SB Financial Group Announces Second Quarter 2021 Results

Rhea-AI Summary

SB Financial Group reported a net income of $3.8 million for Q2 2021, reflecting a 10.6% increase in diluted EPS at $0.52. Adjusted net income was $3.84 million excluding OMSR impairment. However, mortgage origination volume dropped by 26.3% to $164.9 million. For the first half of the year, net income surged 150% to $10.8 million, with a diluted EPS increase of 166.1%. Total deposits rose by 10.1% to $1.09 billion, while nonperforming assets decreased by 22.6%.

Positive

• Net income for Q2 2021 increased to $3.8 million, a 10.6% rise in diluted EPS.
• Net income for the first six months grew to $10.8 million, a 150% increase.
• Total deposits grew by 10.1% to $1.09 billion.
• Nonperforming assets decreased by 22.6%, indicating improved asset quality.

Negative

• Mortgage origination volume decreased by 26.3% to $164.9 million.
• Total operating revenue fell by 10.3% compared to Q2 2020.
• Noninterest income declined by 24% year-over-year.

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

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

• Net income of $3.8 million; diluted earnings per share ("EPS") of $0.52 or a 10.6 percent increase
• Adjusted net income, excluding the impact of the Originated Mortgage Servicing Rights ("OMSR") impairment of $0.1 million was $3.84 million, with EPS of $0.53
• Mortgage origination volume of $164.9 million, reflects a decrease of $58.8 million, or 26.3 percent

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

• Net income of $10.8 million and diluted EPS of $1.49, compared to $4.3 million, or $0.56 per share or a 166.1 percent increase
• Adjusted net income, excluding the impact of OMSR activity and merger costs of $8.8 million, up $0.9 million or 10.9 percent
• Adjusted diluted EPS of $1.21, up $0.18 per share or 17.5 percent

Second quarter 2021 trailing twelve-month highlights include:

• Loans excluding Paycheck Protection Program ("PPP") loan balances of $34.8 million, decreased $3.0 million, or 0.4 percent from the prior year
• Deposits grew by $100.4 million, or 10.1 percent to $1.09 billion at quarter end
• Mortgage origination volume of $689.9 million; servicing portfolio of $1.32 billion, which is up $1.2 million, or 4.9 percent

 

Highlights	Three Months Ended					Six Months Ended
($ in thousands, except per share & ratios)	Jun. 2021	Jun. 2020	% Change			Jun. 2021	Jun. 2020	% Change
Operating revenue	$      15,694	$      17,487	-10.3%			$      36,241	$      28,196	28.5%
Interest income	10,163	10,595	-4.1%			20,868	21,239	-1.7%
Interest expense	1,006	1,723	-41.6%			2,086	3,819	-45.4%
Net interest income	9,157	8,872	3.2%			18,782	17,420	7.8%
Provision for loan losses	-	1,300	-100.0%			750	1,900	-60.5%
Noninterest income	6,537	8,615	-24.1%			17,459	10,776	62.0%
Noninterest expense	11,076	11,662	-5.0%			21,985	21,068	4.4%
Net income	3,761	3,655	2.9%			10,842	4,336	150.0%
Earnings per diluted share	0.52	0.47	10.6%			1.49	0.56	166.1%
Return on average assets	1.13%	1.25%	-9.6%			1.66%	0.78%	112.8%
Return on average equity	10.42%	10.31%	1.1%			15.09%	6.22%	142.6%
Non-GAAP Measures
Adjusted net income	$        3,840	$        5,495	-30.1%			$        8,783	$        7,923	10.9%
Adjusted diluted EPS	0.53	0.71	-25.4%			1.21	1.03	17.5%
Adjusted return on average assets	1.16%	1.88%	-38.3%			1.50%	1.42%	6.3%
Adjusted pre-tax, pre-provision income	4,717	8,154	-42.1%			10,900	11,669	-6.6%

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

RESULTS OF OPERATIONS

Consolidated Revenue

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

• Net interest income was up from the year-ago quarter by 3.2 percent, but down 4.9 percent from the linked quarter. 
• Net interest margin on a fully taxable equivalent basis (FTE) was down from both year-ago and linked quarters by 38 and 27 basis points, respectively, as cash balances continued to be higher than normal and PPP forgiveness slowed.  
• Noninterest income was down 24 and 40 percent from the year ago and linked quarters, respectively, due to lower mortgage volume and no OMSR recapture.       

Mortgage Loan Business

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

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

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

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

Noninterest Income and Noninterest Expense

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

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

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

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

Balance Sheet

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

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

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

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

Loan Balances
($ in thousands, except ratios)	Jun. 2021	Mar. 2021	Dec. 2020	Sep. 2020	Jun. 2020	Annual Growth
Commercial	$       149,998	$       179,157	$       203,256	$       216,667	$       222,108	$        (72,110)
% of Total	17.6%	21.1%	23.3%	24.5%	24.6%	-32.5%
Commercial RE	389,287	385,403	370,984	371,947	375,450	13,837
% of Total	45.8%	45.4%	42.5%	42.0%	41.6%	3.7%
Agriculture	50,895	48,405	55,251	57,420	58,817	(7,922)
% of Total	6.0%	5.7%	6.3%	6.5%	6.5%	-13.5%
Residential RE	203,294	176,998	182,076	178,393	184,684	18,610
% of Total	23.9%	20.9%	20.9%	20.1%	20.6%	10.1%
Consumer & Other	57,039	58,213	61,156	61,423	60,489	(3,450)
% of Total	6.7%	6.9%	7.0%	6.9%	6.7%	-5.7%
Total Loans	$       850,513	$       848,176	$       872,723	$       885,850	$       901,548	$        (51,035)
Total Growth Percentage						-5.7%
Deposit Balances
($ in thousands, except ratios)	Jun. 2021	Mar. 2021	Dec. 2020	Sep. 2020	Jun. 2020	Annual Growth
Non-Int DDA	$       240,572	$       273,026	$       251,649	$       225,003	$       229,042	$         11,530
% of Total	22.0%	24.4%	24.0%	22.2%	23.1%	5.0%
Interest DDA	187,023	191,593	176,785	164,248	154,143	32,880
% of Total	17.1%	17.1%	16.9%	16.2%	15.6%	21.3%
Savings	235,231	218,260	174,864	169,474	161,182	74,049
% of Total	21.6%	19.5%	16.7%	16.7%	16.2%	45.9%
Money Market	255,512	249,088	216,164	204,862	189,380	66,132
% of Total	23.4%	22.2%	20.6%	20.2%	19.1%	34.9%
Time Deposits	172,696	188,229	229,549	250,428	256,840	(84,144)
% of Total	15.8%	16.8%	21.9%	24.7%	25.9%	-32.8%
Total Deposits	$    1,091,034	$    1,120,196	$    1,049,011	$    1,014,015	$       990,587	$       100,447
Total Growth Percentage						10.1%

Asset Quality

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

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

Webcast and Conference Call

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

About SB Financial Group

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

Forward-Looking Statements

Certain statements within this document, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties and actual results may differ materially from those predicted by the forward-looking statements. These risks and uncertainties include, but are not limited to, the duration and scope of the COVID-19 outbreak in the United States and the market areas in which SB Financial and its subsidiaries operate, including the impact to the state and local economies of prolonged shelter in place orders and the pandemic generally, risks and uncertainties inherent in the national and regional banking industry, changes in economic conditions in the market areas in which SB Financial and its subsidiaries operate, changes in policies by regulatory agencies, changes in accounting standards and policies, changes in tax laws, fluctuations in interest rates, demand for loans in the market areas in SB Financial and its subsidiaries operate, increases in FDIC insurance premiums, changes in the competitive environment, losses of significant customers, geopolitical events, the loss of key personnel and other risks identified in SB Financial's Annual Report on Form 10-K and documents subsequently filed by SB Financial with the Securities and Exchange Commission.  Forward-looking statements speak only as of the date on which they are made, and SB Financial undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, except as required by law. All subsequent written and oral forward-looking statements attributable to SB Financial or any person acting on its behalf are qualified by these cautionary statements.

Non-GAAP Financial Measures

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

Investor Contact Information:
Mark A. Klein
Chairman, President and
Chief Executive Officer
Mark.Klein@YourStateBank.com

Anthony V. Cosentino
Executive Vice President and
Chief Financial Officer
Tony.Cosentino@YourStateBank.com

 

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

 

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

 

SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
($ in thousands, except per share & ratios)		At and for the Three Months Ended										Six Months Ended
		June		March		December		September		June		June		June
SUMMARY OF OPERATIONS		2021		2021		2020		2020		2020		2021		2020
Net interest income		$        9,157		$        9,625		$        9,251		$        9,259		$        8,872		$       18,782		$       17,420
Tax-equivalent adjustment		35		36		37		36		37		71		79
Tax-equivalent net interest income		9,192		9,661		9,288		9,295		8,909		18,853		17,499
Provision for loan loss		-		750		800		1,800		1,300		750		1,900
Noninterest income		6,537		10,922		8,902		10,418		8,615		17,459		10,776
Total operating revenue		15,694		20,547		18,153		19,677		17,487		36,241		28,196
Noninterest expense		11,076		10,909		10,684		11,335		11,662		21,985		21,068
Pre-tax pre-provision income		4,618		9,638		7,469		8,342		5,825		14,256		7,128
Pretax income		4,618		8,888		6,669		6,542		4,525		13,506		5,228
Net income		3,761		7,081		5,358		5,250		3,655		10,842		4,336
PER SHARE INFORMATION:
Basic earnings per share (EPS)		0.53		0.97		0.71		0.69		0.47		1.50		0.56
Diluted earnings per share		0.52		0.97		0.71		0.69		0.47		1.49		0.56
Common dividends		0.110		0.105		0.105		0.100		0.100		0.215		0.195
Book value per common share		20.50		19.88		19.39		18.73		17.98		20.50		17.98
Tangible book value per common share (TBV)		17.26		16.74		16.30		15.72		15.01		17.26		15.01
Market price per common share		18.50		18.26		18.28		13.49		16.62		18.50		16.62
Market price to TBV		107.2%		109.1%		112.1%		85.8%		110.8%		107.2%		110.8%
Market price to trailing 12 month EPS		6.4		6.4		9.3		8.0		11.4		6.4		11.4
PERFORMANCE RATIOS:
Return on average assets (ROAA)		1.13%		2.21%		1.73%		1.73%		1.25%		1.66%		0.78%
Pre-tax pre-provision ROAA		1.39%		3.01%		2.41%		2.74%		1.99%		2.32%		1.28%
Return on average equity		10.42%		19.78%		15.05%		15.01%		10.31%		15.09%		6.22%
Return on average tangible equity		12.37%		23.52%		17.91%		17.93%		11.91%		17.92%		7.17%
Efficiency ratio		70.46%		53.01%		58.76%		57.48%		66.68%		60.56%		74.70%
Earning asset yield		3.25%		3.56%		3.66%		3.96%		3.95%		3.40%		4.13%
Cost of interest bearing liabilities		0.44%		0.50%		0.64%		0.75%		0.89%		0.47%		1.00%
Net interest margin		2.93%		3.20%		3.20%		3.39%		3.31%		3.06%		3.39%
Tax equivalent effect		0.01%		0.01%		0.01%		0.02%		0.01%		0.01%		0.01%
Net interest margin, tax equivalent		2.94%		3.21%		3.21%		3.41%		3.32%		3.07%		3.40%
Non interest income/Average assets		1.97%		3.41%		2.87%		3.42%		2.95%		2.67%		1.93%
Non interest expense/Average assets		3.33%		3.40%		3.45%		3.73%		3.99%		3.37%		3.78%
Net noninterest expense/Average assets		-1.37%		0.00%		-0.58%		-0.30%		-1.04%		-0.69%		-1.85%
ASSET QUALITY RATIOS:
Gross charge-offs		26		52		57		32		254		78		654
Recoveries		6		54		39		11		10		60		13
Net charge-offs		20		(2)		18		21		244		18		641
Nonaccruing loans/Total loans		0.43%		0.66%		0.74%		0.72%		0.72%		0.43%		0.72%
Nonperforming loans/Total loans		0.51%		0.76%		0.83%		0.81%		0.81%		0.51%		0.81%
Nonperforming assets/Loans & OREO		0.70%		0.76%		0.83%		0.82%		0.86%		0.70%		0.86%
Nonperforming assets/Total assets		0.46%		0.49%		0.58%		0.60%		0.64%		0.46%		0.64%
Allowance for loan loss/Nonperforming loans		304.28%		207.28%		173.77%		163.84%		136.45%		304.28%		136.45%
Allowance for loan loss/Total loans		1.56%		1.57%		1.44%		1.33%		1.11%		1.56%		1.11%
Net loan charge-offs/Average loans (ann.)		0.01%		(0.00%)		0.01%		0.01%		0.11%		0.00%		0.15%
Loan loss provision/Net charge-offs		0.00%		(37500.00%)		4444.44%		8571.43%		532.79%		4166.67%		296.41%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		77.95%		75.72%		83.19%		87.36%		91.01%		77.95%		91.01%
Equity/ Assets		10.97%		10.86%		11.36%		11.60%		11.46%		10.97%		11.46%
Tangible equity/Tangible assets		9.41%		9.30%		9.73%		9.92%		9.75%		9.41%		9.75%
Common equity tier 1 ratio (Bank)		13.45%		13.08%		12.91%		12.71%		11.97%		13.08%		11.97%
END OF PERIOD BALANCES
Total assets		1,312,507		1,325,867		1,257,839		1,218,241		1,202,936		1,312,507		1,202,936
Total loans		850,513		848,176		872,723		885,850		901,548		850,513		901,548
Deposits		1,091,034		1,120,196		1,049,011		1,014,015		990,587		1,091,034		990,587
Stockholders equity		144,017		143,966		142,923		141,347		137,881		144,017		137,881
Goodwill and intangibles		22,710		22,728		22,745		22,763		22,813		22,710		22,813
Tangible equity		121,307		121,238		120,178		118,584		115,068		121,307		115,068
Mortgage servicing portfolio		1,323,804		1,304,097		1,299,698		1,293,037		1,261,746		1,323,804		1,261,746
Wealth/Brokerage assets under care		600,904		576,503		558,409		522,360		495,025		600,904		495,025
Total assets under care		3,237,215		3,206,467		3,115,946		3,033,638		2,959,707		3,237,215		2,959,707
Full-time equivalent employees		256		246		244		251		254		256		254
Period end common shares outstanding		7,027		7,242		7,372		7,545		7,668		7,027		7,668
Market capitalization (all)		129,998		132,239		134,760		101,782		127,442		129,998		127,442
AVERAGE BALANCES
Total assets		1,329,348		1,281,635		1,238,790		1,216,843		1,169,030		1,306,355		1,115,527
Total earning assets		1,251,213		1,203,284		1,156,718		1,090,386		1,073,490		1,227,359		1,028,114
Total loans		853,794		862,898		893,244		907,483		898,216		858,321		865,595
Deposits		1,115,186		1,073,641		1,031,649		1,007,679		946,053		1,094,269		900,812
Stockholders equity		144,315		143,167		142,418		139,908		141,821		143,709		139,521
Goodwill and intangibles		22,718		22,736		22,754		22,787		19,066		22,727		18,537
Tangible equity		121,597		120,431		119,664		117,121		122,755		120,982		120,984
Average basic shares outstanding		7,148		7,317		7,487		7,607		7,708		7,232		7,750
Average diluted shares outstanding		7,200		7,335		7,487		7,607		7,708		7,256		7,750

 

SB FINANCIAL GROUP, INC.
	Rate Volume Analysis - (Unaudited)
	At and for the Three and Six Months Ended June 30, 2021 and 2020
	($ in thousands)		Three Months Ended Jun. 30, 2021					Three Months Ended Jun. 30, 2020
			Average		Average			Average		Average
Assets			Balance	Interest	Rate			Balance	Interest	Rate
	Taxable securities/cash		$           390,036	$                 835	0.86%			$           168,373	$                 510	1.21%
	Nontaxable securities		7,383	85	4.61%			6,901	81	4.69%
	Loans, net		853,794	9,243	4.33%			898,216	10,004	4.46%
	Total earning assets		1,251,213	10,163	3.25%			1,073,490	10,595	3.95%
	Cash and due from banks		6,992					18,937
	Allowance for loan losses		(13,565)					(9,369)
	Premises and equipment		23,988					23,896
	Other assets		60,720					62,076
	Total assets		$        1,329,348					$        1,169,030
Liabilities
	Savings, MMDA and interest bearing demand		$           672,803	$                 464	0.28%			$           473,793	$              1,215	1.03%
	Time deposits		183,138	354	0.77%			251,482	334	0.53%
	Repurchase agreements & other		23,607	12	0.20%			19,200	20	0.42%
	Advances from Federal Home Loan Bank		7,066	51	2.89%			24,472	92	1.50%
	Trust preferred securities		10,310	50	1.94%			10,310	62	2.41%
	Subordinated debt		9,880	75	3.04%			-	-	0.00%
	Total interest bearing liabilities		906,804	1,006	0.44%			779,257	1,723	0.88%
	Non interest bearing demand		259,245	-				220,778	-
	Total funding		1,166,049		0.35%			1,000,035		0.69%
	Other liabilities		18,984					27,174
	Total liabilities		1,185,033					1,027,209
	Equity		144,315					141,821
	Total liabilities and equity		$        1,329,348					$        1,169,030
	Net interest income			$              9,157					$              8,872
	Net interest income as a percent of average interest-earning assets - GAAP measure				2.93%					3.31%
	Net interest income as a percent of average interest-earning assets - non GAAP				2.94%					3.32%
	- Computed on a fully tax equivalent (FTE) basis
			Six Months Ended Jun. 30, 2021					Six Months Ended Jun. 30, 2020
			Average		Average			Average		Average
Assets			Balance	Interest	Rate			Balance	Interest	Rate
	Taxable securities/cash		$           361,566	$              1,478	0.82%			$           155,787	$              1,202	1.54%
	Nontaxable securities		7,472	173	4.63%			6,732	159	4.72%
	Loans, net		858,321	19,217	4.48%			865,595	19,878	4.59%
	Total earning assets		1,227,359	20,868	3.40%			1,028,114	21,239	4.13%
	Cash and due from banks		7,769					12,693
	Allowance for loan losses		(13,206)					(9,118)
	Premises and equipment		23,743					23,797
	Other assets		60,690					60,041
	Total assets		$        1,306,355					$        1,115,527
Liabilities
	Savings, MMDA and interest bearing demand		$           643,962	$                 972	0.30%			$           458,116	$              2,298	1.00%
	Time deposits		194,955	808	0.83%			252,912	1,131	0.89%
	Repurchase agreements & Other		23,869	23	0.19%			20,868	48	0.46%
	Advances from Federal Home Loan Bank		7,530	107	2.84%			20,302	192	1.89%
	Trust preferred securities		10,310	101	1.96%			10,310	150	2.91%
	Subordinated debt		5,646	75	2.66%			-	-	0.00%
	Total interest bearing liabilities		886,272	2,086	0.47%			762,508	3,819	1.00%
	Non interest bearing demand		255,352		0.37%			189,784		0.80%
	Total funding		1,141,624					952,292
	Other liabilities		21,022					23,714
	Total liabilities		1,162,646					976,006
	Equity		143,709					139,521
	Total liabilities and equity		$        1,306,355					$        1,115,527
	Net interest income			$            18,782					$            17,420
	Net interest income as a percent of average interest-earning assets - GAAP measure				3.06%					3.39%
	Net interest income as a percent of average interest-earning assets - non GAAP				3.07%					3.40%
	- Computed on a fully tax equivalent (FTE) basis

 

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

 

View original content:https://www.prnewswire.com/news-releases/sb-financial-group-announces-second-quarter-2021-results-301341408.html

SOURCE SB Financial Group, Inc.

FAQ

What were the earnings of SB Financial Group for Q2 2021?

SB Financial Group reported a net income of $3.8 million for Q2 2021.

What is the diluted EPS for SB Financial Group for the second quarter of 2021?

The diluted EPS for Q2 2021 was $0.52, reflecting a 10.6% increase.

How much did mortgage origination volume decline for SB Financial Group?

Mortgage origination volume decreased by 26.3% to $164.9 million in Q2 2021.

What was the total deposits growth for SB Financial Group as of June 30, 2021?

Total deposits increased by 10.1% to $1.09 billion.

What is the percentage increase in net income for the first half of 2021 for SB Financial Group?

Net income for the first half of 2021 surged by 150% to $10.8 million.