• SB Financial Group Announces Fourth Quarter and Full Year 2023 Results

    ソース: Nasdaq GlobeNewswire / 25 1 2024 16:15:01   America/New_York

    DEFIANCE, Ohio, Jan. 25, 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 fourth quarter and twelve months ended December 31, 2023.

    Fourth Quarter 2023 Highlights Over the Fourth Quarter Prior Year Include:

    • Net income of $3.9 million increased by 9.9 percent compared to the prior year with diluted Earnings Per Share (“EPS”) of $0.57 and increased 44.5 percent compared to the linked quarter.
    • Interest income of $15.1 million increased by 16.9 percent from the prior year.
    • Loan growth of $38.1 million, or 4.0 percent from the prior year quarter, marks the eighth consecutive quarter of expanding loans.
    • Strong asset quality with nonperforming assets decreasing to 25 basis points of total assets, a marked improvement from 33 basis points in the same quarter of the previous year.   Delinquency levels for loans 30 days or more past due ended the year at 15 basis points of total loans.

    Twelve Months Ended December 31, 2023 Highlights Over the Prior Year Include:

    • Net income decreased slightly to $12.1 million, a 3.4 percent drop from the prior year's $12.5 million, and diluted EPS was $1.75, down 1.13 percent from $1.77. Adjusted EPS were up by $0.12 per share or 7.4 percent.
    • Deposits decreased by $16.5 million, or 1.5 percent to $1.07 billion.
    • Mortgage origination volume was $215.5 million for the trailing twelve months, with a servicing portfolio of $1.37 billion.
             
    Earnings HighlightsThree Months Ended  Twelve Months Ended
    ($ in thousands, except per share & ratios)Dec. 2023Dec. 2022% Change  Dec. 2023Dec. 2022% Change
    Operating revenue$15,115 $14,613 3.4%  $56,994 $57,630 -1.1%
    Interest income 15,126  12,937 16.9%   58,152  44,569 30.5%
    Interest expense 5,542  2,037 172.1%   18,879  5,170 265.2%
    Net interest income 9,584  10,900 -12.1%   39,273  39,399 -0.3%
    Provision for credit losses (74) - 0.0%   315  - 0.0%
    Noninterest income 5,531  3,713 49.0%   17,721  18,231 -2.8%
    Noninterest expense 10,369  10,269 1.0%   41,962  42,314 -0.8%
    Net income 3,883  3,533 9.9%   12,095  12,521 -3.4%
    Earnings per diluted share 0.57  0.50 14.0%   1.75  1.77 -1.1%
    Return on average assets 1.17% 1.08%8.3%   0.91% 0.95%-4.2%
    Return on average equity 13.23% 12.17%8.7%   10.22% 9.86%3.7%
             

    “We demonstrated our resilience and operational strength throughout the fourth quarter of 2023," stated Mark A. Klein, Chairman, President, and CEO. "In doing so, we achieved a 9.9 percent increase in net income over the prior year, underpinned by robust growth in our loan portfolio, which eclipsed the $1 billion mark for the first time in our history. This marks our eighth successive quarter of loan expansion, underscoring our commitment to disciplined and consistent growth in our loan portfolio. While we navigate the economic headwinds, these milestones underscore our capability to adapt and broaden our revenue base. Looking to the future, we remain dedicated to reinforcing our solid financial foundation and delivering outstanding value to our clients and shareholders.”

    RESULTS OF OPERATIONS

    Consolidated Revenue

    Total operating revenue, which includes both net interest income and noninterest income, showed a notable increase of 10.3 percent compared to the linked quarter and a 3.4 percent increase over the same quarter last year. Specifically, net interest income rose by 0.5 percent from the linked quarter, although it decreased by 12.1 percent from the year-ago quarter. The net interest margin saw a slight increase of 2 basis points from the linked quarter but experienced a decrease of 50 basis points when compared to the prior-year quarter. These changes in net interest income and margin primarily resulted from higher costs associated with deposits and funding.

    In terms of noninterest income, we observed significant growth, increasing by 32.9 percent from the linked quarter and by 49.0 percent from the prior year quarter, largely due to our opportunistic decision to sell equity securities , resulting in a $1.5 million gain. Mortgage servicing revenue and gain on sale from residential loans were stable in the quarter compared to the prior year with SBA gains of $177 thousand. Conversely, income from wealth management and customer service fees, along with title insurance revenue, showed a decrease compared to the figures from the previous year’s corresponding quarter.

    Mortgage Loan Business

    Mortgage loan originations for the fourth quarter of 2023 stood at $39.6 million, a decrease of $11.7 million, or 22.8 percent, from the year-ago quarter. This decline reflects the cooling housing market, which aligns with broader economic trends. However, it's noteworthy that the total sales of originated loans reached $33.4 million, marking an increase of $9.8 million, or 41.4 percent from the prior year quarter. This increase underscores an effective sales strategy in the purchase market and indicates our commitment to emphasizing our traditional model of generation and sale.

    For the full year of 2023, SB Financial reported mortgage originations totaling $215.5 million. Our originations reflected the changes in the market, with new purchase/construction lending constituting 92 percent of the business, up from 80 percent for all of 2022.

    Net mortgage banking revenue for the quarter was $1.3 million, reflecting a steady performance with a marginal increase from the $1.2 million reported in the fourth quarter of 2022. Mortgage servicing operations demonstrated commendable stability, with a valuation adjustment resulting in a positive valuation adjustment of $12 thousand in the fourth quarter of 2023, a significant improvement from the $0.1 million decrease experienced in the same quarter of the prior year. The year 2023 concluded with a favorable adjustment, recapturing $0.1 million in servicing rights, in stark contrast to the previous year's $1.3 million impairment of these rights. The mortgage servicing portfolio experienced growth, closing at $1.37 billion as of December 31, 2023, an increase of $14.7 million, or 1.1 percent from the prior year.

    "In a year marked by fluctuating interest rates and heightened market sensitivity, our mortgage loan business has showcased remarkable resilience," said Mr. Klein. "The increase in total sales of originated loans by over 40 percent compared to the same period last year, when originations faced significant headwinds, speaks to the agility, expertise and presence of our team. The steady net mortgage banking revenue and the growth of our servicing portfolio affirm our strategic focus and our dedication to delivering exceptional service and value to our clients."

            
    Mortgage Banking       
    ($ in thousands)Dec. 2023Sep. 2023Jun. 2023Mar. 2023Dec. 2022 Prior Year Growth
    Mortgage originations$39,566 $61,200 $65,387 $49,366 $51,219  $(11,653)
    Mortgage sales 33,362  54,085  47,933  25,803  23,590   9,772 
    Mortgage servicing portfolio 1,366,667  1,367,209  1,353,904  1,344,158  1,352,016   14,651 
    Mortgage servicing rights 13,906  13,893  13,723  13,548  13,503   403 
            
            
    Mortgage servicing revenue       
    Loan servicing fees 855  850  844  844  851   4 
    OMSR amortization (282) (334) (334) (292) (310)  28 
    Net administrative fees 573  516  510  552  541   32 
    OMSR valuation adjustment (12) (78) (16) 56  86   (98)
    Net loan servicing fees 561  438  494  608  627   (66)
    Gain on sale of mortgages 747  1,207  1,056  599  550   197 
    Mortgage banking revenue, net$ 1,308 $ 1,645 $ 1,550 $ 1,207 $ 1,177  $ 131 
            

    Noninterest Income and Noninterest Expense

    Noninterest income for the quarter increased from the prior year quarter by 49.0 percent and increased by 32.9 percent from the linked quarter, reflective of the equity sale discussed earlier. Gain-on-sale yields on mortgage loans increased $0.2 million, or 35.8 percent from the prior year. Similarly, gain-on-sale yields of non-mortgage loans also saw a notable increase from both the prior year and the linked quarter, primarily driven by favorable market conditions and our focused efforts to capitalize on emerging lending opportunities.

    For the fourth quarter of 2023, SB Financial reported a noninterest expense of $10.4 million, reflecting a slight increase from the prior year but a decrease from the linked quarter. The increase over the prior year was the direct result of a $0.2 million increase in professional fees and an increase of $0.1 million in data processing fees. These increases were partially offset by a $0.1 million decrease in marketing expenses and a marginal decrease of $25 thousand in salaries and employee benefits. As a result, total headcount for the Company is down over 6 percent compared to the prior year.

    "Our noninterest income, always one of our strengths, was up over the same period last year and compared to the linked quarter," Mr. Klein noted. “Significant contributions came from our gain-on-sale yields, which saw a substantial increase in both mortgage and non-mortgage loans compared to the same quarter of the previous year. On the expense side, we've maintained a disciplined approach, with noninterest expenses witnessing a modest year-over-year increase due to targeted investments in professional and data processing services. These investments are critical in supporting our growth and enhancing our operational efficiency. Even with these necessary expenditures, we've managed to realize savings in marketing and personnel costs, underscoring our commitment to control costs and improve our efficiency."

             
    Noninterest Income/Noninterest Expense       
    ($ in thousands, except ratios) Dec. 2023Sep. 2023Jun. 2023Mar. 2023Dec. 2022 Prior Year Growth
    Noninterest Income (NII) $5,531 $4,163 $4,361 $3,666 $3,713  $1,818 
    NII / Total Revenue  36.6% 30.4% 30.7% 26.2% 25.4%  11.2%
    NII / Average Assets  1.7% 1.2% 1.3% 1.1% 1.1%  0.6%
    Total Revenue Growth  3.4% -5.3% -0.5% -2.0% -6.7%  3.4%
             
    Noninterest Expense (NIE) $10,369 $10,481 $10,339 $10,773 $10,269  $100 
    Efficiency Ratio  68.4% 76.4% 72.7% 76.9% 70.2%  -1.8%
    NIE / Average Assets  3.1% 3.1% 3.1% 3.2% 3.1%  0.0%
    Net Noninterest Expense/Avg. Assets -1.4% -1.9% -1.8% -2.1% -2.0%  0.6%
    Total Expense Growth  1.0% 0.9% -4.3% -0.8% -11.2%  1.0%
             

    Balance Sheet

    As of December 31, 2023, SB Financial reported total assets of $1.34 billion, reflecting a growth of 1.2 percent from the linked quarter and an increase of 0.5 percent from the previous year. The growth in assets is primarily attributed to the increase in the loan portfolio, which has reached $1 billion, marking a historic milestone, with a $38.1 million or 4.0 percent increase over the year. The strategic reallocation of liquidity, reflected in a decrease in cash and investments, has been instrumental in this growth, demonstrating the ability to prudently manage resources to maximize shareholder returns while maintaining a solid financial position.

    Total shareholders’ equity increased to $124.3 million, up $5.9 million from the prior-year quarter. This increase is a direct reflection of our commitment to enhancing shareholder value and management’s confidence in the Company's long-term strategy. The active capital management approach, including the repurchase of 53,000 shares in the fourth quarter, as part of the ongoing buyback program, reflects SB Financial’s dedication to delivering returns to its shareholders.

    "As we cap off 2023, our commitment to disciplined growth and robust asset quality has once again proven effective," said Mr. Klein. "The fourth quarter saw our loan balances grow by $38.1 million, securing a full year of continuous quarterly loan growth. Our dynamic approach to build strong lending relationships has borne fruit, despite commercial pipelines feeling the squeeze in a fairly competitive landscape. Our asset quality remains a cornerstone of our operations, with top decile coverage ratios, reinforcing the bank's financial health. Over the year, we've generated an increase in our loan portfolio, demonstrating our capacity to drive organic growth amidst fluctuating interest rates and a challenging economic environment. This growth represents our deepening relationships with our customers and our ability to meet their evolving needs. Looking forward, we remain committed to leveraging our strong asset base while we maintain our focus on strategic initiatives that enhance shareholder value and position us for continued success in the coming years."

           
    Loan Balances      
    ($ in thousands, except ratios)Dec. 2023Sep. 2023Jun. 2023Mar. 2023Dec. 2022Annual Growth
    Commercial$126,718 $120,325 $123,226 $126,066 $128,393 $(1,675)
    % of Total 12.7% 12.2% 12.5% 12.9% 13.3% -1.3%
    Commercial RE 424,041  421,736  417,412  419,024  412,809  11,232 
    % of Total 42.4% 42.6% 42.4% 42.9% 42.9% 2.7%
    Agriculture 65,657  60,928  58,222  57,761  64,505  1,152 
    % of Total 6.6% 6.2% 5.9% 5.9% 6.7% 1.8%
    Residential RE 318,123  320,306  321,365  309,684  291,368  26,755 
    % of Total 31.8% 32.4% 32.6% 31.7% 30.3% 9.2%
    Consumer & Other 65,673  65,726  64,599  63,777  65,000  673 
    % of Total 6.6% 6.6% 6.6% 6.5% 6.8% 1.0%
    Total Loans$ 1,000,212 $ 989,021 $ 984,824 $ 976,312 $ 962,075 $ 38,137 
    Total Growth Percentage        4.0%
           
           
    Deposit Balances      
    ($ in thousands, except ratios)Dec. 2023Sep. 2023Jun. 2023Mar. 2023Dec. 2022Annual Growth
    Non-Int DDA$228,713 $224,182 $218,411 $237,175 $256,799 $(28,086)
    % of Total 21.4% 20.7% 20.4% 21.4% 23.6% -10.9%
    Interest DDA 166,413  174,729  170,282  188,497  191,719  (25,306)
    % of Total 15.5% 16.1% 15.9% 17.0% 17.6% -13.2%
    Savings 216,965  226,077  225,065  227,974  191,272  25,693 
    % of Total 20.3% 20.8% 21.0% 20.5% 17.6% 13.4%
    Money Market 202,605  216,565  217,681  222,203  255,995  (53,390)
    % of Total 18.9% 20.0% 20.3% 20.0% 23.6% -20.9%
    Time Deposits 255,509  243,766  239,717  234,295  190,880  64,629 
    % of Total 23.9% 22.5% 22.4% 21.1% 17.6% 33.9%
    Total Deposits$ 1,070,205 $ 1,085,319 $ 1,071,156 $ 1,110,144 $ 1,086,665 $ (16,460)
    Total Growth Percentage        -1.5%
           

    Asset Quality

    SB Financial has demonstrated a strong commitment to maintaining high standards of asset quality. As of December 31, 2023, SB Financial reported nonperforming assets totaling $3.3 million, a significant decrease of $1.1 million or 25.3 percent from the same quarter last year, driven primarily by a decline in Residential Real Estate. This notable reduction in nonperforming assets is a clear indicator of the effectiveness of our risk management strategies and the overall health of the loan portfolio.

    Furthermore, the coverage ratio for problem loans has seen a remarkable improvement, up by 185 basis points from the previous year to 560 percent. This improvement in the coverage ratio is a direct result of proactive measures in asset quality management. It includes the expansion of the allowance for credit losses, which followed a Current Expected Credit Loss (CECL) adjustment of $1.4 million. Additionally, this improvement coincides with a concurrent reduction in problem loans, underscoring our focused efforts on maintaining a robust and healthy loan portfolio.

           
    Nonperforming Assets     Annual
    Change
    ($ in thousands, except ratios)Dec. 2023Sep. 2023Jun. 2023Mar. 2023Dec. 2022
    Commercial & Agriculture$748 $717 $170 $185 $114 $634 
    % of Total Com./Ag. loans 0.39% 0.40% 0.09% 0.10% 0.06% 556.1%
    Commercial RE 168  222  192  199  210  (42)
    % of Total CRE loans 0.04% 0.05% 0.05% 0.05% 0.05% -20.0%
    Residential RE 1,690  2,182  2,266  2,742  3,020  (1,330)
    % of Total Res. RE loans 0.53% 0.68% 0.71% 0.89% 1.04% -44.0%
    Consumer & Other 212  208  282  270  338  (126)
    % of Total Con./Oth. loans 0.32% 0.32% 0.44% 0.42% 0.52% -37.3%
    Total Nonaccruing Loans 2,818  3,329  2,910  3,396  3,682  (864)
    % of Total loans 0.28% 0.34% 0.30% 0.35% 0.38% -23.5%
    Foreclosed Assets and Other Assets 511  629  625  650  777  (266)
    Total Change (%)      -34.2%
    Total Nonperforming Assets$3,329 $3,958 $3,535 $4,046 $4,459 $(1,130)
    % of Total assets 0.25% 0.30% 0.26% 0.30% 0.33% -25.34%
           

    Webcast and Conference Call

    The Company will hold the fourth quarter 2023 earnings conference call and webcast on January 26, 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 impairment 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

     

    SB FINANCIAL GROUP, INC.
    CONSOLIDATED BALANCE SHEETS - (Unaudited)
                  
         December September June March December
       ($ in thousands)  2023   2023   2023   2023   2022 
                  
    ASSETS          
     Cash and due from banks $22,965  $19,049  $20,993  $21,625  $27,817 
     Interest bearing time deposits  1,535   1,180   1,180   1,380   2,131 
     Available-for-sale securities  219,708   212,768   227,996   237,607   238,780 
     Loans held for sale  2,525   3,206   5,684   5,592   2,073 
     Loans, net of unearned income  1,000,212   989,021   984,824   976,312   962,075 
     Allowance for credit losses  (15,786)  (15,790)  (15,795)  (15,442)  (13,818)
     Premises and equipment, net  21,378   21,934   22,230   22,621   22,829 
     Federal Reserve and FHLB Stock, at cost  7,279   6,261   7,634   6,054   6,326 
     Foreclosed assets and other assets  511   629   625   650   777 
     Interest receivable  4,657   4,457   4,079   3,926   4,091 
     Goodwill  23,239   23,239   23,239   23,239   23,239 
     Cash value of life insurance  29,121   29,291   29,183   29,024   28,870 
     Mortgage servicing rights  13,906   13,893   13,723   13,548   13,503 
     Other assets  11,137   17,336   15,840   15,157   16,940 
                  
       Total assets $1,342,387  $1,326,474  $1,341,435  $1,341,293  $1,335,633 
                  
                  
                  
    LIABILITIES AND SHAREHOLDERS' EQUITY          
     Deposits          
      Non interest bearing demand $228,713  $224,182  $218,411  $237,175  $256,799 
      Interest bearing demand  166,413   174,729   170,282   188,497   191,719 
      Savings  216,965   226,077   225,065   227,974   191,272 
      Money market  202,605   216,565   217,681   222,203   255,995 
      Time deposits  255,509   243,766   239,717   234,295   190,880 
                  
       Total deposits  1,070,205   1,085,319   1,071,156   1,110,144   1,086,665 
                  
     Short-term borrowings  13,387   16,519   21,118   15,998   14,923 
     Federal Home Loan Bank advances  83,600   59,500   81,300   44,500   60,000 
     Trust preferred securities  10,310   10,310   10,310   10,310   10,310 
     Subordinated debt net of issuance costs  19,642   19,630   19,618   19,606   19,594 
     Interest payable  2,443   2,216   1,866   1,441   769 
     Other liabilities  18,458   20,632   18,401   19,535   24,944 
                  
       Total liabilities  1,218,045   1,214,126   1,223,769   1,221,534   1,217,205 
                  
     Shareholders' Equity          
      Common stock  61,319   61,319   61,319   61,319   61,319 
      Additional paid-in capital  15,124   15,037   15,154   14,953   15,087 
      Retained earnings  108,486   105,521   103,725   101,548   101,966 
      Accumulated other comprehensive loss  (29,831)  (39,517)  (32,894)  (29,671)  (32,120)
      Treasury stock  (30,756)  (30,012)  (29,638)  (28,390)  (27,824)
                  
       Total shareholders' equity  124,342   112,348   117,666   119,759   118,428 
                  
       Total liabilities and shareholders' equity$1,342,387  $1,326,474  $1,341,435  $1,341,293  $1,335,633 
                  


    SB FINANCIAL GROUP, INC.
    CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
                     
    ($ in thousands, except per share & ratios) At and for the Three Months Ended Twelve Months Ended
                     
        December September June March December December December
    Interest income  2023   2023  2023  2023  2022 2023 2022
     Loans              
       Taxable $13,438  $13,128  $12,715 $12,126  $11,222 $51,407 $38,238
       Tax exempt  124   122   121  116   109  483  335
     Securities              
       Taxable  1,526   1,507   1,524  1,535   1,559  6,092  5,798
       Tax exempt  38   39   46  47   47  170  198
                     
      Total interest income  15,126   14,796   14,406  13,824   12,937  58,152  44,569
                     
    Interest expense              
     Deposits  4,398   4,194   3,538  2,578   1,440  14,708  3,477
     Repurchase agreements & other  39   16   9  10   7  74  39
     Federal Home Loan Bank advances 720   666   664  553   258  2,603  515
     Trust preferred securities  191   189   172  164   138  716  361
     Subordinated debt  194   195   194  195   194  778  778
                     
      Total interest expense  5,542   5,260   4,577  3,500   2,037  18,879  5,170
                     
                     
    Net interest income  9,584   9,536   9,829  10,324   10,900  39,273  39,399
                     
     Provision for credit losses  (74)  (6)  145  250   -  315  -
                     
    Net interest income after provision              
      for loan losses  9,658   9,542   9,684  10,074   10,900  38,958  39,399
                     
    Noninterest income              
     Wealth management fees  838   837   940  917   907  3,532  3,728
     Customer service fees  844   863   871  825   880  3,403  3,378
     Gain on sale of mtg. loans & OMSR 747   1,207   1,056  599   550  3,609  4,298
     Mortgage loan servicing fees, net  561   438   494  608   627  2,101  2,964
     Gain on sale of non-mortgage loans 177   10   218  24   105  429  566
     Title insurance revenue  378   429   455  373   454  1,635  2,229
     Net gain on sales of securities  1,453   -   -  -   -  1,453  -
     Gain (loss) on sale of assets  16   -   15  (11)  18  20  61
     Other  517   379   312  331   172  1,539  1,007
                     
      Total noninterest income  5,531   4,163   4,361  3,666   3,713  17,721  18,231
                     
    Noninterest expense              
     Salaries and employee benefits  5,652   5,491   5,721  5,913   5,677  22,777  24,142
     Net occupancy expense  746   764   802  784   763  3,096  2,993
     Equipment expense  1,027   1,068   1,002  981   1,017  4,078  3,616
     Data processing fees  680   648   685  646   627  2,659  2,510
     Professional fees  926   623   612  863   738  3,024  3,214
     Marketing expense  182   189   213  198   258  782  911
     Telephone and communication expense   132   124   124  121   124  501  474
     Postage and delivery expense  167   100   78  87   121  432  422
     State, local and other taxes  285   218   218  228   277  949  1,082
     Employee expense  146   141   156  188   157  631  613
     Other expenses  426   1,115   728  764   510  3,033  2,337
                     
      Total noninterest expense  10,369   10,481   10,339  10,773   10,269  41,962  42,314
                     
                     
    Income before income tax expense  4,820   3,224   3,706  2,967   4,345  14,717  15,315
                     
     Income tax expense  937   537   631  517   812  2,622  2,794
                     
    Net income  $3,883  $2,687  $3,075 $2,450  $3,533 $12,095 $12,521
                     
    Common share data:              
     Basic earnings per common share $0.58  $0.40  $0.45 $0.35  $0.51 $1.77 $1.79
                     
     Diluted earnings per common share$0.57  $0.39  $0.44 $0.35  $0.50 $1.75 $1.77
                     
    Average shares outstanding (in thousands):              
     Basic:  6,748   6,791   6,847  6,933   6,945  6,829  7,005
     Diluted:  6,851   6,878   6,910  7,008   7,021  6,917  7,078
                     


    SB FINANCIAL GROUP, INC.
    CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
                   
    ($ in thousands, except per share & ratios)At and for the Three Months Ended Twelve Months Ended
                   
      December September June March December December December
    SUMMARY OF OPERATIONS  2023   2023   2023   2023   2022   2023   2022 
                   
       Net interest income $9,584  $9,536  $9,829  $10,324  $10,900  $39,273  $39,399 
             Tax-equivalent adjustment  43   43   44   43   41   174   142 
       Tax-equivalent net interest income  9,627   9,579   9,873   10,367   10,941   39,447   39,541 
       Provision for credit loss  (74)  (6)  145   250   -   315   - 
       Noninterest income  5,531   4,163   4,361   3,666   3,713   17,721   18,231 
       Total operating revenue  15,115   13,699   14,190   13,990   14,613   56,994   57,630 
       Noninterest expense  10,369   10,481   10,339   10,773   10,269   41,962   42,314 
       Pre-tax pre-provision income  4,746   3,218   3,851   3,217   4,344   15,032   15,316 
       Pretax income  4,820   3,224   3,706   2,967   4,344   14,717   15,316 
       Net income  3,883   2,687   3,075   2,450   3,533   12,095   12,521 
                   
    PER SHARE INFORMATION:              
       Basic earnings per share (EPS)  0.58   0.40   0.45   0.35   0.51   1.77   1.79 
       Diluted earnings per share  0.57   0.39   0.44   0.35   0.50   1.75   1.77 
       Common dividends  0.135   0.130   0.130   0.125   0.125   0.520   0.480 
       Book value per common share  18.50   16.59   17.30   17.37   17.08   18.50   17.08 
       Tangible book value per common share (TBV)  14.98   13.09   13.81   13.93   13.65   14.98   13.65 
       Market price per common share  15.35   13.50   12.62   14.13   16.95   15.35   16.95 
       Market price to TBV  102.5%  103.1%  91.4%  101.4%  124.2%  102.5%  124.2%
       Market price to trailing 12 month EPS  8.8   8.0   7.1   8.2   9.6   8.8   9.6 
                   
    PERFORMANCE RATIOS:              
       Return on average assets (ROAA)  1.17%  0.80%  0.91%  0.73%  1.07%  0.91%  0.95%
       Pre-tax pre-provision ROAA  1.43%  0.96%  1.14%  0.96%  1.32%  1.21%  1.25%
       Return on average equity  13.23%  9.25%  10.32%  8.22%  12.17%  10.22%  9.86%
       Return on average tangible equity  16.57%  11.62%  12.89%  10.26%  15.30%  12.78%  12.14%
       Efficiency ratio  68.44%  76.34%  72.71%  76.85%  70.16%  73.47%  73.31%
       Earning asset yield  4.89%  4.78%  4.61%  4.49%  4.27%  4.67%  3.63%
       Cost of interest bearing liabilities  2.33%  2.18%  1.90%  1.46%  0.90%  1.97%  0.56%
       Net interest margin  3.10%  3.08%  3.15%  3.35%  3.60%  3.15%  3.21%
       Tax equivalent effect  0.01%  0.01%  0.01%  0.02%  0.01%  0.01%  0.01%
       Net interest margin, tax equivalent  3.11%  3.09%  3.16%  3.37%  3.61%  3.16%  3.22%
       Non interest income/Average assets  1.67%  1.24%  1.30%  1.10%  1.13%  1.33%  1.38%
       Non interest expense/Average assets  3.12%  3.13%  3.07%  3.23%  3.13%  3.14%  3.21%
       Net noninterest expense/Average assets  -1.46%  -1.89%  -1.78%  -2.13%  -2.00%  -1.82%  -1.83%
                   
    ASSET QUALITY RATIOS:              
       Gross charge-offs  5   12   32   69   7   118   34 
       Recoveries  1   7   10   8   1   26   47 
       Net charge-offs  4   5   22   61   6   92   (13)
       Nonperforming loans/Total loans  0.28%  0.34%  0.30%  0.35%  0.38%  0.28%  0.38%
       Nonperforming assets/Loans & OREO  0.33%  0.40%  0.36%  0.41%  0.46%  0.33%  0.46%
       Nonperforming assets/Total assets  0.25%  0.30%  0.26%  0.30%  0.33%  0.25%  0.33%
       Allowance for credit loss/Nonperforming loans  560.18%  474.32%  542.78%  454.71%  375.29%  560.18%  375.29%
       Allowance for credit loss/Total loans  1.58%  1.60%  1.60%  1.58%  1.44%  1.58%  1.44%
       Net loan charge-offs/Average loans (ann.)  0.00%  0.00%  0.01%  0.03%  0.00%  0.01%  (0.00%)
                   
    CAPITAL & LIQUIDITY RATIOS:              
       Loans/ Deposits  93.46%  91.13%  91.94%  87.94%  88.53%  93.46%  88.53%
       Equity/ Assets  9.26%  8.47%  8.77%  8.93%  8.87%  9.26%  8.87%
       Tangible equity/Tangible assets  7.63%  6.81%  7.13%  7.29%  7.22%  7.63%  7.22%
       Common equity tier 1 ratio (Bank)  13.42%  13.56%  13.18%  13.44%  13.42%  13.42%  13.42%
                   
    END OF PERIOD BALANCES              
       Total assets  1,342,387   1,326,474   1,341,435   1,341,293   1,335,633   1,342,387   1,335,633 
       Total loans  1,000,212   989,021   984,824   976,312   962,075   1,000,212   962,075 
       Deposits  1,070,205   1,085,319   1,071,156   1,110,144   1,086,665   1,070,205   1,086,665 
       Shareholders equity  124,342   112,348   117,666   119,759   118,428   124,342   118,428 
       Goodwill and intangibles  23,662   23,687   23,710   23,732   23,753   23,662   23,753 
       Tangible equity  100,680   88,661   93,956   96,027   94,675   100,680   94,675 
       Mortgage servicing portfolio  1,366,667   1,367,209   1,353,904   1,344,158   1,352,016   1,366,667   1,352,016 
       Wealth/Brokerage assets under care  501,829   478,236   499,255   518,009   507,093   501,829   507,093 
       Total assets under care  3,210,883   3,171,919   3,194,594   3,203,460   3,194,742   3,210,883   3,194,742 
       Full-time equivalent employees  251   252   253   255   268   251   268 
       Period end common shares outstanding  6,720   6,773   6,803   6,894   6,935   6,720   6,935 
       Market capitalization (all)  103,147   91,437   85,857   97,419   117,556   103,147   117,556 
                   
    AVERAGE BALANCES              
       Total assets  1,327,415   1,339,870   1,346,010   1,335,056   1,314,419   1,334,644   1,318,781 
       Total earning assets  1,236,165   1,239,145   1,248,813   1,232,018   1,211,674   1,246,531   1,226,771 
       Total loans  992,337   989,089   988,348   970,813   937,898   985,217   888,116 
       Deposits  1,084,939   1,095,414   1,100,344   1,098,935   1,094,491   1,094,547   1,105,571 
       Shareholders equity  117,397   116,165   119,177   119,237   116,114   118,315   126,963 
       Goodwill and intangibles  23,675   23,698   23,721   23,743   23,761   23,709   23,783 
       Tangible equity  93,722   92,467   95,456   95,494   92,353   94,606   103,180 
       Average basic shares outstanding  6,748   6,791   6,847   6,933   6,945   6,829   7,005 
       Average diluted shares outstanding  6,851   6,878   6,910   7,008   7,021   6,917   7,078 
                   


    SB FINANCIAL GROUP, INC.
     Rate Volume Analysis - (Unaudited)
     For the Three & Twelve Months Ended Dec. 31, 2023 and 2022
           
     ($ in thousands) Three Months Ended Dec. 31, 2023  Three Months Ended Dec. 31, 2022
       Average Average  Average Average
    Assets BalanceInterestRate  BalanceInterestRate
               
     Taxable securities/cash $237,203 $1,5262.57%  $265,711 $1,5592.35%
     Nontaxable securities  6,625  382.29%   8,065  472.33%
     Loans, net  992,337  13,5625.47%   937,898  11,3314.83%
               
            Total earning assets  1,236,165  15,1264.89%   1,211,674  12,9374.27%
               
     Cash and due from banks  4,077      7,052   
     Allowance for loan losses  (15,787)     (13,820)  
     Premises and equipment  22,205      23,757   
     Other assets  80,755      85,756   
               
           Total assets $1,327,415     $1,314,419   
               
    Liabilities         
     Savings, MMDA and interest bearing demand$601,034 $2,2321.49%  $646,498 $9650.60%
     Time deposits  247,382  2,1663.50%   180,678  4751.05%
     Repurchase agreements & other  13,359  391.17%   18,058  70.16%
     Advances from Federal Home Loan Bank  58,330  7204.94%   29,078  2583.55%
     Trust preferred securities  10,310  1917.41%   10,310  1385.35%
     Subordinated debt  19,634  1943.95%   19,588  1943.96%
               
           Total interest bearing liabilities  950,049  5,5422.33%   904,210  2,0370.90%
               
     Non interest bearing demand  236,523  -    267,315  - 
               
           Total funding  1,186,572  1.87%   1,171,525  0.70%
               
     Other liabilities  23,446      26,780   
               
           Total liabilities  1,210,018      1,198,305   
               
     Equity  117,397      116,114   
               
           Total liabilities and equity $1,327,415     $1,314,419   
               
     Net interest income  $9,584    $10,900 
               
     Net interest income as a percent of average interest-earning assets - GAAP measure   3.10%    3.60%
               
     Net interest income as a percent of average interest-earning assets - non GAAP3.11%    3.61%
      - Computed on a fully tax equivalent (FTE) basis       
               
       Twelve Months Ended Dec. 31, 2023  Twelve Months Ended Dec. 31, 2022
       Average Average  Average Average
    Assets BalanceInterestRate  BalanceInterestRate
               
     Taxable securities/cash $254,133 $6,0922.40%  $330,549 $5,7981.75%
     Nontaxable securities  7,181  1702.37%   8,106  1982.44%
     Loans, net  985,217  51,8905.27%   888,116  38,5734.34%
               
            Total earning assets  1,246,531  58,1524.67%   1,226,771  44,5693.63%
               
     Cash and due from banks  4,035      7,296   
     Allowance for loan losses  (15,478)     (13,808)  
     Premises and equipment  22,990      24,137   
     Other assets  76,566      74,385   
               
           Total assets $1,334,644     $1,318,781   
               
    Liabilities         
     Savings, MMDA and interest bearing demand$619,906 $7,5991.23%  $693,271 $2,2580.33%
     Time deposits  236,665  7,1093.00%   159,401  1,2190.76%
     Repurchase agreements & Other  15,765  740.47%   20,481  390.19%
     Advances from Federal Home Loan Bank  55,044  2,6034.73%   16,420  5153.14%
     Trust preferred securities  10,310  7166.94%   10,310  3613.50%
     Subordinated debt  19,616  7783.97%   19,570  7783.98%
               
           Total interest bearing liabilities  957,306  18,8791.97%   919,453  5,1690.56%
               
     Non interest bearing demand  237,976  1.58%   252,899  0.44%
               
           Total funding  1,195,282      1,172,352   
               
     Other liabilities  21,047      19,466   
               
           Total liabilities  1,216,329      1,191,818   
               
     Equity  118,315      126,963   
               
           Total liabilities and equity $1,334,644     $1,318,781   
               
     Net interest income  $39,273    $39,400 
               
     Net interest income as a percent of average interest-earning assets - GAAP measure   3.15%    3.21%
               
     Net interest income as a percent of average interest-earning assets - non GAAP3.16%    3.22%
      - Computed on a fully tax equivalent (FTE) basis       
               



    Non-GAAP reconciliation Three Months Ended Twelve Months Ended
             
    ($ in thousands, except per share & ratios) Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022
             
    Total Operating Revenue $15,115  $14,613  $56,994  $57,630 
     Adjustment to (deduct)/add OMSR recapture/impairment * 12   (86)  51   (1,279)
             
    Adjusted Total Operating Revenue  15,127   14,527   57,045   56,351 
             
             
    Income before Income Taxes  4,820   4,345   14,717   15,316 
     Adjustment for OMSR *  12   (86)  51   (1,279)
             
    Adjusted Income before Income Taxes  4,832   4,259   14,768   14,037 
             
             
    Provision for Income Taxes  937   812   2,622   2,795 
     Adjustment for OMSR **  3   (18)  11   (269)
             
    Adjusted Provision for Income Taxes  940   794   2,633   2,527 
             
             
    Net Income  3,883   3,533   12,095   12,521 
     Adjustment for OMSR *  9   (68)  40   (1,010)
             
    Adjusted Net Income  3,892   3,465   12,135   11,511 
             
             
    Diluted Earnings per Share  0.57   0.50   1.75   1.77 
     Adjustment for OMSR *  0.00   (0.01)  0.01   (0.14)
             
    Adjusted Diluted Earnings per Share $0.57  $0.49  $1.75  $1.63 
             
             
    Return on Average Assets  1.17%  1.08%  0.91%  0.95%
     Adjustment for OMSR *  0.00%  -0.02%  0.00%  -0.08%
             
    Adjusted Return on Average Assets  1.17%  1.05%  0.91%  0.87%
             
    *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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