Toggle SGML Header (+)


Section 1: 8-K (CURRENT REPORT)

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) April 18, 2019

 

SB FINANCIAL GROUP, INC

(Exact name of registrant as specified in its charter)

 

Ohio   0-13507   34-1395608
(State or other jurisdiction of
incorporation)
 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

401 Clinton Street, Defiance, OH   43512
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code (419) 783-8950

 

Not Applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 1 4a- 12 under the Exchange Act (17 CFR 240.1 4a- 12)

 

Pre-commencement communications pursuant to Rule 1 4d-2(b) under the Exchange Act (17 CFR 240.1 4d-2(b))

 

Pre-commencement communications pursuant to Rule 1 3e-4(c) under the Exchange Act (17 CFR 240.1 3e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company        ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.        ☐

 

 

  

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On April 18, 2019, SB Financial Group, Inc. (the “Company”) issued a news release reporting financial results for the first quarter 2019. A copy of the April 18, 2019 news release is furnished as Exhibit 99.1 and is incorporated herein by reference.

 

The information in this Item 2.02, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(a) Not Applicable

 

(b) Not Applicable

 

(c) Not Applicable

 

(d) Exhibits

 

Exhibit No.   Description
99.1   News release issued by SB Financial Group, Inc. on April 18, 2019, reporting financial results for the first quarter 2019.

 

1

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  SB FINANCIAL GROUP, INC.
     
Dated:  April 18, 2019 By: /s/ Anthony V. Cosentino 
    Anthony V. Cosentino 
    Chief Financial Officer 

 

2

 

 

INDEX TO EXHIBITS

 

Current Report on Form 8-K

Dated April 18, 2019

 

SB Financial Group, Inc.

 

Exhibit No.   Description
99.1   News release issued by SB Financial Group, Inc. on April 18, 2019, reporting financial results for the first quarter 2019.

 

 

3

 

(Back To Top)

Section 2: EX-99.1 (NEWS RELEASE ISSUED BY SB FINANCIAL GROUP, INC. ON APRIL 18, 2019, REPORTING FINANCIAL RESULTS FOR THE FIRST QUARTER 2019)

Exhibit 99.1

 

 

Investor Contact Information:

Anthony V. Cosentino

Executive Vice President and

Chief Financial Officer

Tony.Cosentino@YourStateBank.com

 

SB Financial Group, Inc. Announces First Quarter 2019 Results

 

DEFIANCE, Ohio, April 18, 2019 -- SB Financial Group, Inc. (NASDAQ: SBFG) (“SB Financial” or the “Company”), a diversified financial services company providing full-service community banking, mortgage banking and wealth management, today reported earnings for the first quarter ended March 31, 2019.

 

First quarter 2019 highlights over prior year first quarter include:

 

Net income of $2.2 million; adjusted net income of $2.8 million, up $0.3 million or 13.6 percent
Diluted EPS of $0.28; adjusted diluted EPS of $0.35, flat to the prior year
Mortgage origination volume of $51.4 million, a decrease of $7.1 million, or 12.1 percent

 

First quarter 2019 trailing twelve-month highlights include:

 

Loan growth of $75.3 million, or 10.6 percent
Deposit growth of $78.9 million, or 10.5 percent
Mortgage origination volume of $335.0 million, an increase of $17.4 million, or 5.5 percent; servicing portfolio of $1.09 billion, up $89.3 million, or 8.9 percent

 

Highlights

 

   Three Months Ended 
($ in thousands, except per share & ratios)  Mar. 2019   Mar. 2018   % Change 
Operating revenue  $11,340   $11,943    -5.0%
Interest income   10,498    8,851    18.6%
Interest expense   2,158    1,151    87.5%
Net interest income   8,340    7,700    8.3%
Provision for loan losses   -    300    -100.0%
Noninterest income   3,000    4,243    -29.3%
Noninterest expense   8,626    8,627    0.0%
Net income   2,226    2,453    -9.3%
Earnings per diluted share   0.28    0.35    -20.0%
Return on average assets   0.89%   1.08%   -17.6%
Return on average equity   6.76%   9.03%   -25.1%
                
Non-GAAP Measures               
Adjusted net income  $2,785   $2,453    13.5%
Adjusted diluted EPS   0.35    0.35    0.0%
Net interest margin (FTE)   3.81%   3.86%   -1.3%

 

“SB Financial’s first quarter GAAP results were impacted by the inversion of the rate curve, resulting in an impairment to our mortgage servicing rights. Adjusting for that temporary event, net income was up over 13 percent,” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “Organic balance sheet loan and deposit growth of $11 and $25 million, respectively, offset a softer mortgage origination quarter.”

 

 

 

 

RESULTS OF OPERATIONS

 

Consolidated Revenue

 

Total operating revenue, consisting of net interest income and noninterest income, was down 5.0 percent from the first quarter of 2018, and down 9.6 percent to the linked quarter. However, when adjusting for the Originated Mortgage Servicing Rights (OMSR) temporary impairment, total revenue was up 0.9 percent from the prior year.

 

Net interest income was up 8.3 percent from the year-ago quarter, but down 3.1 percent from the linked quarter.
Net interest margin (FTE) was down 5 basis point from the year-ago quarter and down 15 basis points from the linked quarter.
Noninterest income for the quarter was down from both year ago and linked quarter by 29 and 24 percent, respectively. Adjusting for the temporary OMSR impairment, noninterest income would be down 13 and 6 percent, respectively.

 

Mortgage Loan Business

 

Mortgage loan originations for the first quarter of 2019 were $51.4 million, down $7.1 million, or 12.1 percent, from the year-ago quarter. Total sales of originated loans were $43.5 million, up $2.9 million, or 7.1 percent from the year-ago quarter.

 

Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $0.9 million for the first quarter of 2019, compared to $1.6 million for the year-ago quarter. The mortgage servicing valuation adjustment for the first quarter of 2019 was a negative $0.7 million, compared to a positive adjustment of $0.1 million for the first quarter of 2018. The temporary impairment for the quarter was due to the inversion of the yield curve and the rapid acceleration of pre-payment speed assumptions. The aggregate servicing valuation impairment ended the quarter at $0.9 million. The servicing portfolio at March 31, 2019, was $1.09 billion, up $0.90 million, or 8.9 percent, from $1.0 billion at March 31, 2018.

 

Mr. Klein noted, “We experienced a slowing mortgage origination market this quarter as market factors and decreased inventory impacted our results. We continue to believe our regional production model and geographic diversity will lead to greater market presence.”

 

Mortgage Banking

 

($ in thousands)  Mar. 2019   Dec. 2018   Sep. 2018   Jun. 2018   Mar. 2018 
Mortgage originations  $51,417   $78,829   $95,289   $109,466   $58,485 
Mortgage sales   43,472    60,345    80,555    79,162    40,589 
Mortgage servicing portfolio   1,094,060    1,084,678    1,066,402    1,030,780    1,004,728 
Mortgage servicing rights   10,838    11,347    11,129    10,634    10,195 
                          
Mortgage servicing revenue:                         
Loan servicing fees   682    673    653    636    625 
OMSR amortization   (254)   (300)   (318)   (367)   (246)
Net administrative fees   428    373    335    269    379 
OMSR valuation adjustment   (708)   (68)   (62)   (22)   92 
Net loan servicing fees   (280)   305    273    247    471 
Gain on sale of mortgages   1,192    1,646    2,066    2,058    1,100 
Mortgage banking revenue, net  $912   $1,951   $2,339   $2,305   $1,571 

 

2

 

 

Noninterest Income and Noninterest Expense

 

SB Financial’s noninterest income includes revenue from a diverse group of services, such as wealth management, deposit fees, residential loan sales and the sale of Small Business Administration (SBA) and US Department of Agriculture (USDA) loans. SBA and USDA activity for the quarter consisted of total origination volume of $3.0 million with sales volume of $2.2 million resulting in gains of $0.3 million. Wealth management assets under the Company’s care stood at $462.6 million as of March 31, 2019, up $39.3 million from the linked quarter and up $50.9 million from the year ago quarter. For the first quarter of 2019, noninterest income as a percentage of total revenue was 26.5 percent (30.8 percent when adjusting for the OMSR impairment). Results included revenue from the Company’s newly acquired Title Agency, which will further add to our revenue diversity throughout 2019.

 

For the first quarter of 2019, noninterest expense of $8.6 million was flat to the prior year and down $0.2 million from the linked quarter. Lower mortgage production volumes reduced compensation expense compared to the prior year.

 

Mr. Klein stated, “Fee income levels from mortgage lending were down this quarter and the OMSR temporary impairment had a significant impact on our operating results. We closed on our Title Agency acquisition in March, and we are excited for the opportunities that this new revenue stream will offer. We continue to pay close attention to expenses and are committed to measured expense growth, in line with revenue increases.”

 

Noninterest Income / Noninterest Expense                
                 
($ in thousands, except ratios)  Mar. 2019   Dec. 2018   Sep. 2018   Jun. 2018   Mar. 2018 
Noninterest Income (NII)  $3,000   $3,930   $4,202   $4,249   $4,243 
NII / Total Revenue   26.5%   31.3%   33.0%   33.5%   35.5%
NII / Average Assets   1.2%   1.6%   1.8%   1.8%   1.9%
                          
Noninterest Expense (NIE)  $8,626   $8,852   $8,789   $8,579   $8,627 
Efficiency Ratio   76.1%   70.6%   69.0%   67.7%   72.2%
NIE / Average Assets   3.5%   3.6%   3.7%   3.7%   3.8%
Net Noninterest Expense   -2.3%   -2.0%   -1.9%   -1.9%   -1.9%

 

Balance Sheet

 

Total assets as of March 31, 2019, were $1.0 billion, up $95.6 million, or 10.3 percent, from a year ago. Total equity as of March 31, 2019, was $131.5 million, up 7.0 percent from a year ago, and comprised 12.9 percent of total assets.

 

Total loans held for investment were $782.5 million at March 31, 2019, up $75.3 million, or 10.7 percent, from March 31, 2018. Residential real estate loans were up $35.7 million, or 23.5 percent, with commercial loans rising $28.6 million, or 26.6 percent.

 

The investment portfolio of $99.9 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 9.8 percent of assets at March 31, 2019, and was up 4.4 percent from the year-ago period. Deposit balances of $827.7 million at March 31, 2019, increased by $78.9 million or 10.5 percent, since March 31, 2018. Growth from the prior year included $7.6 million in checking and $71.3 million in savings and time deposit balances.

 

3

 

 

Mr. Klein continued, “Both loan and deposit volumes were up over 10 percent from the prior year and grew 14 and 31 percent for the quarter, respectively. Nonperforming assets to total assets ended the quarter at 42 basis points, up just 4 basis points from the prior year.”

 

Loan Balance                        
($ in thousands, except ratios)  Mar. 2019   Dec. 2018   Sep. 2018   Jun. 2018   Mar. 2018   Annual Growth 
Commercial  $136,201   $127,640   $119,810   $115,140   $107,579   $28,622 
% of Total   17.4%   16.5%   15.5%   15.3%   15.2%   26.6%
Commercial RE   343,900    340,791    356,563    350,266    338,586    5,314 
% of Total   43.9%   44.2%   46.2%   46.5%   47.9%   1.6%
Agriculture   50,620    52,012    52,814    52,466    50,266    354 
% of Total   6.5%   6.7%   6.8%   7.0%   7.1%   0.7%
Residential RE   187,548    187,104    178,033    172,773    151,820    35,728 
% of Total   24.0%   24.2%   23.1%   22.9%   21.5%   23.5%
Consumer & Other   64,254    64,336    64,478    62,640    58,956    5,298 
% of Total   8.2%   8.3%   8.4%   8.3%   8.3%   9.0%
Total Loans  $782,523   $771,883   $771,698   $753,285   $707,207   $75,316 
Total Growth Percentage                            10.6%

 

Deposit Balance                        
($ in thousands, except ratios)  Mar. 2019   Dec. 2018   Sep. 2018   Jun. 2018   Mar. 2018   Annual Growth 
Non-Int DDA  $146,327   $144,592   $134,747   $131,125   $132,919   $13,408 
% of Total   17.7%   18.0%   17.1%   17.4%   17.8%   10.1%
Interest DDA   132,101    130,628    130,897    129,486    137,893    (5,792)
% of Total   16.0%   16.3%   16.6%   17.2%   18.4%   -4.2%
Savings   115,272    104,444    114,213    118,108    116,820    (1,548)
% of Total   13.8%   12.9%   14.4%   15.7%   15.6%   -1.3%
Money Market   175,334    181,426    170,190    151,228    143,679    31,655 
% of Total   21.2%   22.6%   21.6%   20.1%   19.2%   22.0%
Certificates   258,624    241,462    239,379    222,932    217,484    41,140 
% of Total   31.2%   30.1%   30.3%   29.6%   29.0%   18.9%
Total Deposits  $827,658   $802,552   $789,426   $752,879   $748,795   $78,863 
Total Growth Percentage                            10.5%

 

4

 

 

Asset Quality

 

SB Financial maintained its high-performance among its peers in asset quality levels for the quarter, reporting nonperforming assets of $4.3 million as of March 31, 2019, up $0.8 million, or 22.3 percent, from the year-ago quarter. SB Financial’s nonperforming assets to total assets ratio of 0.42 percent is in the top quartile of its 65-bank peer group. The coverage of problem loans by the loan loss allowance was at 204 percent at March 31, 2019, down from 239 percent at March 31, 2018.

 

Summary of Nonperforming Assets

 

                       Annual 
($ in thousands, except ratios)  Mar. 2019   Dec. 2018   Sep. 2018   Jun. 2018   Mar. 2018   Growth 
Commercial & Agriculture  $998   $731   $360   $33   $35   $963 
% of Total Com./Ag. loans   0.53%   0.41%   0.21%   0.02%   0.02%   N/M 
Commercial RE   212    218    228    234    487    (275)
% of Total CRE loans   0.06%   0.06%   0.06%   0.07%   0.14%   -56.5%
Residential RE   1,612    1,738    1,541    1,634    1,714    (102)
% of Total Res. RE loans   0.86%   0.93%   0.87%   0.95%   1.13%   -6.0%
Consumer & Other   325    219    252    221    85    240 
% of Total Con./Oth. loans   0.51%   0.34%   0.39%   0.35%   0.14%   N/M 
Total Nonaccruing Loans   3,147    2,906    2,381    2,122    2,321    826 
% of Total loans   0.40%   0.38%   0.31%   0.28%   0.33%   35.6%
Accruing Restructured Loans   827    928    940    1,101    1,115    (288)
Total Growth (%)                            -25.8%
Total Nonaccruing & Restructured Loans   3,974    3,834    3,321    3,223    3,436    538 
% of Total loans   0.51%   0.50%   0.43%   0.43%   0.49%   15.7%
Foreclosed Assets   313    131    105    16    70    243 
Total Growth (%)                            347.1%
Total Nonperforming Assets  $4,287   $3,965   $3,426   $3,239   $3,506   $781 
% of Total assets   0.42%   0.40%   0.35%   0.34%   0.38%   22.3%

 

Webcast and Conference Call

 

The Company will hold a related conference call and webcast on April 18, 2019, at 5:00 p.m. EDT. Interested parties may access the conference call by dialing 1-888-338-9469. The webcast can be accessed at www.yoursbfinancial.com/investorrelations.html. An audio replay of the call will be available on the SB Financial 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). 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 20 offices; 19 in nine Ohio counties and one in Fort Wayne, Indiana, and 26 full-service ATMs. The Company has seven loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. SB Financial’s common stock is listed on the NASDAQ Capital Market under the symbol “SBFG”.  SB Financial’s preferred stock is listed on the NASDAQ Capital Market under the symbol “SBFGP”.  

 

In May 2018, SB Financial was ranked #72 on the American Banker Magazine’s list of Top 200 Publicly Traded Community Banks and Thrifts based on three-year average return on equity (“ROE”).

 

5

 

 

Forward-Looking Statements

 

Certain statements within this document, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties and actual results may differ materially from those predicted by the forward-looking statements. These risks and uncertainties include, but are not limited to, 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 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. 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.

 

###

 

6

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS - (Unaudited)

 

   March   December   September   June   March 
($ in thousands)  2019   2018   2018   2018   2018 
                     
ASSETS                    
Cash and due from banks  $62,962   $48,363   $45,515   $24,413   $48,329 
Available-for-sale securities   95,802    90,969    84,114    89,911    91,987 
Loans held for sale   4,346    4,445    6,888    7,551    8,893 
Loans, net of unearned income   782,523    771,883    771,698    753,285    707,207 
Allowance for loan losses   (8,121)   (8,167)   (8,489)   (8,494)   (8,219)
Premises and equipment, net   23,270    22,084    21,900    21,683    21,776 
Federal Reserve and FHLB Stock, at cost   4,123    4,123    4,123    3,748    3,748 
Foreclosed assets held for sale, net   313    131    105    16    70 
Interest receivable   3,123    2,822    2,433    2,000    1,925 
Goodwill and other intangibles   17,838    16,401    16,404    16,406    16,409 
Cash value of life insurance   16,966    16,834    16,745    16,656    16,567 
Mortgage servicing rights   10,838    11,365    11,129    10,633    10,196 
Other assets   7,288    5,575    6,615    6,977    6,753 
Total assets  $1,021,271   $986,828   $979,180   $944,785   $925,641 
                          
LIABILITIES AND SHAREHOLDERS' EQUITY                         
Deposits                         
Non interest bearing demand  $146,327   $144,592   $134,747   $131,125   $132,919 
Interest bearing demand   132,101    130,628    130,897    129,486    137,893 
Savings   115,272    104,444    114,213    118,108    116,820 
Money market   175,334    181,426    170,190    151,228    143,679 
Time deposits   258,624    241,462    239,379    222,932    217,484 
Total deposits   827,658    802,552    789,426    752,879    748,795 
                          
Repurchase agreements   12,255    15,184    15,539    18,191    14,505 
Federal Home Loan Bank advances   24,000    16,000    24,500    26,500    18,500 
Trust preferred securities   10,310    10,310    10,310    10,310    10,310 
Interest payable   1,123    909    891    685    633 
Other liabilities   14,419    11,438    11,405    11,116    9,999 
Total liabilities   889,765    856,393    852,071    819,681    802,742 
                          
Shareholders' Equity                         
Preferred stock   13,978    13,979    13,979    13,983    13,983 
Common stock   40,486    40,485    40,485    40,481    40,481 
Additional paid-in capital   15,143    15,226    15,160    15,098    15,189 
Retained earnings   65,438    64,012    61,854    59,503    57,162 
Accumulated other comprehensive loss   124    (552)   (1,654)   (1,240)   (941)
Treasury stock   (3,663)   (2,715)   (2,715)   (2,721)   (2,975)
Total equity   131,506    130,435    127,109    125,104    122,899 
                          
Total liabilities and shareholders' equity  $1,021,271   $986,828   $979,180   $944,785   $925,641 

 

7

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

 

($ in thousands, except per share & ratios)  At and for the Three Months Ended 
   March   December   September   June   March 
Interest income  2019   2018   2018   2018   2018 
Loans                    
Taxable  $9,427   $9,661   $9,499   $8,968   $8,140 
Tax exempt   62    55    42    36    21 
Securities                         
Taxable   911    822    610    613    573 
Tax exempt   98    100    107    115    117 
Total interest income   10,498    10,638    10,258    9,732    8,851 
                          
Interest expense                         
Deposits   1,918    1,776    1,472    1,091    975 
Repurchase agreements & other   26    10    11    6    10 
Federal Home Loan Bank advances   100    131    140    110    79 
Trust preferred securities   114    107    106    101    87 
Total interest expense   2,158    2,024    1,729    1,308    1,151 
                          
Net interest income   8,340    8,614    8,529    8,424    7,700 
Provision for loan losses   -    -    -    300    300 
                          
Net interest income after provision for loan losses   8,340    8,614    8,529    8,124    7,400 
                          
Noninterest income                         
Wealth Management Fees   734    717    705    710    739 
Customer service fees   631    679    672    675    644 
Gain on sale of mtg. loans & OMSR   1,192    1,646    2,066    2,058    1,100 
Mortgage loan servicing fees, net   (280)   305    273    247    471 
Gain on sale of non-mortgage loans   327    295    125    150    660 
Title insurance income   19    -    -    -    - 
Net gain on sales of securities   -    -    70    -    - 
Gain/(loss) on sale of assets   (2)   14    -    60    (39)
Other   379    274    291    349    668 
Total noninterest income   3,000    3,930    4,202    4,249    4,243 
                          
Noninterest expense                         
Salaries and employee benefits   4,902    5,108    5,372    5,201    4,939 
Net occupancy expense   645    600    588    560    649 
Equipment expense   711    756    667    637    829 
Data processing fees   443    466    489    418    438 
Professional fees   617    532    393    504    419 
Marketing expense   239    262    197    204    221 
Telephone and communication   115    121    124    128    122 
Postage and delivery expense   84    66    83    63    74 
State, local and other taxes   255    180    177    176    186 
Employee expense   153    283    243    220    166 
Other expenses   462    478    456    468    584 
Total noninterest expense   8,626    8,852    8,789    8,579    8,627 
                          
Income before income tax expense   2,714    3,692    3,942    3,794    3,016 
Income tax expense   488    732    824    687    563 
Net income  $2,226   $2,960   $3,118   $3,107   $2,453 
                          
Preferred Share Dividends   244    243    244    244    244 
                          
Net income available to common shareholders   1,982    2,717    2,874    2,863    2,209 
                          
Common share data:                         
Basic earnings per common share  $0.31   $0.42   $0.45   $0.45   $0.40 
Diluted earnings per common share  $0.28   $0.37   $0.39   $0.40   $0.35 
                          
Average shares outstanding (in thousands):                         
Basic:   6,482    6,503    6,503    6,489    5,519 
Diluted:   7,994    8,030    8,022    8,003    7,055 

8

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

 

($ in thousands, except per share & ratios)  At and for the Three Months Ended 
   March   December   September   June   March 
SUMMARY OF OPERATIONS  2018   2018   2018   2018   2018 
                     
Net interest income  $8,340   $8,614   $8,529   $8,424   $7,700 
Tax-equivalent adjustment   43    41    40    40    37 
Tax-equivalent net interest income   8,383    8,655    8,569    8,464    7,737 
Provision for loan loss   -    -    -    300    300 
Noninterest income   3,000    3,930    4,202    4,249    4,243 
Total operating revenue   11,340    12,544    12,731    12,673    11,943 
Noninterest expense   8,626    8,852    8,789    8,579    8,627 
Pre-tax pre-provision income   2,714    3,692    3,942    4,094    3,316 
Pretax income   2,714    3,692    3,942    3,794    3,016 
Net income   2,226    2,960    3,118    3,107    2,453 
Income available to common shareholders   1,982    2,717    2,874    2,863    2,209 
                          
PER SHARE INFORMATION:                         
Basic earnings per share  $0.31   $0.42   $0.45   $0.45   $0.40 
Diluted earnings per share   0.28    0.37    0.39    0.40    0.35 
Common dividends   0.085    0.085    0.080    0.080    0.075 
Book value per common share   16.57    16.36    15.94    15.73    15.49 
Tangible book value per common share (TBV)   15.43    15.39    14.87    14.57    14.27 
Fully converted TBV per common share   14.32    14.30    13.88    13.66    13.42 
Market price per common share   18.02    16.45    20.35    20.32    18.51 
Market price per preferred share   19.00    17.90    20.25    19.82    18.20 
Market price to tangible book value   116.8%   106.9%   136.8%   139.5%   129.7%
Market price to fully converted TBV   125.8%   115.0%   146.6%   148.7%   137.9%
Market price to trailing 12 month EPS   12.6    11.0    11.5    11.2    10.3 
                          
PERFORMANCE RATIOS:                         
Return on average assets (ROAA)   0.89%   1.19%   1.30%   1.35%   1.08%
Pre-tax pre-provision ROAA   1.08%   1.48%   1.64%   1.78%   1.46%
Return on average equity   6.76%   9.21%   9.89%   10.02%   9.03%
Return on average tangible equity   8.83%   12.06%   13.02%   13.28%   12.54%
Efficiency ratio   76.05%   70.55%   69.01%   67.67%   72.22%
Earning asset yield   4.78%   4.86%   4.75%   4.76%   4.41%
Cost of interest bearing liabilities   1.20%   1.15%   1.00%   0.80%   0.71%
Net interest margin   3.79%   3.93%   3.95%   4.12%   3.84%
Tax equivalent effect   0.02%   0.02%   0.01%   0.02%   0.02%
Net interest margin, tax equivalent   3.81%   3.95%   3.96%   4.14%   3.86%
Non interest income/Average assets   1.20%   1.58%   1.75%   1.84%   1.87%
Non interest expense/Average assets   3.45%   3.56%   3.65%   3.72%   3.81%
Net noninterest expense/Average assets   2.25%   1.98%   1.91%   1.88%   1.93%
                          
ASSET QUALITY RATIOS:                         
Gross charge-offs  $60   $322   $12   $54   $19 
Recoveries   13    1    6    29    9 
Net charge-offs   47    321    6    25    10 
Nonaccruing loans/ Total loans   0.40%   0.38%   0.31%   0.28%   0.33%
Nonperforming loans/ Total loans   0.51%   0.50%   0.43%   0.43%   0.49%
Nonperforming assets/ Loans & OREO   0.55%   0.51%   0.44%   0.43%   0.50%
Nonperforming assets/ Total assets   0.42%   0.40%   0.35%   0.34%   0.38%
Allowance for loan loss/ Nonperforming loans   204.35%   213.02%   255.62%   263.54%   239.20%
Allowance for loan loss/ Total loans   1.04%   1.06%   1.10%   1.13%   1.16%
Net loan charge-offs/ Average loans (ann.)   0.02%   0.17%   0.00%   0.01%   0.01%
Loan loss provision/ Net charge-offs   0.00%   0.00%   0.00%   1200.00%   3000.00%
                          
CAPITAL & LIQUIDITY RATIOS:                         
Loans/ Deposits   94.55%   96.18%   97.75%   100.05%   94.45%
Equity/ Assets   12.88%   13.22%   12.98%   13.24%   13.28%
Tangible equity/ Tangible assets   9.93%   10.31%   10.05%   10.20%   10.17%
Tangible equity adjusted for conversion   11.33%   11.75%   11.50%   11.71%   11.71%
Common equity tier 1 ratio (Bank) - 3/19 est.   12.87%   12.57%   12.16%   11.91%   12.23%
                          
END OF PERIOD BALANCES                         
Total assets  $1,021,271   $986,828   $979,180   $944,785   $925,641 
Total loans   782,523    771,883    771,698    753,285    707,207 
Deposits   827,658    802,552    789,426    752,879    748,795 
Stockholders equity   131,506    130,435    127,109    125,104    122,899 
Goodwill & intangibles   17,838    16,401    16,404    16,406    16,409 
Preferred equity   13,978    13,979    13,979    13,983    13,983 
Tangible equity   99,690    100,055    96,726    94,715    92,507 
Mortgage servicing portfolio   1,094,060    1,084,678    1,066,402    1,030,780    1,004,728 
Wealth/Brokerage assets under care   462,580    423,289    412,218    407,592    411,654 
Total assets under care   2,577,911    2,494,795    2,457,800    2,383,157    2,342,023 
Full-time equivalent employees (actual)   256    250    250    241    240 
Period end basic shares outstanding   6,460    6,503    6,503    6,502    6,483 
Period end outstanding (Series A Converted)   1,475    1,472    1,470    1,453    1,453 
Market capitalization (all)   144,898    133,824    162,711    161,851    147,300 
                          
AVERAGE BALANCES                         
Total assets  $1,001,282   $994,977   $962,369   $922,355   $906,281 
Total earning assets   879,394    875,747    864,490    817,270    802,358 
Total loans   775,280    775,060    770,948    724,710    711,733 
Deposits   812,190    803,928    769,266    739,877    738,867 
Stockholders equity   131,691    128,539    126,144    123,990    108,662 
Intangibles   16,880    16,403    16,405    16,407    16,410 
Preferred equity   13,979    13,979    13,983    13,983    13,983 
Tangible equity   100,832    98,157    95,756    93,600    78,269 
Average basic shares outstanding   6,482    6,503    6,503    6,489    5,519 
Average diluted shares outstanding   7,994    8,030    8,022    8,003    7,055 

 

9

 

 

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

At and for the Three Months Ended March 31, 2019 and 2018

 

($ in thousands)  Three Months Ended Mar. 31, 2019   Three Months Ended Mar. 31, 2018 
   Average       Average   Average       Average 
   Balance   Interest   Rate   Balance   Interest   Rate 
Assets                        
Taxable securities  $94,623   $911    3.85%  $77,802   $573    2.95%
Nontaxable securities   9,491    98    4.13%   12,823    117    3.66%
Loans, net   775,280    9,489    4.90%   711,733    8,161    4.59%
Total earning assets   879,394    10,498    4.78%   802,358    8,851    4.41%
Cash and due from banks   56,976              38,145           
Allowance for loan losses   (8,284)             (8,043)          
Premises and equipment   22,650              21,307           
Other assets   50,546              52,514           
Total assets  $1,001,282             $906,281           
Liabilities                              
Savings, MMDA and interest bearing demand  $422,649   $722    0.68%  $389,809   $256    0.26%
Time deposits   249,655    1,196    1.92%   214,645    719    1.34%
Repurchase agreements & other   17,704    26    0.59%   18,124    10    0.22%
Advances from Federal Home Loan Bank   16,267    100    2.46%   18,500    79    1.71%
Trust preferred securities   10,310    114    4.42%   10,310    87    3.38%
Total interest bearing liabilities   716,585    2,158    1.20%   651,388    1,151    0.71%
Non interest bearing demand   139,886    -         134,413    -      
Total funding   856,471         1.01%   785,801         0.59%
Other liabilities   13,120              11,818           
Total liabilities   869,591              797,619           
Equity   131,691              108,662           
                               
Total liabilities and equity  $1,001,282             $906,281           
                               
Net interest income       $8,340             $7,700      
                               
Net interest income as a percent of average interest-earning assets - GAAP measure             3.79%             3.84%
                               
Net interest income as a percent of average interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis             3.81%             3.86%

 

10

 

 

Non-GAAP reconciliation 1st Quarter 2019

 

   3 Months ended   3 Months ended 
($ in thousands, except per share & ratios)  March 31,
2019
   March 31,
2018
 
         
Total Revenues  $11,340   $11,943 
Adjustment to remove temporary impairment*   708    - 
Adjusted Total Revenues  $12,048   $11,943 
           
Income before Income Taxes  $2,714   $3,016 
Adjustment to remove temporary impairment   708    - 
Adjusted Income before Income Taxes  $3,422   $3,016 
           
Provision for Income Taxes  $488   $563 
Adjustment to remove temporary impairment   149    - 
Adjusted Provision for Income Taxes  $637   $563 
           
Net Income  $2,226   $2,453 
Adjustment to remove temporary impairment   559    - 
Adjusted Net Income  $2,785   $2,453 
           
Diluted Earnings per Share  $0.28   $0.35 
Adjustment to remove temporary impairment   0.07    - 
Adjusted Diluted Earnings per Share  $0.35   $0.35 
           
Return on Average Assets   0.89%   1.08%
Adjustment to remove temporary impairment   0.06%   - 
Adjusted Return on Average Assets   0.95%   1.08%

 

* temporary valuation adjustment to the Company's mortgage servicing rights

 

 

11

 

 

(Back To Top)