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 Fourth-Quarter and Full-Year 2014 Results

 

8.2% year-over-year loan growth and 25% year-over-year earnings growth

 

DEFIANCE, Ohio, January 21, 2015 — 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 fourth quarter and full year ended December 31, 2014.

 

Fourth-quarter highlights include:

 

	●	Net income of $1.5 million for the fourth quarter represented a 25.0 percent increase over the prior year fourth quarter
	●	Loan growth up $39.0 million, or 8.2 percent, from the prior year
	●	Fully tax equivalent (FTE) revenue up 8.9 percent from the prior year
	●	Net interest margin (FTE) of 3.73 percent for the quarter was up 16 basis points from the prior year
	●	Asset quality remained strong for the quarter, with the nonperforming asset ratio at 0.92 percent at December 31, 2014
	●	Operating expenses were up slightly compared with the year-ago fourth quarter, but down 7.6 percent from the linked quarter

 

Full-year 2014 highlights include:

 

	●	Net income of $5.3 million, or $1.07 per diluted share, compared to $5.2 million, or $1.07 per diluted share, for the prior year
	●	Total revenue (FTE) of $34.1 million, which was down 2.9 percent from the prior year
	●	Total operating expense of $26.0 million, which was down 2.1 percent from the prior year

 

Highlights*		Three Months Ended								Full Year
(in $000’s except ratios and per share data)		Dec. 2014				Dec. 2013				2014				2013
Net interest income (FTE)		$	5,599			$	5,096			$	21,316			$	21,110
Noninterest income			3,164				2,949				12,827				14,046
Noninterest expense			6,364				6,199				25,957				26,511
Net income			1,524				1,224				5,263				5,205
Earnings per diluted share			0.30				0.25				1.07				1.07
Net interest margin (FTE)			3.73	%			3.57	%			3.62	%			3.75	%
Return on assets			0.89	%			0.76	%			0.78	%			0.81	%
Return on equity			9.40	%			8.75	%			8.74	%			9.52	%

 

*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).

 

 

“We are pleased with our solid fourth-quarter results,” 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. During the quarter, we had robust mortgage production, solid balance sheet growth, expense control and stable asset quality. Additionally, we successfully completed our preferred stock offering and announced our re-entry into the Findlay, Ohio market.”

 

RESULTS OF OPERATIONS

 

Consolidated Revenue

 

Total revenue, consisting of net interest income on a fully tax equivalent (FTE) basis and noninterest income, was up 8.9 percent from the fourth quarter of 2013, but down 5.3 percent from the linked quarter.

 

	●	Net interest income (FTE) was up 9.9 percent for the fourth quarter, and up 2.8 percent compared to the linked quarter. For the full year, net interest income (FTE) was up 1.0 percent.
	●	Net interest margin (FTE) was up 16 basis points for the fourth quarter, and up 9 basis points from the linked quarter. Margin for the full year was down 13 basis points.
	●	Net interest margin was impacted by the payoff of our fixed rate trust preferred securities late in the third quarter. For the fourth quarter, this early payoff increased margin by 15 basis points.
	●	Noninterest income was up 7.3 percent for the fourth quarter, but down 16.9 percent from the linked quarter. For the full year, noninterest income was down 8.7 percent.

 

Total revenue, consisting of net interest income on an FTE basis and noninterest income, for the twelve months of 2014 was $34.1 million, compared to $35.2 million for the twelve months of 2013 or a 2.9 percent decline. The twelve-month results were impacted by lower mortgage origination volume during the first half of 2014 and the reduction in the yield on earning assets.

 

Mortgage Loan Business

 

Mortgage loan originations for the fourth quarter of 2014 were $52.1 million, up $12.4 million, or 31.2 percent, from the year-ago fourth quarter. For the twelve months of 2014, mortgage loan originations were $219.7 million, down from $248.8 million for the twelve months of 2013 or an 11.7 percent decline.

 

Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.0 million for the fourth quarter of 2014, compared to $1.0 million for the year-ago quarter. The mortgage servicing valuation adjustment for the fourth-quarter 2014 was a negative $0.19 million, down $0.25 million from the linked quarter. The mortgage servicing portfolio at December 31, 2014, was $665.7 million, up $59.7 million from $606.0 million, or 9.9 percent, from December 31, 2013.

 

Mr. Klein noted, “Our mortgage volumes for the quarter were strong compared to the prior year. While 2014 volumes were lower than in previous years, we were pleased that 93 percent of this year’s activity was from new SB Financial clients.”

 

 

Mortgage Banking ($000’s)
		Dec. 2014				Sep. 2014				Jun. 2014				Mar. 2014				Dec. 2013
Mortgage originations		$	52,058			$	67,502			$	66,563			$	33,602			$	39,679
Mortgage sales			43,542				60,982				49,091				27,961				33,921
Mortgage servicing portfolio			665,710				649,669				627,215				609,419				605,993
Mortgage servicing rights			5,704				5,720				5,375				5,228				5,180

 

Mortgage servicing revenue:
Loan servicing fees			410				400				387				380				388
OMSR amortization			(174	)			(175	)			(147	)			(117	)			(126	)
Net administrative fees			236				225				240				263				262
OMSR valuation adjustment			(193	)			62				(83	)			(18	)			(21	)
Net loan servicing fees			43				287				156				245				241
Gain on sale of mortgages			1,003				1,442				1,211				572				776
Mortgage banking revenue, net			1,046			$	1,729			$	1,368			$	817			$	1,017

 

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 $330.8 million as of December 31, 2014. For the fourth quarter of 2014, fee income as a percentage of total revenue was 36.5 percent, down slightly from the prior year. For the twelve months of 2014, fee income as a percentage of total revenue was 38.0 percent.

 

For the fourth quarter of 2014, noninterest expense (NIE) was up $0.2 million, or 2.7 percent, compared to the fourth quarter of 2013. For the twelve months of 2014, operating expenses were down $0.6 million, or 2.1 percent, compared to the twelve months of 2013. When adjusted for the trust preferred securities prepayment, expenses for the twelve months of 2014 were down $1.0 million, or 3.7 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 fourth quarter, our fee income included the sale of several SBA credits, which delivered $143,000 in gains. We have been actively pursuing SBA loans all year and our pipeline is strengthening.”

 

Fee Income / Noninterest Expense (000’s)
		Dec. 2014				Sep. 2014				Jun. 2014				Mar. 2014				Dec. 2013
Fee Income		$	3,164			$	3,809			$	3,295			$	2,559			$	2,949
Fee Income / Total Revenue			36.5	%			41.6	%			38.6	%			34.7	%			37.1	%
Fee Income / Average Assets			1.8	%			2.3	%			2.0	%			1.6	%			1.8	%
Noninterest Expense		$	6,364			$	6,888			$	6,627			$	6,079			$	6,199
Efficiency Ratio			72.8	%			74.6	%			76.0	%			80.6	%			76.4	%
NIE / Average Assets			3.7	%			4.1	%			4.0	%			3.8	%			3.8	%

 

 

Balance Sheet

 

Total assets as of December 31, 2014, were $684.2 million, up 8.3 percent from a year ago. Total equity as of December 31, 2014, was $75.7 million, up 34.5 percent from a year ago. Equity balances included the net impact of our capital raise completed in the fourth quarter, which added $14.0 million to total equity through the public offering of depository shares representing 1/100^th interest in our 6.50 percent Noncumulative Convertible Preferred Shares, Series A.

 

Total loans held for investment were $516.3 million at December 31, 2014, up $39.0 million, or 8.2 percent, from December 31, 2013. Residential real estate loans accounted for the majority of growth, up $18.8 million, or 18.8 percent. Commercial real estate and agricultural loans rose $11.7 million, or 5.7 percent, and $7.0 million, or 17.9 percent, respectively.

 

The investment portfolio, including Federal Reserve Bank and Federal Home Loan Bank stock, of $89.0 million represented 13.0 percent of assets at December 31, 2014, and was down slightly from a year ago. Deposit balances of $550.9 million at December 31, 2014, increased by $32.7 million, or 6.3 percent since December 31, 2013. Growth from the prior year included $17.8 million in checking and $14.9 million in savings and time deposit balances.

 

Mr. Klein said, “We continued to see solid growth in our loan portfolio during the fourth quarter, primarily as a result of higher residential and commercial real estate loan activity. Our equity balances improved substantially this quarter after the completion of a very successful preferred stock offering.”

 

Loan Portfolio ($000’s)		Dec. 2014				Sep. 2014				Jun. 2014				Mar. 2014				Dec. 2013				Variance YOY
Commercial		$	83,190			$	90,407			$	92,424			$	85,701			$	85,368			$	(2,178	)
% of Total			16.1	%			17.9	%			18.3	%			17.8	%			17.9	%			2.6	%
Commercial RE			217,030				212,964				215,824				212,502				205,301				11,729
% of Total			42.0	%			42.1	%			42.6	%			44.1	%			43.0	%			5.7	%
Agriculture			46,217				44,162				43,475				39,028				39,210				7,007
% of Total			9.0	%			8.7	%			8.6	%			8.1	%			8.2	%			17.9	%
Residential RE			118,382				107,712				105,054				97,857				99,620				18,762
% of Total			22.9	%			21.3	%			20.8	%			20.3	%			20.9	%			18.8	%
Consumer & Other			51,517				50,679				49,350				46,836				47,804				3,713
% of Total			10.0	%			10.0	%			9.7	%			9.7	%			10.0	%			7.8	%
Total Loans		$	516,336			$	505,924			$	506,127			$	481,924			$	477,303			$	39,033
Total Growth Percentage																							8.2	%

 

 

Asset Quality

 

SB Financial continues to improve its asset quality, reporting nonperforming assets of $6.3 million as of December 31, 2014, down $1.0 million, or 13.2 percent, from the year-ago quarter. Already trending better than our key peer metrics, the 0.92 percent of nonperforming assets to total assets continues a trend of sub 1.0 percent for the last three quarters. Coverage of problem loans by the loan loss allowance was 113.0 percent at December 31, 2014, up from the 105.8 percent at December 31, 2013.

 

Summary of Nonperforming Assets ($000’s)
Nonperforming Loan Category		Dec. 2014				Sep. 2014				Jun. 2014				Mar. 2014				Dec. 2013
Commercial		$	1,387			$	1,397			$	1,485			$	1,818			$	2,316
% of Total Commercial loans			1.7	%			1.5	%			1.6	%			2.1	%			2.7	%
Commercial RE			2,092				616				699				753				532
% of Total CRE loans			1.0	%			0.3	%			0.3	%			0.4	%			0.3	%
Residential RE			992				1,015				1,534				1,555				1,651
% of Total Res. RE loans			0.8	%			0.9	%			1.5	%			1.6	%			1.7	%
Consumer & Other			138				174				288				280				345
% of Total Cons. & Other loans			0.3	%			0.3	%			0.6	%			0.6	%			0.7	%
Total Nonaccruing Loans			4,609				3,202				4,006				4,406				4,844
% of Total Loans			0.9	%			0.6	%			0.8	%			0.9	%			1.0	%
Accruing Restructured Loans			1,384				1,620				1,665				1,793				1,739
Total Nonaccruing & Restructured Loans		$	5,993			$	4,822			$	5,671			$	6,199			$	6,583
% of Total Loans			1.2	%			1.0	%			1.1	%			1.3	%			1.4	%
OREO & Repossessed Vehicles			285				540				516				615				651
Total Nonperforming Assets		$	6,278			$	5,362			$	6,187			$	6,814			$	7,233
% of Total Assets			0.9	%			0.8	%			0.9	%			1.1	%			1.1	%

 

Capitalization

 

Improving capital ratios remains an important focus of management. The tangible equity ratio improved by 36 basis points over the past year and stood at 6.8 percent as of December 31, 2014. All bank regulatory ratios remain in excess of "well-capitalized" levels. At December 31, 2014, State Bank's Total Risk-Based Capital was estimated to be $63.5 million, $21.2 million above the “well-capitalized” level. The Total Risk-Based Capital Ratio is estimated at 12.5 percent.

 

The Company will hold a related conference call and webcast on January 22, at 10:00 a.m. EST. 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 two loan production offices located in Columbus, Ohio, and one loan production office located in 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 Capital Market under the symbol SBFG. SB Financial’s preferred stock is listed on the NASDAQ Capital Market under the symbol SBFGP.

 

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)

 

		December				September				June				March				December
($ in Thousands)		2014				2014				2014				2014				2013
ASSETS
Cash and due from banks		$	28,197			$	21,870			$	13,778			$	14,860			$	13,137
Securities available for sale, at fair value			85,240				81,148				85,586				93,305				89,793
Other securities - FRB and FHLB Stock			3,748				3,748				3,748				3,748				3,748
Total investment securities			88,988				84,896				89,334				97,053				93,541
Loans held for sale			5,168				6,736				8,290				7,165				3,366
Loans, net of unearned income			516,336				505,924				506,127				481,924				477,303
Allowance for loan losses			(6,771	)			(6,713	)			(6,568	)			(6,726	)			(6,964	)
Net loans			509,565				499,211				499,559				475,198				470,339
Premises and equipment, net			13,604				13,256				13,281				13,414				12,607
Cash surrender value of life insurance			13,148				13,074				13,059				12,982				12,906
Goodwill			16,353				16,353				16,353				16,353				16,353
Core deposits and other intangibles			283				338				393				524				655
Foreclosed assets held for sale, net			285				540				516				615				651
Mortgage servicing rights			5,704				5,720				5,375				5,228				5,180
Accrued interest receivable			1,346				1,853				1,456				1,423				1,281
Other assets			1,587				709				1,106				1,487				1,738
Total assets		$	684,228			$	664,556			$	662,500			$	646,302			$	631,754
LIABILITIES AND EQUITY
Deposits
Non interest bearing demand		$	97,853			$	90,261			$	87,706			$	84,265			$	81,570
Interest bearing demand			121,043				119,805				116,765				126,520				119,551
Savings			64,107				61,770				63,199				64,306				61,652
Money market			104,602				96,506				80,288				85,731				79,902
Time deposits			163,301				166,919				176,109				171,897				175,559
Total deposits			550,906				535,261				524,067				532,719				518,234
Notes payable			-				7,000				-				-				589
Advances from Federal Home Loan Bank			30,000				30,000				37,000				14,000				16,000
Repurchase agreements			12,740				17,902				17,246				16,905				14,696
Trust preferred securities			10,310				10,310				20,620				20,620				20,620
Accrued interest payable			264				355				655				425				639
Other liabilities			4,325				3,462				3,902				4,198				4,707
Total liabilities			608,545				604,290				603,490				588,867				575,485
Equity
Preferred stock			13,983				-				-				-				-
Common stock			12,569				12,569				12,569				12,569				12,569
Additional paid-in capital			15,461				15,418				15,403				15,391				15,412
Retained earnings			34,379				33,075				31,757				30,708				29,899
Accumulated other comprehensive income			918				831				908				407				74
Treasury stock			(1,627	)			(1,627	)			(1,627	)			(1,640	)			(1,685	)
Total equity			75,683				60,266				59,010				57,435				56,269
Total liabilities and equity		$	684,228			$	664,556			$	662,500			$	646,302			$	631,754

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

 

($ in thousands, except share data)		Three Months Ended																				Twelve Months Ended
		December				September				June				March				December				December				December
		2014				2014				2014				2014				2013				2014				2013
Interest income
Loans
Taxable		$	5,707			$	5,855			$	5,654			$	5,241			$	5,428			$	22,457			$	22,834
Nontaxable			6				9				13				16				13				44				67
Securities
Taxable			300				279				310				309				313				1,198				1,244
Nontaxable			177				178				179				175				181				709				703
Total interest income			6,190				6,321				6,156				5,741				5,935				24,408				24,848
Interest expense
Deposits			483				500				503				498				513				1,984				2,231
Repurchase Agreements & Other			53				23				4				11				14				91				58
Federal Home Loan Bank advances			95				94				71				74				82				334				339
Trust preferred securities			54				354				330				333				330				1,071				1,407
Total interest expense			685				971				908				916				939				3,480				4,035
Net interest income			5,505				5,350				5,248				4,825				4,996				20,928				20,813
Provision for loan losses			150				150				150				-				-				450				900
Net interest income after provision for loan losses			5,355				5,200				5,098				4,825				4,996				20,478				19,913
Noninterest income
Wealth Management Fees			679				670				649				632				689				2,630				2,653
Customer service fees			686				730				665				610				673				2,691				2,587
Gain on sale of mtg. loans & OMSR's			1,003				1,442				1,211				572				776				4,228				5,066
Mortgage loan servicing fees, net			43				287				156				245				241				731				1,246
Gain on sale of non-mortgage loans			143				71				84				23				303				321				585
Data service fees			324				337				322				306				295				1,289				1,500
Net gain on sales of securities			104				-				56				-				-				160				48
Gain/(loss) on sale/disposal of assets			(15	)			(15	)			(15	)			(34	)			(265	)			(79	)			(484	)
Other income			197				287				167				205				237				856				845
Total non-interest income			3,164				3,809				3,295				2,559				2,949				12,827				14,046
Noninterest expense
Salaries and employee benefits			3,179				3,435				3,451				3,120				3,027				13,185				13,497
Net occupancy expense			521				508				485				573				494				2,087				2,055
Equipment expense			625				616				645				639				651				2,525				2,810
Data processing fees			230				238				249				211				254				928				714
Professional fees			465				435				465				338				443				1,703				1,827
Marketing expense			166				105				170				123				136				564				471
Telephone and communication			91				94				107				112				110				404				582
Postage and delivery expense			197				195				187				204				173				783				796
State, local and other taxes			94				89				95				92				138				370				550
Employee expense			111				122				140				115				154				488				557
Intangible amortization expense			55				55				131				131				129				372				564
OREO Impairment			-				-				-				-				-				-				33
Other expenses			630				996				502				421				490				2,548				2,055
Total non-interest expense			6,364				6,888				6,627				6,079				6,199				25,957				26,511
Income before income tax expense			2,155				2,121				1,767				1,306				1,746				7,348				7,448
Income tax expense			631				607				521				326				522				2,085				2,243
Net income		$	1,524			$	1,513			$	1,246			$	980			$	1,224			$	5,263			$	5,205
Preferred Stock Dividends			-				-				-				-				-				-				-
Net income available to common			1,524				1,513				1,246				980				1,224				5,263				5,205
Common share data:
Basic earnings per common share		$	0.31			$	0.31			$	0.26			$	0.20			$	0.25			$	1.08			$	1.07
Diluted earnings per common share		$	0.30			$	0.31			$	0.25			$	0.20			$	0.25			$	1.07			$	1.07
Average shares outstanding ($ in thousands):
Basic:			4,875				4,875				4,874				4,871				4,870				4,874				4,866
Diluted:			5,044				4,900				4,893				4,894				4,882				4,932				4,878

 

 

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 Twelve Months Ended
SUMMARY OF		December				September				June				March				December					December				December
OPERATIONS		2014				2014				2014				2014				2013					2014				2013
Net interest income		$	5,505				5,350				5,248				4,825				4,996					20,928				20,813
Tax-equivalent adjustment		$	94				96				99				98				100					388				297
Tax-equivalent net interest income		$	5,599				5,446				5,347				4,923				5,096					21,316				21,110
Provision for loan loss		$	150				150				150				-				-					450				900
Noninterest income		$	3,164				3,809				3,295				2,559				2,949					12,827				14,046
Total revenue, tax-equivalent		$	8,763				9,255				8,642				7,482				8,045					34,143				35,156
Noninterest expense		$	6,364				6,888				6,627				6,079				6,199					25,957				26,511
Pre provision pretax income		$	2,305				2,271				1,917				1,306				1,746					7,798				8,348
Pretax income		$	2,155				2,121				1,767				1,306				1,746					7,348				7,448
Net income		$	1,524				1,513				1,246				980				1,224					5,263				5,205
PER SHARE INFORMATION:
Basic earnings per share		$	0.31				0.31				0.26				0.20				0.25					1.08				1.07
Diluted earnings per share		$	0.30				0.31				0.25				0.20				0.25					1.07				1.07
Common dividends		$	0.045				0.040				0.040				0.035				0.035					0.16				0.12
Book value per common share		$	11.96				12.36				12.10				11.78				11.55					11.96				11.55
Tangible book value per common share		$	9.24				8.94				8.67				8.32				8.06					9.24				8.06
Market price per share		$	9.40				9.05				8.37				8.35				7.88					9.40				7.88
PERFORMANCE RATIOS:
Return on average assets			0.89	%			0.90	%			0.76	%			0.61	%			0.76	%				0.78	%			0.81	%
Return on average common equity			9.40	%			10.14	%			8.55	%			6.88	%			8.75	%				8.74	%			9.52	%
Return on avg. tangible common equity			13.03	%			14.09	%			12.01	%			9.89	%			12.71	%				12.22	%			13.93	%
Efficiency ratio			72.78	%			74.60	%			76.03	%			80.55	%			76.40	%				75.80	%			74.43	%
Earning asset yield			4.18	%			4.29	%			4.16	%			4.10	%			4.31	%				4.21	%			4.43	%
Cost of interest bearing liabilities			0.53	%			0.76	%			0.72	%			0.74	%			0.76	%				0.69	%			0.81	%
Net interest margin			3.66	%			3.58	%			3.53	%			3.39	%			3.50	%				3.55	%			3.68	%
Tax equivalent effect			0.07	%			0.06	%			0.07	%			0.07	%			0.07	%				0.07	%			0.07	%
Net interest margin - fully tax equivalent basis			3.73	%			3.64	%			3.60	%			3.46	%			3.57	%				3.62	%			3.75	%
ASSET QUALITY RATIOS:
Gross charge-offs		$	101				94				330				323				163					848				1,328
Recoveries		$	9				90				21				85				7					205				260
Net charge-offs		$	92				4				309				238				156					643				1,068
Nonaccruing loans/ Total loans			0.89	%			0.63	%			0.79	%			0.91	%			1.01	%				0.89	%			1.01	%
Nonperforming loans/ Total loans			1.16	%			0.95	%			1.12	%			1.29	%			1.38	%				1.16	%			1.38	%
Nonperforming assets/ Loans & OREO			1.22	%			1.06	%			1.22	%			1.41	%			1.51	%				1.22	%			1.51	%
Nonperforming assets/ Total assets			0.92	%			0.81	%			0.93	%			1.05	%			1.14	%				0.92	%			1.14	%
Allowance for loan loss/ Nonperforming loans			112.98	%			139.22	%			115.82	%			108.50	%			105.80	%				112.98	%			105.80	%
Allowance for loan loss/ Total loans			1.31	%			1.33	%			1.30	%			1.40	%			1.46	%				1.31	%			1.46	%
Net loan charge-offs/ Average loans (ann.)			0.07	%			N/M				0.25	%			0.20	%			0.13	%				0.13	%			0.23	%
Loan loss provision/ Net charge-offs			163.04	%			N/M				48.54	%			0.00	%			0.00	%				69.98	%			84.27	%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits			93.72	%			94.52	%			96.58	%			90.46	%			92.10	%				93.72	%			92.10	%
Equity/ Assets			11.06	%			9.07	%			8.91	%			8.89	%			8.91	%				11.06	%			8.91	%
Tangible equity/ Tangible assets			6.75	%			6.73	%			6.54	%			6.44	%			6.39	%				6.75	%			6.39	%
END OF PERIOD BALANCES
Total loans		$	516,336				505,924				506,127				481,924				477,303					516,336				477,303
Total assets		$	684,228				664,556				662,500				646,302				631,754					684,228				631,754
Deposits		$	550,906				535,261				524,067				532,719				518,234					550,906				518,234
Stockholders equity		$	75,683				60,266				59,010				57,435				56,269					75,683				56,269
Intangibles		$	16,636				16,691				16,746				16,877				17,008					16,636				17,008
Preferred equity		$	13,983				-				-				-				-					13,983				-
Tangible equity		$	45,064				43,575				42,264				40,558				39,261					45,064				39,261
Full-time equivalent employees			190				195				193				197				200					190				200
Period end basic shares outstanding			4,875				4,875				4,875				4,874				4,870					4,875				4,870
Period end outstanding (Series A Converted)			1,451				-				-				-				-					1,451				-
AVERAGE BALANCES
Total loans		$	516,517				512,151				500,167				476,553				479,701					501,486				469,603
Total earning assets		$	600,851				598,223				594,256				569,524				571,332					589,332				565,390
Total assets		$	687,674				673,213				658,108				646,864				645,148					672,277				639,920
Deposits		$	551,906				534,841				531,786				524,145				525,334					535,560				521,648
Stockholders equity		$	64,846				59,684				58,276				56,977				55,925					60,186				54,700
Intangibles		$	16,664				16,719				16,811				17,347				17,404					16,787				17,323
Preferred equity		$	1,398				-				-				-				-					350				-
Tangible equity		$	46,784				42,965				41,465				39,630				38,521					43,049				37,377
Average diluted shares outstanding			5,044				4,900				4,893				4,894				4,882					4,932				4,878

 

 

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

For the Three & Twelve Months Ended December 31, 2014 and 2013

 

($ in Thousands)		Three Months Ended December 31, 2014												Three Months Ended December 31, 2013
		Average								Average				Average								Average
		Balance				Interest				Rate				Balance				Interest				Rate
Assets
Taxable securities		$	66,235				300				1.81	%		$	73,306				313				1.71	%
Nontaxable securities			18,099				268				5.93	%			18,325				274				5.99	%
Federal funds sold			-				-				N/A				-				-				N/A
Loans, net			516,517				5,716				4.43	%			479,701				5,448				4.54	%
Total earning assets			600,851				6,284				4.18	%			571,332				6,035				4.23	%
Cash and due from banks			35,261												22,369
Allowance for loan losses			(6,730	)											(7,075	)
Premises and equipment			13,686												13,811
Other assets			44,606												44,711
Total assets		$	687,674											$	645,148
Liabilities
Savings and interest bearing demand		$	290,329				40				0.06	%		$	265,258				18				0.03	%
Time deposits			165,227				443				1.07	%			176,609				495				1.12	%
Repurchase agreements & Other			20,582				53				1.03	%			15,765				14				0.36	%
Advances from Federal Home Loan Bank			30,000				95				1.27	%			16,000				82				2.05	%
Trust preferred securities			10,310				54				2.10	%			20,620				330				6.40	%
Total interest bearing liabilities			516,448				685				0.53	%			494,252				939				0.76	%
Non interest bearing demand			96,350												83,467
Other liabilities			10,030												11,504
Total liabilities			622,828												589,223
Equity			64,846												55,925
Total liabilities and equity		$	687,674											$	645,148
Net interest income (tax equivalent basis)						$	5,599											$	5,096
Net interest income as a percent of average interest-earning assets											3.73	%											3.57	%

 

 

		Twelve Months Ended December 31, 2014												Twelve Months Ended December 31, 2013
		Average								Average				Average								Average
		Balance				Interest				Rate				Balance				Interest				Rate
Assets
Taxable securities		$	69,795				1,198				1.72	%		$	78,520				1,244				1.58	%
Nontaxable securities			18,051				1,074				5.95	%			17,267				1,065				6.17	%
Federal funds sold			-				-				N/A				-				-				N/A
Loans, net			501,486				22,524				4.49	%			469,603				22,936				4.88	%
Total earning assets			589,332				24,796				4.21	%			565,390				25,245				4.47	%
Cash and due from banks			24,665												20,827
Allowance for loan losses			(6,785	)											(6,962	)
Premises and equipment			13,725												14,635
Other assets			51,340												46,030
Total assets		$	672,277											$	639,920
Liabilities
Savings and interest bearing demand		$	275,188				105				0.04	%		$	262,954				136				0.05	%
Time deposits			171,399				1,879				1.10	%			180,154				2,095				1.16	%
Repurchase agreements & Other			18,764				91				0.48	%			13,085				58				0.44	%
Advances from Federal Home Loan Bank			24,294				334				1.37	%			18,551				339				1.83	%
Trust preferred securities			17,448				1,071				6.14	%			20,620				1,407				6.82	%
Total interest bearing liabilities			507,093				3,480				0.69	%			495,364				4,035				0.81	%
Non interest bearing demand			88,973												78,540
Other liabilities			16,025												11,316
Total liabilities			612,091												585,220
Equity			60,186												54,700
Total liabilities and equity		$	672,277											$	639,920
Net interest income (tax equivalent basis)						$	21,316											$	21,210
Net interest income as a percent of average interest-earning assets											3.62	%											3.75	%

 

 

 

11