• SB Financial Group Announces First Quarter 2023 Results

    المصدر: Nasdaq GlobeNewswire / 20 أبريل 2023 15:15:01   America/Chicago

    DEFIANCE, Ohio, April 20, 2023 (GLOBE NEWSWIRE) -- SB Financial Group, Inc. (NASDAQ: SBFG) (“SB Financial” or the “Company”), a diversified financial services company providing full-service community banking, mortgage banking, wealth management, private client and title insurance services today reported earnings for the first quarter ended March 31, 2023.

    First quarter 2023 highlights:

    • Net income of $2.5 million decreased 12.9 percent compared to the prior year with diluted earnings per share (“EPS”) of $0.35
    • Adjusted for Mortgage Servicing Rights recapture (“OMSR”), net income is higher by 14.0 percent compared to the prior year
    • Noninterest expense of $10.8 million declined 0.8 percent from the prior year
    • Loan growth of $14.2 million from the linked quarter, or 5.9 percent annualized
    • Deposit growth of $23.5 million from the linked quarter, or 8.6 percent annualized
    • Stable asset quality with nonperforming assets at 35 basis points
    Earnings HighlightsThree Months Ended
    ($ in thousands, except per share & ratios)Mar. 2023Mar. 2022% Change
    Operating revenue$13,990$14,279-2.0%
    Interest income 13,824 9,39547.1%
    Interest expense 3,500 918281.3%
    Net interest income 10,324 8,47721.8%
    Provision for credit losses 250 -0.0%
    Noninterest income 3,666 5,802-36.8%
    Noninterest expense 10,773 10,859-0.8%
    Net income 2,450 2,813-12.9%
    Earnings per diluted share 0.35 0.40-12.5%
    Return on average assets 0.73% 0.83%-12.0%
    Return on average equity 8.37% 8.08%3.6%
          

    “Our Company experienced the volatility of the banking sector this quarter and it has impacted our earnings results,” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “Liquidity concerns resulted in a much more competitive arena for deposits and funding in the quarter, which drove our deposit beta significantly higher and reduced margin income. We still were able to add loan balances in the quarter even as we have begun to examine all of our credit underwriting standards.”

    RESULTS OF OPERATIONS

    Consolidated Revenue

    Total operating revenue, consisting of net interest income and noninterest income, was down from both the linked quarter and the prior year quarter by 4.3 and 2.0 percent, respectively. Operating revenue was negatively impacted by the decline in mortgage banking revenue and higher funding costs.

    • Net interest income was down 5.3 percent from the linked quarter but up 21.8 percent from the year ago quarter.
    • Net interest margin was up from the prior year by 68 basis points, primarily from the shift in mix of our balance sheet with cash and securities reallocated to the loan portfolio offset by the shift in our funding mix to higher cost term deposits.      
    • Noninterest income was down 36.8 percent from the year ago quarter, due to lower mortgage volume and OMSR recapture.

    Mortgage Loan Business

    Mortgage loan originations for the first quarter of 2023 were $49.3 million, down $48.0 million, or 49.3 percent, from the year-ago quarter; likewise, total sales of originated loans were $22.6 million, down $49.5 million, or 68.7 percent.  

    Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.2 million for the first quarter of 2023, compared to $2.9 million for the year-ago quarter. The mortgage servicing valuation adjustment for the first quarter of 2023 was a positive $0.1 million, compared to a positive adjustment of $0.9 million for the first quarter of 2022. The servicing portfolio at March 31, 2023, was $1.34 billion, which was down 2.3 percent to the prior year.

    Mr. Klein noted, “While we added producers in our high growth markets of Indianapolis and Columbus, mortgage origination volume was constrained by the rate environment. Our pipelines are improving and notably nearly 75 percent of the pipeline is saleable product, which is back to our more normal business model.”  

    Mortgage Banking       
    ($ in thousands)Mar. 2023
    		 Dec. 2022
    		 Sep. 2022
    		 Jun. 2022
    		 Mar. 2022
    		  Annual Growth
    Mortgage originations$49,366 $51,219 $68,557 $95,454 $97,394  $(48,028)
    Mortgage sales 25,803  23,590  39,176  49,915  72,154   (46,351)
    Mortgage servicing portfolio 1,344,158  1,352,016  1,362,666  1,369,732  1,375,554   (31,396)
    Mortgage servicing rights 13,548  13,503  13,473  13,408  13,135   413 
            
            
    Mortgage servicing revenue       
    Loan servicing fees 844  851  858  863  861   (17)
    OMSR amortization (292) (310) (396) (496) (547)  255 
    Net administrative fees 552  541  462  367  314   238 
    OMSR valuation adjustment 56  86  65  239  890   (834)
    Net loan servicing fees 608  627  527  606  1,204   (596)
    Gain on sale of mortgages 599  550  876  1,196  1,676   (1,077)
    Mortgage banking revenue, net$ 1,207 $ 1,177 $ 1,403 $ 1,802 $ 2,880  $ (1,673)
            

    Noninterest Income and Noninterest Expense

    Noninterest income declined for the first quarter, from both the linked quarter and prior year. Gain-on-sale from mortgage loans were down significantly from the prior year and total sales were down over $46 million. The Title insurance business was off nearly 40 percent, reflecting the lower level of residential volume.

    For the first quarter of 2023, noninterest expense of $10.8 million was down $0.1 million or 0.8 percent compared to the prior year quarter. Overall head count is down from the linked quarter by 4.9 percent as we continue to right size the mortgage business line. Commission expense for both mortgage and SBA is down compared to the prior year due to the lower total origination volume.

    Mr. Klein stated, “We have undertaken a full scale review of our expense structure as we understand the headwinds that revenue growth will encounter in 2023. Our mortgage business line infrastructure has been reduced and we are looking at other areas to provide meaningful expense reductions.”

    Noninterest Income / Noninterest Expense       
    ($ in thousands, except ratios)Mar. 2023
    		 Dec. 2022
    		 Sep. 2022
    		 Jun. 2022
    		 Mar. 2022
    		  Annual Growth
    Noninterest Income (NII)$3,666 $3,713 $4,043 $4,673 $5,802  $(2,136)
    NII / Total Revenue 26.2%  25.4%  27.9%  32.8%  40.6%   -14.4% 
    NII / Average Assets 1.1%  1.1%  1.2%  1.4%  1.7%   -0.6% 
    Total Revenue Growth -2.0%  -6.7%  -13.2%  -9.1%  -46.9%   44.9% 
            
    Noninterest Expense (NIE)$10,773 $10,269 $10,384 $10,802 $10,859  $(86)
    Efficiency Ratio 76.9%  70.2%  71.6%  75.6%  75.9%   1.0% 
    NIE / Average Assets 3.2%  3.1%  3.2%  3.3%  3.2%   0.0% 
    Net Noninterest Expense/Avg. Assets -2.1%  -2.0%  -2.0%  -1.9%  -1.5%   -0.6% 
    Total Expense Growth -0.8%  -11.2%  -7.7%  -2.5%  -0.5%   -0.3% 
                        

    Balance Sheet

    Total assets as of March 31, 2023, were $1.34 billion, or in line with the year ago quarter primarily due to the increase in the loan portfolio which was offset by declines in cash and investments. Total shareholders’ equity as of March 31, 2023, was $119.8 million, down from the prior year but compared to the linked quarter was higher due to the declining impairment of our bond portfolio. Excluding the impact of the valuation adjustment, equity increased $3.1 million or 2.1 percent. Our adoption of CECL on January 1st resulted in a reduction of equity that was transferred into our allowance for credit losses. SB Financial repurchased 56,000 shares of our stock during the quarter.  

    The investment portfolio of $237.9 million, represented 17.7 percent of assets at March 31, 2023, and was down $27.4 million or 10.3 percent from the year-ago period. Total loans held for investment were $976.3 million at March 31, 2023, up $125.6 million, or 14.8 percent, from March 31, 2022.

    Deposit balances of $1.11 billion at March 31, 2023, decreased by $27.9 million, or 2.5 percent, since March 31, 2022. However, deposits have increased from the linked quarter by $23.5 million and have increased for three consecutive quarters. The growth in deposits has come with a significant shift in the mix as time deposits now comprise 21.1 percent of the total compared to 13.1 percent at March 31, 2022.  

    Mr. Klein continued, “Loan growth continued in the quarter and compared to the prior year we have increased our loan portfolio by over $125 million which has led to a positive mix shift on the asset side of the balance sheet. Like every community bank, the quest for deposits and low-cost funding was challenging. We are pleased that we have been able to grow deposits over the last three quarters, albeit at a higher cost.”

    Loan Balances      
    ($ in thousands, except ratios)Mar. 2023
    		 Dec. 2022
    		 Sep. 2022
    		 Jun. 2022
    		 Mar. 2022
    		 Annual Growth
    		 
    Commercial$126,065 $128,534 $128,565 $127,711 $124,857 $1,208 
    % of Total 12.9%  13.4%  13.9%  14.3%  14.7%  1.0% 
    Commercial RE 419,024  412,636  404,710  404,260  400,101  18,923 
    % of Total 42.9%  42.9%  43.7%  45.1%  47.0%  4.7% 
    Agriculture 57,761  64,388  60,522  60,586  55,741  2,020 
    % of Total 5.9%  6.7%  6.5%  6.8%  6.6%  3.6% 
    Residential RE 309,684  291,512  267,135  241,614  214,015  95,669 
    % of Total 31.7%  30.3%  28.9%  27.0%  25.2%  44.7% 
    Consumer & Other 63,778  65,005  64,317  61,440  55,957  7,821 
    % of Total 6.5%  6.8%  7.0%  6.9%  6.6%  14.0% 
    Total Loans$ 976,312 $ 962,075 $ 925,249 $ 895,611 $ 850,671 $ 125,641 
    Total Growth Percentage        14.8% 
           
           
    Deposit Balances      
    ($ in thousands, except ratios)Mar. 2023
    		 Dec. 2022
    		 Sep. 2022
    		 Jun. 2022
    		 Mar. 2022
    		 Annual Growth
    		 
    Non-Int DDA$237,175 $256,799 $250,791 $239,676 $252,273 $(15,098)
    % of Total 21.4%  23.6%  23.1%  22.4%  22.2%  -6.0% 
    Interest DDA 188,497  191,719  199,523  198,286  211,152  (22,655)
    % of Total 17.0%  17.6%  18.4%  18.5%  18.6%  -10.7% 
    Savings 227,974  191,272  201,402  215,285  236,394  (8,420)
    % of Total 20.5%  17.6%  18.5%  20.1%  20.8%  -3.6% 
    Money Market 222,203  255,995  258,975  276,274  289,699  (67,496)
    % of Total 20.0%  23.6%  23.8%  25.8%  25.5%  -23.3% 
    Time Deposits 234,295  190,880  175,202  142,258  148,553  85,742 
    % of Total 21.1%  17.6%  16.1%  13.3%  13.1%  57.7% 
    Total Deposits$ 1,110,144 $ 1,086,665 $ 1,085,893 $ 1,071,779 $ 1,138,071 $ (27,927)
    Total Growth Percentage        -2.5% 
           

    Asset Quality

    SB Financial reported nonperforming assets of $4.7 million as of March 31, 2023, down $0.9 million or 16.0 percent from the year-ago quarter. The coverage ratio of problem loans to the allowance for credit losses was at 382.4 percent at March 31, 2023, which was up over 100 basis points from the prior year due in large part to the expansion of the allowance from the CECL adjustment of $1.4 million.

    Nonperforming Assets     Annual Change
    		 
    ($ in thousands, except ratios)Mar. 2023
    		 Dec. 2022
    		 Sep. 2022
    		 Jun. 2022
    		 Mar. 2022
    		  
    Commercial & Agriculture$185 $114 $114 $140 $142 $43 
    % of Total Com./Ag. loans 0.10%  0.06%  0.06%  0.07%  0.08%  30.3% 
    Commercial RE 199  210  223  359  544  (345)
    % of Total CRE loans 0.05%  0.05%  0.06%  0.09%  0.14%  -63.4% 
    Residential RE 2,742  2,967  3,129  3,176  3,198  (456)
    % of Total Res. RE loans 0.89%  1.02%  1.17%  1.31%  1.49%  -14.3% 
    Consumer & Other 270  391  280  323  409  (139)
    % of Total Con./Oth. loans 0.42%  0.60%  0.44%  0.53%  0.73%  -34.0% 
    Total Nonaccruing Loans 3,396  3,682  3,746  3,998  4,293  (897)
    % of Total loans 0.35%  0.38%  0.40%  0.45%  0.50%  -20.9% 
    Accruing Restructured Loans 642  654  668  683  762  (120)
    Total Change (%)      -15.7% 
    Total Nonaccruing & Restructured Loans 4,038  4,336  4,414  4,681  5,055  (1,017)
    % of Total loans 0.41%  0.45%  0.48%  0.52%  0.59%  -20.1% 
    Foreclosed Assets and Other Assets 650  777  756  730  527  123 
    Total Change (%)      23.3% 
    Total Nonperforming Assets$4,688 $5,113 $5,170 $5,411 $5,582 $(894)
    % of Total assets 0.35%  0.38%  0.40%  0.42%  0.42%  -16.0% 
           

    Webcast and Conference Call

    The Company will hold the first quarter 2023 earnings conference call and webcast on April 21, 2023, 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 23 ATMs. State Bank has six 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”.

    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 OMSR impairment from net income to report anon-GAAP 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


    SB FINANCIAL GROUP, INC.
    CONSOLIDATED BALANCE SHEETS - (Unaudited)
              
     March December September June March
    ($ in thousands) 2023   2022   2022   2022   2022 
    ASSETS         
    Cash and due from banks$21,625  $27,817  $27,934  $29,567  $130,003 
    Interest bearing time deposits 1,380   2,131   2,134   1,691   1,894 
    Available-for-sale securities 237,917   238,780   243,233   266,162   265,311 
    Loans held for sale 5,592   2,073   2,979   4,242   4,737 
    Loans, net of unearned income 976,312   962,075   925,249   895,611   850,671 
    Allowance for credit losses (15,442)  (13,818)  (13,824)  (13,801)  (13,804)
    Premises and equipment, net 22,621   22,829   22,842   23,122   23,039 
    Federal Reserve and FHLB Stock, at cost 6,054   6,326   5,230   5,303   5,303 
    Foreclosed assets and other assets 650   777   756   730   527 
    Interest receivable 3,926   4,091   3,556   3,256   2,815 
    Goodwill 23,239   23,239   23,239   23,239   23,239 
    Cash value of life insurance 29,024   28,870   28,713   28,556   17,932 
    Mortgage servicing rights 13,548   13,503   13,473   13,408   13,135 
    Other assets 14,847   16,940   17,863   12,886   10,328 
    Total assets$1,341,293  $1,335,633  $1,303,377  $1,293,972  $1,335,130 
              
    LIABILITIES AND SHAREHOLDERS' EQUITY         
    Deposits         
    Non interest bearing demand$237,175  $256,799  $250,791  $239,676  $252,273 
    Interest bearing demand 188,497   191,719   199,523   198,286   211,152 
    Savings 227,974   191,272   201,402   215,285   236,394 
    Money market 222,203   255,995   258,975   276,274   289,699 
    Time deposits 234,295   190,880   175,202   142,258   148,553 
    Total deposits 1,110,144   1,086,665   1,085,893   1,071,779   1,138,071 
              
    Short-term borrowings 15,998   14,923   19,754   30,772   19,035 
    Federal Home Loan Bank advances 44,500   60,000   35,000   25,000   5,500 
    Trust preferred securities 10,310   10,310   10,310   10,310   10,310 
    Subordinated debt net of issuance costs 19,606   19,594   19,582   19,570   19,558 
    Interest payable 1,441   769   623   307   536 
    Other liabilities 19,535   24,944   17,587   11,678   9,483 
    Total liabilities 1,221,534   1,217,205   1,188,749   1,169,416   1,202,493 
              
    Shareholders' Equity         
    Common stock 61,319   61,319   61,319   61,319   61,319 
    Additional paid-in capital 14,953   15,087   15,000   15,069   14,872 
    Retained earnings 101,548   101,966   99,309   96,809   94,833 
    Accumulated other comprehensive income (loss) (29,671)  (32,120)  (33,426)  (22,210)  (13,659)
    Treasury stock (28,390)  (27,824)  (27,574)  (26,431)  (24,728)
    Total shareholders' equity 119,759   118,428   114,628   124,556   132,637 
              
    Total liabilities and shareholders' equity$1,341,293  $1,335,633  $1,303,377  $1,293,972  $1,335,130 
                        


    SB FINANCIAL GROUP, INC.
    CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
                  
    ($ in thousands, except per share & ratios)At and for the Three Months Ended Six Months Ended
     March December September June March June June
    Interest income 2023   2022   2022   2022   2022   2023   2022 
    Loans             
    Taxable$12,126  $11,222  $10,084  $8,880  $8,052  $12,126  $16,932 
    Tax exempt 116   109   92   73   61   116   134 
    Securities             
    Taxable 1,535   1,559   1,536   1,469   1,235   1,535   2,704 
    Tax exempt 47   47   52   52   47   47   99 
    Total interest income 13,824   12,937   11,764   10,474   9,395   13,824   19,869 
                  
    Interest expense             
    Deposits 2,578   1,440   852   567   618   2,578   1,185 
    Repurchase agreements & other 10   7   8   11   13   10   24 
    Federal Home Loan Bank advances 553   258   180   38   39   553   77 
    Trust preferred securities 164   138   99   71   53   164   124 
    Subordinated debt 195   194   195   194   195   195   389 
    Total interest expense 3,500   2,037   1,334   881   918   3,500   1,799 
                                
    Net interest income 10,324   10,900   10,430   9,593   8,477   10,324   18,070 
    Provision for credit losses 250   -   -   -   -   250   - 
                  
    Net interest income after provision for loan losses
    		 10,074   10,900   10,430   9,593   8,477   10,074   18,070 
                  
    Noninterest income             
    Wealth management fees 917   907   930   936   955   917   1,891 
    Customer service fees 825   880   844   860   794   825   1,654 
    Gain on sale of mtg. loans & OMSR 599   550   876   1,196   1,676   599   2,872 
    Mortgage loan servicing fees, net 608   627   527   606   1,204   608   1,810 
    Gain on sale of non-mortgage loans 24   105   125   167   169   24   336 
    Title insurance revenue 373   454   476   697   602   373   1,299 
    Gain (loss) on sale of assets (11)  18   (12)  -   55   (11)  55 
    Other 331   172   277   211   347   331   558 
    Total noninterest income 3,666   3,713   4,043   4,673   5,802   3,666   10,475 
                  
    Noninterest expense             
    Salaries and employee benefits 5,913   5,677   5,858   6,418   6,189   5,913   12,607 
    Net occupancy expense 784   763   769   719   742   784   1,461 
    Equipment expense 981   1,017   918   827   854   981   1,681 
    Data processing fees 646   627   664   643   576   646   1,219 
    Professional fees 863   738   766   760   950   863   1,710 
    Marketing expense 198   258   200   222   231   198   453 
    Telephone and communication expense 121   124   134   105   111   121   216 
    Postage and delivery expense 87   121   75   110   116   87   226 
    State, local and other taxes 228   277   250   277   278   228   555 
    Employee expense 188   157   145   175   136   188   311 
    Other expenses 764   510   605   546   676   764   1,222 
    Total noninterest expense 10,773   10,269   10,384   10,802   10,859   10,773   21,661 
                  
    Income before income tax expense 2,967   4,344   4,088   3,464   3,420   2,967   6,884 
    Income tax expense 517   811   746   630   607   517   1,237 
                  
    Net income $2,450  $3,533  $3,342  $2,834  $2,813  $2,450  $5,647 
                  
    Common share data:             
    Basic earnings per common share$0.35  $0.51  $0.48  $0.40  $0.40  $0.35  $0.80 
    Diluted earnings per common share$0.35  $0.50  $0.47  $0.40  $0.40  $0.35  $0.79 
                  
    Average shares outstanding (in thousands):             
    Basic: 6,933   6,945   6,968   7,075   7,035   6,933   7,055 
    Diluted: 7,008   7,021   7,033   7,149   7,100   7,008   7,116 
                                


    SB FINANCIAL GROUP, INC.
    CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
    ($ in thousands, except per share & ratios) At and for the Three Months Ended Six Months Ended
      March December September June March June June
    SUMMARY OF OPERATIONS  2023   2022   2022   2022   2022   2023   2022 
    Net interest income $10,324  $10,900  $10,430  $9,593  $8,477  $10,324  $18,070 
    Tax-equivalent adjustment  43   41   38   33   29   43   62 
    Tax-equivalent net interest income  10,367   10,941   10,468   9,626   8,506   10,367   18,132 
    Provision for credit loss  250   -   -   -   -   -   - 
    Noninterest income  3,666   3,713   4,043   4,673   5,802   3,666   10,475 
    Total operating revenue  13,990   14,613   14,473   14,266   14,279   13,990   28,545 
    Noninterest expense  10,773   10,269   10,384   10,802   10,859   10,773   21,661 
    Pre-tax pre-provision income  3,217   4,344   4,088   3,464   3,420   3,217   6,884 
    Pretax income  2,967   4,344   4,088   3,464   3,420   3,217   6,884 
    Net income  2,450   3,533   3,342   2,834   2,813   2,450   5,647 
                   
    PER SHARE INFORMATION:              
    Basic earnings per share (EPS)  0.35   0.51   0.48   0.40   0.40   0.35   0.80 
    Diluted earnings per share  0.35   0.50   0.47   0.40   0.40   0.35   0.79 
    Common dividends  0.125   0.125   0.120   0.120   0.115   0.125   0.235 
    Book value per common share  17.37   17.08   16.49   17.75   18.65   17.37   17.75 
    Tangible book value per common share (TBV)  13.93   13.65   13.07   14.36   15.31   13.93   14.36 
    Market price per common share  14.16   16.95   16.85   17.26   19.91   14.16   17.26 
    Market price to TBV  101.7%  124.2%  128.9%  120.2%  130.1%  101.7%  120.2%
    Market price to trailing 12 month EPS  8.2   9.6   9.6   9.3   10.0   8.2   9.3 
                   
    PERFORMANCE RATIOS:              
    Return on average assets (ROAA)  0.73%  1.08%  1.03%  0.87%  0.83%  0.73%  0.85%
    Pre-tax pre-provision ROAA  0.96%  1.32%  1.26%  1.06%  1.01%  1.04%  1.11%
    Return on average equity  8.37%  12.17%  10.89%  8.89%  8.08%  8.37%  8.46%
    Return on average tangible equity  10.50%  15.30%  13.51%  10.93%  9.75%  10.51%  10.30%
    Efficiency ratio  76.85%  70.16%  71.63%  75.60%  75.93%  76.85%  75.76%
    Earning asset yield  4.49%  4.27%  3.89%  3.45%  2.96%  4.49%  3.20%
    Cost of interest bearing liabilities  1.46%  0.90%  0.58%  0.39%  0.39%  1.46%  0.38%
    Net interest margin  3.35%  3.60%  3.45%  3.15%  2.67%  3.36%  2.91%
    Tax equivalent effect  0.02%  0.01%  0.01%  0.01%  0.01%  0.01%  0.01%
    Net interest margin, tax equivalent  3.37%  3.61%  3.46%  3.16%  2.68%  3.37%  2.92%
    Non interest income/Average assets  1.10%  1.13%  1.24%  1.43%  1.72%  1.10%  1.58%
    Non interest expense/Average assets  3.23%  3.13%  3.19%  3.31%  3.22%  3.23%  3.26%
    Net noninterest expense/Average assets  -2.13%  -2.00%  -1.95%  -1.88%  -1.50%  -2.13%  -1.68%
                   
    ASSET QUALITY RATIOS:              
    Gross charge-offs  69   7   9   9   9   69   18 
    Recoveries  8   1   32   6   8   8   14 
    Net charge-offs  61   6   (23)  3   1   61   4 
    Nonaccruing loans/Total loans  0.35%  0.38%  0.40%  0.45%  0.50%  0.35%  0.45%
    Nonperforming loans/Total loans  0.41%  0.45%  0.48%  0.52%  0.59%  0.41%  0.52%
    Nonperforming assets/Loans & OREO  0.48%  0.53%  0.56%  0.60%  0.66%  0.48%  0.60%
    Nonperforming assets/Total assets  0.35%  0.38%  0.40%  0.42%  0.42%  0.35%  0.42%
    Allowance for credit loss/Nonperforming loans  382.42%  318.68%  313.26%  294.83%  273.08%  382.42%  294.83%
    Allowance for credit loss/Total loans  1.58%  1.44%  1.49%  1.54%  1.62%  1.58%  1.54%
    Net loan charge-offs/Average loans (ann.)  0.03%  0.00%  (0.01%)  0.00%  0.00%  0.03%  0.00%
                   
    CAPITAL & LIQUIDITY RATIOS:              
    Loans/ Deposits  87.94%  88.53%  85.21%  83.56%  74.75%  87.94%  83.56%
    Equity/ Assets  8.93%  8.87%  8.79%  9.63%  9.93%  8.93%  9.63%
    Tangible equity/Tangible assets  7.29%  7.22%  7.10%  7.93%  8.30%  7.29%  7.93%
    Common equity tier 1 ratio (Bank)  13.47%  13.42%  13.23%  13.21%  13.71%  13.47%  13.21%
                   
    END OF PERIOD BALANCES              
    Total assets  1,341,293   1,335,633   1,303,377   1,293,972   1,335,130   1,341,293   1,293,972 
    Total loans  976,312   962,075   925,249   895,611   850,671   976,312   895,611 
    Deposits  1,110,144   1,086,665   1,085,893   1,071,779   1,138,071   1,110,144   1,071,779 
    Stockholders equity  119,759   118,428   114,628   124,556   132,637   119,759   124,556 
    Goodwill and intangibles  23,732   23,753   23,770   23,787   23,804   23,732   23,787 
    Tangible equity  96,027   94,675   90,858   100,769   108,833   96,027   100,769 
    Mortgage servicing portfolio  1,344,158   1,352,016   1,362,666   1,369,732   1,375,554   1,344,158   1,369,732 
    Wealth/Brokerage assets under care  518,009   507,093   480,947   500,487   560,698   518,009   500,487 
    Total assets under care  3,203,460   3,194,742   3,146,990   3,164,191   3,271,382   3,203,460   3,164,191 
    Full-time equivalent employees  255   268   271   267   256   255   267 
    Period end common shares outstanding  6,894   6,935   6,950   7,017   7,111   6,894   7,017 
    Market capitalization (all)  97,626   117,556   117,113   121,105   141,575   97,626   121,105 
                   
    AVERAGE BALANCES              
    Total assets  1,335,056   1,314,419   1,302,297   1,305,815   1,350,982   1,335,056   1,328,216 
    Total earning assets  1,232,018   1,211,674   1,209,958   1,216,124   1,270,218   1,232,018   1,243,017 
    Total loans  970,813   937,898   909,909   870,439   832,825   970,813   851,736 
    Deposits  1,098,935   1,094,491   1,085,821   1,108,890   1,134,234   1,098,935   1,121,373 
    Stockholders equity  117,071   116,114   122,738   127,519   139,214   117,071   133,471 
    Goodwill and intangibles  23,743   23,761   23,778   23,796   23,801   23,783   23,798 
    Tangible equity  93,328   92,353   98,960   103,723   115,413   93,288   109,673 
    Average basic shares outstanding  6,933   6,945   6,968   7,075   7,035   6,933   7,055 
    Average diluted shares outstanding  7,008   7,021   7,033   7,149   7,100   7,008   7,116 
                                 


    SB FINANCIAL GROUP, INC.
    Rate Volume Analysis - (Unaudited)
    For the Three Months Ended Mar. 31, 2023 and 2022
    ($ in thousands)Three Months Ended Mar. 31, 2023 Three Months Ended Mar. 31, 2022
     Average Average Average Average
    AssetsBalanceInterestRate BalanceInterestRate
    Taxable securities/cash$253,449 $1,535 2.42% $429,839 $1,235 1.15%
    Nontaxable securities 7,756  47 2.42%  7,554  47 2.49%
    Loans, net 970,813  12,242 5.04%  832,825  8,113 3.90%
    Total earning assets 1,232,018  13,824 4.49%  1,270,218  9,395 2.96%
    Cash and due from banks 11,067     8,156   
    Allowance for loan losses (14,763)    (13,807)  
    Premises and equipment 22,858     25,317   
    Other assets 83,876     61,098   
    Total assets$1,335,056    $1,350,982   
            
    Liabilities       
    Savings, MMDA and interest bearing demand$643,081 $1,285 0.80% $733,095 $398 0.22%
    Time deposits 214,978  1,293 2.41%  155,006  220 0.57%
    Repurchase agreements & other 18,618  10 0.21%  25,115  13 0.21%
    Advances from Federal Home Loan Bank 49,177  553 4.50%  5,500  39 2.84%
    Trust preferred securities 10,310  164 6.36%  10,310  53 2.06%
    Subordinated debt 19,598  195 3.98%  19,552  195 3.99%
    Total interest bearing liabilities 955,762  3,500 1.46%  948,578  918 0.39%
    Non interest bearing demand 240,876  -    246,133  -  
    Total funding 1,196,638  1.17%  1,194,711  0.31%
    Other liabilities 21,347     17,057   
    Total liabilities 1,217,985     1,211,768   
    Equity 117,071     139,214   
    Total liabilities and equity$1,335,056    $1,350,982   
    Net interest income $10,324    $8,477  
            
    Net interest income as a percent of average interest-earning assets - GAAP measure3.35%   2.67%
            
    Net interest income as a percent of average interest-earning assets - non GAAP3.37%   2.68%
    - Computed on a fully tax equivalent (FTE) basis       
            


    Non-GAAP reconciliation Three Months Ended   Twelve Months Ended
    ($ in thousands, except per share & ratios)Mar. 31, 2023 Mar. 31, 2022 Mar. 31, 2023 Mar. 31, 2022
    Total Operating Revenue$13,990  $14,279  $13,990  $68,581 
    Adjustment to (deduct)/add OMSR recapture/impairment * (56)  (889)  (1,279)  (3,436)
    Adjusted Total Operating Revenue 13,934   13,390   12,711   65,145 
            
    Income before Income Taxes 2,967   3,420   2,967   22,723 
    Adjustment for OMSR * (56)  (889)  (1,279)  (3,436)
    Adjusted Income before Income Taxes 2,911   2,531   1,688   19,287 
            
    Provision for Income Taxes 517   607   517   4,446 
    Adjustment for OMSR ** (12)  (187)  (269)  (722)
    Adjusted Provision for Income Taxes 505   420   248   3,725 
            
    Net Income 2,450   2,813   2,450   18,277 
    Adjustment for OMSR * (44)  (703)  (1,010)  (2,714)
    Adjusted Net Income 2,406   2,110   1,440   15,563 
            
    Diluted Earnings per Share 0.35   0.40   0.35   2.56 
    Adjustment for OMSR * (0.01)  (0.10)  (0.14)  (0.38)
    Adjusted Diluted Earnings per Share$0.34  $0.30  $0.21  $2.18 
            
    Return on Average Assets 0.73%  0.83%  0.73%  1.38%
    Adjustment for OMSR * -0.01%  -0.21%  -0.08%  -0.21%
    Adjusted Return on Average Assets 0.72%  0.62%  0.66%  1.18%
            
    *valuation adjustment to the Company's mortgage servicing rights      
    **tax effect is calculated using a 21% statutory federal corporate income tax rate      
           

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