Exhibit 99.1

 

 

 

Investor Contact Information:

Anthony V. Cosentino

Executive Vice President and

Chief Financial Officer

Tony.Cosentino@YourStateBank.com

 

SB Financial Group, Inc. Announces Third-Quarter and Nine-Month 2014 Results

6.5% year-over-year loan growth and 22% linked-quarter earnings growth

 

DEFIANCE, Ohio, October 22, 2014 -- 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 and item processing services, today reported earnings for the third quarter and nine months ended September 30, 2014.

Highlights include:

 

·

Net income of $1.5 million for the third quarter represented a 22 percent increase over the linked quarter and a 13 percent increase over the year-ago quarter

·

Quarterly results included a $0.43 million prepayment penalty for the early redemption of fixed rate trust preferred securities which impacted net income by $0.06 per diluted share

·

Loan growth is up $30.7 million, or 6.5 percent, from the prior year

·

The ratio of nonperforming assets to total assets continued to decline to 0.81 percent

·

Operating expenses, excluding prepayment penalty, were flat compared with year-ago and linked quarters

 

Highlights*		Three Months Ended								Nine Months Ended
(in $000’s except ratios and per share data)		Sep. 2014				Sep. 2013				Sep. 2014				Sep. 2013
Net interest income (FTE)		$	5,446			$	5,274			$	15,717			$	16,114
Noninterest income			3,809				3,710				9,663				11,097
Noninterest expense			6,888				6,562				19,593				20,312
Net income			1,513				1,344				3,738				3,981
Earnings per diluted share			0.31				0.28				0.76				0.82
Net interest margin (FTE)			3.64	%			3.72	%			3.54	%			3.81	%
Return on assets			0.90	%			0.84	%			0.75	%			0.83	%
Return on equity			10.14	%			9.82	%			8.54	%			9.78	%
Adjusted for TRUP Prepayment: **
Net interest income (FTE)		$	5,540			$	5,274			$	15,811			$	16,114
Noninterest expense			6,547				6,562				19,252				20,312
Net income			1,794				1,344				4,019				3,981
Earnings per diluted share			0.37				0.28				0.82				0.82
Return on assets			1.07	%			0.84	%			0.81	%			0.83	%
*Consolidated earnings for SB Financial include the results of the Company’s Banking Group, consisting primarily of The State Bank and Trust Company (“State Bank” or the “Bank”), and the Company’s data services subsidiary, Rurbanc Data Services, Inc. (dba RDSI Banking Systems (RDSI)).

 

---

^** See Non-GAAP Reconciliation of Income on page 11 for discussion and reconciliation.

 

 

“We are quite pleased with our results this quarter,” said Mark Klein, President and Chief Executive Officer of SB Financial. “We continue to drive performance improvement in our company as we implement our strategic initiatives to diversify our revenue streams, achieve operational excellence and expand our market presence. We had strong results across several of our business lines, demonstrated by the $0.37^** per share that we earned for the quarter, when we adjust for the one-time impact of the trust preferred securities prepayment.

 

Additionally, we are excited to take the next step in the development of our greater Columbus region with a new retail/private client presence to complement our existing residential and commercial lending divisions. This new full-service facility in Dublin, Ohio, will enable us to further develop our strategy to expand our number of households and strengthen our presence in existing ones. We look forward to the additional opportunities this greater commitment in a robust market brings to our franchise.”

 

RESULTS OF OPERATIONS

 

Consolidated Revenue

 

Total revenue, consisting of net interest income on a fully tax equivalent (FTE) basis and noninterest income, was up 3.0 percent from the third quarter of 2013, and up 7.1 percent from the linked quarter.

 

	●	Net interest income (FTE) was up 3.3 percent for the third quarter, and up 1.9 percent compared to the linked quarter
	●	Net interest margin (FTE) was down 8 basis points for the third quarter, but up 4 basis points from the linked quarter
	●	Noninterest income was up $0.1 million, or 0.3 percent, for the third quarter, and up $0.5 million, or 15.6 percent, from the linked quarter

 

Total revenue, consisting of net interest income on an FTE basis and noninterest income, for the first nine months of 2014 was $25.4 million, compared to $27.2 million for the first nine months of 2013. The nine-month results were impacted by lower mortgage origination volume during the first quarter of 2014 and the reduction in the yield on earning assets.

 

Mortgage Loan Business

 

In line with the linked quarter, mortgage loan originations for the third quarter of 2014 were $67.5 million, up $12.3 million, or 22.3 percent, from the year-ago third quarter. For the first nine months of 2014, mortgage loan originations were $167.7 million, down from $209.1 million for the first nine months of 2013.

 

Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.7 million for the third quarter of 2014, compared to $1.8 million for the year-ago quarter. The mortgage servicing valuation adjustment for the third-quarter 2014 was a positive $0.06 million, slightly improved from the linked quarter. The mortgage servicing portfolio at September 30, 2014, was $649.7 million, up $52.6 million, or 8.8 percent, from September 30, 2013.

 

Mr. Klein noted, “Our mortgage volumes during the quarter were strong, with $68 million in originations, driven by a higher number of originators who are helping us gain market share in the regions we serve. We expect this segment to continue to be one of our key business areas.”

 

---

^** See Non-GAAP Reconciliation of Income on page 11 for discussion and reconciliation.

 

 

Mortgage Banking ($000’s)		Three Months Ended
		Sep. 2014				Jun. 2014				Mar. 2014				Dec. 2013				Sep. 2013
Mortgage originations		$	67,502			$	66,563			$	33,602			$	39,679			$	55,192
Mortgage sales			60,982				49,091				27,961				33,921				58,101
Mortgage servicing portfolio			649,669				627,215				609,419				605,993				597,030
Mortgage servicing rights			5,720				5,375				5,228				5,180				5,076
Mortgage servicing revenue:
Loan servicing fees			400				387				380				388				367
OMSR amortization			(175	)			(147	)			(117	)			(126	)			(164	)
Net administrative fees			225				240				263				262				203
OMSR valuation adjustment			62				(83	)			(18	)			(21	)			205
Net loan servicing fees			287				156				245				241				408
Gain on sale of mortgages			1,442				1,211				572				776				1,356
Mortgage banking revenue, net		$	1,729			$	1,368			$	817			$	1,017			$	1,764

 

Fee Income and Noninterest Expense

 

SB Financial’s fee income includes revenue from a diverse group of services, such as wealth management, deposit fees and income from bank-owned life insurance. Wealth management assets under management stood at $326.5 million as of September 30, 2014. For the third quarter of 2014, fee income as a percent of total revenue was 41.6 percent, down slightly from the prior year. For the first nine months of 2014, fee income as a percentage of total revenue was 38.5 percent.

 

For the third quarter of 2014, noninterest expense (NIE) was up $0.3 million, or 5.0 percent, compared to the third quarter of 2013. However, when adjusted for the $0.33 million in operating expense related to the trust preferred securities prepayment, expenses for the quarter were in line with the prior year. For the first nine months of 2014, operating expenses were down $0.7 million, or 3.6 percent, compared to the first nine months of 2013. When adjusted for the trust preferred securities prepayment, expenses for the first nine months of 2014 were down $1.1 million, or 5.2 percent, compared to the prior-year period.

 

“In the current interest-rate environment, our fee income continues to be a competitive strength,” Mr. Klein stated. “For the third quarter, our fee income as a percentage of total revenue was 41.6 percent. We were pleased to achieve our 40-percent target level for this metric. Going forward, we will continue to look for ways to diversify our sources of revenue further.”

 

Fee Income / Noninterest Expense (000’s)
		Sep. 2014				Jun. 2014				Mar. 2014				Dec. 2013				Sep. 2013
Fee Income		$	3,809			$	3,295			$	2,559			$	2,949			$	3,710
Fee Income / Total Revenue			41.6	%			38.6	%			34.7	%			37.1	%			41.8	%
Fee Income / Average Assets			2.3	%			2.0	%			1.6	%			1.8	%			2.3	%
Noninterest Expense		$	6,888			$	6,627			$	6,079			$	6,199			$	6,562
Efficiency Ratio			74.6	%			76.0	%			80.6	%			76.4	%			72.4	%
NIE / Average Assets			4.1	%			4.0	%			3.8	%			3.8	%			4.1	%

 

Balance Sheet

 

Total assets as of September 30, 2014, were $664.6 million, up 4.9 percent from a year ago. Total equity as of September 30, 2014, was $60.3 million, up 8.5 percent from a year ago.

 

Total loans held for investment (HFI) were $505.9 million at September 30, 2014, up $30.7 million, or 6.5 percent, from September 30, 2013. Residential real estate loans accounted for the majority of growth, up $11.2 million, or 11.6 percent. Commercial and commercial real estate loans rose $8.9 million and $3.2 million, respectively.

 

 

The investment portfolio, including Federal Reserve Bank and Federal Home Loan Bank stock, of $84.9 million represented 12.8 percent of assets at September 30, 2014, and was down slightly from a year ago. Deposit balances of $535.3 million at September 30, 2014, increased by $13.7 million since September 30, 2013. Growth from the prior year included $7.0 million in checking and $6.7 million in savings and time deposit balances.

 

Mr. Klein said, “We continued to see solid growth in our loan portfolio during the third quarter, primarily as a result of higher residential real estate loan activity. We experienced increased loan volumes across all of our markets, particularly in our lower-share markets of Columbus and Toledo.”

 

Loan Portfolio ($000’s)		Sep. 2014				Jun. 2014				Mar. 2014				Dec. 2013				Sep. 2013				Variance YOY
Commercial		$	90,407			$	92,424			$	85,701			$	85,368			$	81,571			$	8,836
% of Total			17.9	%			18.3	%			17.8	%			17.9	%			17.2	%			10.8	%
Commercial RE			212,964				215,824				212,502				205,301				209,739				3,225
% of Total			42.1	%			42.6	%			44.1	%			43.0	%			44.1	%			1.5	%
Agriculture			44,162				43,475				39,028				39,210				39,636				4,526
% of Total			8.7	%			8.6	%			8.1	%			8.2	%			8.3	%			11.4	%
Residential RE			107,712				105,054				97,857				99,620				96,477				11,235
% of Total			21.3	%			20.8	%			20.3	%			20.9	%			20.3	%			11.6	%
Consumer & Other			50,679				49,350				46,836				47,804				47,810				2,869
% of Total			10.0	%			9.7	%			9.7	%			10.0	%			10.1	%			6.0	%
Total Loans		$	505,924			$	506,127			$	481,924			$	477,303			$	475,233			$	30,691
Total Growth Percentage																							6.5	%

Asset Quality

 

SB Financial continues to improve its asset quality, reporting nonperforming assets of $5.4 million as of September 30, 2014, down $3.4 million, or 38.8 percent, from the year-ago quarter. Already trending better than our key peer metrics, the 0.81 percent of nonperforming assets to total assets was the lowest we have recorded since the first quarter of 2007. Coverage of problem loans by the loan loss allowance was 139 percent at September 30, 2014. This quarter, our delinquency level did rise to 1.2 percent from 0.6 percent in the linked quarter. This increase is driven by one Commercial real estate loan that is in the process of restructure.

 

 

Summary of Nonperforming Assets ($000’s)
Nonperforming Loan Category		Sep. 2014				Jun. 2014				Mar. 2014				Dec. 2013				Sep. 2013
Commercial		$	1,397			$	1,485			$	1,818			$	2,316			$	2,738
% of Total Commercial loans			1.5	%			1.6	%			2.1	%			2.7	%			3.4	%
Commercial RE			616				699				753				532				642
% of Total CRE loans			0.3	%			0.3	%			0.4	%			0.3	%			0.3	%
Residential RE			1,015				1,534				1,555				1,651				1,837
% of Total Res. RE loans			0.9	%			1.5	%			1.6	%			1.7	%			1.9	%
Consumer & Other			174				288				280				345				363
% of Total Cons. & Other loans			0.3	%			0.6	%			0.6	%			0.7	%			0.8	%
Total Nonaccruing Loans			3,202				4,006				4,406				4,844				5,580
% of Total Loans			0.6	%			0.8	%			0.9	%			1.0	%			1.2	%
Accruing Restructured Loans			1,620				1,665				1,793				1,739				1,756
Total Nonaccruing & Restructured Loans		$	4,822			$	5,671			$	6,199			$	6,583			$	7,336
% of Total Loans			1.0	%			1.1	%			1.3	%			1.4	%			1.5	%
OREO & Repossessed Vehicles			540				516				615				651				1,430
Total Nonperforming Assets		$	5,362			$	6,187			$	6,814			$	7,233			$	8,766
% of Total Assets			0.8	%			0.9	%			1.1	%			1.1	%			1.4	%

 

Capitalization

 

Improving capital ratios remains an important focus of management. The tangible equity ratio improved by 50 basis points over the past year and stood at 6.7 percent as of September 30, 2014. All bank regulatory ratios remain in excess of "well-capitalized" levels. At September 30, 2014, State Bank's Total Risk-Based Capital was estimated to be $63.0 million, $21.6 million above the “well-capitalized” level. The Total Risk-Based Capital Ratio is estimated at 12.2 percent.

 

The Company will hold a related conference call and webcast on October 23, 2014, at 9:00 a.m. EDT. Interested parties may access the conference call by dialing 1-888-338-9469. The webcast can be accessed at http://www.yoursbfinancial.com/investorrelations.html. An audio replay of the call will be available on the SB Financial website.

 

About SB Financial Group

 

Headquartered in Defiance, Ohio, SB Financial is a diversified financial services holding company with two wholly-owned operating subsidiaries: State Bank and RDSI. State Bank provides a full range of financial services for consumers and small businesses, including wealth management, mortgage banking and commercial and agricultural lending, operating through 16 banking centers in seven northwestern Ohio counties and one center in Fort Wayne, Indiana, as well as three loan production offices located in Columbus, Ohio, and Angola, Indiana. RDSI provides item processing services to community banks located primarily in the Midwest. SB Financial’s common stock is listed on the NASDAQ Global Market under the 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, 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

 

In addition to results presented in accordance with GAAP, this release contains certain non-GAAP financial measures. Management believes that providing certain non-GAAP financial measures provides investors with information useful in understanding the Company’s financial performance, its performance trends and financial position. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results.

###

 

 

SB FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS - (Unaudited)
		September				June				March				December				September
($ in Thousands)		2014				2014				2014				2013				2013
ASSETS
Cash and due from banks		$	21,870			$	13,778			$	14,860			$	13,137			$	19,016
Securities available for sale, at fair value			81,148				85,586				93,305				89,793				86,620
Other securities - FRB and FHLB Stock			3,748				3,748				3,748				3,748				3,748
Total investment securities			84,896				89,334				97,053				93,541				90,368
Loans held for sale			6,736				8,290				7,165				3,366				2,407
Loans, net of unearned income			505,924				506,127				481,924				477,303				475,233
Allowance for loan losses			(6,713	)			(6,568	)			(6,726	)			(6,964	)			(7,120	)
Net loans			499,211				499,559				475,198				470,339				468,113
Premises and equipment, net			13,256				13,281				13,414				12,607				12,719
Cash surrender value of life insurance			13,074				13,059				12,982				12,906				12,826
Goodwill			16,353				16,353				16,353				16,353				16,353
Core deposits and other intangibles			338				393				524				655				784
Foreclosed assets held for sale, net			540				516				615				651				1,430
Mortgage servicing rights			5,720				5,375				5,228				5,180				5,076
Accrued interest receivable			1,853				1,456				1,423				1,281				1,694
Other assets			709				1,106				1,487				1,738				2,626
Total assets		$	664,556			$	662,500			$	646,302			$	631,754			$	633,412
LIABILITIES AND EQUITY
Deposits
Non interest bearing demand		$	90,261			$	87,706			$	84,265			$	81,570			$	78,217
Interest bearing demand			119,805				116,765				126,520				119,551				124,860
Savings			61,770				63,199				64,306				61,652				61,899
Money market			96,506				80,288				85,731				79,902				78,406
Time deposits			166,919				176,109				171,897				175,559				178,161
Total deposits			535,261				524,067				532,719				518,234				521,543
Notes payable			7,000				-				-				589				680
Advances from Federal Home Loan Bank			30,000				37,000				14,000				16,000				16,000
Repurchase agreements			17,902				17,246				16,905				14,696				14,836
Trust preferred securities			10,310				20,620				20,620				20,620				20,620
Accrued interest payable			355				655				425				639				448
Other liabilities			3,462				3,902				4,198				4,707				3,748
Total liabilities			604,290				603,490				588,867				575,485				577,875
Equity
Preferred stock			-				-				-				-				-
Common stock			12,569				12,569				12,569				12,569				12,569
Additional paid-in capital			15,418				15,403				15,391				15,412				15,399
Retained earnings			33,075				31,757				30,708				29,899				28,846
Accumulated other comprehensive income			831				908				407				74				415
Treasury stock			(1,627	)			(1,627	)			(1,640	)			(1,685	)			(1,692	)
Total equity			60,266				59,010				57,435				56,269				55,537
Total liabilities and equity		$	664,556			$	662,500			$	646,302			$	631,754			$	633,412

 

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

 

($ in thousands, except share data)		Three Months Ended																				Nine Months Ended
		September				June				March				December				September				September				September
Interest income		2014				2014				2014				2013				2013				2014				2013
Loans
Taxable		$	5,855			$	5,654			$	5,241			$	5,428			$	5,649			$	16,750			$	17,406
Nontaxable			9				13				16				13				14				38				54
Securities
Taxable			279				310				309				313				305				898				931
Nontaxable			178				179				175				181				178				532				522
Total interest income			6,321				6,156				5,741				5,935				6,146				18,218				18,913
Interest expense
Deposits			500				503				498				513				539				1,501				1,718
Repurchase Agreements & Other			6				4				11				14				13				21				44
Federal Home Loan Bank advances			94				71				74				82				83				239				257
Trust preferred securities			371				330				333				330				336				1,034				1,077
Total interest expense			971				908				916				939				971				2,795				3,096
Net interest income			5,350				5,248				4,825				4,996				5,175				15,423				15,817
Provision for loan losses			150				150				-				-				401				300				900
Net interest income after provision for loan losses			5,200				5,098				4,825				4,996				4,774				15,123				14,917
Noninterest income
Wealth Management Fees			670				649				632				689				669				1,951				1,964
Customer service fees			730				665				610				673				659				2,005				1,914
Gain on sale of mtg. loans & OMSR's			1,442				1,211				572				776				1,356				3,225				4,290
Mortgage loan servicing fees, net			287				156				245				241				408				688				1,005
Gain on sale of non-mortgage loans			71				84				23				303				44				178				282
Data service fees			337				322				306				295				333				965				1,205
Net gain on sales of securities			-				56				-				-				28				56				48
Gain/(loss) on sale/disposal of assets			(15	)			(15	)			(34	)			(265	)			15				(64	)			(219	)
Other income			287				167				205				237				198				659				608
Total non-interest income			3,809				3,295				2,559				2,949				3,710				9,663				11,097
Noninterest expense
Salaries and employee benefits			3,435				3,451				3,120				3,027				3,343				10,006				10,470
Net occupancy expense			508				485				573				494				507				1,566				1,561
Equipment expense			616				645				639				651				701				1,900				2,159
Data processing fees			238				249				211				254				189				698				460
Professional fees			435				465				338				443				456				1,238				1,384
Marketing expense			105				170				123				136				135				398				335
Telephone and communication			94				107				112				110				156				313				472
Postage and delivery expense			195				187				204				173				199				586				623
State, local and other taxes			89				95				92				138				140				276				412
Employee expense			122				140				115				154				125				377				403
Intangible amortization expense			55				131				131				129				129				317				435
OREO Impairment			-				-				-				-				-				-				33
Other expenses			996				502				421				490				482				1,918				1,565
Total non-interest expense			6,888				6,627				6,079				6,199				6,562				19,593				20,312
Income before income tax expense			2,121				1,767				1,306				1,746				1,922				5,193				5,702
Income tax expense			607				521				326				522				578				1,454				1,721
Net income		$	1,513			$	1,245			$	980			$	1,224			$	1,344			$	3,738			$	3,981
Common share data:
Basic earnings per common share		$	0.31			$	0.26			$	0.20			$	0.25			$	0.28			$	0.77			$	0.82
Diluted earnings per common share		$	0.31			$	0.25			$	0.20			$	0.25			$	0.28			$	0.76			$	0.82
Average Shares outstanding ($ in thousands):
Basic:			4,875				4,874				4,871				4,870				4,867				4,873				4,865
Diluted:			4,900				4,893				4,894				4,882				4,881				4,896				4,877

  

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

 

($ in thousands, except per share data)		At and For the Three Months Ended																					At and For the Nine Months Ended
		September				June				March				December				September					September				September
SUMMARY OF OPERATIONS		2014				2014				2014				2013				2013					2014				2013
Net interest income		$	5,350				5,248				4,825				4,996				5,175					15,423				15,817
Tax-equivalent adjustment		$	96				99				98				100				99					294				297
Tax-equivalent net interest income		$	5,446				5,347				4,923				5,096				5,274					15,717				16,114
Provision for loan loss		$	150				150				-				-				401					300				900
Noninterest income		$	3,809				3,295				2,559				2,949				3,710					9,663				11,097
Total revenue, tax-equivalent		$	9,255				8,642				7,482				8,045				8,984					25,380				27,211
Noninterest expense		$	6,888				6,627				6,079				6,199				6,562					19,593				20,312
Pre provision pretax income		$	2,271				1,917				1,306				1,746				2,323					5,493				6,602
Pretax income		$	2,121				1,767				1,306				1,746				1,922					5,193				5,702
Net income		$	1,513				1,245				980				1,224				1,344					3,738				3,981
PER SHARE INFORMATION:
Basic earnings per share		$	0.31				0.26				0.20				0.25				0.28					0.77				0.82
Diluted earnings per share		$	0.31				0.25				0.20				0.25				0.28					0.76				0.82
Common dividends		$	0.040				0.040				0.035				0.035				0.030					0.115				0.085
Book value per common share		$	12.36				12.10				11.78				11.55				11.41					12.36				11.41
Tangible book value per common share		$	8.94				8.67				8.32				8.06				7.89					8.94				7.89
Market price per share		$	9.05				8.37				8.35				7.88				7.77					9.05				7.77
PERFORMANCE RATIOS:
Return on average assets			0.90	%			0.76	%			0.61	%			0.76	%			0.84	%				0.75	%			0.83	%
Return on average common equity			10.14	%			8.55	%			6.88	%			8.75	%			9.82	%				8.54	%			9.78	%
Return on avg. tangible common equity			14.09	%			12.01	%			9.89	%			12.71	%			14.43	%				12.00	%			14.36	%
Efficiency ratio			74.61	%			76.03	%			80.55	%			76.40	%			72.40	%				76.84	%			73.85	%
Earning asset yield			4.29	%			4.16	%			4.10	%			4.31	%			4.40	%				4.16	%			4.54	%
Cost of interest bearing liabilities			0.76	%			0.72	%			0.74	%			0.76	%			0.79	%				0.74	%			0.83	%
Net interest margin			3.58	%			3.53	%			3.39	%			3.50	%			3.65	%				3.47	%			3.74	%
Tax equivalent effect			0.06	%			0.07	%			0.07	%			0.07	%			0.07	%				0.07	%			0.07	%
Net interest margin - fully tax equivalent basis			3.64	%			3.60	%			3.46	%			3.57	%			3.72	%				3.54	%			3.81	%
ASSET QUALITY RATIOS:
Gross charge-offs		$	94				330				323				163				307					747				656
Recoveries		$	90				21				85				7				13					196				65
Net charge-offs		$	4				309				238				156				294					551				591
Nonaccruing loans/ Total loans			0.63	%			0.79	%			0.91	%			1.01	%			1.14	%				0.63	%			1.14	%
Nonperforming loans/ Total loans			0.95	%			1.12	%			1.29	%			1.38	%			1.51	%				0.95	%			1.51	%
Nonperforming assets/ Loans & OREO			1.06	%			1.22	%			1.41	%			1.51	%			1.80	%				1.06	%			1.80	%
Nonperforming assets/ Total assets			0.81	%			0.93	%			1.05	%			1.14	%			1.36	%				0.81	%			1.36	%
Allowance for loan loss/ Nonperforming loans			139.22	%			115.82	%			108.50	%			105.80	%			99.41	%				139.22	%			99.41	%
Allowance for loan loss/ Total loans			1.33	%			1.30	%			1.40	%			1.46	%			1.50	%				1.33	%			1.50	%
Net loan charge-offs/ Average loans (ann.)			N/M				0.25	%			0.20	%			0.13	%			0.25	%				0.15	%			0.17	%
Loan loss provision/ Net charge-offs			N/M				48.54	%			0.00	%			0.00	%			136.39	%				54.45	%			152.28	%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits			94.52	%			96.58	%			90.46	%			92.10	%			91.12	%				94.52	%			91.12	%
Equity/ Assets			9.07	%			8.91	%			8.89	%			8.91	%			8.77	%				9.07	%			8.77	%
Tangible equity/ Tangible assets			6.73	%			6.54	%			6.44	%			6.39	%			6.23	%				6.73	%			6.23	%
END OF PERIOD BALANCES
Total loans		$	505,924				506,127				481,924				477,303				475,233					505,924				475,233
Total assets		$	664,556				662,500				646,302				631,754				633,412					664,556				633,412
Deposits		$	535,261				524,067				532,719				518,234				521,543					535,261				521,543
Stockholders equity		$	60,266				59,010				57,435				56,269				55,537					60,266				55,537
Intangibles		$	16,691				16,746				16,877				17,008				17,137					16,691				17,137
Tangible equity		$	43,575				42,264				40,558				39,261				38,400					43,575				38,400
Full-time equivalent employees			195				193				197				200				196					195				196
Period end basic shares outstanding			4,875				4,875				4,874				4,870				4,869					4,875				4,869
AVERAGE BALANCES
Total loans		$	512,151				500,167				476,553				479,701				474,349					496,421				466,200
Total earning assets		$	598,223				594,256				569,524				571,332				567,787					592,515				563,730
Total assets		$	673,213				658,108				646,864				645,148				636,437					664,589				638,667
Deposits		$	534,841				531,786				524,145				525,334				516,669					530,314				520,359
Stockholders equity		$	59,684				58,276				56,977				55,925				54,758					58,330				54,287
Intangibles		$	16,719				16,811				17,347				17,404				17,504					16,827				17,323
Tangible equity		$	42,965				41,465				39,630				38,521				37,254					41,503				36,964
Average basic shares outstanding			4,875				4,874				4,871				4,870				4,867					4,873				4,865
Average diluted shares outstanding			4,900				4,893				4,894				4,882				4,881					4,896				4,877

  

 

SB FINANCIAL GROUP, INC.
Rate Volume Analysis - (Unaudited)
For the Three & Nine Months Ended September 30, 2014 and 2013
($ in Thousands)		Three Months Ended September 30, 2014												Three Months Ended September 30, 2013
		Average								Average				Average								Average
Assets		Balance				Interest				Rate				Balance				Interest				Rate
Taxable securities		$	68,275				279				1.63	%		$	74,918				305				1.63	%
Nontaxable securities			17,797				270				6.06	%			18,520				270				5.82	%
Federal funds sold			-				-				N/A				-				-				N/A
Loans, net			512,151				5,869				4.58	%			474,349				5,670				4.78	%
Total earning assets			598,223				6,417				4.29	%			567,787				6,245				4.40	%
Cash and due from banks			23,672												15,270
Allowance for loan losses			(6,652	)											(6,947	)
Premises and equipment			13,791												14,461
Other assets			44,179												45,866
Total assets		$	673,213											$	636,437
Liabilities
Savings and interest bearing demand		$	271,848				40				0.06	%		$	262,166				19				0.03	%
Time deposits			172,886				460				1.06	%			177,802				520				1.17	%
Repurchase agreements & Other			20,639				6				0.12	%			13,261				13				0.39	%
Advances from Federal Home Loan Bank			30,000				94				1.25	%			19,038				83				1.74	%
Trust preferred securities			18,043				371				8.22	%			20,620				336				6.52	%
Total interest bearing liabilities			513,416				971				0.76	%			492,887				971				0.79	%
Non interest bearing demand			90,107												76,701
Other liabilities			10,006												12,091
Total liabilities			613,529												581,679
Equity			59,684												54,758
Total liabilities and equity		$	673,213											$	636,437
Net interest income (tax equivalent basis)						$	5,446											$	5,274
Net interest income as a percent of average interest-earning assets											3.64	%											3.72	%

 

 

		Nine Months Ended September 30, 2014												Nine Months Ended September 30, 2013
		Average								Average				Average								Average
Assets		Balance				Interest				Rate				Balance				Interest				Rate
Taxable securities		$	77,134				898				1.55	%		$	80,553				931				1.54	%
Nontaxable securities			18,960				806				5.67	%			16,977				791				6.21	%
Federal funds sold			-				-				N/A				-				-				N/A
Loans, net			496,421				16,808				4.51	%			466,200				17,488				5.00	%
Total earning assets			592,515				18,512				4.16	%			563,730				19,210				4.54	%
Cash and due from banks			21,095												20,307
Allowance for loan losses			(6,804	)											(6,924	)
Premises and equipment			13,739												14,913
Other assets			44,044												46,641
Total assets		$	664,589											$	638,667
Liabilities
Savings and interest bearing demand		$	270,086				105				0.05	%		$	262,177				58				0.03	%
Time deposits			173,480				1,396				1.07	%			181,348				1,660				1.22	%
Repurchase agreements & Other			18,457				21				0.15	%			12,170				44				0.48	%
Advances from Federal Home Loan Bank			22,371				239				1.42	%			19,410				257				1.76	%
Trust preferred securities			19,589				1,034				7.04	%			20,620				1,077				6.96	%
Total interest bearing liabilities			503,983				2,795				0.74	%			495,725				3,096				0.83	%
Non interest bearing demand			86,748												76,834
Other liabilities			15,528												11,821
Total liabilities			606,259												584,380
Equity			58,330												54,287
Total liabilities and equity		$	664,589											$	638,667
Net interest income (tax equivalent basis)						$	15,717											$	16,114
Net interest income as a percent of average interest-earning assets											3.54	%											3.81	%

 

 

 

SB FINANCIAL GROUP, INC.
NON-GAAP RECONCILIATION OF INCOME - (Unaudited)
($ in thousands, except share data)
		Three Months Ended								Nine Months Ended
		September				September				September				September
		2014				2013				2014				2013
Tax-equivalent net interest income			5,446				5,274				15,717				16,114
TRUP prepayment - interest expense			94				-				94				-
Adjusted Tax-equivalent net interest income			5,540				5,274				15,811				16,114
Noninterest income			3,809				3,710				9,663				11,097
Total revenue, tax-equivalent			9,349				8,984				25,474				27,211
Noninterest expense			6,888				6,562				19,593				20,312
TRUP prepayment - noninterest expense			331				-				331				-
Adjusted noninterest expense			6,557				6,562				19,262				20,312
Net income			1,513				1,344				3,738				3,981
TRUP prepayment			281				-				281				-
Adjusted net income			1,794				1,344				4,018				3,981
Diluted earnings per share			0.31				0.28				0.76				0.82
TRUP prepayment			0.06				-				0.06				-
Adjusted earnings per share			0.37				0.28				0.82				0.82
Return on average assets			0.90	%			0.84	%			0.75	%			0.83	%
TRUP prepayment			0.17	%			0.00	%			0.17	%			0.00	%
Adjusted return on average assets			1.07	%			0.84	%			0.92	%			0.83	%

 

 

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