EX-99.1 2 ea020447701ex99-1_sbfin.htm NEWS RELEASE ISSUED BY SB FINANCIAL GROUP, INC. ON APRIL 18, 2024, REPORTING FINANCIAL RESULTS FOR THE FIRST QUARTER 2024

Exhibit 99.1

 

 

SB Financial Group Announces First Quarter 2024 Results

 

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

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

 

●Net income of $2.4 million down 3.3 percent from $2.5 million in the same quarter last year. Diluted Earnings Per Share (“EPS”) remained steady at $0.35.

 

●Net interest income totaled $9.2 million, a 11.1 percent decrease from the $10.3 million reported in the first quarter of the prior year.

 

●Loan growth saw an increase to $991.6 million, up by $15.2 million or 1.6 percent from the $976.3 million in the first quarter of the previous year.

 

●Nonperforming assets improved to 0.22 percent of total assets, down from 0.30 percent in the same quarter of the prior year.

 

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

 

●EPS was $1.75 for the twelve months ended March 2024, an increase of 1.7 percent from the prior twelve months of $1.72.

 

●Total deposits were $1.112 billion at the end of March 2024, representing a marginal increase of 0.2 percent from $1.110 billion at the end of March 2023.

 

●Mortgage origination volume was $209.1 million for the trailing twelve months, with a servicing portfolio of $1.37 billion, which increased by 2.1 percent from the prior year.

 

Earnings Highlights  Three Months Ended 
($ in thousands, except per share & ratios)  Mar. 2024   Mar. 2023   % Change 
Operating revenue  $13,131   $13,990    -6.1%
Interest income   15,300    13,824    10.7%
Interest expense   6,120    3,500    74.9%
Net interest income   9,180    10,324    -11.1%
Provision for credit losses   -    250    -100.0%
Noninterest income   3,951    3,666    7.8%
Noninterest expense   10,282    10,773    -4.6%
Net income   2,368    2,450    -3.3%
Earnings per diluted share   0.35    0.35    0.0%
Return on average assets   0.71%   0.73%   -2.7%
Return on average equity   7.70%   8.22%   -6.3%

 

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

 

 

 

 

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

 

RESULTS OF OPERATIONS

 

Consolidated Revenue

 

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

 

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

 

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

 

Mortgage Loan Business

 

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

 

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

 

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

 

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

 

Noninterest Income and Noninterest Expense

 

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

 

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

 

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

 

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

 

Balance Sheet

 

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

 

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

 

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

 

Loan Balances
($ in thousands, except ratios)		  Mar. 2024   Dec. 2023   Sep. 2023   Jun. 2023   Mar. 2023   Annual Growth 
Commercial  $120,016   $126,716   $120,325   $123,226   $126,066   $(6,050)
% of Total   12.1%   12.7%   12.2%   12.5%   12.9%   -4.8%
Commercial RE   429,362    424,041    421,736    417,412    419,024    10,338 
% of Total   43.3%   42.4%   42.6%   42.4%   42.9%   2.5%
Agriculture   62,365    65,659    60,928    58,222    57,761    4,604 
% of Total   6.3%   6.6%   6.2%   5.9%   5.9%   8.0%
Residential RE   314,668    318,123    320,306    321,365    309,684    4,984 
% of Total   31.7%   31.8%   32.4%   32.6%   31.7%   1.6%
Consumer & Other   65,141    65,673    65,726    64,599    63,777    1,364 
% of Total   6.6%   6.6%   6.6%   6.6%   6.5%   2.1%
Total Loans  $991,552   $1,000,212   $989,021   $984,824   $976,312   $15,240 
Total Growth Percentage                            1.6%

 

Deposit Balances
($ in thousands, except ratios)		  Mar. 2024   Dec. 2023   Sep. 2023   Jun. 2023   Mar. 2023   Annual
Growth		 
Non-Int DDA  $219,395   $228,713   $224,182   $218,411   $237,175   $(17,780)
% of Total   19.7%   21.4%   20.7%   20.4%   21.4%   -7.5%
Interest DDA   169,171    166,413    174,729    170,282    188,497    (19,326)
% of Total   15.2%   15.5%   16.1%   15.9%   17.0%   -10.3%
Savings   244,157    216,965    226,077    225,065    227,974    16,183 
% of Total   21.9%   20.3%   20.8%   21.0%   20.5%   7.1%
Money Market   221,362    202,605    216,565    217,681    222,203    (841)
% of Total   19.9%   18.9%   20.0%   20.3%   20.0%   -0.4%
Time Deposits   258,257    255,509    243,766    239,717    234,295    23,962 
% of Total   23.2%   23.9%   22.5%   22.4%   21.1%   10.2%
Total Deposits  $1,112,342   $1,070,205   $1,085,319   $1,071,156   $1,110,144   $2,198 
Total Growth Percentage                            0.2%

 

Asset Quality

 

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

 

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

 

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

 

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

 

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

 

Webcast and Conference Call

 

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

 

About SB Financial Group

 

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

 

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

 

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Forward-Looking Statements

 

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

 

Non-GAAP Financial Measures

 

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

 

Investor Contact Information:

 

Mark A. Klein

Chairman, President and

Chief Executive Officer

Mark.Klein@YourStateBank.com

 

Anthony V. Cosentino

Executive Vice President and

Chief Financial Officer

Tony.Cosentino@YourStateBank.com

 

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SB FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS - (Unaudited)

 

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

 

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SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

 

   At and for the Three Months Ended 
   March   December   September   June   March 
($ in thousands, except per share & ratios)  2024   2023   2023   2023   2023 
Interest income                    
Loans                    
Taxable  $13,547   $13,438   $13,128   $12,715   $12,126 
Tax exempt   123    124    122    121    116 
Securities                         
Taxable   1,593    1,526    1,507    1,524    1,535 
Tax exempt   37    38    39    46    47 
Total interest income   15,300    15,126    14,796    14,406    13,824 
                          
Interest expense                         
Deposits   5,090    4,398    4,194    3,538    2,578 
Repurchase agreements & other   34    39    16    9    10 
Federal Home Loan Bank advances   613    720    666    664    553 
Trust preferred securities   188    191    189    172    164 
Subordinated debt   195    194    195    194    195 
Total interest expense   6,120    5,542    5,260    4,577    3,500 
                          
Net interest income   9,180    9,584    9,536    9,829    10,324 
                          
Provision for credit losses   -    (74)   (6)   145    250 
                          
Net interest income after provision for loan losses   9,180    9,658    9,542    9,684    10,074 
                          
Noninterest income                         
Wealth management fees   865    838    837    940    917 
Customer service fees   880    844    863    871    825 
Gain on sale of mtg. loans & OMSR   781    747    1,207    1,056    599 
Mortgage loan servicing fees, net   671    561    438    494    608 
Gain on sale of non-mortgage loans   10    177    10    218    24 
Title insurance revenue   266    378    429    455    373 
Net gain on sales of securities   -    1,453    -    -    - 
Gain (loss) on sale of assets   -    16    -    15    (11)
Other   478    517    379    312    331 
Total noninterest income   3,951    5,531    4,163    4,361    3,666 
                          
Noninterest expense                         
Salaries and employee benefits   5,352    5,652    5,491    5,721    5,913 
Net occupancy expense   769    746    764    802    784 
Equipment expense   1,077    1,027    1,068    1,002    981 
Data processing fees   769    680    648    685    646 
Professional fees   758    926    623    612    863 
Marketing expense   197    182    189    213    198 
Telephone and communication expense   105    132    124    124    121 
Postage and delivery expense   97    167    100    78    87 
State, local and other taxes   245    285    218    218    228 
Employee expense   178    146    141    156    188 
Other expenses   735    426    1,115    728    764 
Total noninterest expense   10,282    10,369    10,481    10,339    10,773 
                          
Income before income tax expense   2,849    4,820    3,224    3,706    2,967 
Income tax expense   481    937    537    631    517 
Net income  $2,368   $3,883   $2,687   $3,075   $2,450 
                          
Common share data:                         
Basic earnings per common share  $0.35   $0.58   $0.40   $0.45   $0.35 
Diluted earnings per common share  $0.35   $0.57   $0.39   $0.44   $0.35 
                          
Average shares outstanding (in thousands):                         
Basic:   6,715    6,748    6,791    6,847    6,933 
Diluted:   6,723    6,851    6,878    6,910    7,008 

 

8

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

 

   At and for the Three Months Ended 
($ in thousands, except per share & ratios)  March   December   September   June   March 
SUMMARY OF OPERATIONS  2024   2023   2023   2023   2023 
Net interest income  $9,180   $9,584   $9,536   $9,829   $10,324 
Tax-equivalent adjustment   43    43    43    44    43 
Tax-equivalent net interest income   9,223    9,627    9,579    9,873    10,367 
Provision for credit loss   -    (74)   (6)   145    250 
Noninterest income   3,951    5,531    4,163    4,361    3,666 
Total operating revenue   13,131    15,115    13,699    14,190    13,990 
Noninterest expense   10,282    10,369    10,481    10,339    10,773 
Pre-tax pre-provision income   2,849    4,746    3,218    3,851    3,217 
Pretax income   2,849    4,820    3,224    3,706    2,967 
Net income   2,368    3,883    2,687    3,075    2,450 
                          
PER SHARE INFORMATION:                         
Basic earnings per share (EPS)   0.35    0.58    0.40    0.45    0.35 
Diluted earnings per share   0.35    0.57    0.39    0.44    0.35 
Common dividends   0.135    0.135    0.130    0.130    0.125 
Book value per common share   18.46    18.50    16.59    17.30    17.37 
Tangible book value per common share (TBV)   14.93    14.98    13.09    13.81    13.93 
Market price per common share   13.78    15.35    13.50    12.62    14.13 
Market price to TBV   92.3%   102.5%   103.1%   91.4%   101.4%
Market price to trailing 12 month EPS   7.9    8.8    8.0    7.1    8.2 
                          
PERFORMANCE RATIOS:                         
Return on average assets (ROAA)   0.71%   1.17%   0.80%   0.91%   0.73%
Pre-tax pre-provision ROAA   0.85%   1.43%   0.96%   1.14%   0.96%
Return on average equity   7.70%   13.23%   9.25%   10.32%   8.22%
Return on average tangible equity   9.53%   16.57%   11.62%   12.89%   10.26%
Efficiency ratio   78.17%   68.44%   76.34%   72.71%   76.85%
Earning asset yield   4.97%   4.89%   4.78%   4.61%   4.49%
Cost of interest bearing liabilities   2.55%   2.33%   2.18%   1.90%   1.46%
Net interest margin   2.98%   3.10%   3.08%   3.15%   3.35%
Tax equivalent effect   0.01%   0.01%   0.01%   0.01%   0.02%
Net interest margin, tax equivalent   2.99%   3.11%   3.09%   3.16%   3.37%
Non interest income/Average assets   1.19%   1.67%   1.24%   1.30%   1.10%
Non interest expense/Average assets   3.08%   3.12%   3.13%   3.07%   3.23%
Net noninterest expense/Average assets   -1.90%   -1.46%   -1.89%   -1.78%   -2.13%
                          
ASSET QUALITY RATIOS:                         
Gross charge-offs   66    5    12    32    69 
Recoveries   9    1    7    10    8 
Net charge-offs   57    4    5    22    61 
Nonperforming loans/Total loans   0.25%   0.28%   0.34%   0.30%   0.35%
Nonperforming assets/Loans & OREO   0.30%   0.33%   0.40%   0.36%   0.41%
Nonperforming assets/Total assets   0.22%   0.25%   0.30%   0.26%   0.30%
Allowance for credit loss/Nonperforming loans   642.69%   560.18%   474.32%   542.78%   454.71%
Allowance for credit loss/Total loans   1.58%   1.58%   1.60%   1.60%   1.58%
Net loan charge-offs/Average loans (ann.)   0.02%   0.00%   0.00%   0.01%   0.03%
                          
CAPITAL & LIQUIDITY RATIOS:                         
Loans/ Deposits   89.14%   93.46%   91.13%   91.94%   87.94%
Equity/ Assets   9.26%   9.26%   8.47%   8.77%   8.93%
Tangible equity/Tangible assets   7.63%   7.63%   6.81%   7.13%   7.29%
Common equity tier 1 ratio (Bank)   13.84%   13.42%   13.56%   13.18%   13.44%
                          
END OF PERIOD BALANCES                         
Total assets   1,336,012    1,343,249    1,326,474    1,341,435    1,341,293 
Total loans   991,552    1,000,212    989,021    984,824    976,312 
Deposits   1,112,342    1,070,205    1,085,319    1,071,156    1,110,144 
Shareholders equity   123,723    124,342    112,348    117,666    119,759 
Goodwill and intangibles   23,646    23,662    23,687    23,710    23,732 
Tangible equity   100,077    100,680    88,661    93,956    96,027 
Mortgage servicing portfolio   1,371,713    1,366,667    1,367,209    1,353,904    1,344,158 
Wealth/Brokerage assets under care   525,517    501,829    478,236    499,255    518,009 
Total assets under care   3,233,242    3,211,745    3,171,919    3,194,594    3,203,460 
Full-time equivalent employees   245    251    252    253    255 
Period end common shares outstanding   6,702    6,720    6,773    6,803    6,894 
Market capitalization (all)   92,359    103,147    91,437    85,857    97,419 
                          
AVERAGE BALANCES                         
Total assets   1,333,236    1,327,415    1,339,870    1,346,010    1,335,056 
Total earning assets   1,230,736    1,236,165    1,239,145    1,248,813    1,232,018 
Total loans   993,310    992,337    989,089    988,348    970,813 
Deposits   1,091,803    1,084,939    1,095,414    1,100,344    1,098,935 
Shareholders equity   123,058    117,397    116,165    119,177    119,237 
Goodwill and intangibles   23,654    23,675    23,698    23,721    23,743 
Tangible equity   99,404    93,722    92,467    95,456    95,494 
Average basic shares outstanding   6,715    6,748    6,791    6,847    6,933 
Average diluted shares outstanding   6,723    6,851    6,878    6,910    7,008 

 

9

 

 

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

  For the Three Months Ended Mar. 31, 2024 and 2023

 

   Three Months Ended Mar. 31, 2024   Three Months Ended Mar. 31, 2023 
   Average       Average   Average       Average 
($ in thousands)  Balance   Interest   Rate   Balance   Interest   Rate 
Assets                        
Taxable securities/cash  $230,981   $1,593    2.76%  $253,449   $1,535    2.42%
Nontaxable securities   6,445    37    2.30%   7,756    47    2.42%
Loans, net   993,310    13,670    5.50%   970,813    12,242    5.04%
Total earning assets   1,230,736    15,300    4.97%   1,232,018    13,824    4.49%
Cash and due from banks   4,512              11,067           
Allowance for loan losses   (15,830)             (14,763)          
Premises and equipment   21,281              22,858           
Other assets   92,537              83,876           
Total assets  $1,333,236             $1,335,056           
                               
Liabilities                              
Savings, MMDA and interest bearing demand  $605,243   $2,525    1.67%  $643,081   $1,285    0.80%
Time deposits   258,592    2,565    3.97%   214,978    1,293    2.41%
Repurchase agreements & other   15,993    34    0.85%   18,618    10    0.21%
Advances from Federal Home Loan Bank   51,030    613    4.81%   49,177    553    4.50%
Trust preferred securities   10,310    188    7.29%   10,310    164    6.36%
Subordinated debt   19,646    195    3.97%   19,598    195    3.98%
Total interest bearing liabilities   960,814    6,120    2.55%   955,762    3,500    1.46%
Non interest bearing demand   227,968    -         240,876    -      
Total funding   1,188,782         2.06%   1,196,638         1.17%
Other liabilities   21,396              21,347           
Total liabilities   1,210,178              1,217,985           
Equity   123,058              117,071           
Total liabilities and equity  $1,333,236             $1,335,056           
                               
Net interest income       $9,180             $10,324      
                               
Net interest income as a percent of average interest-earning assets - GAAP measure             2.98%             3.35%
                               
Net interest income as a percent of average interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis             2.99%             3.37%

 

10

 

 

   Three Months Ended 
Non-GAAP reconciliation
($ in thousands, except per share & ratios)		  Mar. 31,
2024		   Mar. 31,
2023		 
         
Total Operating Revenue  $13,131   $13,990 
Adjustment to (deduct)/add OMSR recapture/impairment *   (181)   (56)
Adjusted Total Operating Revenue   12,950    13,934 
           
Income before Income Taxes   2,849    2,967 
Adjustment for OMSR *   (181)   (56)
Adjusted Income before Income Taxes   2,668    2,911 
           
Provision for Income Taxes   481    517 
Adjustment for OMSR **   (38)   (12)
Adjusted Provision for Income Taxes   443    505 
           
Net Income   2,368    2,450 
Adjustment for OMSR *   (143)   (44)
Adjusted Net Income   2,225    2,406 
           
Diluted Earnings per Share   0.35    0.35 
Adjustment for OMSR *   (0.02)   (0.01)
Adjusted Diluted Earnings per Share  $0.33   $0.34 
           
Return on Average Assets   0.71%   0.73%
Adjustment for OMSR *   -0.04%   -0.01%
Adjusted Return on Average Assets   0.67%   0.72%

 

*valuation adjustment to the Company’s mortgage servicing rights

 

**tax effect is calculated using a 21% statutory federal corporate income tax rate

 

 

11