SB Financial Group Inc.

22/07/2024 | Press release | Distributed by Public on 23/07/2024 01:27

SB Financial Group Announces Second Quarter 2024 Results Form 8 K

SB Financial Group Announces Second Quarter 2024 Results

DEFIANCE, OH, July 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 second quarter ended June 30, 2024.

Second Quarter 2024 Highlights compared to the second quarter of the prior year:

● Net income of $3.1 million, up 1.2 percent and in line with the same quarter last year. Diluted Earnings Per Share ("EPS") increased to $0.47 or 6.8% from $0.44;
● Net interest income totaled $9.7 million, a 1.7 percent decrease from the $9.8 million;
● Loan growth increased to $1.01 billion, up by $20.6 million or 2.1 percent from the $984.8 million;
● Return on Average Assets ("ROAA") increased to 0.93%, up 2 basis points from the previous year, while Return on Average Equity ("ROAE") declined slightly to 10.16%, down 16 basis points from 10.32%.

Six Months Ended June 30, 2024 Highlights compared to the same period of the prior year:

● Mortgage Banking Revenue increased to $3.4 million, up by 22.8 percent from $2.8 million.

Trailing Twelve Months Ended June 30, 2024 Highlights compared to the prior year:

● EPS was $1.78 for the twelve months ended June 2024, an increase of 1.1 percent from the prior twelve months of $1.76.
● Total deposits were $1.12 billion at the end of June 2024, representing an increase of 4.1 percent from $1.07 billion at the end of June 2023.
● Mortgage origination volume was $218.8 million for the trailing twelve months, with the servicing portfolio of $1.39 billion, which increased by 2.7 percent.
Earnings Highlights Three Months Ended Six Months Ended
($ in thousands, except per share & ratios) Jun. 2024 Jun. 2023 % Change Jun. 2024 Jun. 2023 % Change
Operating revenue $ 14,045 $ 14,190 -1.0 % $ 27,176 $ 28,180 -3.6 %
Interest income 15,654 14,406 8.7 % 30,954 28,230 9.6 %
Interest expense 5,995 4,577 31.0 % 12,115 8,077 50.0 %
Net interest income 9,659 9,829 -1.7 % 18,839 20,153 -6.5 %
Provision for credit losses - 145 -100.0 % - 395 0.0 %
Noninterest income 4,386 4,361 0.6 % 8,337 8,027 3.9 %
Noninterest expense 10,671 10,339 3.2 % 20,953 21,112 -0.8 %
Net income 3,113 3,075 1.2 % 5,481 5,525 -0.8 %
Earnings per diluted share 0.47 0.44 6.8 % 0.82 0.79 3.8 %
Return on average assets 0.93 % 0.91 % 2.2 % 0.82 % 0.82 % 0.0 %
Return on average equity 10.16 % 10.32 % -1.6 % 9.02 % 9.01 % 0.1 %

"We demonstrated solid execution and financial stability in the quarter ended June 30, 2024," stated Mark A. Klein, Chairman, President, and CEO. "We maintained a net income of $3.1 million, a testament to our operational resilience and our relentless focus on profitability. Notably, our diluted earnings per share increased by 6.8% to $0.47, reflecting our unwavering commitment to delivering shareholder value amidst economic uncertainties."

"Our loan portfolio expanded to $1.01 billion, an increase of $20.6 million, showcasing our disciplined growth strategy and the strong confidence our clients place in our partnership. Despite ongoing market challenges, our deposit base grew by $44.0 million or 4.1% year-over-year to $1.12 billion, underscoring our margin oversight and the sustained trust of our customers. We continue to maintain a conservative risk profile, with peer leading asset quality and no loan charge-offs," added Mr. Klein.

RESULTS OF OPERATIONS

Consolidated Revenue

In the second quarter of 2024, SB Financial Group demonstrated operational resilience with a slight year-over-year decline in operating revenue of only 1.0%, coupled with an increase of 7.0% from the preceding quarter. Despite a 1.7% decrease in net interest income-largely attributable to elevated deposit costs-our financial management mitigated the impact, resulting in a nominal 5 basis point reduction in our net interest margin when compared to the second quarter of 2023.

Noninterest income recorded a 0.6% increase over the same quarter last year, fueled by a substantial 20.9% surge in gains from the sale of mortgages and OMSR, alongside a 14.4% increase in mortgage loan servicing fees. Consistent customer service fees further improved our solid revenue base. However, we noted variances in performance across other noninterest income areas, such as wealth management and title insurance services, which saw declines. For the first time in over 2 years, interest expenses decreased on a linked quarter basis, highlighting the stabilization of funding costs.

Mortgage Loan Business

In the second quarter of 2024, SB Financial Group's mortgage loan business recorded a 14.9% increase in loan originations, reaching $75.1 million from $65.4 million in the corresponding period last year. This notable growth underscores some strengthening in the housing market and hopefully signals broader positive economic trends.

Mortgage sales demonstrated significant expansion this quarter, reaching $55.8 million, or 74% of total originations. This higher level of sales volume, marked a 16.5% year-over-year increase from $47.9 million, underscores our successful market penetration and strategic positioning, particularly in a competitive lending environment. Our mortgage banking net revenue saw an increase to $1.8 million, up 18.8% from the previous year, reflecting our strong operational efficiency. Additionally, the mortgage servicing portfolio expanded by 2.7%, reaching $1.39 billion, which reinforces our dedication to sustainable growth and enhanced servicing capabilities.

Mr. Klein, Chairman, President, and CEO of SB Financial Group, stated, "This quarter has showcased improved efficiency in our mortgage operations. Although our results slightly missed our internal targets, the shortfall primarily reflects the heightened competitiveness and shifting dynamics within the mortgage market. Despite these challenges, our proactive measures, most notably the expansion of our origination teams, have positioned us to capitalize on market opportunities and maintain our growth momentum."

Mortgage Banking
($ in thousands) 		Jun. 2024 Mar. 2024 Dec. 2023 Sep. 2023 Jun. 2023 Prior Year
Growth
Mortgage originations $ 75,110 $ 42,912 $ 39,566 $ 61,200 $ 65,387 $ 9,723
Mortgage sales 55,835 36,623 33,362 54,085 47,933 7,902
Mortgage servicing portfolio 1,389,805 1,371,713 1,366,667 1,367,209 1,353,904 35,901
Mortgage servicing rights 14,548 14,191 13,906 13,893 13,723 825
Revenue
Loan servicing fees 862 855 855 850 844 18
OMSR amortization (335 ) (273 ) (282 ) (334 ) (334 ) (1 )
Net administrative fees 527 582 573 516 510 17
OMSR valuation adjustment 38 181 (12 ) (78 ) (16 ) 54
Net loan servicing fees 565 763 561 438 494 71
Gain on sale of mortgages 1,277 781 747 1,207 1,056 221
Mortgage banking revenue, net $ 1,842 $ 1,544 $ 1,308 $ 1,645 $ 1,550 $ 292

2

Noninterest Income and Noninterest Expense

For the second quarter of 2024, noninterest income at SB Financial Group increased slightly to $4.4 million compared to the prior year quarter, marking a modest increase of 0.6%. This growth is primarily attributable to 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 marginally, reinforcing our attention in this area. Noninterest expenses for the second quarter were reported at $10.7 million, reflecting a 3.2% increase from the previous year's $10.3 million, as higher commission costs from mortgage volume drove compensation higher.

Noninterest Income/Noninterest Expense
($ in thousands, except ratios) 		Jun. 2024 Mar. 2024 Dec. 2023 Sep. 2023 Jun. 2023 Prior Year
Growth
Noninterest Income (NII) $ 4,386 $ 3,951 $ 5,531 $ 4,163 $ 4,361 $ 25
NII / Total Revenue 31.5 % 30.1 % 36.6 % 30.4 % 30.7 % 0.8 %
NII / Average Assets 1.3 % 1.2 % 1.7 % 1.2 % 1.3 % 0.0 %
Total Revenue Growth -0.6 % -6.1 % 3.4 % -5.3 % -0.5 % -0.6 %
Noninterest Expense (NIE) $ 10,671 $ 10,282 $ 10,369 $ 10,481 $ 10,339 $ 332
Efficiency Ratio 75.9 % 78.2 % 68.4 % 79.0 % 72.7 % 3.2 %
NIE / Average Assets 3.2 % 3.1 % 3.1 % 3.1 % 3.1 % 0.1 %
Net Noninterest Expense/Avg. Assets -1.9 % -1.9 % -1.4 % -1.9 % -1.8 % -0.1 %
Total Expense Growth 3.2 % -4.6 % 1.0 % 0.9 % -4.3 % 3.2 %

Mr. Klein commented on the financial performance, stating, "Our noninterest income has shown consistent resilience, supported by significant gains from mortgage and mortgage servicing fees, reflecting our agility and expertise in capitalizing on favorable market conditions. Regarding expenses, the increase this quarter is driven by revenue generation activities. Our focus remains on optimizing our cost structure and ensuring operational efficiency, which is paramount in delivering sustained value to our stakeholders."

Balance Sheet

As of June 30, 2024, SB Financial Group has continued to demonstrate financial stability, with total assets reporting a marginal increase to $1.34 billion, up by 0.06% year-over-year. Our loan portfolio again crossed the $1 billion threshold and now stands at $1.01 billion, marking an increase of $20.6 million or 2.1% compared to the previous year. This growth is indicative of our effective lending practices in a dynamic economic landscape. Furthermore, an increase in cash and cash equivalents has provided enhanced liquidity, further strengthening our financial position.

Shareholders' equity experienced a slight quarterly expansion of 1.4% to $125.5 million compared to the linked quarter and also showed positive growth of 6.6% on a year-over-year basis. This growth underscores our consistent efforts to enhance shareholder value amidst fluctuating market conditions.

"In 2024, we have maintained a disciplined and proactive approach to our growth and capital management, aligning closely with our objectives. Our ability to sustain and grow our loan portfolio, even in a highly competitive market, demonstrates the resilience of our business model and the effectiveness of our relationship-driven lending practices. Moreover, the year-over-year increase in shareholders' equity highlights our continued commitment to driving shareholder value. We remain poised to leverage any opportunities that will fortify our financial position and ensure long-term prosperity for our stakeholders," commented Mr. Klein.

3

Loan Balances
($ in thousands, except ratios) 		Jun. 2024 Mar. 2024 Dec. 2023 Sep. 2023 Jun. 2023 Annual
Growth
Commercial $ 123,287 $ 120,016 $ 126,716 $ 120,325 $ 123,226 $ 61
% of Total 12.3 % 12.1 % 12.7 % 12.2 % 12.5 % 0.0 %
Commercial RE 434,967 429,362 424,041 421,736 417,412 17,555
% of Total 43.3 % 43.3 % 42.4 % 42.6 % 42.4 % 4.2 %
Agriculture 64,329 62,365 65,659 60,928 58,222 6,107
% of Total 6.4 % 6.3 % 6.6 % 6.2 % 5.9 % 10.5 %
Residential RE 316,233 314,668 318,123 320,306 321,365 (5,132 )
% of Total 31.5 % 31.7 % 31.8 % 32.4 % 32.6 % -1.6 %
Consumer & Other 66,574 65,141 65,673 65,726 64,599 1,975
% of Total 6.6 % 6.6 % 6.6 % 6.6 % 6.6 % 3.1 %
Total Loans $ 1,005,390 $ 991,552 $ 1,000,212 $ 989,021 $ 984,824 $ 20,566
Total Growth Percentage 2.1 %
Deposit Balances
($ in thousands, except ratios) 		Jun. 2024 Mar. 2024 Dec. 2023 Sep. 2023 Jun. 2023 Annual
Growth
Non-Int DDA $ 208,244 $ 219,395 $ 228,713 $ 224,182 $ 218,411 $ (10,167 )
% of Total 18.7 % 19.7 % 21.4 % 20.7 % 20.4 % -4.7 %
Interest DDA 190,857 169,171 166,413 174,729 170,282 20,575
% of Total 17.1 % 15.2 % 15.5 % 16.1 % 15.9 % 12.1 %
Savings 231,855 244,157 216,965 226,077 225,065 6,790
% of Total 20.8 % 21.9 % 20.3 % 20.8 % 21.0 % 3.0 %
Money Market 225,650 221,362 202,605 216,565 217,681 7,969
% of Total 20.2 % 19.9 % 18.9 % 20.0 % 20.3 % 3.7 %
Time Deposits 258,582 258,257 255,509 243,766 239,717 18,865
% of Total 23.2 % 23.2 % 23.9 % 22.5 % 22.4 % 7.9 %
Total Deposits $ 1,115,188 $ 1,112,342 $ 1,070,205 $ 1,085,319 $ 1,071,156 $ 44,032
Total Growth Percentage 4.1 %

Asset Quality

SB Financial Group's dedication to maintaining exceptional asset quality remains evident through the second quarter of 2024. As of June 2024, nonperforming loans constituted 0.47% of total loans, reflecting an increase from 0.25% in the previous quarter. Despite the slight increase in nonperforming loans to total loans, our criticized loan categories are down nearly 23% compared to the prior year and our reserve coverage remains above 325%.

Moreover, the net loan charge-offs to average loans ratio, annualized at -0.01%, highlights our effective management of loan repayments and the high quality of our credit portfolio. These metrics reinforce our reputation for rigorous risk management and credit excellence.

Mark A. Klein, Chairman, President, and CEO of SB Financial, commented, "Our second-quarter performance underscores our unwavering commitment to asset quality. Despite a slight increase in nonperforming loans, our substantial allowance for credit losses and effective loan management practices reflects our measured approach to risk management. We are steadfast in ensuring the strength and stability of our loan portfolio, even in the face of economic fluctuations."

4

Nonperforming Assets
($ in thousands, except ratios) 		Jun. 2024 Mar. 2024 Dec. 2023 Sep. 2023 Jun. 2023 Annual
Change
Commercial & Agriculture $ 2,781 $ 897 $ 748 $ 717 $ 170 $ 2,611
% of Total Com./Ag. loans 1.48 % 0.49 % 0.39 % 0.40 % 0.09 % 1535.9 %
Commercial RE 475 49 168 222 192 283
% of Total CRE loans 0.11 % 0.01 % 0.04 % 0.05 % 0.05 % 147.4 %
Residential RE 1,247 1,295 1,690 2,182 2,266 (1,019 )
% of Total Res. RE loans 0.39 % 0.41 % 0.53 % 0.68 % 0.71 % -45.0 %
Consumer & Other 231 193 212 208 282 (51 )
% of Total Con./Oth. loans 0.35 % 0.30 % 0.32 % 0.32 % 0.44 % -18.1 %
Total Nonaccruing Loans 4,734 2,434 2,818 3,329 2,910 1,824
% of Total loans 0.47 % 0.25 % 0.28 % 0.34 % 0.30 % 62.7 %
Foreclosed Assets and Other Assets 510 510 511 629 625 (115 )
Total Change (%) -18.4 %
Total Nonperforming Assets $ 5,244 $ 2,944 $ 3,329 $ 3,958 $ 3,535 $ 1,709
% of Total assets 0.39 % 0.22 % 0.25 % 0.30 % 0.26 % 48.35 %

Webcast and Conference Call

The Company will hold the second quarter 2024 earnings conference call and webcast on July 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".

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.

5

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]

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SB FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS - (Unaudited)

June March December September June
($ in thousands) 2024 2024 2023 2023 2023
ASSETS
Cash and due from banks $ 21,983 $ 26,602 $ 22,965 $ 19,049 $ 20,993
Interest bearing time deposits 2,417 2,417 1,535 1,180 1,180
Available-for-sale securities 208,156 213,239 219,708 212,768 227,996
Loans held for sale 7,864 4,730 2,525 3,206 5,684
Loans, net of unearned income 1,005,390 991,552 1,000,212 989,021 984,824
Allowance for credit losses (15,612 ) (15,643 ) (15,786 ) (15,790 ) (15,795 )
Premises and equipment, net 20,860 20,985 21,378 21,934 22,230
Federal Reserve and FHLB Stock, at cost 5,204 6,512 7,279 6,261 7,634
Foreclosed assets and other assets 510 510 511 629 625
Interest receivable 4,821 3,706 4,657 6,673 4,079
Goodwill 23,239 23,239 23,239 23,239 23,239
Cash value of life insurance 30,294 30,103 29,121 29,291 29,183
Mortgage servicing rights 14,548 14,191 13,906 13,893 13,723
Other assets 12,512 13,869 11,999 15,120 15,840
Total assets $ 1,342,186 $ 1,336,012 $ 1,343,249 $ 1,326,474 $ 1,341,435
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non interest bearing demand $ 208,244 $ 219,395 $ 228,713 $ 224,182 $ 218,411
Interest bearing demand 190,857 169,171 166,413 174,729 170,282
Savings 231,855 244,157 216,965 226,077 225,065
Money market 225,650 221,362 202,605 216,565 217,681
Time deposits 258,582 258,257 255,509 243,766 239,717
Total deposits 1,115,188 1,112,342 1,070,205 1,085,319 1,071,156
Short-term borrowings 15,178 12,916 13,387 16,519 21,118
Federal Home Loan Bank advances 35,000 35,000 83,600 59,500 81,300
Trust preferred securities 10,310 10,310 10,310 10,310 10,310
Subordinated debt net of issuance costs 19,666 19,654 19,642 19,630 19,618
Interest payable 2,944 2,772 2,443 2,216 1,866
Other liabilities 18,421 19,295 19,320 20,632 18,401
Total liabilities 1,216,707 1,212,289 1,218,907 1,214,126 1,223,769
Shareholders' Equity
Common stock 61,319 61,319 61,319 61,319 61,319
Additional paid-in capital 15,195 14,978 15,124 15,037 15,154
Retained earnings 112,104 109,938 108,486 105,521 103,725
Accumulated other comprehensive loss (31,801 ) (31,547 ) (29,831 ) (39,517 ) (32,894 )
Treasury stock (31,338 ) (30,965 ) (30,756 ) (30,012 ) (29,638 )
Total shareholders' equity 125,479 123,723 124,342 112,348 117,666
Total liabilities and shareholders' equity $ 1,342,186 $ 1,336,012 $ 1,343,249 $ 1,326,474 $ 1,341,435

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SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

At and for the Three Months Ended Six Months Ended
June March December September June June June
($ in thousands, except per share & ratios) 2024 2024 2023 2023 2023 2024 2023
Interest income
Loans
Taxable $ 13,883 $ 13,547 $ 13,438 $ 13,128 $ 12,715 $ 27,430 $ 24,841
Tax exempt 124 123 124 122 121 247 237
Securities
Taxable 1,610 1,593 1,526 1,507 1,524 3,203 3,059
Tax exempt 37 37 38 39 46 74 93
Total interest income 15,654 15,300 15,126 14,796 14,406 30,954 28,230
Interest expense
Deposits 5,208 5,090 4,398 4,194 3,538 10,298 6,116
Repurchase agreements & other 36 34 39 16 9 70 19
Federal Home Loan Bank advances 370 613 720 666 664 983 1,217
Trust preferred securities 187 188 191 189 172 375 336
Subordinated debt 194 195 194 195 194 389 389
Total interest expense 5,995 6,120 5,542 5,260 4,577 12,115 8,077
Net interest income 9,659 9,180 9,584 9,536 9,829 18,839 20,153
Provision for credit losses - - (74 ) (6 ) 145 - 395
Net interest income after provision for loan losses 9,659 9,180 9,658 9,542 9,684 18,839 19,758
Noninterest income
Wealth management fees 848 865 838 837 940 1,713 1,857
Customer service fees 875 880 844 863 871 1,755 1,696
Gain on sale of mtg. loans & OMSR 1,277 781 747 1,207 1,056 2,058 1,655
Mortgage loan servicing fees, net 565 763 561 438 494 1,328 1,102
Gain on sale of non-mortgage loans 105 10 177 10 218 115 242
Title insurance revenue 406 266 378 429 455 672 828
Net gain on sales of securities - - 1,453 - - - -
Gain (loss) on sale of assets - - 16 - 15 - 4
Other 310 386 517 379 312 696 643
Total noninterest income 4,386 3,951 5,531 4,163 4,361 8,337 8,027
Noninterest expense
Salaries and employee benefits 6,009 5,352 5,652 5,491 5,721 11,361 11,634
Net occupancy expense 707 769 746 764 802 1,476 1,586
Equipment expense 1,060 1,077 1,027 1,068 1,002 2,137 1,983
Data processing fees 727 769 680 648 685 1,496 1,331
Professional fees 615 758 926 623 612 1,373 1,475
Marketing expense 176 197 182 189 213 373 411
Telephone and communication expense 156 105 132 124 124 261 245
Postage and delivery expense 89 97 167 100 78 186 165
State, local and other taxes 230 245 285 218 218 475 446
Employee expense 159 178 146 141 156 337 344
Other expenses 743 735 426 1,115 728 1,478 1,492
Total noninterest expense 10,671 10,282 10,369 10,481 10,339 20,953 21,112
Income before income tax expense 3,374 2,849 4,820 3,224 3,706 6,223 6,673
Income tax expense 261 481 937 537 631 742 1,148
Net income $ 3,113 $ 2,368 $ 3,883 $ 2,687 $ 3,075 $ 5,481 $ 5,525
Common share data:
Basic earnings per common share $ 0.47 $ 0.35 $ 0.58 $ 0.40 $ 0.45 $ 0.82 $ 0.80
Diluted earnings per common share $ 0.47 $ 0.35 $ 0.57 $ 0.39 $ 0.44 $ 0.82 $ 0.79
Average shares outstanding (in thousands):
Basic: 6,692 6,715 6,748 6,791 6,847 6,703 6,890
Diluted: 6,700 6,723 6,851 6,878 6,910 6,715 6,976

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SB FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

At and for the Three Months Ended Six Months Ended
June March December September June June June
($ in thousands, except per share & ratios) 2024 2024 2023 2023 2023 2024 2023
SUMMARY OF OPERATIONS
Net interest income $ 9,659 $ 9,180 $ 9,584 $ 9,536 $ 9,829 $ 18,839 $ 20,153
Tax-equivalent adjustment 43 43 43 43 44 85 88
Tax-equivalent net interest income 9,702 9,223 9,627 9,579 9,873 18,924 20,241
Provision for credit loss - - (74 ) (6 ) 145 - 395
Noninterest income 4,386 3,951 5,531 4,163 4,361 8,337 8,027
Total operating revenue 14,045 13,131 15,115 13,699 14,190 27,176 28,180
Noninterest expense 10,671 10,282 10,369 10,481 10,339 20,953 21,112
Pre-tax pre-provision income 3,374 2,849 4,746 3,218 3,851 6,223 7,068
Net income 3,113 2,368 3,883 2,687 3,075 5,481 5,525
PER SHARE INFORMATION:
Basic earnings per share (EPS) 0.47 0.35 0.58 0.40 0.45 0.82 0.80
Diluted earnings per share 0.47 0.35 0.57 0.39 0.44 0.82 0.79
Common dividends 0.140 0.135 0.135 0.130 0.130 0.275 0.255
Book value per common share 18.80 18.46 18.50 16.59 17.30 18.80 17.30
Tangible book value per common share (TBV) 15.26 14.93 14.98 13.09 13.81 15.26 13.81
Market price per common share 14.00 13.78 15.35 13.50 12.62 14.00 12.62
Market price to TBV 91.8 % 92.3 % 102.5 % 103.1 % 91.4 % 91.8 % 91.4 %
Market price to trailing 12 month EPS 7.9 7.9 8.8 8.0 7.1 7.9 7.1
PERFORMANCE RATIOS:
Return on average assets (ROAA) 0.93 % 0.71 % 1.17 % 0.80 % 0.91 % 0.82 % 0.82 %
Pre-tax pre-provision ROAA 1.01 % 0.85 % 1.43 % 0.96 % 1.14 % 1.00 % 1.14 %
Return on average equity (ROE) 10.16 % 7.70 % 13.23 % 9.25 % 10.32 % 9.02 % 9.01 %
Return on average tangible equity 12.59 % 9.53 % 16.57 % 11.62 % 12.89 % 11.21 % 11.18 %
Efficiency ratio 75.86 % 78.17 % 68.44 % 79.00 % 72.71 % 76.98 % 74.77 %
Earning asset yield 5.02 % 4.97 % 4.89 % 4.78 % 4.61 % 4.96 % 4.54 %
Cost of interest bearing liabilities 2.47 % 2.55 % 2.33 % 2.18 % 1.90 % 2.51 % 1.69 %
Net interest margin 3.10 % 2.98 % 3.10 % 3.08 % 3.15 % 3.02 % 3.24 %
Tax equivalent effect 0.01 % 0.01 % 0.01 % 0.01 % 0.01 % 0.02 % 0.02 %
Net interest margin, tax equivalent 3.11 % 2.99 % 3.11 % 3.09 % 3.16 % 3.04 % 3.26 %
Non interest income/Average assets 1.31 % 1.19 % 1.67 % 1.24 % 1.30 % 1.25 % 1.20 %
Non interest expense/Average assets 3.18 % 3.08 % 3.12 % 3.13 % 3.07 % 3.13 % 3.15 %
Net noninterest expense/Average assets -1.87 % -1.90 % -1.46 % -1.89 % -1.78 % -1.89 % -1.95 %
ASSET QUALITY RATIOS:
Gross charge-offs - 66 5 12 32 66 101
Recoveries 16 9 1 7 10 25 18
Net charge-offs (16 ) 57 4 5 22 41 83
Nonperforming loans/Total loans 0.47 % 0.25 % 0.28 % 0.34 % 0.30 % 0.47 % 0.30 %
Nonperforming assets/Loans & OREO 0.52 % 0.30 % 0.33 % 0.40 % 0.36 % 0.52 % 0.36 %
Nonperforming assets/Total assets 0.39 % 0.22 % 0.25 % 0.30 % 0.26 % 0.39 % 0.26 %
Allowance for credit loss/Nonperforming loans 329.78 % 642.69 % 560.18 % 474.32 % 542.78 % 329.78 % 542.78 %
Allowance for credit loss/Total loans 1.55 % 1.58 % 1.58 % 1.60 % 1.60 % 1.55 % 1.60 %
Net loan charge-offs/Average loans (ann.) (0.01 )% 0.02 % 0.00 % 0.00 % 0.01 % 0.01 % 0.02 %
CAPITAL & LIQUIDITY RATIOS:
Loans/Deposits 90.15 % 89.14 % 93.46 % 91.13 % 91.94 % 90.15 % 91.94 %
Equity/Assets 9.35 % 9.26 % 9.26 % 8.47 % 8.77 % 9.35 % 8.77 %
Tangible equity/Tangible assets 7.72 % 7.63 % 7.63 % 6.81 % 7.13 % 7.72 % 7.13 %
Common equity tier 1 ratio (Bank) 13.89 % 13.84 % 13.42 % 13.56 % 13.18 % 13.89 % 13.18 %
END OF PERIOD BALANCES
Total assets 1,342,186 1,336,012 1,343,249 1,326,474 1,341,435 1,342,186 1,341,435
Total loans 1,005,390 991,552 1,000,212 989,021 984,824 1,005,390 984,824
Deposits 1,115,188 1,112,342 1,070,205 1,085,319 1,071,156 1,115,188 1,071,156
Shareholders equity 125,479 123,723 124,342 112,348 117,666 125,479 117,666
Goodwill and intangibles 23,630 23,646 23,662 23,687 23,710 23,630 23,710
Tangible equity 101,849 100,077 100,680 88,661 93,956 101,849 93,956
Mortgage servicing portfolio 1,389,805 1,371,713 1,366,667 1,367,209 1,353,904 1,389,805 1,353,904
Wealth/Brokerage assets under care 525,713 525,517 501,829 478,236 499,255 525,713 499,255
Total assets under care 3,257,704 3,233,242 3,211,745 3,171,919 3,194,594 3,257,704 3,194,594
Full-time equivalent employees 249 245 251 252 253 249 253
Period end common shares outstanding 6,676 6,702 6,720 6,773 6,803 6,676 6,803
Market capitalization (all) 93,458 92,359 103,147 91,437 85,857 93,458 85,857
AVERAGE BALANCES
Total assets 1,342,847 1,333,236 1,327,415 1,339,870 1,346,010 1,337,244 1,341,918
Total earning assets 1,246,099 1,230,736 1,236,165 1,239,145 1,248,813 1,246,956 1,243,540
Total loans 1,005,018 993,310 992,337 989,089 988,348 999,164 979,629
Deposits 1,120,367 1,091,803 1,084,939 1,095,414 1,100,344 1,106,633 1,098,647
Shareholders equity 122,510 123,058 117,397 116,165 119,177 121,474 122,601
Goodwill and intangibles 23,638 23,654 23,675 23,698 23,721 23,646 23,732
Tangible equity 98,872 99,404 93,722 92,467 95,456 97,828 98,869
Average basic shares outstanding 6,692 6,715 6,748 6,791 6,847 6,703 6,890
Average diluted shares outstanding 6,700 6,723 6,851 6,878 6,910 6,715 6,976

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SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

For the Three Months Ended June 30, 2024 and 2023

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023
Average Average Average Average
($ in thousands) Balance Interest Rate Balance Interest Rate
Assets
Taxable securities/cash $ 236,320 $ 1,610 2.73 % $ 252,899 $ 1,524 2.41 %
Nontaxable securities 4,761 37 3.11 % 7,566 46 2.43 %
Loans, net 1,005,018 14,007 5.57 % 988,348 12,836 5.19 %
Total earning assets 1,246,099 15,654 5.02 % 1,248,813 14,406 4.61 %
Cash and due from banks 4,448 3,952
Allowance for loan losses (15,647 ) (15,556 )
Premises and equipment 20,978 22,529
Other assets 86,969 86,272
Total assets $ 1,342,847 $ 1,346,010
Liabilities
Savings, MMDA and interest bearing demand $ 637,561 $ 2,776 1.74 % $ 621,999 $ 1,850 1.19 %
Time deposits 257,359 2,432 3.78 % 239,532 1,688 2.82 %
Repurchase agreements & other 12,050 36 1.20 % 15,064 9 0.24 %
Advances from Federal Home Loan Bank 35,374 370 4.18 % 57,495 664 4.62 %
Trust preferred securities 10,310 187 7.26 % 10,310 172 6.67 %
Subordinated debt 19,658 194 3.95 % 19,610 194 3.96 %
Total interest bearing liabilities 972,312 5,995 2.47 % 964,010 4,577 1.90 %
Non interest bearing demand 225,447 - 238,813 -
Total funding 1,197,759 2.00 % 1,202,823 1.52 %
Other liabilities 22,578 20,301
Total liabilities 1,220,337 1,223,124
Equity 122,510 122,886
Total liabilities and equity $ 1,342,847 $ 1,346,010 -
Net interest income $ 9,659 $ 9,829
Net interest income as a percent of average interest-earning assets - GAAP measure 3.10 % 3.15 %
Net interest income as a percent of average interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis 3.11 % 3.16 %

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Six Months Ended June 30, 2024 Six Months Ended June 30, 2023
Average Average Average Average
Balance Interest Rate Balance Interest Rate
Assets
Taxable securities/cash $ 243,032 $ 3,203 2.64 % $ 256,250 $ 3,059 2.39 %
Nontaxable securities 4,760 74 3.11 % 7,661 93 2.43 %
Loans, net 999,164 27,677 5.54 % 979,629 25,078 5.12 %
Total earning assets 1,246,956 30,954 4.96 % 1,243,540 28,230 4.54 %
Cash and due from banks 4,479 4,019
Allowance for loan losses (15,739 ) (15,162 )
Premises and equipment 21,130 22,692
Other assets 80,418 86,829
Total assets $ 1,337,244 $ 1,341,918
Liabilities
Savings, MMDA and interest bearing demand $ 621,950 $ 5,301 1.70 % $ 629,061 $ 3,135 1.00 %
Time deposits 257,975 4,997 3.87 % 227,343 2,981 2.62 %
Repurchase agreements & Other 14,021 70 1.00 % 16,832 19 0.23 %
Advances from Federal Home Loan Bank 43,202 983 4.55 % 53,359 1,217 4.56 %
Trust preferred securities 10,310 375 7.27 % 10,310 336 6.52 %
Subordinated debt 19,652 389 3.96 % 19,604 389 3.97 %
Total interest bearing liabilities 967,110 12,115 2.51 % 956,509 8,077 1.69 %
Non interest bearing demand 226,708 2.03 % 242,243 1.35 %
Total funding 1,193,818 1,198,752
Other liabilities 27,863 20,565
Total liabilities 1,221,681 1,219,317
Equity 121,474 122,601
Total liabilities and equity $ 1,343,155 $ 1,341,918
Net interest income $ 18,839 $ 20,153
Net interest income as a percent of average interest-earning assets - GAAP measure 3.02 % 3.24 %
Net interest income as a percent of average interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis 3.04 % 3.26 %

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Three Months Ended Six Months Ended
Non-GAAP reconciliation
($ in thousands, except per share & ratios) 		June 30,
2024 		June 30,
2023 		June 30,
2024 		June 30,
2023
Total Operating Revenue $ 14,045 $ 14,190 $ 27,176 $ 28,180
Adjustment to (deduct)/add OMSR recapture/impairment * (38 ) 16 (219 ) (39 )
Adjusted Total Operating Revenue 14,007 14,206 26,957 28,141
Income before Income Taxes 3,374 3,706 6,223 6,673
Adjustment for OMSR * (38 ) 16 (219 ) (39 )
Adjusted Income before Income Taxes 3,336 3,722 6,004 6,634
Provision for Income Taxes 261 631 742 1,148
Adjustment for OMSR ** (8 ) 3 (46 ) (8 )
Adjusted Provision for Income Taxes 253 634 696 1,140
Net Income 3,113 3,075 5,481 5,525
Adjustment for OMSR * (30 ) 13 (173 ) (31 )
Adjusted Net Income 3,083 3,088 5,308 5,494
Diluted Earnings per Share 0.47 0.44 0.82 0.79
Adjustment for OMSR * (0.01 ) 0.01 (0.03 ) (0.00 )
Adjusted Diluted Earnings per Share $ 0.46 $ 0.45 $ 0.79 $ 0.79
Return on Average Assets 0.93 % 0.91 % 0.82 % 0.82 %
Adjustment for OMSR * -0.01 % 0.00 % -0.01 % 0.00 %
Adjusted Return on Average Assets 0.92 % 0.92 % 0.81 % 0.82 %
* valuation adjustment to the Company's mortgage servicing rights
** tax effect is calculated using a 21% statutory federal corporate income tax rate

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