SBFG 8-K
Sb Financial Group, Inc. (SBFG)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 2, 2021 (July 26, 2021)
SB FINANCIAL GROUP, INC
(Exact name of registrant as specified in its charter)
| Ohio | 0-13507 | 34-1395608 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 401 Clinton Street, Defiance, OH | 43512 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (419) 783-8950
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registererd | ||
| Common Shares, No Par Value 7,050,250 Outstanding at August 2, 2021 | SBFG | The NASDAQ Stock Market, LLC (NASDAQ Capital Market) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On July 26, 2021, SB Financial Group, Inc. (the “Company”) issued a news release reporting financial results for the second quarter 2021. A copy of the July 26, 2021 news release is furnished as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 2.02, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.
Item 9.01. Financial Statements and Exhibits.
(a) Not Applicable
(b) Not Applicable
(c) Not Applicable
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | News release issued by SB Financial Group, Inc. on July 26, 2021, reporting financial results for the second quarter 2021. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SB FINANCIAL GROUP, INC. | ||
| Dated:August 2, 2021 | By: | /s/ Anthony V. Cosentino |
| Anthony V. Cosentino | ||
| Chief Financial Officer | ||
-2-
INDEX TO EXHIBITS
Current Report on Form 8-K
Dated August 2, 2021
SB Financial Group, Inc.
| Exhibit No. | Description | |
| 99.1 | News release issued by SB Financial Group, Inc. on July 26, 2021, reporting financial results for the second quarter 2021. |
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Exhibit 99.1
SB Financial Group Announces Second Quarter 2021 Results
DEFIANCE, OH, July 26, 2021 -- 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 and six months ended June 30, 2021.
Second quarter 2021 highlights over prior-year second quarter include:
| ● | Net income of $3.8 million; diluted earnings per share (“EPS”) of $0.52 or a 10.6 percent increase |
| ● | Adjusted net income, excluding the impact of the Originated Mortgage Servicing Rights (“OMSR”) impairment of $0.1 million was $3.84 million, with EPS of $0.53 |
| ● | Mortgage origination volume of $164.9 million, reflects a decrease of $58.8 million, or 26.3 percent |
Six months ended June 30, 2021, highlights over prior-year six months include:
| ● | Net income of $10.8 million and diluted EPS of $1.49, compared to $4.3 million, or $0.56 per share or a 166.1 percent increase |
| ● | Adjusted net income, excluding the impact of OMSR activity and merger costs of $8.8 million, up $0.9 million or 10.9 percent |
| ● | Adjusted diluted EPS of $1.21, up $0.18 per share or 17.5 percent |
Second quarter 2021 trailing twelve-month highlights include:
| ● | Loans excluding Paycheck Protection Program (“PPP”) loan balances of $34.8 million, decreased $3.0 million, or 0.4 percent from the prior year |
| ● | Deposits grew by $100.4 million, or 10.1 percent to $1.09 billion at quarter end |
| ● | Mortgage origination volume of $689.9 million; servicing portfolio of $1.32 billion, which is up $1.2 million, or 4.9 percent |
| Highlights ($ in thousands, except per | Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| share & ratios) | Jun. 2021 | Jun. 2020 | % Change | Jun. 2021 | Jun. 2020 | % Change | ||||||||||||||||||
| Operating revenue | $ | 15,694 | $ | 17,487 | -10.3 | % | $ | 36,241 | $ | 28,196 | 28.5 | % | ||||||||||||
| Interest income | 10,163 | 10,595 | -4.1 | % | 20,868 | 21,239 | -1.7 | % | ||||||||||||||||
| Interest expense | 1,006 | 1,723 | -41.6 | % | 2,086 | 3,819 | -45.4 | % | ||||||||||||||||
| Net interest income | 9,157 | 8,872 | 3.2 | % | 18,782 | 17,420 | 7.8 | % | ||||||||||||||||
| Provision for loan losses | - | 1,300 | -100.0 | % | 750 | 1,900 | -60.5 | % | ||||||||||||||||
| Noninterest income | 6,537 | 8,615 | -24.1 | % | 17,459 | 10,776 | 62.0 | % | ||||||||||||||||
| Noninterest expense | 11,076 | 11,662 | -5.0 | % | 21,985 | 21,068 | 4.4 | % | ||||||||||||||||
| Net income | 3,761 | 3,655 | 2.9 | % | 10,842 | 4,336 | 150.0 | % | ||||||||||||||||
| Earnings per diluted share | 0.52 | 0.47 | 10.6 | % | 1.49 | 0.56 | 166.1 | % | ||||||||||||||||
| Return on average assets | 1.13 | % | 1.25 | % | -9.6 | % | 1.66 | % | 0.78 | % | 112.8 | % | ||||||||||||
| Return on average equity | 10.42 | % | 10.31 | % | 1.1 | % | 15.09 | % | 6.22 | % | 142.6 | % | ||||||||||||
| Non-GAAP Measures | ||||||||||||||||||||||||
| Adjusted net income | $ | 3,840 | $ | 5,495 | -30.1 | % | $ | 8,783 | $ | 7,923 | 10.9 | % | ||||||||||||
| Adjusted diluted EPS | 0.53 | 0.71 | -25.4 | % | 1.21 | 1.03 | 17.5 | % | ||||||||||||||||
| Adjusted return on average assets | 1.16 | % | 1.88 | % | -38.3 | % | 1.50 | % | 1.42 | % | 5.6 | % | ||||||||||||
| Adjusted pre-tax, pre-provision income | 4,717 | 8,154 | -42.2 | % | 10,900 | 11,669 | -6.6 | % | ||||||||||||||||
“We began to see some return to normalcy in our second quarter results” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “We achieved month over month loan growth in May and June and despite market headwinds, our mortgage team originated nearly $165 million in volume this quarter. We also successfully completed a debt raise in the quarter, which will serve us well as we look to grow our Company in the coming years.”
RESULTS OF OPERATIONS
Consolidated Revenue
Total operating revenue, consisting of net interest income and noninterest income, was down 10.3 percent from the second quarter of 2020, and down 23.6 percent from the linked quarter.
| ● | Net interest income was up from the year-ago quarter by 3.2 percent, but down 4.9 percent from the linked quarter. | |
| ● | Net interest margin on a fully taxable equivalent basis (FTE) was down from both year-ago and linked quarters by 38 and 27 basis points, respectively, as cash balances continued to be higher than normal and PPP forgiveness slowed. | |
| ● | Noninterest income was down 24 and 40 percent from the year ago and linked quarters, respectively, due to lower mortgage volume and no OMSR recapture. |
Mortgage Loan Business
Mortgage loan originations for the second quarter of 2021 were $164.9 million, down $58.8 million, or 26.3 percent, from the year-ago quarter. Total sales of originated loans were $119.1 million, down $85.6 million, or 41.8 percent, from the year-ago quarter. For the first six months of 2021, SB Financial had total volume of $320.7 million, of which $143.1 million (44 percent) was new purchase/construction lending, $92.3 million was external refinance (29 percent), and the remaining $85.3 million (27 percent) was internal refinance.
Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $4.0 million for the second quarter of 2021, compared to $6.2 million for the year-ago quarter. The mortgage servicing valuation adjustment for the second quarter of 2021 was a negative $0.1 million, compared to a negative adjustment of $1.1 million for the second quarter of 2020. For the first six months of 2021, the recapture of servicing rights was $2.6 million compared to impairment of $3.3 million for the prior year six months. The aggregate servicing valuation impairment ended the quarter at $2.3 million. The servicing portfolio at June 30, 2021, was $1.32 billion, up $0.06 billion, or 4.9 percent, from $1.26 billion at June 30, 2020.
Mr. Klein noted, “The slowdown in refinance transactions and the lower levels of housing inventory were headwinds in the quarter, but we are pleased with the relationships we have built that allow us to continue to increase the number of households serviced. We continue to expand and add resources to this business line and it continues to provide great revenue diversity.”
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| Mortgage Banking | ||||||||||||||||||||
| ($ in thousands) | Jun. 2021 | Mar. 2021 | Dec. 2020 | Sep. 2020 | Jun. 2020 | |||||||||||||||
| Mortgage originations | $ | 164,883 | $ | 155,836 | $ | 168,997 | $ | 200,158 | $ | 223,671 | ||||||||||
| Mortgage sales | 119,064 | 136,708 | 143,151 | 166,201 | 204,628 | |||||||||||||||
| Mortgage servicing portfolio | 1,323,804 | 1,304,097 | 1,299,698 | 1,293,037 | 1,261,746 | |||||||||||||||
| Mortgage servicing rights | 10,678 | 10,490 | 7,759 | 8,535 | 8,168 | |||||||||||||||
| Mortgage servicing revenue | ||||||||||||||||||||
| Loan servicing fees | 830 | 859 | 857 | 813 | 782 | |||||||||||||||
| OMSR amortization | (948 | ) | (1,187 | ) | (1,283 | ) | (1,308 | ) | (1,574 | ) | ||||||||||
| Net administrative fees | (118 | ) | (328 | ) | (426 | ) | (495 | ) | (792 | ) | ||||||||||
| OMSR valuation adjustment | (99 | ) | 2,706 | (611 | ) | 326 | (1,088 | ) | ||||||||||||
| Net loan servicing fees | (217 | ) | 2,378 | (1,037 | ) | (169 | ) | (1,880 | ) | |||||||||||
| Gain on sale of mortgages | 4,255 | 5,859 | 7,197 | 8,085 | 8,119 | |||||||||||||||
| Mortgage banking revenue, net | $ | 4,038 | $ | 8,237 | $ | 6,160 | $ | 7,916 | $ | 6,239 | ||||||||||
Noninterest Income and Noninterest Expense
SB Financial’s noninterest income for the quarter was down from the prior year and the linked quarter by 24 and 40 percent, respectively. Gain on sale yields on mortgage loan sales were down 40 basis points from the prior year and the total dollars of sales were down nearly $86 million. Wealth management revenue was up over 23 percent from the prior year due to higher retention levels and growth in the equity sector. Reflective of the continued strength in the mortgage market, SB Financial’s Title Agency provided revenue in the quarter of $0.5 million.
For the second quarter of 2021, noninterest expense of $11.1 million was down $0.6 million compared to the prior year or 5.0 percent. Lower mortgage volume and timing of technology initiatives have resulted in lower operating expenses.
Mr. Klein stated, “The wealth management business line has grown nicely year over year and it demonstrates the full slate of products we can provide to both our retail and business clients. The Peak Title partnership is growing each quarter and will continue to provide additional points of entry to new markets.”
| Noninterest Income / Noninterest Expense | ||||||||||||||||||||
| ($ in thousands, except ratios) | Jun. 2021 | Mar. 2021 | Dec. 2020 | Sep. 2020 | Jun. 2020 | |||||||||||||||
| Noninterest Income (NII) | $ | 6,537 | $ | 10,922 | $ | 8,902 | $ | 10,418 | $ | 8,615 | ||||||||||
| NII / Total Revenue | 41.7 | % | 53.2 | % | 49.0 | % | 52.9 | % | 49.3 | % | ||||||||||
| NII / Average Assets | 2.0 | % | 3.4 | % | 2.9 | % | 3.4 | % | 3.0 | % | ||||||||||
| Total Revenue Growth | -10.3 | % | 91.9 | % | 24.7 | % | 36.4 | % | 39.6 | % | ||||||||||
| Noninterest Expense (NIE) | $ | 11,076 | $ | 10,909 | $ | 10,684 | $ | 11,335 | $ | 11,662 | ||||||||||
| Efficiency Ratio | 70.5 | % | 53.0 | % | 58.8 | % | 57.5 | % | 66.7 | % | ||||||||||
| NIE / Average Assets | 3.3 | % | 3.4 | % | 3.5 | % | 3.7 | % | 4.0 | % | ||||||||||
| Net Noninterest Expense/Avg. Assets | -1.4 | % | 0.0 | % | -0.6 | % | -0.3 | % | -1.0 | % | ||||||||||
| Total Expense Growth | -5.0 | % | 16.0 | % | 5.0 | % | 19.3 | % | 28.0 | % | ||||||||||
| Operating Leverage | -2.1 | 5.7 | 4.9 | 1.9 | 1.4 | |||||||||||||||
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Balance Sheet
Total assets as of June 30, 2021, were $1.3 billion, up $0.1 billion, or 9.1 percent, from the year ago quarter due to higher liquidity levels and PPP activity. Total shareholders’ equity as of June 30, 2021, was $144.0 million, up 4.4 percent from a year ago, and comprised 11.0 percent of total assets.
Total loans held for investment were $850.5 million at June 30, 2021, down $51.0 million, or 5.7 percent, from June 30, 2020. Excluding PPP activity from both years, loan balances were down just $3.0 million, or 0.4 percent.
The investment portfolio of $217.1 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 16.5 percent of assets at June 30, 2021, and was up 99.0 percent from the year-ago period. Deposit balances of $1.09 billion at June 30, 2021, increased by $0.1 billion, or 10.1 percent, since June 30, 2020. Growth from the prior year included $44.4 million in checking and $56.0 million in savings and time deposit balances.
Mr. Klein continued, “Positive loan growth from the linked quarter was welcomed and we feel good about the loan pipelines in all of our markets. Our focus on Private Client residential real estate has provided a good lift in not only balances but has allowed us to expand our relationships with high end clients that have high potential to utilize multiple services. Asset quality metrics have continued to improve and we are pleased that all COVID deferrals are now back to full paying status.”
Loan Balances
| ($ in thousands, except ratios) | Jun. 2021 | Mar. 2021 | Dec. 2020 | Sep. 2020 | Jun. 2020 | Annual Growth | ||||||||||||||||||
| Commercial | $ | 149,998 | $ | 179,157 | $ | 203,256 | $ | 216,667 | $ | 222,108 | $ | (72,110 | ) | |||||||||||
| % of Total | 17.6 | % | 21.1 | % | 23.3 | % | 24.5 | % | 24.6 | % | -32.5 | % | ||||||||||||
| Commercial RE | 389,287 | 385,403 | 370,984 | 371,947 | 375,450 | 13,837 | ||||||||||||||||||
| % of Total | 45.8 | % | 45.4 | % | 42.5 | % | 42.0 | % | 41.6 | % | 3.7 | % | ||||||||||||
| Agriculture | 50,895 | 48,405 | 55,251 | 57,420 | 58,817 | (7,922 | ) | |||||||||||||||||
| % of Total | 6.0 | % | 5.7 | % | 6.3 | % | 6.5 | % | 6.5 | % | -13.5 | % | ||||||||||||
| Residential RE | 203,294 | 176,998 | 182,076 | 178,393 | 184,684 | 18,610 | ||||||||||||||||||
| % of Total | 23.9 | % | 20.9 | % | 20.9 | % | 20.1 | % | 20.6 | % | 10.1 | % | ||||||||||||
| Consumer & Other | 57,039 | 58,213 | 61,156 | 61,423 | 60,489 | (3,450 | ) | |||||||||||||||||
| % of Total | 6.7 | % | 6.9 | % | 7.0 | % | 6.9 | % | 6.7 | % | -5.7 | % | ||||||||||||
| Total Loans | $ | 850,513 | $ | 848,176 | $ | 872,723 | $ | 885,850 | $ | 901,548 | $ | (51,035 | ) | |||||||||||
| Total Growth Percentage | -5.7 | % | ||||||||||||||||||||||
Deposit Balances
| ($ in thousands, except ratios) | Jun. 2021 | Mar. 2021 | Dec. 2020 | Sep. 2020 | Jun. 2020 | Annual Growth | ||||||||||||||||||
| Non-Int DDA | $ | 240,572 | $ | 273,026 | $ | 251,649 | $ | 225,003 | $ | 229,042 | $ | 11,530 | ||||||||||||
| % of Total | 22.0 | % | 24.4 | % | 24.0 | % | 22.2 | % | 23.1 | % | 5.0 | % | ||||||||||||
| Interest DDA | 187,023 | 191,593 | 176,785 | 164,248 | 154,143 | 32,880 | ||||||||||||||||||
| % of Total | 17.1 | % | 17.1 | % | 16.9 | % | 16.2 | % | 15.6 | % | 21.3 | % | ||||||||||||
| Savings | 235,231 | 218,260 | 174,864 | 169,474 | 161,182 | 74,049 | ||||||||||||||||||
| % of Total | 21.6 | % | 19.5 | % | 16.7 | % | 16.7 | % | 16.2 | % | 45.9 | % | ||||||||||||
| Money Market | 255,512 | 249,088 | 216,164 | 204,862 | 189,380 | 66,132 | ||||||||||||||||||
| % of Total | 23.4 | % | 22.2 | % | 20.6 | % | 20.2 | % | 19.1 | % | 34.9 | % | ||||||||||||
| Time Deposits | 172,696 | 188,229 | 229,549 | 250,428 | 256,840 | (84,144 | ) | |||||||||||||||||
| % of Total | 15.8 | % | 16.8 | % | 21.9 | % | 24.7 | % | 25.9 | % | -32.8 | % | ||||||||||||
| Total Deposits | $ | 1,091,034 | $ | 1,120,196 | $ | 1,049,011 | $ | 1,014,015 | $ | 990,587 | $ | 100,447 | ||||||||||||
| Total Growth Percentage | 10.1 | % | ||||||||||||||||||||||
4
Asset Quality
SB Financial reported nonperforming assets of $6.0 million as of June 30, 2021, down $1.7 million or 22.6 percent from the year-ago quarter. The Company took $0.02 million in charge-offs in the quarter and believes that further pressure on the portfolio due to the COVID-19 impact is unknown, but impact is currently minimal. The coverage of problem loans by the loan loss allowance was at 304 percent at June 30, 2021, up from 136 percent at June 30, 2020. As of June 30, 2021, the Company had no remaining COVID related forbearances in place.
Nonperforming Assets
| ($ in thousands, except ratios) | Jun. 2021 | Mar. 2021 | Dec. 2020 | Sep. 2020 | Jun. 2020 | Annual Change | ||||||||||||||||||
| Commercial & Agriculture | $ | 375 | $ | 615 | $ | 902 | $ | 1,140 | $ | 1,204 | $ | (829 | ) | |||||||||||
| % of Total Com./Ag. loans | 0.19 | % | 0.27 | % | 0.35 | % | 0.42 | % | 0.43 | % | -68.9 | % | ||||||||||||
| Commercial RE | 1,026 | 2,402 | 2,412 | 2,475 | 2,484 | (1,458 | ) | |||||||||||||||||
| % of Total CRE loans | 0.26 | % | 0.62 | % | 0.65 | % | 0.67 | % | 0.66 | % | -58.7 | % | ||||||||||||
| Residential RE | 1,751 | 2,138 | 2,704 | 2,481 | 2,538 | (787 | ) | |||||||||||||||||
| % of Total Res. RE loans | 0.86 | % | 1.21 | % | 1.49 | % | 1.39 | % | 1.37 | % | -31.0 | % | ||||||||||||
| Consumer & Other | 463 | 480 | 408 | 313 | 308 | 155 | ||||||||||||||||||
| % of Total Con./Oth. loans | 0.81 | % | 0.82 | % | 0.67 | % | 0.51 | % | 0.51 | % | 50.3 | % | ||||||||||||
| Total Nonaccruing Loans | 3,615 | 5,635 | 6,426 | 6,409 | 6,534 | (2,919 | ) | |||||||||||||||||
| % of Total loans | 0.43 | % | 0.66 | % | 0.74 | % | 0.72 | % | 0.72 | % | -44.7 | % | ||||||||||||
| Accruing Restructured Loans | 758 | 794 | 810 | 789 | 804 | (46 | ) | |||||||||||||||||
| Total Change (%) | -5.7 | % | ||||||||||||||||||||||
| Total Nonaccruing & Restructured Loans | 4,373 | 6,429 | 7,236 | 7,198 | 7,338 | (2,965 | ) | |||||||||||||||||
| % of Total loans | 0.51 | % | 0.76 | % | 0.83 | % | 0.81 | % | 0.81 | % | -40.4 | % | ||||||||||||
| Foreclosed Assets | 1,603 | 43 | 23 | 76 | 382 | 1,221 | ||||||||||||||||||
| Total Change (%) | 319.6 | % | ||||||||||||||||||||||
| Total Nonperforming Assets | $ | 5,976 | $ | 6,472 | $ | 7,259 | $ | 7,274 | $ | 7,720 | $ | (1,744 | ) | |||||||||||
| % of Total assets | 0.46 | % | 0.49 | % | 0.58 | % | 0.60 | % | 0.64 | % | -22.6 | % | ||||||||||||
Webcast and Conference Call
The Company will hold a related conference call and webcast on July 27, 2021, 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 24 full-service ATMs. State Bank has five loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. Peak Title provides title insurance and opinions throughout the Tri-State region. SB Financial’s common stock is listed on the NASDAQ Capital Market under the symbol “SBFG”.
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Forward-Looking Statements
Certain statements within this document, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties and actual results may differ materially from those predicted by the forward-looking statements. These risks and uncertainties include, but are not limited to, the duration and scope of the COVID-19 outbreak in the United States and the market areas in which SB Financial and its subsidiaries operate, including the impact to the state and local economies of prolonged shelter in place orders and the pandemic generally, 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 non-GAAP items of OMSR impairment and merger related costs from net income to report an 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) | 2021 | 2021 | 2020 | 2020 | 2020 | |||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 154,993 | $ | 206,036 | $ | 140,690 | $ | 94,641 | $ | 85,661 | ||||||||||
| Interest bearing time deposits | 2,906 | 3,562 | 5,823 | 8,956 | 10,542 | |||||||||||||||
| Available-for-sale securities | 211,756 | 177,918 | 149,406 | 130,315 | 104,289 | |||||||||||||||
| Loans held for sale | 8,731 | 8,689 | 7,234 | 13,943 | 13,742 | |||||||||||||||
| Loans, net of unearned income | 850,513 | 848,176 | 872,723 | 885,850 | 901,548 | |||||||||||||||
| Allowance for loan losses | (13,306 | ) | (13,326 | ) | (12,574 | ) | (11,793 | ) | (10,013 | ) | ||||||||||
| Premises and equipment, net | 24,343 | 23,233 | 23,557 | 23,785 | 23,662 | |||||||||||||||
| Federal Reserve and FHLB Stock, at cost | 5,303 | 5,303 | 5,303 | 5,303 | 4,837 | |||||||||||||||
| Foreclosed assets held for sale, net | 1,603 | 43 | 23 | 76 | 382 | |||||||||||||||
| Interest receivable | 3,000 | 3,371 | 3,799 | 4,159 | 4,272 | |||||||||||||||
| Goodwill | 22,091 | 22,091 | 22,091 | 22,091 | 22,117 | |||||||||||||||
| Cash value of life insurance | 17,721 | 17,651 | 17,530 | 17,453 | 17,375 | |||||||||||||||
| Mortgage servicing rights | 10,678 | 10,490 | 7,759 | 8,535 | 8,168 | |||||||||||||||
| Other assets | 12,175 | 12,630 | 14,475 | 14,927 | 16,354 | |||||||||||||||
| Total assets | $ | 1,312,507 | $ | 1,325,867 | $ | 1,257,839 | $ | 1,218,241 | $ | 1,202,936 | ||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| Non interest bearing demand | $ | 240,572 | $ | 273,026 | $ | 251,649 | $ | 225,003 | $ | 229,042 | ||||||||||
| Interest bearing demand | 187,023 | 191,593 | 176,785 | 164,248 | 154,143 | |||||||||||||||
| Savings | 235,231 | 218,260 | 174,864 | 169,474 | 161,182 | |||||||||||||||
| Money market | 255,512 | 249,088 | 216,164 | 204,862 | 189,380 | |||||||||||||||
| Time deposits | 172,696 | 188,229 | 229,549 | 250,428 | 256,840 | |||||||||||||||
| Total deposits | 1,091,034 | 1,120,196 | 1,049,011 | 1,014,015 | 990,587 | |||||||||||||||
| Short-term borrowings | 25,096 | 24,321 | 20,189 | 20,710 | 23,826 | |||||||||||||||
| Federal Home Loan Bank advances | 5,500 | 8,000 | 8,000 | 8,000 | 13,000 | |||||||||||||||
| Trust preferred securities | 10,310 | 10,310 | 10,310 | 10,310 | 10,310 | |||||||||||||||
| Subordinated debt net of issuance costs | 19,522 | - | - | - | - | |||||||||||||||
| Interest payable | 417 | 489 | 616 | 946 | 929 | |||||||||||||||
| Other liabilities | 16,611 | 18,585 | 26,790 | 22,913 | 26,403 | |||||||||||||||
| Total liabilities | 1,168,490 | 1,181,901 | 1,114,916 | 1,076,894 | 1,065,055 | |||||||||||||||
| Shareholders' Equity | ||||||||||||||||||||
| Common stock | 54,463 | 54,463 | 54,463 | 54,463 | 54,463 | |||||||||||||||
| Additional paid-in capital | 14,906 | 14,755 | 14,845 | 14,782 | 14,780 | |||||||||||||||
| Retained earnings | 93,851 | 90,883 | 84,578 | 80,012 | 75,526 | |||||||||||||||
| Accumulated other comprehensive income (loss) | 499 | (457 | ) | 2,210 | 2,221 | 2,320 | ||||||||||||||
| Treasury stock | (19,702 | ) | (15,678 | ) | (13,173 | ) | (10,131 | ) | (9,208 | ) | ||||||||||
| Total shareholders' equity | 144,017 | 143,966 | 142,923 | 141,347 | 137,881 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,312,507 | $ | 1,325,867 | $ | 1,257,839 | $ | 1,218,241 | $ | 1,202,936 | ||||||||||
7
SB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
| At and for the Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
| ($ in thousands, except per | June | March | December | September | June | June | June | |||||||||||||||||||||
| share & ratios) | 2021 | 2021 | 2020 | 2020 | 2020 | 2021 | 2020 | |||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||
| Loans | ||||||||||||||||||||||||||||
| Taxable | $ | 9,196 | $ | 9,926 | $ | 9,816 | $ | 10,179 | $ | 9,945 | $ | 19,122 | $ | 19,740 | ||||||||||||||
| Tax exempt | 47 | 48 | 54 | 47 | 59 | 95 | 138 | |||||||||||||||||||||
| Securities | ||||||||||||||||||||||||||||
| Taxable | 835 | 643 | 632 | 494 | 510 | 1,478 | 1,202 | |||||||||||||||||||||
| Tax exempt | 85 | 88 | 87 | 87 | 81 | 173 | 159 | |||||||||||||||||||||
| Total interest income | 10,163 | 10,705 | 10,589 | 10,807 | 10,595 | 20,868 | 21,239 | |||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||
| Deposits | 818 | 962 | 1,218 | 1,423 | 1,549 | 1,780 | 3,429 | |||||||||||||||||||||
| Repurchase agreements & other | 12 | 11 | 10 | 12 | 20 | 23 | 48 | |||||||||||||||||||||
| Federal Home Loan Bank advances | 51 | 56 | 58 | 59 | 92 | 107 | 192 | |||||||||||||||||||||
| Trust preferred securities | 50 | 51 | 52 | 54 | 62 | 101 | 150 | |||||||||||||||||||||
| Subordinated debt | 75 | - | - | - | - | 75 | - | |||||||||||||||||||||
| Total interest expense | 1,006 | 1,080 | 1,338 | 1,548 | 1,723 | 2,086 | 3,819 | |||||||||||||||||||||
| Net interest income | 9,157 | 9,625 | 9,251 | 9,259 | 8,872 | 18,782 | 17,420 | |||||||||||||||||||||
| Provision for loan losses | - | 750 | 800 | 1,800 | 1,300 | 750 | 1,900 | |||||||||||||||||||||
| Net interest income after provision for loan losses | 9,157 | 8,875 | 8,451 | 7,459 | 7,572 | 18,032 | 15,520 | |||||||||||||||||||||
| Noninterest income | ||||||||||||||||||||||||||||
| Wealth management fees | 955 | 912 | 863 | 839 | 775 | 1,867 | 1,543 | |||||||||||||||||||||
| Customer service fees | 820 | 758 | 728 | 730 | 667 | 1,578 | 1,349 | |||||||||||||||||||||
| Gain on sale of mtg. loans & OMSR | 4,255 | 5,859 | 7,197 | 8,085 | 8,119 | 10,114 | 10,068 | |||||||||||||||||||||
| Mortgage loan servicing fees, net | (217 | ) | 2,378 | (1,037 | ) | (169 | ) | (1,880 | ) | 2,161 | (3,932 | ) | ||||||||||||||||
| Gain on sale of non-mortgage loans | 45 | 17 | 123 | 119 | 107 | 62 | 211 | |||||||||||||||||||||
| Title insurance revenue | 532 | 521 | 522 | 517 | 609 | 1,053 | 874 | |||||||||||||||||||||
| Gain (loss) on sale of assets | 2 | (2 | ) | 181 | (52 | ) | (80 | ) | - | (126 | ) | |||||||||||||||||
| Other | 145 | 479 | 325 | 349 | 298 | 624 | 789 | |||||||||||||||||||||
| Total noninterest income | 6,537 | 10,922 | 8,902 | 10,418 | 8,615 | 17,459 | 10,776 | |||||||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||||
| Salaries and employee benefits | 6,881 | 6,620 | 6,556 | 6,995 | 6,419 | 13,501 | 11,846 | |||||||||||||||||||||
| Net occupancy expense | 748 | 740 | 782 | 736 | 675 | 1,488 | 1,373 | |||||||||||||||||||||
| Equipment expense | 778 | 732 | 818 | 888 | 780 | 1,510 | 1,480 | |||||||||||||||||||||
| Data processing fees | 653 | 534 | 633 | 586 | 1,288 | 1,187 | 1,836 | |||||||||||||||||||||
| Professional fees | 574 | 764 | 631 | 695 | 1,224 | 1,338 | 1,981 | |||||||||||||||||||||
| Marketing expense | 220 | 135 | 172 | 137 | 141 | 355 | 349 | |||||||||||||||||||||
| Telephone and communication expense | 139 | 154 | 156 | 142 | 122 | 293 | 237 | |||||||||||||||||||||
| Postage and delivery expense | 97 | 111 | 108 | 96 | 96 | 208 | 211 | |||||||||||||||||||||
| State, local and other taxes | 278 | 323 | 299 | 331 | 262 | 601 | 516 | |||||||||||||||||||||
| Employee expense | 161 | 153 | 103 | 155 | 93 | 314 | 277 | |||||||||||||||||||||
| Other expenses | 547 | 643 | 426 | 574 | 562 | 1,190 | 962 | |||||||||||||||||||||
| Total noninterest expense | 11,076 | 10,909 | 10,684 | 11,335 | 11,662 | 21,985 | 21,068 | |||||||||||||||||||||
| Income before income tax expense | 4,618 | 8,888 | 6,669 | 6,542 | 4,525 | 13,506 | 5,228 | |||||||||||||||||||||
| Income tax expense | 857 | 1,807 | 1,311 | 1,292 | 870 | 2,664 | 892 | |||||||||||||||||||||
| Net income available to common shareholders | $ | 3,761 | $ | 7,081 | $ | 5,358 | $ | 5,250 | $ | 3,655 | $ | 10,842 | $ | 4,336 | ||||||||||||||
| Common share data: | ||||||||||||||||||||||||||||
| Basic earnings per common share | $ | 0.53 | $ | 0.97 | $ | 0.71 | $ | 0.69 | $ | 0.47 | $ | 1.50 | $ | 0.56 | ||||||||||||||
| Diluted earnings per common share | $ | 0.52 | $ | 0.97 | $ | 0.71 | $ | 0.69 | $ | 0.47 | $ | 1.49 | $ | 0.56 | ||||||||||||||
| Average shares outstanding (in thousands): | ||||||||||||||||||||||||||||
| Basic: | 7,148 | 7,317 | 7,487 | 7,607 | 7,708 | 7,232 | 7,750 | |||||||||||||||||||||
| Diluted: | 7,200 | 7,335 | 7,487 | 7,607 | 7,708 | 7,256 | 7,750 | |||||||||||||||||||||
8
SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
| ($ in thousands, | At and for the Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
| except per share & ratios) | June | March | December | September | June | June | June | |||||||||||||||||||||
| SUMMARY OF OPERATIONS | 2021 | 2021 | 2020 | 2020 | 2020 | 2021 | 2020 | |||||||||||||||||||||
| Net interest income | $ | 9,157 | $ | 9,625 | $ | 9,251 | $ | 9,259 | $ | 8,872 | $ | 18,782 | $ | 17,420 | ||||||||||||||
| Tax-equivalent adjustment | 35 | 36 | 37 | 36 | 37 | 71 | 79 | |||||||||||||||||||||
| Tax-equivalent net interest income | 9,192 | 9,661 | 9,288 | 9,295 | 8,909 | 18,853 | 17,499 | |||||||||||||||||||||
| Provision for loan loss | - | 750 | 800 | 1,800 | 1,300 | 750 | 1,900 | |||||||||||||||||||||
| Noninterest income | 6,537 | 10,922 | 8,902 | 10,418 | 8,615 | 17,459 | 10,776 | |||||||||||||||||||||
| Total operating revenue | 15,694 | 20,547 | 18,153 | 19,677 | 17,487 | 36,241 | 28,196 | |||||||||||||||||||||
| Noninterest expense | 11,076 | 10,909 | 10,684 | 11,335 | 11,662 | 21,985 | 21,068 | |||||||||||||||||||||
| Pre-tax pre-provision income | 4,618 | 9,638 | 7,469 | 8,342 | 5,825 | 14,256 | 7,128 | |||||||||||||||||||||
| Pretax income | 4,618 | 8,888 | 6,669 | 6,542 | 4,525 | 13,506 | 5,228 | |||||||||||||||||||||
| Net income | 3,761 | 7,081 | 5,358 | 5,250 | 3,655 | 10,842 | 4,336 | |||||||||||||||||||||
| PER SHARE INFORMATION: | ||||||||||||||||||||||||||||
| Basic earnings per share (EPS) | 0.53 | 0.97 | 0.71 | 0.69 | 0.47 | 1.50 | 0.56 | |||||||||||||||||||||
| Diluted earnings per share | 0.52 | 0.97 | 0.71 | 0.69 | 0.47 | 1.49 | 0.56 | |||||||||||||||||||||
| Common dividends | 0.110 | 0.105 | 0.105 | 0.100 | 0.100 | 0.215 | 0.195 | |||||||||||||||||||||
| Book value per common share | 20.50 | 19.88 | 19.39 | 18.73 | 17.98 | 20.50 | 17.98 | |||||||||||||||||||||
| Tangible book value per common share (TBV) | 17.26 | 16.74 | 16.30 | 15.72 | 15.01 | 17.26 | 15.01 | |||||||||||||||||||||
| Market price per common share | 18.50 | 18.26 | 18.28 | 13.49 | 16.62 | 18.50 | 16.62 | |||||||||||||||||||||
| Market price to TBV | 107.2 | % | 109.1 | % | 112.1 | % | 85.8 | % | 110.8 | % | 107.2 | % | 110.8 | % | ||||||||||||||
| Market price to trailing 12 month EPS | 6.4 | 6.4 | 9.3 | 8.0 | 11.4 | 6.4 | 11.4 | |||||||||||||||||||||
| PERFORMANCE RATIOS: | ||||||||||||||||||||||||||||
| Return on average assets (ROAA) | 1.13 | % | 2.21 | % | 1.73 | % | 1.73 | % | 1.25 | % | 1.66 | % | 0.78 | % | ||||||||||||||
| Pre-tax pre-provision ROAA | 1.39 | % | 3.01 | % | 2.41 | % | 2.74 | % | 1.99 | % | 2.32 | % | 1.28 | % | ||||||||||||||
| Return on average equity | 10.42 | % | 19.78 | % | 15.05 | % | 15.01 | % | 10.31 | % | 15.09 | % | 6.22 | % | ||||||||||||||
| Return on average tangible equity | 12.37 | % | 23.52 | % | 17.91 | % | 17.93 | % | 11.91 | % | 17.92 | % | 7.17 | % | ||||||||||||||
| Efficiency ratio | 70.46 | % | 53.01 | % | 58.76 | % | 57.48 | % | 66.68 | % | 60.56 | % | 74.70 | % | ||||||||||||||
| Earning asset yield | 3.25 | % | 3.56 | % | 3.66 | % | 3.96 | % | 3.95 | % | 3.40 | % | 4.13 | % | ||||||||||||||
| Cost of interest bearing liabilities | 0.44 | % | 0.50 | % | 0.64 | % | 0.75 | % | 0.89 | % | 0.47 | % | 1.00 | % | ||||||||||||||
| Net interest margin | 2.93 | % | 3.20 | % | 3.20 | % | 3.39 | % | 3.31 | % | 3.06 | % | 3.39 | % | ||||||||||||||
| Tax equivalent effect | 0.01 | % | 0.01 | % | 0.01 | % | 0.02 | % | 0.01 | % | 0.01 | % | 0.01 | % | ||||||||||||||
| Net interest margin, tax equivalent | 2.94 | % | 3.21 | % | 3.21 | % | 3.41 | % | 3.32 | % | 3.07 | % | 3.40 | % | ||||||||||||||
| Non interest income/Average assets | 1.97 | % | 3.41 | % | 2.87 | % | 3.42 | % | 2.95 | % | 2.67 | % | 1.93 | % | ||||||||||||||
| Non interest expense/Average assets | 3.33 | % | 3.40 | % | 3.45 | % | 3.73 | % | 3.99 | % | 3.37 | % | 3.78 | % | ||||||||||||||
| Net noninterest expense/Average assets | -1.37 | % | 0.00 | % | -0.58 | % | -0.30 | % | -1.04 | % | -0.69 | % | -1.85 | % | ||||||||||||||
| ASSET QUALITY RATIOS: | ||||||||||||||||||||||||||||
| Gross charge-offs | 26 | 52 | 57 | 32 | 254 | 78 | 654 | |||||||||||||||||||||
| Recoveries | 6 | 54 | 39 | 11 | 10 | 60 | 13 | |||||||||||||||||||||
| Net charge-offs | 20 | (2 | ) | 18 | 21 | 244 | 18 | 641 | ||||||||||||||||||||
| Nonaccruing loans/Total loans | 0.43 | % | 0.66 | % | 0.74 | % | 0.72 | % | 0.72 | % | 0.43 | % | 0.72 | % | ||||||||||||||
| Nonperforming loans/Total loans | 0.51 | % | 0.76 | % | 0.83 | % | 0.81 | % | 0.81 | % | 0.51 | % | 0.81 | % | ||||||||||||||
| Nonperforming assets/Loans & OREO | 0.70 | % | 0.76 | % | 0.83 | % | 0.82 | % | 0.86 | % | 0.70 | % | 0.86 | % | ||||||||||||||
| Nonperforming assets/Total assets | 0.46 | % | 0.49 | % | 0.58 | % | 0.60 | % | 0.64 | % | 0.46 | % | 0.64 | % | ||||||||||||||
| Allowance for loan loss/Nonperforming loans | 304.28 | % | 207.28 | % | 173.77 | % | 163.84 | % | 136.45 | % | 304.28 | % | 136.45 | % | ||||||||||||||
| Allowance for loan loss/Total loans | 1.56 | % | 1.57 | % | 1.44 | % | 1.33 | % | 1.11 | % | 1.56 | % | 1.11 | % | ||||||||||||||
| Net loan charge-offs/Average loans (ann.) | 0.01 | % | (0.00 | %) | 0.01 | % | 0.01 | % | 0.11 | % | 0.00 | % | 0.15 | % | ||||||||||||||
| Loan loss provision/Net charge-offs | 0.00 | % | (37500.00 | %) | 4444.44 | % | 8571.43 | % | 532.79 | % | 4166.67 | % | 296.41 | % | ||||||||||||||
| CAPITAL & LIQUIDITY RATIOS: | ||||||||||||||||||||||||||||
| Loans/ Deposits | 77.95 | % | 75.72 | % | 83.19 | % | 87.36 | % | 91.01 | % | 77.95 | % | 91.01 | % | ||||||||||||||
| Equity/ Assets | 10.97 | % | 10.86 | % | 11.36 | % | 11.60 | % | 11.46 | % | 10.97 | % | 11.46 | % | ||||||||||||||
| Tangible equity/Tangible assets | 9.41 | % | 9.30 | % | 9.73 | % | 9.92 | % | 9.75 | % | 9.41 | % | 9.75 | % | ||||||||||||||
| Common equity tier 1 ratio (Bank) | 13.11 | % | 13.08 | % | 12.91 | % | 12.71 | % | 11.97 | % | 13.11 | % | 11.97 | % | ||||||||||||||
| END OF PERIOD BALANCES | ||||||||||||||||||||||||||||
| Total assets | 1,312,507 | 1,325,867 | 1,257,839 | 1,218,241 | 1,202,936 | 1,312,507 | 1,202,936 | |||||||||||||||||||||
| Total loans | 850,513 | 848,176 | 872,723 | 885,850 | 901,548 | 850,513 | 901,548 | |||||||||||||||||||||
| Deposits | 1,091,034 | 1,120,196 | 1,049,011 | 1,014,015 | 990,587 | 1,091,034 | 990,587 | |||||||||||||||||||||
| Stockholders equity | 144,017 | 143,966 | 142,923 | 141,347 | 137,881 | 144,017 | 137,881 | |||||||||||||||||||||
| Goodwill and intangibles | 22,710 | 22,728 | 22,745 | 22,763 | 22,813 | 22,710 | 22,813 | |||||||||||||||||||||
| Tangible equity | 121,307 | 121,238 | 120,178 | 118,584 | 115,068 | 121,307 | 115,068 | |||||||||||||||||||||
| Mortgage servicing portfolio | 1,323,804 | 1,304,097 | 1,299,698 | 1,293,037 | 1,261,746 | 1,323,804 | 1,261,746 | |||||||||||||||||||||
| Wealth/Brokerage assets under care | 600,904 | 576,503 | 558,409 | 522,360 | 495,025 | 600,904 | 495,025 | |||||||||||||||||||||
| Total assets under care | 3,237,215 | 3,206,467 | 3,115,946 | 3,033,638 | 2,959,707 | 3,237,215 | 2,959,707 | |||||||||||||||||||||
| Full-time equivalent employees | 256 | 246 | 244 | 251 | 254 | 256 | 254 | |||||||||||||||||||||
| Period end common shares outstanding | 7,027 | 7,242 | 7,372 | 7,545 | 7,668 | 7,027 | 7,668 | |||||||||||||||||||||
| Market capitalization (all) | 129,998 | 132,239 | 134,760 | 101,782 | 127,442 | 129,998 | 127,442 | |||||||||||||||||||||
| AVERAGE BALANCES | ||||||||||||||||||||||||||||
| Total assets | 1,329,348 | 1,281,635 | 1,238,790 | 1,216,843 | 1,169,030 | 1,306,355 | 1,115,527 | |||||||||||||||||||||
| Total earning assets | 1,251,213 | 1,203,284 | 1,156,718 | 1,090,386 | 1,073,490 | 1,227,359 | 1,028,114 | |||||||||||||||||||||
| Total loans | 853,794 | 862,898 | 893,244 | 907,483 | 898,216 | 858,321 | 865,595 | |||||||||||||||||||||
| Deposits | 1,115,186 | 1,073,641 | 1,031,649 | 1,007,679 | 946,053 | 1,094,269 | 900,812 | |||||||||||||||||||||
| Stockholders equity | 144,315 | 143,167 | 142,418 | 139,908 | 141,821 | 143,709 | 139,521 | |||||||||||||||||||||
| Goodwill and intangibles | 22,718 | 22,736 | 22,754 | 22,787 | 19,066 | 22,727 | 18,537 | |||||||||||||||||||||
| Tangible equity | 121,597 | 120,431 | 119,664 | 117,121 | 122,755 | 120,982 | 120,984 | |||||||||||||||||||||
| Average basic shares outstanding | 7,148 | 7,317 | 7,487 | 7,607 | 7,708 | 7,232 | 7,750 | |||||||||||||||||||||
| Average diluted shares outstanding | 7,200 | 7,335 | 7,487 | 7,607 | 7,708 | 7,256 | 7,750 | |||||||||||||||||||||
9
SB FINANCIAL GROUP, INC.
Rate Volume Analysis - (Unaudited)
At and for the Three and Six Months Ended June 30, 2021 and 2020
| ($ in thousands) | Three Months Ended Jun. 30, 2021 | Three Months Ended Jun. 30, 2020 | ||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Taxable securities/cash | $ | 390,036 | $ | 835 | 0.86 | % | $ | 168,373 | $ | 510 | 1.21 | % | ||||||||||||
| Nontaxable securities | 7,383 | 85 | 4.61 | % | 6,901 | 81 | 4.69 | % | ||||||||||||||||
| Loans, net | 853,794 | 9,243 | 4.33 | % | 898,216 | 10,004 | 4.46 | % | ||||||||||||||||
| Total earning assets | 1,251,213 | 10,163 | 3.25 | % | 1,073,490 | 10,595 | 3.95 | % | ||||||||||||||||
| Cash and due from banks | 6,992 | 18,937 | ||||||||||||||||||||||
| Allowance for loan losses | (13,565 | ) | (9,369 | ) | ||||||||||||||||||||
| Premises and equipment | 23,988 | 23,896 | ||||||||||||||||||||||
| Other assets | 60,720 | 62,076 | ||||||||||||||||||||||
| Total assets | $ | 1,329,348 | $ | 1,169,030 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Savings, MMDA and interest bearing demand | $ | 672,803 | $ | 464 | 0.28 | % | $ | 473,793 | $ | 1,215 | 1.03 | % | ||||||||||||
| Time deposits | 183,138 | 354 | 0.77 | % | 251,482 | 334 | 0.53 | % | ||||||||||||||||
| Repurchase agreements & other | 23,607 | 12 | 0.20 | % | 19,200 | 20 | 0.42 | % | ||||||||||||||||
| Advances from Federal Home Loan Bank | 7,066 | 51 | 2.89 | % | 24,472 | 92 | 1.50 | % | ||||||||||||||||
| Trust preferred securities | 10,310 | 50 | 1.94 | % | 10,310 | 62 | 2.41 | % | ||||||||||||||||
| Subordinated debt | 9,880 | 75 | 3.04 | % | - | - | 0.00 | % | ||||||||||||||||
| Total interest bearing liabilities | 906,804 | 1,006 | 0.44 | % | 779,257 | 1,723 | 0.88 | % | ||||||||||||||||
| Non interest bearing demand | 259,245 | - | 220,778 | - | ||||||||||||||||||||
| Total funding | 1,166,049 | 0.35 | % | 1,000,035 | 0.69 | % | ||||||||||||||||||
| Other liabilities | 18,984 | 27,174 | ||||||||||||||||||||||
| Total liabilities | 1,185,033 | 1,027,209 | ||||||||||||||||||||||
| Equity | 144,315 | 141,821 | ||||||||||||||||||||||
| Total liabilities and equity | $ | 1,329,348 | $ | 1,169,030 | ||||||||||||||||||||
| Net interest income | $ | 9,157 | $ | 8,872 | ||||||||||||||||||||
| Net interest income as a percent of average interest-earning assets - GAAP measure | 2.93 | % | 3.31 | % | ||||||||||||||||||||
| Net interest income as a percent of average interest-earning assets - non GAAP | 2.94 | % | 3.32 | % | ||||||||||||||||||||
| - Computed on a fully tax equivalent (FTE) basis | ||||||||||||||||||||||||
| Six Months Ended Jun. 30, 2021 | Six Months Ended Jun. 30, 2020 | |||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Taxable securities/cash | $ | 361,566 | $ | 1,478 | 0.82 | % | $ | 155,787 | $ | 1,202 | 1.54 | % | ||||||||||||
| Nontaxable securities | 7,472 | 173 | 4.63 | % | 6,732 | 159 | 4.72 | % | ||||||||||||||||
| Loans, net | 858,321 | 19,217 | 4.48 | % | 865,595 | 19,878 | 4.59 | % | ||||||||||||||||
| Total earning assets | 1,227,359 | 20,868 | 3.40 | % | 1,028,114 | 21,239 | 4.13 | % | ||||||||||||||||
| Cash and due from banks | 7,769 | 12,693 | ||||||||||||||||||||||
| Allowance for loan losses | (13,206 | ) | (9,118 | ) | ||||||||||||||||||||
| Premises and equipment | 23,743 | 23,797 | ||||||||||||||||||||||
| Other assets | 60,690 | 60,041 | ||||||||||||||||||||||
| Total assets | $ | 1,306,355 | $ | 1,115,527 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Savings, MMDA and interest bearing demand | $ | 643,962 | $ | 972 | 0.30 | % | $ | 458,116 | $ | 2,298 | 1.00 | % | ||||||||||||
| Time deposits | 194,955 | 808 | 0.83 | % | 252,912 | 1,131 | 0.89 | % | ||||||||||||||||
| Repurchase agreements & Other | 23,869 | 23 | 0.19 | % | 20,868 | 48 | 0.46 | % | ||||||||||||||||
| Advances from Federal Home Loan Bank | 7,530 | 107 | 2.84 | % | 20,302 | 192 | 1.89 | % | ||||||||||||||||
| Trust preferred securities | 10,310 | 101 | 1.96 | % | 10,310 | 150 | 2.91 | % | ||||||||||||||||
| Subordinated debt | 5,646 | 75 | 2.66 | % | - | - | 0.00 | % | ||||||||||||||||
| Total interest bearing liabilities | 886,272 | 2,086 | 0.47 | % | 762,508 | 3,819 | 1.00 | % | ||||||||||||||||
| Non interest bearing demand | 255,352 | 0.37 | % | 189,784 | 0.80 | % | ||||||||||||||||||
| Total funding | 1,141,624 | 952,292 | ||||||||||||||||||||||
| Other liabilities | 21,022 | 23,714 | ||||||||||||||||||||||
| Total liabilities | 1,162,646 | 976,006 | ||||||||||||||||||||||
| Equity | 143,709 | 139,521 | ||||||||||||||||||||||
| Total liabilities and equity | $ | 1,306,355 | $ | 1,115,527 | ||||||||||||||||||||
| Net interest income | $ | 18,782 | $ | 17,420 | ||||||||||||||||||||
| Net interest income as a percent of average interest-earning assets - GAAP measure | 3.06 | % | 3.39 | % | ||||||||||||||||||||
| Net interest income as a percent of average interest-earning assets - non GAAP | 3.07 | % | 3.40 | % | ||||||||||||||||||||
| - Computed on a fully tax equivalent (FTE) basis | ||||||||||||||||||||||||
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| Three Months Ended | Six Months Ended | |||||||||||||||
| Non-GAAP reconciliation ($ in thousands, except per share & ratios) | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||||||||||||
| Total Operating Revenue | $ | 15,694 | $ | 17,487 | $ | 36,241 | $ | 28,196 | ||||||||
| Adjustment to (deduct)/add OMSR impairment* | 99 | 1,088 | (2,606 | ) | 3,300 | |||||||||||
| Adjusted Total Operating Revenue | 15,793 | 18,575 | 33,635 | 31,496 | ||||||||||||
| Total Operating Expense | $ | 11,076 | $ | 11,662 | $ | 21,985 | $ | 21,068 | ||||||||
| Adjustment for merger expenses** | - | (1,241 | ) | - | (1,241 | ) | ||||||||||
| Adjusted Total Operating Expense | 11,076 | 10,421 | 21,985 | 19,827 | ||||||||||||
| Income before Income Taxes | 4,618 | 4,525 | 13,506 | 5,228 | ||||||||||||
| Adjustment for OMSR & merger expenses | 99 | 2,329 | (2,606 | ) | 4,541 | |||||||||||
| Adjusted Income before Income Taxes | 4,717 | 6,854 | 10,900 | 9,769 | ||||||||||||
| Provision for Income Taxes | 857 | 870 | 2,664 | 892 | ||||||||||||
| Adjustment for OMSR & merger expenses*** | 21 | 489 | (547 | ) | 954 | |||||||||||
| Adjusted Provision for Income Taxes | 878 | 1,359 | 2,117 | 1,847 | ||||||||||||
| Net Income | 3,761 | 3,655 | 10,842 | 4,336 | ||||||||||||
| Adjustment for OMSR & merger expenses | 79 | 1,840 | (2,059 | ) | 3,587 | |||||||||||
| Adjusted Net Income | 3,840 | 5,495 | 8,783 | 7,924 | ||||||||||||
| Diluted Earnings per Share | 0.52 | 0.47 | 1.49 | 0.56 | ||||||||||||
| Adjustment for OMSR & merger expenses | 0.01 | 0.24 | (0.28 | ) | 0.46 | |||||||||||
| Adjusted Diluted Earnings per Share | $ | 0.53 | $ | 0.71 | $ | 1.21 | $ | 1.03 | ||||||||
| Return on Average Assets | 1.13 | % | 1.25 | % | 1.66 | % | 0.78 | % | ||||||||
| Adjustment for OMSR & merger expenses | 0.02 | % | 0.63 | % | -0.16 | % | 0.64 | % | ||||||||
| Adjusted Return on Average Assets | 1.16 | % | 1.88 | % | 1.50 | % | 1.42 | % | ||||||||
*valuation adjustment to the Company's mortgage servicing rights
**transaction costs related to the Edon acquisition
***tax effect is calculated using a 21% statutory federal corporate income tax rate
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