mortgage origination volume of $95.3 million, an increase of $6.1 million, or 6.8 percent

 

Nine-month 2018 highlights over prior-year nine months include:

 

Net income of $8.7 million, an increase of $1.6 million, or 23.4 percent
   
Operating revenue of $37.3 million, up $3.5 million, or 10.3 percent
   
Return on average assets of 1.24 percent, up 13 basis points, or 11.7 percent
   
Diluted EPS of $1.14, an increase of $0.03 per share, or 2.7 percent
   
Mortgage origination volume of $263.2 million, an increase of $19.5 million, or 8.0 percent

 

Third-quarter 2018, trailing twelve-month highlights include:

 

Total assets increased to $979.2 million, up $118.7 million, or 13.8 percent
   
Loan growth of $96.6 million, or 14.3 percent
   
Deposit growth of $72.6 million, or 10.1 percent
   
Mortgage origination volume of $335.3 million, an increase of $8.1 million, or 2.5 percent; servicing portfolio of $1.07 billion, up $0.09 billion, or 8.9 percent

 

 

 

Highlights

 

  Three Months Ended   Nine Months Ended 
($ in thousands, except per share & ratios)  Sep. 2018   Sep. 2017   % Change   Sep. 2018   Sep. 2017   % Change 
Operating revenue  $12,731   $12,124    5.0%  $37,348   $33,857    10.3%
Interest income   10,258    8,338    23.0    28,840    23,718    21.6 
Interest expense   1,729    1,075    60.8    4,187    2,986    40.2 
Net interest income   8,529    7,263    17.4    24,653    20,732    18.9 
Noninterest income   4,202    4,861    (13.6)   12,695    13,125    (3.3)
Noninterest expense   8,789    8,284    6.1    25,995    23,472    10.7 
Net income   3,118    2,723    14.5    8,679    7,033    23.4 
Earnings per diluted share   0.39    0.43    (9.3)   1.14    1.11    2.7 
Net interest margin (FTE)   3.96%   3.81%   3.9    3.96%   3.71%   6.7 
Return on average assets   1.30%   1.27%   2.4    1.24%   1.11%   11.7 
Return on average equity   9.89%   12.11%   (18.3)   9.75%   10.57%   (7.8)

 

“SB Financial’s third-quarter net income was up 14 percent compared to the prior-year quarter,” said Mark A. Klein, Chairman, President and CEO of SB Financial. Loan volume was again strong, as we added $18 million in the quarter and $75 million for the nine months, while our non-performing assets held steady at 35 basis points.”

 

RESULTS OF OPERATIONS

 

Consolidated Revenue

 

Total operating revenue, consisting of net interest income and noninterest income, was up 5.0 percent from the third quarter of 2017, and flat to the linked quarter.

 

Net interest income was up 17.4 percent from the year-ago quarter, and up 1.2 percent from the linked quarter.

 

Net interest margin (FTE) was up 15 basis points from the year-ago quarter, but down 18 basis points from the linked quarter.

 

Noninterest income was down 13.5 percent from the year-ago quarter, and flat to the linked quarter.

 

Mortgage Loan Business

 

Mortgage loan originations for the third quarter of 2018 were $95.3 million, up $6.1 million, or 6.8 percent, from the year-ago quarter. Total sales of originated loans were $80.6 million, up $3.7 million, or 4.8 percent from the year-ago quarter.

 

Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $2.3 million for the third quarter of 2018, compared to $2.4 million for the year-ago quarter. The mortgage servicing valuation adjustment for the third quarter 2018 was a negative $0.06 million, compared to a negative adjustment of $0.04 million for the third quarter of 2017. The aggregate servicing valuation impairment ended the quarter at $0.14 million. The mortgage-servicing portfolio at September 30, 2018, was $1.07 billion, up $0.09 billion, or 8.9 percent, from $0.98 billion at September 30, 2017.

 

Mr. Klein noted, “Mortgage volumes were down from the linked quarter but up nearly 7 percent from the year ago quarter. To ensure we remain on plan, we have recently leveraged our regional real estate expertise into one of the Midwest’s most dynamic markets – Indianapolis, which should add another productive mortgage region to the Company.”

 

Mortgage Banking

 

                    
($ in thousands)  Sep. 2018   Jun. 2018   Mar. 2018   Dec. 2017   Sep. 2017 
Mortgage originations  $95,289   $109,466   $58,485   $72,102   $89,217 
Mortgage sales   80,555    79,162    40,589    53,825    76,919 
Mortgage servicing portfolio   1,066,402    1,030,780    1,004,728    994,915    979,251 
Mortgage servicing rights   11,129    10,634    10,195    9,907    9,560 
                          
                          
Mortgage servicing revenue:                         
Loan servicing fees   653    636    625    617    605 
OMSR amortization   (318)   (367)   (246)   (269)   (343)
Net administrative fees   335    269    379    348    262 
OMSR valuation adjustment   (62)   (22)   92    118    (36)
Net loan servicing fees   273    247    471    466    227 
Gain on sale of mortgages   2,066    2,058    1,100    1,608    2,211 
Mortgage banking revenue, net  $2,339   $2,305   $1,571   $2,074   $2,438 

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Noninterest Income and Noninterest Expense

 

SB Financial’s noninterest income includes revenue from a diverse group of services, such as wealth management, deposit fees, residential loan sales and the sale of Small Business Administration (SBA) loans. SBA activity for the quarter consisted of total sold loan volume of $0.9 million and gains of $0.1 million. Wealth management assets under the Company’s care stood at $412.2 million as of September 30, 2018. For the third quarter of 2018, noninterest income as a percentage of total revenue was 33.0 percent.

 

For the third quarter of 2018, noninterest expense (NIE) of $8.8 million was up $0.5 million, or 6.1 percent, compared to the same quarter last year. Compared to the linked quarter, NIE was up $0.2 million. Mr. Klein stated, “Fee income levels have slowed this year with lower mortgage sales and in the quarter we had some timing issues with the sale of several SBA credits.”

 

Noninterest Income / Noninterest Expense

 

                   
($ in thousands, except ratios)  Sep. 2018   Jun. 2018   Mar. 2018   Dec. 2017   Sep. 2017 
Noninterest Income (NII)  $4,202   $4,249   $4,243   $4,092   $4,861 
NII / Total Revenue   33.0%   33.5%   35.5%   34.8%   40.1%
NII / Average Assets   1.8%   1.8%   1.9%   1.9%   2.3%
                          
Noninterest Expense (NIE)  $8,789   $8,579   $8,627   $8,106   $8,284 
Efficiency Ratio   69.0%   67.7%   72.2%   69.0%   68.3%
NIE / Average Assets   3.7%   3.7%   3.8%   3.7%   3.9%
Net Noninterest Expense   -1.9    -1.9    -1.9    -1.8    -1.6 

 

Balance Sheet

 

Total assets as of September 30, 2018, were $979.2 million, up $118.7 million, or 13.8 percent, from a year ago. Total equity as of September 30, 2018, was $127.1 million, up 39.8 percent from a year ago, and comprised 13.0 percent of total assets. Both the equity and total assets reflect the $30 million common capital raise completed in the first quarter of 2018.

 

Total loans held for investment were $771.7 million at September 30, 2018, up $96.6 million, or 14.3 percent, from September 30, 2017. Commercial real estate loans were up $36.8 million, or 11.5 percent, with residential real estate rising $36.7 million, or 26.0 percent.

 

The investment portfolio of $88.2 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 9.0 percent of assets at September 30, 2018, and was down 0.9 percent from the year-ago period. Deposit balances of $789.4 million at September 30, 2018, increased by $72.6 million, or 10.1 percent, since September 30, 2017. Growth from the prior year included $10.3 million in checking and $62.3 million in savings and time deposit balances.

 

Mr. Klein continued, “Loan volumes have been strong for us all year, with total growth of $97 million, or 14 percent, from the prior year. Our loan pipelines remain consistent and we ended the quarter just short of the $1 billion total asset level. Additionally, we maintained strong asset quality in the quarter, with net charge offs only $6,000 and nonperforming assets at 35 basis points.”

 

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Loan Balance

 

                       Annual 
($ in thousands, except ratios)  Sep. 2018   Jun. 2018   Mar. 2018   Dec. 2017   Sep. 2017   Growth 
Commercial  $119,810   $115,140   $107,579   $102,041   $104,723   $15,087 
% of Total   15.5%   15.3%   15.2%   14.6%   15.5%   14.4%
Commercial RE   356,563    350,266    338,586    332,154    319,764    36,799 
% of Total   46.2%   46.5%   47.9%   47.7%   47.4%   11.5%
Agriculture   52,814    52,466    50,266    51,947    51,140    1,674 
% of Total   6.8%   7.0%   7.1%   7.5%   7.6%   3.3%
Residential RE   178,033    172,773    151,820    150,854    141,296    36,737 
% of Total   23.1%   22.9%   21.5%   21.6%   20.9%   26.0%
Consumer & Other   64,478    62,640    58,956    59,619    58,152    6,326 
% of Total   8.4%   8.3%   8.3%   8.6%   8.6%   10.9%
Total Loans  $771,698   $753,285   $707,207   $696,615   $675,075   $96,623 
Total Growth Percentage                            14.3%

 

Deposit Balance                        
                         
($ in thousands, except ratios)  Sep. 2018   Jun. 2018   Mar. 2018   Dec. 2017   Sep. 2017   Annual Growth 
Non-Int DDA  $134,747   $131,125   $132,919   $135,592   $124,840   $9,907 
% of Total   17.1%   17.4%   17.8%   18.6%   17.4%   7.9%
Interest DDA   130,897    129,486    137,893    131,079    130,513    384 
% of Total   16.6%   17.2%   18.4%   18.0%   18.2%   0.3%
Savings   114,213    118,108    116,820    103,267    103,530    10,683 
% of Total   14.4%   15.7%   15.6%   14.1%   14.5%   10.3%
Money Market   170,190    151,228    143,679    141,844    140,647    29,543 
% of Total   21.6%   20.1%   19.2%   19.4%   19.6%   21.0%
Certificates   239,379    222,932    217,484    217,818    217,277    22,102 
% of Total   30.3%   29.6%   29.0%   29.9%   30.3%   10.2%
Total Deposits  $789,426   $752,879   $748,795   $729,600   $716,807   $72,619 
Total Growth Percentage                            10.1%

 

Asset Quality

 

SB Financial maintained its high performance among its peers in asset quality levels for the quarter, reporting nonperforming assets of $3.4 million as of September 30, 2018, down $0.3 million, or 8.2 percent, from the year-ago quarter. SB Financial’s nonperforming assets to total assets ratio of 0.35 percent is in the top quartile of its 65-bank peer group. The coverage of problem loans by the loan loss allowance was at 256 percent at September 30, 2018, up from 213 percent at September 30, 2017.

 

 4 

 

 

Summary of Nonperforming Assets

 

($ in thousands, except ratios)  Sep. 2018   Jun. 2018   Mar. 2018   Dec. 2017   Sep. 2017   Annual Growth 
Commercial & Agriculture  $360   $33   $35   $121   $125   $235 
% of Total Com./Ag. loans   0.21%   0.02%   0.02%   0.08%   0.08%   188.0%
Commercial RE   228    234    487    1,322    1,029    (801)
% of Total CRE loans   0.06%   0.07%   0.14%   0.40%   0.32%   -77.8%
Residential RE   1,541    1,634    1,714    1,123    1,074    467 
% of Total Res. RE loans   0.87%   0.95%   1.13%   0.74%   0.76%   43.5%
Consumer & Other   252    221    85    138    153    99 
% of Total Con./Oth. loans   0.39%   0.35%   0.14%   0.23%   0.26%   64.7%
Total Nonaccruing Loans   2,381    2,122    2,321    2,704    2,381    - 
% of Total loans   0.31%   0.28%   0.33%   0.39%   0.35%   0.0%
Accruing Restructured Loans   940    1,101    1,115    1,129    1,258    (318)
Total Growth (%)                            -25.3%
Total Nonaccruing & Restructured Loans  $3,321   $3,223   $3,436   $3,833   $3,639   ($318)
% of Total loans   0.43%   0.43%   0.49%   0.55%   0.54%   -8.7%
Foreclosed Assets   105    16    70    26    94    11 
Total Growth (%)                            11.7%
Total Nonperforming Assets  $3,426   $3,239   $3,506   $3,859   $3,733   ($307)
% of Total assets   0.35%   0.34%   0.38%   0.44%   0.43%   -8.2%

 

Webcast and Conference Call

 

The Company will hold a related conference call and webcast on October 19, 2018, 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 http://www.yoursbfinancial.com/investorrelations.html. An audio replay of the call will be available on the SB Financial 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). 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 20 banking centers; 19 in nine Ohio counties and one center in Fort Wayne, Indiana, and 26 full-service ATMs. The Company has six loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. SB Financial’s common stock is listed on the NASDAQ Capital Market under the symbol “SBFG”.  SB Financial’s preferred stock is listed on the NASDAQ Capital Market under the symbol “SBFGP”.  

 

In May 2018, SB Financial was ranked #72 on the American Banker Magazine’s list of Top 200 Publicly Traded Community Banks and Thrifts based on three-year average return on equity (“ROE”).

 

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

 

In addition to results presented in accordance with GAAP, this release contains certain non-GAAP financial measures. Management believes that including certain non-GAAP financial measures will provide investors with information useful in understanding the Company’s financial performance, its performance trends and financial position. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results.

 

###

 

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SB FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS - (Unaudited)

 

   September   June   March   December   September 
($ in thousands)  2018   2018   2018   2017   2017 
                     
ASSETS                    
Cash and due from banks  $45,515   $24,413    48,329    26,616    28,258 
                          
Securities available for sale, at fair value   84,114    89,911    91,987    82,790    85,304 
Other securities - FRB and FHLB Stock   4,123    3,748    3,748    3,748    3,748 
Total investment securities   88,237    93,659    95,735    86,538    89,052 
                          
Loans held for sale   6,888    7,551    8,893    3,940    7,663 
                          
Loans, net of unearned income   771,698    753,285    707,207    696,615    675,075 
Allowance for loan losses   (8,489)   (8,494)   (8,219)   (7,930)   (7,760)
Net loans   763,209    744,791    698,988    688,685    667,315 
                          
Premises, equipment and software, net   21,900    21,683    21,776    21,277    21,271 
Cash surrender value of life insurance   16,745    16,656    16,567    16,479    13,692 
Goodwill & other intangibles   16,404    16,406    16,409    16,411    16,414 
Foreclosed assets held for sale, net   105    16    70    26    94 
Mortgage servicing rights   11,129    10,633    10,196    9,907    9,560 
Accrued interest receivable   2,433    2,000    1,925    1,825    1,880 
Other assets   6,615    6,977    6,753    4,923    5,263 
Total assets  $979,180   $944,785    925,641    876,627    860,462 
                          
LIABILITIES AND EQUITY                         
Deposits                         
Non interest bearing demand  $134,747   $131,125    132,919    135,592    124,840 
Interest bearing demand   130,897    129,486    137,893    131,079    130,513 
Savings deposits   114,213    118,108    116,820    103,267    103,530 
Money market deposits   170,190    151,228    143,679    141,844    140,647 
Time deposits   239,379    222,932    217,484    217,818    217,277 
Total deposits   789,426    752,879    748,795    729,600    716,807 
                          
Repurchase agreements   15,539    18,191    14,505    15,082    11,343 
Advances from Federal Home Loan Bank   24,500    26,500    18,500    18,500    20,500 
Trust preferred securities   10,310    10,310    10,310    10,310    10,310 
Accrued interest payable   891    685    633    592    611 
Other liabilities   11,405    11,116    9,999    8,543    9,982 
Total liabilities   852,071    819,681    802,742    782,627    769,553 
                          
Equity                         
Preferred shares   13,979    13,983    13,983    13,983    13,983 
Common shares   40,485    40,481    40,481    12,569    12,569 
Additional paid-in capital   15,160    15,098    15,189    15,405    15,335 
Retained earnings   61,854    59,503    57,162    55,439    51,991 
Accumulated other comprehensive income (loss)   (1,654)   (1,240)   (941)   (141)   335 
Treasury shares   (2,715)   (2,721)   (2,975)   (3,255)   (3,304)
Total equity   127,109    125,104    122,899    94,000    90,909 
                          
Total liabilities and equity  $979,180   $944,785    925,641    876,627    860,462 

 

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SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

 

   At and for the Three Months Ended   Nine Months Ended 
($ in thousands, except per share & ratios)  September   June   March   December   September   September   September 
  2018   2018   2018   2017   2017   2018   2017 
Interest income                            
Loans                            
Taxable  $9,499   $8,968    8,140    8,096    7,653    26,607    21,696 
Nontaxable   42    36    21    23    21    99    62 
Securities Taxable   610    612    573    514    532    1,795    1,562 
Nontaxable   107    115    117    129    132    339    398 
Total interest income   10,258    9,731    8,851    8,762    8,338    28,840    23,718 
                                    
Interest expense                                   
Deposits   1,472    1,091    975    938    907    3,538    2,518 
Repurchase Agreements & Other   11    6    10    2    4    27    10 
Federal Home Loan Bank advances   140    110    79    85    86    329    235 
Trust preferred securities   106    100    87    83    78    293    223 
Total interest expense   1,729    1,307    1,151    1,108    1,075    4,187    2,986 
                                    
Net interest income   8,529    8,424    7,700    7,654    7,263    24,653    20,732 
                                    
Provision for loan losses   -    300    300    200    -    600    200 
                                    
Net interest income after provision for loan losses   8,529    8,124    7,400    7,454    7,263    24,053    20,532 
                                    
Noninterest income                                   
Wealth Management Fees   705    710    739    718    688    2,155    2,059 
Customer service fees   672    675    644    690    674    1,991    1,981 
Gain on sale of mtg. loans & OMSR’s   2,066    2,058    1,100    1,608    2,211    5,224    5,524 
Mortgage loan servicing fees, net   273    247    471    465    227    991    851 
Gain on sale of non-mortgage loans   125    150    660    179    294    935    1,093 
Data service fees   -    -    -    179    182    -    559 
Net gain on sales of securities   70    -    -    -    119    70    119 
Gain/(loss) on sale/disposal of assets   -    60    (39)   (4)   8    21    10 
Other income   291    349    668    257    458    1,308    929 
Total non-interest income   4,202    4,249    4,243    4,092    4,861    12,695    13,125 
                                    
Noninterest expense                                   
Salaries and employee benefits   5,372    5,201    4,939    4,749    4,844    15,513    13,897 
Net occupancy expense   588    561    649    582    566    1,797    1,678 
Equipment expense   667    637    829    748    688    2,133    2,012 
Data processing fees   489    418    438    363    429    1,345    1,195 
Professional fees   393    504    419    492    502    1,316    1,282 
Marketing expense   197    203    221    153    180    622    581 
Telephone and communication   124    128    122    113    120    374    349 
Postage and delivery expense   83    63    74    118    103    221    336 
State, local and other taxes   177    176    186    164    198    538    535 
Employee expense   243    220    166    227    242    629    570 
Other expenses   456    468    584    397    412    1,507    1,037 
Total non-interest expense   8,789    8,579    8,627    8,106    8,284    25,995    23,472 
                                    
Income before income tax expense   3,942    3,794    3,016    3,440    3,840    10,753    10,185 
Income tax expense (benefit)   824    687    563    (592)   1,117    2,074    3,152 
                                    
Net income  $3,118   $3,107    2,453    4,032    2,723    8,679    7,033 
                                    
Preferred Share Dividends   244    244    244    244    244    731    731 
                                    
Net income available to common shares   2,874    2,863    2,209    3,788    2,479    7,947    6,302 
                                    
Common share data:                                   
Basic earnings per common share  $0.45   $0.45    0.40    0.79    0.52    1.30    1.31 
Diluted earnings per common share  $0.39   $0.40    0.35    0.64    0.43    1.14    1.11 
                                    
Average shares outstanding ($ in thousands):                                   
Basic:   6,503    6,489    5,519    4,790    4,797    6,106    4,825 
Diluted:   8,022    8,003    7,055    6,329    6,326    7,626    6,356 

 7 

 

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  2018   2018   2018   2017   2017   2018   2017 
Net interest income  $8,529    8,424    7,700    7,654    7,263    24,653    20,732 
Tax-equivalent adjustment   40    40    37    78    79    116    237 
Tax-equivalent net interest income   8,569    8,464    7,737    7,732    7,342    24,769    20,969 
Provision for loan loss   -    300    300    200    -    600    200 
Noninterest income   4,202    4,249    4,243    4,092    4,861    12,695    13,125 
Total operating revenue   12,731    12,673    11,943    11,746    12,124    37,348    33,857 
Noninterest expense   8,789    8,579    8,627    8,106    8,284    25,995    23,472 
Pre-tax pre-provision income   3,942    4,094    3,316    3,640    3,840    11,353    10,385 
Pretax income   3,942    3,794    3,016    3,440    3,840    10,753    10,185 
Net income   3,118    3,107    2,453    4,032    2,723    8,678    7,033 
Income available to common shareholders   2,874    2,863    2,209    3,788    2,479    7,947    6,302 
                                    
PER SHARE INFORMATION:                                   
Basic earnings per share  $0.45    0.45    0.40    0.79    0.52    1.30    1.31 
Diluted earnings per share   0.39    0.40    0.35    0.64    0.43    1.14    1.11 
Common dividends   0.080    0.080    0.075    0.075    0.070    0.235    0.205 
Book value per common share   15.94    15.73    15.49    15.05    14.57    15.94    14.57 
Tangible book value per common share   14.87    14.57    14.27    13.27    12.64    14.87    12.64 
Fully converted TBV per common share   13.88    13.66    13.42    12.42    11.94    13.88    11.94 
Market price per common share   20.35    20.32    18.51    18.49    17.16    20.35    17.16 
Market price per preferred share   20.25    19.82    18.20    17.90    16.45    20.25    16.45 
Market price to tangible book value   136.8%   139.5%   129.7%   139.3%   135.8%   136.8%   135.8%
Market price to trailing 12 month EPS   11.5    11.2    10.3    10.6    11.6    11.5    11.6 
                                    
PERFORMANCE RATIOS:                                   
Return on average assets (ROAA)   1.30%   1.35%   1.08%   1.83%   1.27%   1.24%   1.11%
Pre-tax pre-provision ROAA   1.64%   1.78%   1.46%   1.65%   1.79%   1.62%   1.64%
Return on average equity   9.89%   10.02%   9.03%   17.52%   12.11%   9.75%   10.57%
Return on average tangible equity   13.02%   13.28%   12.54%   26.16%   18.28%   13.10%   16.09%
Efficiency ratio   69.01%   67.67%   72.22%   68.99%   68.30%   69.59%   69.31%
Earning asset yield   4.75%   4.76%   4.41%   4.52%   4.36%   4.61%   4.24%
Cost of interest bearing liabilities   1.00%   0.80%   0.71%   0.69%   0.68%   0.84%   0.64%
Net interest margin   3.95%   4.12%   3.84%   3.92%   3.77%   3.94%   3.67%
Tax equivalent effect   0.01%   0.02%   0.02%   0.04%   0.04%   0.02%   0.04%
Net interest margin, tax equivalent   3.96%   4.14%   3.86%   3.96%   3.81%   3.96%   3.71%
Non interest income/Average assets   1.75%   1.84%   1.87%   1.86%   2.27%   1.82%   2.07%
Non interest expense/Average assets   3.65%   3.72%   3.81%   3.68%   3.87%   3.72%   3.70%
Net noninterest expense/Average assets   1.91%   1.88%   1.93%   1.82%   1.60%   1.90%   1.63%
                                    
ASSET QUALITY RATIOS:                                   
Gross charge-offs  $12    54    19    36    75    85    195 
Recoveries   6    29    9    5    10    44    30 
Net charge-offs   6    25    10    31    65    41    165 
Nonaccruing loans/ Total loans   0.31%   0.28%   0.33%   0.39%   0.35%   0.31%   0.35%
Nonperforming loans/ Total loans   0.43%   0.43%   0.49%   0.55%   0.54%   0.43%   0.54%
Nonperforming assets/ Loans & OREO   0.44%   0.43%   0.50%   0.55%   0.55%   0.44%   0.55%
Nonperforming assets/ Total assets   0.35%   0.34%   0.38%   0.44%   0.43%   0.35%   0.43%
Allowance for loan loss/ Nonperforming loans   255.62%   263.54%   239.20%   206.89%   213.25%   255.62%   213.25%
Allowance for loan loss/ Total loans   1.10%   1.13%   1.16%   1.14%   1.15%   1.10%   1.15%
Net loan charge-offs/ Average loans (ann.)   0.00%   0.01%   0.01%   0.02%   0.04%   0.01%   0.03%
Loan loss provision/ Net charge-offs   0.00%   1200.00%   3000.00%   645.16%   0.00%   1463.41%   121.21%
                                    
CAPITAL & LIQUIDITY RATIOS:                                   
Loans/ Deposits   97.75%   100.05%   94.45%   95.48%   94.18%   97.75%   94.18%
Equity/ Assets   12.98%   13.24%   13.28%   10.72%   10.57%   12.98%   10.57%
Tangible equity/ Tangible assets   10.05%   10.20%   10.17%   7.39%   7.17%   10.05%   7.17%
Tangible equity adjusted for conversion   11.50%   11.71%   11.71%   9.02%   8.83%   11.50%   8.83%
Common equity tier 1 ratio (Bank) - 9/18 est.   12.31%   11.91%   12.23%   10.53%   10.39%   12.31%   10.39%
                                    
END OF PERIOD BALANCES                                   
Total assets  $979,180    944,785    925,641    876,627    860,462    979,180    860,462 
Total loans   771,698    753,285    707,207    696,615    675,075    771,698    675,075 
Deposits   789,426    752,879    748,795    729,600    716,807    789,426    716,807 
Stockholders equity   127,109    125,104    122,899    94,000    90,909    127,109    90,909 
Goodwill & intangibles   16,404    16,406    16,409    16,411    16,414    16,404    16,414 
Preferred equity   13,979    13,983    13,983    13,983    13,983    13,979    13,983 
Tangible equity   96,726    94,715    92,507    63,606    60,512    96,726    60,512 
Mortgage servicing portfolio   1,066,402    1,030,780    1,004,728    994,915    979,251    1,066,402    979,251 
Wealth/Brokerage assets under care   412,218    407,592    411,654    437,034    429,777    412,218    429,777 
Total assets under care   2,457,800    2,383,157    2,342,023    2,308,576    2,269,490    2,457,800    2,269,490 
Full-time equivalent employees (actual)   250    241    240    240    237    250    237 
Period end basic shares outstanding   6,503    6,502    6,483    4,793    4,788    6,503    4,788 
Period end outstanding (Series A Converted)   1,470    1,453    1,453    1,453    1,452    1,470    1,452 
                                    
AVERAGE BALANCES                                   
Total assets  $962,369    922,355    906,281    880,446    857,147    931,507    845,836 
Total earning assets   864,490    817,270    802,358    781,795    771,722    833,942    752,753 
Total loans   770,948    724,710    711,733    691,929    667,943    740,292    650,142 
Deposits   769,266    739,877    738,867    731,992    712,614    751,156    704,638 
Stockholders equity   126,144    123,990    108,662    92,036    89,974    118,718    88,676 
Intangibles   16,405    16,407    16,410    16,412    16,415    16,407    16,418 
Preferred equity   13,983    13,983    13,983    13,983    13,983    13,983    13,983 
Tangible equity   95,756    93,600    78,269    61,641    59,576    88,328    58,275 
Average basic shares outstanding   6,503    6,489    5,519    4,790    4,797    6,106    4,825 
Average diluted shares outstanding   8,022    8,003    7,055    6,329    6,326    7,626    6,356 

 8 

 

 

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

At and for the Three Months Ended September 30, 2018 and 2017

 

($ in thousands)  Three Months Ended Sep. 30, 2018   Three Months Ended Sep. 30, 2017 
   Average       Average   Average       Average 
   Balance   Interest   Rate   Balance   Interest   Rate 
Assets                        
Taxable securities  $82,250    610    2.97%  $89,512    532    2.38%
Nontaxable securities   11,292    107    3.79%   14,267    132    3.70%
Loans, net   770,948    9,541    4.95%   667,943    7,674    4.60%
                               
Total earning assets   864,490    10,258    4.75%   771,722    8,338    4.32%
                               
Cash and due from banks   33,545              25,011           
Allowance for loan losses   (8,593)             (7,914)          
Premises and equipment   21,850              21,243           
Other assets   51,077              47,085           
                               
Total assets  $962,369             $857,147           
                               
Liabilities                              
Savings and interest bearing demand  $403,236    504    0.50%  $368,080    210    0.23%
Time deposits   231,884    968    1.67%   218,561    697    1.28%
Repurchase agreements & Other   19,293    11    0.23%   12,655    4    0.13%
Advances from Federal Home Loan Bank   24,609    140    2.28%   20,772    86    1.66%
Trust preferred securities   10,310    106    4.11%   10,310    78    3.03%
                               
Total interest bearing liabilities   689,332    1,729    1.00%   630,378    1,075    0.68%
                               
Non interest bearing demand   134,146    -         125,973    -      
                               
Total funding   823,478         0.84%   756,351         0.57%
                               
Other liabilities   12,747              10,822           
                               
Total liabilities   836,225              767,173           
                               
Equity   126,144         559,131    89,974           
                               
Total liabilities and equity  $962,369             $857,147           
                               
Net interest income       $8,529             $7,263      
                               
Net interest income as a percent of average interest-earning assets - GAAP measure             3.95%             3.76%
                               
Net interest income as a percent of average interest-earning assets - non GAAP- Computed on a fully tax equivalent (FTE) basis             3.96%             3.81%

 

 9 

 

 

   Nine Months Ended Sep. 30, 2018   Nine Months Ended Sep. 30, 2017 
   Average       Average   Average       Average 
   Balance   Interest    Rate   Balance   Interest   Rate 
Assets                        
Taxable securities  $81,835    1,795    2.92%  $88,358    1,562    2.36%
Nontaxable securities   11,815    339    3.83%   14,253    398    3.72%
Loans, net   740,292    26,706    4.81%   650,142    21,758    4.46%
Total earning assets   833,942    28,840    4.61%   752,753    23,718    4.20%
Cash and due from banks   33,137              34,204           
Allowance for loan losses   (8,318)             (7,824)          
Premises and equipment   21,656              20,969           
Other assets   51,090              45,734           
Total assets  $931,507             $845,836           
                               
Liabilities                              
Savings and interest bearing demand  $395,948    1,063    0.36%  $366,026    576    0.21%
Time deposits   220,642    2,475    1.50%   213,853    1,942    1.21%
Repurchase agreements & Other   16,875    27    0.21%   12,057    10    0.11%
Advances from Federal Home Loan Bank   21,987    329    2.00%   19,905    235    1.57%
Trust preferred securities   10,310    293    3.79%   10,310    223    2.88%
Total interest bearing liabilities   665,762    4,187    0.84%   622,151    2,986    0.64%
Non interest bearing demand   134,566         0.70%   124,759         0.53%
Total funding   800,328              746,910           
                               
Other liabilities   12,461              10,250           
Total liabilities   812,789              757,160           
                               
Equity   118,718              88,676           
                               
Total liabilities and equity  $931,507             $845,836           
                               
Net interest income       $24,653             $20,732      
                               
Net interest income as a percent of average interest-earning assets - GAAP measure             3.94%             3.67%
                               
Net interest income as a percent of average interest-earning assets - non GAAP  - Computed on a fully tax equivalent (FTE) basis             3.96%             3.71%

 

 

 10