SB Financial Group Announces Second Quarter 2022 Results

Rhea-AI Summary

SB Financial Group reported a net income of $2.8 million for Q2 2022, down 24.6% year-over-year, with a diluted EPS of $0.40, reflecting a 23.1% decrease. The company noted significant challenges in mortgage origination, totaling $95.5 million, a decline of 42.1%. For the first half of 2022, net income was $5.6 million, or $0.79 per share, a 47% drop from the previous year. Despite a 9.7% increase in loans, total operating revenue fell by 9.1%, driven by a 28.5% drop in noninterest income.

Positive

• Loan balances increased by 5.3% year-over-year to $895.6 million.
• Net interest income rose 4.8% year-over-year, showing strength in interest income despite challenges.

Negative

• Net income dropped by 47.9% in the first half of 2022 compared to the previous year.
• Mortgage origination volume decreased by 42.1% year-over-year.
• Noninterest income fell by 28.5%, primarily due to a decline in mortgage volume.
• Total deposits decreased by 1.8% year-over-year to $1.07 billion.

DEFIANCE, Ohio, July 25, 2022 (GLOBE NEWSWIRE) -- 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, 2022.

Second quarter 2022 highlights over prior-year second quarter include:

• Net income of $2.8 million; diluted earnings per share (“EPS”) of $0.40 or a 23.1 percent decrease
• Adjusted net income, excluding the impact of the Originated Mortgage Servicing Rights (“OMSR”) recapture of $0.2 million was $2.6 million, with EPS of $0.37
• Mortgage origination volume of $95.5 million, reflects a decrease of $69.4 million, or 42.1 percent
  

Six months ended June 30, 2022, highlights over prior-year six months include:

• Net income of $5.6 million and diluted EPS of $0.79, compared to $10.8 million, or $1.49 per share or a 47.0 percent decrease
• Adjusted net income, excluding the impact of OMSR activity of $4.8 million, down $4.0 million or 45.9 percent

Second quarter 2022 trailing twelve-month highlights include:

• Loans excluding Paycheck Protection Program (“PPP”) loans, increased $79.3 million, or 9.7 percent from the prior year
• Deposits decreased by $19.3 million, or 1.8 percent to $1.07 billion at quarter end
• Mortgage origination volume of $472.1 million; servicing portfolio of $1.37 billion, which is up $0.05 billion, or 3.5 percent

Highlights	Three Months Ended										Six Months Ended
($ in thousands, except per share & ratios)	Jun. 2022			Jun. 2021			% Change				Jun. 2022			Jun. 2021			% Change
Operating revenue	$	14,266		$	15,694		-9.1	%			$	28,545		$	36,241		-21.2	%
Interest income		10,474			10,163		3.1	%				19,869			20,868		-4.8	%
Interest expense		881			1,006		-12.4	%				1,799			2,086		-13.8	%
Net interest income		9,593			9,157		4.8	%				18,070			18,782		-3.8	%
Provision for loan losses		-			-		0.0	%				-			750		-100.0	%
Noninterest income		4,673			6,537		-28.5	%				10,475			17,459		-40.0	%
Noninterest expense		10,802			11,076		-2.5	%				21,661			21,985		-1.5	%
Net income		2,834			3,761		-24.6	%				5,647			10,842		-47.9	%
Earnings per diluted share		0.40			0.52		-23.1	%				0.79			1.49		-47.0	%
Return on average assets		0.87	%		1.13	%	-23.0	%				0.85	%		1.66	%	-48.8	%
Return on average equity		8.88	%		10.42	%	-14.8	%				8.46	%		15.09	%	-43.9	%
Non-GAAP Measures
Adjusted net income	$	2,643		$	3,840		-31.2	%			$	4,754		$	8,783		-45.9	%
Adjusted diluted EPS		0.37			0.53		-30.2	%				0.67			1.21		-44.6	%
Adjusted return on average assets		0.81	%		1.16	%	-30.2	%				0.78	%		1.50	%	-48.0	%
Adjusted pre-tax, pre-provision income		3,223			4,717		-31.7	%				5,754			10,900		-47.2	%

“We had very strong loan growth this quarter of $45 million, which is in addition to the $28 million in growth we achieved in Q1,” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “For the first half of 2022 we have grown our loan balances by 8.9 percent over 2021 year end. This growth was across all categories and we had positive growth from nearly all of our regions. The prime rate increases coupled with the loan growth resulted in interest income increasing over 11 percent from the linked quarter.”

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was down 9.1 percent from the second quarter of 2021, and flat from the linked quarter.

• Net interest income was up from the year-ago quarter by 4.8 percent, and up 13.2 percent from the linked quarter.
• Net interest margin on a fully taxable equivalent basis (FTE) was up from both year-ago and linked quarters by 23 and 49 basis points, respectively, as loan balances were up $44.9 million from the linked quarter. Net of PPP, our net interest margin is higher by 34 basis points compared to the prior year.   
• Noninterest income was down 29 and 19 percent from the year ago and linked quarters, respectively, due to lower mortgage volume and OMSR recapture. 
  

Mortgage Loan Business

Mortgage loan originations for the second quarter of 2022 were $95.5 million, down $69.4 million, or 42.1 percent, from the year-ago quarter; likewise, total sales of originated loans were $49.9 million, down $69.1 million, or 58.1 percent.   For the first six months of 2022, SB Financial had total volume of $192.8 million, of which $141.4 million (73 percent) was new purchase/construction lending, $33.0 million was external refinance (17 percent), and the remaining $18.4 million (10 percent) was internal refinance.

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.8 million for the second quarter of 2022, compared to $4.0 million for the year-ago quarter. The mortgage servicing valuation adjustment for the second quarter of 2022 was a positive $0.2 million, compared to a negative adjustment of $0.1 million for the second quarter of 2021. For the first six months of 2022, the recapture of servicing rights was $1.1 million compared to a recapture of $2.6 million for the prior year six months. The aggregate servicing valuation impairment ended the quarter at $0.3 million.   The servicing portfolio at June 30, 2022, was $1.37 billion, up $0.05 billion, or 3.5 percent, from $1.32 billion at June 30, 2021.

Mr. Klein noted, “With fixed rate saleable mortgage rates above 5 percent for most of the quarter, we have continued to be flexible by originating more portfolio product with a special emphasis on the Private Client segment. We continue to look for ways to improve our efficiency in the mortgage business line and are committed to adding additional originators to capture market share and balance the entire business-line ecosystem.”

Mortgage Banking
($ in thousands)	Jun. 2022			Mar. 2022			Dec. 2021			Sep. 2021			Jun. 2021
Mortgage originations	$	95,454		$	97,394		$	126,611		$	152,623		$	164,883
Mortgage sales		49,915			72,154			110,543			123,083			119,064
Mortgage servicing portfolio		1,369,732			1,375,554			1,362,962			1,341,439			1,323,804
Mortgage servicing rights		13,408			13,135			12,034			11,194			10,678
Mortgage servicing revenue
Loan servicing fees		863			861			850			850			830
OMSR amortization		(496	)		(547	)		(807	)		(943	)		(948	)
Net administrative fees		367			314			43			(93	)		(118	)
OMSR valuation adjustment		239			890			581			248			(99	)
Net loan servicing fees		606			1,204			624			155			(217	)
Gain on sale of mortgages		1,196			1,676			3,194			3,947			4,255
Mortgage banking revenue, net	$	1,802		$	2,880		$	3,818		$	4,102		$	4,038

Noninterest Income and Noninterest Expense

SB Financial’s noninterest income for the quarter was down from the prior year and the linked quarter by 29 and 19 percent, respectively. Gain on sale yields on mortgage loan sales were down over 100 basis points from the prior year and the total dollars of sales were down over $69 million. Wealth management revenue was flat from the prior year as our retention efforts and new sales offset general market declines. SB Financial’s title agency, Peak Title, continued to transition to serving all of the Company’s needs by increasing commercial volume and with our new market expansions; as a result, revenue was up 31 percent compared to the prior year.  

For the second quarter of 2022, noninterest expense of $10.8 million was down $0.3 million or 2.5 percent compared to the prior year. Decreased mortgage volume has been the main driver of lower operating expenses.

Mr. Klein stated, “We are committed to lowering our operating costs in both the Mortgage and Retail business lines to reflect not only lower volumes but also the change in consumer behavior of a more robust adoption of digital banking solutions.”

Noninterest Income / Noninterest Expense
($ in thousands, except ratios)	Jun. 2022			Mar. 2022			Dec. 2021			Sep. 2021			Jun. 2021
Noninterest Income (NII)	$	4,673		$	5,802		$	6,589		$	6,649		$	6,537
NII / Total Revenue		32.8	%		40.6	%		42.1	%		39.9	%		41.7	%
NII / Average Assets		1.4	%		1.7	%		2.0	%		2.0	%		2.0	%
Total Revenue Growth		-9.1	%		-46.9	%		-13.7	%		-15.3	%		-10.3	%
Noninterest Expense (NIE)	$	10,802		$	10,859		$	11,567		$	11,256		$	11,076
Efficiency Ratio		75.6	%		75.9	%		73.7	%		67.4	%		70.5	%
NIE / Average Assets		3.3	%		3.2	%		3.5	%		3.4	%		3.3	%
Net Noninterest Expense/Avg. Assets		-1.9	%		-1.5	%		-1.5	%		-1.4	%		-1.4	%
Total Expense Growth		-2.5	%		-0.5	%		8.3	%		-0.7	%		-5.0	%

Balance Sheet

Total assets as of June 30, 2022, were $1.29 billion, down $0.02 billion, or 1.4 percent, from the year ago quarter due to declining deposit levels as the consumer began to put their excess liquidity to use in the economy. Total shareholders’ equity as of June 30, 2022, was $124.6 million, down 13.5 percent from a year ago due to the valuation adjustment on the Company’s bond portfolio. Absent that negative impact, equity increased $3.2 million or 2.3 percent. SB Financial bought back 94,211 shares of our stock in the quarter at an average price of $18.08 or 122 percent of tangible book value.  

Total loans held for investment were $895.6 million at June 30, 2022, up $45.1 million, or 5.3 percent, from June 30, 2021. Excluding PPP activity from both years, loan balances were up $79.3 million, or 9.7 percent.

The investment portfolio of $271.5 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 21.0 percent of assets at June 30, 2022, and was up 25.1 percent from the year-ago period. Deposit balances of $1.07 billion at June 30, 2022, decreased by $0.02 billion, or 1.8 percent, since June 30, 2021.

Mr. Klein continued, “Loan growth from the linked quarter met and exceeded our expectations and we remain very positive about the loan pipelines in all of our markets.   The consumer and our small business clients began to utilize their liquidity as we saw deposit and cash levels decline this quarter.”

Loan Balances
($ in thousands, except ratios)	Jun. 2022			Mar. 2022			Dec. 2021			Sep. 2021			Jun. 2021			Annual Growth
Commercial	$	127,711		$	124,857		$	122,373		$	138,085		$	149,998		$	(22,287	)
% of Total		14.3	%		14.7	%		14.9	%		16.3	%		17.6	%		-14.9	%
Commercial RE		404,260			400,101			381,387			387,858			389,287			14,973
% of Total		45.1	%		47.0	%		46.4	%		45.8	%		45.8	%		3.8	%
Agriculture		60,586			55,741			57,473			57,374			50,895			9,691
% of Total		6.8	%		6.6	%		7.0	%		6.8	%		6.0	%		19.0	%
Residential RE		241,614			214,015			206,324			207,571			203,294			38,320
% of Total		27.0	%		25.2	%		25.1	%		24.5	%		23.9	%		18.8	%
Consumer & Other		61,440			55,957			55,157			55,660			57,039			4,401
% of Total		6.9	%		6.6	%		6.7	%		6.6	%		6.7	%		7.7	%
Total Loans	$	895,611		$	850,671		$	822,714		$	846,548		$	850,513		$	45,098
Total Growth Percentage																	5.3	%
Deposit Balances
($ in thousands, except ratios)	Jun. 2022			Mar. 2022			Dec. 2021			Sep. 2021			Jun. 2021			Annual Growth
Non-Int DDA	$	239,676		$	252,273		$	247,044		$	258,857		$	240,572		$	(896	)
% of Total		22.4	%		22.2	%		22.2	%		23.3	%		22.0	%		-0.4	%
Interest DDA		198,286			211,152			195,464			189,130			187,023			11,263
% of Total		18.5	%		18.6	%		17.6	%		17.0	%		17.1	%		6.0	%
Savings		215,285			236,394			237,571			246,414			235,231			(19,946	)
% of Total		20.1	%		20.8	%		21.3	%		22.2	%		21.6	%		-8.5	%
Money Market		276,274			289,699			276,462			258,741			255,512			20,762
% of Total		25.8	%		25.5	%		24.8	%		23.3	%		23.4	%		8.1	%
Time Deposits		142,258			148,553			156,504			158,518			172,696			(30,438	)
% of Total		13.3	%		13.1	%		14.1	%		14.3	%		15.8	%		-17.6	%
Total Deposits	$	1,071,779		$	1,138,071		$	1,113,045		$	1,111,660		$	1,091,034		$	(19,255	)
Total Growth Percentage																	-1.8	%

Asset Quality

SB Financial reported nonperforming assets of $5.4 million as of June 30, 2022, down $0.6 million or 9.5 percent from the year-ago quarter. The Company took minimal charge-offs in the quarter, and for the year, had just $4,000 in net charge-offs. The coverage of problem loans by the loan loss allowance was at 290 percent at June 30, 2022.

Nonperforming Assets ($ in thousands, except ratios)	Jun. 2022			Mar. 2022			Dec. 2021			Sep. 2021			Jun. 2021			Annual Change
Commercial & Agriculture	$	140		$	142		$	143		$	144		$	375		$	(235	)
% of Total Com./Ag. loans		0.07	%		0.08	%		0.08	%		0.07	%		0.19	%		-62.7	%
Commercial RE		359			544			554			566			1,026			(667	)
% of Total CRE loans		0.09	%		0.14	%		0.15	%		0.15	%		0.26	%		-65.0	%
Residential RE		3,176			3,198			2,484			2,056			1,751			1,425
% of Total Res. RE loans		1.31	%		1.49	%		1.20	%		0.99	%		0.86	%		81.4	%
Consumer & Other		323			409			471			422			463			(140	)
% of Total Con./Oth. loans		0.53	%		0.73	%		0.85	%		0.76	%		0.81	%		-30.2	%
Total Nonaccruing Loans		3,998			4,293			3,652			3,188			3,615			383
% of Total loans		0.45	%		0.50	%		0.44	%		0.38	%		0.43	%		10.6	%
Accruing Restructured Loans		683			762			725			805			758			(75	)
Total Change (%)																	-9.9	%
Total Nonaccruing & Restructured Loans		4,681			5,055			4,377			3,993			4,373			308
% of Total loans		0.52	%		0.59	%		0.53	%		0.47	%		0.51	%		7.0	%
Foreclosed Assets and Other Assets		730			527			2,104			1,601			1,603			(873	)
Total Change (%)																	-54.5	%
Total Nonperforming Assets	$	5,411		$	5,582		$	6,481		$	5,594		$	5,976		$	(565	)
% of Total assets		0.42	%		0.42	%		0.49	%		0.42	%		0.46	%		-9.5	%

Webcast and Conference Call

The Company will hold a related conference call and webcast on July 26, 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 title opinions throughout the Tri-State region. SB Financial’s common stock is listed on the NASDAQ Capital Market under the symbol “SBFG”.

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

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)			2022				2022				2021				2021				2021
ASSETS
	Cash and due from banks				$	29,567			$	130,003			$	149,511			$	138,015			$	154,993
	Interest bearing time deposits					1,691				1,894				2,643				2,651				2,906
	Available-for-sale securities					266,162				265,311				263,259				248,815				211,756
	Loans held for sale					4,242				4,737				7,472				10,335				8,731
	Loans, net of unearned income					895,611				850,671				822,714				846,548				850,513
	Allowance for loan losses					(13,801	)			(13,804	)			(13,805	)			(13,812	)			(13,306	)
	Premises and equipment, net					23,122				23,039				23,212				23,874				24,343
	Federal Reserve and FHLB Stock, at cost					5,303				5,303				5,303				5,303				5,303
	Foreclosed assets and other assets					730				527				2,104				1,601				1,603
	Interest receivable					3,256				2,815				2,920				2,954				3,000
	Goodwill					23,239				23,239				23,191				22,091				22,091
	Cash value of life insurance					28,556				17,932				17,867				17,795				17,721
	Mortgage servicing rights					13,408				13,135				12,034				11,194				10,678
	Other assets					12,886				10,328				12,430				12,361				12,175
			Total assets		$	1,293,972			$	1,335,130			$	1,330,855			$	1,329,725			$	1,312,507
LIABILITIES AND SHAREHOLDERS' EQUITY
	Deposits
		Non interest bearing demand			$	239,676			$	252,273			$	247,044			$	258,857			$	240,572
		Interest bearing demand				198,286				211,152				195,464				189,130				187,023
		Savings				215,285				236,394				237,571				246,414				235,231
		Money market				276,274				289,699				276,462				258,741				255,512
		Time deposits				142,258				148,553				156,504				158,518				172,696
			Total deposits			1,071,779				1,138,071				1,113,045				1,111,660				1,091,034
	Short-term borrowings					30,772				19,035				15,320				20,771				25,096
	Federal Home Loan Bank advances					25,000				5,500				5,500				5,500				5,500
	Trust preferred securities					10,310				10,310				10,310				10,310				10,310
	Subordinated debt net of issuance costs					19,570				19,558				19,546				19,534				19,522
	Interest payable					307				536				299				576				417
	Other liabilities					11,678				9,483				21,906				17,082				16,611
			Total liabilities			1,169,416				1,202,493				1,185,926				1,185,433				1,168,490
	Shareholders' Equity
		Common stock				61,319				61,319				54,463				54,463				54,463
		Additional paid-in capital				15,069				14,872				14,944				14,875				14,906
		Retained earnings				96,809				94,833				99,716				97,183				93,851
		Accumulated other comprehensive income (loss)				(22,210	)			(13,659	)			(1,845	)			(699	)			499
		Treasury stock				(26,431	)			(24,728	)			(22,349	)			(21,530	)			(19,702	)
			Total shareholders' equity			124,556				132,637				144,929				144,292				144,017
			Total liabilities and shareholders' equity		$	1,293,972			$	1,335,130			$	1,330,855			$	1,329,725			$	1,312,507

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					2022				2022				2021				2021				2021				2022				2021
	Loans
	Taxable			$	8,880			$	8,052			$	8,889			$	9,948			$	9,196			$	16,932			$	19,122
	Tax exempt				73				61				59				52				47				134				95
	Securities
	Taxable				1,469				1,235				969				939				835				2,704				1,478
	Tax exempt				52				47				86				94				85				99				173
		Total interest income			10,474				9,395				10,003				11,033				10,163				19,869				20,868
Interest expense
	Deposits				567				618				640				709				818				1,185				1,780
	Repurchase agreements & other				11				13				7				12				12				24				23
	Federal Home Loan Bank advances				38				39				41				40				51				77				107
	Trust preferred securities				71				53				49				49				50				124				101
	Subordinated debt				194				195				188				199				75				389				75
		Total interest expense			881				918				925				1,009				1,006				1,799				2,086
Net interest income					9,593				8,477				9,078				10,024				9,157				18,070				18,782
	Provision for loan losses				-				-				-				300				-				-				750
Net interest income after provision for loan losses					9,593				8,477				9,078				9,724				9,157				18,070				18,032
Noninterest income
	Wealth management fees				936				955				988				959				955				1,891				1,867
	Customer service fees				860				794				827				812				820				1,654				1,578
	Gain on sale of mtg. loans & OMSR				1,196				1,676				3,194				3,947				4,255				2,872				10,114
	Mortgage loan servicing fees, net				606				1,204				624				155				(217	)			1,810				2,161
	Gain on sale of non-mortgage loans				167				169				44				52				45				336				62
	Title insurance revenue				697				602				528				508				532				1,299				1,053
	Gain (loss) on sale of assets				-				55				1				1				2				55				-
	Other				211				347				383				215				145				558				624
		Total noninterest income			4,673				5,802				6,589				6,649				6,537				10,475				17,459
Noninterest expense
	Salaries and employee benefits				6,418				6,189				6,648				6,689				6,881				12,607				13,501
	Net occupancy expense				719				742				846				714				748				1,461				1,488
	Equipment expense				827				854				899				872				778				1,681				1,510
	Data processing fees				643				576				721				671				653				1,219				1,187
	Professional fees				760				950				872				817				574				1,710				1,338
	Marketing expense				222				231				228				201				220				453				355
	Telephone and communication expense				105				111				148				140				139				216				293
	Postage and delivery expense				110				116				106				100				97				226				208
	State, local and other taxes				277				278				288				286				278				555				601
	Employee expense				175				136				163				186				161				311				314
	Other expenses				546				676				648				580				547				1,222				1,190
		Total noninterest expense			10,802				10,859				11,567				11,256				11,076				21,661				21,985
Income before income tax expense					3,464				3,420				4,100				5,117				4,618				6,884				13,506
	Income tax expense				630				607				768				1,014				857				1,237				2,664
Net income				$	2,834			$	2,813			$	3,332			$	4,103			$	3,761			$	5,647			$	10,842
Common share data:
	Basic earnings per common share			$	0.40			$	0.40			$	0.49			$	0.59			$	0.53			$	0.80			$	1.50
	Diluted earnings per common share			$	0.40			$	0.40			$	0.49			$	0.58			$	0.52			$	0.79			$	1.49
Average shares outstanding (in thousands):
	Basic:				7,075				7,035				6,906				6,966				7,148				7,055				7,232
	Diluted:				7,149				7,100				6,970				7,017				7,200				7,116				7,256

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			2022				2022				2021				2021				2021				2022				2021
Net interest income		$	9,593			$	8,477			$	9,078			$	10,024			$	9,157			$	18,070			$	18,782
Tax-equivalent adjustment			33				29				39				39				35				62				71
Tax-equivalent net interest income			9,626				8,506				9,117				10,063				9,192				18,132				18,853
Provision for loan loss			-				-				-				300				-				-				750
Noninterest income			4,673				5,802				6,589				6,649				6,537				10,475				17,459
Total operating revenue			14,266				14,279				15,667				16,673				15,694				28,545				36,241
Noninterest expense			10,802				10,859				11,567				11,256				11,076				21,661				21,985
Pre-tax pre-provision income			3,464				3,420				4,100				5,417				4,618				6,884				14,256
Pretax income			3,464				3,420				4,100				5,117				4,618				6,884				13,506
Net income			2,834				2,813				3,332				4,103				3,761				5,647				10,842
PER SHARE INFORMATION:
Basic earnings per share (EPS)			0.40				0.40				0.49				0.59				0.53				0.80				1.50
Diluted earnings per share			0.40				0.40				0.49				0.58				0.52				0.79				1.49
Common dividends			0.120				0.115				0.115				0.110				0.110				0.235				0.215
Book value per common share			17.75				18.65				21.05				20.83				20.49				17.75				20.49
Tangible book value per common share (TBV)			14.36				15.31				17.60				17.55				17.25				14.36				17.25
Market price per common share			17.26				19.91				19.67				18.18				18.50				17.26				18.50
Market price to TBV			120.2	%			130.1	%			111.8	%			103.6	%			107.2	%			120.2	%			107.2	%
Market price to trailing 12 month EPS			9.3				10.0				7.7				6.7				6.5				9.3				6.5
PERFORMANCE RATIOS:
Return on average assets (ROAA)			0.87	%			0.83	%			0.99	%			1.23	%			1.13	%			0.85	%			1.66	%
Pre-tax pre-provision ROAA			1.06	%			1.01	%			1.22	%			1.63	%			1.39	%			1.11	%			2.32	%
Return on average equity			8.89	%			8.08	%			9.21	%			11.35	%			10.42	%			8.46	%			15.09	%
Return on average tangible equity			10.93	%			9.75	%			10.92	%			13.47	%			12.37	%			10.30	%			17.92	%
Efficiency ratio			75.60	%			75.93	%			73.72	%			67.40	%			70.46	%			75.76	%			60.56	%
Earning asset yield			3.45	%			2.96	%			3.17	%			3.25	%			3.56	%			3.20	%			3.40	%
Cost of interest bearing liabilities			0.39	%			0.39	%			0.40	%			0.44	%			0.44	%			0.38	%			0.47	%
Net interest margin			3.15	%			2.67	%			2.87	%			3.20	%			2.93	%			2.91	%			3.06	%
Tax equivalent effect			0.01	%			0.01	%			0.02	%			0.01	%			0.01	%			0.01	%			0.01	%
Net interest margin, tax equivalent			3.16	%			2.68	%			2.89	%			3.21	%			2.94	%			2.92	%			3.07	%
Non interest income/Average assets			1.43	%			1.72	%			1.96	%			1.99	%			1.97	%			1.58	%			2.67	%
Non interest expense/Average assets			3.31	%			3.22	%			3.45	%			3.38	%			3.33	%			3.26	%			3.37	%
Net noninterest expense/Average assets			-1.88	%			-1.50	%			-1.48	%			-1.38	%			-1.37	%			-1.68	%			-0.70	%
ASSET QUALITY RATIOS:
Gross charge-offs			9				9				34				24				26				18				78
Recoveries			6				8				27				230				6				14				60
Net charge-offs			3				1				7				(206	)			20				4				18
Nonaccruing loans/Total loans			0.45	%			0.50	%			0.44	%			0.38	%			0.43	%			0.45	%			0.43	%
Nonperforming loans/Total loans			0.52	%			0.59	%			0.53	%			0.47	%			0.51	%			0.52	%			0.51	%
Nonperforming assets/Loans & OREO			0.60	%			0.66	%			0.79	%			0.66	%			0.70	%			0.60	%			0.70	%
Nonperforming assets/Total assets			0.42	%			0.42	%			0.49	%			0.42	%			0.46	%			0.42	%			0.46	%
Allowance for loan loss/Nonperforming loans			294.83	%			273.08	%			315.40	%			345.91	%			304.28	%			294.83	%			304.28	%
Allowance for loan loss/Total loans			1.54	%			1.62	%			1.68	%			1.63	%			1.56	%			1.54	%			1.56	%
Net loan charge-offs/Average loans (ann.)			0.00	%			0.00	%			0.00	%			(0.10	%)			0.01	%			0.00	%			0.00	%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits			83.56	%			74.75	%			73.92	%			76.15	%			77.95	%			83.56	%			77.95	%
Equity/ Assets			9.63	%			9.93	%			10.89	%			10.85	%			10.97	%			9.63	%			10.97	%
Tangible equity/Tangible assets			7.93	%			8.30	%			9.27	%			9.30	%			9.41	%			7.93	%			9.41	%
Common equity tier 1 ratio (Bank)			14.08	%			13.71	%			13.94	%			13.23	%			13.11	%			14.08	%			13.11	%
END OF PERIOD BALANCES
Total assets			1,293,972				1,335,130				1,330,855				1,329,725				1,312,507				1,293,972				1,312,507
Total loans			895,611				850,671				822,714				846,548				850,513				895,611				850,513
Deposits			1,071,779				1,138,071				1,113,045				1,111,660				1,091,034				1,071,779				1,091,034
Stockholders equity			124,556				132,637				144,929				144,292				144,017				124,556				144,017
Goodwill and intangibles			23,804				23,804				23,774				22,692				22,710				23,804				22,710
Tangible equity			100,752				108,833				121,155				121,600				121,307				100,752				121,307
Mortgage servicing portfolio			1,369,732				1,375,554				1,362,962				1,341,439				1,323,804				1,369,732				1,323,804
Wealth/Brokerage assets under care			500,487				560,698				618,279				588,319				600,904				500,487				600,904
Total assets under care			3,164,191				3,271,382				3,312,096				3,259,483				3,237,215				3,164,191				3,237,215
Full-time equivalent employees			267				256				269				264				256				267				256
Period end common shares outstanding			7,017				7,111				6,884				6,927				7,027				7,017				7,027
Market capitalization (all)			121,105				141,575				135,415				125,935				130,000				121,105				130,000
AVERAGE BALANCES
Total assets			1,305,815				1,350,982				1,342,202				1,333,369				1,329,348				1,328,216				1,306,355
Total earning assets			1,216,124				1,270,218				1,263,431				1,253,722				1,251,213				1,243,017				1,227,359
Total loans			870,439				832,825				845,078				856,486				853,794				851,736				858,321
Deposits			1,108,890				1,134,234				1,123,843				1,109,491				1,115,186				1,121,373				1,094,269
Stockholders equity			127,519				139,214				144,749				144,565				144,315				133,471				143,709
Goodwill and intangibles			23,796				23,801				22,701				22,701				22,718				23,798				22,727
Tangible equity			103,723				115,413				122,048				121,864				121,597				109,673				120,982
Average basic shares outstanding			7,075				7,035				6,906				6,966				7,148				7,055				7,232
Average diluted shares outstanding			7,149				7,100				6,970				7,017				7,200				7,116				7,256

SB FINANCIAL GROUP, INC.
	Rate Volume Analysis - (Unaudited)
	For the Three and Six Months Ended June 30, 2022 and 2021
	($ in thousands)		Three Months Ended Jun. 30, 2022									Three Months Ended Jun. 30, 2021
			Average					Average				Average					Average
Assets			Balance			Interest		Rate				Balance			Interest		Rate
	Taxable securities/cash		$	337,226		$	1,469	1.74	%			$	390,036		$	835	0.86	%
	Nontaxable securities			8,459			52	2.46	%				7,383			85	4.61	%
	Loans, net			870,439			8,953	4.11	%				853,794			9,243	4.33	%
	Total earning assets			1,216,124			10,474	3.45	%				1,251,213			10,163	3.25	%
	Cash and due from banks			7,177									6,992
	Allowance for loan losses			(13,803	)								(13,565	)
	Premises and equipment			23,741									23,988
	Other assets			72,576									60,720
	Total assets		$	1,305,815								$	1,329,348
Liabilities
	Savings, MMDA and interest bearing demand		$	713,367		$	353	0.20	%			$	672,803		$	464	0.28	%
	Time deposits			145,694			214	0.59	%				183,138			354	0.77	%
	Repurchase agreements & other			18,671			11	0.24	%				23,607			12	0.20	%
	Advances from Federal Home Loan Bank			3,989			38	3.81	%				7,066			51	2.89	%
	Trust preferred securities			10,310			71	2.75	%				10,310			50	1.94	%
	Subordinated debt			19,564			194	3.97	%				9,880			75	0.00	%
	Total interest bearing liabilities			911,595			881	0.39	%				906,804			1,006	0.44	%
	Non interest bearing demand			249,829			-						259,245			-
	Total funding			1,161,424				0.30	%				1,166,049				0.35	%
	Other liabilities			16,872									18,984
	Total liabilities			1,178,296									1,185,033
	Equity			127,519									144,315
	Total liabilities and equity		$	1,305,815								$	1,329,348
	Net interest income					$	9,593								$	9,157
	Net interest income as a percent of average interest-earning assets - GAAP measure							3.155	%								2.93	%
	Net interest income as a percent of average interest-earning assets - non GAAP							3.164	%								2.94	%
	- Computed on a fully tax equivalent (FTE) basis
			Six Months Ended Jun. 30, 2022									Six Months Ended Jun. 30, 2021
			Average					Average				Average					Average
Assets			Balance			Interest		Rate				Balance			Interest		Rate
	Taxable securities/cash		$	383,272		$	2,704	1.41	%			$	361,566		$	1,478	0.82	%
	Nontaxable securities			8,009			99	2.47	%				7,472			173	4.63	%
	Loans, net			851,736			17,066	4.01	%				858,321			19,217	4.48	%
	Total earning assets			1,243,017			19,869	3.20	%				1,227,359			20,868	3.40	%
	Cash and due from banks			7,593									7,769
	Allowance for loan losses			(13,805	)								(13,206	)
	Premises and equipment			24,522									23,743
	Other assets			66,889									60,690
	Total assets		$	1,328,216								$	1,306,355
Liabilities
	Savings, MMDA and interest bearing demand		$	723,176		$	751	0.21	%			$	643,962		$	972	0.30	%
	Time deposits			156,268			435	0.56	%				194,955			808	0.83	%
	Repurchase agreements & Other			21,876			24	0.22	%				23,869			23	0.19	%
	Advances from Federal Home Loan Bank			4,740			77	3.25	%				7,530			107	2.84	%
	Trust preferred securities			10,310			124	2.41	%				10,310			101	1.96	%
	Subordinated debt			19,558			389	3.98	%				5,646			75	2.66	%
	Total interest bearing liabilities			935,928			1,799	0.38	%				886,272			2,086	0.47	%
	Non interest bearing demand			241,929				0.31	%				255,352				0.37	%
	Total funding			1,177,857									1,141,624
	Other liabilities			16,888									21,022
	Total liabilities			1,194,745									1,162,646
	Equity			133,471									143,709
	Total liabilities and equity		$	1,328,216								$	1,306,355
	Net interest income					$	18,070								$	18,782
	Net interest income as a percent of average interest-earning assets - GAAP measure							2.91	%								3.06	%
	Net interest income as a percent of average interest-earning assets - non GAAP							2.92	%								3.07	%
	- 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, 2022				Jun. 30, 2021				Jun. 30, 2022				Jun. 30, 2021
Total Operating Revenue		$	14,266			$	15,694			$	28,545			$	36,241
Adjustment to (deduct)/add OMSR recapture/impairment*			(239	)			99				(1,128	)			(2,606	)
Adjusted Total Operating Revenue			14,027				15,793				27,417				33,635
Income before Income Taxes			3,464				4,618				6,884				13,506
Adjustment for OMSR			(239	)			99				(1,128	)			(2,606	)
Adjusted Income before Income Taxes			3,225				4,717				5,756				10,900
Provision for Income Taxes			630				857				1,237				2,664
Adjustment for OMSR **			(50	)			21				(237	)			(547	)
Adjusted Provision for Income Taxes			580				878				1,000				2,118
Net Income			2,834				3,761				5,647				10,842
Adjustment for OMSR			(189	)			79				(891	)			(2,059	)
Adjusted Net Income			2,645				3,840				4,756				8,783
Diluted Earnings per Share			0.40				0.52				0.79				1.49
Adjustment for OMSR			(0.03	)			0.01				(0.13	)			(0.28	)
Adjusted Diluted Earnings per Share		$	0.37			$	0.53			$	0.67			$	1.21
Return on Average Assets			0.87	%			1.13	%			0.85	%			1.66	%
Adjustment for OMSR			-0.06	%			0.02	%			-0.07	%			-0.16	%
Adjusted Return on Average Assets			0.81	%			1.15	%			0.78	%			1.50	%
*valuation adjustment to the Company's mortgage servicing rights
**tax effect is calculated using a 21% statutory federal corporate income tax rate

 

FAQ

What were SB Financial Group's earnings for the second quarter of 2022?

SB Financial reported a net income of $2.8 million for Q2 2022.

How much did SB Financial's mortgage origination volume decrease in Q2 2022?

Mortgage origination volume decreased by 42.1%, totaling $95.5 million.

What is the diluted EPS for SB Financial Group in Q2 2022?

The diluted EPS for Q2 2022 was $0.40.

What were the total deposits for SB Financial Group as of June 30, 2022?

Total deposits were $1.07 billion, down 1.8% year-over-year.

How did SB Financial Group's net income change in the first half of 2022?

Net income decreased by 47.9% in the first half of 2022 compared to the previous year.