Press Release

SB Financial Group Announces Second Quarter 2020 Results

Company Release - 7/27/2020 4:15 PM ET

DEFIANCE, Ohio, July 27, 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 second quarter and six months ended June 30, 2020.

Second quarter 2020 highlights over prior-year second quarter include:

  • Net income of $3.7 million; diluted earnings per share ("EPS") of $0.47
  • Adjusted net income, excluding the impact of the Originated Mortgage Servicing Rights ("OMSR") impairment of $1.1 million and Edon merger costs of $1.2 million with a combined after-tax impact of $1.8 million, was $5.5 million, with EPS of $0.71
  • Mortgage origination volume of $223.7 million, an increase of $125.2 million, or 127.2 percent

Six months ended June 30, 2020, highlights over prior-year six months include:

  • Net income of $4.3 million; adjusted for OMSR and merger costs of $3.6 million after-tax net income rises to $7.9 million, which was up $2.0 million, or 33.0 percent
  • Diluted EPS of $0.56; adjusted EPS of $1.03
  • Return on Average Assets ("ROA") of 0.78 percent; adjusted ROA of 1.42 percent

Second quarter 2020 trailing twelve-month highlights include:

  • Loan growth of $87.0 million, or 10.7 percent, which includes Paycheck Protection Program ("PPP") loan balances of $82.9 million and loans acquired in the Edon acquisition of $16.3 million.
  • Deposit growth of $151.2 million, or 18.0 percent, driven by PPP balances and the Edon acquisition
  • Mortgage origination volume of $620.5 million; servicing portfolio of $1.26 billion, which is up $0.15 billion, or 13.4 percent

Highlights

Three Months Ended


Six Months Ended

($ in thousands, except per share & ratios)

Jun. 2020

Jun. 2019

% Change


Jun. 2020

Jun. 2019

% Change

Operating revenue 

$      17,487

$      12,523

39.6%


$      28,196

$      23,863

18.2%

Interest income 

10,595

11,151

-5.0%


21,239

21,649

-1.9%

Interest expense

1,723

2,319

-25.7%


3,819

4,477

-14.7%

Net interest income 

8,872

8,832

0.5%


17,420

17,172

1.4%

Provision for loan losses

1,300

200

550.0%


1,900

200

850.0%

Noninterest income

8,615

3,691

133.4%


10,776

6,691

61.1%

Noninterest expense

11,662

9,108

28.0%


21,068

17,734

18.8%

Net income 

3,655

2,627

39.1%


4,336

4,853

-10.7%

Earnings per diluted share

0.47

0.33

42.4%


0.56

0.61

-8.2%

Return on average assets

1.25%

1.03%

21.4%


0.78%

0.96%

-18.8%

Return on average equity

10.31%

7.92%

30.2%


6.22%

7.36%

-15.5%









Non-GAAP Measures








Adjusted net income

$        5,495

$        3,172

73.2%


$        7,923

$        5,958

33.0%

Adjusted diluted EPS

0.71

0.40

77.5%


1.03

0.75

37.3%

Adjusted return on average assets

1.88%

1.09%

72.5%


1.42%

1.18%

20.3%

Adjusted pre-tax, pre-provision income

8,154

4,105

98.6%


11,668

7,527

55.0%

"SB Financial's second quarter results reflect the efforts of our staff working at full capacity to best serve our residential mortgage and small business clients and to integrate the Edon acquisition.  Despite an OMSR impairment of $1.1 million and merger costs of $1.2 million, our GAAP diluted EPS were up 42 percent from the prior year.  Adjusting for those events, EPS of $0.71 were up 78 percent from $0.40 in the prior year, reflecting the success of our balance sheet growth and revenue diversity strategies" said Mark A. Klein, Chairman, President, and CEO of SB Financial.   "Our offices are back open and we remain committed to serving all of our clients in a safe and productive manner as we monitor the COVID-19 situation."

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was up 39.6 percent from the second quarter of 2019, and up 63.3 percent to the linked quarter.

  • Net interest income was flat from the year-ago quarter, and up 3.8 percent from the linked quarter. 
  • Net interest margin on a fully taxable equivalent basis (FTE) was down from both year-ago and linked quarters by 56 and 16 basis points, respectively as cash balances were higher and the PPP loans held down loan yields.  
  • Noninterest income was up 133 and 299 percent from the year ago and linked quarters, respectively.       

Mortgage Loan Business

Mortgage loan originations for the second quarter of 2020 were $223.7 million, up $125.2 million, or 127.2 percent, from the year-ago quarter.  Total sales of originated loans were $204.6 million, up $133.6 million, or 188.2 percent, from the year-ago quarter.  Refinance activity accelerated in the quarter, with total internal refinance volume of $88.4 million or 39 percent, compared to 19 percent for all of 2019.  For the first six months, SB Financial had total volume of $325.0 million, of which $113.1 million (35 percent) was internal refinance, $100.7 million was external refinance (31 percent), and the remaining $111.2 million was new purchase/construction lending.

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $6.2 million for the second quarter of 2020, compared to $1.2 million for the year-ago quarter.  The mortgage servicing valuation adjustment for the second quarter of 2020 was a negative $1.1 million, compared to a negative adjustment of $0.7 million for the second quarter of 2019.  For the first six months, the impairment on servicing rights was $3.3 million compared to $1.4 million for the prior year six months.  The aggregate servicing valuation impairment ended the quarter at $4.6 million.  The servicing portfolio at June 30, 2020, was $1.26 billion, up $0.15 billion, or 13.4 percent, from $1.11 billion at June 30, 2019.  Normal amortization is up 242 percent from the prior year due to higher refinance activity.

Mr. Klein noted, "Mortgage volume accelerated again in the quarter as we originated over $223 million in volume.  Given the volatility in the mortgage markets early in the quarter, our disciplined approach was critical in achieving the record number of originations and sales in the quarter.  We remain very bullish on the mortgage business and our pipelines in all markets are near capacity."

Mortgage Banking






($ in thousands)

Jun. 2020

Mar. 2020

Dec. 2019

Sep. 2019

Jun. 2019

Mortgage originations

$      223,671

$      101,365

$      137,528

$      157,947

$       98,447

Mortgage sales

204,628

84,476

127,441

125,386

70,993

Mortgage servicing portfolio

1,261,746

1,216,292

1,199,107

1,153,020

1,112,857

Mortgage servicing rights

8,168

8,974

11,017

10,447

10,264













Mortgage servicing revenue






Loan servicing fees

782

757

740

709

691

OMSR amortization

(1,574)

(597)

(709)

(701)

(460)

Net administrative fees

(792)

160

31

8

231

OMSR valuation adjustment

(1,088)

(2,212)

303

-

(690)

Net loan servicing fees

(1,880)

(2,052)

334

8

(459)

Gain on sale of mortgages

8,119

1,949

3,048

2,495

1,678

Mortgage banking revenue, net

$         6,239

$           (103)

$         3,382

$         2,503

$         1,219

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.  SBA and USDA activity outside of the PPP program for the quarter consisted of total origination volume of $0.1 million, with sales volume of $0.4 million resulting in gains of $0.07 million.  Wealth management assets under the Company's care rebounded to $495.0 million as of June 30, 2020.  For the second quarter of 2020, noninterest income as a percentage of total operating revenue was 49.3 percent.  Reflective of the robust mortgage market, SB Financial'sTitle Agency provided revenue in the quarter of $0.6 million, up 98 percent from the prior year. 

For the second quarter of 2020, noninterest expense of $11.7 million was up $2.6 million compared to the prior year or 28.0 percent.  Excluding the $1.2 million of legal, technology and processing costs incurred for the Edon merger, year-over-year growth was 15.4 percent, which is driven by higher mortgage commission and higher expenses in the Title Agency.

Mr. Klein stated, "We actively participated in the SBA's PPP program and helped nearly 650 small business clients with $83 million in loans on our way to help preserve over 9,000 jobs.  Our efforts rested exclusively with the small business owner as our average loan size was $124 thousand and our median loan size was $42 thousand;  just 15 clients borrowed in excess of $1.0 million.  Interest and fees from these loans increased revenue in the quarter by $450,000; the remaining deferred fees associated with the PPP initiative now stands at $2.7 million.  We were especially pleased with the nearly 200 new relationships we were able to garner by our participation in the program.  In the aggregate, net non-interest expense was the lowest ever at -1.0 percent and led to a positive adjusted operating leverage for the first half of 2020."

Noninterest Income / Noninterest Expense






($ in thousands, except ratios)

Jun. 2020

Mar. 2020

Dec. 2019

Sep. 2019

Jun. 2019

Noninterest Income (NII)

$          8,615

$          2,161

$          5,959

$          5,366

$          3,691

NII / Total Revenue

49.3%

20.2%

40.9%

37.2%

29.5%

NII / Average Assets

3.0%

0.8%

2.3%

2.1%

1.5%







Noninterest Expense (NIE)

$        11,662

$          9,406

$        10,176

$          9,500

$          9,108

Efficiency Ratio

66.7%

87.8%

69.9%

65.9%

72.7%

NIE / Average Assets

4.0%

3.5%

3.9%

3.6%

3.6%

Net Noninterest Expense/Avg. Assets

-1.0%

-2.7%

-1.6%

-1.6%

-2.1%

Balance Sheet

Total assets as of June 30, 2020, were $1.2 billion, up $173.8 million, or 16.9 percent, from the year ago quarter due to the impact of the Edon acquisition ($68.1 million) and the PPP activity.  Total equity as of June 30, 2020, was $137.9 million, up 2.9 percent from a year ago, and comprised 11.5 percent of total assets. 

Total loans held for investment were $901.5 million at June 30, 2020, up $87.0 million, or 10.7 percent, from June 30, 2019.  Commercial loans were up $78.3 million, or 54.5 percent, commercial real estate up $15.0 million or 4.1 percent and agricultural loans increasing $4.5 million or 8.3 percent.   The Edon acquisition added $16.3 million in loan balances.  Absent the effects of the Edon acquisition and PPP loans, loan balances were down $12.0 million from the year ago quarter.

The investment portfolio of $109.1 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 9.1 percent of assets at June 30, 2020, and was up 21.4 percent from the year-ago period.  Deposit balances of $990.6 million at June 30, 2020, increased by $151.2 million, or 18.0 percent, since June 30, 2019.  Growth from the prior year included $112.2 million in checking and $39.0 million in savings and time deposit balances. The Edon acquisition added $52.3 million in deposit balances and retention of PPP funding in the Bank increased checking deposits significantly.

Mr. Klein continued, "A large percentage of our PPP clients have retained their loan balances in their operating accounts and the successful integration of the Edon acquisition added to our deposit balances in the quarter.  Like all banks we have seen some weakness in certain industries and our nonperforming assets to total assets increased to 64 basis points at quarter end, up 21 basis points from the prior year.  We did set aside much higher reserves in the quarter, totaling $1.3 million."

Loan Balances







($ in thousands, except ratios)

Jun. 2020

Mar. 2020

Dec. 2019

Sep. 2019

Jun. 2019

Annual

Growth

Commercial

$       222,108

$       151,538

$       151,018

$       145,147

$       143,798

$         78,310

% of Total

24.6%

18.2%

18.3%

17.6%

17.7%

54.5%

Commercial RE

375,450

378,212

369,962

362,580

360,491

14,959

% of Total

41.6%

45.5%

44.8%

44.0%

44.2%

4.1%

Agriculture

58,817

47,660

50,994

51,946

54,317

4,500

% of Total

6.5%

5.7%

6.2%

6.3%

6.7%

8.3%

Residential RE

184,684

189,738

189,290

199,036

191,642

-6,958

% of Total

20.6%

22.9%

22.9%

24.2%

23.5%

-3.6%

Consumer & Other

60,489

63,616

64,246

64,658

64,261

-3,772

% of Total

6.7%

7.7%

7.8%

7.9%

7.9%

-5.9%

Total Loans

$       901,548

$       830,764

$       825,510

$       823,367

$       814,509

$         87,039

Total Growth Percentage






10.7%















Deposit Balances







($ in thousands, except ratios)

Jun. 2020

Mar. 2020

Dec. 2019

Sep. 2019

Jun. 2019

Annual

Growth

Non-Int DDA

$       229,042

$       170,920

$       158,357

$       152,932

$       141,216

$         87,826

% of Total

23.1%

19.8%

18.8%

18.0%

16.8%

62.2%

Interest DDA

154,143

133,722

131,084

131,655

129,710

24,433

% of Total

15.6%

15.5%

15.6%

15.5%

15.5%

18.8%

Savings

161,182

138,863

119,359

121,991

118,931

42,251

% of Total

16.2%

16.0%

14.1%

14.3%

14.1%

35.5%

Money Market

189,380

169,209

173,666

173,237

175,455

13,925

% of Total

19.1%

19.6%

20.7%

20.4%

20.9%

7.9%

Time Deposits

256,840

251,177

257,753

268,139

274,062

(17,222)

% of Total

25.9%

29.1%

30.8%

31.8%

32.7%

-6.3%

Total Deposits

$       990,587

$       863,891

$       840,219

$       847,954

$       839,374

$       151,213

Total Growth Percentage






18.0%

Asset Quality

SB Financial reported nonperforming assets of $7.7 million as of June 30, 2020, up $3.3 million from the year-ago quarter.  The Company took $0.2 million in charge-offs in the quarter and expects further pressure on the portfolio due to the COVID-19 impact.  The coverage of problem loans by the loan loss allowance was at 136 percent at June 30, 2020, down from 212 percent at June 30, 2019.  The Company continued to provide payment relief to clients as needed, with total forbearance  as of June 30, 2020 of 510 loans at $195.1 million.  The detail on these deferrals; 200 commercial at $142.7 million, 62 portfolio residential and consumer at $10.6 million and 248 sold residential real estate at $41.8 million.  

Nonperforming Assets






Annual

Change

($ in thousands, except ratios)

Jun. 2020

Mar. 2020

Dec. 2019

Sep. 2019

Jun. 2019

Commercial & Agriculture

$           1,204

$           1,309

$           1,772

$              834

$              674

$              530

% of Total Com./Ag. loans

0.43%

0.66%

0.88%

0.42%

0.34%

78.6%

Commercial RE 

2,484

1,816

1,826

262

208

2,276

% of Total CRE loans

0.66%

0.48%

0.49%

0.07%

0.06%

1094.2%

Residential RE

2,538

2,330

1,635

1,763

1,768

770

% of Total Res. RE loans

1.37%

1.23%

0.86%

0.89%

0.92%

43.6%

Consumer & Other

308

327

267

416

456

(148)

% of Total Con./Oth. loans  

0.51%

0.51%

0.42%

0.64%

0.71%

-32.5%

Total Nonaccruing Loans 

6,534

5,782

5,500

3,275

3,106

3,428

% of Total loans

0.72%

0.70%

0.67%

0.40%

0.38%

110.4%

Accruing Restructured Loans

804

816

874

825

814

(10)

Total Change (%)






-1.2%

Total Nonaccruing & Restructured Loans

7,338

6,598

6,374

4,100

3,920

3,418

% of Total loans

0.81%

0.79%

0.77%

0.50%

0.48%

87.2%

Foreclosed Assets

382

85

305

489

530

(148)

Total Change (%)






-27.9%

Total Nonperforming Assets

$           7,720

$           6,683

$           6,679

$           4,589

$           4,450

$           3,270

% of Total assets

0.64%

0.61%

0.64%

0.44%

0.43%

73.5%















Webcast and Conference Call

The Company will hold a related conference call and webcast on July 28, 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 21 offices; 20 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)




















June


March


December


September


June




($ in thousands)


2020


2020


2019


2019


2019















ASSETS













Cash and due from banks


$       96,203


$       56,393


$       27,064


$       49,824


$       42,786


Available-for-sale securities


104,289


107,727


100,948


77,029


85,261


Loans held for sale


13,742


11,328


7,258


13,655


9,579


Loans, net of unearned income


901,548


830,764


825,510


823,367


814,509


Allowance for loan losses


(10,013)


(8,958)


(8,755)


(8,492)


(8,306)


Premises and equipment, net


23,662


23,599


23,385


23,898


23,150


Federal Reserve and FHLB Stock, at cost


4,837


4,648


4,648


4,648


4,648


Foreclosed assets held for sale, net


382


85


305


489


530


Interest receivable


4,272


2,940


3,106


3,176


3,209


Goodwill and other intangibles


22,813


17,830


17,832


17,834


17,836


Cash value of life insurance


17,375


17,299


17,221


17,137


17,051


Mortgage servicing rights


8,168


8,974


11,017


10,447


10,264


Other assets


15,658


15,684


9,038


9,749


8,606


















Total assets


$   1,202,936


$   1,088,313


$   1,038,577


$   1,042,761


$   1,029,123















LIABILITIES AND SHAREHOLDERS' EQUITY












Deposits













Non interest bearing demand


$     229,042


$     170,920


$     158,357


$     152,932


$     141,216



Interest bearing demand


154,143


133,722


131,084


131,655


129,710



Savings


161,182


138,863


119,359


121,991


118,931



Money market


189,380


169,209


173,666


173,237


175,455



Time deposits


256,840


251,177


257,753


268,139


274,062


















Total deposits


990,587


863,891


840,219


847,954


839,374
















Short-term borrowings


23,826


36,881


12,945


14,659


13,968


Federal Home Loan Bank advances


13,000


16,000


16,000


16,000


16,000


Trust preferred securities


10,310


10,310


10,310


10,310


10,310


Interest payable


929


1,131


1,191


1,391


1,188


Other liabilities


26,403


24,195


21,818


18,201


14,346


















Total liabilities


1,065,055


952,408


902,483


908,515


895,186
















Shareholders' Equity













Preferred stock


-


-


-


13,241


13,978



Common stock


54,463


54,463


54,463


41,223


40,486



Additional paid-in capital


14,780


14,655


15,023


15,219


15,259



Retained earnings


75,526


72,641


72,704


70,184


67,236



Accumulated other comprehensive income (loss)

2,320


2,049


659


900


801



Treasury stock


(9,208)


(7,903)


(6,755)


(6,521)


(3,823)


















Total shareholders' equity


137,881


135,905


136,094


134,246


133,937


















Total liabilities and shareholders' equity


$   1,202,936


$   1,088,313


$   1,038,577


$   1,042,761


$   1,029,123

 


SB FINANCIAL GROUP, INC.


CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)



















($ in thousands, except per share & ratios)


At and for the Three Months Ended



Six Months Ended























June


March


December


September


June



June


June

Interest income




2020


2020


2019


2019


2019



2020


2019


Loans

















  Taxable 


$        9,945


$        9,795


$      10,313


$      10,607


$      10,182



$      19,740


$      19,609


  Tax exempt


59


79


83


82


73



138


135


Securities

















  Taxable 


510


692


737


776


802



1,202


1,713


  Tax exempt


81


78


72


81


94



159


192





















Total interest income


10,595


10,644


11,205


11,546


11,151



21,239


21,649



















Interest expense


















Deposits


1,549


1,880


2,392


2,258


2,092



3,429


4,010


Repurchase agreements & other


20


28


17


22


17



48


43


Federal Home Loan Bank advances


92


100


101


101


100



192


200


Trust preferred securities


62


88


99


107


110



150


224





















Total interest expense


1,723


2,096


2,609


2,488


2,319



3,819


4,477



















Net interest income


8,872


8,548


8,596


9,058


8,832



17,420


17,172




















Provision for loan losses 


1,300


600


300


300


200



1,900


200



















Net interest income after provision
















  for loan losses



7,572


7,948


8,296


8,758


8,632



15,520


16,972



















Noninterest income


















Wealth management fees


775


768


801


775


783



1,543


1,517


Customer service fees


667


682


712


729


689



1,349


1,320


Gain on sale of mtg. loans & OMSR


8,119


1,949


3,048


2,495


1,678



10,068


2,870


Mortgage loan servicing fees, net


(1,880)


(2,052)


334


8


(459)



(3,932)


(739)


Gain on sale of non-mortgage loans


107


104


250


462


216



211


543


Title insurance revenue


609


265


393


400


308



874


327


Net gain on sales of securities


-


-


-


-


206



-


206


Gain (loss) on sale of assets


(80)


(46)


1


1


(5)



(126)


(7)


Other


298


491


420


496


275



789


654





















Total noninterest income


8,615


2,161


5,959


5,366


3,691



10,776


6,691



















Noninterest expense

















Salaries and employee benefits


6,419


5,427


6,142


5,715


5,305



11,846


10,207


Net occupancy expense


675


698


675


656


627



1,373


1,272


Equipment expense


780


700


764


688


665



1,480


1,376


Data processing fees


1,288


548


543


499


488



1,836


931


Professional fees


1,224


757


639


571


649



1,981


1,266


Marketing expense


141


208


171


239


246



349


485


Telephone and communication expense

122


115


121


118


112



237


227


Postage and delivery expense


96


115


86


89


81



211


165


State, local and other taxes


262


254


347


243


247



516


502


Employee expense


93


184


207


199


236



277


389


Other expenses


562


400


481


483


452



962


914





















Total noninterest expense


11,662


9,406


10,176


9,500


9,108



21,068


17,734



















Income before income tax expense


4,525


703


4,079


4,624


3,215



5,228


5,929




















Income tax expense


870


22


721


862


588



892


1,076



















Net income 




$        3,655


$          681


$        3,358


$        3,762


$        2,627



$        4,336


$        4,853



















Preferred share dividends 


-


-


230


233


243



-


487



















Net income available to common shareholders


3,655


681


3,128


3,529


2,384



4,336


4,366



















Common share data:

















Basic earnings per common share


$         0.47


$         0.09


$         0.48


$         0.55


$         0.37



$         0.56


$         0.68




















Diluted earnings per common share


$         0.47


$         0.09


$         0.42


$         0.48


$         0.33



$         0.56


$         0.61



















Average shares outstanding (in thousands):

















Basic:


7,708


7,756


6,445


6,397


6,454



7,750


6,469


Diluted: 


7,708


7,756


7,799


7,876


7,967



7,750


7,982

 


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


2020


2020


2019


2019


2019



2020


2019

















   Net interest income 


$        8,872


$        8,548


$        8,596


$        9,058


$        8,832



$       17,420


$       17,172

         Tax-equivalent adjustment


37


42


41


43


44



79


87

   Tax-equivalent net interest income 


8,909


8,590


8,637


9,101


8,876



17,499


17,259

   Provision for loan loss 


1,300


600


300


300


200



1,900


200

   Noninterest income


8,615


2,161


5,959


5,366


3,691



10,776


6,691

   Total operating revenue


17,487


10,709


14,555


14,424


12,523



28,196


23,863

   Noninterest expense


11,662


9,406


10,176


9,500


9,108



21,068


17,734

   Pre-tax pre-provision income


5,825


1,303


4,379


4,924


3,415



7,128


6,129

   Pretax income


4,525


703


4,079


4,624


3,215



5,228


5,929

   Net income 


3,655


681


3,358


3,762


2,627



4,336


4,853

   Net income available to common shareholders 


3,655


681


3,128


3,529


2,384



4,336


4,366

















PER SHARE INFORMATION:
















   Basic earnings per share (EPS)


0.47


0.09


0.48


0.55


0.37



0.56


0.68

   Diluted earnings per share


0.47


0.09


0.42


0.48


0.33



0.56


0.61

   Common dividends


0.100


0.095


0.095


0.090


0.090



0.195


0.175

   Book value per common share


17.97


17.64


17.53


17.28


16.89



17.97


16.89

   Tangible book value per common share (TBV)


15.00


15.32


15.23


16.23


15.83



15.00


15.83

   Fully converted TBV per common share


-


-


-


14.98


14.64



-


14.64

   Market price per common share


16.62


11.12


19.69


16.72


16.46



16.62


16.46

   Market price per preferred share


-


-


-


16.50


16.10



-


16.10

   Market price to TBV


110.8%


72.6%


129.2%


103.0%


104.0%



110.8%


104.0%

   Market price to fully converted TBV


-


-


-


111.6%


112.4%



-


112.4%

   Market price to trailing 12 month EPS


11.4


8.4


13.0


11.5


12.1



11.4


12.1

















PERFORMANCE RATIOS:
















   Return on average assets (ROAA)


1.25%


0.26%


1.28%


1.44%


1.03%



0.78%


0.96%

   Pre-tax pre-provision ROAA


1.99%


0.49%


1.67%


1.89%


1.34%



1.28%


1.22%

   Return on average equity


10.31%


1.99%


9.93%


11.24%


7.92%



6.22%


7.36%

   Return on average tangible equity


11.91%


2.29%


12.83%


14.67%


10.41%



7.17%


9.65%

   Efficiency ratio 


66.68%


87.81%


69.90%


65.85%


72.71%



74.71%


74.30%

   Earning asset yield


3.95%


4.32%


4.80%


4.98%


4.88%



4.13%


4.82%

   Cost of interest bearing liabilities


0.89%


1.12%


1.42%


1.33%


1.28%



1.00%


1.24%

   Net interest margin


3.30%


3.47%


3.68%


3.91%


3.86%



3.39%


3.83%

   Tax equivalent effect


0.02%


0.01%


0.02%


0.02%


0.02%



0.01%


0.01%

   Net interest margin, tax equivalent 


3.32%


3.48%


3.70%


3.93%


3.88%



3.40%


3.84%

   Non interest income/Average assets


2.95%


0.81%


2.27%


2.06%


1.45%



1.93%


1.33%

   Non interest expense/Average assets


3.99%


3.54%


3.87%


3.64%


3.58%



3.78%


3.52%

   Net noninterest expense/Average assets


-1.04%


-2.73%


-1.60%


-1.58%


-2.13%



-1.85%


-2.19%

















ASSET QUALITY RATIOS:
















   Gross charge-offs


254


400


51


128


20



654


80

   Recoveries


10


3


14


15


5



13


18

   Net charge-offs


244


397


37


113


15



641


62

   Nonaccruing loans/Total loans


0.72%


0.70%


0.67%


0.40%


0.38%



0.72%


0.38%

   Nonperforming loans/Total loans


0.81%


0.79%


0.77%


0.50%


0.48%



0.81%


0.48%

   Nonperforming assets/Loans & OREO


0.86%


0.80%


0.81%


0.56%


0.55%



0.86%


0.55%

   Nonperforming assets/Total assets


0.64%


0.61%


0.64%


0.44%


0.43%



0.64%


0.43%

   Allowance for loan loss/Nonperforming loans


136.45%


135.77%


137.35%


207.12%


211.89%



136.45%


211.89%

   Allowance for loan loss/Total loans


1.11%


1.08%


1.06%


1.03%


1.02%



1.11%


1.02%

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


0.11%


0.19%


0.02%


0.05%


0.01%



0.15%


0.02%

   Loan loss provision/Net charge-offs


532.79%


151.13%


810.81%


265.49%


1333.33%



296.41%


322.58%

















CAPITAL & LIQUIDITY RATIOS:
















   Loans/ Deposits


91.01%


96.17%


98.25%


97.10%


97.04%



91.01%


97.04%

   Equity/ Assets


11.46%


12.49%


13.10%


12.87%


13.01%



11.46%


13.01%

   Tangible equity/Tangible assets


9.75%


11.03%


11.59%


10.07%


10.10%



9.75%


10.10%

   Tangible equity adjusted for conversion


-


-


-


11.36%


11.48%



-


11.48%

   Common equity tier 1 ratio (Bank) 6/20 estimate

11.21%


12.17%


12.46%


12.07%


12.53%



11.21%


12.53%

















END OF PERIOD BALANCES
















   Total assets


1,202,936


1,088,313


1,038,577


1,042,761


1,029,123



1,202,936


1,029,123

   Total loans 


901,548


830,764


825,510


823,367


814,509



901,548


814,509

   Deposits


990,587


863,891


840,219


847,954


839,374



990,587


839,374

   Stockholders equity


137,881


135,905


136,094


134,246


133,937



137,881


133,937

   Goodwill and intangibles


22,813


17,830


17,832


17,834


17,836



22,813


17,836

   Preferred equity


-


-


-


13,241


13,978



-


13,978

   Tangible equity


115,068


118,075


118,262


103,171


102,123



115,068


102,123

   Mortgage servicing portfolio


1,261,746


1,216,292


1,199,107


1,153,020


1,112,857



1,261,746


1,112,857

   Wealth/Brokerage assets under care


495,025


427,129


507,670


484,295


479,442



495,025


479,442

   Total assets under care


2,959,707


2,731,734


2,745,354


2,680,076


2,621,422



2,959,707


2,621,422

   Full-time equivalent employees 


254


253


252


247


250



254


250

   Period end common shares outstanding


7,672


7,705


7,763


6,357


6,451



7,672


6,451

   Period end outstanding (Series A Converted)


-


-


-


1,414


1,478



-


1,478

   Market capitalization (all)


127,509


85,680


152,853


129,620


130,324



127,509


130,324

















AVERAGE BALANCES
















   Total assets


1,169,030


1,061,365


1,051,071


1,043,791


1,016,493



1,115,527


1,008,559

   Total earning assets 


1,073,490


986,216


934,540


927,360


914,652



1,028,114


897,611

   Total loans 


898,216


832,975


828,108


829,699


804,716



865,595


790,080

   Deposits


946,053


855,272


856,961


849,984


827,615



900,812


819,252

   Stockholders equity


141,821


136,930


135,267


133,891


132,734



139,521


131,861

   Goodwill and intangibles


19,066


17,831


17,833


17,835


17,837



18,537


17,359

   Preferred equity


-


-


12,707


13,459


13,978



-


13,978

   Tangible equity


122,755


119,099


104,727


102,597


100,919



120,984


100,524

   Average basic shares outstanding


7,708


7,756


6,445


6,397


6,454



7,750


6,469

   Average diluted shares outstanding


7,708


7,756


7,799


7,876


7,967



7,750


7,982

 

SB FINANCIAL GROUP, INC.


Rate Volume Analysis - (Unaudited)


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









($ in thousands)


Three Months Ended Jun. 30, 2020



Three Months Ended Jun. 30, 2019




Average


Average



Average


Average

Assets


Balance

Interest

Rate



Balance

Interest

Rate













Taxable securities/Cash


$           168,373

$                  510

1.21%



$           100,768

$                  802

3.18%


Nontaxable securities


6,901

81

4.69%



9,168

94

4.10%


Loans, net


898,216

10,004

4.46%



804,716

10,255

5.10%













       Total earning assets


1,073,490

10,595

3.95%



914,652

11,151

4.88%













Cash and due from banks


18,937





36,908




Allowance for loan losses


(9,369)





(8,232)




Premises and equipment


23,896





23,555




Other assets


62,076





49,610















      Total assets


$         1,169,030





$         1,016,493














Liabilities











Savings, MMDA and interest bearing demand


$           473,793

$               1,220

1.03%



$           422,327

$                  740

0.70%


Time deposits


251,482

334

0.53%



261,746

1,352

2.07%


Repurchase agreements & other


19,200

20

0.42%



13,645

17

0.50%


Advances from Federal Home Loan Bank


24,472

92

1.50%



16,000

100

2.50%


Trust preferred securities


10,310

62

2.41%



10,310

110

4.27%













      Total interest bearing liabilities


779,257

1,728

0.89%



724,028

2,319

1.28%













Non interest bearing demand


220,778

-




143,542

-














      Total funding


1,000,035


0.69%



867,570


1.07%













Other liabilities


27,174





16,189















      Total liabilities


1,027,209





883,759















Equity


141,821





132,734















      Total liabilities and equity


$         1,169,030





$         1,016,493















Net interest income



$               8,867





$               8,832














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

3.30%





3.86%













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

3.32%





3.88%


 - Computed on a fully tax equivalent (FTE) basis























Six Months Ended Jun. 30, 2020



Six Months Ended Jun. 30, 2019




Average


Average



Average


Average

Assets


Balance

Interest

Rate



Balance

Interest

Rate













Taxable securities


$           155,787

$               1,202

1.54%



$             98,203

$               1,713

3.49%


Nontaxable securities


6,732

159

4.72%



9,328

192

4.12%


Loans, net


865,595

19,878

4.59%



790,080

19,744

5.00%













       Total earning assets


1,028,114

21,239

4.13%



897,611

21,649

4.82%













Cash and due from banks


12,693





41,724




Allowance for loan losses


(9,118)





(8,258)




Premises and equipment


23,797





23,536




Other assets


60,041





53,946















      Total assets


$         1,115,527





$         1,008,559














Liabilities











Savings, MMDA and interest bearing demand


$           458,116

$               2,303

1.01%



$           422,494

$               1,462

0.69%


Time deposits


252,912

1,131

0.89%



255,734

2,548

1.99%


Repurchase agreements & Other


20,868

48

0.46%



15,663

43

0.55%


Advances from Federal Home Loan Bank


20,302

192

1.89%



16,133

200

2.48%


Trust preferred securities


10,310

150

2.91%



10,310

224

4.35%













      Total interest bearing liabilities


762,508

3,824

1.00%



720,334

4,477

1.24%













Non interest bearing demand


189,784


0.80%



141,024


1.04%













      Total funding


952,292





861,358















Other liabilities


23,714





15,340















      Total liabilities


976,006





876,698















Equity


139,521





131,861















      Total liabilities and equity


$         1,115,527





$         1,008,559















Net interest income



$             17,415





$             17,172














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

3.39%





3.83%













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

3.40%





3.84%


 - Computed on a fully tax equivalent (FTE) basis









 

Non-GAAP reconciliation


 Three Months Ended 


 Six Months Ended 










($ in thousands, except per share & ratios)


 Jun. 30, 2020 


 Jun. 30, 2019 


 Jun. 30, 2020 


 Jun. 30, 2019 










Total Operating Revenue


$          17,487


$          12,523


$          28,196


$          23,863

 Adjustment to (deduct)/add OMSR impairment*


1,088


690


3,300


1,398










Adjusted Total Operating Revenue


18,575


13,213


31,496


25,261










Total Operating Expense


$          11,662


$           9,108


$          21,068


$          17,734

 Adjustment for merger expenses**


(1,241)


-


(1,241)


-










Adjusted Total Operating Expense


10,421


9,108


19,827


17,734










Income before Income Taxes


4,525


3,215


5,228


5,929

 Adjustment for OMSR & merger expense


2,329


690


4,541


1,398










Adjusted Income before Income Taxes


6,854


3,905


9,769


7,327



















Provision for Income Taxes


870


588


892


1,076

 Adjustment for OMSR & merger expense***


489


145


954


294










Adjusted Provision for Income Taxes


1,359


733


1,846


1,371



















Net Income


3,655


2,627


4,336


4,853

 Adjustment for OMSR & merger expense


1,840


545


3,587


1,104










Adjusted Net Income


5,495


3,172


7,923


5,958



















Diluted Earnings per Share


0.47


0.33


0.56


0.61

 Adjustment for OMSR & merger expense


0.24


0.07


0.46


0.14










Adjusted Diluted Earnings per Share


$             0.71


$             0.40


$             1.02


$             0.75



















Return on Average Assets


1.25%


1.03%


0.78%


0.96%

 Adjustment for OMSR & merger expense


0.63%


0.05%


0.64%


0.11%










Adjusted Return on Average Assets


1.88%


1.09%


1.42%


1.07%


*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-second-quarter-2020-results-301100464.html

SOURCE SB Financial Group, Inc.