SBFG
$17.55
Sb Financial Group
($.32)
(1.79%)
Earnings Details
3rd Quarter September 2020
Thursday, October 29, 2020 4:15:00 PM
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Summary

Sb Financial Group (SBFG) Recent Earnings

Sb Financial Group (SBFG) reported 3rd Quarter September 2020 earnings of $0.65 per share on revenue of $21.2 million. The consensus earnings estimate was $0.52 per share on revenue of $16.7 million. Revenue grew 25.5% on a year-over-year basis.

Results
Reported Earnings
$0.65
Earnings Whisper
-
Consensus Estimate
$0.52
Reported Revenue
$21.2 Mil
Revenue Estimate
$16.7 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

SB Financial Group Announces Third Quarter 2020 Results

DEFIANCE, Ohio, Oct. 29, 2020 /PRNewswire/ -- SB Financial Group, Inc. (NASDAQ: SBFG) ("SB Financial" or the "Company"), a diversified financial services company providing full-service community banking, mortgage banking, wealth management, private client and title insurance services today reported earnings for the third quarter and nine months ended September 30, 2020.

Third quarter 2020 highlights over prior-year third quarter include:

  • Net income of $5.3 million up $1.5 million or 39.6 percent; diluted earnings per share ("EPS") of $0.69 up $0.21 per share or 43.8 percent
  • Adjusted net income, excluding for the impact of the Originated Mortgage Servicing Rights ("OMSR") recapture of $0.3 million, of $5.0 million, with adjusted EPS of $0.65
  • Mortgage origination volume of $200.2 million, an increase of $42.2 million, or 26.7 percent
  • Pre-tax, pre-provision income of $8.3 million up $2.5 million or 43.2 percent

The nine months ended September 30, 2020, highlights over the prior-year nine months include:

  • Net income of $9.6 million; diluted EPS of $1.25
  • Adjusted net income, excluding the impact of OMSR and merger costs of $3.3 million after- tax, rose to $12.9 million, up $3.2 million or 32.9 percent, with adjusted EPS of $1.67
  • Return on Average Assets ("ROA") of 1.12 percent; adjusted ROA of 1.41 percent

Third quarter 2020 trailing twelve-month highlights include:

  • Loan growth of $62.5 million, or 7.6 percent, which includes Paycheck Protection Program ("PPP") loan balances of $82.1 million and loans acquired in the Edon acquisition of $15.7 million.
  • Deposit growth of $166.1 million, or 19.6 percent, driven by PPP balances and the Edon acquisition
  • Mortgage origination volume of $662.7 million; servicing portfolio of $1.29 billion, which is up $140.0 million, or 12.1 percent

 

Highlights

Three Months Ended


Nine Months Ended

($ in thousands, except per share & ratios)

Sep. 2020

Sep. 2019

% Change


Sep. 2020

Sep. 2019

% Change

Operating revenue 

$       19,677

$      14,424

36.4%


$      47,873

$      38,287

25.0%

Interest income 

10,807

11,546

-6.4%


32,046

33,195

-3.5%

Interest expense

1,548

2,488

-37.8%


5,367

6,965

-22.9%

Net interest income 

9,259

9,058

2.2%


26,679

26,230

1.7%

Provision for loan losses

1,800

300

500.0%


3,700

500

640.0%

Noninterest income

10,418

5,366

94.1%


21,194

12,057

75.8%

Noninterest expense

11,335

9,500

19.3%


32,403

27,234

19.0%

Net income 

5,250

3,762

39.6%


9,586

8,615

11.3%

Earnings per diluted share

0.69

0.48

43.8%


1.25

1.08

15.7%

Return on average assets

1.73%

1.44%

20.1%


1.12%

1.13%

-0.9%

Return on average equity

15.01%

11.24%

33.5%


9.74%

8.67%

12.3%









Non-GAAP Measures








Adjusted net income

$        4,992

$        3,762

32.7%


$      12,916

$        9,720

32.9%

Adjusted diluted EPS

0.65

0.48

35.4%


1.67

1.22

36.9%

Adjusted return on average assets

1.64%

1.44%

13.9%


1.41%

1.23%

14.6%

Adjusted pre-tax, pre-provision income

8,016

4,924

62.8%


19,685

12,451

58.1%

"Mortgage volume continued its strong growth in the third quarter, which resulted in our net income rising from the prior year by over 40 percent." said Mark A. Klein, Chairman, President, and CEO of SB Financial.   "Our revenue diversification strategy continues to drive EPS and tangible book value growth despite the headwinds that the economy is facing in all of our markets.  We continued to return capital to our shareholders in the quarter through stock buybacks and a cash dividend of nearly 15 percent of earnings."

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was up 36.4 percent from the third quarter of 2019, and up 12.5 percent to the linked quarter.

  • Net interest income was up 2.2 percent from the year-ago quarter, and up 4.4 percent from the linked quarter.
  • Net interest margin on a fully taxable equivalent basis (FTE) was down from the year-ago quarter by 52 basis points but up 9 basis points from the linked quarter as transactional cash balances were higher and PPP loans made marginal contribution.
  • Noninterest income was up 94 percent year over year and 21 percent from the linked quarter.

Mortgage Loan Business

Mortgage loan originations for the third quarter of 2020 were $200.2 million, up $42.2 million, or 26.7 percent, from the year-ago quarter.  Total sales of originated loans were $166.2 million, up $40.8 million, or 32.6 percent.  For the first nine months, SB Financial had total volume of $525.2 million, of which $210.2 million (40 percent) was new purchase/construction lending, $169.2 million (32 percent) was internal refinance, and the remaining $145.8 million (28 percent) was new customer refinance volume.

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $7.9 million for the third quarter of 2020, compared to $2.5 million for the year-ago quarter.  The mortgage servicing valuation adjustment for the third quarter of 2020 was a positive $0.3 million, compared to no adjustment for the third quarter of 2019.  For the first nine months, the impairment on servicing rights was $3.0 million, compared to $1.4 million for the prior year nine months.  The aggregate servicing valuation impairment ended the quarter at $4.3 million.  The servicing portfolio at September 30, 2020, was $1.29 billion up $140.0 million or 12.1 percent, from $1.15 billion at September 30, 2019.  Normal amortization is up 87 percent from the prior year due to higher refinance activity.

Mr. Klein noted, "Mortgage volume was steady in the quarter as we originated over $200 million in volume.  In addition to strong origination levels, our pricing and hedging strategies enabled us to deliver additional mortgage banking revenue of $5.4 million or a year over year increase of over 200 percent.  We were also pleased to recapture a small amount of our prior quarter's impairment on our servicing rights."

Mortgage Banking






($ in thousands)

Sep. 2020

Jun. 2020

Mar. 2020

Dec. 2019

Sep. 2019

Mortgage originations

$     200,158

$     223,671

$     101,365

$     137,528

$     157,947

Mortgage sales

166,201

204,628

84,476

127,441

125,386

Mortgage servicing portfolio

1,293,037

1,261,746

1,216,292

1,199,107

1,153,020

Mortgage servicing rights

8,535

8,168

8,974

11,017

10,447













Mortgage servicing revenue






Loan servicing fees

813

782

757

740

709

OMSR amortization

(1,308)

(1,574)

(597)

(709)

(701)

Net administrative fees

(495)

(792)

160

31

8

OMSR valuation adjustment

326

(1,088)

(2,212)

303

-

Net loan servicing fees

(169)

(1,880)

(2,052)

334

8

Gain on sale of mortgages

8,085

8,119

1,949

3,048

2,495

Mortgage banking revenue, net

$         7,916

$         6,239

$          (103)

$         3,382

$         2,503

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 U.S. Department of Agriculture (USDA) loans.  Wealth management assets under the Company's care were $522.4 million as of September 30, 2020, up $38.1 million or 7.9 percent compared to the prior year.  For the third quarter of 2020, noninterest income as a percentage of total operating revenue was 52.9 percent.  Reflective of the robust mortgage market, SB Financial's Title Agency provided revenue in the quarter of $0.5 million, up 29 percent from the prior year. 

For the third quarter of 2020, noninterest expense of $11.3 million was up $1.8 million year over year or 19.3 percent reflecting a 1.9 times positive operating leverage.  On a year-to-date basis, when adjusted for the Edon merger costs, noninterest expense is up 14.4 percent compared to the prior year nine-month period.  Operating leverage for the year is a positive 1.3 times, which will improve to 1.7 times when the merger costs are removed.

Mr. Klein stated, "Revenue growth was up over 36 percent from the prior year compared to operating expense growing 19 percent.  We had the lowest net, noninterest expense to average assets in our history this quarter and the significant positive operating leverage was key to our earnings growth. We remain optimistic that the consumer and business momentum from this quarter will continue into the fourth quarter and translate into improved loan pipelines."

Noninterest Income / Noninterest Expense 





($ in thousands, except ratios)

Sep. 2020

Jun. 2020

Mar. 2020

Dec. 2019

Sep. 2019

Noninterest Income (NII)

$       10,418

$         8,615

$         2,161

$         5,959

$         5,366

NII / Total Revenue

52.9%

49.3%

20.2%

40.9%

37.2%

NII / Average Assets

3.4%

3.0%

0.8%

2.3%

2.1%

Total Revenue Growth

36.4%

39.6%

-5.6%

16.0%

-1.2%







Noninterest Expense (NIE)

$       11,335

$       11,662

$         9,406

$       10,176

$         9,500

Efficiency Ratio

57.5%

66.7%

87.8%

69.9%

65.9%

NIE / Average Assets

3.7%

4.0%

3.5%

3.9%

3.6%

Net Noninterest Expense/Avg. Assets

-0.3

-1.0%

-2.7%

-1.6%

-1.6%

Total Expense Growth

19.3%

28.0%

9.0%

15.0%

6.2%

Operating Leverage

1.9

1.4

-0.6

1.1

-0.2

Balance Sheet

Total assets as of September 30, 2020, were $1.22 billion, up $175.5 million, or 16.8 percent, from the year ago quarter due to the impact of the Edon acquisition and the PPP activity.  Total equity as of September 30, 2020, was $141.3 million, up 5.3 percent from a year ago, and comprised 11.6 percent of total assets. 

Total loans held for investment were $885.9 million at September 30, 2020, up $62.5 million, or 7.6 percent, from September 30, 2019.  Commercial loans were up $71.5 million, or 49.3 percent, commercial real estate up $9.4 million or 2.6 percent and agricultural loans increasing $5.5 million or 10.5 percent.   Absent the effects of the Edon acquisition and PPP loans, loan balances were down $35.4 million from the year ago quarter.

The investment portfolio of $135.6 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 11.1 percent of assets at September 30, 2020, and was up 66.0 percent from the year-ago period.  Deposit balances of $1.01 billion at September 30, 2020, increased by $166.1 million, or 19.6 percent, since September 30, 2019.  Growth from the prior year included $104.7 million in checking and $61.4 million in savings and time deposit balances.

Mr. Klein continued, "Asset quality was largely stable in the quarter.  Our number and dollar of loans on forbearance were down 60 and 75 percent respectively from the linked quarter.  We are encouraged by these trends but we also understand that further weakness is possible.  To prepare for these unknowns, we decided to allocate some of our higher than expected mortgage revenue into provision this quarter.  We expect to begin the PPP forgiveness process in the fourth quarter, which will help all of our 700 PPP clients who were impacted by the pandemic."

Loan Balances







($ in thousands, except ratios)

Sep. 2020

Jun. 2020

Mar. 2020

Dec. 2019

Sep. 2019

Annual
Growth

Commercial

$       216,667

$       222,108

$       151,538

$       151,018

$       145,147

$         71,520

% of Total

24.5%

24.6%

18.2%

18.3%

17.6%

49.3%

Commercial RE

371,947

375,450

378,212

369,962

362,580

9,367

% of Total

42.0%

41.6%

45.5%

44.8%

44.0%

2.6%

Agriculture

57,420

58,817

47,660

50,994

51,946

5,474

% of Total

6.5%

6.5%

5.7%

6.2%

6.3%

10.5%

Residential RE

178,393

184,684

189,738

189,290

199,036

-20,643

% of Total

20.1%

20.6%

22.9%

22.9%

24.2%

-10.4%

Consumer & Other

61,423

60,489

63,616

64,246

64,658

-3,235

% of Total

6.9%

6.7%

7.7%

7.8%

7.9%

-5.0%

Total Loans

$       885,850

$       901,548

$       830,764

$       825,510

$       823,367

$         62,483

Total Growth Percentage






7.6%















Deposit Balances







($ in thousands, except ratios)

Sep. 2020

Jun. 2020

Mar. 2020

Dec. 2019

Sep. 2019

Annual
Growth

Non-Int DDA

$       225,003

$       229,042

$       170,920

$       158,357

$       152,932

$         72,071

% of Total

22.2%

23.1%

19.8%

18.8%

18.0%

47.1%

Interest DDA

164,248

154,143

133,722

131,084

131,655

32,593

% of Total

16.2%

15.6%

15.5%

15.6%

15.5%

24.8%

Savings

169,474

161,182

138,863

119,359

121,991

47,483

% of Total

16.7%

16.3%

16.0%

14.1%

14.3%

38.9%

Money Market

204,862

189,380

169,209

173,666

173,237

31,625

% of Total

20.2%

19.1%

19.6%

20.7%

20.4%

18.3%

Time Deposits

250,428

256,840

251,177

257,753

268,139

(17,711)

% of Total

24.7%

25.9%

29.1%

30.8%

31.8%

-6.6%

Total Deposits

$    1,014,015

$       990,587

$       863,891

$       840,219

$       847,954

$       166,061

Total Growth Percentage






19.6%

Asset Quality

SB Financial reported nonperforming assets of $7.3 million as of September 30, 2020, up $2.7 million from the year-ago quarter.  The coverage of nonperforming loans by the loan loss allowance was at 164 percent at September 30, 2020, down from 207 percent at September 30, 2019.  

Nonperforming Assets






Annual
Change

($ in thousands, except ratios)

Sep. 2020

Jun. 2020

Mar. 2020

Dec. 2019

Sep. 2019

Commercial & Agriculture

$          1,140

$          1,204

$          1,309

$          1,772

$             834

$             306

% of Total Com./Ag. loans

0.42%

0.43%

0.66%

0.88%

0.42%

36.7%

Commercial RE 

2,475

2,484

1,816

1,826

262

2,213

% of Total CRE loans

0.67%

0.66%

0.48%

0.49%

0.07%

844.7%

Residential RE

2,481

2,538

2,330

1,635

1,763

718

% of Total Res. RE loans

1.39%

1.37%

1.23%

0.86%

0.89%

40.7%

Consumer & Other

313

308

327

267

416

(103)

% of Total Con./Oth. loans  

0.51%

0.51%

0.51%

0.42%

0.64%

-24.8%

Total Nonaccruing Loans 

6,409

6,534

5,782

5,500

3,275

3,134

% of Total loans

0.72%

0.72%

0.70%

0.67%

0.40%

95.7%

Accruing Restructured Loans

789

804

816

874

825

(36)

Total Change (%)






-4.4%

Total Nonaccruing & Restructured Loans

7,198

7,338

6,598

6,374

4,100

3,098

% of Total loans

0.81%

0.81%

0.79%

0.77%

0.50%

75.6%

Foreclosed Assets

76

382

85

305

489

(413)

Total Change (%)






-84.5%

Total Nonperforming Assets

$          7,274

$          7,720

$          6,683

$          6,679

$          4,589

$          2,685

% of Total assets

0.60%

0.64%

0.61%

0.64%

0.44%

58.5%

The Company continued to provide payment relief to clients as needed, with total forbearance as of September 30, 2020 of 204 loans at $80.7 million.  The detail on these deferrals; 19 commercial at $36.4 million down $106.3 million or 74.5%, 7 portfolio residential and consumer at $2.0 million down $8.6 million or 81.3 percent and 178 sold residential real estate at $42.3 million up $0.6 million or 1.4 percent. 

Loans in Deferral Status




Linked Qtr.
Change

($ in thousands, except ratios)

Sep. 2020

Jun. 2020







Total Commercial

$            36,366

$           142,682


$          (106,316)






Total Consumer

28

350


(322)






Total Portfolio Mortgage

1,959

10,274


(8,315)

Total Balance Sheet Deferrals

$            38,353

$           153,306


$          (114,953)






% of Total loans

4.33%

17.00%


-12.68%






Total Sold Mortgage

$            42,317

$            41,751


$                 566











Commercial High Sensitivity





Portfolio Update




Linked Qtr.
Change

($ in thousands, except ratios)

Sep. 2020

Jun. 2020







Hotel/Travel Accomodation

$                 32,475

$                 32,758


$                     (283)






Food Service/Restaurant

9,698

10,480


(782)






Elder/Child Care

7,188

7,302


(114)






Arts/Entertainment/Recreation

6,614

5,698


916






Education/Religious

13,412

15,083


(1,671)






Energy

-

-


-






Total

$                 69,387

$                 71,321


$                 (1,934)






% of Total loans

7.83%

7.91%


-0.08%

Webcast and Conference Call

The Company will hold a related conference call and webcast on October 30, 2020, at 11:00 a.m. EDT.  Interested parties may access the conference call by dialing 1-888-338-9469.  The webcast can be accessed at ir.yourstatebank.com.  An audio replay of the call will be available on the Company's website.

About SB Financial Group                                                                          

Headquartered in Defiance, Ohio, SB Financial is a diversified financial services holding company for the State Bank & Trust Company (State Bank) and SBFG Title, LLC dba Peak Title (Peak Title).  State Bank provides a full range of financial services for consumers and small businesses, including wealth management, private client services, mortgage banking and commercial and agricultural lending, operating through a total of 22 offices; 21 in nine Ohio counties and one in Fort Wayne, Indiana, and 23 full-service ATMs. State Bank has five loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan.  Peak Title provides title insurance and opinions throughout the Tri-State region. SB Financial's common stock is listed on the NASDAQ Capital Market under the symbol "SBFG".

In May 2020, SB Financial was ranked #125 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, the duration and scope of the COVID-19 outbreak in the United States and the market areas in which SB Financial and its subsidiaries operate, including the impact to the state and local economies of prolonged shelter in place orders and the pandemic generally, risks and uncertainties inherent in the national and regional banking industry, changes in economic conditions in the market areas in which SB Financial and its subsidiaries operate, changes in policies by regulatory agencies, changes in accounting standards and policies, changes in tax laws, fluctuations in interest rates, demand for loans in the market areas in SB Financial and its subsidiaries operate, increases in FDIC insurance premiums, changes in the competitive environment, losses of significant customers, geopolitical events, the loss of key personnel and other risks identified in SB Financial's Annual Report on Form 10-K and documents subsequently filed by SB Financial with the Securities and Exchange Commission.  Forward-looking statements speak only as of the date on which they are made, and SB Financial undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, except as required by law. All subsequent written and oral forward-looking statements attributable to SB Financial or any person acting on its behalf are qualified by these cautionary statements.

Non-GAAP Financial Measures

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

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

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



SB FINANCIAL GROUP, INC.  



CONSOLIDATED BALANCE SHEETS - (Unaudited)




















September


June


March


December


September




($ in thousands)


2020


2020


2020


2019


2019















ASSETS












Cash and due from banks


$       94,641


$       85,661


$       56,393


$       27,064


$       49,824


Interest bearing time deposits


8,956


10,542


-


-


-


Available-for-sale securities


130,315


104,289


107,727


100,948


77,029


Loans held for sale


13,943


13,742


11,328


7,258


13,655


Loans, net of unearned income


885,850


901,548


830,764


825,510


823,367


Allowance for loan losses


(11,793)


(10,013)


(8,958)


(8,755)


(8,492)


Premises and equipment, net


23,785


23,662


23,599


23,385


23,898


Federal Reserve and FHLB Stock, at cost


5,303


4,837


4,648


4,648


4,648


Foreclosed assets held for sale, net


76


382


85


305


489


Interest receivable


4,159


4,272


2,940


3,106


3,176


Goodwill and other intangibles


22,763


22,813


17,830


17,832


17,834


Cash value of life insurance


17,453


17,375


17,299


17,221


17,137


Mortgage servicing rights


8,535


8,168


8,974


11,017


10,447


Other assets


14,255


15,658


15,684


9,038


9,749


















Total assets


$  1,218,241


$  1,202,936


$  1,088,313


$  1,038,577


$  1,042,761











































LIABILITIES AND SHAREHOLDERS' EQUITY












Deposits













Non interest bearing demand


$     225,003


$     229,042


$     170,920


$     158,357


$     152,932



Interest bearing demand


164,248


154,143


133,722


131,084


131,655



Savings


169,474


161,182


138,863


119,359


121,991



Money market


204,862


189,380


169,209


173,666


173,237



Time deposits


250,428


256,840


251,177


257,753


268,139


















Total deposits


1,014,015


990,587


863,891


840,219


847,954
















Short-term borrowings


20,710


23,826


36,881


12,945


14,659


Federal Home Loan Bank advances


8,000


13,000


16,000


16,000


16,000


Trust preferred securities


10,310


10,310


10,310


10,310


10,310


Interest payable


946


929


1,131


1,191


1,391


Other liabilities


22,913


26,403


24,195


21,818


18,201


















Total liabilities


1,076,894


1,065,055


952,408


902,483


908,515
















Shareholders' Equity













Preferred stock


-


-


-


-


13,241



Common stock


54,463


54,463


54,463


54,463


41,223



Additional paid-in capital


14,782


14,780


14,655


15,023


15,219



Retained earnings


80,012


75,526


72,641


72,704


70,184



Accumulated other comprehensive income (loss)

2,221


2,320


2,049


659


900



Treasury stock


(10,131)


(9,208)


(7,903)


(6,755)


(6,521)


















Total shareholders' equity


141,347


137,881


135,905


136,094


134,246


















Total liabilities and shareholders' equity


$  1,218,241


$  1,202,936


$  1,088,313


$  1,038,577


$  1,042,761

 


SB FINANCIAL GROUP, INC.


CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)



















($ in thousands, except per share & ratios)


At and for the Three Months Ended



Nine Months Ended























September


June


March


December


September



September


September

Interest income


2020


2020


2020


2019


2019



2020


2019


Loans

















  Taxable 


$     10,179


$        9,945


$        9,795


$     10,313


$     10,607



$     29,919


$     30,216


  Tax exempt


47


59


79


83


82



185


217


Securities

















  Taxable 


494


510


692


737


776



1,696


2,489


  Tax exempt


87


81


78


72


81



246


273





















Total interest income


10,807


10,595


10,644


11,205


11,546



32,046


33,195



















Interest expense

















Deposits


1,423


1,549


1,880


2,392


2,258



4,852


6,268


Repurchase agreements & other


12


20


28


17


22



60


65


Federal Home Loan Bank advances


59


92


100


101


101



251


301


Trust preferred securities


54


62


88


99


107



204


331





















Total interest expense


1,548


1,723


2,096


2,609


2,488



5,367


6,965





































Net interest income


9,259


8,872


8,548


8,596


9,058



26,679


26,230




















Provision for loan losses 


1,800


1,300


600


300


300



3,700


500



















Net interest income after provision
















  for loan losses

7,459


7,572


7,948


8,296


8,758



22,979


25,730



















Noninterest income

















Wealth management fees


839


775


768


801


775



2,382


2,292


Customer service fees


730


667


682


712


729



2,079


2,049


Gain on sale of mtg. loans & OMSR


8,085


8,119


1,949


3,048


2,495



18,153


5,365


Mortgage loan servicing fees, net


(169)


(1,880)


(2,052)


334


8



(4,101)


(731)


Gain on sale of non-mortgage loans


119


107


104


250


462



330


1,005


Title insurance revenue


517


609


265


393


400



1,391


727


Net gain on sales of securities


-


-


-


-


-



-


206


Gain (loss) on sale of assets


(52)


(80)


(46)


1


1



(178)


(6)


Other


349


298


491


420


496



1,138


1,150





















Total noninterest income


10,418


8,615


2,161


5,959


5,366



21,194


12,057



















Noninterest expense

















Salaries and employee benefits


6,995


6,419


5,427


6,142


5,715



18,841


15,922


Net occupancy expense


736


675


698


675


656



2,109


1,928


Equipment expense


888


780


700


764


688



2,368


2,064


Data processing fees


586


1,288


548


543


499



2,422


1,430


Professional fees


695


1,224


757


639


571



2,676


1,837


Marketing expense


137


141


208


171


239



486


724


Telephone and communication expense

142


122


115


121


118



379


345


Postage and delivery expense


96


96


115


86


89



307


254


State, local and other taxes


331


262


254


347


243



847


745


Employee expense


155


93


184


207


199



432


588


Other expenses


574


562


400


481


483



1,536


1,397





















Total noninterest expense


11,335


11,662


9,406


10,176


9,500



32,403


27,234





































Income before income tax expense


6,542


4,525


703


4,079


4,624



11,770


10,553




















Income tax expense


1,292


870


22


721


862



2,184


1,938



















Net income 


$        5,250


$        3,655


$           681


$        3,358


$        3,762



$        9,586


$        8,615



















Preferred share dividends 


-


-


-


230


233



-


720



















Net income available to common shareholders


5,250


3,655


681


3,128


3,529



9,586


7,895



















Common share data:

















Basic earnings per common share


$          0.69


$          0.47


$          0.09


$          0.48


$          0.55



$          1.25


$          1.22




















Diluted earnings per common share


$          0.69


$          0.47


$          0.09


$          0.42


$          0.48



$          1.25


$          1.08



















Average shares outstanding (in thousands):

















Basic:


7,607


7,708


7,756


6,445


6,397



7,700


6,459


Diluted: 


7,607


7,708


7,756


7,799


7,876



7,700


7,955

 


SB FINANCIAL GROUP, INC.







CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)






















($ in thousands, except per share & ratios)


At and for the Three Months Ended



Nine Months Ended



















September


June


March


December


September



September


September

SUMMARY OF OPERATIONS


2020


2020


2020


2019


2019



2020


2019

















   Net interest income 


$        9,259


$        8,872


$        8,548


$        8,596


$        9,058



$       26,679


$       26,230

         Tax-equivalent adjustment


36


37


42


41


43



115


130

   Tax-equivalent net interest income 


9,295


8,909


8,590


8,637


9,101



26,794


26,360

   Provision for loan loss 


1,800


1,300


600


300


300



3,700


500

   Noninterest income


10,418


8,615


2,161


5,959


5,366



21,194


12,057

   Total operating revenue


19,677


17,487


10,709


14,555


14,424



47,873


38,287

   Noninterest expense


11,335


11,662


9,406


10,176


9,500



32,403


27,234

   Pre-tax pre-provision income


8,342


5,825


1,303


4,379


4,924



15,470


11,053

   Pretax income


6,542


4,525


703


4,079


4,624



11,770


10,553

   Net income 


5,250


3,655


681


3,358


3,762



9,586


8,615

   Net income available to common shareholders 

5,250


3,655


681


3,128


3,529



9,586


7,895

















PER SHARE INFORMATION:
















   Basic earnings per share (EPS)


0.69


0.47


0.09


0.48


0.55



1.24


1.22

   Diluted earnings per share


0.69


0.47


0.09


0.42


0.48



1.24


1.08

   Common dividends


0.100


0.100


0.095


0.095


0.090



0.295


0.265

   Book value per common share


18.73


17.97


17.64


17.53


17.28



18.73


17.3

   Tangible book value per common share (TBV)


15.72


15.00


15.32


15.23


16.23



15.72


16.2

   Fully converted TBV per common share


-


-


-


-


14.98



-


15.0

   Market price per common share


13.49


16.62


11.12


19.69


16.72



13.49


16.7

   Market price per preferred share


-


-


-


-


16.50



-


16.5

   Market price to TBV


85.8%


110.8%


72.6%


129.2%


103.0%



85.8%


103.0%

   Market price to fully converted TBV


-


-


-


-


111.6%



-


111.6%

   Market price to trailing 12 month EPS


8.0


11.4


8.4


13.0


11.5



8.0


11.5

















PERFORMANCE RATIOS:
















   Return on average assets (ROAA)


1.73%


1.25%


0.26%


1.28%


1.44%



1.12%


1.13%

   Pre-tax pre-provision ROAA


2.74%


1.99%


0.49%


1.67%


1.89%



1.81%


1.44%

   Return on average equity


15.01%


10.31%


1.99%


9.93%


11.24%



9.74%


8.67%

   Return on average tangible equity


17.93%


11.91%


2.29%


12.83%


14.67%



11.48%


11.35%

   Efficiency ratio 


57.48%


66.68%


87.81%


69.90%


65.85%



67.68%


71.12%

   Earning asset yield


3.96%


3.95%


4.32%


4.80%


4.98%



4.08%


4.87%

   Cost of interest bearing liabilities


0.75%


0.89%


1.12%


1.42%


1.33%



0.91%


1.27%

   Net interest margin


3.39%


3.30%


3.47%


3.68%


3.91%



3.39%


3.85%

   Tax equivalent effect


0.02%


0.02%


0.01%


0.02%


0.02%



0.02%


0.02%

   Net interest margin, tax equivalent 


3.41%


3.32%


3.48%


3.70%


3.93%



3.41%


3.87%

   Non interest income/Average assets


3.42%


2.95%


0.81%


2.27%


2.06%



2.48%


1.58%

   Non interest expense/Average assets


3.73%


3.99%


3.54%


3.87%


3.64%



3.79%


3.56%

   Net noninterest expense/Average assets


-0.30%


-1.04%


-2.73%


-1.60%


-1.58%



-1.31%


-1.98%

















ASSET QUALITY RATIOS:
















   Gross charge-offs


32


254


400


51


128



686


208

   Recoveries


11


10


3


14


15



24


33

   Net charge-offs


21


244


397


37


113



662


175

   Nonaccruing loans/Total loans


0.72%


0.72%


0.70%


0.67%


0.40%



0.72%


0.40%

   Nonperforming loans/Total loans


0.81%


0.81%


0.79%


0.77%


0.50%



0.81%


0.50%

   Nonperforming assets/Loans & OREO


0.82%


0.86%


0.80%


0.81%


0.56%



0.82%


0.56%

   Nonperforming assets/Total assets


0.60%


0.64%


0.61%


0.64%


0.44%



0.60%


0.44%

   Allowance for loan loss/Nonperforming loans


163.84%


136.45%


135.77%


137.35%


207.12%



163.84%


207.12%

   Allowance for loan loss/Total loans


1.33%


1.11%


1.08%


1.06%


1.03%



1.33%


1.03%

   Allowance for loan loss/Total loans less PPP


1.47%


1.22%


1.08%


1.06%


1.03%



1.47%


1.03%

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


0.01%


0.11%


0.19%


0.02%


0.05%



0.10%


0.03%

   Loan loss provision/Net charge-offs


8571.43%


532.79%


151.13%


810.81%


265.49%



558.91%


285.71%

















CAPITAL & LIQUIDITY RATIOS:
















   Loans/ Deposits


87.36%


91.01%


96.17%


98.25%


97.10%



87.36%


97.10%

   Equity/ Assets


11.60%


11.46%


12.49%


13.10%


12.87%



11.60%


12.87%

   Tangible equity/Tangible assets


9.92%


9.75%


11.03%


11.59%


10.07%



9.92%


10.07%

   Tangible equity adjusted for conversion


-


-


-


-


11.36%



-


11.36%

   Common equity tier 1 ratio (Bank)


13.20%


11.97%


12.17%


12.46%


12.07%



13.20%


12.07%

















END OF PERIOD BALANCES
















   Total assets


1,218,241


1,202,936


1,088,313


1,038,577


1,042,761



1,218,241


1,042,761

   Total loans 


885,850


901,548


830,764


825,510


823,367



885,850


823,367

   Deposits


1,014,015


990,587


863,891


840,219


847,954



1,014,015


847,954

   Stockholders equity


141,347


137,881


135,905


136,094


134,246



141,347


134,246

   Goodwill and intangibles


22,763


22,813


17,830


17,832


17,834



22,763


17,834

   Preferred equity


-


-


-


-


13,241



-


13,241

   Tangible equity


118,584


115,068


118,075


118,262


103,171



118,584


103,171

   Mortgage servicing portfolio


1,293,037


1,261,746


1,216,292


1,199,107


1,153,020



1,293,037


1,153,020

   Wealth/Brokerage assets under care


522,360


495,025


427,129


507,670


484,295



522,360


484,295

   Total assets under care


3,033,638


2,959,707


2,731,734


2,745,354


2,680,076



3,033,638


2,680,076

   Full-time equivalent employees 


251


254


253


252


247



251


247

   Period end common shares outstanding


7,545


7,672


7,705


7,763


6,357



7,545


6,357

   Period end outstanding (Series A Converted)


-


-


-


-


1,414



-


1,414

   Market capitalization (all)


101,782


127,509


85,680


152,853


129,620



101,782


129,620

















AVERAGE BALANCES
















   Total assets


1,216,843


1,169,030


1,061,365


1,051,071


1,043,791



1,141,008


1,020,074

   Total earning assets 


1,090,386


1,073,490


986,216


934,540


927,360



1,047,846


908,284

   Total loans 


907,483


898,216


832,975


828,108


829,699



879,536


803,431

   Deposits


1,007,679


946,053


855,272


856,961


849,984



936,805


829,335

   Stockholders equity


139,908


141,821


136,930


135,267


133,891



131,156


132,465

   Goodwill and intangibles


22,787


19,066


17,831


17,833


17,835



19,813


17,518

   Preferred equity


-


-


-


12,707


13,459



-


13,771

   Tangible equity


117,121


122,755


119,099


104,727


102,597



111,343


101,176

   Average basic shares outstanding


7,607


7,708


7,756


6,445


6,397



7,700


6,459

   Average diluted shares outstanding


7,607


7,708


7,756


7,799


7,876



7,700


7,955

 

SB FINANCIAL GROUP, INC.


Rate Volume Analysis - (Unaudited)


At and for the Three Months Ended September 30, 2020 and 2019









($ in thousands)


Three Months Ended Sep. 30, 2020



Three Months Ended Sep. 30, 2019




Average


Average



Average


Average

Assets


Balance

Interest

Rate



Balance

Interest

Rate













Taxable securities/Cash


$           176,821

$                 494

1.12%



$            89,782

$                 776

3.46%


Nontaxable securities


6,082

87

5.72%



7,879

81

4.11%


Loans, net


907,483

10,226

4.51%



829,699

10,689

5.15%













       Total earning assets


1,090,386

10,807

3.96%



927,360

11,546

4.98%













Cash and due from banks


53,532





55,039




Allowance for loan losses


(10,448)





(8,392)




Premises and equipment


23,968





23,855




Other assets


59,405





45,929















      Total assets


$        1,216,843





$        1,043,791














Liabilities











Savings, MMDA and interest bearing demand


$           531,913

$                 690

0.52%



$           434,190

$                 769

0.71%


Time deposits


254,381

746

1.17%



272,433

1,489

2.19%


Repurchase agreements & other


23,811

12

0.20%



15,948

22

0.55%


Advances from Federal Home Loan Bank


8,272

59

2.85%



16,000

101

2.53%


Trust preferred securities


10,310

54

2.10%



10,310

107

4.15%













      Total interest bearing liabilities


828,687

1,561

0.75%



748,881

2,488

1.33%













Non interest bearing demand


221,385

-




143,361

-














      Total funding


1,050,072


0.59%



892,242


1.12%













Other liabilities


26,863





17,658















      Total liabilities


1,076,935





909,900















Equity


139,908





133,891















      Total liabilities and equity


$        1,216,843





$        1,043,791















Net interest income



$              9,246





$              9,058














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

3.39%





3.91%













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

3.41%





3.93%


 - Computed on a fully tax equivalent (FTE) basis



















Nine Months Ended Sep. 30, 2020



Nine Months Ended Sep. 30, 2019




Average


Average



Average


Average

Assets


Balance

Interest

Rate



Balance

Interest

Rate













Taxable securities


$           161,947

$              1,696

1.40%



$            96,013

$              2,489

3.46%


Nontaxable securities


6,363

246

5.15%



8,840

273

4.12%


Loans, net


879,536

30,104

4.56%



803,431

30,433

5.05%













       Total earning assets


1,047,846

32,046

4.08%



908,284

33,195

4.87%













Cash and due from banks


28,040





46,797




Allowance for loan losses


(9,560)





(8,303)




Premises and equipment


23,855





23,643




Other assets


50,827





49,653















      Total assets


$        1,141,008





$        1,020,074














Liabilities











Savings, MMDA and interest bearing demand


$           483,156

$              2,550

0.70%



$           426,436

$              2,232

0.70%


Time deposits


253,398

2,315

1.22%



261,362

4,036

2.06%


Repurchase agreements & Other


21,856

60

0.37%



15,760

65

0.55%


Advances from Federal Home Loan Bank


16,263

251

2.06%



16,088

301

2.49%


Trust preferred securities


10,310

204

2.64%



10,310

331

4.28%













      Total interest bearing liabilities


784,983

5,380

0.91%



729,956

6,965

1.27%













Non interest bearing demand


200,251


0.73%



141,537


1.07%













      Total funding


985,234





871,493















Other liabilities


24,618





16,116















      Total liabilities


1,009,852





887,609















Equity


131,156





132,465















      Total liabilities and equity


$        1,141,008





$        1,020,074















Net interest income



$            26,666





$            26,230














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

3.39%





3.85%













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

3.41%





3.87%


 - Computed on a fully tax equivalent (FTE) basis


 


Non-GAAP reconciliation


 Three Months Ended 


 Nine Months Ended 












($ in thousands, except per share & ratios)


 Sep. 30, 2020 


 Sep. 30, 2019 


 Sep. 30, 2020 


 Sep. 30, 2019 












Total operating revenue


$         19,677


$         14,424


$         47,873


$         38,287


 Adjustment to (deduct)/add OMSR impairment*


(326)


-


2,974


1,398












Adjusted total operating revenue


19,351


14,424


50,847


39,685












Total operating expense


11,335


9,500


32,403


27,234


 Adjustment for merger expenses**


-


-


(1,241)


-












Adjusted total operating expense


11,335


9,500


31,162


27,234












Income before income taxes


6,542


4,624


11,770


10,553


 Adjustment for OMSR & merger expense


(326)


-


4,215


1,398












Adjusted income before income taxes


6,216


4,624


15,985


11,951












Provision for income taxes


1,292


862


2,184


1,938


 Adjustment for OMSR & merger expense***


(68)


-


885


294












Adjusted provision for income taxes


1,224


862


3,069


2,233












Net income


5,250


3,762


9,586


8,615


 Adjustment for OMSR & merger expense


(258)


-


3,330


1,104












Adjusted net income


4,992


3,762


12,916


9,720












Diluted earnings per share


0.69


0.48


1.25


1.08


 Adjustment for OMSR & merger expense


(0.04)


-


0.42


0.14












Adjusted diluted earnings per share


$            0.65


$            0.48


$            1.67


$            1.22












Return on average assets


1.73%


1.44%


1.12%


1.13%


 Adjustment for OMSR & merger expense


-0.08%


0.00%


0.29%


0.11%












Adjusted return on average assets


1.64%


1.44%


1.41%


1.23%






















Pretax, preprovision income


8,342


4,924


15,470


11,053


 Adjustment for OMSR & merger expense


(326)


-


4,215


1,398












Adjusted pretax, preprovision income


8,016


4,924


19,685


12,451






















*valuation adjustment to the Company's mortgage servicing rights












**transactions costs related to the Edon acquisition












***tax effect is calculated using a 21% statutory federal corporate income tax rate

 

Cision View original content:http://www.prnewswire.com/news-releases/sb-financial-group-announces-third-quarter-2020-results-301163293.html

SOURCE SB Financial Group, Inc.