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) January 24, 2020 (January 23, 2020)
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 |
(IRS
Employer |
| 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 7,812,418 Outstanding at January 24, 2020 |
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 January 23, 2020, SB Financial Group, Inc. (the “Company”) issued a news release reporting financial results for the fourth quarter 2019. A copy of the January 23, 2020 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 January 23, 2020, reporting financial results for the fourth quarter 2019. |
1
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: January 24, 2020 | By: | /s/ Anthony V. Cosentino |
| Anthony V. Cosentino | ||
| Chief Financial Officer | ||
2
INDEX TO EXHIBITS
Current Report on Form 8-K
Dated January 24, 2020
SB Financial Group, Inc.
| Exhibit No. | Description | |
| 99.1 | News release issued by SB Financial Group, Inc. on January 23, 2020, reporting financial results for the fourth quarter 2019. |
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Exhibit 99.1
SB Financial Group, Inc. Announces Fourth-Quarter and Twelve-Month 2019 Earnings
DEFIANCE, Ohio, January 23, 2020 — 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, 2019.
Fourth-quarter, 2019 highlights over prior-year fourth quarter, include:
| ● | Total assets increased to $1.04 billion, up $51.7 million, or 5.2 percent |
| ● | GAAP Net income of $3.4 million, up $0.4 million, or 13.4 percent, and diluted earnings per share (EPS) of $0.42 |
| ● | Net income of $3.1 million, adjusted for the mortgage servicing rights recapture, which is up $0.1 million, or 3.5 percent |
| ● | Adjusted diluted (EPS) of $0.39, up $0.01 per share, or 2.6 percent |
| ● | Fully converted tangible book value (TBV) per common share increased 6.5 percent to $15.23 per share |
| ● | Total market capitalization rose to $152.9 million with the conversion of our preferred shares on 12/26/19 |
Twelve month 2019 highlights over prior-year twelve months include:
| ● | GAAP Net income of $12.0 million up $0.3 million, or 2.9 percent, and diluted EPS of $1.51 |
| ● | Net income of $12.8 million, adjusted for the mortgage servicing rights impairment, which is up $1.2 million, or 9.8 percent |
| ● | Adjusted diluted EPS of $1.62, which is up $0.10 per share, or 6.6 percent |
| Highlights | Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
| ($ in thousands, except per share & ratios) | Dec. 2019 | Dec. 2018 | % Change | Dec. 2019 | Dec. 2018 | % Change | ||||||||||||||||||
| Operating revenue | $ | 14,555 | $ | 12,544 | 16.0 | % | $ | 52,842 | $ | 49,891 | 5.9 | % | ||||||||||||
| Interest income | 11,205 | 10,638 | 5.3 | % | 44,400 | 39,479 | 12.5 | % | ||||||||||||||||
| Interest expense | 2,609 | 2,024 | 28.9 | % | 9,574 | 6,212 | 54.1 | % | ||||||||||||||||
| Net interest income | 8,596 | 8,614 | -0.2 | % | 34,826 | 33,267 | 4.7 | % | ||||||||||||||||
| Provision for loan losses | 300 | - | N/A | 800 | 600 | 33.3 | % | |||||||||||||||||
| Noninterest income | 5,959 | 3,930 | 51.6 | % | 18,016 | 16,624 | 8.4 | % | ||||||||||||||||
| Noninterest expense | 10,176 | 8,852 | 15.0 | % | 37,410 | 34,847 | 7.4 | % | ||||||||||||||||
| Net income | 3,358 | 2,960 | 13.4 | % | 11,973 | 11,638 | 2.9 | % | ||||||||||||||||
| Earnings per diluted share | 0.42 | 0.37 | 13.5 | % | 1.51 | 1.51 | 0.0 | % | ||||||||||||||||
| Return on average assets | 1.28 | % | 1.19 | % | 7.6 | % | 1.16 | % | 1.23 | % | -5.7 | % | ||||||||||||
| Return on average equity | 9.93 | % | 9.21 | % | 7.8 | % | 8.99 | % | 9.61 | % | -6.5 | % | ||||||||||||
| Non-GAAP Measures | ||||||||||||||||||||||||
| Adjusted net income | $ | 3,119 | $ | 3,014 | 3.5 | % | $ | 12,837 | $ | 11,686 | 9.8 | % | ||||||||||||
| Adjusted diluted EPS | 0.39 | 0.38 | 2.6 | % | 1.62 | 1.52 | 6.6 | % | ||||||||||||||||
| Adjusted return on average assets | 1.26 | % | 1.20 | % | 5.0 | % | 1.25 | % | 1.23 | % | 1.6 | % | ||||||||||||
| Net interest margin (FTE) | 3.70 | % | 3.95 | % | -6.3 | % | 3.82 | % | 3.95 | % | -3.3 | % | ||||||||||||
“This quarter, we delivered earnings of $0.42 per diluted share, which is up 14 percent from the prior year,” said Mark A. Klein, Chairman, President and CEO of SB Financial. “We originated $138 million in residential mortgage loans, a fourth quarter record, while growing our loan portfolio over $13 million, when we adjust for the residential loan sale of $11.1 million in December 2019. We are especially pleased with our Wealth Management group’s ability to surpass our goal to achieve $500 million of assets under management.”
RESULTS OF OPERATIONS
Consolidated Revenue
Total operating revenue, consisting of net interest income and noninterest income, was up 16.0 percent from the fourth quarter of 2018, and up 0.9 percent from the linked quarter.
| ● | Net interest income was flat from the year-ago quarter, but down 5.1 percent from the linked quarter. |
| ● | Noninterest income was up 51.6 percent from the year-ago quarter, and up 11.1 percent from the linked quarter, primarily due to significant residential real estate volume. |
Mortgage Loan Business
Mortgage loan originations for the fourth quarter were $137.5 million, up $58.7 million, or 74.5 percent, from the year-ago quarter. Total sales of originated loans were $127.4 million, up $67.1 million, or 111.2 percent from the year-ago quarter. This quarter, a small residential mortgage loan sale was executed for $11.1 million generating loan sale gains of $0.24 million.
Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $3.4 million for the fourth quarter, compared to $2.0 million for the year-ago quarter. The mortgage servicing valuation adjustment for the fourth quarter was a positive $0.3 million, compared to a negative adjustment of $0.01 million for the fourth quarter of 2018. The aggregate servicing valuation impairment ended the quarter at $1.3 million, which is up $1.1 million from the $0.2 million at December 31, 2018. The mortgage servicing portfolio at December 31, 2019, was $1.2 billion, up $0.12 billion, or 10.5 percent, from $1.08 billion at December 31, 2018.
Mr. Klein noted, “We capped off a tremendous year in the mortgage business this quarter. Originations of $138 million were up nearly 75 percent from the prior year and supplemented the prior three quarters, resulting in a record full-year volume of $445 million. The quarter also resulted in a small recapture of OMSR impairment but our net income for 2019 was still negatively impacted by $0.8 million due to portfolio impairment.”
| Mortgage Banking | ||||||||||||||||||||
| ($ in thousands) | Dec. 2019 | Sep. 2019 | Jun. 2019 | Mar. 2019 | Dec. 2018 | |||||||||||||||
| Mortgage originations | $ | 137,528 | $ | 157,947 | $ | 98,447 | $ | 51,417 | $ | 78,829 | ||||||||||
| Mortgage sales | 127,441 | 125,386 | 70,993 | 43,472 | 60,345 | |||||||||||||||
| Mortgage servicing portfolio | 1,199,107 | 1,153,020 | 1,112,857 | 1,094,060 | 1,084,678 | |||||||||||||||
| Mortgage servicing rights | 11,017 | 10,447 | 10,264 | 10,838 | 11,365 | |||||||||||||||
| Mortgage servicing revenue: | ||||||||||||||||||||
| Loan servicing fees | 740 | 709 | 691 | 682 | 673 | |||||||||||||||
| OMSR amortization | (709 | ) | (701 | ) | (460 | ) | (254 | ) | (300 | ) | ||||||||||
| Net administrative fees | 31 | 8 | 231 | 428 | 373 | |||||||||||||||
| OMSR valuation adjustment | 303 | - | (690 | ) | (708 | ) | (68 | ) | ||||||||||||
| Net loan servicing fees | 334 | 8 | (459 | ) | (280 | ) | 305 | |||||||||||||
| Gain on sale of mortgages | 3,048 | 2,495 | 1,678 | 1,192 | 1,646 | |||||||||||||||
| Mortgage banking revenue, net | $ | 3,382 | $ | 2,503 | $ | 1,219 | $ | 912 | $ | 1,951 | ||||||||||
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Noninterest Income and Noninterest Expense
SB Financial’s noninterest income includes revenue from a diverse group of services, such as wealth management, deposit fees, residential loan sales, title insurance revenue, and the sale of Small Business Administration (SBA) loans. Wealth management assets under the Company’s care rose above $500 million for the first time to stand at $507.7 million as of December 31, 2019, title insurance business delivered revenue of $0.4 million, SBA activity for the quarter consisted of total loan sales of $2.3 million generating gains of $0.2 million and deposit fees increased to $0.7 million. As a result, noninterest income as a percentage of total revenue was 40.9 percent for the quarter, with the year-to-date percentage at 35.4 percent when adjusted for the impairment.
Noninterest expense (NIE) of $10.2 million was up $1.3 million, or 15.0 percent, compared to the same quarter last year. Compared to the linked quarter, NIE was also up $0.7 million, with net noninterest expense declining from negative 2.0 percent in the prior year to negative 1.6 percent currently. Expense growth was driven by higher mortgage commission and incentive payments, regulatory burden, medical costs, higher occupancy and data processing costs.
Noninterest Income / Noninterest Expense
| ($ in thousands, except ratios) | Dec. 2019 | Sep. 2019 | Jun. 2019 | Mar. 2019 | Dec. 2018 | |||||||||||||||
| Noninterest Income (NII) | $ | 5,959 | $ | 5,366 | $ | 3,691 | $ | 3,000 | $ | 3,930 | ||||||||||
| NII / Total Revenue | 40.9 | % | 37.2 | % | 29.5 | % | 26.5 | % | 31.3 | % | ||||||||||
| NII / Average Assets | 2.3 | % | 2.1 | % | 1.5 | % | 1.2 | % | 1.6 | % | ||||||||||
| Noninterest Expense (NIE) | $ | 10,176 | $ | 9,500 | $ | 9,108 | $ | 8,626 | $ | 8,852 | ||||||||||
| Efficiency Ratio | 69.9 | % | 65.9 | % | 72.7 | % | 76.1 | % | 70.6 | % | ||||||||||
| NIE / Average Assets | 3.9 | % | 3.6 | % | 3.6 | % | 3.5 | % | 3.6 | % | ||||||||||
| Net Noninterest Expense/Avg. Assets | -1.6 | % | -1.6 | % | -2.1 | % | -2.3 | % | -2.0 | % | ||||||||||
Balance Sheet
Total assets as of December 31, 2019, were $1.04 billion, up $51.7 million, or 5.2 percent, from a year ago. Total equity as of December 31, 2019, was $136.1 million, up 4.3 percent from a year ago, and comprised 13.1 percent of total assets.
Total loans held for investment were $825.5 million at year end, up $53.6 million, or 7.0 percent, from December 31, 2018. Loan balances were impacted by the $11.1 million residential loan sale and the early pay-downs in commercial real estate of $13.2 million. From the prior year, commercial real estate loans were up $29.2 million, or 8.6 percent, with commercial and industrial loans rising $23.4 million, or 18.3 percent.
The investment portfolio of $105.6 million, including Federal Reserve Bank and Federal Home Loan Bank stock, represented 10.2 percent of assets at December 31, 2019. Deposit balances of $840.2 million at year end increased by $37.7 million, or 4.7 percent, since December 31, 2018. Growth from the prior year included $14.2 million in checking and $23.5 million in savings, money market and time deposit balances.
Mr. Klein stated, “We continued to incur some selective pay-downs in commercial real estate in the quarter and undertook a residential loan sale yet we still were able to achieve loan growth in the quarter. We recognize competitive pressures are increasing in all of our markets on both loan pricing and deposit gathering.”
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Loan Balances | ||||||||||||||||||||||||
| ($ in thousands, except ratios) | Dec. 2019 | Sep. 2019 | Jun. 2019 | Mar. 2019 | Dec. 2018 | Annual Growth | ||||||||||||||||||
| Commercial | $ | 151,018 | $ | 145,147 | $ | 143,798 | $ | 136,201 | $ | 127,640 | $ | 23,378 | ||||||||||||
| % of Total | 18.3 | % | 17.6 | % | 17.7 | % | 17.4 | % | 16.5 | % | 18.3 | % | ||||||||||||
| Commercial RE | 369,962 | 362,580 | 360,491 | 343,900 | 340,791 | 29,171 | ||||||||||||||||||
| % of Total | 44.8 | % | 44.0 | % | 44.2 | % | 43.9 | % | 44.2 | % | 8.6 | % | ||||||||||||
| Agriculture | 50,994 | 51,946 | 54,317 | 50,620 | 52,012 | (1,018 | ) | |||||||||||||||||
| % of Total | 6.2 | % | 6.3 | % | 6.7 | % | 6.5 | % | 6.7 | % | -2.0 | % | ||||||||||||
| Residential RE | 189,290 | 199,036 | 191,642 | 187,548 | 187,104 | 2,186 | ||||||||||||||||||
| % of Total | 22.9 | % | 24.2 | % | 23.5 | % | 24.0 | % | 24.2 | % | 1.2 | % | ||||||||||||
| Consumer & Other | 64,246 | 64,658 | 64,261 | 64,254 | 64,336 | -90 | ||||||||||||||||||
| % of Total | 7.8 | % | 7.9 | % | 7.9 | % | 8.2 | % | 8.3 | % | -0.1 | % | ||||||||||||
| Total Loans | $ | 825,510 | $ | 823,367 | $ | 814,509 | $ | 782,523 | $ | 771,883 | $ | 53,627 | ||||||||||||
| Total Growth Percentage | 6.9 | % | ||||||||||||||||||||||
| Deposit Balances | ||||||||||||||||||||||||
| ($ in thousands, except ratios) | Dec. 2019 | Sep. 2019 | Jun. 2019 | Mar. 2019 | Dec. 2018 | Annual Growth | ||||||||||||||||||
| Non-Int DDA | $ | 158,357 | $ | 152,932 | $ | 141,216 | $ | 146,327 | $ | 144,592 | $ | 13,765 | ||||||||||||
| % of Total | 18.8 | % | 18.0 | % | 16.8 | % | 17.7 | % | 18.0 | % | 9.5 | % | ||||||||||||
| Interest DDA | 131,084 | 131,655 | 129,710 | 132,101 | 130,628 | 456 | ||||||||||||||||||
| % of Total | 15.6 | % | 15.5 | % | 15.5 | % | 16.0 | % | 16.3 | % | 0.3 | % | ||||||||||||
| Savings | 119,359 | 121,991 | 118,931 | 115,272 | 104,444 | 14,915 | ||||||||||||||||||
| % of Total | 14.1 | % | 14.3 | % | 14.1 | % | 13.8 | % | 12.9 | % | 14.3 | % | ||||||||||||
| Money Market | 173,666 | 173,237 | 175,455 | 175,334 | 181,426 | -7,760 | ||||||||||||||||||
| % of Total | 20.7 | % | 20.4 | % | 20.9 | % | 21.2 | % | 22.6 | % | -4.3 | % | ||||||||||||
| Time Deposits | 257,753 | 268,139 | 274,062 | 258,624 | 241,462 | 16,291 | ||||||||||||||||||
| % of Total | 30.7 | % | 31.6 | % | 32.7 | % | 31.2 | % | 30.1 | % | 6.7 | % | ||||||||||||
| Total Deposits | $ | 840,219 | $ | 847,954 | $ | 839,374 | $ | 827,658 | $ | 802,552 | $ | 37,667 | ||||||||||||
| Total Growth Percentage | 4.7 | % | ||||||||||||||||||||||
Asset Quality
SB Financial’s nonperforming assets to total assets ratio of 0.42 percent continues to be in the top quartile of its publicly traded 65-bank peer group. The coverage of non-performing loans by the loan loss allowance was at 218 percent at year end, up from 213 percent at the prior year.
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Nonperforming Assets
| ($ in thousands, except ratios) | Dec. 2019 | Sep. 2019 | Jun. 2019 | Mar. 2019 | Dec. 2018 | Annual Change | ||||||||||||||||||
| Commercial & Agriculture | $ | 772 | $ | 834 | $ | 674 | $ | 998 | $ | 731 | $ | 41 | ||||||||||||
| % of Total Com./Ag. loans | 0.38 | % | 0.42 | % | 0.34 | % | 0.53 | % | 0.41 | % | 5.6 | % | ||||||||||||
| Commercial RE | 464 | 262 | 208 | 212 | 218 | 246 | ||||||||||||||||||
| % of Total CRE loans | 0.13 | % | 0.07 | % | 0.06 | % | 0.06 | % | 0.06 | % | 112.8 | % | ||||||||||||
| Residential RE | 1,580 | 1,763 | 1,768 | 1,612 | 1,738 | (158 | ) | |||||||||||||||||
| % of Total Res. RE loans | 0.83 | % | 0.89 | % | 0.92 | % | 0.86 | % | 0.93 | % | -9.1 | % | ||||||||||||
| Consumer & Other | 322 | 416 | 456 | 325 | 219 | 103 | ||||||||||||||||||
| % of Total Con./Oth. loans | 0.50 | % | 0.64 | % | 0.71 | % | 0.51 | % | 0.34 | % | 47.0 | % | ||||||||||||
| Total Nonaccruing Loans | 3,138 | 3,275 | 3,106 | 3,147 | 2,906 | 232 | ||||||||||||||||||
| % of Total loans | 0.38 | % | 0.40 | % | 0.38 | % | 0.40 | % | 0.38 | % | 8.0 | % | ||||||||||||
| Accruing Restructured Loans | 874 | 825 | 814 | 827 | 928 | (54 | ) | |||||||||||||||||
| Total Change (%) | -5.8 | % | ||||||||||||||||||||||
| Total Nonaccruing & Restructured Loans | 4,012 | 4,100 | 3,920 | 3,974 | 3,834 | 178 | ||||||||||||||||||
| % of Total loans | 0.49 | % | 0.50 | % | 0.48 | % | 0.51 | % | 0.50 | % | 4.6 | % | ||||||||||||
| Foreclosed Assets | 305 | 489 | 530 | 313 | 131 | 174 | ||||||||||||||||||
| Total Change (%) | 132.8 | % | ||||||||||||||||||||||
| Total Nonperforming Assets | $ | 4,317 | $ | 4,589 | $ | 4,450 | $ | 4,287 | $ | 3,965 | $ | 352 | ||||||||||||
| % of Total assets | 0.42 | % | 0.44 | % | 0.43 | % | 0.42 | % | 0.40 | % | 8.9 | % | ||||||||||||
Webcast and Conference Call
The Company will hold a related conference call and webcast on January 24, 2020, at 11:00 a.m. EST. Interested parties may access the conference call by dialing 1-888-338-9469. The webcast can be accessed at http://www.yoursbfinancial.com/investorrelations.html. An audio replay of the call will be available on the SB Financial 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 20 offices; 19 in nine Ohio counties and one in Fort Wayne, Indiana, and 25 full-service ATMs. State Bank has seven 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”.
In May 2019, SB Financial was ranked #94 on the American Banker Magazine’s list of Top 200 Publicly Traded Community Banks and Thrifts based on three-year average return on equity (“ROE”).
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.
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Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this release contains certain non-GAAP financial measures. Management believes that including certain non-GAAP financial measures will provide investors with information useful in understanding the Company’s financial performance, its performance trends and financial position. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results.
Investor Contact Information:
Anthony V. Cosentino
Executive Vice President and
Chief Financial Officer
###
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SB FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS - (Unaudited)
| December | September | June | March | December | ||||||||||||||||
| ($ in thousands) | 2019 | 2019 | 2019 | 2019 | 2018 | |||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 27,064 | $ | 49,824 | $ | 42,786 | $ | 62,962 | $ | 48,363 | ||||||||||
| Available-for-sale securities | 100,948 | 77,029 | 85,261 | 95,802 | 90,969 | |||||||||||||||
| Loans held for sale | 7,258 | 13,655 | 9,579 | 4,346 | 4,445 | |||||||||||||||
| Loans, net of unearned income | 825,510 | 823,367 | 814,509 | 782,523 | 771,883 | |||||||||||||||
| Allowance for loan losses | (8,755 | ) | (8,492 | ) | (8,306 | ) | (8,121 | ) | (8,167 | ) | ||||||||||
| Premises and equipment, net | 23,385 | 23,898 | 23,150 | 23,270 | 22,084 | |||||||||||||||
| Federal Reserve and FHLB Stock, at cost | 4,648 | 4,648 | 4,648 | 4,123 | 4,123 | |||||||||||||||
| Foreclosed assets held for sale, net | 305 | 489 | 530 | 313 | 131 | |||||||||||||||
| Interest receivable | 3,106 | 3,176 | 3,209 | 3,123 | 2,822 | |||||||||||||||
| Goodwill and other intangibles | 17,832 | 17,834 | 17,836 | 17,838 | 16,401 | |||||||||||||||
| Cash value of life insurance | 17,221 | 17,137 | 17,051 | 16,966 | 16,834 | |||||||||||||||
| Mortgage servicing rights | 11,017 | 10,447 | 10,264 | 10,838 | 11,365 | |||||||||||||||
| Other assets | 9,038 | 9,749 | 8,606 | 7,288 | 5,575 | |||||||||||||||
| Total assets | $ | 1,038,577 | $ | 1,042,761 | $ | 1,029,123 | $ | 1,021,271 | $ | 986,828 | ||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| Non interest bearing demand | $ | 158,357 | $ | 152,932 | $ | 141,216 | $ | 146,327 | $ | 144,592 | ||||||||||
| Interest bearing demand | 131,084 | 131,655 | 129,710 | 132,101 | 130,628 | |||||||||||||||
| Savings | 119,359 | 121,991 | 118,931 | 115,272 | 104,444 | |||||||||||||||
| Money market | 173,666 | 173,237 | 175,455 | 175,334 | 181,426 | |||||||||||||||
| Time deposits | 257,753 | 268,139 | 274,062 | 258,624 | 241,462 | |||||||||||||||
| Total deposits | 840,219 | 847,954 | 839,374 | 827,658 | 802,552 | |||||||||||||||
| Repurchase agreements | 12,945 | 14,659 | 13,968 | 12,255 | 15,184 | |||||||||||||||
| Federal Home Loan Bank advances | 16,000 | 16,000 | 16,000 | 24,000 | 16,000 | |||||||||||||||
| Trust preferred securities | 10,310 | 10,310 | 10,310 | 10,310 | 10,310 | |||||||||||||||
| Interest payable | 1,191 | 1,391 | 1,188 | 1,123 | 909 | |||||||||||||||
| Other liabilities | 21,818 | 18,201 | 14,346 | 14,419 | 11,438 | |||||||||||||||
| Total liabilities | 902,483 | 908,515 | 895,186 | 889,765 | 856,393 | |||||||||||||||
| Shareholders' Equity | ||||||||||||||||||||
| Preferred stock | - | 13,241 | 13,978 | 13,978 | 13,979 | |||||||||||||||
| Common stock | 54,463 | 41,223 | 40,486 | 40,486 | 40,485 | |||||||||||||||
| Additional paid-in capital | 15,023 | 15,219 | 15,259 | 15,143 | 15,226 | |||||||||||||||
| Retained earnings | 72,704 | 70,184 | 67,236 | 65,438 | 64,012 | |||||||||||||||
| Accumulated other comprehensive income (loss) | 659 | 900 | 801 | 124 | (552 | ) | ||||||||||||||
| Treasury stock | (6,755 | ) | (6,521 | ) | (3,823 | ) | (3,663 | ) | (2,715 | ) | ||||||||||
| Total shareholders' equity | 136,094 | 134,246 | 133,937 | 131,506 | 130,435 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 1,038,577 | $ | 1,042,761 | $ | 1,029,123 | $ | 1,021,271 | $ | 986,828 | ||||||||||
7
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 | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||
| Loans | ||||||||||||||||||||||||||||
| Taxable | $ | 10,313 | $ | 10,607 | $ | 10,182 | $ | 9,427 | $ | 9,661 | $ | 40,529 | $ | 36,268 | ||||||||||||||
| Tax exempt | 83 | 82 | 73 | 62 | 55 | 300 | 154 | |||||||||||||||||||||
| Securities | ||||||||||||||||||||||||||||
| Taxable | 737 | 776 | 802 | 911 | 822 | 3,226 | 2,618 | |||||||||||||||||||||
| Tax exempt | 72 | 81 | 94 | 98 | 100 | 345 | 439 | |||||||||||||||||||||
| Total interest income | 11,205 | 11,546 | 11,151 | 10,498 | 10,638 | 44,400 | 39,479 | |||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||
| Deposits | 2,392 | 2,258 | 2,092 | 1,918 | 1,776 | 8,660 | 5,314 | |||||||||||||||||||||
| Repurchase agreements & other | 17 | 22 | 17 | 26 | 10 | 82 | 37 | |||||||||||||||||||||
| Federal Home Loan Bank advances | 101 | 101 | 100 | 100 | 131 | 402 | 460 | |||||||||||||||||||||
| Trust preferred securities | 99 | 107 | 110 | 114 | 107 | 430 | 401 | |||||||||||||||||||||
| Total interest expense | 2,609 | 2,488 | 2,319 | 2,158 | 2,024 | 9,574 | 6,212 | |||||||||||||||||||||
| Net interest income | 8,596 | 9,058 | 8,832 | 8,340 | 8,614 | 34,826 | 33,267 | |||||||||||||||||||||
| Provision for loan losses | 300 | 300 | 200 | - | - | 800 | 600 | |||||||||||||||||||||
| Net interest income after provision for loan losses | 8,296 | 8,758 | 8,632 | 8,340 | 8,614 | 34,026 | 32,667 | |||||||||||||||||||||
| Noninterest income | ||||||||||||||||||||||||||||
| Wealth management fees | 801 | 775 | 783 | 734 | 717 | 3,093 | 2,871 | |||||||||||||||||||||
| Customer service fees | 712 | 729 | 689 | 631 | 679 | 2,761 | 2,670 | |||||||||||||||||||||
| Gain on sale of mtg. loans & OMSR | 3,048 | 2,495 | 1,678 | 1,192 | 1,646 | 8,413 | 6,870 | |||||||||||||||||||||
| Mortgage loan servicing fees, net | 334 | 8 | (459 | ) | (280 | ) | 305 | (397 | ) | 1,295 | ||||||||||||||||||
| Gain on sale of non-mortgage loans | 250 | 462 | 216 | 327 | 295 | 1,255 | 1,230 | |||||||||||||||||||||
| Title insurance income | 393 | 400 | 308 | 19 | - | 1,120 | - | |||||||||||||||||||||
| Net gain on sales of securities | - | - | 206 | - | - | 206 | 70 | |||||||||||||||||||||
| Gain (loss) on sale of assets | 1 | 1 | (5 | ) | (2 | ) | 14 | (5 | ) | 35 | ||||||||||||||||||
| Other | 420 | 496 | 275 | 379 | 274 | 1,570 | 1,583 | |||||||||||||||||||||
| Total noninterest income | 5,959 | 5,366 | 3,691 | 3,000 | 3,930 | 18,016 | 16,624 | |||||||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||||
| Salaries and employee benefits | 6,142 | 5,715 | 5,305 | 4,902 | 5,108 | 22,064 | 20,620 | |||||||||||||||||||||
| Net occupancy expense | 675 | 656 | 627 | 645 | 600 | 2,603 | 2,397 | |||||||||||||||||||||
| Equipment expense | 764 | 688 | 665 | 711 | 756 | 2,828 | 2,889 | |||||||||||||||||||||
| Data processing fees | 543 | 499 | 488 | 443 | 466 | 1,973 | 1,811 | |||||||||||||||||||||
| Professional fees | 639 | 571 | 649 | 617 | 532 | 2,476 | 1,848 | |||||||||||||||||||||
| Marketing expense | 171 | 239 | 246 | 239 | 262 | 895 | 884 | |||||||||||||||||||||
| Telephone and communication expense | 121 | 118 | 112 | 115 | 121 | 466 | 495 | |||||||||||||||||||||
| Postage and delivery expense | 86 | 89 | 81 | 84 | 66 | 340 | 286 | |||||||||||||||||||||
| State, local and other taxes | 347 | 243 | 247 | 255 | 180 | 1,092 | 719 | |||||||||||||||||||||
| Employee expense | 207 | 199 | 236 | 153 | 283 | 795 | 912 | |||||||||||||||||||||
| Other expenses | 481 | 483 | 452 | 462 | 478 | 1,878 | 1,986 | |||||||||||||||||||||
| Total noninterest expense | 10,176 | 9,500 | 9,108 | 8,626 | 8,852 | 37,410 | 34,847 | |||||||||||||||||||||
| Income before income tax expense | 4,079 | 4,624 | 3,215 | 2,714 | 3,692 | 14,632 | 14,444 | |||||||||||||||||||||
| Income tax expense | 721 | 862 | 588 | 488 | 732 | 2,659 | 2,806 | |||||||||||||||||||||
| Net income | $ | 3,358 | $ | 3,762 | $ | 2,627 | $ | 2,226 | $ | 2,960 | $ | 11,973 | $ | 11,638 | ||||||||||||||
| Preferred share dividends | 230 | 233 | 243 | 244 | 243 | 950 | 974 | |||||||||||||||||||||
| Net income available to common shareholders | 3,128 | 3,529 | 2,384 | 1,982 | 2,717 | 11,023 | 10,663 | |||||||||||||||||||||
| Common share data: | ||||||||||||||||||||||||||||
| Basic earnings per common share | $ | 0.49 | $ | 0.55 | $ | 0.37 | $ | 0.31 | $ | 0.42 | $ | 1.71 | $ | 1.72 | ||||||||||||||
| Diluted earnings per common share | $ | 0.42 | $ | 0.48 | $ | 0.33 | $ | 0.28 | $ | 0.37 | $ | 1.51 | $ | 1.51 | ||||||||||||||
| Average shares outstanding (in thousands): | ||||||||||||||||||||||||||||
| Basic: | 6,445 | 6,397 | 6,454 | 6,482 | 6,503 | 6,456 | 6,198 | |||||||||||||||||||||
| Diluted: | 7,799 | 7,876 | 7,967 | 7,994 | 8,030 | 7,929 | 7,719 | |||||||||||||||||||||
8
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 | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||
| Net interest income | $ | 8,596 | $ | 9,058 | $ | 8,832 | $ | 8,340 | $ | 8,614 | $ | 34,826 | $ | 33,267 | ||||||||||||||
| Tax-equivalent adjustment | 41 | 43 | 44 | 43 | 41 | 171 | 158 | |||||||||||||||||||||
| Tax-equivalent net interest income | 8,637 | 9,101 | 8,876 | 8,383 | 8,655 | 34,997 | 33,425 | |||||||||||||||||||||
| Provision for loan loss | 300 | 300 | 200 | - | - | 800 | 600 | |||||||||||||||||||||
| Noninterest income | 5,959 | 5,366 | 3,691 | 3,000 | 3,930 | 18,016 | 16,624 | |||||||||||||||||||||
| Total operating revenue | 14,555 | 14,424 | 12,523 | 11,340 | 12,544 | 52,842 | 49,891 | |||||||||||||||||||||
| Noninterest expense | 10,176 | 9,500 | 9,108 | 8,626 | 8,852 | 37,410 | 34,847 | |||||||||||||||||||||
| Pre-tax pre-provision income | 4,379 | 4,924 | 3,415 | 2,714 | 3,692 | 15,432 | 15,044 | |||||||||||||||||||||
| Pretax income | 4,079 | 4,624 | 3,215 | 2,714 | 3,692 | 14,632 | 14,444 | |||||||||||||||||||||
| Net income | 3,358 | 3,762 | 2,627 | 2,226 | 2,960 | 11,973 | 11,638 | |||||||||||||||||||||
| Income available to common shareholders | 3,128 | 3,529 | 2,384 | 1,982 | 2,717 | 11,023 | 10,663 | |||||||||||||||||||||
| PER SHARE INFORMATION: | ||||||||||||||||||||||||||||
| Basic earnings per share (EPS) | 0.49 | 0.55 | 0.37 | 0.31 | 0.42 | 1.71 | 1.72 | |||||||||||||||||||||
| Diluted earnings per share | 0.42 | 0.48 | 0.33 | 0.28 | 0.37 | 1.51 | 1.51 | |||||||||||||||||||||
| Common dividends | 0.095 | 0.090 | 0.090 | 0.085 | 0.085 | 0.360 | 0.320 | |||||||||||||||||||||
| Book value per common share | 17.53 | 17.28 | 16.89 | 16.57 | 16.36 | 17.53 | 16.36 | |||||||||||||||||||||
| Tangible book value per common share (TBV) | 15.23 | 16.23 | 15.83 | 15.43 | 15.39 | 15.23 | 15.39 | |||||||||||||||||||||
| Fully converted TBV per common share | 15.23 | 14.98 | 14.64 | 14.32 | 14.30 | 15.23 | 14.30 | |||||||||||||||||||||
| Market price per common share | 19.69 | 16.72 | 16.46 | 18.02 | 16.45 | 19.69 | 16.45 | |||||||||||||||||||||
| Market price per preferred share | - | 16.50 | 16.10 | 19.00 | 17.90 | - | 17.90 | |||||||||||||||||||||
| Market price to TBV | 129.2 | % | 103.0 | % | 104.0 | % | 116.8 | % | 106.9 | % | 129.2 | % | 106.9 | % | ||||||||||||||
| Market price to fully converted TBV | 129.2 | % | 111.6 | % | 112.4 | % | 125.8 | % | 115.0 | % | 129.2 | % | 115.0 | % | ||||||||||||||
| Market price to trailing 12 month EPS | 13.0 | 11.5 | 16.9 | 12.6 | 11.0 | 13.0 | 11.0 | |||||||||||||||||||||
| PERFORMANCE RATIOS: | ||||||||||||||||||||||||||||
| Return on average assets (ROAA) | 1.28 | % | 1.44 | % | 1.03 | % | 0.89 | % | 1.19 | % | 1.16 | % | 1.23 | % | ||||||||||||||
| Pre-tax pre-provision ROAA | 1.67 | % | 1.89 | % | 1.34 | % | 1.08 | % | 1.48 | % | 1.50 | % | 1.59 | % | ||||||||||||||
| Return on average equity | 9.93 | % | 11.24 | % | 7.92 | % | 6.76 | % | 9.21 | % | 8.99 | % | 9.61 | % | ||||||||||||||
| Return on average tangible equity | 12.83 | % | 14.67 | % | 10.41 | % | 8.83 | % | 12.06 | % | 11.73 | % | 12.83 | % | ||||||||||||||
| Efficiency ratio | 69.90 | % | 65.85 | % | 72.71 | % | 76.05 | % | 70.54 | % | 70.78 | % | 69.83 | % | ||||||||||||||
| Earning asset yield | 4.80 | % | 4.98 | % | 4.88 | % | 4.78 | % | 4.86 | % | 4.85 | % | 4.67 | % | ||||||||||||||
| Cost of interest bearing liabilities | 1.42 | % | 1.33 | % | 1.28 | % | 1.20 | % | 1.15 | % | 1.31 | % | 0.92 | % | ||||||||||||||
| Net interest margin | 3.68 | % | 3.91 | % | 3.86 | % | 3.79 | % | 3.93 | % | 3.81 | % | 3.93 | % | ||||||||||||||
| Tax equivalent effect | 0.02 | % | 0.02 | % | 0.02 | % | 0.02 | % | 0.02 | % | 0.01 | % | 0.02 | % | ||||||||||||||
| Net interest margin, tax equivalent | 3.70 | % | 3.93 | % | 3.88 | % | 3.81 | % | 3.95 | % | 3.82 | % | 3.95 | % | ||||||||||||||
| Non interest income/Average assets | 2.27 | % | 2.06 | % | 1.45 | % | 1.20 | % | 1.58 | % | 1.75 | % | 1.75 | % | ||||||||||||||
| Non interest expense/Average assets | 3.87 | % | 3.64 | % | 3.58 | % | 3.45 | % | 3.56 | % | 3.64 | % | 3.68 | % | ||||||||||||||
| Net noninterest expense/Average assets | -1.60 | % | -1.58 | % | -2.13 | % | -2.25 | % | -1.98 | % | -1.89 | % | -1.92 | % | ||||||||||||||
| ASSET QUALITY RATIOS: | ||||||||||||||||||||||||||||
| Gross charge-offs | 51 | 128 | 20 | 60 | 322 | 259 | 407 | |||||||||||||||||||||
| Recoveries | 14 | 15 | 5 | 13 | 1 | 47 | 45 | |||||||||||||||||||||
| Net charge-offs | 37 | 113 | 15 | 47 | 321 | 212 | 362 | |||||||||||||||||||||
| Nonaccruing loans/Total loans | 0.38 | % | 0.40 | % | 0.38 | % | 0.40 | % | 0.38 | % | 0.38 | % | 0.38 | % | ||||||||||||||
| Nonperforming loans/Total loans | 0.49 | % | 0.50 | % | 0.48 | % | 0.51 | % | 0.50 | % | 0.49 | % | 0.50 | % | ||||||||||||||
| Nonperforming assets/Loans & OREO | 0.52 | % | 0.56 | % | 0.55 | % | 0.55 | % | 0.51 | % | 0.52 | % | 0.51 | % | ||||||||||||||
| Nonperforming assets/Total assets | 0.42 | % | 0.44 | % | 0.43 | % | 0.42 | % | 0.40 | % | 0.42 | % | 0.40 | % | ||||||||||||||
| Allowance for loan loss/Nonperforming loans | 218.22 | % | 207.12 | % | 211.89 | % | 204.35 | % | 213.02 | % | 218.22 | % | 213.02 | % | ||||||||||||||
| Allowance for loan loss/Total loans | 1.06 | % | 1.03 | % | 1.02 | % | 1.04 | % | 1.06 | % | 1.06 | % | 1.06 | % | ||||||||||||||
| Net loan charge-offs/Average loans (ann.) | 0.02 | % | 0.05 | % | 0.01 | % | 0.02 | % | 0.17 | % | 0.03 | % | 0.06 | % | ||||||||||||||
| Loan loss provision/Net charge-offs | 810.81 | % | 265.49 | % | 1333.33 | % | 0.00 | % | 0.00 | % | 377.36 | % | 165.75 | % | ||||||||||||||
| CAPITAL & LIQUIDITY RATIOS: | ||||||||||||||||||||||||||||
| Loans/ Deposits | 98.25 | % | 97.10 | % | 97.04 | % | 94.55 | % | 96.18 | % | 98.25 | % | 96.18 | % | ||||||||||||||
| Equity/ Assets | 13.10 | % | 12.87 | % | 13.01 | % | 12.88 | % | 13.22 | % | 13.10 | % | 13.22 | % | ||||||||||||||
| Tangible equity/Tangible assets | 11.59 | % | 10.07 | % | 10.10 | % | 9.93 | % | 10.31 | % | 11.59 | % | 10.31 | % | ||||||||||||||
| Tangible equity adjusted for conversion | 11.59 | % | 11.36 | % | 11.48 | % | 11.33 | % | 11.75 | % | 11.59 | % | 11.75 | % | ||||||||||||||
| Common equity tier 1 ratio (Bank) (12/19 est.) | 12.21 | % | 12.07 | % | 12.53 | % | 12.71 | % | 12.57 | % | 12.21 | % | 12.57 | % | ||||||||||||||
| END OF PERIOD BALANCES | ||||||||||||||||||||||||||||
| Total assets | 1,038,577 | 1,042,761 | 1,029,123 | 1,021,271 | 986,828 | 1,038,577 | 986,828 | |||||||||||||||||||||
| Total loans | 825,510 | 823,367 | 814,509 | 782,523 | 771,883 | 825,510 | 771,883 | |||||||||||||||||||||
| Deposits | 840,219 | 847,954 | 839,374 | 827,658 | 802,552 | 840,219 | 802,552 | |||||||||||||||||||||
| Stockholders equity | 136,094 | 134,246 | 133,937 | 131,506 | 130,435 | 136,094 | 130,435 | |||||||||||||||||||||
| Goodwill & intangibles | 17,832 | 17,834 | 17,836 | 17,838 | 16,401 | 17,832 | 16,401 | |||||||||||||||||||||
| Preferred equity | - | 13,241 | 13,978 | 13,978 | 13,979 | - | 13,979 | |||||||||||||||||||||
| Tangible equity | 118,262 | 103,171 | 102,123 | 99,690 | 100,055 | 118,262 | 100,055 | |||||||||||||||||||||
| Mortgage servicing portfolio | 1,199,107 | 1,153,020 | 1,112,857 | 1,094,060 | 1,084,678 | 1,199,107 | 1,084,678 | |||||||||||||||||||||
| Wealth/Brokerage assets under care | 507,670 | 484,295 | 479,442 | 462,580 | 423,289 | 507,670 | 423,289 | |||||||||||||||||||||
| Total assets under care | 2,745,354 | 2,680,076 | 2,621,422 | 2,577,911 | 2,494,795 | 2,745,354 | 2,494,795 | |||||||||||||||||||||
| Full-time equivalent employees (actual) | 252 | 247 | 250 | 256 | 250 | 252 | 250 | |||||||||||||||||||||
| Period end basic shares outstanding | 7,763 | 6,357 | 6,451 | 6,460 | 6,503 | 7,763 | 6,503 | |||||||||||||||||||||
| Period end outstanding (Series A Converted) | - | 1,414 | 1,478 | 1,475 | 1,472 | - | 1,472 | |||||||||||||||||||||
| Market capitalization (all) | 152,853 | 129,620 | 130,324 | 144,898 | 133,824 | 152,853 | 133,824 | |||||||||||||||||||||
| AVERAGE BALANCES | ||||||||||||||||||||||||||||
| Total assets | 1,051,071 | 1,043,791 | 1,016,493 | 1,001,282 | 994,977 | 1,027,932 | 947,266 | |||||||||||||||||||||
| Total earning assets | 934,540 | 927,360 | 914,652 | 879,394 | 875,747 | 914,975 | 845,672 | |||||||||||||||||||||
| Total loans | 828,108 | 829,699 | 804,716 | 775,280 | 775,060 | 809,651 | 749,055 | |||||||||||||||||||||
| Deposits | 856,961 | 849,984 | 827,615 | 812,190 | 803,928 | 836,299 | 764,297 | |||||||||||||||||||||
| Stockholders equity | 135,267 | 133,891 | 132,734 | 131,691 | 128,539 | 133,190 | 121,094 | |||||||||||||||||||||
| Intangibles | 17,833 | 17,835 | 17,837 | 16,880 | 16,403 | 17,597 | 16,406 | |||||||||||||||||||||
| Preferred equity | 12,707 | 13,459 | 13,978 | 13,979 | 13,979 | 13,484 | 13,982 | |||||||||||||||||||||
| Tangible equity | 104,727 | 102,597 | 100,919 | 100,832 | 98,157 | 102,109 | 90,706 | |||||||||||||||||||||
| Average basic shares outstanding | 6,445 | 6,397 | 6,454 | 6,482 | 6,503 | 6,456 | 6,198 | |||||||||||||||||||||
| Average diluted shares outstanding | 7,799 | 7,876 | 7,967 | 7,994 | 8,030 | 7,929 | 7,719 | |||||||||||||||||||||
9
SB FINANCIAL GROUP, INC.
Rate Volume Analysis - (Unaudited)
At and for the Three and Twelve Months Ended December 31, 2019 and 2018
| ($ in thousands) | Three Months Ended Dec. 31, 2019 | Three Months Ended Dec. 31, 2018 | ||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||||
| Assets | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
| Taxable securities | $ | 99,149 | $ | 737 | 2.97 | % | $ | 90,602 | $ | 822 | 3.63 | % | ||||||||||||
| Nontaxable securities | 7,283 | 72 | 3.95 | % | 10,085 | 100 | 3.97 | % | ||||||||||||||||
| Loans, net | 828,108 | 10,396 | 5.02 | % | 775,060 | 9,716 | 5.01 | % | ||||||||||||||||
| Total earning assets | 934,540 | 11,205 | 4.80 | % | 875,747 | 10,638 | 4.86 | % | ||||||||||||||||
| Cash and due from banks | 48,289 | 56,358 | ||||||||||||||||||||||
| Allowance for loan losses | (8,566 | ) | (8,490 | ) | ||||||||||||||||||||
| Premises and equipment | 24,183 | 22,200 | ||||||||||||||||||||||
| Other assets | 52,625 | 49,162 | ||||||||||||||||||||||
| Total assets | $ | 1,051,071 | $ | 994,977 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Savings, MMDA and interest bearing demand | $ | 432,077 | $ | 614 | 0.57 | % | $ | 418,284 | $ | 691 | 0.66 | % | ||||||||||||
| Time deposits | 264,054 | 1,778 | 2.69 | % | 239,787 | 1,085 | 1.81 | % | ||||||||||||||||
| Repurchase agreements & other | 13,891 | 17 | 0.49 | % | 15,222 | 10 | 0.26 | % | ||||||||||||||||
| Advances from Federal Home Loan Bank | 16,000 | 101 | 2.53 | % | 22,467 | 131 | 2.33 | % | ||||||||||||||||
| Trust preferred securities | 10,310 | 99 | 3.84 | % | 10,310 | 107 | 4.15 | % | ||||||||||||||||
| Total interest bearing liabilities | 736,332 | 2,609 | 1.42 | % | 706,070 | 2,024 | 1.15 | % | ||||||||||||||||
| Non interest bearing demand | 160,830 | - | 145,857 | - | ||||||||||||||||||||
| Total funding | 897,162 | 1.16 | % | 851,927 | 0.95 | % | ||||||||||||||||||
| Other liabilities | 18,642 | 14,511 | ||||||||||||||||||||||
| Total liabilities | 915,804 | 866,438 | ||||||||||||||||||||||
| Equity | 135,267 | 128,539 | ||||||||||||||||||||||
| Total liabilities and equity | $ | 1,051,071 | $ | 994,977 | ||||||||||||||||||||
| Net interest income | $ | 8,596 | $ | 8,614 | ||||||||||||||||||||
| Net interest income as a percent of average interest-earning assets - GAAP measure | 3.68 | % | 3.93 | % | ||||||||||||||||||||
| Net interest income as a percent of average interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis | 3.70 | % | 3.95 | % | ||||||||||||||||||||
10
| Twelve Months Ended Dec. 31, 2019 | Twelve Months Ended Dec. 31, 2018 | |||||||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||||||
| Assets | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
| Taxable securities | $ | 95,216 | $ | 3,226 | 3.39 | % | $ | 85,238 | $ | 2,618 | 3.07 | % | ||||||||||||
| Nontaxable securities | 10,108 | 345 | 3.41 | % | 11,379 | 439 | 3.86 | % | ||||||||||||||||
| Loans, net | 809,651 | 40,829 | 5.04 | % | 749,055 | 36,422 | 4.86 | % | ||||||||||||||||
| Total earning assets | 914,975 | 44,400 | 4.85 | % | 845,672 | 39,479 | 4.67 | % | ||||||||||||||||
| Cash and due from banks | 47,135 | 38,990 | ||||||||||||||||||||||
| Allowance for loan losses | (8,370 | ) | (8,361 | ) | ||||||||||||||||||||
| Premises and equipment | 23,779 | 21,795 | ||||||||||||||||||||||
| Other assets | 50,413 | 49,170 | ||||||||||||||||||||||
| Total assets | $ | 1,027,932 | $ | 947,266 | ||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Savings, MMDA and interest bearing demand | $ | 427,858 | $ | 2,846 | 0.67 | % | $ | 401,577 | $ | 1,754 | 0.44 | % | ||||||||||||
| Time deposits | 262,040 | 5,814 | 2.22 | % | 225,467 | 3,560 | 1.58 | % | ||||||||||||||||
| Repurchase agreements & Other | 15,288 | 82 | 0.54 | % | 16,458 | 37 | 0.22 | % | ||||||||||||||||
| Advances from Federal Home Loan Bank | 16,066 | 402 | 2.50 | % | 22,108 | 460 | 2.08 | % | ||||||||||||||||
| Trust preferred securities | 10,310 | 430 | 4.17 | % | 10,310 | 401 | 3.89 | % | ||||||||||||||||
| Total interest bearing liabilities | 731,562 | 9,574 | 1.31 | % | 675,920 | 6,212 | 0.92 | % | ||||||||||||||||
| Non interest bearing demand | 146,401 | 1.09 | % | 137,253 | 0.76 | % | ||||||||||||||||||
| Total funding | 877,963 | 813,173 | ||||||||||||||||||||||
| Other liabilities | 16,779 | 12,999 | ||||||||||||||||||||||
| Total liabilities | 894,742 | 826,172 | ||||||||||||||||||||||
| Equity | 133,190 | 121,094 | ||||||||||||||||||||||
| Total liabilities and equity | $ | 1,027,932 | $ | 947,266 | ||||||||||||||||||||
| Net interest income | $ | 34,826 | $ | 33,267 | ||||||||||||||||||||
| Net interest income as a percent of average interest-earning assets - GAAP measure | 3.81 | % | 3.93 | % | ||||||||||||||||||||
| Net interest income as a percent of average interest-earning assets - non GAAP | 3.82 | % | 3.95 | % | ||||||||||||||||||||
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| Non-GAAP reconciliation | Three Months Ended | Twelve Months Ended | ||||||||||||||
| ($ in thousands, except per share & ratios) | Dec.
31, 2019 | Dec.
31, 2018 | Dec.
31, 2019 | Dec.
31, 2018 | ||||||||||||
| Total Revenues | $ | 14,555 | $ | 12,544 | $ | 52,842 | $ | 49,891 | ||||||||
| Adjustment to (deduct)/add OMSR impairment* | (303 | ) | 68 | 1,094 | 61 | |||||||||||
| Adjusted Total Revenues | 14,252 | 12,612 | 53,936 | 49,952 | ||||||||||||
| Income before Income Taxes | 4,079 | 3,692 | 14,632 | 14,444 | ||||||||||||
| Adjustment to (deduct)/add OMSR impairment | (303 | ) | 68 | 1,094 | 61 | |||||||||||
| Adjusted Income before Income Taxes | 3,776 | 3,760 | 15,726 | 14,505 | ||||||||||||
| Provision for Income Taxes | 721 | 732 | 2,659 | 2,806 | ||||||||||||
| Adjustment to (deduct)/add OMSR impairment | (64 | ) | 14 | 230 | 13 | |||||||||||
| Adjusted Provision for Income Taxes | 657 | 746 | 2,889 | 2,819 | ||||||||||||
| Net Income | 3,358 | 2,960 | 11,973 | 11,638 | ||||||||||||
| Adjustment to (deduct)/add OMSR impairment | (239 | ) | 54 | 864 | 48 | |||||||||||
| Adjusted Net Income | 3,119 | 3,014 | 12,837 | 11,686 | ||||||||||||
| Diluted Earnings per Share | 0.42 | 0.37 | 1.51 | 1.51 | ||||||||||||
| Adjustment to (deduct)/add OMSR impairment | (0.03 | ) | 0.01 | 0.11 | 0.01 | |||||||||||
| Adjusted Diluted Earnings per Share | $ | 0.39 | $ | 0.38 | $ | 1.62 | $ | 1.52 | ||||||||
| Return on Average Assets | 1.28 | % | 1.19 | % | 1.16 | % | 1.23 | % | ||||||||
| Adjustment to (deduct)/add OMSR impairment | -0.02 | % | 0.01 | % | 0.08 | % | 0.01 | % | ||||||||
| Adjusted Return on Average Assets | 1.26 | % | 1.20 | % | 1.25 | % | 1.23 | % | ||||||||
| * | valuation adjustment to the Company's mortgage servicing rights |
12