SB Financial Group Announces Fourth Quarter 2020 Results

Rhea-AI Summary

SB Financial Group (NASDAQ: SBFG) reported significant fourth-quarter and annual earnings for 2020. Net income reached $5.4 million, a 59.6% increase, resulting in diluted EPS of $0.71, up 69.0%. Adjusted net income rose to $5.8 million, lifting adjusted EPS to $0.77. Mortgage origination volumes increased by 22.9% to $169 million. For the year, net income was $14.9 million, and diluted EPS was $1.96, representing a 30% increase from 2019. Notably, total assets grew to $1.26 billion, a 21.1% increase driven by acquisitions and PPP activity.

Positive

• Net income increased to $5.4 million, up 59.6%.
• Diluted EPS rose to $0.71, a 69.0% increase.
• Adjusted net income grew to $5.8 million, adjusted EPS increased to $0.77.
• Mortgage origination volume reached $169 million, a 22.9% increase.
• Total operating revenue increased by 24.7% in Q4 and 24.9% for the year.
• Total assets grew to $1.26 billion, a 21.1% increase.

Negative

• Interest income decreased by 5.5% year-over-year in Q4.
• Provision for loan losses increased significantly to $800,000, up 166.7% from the previous year.
• Noninterest expense increased by 15.2% for the year.

DEFIANCE, Ohio, Jan. 28, 2021 /PRNewswire/ -- 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, 2020.

Fourth quarter 2020 highlights over prior-year fourth quarter include:

• Net income of $5.4 million up $2.0 million or 59.6 percent; diluted earnings per share ("EPS") of $0.71, up $0.29 per share or 69.0 percent
• Adjusted net income, excluding the impact of the Originated Mortgage Servicing Rights ("OMSR") recapture, was $5.8 million, which yields an increase in adjusted EPS of $0.06 to $0.77
• Mortgage origination volume of $169.0 million, an increase of $31.5 million, or 22.9 percent
• Pre-tax, pre-provision income of $7.5 million, up $3.1 million or 70.6 percent

The twelve months ended December 31, 2020, highlights over the prior-year twelve months include:

• Net income of $14.9 million; diluted EPS of $1.96
• Adjusted net income, excluding the impact of OMSR and Edon merger costs, rose to $18.8 million, up $5.9 million, or 46.1 percent, with adjusted EPS of $2.44
• Return on Average Assets ("ROAA") of 1.29 percent; adjusted ROAA of 1.61 percent
• Loan growth of $47.2 million, or 5.7 percent, which includes Paycheck Protection Program ("PPP") loan balances and loans acquired in the Edon acquisition.
• Deposit growth of $213.9 million, or 25.4 percent, driven by PPP balances and the Edon acquisition
• Mortgage origination volume of $694.2 million; servicing portfolio of $1.3 billion, which is up $101 million, or 8.4 percent

Highlights	Three Months Ended				Twelve Months Ended
($ in thousands, except per share & ratios)	Dec. 2020	Dec. 2019	% Change		Dec. 2020	Dec. 2019	% Change
Operating revenue	$  18,153	$  14,555	24.7%		$  66,026	$  52,842	24.9%
Interest income	10,589	11,205	-5.5%		42,635	44,400	-4.0%
Interest expense	1,338	2,609	-48.7%		6,705	9,574	-30.0%
Net interest income	9,251	8,596	7.6%		35,930	34,826	3.2%
Provision for loan losses	800	300	166.7%		4,500	800	462.5%
Noninterest income	8,902	5,959	49.4%		30,096	18,016	67.1%
Noninterest expense	10,684	10,176	5.0%		43,087	37,410	15.2%
Net income	5,358	3,358	59.6%		14,944	11,973	24.8%
Earnings per diluted share	0.71	0.42	69.0%		1.96	1.51	29.8%
Return on average assets	1.73%	1.28%	35.2%		1.29%	1.16%	11.2%
Return on average equity	15.05%	9.93%	51.6%		10.74%	8.99%	19.5%
Non-GAAP Measures
Adjusted net income	$   5,841	$   3,119	87.3%		$  18,757	$  12,838	46.1%
Adjusted diluted EPS	0.77	0.39	97.4%		2.44	1.62	50.6%
Adjusted return on average assets	1.89%	1.26%	50.0%		1.61%	1.24%	29.8%
Adjusted pre-tax, pre-provision income	8,172	4,076	100.5%		19,685	16,526	19.1%

"The fourth quarter completed a record year of earnings for our Company.  We earned $0.71 per share in the quarter up 69 percent from the prior year and for the full year $1.96, which was up 30 percent over the prior twelve months," said Mark A. Klein, Chairman, President, and CEO of SB Financial.   "We had significant contributions from our lending teams in the PPP initiative and our Residential Mortgage group originated record volume during 2020.  We were especially pleased to have returned over $10 million to our shareholders in the form of dividends and buybacks this past year and to have increased shareholder book value by nearly 11 percent."

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was up 24.7 percent from the fourth quarter of 2019 and for the year was up 24.9 percent.

• Net interest income was up 7.6 percent from the year-ago quarter, and remained flat to the linked quarter. 
• Net interest margin on a fully taxable equivalent basis (FTE) was down from the year-ago quarter by 49 basis points and down 20 basis points from the linked quarter due to higher transactional cash balances, slower PPP forgiveness realization and lower mortgage volume.   Loan yields are down 60 bps with the decline in the rate curve.
• Noninterest income was up 49.4 percent year over year but down 14.5 percent from the linked quarter, due to servicing rights impairment and lower mortgage volume.       

Mortgage Loan Business

Mortgage loan originations for the fourth quarter of 2020 were $169.0 million, up $31.5 million, or 22.9 percent, from the year-ago quarter.  Total sales of originated loans were $143.2 million, up $15.7 million, or 12.3 percent.  For the full year, SB Financial had total volume of $694.2 million, of which $290.9 million (42 percent) was new purchase/construction lending, $217.0 million (31 percent) was internal refinance, and the remaining $186.3 million (27 percent) was new customer refinance volume.

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $6.2 million for the fourth quarter of 2020, compared to $3.4 million for the year-ago quarter.  The mortgage servicing valuation adjustment for the fourth quarter of 2020 was a negative $0.6 million, compared to a positive adjustment of $0.3 million for the fourth quarter of 2019.  For the year, the impairment on servicing rights was $3.6 million, compared to $1.1 million for the prior year.  The aggregate servicing valuation impairment ended the quarter at $4.9 million.  The servicing portfolio at December 31, 2020, was $1.3 billion up $100.6 million or 8.4 percent, from $1.2 billion at December 31, 2019.  Normal amortization is up 124 percent from the prior year due to higher refinance activity.

Mr. Klein noted, "Our mortgage machine continued at a brisk pace in the quarter with nearly $170 million in volume and for the year we were just a few loans shy of $700 million.  Our sales and processing teams set a new standard of excellence with over 3,100 units closed during the year, and the gain on sale yields continued at high levels in the quarter allowing us to overcome the effects of the servicing rights impairment.  We can add to book value in the future with the potential realization of our $4.9 million in valuation impairment."

Mortgage Banking
($ in thousands)	Dec. 2020	Sep. 2020	Jun. 2020	Mar. 2020	Dec. 2019
Mortgage originations	$ 168,997	$ 200,158	$ 223,671	$ 101,365	$ 137,528
Mortgage sales	143,151	166,201	204,628	84,476	127,441
Mortgage servicing portfolio	1,299,698	1,293,037	1,261,746	1,216,292	1,199,107
Mortgage servicing rights	7,759	8,535	8,168	8,974	11,017
Mortgage servicing revenue
Loan servicing fees	857	813	782	757	740
OMSR amortization	(1,283)	(1,308)	(1,574)	(597)	(709)
Net administrative fees	(426)	(495)	(792)	160	31
OMSR valuation adjustment	(611)	326	(1,088)	(2,212)	303
Net loan servicing fees	(1,037)	(169)	(1,880)	(2,052)	334
Gain on sale of mortgages	7,197	8,085	8,119	1,949	3,048
Mortgage banking revenue, net	$     6,160	$     7,916	$     6,239	$      (103)	$     3,382

 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 and the sale of Small Business Administration (SBA) and U.S. Department of Agriculture (USDA) loans.  Wealth management assets under the Company's care were $558.4 million as of December 31, 2020, up $50.7 million, or 10.0 percent, compared to the prior year.  For the fourth quarter of 2020, noninterest income as a percentage of total operating revenue was 49.0 percent.  Reflective of the robust mortgage market, SB Financial's Title Agency provided revenue in the quarter of $0.5 million, up 32.8 percent from the prior year. 

For the fourth quarter of 2020, noninterest expense of $10.7 million was up $0.5 million year over year or 5.0 percent reflecting a 4.9 times positive operating leverage.  On a full year basis, noninterest expense of $43.1 million is up $5.7 million or 15.2 percent.  Operating leverage for the year was a positive 1.6 times, however when adjusted for the Edon merger costs, operating leverage improves to 2.1 times.

Mr. Klein stated, "We continued to see the positive effects to net income this quarter from the resources we have allocated to our revenue lines.  Our commitment to technology, hedging and geographic expansion continued to pay dividends as our revenue growth exceeded expense growth by over two times and we continue to realize significant benefits from our commitment to the mortgage business line for each of our stakeholders."

Noninterest Income / Noninterest Expense
($ in thousands, except ratios)	Dec. 2020	Sep. 2020	Jun. 2020	Mar. 2020	Dec. 2019
Noninterest Income (NII)	$   8,902	$  10,418	$   8,615	$   2,161	$   5,959
NII / Total Revenue	49.0%	52.9%	49.3%	20.2%	40.9%
NII / Average Assets	2.9%	3.4%	3.0%	0.8%	2.3%
Total Revenue Growth	24.7%	36.4%	39.6%	-5.6%	16.0%
Noninterest Expense (NIE)	$  10,684	$  11,335	$ 11,662	$   9,406	$  10,176
Efficiency Ratio	58.8%	57.5%	66.7%	87.8%	69.9%
NIE / Average Assets	3.5%	3.7%	4.0%	3.5%	3.9%
Net Noninterest Expense/Avg. Assets	-0.6	-0.3	-1.0%	-2.7%	-1.6%
Total Expense Growth	5.0%	19.3%	28.0%	9.0%	15.0%
Operating Leverage	4.9	1.9	1.4	-0.6	1.1

Balance Sheet

Total assets as of December 31, 2020, were $1.26 billion, up $219.3 million, or 21.1 percent, from the year ago quarter due to the impact of the Edon acquisition and the PPP activity.  Total equity as of December 31, 2020, was $142.9 million, up 5.0 percent from a year ago, and comprised 11.4 percent of total assets. 

Total loans held for investment were $872.7 million at December 31, 2020, up $47.2 million, or 5.7 percent, from December 31, 2019.  Commercial loans were up $52.2 million, or 34.6 percent, commercial real estate up $1.0 million or 0.3 percent and agricultural loans increasing $4.3 million, or 8.3 percent.   Absent the effects of the Edon acquisition and PPP loans, loan balances were down $44.7 million from the year ago quarter.

The investment portfolio of $154.7 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 12.3 percent of assets at December 31, 2020, and was up 46.5 percent from the year-ago period.  Deposit balances of $1.05 billion at December 31, 2020, increased by $213.9 million, or 25.5 percent, since December 31, 2019.  Growth from the prior year included $144.1 million in checking and $69.8 million in savings and time deposit balances.

Mr. Klein continued, "We allocated more to our loan loss allowance in the quarter despite what we see as relatively stable asset quality.  We continue to prepare for potential COVID impacts to our clients and other credit unknowns.  For the year, we set aside $4.5 million in provision expense compared to credit losses of $0.7 million.  We have been able to offset the provision expense with our PPP revenue and the pandemic related expense reductions we realized during the year.  Adjusting for our PPP balances, our reserve level ended the year at $12.6 million, or 1.56 percent of loans, compared to the $8.8 million and 1.06 percent at the end of the prior year."

Loan Balances
($ in thousands, except ratios)	Dec. 2020	Sep. 2020	Jun. 2020	Mar. 2020	Dec. 2019	Annual Growth
Commercial	$   203,256	$   216,667	$222,108	$151,538	$151,018	$           52,238
% of Total	23.3%	24.5%	24.6%	18.2%	18.3%	34.6%
Commercial RE	370,984	371,947	375,450	378,212	369,962	1,022
% of Total	42.5%	42.0%	41.6%	45.5%	44.8%	0.3%
Agriculture	55,251	57,420	58,817	47,660	50,994	4,257
% of Total	6.3%	6.5%	6.5%	5.7%	6.2%	8.3%
Residential RE	182,076	178,393	184,684	189,738	189,290	(7,214)
% of Total	20.9%	20.1%	20.6%	22.9%	22.9%	-3.8%
Consumer & Other	61,156	61,423	60,489	63,616	64,246	(3,090)
% of Total	7.0%	6.9%	6.7%	7.7%	7.8%	-4.8%
Total Loans	$   872,723	$   885,850	$901,548	$830,764	$825,510	$           47,213
Total Growth Percentage						5.7%
Deposit Balances
($ in thousands, except ratios)	Dec. 2020	Sep. 2020	Jun. 2020	Mar. 2020	Dec. 2019	Annual Growth
Non-Int DDA	$   251,649	$   225,003	$229,042	$170,920	$158,357	$           93,292
% of Total	24.0%	22.2%	23.1%	19.8%	18.8%	58.9%
Interest DDA	176,785	164,248	154,143	133,722	131,084	45,701
% of Total	16.9%	16.2%	15.6%	15.5%	15.6%	34.9%
Savings	174,864	169,474	161,182	138,863	119,359	55,505
% of Total	16.7%	16.7%	16.2%	16.0%	14.1%	46.5%
Money Market	216,164	204,862	189,380	169,209	173,666	42,498
% of Total	20.6%	20.2%	19.1%	19.6%	20.7%	24.5%
Time Deposits	229,549	250,428	256,840	251,177	257,753	(28,204)
% of Total	21.9%	24.7%	25.9%	29.2%	30.9%	-10.9%
Total Deposits	$1,049,011	$1,014,015	$990,587	$863,891	$840,219	$         208,792
Total Growth Percentage						24.8%

Asset Quality

SB Financial reported nonperforming assets of $7.3 million as of December 31, 2020, up $0.6 million from the year-ago quarter.  The coverage of nonperforming loans by the loan loss allowance was at 174 percent at December 31, 2020, up from 137 percent at December 31, 2019. 

Nonperforming Assets						Annual Change
($ in thousands, except ratios)	Dec. 2020	Sep. 2020	Jun. 2020	Mar. 2020	Dec. 2019
Commercial & Agriculture	$        902	$     1,140	$     1,204	$     1,309	$     1,772	$               (870)
% of Total Com./Ag. loans	0.35%	0.42%	0.43%	0.66%	0.88%	-49.1%
Commercial RE	2,412	2,475	2,484	1,816	1,826	586
% of Total CRE loans	0.65%	0.67%	0.66%	0.48%	0.49%	32.1%
Residential RE	2,704	2,481	2,538	2,330	1,635	1,069
% of Total Res. RE loans	1.49%	1.39%	1.37%	1.23%	0.86%	65.4%
Consumer & Other	408	313	308	327	267	141
% of Total Con./Oth. loans	0.67%	0.51%	0.51%	0.51%	0.42%	52.8%
Total Nonaccruing Loans	6,426	6,409	6,534	5,782	5,500	926
% of Total loans	0.74%	0.72%	0.72%	0.70%	0.67%	16.8%
Accruing Restructured Loans	810	789	804	816	874	(64)
Total Change (%)						-7.3%
Total Nonaccruing & Restructured Loans	7,236	7,198	7,338	6,598	6,374	862
% of Total loans	0.83%	0.81%	0.81%	0.79%	0.77%	13.5%
Foreclosed Assets	23	76	382	85	305	(282)
Total Change (%)						-92.5%
Total Nonperforming Assets	$     7,259	$     7,274	$     7,720	$     6,683	$     6,679	$                580
% of Total assets	0.58%	0.60%	0.64%	0.61%	0.64%	8.7%

The Company continued to provide payment relief to clients as needed, with total forbearance as of December 31, 2020 of 83 loans at $39.7 million.  The detail on these deferrals; 9 commercial at $28.0 million down $8.3 million from the linked quarter, zero portfolio residential and consumer loans, down $2.0 million from the linked quarter and 74 sold residential real estate loans at $11.7 million, down $30.6 million from the linked quarter. 

Loans in Deferral Status					Linked Qtr. Change
($ in thousands, except ratios)	Dec. 2020	Sep. 2020	Jun. 2020
Total Commercial	$  28,032	$  36,366	$142,682		$                   (8,334)
Total Consumer	-	28	350		(28)
Total Portfolio Mortgage	-	1,959	10,274		(1,959)
Total Balance Sheet Deferrals	$  28,032	$  38,353	$153,306		$                 (10,321)
% of Total loans	3.21%	4.33%	17.00%		-1.12%
Total Sold Mortgage	$  11,685	$  42,317	$  41,751		$                 (30,632)

Webcast and Conference Call

The Company will hold a related conference call and webcast on January 29, 2021, 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 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 22 offices; 21 in nine Ohio counties and one in Fort Wayne, Indiana, and 23 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".

In May 2020, SB Financial was ranked #125 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, 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.

		SB FINANCIAL GROUP, INC.
		CONSOLIDATED BALANCE SHEETS - (Unaudited)
				December		September		June		March		December
			($ in thousands)	2020		2020		2020		2020		2019
ASSETS
	Cash and due from banks			$    142,225		$      94,641		$      85,661		$      56,393		$      27,064
	Interest bearing time deposits			4,288		8,956		10,542		-		-
	Available-for-sale securities			149,406		130,315		104,289		107,727		100,948
	Loans held for sale			7,234		13,943		13,742		11,328		7,258
	Loans, net of unearned income			872,723		885,850		901,548		830,764		825,510
	Allowance for loan losses			(12,574)		(11,793)		(10,013)		(8,958)		(8,755)
	Premises and equipment, net			23,557		23,785		23,662		23,599		23,385
	Federal Reserve and FHLB Stock, at cost			5,303		5,303		4,837		4,648		4,648
	Foreclosed assets held for sale, net			23		76		382		85		305
	Interest receivable			3,799		4,159		4,272		2,940		3,106
	Goodwill			22,745		22,091		22,117		17,792		17,792
	Cash value of life insurance			17,530		17,453		17,375		17,299		17,221
	Mortgage servicing rights			7,759		8,535		8,168		8,974		11,017
	Other assets			13,821		14,927		16,354		15,722		9,078
			Total assets	$ 1,257,839		$ 1,218,241		$ 1,202,936		$ 1,088,313		$ 1,038,577
LIABILITIES AND SHAREHOLDERS' EQUITY
	Deposits
		Non interest bearing demand		$    251,649		$    225,003		$    229,042		$    170,920		$    158,357
		Interest bearing demand		176,785		164,248		154,143		133,722		131,084
		Savings		174,864		169,474		161,182		138,863		119,359
		Money market		216,164		204,862		189,380		169,209		173,666
		Time deposits		229,549		250,428		256,840		251,177		257,753
			Total deposits	1,049,011		1,014,015		990,587		863,891		840,219
	Short-term borrowings			20,189		20,710		23,826		36,881		12,945
	Federal Home Loan Bank advances			8,000		8,000		13,000		16,000		16,000
	Trust preferred securities			10,310		10,310		10,310		10,310		10,310
	Interest payable			616		946		929		1,131		1,191
	Other liabilities			26,790		22,913		26,403		24,195		21,818
			Total liabilities	1,114,916		1,076,894		1,065,055		952,408		902,483
	Shareholders' Equity
		Preferred stock		-		-		-		-		-
		Common stock		54,463		54,463		54,463		54,463		54,463
		Additional paid-in capital		14,845		14,782		14,780		14,655		15,023
		Retained earnings		84,578		80,012		75,526		72,641		72,704
		Accumulated other comprehensive income (loss)		2,210		2,221		2,320		2,049		659
		Treasury stock		(13,173)		(10,131)		(9,208)		(7,903)		(6,755)
			Total shareholders' equity	142,923		141,347		137,881		135,905		136,094
			Total liabilities and shareholders' equity	$ 1,257,839		$ 1,218,241		$ 1,202,936		$ 1,088,313		$ 1,038,577

	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			2020		2020		2020		2020		2019			2020		2019
	Loans
	Taxable		$     9,816		$    10,179		$ 9,945		$ 9,795		$   10,313			$   39,735		$   40,529
	Tax exempt		54		47		59		79		83			239		300
	Securities
	Taxable		632		494		510		692		737			2,328		3,226
	Tax exempt		87		87		81		78		72			333		345
		Total interest income	10,589		10,807		10,595		10,644		11,205			42,635		44,400
Interest expense
	Deposits		1,218		1,423		1,549		1,880		2,392			6,070		8,660
	Repurchase agreements & other		10		12		20		28		17			70		82
	Federal Home Loan Bank advances		58		59		92		100		101			309		402
	Trust preferred securities		52		54		62		88		99			256		430
		Total interest expense	1,338		1,548		1,723		2,096		2,609			6,705		9,574
Net interest income			9,251		9,259		8,872		8,548		8,596			35,930		34,826
	Provision for loan losses		800		1,800		1,300		600		300			4,500		800
Net interest income after provision
for loan losses			8,451		7,459		7,572		7,948		8,296			31,430		34,026
Noninterest income
	Wealth management fees		863		839		775		768		801			3,245		3,093
	Customer service fees		728		730		667		682		712			2,807		2,761
	Gain on sale of mtg. loans & OMSR		7,197		8,085		8,119		1,949		3,048			25,350		8,413
	Mortgage loan servicing fees, net		(1,037)		(169)		(1,880)		(2,052)		334			(5,138)		(397)
	Gain on sale of non-mortgage loans		123		119		107		104		250			453		1,255
	Title insurance revenue		522		517		609		265		393			1,913		1,120
	Net gain on sales of securities		-		-		-		-		-			-		206
	Gain (loss) on sale of assets		181		(52)		(80)		(46)		1			3		(5)
	Other		325		349		298		491		420			1,463		1,570
		Total noninterest income	8,902		10,418		8,615		2,161		5,959			30,096		18,016
Noninterest expense
	Salaries and employee benefits		6,556		6,995		6,419		5,427		6,142			25,397		22,064
	Net occupancy expense		782		736		675		698		675			2,891		2,603
	Equipment expense		818		888		780		700		764			3,186		2,828
	Data processing fees		633		586		1,288		548		543			3,055		1,973
	Professional fees		631		695		1,224		757		639			3,307		2,476
	Marketing expense		172		137		141		208		171			658		895
	Telephone and communication expense		156		142		122		115		121			535		466
	Postage and delivery expense		108		96		96		115		86			415		340
	State, local and other taxes		299		331		262		254		347			1,146		1,092
	Employee expense		103		155		93		184		207			535		795
	Other expenses		426		574		562		400		481			1,962		1,878
		Total noninterest expense	10,684		11,335		11,662		9,406		10,176			43,087		37,410
Income before income tax expense			6,669		6,542		4,525		703		4,079			18,439		14,632
	Income tax expense		1,311		1,292		870		22		721			3,495		2,659
Net income			$     5,358		$       5,250		$ 3,655		$    681		$     3,358			$   14,944		$   11,973
Preferred share dividends			-		-		-		-		230			-		950
Net income available to common shareholders			5,358		5,250		3,655		681		3,128			14,944		11,023
Common share data:
	Basic earnings per common share		$        0.71		$         0.69		$   0.47		$   0.09		$        0.48			$        1.96		$        1.71
	Diluted earnings per common share		$        0.71		$         0.69		$   0.47		$   0.09		$        0.42			$        1.96		$        1.51
Average shares outstanding (in thousands):
	Basic:		7,487		7,607		7,708		7,749		6,445			7,635		6,456
	Diluted:		7,487		7,607		7,708		7,756		7,799			7,635		7,935

	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		2020		2020		2020		2020		2019			2020		2019
Net interest income		$        9,251		$        9,259		$        8,872		$        8,548		$        8,596			$       35,930		$       34,826
Tax-equivalent adjustment		37		36		37		42		41			152		171
Tax-equivalent net interest income		9,288		9,295		8,909		8,590		8,637			36,082		34,997
Provision for loan loss		800		1,800		1,300		600		300			4,500		800
Noninterest income		8,902		10,418		8,615		2,161		5,959			30,096		18,016
Total operating revenue		18,153		19,677		17,487		10,709		14,555			66,026		52,842
Noninterest expense		10,684		11,335		11,662		9,406		10,176			43,087		37,410
Pre-tax pre-provision income		7,469		8,342		5,825		1,303		4,379			22,939		15,432
Pretax income		6,669		6,542		4,525		703		4,079			18,439		14,632
Net income		5,358		5,250		3,655		681		3,358			14,944		11,973
Net income available to common shareholders		5,358		5,250		3,655		681		3,128			14,944		11,023
PER SHARE INFORMATION:
Basic earnings per share (EPS)		0.71		0.69		0.47		0.09		0.48			1.96		1.71
Diluted earnings per share		0.71		0.69		0.47		0.09		0.42			1.96		1.51
Common dividends		0.105		0.100		0.100		0.095		0.095			0.400		0.360
Book value per common share		19.39		18.73		17.97		17.64		17.53			19.39		17.53
Tangible book value per common share (TBV)		16.30		15.72		15.09		15.33		15.24			16.30		15.24
Market price per common share		18.28		13.49		16.62		11.12		19.69			18.28		19.69
Market price to TBV		112.1%		85.8%		110.1%		72.5%		129.2%			112.1%		129.2%
Market price to trailing 12 month EPS		9.3		8.0		11.4		8.4		13.0			9.3		13.0
PERFORMANCE RATIOS:
Return on average assets (ROAA)		1.73%		1.73%		1.25%		0.26%		1.28%			1.29%		1.16%
Pre-tax pre-provision ROAA		2.41%		2.74%		1.99%		0.49%		1.67%			2.14%		1.50%
Return on average equity		15.05%		15.01%		10.31%		1.99%		9.93%			10.74%		8.99%
Return on average tangible equity		17.91%		17.93%		11.91%		2.29%		12.83%			12.59%		11.73%
Efficiency ratio		58.76%		57.48%		66.68%		87.81%		69.90%			65.25%		70.79%
Earning asset yield		3.66%		3.96%		3.95%		4.32%		4.80%			3.98%		4.85%
Cost of interest bearing liabilities		0.64%		0.75%		0.89%		1.12%		1.42%			0.85%		1.31%
Net interest margin		3.20%		3.39%		3.30%		3.47%		3.68%			3.35%		3.81%
Tax equivalent effect		0.01%		0.02%		0.02%		0.01%		0.02%			0.01%		0.01%
Net interest margin, tax equivalent		3.21%		3.41%		3.32%		3.48%		3.70%			3.36%		3.82%
Non interest income/Average assets		2.87%		3.42%		2.95%		0.81%		2.27%			2.59%		1.75%
Non interest expense/Average assets		3.45%		3.73%		3.99%		3.54%		3.87%			3.71%		3.64%
Net noninterest expense/Average assets		-0.58%		-0.30%		-1.04%		-2.73%		-1.60%			-1.12%		-1.89%
ASSET QUALITY RATIOS:
Gross charge-offs		57		32		254		400		51			743		259
Recoveries		39		11		10		3		14			63		47
Net charge-offs		18		21		244		397		37			680		212
Nonaccruing loans/Total loans		0.74%		0.72%		0.72%		0.70%		0.67%			0.74%		0.67%
Nonperforming loans/Total loans		0.83%		0.81%		0.81%		0.79%		0.77%			0.83%		0.77%
Nonperforming assets/Loans & OREO		0.83%		0.82%		0.86%		0.80%		0.81%			0.83%		0.81%
Nonperforming assets/Total assets		0.58%		0.60%		0.64%		0.61%		0.64%			0.58%		0.64%
Allowance for loan loss/Nonperforming loans		173.77%		163.84%		136.45%		135.77%		137.35%			173.77%		137.35%
Allowance for loan loss/Total loans		1.44%		1.33%		1.11%		1.08%		1.06%			1.44%		1.06%
Net loan charge-offs/Average loans (ann.)		0.01%		0.01%		0.11%		0.19%		0.02%			0.08%		0.03%
Loan loss provision/Net charge-offs		4444.44%		8571.43%		532.79%		151.13%		810.81%			661.76%		377.36%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		83.19%		87.36%		91.01%		96.17%		98.25%			83.19%		98.25%
Equity/ Assets		11.36%		11.60%		11.46%		12.49%		13.10%			11.36%		13.10%
Tangible equity/Tangible assets		9.73%		9.97%		9.80%		11.03%		11.59%			9.73%		11.59%
Common equity tier 1 ratio (Bank)		12.91%		12.71%		11.97%		12.17%		12.46%			12.91%		12.46%
END OF PERIOD BALANCES
Total assets		1,257,839		1,218,241		1,202,936		1,088,313		1,038,577			1,257,839		1,038,577
Total loans		872,723		885,850		901,548		830,764		825,510			872,723		825,510
Deposits		1,049,011		1,014,015		990,587		863,891		840,219			1,049,011		840,219
Stockholders equity		142,923		141,347		137,881		135,905		136,094			142,923		136,094
Goodwill and intangibles		22,745		22,091		22,117		17,792		17,792			22,745		17,792
Tangible equity		120,178		119,256		115,764		118,113		118,302			120,178		118,302
Mortgage servicing portfolio		1,299,698		1,293,037		1,261,746		1,216,292		1,199,107			1,299,698		1,199,107
Wealth/Brokerage assets under care		558,409		522,360		495,025		427,129		507,670			558,409		507,670
Total assets under care		3,115,946		3,033,638		2,959,707		2,731,734		2,745,354			3,115,946		2,745,354
Full-time equivalent employees		244		251		254		253		252			244		252
Period end common shares outstanding		7,372		7,545		7,672		7,705		7,763			7,372		7,763
Market capitalization (all)		134,760		101,782		127,509		85,680		152,853			134,760		152,853
AVERAGE BALANCES
Total assets		1,238,790		1,216,843		1,169,030		1,061,365		1,051,071			1,161,396		1,027,932
Total earning assets		1,156,718		1,090,386		1,073,490		986,216		934,540			1,072,443		914,975
Total loans		893,244		907,483		898,216		832,975		828,108			880,338		809,651
Deposits		1,031,649		1,007,679		946,053		855,272		856,961			951,226		836,299
Stockholders equity		142,418		139,908		141,821		136,930		135,267			139,197		133,190
Goodwill and intangibles		22,754		22,787		19,066		17,831		17,833			20,491		17,597
Preferred equity		-		-		-		-		12,707			-		13,484
Tangible equity		119,664		117,121		122,755		119,099		104,727			118,706		102,109
Average basic shares outstanding		7,487		7,607		7,708		7,749		6,445			7,635		6,456
Average diluted shares outstanding		7,487		7,607		7,708		7,756		7,799			7,635		7,935

SB FINANCIAL GROUP, INC.
	Rate Volume Analysis - (Unaudited)
	At and for the Three Months Ended December 31, 2020 and 2019
	($ in thousands)		Three Months Ended Dec. 31, 2020					Three Months Ended Dec. 31, 2019
			Average		Average			Average		Average
Assets			Balance	Interest	Rate			Balance	Interest	Rate
	Taxable securities/Cash		$           256,068	$                 632	0.99%			$            99,149	$                 737	2.97%
	Nontaxable securities		7,406	87	4.70%			7,283	72	3.95%
	Loans, net		893,244	9,870	4.42%			828,108	10,396	5.02%
	Total earning assets		1,156,718	10,589	3.66%			934,540	11,205	4.80%
	Cash and due from banks		7,463					48,289
	Allowance for loan losses		(12,045)					(8,566)
	Premises and equipment		23,841					24,183
	Other assets		62,813					52,625
	Total assets		$        1,238,790					$        1,051,071
Liabilities
	Savings, MMDA and interest bearing demand		$           552,018	$                 841	0.61%			$           432,077	$                 614	0.57%
	Time deposits		238,284	377	0.63%			264,054	1,778	2.69%
	Repurchase agreements & other		21,610	10	0.19%			13,891	17	0.49%
	Advances from Federal Home Loan Bank		8,000	58	2.90%			16,000	101	2.53%
	Trust preferred securities		10,310	52	2.02%			10,310	99	3.84%
	Total interest bearing liabilities		830,222	1,338	0.64%			736,332	2,609	1.42%
	Non interest bearing demand		241,347	-				160,830	-
	Total funding		1,071,569		0.50%			897,162		1.16%
	Other liabilities		24,803					18,642
	Total liabilities		1,096,372					915,804
	Equity		142,418					135,267
	Total liabilities and equity		$        1,238,790					$        1,051,071
	Net interest income			$              9,251					$              8,596
	Net interest income as a percent of average interest-earning assets - GAAP measure				3.20%					3.68%
	Net interest income as a percent of average interest-earning assets - non GAAP				3.21%					3.70%
	- Computed on a fully tax equivalent (FTE) basis
			Twelve Months Ended Dec. 31, 2020					Twelve Months Ended Dec. 31, 2019
			Average		Average			Average		Average
Assets			Balance	Interest	Rate			Balance	Interest	Rate
	Taxable securities/Cash		$           185,480	$              2,328	1.26%			$            95,216	$              3,226	3.39%
	Nontaxable securities		6,625	333	5.03%			10,108	345	3.41%
	Loans, net		880,338	39,974	4.54%			809,651	40,829	5.04%
	Total earning assets		1,072,443	42,635	3.98%			914,975	44,400	4.85%
	Cash and due from banks		14,553					47,135
	Allowance for loan losses		(10,165)					(8,370)
	Premises and equipment		23,776					23,779
	Other assets		60,789					50,413
	Total assets		$        1,161,396					$        1,027,932
Liabilities
	Savings, MMDA and interest bearing demand		$           492,267	$              3,152	0.64%			$           427,858	$              2,846	0.67%
	Time deposits		247,955	2,918	1.18%			262,040	5,814	2.22%
	Repurchase agreements & Other		22,832	70	0.31%			15,288	82	0.54%
	Advances from Federal Home Loan Bank		14,186	309	2.18%			16,066	402	2.50%
	Trust preferred securities		10,310	256	2.48%			10,310	430	4.17%
	Total interest bearing liabilities		787,550	6,705	0.85%			731,562	9,574	1.31%
	Non interest bearing demand		211,004		0.67%			146,401		1.09%
	Total funding		998,554					877,963
	Other liabilities		23,645					16,779
	Total liabilities		1,022,199					894,742
	Equity		139,197					133,190
	Total liabilities and equity		$        1,161,396					$        1,027,932
	Net interest income			$            35,930					$            34,826
	Net interest income as a percent of average interest-earning assets - GAAP measure				3.35%					3.81%
	Net interest income as a percent of average interest-earning assets - non GAAP				3.36%					3.82%
	- Computed on a fully tax equivalent (FTE) basis

Non-GAAP reconciliation		Three Months Ended				Twelve Months Ended
($ in thousands, except per share & ratios)		Dec. 31, 2020		Dec. 31, 2019		Dec. 31, 2020		Dec. 31, 2019
Total Operating Revenue		$         18,153		$         14,555		$         66,026		$         52,842
Adjustment to (deduct)/add OMSR impairment*		611		(303)		3,585		1,094
Adjusted Total Operating Revenue		18,764		14,252		69,611		53,936
Total Operating Expense		$         10,684		$           9,500		$         43,087		$         37,410
Adjustment for merger expenses**		-		-		(1,241)		-
Adjusted Total Operating Expense		10,684		9,500		41,846		37,410
Income before Income Taxes		6,669		4,079		18,439		14,632
Adjustment for OMSR & merger expense		611		(303)		4,826		1,094
Adjusted Income before Income Taxes		7,280		3,776		23,265		15,726
Provision for Income Taxes		1,311		721		3,495		2,659
Adjustment for OMSR & merger expense***		128		(64)		1,013		230
Adjusted Provision for Income Taxes		1,439		657		4,508		2,890
Net Income		5,358		3,358		14,944		11,973
Adjustment for OMSR & merger expense		483		(239)		3,813		864
Adjusted Net Income		5,841		3,119		18,757		12,838
Diluted Earnings per Share		0.71		0.42		1.96		1.51
Adjustment for OMSR & merger expense		0.06		(0.03)		0.48		0.11
Adjusted Diluted Earnings per Share		$            0.77		$            0.39		$            2.44		$            1.62
Return on Average Assets		1.73%		1.28%		1.29%		1.16%
Adjustment for OMSR & merger expense		0.16%		-0.02%		0.33%		0.08%
Adjusted Return on Average Assets		1.89%		1.26%		1.61%		1.24%
*valuation adjustment to the Company's mortgage servicing rights
**transactions costs related to the Edon acquisition
***tax effect is calculated using a 21% statutory federal corporate income tax rate

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

 

View original content:http://www.prnewswire.com/news-releases/sb-financial-group-announces-fourth-quarter-2020-results-301217593.html

SOURCE SB Financial Group, Inc.

FAQ

What were SB Financial's earnings for the fourth quarter of 2020?

SB Financial reported net income of $5.4 million for Q4 2020.

How much did SB Financial's diluted EPS increase?

Diluted EPS for SB Financial increased by 69.0% to $0.71.

What was the mortgage origination volume for SB Financial in Q4 2020?

The mortgage origination volume for Q4 2020 was $169 million, a 22.9% increase.

What is the adjusted net income for SB Financial in 2020?

SB Financial's adjusted net income for 2020 was $18.8 million, an increase of 46.1%.

How did SB Financial's total assets change by year-end 2020?

By year-end 2020, SB Financial's total assets increased to $1.26 billion, a 21.1% growth.