8-K
SB FINANCIAL GROUP, INC. (SBFG)
UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 29, 2021 (October 28, 2021)
SB FINANCIAL GROUP, INC
(Exact name of registrant as specified in its charter)
| Ohio | 0-13507 | 34-1395608 |
|---|---|---|
| (State or other jurisdiction <br><br>of incorporation) | (Commission File Number) | (IRS Employer <br><br>Identification No.) |
| 401<br> 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<br>communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br>material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement<br>communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement<br>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 7,366,101 Outstanding at October 29, 2021 | SBFG | The NASDAQ Stock Market, LLC <br><br>(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 October 28, 2021, SB Financial Group, Inc. (the “Company”) issued a news release reporting financial results for the third quarter 2021. A copy of the October 28, 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 October 28, 2021, reporting financial results for the third quarter 2021. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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: October 29, 2021 | By: | /s/ Anthony V. Cosentino |
| Anthony V. Cosentino | ||
| Chief Financial Officer |
2
INDEX TO EXHIBITS
Current Report on Form 8-K
Dated October 29, 2021
SB Financial Group, Inc.
| Exhibit No. | Description |
|---|---|
| 99.1 | News release issued by SB<br> Financial Group, Inc. on October 28, 2021, reporting financial results for the third quarter 2021. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
3
Exhibit 99.1
SB Financial Group Announces Third Quarter 2021Results
DEFIANCE, OH, October 28, 2021 -- SB FinancialGroup, 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 third quarter and nine months ended September 30, 2021.
Third quarter 2021 highlights over prior-year third quarter include:
| ● | Net<br> income of $4.1 million; diluted earnings per share (“EPS”) of $0.58 or a 15.9<br> percent decrease |
|---|---|
| ● | Adjusted<br> net income, excluding the impact of the Originated Mortgage Servicing Rights (“OMSR”)<br> impairment of $250,000 was $3.9 million, with EPS of $0.56 |
| --- | --- |
| ● | Mortgage<br> origination volume of $152.6 million, reflects a decrease of $47.5 million, or 23.8 percent |
| --- | --- |
Third quarter 2021 highlights over the linked quarter include:
| ● | Net<br> income up $342,000 with EPS increasing $0.06 or 11.5 percent |
|---|---|
| ● | Loan<br> growth excluding the impact of Paycheck Protection Program (“PPP”) was up $20.6<br> million or 10 percent annualized |
| --- | --- |
Nine months ended September 30, 2021, highlights over prior-year nine months include:
| ● | Net<br> income of $14.9 million and diluted EPS of $2.08, compared to $9.6 million, or $1.25 per<br> share or a 66.4 percent increase |
|---|---|
| ● | Adjusted<br> net income, excluding the impact of OMSR activity and merger costs, was $12.7 million, down<br> $227,000 or 1.8 percent with EPS of $1.76, up $0.09 or 5.4 percent |
| --- | --- |
Third quarter 2021 trailing twelve-month highlights include:
| ● | Loans,<br> excluding the impact of PPP loan balances from both years of $10.2 and $82.1 million, respectively,<br> increased $32.6 million, or 4.1 percent from the prior year | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ● | Deposits<br> grew by $97.7 million, or 9.6 percent to $1.11 billion at quarter end | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ● | Mortgage<br> origination volume of $642.3 million; servicing portfolio of $1.34 billion, which is up $48.4<br> million, or 3.7 percent | |||||||||||||||||
| --- | --- | |||||||||||||||||
| Highlights | Three<br> Months Ended | Nine<br> Months Ended | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| ($ in thousands,<br> except per share & ratios) | Sep.<br> 2021 | Sep.<br> 2020 | % Change | Sep.<br> 2021 | Sep.<br> 2020 | % Change | ||||||||||||
| Operating revenue | $ | 16,673 | $ | 19,677 | -15.3 | % | $ | 52,914 | $ | 47,873 | 10.5 | % | ||||||
| Interest income | 11,033 | 10,807 | 2.1 | % | 31,901 | 32,046 | -0.5 | % | ||||||||||
| Interest expense | 1,009 | 1,548 | -34.8 | % | 3,095 | 5,367 | -42.3 | % | ||||||||||
| Net interest income | 10,024 | 9,259 | 8.3 | % | 28,806 | 26,679 | 8.0 | % | ||||||||||
| Provision for loan losses | 300 | 1,800 | -83.3 | % | 1,050 | 3,700 | -71.6 | % | ||||||||||
| Noninterest income | 6,649 | 10,418 | -36.2 | % | 24,108 | 21,194 | 13.7 | % | ||||||||||
| Noninterest expense | 11,256 | 11,335 | -0.7 | % | 33,241 | 32,403 | 2.6 | % | ||||||||||
| Net income | 4,103 | 5,250 | -21.8 | % | 14,945 | 9,586 | 55.9 | % | ||||||||||
| Earnings per diluted share | 0.58 | 0.69 | -15.9 | % | 2.08 | 1.25 | 66.4 | % | ||||||||||
| Return on average assets | 1.23 | % | 1.73 | % | -28.9 | % | 1.51 | % | 1.12 | % | 34.8 | % | ||||||
| Return on average equity | 11.35 | % | 15.01 | % | -24.4 | % | 13.84 | % | 9.74 | % | 42.1 | % | ||||||
| Non-GAAP Measures | ||||||||||||||||||
| Adjusted net income | $ | 3,907 | $ | 4,992 | -21.7 | % | $ | 12,690 | $ | 12,917 | -1.8 | % | ||||||
| Adjusted diluted EPS | 0.56 | 0.65 | -13.8 | % | 1.76 | 1.67 | 5.4 | % | ||||||||||
| Adjusted return on average assets | 1.17 | % | 1.64 | % | -28.7 | % | 1.34 | % | 1.41 | % | -5.0 | % | ||||||
| Adjusted pre-tax, pre-provision income | 5,169 | 8,016 | -35.5 | % | 17,569 | 18,444 | -4.7 | % |
“The third quarter saw significant PPP forgiveness, which drove our EPS up nearly 12 percent from the linked quarter” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “Loan growth net of PPP was up compared to the prior year quarter and we have now had positive loan growth, excluding PPP, in each of the last two quarters.”
1
RESULTS OF OPERATIONS
Consolidated Revenue
Total operating revenue, consisting of net interest income and noninterest income, was down 15.3 percent from the third quarter of 2020, but up 6.2 percent from the linked quarter.
| ● | Net<br> interest income was up from the year-ago quarter by 8.3 percent, and up 9.5 percent from<br> the linked quarter. |
|---|---|
| ● | Net<br> interest margin on a fully taxable equivalent basis (FTE) was down from the year-ago quarter<br> by 20 basis points and flat to the linked quarter, as cash balances continued to be higher<br> than normal, which was offset by higher PPP forgiveness. |
| --- | --- |
| ● | Noninterest<br> income was down 36 percent from the year ago quarter as mortgage volume and gain on sale<br> yields trended lower. This compares to a two percent increase from the linked quarter. |
| --- | --- |
Mortgage Loan Business
Mortgage loan originations for the third quarter of 2021 were $152.6 million, down $47.5 million, or 23.8 percent, from the year-ago quarter. Total sales of originated loans were $123.1 million, down $43.1 million, or 25.9 percent, from the year-ago quarter. For the first nine months of 2021, SB Financial had total volume of $473.8 million, of which $236.2 million (50 percent) was new purchase/construction lending, $118.5 million was external refinance (25 percent), and the remaining $119.1 million (25 percent) was internal refinance.
Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $4.1 million for the third quarter of 2021, compared to $7.9 million for the year-ago quarter. The mortgage servicing valuation adjustment for the third quarter of 2021 was a positive $248,000, compared to a positive adjustment of $326,000 for the third quarter of 2020. For the first nine months of 2021, the recapture of servicing rights was $2.9 million compared to impairment of $3.0 million for the prior year nine months. The aggregate servicing valuation impairment ended the quarter at $2.0 million. The servicing portfolio at September 30, 2021, was $1.34 billion, up $48.4 million, or 3.7 percent, from $1.29 billion at September 30, 2020.
Mr. Klein noted, “This quarter had relatively strong mortgage origination of $153 million, which while down 24 percent from the prior year, was down just seven percent from the linked quarter. We continue to be positive about our mortgage pipeline as construction and private client activity remain strong. We now have a total of 24 Mortgage Originators that represents an increase of four from the prior year which includes the addition of two originators in our Ft. Wayne growth market.”
2
| Mortgage Banking | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | Sep. 2021 | Jun. 2021 | Mar. 2021 | Dec. 2020 | Sep. 2020 | ||||||||||
| Mortgage originations | $ | 152,623 | $ | 164,883 | $ | 155,836 | $ | 168,997 | $ | 200,158 | |||||
| Mortgage sales | 123,083 | 119,064 | 136,708 | 143,151 | 166,201 | ||||||||||
| Mortgage servicing portfolio | 1,341,439 | 1,323,804 | 1,304,097 | 1,299,698 | 1,293,037 | ||||||||||
| Mortgage servicing rights | 11,194 | 10,678 | 10,490 | 7,759 | 8,535 | ||||||||||
| Mortgage servicing revenue | |||||||||||||||
| Loan servicing fees | 850 | 830 | 859 | 857 | 813 | ||||||||||
| OMSR amortization | (943 | ) | (948 | ) | (1,187 | ) | (1,283 | ) | (1,308 | ) | |||||
| Net administrative fees | (93 | ) | (118 | ) | (328 | ) | (426 | ) | (495 | ) | |||||
| OMSR valuation adjustment | 248 | (99 | ) | 2,706 | (611 | ) | 326 | ||||||||
| Net loan servicing fees | 155 | (217 | ) | 2,378 | (1,037 | ) | (169 | ) | |||||||
| Gain on sale of mortgages | 3,947 | 4,255 | 5,859 | 7,197 | 8,085 | ||||||||||
| Mortgage banking revenue, net | $ | 4,102 | $ | 4,038 | $ | 8,237 | $ | 6,160 | $ | 7,916 |
Noninterest Income and Noninterest Expense
SB Financial’s noninterest income for the quarter was down 36 percent from the prior year but up compared to the linked quarter by approximately two percent. The gain on sale mortgage loan yields were down 165 basis points from the prior year with the total dollars of sales down $43.1 million. Wealth management revenue was up over 14 percent from the prior year due to higher retention levels and growth in the equity sector. SB Financial’s Title Agency provided revenue in the quarter of $508,000.
For the third quarter of 2021, noninterest expense of $11.3 million was flat to the prior year and up slightly to the linked quarter. For the first nine months, noninterest expense of $33.2 million was up $838,000 or 2.6 percent compared to the prior year first nine months. Operating leverage for the nine months of 2021 compared to the prior year was positive with revenue growth of 10.5 percent exceeding expense growth of 2.6 percent by 4.1 times.
| Noninterest Income / Noninterest Expense | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except ratios) | Sep. 2021 | Jun. 2021 | Mar. 2021 | Dec. 2020 | Sep. 2020 | ||||||||||
| Noninterest Income (NII) | $ | 6,649 | $ | 6,537 | $ | 10,922 | $ | 8,902 | $ | 10,418 | |||||
| NII / Total Revenue | 39.9 | % | 41.7 | % | 53.2 | % | 49.0 | % | 52.9 | % | |||||
| NII / Average Assets | 2.0 | % | 2.0 | % | 3.4 | % | 2.9 | % | 3.4 | % | |||||
| Total Revenue Growth | -15.3 | % | -10.3 | % | 91.9 | % | 24.7 | % | 36.4 | % | |||||
| Noninterest Expense (NIE) | $ | 11,256 | $ | 11,076 | $ | 10,909 | $ | 10,684 | $ | 11,335 | |||||
| Efficiency Ratio | 67.4 | % | 70.5 | % | 53.0 | % | 58.8 | % | 57.5 | % | |||||
| NIE / Average Assets | 3.4 | % | 3.3 | % | 3.4 | % | 3.5 | % | 3.7 | % | |||||
| Net Noninterest Expense/Avg. Assets | -1.4 | % | -1.4 | % | 0.0 | % | -0.6 | % | -0.3 | % | |||||
| Total Expense Growth | -0.7 | % | -5.0 | % | 16.0 | % | 5.0 | % | 19.3 | % | |||||
| Operating Leverage | -21.5 | -2.1 | 5.7 | 4.9 | 1.9 |
3
Balance Sheet
Total assets as of September 30, 2021, were $1.33 billion, up $111.5 million, or 9.2 percent, from the year ago quarter due to higher liquidity levels and PPP activity. Total shareholders’ equity as of September 30, 2021, was $144.3 million, up 2.1 percent from a year ago, and comprised 10.9 percent of total assets.
Total loans held for investment were $846.5 million at September 30, 2021, down $39.3 million, or 4.4 percent, from September 30, 2020. Excluding PPP activity from both years, loan balances were up $32.6 million, or 4.1 percent.
The investment portfolio of $254.1 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 19.1 percent of assets at September 30, 2021, and was up 87.4 percent from the year-ago period. Deposit balances of $1.11 billion at September 30, 2021, increased by $97.6 million, or 9.6 percent, since September 30, 2020. Growth from the prior year included $58.7 million in checking and $38.9 million in savings and time deposit balances.
Mr. Klein continued, “Our lending teams were very busy in the quarter as we had solid loan growth for the second consecutive quarter and we assisted a number of clients in submitting PPP forgiveness applications. We also had two non-performing credits that paid off in the quarter, resulting in lower NPA balances and recapture of prior non-accrual interest. Our coverage of non-performing loans is now above 350 percent and we continue to have no loans on COVID deferral.”
| Loan Balances | Annual | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except ratios) | Sep. 2021 | Jun. 2021 | Mar. 2021 | Dec. 2020 | Sep. 2020 | Growth | ||||||||||||
| Commercial | $ | 138,085 | $ | 149,998 | $ | 179,157 | $ | 203,256 | $ | 216,667 | $ | (78,582 | ) | |||||
| % of Total | 16.3 | % | 17.6 | % | 21.1 | % | 23.3 | % | 24.5 | % | -36.3 | % | ||||||
| Commercial RE | 387,858 | 389,287 | 385,403 | 370,984 | 371,947 | 15,911 | ||||||||||||
| % of Total | 45.8 | % | 45.8 | % | 45.4 | % | 42.5 | % | 42.0 | % | 4.3 | % | ||||||
| Agriculture | 57,374 | 50,895 | 48,405 | 55,251 | 57,420 | (46 | ) | |||||||||||
| % of Total | 6.8 | % | 6.0 | % | 5.7 | % | 6.3 | % | 6.5 | % | -0.1 | % | ||||||
| Residential RE | 207,571 | 203,294 | 176,998 | 182,076 | 178,393 | 29,178 | ||||||||||||
| % of Total | 24.5 | % | 23.9 | % | 20.9 | % | 20.9 | % | 20.1 | % | 16.4 | % | ||||||
| Consumer & Other | 55,660 | 57,039 | 58,213 | 61,156 | 61,423 | (5,763 | ) | |||||||||||
| % of Total | 6.6 | % | 6.7 | % | 6.9 | % | 7.0 | % | 6.9 | % | -9.4 | % | ||||||
| Total Loans | $ | 846,548 | $ | 850,513 | $ | 848,176 | $ | 872,723 | $ | 885,850 | $ | (39,302 | ) | |||||
| Total Growth Percentage | -4.4 | % |
| Deposit Balances | Annual | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except ratios) | Sep. 2021 | Jun. 2021 | Mar. 2021 | Dec. 2020 | Sep. 2020 | Growth | ||||||||||||
| Non-Int DDA | $ | 258,857 | $ | 240,572 | $ | 273,026 | $ | 251,649 | $ | 225,003 | $ | 33,854 | ||||||
| % of Total | 23.3 | % | 22.0 | % | 24.4 | % | 24.0 | % | 22.2 | % | 15.0 | % | ||||||
| Interest DDA | 189,130 | 187,023 | 191,593 | 176,785 | 164,248 | 24,882 | ||||||||||||
| % of Total | 17.0 | % | 17.1 | % | 17.1 | % | 16.9 | % | 16.2 | % | 15.1 | % | ||||||
| Savings | 246,414 | 235,231 | 218,260 | 174,864 | 169,474 | 76,940 | ||||||||||||
| % of Total | 22.2 | % | 21.6 | % | 19.5 | % | 16.7 | % | 16.7 | % | 45.4 | % | ||||||
| Money Market | 258,741 | 255,512 | 249,088 | 216,164 | 204,862 | 53,879 | ||||||||||||
| % of Total | 23.3 | % | 23.4 | % | 22.2 | % | 20.6 | % | 20.2 | % | 26.3 | % | ||||||
| Time Deposits | 158,518 | 172,696 | 188,229 | 229,549 | 250,428 | (91,910 | ) | |||||||||||
| % of Total | 14.3 | % | 15.8 | % | 16.8 | % | 21.9 | % | 24.7 | % | -36.7 | % | ||||||
| Total Deposits | $ | 1,111,660 | $ | 1,091,034 | $ | 1,120,196 | $ | 1,049,011 | $ | 1,014,015 | $ | 97,645 | ||||||
| Total Growth Percentage | 9.6 | % |
4
Asset Quality
SB Financial reported nonperforming assets of $5.6 million as of September 30, 2021, down $1.7 million or 23.1 percent from the year-ago quarter. The Company took $206,000 in net recoveries in the quarter. The coverage of problem loans by the loan loss allowance was at 351 percent at September 30, 2021, up from 164 percent at September 30, 2020.
| Nonperforming Assets ($ in thousands, except ratios) | Sep. 2021 | Jun. 2021 | Mar. 2021 | Dec. 2020 | Sep. 2020 | Annual Change | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Commercial & Agriculture | $ | 144 | $ | 375 | $ | 615 | $ | 902 | $ | 1,140 | $ | (996 | ) | |||||
| % of Total Com./Ag. loans | 0.07 | % | 0.19 | % | 0.27 | % | 0.35 | % | 0.42 | % | -87.4 | % | ||||||
| Commercial RE | 566 | 1,026 | 2,402 | 2,412 | 2,475 | (1,909 | ) | |||||||||||
| % of Total CRE loans | 0.15 | % | 0.26 | % | 0.62 | % | 0.65 | % | 0.67 | % | -77.1 | % | ||||||
| Residential RE | 2,056 | 1,751 | 2,138 | 2,704 | 2,481 | (425 | ) | |||||||||||
| % of Total Res. RE loans | 0.99 | % | 0.86 | % | 1.21 | % | 1.49 | % | 1.39 | % | -17.1 | % | ||||||
| Consumer & Other | 422 | 463 | 480 | 408 | 313 | 109 | ||||||||||||
| % of Total Con./Oth. loans | 0.76 | % | 0.81 | % | 0.82 | % | 0.67 | % | 0.51 | % | 34.8 | % | ||||||
| Total Nonaccruing Loans | 3,188 | 3,615 | 5,635 | 6,426 | 6,409 | (3,221 | ) | |||||||||||
| % of Total loans | 0.38 | % | 0.43 | % | 0.66 | % | 0.74 | % | 0.72 | % | -50.3 | % | ||||||
| Accruing Restructured Loans | 805 | 758 | 794 | 810 | 789 | 16 | ||||||||||||
| Total Change (%) | 2.0 | % | ||||||||||||||||
| Total Nonaccruing & Restructured Loans | 3,993 | 4,373 | 6,429 | 7,236 | 7,198 | (3,205 | ) | |||||||||||
| % of Total loans | 0.47 | % | 0.51 | % | 0.76 | % | 0.83 | % | 0.81 | % | -44.5 | % | ||||||
| Foreclosed Assets | 1,601 | 1,603 | 43 | 23 | 76 | 1,525 | ||||||||||||
| Total Change (%) | 2006.6 | % | ||||||||||||||||
| Total Nonperforming Assets | $ | 5,594 | $ | 5,976 | $ | 6,472 | $ | 7,259 | $ | 7,274 | $ | (1,680 | ) | |||||
| % of Total assets | 0.42 | % | 0.46 | % | 0.49 | % | 0.58 | % | 0.60 | % | -23.1 | % |
Webcast and Conference Call
The Company will hold a related conference call and webcast on October 29, 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”.
In May 2021, SB Financial was named to the Keefe, Bruyette & Woods, Inc. “Bank Honor Roll” of superior performers as revealed in EPS increases for 10 consecutive years. The honor roll review determined that just 16 banks, including SB Financial, or 4% of the nearly 400 banks screened, qualified for inclusion.
5
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
Mark.Klein@YourStateBank.com
Anthony V. Cosentino
Executive Vice President and
Chief Financial Officer
Tony.Cosentino@YourStateBank.com
6
SBFINANCIAL GROUP, INC.
CONSOLIDATEDBALANCE SHEETS - (Unaudited)
| September | June | March | December | September | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($<br> in thousands) | 2021 | 2021 | 2021 | 2020 | 2020 | ||||||||||
| ASSETS | |||||||||||||||
| Cash and due from banks | $ | 138,015 | $ | 154,993 | $ | 206,036 | $ | 140,690 | $ | 94,641 | |||||
| Interest bearing time deposits | 2,651 | 2,906 | 3,562 | 5,823 | 8,956 | ||||||||||
| Available-for-sale securities | 248,815 | 211,756 | 177,918 | 149,406 | 130,315 | ||||||||||
| Loans held for sale | 10,335 | 8,731 | 8,689 | 7,234 | 13,943 | ||||||||||
| Loans, net of unearned income | 846,548 | 850,513 | 848,176 | 872,723 | 885,850 | ||||||||||
| Allowance for loan losses | (13,812 | ) | (13,306 | ) | (13,326 | ) | (12,574 | ) | (11,793 | ) | |||||
| Premises and equipment, net | 23,874 | 24,343 | 23,233 | 23,557 | 23,785 | ||||||||||
| Federal Reserve and FHLB Stock, at cost | 5,303 | 5,303 | 5,303 | 5,303 | 5,303 | ||||||||||
| Foreclosed assets held for sale, net | 1,601 | 1,603 | 43 | 23 | 76 | ||||||||||
| Interest receivable | 2,954 | 3,000 | 3,371 | 3,799 | 4,159 | ||||||||||
| Goodwill | 22,091 | 22,091 | 22,091 | 22,091 | 22,091 | ||||||||||
| Cash value of life insurance | 17,795 | 17,721 | 17,651 | 17,530 | 17,453 | ||||||||||
| Mortgage servicing rights | 11,194 | 10,678 | 10,490 | 7,759 | 8,535 | ||||||||||
| Other assets | 12,361 | 12,175 | 12,630 | 14,475 | 14,927 | ||||||||||
| Total assets | $ | 1,329,725 | $ | 1,312,507 | $ | 1,325,867 | $ | 1,257,839 | $ | 1,218,241 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||
| Deposits | |||||||||||||||
| Non interest bearing demand | $ | 258,857 | $ | 240,572 | $ | 273,026 | $ | 251,649 | $ | 225,003 | |||||
| Interest bearing demand | 189,130 | 187,023 | 191,593 | 176,785 | 164,248 | ||||||||||
| Savings | 246,414 | 235,231 | 218,260 | 174,864 | 169,474 | ||||||||||
| Money market | 258,741 | 255,512 | 249,088 | 216,164 | 204,862 | ||||||||||
| Time deposits | 158,518 | 172,696 | 188,229 | 229,549 | 250,428 | ||||||||||
| Total deposits | 1,111,660 | 1,091,034 | 1,120,196 | 1,049,011 | 1,014,015 | ||||||||||
| Short-term borrowings | 20,771 | 25,096 | 24,321 | 20,189 | 20,710 | ||||||||||
| Federal Home Loan Bank advances | 5,500 | 5,500 | 8,000 | 8,000 | 8,000 | ||||||||||
| Trust preferred securities | 10,310 | 10,310 | 10,310 | 10,310 | 10,310 | ||||||||||
| Subordinated debt net of issuance costs | 19,534 | 19,522 | - | - | - | ||||||||||
| Interest payable | 576 | 417 | 489 | 616 | 946 | ||||||||||
| Other liabilities | 17,082 | 16,611 | 18,585 | 26,790 | 22,913 | ||||||||||
| Total liabilities | 1,185,433 | 1,168,490 | 1,181,901 | 1,114,916 | 1,076,894 | ||||||||||
| Shareholders’ Equity | |||||||||||||||
| Common stock | 54,463 | 54,463 | 54,463 | 54,463 | 54,463 | ||||||||||
| Additional paid-in capital | 14,875 | 14,906 | 14,755 | 14,845 | 14,782 | ||||||||||
| Retained earnings | 97,183 | 93,851 | 90,883 | 84,578 | 80,012 | ||||||||||
| Accumulated other comprehensive income (loss) | (699 | ) | 499 | (457 | ) | 2,210 | 2,221 | ||||||||
| Treasury stock | (21,530 | ) | (19,702 | ) | (15,678 | ) | (13,173 | ) | (10,131 | ) | |||||
| Total shareholders’ equity | 144,292 | 144,017 | 143,966 | 142,923 | 141,347 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 1,329,725 | $ | 1,312,507 | $ | 1,325,867 | $ | 1,257,839 | $ | 1,218,241 |
7
SBFINANCIAL GROUP, INC.
CONSOLIDATEDSTATEMENTS OF INCOME - (Unaudited)
| ($<br> in thousands, except per share & ratios) | At<br> and for the Three Months Ended | Nine<br> Months Ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September | June | March | December | September | September | September | |||||||||||||
| **** | 2021 | 2021 | 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||
| Interest<br> income | |||||||||||||||||||
| Loans | |||||||||||||||||||
| Taxable | $ | 9,948 | $ | 9,196 | $ | 9,926 | $ | 9,816 | $ | 10,179 | $ | 29,070 | $ | 29,919 | |||||
| Tax<br> exempt | 52 | 47 | 48 | 54 | 47 | 147 | 185 | ||||||||||||
| Securities | |||||||||||||||||||
| Taxable | 939 | 835 | 643 | 632 | 494 | 2,417 | 1,696 | ||||||||||||
| Tax<br> exempt | 94 | 85 | 88 | 87 | 87 | 267 | 246 | ||||||||||||
| Total<br> interest income | 11,033 | 10,163 | 10,705 | 10,589 | 10,807 | 31,901 | 32,046 | ||||||||||||
| Interest<br> expense | |||||||||||||||||||
| Deposits | 709 | 818 | 962 | 1,218 | 1,423 | 2,489 | 4,852 | ||||||||||||
| Repurchase<br> agreements & other | 12 | 12 | 11 | 10 | 12 | 35 | 60 | ||||||||||||
| Federal<br> Home Loan Bank advances | 40 | 51 | 56 | 58 | 59 | 147 | 251 | ||||||||||||
| Trust<br> preferred securities | 49 | 50 | 51 | 52 | 54 | 150 | 204 | ||||||||||||
| Subordinated<br> debt | 199 | 75 | - | - | - | 274 | - | ||||||||||||
| Total<br> interest expense | 1,009 | 1,006 | 1,080 | 1,338 | 1,548 | 3,095 | 5,367 | ||||||||||||
| Net<br> interest income | 10,024 | 9,157 | 9,625 | 9,251 | 9,259 | 28,806 | 26,679 | ||||||||||||
| Provision<br> for loan losses | 300 | - | 750 | 800 | 1,800 | 1,050 | 3,700 | ||||||||||||
| Net<br> interest income after provision for<br> loan losses | 9,724 | 9,157 | 8,875 | 8,451 | 7,459 | 27,756 | 22,979 | ||||||||||||
| Noninterest<br> income | |||||||||||||||||||
| Wealth<br> management fees | 959 | 955 | 912 | 863 | 839 | 2,826 | 2,382 | ||||||||||||
| Customer<br> service fees | 812 | 820 | 758 | 728 | 730 | 2,390 | 2,079 | ||||||||||||
| Gain<br> on sale of mtg. loans & OMSR | 3,947 | 4,255 | 5,859 | 7,197 | 8,085 | 14,061 | 18,153 | ||||||||||||
| Mortgage<br> loan servicing fees, net | 155 | (217 | ) | 2,378 | (1,037 | ) | (169 | ) | 2,316 | (4,101 | ) | ||||||||
| Gain<br> on sale of non-mortgage loans | 52 | 45 | 17 | 123 | 119 | 114 | 330 | ||||||||||||
| Title<br> insurance revenue | 508 | 532 | 521 | 522 | 517 | 1,561 | 1,391 | ||||||||||||
| Gain<br> (loss) on sale of assets | 1 | 2 | (2 | ) | 181 | (52 | ) | 1 | (178 | ) | |||||||||
| Other | 215 | 145 | 479 | 325 | 349 | 839 | 1,138 | ||||||||||||
| Total<br> noninterest income | 6,649 | 6,537 | 10,922 | 8,902 | 10,418 | 24,108 | 21,194 | ||||||||||||
| Noninterest<br> expense | |||||||||||||||||||
| Salaries<br> and employee benefits | 6,689 | 6,881 | 6,620 | 6,556 | 6,995 | 20,190 | 18,841 | ||||||||||||
| Net<br> occupancy expense | 714 | 748 | 740 | 782 | 736 | 2,202 | 2,109 | ||||||||||||
| Equipment<br> expense | 872 | 778 | 732 | 818 | 888 | 2,382 | 2,368 | ||||||||||||
| Data<br> processing fees | 671 | 653 | 534 | 633 | 586 | 1,858 | 2,422 | ||||||||||||
| Professional<br> fees | 817 | 574 | 764 | 631 | 695 | 2,155 | 2,676 | ||||||||||||
| Marketing<br> expense | 201 | 220 | 135 | 172 | 137 | 556 | 486 | ||||||||||||
| Telephone<br> and communication expense | 140 | 139 | 154 | 156 | 142 | 433 | 379 | ||||||||||||
| Postage<br> and delivery expense | 100 | 97 | 111 | 108 | 96 | 308 | 307 | ||||||||||||
| State,<br> local and other taxes | 286 | 278 | 323 | 299 | 331 | 887 | 847 | ||||||||||||
| Employee<br> expense | 186 | 161 | 153 | 103 | 155 | 500 | 432 | ||||||||||||
| Other<br> expenses | 580 | 547 | 643 | 426 | 574 | 1,770 | 1,536 | ||||||||||||
| Total<br> noninterest expense | 11,256 | 11,076 | 10,909 | 10,684 | 11,335 | 33,241 | 32,403 | ||||||||||||
| Income<br> before income tax expense | 5,117 | 4,618 | 8,888 | 6,669 | 6,542 | 18,623 | 11,770 | ||||||||||||
| Income<br> tax expense | 1,014 | 857 | 1,807 | 1,311 | 1,292 | 3,678 | 2,184 | ||||||||||||
| Net<br> income | $ | 4,103 | $ | 3,761 | $ | 7,081 | $ | 5,358 | $ | 5,250 | $ | 14,945 | $ | 9,586 | |||||
| Common<br> share data: | |||||||||||||||||||
| Basic<br> earnings per common share | $ | 0.59 | $ | 0.53 | $ | 0.97 | $ | 0.71 | $ | 0.69 | $ | 2.09 | $ | 1.25 | |||||
| Diluted<br> earnings per common share | $ | 0.58 | $ | 0.52 | $ | 0.97 | $ | 0.71 | $ | 0.69 | $ | 2.08 | $ | 1.25 | |||||
| Average<br> shares outstanding (in thousands): | |||||||||||||||||||
| Basic: | 6,966 | 7,148 | 7,317 | 7,487 | 7,607 | 7,142 | 7,700 | ||||||||||||
| Diluted: | 7,017 | 7,200 | 7,335 | 7,487 | 7,607 | 7,167 | 7,700 |
8
SBFINANCIAL GROUP, INC.
CONSOLIDATEDFINANCIAL HIGHLIGHTS - (Unaudited)
| ($<br> in thousands, except per share & ratios) | At<br> and for the Three Months Ended | Nine<br> Months Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September | June | March | December | September | September | September | |||||||||||||||
| SUMMARY<br> OF OPERATIONS | 2021 | 2021 | 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||||
| Net<br> interest income | $ | 10,024 | $ | 9,157 | $ | 9,625 | $ | 9,251 | $ | 9,259 | $ | 28,806 | $ | 26,679 | |||||||
| Tax-equivalent<br> adjustment | 39 | 35 | 36 | 37 | 36 | 110 | 115 | ||||||||||||||
| Tax-equivalent<br> net interest income | 10,063 | 9,192 | 9,661 | 9,288 | 9,295 | 28,916 | 26,794 | ||||||||||||||
| Provision<br> for loan loss | 300 | - | 750 | 800 | 1,800 | 1,050 | 3,700 | ||||||||||||||
| Noninterest<br> income | 6,649 | 6,537 | 10,922 | 8,902 | 10,418 | 24,108 | 21,194 | ||||||||||||||
| Total<br> operating revenue | 16,673 | 15,694 | 20,547 | 18,153 | 19,677 | 52,914 | 47,873 | ||||||||||||||
| Noninterest<br> expense | 11,256 | 11,076 | 10,909 | 10,684 | 11,335 | 33,241 | 32,403 | ||||||||||||||
| Pre-tax<br> pre-provision income | 5,417 | 4,618 | 9,638 | 7,469 | 8,342 | 19,673 | 15,470 | ||||||||||||||
| Pretax<br> income | 5,117 | 4,618 | 8,888 | 6,669 | 6,542 | 18,623 | 11,770 | ||||||||||||||
| Net<br> income | 4,103 | 3,761 | 7,081 | 5,358 | 5,250 | 14,945 | 9,586 | ||||||||||||||
| PER<br> SHARE INFORMATION: | |||||||||||||||||||||
| Basic<br> earnings per share (EPS) | 0.59 | 0.53 | 0.97 | 0.71 | 0.69 | 2.09 | 1.25 | ||||||||||||||
| Diluted<br> earnings per share | 0.58 | 0.52 | 0.97 | 0.71 | 0.69 | 2.08 | 1.25 | ||||||||||||||
| Common<br> dividends | 0.110 | 0.110 | 0.105 | 0.105 | 0.100 | 0.325 | 0.295 | ||||||||||||||
| Book<br> value per common share | 20.83 | 20.50 | 19.88 | 19.39 | 18.73 | 20.83 | 18.73 | ||||||||||||||
| Tangible<br> book value per common share (TBV) | 17.55 | 17.27 | 16.74 | 16.30 | 15.72 | 17.55 | 15.72 | ||||||||||||||
| Market<br> price per common share | 18.18 | 18.50 | 18.26 | 18.28 | 13.49 | 18.18 | 13.49 | ||||||||||||||
| Market<br> price to TBV | 103.6 | % | 107.2 | % | 109.1 | % | 112.1 | % | 85.8 | % | 103.6 | % | 85.8 | % | |||||||
| Market<br> price to trailing 12 month EPS | 6.5 | 6.4 | 6.4 | 9.3 | 8.0 | 6.5 | 8.0 | ||||||||||||||
| PERFORMANCE<br> RATIOS: | |||||||||||||||||||||
| Return<br> on average assets (ROAA) | 1.23 | % | 1.13 | % | 2.21 | % | 1.73 | % | 1.73 | % | 1.51 | % | 1.12 | % | |||||||
| Pre-tax<br> pre-provision ROAA | 1.63 | % | 1.39 | % | 3.01 | % | 2.41 | % | 2.74 | % | 2.12 | % | 1.81 | % | |||||||
| Return<br> on average equity | 11.35 | % | 10.42 | % | 19.78 | % | 15.05 | % | 15.01 | % | 13.84 | % | 9.74 | % | |||||||
| Return<br> on average tangible equity | 13.47 | % | 12.37 | % | 23.52 | % | 17.91 | % | 17.93 | % | 16.43 | % | 11.48 | % | |||||||
| Efficiency<br> ratio | 67.40 | % | 70.46 | % | 53.01 | % | 58.76 | % | 57.48 | % | 62.72 | % | 67.63 | % | |||||||
| Earning<br> asset yield | 3.52 | % | 3.25 | % | 3.56 | % | 3.66 | % | 3.96 | % | 3.44 | % | 4.08 | % | |||||||
| Cost<br> of interest bearing liabilities | 0.44 | % | 0.44 | % | 0.50 | % | 0.64 | % | 0.75 | % | 0.46 | % | 0.91 | % | |||||||
| Net<br> interest margin | 3.20 | % | 2.93 | % | 3.20 | % | 3.20 | % | 3.39 | % | 3.11 | % | 3.39 | % | |||||||
| Tax<br> equivalent effect | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.02 | % | 0.01 | % | 0.02 | % | |||||||
| Net<br> interest margin, tax equivalent | 3.21 | % | 2.94 | % | 3.21 | % | 3.21 | % | 3.41 | % | 3.12 | % | 3.41 | % | |||||||
| Non<br> interest income/Average assets | 1.99 | % | 1.97 | % | 3.41 | % | 2.87 | % | 3.42 | % | 2.44 | % | 2.48 | % | |||||||
| Non<br> interest expense/Average assets | 3.38 | % | 3.33 | % | 3.40 | % | 3.45 | % | 3.73 | % | 3.37 | % | 3.79 | % | |||||||
| Net<br> noninterest expense/Average assets | -1.38 | % | -1.37 | % | 0.00 | % | -0.58 | % | -0.31 | % | -0.93 | % | -1.31 | % | |||||||
| ASSET<br> QUALITY RATIOS: | |||||||||||||||||||||
| Gross<br> charge-offs | 24 | 26 | 52 | 57 | 32 | 102 | 686 | ||||||||||||||
| Recoveries | 230 | 6 | 54 | 39 | 11 | 290 | 24 | ||||||||||||||
| Net<br> charge-offs | (206 | ) | 20 | (2 | ) | 18 | 21 | (188 | ) | 662 | |||||||||||
| Nonaccruing<br> loans/Total loans | 0.38 | % | 0.43 | % | 0.66 | % | 0.74 | % | 0.72 | % | 0.38 | % | 0.72 | % | |||||||
| Nonperforming<br> loans/Total loans | 0.47 | % | 0.51 | % | 0.76 | % | 0.83 | % | 0.81 | % | 0.47 | % | 0.81 | % | |||||||
| Nonperforming<br> assets/Loans & OREO | 0.66 | % | 0.70 | % | 0.76 | % | 0.83 | % | 0.82 | % | 0.66 | % | 0.82 | % | |||||||
| Nonperforming<br> assets/Total assets | 0.42 | % | 0.46 | % | 0.49 | % | 0.58 | % | 0.60 | % | 0.42 | % | 0.60 | % | |||||||
| Allowance<br> for loan loss/Nonperforming loans | 345.91 | % | 304.28 | % | 207.28 | % | 173.77 | % | 163.84 | % | 345.91 | % | 163.84 | % | |||||||
| Allowance<br> for loan loss/Total loans | 1.63 | % | 1.56 | % | 1.57 | % | 1.44 | % | 1.33 | % | 1.63 | % | 1.33 | % | |||||||
| Net<br> loan charge-offs/Average loans (ann.) | (0.10 | %) | 0.01 | % | (0.00 | %) | 0.01 | % | 0.01 | % | (0.03 | %) | 0.10 | % | |||||||
| Loan<br> loss provision/Net charge-offs | (145.63 | %) | 0.00 | % | (37500.00 | %) | 4444.44 | % | 8571.43 | % | (558.51 | %) | 558.91 | % | |||||||
| CAPITAL<br> & LIQUIDITY RATIOS: | |||||||||||||||||||||
| Loans/<br> Deposits | 76.15 | % | 77.95 | % | 75.72 | % | 83.19 | % | 87.36 | % | 76.15 | % | 87.36 | % | |||||||
| Equity/<br> Assets | 10.85 | % | 10.97 | % | 10.86 | % | 11.36 | % | 11.60 | % | 10.85 | % | 11.60 | % | |||||||
| Tangible<br> equity/Tangible assets | 9.30 | % | 9.41 | % | 9.30 | % | 9.73 | % | 9.92 | % | 9.30 | % | 9.92 | % | |||||||
| Common<br> equity tier 1 ratio (Bank) | 13.23 | % | 13.11 | % | 13.08 | % | 12.91 | % | 12.71 | % | 13.23 | % | 12.71 | % | |||||||
| END<br> OF PERIOD BALANCES | |||||||||||||||||||||
| Total<br> assets | 1,329,725 | 1,312,507 | 1,325,867 | 1,257,839 | 1,218,241 | 1,329,725 | 1,218,241 | ||||||||||||||
| Total<br> loans | 846,548 | 850,513 | 848,176 | 872,723 | 885,850 | 846,548 | 885,850 | ||||||||||||||
| Deposits | 1,111,660 | 1,091,034 | 1,120,196 | 1,049,011 | 1,014,015 | 1,111,660 | 1,014,015 | ||||||||||||||
| Stockholders<br> equity | 144,292 | 144,017 | 143,966 | 142,923 | 141,347 | 144,292 | 141,347 | ||||||||||||||
| Goodwill<br> and intangibles | 22,692 | 22,710 | 22,728 | 22,745 | 22,813 | 22,692 | 22,813 | ||||||||||||||
| Tangible<br> equity | 121,600 | 121,307 | 121,238 | 120,178 | 118,534 | 121,600 | 118,534 | ||||||||||||||
| Mortgage<br> servicing portfolio | 1,341,439 | 1,323,804 | 1,304,097 | 1,299,698 | 1,293,037 | 1,341,439 | 1,293,037 | ||||||||||||||
| Wealth/Brokerage<br> assets under care | 588,319 | 600,904 | 576,503 | 558,409 | 522,360 | 588,319 | 522,360 | ||||||||||||||
| Total<br> assets under care | 3,259,483 | 3,237,215 | 3,206,467 | 3,115,946 | 3,033,638 | 3,259,483 | 3,033,638 | ||||||||||||||
| Full-time<br> equivalent employees | 264 | 256 | 246 | 244 | 251 | 264 | 251 | ||||||||||||||
| Period<br> end common shares outstanding | 6,927 | 7,026 | 7,242 | 7,372 | 7,545 | 6,927 | 7,545 | ||||||||||||||
| Market<br> capitalization (all) | 125,935 | 129,984 | 132,239 | 134,760 | 101,782 | 125,935 | 101,782 | ||||||||||||||
| AVERAGE<br> BALANCES | |||||||||||||||||||||
| Total<br> assets | 1,333,369 | 1,329,348 | 1,281,635 | 1,238,790 | 1,216,843 | 1,315,521 | 1,141,008 | ||||||||||||||
| Total<br> earning assets | 1,253,722 | 1,251,213 | 1,203,284 | 1,156,718 | 1,090,386 | 1,236,227 | 1,047,846 | ||||||||||||||
| Total<br> loans | 856,486 | 853,794 | 862,898 | 893,244 | 907,483 | 857,703 | 879,536 | ||||||||||||||
| Deposits | 1,109,491 | 1,115,186 | 1,073,641 | 1,031,649 | 1,007,679 | 1,099,892 | 936,805 | ||||||||||||||
| Stockholders<br> equity | 144,565 | 144,315 | 143,167 | 142,418 | 139,908 | 144,020 | 131,156 | ||||||||||||||
| Goodwill<br> and intangibles | 22,701 | 22,718 | 22,736 | 22,754 | 22,787 | 22,718 | 19,813 | ||||||||||||||
| Tangible<br> equity | 121,864 | 121,597 | 120,431 | 119,664 | 117,121 | 121,302 | 111,343 | ||||||||||||||
| Average<br> basic shares outstanding | 6,966 | 7,148 | 7,317 | 7,487 | 7,607 | 7,142 | 7,700 | ||||||||||||||
| Average<br> diluted shares outstanding | 7,017 | 7,200 | 7,335 | 7,487 | 7,607 | 7,167 | 7,700 |
9
SBFINANCIAL GROUP, INC.
RateVolume Analysis - (Unaudited)
Atand for the Three and Nine Months Ended September 30, 2021 and 2020
| ($<br> in thousands) | Three<br> Months Ended Sep. 30, 2021 | Three<br> Months Ended Sep. 30, 2020 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average | Average | Average | Average | |||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||
| Assets | ||||||||||||||||
| Taxable<br> securities/cash | $ | 388,800 | $ | 939 | 0.97 | % | $ | 176,821 | $ | 494 | 1.12 | % | ||||
| Nontaxable<br> securities | 8,436 | 94 | 4.46 | % | 6,082 | 87 | 5.72 | % | ||||||||
| Loans,<br> net | 856,486 | 10,000 | 4.67 | % | 907,483 | 10,226 | 4.51 | % | ||||||||
| Total<br> earning assets | 1,253,722 | 11,033 | 3.52 | % | 1,090,386 | 10,807 | 3.96 | % | ||||||||
| Cash<br> and due from banks | 6,975 | 53,532 | ||||||||||||||
| Allowance<br> for loan losses | (13,475 | ) | (10,448 | ) | ||||||||||||
| Premises<br> and equipment | 25,820 | 23,968 | ||||||||||||||
| Other<br> assets | 60,327 | 59,405 | ||||||||||||||
| Total<br> assets | $ | 1,333,369 | $ | 1,216,843 | ||||||||||||
| Liabilities | ||||||||||||||||
| Savings,<br> MMDA and interest bearing demand | $ | 695,801 | $ | 441 | 0.25 | % | $ | 531,913 | $ | 690 | 0.52 | % | ||||
| Time<br> deposits | 164,432 | 268 | 0.65 | % | 254,381 | 733 | 1.15 | % | ||||||||
| Repurchase<br> agreements & other | 24,672 | 12 | 0.19 | % | 23,811 | 12 | 0.20 | % | ||||||||
| Advances<br> from Federal Home Loan Bank | 5,500 | 40 | 2.91 | % | 8,272 | 59 | 2.85 | % | ||||||||
| Trust<br> preferred securities | 10,310 | 49 | 1.90 | % | 10,310 | 54 | 2.10 | % | ||||||||
| Subordinated<br> debt | 19,528 | 199 | 4.08 | % | - | - | 0.00 | % | ||||||||
| Total<br> interest bearing liabilities | 920,243 | 1,009 | 0.44 | % | 828,687 | 1,548 | 0.75 | % | ||||||||
| Non<br> interest bearing demand | 249,258 | - | 221,385 | - | ||||||||||||
| Total<br> funding | 1,169,501 | 0.35 | % | 1,050,072 | 0.59 | % | ||||||||||
| Other<br> liabilities | 19,303 | 26,863 | ||||||||||||||
| Total<br> liabilities | 1,188,804 | 1,076,935 | ||||||||||||||
| Equity | 144,565 | 139,908 | ||||||||||||||
| Total<br> liabilities and equity | $ | 1,333,369 | $ | 1,216,843 | ||||||||||||
| Net<br> interest income | $ | 10,024 | $ | 9,259 | ||||||||||||
| Net<br> interest income as a percent of average interest-earning assets - GAAP measure | 3.20 | % | 3.40 | % | ||||||||||||
| Net<br> interest income as a percent of average interest-earning assets - non GAAP <br><br>-<br> Computed on a fully tax equivalent (FTE) basis | 3.21 | % | 3.41 | % |
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| Nine<br> Months Ended Sep. 30, 2021 | Nine<br> Months Ended Sep. 30, 2020 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average | Average | Average | Average | |||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||
| Assets | ||||||||||||||||
| Taxable<br> securities/cash | $ | 370,743 | $ | 2,417 | 0.87 | % | $ | 161,947 | $ | 1,696 | 1.40 | % | ||||
| Nontaxable<br> securities | 7,781 | 267 | 4.58 | % | 6,363 | 246 | 5.15 | % | ||||||||
| Loans,<br> net | 857,703 | 29,217 | 4.54 | % | 879,536 | 30,104 | 4.56 | % | ||||||||
| Total<br> earning assets | 1,236,227 | 31,901 | 3.44 | % | 1,047,846 | 32,046 | 4.08 | % | ||||||||
| Cash<br> and due from banks | 7,554 | 28,040 | ||||||||||||||
| Allowance<br> for loan losses | (13,297 | ) | (9,560 | ) | ||||||||||||
| Premises<br> and equipment | 24,442 | 23,855 | ||||||||||||||
| Other<br> assets | 60,595 | 50,827 | ||||||||||||||
| Total<br> assets | $ | 1,315,521 | $ | 1,141,008 | ||||||||||||
| Liabilities | ||||||||||||||||
| Savings,<br> MMDA and interest bearing demand | $ | 661,433 | $ | 1,413 | 0.28 | % | $ | 483,156 | $ | 2,550 | 0.70 | % | ||||
| Time<br> deposits | 184,668 | 1,076 | 0.78 | % | 253,398 | 2,302 | 1.21 | % | ||||||||
| Repurchase<br> agreements & Other | 24,139 | 35 | 0.19 | % | 21,856 | 60 | 0.37 | % | ||||||||
| Advances<br> from Federal Home Loan Bank | 6,846 | 147 | 2.86 | % | 16,263 | 251 | 2.06 | % | ||||||||
| Trust<br> preferred securities | 10,310 | 150 | 1.94 | % | 10,310 | 204 | 2.64 | % | ||||||||
| Subordinated<br> debt | 9,811 | 274 | 3.72 | % | - | - | 0.00 | % | ||||||||
| Total<br> interest bearing liabilities | 897,207 | 3,095 | 0.46 | % | 784,983 | 5,367 | 0.91 | % | ||||||||
| Non<br> interest bearing demand | 253,791 | 0.36 | % | 200,251 | 0.73 | % | ||||||||||
| Total<br> funding | 1,150,998 | 985,234 | ||||||||||||||
| Other<br> liabilities | 20,503 | 24,618 | ||||||||||||||
| Total<br> liabilities | 1,171,501 | 1,009,852 | ||||||||||||||
| Equity | 144,020 | 131,156 | ||||||||||||||
| Total<br> liabilities and equity | $ | 1,315,521 | $ | 1,141,008 | ||||||||||||
| Net<br> interest income | $ | 28,806 | $ | 26,679 | ||||||||||||
| Net<br> interest income as a percent of average interest-earning assets - GAAP measure | 3.11 | % | 3.39 | % | ||||||||||||
| Net<br> interest income as a percent of average interest-earning assets - non GAAP<br><br> -<br> Computed on a fully tax equivalent (FTE) basis | 3.12 | % | 3.41 | % |
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| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Non-GAAP reconciliation<br><br>($ in thousands, except per share & ratios) | Sep. 30,<br><br> 2021 | Sep. 30,<br><br> 2020 | Sep. 30,<br><br> 2021 | Sep. 30,<br><br> 2020 | ||||||||
| Total Operating Revenue | $ | 16,673 | $ | 19,677 | $ | 52,914 | $ | 47,873 | ||||
| Adjustment to (deduct)/add OMSR recapture/impairment* | (248 | ) | (326 | ) | (2,854 | ) | 2,974 | |||||
| Adjusted Total Operating Revenue | 16,425 | 19,351 | 50,060 | 50,847 | ||||||||
| Total Operating Expense | $ | 11,256 | $ | 11,335 | $ | 33,241 | $ | 32,403 | ||||
| Adjustment for merger expenses** | - | - | - | (1,241 | ) | |||||||
| Adjusted Total Operating Expense | 11,256 | 11,335 | 33,241 | 31,162 | ||||||||
| Income before Income Taxes | 5,117 | 6,542 | 18,623 | 11,770 | ||||||||
| Adjustment for OMSR & merger expenses | (248 | ) | (326 | ) | (2,854 | ) | 4,215 | |||||
| Adjusted Income before Income Taxes | 4,869 | 6,216 | 15,769 | 15,985 | ||||||||
| Provision for Income Taxes | 1,014 | 1,292 | 3,678 | 2,184 | ||||||||
| Adjustment for OMSR & merger expenses*** | (52 | ) | (68 | ) | (599 | ) | 885 | |||||
| Adjusted Provision for Income Taxes | 962 | 1,224 | 3,079 | 3,070 | ||||||||
| Net Income | 4,103 | 5,250 | 14,945 | 9,586 | ||||||||
| Adjustment for OMSR & merger expenses | (196 | ) | (258 | ) | (2,255 | ) | 3,330 | |||||
| Adjusted Net Income | 3,907 | 4,992 | 12,690 | 12,917 | ||||||||
| Diluted Earnings per Share | 0.58 | 0.69 | 2.08 | 1.25 | ||||||||
| Adjustment for OMSR & merger expenses | (0.03 | ) | (0.04 | ) | (0.31 | ) | 0.42 | |||||
| Adjusted Diluted Earnings per Share | $ | 0.56 | $ | 0.65 | $ | 1.77 | $ | 1.67 | ||||
| Return on Average Assets | 1.23 | % | 1.73 | % | 1.51 | % | 1.12 | % | ||||
| Adjustment for OMSR & merger expenses | -0.06 | % | -0.08 | % | -0.17 | % | 0.29 | % | ||||
| Adjusted Return on Average Assets | 1.17 | % | 1.64 | % | 1.34 | % | 1.41 | % | ||||
| * | valuation<br>adjustment to the Company’s mortgage servicing rights | |||||||||||
| --- | --- | |||||||||||
| ** | transaction<br>costs related to the Edon acquisition | |||||||||||
| --- | --- | |||||||||||
| *** | tax<br>effect is calculated using a 21% statutory federal corporate income tax rate | |||||||||||
| --- | --- |
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