Exhibit 99.1

 

 

SB Financial Group, Inc. Announces Fourth-Quarter and Twelve-Month 2019 Earnings

 

DEFIANCE, Ohio, January 23, 2020 — 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 fourth-quarter and twelve months ended December 31, 2019.

 

Fourth-quarter, 2019 highlights over prior-year fourth quarter, include:

 

●

Total assets increased to $1.04 billion, up $51.7 million, or 5.2 percent

●

GAAP Net income of $3.4 million, up $0.4 million, or 13.4 percent, and diluted earnings per share (EPS) of $0.42

●

Net income of $3.1 million, adjusted for the mortgage servicing rights recapture, which is up $0.1 million, or 3.5 percent

●

Adjusted diluted (EPS) of $0.39, up $0.01 per share, or 2.6 percent

●

Fully converted tangible book value (TBV) per common share increased 6.5 percent to $15.23 per share

●

Total market capitalization rose to $152.9 million with the conversion of our preferred shares on 12/26/19

 

Twelve month 2019 highlights over prior-year twelve months include:

 

●

GAAP Net income of $12.0 million up $0.3 million, or 2.9 percent, and diluted EPS of $1.51

●

Net income of $12.8 million, adjusted for the mortgage servicing rights impairment, which is up $1.2 million, or 9.8 percent

●

Adjusted diluted EPS of $1.62, which is up $0.10 per share, or 6.6 percent

 

Highlights		Three Months Ended												Twelve Months Ended
($ in thousands, except per share & ratios)		Dec. 2019				Dec. 2018				% Change				Dec. 2019				Dec. 2018				% Change
Operating revenue		$	14,555			$	12,544				16.0	%		$	52,842			$	49,891				5.9	%
Interest income			11,205				10,638				5.3	%			44,400				39,479				12.5	%
Interest expense			2,609				2,024				28.9	%			9,574				6,212				54.1	%
Net interest income			8,596				8,614				-0.2	%			34,826				33,267				4.7	%
Provision for loan losses			300				-				N/A				800				600				33.3	%
Noninterest income			5,959				3,930				51.6	%			18,016				16,624				8.4	%
Noninterest expense			10,176				8,852				15.0	%			37,410				34,847				7.4	%
Net income			3,358				2,960				13.4	%			11,973				11,638				2.9	%
Earnings per diluted share			0.42				0.37				13.5	%			1.51				1.51				0.0	%
Return on average assets			1.28	%			1.19	%			7.6	%			1.16	%			1.23	%			-5.7	%
Return on average equity			9.93	%			9.21	%			7.8	%			8.99	%			9.61	%			-6.5	%
Non-GAAP Measures
Adjusted net income		$	3,119			$	3,014				3.5	%		$	12,837			$	11,686				9.8	%
Adjusted diluted EPS			0.39				0.38				2.6	%			1.62				1.52				6.6	%
Adjusted return on average assets			1.26	%			1.20	%			5.0	%			1.25	%			1.23	%			1.6	%
Net interest margin (FTE)			3.70	%			3.95	%			-6.3	%			3.82	%			3.95	%			-3.3	%

 

“This quarter, we delivered earnings of $0.42 per diluted share, which is up 14 percent from the prior year,” said Mark A. Klein, Chairman, President and CEO of SB Financial. “We originated $138 million in residential mortgage loans, a fourth quarter record, while growing our loan portfolio over $13 million, when we adjust for the residential loan sale of $11.1 million in December 2019. We are especially pleased with our Wealth Management group’s ability to surpass our goal to achieve $500 million of assets under management.”

 

 

RESULTS OF OPERATIONS

 

Consolidated Revenue

 

Total operating revenue, consisting of net interest income and noninterest income, was up 16.0 percent from the fourth quarter of 2018, and up 0.9 percent from the linked quarter.

 

●

Net interest income was flat from the year-ago quarter, but down 5.1 percent from the linked quarter.

●

Noninterest income was up 51.6 percent from the year-ago quarter, and up 11.1 percent from the linked quarter, primarily due to significant residential real estate volume.

 

Mortgage Loan Business

 

Mortgage loan originations for the fourth quarter were $137.5 million, up $58.7 million, or 74.5 percent, from the year-ago quarter. Total sales of originated loans were $127.4 million, up $67.1 million, or 111.2 percent from the year-ago quarter. This quarter, a small residential mortgage loan sale was executed for $11.1 million generating loan sale gains of $0.24 million.

 

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $3.4 million for the fourth quarter, compared to $2.0 million for the year-ago quarter. The mortgage servicing valuation adjustment for the fourth quarter was a positive $0.3 million, compared to a negative adjustment of $0.01 million for the fourth quarter of 2018. The aggregate servicing valuation impairment ended the quarter at $1.3 million, which is up $1.1 million from the $0.2 million at December 31, 2018. The mortgage servicing portfolio at December 31, 2019, was $1.2 billion, up $0.12 billion, or 10.5 percent, from $1.08 billion at December 31, 2018.

 

Mr. Klein noted, “We capped off a tremendous year in the mortgage business this quarter. Originations of $138 million were up nearly 75 percent from the prior year and supplemented the prior three quarters, resulting in a record full-year volume of $445 million. The quarter also resulted in a small recapture of OMSR impairment but our net income for 2019 was still negatively impacted by $0.8 million due to portfolio impairment.”

 

Mortgage Banking
($ in thousands)		Dec. 2019				Sep. 2019				Jun. 2019				Mar. 2019				Dec. 2018
Mortgage originations		$	137,528			$	157,947			$	98,447			$	51,417			$	78,829
Mortgage sales			127,441				125,386				70,993				43,472				60,345
Mortgage servicing portfolio			1,199,107				1,153,020				1,112,857				1,094,060				1,084,678
Mortgage servicing rights			11,017				10,447				10,264				10,838				11,365
Mortgage servicing revenue:
Loan servicing fees			740				709				691				682				673
OMSR amortization			(709	)			(701	)			(460	)			(254	)			(300	)
Net administrative fees			31				8				231				428				373
OMSR valuation adjustment			303				-				(690	)			(708	)			(68	)
Net loan servicing fees			334				8				(459	)			(280	)			305
Gain on sale of mortgages			3,048				2,495				1,678				1,192				1,646
Mortgage banking revenue, net		$	3,382			$	2,503			$	1,219			$	912			$	1,951

 

 

Noninterest Income and Noninterest Expense

 

SB Financial’s noninterest income includes revenue from a diverse group of services, such as wealth management, deposit fees, residential loan sales, title insurance revenue, and the sale of Small Business Administration (SBA) loans. Wealth management assets under the Company’s care rose above $500 million for the first time to stand at $507.7 million as of December 31, 2019, title insurance business delivered revenue of $0.4 million, SBA activity for the quarter consisted of total loan sales of $2.3 million generating gains of $0.2 million and deposit fees increased to $0.7 million. As a result, noninterest income as a percentage of total revenue was 40.9 percent for the quarter, with the year-to-date percentage at 35.4 percent when adjusted for the impairment.

 

Noninterest expense (NIE) of $10.2 million was up $1.3 million, or 15.0 percent, compared to the same quarter last year. Compared to the linked quarter, NIE was also up $0.7 million, with net noninterest expense declining from negative 2.0 percent in the prior year to negative 1.6 percent currently. Expense growth was driven by higher mortgage commission and incentive payments, regulatory burden, medical costs, higher occupancy and data processing costs.

 

Noninterest Income / Noninterest Expense

 

($ in thousands, except ratios)		Dec. 2019				Sep. 2019				Jun. 2019				Mar. 2019				Dec. 2018
Noninterest Income (NII)		$	5,959			$	5,366			$	3,691			$	3,000			$	3,930
NII / Total Revenue			40.9	%			37.2	%			29.5	%			26.5	%			31.3	%
NII / Average Assets			2.3	%			2.1	%			1.5	%			1.2	%			1.6	%
Noninterest Expense (NIE)		$	10,176			$	9,500			$	9,108			$	8,626			$	8,852
Efficiency Ratio			69.9	%			65.9	%			72.7	%			76.1	%			70.6	%
NIE / Average Assets			3.9	%			3.6	%			3.6	%			3.5	%			3.6	%
Net Noninterest Expense/Avg. Assets			-1.6	%			-1.6	%			-2.1	%			-2.3	%			-2.0	%

  

Balance Sheet

 

Total assets as of December 31, 2019, were $1.04 billion, up $51.7 million, or 5.2 percent, from a year ago. Total equity as of December 31, 2019, was $136.1 million, up 4.3 percent from a year ago, and comprised 13.1 percent of total assets.

 

Total loans held for investment were $825.5 million at year end, up $53.6 million, or 7.0 percent, from December 31, 2018. Loan balances were impacted by the $11.1 million residential loan sale and the early pay-downs in commercial real estate of $13.2 million. From the prior year, commercial real estate loans were up $29.2 million, or 8.6 percent, with commercial and industrial loans rising $23.4 million, or 18.3 percent.

 

The investment portfolio of $105.6 million, including Federal Reserve Bank and Federal Home Loan Bank stock, represented 10.2 percent of assets at December 31, 2019. Deposit balances of $840.2 million at year end increased by $37.7 million, or 4.7 percent, since December 31, 2018. Growth from the prior year included $14.2 million in checking and $23.5 million in savings, money market and time deposit balances.

 

Mr. Klein stated, “We continued to incur some selective pay-downs in commercial real estate in the quarter and undertook a residential loan sale yet we still were able to achieve loan growth in the quarter. We recognize competitive pressures are increasing in all of our markets on both loan pricing and deposit gathering.”

 

 

Loan Balances
($ in thousands, except ratios)		Dec. 2019				Sep. 2019				Jun. 2019				Mar. 2019				Dec. 2018				Annual Growth
Commercial		$	151,018			$	145,147			$	143,798			$	136,201			$	127,640			$	23,378
% of Total			18.3	%			17.6	%			17.7	%			17.4	%			16.5	%			18.3	%
Commercial RE			369,962				362,580				360,491				343,900				340,791				29,171
% of Total			44.8	%			44.0	%			44.2	%			43.9	%			44.2	%			8.6	%
Agriculture			50,994				51,946				54,317				50,620				52,012				(1,018	)
% of Total			6.2	%			6.3	%			6.7	%			6.5	%			6.7	%			-2.0	%
Residential RE			189,290				199,036				191,642				187,548				187,104				2,186
% of Total			22.9	%			24.2	%			23.5	%			24.0	%			24.2	%			1.2	%
Consumer & Other			64,246				64,658				64,261				64,254				64,336				-90
% of Total			7.8	%			7.9	%			7.9	%			8.2	%			8.3	%			-0.1	%
Total Loans		$	825,510			$	823,367			$	814,509			$	782,523			$	771,883			$	53,627
Total Growth Percentage																							6.9	%

 

Deposit Balances
($ in thousands, except ratios)		Dec. 2019				Sep. 2019				Jun. 2019				Mar. 2019				Dec. 2018				Annual Growth
Non-Int DDA		$	158,357			$	152,932			$	141,216			$	146,327			$	144,592			$	13,765
% of Total			18.8	%			18.0	%			16.8	%			17.7	%			18.0	%			9.5	%
Interest DDA			131,084				131,655				129,710				132,101				130,628				456
% of Total			15.6	%			15.5	%			15.5	%			16.0	%			16.3	%			0.3	%
Savings			119,359				121,991				118,931				115,272				104,444				14,915
% of Total			14.1	%			14.3	%			14.1	%			13.8	%			12.9	%			14.3	%
Money Market			173,666				173,237				175,455				175,334				181,426				-7,760
% of Total			20.7	%			20.4	%			20.9	%			21.2	%			22.6	%			-4.3	%
Time Deposits			257,753				268,139				274,062				258,624				241,462				16,291
% of Total			30.7	%			31.6	%			32.7	%			31.2	%			30.1	%			6.7	%
Total Deposits		$	840,219			$	847,954			$	839,374			$	827,658			$	802,552			$	37,667
Total Growth Percentage																							4.7	%

 

Asset Quality

 

SB Financial’s nonperforming assets to total assets ratio of 0.42 percent continues to be in the top quartile of its publicly traded 65-bank peer group. The coverage of non-performing loans by the loan loss allowance was at 218 percent at year end, up from 213 percent at the prior year.

 

 

Nonperforming Assets

 

($ in thousands, except ratios)		Dec. 2019				Sep. 2019				Jun. 2019				Mar. 2019				Dec. 2018				Annual Change
Commercial & Agriculture		$	772			$	834			$	674			$	998			$	731			$	41
% of Total Com./Ag. loans			0.38	%			0.42	%			0.34	%			0.53	%			0.41	%			5.6	%
Commercial RE			464				262				208				212				218				246
% of Total CRE loans			0.13	%			0.07	%			0.06	%			0.06	%			0.06	%			112.8	%
Residential RE			1,580				1,763				1,768				1,612				1,738				(158	)
% of Total Res. RE loans			0.83	%			0.89	%			0.92	%			0.86	%			0.93	%			-9.1	%
Consumer & Other			322				416				456				325				219				103
% of Total Con./Oth. loans			0.50	%			0.64	%			0.71	%			0.51	%			0.34	%			47.0	%
Total Nonaccruing Loans			3,138				3,275				3,106				3,147				2,906				232
% of Total loans			0.38	%			0.40	%			0.38	%			0.40	%			0.38	%			8.0	%
Accruing Restructured Loans			874				825				814				827				928				(54	)
Total Change (%)																							-5.8	%
Total Nonaccruing & Restructured Loans			4,012				4,100				3,920				3,974				3,834				178
% of Total loans			0.49	%			0.50	%			0.48	%			0.51	%			0.50	%			4.6	%
Foreclosed Assets			305				489				530				313				131				174
Total Change (%)																							132.8	%
Total Nonperforming Assets		$	4,317			$	4,589			$	4,450			$	4,287			$	3,965			$	352
% of Total assets			0.42	%			0.44	%			0.43	%			0.42	%			0.40	%			8.9	%

 

Webcast and Conference Call

 

The Company will hold a related conference call and webcast on January 24, 2020, at 11:00 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 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 20 offices; 19 in nine Ohio counties and one in Fort Wayne, Indiana, and 25 full-service ATMs. State Bank has seven loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. Peak Title provides title insurance and opinions throughout the Tri-State region. SB Financial’s common stock is listed on the NASDAQ Capital Market under the symbol “SBFG”.    

 

In May 2019, SB Financial was ranked #94 on the American Banker Magazine’s list of Top 200 Publicly Traded Community Banks and Thrifts based on three-year average return on equity (“ROE”).

 

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 including certain non-GAAP financial measures will provide 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.

 

Investor Contact Information:

Anthony V. Cosentino

Executive Vice President and

Chief Financial Officer

Tony.Cosentino@yoursbfinancial.com

 

###

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS - (Unaudited)

 

		December				September				June				March				December
($ in thousands)		2019				2019				2019				2019				2018
ASSETS
Cash and due from banks		$	27,064			$	49,824			$	42,786			$	62,962			$	48,363
Available-for-sale securities			100,948				77,029				85,261				95,802				90,969
Loans held for sale			7,258				13,655				9,579				4,346				4,445
Loans, net of unearned income			825,510				823,367				814,509				782,523				771,883
Allowance for loan losses			(8,755	)			(8,492	)			(8,306	)			(8,121	)			(8,167	)
Premises and equipment, net			23,385				23,898				23,150				23,270				22,084
Federal Reserve and FHLB Stock, at cost			4,648				4,648				4,648				4,123				4,123
Foreclosed assets held for sale, net			305				489				530				313				131
Interest receivable			3,106				3,176				3,209				3,123				2,822
Goodwill and other intangibles			17,832				17,834				17,836				17,838				16,401
Cash value of life insurance			17,221				17,137				17,051				16,966				16,834
Mortgage servicing rights			11,017				10,447				10,264				10,838				11,365
Other assets			9,038				9,749				8,606				7,288				5,575
Total assets		$	1,038,577			$	1,042,761			$	1,029,123			$	1,021,271			$	986,828
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non interest bearing demand		$	158,357			$	152,932			$	141,216			$	146,327			$	144,592
Interest bearing demand			131,084				131,655				129,710				132,101				130,628
Savings			119,359				121,991				118,931				115,272				104,444
Money market			173,666				173,237				175,455				175,334				181,426
Time deposits			257,753				268,139				274,062				258,624				241,462
Total deposits			840,219				847,954				839,374				827,658				802,552
Repurchase agreements			12,945				14,659				13,968				12,255				15,184
Federal Home Loan Bank advances			16,000				16,000				16,000				24,000				16,000
Trust preferred securities			10,310				10,310				10,310				10,310				10,310
Interest payable			1,191				1,391				1,188				1,123				909
Other liabilities			21,818				18,201				14,346				14,419				11,438
Total liabilities			902,483				908,515				895,186				889,765				856,393
Shareholders' Equity
Preferred stock			-				13,241				13,978				13,978				13,979
Common stock			54,463				41,223				40,486				40,486				40,485
Additional paid-in capital			15,023				15,219				15,259				15,143				15,226
Retained earnings			72,704				70,184				67,236				65,438				64,012
Accumulated other comprehensive income (loss)			659				900				801				124				(552	)
Treasury stock			(6,755	)			(6,521	)			(3,823	)			(3,663	)			(2,715	)
Total shareholders' equity			136,094				134,246				133,937				131,506				130,435
Total liabilities and shareholders' equity		$	1,038,577			$	1,042,761			$	1,029,123			$	1,021,271			$	986,828

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

 

($ in thousands, except per share & ratios)		At and for the Three Months Ended																				Twelve Months Ended
		December				September				June				March				December				December				December
Interest income		2019				2019				2019				2019				2018				2019				2018
Loans
Taxable		$	10,313			$	10,607			$	10,182			$	9,427			$	9,661			$	40,529			$	36,268
Tax exempt			83				82				73				62				55				300				154
Securities
Taxable			737				776				802				911				822				3,226				2,618
Tax exempt			72				81				94				98				100				345				439
Total interest income			11,205				11,546				11,151				10,498				10,638				44,400				39,479
Interest expense
Deposits			2,392				2,258				2,092				1,918				1,776				8,660				5,314
Repurchase agreements & other			17				22				17				26				10				82				37
Federal Home Loan Bank advances			101				101				100				100				131				402				460
Trust preferred securities			99				107				110				114				107				430				401
Total interest expense			2,609				2,488				2,319				2,158				2,024				9,574				6,212
Net interest income			8,596				9,058				8,832				8,340				8,614				34,826				33,267
Provision for loan losses			300				300				200				-				-				800				600
Net interest income after provision for loan losses			8,296				8,758				8,632				8,340				8,614				34,026				32,667
Noninterest income
Wealth management fees			801				775				783				734				717				3,093				2,871
Customer service fees			712				729				689				631				679				2,761				2,670
Gain on sale of mtg. loans & OMSR			3,048				2,495				1,678				1,192				1,646				8,413				6,870
Mortgage loan servicing fees, net			334				8				(459	)			(280	)			305				(397	)			1,295
Gain on sale of non-mortgage loans			250				462				216				327				295				1,255				1,230
Title insurance income			393				400				308				19				-				1,120				-
Net gain on sales of securities			-				-				206				-				-				206				70
Gain (loss) on sale of assets			1				1				(5	)			(2	)			14				(5	)			35
Other			420				496				275				379				274				1,570				1,583
Total noninterest income			5,959				5,366				3,691				3,000				3,930				18,016				16,624
Noninterest expense
Salaries and employee benefits			6,142				5,715				5,305				4,902				5,108				22,064				20,620
Net occupancy expense			675				656				627				645				600				2,603				2,397
Equipment expense			764				688				665				711				756				2,828				2,889
Data processing fees			543				499				488				443				466				1,973				1,811
Professional fees			639				571				649				617				532				2,476				1,848
Marketing expense			171				239				246				239				262				895				884
Telephone and communication expense			121				118				112				115				121				466				495
Postage and delivery expense			86				89				81				84				66				340				286
State, local and other taxes			347				243				247				255				180				1,092				719
Employee expense			207				199				236				153				283				795				912
Other expenses			481				483				452				462				478				1,878				1,986
Total noninterest expense			10,176				9,500				9,108				8,626				8,852				37,410				34,847
Income before income tax expense			4,079				4,624				3,215				2,714				3,692				14,632				14,444
Income tax expense			721				862				588				488				732				2,659				2,806
Net income		$	3,358			$	3,762			$	2,627			$	2,226			$	2,960			$	11,973			$	11,638
Preferred share dividends			230				233				243				244				243				950				974
Net income available to common shareholders			3,128				3,529				2,384				1,982				2,717				11,023				10,663
Common share data:
Basic earnings per common share		$	0.49			$	0.55			$	0.37			$	0.31			$	0.42			$	1.71			$	1.72
Diluted earnings per common share		$	0.42			$	0.48			$	0.33			$	0.28			$	0.37			$	1.51			$	1.51
Average shares outstanding (in thousands):
Basic:			6,445				6,397				6,454				6,482				6,503				6,456				6,198
Diluted:			7,799				7,876				7,967				7,994				8,030				7,929				7,719

 

  

SB FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

 

 

($ in thousands, except per share & ratios)		At and for the Three Months Ended																				Twelve Months Ended
		December				September				June				March				December				December				December
SUMMARY OF OPERATIONS		2019				2019				2019				2019				2018				2019				2018
Net interest income		$	8,596			$	9,058			$	8,832			$	8,340			$	8,614			$	34,826			$	33,267
Tax-equivalent adjustment			41				43				44				43				41				171				158
Tax-equivalent net interest income			8,637				9,101				8,876				8,383				8,655				34,997				33,425
Provision for loan loss			300				300				200				-				-				800				600
Noninterest income			5,959				5,366				3,691				3,000				3,930				18,016				16,624
Total operating revenue			14,555				14,424				12,523				11,340				12,544				52,842				49,891
Noninterest expense			10,176				9,500				9,108				8,626				8,852				37,410				34,847
Pre-tax pre-provision income			4,379				4,924				3,415				2,714				3,692				15,432				15,044
Pretax income			4,079				4,624				3,215				2,714				3,692				14,632				14,444
Net income			3,358				3,762				2,627				2,226				2,960				11,973				11,638
Income available to common shareholders			3,128				3,529				2,384				1,982				2,717				11,023				10,663
PER SHARE INFORMATION:
Basic earnings per share (EPS)			0.49				0.55				0.37				0.31				0.42				1.71				1.72
Diluted earnings per share			0.42				0.48				0.33				0.28				0.37				1.51				1.51
Common dividends			0.095				0.090				0.090				0.085				0.085				0.360				0.320
Book value per common share			17.53				17.28				16.89				16.57				16.36				17.53				16.36
Tangible book value per common share (TBV)			15.23				16.23				15.83				15.43				15.39				15.23				15.39
Fully converted TBV per common share			15.23				14.98				14.64				14.32				14.30				15.23				14.30
Market price per common share			19.69				16.72				16.46				18.02				16.45				19.69				16.45
Market price per preferred share			-				16.50				16.10				19.00				17.90				-				17.90
Market price to TBV			129.2	%			103.0	%			104.0	%			116.8	%			106.9	%			129.2	%			106.9	%
Market price to fully converted TBV			129.2	%			111.6	%			112.4	%			125.8	%			115.0	%			129.2	%			115.0	%
Market price to trailing 12 month EPS			13.0				11.5				16.9				12.6				11.0				13.0				11.0
PERFORMANCE RATIOS:
Return on average assets (ROAA)			1.28	%			1.44	%			1.03	%			0.89	%			1.19	%			1.16	%			1.23	%
Pre-tax pre-provision ROAA			1.67	%			1.89	%			1.34	%			1.08	%			1.48	%			1.50	%			1.59	%
Return on average equity			9.93	%			11.24	%			7.92	%			6.76	%			9.21	%			8.99	%			9.61	%
Return on average tangible equity			12.83	%			14.67	%			10.41	%			8.83	%			12.06	%			11.73	%			12.83	%
Efficiency ratio			69.90	%			65.85	%			72.71	%			76.05	%			70.54	%			70.78	%			69.83	%
Earning asset yield			4.80	%			4.98	%			4.88	%			4.78	%			4.86	%			4.85	%			4.67	%
Cost of interest bearing liabilities			1.42	%			1.33	%			1.28	%			1.20	%			1.15	%			1.31	%			0.92	%
Net interest margin			3.68	%			3.91	%			3.86	%			3.79	%			3.93	%			3.81	%			3.93	%
Tax equivalent effect			0.02	%			0.02	%			0.02	%			0.02	%			0.02	%			0.01	%			0.02	%
Net interest margin, tax equivalent			3.70	%			3.93	%			3.88	%			3.81	%			3.95	%			3.82	%			3.95	%
Non interest income/Average assets			2.27	%			2.06	%			1.45	%			1.20	%			1.58	%			1.75	%			1.75	%
Non interest expense/Average assets			3.87	%			3.64	%			3.58	%			3.45	%			3.56	%			3.64	%			3.68	%
Net noninterest expense/Average assets			-1.60	%			-1.58	%			-2.13	%			-2.25	%			-1.98	%			-1.89	%			-1.92	%
ASSET QUALITY RATIOS:
Gross charge-offs			51				128				20				60				322				259				407
Recoveries			14				15				5				13				1				47				45
Net charge-offs			37				113				15				47				321				212				362
Nonaccruing loans/Total loans			0.38	%			0.40	%			0.38	%			0.40	%			0.38	%			0.38	%			0.38	%
Nonperforming loans/Total loans			0.49	%			0.50	%			0.48	%			0.51	%			0.50	%			0.49	%			0.50	%
Nonperforming assets/Loans & OREO			0.52	%			0.56	%			0.55	%			0.55	%			0.51	%			0.52	%			0.51	%
Nonperforming assets/Total assets			0.42	%			0.44	%			0.43	%			0.42	%			0.40	%			0.42	%			0.40	%
Allowance for loan loss/Nonperforming loans			218.22	%			207.12	%			211.89	%			204.35	%			213.02	%			218.22	%			213.02	%
Allowance for loan loss/Total loans			1.06	%			1.03	%			1.02	%			1.04	%			1.06	%			1.06	%			1.06	%
Net loan charge-offs/Average loans (ann.)			0.02	%			0.05	%			0.01	%			0.02	%			0.17	%			0.03	%			0.06	%
Loan loss provision/Net charge-offs			810.81	%			265.49	%			1333.33	%			0.00	%			0.00	%			377.36	%			165.75	%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits			98.25	%			97.10	%			97.04	%			94.55	%			96.18	%			98.25	%			96.18	%
Equity/ Assets			13.10	%			12.87	%			13.01	%			12.88	%			13.22	%			13.10	%			13.22	%
Tangible equity/Tangible assets			11.59	%			10.07	%			10.10	%			9.93	%			10.31	%			11.59	%			10.31	%
Tangible equity adjusted for conversion			11.59	%			11.36	%			11.48	%			11.33	%			11.75	%			11.59	%			11.75	%
Common equity tier 1 ratio (Bank) (12/19 est.)			12.21	%			12.07	%			12.53	%			12.71	%			12.57	%			12.21	%			12.57	%
END OF PERIOD BALANCES
Total assets			1,038,577				1,042,761				1,029,123				1,021,271				986,828				1,038,577				986,828
Total loans			825,510				823,367				814,509				782,523				771,883				825,510				771,883
Deposits			840,219				847,954				839,374				827,658				802,552				840,219				802,552
Stockholders equity			136,094				134,246				133,937				131,506				130,435				136,094				130,435
Goodwill & intangibles			17,832				17,834				17,836				17,838				16,401				17,832				16,401
Preferred equity			-				13,241				13,978				13,978				13,979				-				13,979
Tangible equity			118,262				103,171				102,123				99,690				100,055				118,262				100,055
Mortgage servicing portfolio			1,199,107				1,153,020				1,112,857				1,094,060				1,084,678				1,199,107				1,084,678
Wealth/Brokerage assets under care			507,670				484,295				479,442				462,580				423,289				507,670				423,289
Total assets under care			2,745,354				2,680,076				2,621,422				2,577,911				2,494,795				2,745,354				2,494,795
Full-time equivalent employees (actual)			252				247				250				256				250				252				250
Period end basic shares outstanding			7,763				6,357				6,451				6,460				6,503				7,763				6,503
Period end outstanding (Series A Converted)			-				1,414				1,478				1,475				1,472				-				1,472
Market capitalization (all)			152,853				129,620				130,324				144,898				133,824				152,853				133,824
AVERAGE BALANCES
Total assets			1,051,071				1,043,791				1,016,493				1,001,282				994,977				1,027,932				947,266
Total earning assets			934,540				927,360				914,652				879,394				875,747				914,975				845,672
Total loans			828,108				829,699				804,716				775,280				775,060				809,651				749,055
Deposits			856,961				849,984				827,615				812,190				803,928				836,299				764,297
Stockholders equity			135,267				133,891				132,734				131,691				128,539				133,190				121,094
Intangibles			17,833				17,835				17,837				16,880				16,403				17,597				16,406
Preferred equity			12,707				13,459				13,978				13,979				13,979				13,484				13,982
Tangible equity			104,727				102,597				100,919				100,832				98,157				102,109				90,706
Average basic shares outstanding			6,445				6,397				6,454				6,482				6,503				6,456				6,198
Average diluted shares outstanding			7,799				7,876				7,967				7,994				8,030				7,929				7,719

 

  

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

 

At and for the Three and Twelve Months Ended December 31, 2019 and 2018

 

($ in thousands)		Three Months Ended Dec. 31, 2019												Three Months Ended Dec. 31, 2018
		Average								Average				Average								Average
Assets		Balance				Interest				Rate				Balance				Interest				Rate
Taxable securities		$	99,149			$	737				2.97	%		$	90,602			$	822				3.63	%
Nontaxable securities			7,283				72				3.95	%			10,085				100				3.97	%
Loans, net			828,108				10,396				5.02	%			775,060				9,716				5.01	%
Total earning assets			934,540				11,205				4.80	%			875,747				10,638				4.86	%
Cash and due from banks			48,289												56,358
Allowance for loan losses			(8,566	)											(8,490	)
Premises and equipment			24,183												22,200
Other assets			52,625												49,162
Total assets		$	1,051,071											$	994,977
Liabilities
Savings, MMDA and interest bearing demand		$	432,077			$	614				0.57	%		$	418,284			$	691				0.66	%
Time deposits			264,054				1,778				2.69	%			239,787				1,085				1.81	%
Repurchase agreements & other			13,891				17				0.49	%			15,222				10				0.26	%
Advances from Federal Home Loan Bank			16,000				101				2.53	%			22,467				131				2.33	%
Trust preferred securities			10,310				99				3.84	%			10,310				107				4.15	%
Total interest bearing liabilities			736,332				2,609				1.42	%			706,070				2,024				1.15	%
Non interest bearing demand			160,830				-								145,857				-
Total funding			897,162								1.16	%			851,927								0.95	%
Other liabilities			18,642												14,511
Total liabilities			915,804												866,438
Equity			135,267												128,539
Total liabilities and equity		$	1,051,071											$	994,977
Net interest income						$	8,596											$	8,614
Net interest income as a percent of average interest-earning assets - GAAP measure											3.68	%											3.93	%
Net interest income as a percent of average interest-earning assets - non GAAP  - Computed on a fully tax equivalent (FTE) basis											3.70	%											3.95	%

 

 

		Twelve Months Ended Dec. 31, 2019												Twelve Months Ended Dec. 31, 2018
		Average								Average				Average								Average
Assets		Balance				Interest				Rate				Balance				Interest				Rate
Taxable securities		$	95,216			$	3,226				3.39	%		$	85,238			$	2,618				3.07	%
Nontaxable securities			10,108				345				3.41	%			11,379				439				3.86	%
Loans, net			809,651				40,829				5.04	%			749,055				36,422				4.86	%
Total earning assets			914,975				44,400				4.85	%			845,672				39,479				4.67	%
Cash and due from banks			47,135												38,990
Allowance for loan losses			(8,370	)											(8,361	)
Premises and equipment			23,779												21,795
Other assets			50,413												49,170
Total assets		$	1,027,932											$	947,266
Liabilities
Savings, MMDA and interest bearing demand		$	427,858			$	2,846				0.67	%		$	401,577			$	1,754				0.44	%
Time deposits			262,040				5,814				2.22	%			225,467				3,560				1.58	%
Repurchase agreements & Other			15,288				82				0.54	%			16,458				37				0.22	%
Advances from Federal Home Loan Bank			16,066				402				2.50	%			22,108				460				2.08	%
Trust preferred securities			10,310				430				4.17	%			10,310				401				3.89	%
Total interest bearing liabilities			731,562				9,574				1.31	%			675,920				6,212				0.92	%
Non interest bearing demand			146,401								1.09	%			137,253								0.76	%
Total funding			877,963												813,173
Other liabilities			16,779												12,999
Total liabilities			894,742												826,172
Equity			133,190												121,094
Total liabilities and equity		$	1,027,932											$	947,266
Net interest income						$	34,826											$	33,267
Net interest income as a percent of average interest-earning assets - GAAP measure											3.81	%											3.93	%
Net interest income as a percent of average interest-earning assets - non GAAP											3.82	%											3.95	%

  

 

Non-GAAP reconciliation		Three Months Ended								Twelve Months Ended
($ in thousands, except per share & ratios)		Dec. 31, 2019				Dec. 31, 2018				Dec. 31, 2019				Dec. 31, 2018
Total Revenues		$	14,555			$	12,544			$	52,842			$	49,891
Adjustment to (deduct)/add OMSR impairment*			(303	)			68				1,094				61
Adjusted Total Revenues			14,252				12,612				53,936				49,952
Income before Income Taxes			4,079				3,692				14,632				14,444
Adjustment to (deduct)/add OMSR impairment			(303	)			68				1,094				61
Adjusted Income before Income Taxes			3,776				3,760				15,726				14,505
Provision for Income Taxes			721				732				2,659				2,806
Adjustment to (deduct)/add OMSR impairment			(64	)			14				230				13
Adjusted Provision for Income Taxes			657				746				2,889				2,819
Net Income			3,358				2,960				11,973				11,638
Adjustment to (deduct)/add OMSR impairment			(239	)			54				864				48
Adjusted Net Income			3,119				3,014				12,837				11,686
Diluted Earnings per Share			0.42				0.37				1.51				1.51
Adjustment to (deduct)/add OMSR impairment			(0.03	)			0.01				0.11				0.01
Adjusted Diluted Earnings per Share		$	0.39			$	0.38			$	1.62			$	1.52
Return on Average Assets			1.28	%			1.19	%			1.16	%			1.23	%
Adjustment to (deduct)/add OMSR impairment			-0.02	%			0.01	%			0.08	%			0.01	%
Adjusted Return on Average Assets			1.26	%			1.20	%			1.25	%			1.23	%

 

*

valuation adjustment to the Company's mortgage servicing rights

 

 

12