8-K
SB FINANCIAL GROUP, INC. (SBFG)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
FORM 8-K
CURRENT REPORTPursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 26, 2022 (July 25, 2022)
SB FINANCIAL GROUP, INC
(Exact name of registrant as specified in its charter)
| Ohio | 0-13507 | 34-1395608 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 401 Clinton Street, Defiance, OH | 43512 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (419) 783-8950
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities<br>Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange<br>Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under<br>the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under<br>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 7,053,289 Outstanding at July 26, 2022 | 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 July 25, 2022, SB Financial Group, Inc. (the “Company”) issued a news release reporting financial results for the second quarter 2022. A copy of the July 25, 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 No. | Description |
|---|---|
| 99.1 | News release issued by SB Financial Group, Inc. on July 25, 2022, reporting financial results for the second 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: July 25, 2022 | By: | /s/ Anthony V. Cosentino |
| Anthony V. Cosentino | ||
| Chief Financial Officer |
-2-
INDEX TO EXHIBITS
Current Report on Form 8-K
Dated July 25, 2022
SB Financial Group, Inc.
| Exhibit No. | Description |
|---|---|
| 99.1 | News release issued by SB Financial Group, Inc. on July 25, 2022, reporting financial results for the second quarter 2022. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
-3-
Exhibit 99.1
SB Financial Group Announces Second Quarter2022 Results
DEFIANCE, OH, July 25, 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 second quarter and six months ended June 30, 2022.
Second quarter 2022 highlights over prior-year second quarter include:
| ● | Net income of $2.8 million; diluted earnings per share (“EPS”)<br>of $0.40 or a 23.1 percent decrease |
|---|---|
| ● | Adjusted net income, excluding the impact of the Originated Mortgage Servicing<br>Rights (“OMSR”) recapture of $0.2 million was $2.6 million, with EPS of $0.37 |
| --- | --- |
| ● | Mortgage origination volume of $95.5 million, reflects a decrease of $69.4<br>million, or 42.1 percent |
| --- | --- |
Six months ended June 30, 2022, highlights over prior-year six months include:
| ● | Net income of $5.6 million and diluted EPS of $0.79, compared to $10.8 million,<br>or $1.49 per share or a 47.0 percent decrease |
|---|---|
| ● | Adjusted net income, excluding the impact of OMSR activity of $4.8 million,<br>down $4.0 million or 45.9 percent |
| --- | --- |
Second quarter 2022 trailing twelve-month highlights include:
| ● | Loans excluding Paycheck Protection Program (“PPP”) loans, increased<br>$79.3 million, or 9.7 percent from the prior year | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ● | Deposits decreased by $19.3 million, or 1.8 percent to $1.07 billion at quarter<br>end | |||||||||||||||||
| --- | --- | |||||||||||||||||
| ● | Mortgage origination volume of $472.1 million; servicing portfolio of $1.37<br>billion, which is up $0.05 billion, or 3.5 percent | |||||||||||||||||
| --- | --- | |||||||||||||||||
| Highlights | Three Months Ended | Six Months Ended | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| ($ in thousands, except per share & ratios) | Jun. 2022 | Jun. 2021 | % Change | Jun. 2022 | Jun. 2021 | % Change | ||||||||||||
| Operating revenue | $ | 14,266 | $ | 15,694 | -9.1 | % | $ | 28,545 | $ | 36,241 | -21.2 | % | ||||||
| Interest income | 10,474 | 10,163 | 3.1 | % | 19,869 | 20,868 | -4.8 | % | ||||||||||
| Interest expense | 881 | 1,006 | -12.4 | % | 1,799 | 2,086 | -13.8 | % | ||||||||||
| Net interest income | 9,593 | 9,157 | 4.8 | % | 18,070 | 18,782 | -3.8 | % | ||||||||||
| Provision for loan losses | - | - | 0.0 | % | - | 750 | -100.0 | % | ||||||||||
| Noninterest income | 4,673 | 6,537 | -28.5 | % | 10,475 | 17,459 | -40.0 | % | ||||||||||
| Noninterest expense | 10,802 | 11,076 | -2.5 | % | 21,661 | 21,985 | -1.5 | % | ||||||||||
| Net income | 2,834 | 3,761 | -24.6 | % | 5,647 | 10,842 | -47.9 | % | ||||||||||
| Earnings per diluted share | 0.40 | 0.52 | -23.1 | % | 0.79 | 1.49 | -47.0 | % | ||||||||||
| Return on average assets | 0.87 | % | 1.13 | % | -23.0 | % | 0.85 | % | 1.66 | % | -48.8 | % | ||||||
| Return on average equity | 8.88 | % | 10.42 | % | -14.8 | % | 8.46 | % | 15.09 | % | -43.9 | % | ||||||
| Non-GAAP Measures | ||||||||||||||||||
| Adjusted net income | $ | 2,643 | $ | 3,840 | -31.2 | % | $ | 4,754 | $ | 8,783 | -45.9 | % | ||||||
| Adjusted diluted EPS | 0.37 | 0.53 | -30.2 | % | 0.67 | 1.21 | -44.6 | % | ||||||||||
| Adjusted return on average assets | 0.81 | % | 1.16 | % | -30.2 | % | 0.78 | % | 1.50 | % | -48.0 | % | ||||||
| Adjusted pre-tax, pre-provision income | 3,223 | 4,717 | -31.7 | % | 5,754 | 10,900 | -47.2 | % |
“We had very strong loan growth this quarter of $45 million, which is in addition to the $28 million in growth we achieved in Q1,” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “For the first half of 2022 we have grown our loan balances by 8.9 percent over 2021 year end. This growth was across all categories and we had positive growth from nearly all of our regions. The prime rate increases coupled with the loan growth resulted in interest income increasing over 11 percent from the linked quarter.”
RESULTS OF OPERATIONS
Consolidated Revenue
Total operating revenue, consisting of net interest income and noninterest income, was down 9.1 percent from the second quarter of 2021, and flat from the linked quarter.
| ● | Net interest income was up from the year-ago<br>quarter by 4.8 percent, and up 13.2 percent from the linked quarter. |
|---|---|
| ● | Net interest margin on a fully taxable equivalent<br>basis (FTE) was up from both year-ago and linked quarters by 23 and 49 basis points, respectively, as loan balances were up $44.9 million<br>from the linked quarter. Net of PPP, our net interest margin is higher by 34 basis points compared to the prior year. |
| --- | --- |
| ● | Noninterest income was down 29 and 19 percent<br>from the year ago and linked quarters, respectively, due to lower mortgage volume and OMSR recapture. |
| --- | --- |
Mortgage Loan Business
Mortgage loan originations for the second quarter of 2022 were $95.5 million, down $69.4 million, or 42.1 percent, from the year-ago quarter; likewise, total sales of originated loans were $49.9 million, down $69.1 million, or 58.1 percent. For the first six months of 2022, SB Financial had total volume of $192.8 million, of which $141.4 million (73 percent) was new purchase/construction lending, $33.0 million was external refinance (17 percent), and the remaining $18.4 million (10 percent) was internal refinance.
Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.8 million for the second quarter of 2022, compared to $4.0 million for the year-ago quarter. The mortgage servicing valuation adjustment for the second quarter of 2022 was a positive $0.2 million, compared to a negative adjustment of $0.1 million for the second quarter of 2021. For the first six months of 2022, the recapture of servicing rights was $1.1 million compared to a recapture of $2.6 million for the prior year six months. The aggregate servicing valuation impairment ended the quarter at $0.3 million. The servicing portfolio at June 30, 2022, was $1.37 billion, up $0.05 billion, or 3.5 percent, from $1.32 billion at June 30, 2021.
Mr. Klein noted, “With fixed rate saleable mortgage rates above 5 percent for most of the quarter, we have continued to be flexible by originating more portfolio product with a special emphasis on the Private Client segment. We continue to look for ways to improve our efficiency in the mortgage business line and are committed to adding additional originators to capture market share and balance the entire business-line ecosystem.”
| Mortgage Banking | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | Jun. 2022 | Mar. 2022 | Dec. 2021 | Sep. 2021 | Jun. 2021 | ||||||||||
| Mortgage originations | $ | 95,454 | $ | 97,394 | $ | 126,611 | $ | 152,623 | $ | 164,883 | |||||
| Mortgage sales | 49,915 | 72,154 | 110,543 | 123,083 | 119,064 | ||||||||||
| Mortgage servicing portfolio | 1,369,732 | 1,375,554 | 1,362,962 | 1,341,439 | 1,323,804 | ||||||||||
| Mortgage servicing rights | 13,408 | 13,135 | 12,034 | 11,194 | 10,678 | ||||||||||
| Mortgage servicing revenue | |||||||||||||||
| Loan servicing fees | 863 | 861 | 850 | 850 | 830 | ||||||||||
| OMSR amortization | (496 | ) | (547 | ) | (807 | ) | (943 | ) | (948 | ) | |||||
| Net administrative fees | 367 | 314 | 43 | (93 | ) | (118 | ) | ||||||||
| OMSR valuation adjustment | 239 | 890 | 581 | 248 | (99 | ) | |||||||||
| Net loan servicing fees | 606 | 1,204 | 624 | 155 | (217 | ) | |||||||||
| Gain on sale of mortgages | 1,196 | 1,676 | 3,194 | 3,947 | 4,255 | ||||||||||
| Mortgage banking revenue, net | $ | 1,802 | $ | 2,880 | $ | 3,818 | $ | 4,102 | $ | 4,038 |
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Noninterest Income and Noninterest Expense
SB Financial’s noninterest income for the quarter was down from the prior year and the linked quarter by 29 and 19 percent, respectively. Gain on sale yields on mortgage loan sales were down over 100 basis points from the prior year and the total dollars of sales were down over $69 million. Wealth management revenue was flat from the prior year as our retention efforts and new sales offset general market declines. SB Financial’s title agency, Peak Title, continued to transition to serving all of the Company’s needs by increasing commercial volume and with our new market expansions; as a result, revenue was up 31 percent compared to the prior year.
For the second quarter of 2022, noninterest expense of $10.8 million was down $0.3 million or 2.5 percent compared to the prior year. Decreased mortgage volume has been the main driver of lower operating expenses.
Mr. Klein stated, “We are committed to lowering our operating costs in both the Mortgage and Retail business lines to reflect not only lower volumes but also the change in consumer behavior of a more robust adoption of digital banking solutions.”
| Noninterest Income / Noninterest Expense | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except ratios) | Jun. 2022 | Mar. 2022 | Dec. 2021 | Sep. 2021 | Jun. 2021 | ||||||||||
| Noninterest Income (NII) | $ | 4,673 | $ | 5,802 | $ | 6,589 | $ | 6,649 | $ | 6,537 | |||||
| NII / Total Revenue | 32.8 | % | 40.6 | % | 42.1 | % | 39.9 | % | 41.7 | % | |||||
| NII / Average Assets | 1.4 | % | 1.7 | % | 2.0 | % | 2.0 | % | 2.0 | % | |||||
| Total Revenue Growth | -9.1 | % | -46.9 | % | -13.7 | % | -15.3 | % | -10.3 | % | |||||
| Noninterest Expense (NIE) | $ | 10,802 | $ | 10,859 | $ | 11,567 | $ | 11,256 | $ | 11,076 | |||||
| Efficiency Ratio | 75.6 | % | 75.9 | % | 73.7 | % | 67.4 | % | 70.5 | % | |||||
| NIE / Average Assets | 3.3 | % | 3.2 | % | 3.5 | % | 3.4 | % | 3.3 | % | |||||
| Net Noninterest Expense/Avg. Assets | -1.9 | % | -1.5 | % | -1.5 | % | -1.4 | % | -1.4 | % | |||||
| Total Expense Growth | -2.5 | % | -0.5 | % | 8.3 | % | -0.7 | % | -5.0 | % |
Balance Sheet
Total assets as of June 30, 2022, were $1.29 billion, down $0.02 billion, or 1.4 percent, from the year ago quarter due to declining deposit levels as the consumer began to put their excess liquidity to use in the economy. Total shareholders’ equity as of June 30, 2022, was $124.6 million, down 13.5 percent from a year ago due to the valuation adjustment on the Company’s bond portfolio. Absent that negative impact, equity increased $3.2 million or 2.3 percent. SB Financial bought back 94,211 shares of our stock in the quarter at an average price of $18.08 or 122 percent of tangible book value.
Total loans held for investment were $895.6 million at June 30, 2022, up $45.1 million, or 5.3 percent, from June 30, 2021. Excluding PPP activity from both years, loan balances were up $79.3 million, or 9.7 percent.
The investment portfolio of $271.5 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 21.0 percent of assets at June 30, 2022, and was up 25.1 percent from the year-ago period. Deposit balances of $1.07 billion at June 30, 2022, decreased by $0.02 billion, or 1.8 percent, since June 30, 2021.
Mr. Klein continued, “Loan growth from the linked quarter met and exceeded our expectations and we remain very positive about the loan pipelines in all of our markets. The consumer and our small business clients began to utilize their liquidity as we saw deposit and cash levels decline this quarter.”
3
| Loan Balances<br><br> ($ in thousands, except ratios) | Jun. 2022 | Mar. 2022 | Dec. 2021 | Sep. 2021 | Jun. 2021 | Annual<br><br>Growth | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Commercial | $ | 127,711 | $ | 124,857 | $ | 122,373 | $ | 138,085 | $ | 149,998 | $ | (22,287 | ) | |||||
| % of Total | 14.3 | % | 14.7 | % | 14.9 | % | 16.3 | % | 17.6 | % | -14.9 | % | ||||||
| Commercial RE | 404,260 | 400,101 | 381,387 | 387,858 | 389,287 | 14,973 | ||||||||||||
| % of Total | 45.1 | % | 47.0 | % | 46.4 | % | 45.8 | % | 45.8 | % | 3.8 | % | ||||||
| Agriculture | 60,586 | 55,741 | 57,473 | 57,374 | 50,895 | 9,691 | ||||||||||||
| % of Total | 6.8 | % | 6.6 | % | 7.0 | % | 6.8 | % | 6.0 | % | 19.0 | % | ||||||
| Residential RE | 241,614 | 214,015 | 206,324 | 207,571 | 203,294 | 38,320 | ||||||||||||
| % of Total | 27.0 | % | 25.2 | % | 25.1 | % | 24.5 | % | 23.9 | % | 18.8 | % | ||||||
| Consumer & Other | 61,440 | 55,957 | 55,157 | 55,660 | 57,039 | 4,401 | ||||||||||||
| % of Total | 6.9 | % | 6.6 | % | 6.7 | % | 6.6 | % | 6.7 | % | 7.7 | % | ||||||
| Total Loans | $ | 895,611 | $ | 850,671 | $ | 822,714 | $ | 846,548 | $ | 850,513 | $ | 45,098 | ||||||
| Total Growth Percentage | 5.3 | % | ||||||||||||||||
| Deposit Balances ($ in thousands, except ratios) | Jun. 2022 | **** | Mar. 2022 | **** | Dec. 2021 | **** | Sep. 2021 | **** | Jun. 2021 | **** | Annual Growth | **** | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Non-Int DDA | $ | 239,676 | $ | 252,273 | $ | 247,044 | $ | 258,857 | $ | 240,572 | $ | (896 | ) | |||||
| % of Total | 22.4 | % | 22.2 | % | 22.2 | % | 23.3 | % | 22.0 | % | -0.4 | % | ||||||
| Interest DDA | 198,286 | 211,152 | 195,464 | 189,130 | 187,023 | 11,263 | ||||||||||||
| % of Total | 18.5 | % | 18.6 | % | 17.6 | % | 17.0 | % | 17.1 | % | 6.0 | % | ||||||
| Savings | 215,285 | 236,394 | 237,571 | 246,414 | 235,231 | (19,946 | ) | |||||||||||
| % of Total | 20.1 | % | 20.8 | % | 21.3 | % | 22.2 | % | 21.6 | % | -8.5 | % | ||||||
| Money Market | 276,274 | 289,699 | 276,462 | 258,741 | 255,512 | 20,762 | ||||||||||||
| % of Total | 25.8 | % | 25.5 | % | 24.8 | % | 23.3 | % | 23.4 | % | 8.1 | % | ||||||
| Time Deposits | 142,258 | 148,553 | 156,504 | 158,518 | 172,696 | (30,438 | ) | |||||||||||
| % of Total | 13.3 | % | 13.1 | % | 14.1 | % | 14.3 | % | 15.8 | % | -17.6 | % | ||||||
| Total Deposits | $ | 1,071,779 | $ | 1,138,071 | $ | 1,113,045 | $ | 1,111,660 | $ | 1,091,034 | $ | (19,255 | ) | |||||
| Total Growth Percentage | -1.8 | % |
Asset Quality
SB Financial reported nonperforming assets of $5.4 million as of June 30, 2022, down $0.6 million or 9.5 percent from the year-ago quarter. The Company took minimal charge-offs in the quarter, and for the year, had just $4,000 in net charge-offs. The coverage of problem loans by the loan loss allowance was at 290 percent at June 30, 2022.
| Nonperforming Assets | Annual | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except ratios) | Jun. 2022 | Mar. 2022 | Dec. 2021 | Sep. 2021 | Jun. 2021 | Change | ||||||||||||
| Commercial & Agriculture | $ | 140 | $ | 142 | $ | 143 | $ | 144 | $ | 375 | $ | (235 | ) | |||||
| % of Total Com./Ag. loans | 0.07 | % | 0.08 | % | 0.08 | % | 0.07 | % | 0.19 | % | -62.7 | % | ||||||
| Commercial RE | 359 | 544 | 554 | 566 | 1,026 | (667 | ) | |||||||||||
| % of Total CRE loans | 0.09 | % | 0.14 | % | 0.15 | % | 0.15 | % | 0.26 | % | -65.0 | % | ||||||
| Residential RE | 3,176 | 3,198 | 2,484 | 2,056 | 1,751 | 1,425 | ||||||||||||
| % of Total Res. RE loans | 1.31 | % | 1.49 | % | 1.20 | % | 0.99 | % | 0.86 | % | 81.4 | % | ||||||
| Consumer & Other | 323 | 409 | 471 | 422 | 463 | (140 | ) | |||||||||||
| % of Total Con./Oth. loans | 0.53 | % | 0.73 | % | 0.85 | % | 0.76 | % | 0.81 | % | -30.2 | % | ||||||
| Total Nonaccruing Loans | 3,998 | 4,293 | 3,652 | 3,188 | 3,615 | 383 | ||||||||||||
| % of Total loans | 0.45 | % | 0.50 | % | 0.44 | % | 0.38 | % | 0.43 | % | 10.6 | % | ||||||
| Accruing Restructured Loans | 683 | 762 | 725 | 805 | 758 | (75 | ) | |||||||||||
| Total Change (%) | -9.9 | % | ||||||||||||||||
| Total Nonaccruing & Restructured Loans | 4,681 | 5,055 | 4,377 | 3,993 | 4,373 | 308 | ||||||||||||
| % of Total loans | 0.52 | % | 0.59 | % | 0.53 | % | 0.47 | % | 0.51 | % | 7.0 | % | ||||||
| Foreclosed Assets and Other Assets | 730 | 527 | 2,104 | 1,601 | 1,603 | (873 | ) | |||||||||||
| Total Change (%) | -54.5 | % | ||||||||||||||||
| Total Nonperforming Assets | $ | 5,411 | $ | 5,582 | $ | 6,481 | $ | 5,594 | $ | 5,976 | $ | (565 | ) | |||||
| % of Total assets | 0.42 | % | 0.42 | % | 0.49 | % | 0.42 | % | 0.46 | % | -9.5 | % |
4
Webcast and Conference Call
The Company will hold a related conference call and webcast on July 26, 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 under the 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.
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
5
SBFINANCIAL GROUP, INC.
CONSOLIDATEDBALANCE SHEETS - (Unaudited)
| June | March | December | September | June | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | 2022 | 2022 | 2021 | 2021 | 2021 | ||||||||||
| ASSETS | |||||||||||||||
| Cash and due from banks | $ | 29,567 | $ | 130,003 | $ | 149,511 | $ | 138,015 | $ | 154,993 | |||||
| Interest bearing time deposits | 1,691 | 1,894 | 2,643 | 2,651 | 2,906 | ||||||||||
| Available-for-sale securities | 266,162 | 265,311 | 263,259 | 248,815 | 211,756 | ||||||||||
| Loans held for sale | 4,242 | 4,737 | 7,472 | 10,335 | 8,731 | ||||||||||
| Loans, net of unearned income | 895,611 | 850,671 | 822,714 | 846,548 | 850,513 | ||||||||||
| Allowance for loan losses | (13,801 | ) | (13,804 | ) | (13,805 | ) | (13,812 | ) | (13,306 | ) | |||||
| Premises and equipment, net | 23,122 | 23,039 | 23,212 | 23,874 | 24,343 | ||||||||||
| Federal Reserve and FHLB Stock, at cost | 5,303 | 5,303 | 5,303 | 5,303 | 5,303 | ||||||||||
| Foreclosed assets and other assets | 730 | 527 | 2,104 | 1,601 | 1,603 | ||||||||||
| Interest receivable | 3,256 | 2,815 | 2,920 | 2,954 | 3,000 | ||||||||||
| Goodwill | 23,239 | 23,239 | 23,191 | 22,091 | 22,091 | ||||||||||
| Cash value of life insurance | 28,556 | 17,932 | 17,867 | 17,795 | 17,721 | ||||||||||
| Mortgage servicing rights | 13,408 | 13,135 | 12,034 | 11,194 | 10,678 | ||||||||||
| Other assets | 12,886 | 10,328 | 12,430 | 12,361 | 12,175 | ||||||||||
| Total assets | $ | 1,293,972 | $ | 1,335,130 | $ | 1,330,855 | $ | 1,329,725 | $ | 1,312,507 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||
| Deposits | |||||||||||||||
| Non interest bearing demand | $ | 239,676 | $ | 252,273 | $ | 247,044 | $ | 258,857 | $ | 240,572 | |||||
| Interest bearing demand | 198,286 | 211,152 | 195,464 | 189,130 | 187,023 | ||||||||||
| Savings | 215,285 | 236,394 | 237,571 | 246,414 | 235,231 | ||||||||||
| Money market | 276,274 | 289,699 | 276,462 | 258,741 | 255,512 | ||||||||||
| Time deposits | 142,258 | 148,553 | 156,504 | 158,518 | 172,696 | ||||||||||
| Total deposits | 1,071,779 | 1,138,071 | 1,113,045 | 1,111,660 | 1,091,034 | ||||||||||
| Short-term borrowings | 30,772 | 19,035 | 15,320 | 20,771 | 25,096 | ||||||||||
| Federal Home Loan Bank advances | 25,000 | 5,500 | 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 | 19,570 | 19,558 | 19,546 | 19,534 | 19,522 | ||||||||||
| Interest payable | 307 | 536 | 299 | 576 | 417 | ||||||||||
| Other liabilities | 11,678 | 9,483 | 21,906 | 17,082 | 16,611 | ||||||||||
| Total liabilities | 1,169,416 | 1,202,493 | 1,185,926 | 1,185,433 | 1,168,490 | ||||||||||
| Shareholders’ Equity | |||||||||||||||
| Common stock | 61,319 | 61,319 | 54,463 | 54,463 | 54,463 | ||||||||||
| Additional paid-in capital | 15,069 | 14,872 | 14,944 | 14,875 | 14,906 | ||||||||||
| Retained earnings | 96,809 | 94,833 | 99,716 | 97,183 | 93,851 | ||||||||||
| Accumulated other comprehensive income (loss) | (22,210 | ) | (13,659 | ) | (1,845 | ) | (699 | ) | 499 | ||||||
| Treasury stock | (26,431 | ) | (24,728 | ) | (22,349 | ) | (21,530 | ) | (19,702 | ) | |||||
| Total shareholders’ equity | 124,556 | 132,637 | 144,929 | 144,292 | 144,017 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 1,293,972 | $ | 1,335,130 | $ | 1,330,855 | $ | 1,329,725 | $ | 1,312,507 |
6
SB FINANCIAL GROUP,INC.
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
| At and for the Three Months Ended | Six Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June | March | December | September | June | June | June | |||||||||
| ($ in thousands, except per share & ratios) | 2022 | 2022 | 2021 | 2021 | 2021 | 2022 | 2021 | ||||||||
| Interest income | |||||||||||||||
| Loans | |||||||||||||||
| Taxable | $ | 8,880 | $ | 8,052 | $ | 8,889 | $ | 9,948 | $ | 9,196 | $ | 16,932 | $ | 19,122 | |
| Tax exempt | 73 | 61 | 59 | 52 | 47 | 134 | 95 | ||||||||
| Securities | |||||||||||||||
| Taxable | 1,469 | 1,235 | 969 | 939 | 835 | 2,704 | 1,478 | ||||||||
| Tax exempt | 52 | 47 | 86 | 94 | 85 | 99 | 173 | ||||||||
| Total interest income | 10,474 | 9,395 | 10,003 | 11,033 | 10,163 | 19,869 | 20,868 | ||||||||
| Interest expense | |||||||||||||||
| Deposits | 567 | 618 | 640 | 709 | 818 | 1,185 | 1,780 | ||||||||
| Repurchase agreements & other | 11 | 13 | 7 | 12 | 12 | 24 | 23 | ||||||||
| Federal Home Loan Bank advances | 38 | 39 | 41 | 40 | 51 | 77 | 107 | ||||||||
| Trust preferred securities | 71 | 53 | 49 | 49 | 50 | 124 | 101 | ||||||||
| Subordinated debt | 194 | 195 | 188 | 199 | 75 | 389 | 75 | ||||||||
| Total interest expense | 881 | 918 | 925 | 1,009 | 1,006 | 1,799 | 2,086 | ||||||||
| Net interest income | 9,593 | 8,477 | 9,078 | 10,024 | 9,157 | 18,070 | 18,782 | ||||||||
| Provision for loan losses | - | - | - | 300 | - | - | 750 | ||||||||
| Net interest income after provision for loan losses | 9,593 | 8,477 | 9,078 | 9,724 | 9,157 | 18,070 | 18,032 | ||||||||
| Noninterest income | |||||||||||||||
| Wealth management fees | 936 | 955 | 988 | 959 | 955 | 1,891 | 1,867 | ||||||||
| Customer service fees | 860 | 794 | 827 | 812 | 820 | 1,654 | 1,578 | ||||||||
| Gain on sale of mtg. loans & OMSR | 1,196 | 1,676 | 3,194 | 3,947 | 4,255 | 2,872 | 10,114 | ||||||||
| Mortgage loan servicing fees, net | 606 | 1,204 | 624 | 155 | (217 | ) | 1,810 | 2,161 | |||||||
| Gain on sale of non-mortgage loans | 167 | 169 | 44 | 52 | 45 | 336 | 62 | ||||||||
| Title insurance revenue | 697 | 602 | 528 | 508 | 532 | 1,299 | 1,053 | ||||||||
| Gain (loss) on sale of assets | - | 55 | 1 | 1 | 2 | 55 | - | ||||||||
| Other | 211 | 347 | 383 | 215 | 145 | 558 | 624 | ||||||||
| Total noninterest income | 4,673 | 5,802 | 6,589 | 6,649 | 6,537 | 10,475 | 17,459 | ||||||||
| Noninterest expense | |||||||||||||||
| Salaries and employee benefits | 6,418 | 6,189 | 6,648 | 6,689 | 6,881 | 12,607 | 13,501 | ||||||||
| Net occupancy expense | 719 | 742 | 846 | 714 | 748 | 1,461 | 1,488 | ||||||||
| Equipment expense | 827 | 854 | 899 | 872 | 778 | 1,681 | 1,510 | ||||||||
| Data processing fees | 643 | 576 | 721 | 671 | 653 | 1,219 | 1,187 | ||||||||
| Professional fees | 760 | 950 | 872 | 817 | 574 | 1,710 | 1,338 | ||||||||
| Marketing expense | 222 | 231 | 228 | 201 | 220 | 453 | 355 | ||||||||
| Telephone and communication expense | 105 | 111 | 148 | 140 | 139 | 216 | 293 | ||||||||
| Postage and delivery expense | 110 | 116 | 106 | 100 | 97 | 226 | 208 | ||||||||
| State, local and other taxes | 277 | 278 | 288 | 286 | 278 | 555 | 601 | ||||||||
| Employee expense | 175 | 136 | 163 | 186 | 161 | 311 | 314 | ||||||||
| Other expenses | 546 | 676 | 648 | 580 | 547 | 1,222 | 1,190 | ||||||||
| Total noninterest expense | 10,802 | 10,859 | 11,567 | 11,256 | 11,076 | 21,661 | 21,985 | ||||||||
| Income before income tax expense | 3,464 | 3,420 | 4,100 | 5,117 | 4,618 | 6,884 | 13,506 | ||||||||
| Income tax expense | 630 | 607 | 768 | 1,014 | 857 | 1,237 | 2,664 | ||||||||
| Net income | $ | 2,834 | $ | 2,813 | $ | 3,332 | $ | 4,103 | $ | 3,761 | $ | 5,647 | $ | 10,842 | |
| Common share data: | |||||||||||||||
| Basic earnings per common share | $ | 0.40 | $ | 0.40 | $ | 0.49 | $ | 0.59 | $ | 0.53 | $ | 0.80 | $ | 1.50 | |
| Diluted earnings per common share | $ | 0.40 | $ | 0.40 | $ | 0.49 | $ | 0.58 | $ | 0.52 | $ | 0.79 | $ | 1.49 | |
| Average shares outstanding (in thousands): | |||||||||||||||
| Basic: | 7,075 | 7,035 | 6,906 | 6,966 | 7,148 | 7,055 | 7,232 | ||||||||
| Diluted: | 7,149 | 7,100 | 6,970 | 7,017 | 7,200 | 7,116 | 7,256 |
7
SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
| At and for the Three Months Ended | Six Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except per share & ratios) | June<br><br>2022 | March<br><br>2022 | December<br><br>2021 | September<br><br>2021 | June<br><br>2021 | June<br><br>2022 | June<br><br>2021 | ||||||||||||||
| SUMMARY OF OPERATIONS | |||||||||||||||||||||
| Net interest income | $ | 9,593 | $ | 8,477 | $ | 9,078 | $ | 10,024 | $ | 9,157 | $ | 18,070 | $ | 18,782 | |||||||
| Tax-equivalent adjustment | 33 | 29 | 39 | 39 | 35 | 62 | 71 | ||||||||||||||
| Tax-equivalent net interest income | 9,626 | 8,506 | 9,117 | 10,063 | 9,192 | 18,132 | 18,853 | ||||||||||||||
| Provision for loan loss | - | - | - | 300 | - | - | 750 | ||||||||||||||
| Noninterest income | 4,673 | 5,802 | 6,589 | 6,649 | 6,537 | 10,475 | 17,459 | ||||||||||||||
| Total operating revenue | 14,266 | 14,279 | 15,667 | 16,673 | 15,694 | 28,545 | 36,241 | ||||||||||||||
| Noninterest expense | 10,802 | 10,859 | 11,567 | 11,256 | 11,076 | 21,661 | 21,985 | ||||||||||||||
| Pre-tax pre-provision income | 3,464 | 3,420 | 4,100 | 5,417 | 4,618 | 6,884 | 14,256 | ||||||||||||||
| Pretax income | 3,464 | 3,420 | 4,100 | 5,117 | 4,618 | 6,884 | 13,506 | ||||||||||||||
| Net income | 2,834 | 2,813 | 3,332 | 4,103 | 3,761 | 5,647 | 10,842 | ||||||||||||||
| PER SHARE INFORMATION: | |||||||||||||||||||||
| Basic earnings per share (EPS) | 0.40 | 0.40 | 0.49 | 0.59 | 0.53 | 0.80 | 1.50 | ||||||||||||||
| Diluted earnings per share | 0.40 | 0.40 | 0.49 | 0.58 | 0.52 | 0.79 | 1.49 | ||||||||||||||
| Common dividends | 0.120 | 0.115 | 0.115 | 0.110 | 0.110 | 0.235 | 0.215 | ||||||||||||||
| Book value per common share | 17.75 | 18.65 | 21.05 | 20.83 | 20.49 | 17.75 | 20.49 | ||||||||||||||
| Tangible book value per common share (TBV) | 14.36 | 15.31 | 17.60 | 17.55 | 17.25 | 14.36 | 17.25 | ||||||||||||||
| Market price per common share | 17.26 | 19.91 | 19.67 | 18.18 | 18.50 | 17.26 | 18.50 | ||||||||||||||
| Market price to TBV | 120.2 | % | 130.1 | % | 111.8 | % | 103.6 | % | 107.2 | % | 120.2 | % | 107.2 | % | |||||||
| Market price to trailing 12 month EPS | 9.3 | 10.0 | 7.7 | 6.7 | 6.5 | 9.3 | 6.5 | ||||||||||||||
| PERFORMANCE RATIOS: | |||||||||||||||||||||
| Return on average assets (ROAA) | 0.87 | % | 0.83 | % | 0.99 | % | 1.23 | % | 1.13 | % | 0.85 | % | 1.66 | % | |||||||
| Pre-tax pre-provision ROAA | 1.06 | % | 1.01 | % | 1.22 | % | 1.63 | % | 1.39 | % | 1.11 | % | 2.32 | % | |||||||
| Return on average equity | 8.89 | % | 8.08 | % | 9.21 | % | 11.35 | % | 10.42 | % | 8.46 | % | 15.09 | % | |||||||
| Return on average tangible equity | 10.93 | % | 9.75 | % | 10.92 | % | 13.47 | % | 12.37 | % | 10.30 | % | 17.92 | % | |||||||
| Efficiency ratio | 75.60 | % | 75.93 | % | 73.72 | % | 67.40 | % | 70.46 | % | 75.76 | % | 60.56 | % | |||||||
| Earning asset yield | 3.45 | % | 2.96 | % | 3.17 | % | 3.25 | % | 3.56 | % | 3.20 | % | 3.40 | % | |||||||
| Cost of interest bearing liabilities | 0.39 | % | 0.39 | % | 0.40 | % | 0.44 | % | 0.44 | % | 0.38 | % | 0.47 | % | |||||||
| Net interest margin | 3.15 | % | 2.67 | % | 2.87 | % | 3.20 | % | 2.93 | % | 2.91 | % | 3.06 | % | |||||||
| Tax equivalent effect | 0.01 | % | 0.01 | % | 0.02 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | |||||||
| Net interest margin, tax equivalent | 3.16 | % | 2.68 | % | 2.89 | % | 3.21 | % | 2.94 | % | 2.92 | % | 3.07 | % | |||||||
| Non interest income/Average assets | 1.43 | % | 1.72 | % | 1.96 | % | 1.99 | % | 1.97 | % | 1.58 | % | 2.67 | % | |||||||
| Non interest expense/Average assets | 3.31 | % | 3.22 | % | 3.45 | % | 3.38 | % | 3.33 | % | 3.26 | % | 3.37 | % | |||||||
| Net noninterest expense/Average assets | -1.88 | % | -1.50 | % | -1.48 | % | -1.38 | % | -1.37 | % | -1.68 | % | -0.70 | % | |||||||
| ASSET QUALITY RATIOS: | |||||||||||||||||||||
| Gross charge-offs | 9 | 9 | 34 | 24 | 26 | 18 | 78 | ||||||||||||||
| Recoveries | 6 | 8 | 27 | 230 | 6 | 14 | 60 | ||||||||||||||
| Net charge-offs | 3 | 1 | 7 | (206 | ) | 20 | 4 | 18 | |||||||||||||
| Nonaccruing loans/Total loans | 0.45 | % | 0.50 | % | 0.44 | % | 0.38 | % | 0.43 | % | 0.45 | % | 0.43 | % | |||||||
| Nonperforming loans/Total loans | 0.52 | % | 0.59 | % | 0.53 | % | 0.47 | % | 0.51 | % | 0.52 | % | 0.51 | % | |||||||
| Nonperforming assets/Loans & OREO | 0.60 | % | 0.66 | % | 0.79 | % | 0.66 | % | 0.70 | % | 0.60 | % | 0.70 | % | |||||||
| Nonperforming assets/Total assets | 0.42 | % | 0.42 | % | 0.49 | % | 0.42 | % | 0.46 | % | 0.42 | % | 0.46 | % | |||||||
| Allowance for loan loss/Nonperforming loans | 294.83 | % | 273.08 | % | 315.40 | % | 345.91 | % | 304.28 | % | 294.83 | % | 304.28 | % | |||||||
| Allowance for loan loss/Total loans | 1.54 | % | 1.62 | % | 1.68 | % | 1.63 | % | 1.56 | % | 1.54 | % | 1.56 | % | |||||||
| Net loan charge-offs/Average loans (ann.) | 0.00 | % | 0.00 | % | 0.00 | % | (0.10 | %) | 0.01 | % | 0.00 | % | 0.00 | % | |||||||
| CAPITAL & LIQUIDITY RATIOS: | |||||||||||||||||||||
| Loans/ Deposits | 83.56 | % | 74.75 | % | 73.92 | % | 76.15 | % | 77.95 | % | 83.56 | % | 77.95 | % | |||||||
| Equity/ Assets | 9.63 | % | 9.93 | % | 10.89 | % | 10.85 | % | 10.97 | % | 9.63 | % | 10.97 | % | |||||||
| Tangible equity/Tangible assets | 7.93 | % | 8.30 | % | 9.27 | % | 9.30 | % | 9.41 | % | 7.93 | % | 9.41 | % | |||||||
| Common equity tier 1 ratio (Bank) | 14.08 | % | 13.71 | % | 13.94 | % | 13.23 | % | 13.11 | % | 14.08 | % | 13.11 | % | |||||||
| END OF PERIOD BALANCES | |||||||||||||||||||||
| Total assets | 1,293,972 | 1,335,130 | 1,330,855 | 1,329,725 | 1,312,507 | 1,293,972 | 1,312,507 | ||||||||||||||
| Total loans | 895,611 | 850,671 | 822,714 | 846,548 | 850,513 | 895,611 | 850,513 | ||||||||||||||
| Deposits | 1,071,779 | 1,138,071 | 1,113,045 | 1,111,660 | 1,091,034 | 1,071,779 | 1,091,034 | ||||||||||||||
| Stockholders equity | 124,556 | 132,637 | 144,929 | 144,292 | 144,017 | 124,556 | 144,017 | ||||||||||||||
| Goodwill and intangibles | 23,804 | 23,804 | 23,774 | 22,692 | 22,710 | 23,804 | 22,710 | ||||||||||||||
| Tangible equity | 100,752 | 108,833 | 121,155 | 121,600 | 121,307 | 100,752 | 121,307 | ||||||||||||||
| Mortgage servicing portfolio | 1,369,732 | 1,375,554 | 1,362,962 | 1,341,439 | 1,323,804 | 1,369,732 | 1,323,804 | ||||||||||||||
| Wealth/Brokerage assets under care | 500,487 | 560,698 | 618,279 | 588,319 | 600,904 | 500,487 | 600,904 | ||||||||||||||
| Total assets under care | 3,164,191 | 3,271,382 | 3,312,096 | 3,259,483 | 3,237,215 | 3,164,191 | 3,237,215 | ||||||||||||||
| Full-time equivalent employees | 267 | 256 | 269 | 264 | 256 | 267 | 256 | ||||||||||||||
| Period end common shares outstanding | 7,017 | 7,111 | 6,884 | 6,927 | 7,027 | 7,017 | 7,027 | ||||||||||||||
| Market capitalization (all) | 121,105 | 141,575 | 135,415 | 125,935 | 130,000 | 121,105 | 130,000 | ||||||||||||||
| AVERAGE BALANCES | |||||||||||||||||||||
| Total assets | 1,305,815 | 1,350,982 | 1,342,202 | 1,333,369 | 1,329,348 | 1,328,216 | 1,306,355 | ||||||||||||||
| Total earning assets | 1,216,124 | 1,270,218 | 1,263,431 | 1,253,722 | 1,251,213 | 1,243,017 | 1,227,359 | ||||||||||||||
| Total loans | 870,439 | 832,825 | 845,078 | 856,486 | 853,794 | 851,736 | 858,321 | ||||||||||||||
| Deposits | 1,108,890 | 1,134,234 | 1,123,843 | 1,109,491 | 1,115,186 | 1,121,373 | 1,094,269 | ||||||||||||||
| Stockholders equity | 127,519 | 139,214 | 144,749 | 144,565 | 144,315 | 133,471 | 143,709 | ||||||||||||||
| Goodwill and intangibles | 23,796 | 23,801 | 22,701 | 22,701 | 22,718 | 23,798 | 22,727 | ||||||||||||||
| Tangible equity | 103,723 | 115,413 | 122,048 | 121,864 | 121,597 | 109,673 | 120,982 | ||||||||||||||
| Average basic shares outstanding | 7,075 | 7,035 | 6,906 | 6,966 | 7,148 | 7,055 | 7,232 | ||||||||||||||
| Average diluted shares outstanding | 7,149 | 7,100 | 6,970 | 7,017 | 7,200 | 7,116 | 7,256 |
8
SB FINANCIAL GROUP, INC.
Rate Volume Analysis - (Unaudited)
For the Three and Six Months Ended June 30,2022 and 2021
| Three Months Ended Jun. 30, 2022 | Three Months Ended Jun. 30, 2021 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Average | Average | Average | Average | |||||||||||||
| ($ in thousands) | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||
| Assets | ||||||||||||||||
| Taxable securities/cash | $ | 337,226 | $ | 1,469 | 1.74 | % | $ | 390,036 | $ | 835 | 0.86 | % | ||||
| Nontaxable securities | 8,459 | 52 | 2.46 | % | 7,383 | 85 | 4.61 | % | ||||||||
| Loans, net | 870,439 | 8,953 | 4.11 | % | 853,794 | 9,243 | 4.33 | % | ||||||||
| Total earning assets | 1,216,124 | 10,474 | 3.45 | % | 1,251,213 | 10,163 | 3.25 | % | ||||||||
| Cash and due from banks | 7,177 | 6,992 | ||||||||||||||
| Allowance for loan losses | (13,803 | ) | (13,565 | ) | ||||||||||||
| Premises and equipment | 23,741 | 23,988 | ||||||||||||||
| Other assets | 72,576 | 60,720 | ||||||||||||||
| Total assets | $ | 1,305,815 | $ | 1,329,348 | ||||||||||||
| Liabilities | ||||||||||||||||
| Savings, MMDA and interest bearing demand | $ | 713,367 | $ | 353 | 0.20 | % | $ | 672,803 | $ | 464 | 0.28 | % | ||||
| Time deposits | 145,694 | 214 | 0.59 | % | 183,138 | 354 | 0.77 | % | ||||||||
| Repurchase agreements & other | 18,671 | 11 | 0.24 | % | 23,607 | 12 | 0.20 | % | ||||||||
| Advances from Federal Home Loan Bank | 3,989 | 38 | 3.81 | % | 7,066 | 51 | 2.89 | % | ||||||||
| Trust preferred securities | 10,310 | 71 | 2.75 | % | 10,310 | 50 | 1.94 | % | ||||||||
| Subordinated debt | 19,564 | 194 | 3.97 | % | 9,880 | 75 | 0.00 | % | ||||||||
| Total interest bearing liabilities | 911,595 | 881 | 0.39 | % | 906,804 | 1,006 | 0.44 | % | ||||||||
| Non interest bearing demand | 249,829 | - | 259,245 | - | ||||||||||||
| Total funding | 1,161,424 | 0.30 | % | 1,166,049 | 0.35 | % | ||||||||||
| Other liabilities | 16,872 | 18,984 | ||||||||||||||
| Total liabilities | 1,178,296 | 1,185,033 | ||||||||||||||
| Equity | 127,519 | 144,315 | ||||||||||||||
| Total liabilities and equity | $ | 1,305,815 | $ | 1,329,348 | ||||||||||||
| Net interest income | $ | 9,593 | $ | 9,157 | ||||||||||||
| Net interest income as a percent of average interest-earning assets - GAAP measure | 3.155 | % | 2.93 | % | ||||||||||||
| Net interest income as a percent of average<br> interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis | 3.164 | % | 2.94 | % |
9
| Six<br> Months Ended Jun. 30, 2022 | Six<br> Months Ended Jun. 30, 2021 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| **** | Average | **** | **** | Average | **** | Average | **** | **** | Average | **** | ||||||
| Balance | **** | Interest | Rate | **** | Balance | **** | Interest | Rate | **** | |||||||
| Assets | ||||||||||||||||
| Taxable<br> securities/cash | $ | 383,272 | $ | 2,704 | 1.41 | % | $ | 361,566 | $ | 1,478 | 0.82 | % | ||||
| Nontaxable<br> securities | 8,009 | 99 | 2.47 | % | 7,472 | 173 | 4.63 | % | ||||||||
| Loans,<br> net | 851,736 | 17,066 | 4.01 | % | 858,321 | 19,217 | 4.48 | % | ||||||||
| Total<br> earning assets | 1,243,017 | 19,869 | 3.20 | % | 1,227,359 | 20,868 | 3.40 | % | ||||||||
| Cash<br> and due from banks | 7,593 | 7,769 | ||||||||||||||
| Allowance<br> for loan losses | (13,805 | ) | (13,206 | ) | ||||||||||||
| Premises<br> and equipment | 24,522 | 23,743 | ||||||||||||||
| Other<br> assets | 66,889 | 60,690 | ||||||||||||||
| Total<br> assets | $ | 1,328,216 | $ | 1,306,355 | ||||||||||||
| Liabilities | ||||||||||||||||
| Savings,<br> MMDA and interest bearing demand | $ | 723,176 | $ | 751 | 0.21 | % | $ | 643,962 | $ | 972 | 0.30 | % | ||||
| Time<br> deposits | 156,268 | 435 | 0.56 | % | 194,955 | 808 | 0.83 | % | ||||||||
| Repurchase<br> agreements & Other | 21,876 | 24 | 0.22 | % | 23,869 | 23 | 0.19 | % | ||||||||
| Advances<br> from Federal Home Loan Bank | 4,740 | 77 | 3.25 | % | 7,530 | 107 | 2.84 | % | ||||||||
| Trust<br> preferred securities | 10,310 | 124 | 2.41 | % | 10,310 | 101 | 1.96 | % | ||||||||
| Subordinated<br> debt | 19,558 | 389 | 3.98 | % | 5,646 | 75 | 2.66 | % | ||||||||
| Total<br> interest bearing liabilities | 935,928 | 1,799 | 0.38 | % | 886,272 | 2,086 | 0.47 | % | ||||||||
| Non<br> interest bearing demand | 241,929 | 0.31 | % | 255,352 | 0.37 | % | ||||||||||
| Total<br> funding | 1,177,857 | 1,141,624 | ||||||||||||||
| Other<br> liabilities | 16,888 | 21,022 | ||||||||||||||
| Total<br> liabilities | 1,194,745 | 1,162,646 | ||||||||||||||
| Equity | 133,471 | 143,709 | ||||||||||||||
| Total<br> liabilities and equity | $ | 1,328,216 | $ | 1,306,355 | ||||||||||||
| Net<br> interest income | $ | 18,070 | $ | 18,782 | ||||||||||||
| Net<br> interest income as a percent of average interest-earning assets - GAAP measure | 2.91 | % | 3.06 | % | ||||||||||||
| Net<br> interest income as a percent of average interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis | 2.92 | % | 3.07 | % |
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| Non-GAAP reconciliation | Three Months Ended | Six Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands, except per share & ratios) | Jun. 30, 2022 | **** | Jun. 30, 2021 | **** | Jun. 30, 2022 | **** | Jun. 30, 2021 | **** | ||||
| Total Operating Revenue | $ | 14,266 | $ | 15,694 | $ | 28,545 | $ | 36,241 | ||||
| Adjustment to (deduct)/add OMSR recapture/impairment* | (239 | ) | 99 | (1,128 | ) | (2,606 | ) | |||||
| Adjusted Total Operating Revenue | 14,027 | 15,793 | 27,417 | 33,635 | ||||||||
| Income before Income Taxes | 3,464 | 4,618 | 6,884 | 13,506 | ||||||||
| Adjustment for OMSR | (239 | ) | 99 | (1,128 | ) | (2,606 | ) | |||||
| Adjusted Income before Income Taxes | 3,225 | 4,717 | 5,756 | 10,900 | ||||||||
| Provision for Income Taxes | 630 | 857 | 1,237 | 2,664 | ||||||||
| Adjustment for OMSR ** | (50 | ) | 21 | (237 | ) | (547 | ) | |||||
| Adjusted Provision for Income Taxes | 580 | 878 | 1,000 | 2,118 | ||||||||
| Net Income | 2,834 | 3,761 | 5,647 | 10,842 | ||||||||
| Adjustment for OMSR | (189 | ) | 79 | (891 | ) | (2,059 | ) | |||||
| Adjusted Net Income | 2,645 | 3,840 | 4,756 | 8,783 | ||||||||
| Diluted Earnings per Share | 0.40 | 0.52 | 0.79 | 1.49 | ||||||||
| Adjustment for OMSR | (0.03 | ) | 0.01 | (0.13 | ) | (0.28 | ) | |||||
| Adjusted Diluted Earnings per Share | $ | 0.37 | $ | 0.53 | $ | 0.67 | $ | 1.21 | ||||
| Return on Average Assets | 0.87 | % | 1.13 | % | 0.85 | % | 1.66 | % | ||||
| Adjustment for OMSR | -0.06 | % | 0.02 | % | -0.07 | % | -0.16 | % | ||||
| Adjusted Return on Average Assets | 0.81 | % | 1.15 | % | 0.78 | % | 1.50 | % | ||||
| * | valuation adjustment to the Company’s mortgage servicing rights | |||||||||||
| --- | --- | |||||||||||
| ** | tax effect is calculated using a 21% statutory federal corporate<br>income tax rate | |||||||||||
| --- | --- |
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