EX-99.1 2 ea172308ex99-1_sbfinancial.htm NEWS RELEASE ISSUED BY SB FINANCIAL GROUP, INC. ON JANUARY 26, 2023, REPORTING FINANCIAL RESULTS FOR THE FOURTH QUARTER 2022

Exhibit 99.1

 

 

 

SB Financial Group Announces Fourth Quarter 2022 Results

 

DEFIANCE, OH, January 26, 2023 -- 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, 2022.

 

Fourth quarter 2022 highlights:

 

●Net income of $3.5 million increased six percent compared to the prior year with diluted earnings per share (“EPS”) of $0.50

 

●Noninterest expense of $10.3 million declined 11.2 percent from the prior year

 

●Loan growth of $36.8 million from the linked quarter, or 15.9 percent annualized

 

●Solid asset quality with nonperforming assets at 38 basis points

 

Twelve months ended December 31, 2022, highlights over the prior-year include:

 

●Net income of $12.5 million and diluted EPS of $1.77, compared to $18.3 million, or $2.56 per share or a 30.9 percent decrease

 

●Loans, increased $141.4 million, or 17.2 percent from the prior year, excluding Paycheck Protection Program (“PPP”) loans,

 

●Deposits decreased by $26.4 million, or 2.4 percent to $1.09 billion

 

●Mortgage origination volume of $312.6 million and a servicing portfolio of $1.35 billion

 

●Net recoveries on loans for the year of $13,000

 

Highlights  Three Months Ended   Twelve Months Ended 
($ in thousands, except per share & ratios)  Dec. 2022   Dec. 2021   % Change   Dec. 2022   Dec. 2021   % Change 
Operating revenue  $14,613   $15,667    -6.7%  $57,630   $68,581    -16.0%
Interest income   12,937    10,003    29.3%   44,569    41,904    6.4%
Interest expense   2,037    925    120.2%   5,170    4,020    28.6%
Net interest income   10,900    9,078    20.1%   39,399    37,884    4.0%
Provision for loan losses   -    -    0.0%   -    1,050    -100.0%
Noninterest income   3,713    6,589    -43.6%   18,231    30,697    -40.6%
Noninterest expense   10,269    11,567    -11.2%   42,314    44,808    -5.6%
Net income   3,533    3,332    6.0%   12,521    18,277    -31.5%
Earnings per diluted share   0.50    0.49    2.0%   1.77    2.56    -30.9%
Return on average assets   1.08%   0.99%   9.1%   0.95%   1.38%   -31.2%
Return on average equity   12.17%   9.21%   32.1%   9.86%   12.67%   -22.2%

 

“In the fourth quarter of 2022 loan growth was strong with balances growing $37 million, or 4.0 percent from the third quarter of 2022” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “And when we compare our growth to the prior year, organic loan growth was up $139.4 million or 16.9 percent. We continued to realize margin expansion as the pace of rate increases of our asset sensitive balance sheet provided greater expansion of interest income than the increased cost of funding, even as deposits repriced.”

 

 

 

RESULTS OF OPERATIONS

 

Consolidated Revenue

 

Total operating revenue, consisting of net interest income and noninterest income, was up 1.0% from the linked quarter but down 6.7 percent from the fourth quarter of 2021. Operating revenue was negatively impacted by the decline in mortgage banking revenue.

 

●Net interest income was up 4.5 percent from the linked quarter and up 20.1 percent from the year ago quarter.

 

●Net interest margin on a fully taxable equivalent basis (FTE) was up from both the linked and year-ago quarters by 15 and 72 basis points, respectively, primarily from the shift in mix of our balance sheet with cash and securities reallocated to the loan portfolio. Net of PPP, net interest margin was higher by 86 basis points compared to the prior year.

 

●Noninterest income was down 8 percent from the linked quarter and 44 percent from the year ago quarter, respectively, due to lower mortgage volume and OMSR recapture.

 

Mortgage Loan Business

 

Mortgage loan originations for the fourth quarter of 2022 were $51.2 million, down $75.4 million, or 59.6 percent, from the year-ago quarter; likewise, total sales of originated loans were $23.6 million, down $87.0 million, or 78.7 percent. For the full year of 2022, SB Financial had total volume of $312.6 million, of which $250.2 million (80 percent) was new purchase/construction lending, $41.0 million was external refinance (13 percent), and the remaining $21.4 million (7 percent) was internal refinance.

 

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.2 million for the fourth quarter of 2022, compared to $3.8 million for the year-ago quarter. The mortgage servicing valuation adjustment for the fourth quarter of 2022 was a positive $0.1 million, compared to a positive adjustment of $0.6 million for the fourth quarter of 2021. For all of 2022, the recapture of servicing rights was $1.3 million compared to a recapture of $3.4 million for the prior year. The aggregate servicing valuation impairment was $0.2 million at the end of the fourth quarter of 2022. The servicing portfolio at December 31, 2022, was $1.35 billion, which was flat to the prior year.

 

Mr. Klein noted, “Refinance activity for 2022 declined significantly to just 20 percent compared to 49 percent in the prior year. Our continued success in this key business line will hinge not only on the overall rate environment but our ability to attract high-producers in our expansion markets as well.”

 

Mortgage Banking

                        
($ in thousands)  Dec. 2022   Sep. 2022   Jun. 2022   Mar. 2022   Dec. 2021   Annual Growth 
Mortgage originations  $51,219   $68,557   $95,454   $97,394   $126,611   $(75,392)
Mortgage sales   23,590    39,176    49,915    72,154    110,543    (86,953)
Mortgage servicing portfolio   1,352,016    1,362,666    1,369,732    1,375,554    1,362,962    (10,946)
Mortgage servicing rights   13,503    13,473    13,408    13,135    12,034    1,469 
                               
Mortgage servicing revenue                              
Loan servicing fees   851    858    863    861    850    1 
OMSR amortization   (310)   (396)   (496)   (547)   (807)   497 
Net administrative fees   541    462    367    314    43    498 
OMSR valuation adjustment   86    65    239    890    581    (495)
Net loan servicing fees   627    527    606    1,204    624    3 
Gain on sale of mortgages   550    876    1,196    1,676    3,194    (2,644)
Mortgage banking revenue, net  $1,177   $1,403   $1,802   $2,880   $3,818   $(2,641)

 

2

 

 

Noninterest Income and Noninterest Expense

 

Noninterest income declined for the fourth quarter, from the linked quarter and year over year. Gain-on-sale yields on mortgage loans were down significantly from the prior year and the total sales were down nearly $87 million. Wealth management revenue was down from both the prior year and linked quarter due to market declines. New sales in the wealth division were insufficient to overcome closed accounts and client distributions during 2022.

 

For the fourth quarter of 2022, noninterest expense of $10.3 million was down $1.3 million or 11.2 percent compared to the prior year quarter. We continue to have positive variance from our commission-based originators and medical costs eased a bit in the quarter. We continue to make headcount reductions and staffing realignment as retail transactions declined in several markets due to the continuing level of adoption of digital banking initiatives.

 

Mr. Klein stated, “We are committed to reducing our operating expenses to reflect not only the reduced revenue in residential mortgage lending but also, as economic expansion and contraction, dictates. Inflation concerns remain top of mind as we work to ensure our growth strategies deliver positive operating leverage.”

 

Noninterest Income / Noninterest Expense                        
($ in thousands, except ratios)  Dec. 2022   Sep. 2022   Jun. 2022   Mar. 2022   Dec. 2021   Annual
Growth		 
Noninterest Income (NII)  $3,713   $4,043   $4,673   $5,802   $6,589   $(2,876)
NII / Total Revenue   25.4%   27.9%   32.8%   40.6%   42.1%   -16.7%
NII / Average Assets   1.1%   1.2%   1.4%   1.7%   2.0%   -0.9%
Total Revenue Growth   -6.7%   -13.2%   -9.1%   -46.9%   -13.7%   7.0%
                               
Noninterest Expense (NIE)  $10,269   $10,384   $10,802   $10,859   $11,567   $(1,298)
Efficiency Ratio   70.2%   71.6%   75.6%   75.9%   73.7%   -3.5%
NIE / Average Assets   3.1%   3.2%   3.3%   3.2%   3.5%   -0.4%
Net Noninterest Expense/Avg. Assets   -2.0%   -2.0%   -1.9%   -1.5%   -1.5%   -0.5%
Total Expense Growth   -11.2%   -7.7%   -2.5%   -0.5%   8.3%   -19.5%

 

Balance Sheet

 

Total assets as of December 31, 2022, were $1.3 billion, or up 0.4 percent from the year ago quarter primarily due to the increase in the loan portfolio and partially offset by declines in cash and investments. Total shareholders’ equity as of December 31, 2022, was $118.4 million, down 18.3 percent from a year ago due to the valuation adjustment on the Company’s bond portfolio, which has regressed by $30.3 million. Excluding the impact of the valuation adjustment, equity increased $7.5 million or 5.2 percent. SB Financial bought back 317,000 shares of our stock during 2022 at an average price of $18.43 or 124.5 percent of tangible book value per share.

 

The investment portfolio of $238.8 million, represented 17.9 percent of assets at December 31, 2022, and was down $24.5 million or 9.3 percent from the year-ago period.

 

3

 

 

Total loans held for investment were $962.1 million at December 31, 2022, up $139.4 million, or 16.9 percent, from December 31, 2021.

 

Deposit balances of $1.09 billion at December 31, 2022, decreased by $30 million, or 2.4 percent, since December 31, 2021. Deposits have stabilized since mid-year as we have been aggressively pursuing deposit clients throughout our footprint; albeit at a higher marginal cost.

 

Mr. Klein continued, “Clearly, another quarter of strong loan growth was achieved even as rates continued to climb higher; loan yields are up by 78 basis points adjusted for PPP. Pressure to fund that growth increased with deposit balances rising at a slower pace; our average cost of deposits increased 30 basis points from the prior year quarter. Asset quality was stellar again this year, as we recorded net recoveries for all of 2022; our second consecutive year of this achievement.”

 

Loan Balances                        
($ in thousands, except ratios)  Dec. 2022   Sep. 2022   Jun. 2022   Mar. 2022   Dec. 2021   Annual
Growth		 
Commercial  $128,534   $128,565   $127,711   $124,857   $122,373   $6,161 
% of Total   13.4%   13.9%   14.3%   14.7%   14.9%   5.0%
Commercial RE   412,636    404,710    404,260    400,101    381,387    31,249 
% of Total   42.9%   43.7%   45.1%   47.0%   46.4%   8.2%
Agriculture   64,388    60,522    60,586    55,741    57,473    6,915 
% of Total   6.7%   6.5%   6.8%   6.6%   7.0%   12.0%
Residential RE   291,512    267,135    241,614    214,015    206,324    85,188 
% of Total   30.3%   28.9%   27.0%   25.2%   25.1%   41.3%
Consumer & Other   65,005    64,317    61,440    55,957    55,157    9,848 
% of Total   6.8%   7.0%   6.9%   6.6%   6.7%   17.9%
Total Loans  $962,075   $925,249   $895,611   $850,671   $822,714   $139,361 
Total Growth Percentage                            16.9%

 

Deposit Balances                        
($ in thousands, except ratios)  Dec. 2022   Sep. 2022   Jun. 2022   Mar. 2022   Dec. 2021   Annual
Growth		 
Non-Int DDA  $256,799   $250,791   $239,676   $252,273   $247,044   $9,755 
% of Total   23.6%   23.1%   22.4%   22.2%   22.2%   3.9%
Interest DDA   191,719    199,523    198,286    211,152    195,464    (3,745)
% of Total   17.6%   18.4%   18.5%   18.6%   17.6%   -1.9%
Savings   191,272    201,402    215,285    236,394    237,571    (46,299)
% of Total   17.6%   18.5%   20.1%   20.8%   21.3%   -19.5%
Money Market   255,995    258,975    276,274    289,699    276,462    (20,467)
% of Total   23.6%   23.8%   25.8%   25.5%   24.8%   -7.4%
Time Deposits   190,880    175,202    142,258    148,553    156,504    34,376 
% of Total   17.6%   16.1%   13.3%   13.1%   14.1%   22.0%
Total Deposits  $1,086,665   $1,085,893   $1,071,779   $1,138,071   $1,113,045   $(26,380)
Total Growth Percentage                            -2.4%

 

4

 

 

Asset Quality

 

SB Financial reported nonperforming assets of $5.1 million as of December 31, 2022, down $1.4 million or 21.1 percent from the year-ago quarter. The Company had small charge-offs in the quarter, but for the full year, the Company had $13,000 in net recoveries. The coverage ratio of problem loans to the loan loss allowance was at 318.6 percent at December 31, 2022.

 

Nonperforming Assets

                        
($ in thousands, except ratios)  Dec. 2022   Sep. 2022   Jun. 2022   Mar. 2022   Dec. 2021   Annual
Change		 
Commercial & Agriculture  $114   $114   $140   $142   $143   $(29)
% of Total Com./Ag. loans   0.06%   0.06%   0.07%   0.08%   0.08%   -20.3%
Commercial RE   210    223    359    544    554    (344)
% of Total CRE loans   0.05%   0.06%   0.09%   0.14%   0.15%   -62.1%
Residential RE   2,967    3,129    3,176    3,198    2,484    483 
% of Total Res. RE loans   1.02%   1.17%   1.31%   1.49%   1.20%   19.4%
Consumer & Other   391    280    323    409    471    (80)
% of Total Con./Oth. loans   0.60%   0.44%   0.53%   0.73%   0.85%   -17.0%
Total Nonaccruing Loans   3,682    3,746    3,998    4,293    3,652    30 
% of Total loans   0.38%   0.40%   0.45%   0.50%   0.44%   0.8%
Accruing Restructured Loans   654    668    683    762    725    (71)
Total Change (%)                            -9.8%
Total Nonaccruing & Restructured Loans   4,336    4,414    4,681    5,055    4,377    (41)
% of Total loans   0.45%   0.48%   0.52%   0.59%   0.53%   -0.9%
Foreclosed Assets and Other Assets   777    756    730    527    2,104    (1,327)
Total Change (%)                            -63.1%
Total Nonperforming Assets  $5,113   $5,170   $5,411   $5,582   $6,481   $(1,368)
% of Total assets   0.38%   0.40%   0.42%   0.42%   0.49%   -21.1%

 

Webcast and Conference Call

 

The Company will hold the fourth quarter 2022 earnings conference call and webcast on January 27, 2023, at 11:00 a.m. EDT. Interested parties may access the conference call by dialing 1-888-338-9469. The webcast can be accessed at ir.yourstatebank.com. An audio replay of the call will be available on the Company’s website.

 

About SB Financial Group

 

Headquartered in Defiance, Ohio, SB Financial is a diversified financial services holding company for the State Bank & Trust Company (State Bank) and SBFG Title, LLC dba Peak Title (Peak Title). State Bank provides a full range of financial services for consumers and small businesses, including wealth management, private client services, mortgage banking and commercial and agricultural lending, operating through a total of 23 offices; 22 in nine Ohio counties and one in Fort Wayne, Indiana, and 24 full-service ATMs. State Bank has six loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. Peak Title provides title insurance and title opinions throughout the Tri-State region. SB Financial’s common stock is listed on the NASDAQ Capital Market with the ticker symbol “SBFG”.

 

In April 2022, SB Financial was named to the Keefe, Bruyette & Woods, Inc. “Bank Honor Roll” of superior performers that consistently reported increases in earnings per share over the last decade. The honor roll review determined that just 17 banks in the U.S., including SB Financial, or five percent of all banks screened, qualified for inclusion.

 

5

 

 

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

 

###

 

6

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS - (Unaudited)

 

   December   September   June   March   December 
($ in thousands)  2022   2022   2022   2022   2021 
ASSETS                    
Cash and due from banks  $27,817   $27,934   $29,567   $130,003   $149,511 
Interest bearing time deposits   2,131    2,134    1,691    1,894    2,643 
Available-for-sale securities   238,780    243,233    266,162    265,311    263,259 
Loans held for sale   2,073    2,979    4,242    4,737    7,472 
Loans, net of unearned income   962,075    925,249    895,611    850,671    822,714 
Allowance for loan losses   (13,818)   (13,824)   (13,801)   (13,804)   (13,805)
Premises and equipment, net   22,829    22,842    23,122    23,039    23,212 
Federal Reserve and FHLB Stock, at cost   6,326    5,230    5,303    5,303    5,303 
Foreclosed assets and other assets   777    756    730    527    2,104 
Interest receivable   4,091    3,556    3,256    2,815    2,920 
Goodwill   23,239    23,239    23,239    23,239    23,191 
Cash value of life insurance   28,870    28,713    28,556    17,932    17,867 
Mortgage servicing rights   13,503    13,473    13,408    13,135    12,034 
Other assets   16,940    17,863    12,886    10,328    12,429 
Total assets  $1,335,633   $1,303,377   $1,293,972   $1,335,130   $1,330,854 
                          
LIABILITIES AND SHAREHOLDERS’ EQUITY                         
Deposits                         
Non interest bearing demand  $256,799   $250,791   $239,676   $252,273   $247,044 
Interest bearing demand   191,719    199,523    198,286    211,152    195,464 
Savings   191,272    201,402    215,285    236,394    237,571 
Money market   255,995    258,975    276,274    289,699    276,462 
Time deposits   190,880    175,202    142,258    148,553    156,504 
Total deposits   1,086,665    1,085,893    1,071,779    1,138,071    1,113,045 
                          
Short-term borrowings   14,923    19,754    30,772    19,035    15,320 
Federal Home Loan Bank advances   60,000    35,000    25,000    5,500    5,500 
Trust preferred securities   10,310    10,310    10,310    10,310    10,310 
Subordinated debt net of issuance costs   19,594    19,582    19,570    19,558    19,546 
Interest payable   769    623    307    536    299 
Other liabilities   24,944    17,587    11,678    9,483    21,905 
Total liabilities   1,217,205    1,188,749    1,169,416    1,202,493    1,185,925 
                          
Shareholders’ Equity                         
Common stock   61,319    61,319    61,319    61,319    54,463 
Additional paid-in capital   15,087    15,000    15,069    14,872    14,944 
Retained earnings   101,966    99,309    96,809    94,833    99,716 
Accumulated other comprehensive income (loss)   (32,120)   (33,426)   (22,210)   (13,659)   (1,845)
Treasury stock   (27,824)   (27,574)   (26,431)   (24,728)   (22,349)
Total shareholders’ equity   118,428    114,628    124,556    132,637    144,929 
Total liabilities and shareholders’ equity  $1,335,633   $1,303,377   $1,293,972   $1,335,130   $1,330,854 

 

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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  2022   2022   2022   2022   2021   2022   2021 
Loans                            
Taxable  $11,222   $10,084   $8,880   $8,052   $8,889   $38,238   $37,959 
Tax exempt   109    92    73    61    59    335    206 
Securities                                   
Taxable   1,559    1,536    1,469    1,235    969    5,798    3,386 
Tax exempt   47    52    52    47    86    198    353 
                                    
Total interest income   12,937    11,764    10,474    9,395    10,003    44,569    41,904 
                                    
Interest expense                                   
Deposits   1,440    852    567    618    640    3,477    3,129 
Repurchase agreements & other   7    8    11    13    7    39    42 
Federal Home Loan Bank advances   258    180    38    39    41    515    188 
Trust preferred securities   138    99    71    53    49    361    199 
Subordinated debt   194    195    194    195    188    778    462 
                                    
Total interest expense   2,037    1,334    881    918    925    5,170    4,020 
                                    
                                    
Net interest income   10,900    10,430    9,593    8,477    9,078    39,399    37,884 
                                    
Provision for loan losses   -    -    -    -    -    -    1,050 
                                    
Net interest income after provision for loan losses   10,900    10,430    9,593    8,477    9,078    39,399    36,834 
                                    
Noninterest income                                   
Wealth management fees   907    930    936    955    988    3,728    3,814 
Customer service fees   880    844    860    794    827    3,378    3,217 
Gain on sale of mtg. loans & OMSR   550    876    1,196    1,676    3,194    4,298    17,255 
Mortgage loan servicing fees, net   627    527    606    1,204    624    2,964    2,940 
Gain on sale of non-mortgage loans   105    125    167    169    44    566    158 
Title insurance revenue   454    476    697    602    528    2,229    2,089 
Gain (loss) on sale of assets   18    (12)   -    55    1    61    2 
Other   172    277    211    347    383    1,007    1,222 
                                    
Total noninterest income   3,713    4,043    4,673    5,802    6,589    18,231    30,697 
                                    
Noninterest expense                                   
Salaries and employee benefits   5,677    5,858    6,418    6,189    6,648    24,142    26,838 
Net occupancy expense   763    769    719    742    846    2,993    3,048 
Equipment expense   1,017    918    827    854    899    3,616    3,281 
Data processing fees   627    664    643    576    721    2,510    2,579 
Professional fees   738    766    760    950    872    3,214    3,027 
Marketing expense   258    200    222    231    228    911    784 
Telephone and communication expense   124    134    105    111    148    474    581 
Postage and delivery expense   121    75    110    116    106    422    414 
State, local and other taxes   277    250    277    278    288    1,082    1,175 
Employee expense   157    145    175    136    163    613    663 
Other expenses   510    605    546    676    648    2,337    2,418 
                                    
Total noninterest expense   10,269    10,384    10,802    10,859    11,567    42,314    44,808 
                                    
                                    
Income before income tax expense   4,344    4,088    3,464    3,420    4,100    15,315    22,723 
                                    
Income tax expense   811    746    630    607    768    2,794    4,446 
                                    
Net income   $3,533   $3,342   $2,834   $2,813   $3,332   $12,521   $18,277 
                                    
Common share data:                                   
Basic earnings per common share  $0.51   $0.48   $0.40   $0.40   $0.49   $1.79   $2.58 
                                    
Diluted earnings per common share  $0.50   $0.47   $0.40   $0.40   $0.49   $1.77   $2.56 
                                    
Average shares outstanding (in thousands):                                   
Basic:   6,945    6,968    7,075    7,035    6,906    7,005    7,083 
Diluted:   7,021    7,033    7,149    7,100    6,970    7,078    7,130 

 

8

 

 

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  2022   2022   2022   2022   2021   2022   2021 
                             
Net interest income  $10,900   $10,430   $9,593   $8,477   $9,078   $39,399   $37,884 
Tax-equivalent adjustment   41    38    33    29    39    142    149 
Tax-equivalent net interest income   10,941    10,468    9,626    8,506    9,117    39,541    38,033 
Provision for loan loss   -    -    -    -    -    -    1,050 
Noninterest income   3,713    4,043    4,673    5,802    6,589    18,231    30,697 
Total operating revenue   14,613    14,473    14,266    14,279    15,667    57,630    68,581 
Noninterest expense   10,269    10,384    10,802    10,859    11,567    42,314    44,808 
Pre-tax pre-provision income   4,344    4,088    3,464    3,420    4,100    15,315    23,773 
Pretax income   4,344    4,088    3,464    3,420    4,100    15,315    22,723 
Net income   3,533    3,342    2,834    2,813    3,332    12,521    18,277 
                                    
PER SHARE INFORMATION:                                   
Basic earnings per share (EPS)   0.51    0.48    0.40    0.40    0.49    1.79    2.58 
Diluted earnings per share   0.50    0.47    0.40    0.40    0.49    1.77    2.56 
Common dividends   0.125    0.120    0.120    0.115    0.115    0.480    0.440 
Book value per common share   17.08    16.49    17.75    18.65    21.05    17.08    21.05 
Tangible book value per common share (TBV)   13.65    13.07    14.36    15.31    17.60    13.65    17.60 
Market price per common share   16.95    16.85    17.26    19.91    18.69    16.95    18.69 
Market price to TBV   124.2%   128.9%   120.2%   130.1%   106.2%   124.2%   106.2%
Market price to trailing 12 month EPS   9.6    9.6    9.3    10.0    7.7    9.6    7.7 
                                    
PERFORMANCE RATIOS:                                   
Return on average assets (ROAA)   1.08%   1.03%   0.87%   0.83%   0.99%   0.95%   1.38%
Pre-tax pre-provision ROAA   1.32%   1.26%   1.06%   1.01%   1.22%   1.25%   1.91%
Return on average equity   12.17%   10.89%   8.89%   8.08%   9.21%   9.86%   12.67%
Return on average tangible equity   15.30%   13.51%   10.93%   9.75%   10.92%   12.14%   15.04%
Efficiency ratio   70.16%   71.63%   75.60%   75.93%   73.72%   73.31%   65.23%
Earning asset yield   4.27%   3.89%   3.45%   2.96%   3.17%   3.63%   3.37%
Cost of interest bearing liabilities   0.90%   0.58%   0.39%   0.39%   0.40%   0.56%   0.45%
Net interest margin   3.60%   3.45%   3.15%   2.67%   2.87%   3.21%   3.05%
Tax equivalent effect   0.01%   0.01%   0.01%   0.01%   0.02%   0.01%   0.01%
Net interest margin, tax equivalent   3.61%   3.46%   3.16%   2.68%   2.89%   3.22%   3.06%
Non interest income/Average assets   1.13%   1.24%   1.43%   1.72%   1.96%   1.38%   2.32%
Non interest expense/Average assets   3.13%   3.19%   3.31%   3.22%   3.45%   3.21%   3.39%
Net noninterest expense/Average assets   -2.00%   -1.95%   -1.88%   -1.50%   -1.48%   -1.83%   -1.07%
                                    
ASSET QUALITY RATIOS:                                   
Gross charge-offs   7    9    9    9    34    34    136 
Recoveries   1    32    6    8    27    47    317 
Net charge-offs   6    (23)   3    1    7    (13)   (181)
Nonaccruing loans/Total loans   0.38%   0.40%   0.45%   0.50%   0.44%   0.38%   0.44%
Nonperforming loans/Total loans   0.45%   0.48%   0.52%   0.59%   0.53%   0.45%   0.53%
Nonperforming assets/Loans & OREO   0.53%   0.56%   0.60%   0.66%   0.79%   0.53%   0.79%
Nonperforming assets/Total assets   0.38%   0.40%   0.42%   0.42%   0.49%   0.38%   0.49%
Allowance for loan loss/Nonperforming loans   318.68%   313.26%   294.83%   273.08%   315.40%   318.68%   315.40%
Allowance for loan loss/Total loans   1.44%   1.49%   1.54%   1.62%   1.68%   1.44%   1.68%
Net loan charge-offs/Average loans (ann.)   0.00%   (0.01%)   0.00%   0.00%   0.00%   (0.00%)   (0.02%)
                                    
CAPITAL & LIQUIDITY RATIOS:                                   
Loans/ Deposits   88.53%   85.21%   83.56%   74.75%   73.92%   88.53%   73.92%
Equity/ Assets   8.87%   8.79%   9.63%   9.93%   10.89%   8.87%   10.89%
Tangible equity/Tangible assets   7.22%   7.10%   7.93%   8.30%   9.27%   7.22%   9.27%
Common equity tier 1 ratio (Bank)   13.42%   13.23%   13.21%   13.71%   13.94%   13.42%   13.94%
                                    
END OF PERIOD BALANCES                                   
Total assets   1,335,633    1,303,377    1,293,972    1,335,130    1,330,854    1,335,633    1,330,854 
Total loans   962,075    925,249    895,611    850,671    822,714    962,075    822,714 
Deposits   1,086,665    1,085,893    1,071,779    1,138,071    1,113,045    1,086,665    1,113,045 
Stockholders equity   118,428    114,628    124,556    132,637    144,929    118,428    144,929 
Goodwill and intangibles   23,753    23,770    23,787    23,804    23,774    23,753    23,774 
Tangible equity   94,675    90,858    100,769    108,833    121,155    94,675    121,155 
Mortgage servicing portfolio   1,352,016    1,362,666    1,369,732    1,375,554    1,362,962    1,352,016    1,362,962 
Wealth/Brokerage assets under care   507,093    480,947    500,487    560,698    618,279    507,093    618,279 
Total assets under care   3,194,742    3,146,990    3,164,191    3,271,382    3,312,095    3,194,742    3,312,095 
Full-time equivalent employees   268    271    267    256    269    268    269 
Period end common shares outstanding   6,935    6,950    7,017    7,111    6,884    6,935    6,884 
Market capitalization (all)   117,556    117,113    121,105    141,575    128,668    117,556    128,668 
                                    
AVERAGE BALANCES                                   
Total assets   1,314,419    1,302,297    1,305,815    1,350,982    1,342,202    1,318,781    1,322,253 
Total earning assets   1,211,674    1,209,958    1,216,124    1,270,218    1,263,431    1,226,771    1,243,093 
Total loans   937,898    909,909    870,439    832,825    845,078    888,116    854,521 
Deposits   1,094,491    1,085,821    1,108,890    1,134,234    1,123,843    1,105,571    1,106,122 
Stockholders equity   116,114    122,738    127,519    139,214    144,749    126,963    144,223 
Goodwill and intangibles   23,761    23,778    23,796    23,801    22,701    23,783    22,718 
Tangible equity   92,353    98,960    103,723    115,413    122,048    103,180    121,505 
Average basic shares outstanding   6,945    6,968    7,075    7,035    6,906    7,005    7,083 
Average diluted shares outstanding   7,021    7,033    7,149    7,100    6,970    7,078    7,130 

 

9

 

 

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

For the Three and Twelve Months Ended Dec. 31, 2022 and 2021

 

 

($ in thousands)  Three Months Ended Dec. 31, 2022   Three Months Ended Dec. 31, 2021 
   Average       Average   Average       Average 
Assets  Balance   Interest   Rate   Balance   Interest   Rate 
Taxable securities/cash  $265,711   $1,559    2.35%  $410,489   $969    0.94%
Nontaxable securities   8,065    47    2.33%   7,864    86    4.37%
Loans, net   937,898    11,331    4.83%   845,078    8,948    4.24%
Total earning assets   1,211,674    12,937    4.27%   1,263,431    10,003    3.17%
Cash and due from banks   7,052              6,489           
Allowance for loan losses   (13,820)             (13,795)          
Premises and equipment   23,757              25,505           
Other assets   85,756              60,572           
                               
Total assets  $1,314,419             $1,342,202           
Liabilities                        
Savings, MMDA and interest bearing demand  $646,498   $965    0.60%  $704,534   $400    0.23%
Time deposits   180,678    475    1.05%   157,888    240    0.61%
Repurchase agreements & other   18,058    7    0.16%   18,910    7    0.15%
Advances from Federal Home Loan Bank   29,078    258    3.55%   5,500    41    2.98%
Trust preferred securities   10,310    138    5.35%   10,310    49    1.90%
Subordinated debt   19,588    194    3.96%   19,539    188    3.85%
Total interest bearing liabilities   904,210    2,037    0.90%   916,681    925    0.40%
Non interest bearing demand   267,315    -         261,421    -      
Total funding   1,171,525         0.70%   1,178,102         0.31%
Other liabilities   26,780              19,351           
Total liabilities   1,198,305              1,197,453           
Equity   116,114              144,749           
Total liabilities and equity  $1,314,419             $1,342,202           
Net interest income       $10,900             $9,078      
Net interest income as a percent of average interest-earning assets - GAAP measure             3.60%             2.87%
Net interest income as a percent of average interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis             3.61%             2.89%

  

   Twelve Months Ended Dec. 31, 2022   Twelve Months Ended Dec. 31, 2021 
   Average       Average   Average       Average 
Assets  Balance   Interest   Rate   Balance   Interest   Rate 
Taxable securities/cash  $330,549   $5,798    1.75%  $380,770   $3,386    0.89%
Nontaxable securities   8,106    198    2.44%   7,802    353    4.52%
Loans, net   888,116    38,573    4.34%   854,521    38,165    4.47%
Total earning assets   1,226,771    44,569    3.63%   1,243,093    41,904    3.37%
Cash and due from banks   7,296              7,290           
Allowance for loan losses   (13,808)             (13,422)          
Premises and equipment   24,137              24,710           
Other assets   74,385              60,582           
Total assets  $1,318,781             $1,322,253           
Liabilities                        
Savings, MMDA and interest bearing demand  $693,271   $2,258    0.33%  $672,296   $1,813    0.27%
Time deposits   159,401    1,219    0.76%   177,918    1,316    0.74%
Repurchase agreements & Other   20,481    39    0.19%   22,821    42    0.18%
Advances from Federal Home Loan Bank   16,420    515    3.14%   6,507    188    2.89%
Trust preferred securities   10,310    361    3.50%   10,310    199    1.93%
Subordinated debt   19,570    778    3.98%   12,057    462    3.83%
Total interest bearing liabilities   919,453    5,170    0.56%   901,909    4,020    0.45%
Non interest bearing demand   252,899         0.44%   255,908         0.35%
Total funding   1,172,352              1,157,817           
Other liabilities   19,466              20,213           
Total liabilities   1,191,818              1,178,030           
Equity   126,963              144,223           
Total liabilities and equity  $1,318,781             $1,322,253           
Net interest income       $39,399             $37,884      
Net interest income as a percent of average interest-earning assets - GAAP measure             3.21%             3.05%
Net interest income as a percent of average interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis             3.22%             3.06%

 

 

10

 

 

Non-GAAP reconciliation  Three Months Ended   Twelve Months Ended 
($ in thousands, except per share & ratios)  Dec. 31,
2022		   Dec. 31,
2021		   Dec. 31,
2022		   Dec. 31,
2021		 
                 
Total Operating Revenue  $14,613   $15,667   $57,630   $68,581 
Adjustment to (deduct)/add OMSR recapture/impairment *   (86)   (581)   (1,279)   (3,436)
Adjusted Total Operating Revenue   14,527    15,086    56,351    65,145 
                     
Income before Income Taxes   4,344    4,100    15,315    22,723 
Adjustment for OMSR *   (86)   (581)   (1,279)   (3,436)
Adjusted Income before Income Taxes   4,258    3,519    14,036    19,287 
                     
Provision for Income Taxes   811    768    2,794    4,446 
Adjustment for OMSR **   (18)   (122)   (269)   (722)
                     
Adjusted Provision for Income Taxes   793    646    2,525    3,725 
                     
Net Income   3,533    3,332    12,521    18,277 
Adjustment for OMSR *   (68)   (459)   (1,010)   (2,714)
                     
Adjusted Net Income   3,465    2,873    11,511    15,563 
                     
Diluted Earnings per Share   0.50    0.49    1.77    2.56 
Adjustment for OMSR *   (0.01)   (0.07)   (0.14)   (0.38)
                     
Adjusted Diluted Earnings per Share  $0.49   $0.42   $1.63   $2.18 
                     
Return on Average Assets   1.08%   0.99%   0.95%   1.38%
Adjustment for OMSR *   -0.02%   -0.14%   -0.08%   -0.21%
                     
Adjusted Return on Average Assets   1.05%   0.86%   0.87%   1.18%

 

*valuation adjustment to the Company’s mortgage servicing rights

 

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

 

 

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