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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) July 24, 2019 (July 23, 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 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading symbol(s)   Name of each exchange on which registererd

Common Shares, No Par Value

6,553,371 Outstanding at July 24, 2019

   SBFG  

The NASDAQ Stock Market, LLC

(NASDAQ Capital Market)

 

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 July 23, 2019, SB Financial Group, Inc. (the “Company”) issued a news release reporting financial results for the second quarter 2019. A copy of the July 23, 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 July 23, 2019, reporting financial results for the second 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:  July 24, 2019 By: /s/ Anthony V. Cosentino
    Anthony V. Cosentino
    Chief Financial Officer

 

-2-

 

 

INDEX TO EXHIBITS

 

Current Report on Form 8-K

Dated July 24, 2019

 

SB Financial Group, Inc. 

 

Exhibit No.   Description
99.1   News release issued by SB Financial Group, Inc. on July 23, 2019, reporting financial results for the second quarter 2019.

 

 

 

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(Back To Top)

Section 2: EX-99.1 (NEWS RELEASE ISSUED BY SB FINANCIAL GROUP, INC. ON JULY 23, 2019, REPORTING FINANCIAL RESULTS FOR THE SECOND QUARTER 2019)

Exhibit 99.1

 

SB FinancialGroup Logo SM.png

 

SB Financial Group, Inc. Announces Second-Quarter and Six-Month 2019 Earnings

 

 

DEFIANCE, Ohio, July 23, 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 second-quarter and six months ended June 30, 2019.

 

Second-quarter 2019 highlights over prior-year second quarter include:

 

●Total assets increased to $1.03 billion, up $84.3 million, or 8.9 percent

 

●Net income of $2.6 million; adjusted net income due to servicing rights impairment of $3.2 million

 

●Diluted earnings per share (EPS) of $0.33; adjusted EPS of $0.40

 

●Tangible book value (TBV) per share increased 8.6 percent to $15.83 per share

 

Six months ended June 30, 2019, highlights over prior-year six months include:

 

●Net income of $4.9 million; adjusted net income of $6.0 million, which is up $0.5 million or 8.0 percent

 

●Diluted EPS of $0.61; adjusted EPS of $0.75

 

●Return on Average Assets (ROA) of 0.96 percent; adjusted 1.07 percent

 

●Net interest margin (NIM) of 3.84 percent down 5 basis points

 

Second-quarter 2019, trailing twelve-month highlights include:

 

●Loan growth of $61.2 million, or 8.1 percent
   
●Deposit growth of $86.5 million, or 11.5 percent

 

●Mortgage origination volume of $324.0 million; servicing portfolio of $1.11 billion

 

Highlights  Three Months Ended   Six Months Ended 
($ in thousands, except per share & ratios)  Jun. 2019   Jun. 2018   % Change   Jun. 2019   Jun. 2018   % Change 
Operating revenue  $12,523   $12,673    -1.2%  $23,863   $24,616    -3.1%
Interest income   11,151    9,732    14.6%   21,649    18,583    16.5%
Interest expense   2,319    1,308    77.3%   4,477    2,459    82.1%
Net interest income   8,832    8,424    4.8%   17,172    16,124    6.5%
Provision for loan losses   200    300    -33.3%   200    600    -66.7%
Noninterest income   3,691    4,249    -13.1%   6,691    8,492    -21.2%
Noninterest expense   9,108    8,579    6.2%   17,734    17,206    3.1%
Net income   2,627    3,107    -15.4%   4,853    5,560    -12.7%
Earnings per diluted share   0.33    0.40    -17.5%   0.61    0.75    -18.7%
Return on average assets   1.03%   1.35%   -23.7%   0.96%   1.21%   -20.7%
Return on average equity   7.92%   10.02%   -21.0%   7.36%   9.64%   -23.7%
                               
Non-GAAP Measures                              
Adjusted net income  $3,172   $3,122    1.6%  $5,957   $5,514    8.0%
Adjusted diluted EPS   0.40    0.40    0.0%   0.75    0.74    1.4%
Adjusted return on average assets   1.09%   1.35%   -19.3%   1.07%   1.20%   -10.8%
Net interest margin (FTE)   3.88%   4.14%   -6.3%   3.84%   3.89%   -1.3%

 

 

 

 

“We delivered increased second-quarter net income compared to the prior-year quarter, when we adjust for the impairment to our mortgage servicing rights,” said Mark A. Klein, Chairman, President and CEO of SB Financial. Our operating results included a very strong loan growth quarter, as we added over $32 million, and over the last 12 months, $61 million. Also, this quarter had a strong rebound in our mortgage origination volume of $98 million, increasing originations over the last 12 months to $324 million.”

 

RESULTS OF OPERATIONS

 

Consolidated Revenue

 

Total operating revenue, consisting of net interest income and noninterest income, was down 1.2 percent from the second quarter of 2018, but up 10.4 percent from the linked quarter.

 

●Net interest income was up 4.8 percent from the year-ago quarter, and up 5.9 percent from the linked quarter.
   
●Net interest margin (FTE) was down 26 basis points from the year-ago quarter, but up 7 basis points from the linked quarter.
   
●Noninterest income was down 13.1 percent from the year-ago quarter, but up 23.0 percent from the linked quarter.

 

Funding costs, primarily from retail deposits have increased from the prior year and from the linked quarter. Deposit cost of funds for the most recent quarter of 1.01 percent are up from the prior year quarter of 0.59 percent. From the linked quarter, deposit cost of funds are up only six basis points from 0.95 percent.

 

Mortgage Loan Business

 

Mortgage loan originations for the second quarter of 2019 were $98.4 million, down $11.0 million, or 10.1 percent, from the year-ago quarter. Total sales of originated loans were $71.0 million, down $8.2 million, or 10.3 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 $1.2 million for the second quarter of 2019, compared to $2.3 million for the year-ago quarter. The mortgage servicing valuation adjustment for the second quarter of 2019 was a negative $0.7 million, compared to a negative adjustment of $0.02 million for the second quarter of 2018. The aggregate servicing valuation impairment ended the quarter at $1.6 million. The mortgage-servicing portfolio at June 30, 2019, was $1.11 billion, up $0.08 billion, or 8.0 percent, from $1.03 billion at June 30, 2018.

 

Mr. Klein noted, “Although our earnings were impacted by the $0.7 million impairment in the quarter and $1.4 million for all of 2019, we are encouraged by the strong mortgage quarter that included purchase volume of $91 million or 93 percent and refinance volume of $7 million or 7 percent. Our current pipeline exceeds $50 million and we continue to attract targeted clients.”

 

Mortgage Banking                    
($ in thousands)  Jun. 2019   Mar. 2019   Dec. 2018   Sep. 2018   Jun. 2018 
Mortgage originations  $98,447   $51,417   $78,829   $95,289   $109,466 
Mortgage sales   70,993    43,472    60,345    80,555    79,162 
Mortgage servicing portfolio   1,112,857    1,094,060    1,084,678    1,066,402    1,030,780 
Mortgage servicing rights   10,264    10,838    11,347    11,129    10,634 

 

Mortgage servicing revenue:                         
Loan servicing fees   691    682    673    653    636 
OMSR amortization   (460)   (254)   (300)   (318)   (367)
Net administrative fees   231    428    373    335    269 
OMSR valuation adjustment   (690)   (708)   (68)   (62)   (22)
Net loan servicing fees   (459)   (280)   305    273    247 
Gain on sale of mortgages   1,678    1,192    1,646    2,066    2,058 
Mortgage banking revenue, net  $1,219   $912   $1,951   $2,339   $2,305 

 

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, title agency revenue and the sale of Small Business Administration (SBA) loans. SBA activity for the quarter consisted of total loan volume of $4.1 million and gains of $0.1 million. Wealth management assets under the Company’s care stood at $479.4 million as of June 30, 2019. In the first full quarter of operation, the title agency business delivered revenue of $0.3 million. For the second quarter of 2019, noninterest income as a percentage of total revenue was 29.5 percent, with the YTD percentage at 33.9 percent when adjusted for the impairment.

 

For the second quarter of 2019, noninterest expense (NIE) of $9.1 million was up $0.5 million, or 6.2 percent, compared to the same quarter last year. Compared to the linked quarter, NIE was also up $0.5 million. Expense growth was the result of higher mortgage commissions, merit increases and the addition of a title agency. We continue to add resources of both technology and personnel in order to meet the expanded needs of our operations, information technology and risk management functions.

 

Noninterest Income / Noninterest Expense                    
($ in thousands, except ratios)   Jun. 2019    Mar. 2019    Dec. 2018    Sep. 2018    Jun. 2018 
Noninterest Income (NII)  $3,691   $3,000   $3,930   $4,202   $4,249 
NII / Total Revenue   29.5%   26.5%   31.3%   33.0%   33.5%
NII / Average Assets   1.5%   1.2%   1.6%   1.8%   1.8%
                          
Noninterest Expense (NIE)  $9,108   $8,626   $8,852   $8,789   $8,579 
Efficiency Ratio   72.7%   76.1%   70.6%   69.0%   67.7%
NIE / Average Assets   3.6%   3.5%   3.6%   3.7%   3.7%
Net Noninterest Expense/Avg. Assets   -2.1%   -2.3%   -2.0%   -1.9%   -1.9%

 

Balance Sheet

 

Total assets as of June 30, 2019, were $1.03 billion, up $84.3 million, or 8.9 percent, from a year ago. Total equity as of June 30, 2019, was $133.9 million, up 7.1 percent from a year ago, and comprised 13.0 percent of total assets.

 

Total loans held for investment were $814.5 million at June 30, 2019, up $61.2 million, or 8.1 percent, from June 30, 2018 and up $32.0 million or 16.4 percent annualized for the quarter. From the prior year, commercial loans were up $28.7 million, or 24.9 percent, with residential real estate rising $18.9 million, or 10.9 percent.

 

The investment portfolio of $89.9 million, including Federal Reserve Bank and Federal Home Loan Bank stock, represented 8.7 percent of assets at June 30, 2019. Deposit balances of $839.4 million at June 30, 2019, increased by $86.5 million, or 11.5 percent, since June 30, 2018. Growth from the prior year included $10.3 million in checking and $76.2 million in savings, money market and time deposit balances.

 

3

 

 

Mr. Klein stated, “Our balance sheet metrics improved this quarter with 16.4 percent annualized loan growth and $12 million in deposit growth. Compared to the prior year, deposit growth of 11.5 percent fully funded our 8.1 percent loan growth. Our asset quality metrics and coverage ratio remain in the top quartile of our peer group.”

 

Loan Balance                        
($ in thousands, except ratios)  Jun. 2019   Mar. 2019   Dec. 2018   Sep. 2018   Jun. 2018   Annual Growth 
Commercial  $143,798   $136,201   $127,640   $119,810   $115,140   $28,658 
% of Total   17.7%   17.4%   16.5%   15.5%   15.3%   24.9%
Commercial RE   360,491    343,900    340,791    356,563    350,266    10,225 
% of Total   44.2%   43.9%   44.2%   46.2%   46.5%   2.9%
Agriculture   54,317    50,620    52,012    52,814    52,466    1,851 
% of Total   6.7%   6.5%   6.7%   6.8%   7.0%   3.5%
Residential RE   191,642    187,548    187,104    178,033    172,773    18,869 
% of Total   23.5%   24.0%   24.2%   23.1%   22.9%   10.9%
Consumer & Other   64,261    64,254    64,336    64,478    62,640    1,621 
% of Total   7.9%   8.2%   8.3%   8.4%   8.3%   2.6%
Total Loans  $814,509   $782,523   $771,883   $771,698   $753,285   $61,224 
Total Growth Percentage                            8.1%

 

Deposit Balance                        
($ in thousands, except ratios)  Jun. 2019   Mar. 2019   Dec. 2018   Sep. 2018   Jun. 2018   Annual Growth 
Non-Int DDA  $141,216   $146,327   $144,592   $134,747   $131,125   $10,091 
% of Total   16.8%   17.7%   18.0%   17.1%   17.4%   7.7%
Interest DDA   129,710    132,101    130,628    130,897    129,486    224 
% of Total   15.5%   16.0%   16.3%   16.6%   17.2%   0.2%
Savings   118,931    115,272    104,444    114,213    118,108    823 
% of Total   14.1%   13.8%   12.9%   14.4%   15.7%   0.7%
Money Market   175,455    175,334    181,426    170,190    151,228    24,227 
% of Total   20.9%   21.2%   22.6%   21.6%   20.1%   16.0%
Certificates   274,062    258,624    241,462    239,379    222,932    51,130 
% of Total   32.7%   31.2%   30.1%   30.3%   29.6%   22.9%
Total Deposits  $839,374   $827,658   $802,552   $789,426   $752,879   $86,495 
Total Growth Percentage                            11.5%

 

Asset Quality

 

SB Financial’s nonperforming assets to total assets ratio of 0.43 percent continues to be in the top quartile of its 65-bank peer group. The coverage of problem loans by the loan loss allowance was at 212 percent at June 30, 2019, down from 264 percent at June 30, 2018.

 

4

 

 

Summary of Nonperforming Assets                      Annual 
($ in thousands, except ratios)  Jun. 2019   Mar. 2019   Dec. 2018   Sep. 2018   Jun. 2018   Growth 
Commercial & Agriculture  $674   $998   $731   $360   $33   $641 
% of Total Com./Ag. loans   0.34%   0.53%   0.41%   0.21%   0.02%   1942.4%
Commercial RE   208    212    218    228    234    (26)
% of Total CRE loans   0.06%   0.06%   0.06%   0.06%   0.07%   -11.1%
Residential RE   1,768    1,612    1,738    1,541    1,634    134 
% of Total Res. RE loans   0.92%   0.86%   0.93%   0.87%   0.95%   8.2%
Consumer & Other   456    325    219    252    221    235 
% of Total Con./Oth. loans   0.71%   0.51%   0.34%   0.39%   0.35%   106.3%
Total Nonaccruing Loans   3,106    3,147    2,906    2,381    2,122    984 
% of Total loans   0.38%   0.40%   0.38%   0.31%   0.28%   46.4%
Accruing Restructured Loans   814    827    928    940    1,101    (287)
Total Growth (%)                            -26.1%
Total Nonaccruing & Restructured Loans   3,920    3,974    3,834    3,321    3,223    697 
% of Total loans   0.48%   0.51%   0.50%   0.43%   0.43%   21.6%
Foreclosed Assets   530    313    131    105    16    514 
Total Growth (%)                            3212.5%
Total Nonperforming Assets  $4,450   $4,287   $3,965   $3,426   $3,239   $1,211 
% of Total assets   0.43%   0.42%   0.40%   0.35%   0.34%   37.4%

 

Webcast and Conference Call

 

The Company will hold a related conference call and webcast on July 24, 2019, 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 http://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) 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 20 offices; 19 in nine Ohio counties and one in Fort Wayne, Indiana, and 25 full-service ATMs. State Bank has seven 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”.  SB Financial’s preferred stock is listed on the NASDAQ Capital Market under the symbol “SBFGP”.

 

In May 2019, SB Financial was ranked #94 on the American Banker Magazine’s list of Top 200 Publicly Traded Community Banks and Thrifts based on three-year average return on equity (“ROE”).

 

Forward-Looking Statements

 

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

 

5

 

 

Non-GAAP Financial Measures

 

In addition to results presented in accordance with GAAP, this release contains certain non-GAAP financial measures. Management believes that including certain non-GAAP financial measures will provide investors with information useful in understanding the Company’s financial performance, its performance trends and financial position. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results.

 

Investor Contact Information:

 

Anthony V. Cosentino

Executive Vice President and

Chief Financial Officer

[email protected]

 

###

 

6

 

 

SB FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS - (Unaudited)

 

   June   March   December   September   June 
($ in thousands)  2019   2019   2018   2018   2018 
                     
ASSETS                    
Cash and due from banks  $42,786   $62,962   $48,363   $45,515   $24,413 
Available-for-sale securities   85,261    95,802    90,969    84,114    89,911 
Loans held for sale   9,579    4,346    4,445    6,888    7,551 
Loans, net of unearned income   814,509    782,523    771,883    771,698    753,285 
Allowance for loan losses   (8,306)   (8,121)   (8,167)   (8,489)   (8,494)
Premises and equipment, net   23,150    23,270    22,084    21,900    21,683 
Federal Reserve and FHLB Stock, at cost   4,648    4,123    4,123    4,123    3,748 
Foreclosed assets held for sale, net   530    313    131    105    16 
Interest receivable   3,209    3,123    2,822    2,433    2,000 
Goodwill and other intangibles   17,836    17,838    16,401    16,404    16,406 
Cash value of life insurance   17,051    16,966    16,834    16,745    16,656 
Mortgage servicing rights   10,264    10,838    11,365    11,129    10,633 
Other assets   8,606    7,288    5,575    6,615    6,977 
Total assets  $1,029,123   $1,021,271   $986,828   $979,180   $944,785 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY                    
Deposits                    
Non interest bearing demand  $141,216   $146,327   $144,592   $134,747   $131,125 
Interest bearing demand   129,710    132,101    130,628    130,897    129,486 
Savings   118,931    115,272    104,444    114,213    118,108 
Money market   175,455    175,334    181,426    170,190    151,228 
Time deposits   274,062    258,624    241,462    239,379    222,932 
Total deposits   839,374    827,658    802,552    789,426    752,879 
                          
Repurchase agreements   13,968    12,255    15,184    15,539    18,191 
Federal Home Loan Bank advances   16,000    24,000    16,000    24,500    26,500 
Trust preferred securities   10,310    10,310    10,310    10,310    10,310 
Interest payable   1,188    1,123    909    891    685 
Other liabilities   14,346    14,419    11,438    11,405    11,116 
Total liabilities   895,186    889,765    856,393    852,071    819,681 
                          
Shareholders’ Equity                         
Preferred stock   13,978    13,978    13,979    13,979    13,983 
Common stock   40,486    40,486    40,485    40,485    40,481 
Additional paid-in capital   15,259    15,143    15,226    15,160    15,098 
Retained earnings   67,236    65,438    64,012    61,854    59,503 
Accumulated other comprehensive income/(loss)   801    124    (552)   (1,654)   (1,240)
Treasury stock   (3,823)   (3,663)   (2,715)   (2,715)   (2,721)
Total equity   133,937    131,506    130,435    127,109    125,104 
Total liabilities and shareholders’ equity  $1,029,123   $1,021,271   $986,828   $979,180   $944,785 

 

7

 

 

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 
   2019   2019   2018   2018   2018   2019   2018 
Interest income                            
Loans                            
 Taxable  $10,182   $9,427   $9,661   $9,499   $8,968   $19,609   $17,108 
 Tax exempt   73    62    55    42    36    135    57 
Securities                                   
 Taxable   802    911    822    610    613    1,713    1,186 
 Tax exempt   94    98    100    107    115    192    232 
Total interest income   11,151    10,498    10,638    10,258    9,732    21,649    18,583 
                                    
Interest expense                                   
Deposits   2,092    1,918    1,776    1,472    1,091    4,010    2,066 
Repurchase agreements & other   17    26    10    11    6    43    16 
Federal Home Loan Bank advances   100    100    131    140    110    200    189 
Trust preferred securities   110    114    107    106    101    224    188 
Total interest expense   2,319    2,158    2,024    1,729    1,308    4,477    2,459 
                                    
Net interest income   8,832    8,340    8,614    8,529    8,424    17,172    16,124 
                                    
Provision for loan losses   200    -    -    -    300    200    600 
                                    
Net interest income after provision  for loan losses   8,632    8,340    8,614    8,529    8,124    16,972    15,524 
                                    
Noninterest income                                   
Wealth Management Fees   783    734    717    705    710    1,517    1,449 
Customer service fees   689    631    679    672    675    1,320    1,319 
Gain on sale of mtg. loans & OMSR   1,678    1,192    1,646    2,066    2,058    2,870    3,158 
Mortgage loan servicing fees, net   (459)   (280)   305    273    247    (739)   718 
Gain on sale of non-mortgage loans   216    327    295    125    150    543    810 
Title insurance income   308    19    -    -    -    327    - 
Net gain on sales of securities   206    -    -    70    -    206    - 
Gain/(loss) on sale of assets   (5)   (2)   14    -    60    (7)   21 
Other   275    379    274    291    349    654    1,017 
Total noninterest income   3,691    3,000    3,930    4,202    4,249    6,691    8,492 
                                    
Noninterest expense                                   
Salaries and employee benefits   5,305    4,902    5,108    5,372    5,201    10,207    10,140 
Net occupancy expense   627    645    600    588    560    1,272    1,209 
Equipment expense   665    711    756    667    637    1,376    1,466 
Data processing fees   488    443    466    489    418    931    856 
Professional fees   649    617    532    393    504    1,266    923 
Marketing expense   246    239    262    197    204    485    425 
Telephone and communication   112    115    121    124    128    227    250 
Postage and delivery expense   81    84    66    83    63    165    137 
State, local and other taxes   247    255    180    177    176    502    362 
Employee expense   236    153    283    243    220    389    386 
Other expenses   452    462    478    456    468    914    1,052 
Total noninterest expense   9,108    8,626    8,852    8,789    8,579    17,734    17,206 
                                    
Income before income tax expense   3,215    2,714    3,692    3,942    3,794    5,929    6,810 
Income tax expense   588    488    732    824    687    1,076    1,250 
                                    
Net income  $2,627   $2,226   $2,960   $3,118   $3,107   $4,853   $5,560 
                                    
Preferred Share Dividends   243    244    243    244    244    487    488 
                                    
Net income available to common shareholders   2,384    1,982    2,717    2,874    2,863    4,366    5,072 
                                    
Common share data:                                   
Basic earnings per common share  $0.37   $0.31   $0.42   $0.45   $0.45   $0.68   $0.85 
Diluted earnings per common share  $0.33   $0.28   $0.37   $0.39   $0.40   $0.61   $0.75 
                                    
Average shares outstanding (in thousands):                                   
Basic:   6,454    6,482    6,503    6,503    6,489    6,469    5,935 
Diluted:   7,967    7,994    8,030    8,022    8,003    7,982    7,454 

 

8

 

 

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  2019   2019   2018   2018   2018   2019   2018 
Net interest income  $8,832   $8,340   $8,614   $8,529   $8,424   $17,172   $16,124 
Tax-equivalent adjustment   44    43    41    40    40    87    77 
Tax-equivalent net interest income   8,876    8,383    8,655    8,569    8,464    17,259    16,201 
Provision for loan loss   200    -    -    -    300    200    600 
Noninterest income   3,691    3,000    3,930    4,202    4,249    6,691    8,492 
Total operating revenue   12,523    11,340    12,544    12,731    12,673    23,863    24,616 
Noninterest expense   9,108    8,626    8,852    8,789    8,579    17,734    17,206 
Pre-tax pre-provision income   3,415    2,714    3,692    3,942    4,094    6,129    7,410 
Pretax income   3,215    2,714    3,692    3,942    3,794    5,929    6,810 
Net income   2,627    2,226    2,960    3,118    3,107    4,853    5,560 
Income available to common shareholders   2,384    1,982    2,717    2,874    2,863    4,366    5,072 
                                    
PER SHARE INFORMATION:                                   
Basic earnings per share (EPS)  $0.37   $0.31   $0.42   $0.45   $0.45   $0.68   $0.85 
Diluted earnings per share   0.33    0.28    0.37    0.39    0.40    0.61    0.75 
Common dividends   0.090    0.085    0.085    0.080    0.080    0.175    0.155 
Book value per common share   16.89    16.57    16.36    15.94    15.73    16.89    15.73 
Tangible book value per common share (TBV)   15.83    15.43    15.39    14.87    14.57    15.83    14.57 
Fully converted TBV per common share   14.64    14.32    14.30    13.88    13.66    14.64    13.66 
Market price per common share   16.46    18.02    16.45    20.35    20.32    16.46    20.32 
Market price per preferred share   16.10    19.00    17.90    20.25    19.82    16.10    19.82 
Market price to TBV   104.0%   116.8%   106.9%   136.8%   139.5%   104.0%   139.5%
Market price to fully converted TBV   112.4%   125.8%   115.0%   146.6%   148.7%   112.4%   148.7%
Market price to trailing 12 month EPS   12.1    12.6    11.0    11.5    11.2    12.1    11.2 
                                    
PERFORMANCE RATIOS:                                   
Return on average assets (ROAA)   1.03%   0.89%   1.19%   1.30%   1.35%   0.96%   1.21%
Pre-tax pre-provision ROAA   1.34%   1.08%   1.48%   1.64%   1.78%   1.22%   1.61%
Return on average equity   7.92%   6.76%   9.21%   9.89%   10.02%   7.36%   9.64%
Return on average tangible equity   10.41%   8.83%   12.06%   13.02%   13.28%   9.65%   13.08%
Efficiency ratio   72.71%   76.05%   70.55%   69.01%   67.67%   74.30%   69.88%
Earning asset yield   4.88%   4.78%   4.86%   4.75%   4.76%   4.82%   4.46%
Cost of interest bearing liabilities   1.28%   1.20%   1.15%   1.00%   0.80%   1.24%   0.75%
Net interest margin   3.86%   3.79%   3.93%   3.95%   4.12%   3.83%   3.87%
Tax equivalent effect   0.02%   0.02%   0.02%   0.01%   0.02%   0.01%   0.02%
Net interest margin, tax equivalent   3.88%   3.81%   3.95%   3.96%   4.14%   3.84%   3.89%
Non interest income/Average assets   1.45%   1.20%   1.58%   1.75%   1.84%   1.33%   1.85%
Non interest expense/Average assets   3.58%   3.45%   3.56%   3.65%   3.72%   3.52%   3.74%
Net noninterest/Average assets   2.13%   2.25%   1.98%   1.91%   1.88%   2.19%   1.89%
                                    
ASSET QUALITY RATIOS:                                   
Gross charge-offs  $20   $60   $322   $12   $54   $80   $73 
Recoveries   5    13    1    6    29    18    38 
Net charge-offs   15    47    321    6    25    62    35 
Nonaccruing loans/ Total loans   0.38%   0.40%   0.38%   0.31%   0.28%   0.38%   0.28%
Nonperforming loans/ Total loans   0.48%   0.51%   0.50%   0.43%   0.43%   0.48%   0.43%
Nonperforming assets/ Loans & OREO   0.55%   0.55%   0.51%   0.44%   0.43%   0.55%   0.43%
Nonperforming assets/ Total assets   0.43%   0.42%   0.40%   0.35%   0.34%   0.43%   0.34%
Allowance for loan loss/ Nonperforming loans   211.89%   204.35%   213.02%   255.62%   263.54%   211.89%   263.54%
Allowance for loan loss/ Total loans   1.02%   1.04%   1.06%   1.10%   1.13%   1.02%   1.13%
Net loan charge-offs/ Average loans (ann.)   0.01%   0.02%   0.17%   0.00%   0.01%   0.02%   0.01%
Loan loss provision/ Net charge-offs   1333.33%   0.00%   0.00%   0.00%   1200.00%   322.58%   1714.29%
                                    
CAPITAL & LIQUIDITY RATIOS:                                   
Loans/ Deposits   97.04%   94.55%   96.18%   97.75%   100.05%   97.04%   100.05%
Equity/ Assets   13.01%   12.88%   13.22%   12.98%   13.24%   13.01%   13.24%
Tangible equity/ Tangible assets   10.10%   9.93%   10.31%   10.05%   10.20%   10.10%   10.20%
Tangible equity adjusted for conversion   11.48%   11.33%   11.75%   11.50%   11.71%   11.48%   11.71%
Common equity tier 1 ratio (Bank) - 6/19 est.   13.03%   12.71%   12.57%   12.16%   11.91%   13.03%   11.91%
                                    
END OF PERIOD BALANCES                                   
Total assets  $1,029,123   $1,021,271   $986,828   $979,180   $944,785   $1,029,123   $944,785 
Total loans   814,509    782,523    771,883    771,698    753,285    814,509    753,285 
Deposits   839,374    827,658    802,552    789,426    752,879    839,374    752,879 
Stockholders equity   133,937    131,506    130,435    127,109    125,104    133,937    125,104 
Goodwill & intangibles   17,836    17,838    16,401    16,404    16,406    17,836    16,406 
Preferred equity   13,978    13,978    13,979    13,979    13,983    13,978    13,983 
Tangible equity   102,123    99,690    100,055    96,726    94,715    102,123    94,715 
Mortgage servicing portfolio   1,112,857    1,094,060    1,084,678    1,066,402    1,030,780    1,112,857    1,030,780 
Wealth/Brokerage assets under care   479,442    462,580    423,289    412,218    407,592    479,442    407,592 
Total assets under care   2,621,422    2,577,911    2,494,795    2,457,800    2,383,157    2,621,422    2,383,157 
Full-time equivalent employees (actual)   250    256    250    250    241    250    241 
Period end basic shares outstanding   6,451    6,460    6,503    6,503    6,502    6,451    6,502 
Period end outstanding (Series A Converted)   1,478    1,475    1,472    1,470    1,453    1,478    1,453 
Market capitalization (all)   130,324    144,898    133,824    162,711    161,851    130,324    161,851 
                                    
AVERAGE BALANCES                                   
Total assets  $1,016,493   $1,001,282   $994,977   $962,369   $922,355   $1,008,559   $920,024 
Total earning assets   914,652    879,394    875,747    864,490    817,270    897,611    832,849 
Total loans   804,716    775,280    775,060    770,948    724,710    790,080    737,544