Exhibit 99.1

 

 

SB Financial Group Announces Second Quarter 2021 Results

 

DEFIANCE, OH, July 26, 2021 -- 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 second quarter and six months ended June 30, 2021.

 

Second quarter 2021 highlights over prior-year second quarter include:

 

●

Net income of $3.8 million; diluted earnings per share (“EPS”) of $0.52 or a 10.6 percent increase

●

Adjusted net income, excluding the impact of the Originated Mortgage Servicing Rights (“OMSR”) impairment of $0.1 million was $3.84 million, with EPS of $0.53

●

Mortgage origination volume of $164.9 million, reflects a decrease of $58.8 million, or 26.3 percent

 

Six months ended June 30, 2021, highlights over prior-year six months include:

 

●

Net income of $10.8 million and diluted EPS of $1.49, compared to $4.3 million, or $0.56 per share or a 166.1 percent increase

●

Adjusted net income, excluding the impact of OMSR activity and merger costs of $8.8 million, up $0.9 million or 10.9 percent

●

Adjusted diluted EPS of $1.21, up $0.18 per share or 17.5 percent

 

Second quarter 2021 trailing twelve-month highlights include:

 

●

Loans excluding Paycheck Protection Program (“PPP”) loan balances of $34.8 million, decreased $3.0 million, or 0.4 percent from the prior year

●

Deposits grew by $100.4 million, or 10.1 percent to $1.09 billion at quarter end

●

Mortgage origination volume of $689.9 million; servicing portfolio of $1.32 billion, which is up $1.2 million, or 4.9 percent

 

Highlights ($ in thousands, except per		Three Months Ended												Six Months Ended
share & ratios)		Jun. 2021				Jun. 2020				% Change				Jun. 2021				Jun. 2020				% Change
Operating revenue		$	15,694			$	17,487				-10.3	%		$	36,241			$	28,196				28.5	%
Interest income			10,163				10,595				-4.1	%			20,868				21,239				-1.7	%
Interest expense			1,006				1,723				-41.6	%			2,086				3,819				-45.4	%
Net interest income			9,157				8,872				3.2	%			18,782				17,420				7.8	%
Provision for loan losses			-				1,300				-100.0	%			750				1,900				-60.5	%
Noninterest income			6,537				8,615				-24.1	%			17,459				10,776				62.0	%
Noninterest expense			11,076				11,662				-5.0	%			21,985				21,068				4.4	%
Net income			3,761				3,655				2.9	%			10,842				4,336				150.0	%
Earnings per diluted share			0.52				0.47				10.6	%			1.49				0.56				166.1	%
Return on average assets			1.13	%			1.25	%			-9.6	%			1.66	%			0.78	%			112.8	%
Return on average equity			10.42	%			10.31	%			1.1	%			15.09	%			6.22	%			142.6	%
Non-GAAP Measures
Adjusted net income		$	3,840			$	5,495				-30.1	%		$	8,783			$	7,923				10.9	%
Adjusted diluted EPS			0.53				0.71				-25.4	%			1.21				1.03				17.5	%
Adjusted return on average assets			1.16	%			1.88	%			-38.3	%			1.50	%			1.42	%			5.6	%
Adjusted pre-tax, pre-provision income			4,717				8,154				-42.2	%			10,900				11,669				-6.6	%

 

“We began to see some return to normalcy in our second quarter results” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “We achieved month over month loan growth in May and June and despite market headwinds, our mortgage team originated nearly $165 million in volume this quarter. We also successfully completed a debt raise in the quarter, which will serve us well as we look to grow our Company in the coming years.”

 

 

RESULTS OF OPERATIONS

 

Consolidated Revenue

 

Total operating revenue, consisting of net interest income and noninterest income, was down 10.3 percent from the second quarter of 2020, and down 23.6 percent from the linked quarter.

 

	●	Net interest income was up from the year-ago quarter by 3.2 percent, but down 4.9 percent from the linked quarter.

	●	Net interest margin on a fully taxable equivalent basis (FTE) was down from both year-ago and linked quarters by 38 and 27 basis points, respectively, as cash balances continued to be higher than normal and PPP forgiveness slowed.

●

Noninterest income was down 24 and 40 percent from the year ago and linked quarters, respectively, due to lower mortgage volume and no OMSR recapture.

 

Mortgage Loan Business

 

Mortgage loan originations for the second quarter of 2021 were $164.9 million, down $58.8 million, or 26.3 percent, from the year-ago quarter. Total sales of originated loans were $119.1 million, down $85.6 million, or 41.8 percent, from the year-ago quarter. For the first six months of 2021, SB Financial had total volume of $320.7 million, of which $143.1 million (44 percent) was new purchase/construction lending, $92.3 million was external refinance (29 percent), and the remaining $85.3 million (27 percent) was internal refinance.

 

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $4.0 million for the second quarter of 2021, compared to $6.2 million for the year-ago quarter. The mortgage servicing valuation adjustment for the second quarter of 2021 was a negative $0.1 million, compared to a negative adjustment of $1.1 million for the second quarter of 2020. For the first six months of 2021, the recapture of servicing rights was $2.6 million compared to impairment of $3.3 million for the prior year six months. The aggregate servicing valuation impairment ended the quarter at $2.3 million. The servicing portfolio at June 30, 2021, was $1.32 billion, up $0.06 billion, or 4.9 percent, from $1.26 billion at June 30, 2020.

 

Mr. Klein noted, “The slowdown in refinance transactions and the lower levels of housing inventory were headwinds in the quarter, but we are pleased with the relationships we have built that allow us to continue to increase the number of households serviced. We continue to expand and add resources to this business line and it continues to provide great revenue diversity.”

 

 

Mortgage Banking
($ in thousands)		Jun. 2021				Mar. 2021				Dec. 2020				Sep. 2020				Jun. 2020
Mortgage originations		$	164,883			$	155,836			$	168,997			$	200,158			$	223,671
Mortgage sales			119,064				136,708				143,151				166,201				204,628
Mortgage servicing portfolio			1,323,804				1,304,097				1,299,698				1,293,037				1,261,746
Mortgage servicing rights			10,678				10,490				7,759				8,535				8,168
Mortgage servicing revenue
Loan servicing fees			830				859				857				813				782
OMSR amortization			(948	)			(1,187	)			(1,283	)			(1,308	)			(1,574	)
Net administrative fees			(118	)			(328	)			(426	)			(495	)			(792	)
OMSR valuation adjustment			(99	)			2,706				(611	)			326				(1,088	)
Net loan servicing fees			(217	)			2,378				(1,037	)			(169	)			(1,880	)
Gain on sale of mortgages			4,255				5,859				7,197				8,085				8,119
Mortgage banking revenue, net		$	4,038			$	8,237			$	6,160			$	7,916			$	6,239

 

Noninterest Income and Noninterest Expense

 

SB Financial’s noninterest income for the quarter was down from the prior year and the linked quarter by 24 and 40 percent, respectively. Gain on sale yields on mortgage loan sales were down 40 basis points from the prior year and the total dollars of sales were down nearly $86 million. Wealth management revenue was up over 23 percent from the prior year due to higher retention levels and growth in the equity sector. Reflective of the continued strength in the mortgage market, SB Financial’s Title Agency provided revenue in the quarter of $0.5 million.

 

For the second quarter of 2021, noninterest expense of $11.1 million was down $0.6 million compared to the prior year or 5.0 percent. Lower mortgage volume and timing of technology initiatives have resulted in lower operating expenses.

 

Mr. Klein stated, “The wealth management business line has grown nicely year over year and it demonstrates the full slate of products we can provide to both our retail and business clients. The Peak Title partnership is growing each quarter and will continue to provide additional points of entry to new markets.”

 

Noninterest Income / Noninterest Expense
($ in thousands, except ratios)		Jun. 2021				Mar. 2021				Dec. 2020				Sep. 2020				Jun. 2020
Noninterest Income (NII)		$	6,537			$	10,922			$	8,902			$	10,418			$	8,615
NII / Total Revenue			41.7	%			53.2	%			49.0	%			52.9	%			49.3	%
NII / Average Assets			2.0	%			3.4	%			2.9	%			3.4	%			3.0	%
Total Revenue Growth			-10.3	%			91.9	%			24.7	%			36.4	%			39.6	%
Noninterest Expense (NIE)		$	11,076			$	10,909			$	10,684			$	11,335			$	11,662
Efficiency Ratio			70.5	%			53.0	%			58.8	%			57.5	%			66.7	%
NIE / Average Assets			3.3	%			3.4	%			3.5	%			3.7	%			4.0	%
Net Noninterest Expense/Avg. Assets			-1.4	%			0.0	%			-0.6	%			-0.3	%			-1.0	%
Total Expense Growth			-5.0	%			16.0	%			5.0	%			19.3	%			28.0	%
Operating Leverage			-2.1				5.7				4.9				1.9				1.4

 

 

Balance Sheet

 

Total assets as of June 30, 2021, were $1.3 billion, up $0.1 billion, or 9.1 percent, from the year ago quarter due to higher liquidity levels and PPP activity. Total shareholders’ equity as of June 30, 2021, was $144.0 million, up 4.4 percent from a year ago, and comprised 11.0 percent of total assets.

 

Total loans held for investment were $850.5 million at June 30, 2021, down $51.0 million, or 5.7 percent, from June 30, 2020. Excluding PPP activity from both years, loan balances were down just $3.0 million, or 0.4 percent.

 

The investment portfolio of $217.1 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 16.5 percent of assets at June 30, 2021, and was up 99.0 percent from the year-ago period. Deposit balances of $1.09 billion at June 30, 2021, increased by $0.1 billion, or 10.1 percent, since June 30, 2020. Growth from the prior year included $44.4 million in checking and $56.0 million in savings and time deposit balances.

 

Mr. Klein continued, “Positive loan growth from the linked quarter was welcomed and we feel good about the loan pipelines in all of our markets. Our focus on Private Client residential real estate has provided a good lift in not only balances but has allowed us to expand our relationships with high end clients that have high potential to utilize multiple services. Asset quality metrics have continued to improve and we are pleased that all COVID deferrals are now back to full paying status.”

 

Loan Balances

 

($ in thousands, except ratios)		Jun. 2021				Mar. 2021				Dec. 2020				Sep. 2020				Jun. 2020				Annual Growth
Commercial		$	149,998			$	179,157			$	203,256			$	216,667			$	222,108			$	(72,110	)
% of Total			17.6	%			21.1	%			23.3	%			24.5	%			24.6	%			-32.5	%
Commercial RE			389,287				385,403				370,984				371,947				375,450				13,837
% of Total			45.8	%			45.4	%			42.5	%			42.0	%			41.6	%			3.7	%
Agriculture			50,895				48,405				55,251				57,420				58,817				(7,922	)
% of Total			6.0	%			5.7	%			6.3	%			6.5	%			6.5	%			-13.5	%
Residential RE			203,294				176,998				182,076				178,393				184,684				18,610
% of Total			23.9	%			20.9	%			20.9	%			20.1	%			20.6	%			10.1	%
Consumer & Other			57,039				58,213				61,156				61,423				60,489				(3,450	)
% of Total			6.7	%			6.9	%			7.0	%			6.9	%			6.7	%			-5.7	%
Total Loans		$	850,513			$	848,176			$	872,723			$	885,850			$	901,548			$	(51,035	)
Total Growth Percentage																							-5.7	%

 

Deposit Balances

 

($ in thousands, except ratios)		Jun. 2021				Mar. 2021				Dec. 2020				Sep. 2020				Jun. 2020				Annual Growth
Non-Int DDA		$	240,572			$	273,026			$	251,649			$	225,003			$	229,042			$	11,530
% of Total			22.0	%			24.4	%			24.0	%			22.2	%			23.1	%			5.0	%
Interest DDA			187,023				191,593				176,785				164,248				154,143				32,880
% of Total			17.1	%			17.1	%			16.9	%			16.2	%			15.6	%			21.3	%
Savings			235,231				218,260				174,864				169,474				161,182				74,049
% of Total			21.6	%			19.5	%			16.7	%			16.7	%			16.2	%			45.9	%
Money Market			255,512				249,088				216,164				204,862				189,380				66,132
% of Total			23.4	%			22.2	%			20.6	%			20.2	%			19.1	%			34.9	%
Time Deposits			172,696				188,229				229,549				250,428				256,840				(84,144	)
% of Total			15.8	%			16.8	%			21.9	%			24.7	%			25.9	%			-32.8	%
Total Deposits		$	1,091,034			$	1,120,196			$	1,049,011			$	1,014,015			$	990,587			$	100,447
Total Growth Percentage																							10.1	%

 

 

Asset Quality

 

SB Financial reported nonperforming assets of $6.0 million as of June 30, 2021, down $1.7 million or 22.6 percent from the year-ago quarter. The Company took $0.02 million in charge-offs in the quarter and believes that further pressure on the portfolio due to the COVID-19 impact is unknown, but impact is currently minimal. The coverage of problem loans by the loan loss allowance was at 304 percent at June 30, 2021, up from 136 percent at June 30, 2020. As of June 30, 2021, the Company had no remaining COVID related forbearances in place.

 

Nonperforming Assets

 

($ in thousands, except ratios)		Jun. 2021				Mar. 2021				Dec. 2020				Sep. 2020				Jun. 2020				Annual Change
Commercial & Agriculture		$	375			$	615			$	902			$	1,140			$	1,204			$	(829	)
% of Total Com./Ag. loans			0.19	%			0.27	%			0.35	%			0.42	%			0.43	%			-68.9	%
Commercial RE			1,026				2,402				2,412				2,475				2,484				(1,458	)
% of Total CRE loans			0.26	%			0.62	%			0.65	%			0.67	%			0.66	%			-58.7	%
Residential RE			1,751				2,138				2,704				2,481				2,538				(787	)
% of Total Res. RE loans			0.86	%			1.21	%			1.49	%			1.39	%			1.37	%			-31.0	%
Consumer & Other			463				480				408				313				308				155
% of Total Con./Oth. loans			0.81	%			0.82	%			0.67	%			0.51	%			0.51	%			50.3	%
Total Nonaccruing Loans			3,615				5,635				6,426				6,409				6,534				(2,919	)
% of Total loans			0.43	%			0.66	%			0.74	%			0.72	%			0.72	%			-44.7	%
Accruing Restructured Loans			758				794				810				789				804				(46	)
Total Change (%)																							-5.7	%
Total Nonaccruing & Restructured Loans			4,373				6,429				7,236				7,198				7,338				(2,965	)
% of Total loans			0.51	%			0.76	%			0.83	%			0.81	%			0.81	%			-40.4	%
Foreclosed Assets			1,603				43				23				76				382				1,221
Total Change (%)																							319.6	%
Total Nonperforming Assets		$	5,976			$	6,472			$	7,259			$	7,274			$	7,720			$	(1,744	)
% of Total assets			0.46	%			0.49	%			0.58	%			0.60	%			0.64	%			-22.6	%

 

Webcast and Conference Call

 

The Company will hold a related conference call and webcast on July 27, 2021, at 11:00 a.m. EDT. Interested parties may access the conference call by dialing 1-888-338-9469. The webcast can be accessed at ir.yourstatebank.com. An audio replay of the call will be available on the Company’s website.

 

About SB Financial Group

 

Headquartered in Defiance, Ohio, SB Financial is a diversified financial services holding company for the State Bank & Trust Company (State Bank) and SBFG Title, LLC dba Peak Title (Peak Title). State Bank provides a full range of financial services for consumers and small businesses, including wealth management, private client services, mortgage banking and commercial and agricultural lending, operating through a total of 23 offices; 22 in nine Ohio counties and one in Fort Wayne, Indiana, and 24 full-service ATMs. State Bank has five loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. Peak Title provides title insurance and opinions throughout the Tri-State region. SB Financial’s common stock is listed on the NASDAQ Capital 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, the duration and scope of the COVID-19 outbreak in the United States and the market areas in which SB Financial and its subsidiaries operate, including the impact to the state and local economies of prolonged shelter in place orders and the pandemic generally, risks and uncertainties inherent in the national and regional banking industry, changes in economic conditions in the market areas in which SB Financial and its subsidiaries operate, changes in policies by regulatory agencies, changes in accounting standards and policies, changes in tax laws, fluctuations in interest rates, demand for loans in the market areas in SB Financial and its subsidiaries operate, increases in FDIC insurance premiums, changes in the competitive environment, losses of significant customers, geopolitical events, the loss of key personnel and other risks identified in SB Financial’s Annual Report on Form 10-K and documents subsequently filed by SB Financial with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made, and SB Financial undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, except as required by law. All subsequent written and oral forward-looking statements attributable to SB Financial or any person acting on its behalf are qualified by these cautionary statements.

 

Non-GAAP Financial Measures

 

This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures, specifically pre-tax, pre-provision income, tangible common equity, tangible assets, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common equity, total interest income – FTE, net interest income – FTE and net interest margin – FTE are used by the Company’s management to measure the strength of its capital and analyze profitability, including its ability to generate earnings on tangible capital invested by its shareholders. In addition, the Company excludes the non-GAAP items of OMSR impairment and merger related costs from net income to report an adjusted net income level. Although management believes these non-GAAP measures are useful to investors by providing a greater understanding of its business, they should not be considered a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

 

Investor Contact Information:

 

Mark A. Klein
Chairman, President and
Chief Executive Officer
Mark.Klein@YourStateBank.com
Anthony V. Cosentino
Executive Vice President and
Chief Financial Officer
Tony.Cosentino@YourStateBank.com

 

###

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS - (Unaudited)

 

		June				March				December				September				June
($ in thousands)		2021				2021				2020				2020				2020
ASSETS
Cash and due from banks		$	154,993			$	206,036			$	140,690			$	94,641			$	85,661
Interest bearing time deposits			2,906				3,562				5,823				8,956				10,542
Available-for-sale securities			211,756				177,918				149,406				130,315				104,289
Loans held for sale			8,731				8,689				7,234				13,943				13,742
Loans, net of unearned income			850,513				848,176				872,723				885,850				901,548
Allowance for loan losses			(13,306	)			(13,326	)			(12,574	)			(11,793	)			(10,013	)
Premises and equipment, net			24,343				23,233				23,557				23,785				23,662
Federal Reserve and FHLB Stock, at cost			5,303				5,303				5,303				5,303				4,837
Foreclosed assets held for sale, net			1,603				43				23				76				382
Interest receivable			3,000				3,371				3,799				4,159				4,272
Goodwill			22,091				22,091				22,091				22,091				22,117
Cash value of life insurance			17,721				17,651				17,530				17,453				17,375
Mortgage servicing rights			10,678				10,490				7,759				8,535				8,168
Other assets			12,175				12,630				14,475				14,927				16,354
Total assets		$	1,312,507			$	1,325,867			$	1,257,839			$	1,218,241			$	1,202,936
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non interest bearing demand		$	240,572			$	273,026			$	251,649			$	225,003			$	229,042
Interest bearing demand			187,023				191,593				176,785				164,248				154,143
Savings			235,231				218,260				174,864				169,474				161,182
Money market			255,512				249,088				216,164				204,862				189,380
Time deposits			172,696				188,229				229,549				250,428				256,840
Total deposits			1,091,034				1,120,196				1,049,011				1,014,015				990,587
Short-term borrowings			25,096				24,321				20,189				20,710				23,826
Federal Home Loan Bank advances			5,500				8,000				8,000				8,000				13,000
Trust preferred securities			10,310				10,310				10,310				10,310				10,310
Subordinated debt net of issuance costs			19,522				-				-				-				-
Interest payable			417				489				616				946				929
Other liabilities			16,611				18,585				26,790				22,913				26,403
Total liabilities			1,168,490				1,181,901				1,114,916				1,076,894				1,065,055
Shareholders' Equity
Common stock			54,463				54,463				54,463				54,463				54,463
Additional paid-in capital			14,906				14,755				14,845				14,782				14,780
Retained earnings			93,851				90,883				84,578				80,012				75,526
Accumulated other comprehensive income (loss)			499				(457	)			2,210				2,221				2,320
Treasury stock			(19,702	)			(15,678	)			(13,173	)			(10,131	)			(9,208	)
Total shareholders' equity			144,017				143,966				142,923				141,347				137,881
Total liabilities and shareholders' equity		$	1,312,507			$	1,325,867			$	1,257,839			$	1,218,241			$	1,202,936

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

 

		At and for the Three Months Ended																				Six Months Ended
($ in thousands, except per		June				March				December				September				June				June				June
share & ratios)		2021				2021				2020				2020				2020				2021				2020
Interest income
Loans
Taxable		$	9,196			$	9,926			$	9,816			$	10,179			$	9,945			$	19,122			$	19,740
Tax exempt			47				48				54				47				59				95				138
Securities
Taxable			835				643				632				494				510				1,478				1,202
Tax exempt			85				88				87				87				81				173				159
Total interest income			10,163				10,705				10,589				10,807				10,595				20,868				21,239
Interest expense
Deposits			818				962				1,218				1,423				1,549				1,780				3,429
Repurchase agreements & other			12				11				10				12				20				23				48
Federal Home Loan Bank advances			51				56				58				59				92				107				192
Trust preferred securities			50				51				52				54				62				101				150
Subordinated debt			75				-				-				-				-				75				-
Total interest expense			1,006				1,080				1,338				1,548				1,723				2,086				3,819
Net interest income			9,157				9,625				9,251				9,259				8,872				18,782				17,420
Provision for loan losses			-				750				800				1,800				1,300				750				1,900
Net interest income after provision for loan losses			9,157				8,875				8,451				7,459				7,572				18,032				15,520
Noninterest income
Wealth management fees			955				912				863				839				775				1,867				1,543
Customer service fees			820				758				728				730				667				1,578				1,349
Gain on sale of mtg. loans & OMSR			4,255				5,859				7,197				8,085				8,119				10,114				10,068
Mortgage loan servicing fees, net			(217	)			2,378				(1,037	)			(169	)			(1,880	)			2,161				(3,932	)
Gain on sale of non-mortgage loans			45				17				123				119				107				62				211
Title insurance revenue			532				521				522				517				609				1,053				874
Gain (loss) on sale of assets			2				(2	)			181				(52	)			(80	)			-				(126	)
Other			145				479				325				349				298				624				789
Total noninterest income			6,537				10,922				8,902				10,418				8,615				17,459				10,776
Noninterest expense
Salaries and employee benefits			6,881				6,620				6,556				6,995				6,419				13,501				11,846
Net occupancy expense			748				740				782				736				675				1,488				1,373
Equipment expense			778				732				818				888				780				1,510				1,480
Data processing fees			653				534				633				586				1,288				1,187				1,836
Professional fees			574				764				631				695				1,224				1,338				1,981
Marketing expense			220				135				172				137				141				355				349
Telephone and communication expense			139				154				156				142				122				293				237
Postage and delivery expense			97				111				108				96				96				208				211
State, local and other taxes			278				323				299				331				262				601				516
Employee expense			161				153				103				155				93				314				277
Other expenses			547				643				426				574				562				1,190				962
Total noninterest expense			11,076				10,909				10,684				11,335				11,662				21,985				21,068
Income before income tax expense			4,618				8,888				6,669				6,542				4,525				13,506				5,228
Income tax expense			857				1,807				1,311				1,292				870				2,664				892
Net income available to common shareholders		$	3,761			$	7,081			$	5,358			$	5,250			$	3,655			$	10,842			$	4,336
Common share data:
Basic earnings per common share		$	0.53			$	0.97			$	0.71			$	0.69			$	0.47			$	1.50			$	0.56
Diluted earnings per common share		$	0.52			$	0.97			$	0.71			$	0.69			$	0.47			$	1.49			$	0.56
Average shares outstanding (in thousands):
Basic:			7,148				7,317				7,487				7,607				7,708				7,232				7,750
Diluted:			7,200				7,335				7,487				7,607				7,708				7,256				7,750

 

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

 

($ in thousands,		At and for the Three Months Ended																				Six Months Ended
except per share & ratios)		June				March				December				September				June				June				June
SUMMARY OF OPERATIONS		2021				2021				2020				2020				2020				2021				2020
Net interest income		$	9,157			$	9,625			$	9,251			$	9,259			$	8,872			$	18,782			$	17,420
Tax-equivalent adjustment			35				36				37				36				37				71				79
Tax-equivalent net interest income			9,192				9,661				9,288				9,295				8,909				18,853				17,499
Provision for loan loss			-				750				800				1,800				1,300				750				1,900
Noninterest income			6,537				10,922				8,902				10,418				8,615				17,459				10,776
Total operating revenue			15,694				20,547				18,153				19,677				17,487				36,241				28,196
Noninterest expense			11,076				10,909				10,684				11,335				11,662				21,985				21,068
Pre-tax pre-provision income			4,618				9,638				7,469				8,342				5,825				14,256				7,128
Pretax income			4,618				8,888				6,669				6,542				4,525				13,506				5,228
Net income			3,761				7,081				5,358				5,250				3,655				10,842				4,336
PER SHARE INFORMATION:
Basic earnings per share (EPS)			0.53				0.97				0.71				0.69				0.47				1.50				0.56
Diluted earnings per share			0.52				0.97				0.71				0.69				0.47				1.49				0.56
Common dividends			0.110				0.105				0.105				0.100				0.100				0.215				0.195
Book value per common share			20.50				19.88				19.39				18.73				17.98				20.50				17.98
Tangible book value per common share (TBV)			17.26				16.74				16.30				15.72				15.01				17.26				15.01
Market price per common share			18.50				18.26				18.28				13.49				16.62				18.50				16.62
Market price to TBV			107.2	%			109.1	%			112.1	%			85.8	%			110.8	%			107.2	%			110.8	%
Market price to trailing 12 month EPS			6.4				6.4				9.3				8.0				11.4				6.4				11.4
PERFORMANCE RATIOS:
Return on average assets (ROAA)			1.13	%			2.21	%			1.73	%			1.73	%			1.25	%			1.66	%			0.78	%
Pre-tax pre-provision ROAA			1.39	%			3.01	%			2.41	%			2.74	%			1.99	%			2.32	%			1.28	%
Return on average equity			10.42	%			19.78	%			15.05	%			15.01	%			10.31	%			15.09	%			6.22	%
Return on average tangible equity			12.37	%			23.52	%			17.91	%			17.93	%			11.91	%			17.92	%			7.17	%
Efficiency ratio			70.46	%			53.01	%			58.76	%			57.48	%			66.68	%			60.56	%			74.70	%
Earning asset yield			3.25	%			3.56	%			3.66	%			3.96	%			3.95	%			3.40	%			4.13	%
Cost of interest bearing liabilities			0.44	%			0.50	%			0.64	%			0.75	%			0.89	%			0.47	%			1.00	%
Net interest margin			2.93	%			3.20	%			3.20	%			3.39	%			3.31	%			3.06	%			3.39	%
Tax equivalent effect			0.01	%			0.01	%			0.01	%			0.02	%			0.01	%			0.01	%			0.01	%
Net interest margin, tax equivalent			2.94	%			3.21	%			3.21	%			3.41	%			3.32	%			3.07	%			3.40	%
Non interest income/Average assets			1.97	%			3.41	%			2.87	%			3.42	%			2.95	%			2.67	%			1.93	%
Non interest expense/Average assets			3.33	%			3.40	%			3.45	%			3.73	%			3.99	%			3.37	%			3.78	%
Net noninterest expense/Average assets			-1.37	%			0.00	%			-0.58	%			-0.30	%			-1.04	%			-0.69	%			-1.85	%
ASSET QUALITY RATIOS:
Gross charge-offs			26				52				57				32				254				78				654
Recoveries			6				54				39				11				10				60				13
Net charge-offs			20				(2	)			18				21				244				18				641
Nonaccruing loans/Total loans			0.43	%			0.66	%			0.74	%			0.72	%			0.72	%			0.43	%			0.72	%
Nonperforming loans/Total loans			0.51	%			0.76	%			0.83	%			0.81	%			0.81	%			0.51	%			0.81	%
Nonperforming assets/Loans & OREO			0.70	%			0.76	%			0.83	%			0.82	%			0.86	%			0.70	%			0.86	%
Nonperforming assets/Total assets			0.46	%			0.49	%			0.58	%			0.60	%			0.64	%			0.46	%			0.64	%
Allowance for loan loss/Nonperforming loans			304.28	%			207.28	%			173.77	%			163.84	%			136.45	%			304.28	%			136.45	%
Allowance for loan loss/Total loans			1.56	%			1.57	%			1.44	%			1.33	%			1.11	%			1.56	%			1.11	%
Net loan charge-offs/Average loans (ann.)			0.01	%			(0.00	%)			0.01	%			0.01	%			0.11	%			0.00	%			0.15	%
Loan loss provision/Net charge-offs			0.00	%			(37500.00	%)			4444.44	%			8571.43	%			532.79	%			4166.67	%			296.41	%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits			77.95	%			75.72	%			83.19	%			87.36	%			91.01	%			77.95	%			91.01	%
Equity/ Assets			10.97	%			10.86	%			11.36	%			11.60	%			11.46	%			10.97	%			11.46	%
Tangible equity/Tangible assets			9.41	%			9.30	%			9.73	%			9.92	%			9.75	%			9.41	%			9.75	%
Common equity tier 1 ratio (Bank)			13.11	%			13.08	%			12.91	%			12.71	%			11.97	%			13.11	%			11.97	%
END OF PERIOD BALANCES
Total assets			1,312,507				1,325,867				1,257,839				1,218,241				1,202,936				1,312,507				1,202,936
Total loans			850,513				848,176				872,723				885,850				901,548				850,513				901,548
Deposits			1,091,034				1,120,196				1,049,011				1,014,015				990,587				1,091,034				990,587
Stockholders equity			144,017				143,966				142,923				141,347				137,881				144,017				137,881
Goodwill and intangibles			22,710				22,728				22,745				22,763				22,813				22,710				22,813
Tangible equity			121,307				121,238				120,178				118,584				115,068				121,307				115,068
Mortgage servicing portfolio			1,323,804				1,304,097				1,299,698				1,293,037				1,261,746				1,323,804				1,261,746
Wealth/Brokerage assets under care			600,904				576,503				558,409				522,360				495,025				600,904				495,025
Total assets under care			3,237,215				3,206,467				3,115,946				3,033,638				2,959,707				3,237,215				2,959,707
Full-time equivalent employees			256				246				244				251				254				256				254
Period end common shares outstanding			7,027				7,242				7,372				7,545				7,668				7,027				7,668
Market capitalization (all)			129,998				132,239				134,760				101,782				127,442				129,998				127,442
AVERAGE BALANCES
Total assets			1,329,348				1,281,635				1,238,790				1,216,843				1,169,030				1,306,355				1,115,527
Total earning assets			1,251,213				1,203,284				1,156,718				1,090,386				1,073,490				1,227,359				1,028,114
Total loans			853,794				862,898				893,244				907,483				898,216				858,321				865,595
Deposits			1,115,186				1,073,641				1,031,649				1,007,679				946,053				1,094,269				900,812
Stockholders equity			144,315				143,167				142,418				139,908				141,821				143,709				139,521
Goodwill and intangibles			22,718				22,736				22,754				22,787				19,066				22,727				18,537
Tangible equity			121,597				120,431				119,664				117,121				122,755				120,982				120,984
Average basic shares outstanding			7,148				7,317				7,487				7,607				7,708				7,232				7,750
Average diluted shares outstanding			7,200				7,335				7,487				7,607				7,708				7,256				7,750

  

 

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

At and for the Three and Six Months Ended June 30, 2021 and 2020

 

($ in thousands)		Three Months Ended Jun. 30, 2021												Three Months Ended Jun. 30, 2020
		Average								Average				Average								Average
		Balance				Interest				Rate				Balance				Interest				Rate
Assets
Taxable securities/cash		$	390,036			$	835				0.86	%		$	168,373			$	510				1.21	%
Nontaxable securities			7,383				85				4.61	%			6,901				81				4.69	%
Loans, net			853,794				9,243				4.33	%			898,216				10,004				4.46	%
Total earning assets			1,251,213				10,163				3.25	%			1,073,490				10,595				3.95	%
Cash and due from banks			6,992												18,937
Allowance for loan losses			(13,565	)											(9,369	)
Premises and equipment			23,988												23,896
Other assets			60,720												62,076
Total assets		$	1,329,348											$	1,169,030
Liabilities
Savings, MMDA and interest bearing demand		$	672,803			$	464				0.28	%		$	473,793			$	1,215				1.03	%
Time deposits			183,138				354				0.77	%			251,482				334				0.53	%
Repurchase agreements & other			23,607				12				0.20	%			19,200				20				0.42	%
Advances from Federal Home Loan Bank			7,066				51				2.89	%			24,472				92				1.50	%
Trust preferred securities			10,310				50				1.94	%			10,310				62				2.41	%
Subordinated debt			9,880				75				3.04	%			-				-				0.00	%
Total interest bearing liabilities			906,804				1,006				0.44	%			779,257				1,723				0.88	%
Non interest bearing demand			259,245				-								220,778				-
Total funding			1,166,049								0.35	%			1,000,035								0.69	%
Other liabilities			18,984												27,174
Total liabilities			1,185,033												1,027,209
Equity			144,315												141,821
Total liabilities and equity		$	1,329,348											$	1,169,030
Net interest income						$	9,157											$	8,872
Net interest income as a percent of average interest-earning assets - GAAP measure											2.93	%											3.31	%
Net interest income as a percent of average interest-earning assets - non GAAP											2.94	%											3.32	%
- Computed on a fully tax equivalent (FTE) basis

  

		Six Months Ended Jun. 30, 2021												Six Months Ended Jun. 30, 2020
		Average								Average				Average								Average
		Balance				Interest				Rate				Balance				Interest				Rate
Assets
Taxable securities/cash		$	361,566			$	1,478				0.82	%		$	155,787			$	1,202				1.54	%
Nontaxable securities			7,472				173				4.63	%			6,732				159				4.72	%
Loans, net			858,321				19,217				4.48	%			865,595				19,878				4.59	%
Total earning assets			1,227,359				20,868				3.40	%			1,028,114				21,239				4.13	%
Cash and due from banks			7,769												12,693
Allowance for loan losses			(13,206	)											(9,118	)
Premises and equipment			23,743												23,797
Other assets			60,690												60,041
Total assets		$	1,306,355											$	1,115,527
Liabilities
Savings, MMDA and interest bearing demand		$	643,962			$	972				0.30	%		$	458,116			$	2,298				1.00	%
Time deposits			194,955				808				0.83	%			252,912				1,131				0.89	%
Repurchase agreements & Other			23,869				23				0.19	%			20,868				48				0.46	%
Advances from Federal Home Loan Bank			7,530				107				2.84	%			20,302				192				1.89	%
Trust preferred securities			10,310				101				1.96	%			10,310				150				2.91	%
Subordinated debt			5,646				75				2.66	%			-				-				0.00	%
Total interest bearing liabilities			886,272				2,086				0.47	%			762,508				3,819				1.00	%
Non interest bearing demand			255,352								0.37	%			189,784								0.80	%
Total funding			1,141,624												952,292
Other liabilities			21,022												23,714
Total liabilities			1,162,646												976,006
Equity			143,709												139,521
Total liabilities and equity		$	1,306,355											$	1,115,527
Net interest income						$	18,782											$	17,420
Net interest income as a percent of average interest-earning assets - GAAP measure											3.06	%											3.39	%
Net interest income as a percent of average interest-earning assets - non GAAP											3.07	%											3.40	%
- Computed on a fully tax equivalent (FTE) basis

  

 

		Three Months Ended								Six Months Ended
Non-GAAP reconciliation ($ in thousands, except per share & ratios)		Jun. 30, 2021				Jun. 30, 2020				Jun. 30, 2021				Jun. 30, 2020
Total Operating Revenue		$	15,694			$	17,487			$	36,241			$	28,196
Adjustment to (deduct)/add OMSR impairment*			99				1,088				(2,606	)			3,300
Adjusted Total Operating Revenue			15,793				18,575				33,635				31,496
Total Operating Expense		$	11,076			$	11,662			$	21,985			$	21,068
Adjustment for merger expenses**			-				(1,241	)			-				(1,241	)
Adjusted Total Operating Expense			11,076				10,421				21,985				19,827
Income before Income Taxes			4,618				4,525				13,506				5,228
Adjustment for OMSR & merger expenses			99				2,329				(2,606	)			4,541
Adjusted Income before Income Taxes			4,717				6,854				10,900				9,769
Provision for Income Taxes			857				870				2,664				892
Adjustment for OMSR & merger expenses***			21				489				(547	)			954
Adjusted Provision for Income Taxes			878				1,359				2,117				1,847
Net Income			3,761				3,655				10,842				4,336
Adjustment for OMSR & merger expenses			79				1,840				(2,059	)			3,587
Adjusted Net Income			3,840				5,495				8,783				7,924
Diluted Earnings per Share			0.52				0.47				1.49				0.56
Adjustment for OMSR & merger expenses			0.01				0.24				(0.28	)			0.46
Adjusted Diluted Earnings per Share		$	0.53			$	0.71			$	1.21			$	1.03
Return on Average Assets			1.13	%			1.25	%			1.66	%			0.78	%
Adjustment for OMSR & merger expenses			0.02	%			0.63	%			-0.16	%			0.64	%
Adjusted Return on Average Assets			1.16	%			1.88	%			1.50	%			1.42	%

 

*valuation adjustment to the Company's mortgage servicing rights

 

**transaction costs related to the Edon acquisition

 

***tax effect is calculated using a 21% statutory federal corporate income tax rate

 

 

11