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) November 2, 2022 (November 1, 2022)
SB
FINANCIAL GROUP, INC
(Exact name of registrant as specified in its charter)
| Ohio | 0-13507 | 34-1395608 |
|---|---|---|
| (State<br> or other jurisdiction<br><br> of incorporation) | (Commission<br> File Number) | (IRS<br> Employer<br><br> <br>Identification<br> No.) |
| 401<br> Clinton Street, Defiance, OH | 43512 | |
| --- | --- | |
| (Address<br> of principal executive offices) | (Zip<br> 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<br> of each class | Trading<br> symbol(s) | Name<br> of each exchange on which registererd |
|---|---|---|
| Common<br>Shares, No Par Value 7,001,339 Outstanding at November 2, 2022 | SBFG | The<br> NASDAQ Stock Market, LLC<br><br> <br>(NASDAQ<br> 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 November 1, 2022, SB Financial Group, Inc. (the “Company”) issued a news release reporting financial results for the third quarter 2022. A copy of the November 1, 2022 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<br> No. | Description |
|---|---|
| 99.1 | News release issued by SB Financial Group, Inc. on November 1, 2022, reporting financial results for the third quarter 2022. |
| 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: November 2, 2022 | By: | /s/ Anthony V. Cosentino |
| Anthony V. Cosentino | ||
| Chief Financial Officer |
-2-
INDEX
TO EXHIBITS
Current
Report on Form 8-K
Dated
November 2, 2022
SB
Financial Group, Inc.
| Exhibit<br> No. | Description |
|---|---|
| 99.1 | News release issued by SB Financial Group, Inc. on November 1, 2022, reporting financial results for the third quarter 2022. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
-3-
Exhibit 99.1
SB Financial Group Announces Third Quarter2022 Results
DEFIANCE, OH, November 1, 2022 -- 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, 2022.
Third quarter 2022 highlights:
| ● | Net<br>income of $3.3 million; diluted earnings per share (“EPS”) of $0.47 or a 19.0 percent decrease compared to the prior year<br>third quarter as increased Net Interest Income was offset by Noninterest Income headwinds |
|---|---|
| ● | Noninterest<br>expense of $10.4 million declined 3.9 percent from the linked quarter |
| --- | --- |
| ● | Loan growth of $29.6 million from the linked quarter, or 13.2 percent annualized |
| --- | --- |
| ● | Deposit growth of $14.1 million from the linked quarter, or 5.3 percent annualized |
| --- | --- |
| ● | Margin expansion of 8.7 percent from the linked quarter |
| --- | --- |
| ● | Strong asset quality with Nonperforming assets at 40 basis points and net<br>recoveries in the quarter |
| --- | --- |
Nine months ended September 30, 2022, highlights over prior-year nine months include:
| ● | Net<br>income of $9.0 million and diluted EPS of $1.27, compared to $14.9 million, or $2.08 per share or a 38.9 percent decrease |
|---|
Third quarter 2022 trailing twelve-month highlights include:
| ● | Loans<br>excluding Paycheck Protection Program (“PPP”) loans, increased $81.5 million, or 9.6 percent from the prior year | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ● | Deposits<br>decreased by $25.8 million, or 2.3 percent to $1.09 billion | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ● | Mortgage<br>origination volume of $388.0 million; servicing portfolio of $1.36 billion up 1.6 percent | |||||||||||||||||
| --- | --- | |||||||||||||||||
| Highlights | Three Months Ended | Nine Months Ended | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| ($ in thousands,except per share & ratios) | Sep. 2022 | Sep. 2021 | % Change | Sep. 2022 | Sep. 2021 | % Change | ||||||||||||
| Operating revenue | $ | 14,473 | $ | 16,673 | -13.2 | % | $ | 43,017 | $ | 52,914 | -18.7 | % | ||||||
| Interest income | 11,764 | 11,033 | 6.6 | % | 31,632 | 31,901 | -0.8 | % | ||||||||||
| Interest expense | 1,334 | 1,009 | 32.2 | % | 3,133 | 3,095 | 1.2 | % | ||||||||||
| Net interest income | 10,430 | 10,024 | 4.1 | % | 28,499 | 28,806 | -1.1 | % | ||||||||||
| Provision for loan losses | - | 300 | 0.0 | % | - | 1,050 | -100.0 | % | ||||||||||
| Noninterest income | 4,043 | 6,649 | -39.2 | % | 14,518 | 24,108 | -39.8 | % | ||||||||||
| Noninterest expense | 10,384 | 11,256 | -7.7 | % | 32,046 | 33,241 | -3.6 | % | ||||||||||
| Net income | 3,342 | 4,103 | -18.5 | % | 8,988 | 14,945 | -39.9 | % | ||||||||||
| Earnings per diluted share | 0.47 | 0.58 | -19.0 | % | 1.27 | 2.08 | -38.9 | % | ||||||||||
| Return on average assets | 1.03 | % | 1.23 | % | -16.3 | % | 0.91 | % | 1.51 | % | -39.7 | % | ||||||
| Return on average equity | 10.89 | % | 11.35 | % | -4.1 | % | 9.21 | % | 13.84 | % | -33.5 | % | ||||||
| Non-GAAP Measures | ||||||||||||||||||
| Adjusted net income | $ | 3,291 | $ | 3,565 | -7.7 | % | $ | 8,046 | $ | 12,690 | -36.6 | % | ||||||
| Adjusted diluted EPS | 0.47 | 0.56 | -16.1 | % | 1.13 | 1.77 | -36.2 | % | ||||||||||
| Adjusted return on average assets | 1.01 | % | 1.17 | % | -13.7 | % | 0.84 | % | 1.34 | % | -37.3 | % | ||||||
| Adjusted pre-tax, pre-provision income | 4,023 | 4,869 | -17.4 | % | 9,778 | 15,769 | -38.0 | % |
“In the third quarter of 2022 we achieved another strong loan origination performance as loans grew $30 million, or 3.3 percent from the second quarter of 2022, or 13.2 percent annualized” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “Compared to prior year, net of PPP, organic loan growth was up $81.5 million or 9.6 percent. Strong loan growth and the increase in loan yields led to net interest margin expansion which partially offset the decline in mortgage revenue. Deposit balances stabilized during the quarter, however as short-term rates continue to rapidly increase our funding costs are beginning to rise.”
2
RESULTS OF OPERATIONS
Consolidated Revenue
Total operating revenue, consisting of net interest income and noninterest income, up 1.5% from the linked quarter and down 13.2 percent from the third quarter of 2021. Operating revenue was negatively impacted by the expected decline in mortgage banking revenue.
| ● | Net<br>interest income was up 8.7 percent from the linked quarter and up 4.1 percent from the year ago quarter. |
|---|---|
| ● | Net<br>interest margin on a fully taxable equivalent basis (FTE) was up from both the linked and year-ago quarters by 30 and 25 basis points,<br>respectively, primarily from the increase in loan balances of $29.6 million from the linked quarter. Net of PPP, net interest margin<br>is higher by 55 basis points compared to the prior year. |
| --- | --- |
| ● | Noninterest<br>income was down 13 and 39 percent from the linked and year ago quarters, respectively, due to lower mortgage volume and OMSR recapture. |
| --- | --- |
Mortgage Loan Business
Mortgage loan originations for the third quarter of 2022 were $68.6 million, down $84.1 million, or 55.1 percent, from the year-ago quarter; likewise, total sales of originated loans were $39.2 million, down $83.9 million, or 68.2 percent. For the first nine months of 2022, SB Financial had total volume of $261.4 million, of which $202.5 million (77.5 percent) was new purchase/construction lending, $39.0 million was external refinance (14.9 percent), and the remaining $19.9 million (7.6 percent) was internal refinance.
Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.4 million for the third quarter of 2022, compared to $4.1 million for the year-ago quarter. The mortgage servicing valuation adjustment for the third quarter of 2022 was a positive $0.1 million, compared to a positive adjustment of $0.2 million for the third quarter of 2021. For the first nine months of 2022, the recapture of servicing rights was $1.2 million compared to a recapture of $2.9 million for the prior year nine months. The aggregate servicing valuation impairment ended the quarter at $0.3 million. The servicing portfolio at September 30, 2022, was $1.36 billion, up $0.02 billion, or 1.6 percent, from $1.34 billion at September 30, 2021.
3
Mr. Klein noted, “Refinance activity declined to just 10.9 percent of mortgage originations in the quarter from 52.0 percent in the prior year as higher rates continue to significantly impact our Residential mortgage business line. We continue to believe that this business segment offers us the opportunity to drive new households as a number of our competitors have begun to abandon the residential market.”
| Mortgage Banking | Annual | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | Sep. 2022 | Jun. 2022 | Mar. 2022 | Dec. 2021 | Sep. 2021 | Growth | ||||||||||||
| Mortgage originations | $ | 68,557 | $ | 95,454 | $ | 97,394 | $ | 126,611 | $ | 152,623 | $ | (84,066 | ) | |||||
| Mortgage sales | 39,176 | 49,915 | 72,154 | 110,543 | 123,083 | (83,907 | ) | |||||||||||
| Mortgage servicing portfolio | 1,362,666 | 1,369,732 | 1,375,554 | 1,362,962 | 1,341,439 | 21,227 | ||||||||||||
| Mortgage servicing rights | 13,473 | 13,408 | 13,135 | 12,034 | 11,194 | 2,279 | ||||||||||||
| Mortgage servicing revenue | ||||||||||||||||||
| Loan servicing fees | 858 | 863 | 861 | 850 | 850 | 8 | ||||||||||||
| OMSR amortization | (396 | ) | (496 | ) | (547 | ) | (807 | ) | (943 | ) | 547 | |||||||
| Net administrative fees | 462 | 367 | 314 | 43 | (93 | ) | 555 | |||||||||||
| OMSR valuation adjustment | 65 | 239 | 890 | 581 | 248 | (183 | ) | |||||||||||
| Net loan servicing fees | 527 | 606 | 1,204 | 624 | 155 | 372 | ||||||||||||
| Gain on sale of mortgages | 876 | 1,196 | 1,676 | 3,194 | 3,947 | (3,071 | ) | |||||||||||
| Mortgage banking revenue, net | $ | 1,403 | $ | 1,802 | $ | 2,880 | $ | 3,818 | $ | 4,102 | $ | (2,699 | ) |
Noninterest Income and Noninterest Expense
SB Financial’s noninterest income for the quarter was down from the prior year and the linked quarter by 39 and 13 percent, respectively. Gain on sale yields on mortgage loans were down nearly 100 basis points from the prior year and the total dollars of sales were down nearly $84 million. Wealth management revenue was down slightly from the prior year as market declines have had an adverse effect on the market value of assets under management. SB Financial’s title agency, Peak Title, was down just 6 percent from the prior year, as commercial transaction volume increased despite the residential mortgage slowdown.
For the third quarter of 2022, noninterest expense of $10.4 million was down $0.9 million or 7.7 percent compared to the prior year.
Reduced expenses due to lower mortgage volume, has offset higher equipment expense related to technology improvements.
4
Mr. Klein stated, “We executed on a number of FTE reductions in our residential mortgage business line in the third quarter as we thoughtfully right sized resources to combat lower volume. We continue to believe that fee income across all of our other business lines remains strong and has reduced our reliance on mortgage sale gains.”
| Noninterest Income / Noninterest Expense | Annual | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except ratios) | Sep. 2022 | Jun. 2022 | Mar. 2022 | Dec. 2021 | Sep. 2021 | Growth | ||||||||||||
| Noninterest Income (NII) | $ | 4,043 | $ | 4,673 | $ | 5,802 | $ | 6,589 | $ | 6,649 | $ | (2,606 | ) | |||||
| NII / Total Revenue | 27.9 | % | 32.8 | % | 40.6 | % | 42.1 | % | 39.9 | % | -12.0 | % | ||||||
| NII / Average Assets | 1.2 | % | 1.4 | % | 1.7 | % | 2.0 | % | 2.0 | % | -0.8 | % | ||||||
| Total Revenue Growth | -13.2 | % | -9.1 | % | -46.9 | % | -13.7 | % | -15.3 | % | 2.1 | % | ||||||
| Noninterest Expense (NIE) | $ | 10,384 | $ | 10,802 | $ | 10,859 | $ | 11,567 | $ | 11,256 | $ | (872 | ) | |||||
| Efficiency Ratio | 71.6 | % | 75.6 | % | 75.9 | % | 73.7 | % | 67.4 | % | 4.2 | % | ||||||
| NIE / Average Assets | 3.2 | % | 3.3 | % | 3.2 | % | 3.5 | % | 3.4 | % | -0.2 | % | ||||||
| Net Noninterest Expense/Avg. Assets | -2.0 | % | -1.9 | % | -1.5 | % | -1.5 | % | -1.4 | % | -0.6 | % | ||||||
| Total Expense Growth | -7.7 | % | -2.5 | % | -0.5 | % | 8.3 | % | -0.7 | % | -7.0 | % |
Balance Sheet
Total assets as of September 30, 2022, were $1.3 billion, or down 2.0 percent from the year ago quarter primarily due to the decrease in the investment portfolio. Total shareholders’ equity as of September 30, 2022, was $114.6 million, down 20.6 percent from a year ago due to the valuation adjustment on the Company’s bond portfolio, which has increased $32.7 million. Absent that negative impact, equity increased $3.1 million or 2.1 percent. SB Financial bought back 77,326 shares of our stock in the quarter at an average price of $17.27 or 132.1 percent of tangible book value per share.
The investment portfolio of $248.5 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 19.1 percent of assets at September 30, 2022, and was down 2.2 percent from the year-ago period. Compared to the linked quarter, the investment portfolio was down $23.0 million as the amortization cash flow was used to fund higher margin loan growth.
Total loans held for investment were $925.2 million at September 30, 2022, up $78.7 million, or 9.3 percent, from September 30, 2021. Excluding PPP activity from both years, loan balances were up $81.5 million, or 9.6 percent.
Deposit balances of $1.09 billion at September 30, 2022, decreased by $0.03 billion, or 2.3 percent, since September 30, 2021. Deposits grew $14.1 million from the linked quarter.
5
Mr. Klein continued, “The loan growth from closing deals from our strong pipelines improved the mix of our balance sheet as we also reduced the investment portfolio and funded additional growth with higher cost deposits. Our ability to grow interest bearing liabilities in the quarter was a positive while increasing those rates by just 19 bps from the linked quarter. We continue to see solid asset quality and are on pace to achieve zero net charge-offs for the full year of 2022.”
| Loan Balances | Annual | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except ratios) | Sep. 2022 | Jun. 2022 | Mar. 2022 | Dec. 2021 | Sep. 2021 | Growth | ||||||||||||
| Commercial | $ | 128,565 | $ | 127,711 | $ | 124,857 | $ | 122,373 | $ | 138,085 | $ | (9,520 | ) | |||||
| % of Total | 13.9 | % | 14.3 | % | 14.7 | % | 14.9 | % | 16.3 | % | -6.9 | % | ||||||
| Commercial RE | 404,710 | 404,260 | 400,101 | 381,387 | 387,858 | 16,852 | ||||||||||||
| % of Total | 43.7 | % | 45.1 | % | 47.0 | % | 46.4 | % | 45.8 | % | 4.3 | % | ||||||
| Agriculture | 60,522 | 60,586 | 55,741 | 57,473 | 57,374 | 3,148 | ||||||||||||
| % of Total | 6.5 | % | 6.8 | % | 6.6 | % | 7.0 | % | 6.8 | % | 5.5 | % | ||||||
| Residential RE | 267,135 | 241,614 | 214,015 | 206,324 | 207,571 | 59,564 | ||||||||||||
| % of Total | 28.9 | % | 27.0 | % | 25.2 | % | 25.1 | % | 24.5 | % | 28.7 | % | ||||||
| Consumer & Other | 64,317 | 61,440 | 55,957 | 55,157 | 55,660 | 8,657 | ||||||||||||
| % of Total | 7.0 | % | 6.9 | % | 6.6 | % | 6.7 | % | 6.6 | % | 15.6 | % | ||||||
| Total Loans | $ | 925,249 | $ | 895,611 | $ | 850,671 | $ | 822,714 | $ | 846,548 | $ | 78,701 | ||||||
| Total Growth Percentage | 9.3 | % | ||||||||||||||||
| Deposit Balances | Annual | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| ($ in thousands, except ratios) | Sep. 2022 | Jun. 2022 | Mar. 2022 | Dec. 2021 | Sep. 2021 | Growth | ||||||||||||
| Non-Int DDA | $ | 250,791 | $ | 239,676 | $ | 252,273 | $ | 247,044 | $ | 258,857 | $ | (8,066 | ) | |||||
| % of Total | 23.1 | % | 22.4 | % | 22.2 | % | 22.2 | % | 23.3 | % | -3.1 | % | ||||||
| Interest DDA | 199,523 | 198,286 | 211,152 | 195,464 | 189,130 | 10,393 | ||||||||||||
| % of Total | 18.4 | % | 18.5 | % | 18.6 | % | 17.6 | % | 17.0 | % | 5.5 | % | ||||||
| Savings | 201,402 | 215,285 | 236,394 | 237,571 | 246,414 | (45,012 | ) | |||||||||||
| % of Total | 18.5 | % | 20.1 | % | 20.8 | % | 21.3 | % | 22.2 | % | -18.3 | % | ||||||
| Money Market | 258,975 | 276,274 | 289,699 | 276,462 | 258,741 | 234 | ||||||||||||
| % of Total | 23.8 | % | 25.8 | % | 25.5 | % | 24.8 | % | 23.3 | % | 0.1 | % | ||||||
| Time Deposits | 175,202 | 142,258 | 148,553 | 156,504 | 158,518 | 16,684 | ||||||||||||
| % of Total | 16.1 | % | 13.3 | % | 13.1 | % | 14.1 | % | 14.3 | % | 10.5 | % | ||||||
| Total Deposits | $ | 1,085,893 | $ | 1,071,779 | $ | 1,138,071 | $ | 1,113,045 | $ | 1,111,660 | $ | (25,767 | ) | |||||
| Total Growth Percentage | -2.3 | % |
6
Asset Quality
SB Financial reported nonperforming assets of $5.2 million as of September 30, 2022, down $0.4 million or 7.6 percent from the year-ago quarter. The Company had net recoveries in the quarter, and for the year-to-date, the Company had $19,000 in net recoveries. The coverage ratio of problem loans to the loan loss allowance was at 313.3 percent at September 30, 2022.
| Nonperforming Assets | Annual | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except ratios) | Sep. 2022 | Jun. 2022 | Mar. 2022 | Dec. 2021 | Sep. 2021 | Change | ||||||||||||
| Commercial & Agriculture | $ | 114 | $ | 140 | $ | 142 | $ | 143 | $ | 144 | $ | (30 | ) | |||||
| % of Total Com./Ag. loans | 0.06 | % | 0.07 | % | 0.08 | % | 0.08 | % | 0.07 | % | -20.8 | % | ||||||
| Commercial RE | 223 | 359 | 544 | 554 | 566 | (343 | ) | |||||||||||
| % of Total CRE loans | 0.06 | % | 0.09 | % | 0.14 | % | 0.15 | % | 0.15 | % | -60.6 | % | ||||||
| Residential RE | 3,129 | 3,176 | 3,198 | 2,484 | 2,056 | 1,073 | ||||||||||||
| % of Total Res. RE loans | 1.17 | % | 1.31 | % | 1.49 | % | 1.20 | % | 0.99 | % | 52.2 | % | ||||||
| Consumer & Other | 280 | 323 | 409 | 471 | 422 | (142 | ) | |||||||||||
| % of Total Con./Oth. loans | 0.44 | % | 0.53 | % | 0.73 | % | 0.85 | % | 0.76 | % | -33.6 | % | ||||||
| Total Nonaccruing Loans | 3,746 | 3,998 | 4,293 | 3,652 | 3,188 | 558 | ||||||||||||
| % of Total loans | 0.40 | % | 0.45 | % | 0.50 | % | 0.44 | % | 0.38 | % | 17.5 | % | ||||||
| Accruing Restructured Loans | 668 | 683 | 762 | 725 | 805 | (137 | ) | |||||||||||
| Total Change (%) | -17.0 | % | ||||||||||||||||
| Total Nonaccruing & Restructured Loans | 4,414 | 4,681 | 5,055 | 4,377 | 3,993 | 421 | ||||||||||||
| % of Total loans | 0.48 | % | 0.52 | % | 0.59 | % | 0.53 | % | 0.47 | % | 10.5 | % | ||||||
| Foreclosed Assets and Other Assets | 756 | 730 | 527 | 2,104 | 1,601 | (845 | ) | |||||||||||
| Total Change (%) | -52.8 | % | ||||||||||||||||
| Total Nonperforming Assets | $ | 5,170 | $ | 5,411 | $ | 5,582 | $ | 6,481 | $ | 5,594 | $ | (424 | ) | |||||
| % of Total assets | 0.40 | % | 0.42 | % | 0.42 | % | 0.49 | % | 0.42 | % | -7.6 | % |
Webcast and Conference Call
The Company will hold the third quarter 2022 earnings conference call and webcast on November 2, 2022, 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 title opinions throughout the Tri-State region. SB Financial’s common stock is listed on the NASDAQ Capital Market with the ticker symbol “SBFG”.
In April 2022, SB Financial was named to the Keefe, Bruyette & Woods, Inc. “Bank Honor Roll” of superior performers that consistently reported increases in earnings per share over the last decade. The honor roll review determined that just 17 banks in the U.S., including SB Financial, or five percent of all banks screened, qualified for inclusion.
7
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
8
SB FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS - (Unaudited)
| September | June | March | December | September | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||
| ASSETS | |||||||||||||||
| Cash and due from banks | $ | 27,934 | $ | 29,567 | $ | 130,003 | $ | 149,511 | $ | 138,015 | |||||
| Interest bearing time deposits | 2,134 | 1,691 | 1,894 | 2,643 | 2,651 | ||||||||||
| Available-for-sale securities | 243,233 | 266,162 | 265,311 | 263,259 | 248,815 | ||||||||||
| Loans held for sale | 2,979 | 4,242 | 4,737 | 7,472 | 10,335 | ||||||||||
| Loans, net of unearned income | 925,249 | 895,611 | 850,671 | 822,714 | 846,548 | ||||||||||
| Allowance for loan losses | (13,824 | ) | (13,801 | ) | (13,804 | ) | (13,805 | ) | (13,812 | ) | |||||
| Premises and equipment, net | 22,842 | 23,122 | 23,039 | 23,212 | 23,874 | ||||||||||
| Federal Reserve and FHLB Stock, at cost | 5,230 | 5,303 | 5,303 | 5,303 | 5,303 | ||||||||||
| Foreclosed assets and other assets | 756 | 730 | 527 | 2,104 | 1,601 | ||||||||||
| Interest receivable | 3,556 | 3,256 | 2,815 | 2,920 | 2,954 | ||||||||||
| Goodwill | 23,239 | 23,239 | 23,239 | 23,191 | 22,091 | ||||||||||
| Cash value of life insurance | 28,713 | 28,556 | 17,932 | 17,867 | 17,795 | ||||||||||
| Mortgage servicing rights | 13,473 | 13,408 | 13,135 | 12,034 | 11,194 | ||||||||||
| Other assets | 17,863 | 12,886 | 10,328 | 12,430 | 12,361 | ||||||||||
| Total assets | $ | 1,303,377 | $ | 1,293,972 | $ | 1,335,130 | $ | 1,330,855 | $ | 1,329,725 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||
| Deposits | |||||||||||||||
| Non interest bearing demand | $ | 250,791 | $ | 239,676 | $ | 252,273 | $ | 247,044 | $ | 258,857 | |||||
| Interest bearing demand | 199,523 | 198,286 | 211,152 | 195,464 | 189,130 | ||||||||||
| Savings | 201,402 | 215,285 | 236,394 | 237,571 | 246,414 | ||||||||||
| Money market | 258,975 | 276,274 | 289,699 | 276,462 | 258,741 | ||||||||||
| Time deposits | 175,202 | 142,258 | 148,553 | 156,504 | 158,518 | ||||||||||
| Total deposits | 1,085,893 | 1,071,779 | 1,138,071 | 1,113,045 | 1,111,660 | ||||||||||
| Short-term borrowings | 19,754 | 30,772 | 19,035 | 15,320 | 20,771 | ||||||||||
| Federal Home Loan Bank advances | 35,000 | 25,000 | 5,500 | 5,500 | 5,500 | ||||||||||
| Trust preferred securities | 10,310 | 10,310 | 10,310 | 10,310 | 10,310 | ||||||||||
| Subordinated debt net of issuance costs | 19,582 | 19,570 | 19,558 | 19,546 | 19,534 | ||||||||||
| Interest payable | 623 | 307 | 536 | 299 | 576 | ||||||||||
| Other liabilities | 17,587 | 11,678 | 9,483 | 21,906 | 17,082 | ||||||||||
| Total liabilities | 1,188,749 | 1,169,416 | 1,202,493 | 1,185,926 | 1,185,433 | ||||||||||
| Shareholders’ Equity | |||||||||||||||
| Common stock | 61,319 | 61,319 | 61,319 | 54,463 | 54,463 | ||||||||||
| Additional paid-in capital | 15,000 | 15,069 | 14,872 | 14,944 | 14,875 | ||||||||||
| Retained earnings | 99,309 | 96,809 | 94,833 | 99,716 | 97,183 | ||||||||||
| Accumulated other comprehensive income (loss) | (33,426 | ) | (22,210 | ) | (13,659 | ) | (1,845 | ) | (699 | ) | |||||
| Treasury stock | (27,574 | ) | (26,431 | ) | (24,728 | ) | (22,349 | ) | (21,530 | ) | |||||
| Total shareholders’ equity | 114,628 | 124,556 | 132,637 | 144,929 | 144,292 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 1,303,377 | $ | 1,293,972 | $ | 1,335,130 | $ | 1,330,855 | $ | 1,329,725 |
9
SB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTSOF INCOME - (Unaudited)
| At and for the Three Months Ended | Nine<br> Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September | June | March | December | September | September | September | |||||||||
| ($ in thousands, except per share & ratios) | 2022 | 2022 | 2022 | 2021 | 2021 | 2022 | 2021 | ||||||||
| Interest income | |||||||||||||||
| Loans | |||||||||||||||
| Taxable | $ | 10,084 | $ | 8,880 | $ | 8,052 | $ | 8,889 | $ | 9,948 | $ | 27,016 | $ | 29,070 | |
| Tax exempt | 92 | 73 | 61 | 59 | 52 | 226 | 147 | ||||||||
| Securities | |||||||||||||||
| Taxable | 1,536 | 1,469 | 1,235 | 969 | 939 | 4,239 | 2,417 | ||||||||
| Tax exempt | 52 | 52 | 47 | 86 | 94 | 151 | 267 | ||||||||
| Total interest income | 11,764 | 10,474 | 9,395 | 10,003 | 11,033 | 31,632 | 31,901 | ||||||||
| Interest expense | |||||||||||||||
| Deposits | 852 | 567 | 618 | 640 | 709 | 2,037 | 2,489 | ||||||||
| Repurchase agreements & other | 8 | 11 | 13 | 7 | 12 | 32 | 35 | ||||||||
| Federal Home Loan Bank advances | 180 | 38 | 39 | 41 | 40 | 257 | 147 | ||||||||
| Trust preferred securities | 99 | 71 | 53 | 49 | 49 | 223 | 150 | ||||||||
| Subordinated debt | 195 | 194 | 195 | 188 | 199 | 584 | 274 | ||||||||
| Total interest expense | 1,334 | 881 | 918 | 925 | 1,009 | 3,133 | 3,095 | ||||||||
| Net interest income | 10,430 | 9,593 | 8,477 | 9,078 | 10,024 | 28,499 | 28,806 | ||||||||
| Provision for loan losses | - | - | - | - | 300 | - | 1,050 | ||||||||
| Net interest income after provision for loan losses | 10,430 | 9,593 | 8,477 | 9,078 | 9,724 | 28,499 | 27,756 | ||||||||
| Noninterest income | |||||||||||||||
| Wealth management fees | 930 | 936 | 955 | 988 | 959 | 2,821 | 2,826 | ||||||||
| Customer service fees | 844 | 860 | 794 | 827 | 812 | 2,498 | 2,390 | ||||||||
| Gain on sale of mtg. loans & OMSR | 876 | 1,196 | 1,676 | 3,194 | 3,947 | 3,748 | 14,061 | ||||||||
| Mortgage loan servicing fees, net | 527 | 606 | 1,204 | 624 | 155 | 2,337 | 2,316 | ||||||||
| Gain on sale of non-mortgage loans | 125 | 167 | 169 | 44 | 52 | 461 | 114 | ||||||||
| Title insurance revenue | 476 | 697 | 602 | 528 | 508 | 1,775 | 1,561 | ||||||||
| Gain (loss) on sale of assets | (12 | ) | - | 55 | 1 | 1 | 43 | 1 | |||||||
| Other | 277 | 211 | 347 | 383 | 215 | 835 | 839 | ||||||||
| Total noninterest income | 4,043 | 4,673 | 5,802 | 6,589 | 6,649 | 14,518 | 24,108 | ||||||||
| Noninterest expense | |||||||||||||||
| Salaries and employee benefits | 5,858 | 6,418 | 6,189 | 6,648 | 6,689 | 18,465 | 20,190 | ||||||||
| Net occupancy expense | 769 | 719 | 742 | 846 | 714 | 2,230 | 2,202 | ||||||||
| Equipment expense | 918 | 827 | 854 | 899 | 872 | 2,599 | 2,382 | ||||||||
| Data processing fees | 664 | 643 | 576 | 721 | 671 | 1,883 | 1,858 | ||||||||
| Professional fees | 766 | 760 | 950 | 872 | 817 | 2,476 | 2,155 | ||||||||
| Marketing expense | 200 | 222 | 231 | 228 | 201 | 653 | 556 | ||||||||
| Telephone and communication expense | 134 | 105 | 111 | 148 | 140 | 350 | 433 | ||||||||
| Postage and delivery expense | 75 | 110 | 116 | 106 | 100 | 301 | 308 | ||||||||
| State, local and other taxes | 250 | 277 | 278 | 288 | 286 | 805 | 887 | ||||||||
| Employee expense | 145 | 175 | 136 | 163 | 186 | 456 | 500 | ||||||||
| Other expenses | 605 | 546 | 676 | 648 | 580 | 1,828 | 1,770 | ||||||||
| Total noninterest expense | 10,384 | 10,802 | 10,859 | 11,567 | 11,256 | 32,046 | 33,241 | ||||||||
| Income before income tax expense | 4,088 | 3,464 | 3,420 | 4,100 | 5,117 | 10,971 | 18,623 | ||||||||
| Income tax expense | 746 | 630 | 607 | 768 | 1,014 | 1,983 | 3,678 | ||||||||
| Net income | $ | 3,342 | $ | 2,834 | $ | 2,813 | $ | 3,332 | $ | 4,103 | $ | 8,988 | $ | 14,945 | |
| Common share data: | |||||||||||||||
| Basic earnings per common share | $ | 0.48 | $ | 0.40 | $ | 0.40 | $ | 0.49 | $ | 0.59 | $ | 1.28 | $ | 2.09 | |
| Diluted earnings per common share | $ | 0.47 | $ | 0.40 | $ | 0.40 | $ | 0.49 | $ | 0.58 | $ | 1.27 | $ | 2.08 | |
| Average shares outstanding (in thousands): | |||||||||||||||
| Basic: | 6,968 | 7,075 | 7,035 | 6,906 | 6,966 | 7,026 | 7,142 | ||||||||
| Diluted: | 7,033 | 7,149 | 7,100 | 6,970 | 7,017 | 7,098 | 7,167 |
10
SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
| ($ in thousands, except per share & ratios) | At and for the Three Months Ended | Nine Months Ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September | June | March | December | September | September | September | |||||||||||||||
| SUMMARY OF OPERATIONS | 2022 | 2022 | 2022 | 2021 | 2021 | 2022 | 2021 | ||||||||||||||
| Net interest income | $ | 10,430 | $ | 9,593 | $ | 8,477 | $ | 9,078 | $ | 10,024 | $ | 28,499 | $ | 28,806 | |||||||
| Tax-equivalent adjustment | 38 | 33 | 29 | 39 | 39 | 100 | 110 | ||||||||||||||
| Tax-equivalent net interest income | 10,468 | 9,626 | 8,506 | 9,117 | 10,063 | 28,599 | 28,916 | ||||||||||||||
| Provision for loan loss | - | - | - | - | 300 | - | 1,050 | ||||||||||||||
| Noninterest income | 4,043 | 4,673 | 5,802 | 6,589 | 6,649 | 14,518 | 24,108 | ||||||||||||||
| Total operating revenue | 14,473 | 14,266 | 14,279 | 15,667 | 16,673 | 43,017 | 52,914 | ||||||||||||||
| Noninterest expense | 10,384 | 10,802 | 10,859 | 11,567 | 11,256 | 32,045 | 33,241 | ||||||||||||||
| Pre-tax pre-provision income | 4,089 | 3,464 | 3,420 | 4,100 | 5,417 | 10,972 | 19,673 | ||||||||||||||
| Pretax income | 4,089 | 3,464 | 3,420 | 4,100 | 5,117 | 10,972 | 18,623 | ||||||||||||||
| Net income | 3,342 | 2,834 | 2,813 | 3,332 | 4,103 | 8,988 | 14,945 | ||||||||||||||
| PER SHARE INFORMATION: | |||||||||||||||||||||
| Basic earnings per share (EPS) | 0.48 | 0.40 | 0.40 | 0.49 | 0.59 | 1.28 | 2.09 | ||||||||||||||
| Diluted earnings per share | 0.47 | 0.40 | 0.40 | 0.49 | 0.58 | 1.27 | 2.08 | ||||||||||||||
| Common dividends | 0.120 | 0.120 | 0.115 | 0.115 | 0.110 | 0.355 | 0.325 | ||||||||||||||
| Book value per common share | 16.49 | 17.75 | 18.65 | 21.05 | 20.83 | 16.49 | 20.83 | ||||||||||||||
| Tangible book value per common share (TBV) | 13.07 | 14.36 | 15.31 | 17.60 | 17.55 | 13.07 | 17.55 | ||||||||||||||
| Market price per common share | 16.85 | 17.26 | 19.91 | 19.67 | 18.18 | 16.85 | 18.18 | ||||||||||||||
| Market price to TBV | 128.9 | % | 120.2 | % | 130.1 | % | 111.8 | % | 103.6 | % | 128.9 | % | 103.6 | % | |||||||
| Market price to trailing 12 month EPS | 9.6 | 9.3 | 10.0 | 7.7 | 6.5 | 9.6 | 6.5 | ||||||||||||||
| PERFORMANCE RATIOS: | |||||||||||||||||||||
| Return on average assets (ROAA) | 1.03 | % | 0.87 | % | 0.83 | % | 0.99 | % | 1.23 | % | 0.91 | % | 1.51 | % | |||||||
| Pre-tax pre-provision ROAA | 1.26 | % | 1.06 | % | 1.01 | % | 1.22 | % | 1.63 | % | 1.19 | % | 2.12 | % | |||||||
| Return on average equity | 10.89 | % | 8.89 | % | 8.08 | % | 9.21 | % | 11.35 | % | 9.21 | % | 13.84 | % | |||||||
| Return on average tangible equity | 13.51 | % | 10.93 | % | 9.75 | % | 10.92 | % | 13.47 | % | 11.28 | % | 16.43 | % | |||||||
| Efficiency ratio | 71.63 | % | 75.60 | % | 75.93 | % | 73.72 | % | 67.40 | % | 74.38 | % | 62.72 | % | |||||||
| Earning asset yield | 3.89 | % | 3.45 | % | 2.96 | % | 3.17 | % | 3.25 | % | 3.42 | % | 3.44 | % | |||||||
| Cost of interest bearing liabilities | 0.58 | % | 0.39 | % | 0.39 | % | 0.40 | % | 0.44 | % | 0.45 | % | 0.46 | % | |||||||
| Net interest margin | 3.45 | % | 3.15 | % | 2.67 | % | 2.87 | % | 3.20 | % | 3.08 | % | 3.11 | % | |||||||
| Tax equivalent effect | 0.01 | % | 0.01 | % | 0.01 | % | 0.02 | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||||
| Net interest margin, tax equivalent | 3.46 | % | 3.16 | % | 2.68 | % | 2.89 | % | 3.21 | % | 3.09 | % | 3.12 | % | |||||||
| Non interest income/Average assets | 1.24 | % | 1.43 | % | 1.72 | % | 1.96 | % | 1.99 | % | 1.47 | % | 2.44 | % | |||||||
| Non interest expense/Average assets | 3.19 | % | 3.31 | % | 3.22 | % | 3.45 | % | 3.38 | % | 3.24 | % | 3.37 | % | |||||||
| Net noninterest expense/Average assets | -1.95 | % | -1.88 | % | -1.50 | % | -1.48 | % | -1.38 | % | -1.77 | % | -0.93 | % | |||||||
| ASSET QUALITY RATIOS: | |||||||||||||||||||||
| Gross charge-offs | 9 | 9 | 9 | 34 | 24 | 27 | 102 | ||||||||||||||
| Recoveries | 32 | 6 | 8 | 27 | 230 | 46 | 290 | ||||||||||||||
| Net charge-offs | (23 | ) | 3 | 1 | 7 | (206 | ) | (19 | ) | (188 | ) | ||||||||||
| Nonaccruing loans/Total loans | 0.40 | % | 0.45 | % | 0.50 | % | 0.44 | % | 0.38 | % | 0.40 | % | 0.38 | % | |||||||
| Nonperforming loans/Total loans | 0.48 | % | 0.52 | % | 0.59 | % | 0.53 | % | 0.47 | % | 0.48 | % | 0.47 | % | |||||||
| Nonperforming assets/Loans & OREO | 0.56 | % | 0.60 | % | 0.66 | % | 0.79 | % | 0.66 | % | 0.56 | % | 0.66 | % | |||||||
| Nonperforming assets/Total assets | 0.40 | % | 0.42 | % | 0.42 | % | 0.49 | % | 0.42 | % | 0.40 | % | 0.42 | % | |||||||
| Allowance for loan loss/Nonperforming loans | 313.26 | % | 294.83 | % | 273.08 | % | 315.40 | % | 345.91 | % | 313.26 | % | 345.91 | % | |||||||
| Allowance for loan loss/Total loans | 1.49 | % | 1.54 | % | 1.62 | % | 1.68 | % | 1.63 | % | 1.49 | % | 1.63 | % | |||||||
| Net loan charge-offs/Average loans (ann.) | (0.01 | )% | 0.00 | % | 0.00 | % | 0.00 | % | (0.10 | %) | (0.00 | %) | (0.03 | %) | |||||||
| CAPITAL & LIQUIDITY RATIOS: | |||||||||||||||||||||
| Loans/ Deposits | 85.21 | % | 83.56 | % | 74.75 | % | 73.92 | % | 76.15 | % | 85.21 | % | 76.15 | % | |||||||
| Equity/ Assets | 8.79 | % | 9.63 | % | 9.93 | % | 10.89 | % | 10.85 | % | 8.79 | % | 10.85 | % | |||||||
| Tangible equity/Tangible assets | 7.10 | % | 7.93 | % | 8.30 | % | 9.27 | % | 9.30 | % | 7.10 | % | 9.30 | % | |||||||
| Common equity tier 1 ratio (Bank) | 13.23 | % | 13.21 | % | 13.71 | % | 13.94 | % | 13.23 | % | 13.21 | % | 13.23 | % | |||||||
| END OF PERIOD BALANCES | |||||||||||||||||||||
| Total assets | 1,303,377 | 1,293,972 | 1,335,130 | 1,330,855 | 1,329,725 | 1,303,377 | 1,329,725 | ||||||||||||||
| Total loans | 925,249 | 895,611 | 850,671 | 822,714 | 846,548 | 925,249 | 846,548 | ||||||||||||||
| Deposits | 1,085,893 | 1,071,779 | 1,138,071 | 1,113,045 | 1,111,660 | 1,085,893 | 1,111,660 | ||||||||||||||
| Stockholders equity | 114,628 | 124,556 | 132,637 | 144,929 | 144,292 | 114,628 | 144,292 | ||||||||||||||
| Goodwill and intangibles | 23,770 | 23,787 | 23,804 | 23,774 | 22,692 | 23,770 | 22,692 | ||||||||||||||
| Tangible equity | 90,858 | 100,769 | 108,833 | 121,155 | 121,600 | 90,858 | 121,600 | ||||||||||||||
| Mortgage servicing portfolio | 1,362,666 | 1,369,732 | 1,375,554 | 1,362,962 | 1,341,439 | 1,362,666 | 1,341,439 | ||||||||||||||
| Wealth/Brokerage assets under care | 480,947 | 500,487 | 560,698 | 618,279 | 588,319 | 480,947 | 588,319 | ||||||||||||||
| Total assets under care | 3,146,990 | 3,164,191 | 3,271,382 | 3,312,096 | 3,259,483 | 3,146,990 | 3,259,483 | ||||||||||||||
| Full-time equivalent employees | 271 | 267 | 256 | 269 | 264 | 271 | 264 | ||||||||||||||
| Period end common shares outstanding | 6,950 | 7,017 | 7,111 | 6,884 | 6,927 | 6,950 | 6,927 | ||||||||||||||
| Market capitalization (all) | 117,113 | 121,105 | 141,575 | 135,415 | 125,935 | 117,113 | 125,935 | ||||||||||||||
| AVERAGE BALANCES | |||||||||||||||||||||
| Total assets | 1,302,297 | 1,305,815 | 1,350,982 | 1,342,202 | 1,333,369 | 1,319,668 | 1,315,521 | ||||||||||||||
| Total earning assets | 1,209,958 | 1,216,124 | 1,270,218 | 1,263,431 | 1,253,722 | 1,231,865 | 1,236,227 | ||||||||||||||
| Total loans | 909,909 | 870,439 | 832,825 | 845,078 | 856,486 | 871,340 | 857,703 | ||||||||||||||
| Deposits | 1,085,821 | 1,108,890 | 1,134,234 | 1,123,843 | 1,109,491 | 1,109,345 | 1,099,892 | ||||||||||||||
| Stockholders equity | 122,738 | 127,519 | 139,214 | 144,749 | 144,565 | 130,069 | 144,020 | ||||||||||||||
| Goodwill and intangibles | 23,778 | 23,796 | 23,801 | 22,701 | 22,701 | 23,791 | 22,718 | ||||||||||||||
| Tangible equity | 98,960 | 103,723 | 115,413 | 122,048 | 121,864 | 106,278 | 121,302 | ||||||||||||||
| Average basic shares outstanding | 6,968 | 7,075 | 7,035 | 6,906 | 6,966 | 7,026 | 7,142 | ||||||||||||||
| Average diluted shares outstanding | 7,033 | 7,149 | 7,100 | 6,970 | 7,017 | 7,098 | 7,167 |
11
SB FINANCIAL GROUP, INC.
Rate Volume Analysis - (Unaudited)
For the Three and Nine Months Ended Sep. 30,2022 and 2021
| Three Months Ended <br><br>Sep. 30, 2022 | Three Months Ended<br><br>Sep. 30, 2021 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| **** | Average | **** | **** | Average | **** | Average | **** | **** | Average | **** | ||||||
| ($ in thousands) | Balance | **** | Interest | Rate | **** | Balance | **** | Interest | Rate | **** | ||||||
| Assets | ||||||||||||||||
| Taxable securities/cash | $ | 291,712 | $ | 1,536 | 2.11 | % | $ | 388,800 | $ | 939 | 0.97 | % | ||||
| Nontaxable securities | 8,337 | 52 | 2.49 | % | 8,436 | 94 | 4.46 | % | ||||||||
| Loans, net | 909,909 | 10,176 | 4.47 | % | 856,486 | 10,000 | 4.67 | % | ||||||||
| Total earning assets | 1,209,958 | 11,764 | 3.89 | % | 1,253,722 | 11,033 | 3.52 | % | ||||||||
| Cash and due from banks | 6,782 | 6,975 | ||||||||||||||
| Allowance for loan losses | (13,802 | ) | (13,475 | ) | ||||||||||||
| Premises and equipment | 23,762 | 25,820 | ||||||||||||||
| Other assets | 75,597 | 60,327 | ||||||||||||||
| Total assets | $ | 1,302,297 | $ | 1,333,369 | ||||||||||||
| Liabilities | ||||||||||||||||
| Savings, MMDA and interest bearing demand | $ | 681,209 | $ | 542 | 0.32 | % | $ | 695,801 | $ | 441 | 0.25 | % | ||||
| Time deposits | 155,979 | 310 | 0.79 | % | 164,432 | 268 | 0.65 | % | ||||||||
| Repurchase agreements & other | 20,160 | 8 | 0.16 | % | 24,672 | 12 | 0.19 | % | ||||||||
| Advances from Federal Home Loan Bank | 26,739 | 180 | 2.69 | % | 5,500 | 40 | 2.91 | % | ||||||||
| Trust preferred securities | 10,310 | 99 | 3.84 | % | 10,310 | 49 | 1.90 | % | ||||||||
| Subordinated debt | 19,576 | 195 | 3.98 | % | 19,528 | 199 | 4.08 | % | ||||||||
| Total interest bearing liabilities | 913,973 | 1,334 | 0.58 | % | 920,243 | 1,009 | 0.44 | % | ||||||||
| Non interest bearing demand | 248,633 | - | 249,258 | - | ||||||||||||
| Total funding | 1,162,606 | 0.46 | % | 1,169,501 | 0.35 | % | ||||||||||
| Other liabilities | 16,952 | 19,303 | ||||||||||||||
| Total liabilities | 1,179,558 | 1,188,804 | ||||||||||||||
| Equity | 122,738 | 144,565 | ||||||||||||||
| Total liabilities and equity | $ | 1,302,296 | $ | 1,333,369 | ||||||||||||
| Net interest income | $ | 10,430 | $ | 10,024 | ||||||||||||
| Net interest income as a percent of average interest-earning assets - GAAP measure | 3.45 | % | 3.20 | % | ||||||||||||
| Net interest income as a percent of average interest-earning assets - non GAAP | 3.46 | % | 3.21 | % | ||||||||||||
| - Computed on a fully tax equivalent (FTE) basis | ||||||||||||||||
| Nine Months Ended<br><br>Sep. 30, 2022 | Nine Months Ended<br><br>Sep. 30, 2021 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **** | Average | **** | **** | Average | **** | Average | **** | **** | Average | **** | ||||||
| **** | Balance | **** | Interest | Rate | **** | Balance | **** | Interest | Rate | **** | ||||||
| Assets | ||||||||||||||||
| Taxable securities/cash | $ | 352,405 | $ | 4,239 | 1.60 | % | $ | 370,743 | $ | 2,417 | 0.87 | % | ||||
| Nontaxable securities | 8,120 | 151 | 2.48 | % | 7,781 | 267 | 4.58 | % | ||||||||
| Loans, net | 871,340 | 27,242 | 4.17 | % | 857,703 | 29,217 | 4.54 | % | ||||||||
| Total earning assets | 1,231,865 | 31,632 | 3.42 | % | 1,236,227 | 31,901 | 3.44 | % | ||||||||
| Cash and due from banks | 7,331 | 7,554 | ||||||||||||||
| Allowance for loan losses | (13,804 | ) | (13,297 | ) | ||||||||||||
| Premises and equipment | 24,265 | 24,442 | ||||||||||||||
| Other assets | 70,011 | 60,595 | ||||||||||||||
| Total assets | $ | 1,319,668 | $ | 1,315,521 | ||||||||||||
| Liabilities | ||||||||||||||||
| Savings, MMDA and interest bearing demand | $ | 709,033 | $ | 1,293 | 0.24 | % | $ | 661,433 | $ | 1,413 | 0.28 | % | ||||
| Time deposits | 152,230 | 744 | 0.65 | % | 184,668 | 1,076 | 0.78 | % | ||||||||
| Repurchase agreements & Other | 21,298 | 32 | 0.20 | % | 24,139 | 35 | 0.19 | % | ||||||||
| Advances from Federal Home Loan Bank | 12,154 | 257 | 2.82 | % | 6,846 | 147 | 2.86 | % | ||||||||
| Trust preferred securities | 10,310 | 223 | 2.88 | % | 10,310 | 150 | 1.94 | % | ||||||||
| Subordinated debt | 19,564 | 584 | 3.98 | % | 9,811 | 274 | 3.72 | % | ||||||||
| Total interest bearing liabilities | 924,589 | 3,133 | 0.45 | % | 897,207 | 3,095 | 0.46 | % | ||||||||
| Non interest bearing demand | 248,082 | 0.36 | % | 253,791 | 0.36 | % | ||||||||||
| Total funding | 1,172,671 | 1,150,998 | ||||||||||||||
| Other liabilities | 16,928 | 20,503 | ||||||||||||||
| Total liabilities | 1,189,599 | 1,171,501 | ||||||||||||||
| Equity | 130,069 | 144,020 | ||||||||||||||
| Total liabilities and equity | $ | 1,319,668 | $ | 1,315,521 | ||||||||||||
| Net interest income | $ | 28,499 | $ | 28,806 | ||||||||||||
| Net interest income as a percent of average interest-earning assets - GAAP measure | 3.08 | % | 3.11 | % | ||||||||||||
| Net interest income as a percent of average interest-earning assets - non GAAP | 3.09 | % | 3.12 | % | ||||||||||||
| - Computed on a fully tax equivalent (FTE) basis |
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| Non-GAAP reconciliation | Three Months Ended | Nine Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except per share & ratios) | Sep. 30, 2022 | **** | Sep. 30, 2021 | **** | Sep. 30, 2022 | **** | Sep. 30, 2021 | **** | ||||
| Total Operating Revenue | $ | 14,473 | $ | 16,673 | $ | 43,017 | $ | 52,914 | ||||
| Adjustment to (deduct)/add OMSR recapture/impairment* | (65 | ) | (248 | ) | (1,193 | ) | (2,854 | ) | ||||
| Adjusted Total Operating Revenue | 14,408 | 16,425 | 41,824 | 50,060 | ||||||||
| Income before Income Taxes | 4,088 | 5,117 | 10,971 | 18,623 | ||||||||
| Adjustment for OMSR | (65 | ) | (248 | ) | (1,193 | ) | (2,854 | ) | ||||
| Adjusted Income before Income Taxes | 4,023 | 4,869 | 9,778 | 15,769 | ||||||||
| Provision for Income Taxes | 746 | 1,014 | 1,983 | 3,678 | ||||||||
| Adjustment for OMSR ** | (14 | ) | (52 | ) | (251 | ) | (599 | ) | ||||
| Adjusted Provision for Income Taxes | 732 | 962 | 1,732 | 3,080 | ||||||||
| Net Income | 3,342 | 3,761 | 8,988 | 14,945 | ||||||||
| Adjustment for OMSR | (51 | ) | (196 | ) | (942 | ) | (2,255 | ) | ||||
| Adjusted Net Income | 3,291 | 3,565 | 8,046 | 12,690 | ||||||||
| Diluted Earnings per Share | 0.47 | 0.58 | 1.27 | 2.08 | ||||||||
| Adjustment for OMSR | (0.01 | ) | (0.03 | ) | (0.13 | ) | (0.31 | ) | ||||
| Adjusted Diluted Earnings per Share | $ | 0.47 | $ | 0.55 | $ | 1.13 | $ | 1.77 | ||||
| Return on Average Assets | 1.03 | % | 1.23 | % | 0.91 | % | 1.51 | % | ||||
| Adjustment for OMSR | -0.02 | % | -0.06 | % | -0.07 | % | -0.17 | % | ||||
| Adjusted Return on Average Assets | 1.01 | % | 1.17 | % | 0.84 | % | 1.34 | % | ||||
| * | valuation<br>adjustment to the Company’s mortgage servicing rights | |||||||||||
| --- | --- | |||||||||||
| ** | tax<br>effect is calculated using a 21% statutory federal corporate income tax rate |
13