SB Financial Group, Inc. Announces Strong First-Quarter 2018 Earnings

Year-over-year earnings per share growth of 13% and loan growth of 13%

News provided by

SB Financial Group, Inc.

Apr 19, 2018, 04:15 ET

DEFIANCE, Ohio, April 19, 2018 /PRNewswire/ -- 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, 2018.

First-quarter 2018 highlights over prior-year first quarter include:

  • Total assets increased to $925.6 million, up $78.8 million or 9.3 percent
  • Net income of $2.5 million, an increase of 23.1 percent
  • Operating revenue of $11.9 million, up $1.6 million or 15.9 percent
  • Return on average assets of 1.08 percent, up 12 basis points or 12.5 percent
  • Diluted earnings per share (EPS) of $0.35, an increase of $0.04 per share, or 12.9 percent

First-quarter 2018 trailing twelve-month highlights include:

  • Loan growth of $80.5 million, or 12.8 percent
  • Deposit growth of $35.9 million, or 5.0 percent
  • Mortgage origination volume of $58.5 million, an increase of 3.2 percent, or $1.8 million; servicing portfolio of $1.00 billion, up 9.5 percent, or $0.09 billion

Highlights

Three Months Ended

($000's except ratios and share data)

 

Mar. 2018

Mar. 2017

% Change

Operating revenue

$ 11,943

$ 10,308

15.9%

Interest income

8,851

7,414

19.4

Interest expense

1,151

908

26.8

Net interest income

7,700

6,506

18.4

Noninterest income

4,243

3,802

11.6

Noninterest expense

8,627

7,382

16.9

Net income

2,453

1,993

23.1

Earnings per diluted share

0.35

0.31

12.9

Net interest margin (FTE)

3.86%

3.59%

7.5

Return on average assets

1.08%

0.96%

12.5

Return on average equity

9.03%

9.13%

(1.1)












"SB Financial Group's first-quarter diluted EPS was up 13 percent compared to the prior-year quarter. The quarter included not only the impact of the 2017 tax cuts but also the increased number of shares as a result of our capital raise that we completed in February," said Mark A. Klein, Chairman, President and CEO of SB Financial.  Operating results included a strong SBA quarter, 13 percent year-over-year loan growth and improved asset quality metrics."

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was up 15.9 percent from the first quarter of 2017, and up 1.7 percent from the linked quarter.

  • Net interest income was up 18.3 percent from the year-ago quarter, and up 0.6 percent from the linked quarter.
  • Net interest margin (FTE) was up 27 basis points from the year-ago quarter, but down 10 basis points from the linked quarter. The year-over-year increase was due to higher loan volume, and higher earning asset yields.
  • Noninterest income was up 11.6 percent from the year-ago quarter, and up 3.7 percent from the linked quarter.

Mortgage Loan Business

Mortgage loan originations for the first quarter of 2018 were $58.5 million, up $1.8 million, or 3.2 percent, from the year-ago quarter.  Total sales of originated loans were $40.6 million, down $9.9 million, or 19.6 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 $1.6 million for the first quarter of 2018, compared to $1.6 million for the year-ago quarter.  The mortgage servicing valuation adjustment for the first quarter 2018 was a positive $0.09 million, compared to a positive adjustment of $0.03 million for the first quarter of 2017.  The aggregate servicing valuation impairment ended the quarter at $0.2 million.  The mortgage servicing portfolio at March 31, 2018, was $1.00 billion, up $0.09 billion, or 9.5 percent, from $0.92 billion at March 31, 2017.

Mr. Klein noted, "We continue to see the mortgage origination business constrained by limited housing inventory in all of our markets.  We are encouraged, however, by the significant increase in our pipeline late in the quarter."

Mortgage Banking ($000's)

Mar. 2018

Dec. 2017

Sep. 2017

Jun. 2017

Mar. 2017

Mortgage originations

$  58,485

$  72,102

$  89,217

$  97,804

$  56,667

Mortgage sales

40,589

53,825

76,919

80,038

50,473

Mortgage servicing portfolio

1,004,728

994,915

979,251

952,364

917,435

Mortgage servicing rights

10,195

9,907

9,560

9,217

8,727






Mortgage servicing revenue:




Loan servicing fees

625

617

605

583

566

OMSR amortization

(246)

(269)

(343)

(303)

(218)

Net administrative fees

379

348

262

280

348

OMSR valuation adjustment

92

117

(35)

(39)

35

Net loan servicing fees

471

465

227

241

383

Gain on sale of mortgages

1,100

1,608

2,211

2,063

1,250

Mortgage banking revenue, net

$1,571

$2,073

$2,438

$2,304

$1,633

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 loans (SBA).  SBA activity for the quarter was significant, with total loan volume of $10.6 million and gains of $0.6 million.  Wealth management assets under the Company's care stood at $411.7 million as of March 31, 2018.  For the first quarter of 2018, noninterest income as a percentage of total revenue was 35.5 percent.  The recapture of mortgage servicing rights positively impacted the quarter by $0.09 million.  The Company completed the sale of our item processing division, DCM, in the quarter, resulting in total revenue of $0.4 million, slightly above the prior year.

For the first quarter of 2018, noninterest expense (NIE) of $8.6 million, was up $1.2 million, or 16.9 percent, compared to the same quarter last year.  In the quarter, we had higher commission for SBA sales, (of $0.1 million) expenses related to the sale of DCM (of $0.2 million) and several of the previously announced tax initiatives (of $0.2 million). Compared to the linked quarter, NIE was up $0.5 million, or 6.4 percent. 

Mr. Klein stated, "We sold several large SBA credits in the quarter that had been in process for some time, this resulted in our largest SBA production quarter since we expanded this business line in 2014.  The sale of DCM, while immaterial to our results, allows our team to focus on our core banking competencies.  Expenses were also higher but we were proud to share some of our tax savings with our staff and communities."

Noninterest Income / Noninterest Expense

($000's)

Mar. 2018

Dec. 2017

Sep. 2017

Jun. 2017

Mar. 2017

Noninterest Income (NII)

$ 4,243

$ 4,092

$ 4,861

$ 4,462

$ 3,802

NII / Total Revenue

35.5%

34.8%

40.1%

39.1%

36.9%

NII / Average Assets

1.9%

1.9%

2.3%

2.1%

1.8%






Noninterest Expense (NIE)

$ 8,627

$ 8,106

$ 8,284

$ 7,806

$ 7,382

Efficiency Ratio

72.2%

69.0%

68.3%

68.3%

71.6%

NIE / Average Assets

3.8%

3.7%

3.9%

3.7%

3.6%

Net Noninterest Expense

(1.9)

(1.8)

(1.6)

(1.6)

(1.7)

Balance Sheet

Total assets as of March 31, 2018, were $925.6 million, up $78.8 million, or 9.3 percent, from a year ago.  Total equity as of March 31, 2018, was $122.9 million, up 39.7 percent, from a year ago, and accounted for 13.3 percent of total assets.  Both the equity and total assets reflect the $30 million common capital raise completed in the quarter.

Total loans held for investment were $707.2 million at March 31, 2018, up $80.5 million, or 12.8 percent, from March 31, 2017.  Commercial real estate loans were up $55.6 million, or 19.7 percent, and accounted for the majority of the total loan growth, while residential real estate also rose $15.1 million or 11.0 percent.

The investment portfolio of $95.7 million, including Federal Reserve Bank and Federal Home Loan Bank stock, represented 10.3 percent of assets at March 31, 2018, and was down 14.3 percent from the year-ago period.  Deposit balances of $748.8 million at March 31, 2018, increased by $35.9 million, or 5.0 percent, since March 31, 2017.  Growth from the prior year included $12.8 million in checking and $23.1 million in savings and time deposit balances.

"Along with the $11 million in SBA production, we had additional balance sheet loan growth in the quarter of $11 million.  Our $30 million increase in capital reflected the very positive response we experienced from our capital raise in February.  Additionally, we continued to improve asset quality in the quarter, with net charge offs at just 1 basis point and nonperforming assets at 38 basis points."

Loan Portfolio ($000's)

Mar. 2018

Dec. 2017

Sep. 2017

Jun. 2017

Mar. 2017

Variance
YOY

Commercial

$ 107,579

$ 102,041

$ 104,723

$ 107,319

$ 102,392

$ 5,187

% of Total

15.2%

14.6%

15.5%

16.5%

16.4%

5.1%

Commercial RE

338,586

332,154

319,764

296,116

282,951

55,635

% of Total

47.9%

47.7%

47.4%

45.4%

45.1%

19.7%

Agriculture

50,266

51,947

51,140

52,107

47,580

2,686

% of Total

7.1%

7.5%

7.8%

8.0%

7.6%

5.6%

Residential RE

151,820

150,854

141,296

137,214

136,762

15,058

% of Total

21.5%

21.7%

20.9%

21.1%

21.8%

11.0%

Consumer & Other

58,956

59,619

58,152

58,833

57,037

1,919

% of Total

8.3%

8.6%

8.6%

9.0%

9.1%

3.4%







Total Loans

$707,207

$696,615

$675,075

$651,589

$626,722

$ 80,485

Total Growth Percentage




12.8%

Deposit Bal. ($000's)

Mar. 2018

Dec. 2017

Sep. 2017

Jun. 2017

Mar. 2017

Variance
YOY

Non-Int DDA

$ 132,919

$ 135,592

$ 124,840

$ 124,213

$ 124,664

$ 8,255

% of Total

17.8%

18.6%

17.4%

17.6%

17.5%

6.6%

Interest DDA

137,893

131,079

130,513

127,409

133,388

4,511

% of Total

18.4%

18.0%

18.2%

18.0%

18.7%

3.4%

Savings

116,820

103,267

103,530

104,720

103,901

12,919

% of Total

15.6%

14.2%

14.4%

14.8%

14.6%

12.4%

Money Market

143,679

141,844

140,647

130,987

138,915

4,764

% of Total

19.2%

19.4%

19.6%

18.5%

19.5%

3.4%

Certificates

217,484

217,818

217,277

220,004

212,047

5,437

% of Total

29.0%

29.9%

30.3%

31.1%

29.7%

2.6%







Total Deposits

$748,795

$729,600

$716,807

$707,333

$712,915

$ 35,880

Total Growth Percentage




5.0%










Asset Quality

SB Financial maintained its high-performing peer asset quality level during the quarter, reporting nonperforming assets of $3.5 million as of March 31, 2018, down $1.2 million, or 25.6 percent, from the year-ago quarter.  SB Financial's nonperforming assets to total assets ratio of 0.38 percent is in the top quartile of its 65-bank peer group.  The coverage of problem loans by the loan loss allowance was at 239 percent at March 31, 2018, up from 204 percent at March 31, 2017.

Summary of Nonperforming Assets ($000's)







Nonperforming
Category

Mar. 2018

Dec. 2017

Sep. 2017

Jun. 2017

Mar. 2017

Variance YOY

Commercial & Agriculture

$ 35

$ 121

$ 125

$ 132

$ 187

($152)

% of Total Com./Ag. loans

0.02%

0.08%

0.08%

0.08%

0.13%

(81.3%)

Commercial RE

487

1,322

1,029

1,049

939

(452)

% of Total CRE loans

0.14%

0.40%

0.32%

0.35%

0.33%

(48.1%)

Residential RE

1,714

1,123

1,074

1,115

1,126

588

% of Total Res. RE loans

1.13%

0.74%

0.76%

0.81%

0.82%

52.2%

Consumer & Other

85

138

153

154

130

(45)

% of Total Con./Oth. loans 

0.14%

0.23%

0.26%

0.26%

0.23%

(34.6%)

Total Nonaccruing Loans

2,321

2,704

2,381

2,450

2,382

(61)

% of Total loans

0.33%

0.39%

0.35%

0.38%

0.38%

(2.56%)

Accruing Restructured Loans

1,115

1,129

1,258

1,366

1,383

Total Nonaccruing & Restructured Loans

$ 3,436

$ 3,833

$ 3,639

$ 3,816

$ 3,765

$ (329)

% of Total loans

0.49%

0.55%

0.54%

0.59%

0.60%

(8.7%)

Foreclosed Assets

70

26

94

94

950

Total Nonperforming Assets

$ 3,506

$ 3,859

$ 3,733

$ 3,910

$ 4,715

$ (1,209)

% of Total assets

0.38%

0.44%

0.43%

0.46%

0.56%

(25.6%)

Webcast and Conference Call

The Company will hold a related conference call and webcast on April 20, 2018, 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). 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 banking centers; 19 in nine Ohio counties and one center in Fort Wayne, Indiana, and 25 full-service ATMs.  The Company has six 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 2017, SB Financial was ranked #145 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.

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.

SB FINANCIAL GROUP, INC.  

CONSOLIDATED BALANCE SHEETS - (Unaudited)




















March

December

September

June

March



($ in Thousands)

2018

2017

2017

2017

2017















ASSETS











Cash and due from banks

$

48,329

26,616

28,258

21,385

45,740
















Securities available for sale, at fair value

91,987

82,790

85,304

103,347

107,937

Other securities - FRB and FHLB Stock

3,748

3,748

3,748

3,748

3,748

















Total investment securities

95,735

86,538

89,052

107,095

111,685
















Loans held for sale

8,893

3,940

7,663

9,437

5,104
















Loans, net of unearned income

707,207

696,615

675,075

651,589

626,722

Allowance for loan losses

(8,219)

(7,930)

(7,760)

(7,825)

(7,679)

















Net loans

698,988

688,685

667,315

643,764

619,043
















Premises, equipment and software, net

21,776

21,277

21,271

20,740

19,909

Cash surrender value of life insurance

16,567

16,479

13,692

13,859

13,791

Goodwill & other intangibles

16,409

16,411

16,414

16,417

16,419

Foreclosed assets held for sale, net

70

26

94

94

950

Mortgage servicing rights

10,196

9,907

9,560

9,217

8,727

Accrued interest receivable

1,925

1,825

1,880

1,411

1,462

Other assets

6,753

4,923

5,263

4,249

4,018


















Total assets

$

925,641

876,627

860,462

847,668

846,848













































LIABILITIES AND EQUITY











Deposits












Non interest bearing demand

$

132,919

135,592

124,840

124,213

124,664


Interest bearing demand

137,893

131,079

130,513

127,409

133,388


Savings deposits

116,820

103,267

103,530

104,720

103,901


Money market deposits

143,679

141,844

140,647

130,987

138,915


Time deposits

217,484

217,818

217,277

220,004

212,047


















Total deposits

748,795

729,600

716,807

707,333

712,915
















Advances from Federal Home Loan Bank

18,500

18,500

20,500

20,500

15,500

Repurchase agreements

14,505

15,082

11,343

11,175

11,796

Trust preferred securities

10,310

10,310

10,310

10,310

10,310

Accrued interest payable

633

592

611

563

450

Other liabilities

9,999

8,543

9,982

8,756

7,849


















Total liabilities

802,742

782,627

769,553

758,637

758,820
















Equity












Preferred shares

13,983

13,983

13,983

13,983

13,983


Common shares

40,481

12,569

12,569

12,569

12,569


Additional paid-in capital

15,189

15,405

15,335

15,260

15,224


Retained earnings

57,162

55,439

51,991

49,851

48,118


Accumulated other comprehensive income (loss)

(941)

(141)

335

340

136


Treasury shares

(2,975)

(3,255)

(3,304)

(2,972)

(2,002)


















Total equity

122,899

94,000

90,909

89,031

88,028


















Total liabilities and equity

$

925,641

876,627

860,462

847,668

846,848















SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)













($ in thousands - except share data)

At and for the Three Months Ended

















March

December

September

June

March

Interest income

2018

2017

2017

2017

2017

Loans










  Taxable 

$

8,140

8,096

7,653

7,243

6,800

  Nontaxable

21

23

21

21

20

Securities










  Taxable 

573

514

532

569

461

  Nontaxable

117

129

132

133

133















Total interest income

8,851

8,762

8,338

7,966

7,414













Interest expense











Deposits

975

938

907

863

748

Repurchase Agreements & Other

10

2

4

6

4

Federal Home Loan Bank advances

79

85

86

63

86

Trust preferred securities

87

83

78

71

70















Total interest expense

1,151

1,108

1,075

1,003

908


























Net interest income

7,700

7,654

7,263

6,963

6,506














Provision for loan losses 

300

200

-

200

-













Net interest income after provision









  for loan losses

7,400

7,454

7,263

6,763

6,506













Noninterest income











Wealth Management Fees

739

718

688

704

667

Customer service fees

644

690

674

667

640

Gain on sale of mtg. loans & OMSR's

1,100

1,608

2,211

2,063

1,250

Mortgage loan servicing fees, net

471

465

227

241

383

Gain on sale of non-mortgage loans

660

179

294

369

430

Data service fees

-

179

182

184

193

Net gain on sales of securities

-

-

119

-

-

Gain/(loss) on sale/disposal of assets

(39)

(4)

8

-

2

Other income

668

257

458

234

237















Total non-interest income

4,243

4,092

4,861

4,462

3,802













Noninterest expense










Salaries and employee benefits

4,939

4,749

4,844

4,667

4,386

Net occupancy expense

649

582

566

552

560

Equipment expense

829

748

688

683

641

Data processing fees

438

363

429

396

370

Professional fees

419

492

502

417

363

Marketing expense

221

153

180

206

195

Telephone and communication

122

113

120

113

116

Postage and delivery expense

74

118

103

59

174

State, local and other taxes

186

164

198

170

167

Employee expense

166

227

242

183

145

Other expenses

584

397

412

360

265















Total non-interest expense

8,627

8,106

8,284

7,806

7,382


























Income before income tax expense

3,016

3,440

3,840

3,419

2,926














Income tax expense (benefit)

563

(592)

1,117

1,102

933













Net income 

$

2,453

4,032

2,723

2,317

1,993













Preferred Share Dividends 

244

244

244

244

244













Net income available to common shares

2,209

3,788

2,479

2,073

1,749













Common share data:










Basic earnings per common share

$

0.40

0.79

0.52

0.43

0.36














Diluted earnings per common share

$

0.35

0.64

0.43

0.37

0.31













Average shares outstanding ($ in thousands):










Basic:

5,519

4,790

4,797

4,827

4,855

Diluted: 

7,055

6,329

6,326

6,351

6,387













SB FINANCIAL GROUP, INC.

                                                  CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)                                               












($ in thousands, except per share data)

At and for the Three Months Ended














March

December

September

June

March

SUMMARY OF OPERATIONS

2018

2017

2017

2017

2017












   Net interest income 

$

7,700

7,654

7,263

6,963

6,506

         Tax-equivalent adjustment

$

37

78

79

79

79

   Tax-equivalent net interest income 

$

7,737

7,732

7,342

7,042

6,585

   Provision for loan loss 

$

300

200

-

200

-

   Noninterest income

$

4,243

4,092

4,861

4,462

3,802

   Total operating revenue

$

11,943

11,746

12,124

11,425

10,308

   Noninterest expense

$

8,627

8,106

8,284

7,806

7,382

   Pre-tax pre-provision income

$

3,316

3,640

3,840

3,619

2,926

   Pretax income

$

3,016

3,440

3,840

3,419

2,926

   Net income 

$

2,453

4,032

2,723

2,317

1,993

   Income available to common shareholders 

$

2,209

3,788

2,479

2,073

1,749












PER SHARE INFORMATION:










   Basic earnings per share

$

0.40

0.79

0.52

0.43

0.36

   Diluted earnings per share

$

0.35

0.64

0.43

0.37

0.31

   Common dividends

$

0.075

0.075

0.070

0.070

0.065

   Book value per common share

$

15.46

15.03

14.55

14.21

13.92

   Tangible book value per common share

$

14.27

13.27

12.64

12.20

11.83

   Market price per common share

$

18.51

18.49

17.16

16.88

16.72

   Market price per preferred share

$

18.20

17.90

16.45

16.89

16.85

   Market price to tangible book value

129.7%

139.3%

135.8%

138.4%

141.4%












PERFORMANCE RATIOS:










   Return on average assets (ROAA)

1.08%

1.83%

1.27%

1.09%

0.96%

   Pre-tax pre-provision ROAA

1.46%

1.65%

1.79%

1.70%

1.41%

   Return on average equity

9.03%

17.52%

12.11%

10.45%

9.13%

   Return on average tangible equity

12.54%

26.16%

18.28%

15.91%

14.00%

   Efficiency ratio 

72.22%

68.99%

68.30%

68.30%

71.59%

   Earning asset yield

4.41%

4.52%

4.36%

4.26%

4.08%

   Cost of interest bearing liabilities

0.71%

0.69%

0.68%

0.64%

0.60%

   Net interest margin

3.84%

3.92%

3.77%

3.69%

3.55%

   Tax equivalent effect

0.02%

0.04%

0.04%

0.04%

0.04%

   Net interest margin, tax equivalent 

3.86%

3.96%

3.81%

3.73%

3.59%

   Non interest income/Average assets

1.87%

1.86%

2.27%

2.09%

1.84%

   Non interest expense/Average assets

3.81%

3.68%

3.87%

3.66%

3.57%

   Net noninterest expense/Average assets

1.93%

1.82%

1.60%

1.57%

1.73%












ASSET QUALITY RATIOS:










   Gross charge-offs

$

19

36

75

69

51

   Recoveries

$

9

5

10

15

5

   Net charge-offs

$

10

31

65

54

46

   Nonaccruing loans/ Total loans

0.33%

0.39%

0.35%

0.38%

0.38%

   Nonperforming loans/ Total loans

0.49%

0.55%

0.54%

0.59%

0.60%

   Nonperforming assets/ Loans & OREO

0.50%

0.55%

0.55%

0.60%

0.75%

   Nonperforming assets/ Total assets

0.38%

0.44%

0.43%

0.46%

0.56%

   Allowance for loan loss/ Nonperforming loans

239.20%

206.89%

213.25%

205.06%

203.96%

   Allowance for loan loss/ Total loans

1.16%

1.14%

1.15%

1.20%

1.23%

   Net loan charge-offs/ Average loans (ann.)

0.01%

0.02%

0.04%

0.03%

0.03%

   Loan loss provision/ Net charge-offs

3000.00%

645.16%

0.00%

370.37%

0.00%












CAPITAL & LIQUIDITY RATIOS:










   Loans/ Deposits

94.45%

95.48%

94.18%

92.12%

87.91%

   Equity/ Assets

13.28%

10.72%

10.57%

10.50%

10.39%

   Tangible equity/ Tangible assets

10.17%

7.39%

7.17%

7.05%

6.94%

   Tangible equity adjusted for conversion

11.71%

9.02%

8.83%

8.74%

8.62%












END OF PERIOD BALANCES










   Total assets

$

925,641

876,627

860,462

847,668

846,848

   Total loans 

$

707,207

696,615

675,075

651,589

626,722

   Deposits

$

748,795

729,600

716,807

707,333

712,915

   Stockholders equity

$

122,899

94,000

90,909

89,031

88,028

   Goodwill & intangibles

$

16,409

16,411

16,414

16,417

16,419

   Preferred equity

$

13,983

13,983

13,983

13,983

13,983

   Tangible equity

$

92,507

63,606

60,512

58,631

57,626

   Mortgage servicing portfolio

$

1,004,728

994,915

979,251

952,364

917,435

   Wealth/Brokerage assets under care

$

411,654

437,034

429,777

407,268

404,290

   Total assets under care

$

2,342,023

2,308,576

2,269,490

2,207,300

2,168,573

   Full-time equivalent employees

240

240

237

237

231

   Period end basic shares outstanding

6,483

4,793

4,788

4,807

4,873

   Period end outstanding (Series A Converted)

1,465

1,463

1,461

1,459

1,452












AVERAGE BALANCES










   Total assets

$

906,281

880,446

857,147

852,526

827,514

   Total earning assets 

$

802,358

781,795

771,722

754,736

734,378

   Total loans 

$

711,733

691,929

667,943

644,658

637,490

   Deposits

$

738,867

731,992

712,614

717,472

683,639

   Stockholders equity

$

108,662

92,036

89,974

88,637

87,344

   Intangibles

$

16,410

16,412

16,415

16,418

16,421

   Preferred equity

$

13,983

13,983

13,983

13,983

13,983

   Tangible equity

$

78,269

61,641

59,576

58,236

56,940

   Average basic shares outstanding

5,519

4,790

4,797

4,827

4,855

   Average diluted shares outstanding

7,055

6,329

6,326

6,351

6,387












SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

At and for the Three Months Ended March 31, 2018 and 2017









($ in Thousands)

Three Months Ended Mar. 31, 2018

Three Months Ended Mar. 31, 2017



Average

Average

Average

Average

Assets

Balance

Interest

Rate

Balance

Interest

Rate













Taxable securities

$

77,802

573

2.95%

$

82,727

461

2.23%

Nontaxable securities

12,823

117

3.65%

14,161

133

3.76%

Loans, net

711,733

8,161

4.59%

637,490

6,820

4.28%













       Total earning assets

802,358

8,851

4.41%

734,378

7,414

4.04%













Cash and due from banks

38,145



35,827



Allowance for loan losses

(8,043)



(7,800)



Premises and equipment

21,307



20,594



Other assets

52,514



44,515















      Total assets

$

906,281


$

827,514














Liabilities










Savings and interest bearing demand

$

389,809

256

0.26%

$

358,542

172

0.19%

Time deposits

214,645

719

1.34%

203,113

576

1.13%

Repurchase agreements & Other

18,124

10

0.22%

13,801

4

0.12%

Advances from Federal Home Loan Bank

18,500

79

1.71%

22,972

86

1.50%

Trust preferred securities

10,310

87

3.38%

10,310

70

2.72%













      Total interest bearing liabilities

651,388

1,151

0.71%

608,738

908

0.60%













Non interest bearing demand

134,413

-


121,984

-














      Total funding

785,801

0.59%

730,722

0.50%













Other liabilities

11,818



9,448















      Total liabilities

797,619



740,170















Equity

108,662



87,344















      Total liabilities and equity

$

906,281


$

827,514















Net interest income

$    7,700



$    6,506














Net interest income as a percent of average interest-earning assets - GAAP measure

3.84%



3.54%













Net interest income as a percent of average interest-earning assets - non GAAP

3.86%



3.59%

 - Computed on a fully tax equivalent (FTE) basis



















SOURCE SB Financial Group, Inc.