SB Financial Group Inc.

04/18/2024 | Press release | Distributed by Public on 04/18/2024 14:19

SB Financial Group Announces First Quarter 2024 Results

DEFIANCE, Ohio, April 18, 2024 (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 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."

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.

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.

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
($ in thousands, except ratios) Mar. 2024 Dec. 2023 Sep. 2023 Jun. 2023 Mar. 2023 Annual 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.

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
[email protected]

Anthony V. Cosentino
Executive Vice President and
Chief Financial Officer
[email protected]

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
SB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
($ in thousands, except per share & ratios)
 		At and for the Three Months Ended
March
 December September June
 March
Interest income 2024
 2023 2023 2023
 2023
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
SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
($ in thousands, except per share & ratios) At and for the Three Months Ended
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) 13.63 % 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
SB FINANCIAL GROUP, INC.
Rate Volume Analysis - (Unaudited)
For the Three Months Ended Mar. 31, 2024 and 2023
($ in thousands) Three Months Ended Mar. 31, 2024
 		Three Months Ended Mar. 31, 2023
Average Average Average Average
Assets Balance Interest Rate Balance Interest Rate
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 2.99 % 3.37 %
- Computed on a fully tax equivalent (FTE) basis
Non-GAAP reconciliation Three Months Ended
($ 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

Source: SB Financial Group, Inc.