SB Financial Group Announces Fourth Quarter Results and Record Full Year 2021 earnings

Rhea-AI Summary

SB Financial Group (NASDAQ: SBFG) announced its fourth-quarter earnings for 2021, reporting a net income of $3.3 million and a diluted earnings per share (EPS) of $0.49, down 31% year-over-year. Adjusted net income, excluding a recovery from mortgage servicing, was $2.9 million with EPS of $0.42. Mortgage origination volume decreased by 25% to $126.7 million. However, the full year recorded a historic net income of $18.3 million, an increase of 30.6% compared to 2020, with total loans up by 2.3% and deposits increased by 6.1% to $1.11 billion.

Positive

• Historic net income of $18.3 million for full year 2021, +30.6% YoY
• Total loans increased by $18.5 million, or 2.3% YoY, excluding PPP impact
• Deposits rose by $64.0 million, or 6.1%, reaching $1.11 billion
• Provision expense reduced by 76.7%, showing improved loan quality

Negative

• Fourth quarter net income decreased by 37.8% to $3.3 million
• EPS down 31.0% YoY to $0.49
• Mortgage origination decreased by 25% to $126.7 million
• Noninterest income dropped 26% YoY

DEFIANCE, Ohio, Jan. 27, 2022 /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, 2021.

Fourth quarter 2021 highlights for the fourth quarter include:

• Net income of $3.3 million; diluted earnings per share ("EPS") of $0.49 or a 31.0 percent decrease year over year
• Adjusted net income, excluding the positive impact of the Originated Mortgage Servicing Rights ("OMSR") recovery of $581,000 was $2.9 million, with EPS of $0.42
• Mortgage origination volume of $126.7 million, reflects a decrease of $42.3 million, or 25.0 percent

Full year 2021 highlights over the prior year include:

• Net income of $18.3 million, which is the highest in history for the Company, with EPS of $2.56 or a 30.6 percent increase
• Loans increased $18.5 million, or 2.3 percent year over year excluding the impact of Paycheck Protection Program ("PPP") loan balances in 2020 and 2021 of $2.0 and $70.6 million, respectively
• Deposits increased by $64.0 million, or 6.1 percent to $1.11 billion
• Mortgage origination volume of $600.0 million, was a decline of $94.2 million or 13.6 percent with the mortgage servicing portfolio increasing by $63.3 million to $1.36 billion, or 4.9 percent
• Provision expense of $1.1 million declined 76.7 percent from the year ago period, with net recoveries of $181,000 in 2021, compared to net charge offs of $681,000 in 2020

 

Highlights	Three Months Ended					Twelve Months Ended
($ in thousands, except per share & ratios)	Dec. 2021	Dec. 2020	% Change			Dec. 2021	Dec. 2020	% Change
Operating revenue	$      15,667	$      18,153	-13.7%			$      68,581	$      66,026	3.9%
Interest income	10,003	10,589	-5.5%			41,904	42,635	-1.7%
Interest expense	925	1,338	-30.9%			4,020	6,705	-40.0%
Net interest income	9,078	9,251	-1.9%			37,884	35,930	5.4%
Provision for loan losses	-	800	-100.0%			1,050	4,500	-76.7%
Noninterest income	6,589	8,902	-26.0%			30,697	30,096	2.0%
Noninterest expense	11,567	10,684	8.3%			44,808	43,087	4.0%
Net income	3,332	5,358	-37.8%			18,277	14,944	22.3%
Earnings per diluted share	0.49	0.71	-31.0%			2.56	1.96	30.6%
Return on average assets	0.99%	1.73%	-42.8%			1.38%	1.29%	7.0%
Return on average equity	9.21%	15.05%	-38.8%			12.67%	10.74%	18.0%
Non-GAAP Measures
Adjusted net income	$        2,873	$        5,841	-50.8%			$      15,563	$      18,757	-17.0%
Adjusted diluted EPS	0.42	0.77	-45.5%			2.18	2.44	-10.7%
Adjusted return on average assets	0.86%	1.89%	-54.5%			1.18%	1.62%	-27.2%
Adjusted pre-tax, pre-provision income	3,518	8,080	-56.5%			20,331	27,765	-26.8%

"The fourth quarter completed the highest earnings performance for our Company in our history," said Mark A. Klein, Chairman, President, and CEO of SB Financial.   "We have completed nearly all of the PPP forgiveness and we are looking forward to a return to a bit more normal operating environment with the onset of the new year.  Our team made meaningful progress this year in the face of a fairly challenging environment."

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was down 13.7 percent from the fourth quarter of 2020, and down 6.0 percent from the linked quarter.

• Net interest income was down from the year-ago quarter by 1.9 percent, and down 9.4 percent from the linked quarter as the impact of PPP forgiveness declined.
• Net interest margin on a fully taxable equivalent basis (FTE) was down from the year-ago and linked quarter by 32 basis points, as cash balances continued to be higher than normal, and PPP balances were down to $2.0 million.
• Noninterest income was down 26 percent from the year ago quarter as mortgage volume and gain on sale yields trended lower.

      

Mortgage Loan Business

Mortgage loan originations for the fourthquarter of 2021 were $126.6 million, down $42.4 million, or 25.1 percent, from the year-ago quarter.  Total sales of originated loans were $110.5 million, down $32.6 million, or 22.8 percent, from the year-ago quarter.  For the twelve months of 2021, SB Financial had total volume of $600.0 million, of which $305.3 million (51 percent) was new purchase/construction lending, $152.2 million (25 percent) was external refinance, and the remaining $142.4 million (24 percent) was internal refinance.

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $3.8 million for the fourth quarter of 2021, compared to $6.2 million for the year-ago quarter.  The mortgage servicing valuation adjustment for the fourth quarter of 2021 was a positive $581,000, compared to a negative adjustment of $611,000 for the fourth quarter of 2020.  For the twelve months of 2021, the recapture of servicing rights was $3.4 million compared to impairment of $3.6 million for the prior year twelve months.  The aggregate servicing valuation impairment ended the quarter at $1.5 million.  The servicing portfolio at December 31, 2021, was $1.36 billion, up $63.3 million, or 4.9 percent, from $1.30 billion at December 31, 2020.  

Mr. Klein noted, "Mortgage originations of $127 million reflected the normal cyclical nature of the business line and also reflected the decline in refinance volume, which was down 20 percent from the linked quarter.  We recaptured nearly $600,000 on our service rights impairment in the quarter, and as rates rise into 2022, potentially, the remaining $1.5 million would add to net income.  We ended the year with strong origination teams in all of our markets, with the commitment to add originators across our footprint to achieve our volume targets."

 

Mortgage Banking
($ in thousands)	Dec. 2021	Sep. 2021	Jun. 2021	Mar. 2021	Dec. 2020
Mortgage originations	$     126,611	$     152,623	$     164,883	$     155,836	$     168,997
Mortgage sales	110,543	123,083	119,064	136,708	143,151
Mortgage servicing portfolio	1,362,962	1,341,439	1,323,804	1,304,097	1,299,698
Mortgage servicing rights	12,034	11,194	10,678	10,490	7,759
Mortgage servicing revenue
Loan servicing fees	850	850	830	859	857
OMSR amortization	(807)	(943)	(948)	(1,187)	(1,283)
Net administrative fees	43	(93)	(118)	(328)	(426)
OMSR valuation adjustment	581	248	(99)	2,706	(611)
Net loan servicing fees	624	155	(217)	2,378	(1,037)
Gain on sale of mortgages	3,194	3,947	4,255	5,859	7,197
Mortgage banking revenue, net	$         3,818	$         4,102	$         4,038	$         8,237	$         6,160

Noninterest Income and Noninterest Expense

SB Financial's noninterest income for the quarter was down 26 percent from the prior year.  The gain on sale mortgage loan yields were down 214 basis points from the prior year with the total dollars of sales down $32.7 million.  Wealth management revenue was up over 14 percent from the prior year due to higher retention levels and growth in the equity sector.  SB Financial's Title Agency provided revenue in the quarter of $528,000.  For the twelve months, noninterest income of $30.7 million was up $600,000 or 2.0 percent year over year.  Fee income as a percent of total revenue finished 2021 at 44.8 percent.

For the fourthquarter of 2021, noninterest expense of $11.6 million was up 8.3 percent from the prior year.  For the twelve months of 2021, noninterest expense of $44.8 million was up $1.7 million or 4.0 percent compared to the prior year.  This increase, in part, reflects our ongoing investment in technology and enhanced customer solutions.

 

Noninterest Income / Noninterest Expense
($ in thousands, except ratios)	Dec. 2021	Sep. 2021	Jun. 2021	Mar. 2021	Dec. 2020
Noninterest Income (NII)	$         6,589	$         6,649	$         6,537	$       10,922	$         8,902
NII / Total Revenue	42.1%	39.9%	41.7%	53.2%	49.0%
NII / Average Assets	2.0%	2.0%	2.0%	3.4%	2.9%
Total Revenue Growth	-13.7%	-15.3%	-10.3%	91.9%	24.7%
Noninterest Expense (NIE)	$       11,567	$       11,256	$       11,076	$       10,909	$       10,684
Efficiency Ratio	73.7%	67.4%	70.5%	53.0%	58.8%
NIE / Average Assets	3.5%	3.4%	3.3%	3.4%	3.5%
Net Noninterest Expense/Avg. Assets	-1.5%	-1.4%	-1.4%	0.0%	-0.6%
Total Expense Growth	8.3%	-0.7%	-5.0%	16.0%	5.0%
Operating Leverage	-1.7	-21.5	-2.1	5.7	4.9

 

Balance Sheet

Total assets as of December 31, 2021, were $1.33 billion, up $73.0 million, or 5.8 percent, year over year due to higher liquidity levels.  Total shareholders' equity as of December 31, 2021, was $144.9 million, up 1.4 percent year over year, and represented 10.9 percent of total assets. 

Total loans held for investment were $822.7 million at December 31, 2021, down $50.0 million, or 5.7 percent, from December 31, 2020.  Excluding PPP activity from both years, loan balances were up $18.5 million, or 2.3 percent.

The investment portfolio of $268.6 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 20.2 percent of assets at December 31, 2021, and was up 87.4 percent year over year.  Deposit balances of $1.11 billion at December 31, 2021, increased by $64.0 million, or 6.1 percent, since December 31, 2020.  Growth from the prior year included $14.1 million in checking and $49.9 million in savings and time deposit balances.

Mr. Klein continued, "Our lenders are pleased to get the PPP process in the rear view mirror and get back out to connect with clients and drive organic growth.  Pipelines are generally strong and we expect to add lenders in key urban markets to drive growth in 2022.  Subsequent to year end, we have an agreement in principle to sell the largest OREO property in our portfolio, which will reduce NPA's to nearly 35 basis points when closed.  Our coverage of non-performing loans ended the year at 315 percent, nearly double the coverage from the prior year."

 

Loan Balances
($ in thousands, except ratios)	Dec. 2021	Sep. 2021	Jun. 2021	Mar. 2021	Dec. 2020	Annual Growth
Commercial	$       122,373	$       138,085	$       149,998	$       179,157	$       203,256	$        (80,883)
% of Total	14.9%	16.3%	17.6%	21.1%	23.3%	-39.8%
Commercial RE	381,387	387,858	389,287	385,403	370,984	10,403
% of Total	46.4%	45.8%	45.8%	45.4%	42.5%	2.8%
Agriculture	57,473	57,374	50,895	48,405	55,251	2,222
% of Total	7.0%	6.8%	6.0%	5.7%	6.3%	4.0%
Residential RE	206,324	207,571	203,294	176,998	182,076	24,248
% of Total	25.1%	24.5%	23.9%	20.9%	20.9%	13.3%
Consumer & Other	55,157	55,660	57,039	58,213	61,156	(5,999)
% of Total	6.7%	6.6%	6.7%	6.9%	7.0%	-9.8%
Total Loans	$       822,714	$       846,548	$       850,513	$       848,176	$       872,723	$        (50,009)
Total Growth Percentage						-5.7%
Deposit Balances
($ in thousands, except ratios)	Dec. 2021	Sep. 2021	Jun. 2021	Mar. 2021	Dec. 2020	Annual Growth
Non-Int DDA	$       247,044	$       258,857	$       240,572	$       273,026	$       251,649	$         (4,605)
% of Total	22.2%	23.3%	22.0%	24.4%	24.0%	-1.8%
Interest DDA	195,464	189,130	187,023	191,593	176,785	18,679
% of Total	17.6%	17.0%	17.1%	17.1%	16.9%	10.6%
Savings	237,571	246,414	235,231	218,260	174,864	62,707
% of Total	21.3%	22.2%	21.6%	19.5%	16.7%	35.9%
Money Market	276,462	258,741	255,512	249,088	216,164	60,298
% of Total	24.8%	23.3%	23.4%	22.2%	20.6%	27.9%
Time Deposits	156,504	158,518	172,696	188,229	229,549	(73,045)
% of Total	14.1%	14.3%	15.8%	16.8%	21.9%	-31.8%
Total Deposits	$    1,113,045	$    1,111,660	$    1,091,034	$    1,120,196	$    1,049,011	$         64,034
Total Growth Percentage						6.1%

Asset Quality

SB Financial reported nonperforming assets of $6.5 million as of December 31, 2021, which was down $778,000 or 10.7 percent year over year.  The Company recorded $7,000 in net recoveries in the quarter, and total net recoveries of $181,000 for the year.  Our loan loss reserve of $13.8 million is up $1.2 million or 9.8 percent year over year and represents 1.68 percent of total loans.

 

Nonperforming Assets						Annual Change
($ in thousands, except ratios)	Dec. 2021	Sep. 2021	Jun. 2021	Mar. 2021	Dec. 2020
Commercial & Agriculture	$             143	$             144	$             375	$             615	$             902	$            (759)
% of Total Com./Ag. loans	0.08%	0.07%	0.19%	0.27%	0.35%	-84.1%
Commercial RE	554	566	1,026	2,402	2,412	(1,858)
% of Total CRE loans	0.15%	0.15%	0.26%	0.62%	0.65%	-77.0%
Residential RE	2,433	2,056	1,751	2,138	2,704	(271)
% of Total Res. RE loans	1.18%	0.99%	0.86%	1.21%	1.49%	-10.0%
Consumer & Other	522	422	463	480	408	114
% of Total Con./Oth. loans	0.95%	0.76%	0.81%	0.82%	0.67%	27.9%
Total Nonaccruing Loans	3,652	3,188	3,615	5,635	6,426	(2,774)
% of Total loans	0.44%	0.38%	0.43%	0.66%	0.74%	-43.2%
Accruing Restructured Loans	725	805	758	794	810	(85)
Total Change (%)						-10.5%
Total Nonaccruing & Restructured Loans	4,377	3,993	4,373	6,429	7,236	(2,859)
% of Total loans	0.53%	0.47%	0.51%	0.76%	0.83%	-39.5%
Foreclosed Assets	2,104	1,601	1,603	43	23	2,081
Total Change (%)						9047.8%
Total Nonperforming Assets	$          6,481	$          5,594	$          5,976	$          6,472	$          7,259	$            (778)
% of Total assets	0.49%	0.42%	0.46%	0.49%	0.58%	-10.7%

Webcast and Conference Call

The Company will hold a related conference call and webcast on January 28, 2022, 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".

In May 2021, SB Financial was named to the Keefe, Bruyette & Woods, Inc. "Bank Honor Roll" of superior performers as revealed in EPS increases for 10 consecutive years.  The honor roll review determined that just 16 banks in the U.S., including SB Financial, or 4 percent of the nearly 400 banks screened, qualified for inclusion.

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)
					December		September		June		March		December
			($ in thousands)		2021		2021		2021		2021		2020
ASSETS
	Cash and due from banks				$     149,511		$     138,015		$     154,993		$     206,036		$     140,690
	Interest bearing time deposits				2,643		2,651		2,906		3,562		5,823
	Available-for-sale securities				263,259		248,815		211,756		177,918		149,406
	Loans held for sale				7,472		10,335		8,731		8,689		7,234
	Loans, net of unearned income				822,714		846,548		850,513		848,176		872,723
	Allowance for loan losses				(13,805)		(13,812)		(13,306)		(13,326)		(12,574)
	Premises and equipment, net				23,212		23,874		24,343		23,233		23,557
	Federal Reserve and FHLB Stock, at cost				5,303		5,303		5,303		5,303		5,303
	Foreclosed assets held for sale, net				2,104		1,601		1,603		43		23
	Interest receivable				2,920		2,954		3,000		3,371		3,799
	Goodwill				23,191		22,091		22,091		22,091		22,091
	Cash value of life insurance				17,867		17,795		17,721		17,651		17,530
	Mortgage servicing rights				12,034		11,194		10,678		10,490		7,759
	Other assets				12,430		12,361		12,175		12,630		14,475
			Total assets		$  1,330,855		$  1,329,725		$  1,312,507		$  1,325,867		$  1,257,839
LIABILITIES AND SHAREHOLDERS' EQUITY
	Deposits
		Non interest bearing demand			$     247,044		$     258,857		$     240,572		$     273,026		$     251,649
		Interest bearing demand			195,464		189,130		187,023		191,593		176,785
		Savings			237,571		246,414		235,231		218,260		174,864
		Money market			276,462		258,741		255,512		249,088		216,164
		Time deposits			156,504		158,518		172,696		188,229		229,549
			Total deposits		1,113,045		1,111,660		1,091,034		1,120,196		1,049,011
	Short-term borrowings				15,320		20,771		25,096		24,321		20,189
	Federal Home Loan Bank advances				5,500		5,500		5,500		8,000		8,000
	Trust preferred securities				10,310		10,310		10,310		10,310		10,310
	Subordinated debt net of issuance costs				19,546		19,534		19,522		-		-
	Interest payable				299		576		417		489		616
	Other liabilities				21,906		17,082		16,611		18,585		26,790
			Total liabilities		1,185,926		1,185,433		1,168,490		1,181,901		1,114,916
	Shareholders' Equity
		Common stock			54,463		54,463		54,463		54,463		54,463
		Additional paid-in capital			14,944		14,875		14,906		14,755		14,845
		Retained earnings			99,716		97,183		93,851		90,883		84,578
		Accumulated other comprehensive income (loss)			(1,845)		(699)		499		(457)		2,210
		Treasury stock			(22,349)		(21,530)		(19,702)		(15,678)		(13,173)
			Total shareholders' equity		144,929		144,292		144,017		143,966		142,923
			Total liabilities and shareholders' equity		$  1,330,855		$  1,329,725		$  1,312,507		$  1,325,867		$  1,257,839

 

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				2021		2021		2021		2021		2020		2021		2020
	Loans
	Taxable			$        8,889		$        9,948		$        9,196		$        9,926		$        9,816		$     37,959		$     39,735
	Tax exempt			59		52		47		48		54		206		239
	Securities
	Taxable			969		939		835		643		632		3,386		2,328
	Tax exempt			86		94		85		88		87		353		333
		Total interest income		10,003		11,033		10,163		10,705		10,589		41,904		42,635
Interest expense
	Deposits			640		709		818		962		1,218		3,129		6,070
	Repurchase agreements & other			7		12		12		11		10		42		70
	Federal Home Loan Bank advances			41		40		51		56		58		188		309
	Trust preferred securities			49		49		50		51		52		199		256
	Subordinated debt			188		199		75		-		-		462		-
		Total interest expense		925		1,009		1,006		1,080		1,338		4,020		6,705
Net interest income				9,078		10,024		9,157		9,625		9,251		37,884		35,930
	Provision for loan losses			-		300		-		750		800		1,050		4,500
Net interest income after provision
for loan losses				9,078		9,724		9,157		8,875		8,451		36,834		31,430
Noninterest income
	Wealth management fees			988		959		955		912		863		3,814		3,245
	Customer service fees			827		812		820		758		728		3,217		2,807
	Gain on sale of mtg. loans & OMSR			3,194		3,947		4,255		5,859		7,197		17,255		25,350
	Mortgage loan servicing fees, net			624		155		(217)		2,378		(1,037)		2,940		(5,138)
	Gain on sale of non-mortgage loans			44		52		45		17		123		158		453
	Title insurance revenue			528		508		532		521		522		2,089		1,913
	Gain (loss) on sale of assets			1		1		2		(2)		181		2		3
	Other			383		215		145		479		325		1,222		1,463
		Total noninterest income		6,589		6,649		6,537		10,922		8,902		30,697		30,096
Noninterest expense
	Salaries and employee benefits			6,648		6,689		6,881		6,620		6,556		26,838		25,397
	Net occupancy expense			846		714		748		740		782		3,048		2,891
	Equipment expense			899		872		778		732		818		3,281		3,186
	Data processing fees			721		671		653		534		633		2,579		3,055
	Professional fees			872		817		574		764		631		3,027		3,307
	Marketing expense			228		201		220		135		172		784		658
	Telephone and communication expense			148		140		139		154		156		581		535
	Postage and delivery expense			106		100		97		111		108		414		415
	State, local and other taxes			288		286		278		323		299		1,175		1,146
	Employee expense			163		186		161		153		103		663		535
	Other expenses			648		580		547		643		426		2,418		1,962
		Total noninterest expense		11,567		11,256		11,076		10,909		10,684		44,808		43,087
Income before income tax expense				4,100		5,117		4,618		8,888		6,669		22,723		18,439
	Income tax expense			768		1,014		857		1,807		1,311		4,446		3,495
Net income				$        3,332		$        4,103		$        3,761		$        7,081		$        5,358		$     18,277		$     14,944
Common share data:
	Basic earnings per common share			$          0.49		$          0.59		$          0.53		$          0.97		$          0.71		$          2.58		$          1.96
	Diluted earnings per common share			$          0.49		$          0.58		$          0.52		$          0.97		$          0.71		$          2.56		$          1.96
Average shares outstanding (in thousands):
	Basic:			6,906		6,966		7,148		7,317		7,470		7,083		7,614
	Diluted:			6,970		7,017		7,200		7,335		7,487		7,130		7,635

 

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		2021		2021		2021		2021		2020		2021		2020
Net interest income		$        9,078		$     10,024		$        9,157		$        9,625		$        9,251		$       37,884		$       35,930
Tax-equivalent adjustment		39		39		35		36		37		149		152
Tax-equivalent net interest income		9,117		10,063		9,192		9,661		9,288		38,033		36,082
Provision for loan loss		-		300		-		750		800		1,050		4,500
Noninterest income		6,589		6,649		6,537		10,922		8,902		30,697		30,096
Total operating revenue		15,667		16,673		15,694		20,547		18,153		68,581		66,026
Noninterest expense		11,567		11,256		11,076		10,909		10,684		44,808		43,087
Pre-tax pre-provision income		4,100		5,417		4,618		9,638		7,469		23,773		22,939
Pretax income		4,100		5,117		4,618		8,888		6,669		22,723		18,439
Net income		3,332		4,103		3,761		7,081		5,358		18,277		14,944
PER SHARE INFORMATION:
Basic earnings per share (EPS)		0.49		0.59		0.53		0.97		0.71		2.58		1.96
Diluted earnings per share		0.49		0.58		0.52		0.97		0.71		2.56		1.96
Common dividends		0.115		0.110		0.110		0.105		0.105		0.440		0.400
Book value per common share		21.05		20.83		20.50		19.88		19.39		21.05		19.39
Tangible book value per common share (TBV)		17.60		17.55		17.27		16.74		16.30		17.60		16.30
Market price per common share		19.67		18.18		18.50		18.26		18.28		19.67		18.28
Market price to TBV		111.8%		103.6%		107.2%		109.1%		112.1%		111.8%		112.1%
Market price to trailing 12 month EPS		7.7		6.7		6.5		6.4		9.3		7.7		9.3
PERFORMANCE RATIOS:
Return on average assets (ROAA)		0.99%		1.23%		1.13%		2.21%		1.73%		1.38%		1.29%
Pre-tax pre-provision ROAA		1.22%		1.63%		1.39%		3.01%		2.41%		1.91%		2.14%
Return on average equity		9.21%		11.35%		10.42%		19.78%		15.05%		12.67%		10.74%
Return on average tangible equity		10.92%		13.47%		12.37%		23.52%		17.91%		15.04%		12.59%
Efficiency ratio		73.72%		67.40%		70.46%		53.01%		58.76%		65.23%		65.25%
Earning asset yield		3.17%		3.25%		3.56%		3.66%		3.66%		3.37%		3.98%
Cost of interest bearing liabilities		0.40%		0.44%		0.44%		0.50%		0.64%		0.45%		0.85%
Net interest margin		2.87%		3.20%		2.93%		3.20%		3.20%		3.05%		3.35%
Tax equivalent effect		0.02%		0.01%		0.01%		0.01%		0.01%		0.01%		0.01%
Net interest margin, tax equivalent		2.89%		3.21%		2.94%		3.21%		3.21%		3.06%		3.36%
Non interest income/Average assets		1.96%		1.99%		1.97%		3.41%		2.87%		2.32%		2.59%
Non interest expense/Average assets		3.45%		3.38%		3.33%		3.40%		3.45%		3.39%		3.71%
Net noninterest expense/Average assets		-1.48%		-1.38%		-1.37%		0.00%		-0.58%		-1.07%		-1.12%
ASSET QUALITY RATIOS:
Gross charge-offs		34		24		26		52		57		136		743
Recoveries		27		230		6		54		39		317		62
Net charge-offs		7		(206)		20		(2)		18		(181)		681
Nonaccruing loans/Total loans		0.44%		0.38%		0.43%		0.66%		0.74%		0.44%		0.74%
Nonperforming loans/Total loans		0.53%		0.47%		0.51%		0.76%		0.83%		0.53%		0.83%
Nonperforming assets/Loans & OREO		0.79%		0.66%		0.70%		0.76%		0.83%		0.79%		0.83%
Nonperforming assets/Total assets		0.49%		0.42%		0.46%		0.49%		0.58%		0.49%		0.58%
Allowance for loan loss/Nonperforming loans		315.40%		345.91%		304.28%		207.28%		173.77%		315.40%		173.77%
Allowance for loan loss/Total loans		1.68%		1.63%		1.56%		1.57%		1.44%		1.68%		1.44%
Net loan charge-offs/Average loans (ann.)		0.00%		(0.10%)		0.01%		(0.00%)		0.01%		(0.02%)		0.08%
Loan loss provision/Net charge-offs		0.00%		(145.63%)		0.00%		(37500.00%)		4444.44%		(580.11%)		660.79%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		73.92%		76.15%		77.95%		75.72%		83.19%		73.92%		83.19%
Equity/ Assets		10.89%		10.85%		10.97%		10.86%		11.36%		10.89%		11.36%
Tangible equity/Tangible assets		9.27%		9.30%		9.41%		9.30%		9.73%		9.27%		9.73%
Common equity tier 1 ratio (Bank)		13.94%		13.23%		13.11%		13.08%		12.91%		13.94%		12.91%
END OF PERIOD BALANCES
Total assets		1,330,855		1,329,725		1,312,507		1,325,867		1,257,839		1,330,855		1,257,839
Total loans		822,714		846,548		850,513		848,176		872,723		822,714		872,723
Deposits		1,113,045		1,111,660		1,091,034		1,120,196		1,049,011		1,113,045		1,049,011
Stockholders equity		144,929		144,292		144,017		143,966		142,923		144,929		142,923
Goodwill and intangibles		23,774		22,692		22,710		22,728		22,745		23,774		22,745
Tangible equity		121,155		121,600		121,307		121,238		120,178		121,155		120,178
Mortgage servicing portfolio		1,362,962		1,341,439		1,323,804		1,304,097		1,299,698		1,362,962		1,299,698
Wealth/Brokerage assets under care		618,279		588,319		600,904		576,503		558,409		618,279		558,409
Total assets under care		3,312,096		3,259,483		3,237,215		3,206,467		3,115,946		3,312,096		3,115,946
Full-time equivalent employees		269		264		256		246		244		269		244
Period end common shares outstanding		6,884		6,927		7,026		7,242		7,372		6,884		7,372
Market capitalization (all)		135,415		125,935		129,984		132,239		134,760		135,415		134,760
AVERAGE BALANCES
Total assets		1,342,202		1,333,369		1,329,348		1,281,635		1,238,790		1,322,253		1,161,396
Total earning assets		1,263,431		1,253,722		1,251,213		1,203,284		1,156,718		1,243,093		1,072,443
Total loans		845,078		856,486		853,794		862,898		893,244		854,521		880,338
Deposits		1,123,843		1,109,491		1,115,186		1,073,641		1,031,649		1,106,122		951,226
Stockholders equity		144,749		144,565		144,315		143,167		142,418		144,223		139,197
Goodwill and intangibles		22,701		22,701		22,718		22,736		22,754		22,718		20,491
Tangible equity		122,048		121,864		121,597		120,431		119,664		121,505		118,706
Average basic shares outstanding		6,906		6,966		7,148		7,317		7,470		7,083		7,614
Average diluted shares outstanding		6,970		7,017		7,200		7,335		7,487		7,130		7,635

 

SB FINANCIAL GROUP, INC.
	Rate Volume Analysis - (Unaudited)
	At and for the Three and Twelve Months Ended December 31, 2021 and 2020
	($ in thousands)		Three Months Ended Dec. 31, 2021					Three Months Ended Dec. 31, 2020
			Average		Average			Average		Average
Assets			Balance	Interest	Rate			Balance	Interest	Rate
	Taxable securities/cash		$           410,489	$                 969	0.94%			$           256,068	$                 632	0.99%
	Nontaxable securities		7,864	86	4.37%			7,406	87	4.70%
	Loans, net		845,078	8,948	4.24%			893,244	9,870	4.42%
	Total earning assets		1,263,431	10,003	3.17%			1,156,718	10,589	3.66%
	Cash and due from banks		6,489					7,463
	Allowance for loan losses		(13,795)					(12,045)
	Premises and equipment		25,505					23,841
	Other assets		60,572					62,813
	Total assets		$        1,342,202					$        1,238,790
Liabilities
	Savings, MMDA and interest bearing demand		$           704,534	$                 400	0.23%			$           552,018	$                 841	0.61%
	Time deposits		157,888	240	0.61%			238,284	377	0.63%
	Repurchase agreements & other		18,910	7	0.15%			21,610	10	0.19%
	Advances from Federal Home Loan Bank		5,500	41	2.98%			8,000	58	2.90%
	Trust preferred securities		10,310	49	1.90%			10,310	52	2.02%
	Subordinated debt		19,539	188	3.85%			-	-	0.00%
	Total interest bearing liabilities		916,681	925	0.40%			830,222	1,338	0.64%
	Non interest bearing demand		261,421	-				241,347	-
	Total funding		1,178,102		0.31%			1,071,569		0.50%
	Other liabilities		19,351					24,803
	Total liabilities		1,197,453					1,096,372
	Equity		144,749					142,418
	Total liabilities and equity		$        1,342,202					$        1,238,790
	Net interest income			$              9,078					$              9,251
	Net interest income as a percent of average interest-earning assets - GAAP measure				2.87%					3.20%
	Net interest income as a percent of average interest-earning assets - non GAAP				2.89%					3.21%
	- Computed on a fully tax equivalent (FTE) basis
			Twelve Months Ended Dec. 31, 2021					Twelve Months Ended Dec. 31, 2020
			Average		Average			Average		Average
Assets			Balance	Interest	Rate			Balance	Interest	Rate
	Taxable securities/cash		$           380,770	$              3,386	0.89%			$           185,480	$              2,328	1.26%
	Nontaxable securities		7,802	353	4.52%			6,625	333	5.03%
	Loans, net		854,521	38,165	4.47%			880,338	39,974	4.54%
	Total earning assets		1,243,093	41,904	3.37%			1,072,443	42,635	3.98%
	Cash and due from banks		7,290					14,553
	Allowance for loan losses		(13,422)					(10,165)
	Premises and equipment		24,710					23,776
	Other assets		60,582					60,789
	Total assets		$        1,322,253					$        1,161,396
Liabilities
	Savings, MMDA and interest bearing demand		$           672,296	$              1,813	0.27%			$           492,267	$              3,152	0.64%
	Time deposits		177,918	1,316	0.74%			247,955	2,918	1.18%
	Repurchase agreements & Other		22,821	42	0.18%			22,832	70	0.31%
	Advances from Federal Home Loan Bank		6,507	188	2.89%			14,186	309	2.18%
	Trust preferred securities		10,310	199	1.93%			10,310	256	2.48%
	Subordinated debt		12,057	462	3.83%			-	-	0.00%
	Total interest bearing liabilities		901,909	4,020	0.45%			787,550	6,705	0.85%
	Non interest bearing demand		255,908		0.35%			211,004		0.67%
	Total funding		1,157,817					998,554
	Other liabilities		20,213					23,645
	Total liabilities		1,178,030					1,022,199
	Equity		144,223					139,197
	Total liabilities and equity		$        1,322,253					$        1,161,396
	Net interest income			$            37,884					$            35,930
	Net interest income as a percent of average interest-earning assets - GAAP measure				3.05%					3.35%
	Net interest income as a percent of average interest-earning assets - non GAAP				3.06%					3.36%
	- 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, 2021		Dec. 31, 2020		Dec. 31, 2021		Dec. 31, 2020
	Total Operating Revenue		$         15,667		$         18,153		$         68,581		$         66,026
	Adjustment to (deduct)/add OMSR recapture/impairment*		(581)		611		(3,436)		3,585
	Adjusted Total Operating Revenue		15,086		18,764		65,145		69,611
	Total Operating Expense		$         11,567		$         10,684		$         44,808		$         43,087
	Adjustment for merger expenses**		-		-		-		(1,241)
	Adjusted Total Operating Expense		11,567		10,684		44,808		41,846
	Income before Income Taxes		4,100		6,669		22,723		18,439
	Adjustment for OMSR & merger expenses		(581)		611		(3,436)		4,826
	Adjusted Income before Income Taxes		3,519		7,280		19,287		23,265
	Provision for Income Taxes		768		1,311		4,446		3,495
	Adjustment for OMSR & merger expenses***		(122)		128		(722)		1,013
	Adjusted Provision for Income Taxes		646		1,439		3,724		4,509
	Net Income		3,332		5,358		18,277		14,944
	Adjustment for OMSR & merger expenses		(459)		483		(2,714)		3,813
	Adjusted Net Income		2,873		5,841		15,563		18,757
	Diluted Earnings per Share		0.49		0.71		2.56		1.96
	Adjustment for OMSR & merger expenses		(0.07)		0.06		(0.38)		0.48
	Adjusted Diluted Earnings per Share		$            0.42		$            0.77		$            2.18		$            2.44
	Return on Average Assets		0.99%		1.73%		1.38%		1.29%
	Adjustment for OMSR & merger expenses		-0.14%		0.16%		-0.21%		0.33%
	Adjusted Return on Average Assets		0.86%		1.89%		1.18%		1.62%
	*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

 

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SOURCE SB Financial Group, Inc.

FAQ

What were SB Financial Group's fourth-quarter earnings results for 2021?

SB Financial Group reported a net income of $3.3 million and diluted EPS of $0.49 for Q4 2021.

How did SBFG perform in the full year 2021?

In the full year 2021, SB Financial achieved a record net income of $18.3 million, an increase of 30.6% from the previous year.

What was the mortgage origination volume for SB Financial in Q4 2021?

SB Financial's mortgage origination volume in Q4 2021 was $126.7 million, a decrease of 25% year-over-year.

What is the significance of SBFG's deposit growth in 2021?

SBFG's deposits increased by $64.0 million or 6.1%, reaching $1.11 billion, reflecting strong customer confidence.

What challenges did SB Financial face in Q4 2021?

SB Financial faced challenges with a 37.8% decline in net income and a 31% drop in EPS compared to the same quarter the previous year.