Press Release

SB Financial Group Announces Fourth Quarter 2020 Results

Company Release - 1/28/2021 4:15 PM ET

DEFIANCE, Ohio, Jan. 28, 2021 /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 fourth quarter and twelve months ended December 31, 2020.

Fourth quarter 2020 highlights over prior-year fourth quarter include:

  • Net income of $5.4 million up $2.0 million or 59.6 percent; diluted earnings per share ("EPS") of $0.71, up $0.29 per share or 69.0 percent
  • Adjusted net income, excluding the impact of the Originated Mortgage Servicing Rights ("OMSR") recapture, was $5.8 million, which yields an increase in adjusted EPS of $0.06 to $0.77
  • Mortgage origination volume of $169.0 million, an increase of $31.5 million, or 22.9 percent
  • Pre-tax, pre-provision income of $7.5 million, up $3.1 million or 70.6 percent

The twelve months ended December 31, 2020, highlights over the prior-year twelve months include:

  • Net income of $14.9 million; diluted EPS of $1.96
  • Adjusted net income, excluding the impact of OMSR and Edon merger costs, rose to $18.8 million, up $5.9 million, or 46.1 percent, with adjusted EPS of $2.44
  • Return on Average Assets ("ROAA") of 1.29 percent; adjusted ROAA of 1.61 percent
  • Loan growth of $47.2 million, or 5.7 percent, which includes Paycheck Protection Program ("PPP") loan balances and loans acquired in the Edon acquisition.
  • Deposit growth of $213.9 million, or 25.4 percent, driven by PPP balances and the Edon acquisition
  • Mortgage origination volume of $694.2 million; servicing portfolio of $1.3 billion, which is up $101 million, or 8.4 percent

Highlights

Three Months Ended


Twelve Months Ended

($ in thousands, except per share & ratios)

Dec. 2020

Dec. 2019

% Change


Dec. 2020

Dec. 2019

% Change

Operating revenue 

$  18,153

$  14,555

24.7%


$  66,026

$  52,842

24.9%

Interest income 

10,589

11,205

-5.5%


42,635

44,400

-4.0%

Interest expense

1,338

2,609

-48.7%


6,705

9,574

-30.0%

Net interest income 

9,251

8,596

7.6%


35,930

34,826

3.2%

Provision for loan losses

800

300

166.7%


4,500

800

462.5%

Noninterest income

8,902

5,959

49.4%


30,096

18,016

67.1%

Noninterest expense

10,684

10,176

5.0%


43,087

37,410

15.2%

Net income 

5,358

3,358

59.6%


14,944

11,973

24.8%

Earnings per diluted share

0.71

0.42

69.0%


1.96

1.51

29.8%

Return on average assets

1.73%

1.28%

35.2%


1.29%

1.16%

11.2%

Return on average equity

15.05%

9.93%

51.6%


10.74%

8.99%

19.5%









Non-GAAP Measures








Adjusted net income

$   5,841

$   3,119

87.3%


$  18,757

$  12,838

46.1%

Adjusted diluted EPS

0.77

0.39

97.4%


2.44

1.62

50.6%

Adjusted return on average assets

1.89%

1.26%

50.0%


1.61%

1.24%

29.8%

Adjusted pre-tax, pre-provision income

8,172

4,076

100.5%


19,685

16,526

19.1%

"The fourth quarter completed a record year of earnings for our Company.  We earned $0.71 per share in the quarter up 69 percent from the prior year and for the full year $1.96, which was up 30 percent over the prior twelve months," said Mark A. Klein, Chairman, President, and CEO of SB Financial.   "We had significant contributions from our lending teams in the PPP initiative and our Residential Mortgage group originated record volume during 2020.  We were especially pleased to have returned over $10 million to our shareholders in the form of dividends and buybacks this past year and to have increased shareholder book value by nearly 11 percent."

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was up 24.7 percent from the fourth quarter of 2019 and for the year was up 24.9 percent.

  • Net interest income was up 7.6 percent from the year-ago quarter, and remained flat to the linked quarter. 
  • Net interest margin on a fully taxable equivalent basis (FTE) was down from the year-ago quarter by 49 basis points and down 20 basis points from the linked quarter due to higher transactional cash balances, slower PPP forgiveness realization and lower mortgage volume.   Loan yields are down 60 bps with the decline in the rate curve.
  • Noninterest income was up 49.4 percent year over year but down 14.5 percent from the linked quarter, due to servicing rights impairment and lower mortgage volume.       

Mortgage Loan Business

Mortgage loan originations for the fourth quarter of 2020 were $169.0 million, up $31.5 million, or 22.9 percent, from the year-ago quarter.  Total sales of originated loans were $143.2 million, up $15.7 million, or 12.3 percent.  For the full year, SB Financial had total volume of $694.2 million, of which $290.9 million (42 percent) was new purchase/construction lending, $217.0 million (31 percent) was internal refinance, and the remaining $186.3 million (27 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 $6.2 million for the fourth quarter of 2020, compared to $3.4 million for the year-ago quarter.  The mortgage servicing valuation adjustment for the fourth quarter of 2020 was a negative $0.6 million, compared to a positive adjustment of $0.3 million for the fourth quarter of 2019.  For the year, the impairment on servicing rights was $3.6 million, compared to $1.1 million for the prior year.  The aggregate servicing valuation impairment ended the quarter at $4.9 million.  The servicing portfolio at December 31, 2020, was $1.3 billion up $100.6 million or 8.4 percent, from $1.2 billion at December 31, 2019.  Normal amortization is up 124 percent from the prior year due to higher refinance activity.

Mr. Klein noted, "Our mortgage machine continued at a brisk pace in the quarter with nearly $170 million in volume and for the year we were just a few loans shy of $700 million.  Our sales and processing teams set a new standard of excellence with over 3,100 units closed during the year, and the gain on sale yields continued at high levels in the quarter allowing us to overcome the effects of the servicing rights impairment.  We can add to book value in the future with the potential realization of our $4.9 million in valuation impairment."

Mortgage Banking






($ in thousands)

Dec. 2020

Sep. 2020

Jun. 2020

Mar. 2020

Dec. 2019

Mortgage originations

$ 168,997

$ 200,158

$ 223,671

$ 101,365

$ 137,528

Mortgage sales

143,151

166,201

204,628

84,476

127,441

Mortgage servicing portfolio

1,299,698

1,293,037

1,261,746

1,216,292

1,199,107

Mortgage servicing rights

7,759

8,535

8,168

8,974

11,017













Mortgage servicing revenue






Loan servicing fees

857

813

782

757

740

OMSR amortization

(1,283)

(1,308)

(1,574)

(597)

(709)

Net administrative fees

(426)

(495)

(792)

160

31

OMSR valuation adjustment

(611)

326

(1,088)

(2,212)

303

Net loan servicing fees

(1,037)

(169)

(1,880)

(2,052)

334

Gain on sale of mortgages

7,197

8,085

8,119

1,949

3,048

Mortgage banking revenue, net

$     6,160

$     7,916

$     6,239

$      (103)

$     3,382

 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 $558.4 million as of December 31, 2020, up $50.7 million, or 10.0 percent, compared to the prior year.  For the fourth quarter of 2020, noninterest income as a percentage of total operating revenue was 49.0 percent.  Reflective of the robust mortgage market, SB Financial'sTitle Agency provided revenue in the quarter of $0.5 million, up 32.8 percent from the prior year. 

For the fourth quarter of 2020, noninterest expense of $10.7 million was up $0.5 million year over year or 5.0 percent reflecting a 4.9 times positive operating leverage.  On a full year basis, noninterest expense of $43.1 million is up $5.7 million or 15.2 percent.  Operating leverage for the year was a positive 1.6 times, however when adjusted for the Edon merger costs, operating leverage improves to 2.1 times.

Mr. Klein stated, "We continued to see the positive effects to net income this quarter from the resources we have allocated to our revenue lines.  Our commitment to technology, hedging and geographic expansion continued to pay dividends as our revenue growth exceeded expense growth by over two times and we continue to realize significant benefits from our commitment to the mortgage business line for each of our stakeholders."

Noninterest Income / Noninterest Expense 





($ in thousands, except ratios)

Dec. 2020

Sep. 2020

Jun. 2020

Mar. 2020

Dec. 2019

Noninterest Income (NII)

$   8,902

$  10,418

$   8,615

$   2,161

$   5,959

NII / Total Revenue

49.0%

52.9%

49.3%

20.2%

40.9%

NII / Average Assets

2.9%

3.4%

3.0%

0.8%

2.3%

Total Revenue Growth

24.7%

36.4%

39.6%

-5.6%

16.0%







Noninterest Expense (NIE)

$  10,684

$  11,335

$ 11,662

$   9,406

$  10,176

Efficiency Ratio

58.8%

57.5%

66.7%

87.8%

69.9%

NIE / Average Assets

3.5%

3.7%

4.0%

3.5%

3.9%

Net Noninterest Expense/Avg. Assets

-0.6

-0.3

-1.0%

-2.7%

-1.6%

Total Expense Growth

5.0%

19.3%

28.0%

9.0%

15.0%

Operating Leverage

4.9

1.9

1.4

-0.6

1.1

Balance Sheet

Total assets as of December 31, 2020, were $1.26 billion, up $219.3 million, or 21.1 percent, from the year ago quarter due to the impact of the Edon acquisition and the PPP activity.  Total equity as of December 31, 2020, was $142.9 million, up 5.0 percent from a year ago, and comprised 11.4 percent of total assets. 

Total loans held for investment were $872.7 million at December 31, 2020, up $47.2 million, or 5.7 percent, from December 31, 2019.  Commercial loans were up $52.2 million, or 34.6 percent, commercial real estate up $1.0 million or 0.3 percent and agricultural loans increasing $4.3 million, or 8.3 percent.   Absent the effects of the Edon acquisition and PPP loans, loan balances were down $44.7 million from the year ago quarter.

The investment portfolio of $154.7 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 12.3 percent of assets at December 31, 2020, and was up 46.5 percent from the year-ago period.  Deposit balances of $1.05 billion at December 31, 2020, increased by $213.9 million, or 25.5 percent, since December 31, 2019.  Growth from the prior year included $144.1 million in checking and $69.8 million in savings and time deposit balances.

Mr. Klein continued, "We allocated more to our loan loss allowance in the quarter despite what we see as relatively stable asset quality.  We continue to prepare for potential COVID impacts to our clients and other credit unknowns.  For the year, we set aside $4.5 million in provision expense compared to credit losses of $0.7 million.  We have been able to offset the provision expense with our PPP revenue and the pandemic related expense reductions we realized during the year.  Adjusting for our PPP balances, our reserve level ended the year at $12.6 million, or 1.56 percent of loans, compared to the $8.8 million and 1.06 percent at the end of the prior year."

Loan Balances







($ in thousands, except ratios)

Dec. 2020

Sep. 2020

Jun. 2020

Mar. 2020

Dec. 2019

Annual
Growth

Commercial

$   203,256

$   216,667

$222,108

$151,538

$151,018

$           52,238

% of Total

23.3%

24.5%

24.6%

18.2%

18.3%

34.6%

Commercial RE

370,984

371,947

375,450

378,212

369,962

1,022

% of Total

42.5%

42.0%

41.6%

45.5%

44.8%

0.3%

Agriculture

55,251

57,420

58,817

47,660

50,994

4,257

% of Total

6.3%

6.5%

6.5%

5.7%

6.2%

8.3%

Residential RE

182,076

178,393

184,684

189,738

189,290

(7,214)

% of Total

20.9%

20.1%

20.6%

22.9%

22.9%

-3.8%

Consumer & Other

61,156

61,423

60,489

63,616

64,246

(3,090)

% of Total

7.0%

6.9%

6.7%

7.7%

7.8%

-4.8%

Total Loans

$   872,723

$   885,850

$901,548

$830,764

$825,510

$           47,213

Total Growth Percentage






5.7%















Deposit Balances







($ in thousands, except ratios)

Dec. 2020

Sep. 2020

Jun. 2020

Mar. 2020

Dec. 2019

Annual Growth

Non-Int DDA

$   251,649

$   225,003

$229,042

$170,920

$158,357

$           93,292

% of Total

24.0%

22.2%

23.1%

19.8%

18.8%

58.9%

Interest DDA

176,785

164,248

154,143

133,722

131,084

45,701

% of Total

16.9%

16.2%

15.6%

15.5%

15.6%

34.9%

Savings

174,864

169,474

161,182

138,863

119,359

55,505

% of Total

16.7%

16.7%

16.2%

16.0%

14.1%

46.5%

Money Market

216,164

204,862

189,380

169,209

173,666

42,498

% of Total

20.6%

20.2%

19.1%

19.6%

20.7%

24.5%

Time Deposits

229,549

250,428

256,840

251,177

257,753

(28,204)

% of Total

21.9%

24.7%

25.9%

29.2%

30.9%

-10.9%

Total Deposits

$1,049,011

$1,014,015

$990,587

$863,891

$840,219

$         208,792

Total Growth Percentage






24.8%

Asset Quality

SB Financial reported nonperforming assets of $7.3 million as of December 31, 2020, up $0.6 million from the year-ago quarter.  The coverage of nonperforming loans by the loan loss allowance was at 174 percent at December 31, 2020, up from 137 percent at December 31, 2019. 

Nonperforming Assets






Annual
Change

($ in thousands, except ratios)

Dec. 2020

Sep. 2020

Jun. 2020

Mar. 2020

Dec. 2019

Commercial & Agriculture

$        902

$     1,140

$     1,204

$     1,309

$     1,772

$               (870)

% of Total Com./Ag. loans

0.35%

0.42%

0.43%

0.66%

0.88%

-49.1%

Commercial RE 

2,412

2,475

2,484

1,816

1,826

586

% of Total CRE loans

0.65%

0.67%

0.66%

0.48%

0.49%

32.1%

Residential RE

2,704

2,481

2,538

2,330

1,635

1,069

% of Total Res. RE loans

1.49%

1.39%

1.37%

1.23%

0.86%

65.4%

Consumer & Other

408

313

308

327

267

141

% of Total Con./Oth. loans  

0.67%

0.51%

0.51%

0.51%

0.42%

52.8%

Total Nonaccruing Loans 

6,426

6,409

6,534

5,782

5,500

926

% of Total loans

0.74%

0.72%

0.72%

0.70%

0.67%

16.8%

Accruing Restructured Loans

810

789

804

816

874

(64)

Total Change (%)






-7.3%

Total Nonaccruing & Restructured Loans

7,236

7,198

7,338

6,598

6,374

862

% of Total loans

0.83%

0.81%

0.81%

0.79%

0.77%

13.5%

Foreclosed Assets

23

76

382

85

305

(282)

Total Change (%)






-92.5%

Total Nonperforming Assets

$     7,259

$     7,274

$     7,720

$     6,683

$     6,679

$                580

% of Total assets

0.58%

0.60%

0.64%

0.61%

0.64%

8.7%

The Company continued to provide payment relief to clients as needed, with total forbearance as of December 31, 2020 of 83 loans at $39.7 million.  The detail on these deferrals; 9 commercial at $28.0 million down $8.3 million from the linked quarter, zero portfolio residential and consumer loans, down $2.0 million from the linked quarter and 74 sold residential real estate loans at $11.7 million, down $30.6 million from the linked quarter. 

Loans in Deferral Status





Linked Qtr.
Change

($ in thousands, except ratios)

Dec. 2020

Sep. 2020

Jun. 2020








Total Commercial

$  28,032

$  36,366

$142,682


$                   (8,334)







Total Consumer

-

28

350


(28)







Total Portfolio Mortgage

-

1,959

10,274


(1,959)

Total Balance Sheet Deferrals

$  28,032

$  38,353

$153,306


$                 (10,321)







% of Total loans

3.21%

4.33%

17.00%


-1.12%







Total Sold Mortgage

$  11,685

$  42,317

$  41,751


$                 (30,632)

Webcast and Conference Call

The Company will hold a related conference call and webcast on January 29, 2021, at 11:00 a.m. EST.  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.



SB FINANCIAL GROUP, INC.  



CONSOLIDATED BALANCE SHEETS - (Unaudited)


















December


September


June


March


December




($ in thousands)

2020


2020


2020


2020


2019














ASSETS











Cash and due from banks

$    142,225


$      94,641


$      85,661


$      56,393


$      27,064


Interest bearing time deposits

4,288


8,956


10,542


-


-


Available-for-sale securities

149,406


130,315


104,289


107,727


100,948


Loans held for sale

7,234


13,943


13,742


11,328


7,258


Loans, net of unearned income

872,723


885,850


901,548


830,764


825,510


Allowance for loan losses

(12,574)


(11,793)


(10,013)


(8,958)


(8,755)


Premises and equipment, net

23,557


23,785


23,662


23,599


23,385


Federal Reserve and FHLB Stock, at cost

5,303


5,303


4,837


4,648


4,648


Foreclosed assets held for sale, net

23


76


382


85


305


Interest receivable

3,799


4,159


4,272


2,940


3,106


Goodwill

22,745


22,091


22,117


17,792


17,792


Cash value of life insurance

17,530


17,453


17,375


17,299


17,221


Mortgage servicing rights

7,759


8,535


8,168


8,974


11,017


Other assets

13,821


14,927


16,354


15,722


9,078

















Total assets

$ 1,257,839


$ 1,218,241


$ 1,202,936


$ 1,088,313


$ 1,038,577








































LIABILITIES AND SHAREHOLDERS' EQUITY











Deposits












Non interest bearing demand

$    251,649


$    225,003


$    229,042


$    170,920


$    158,357



Interest bearing demand

176,785


164,248


154,143


133,722


131,084



Savings

174,864


169,474


161,182


138,863


119,359



Money market

216,164


204,862


189,380


169,209


173,666



Time deposits

229,549


250,428


256,840


251,177


257,753

















Total deposits

1,049,011


1,014,015


990,587


863,891


840,219















Short-term borrowings

20,189


20,710


23,826


36,881


12,945


Federal Home Loan Bank advances

8,000


8,000


13,000


16,000


16,000


Trust preferred securities

10,310


10,310


10,310


10,310


10,310


Interest payable

616


946


929


1,131


1,191


Other liabilities

26,790


22,913


26,403


24,195


21,818

















Total liabilities

1,114,916


1,076,894


1,065,055


952,408


902,483















Shareholders' Equity












Preferred stock

-


-


-


-


-



Common stock

54,463


54,463


54,463


54,463


54,463



Additional paid-in capital

14,845


14,782


14,780


14,655


15,023



Retained earnings

84,578


80,012


75,526


72,641


72,704



Accumulated other comprehensive income (loss)

2,210


2,221


2,320


2,049


659



Treasury stock

(13,173)


(10,131)


(9,208)


(7,903)


(6,755)

















Total shareholders' equity

142,923


141,347


137,881


135,905


136,094

















Total liabilities and shareholders' equity

$ 1,257,839


$ 1,218,241


$ 1,202,936


$ 1,088,313


$ 1,038,577








SB FINANCIAL GROUP, INC.


CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)


















($ in thousands, except per share & ratios)

At and for the Three Months Ended



Twelve Months Ended





















December


September


June


March


December



December


December

Interest income


2020


2020


2020


2020


2019



2020


2019


Loans
















  Taxable 

$     9,816


$    10,179


$ 9,945


$ 9,795


$   10,313



$   39,735


$   40,529


  Tax exempt

54


47


59


79


83



239


300


Securities
















  Taxable 

632


494


510


692


737



2,328


3,226


  Tax exempt

87


87


81


78


72



333


345




















Total interest income

10,589


10,807


10,595


10,644


11,205



42,635


44,400


















Interest expense

















Deposits

1,218


1,423


1,549


1,880


2,392



6,070


8,660


Repurchase agreements & other

10


12


20


28


17



70


82


Federal Home Loan Bank advances

58


59


92


100


101



309


402


Trust preferred securities

52


54


62


88


99



256


430




















Total interest expense

1,338


1,548


1,723


2,096


2,609



6,705


9,574



































Net interest income

9,251


9,259


8,872


8,548


8,596



35,930


34,826



















Provision for loan losses 

800


1,800


1,300


600


300



4,500


800


















Net interest income after provision















  for loan losses


8,451


7,459


7,572


7,948


8,296



31,430


34,026


















Noninterest income

















Wealth management fees

863


839


775


768


801



3,245


3,093


Customer service fees

728


730


667


682


712



2,807


2,761


Gain on sale of mtg. loans & OMSR

7,197


8,085


8,119


1,949


3,048



25,350


8,413


Mortgage loan servicing fees, net

(1,037)


(169)


(1,880)


(2,052)


334



(5,138)


(397)


Gain on sale of non-mortgage loans

123


119


107


104


250



453


1,255


Title insurance revenue

522


517


609


265


393



1,913


1,120


Net gain on sales of securities

-


-


-


-


-



-


206


Gain (loss) on sale of assets

181


(52)


(80)


(46)


1



3


(5)


Other

325


349


298


491


420



1,463


1,570




















Total noninterest income

8,902


10,418


8,615


2,161


5,959



30,096


18,016


















Noninterest expense
















Salaries and employee benefits

6,556


6,995


6,419


5,427


6,142



25,397


22,064


Net occupancy expense

782


736


675


698


675



2,891


2,603


Equipment expense

818


888


780


700


764



3,186


2,828


Data processing fees

633


586


1,288


548


543



3,055


1,973


Professional fees

631


695


1,224


757


639



3,307


2,476


Marketing expense

172


137


141


208


171



658


895


Telephone and communication expense

156


142


122


115


121



535


466


Postage and delivery expense

108


96


96


115


86



415


340


State, local and other taxes

299


331


262


254


347



1,146


1,092


Employee expense

103


155


93


184


207



535


795


Other expenses

426


574


562


400


481



1,962


1,878




















Total noninterest expense

10,684


11,335


11,662


9,406


10,176



43,087


37,410



































Income before income tax expense

6,669


6,542


4,525


703


4,079



18,439


14,632



















Income tax expense

1,311


1,292


870


22


721



3,495


2,659


















Net income 



$     5,358


$       5,250


$ 3,655


$    681


$     3,358



$   14,944


$   11,973


















Preferred share dividends 

-


-


-


-


230



-


950


















Net income available to common shareholders

5,358


5,250


3,655


681


3,128



14,944


11,023


















Common share data:
















Basic earnings per common share

$        0.71


$         0.69


$   0.47


$   0.09


$        0.48



$        1.96


$        1.71



















Diluted earnings per common share

$        0.71


$         0.69


$   0.47


$   0.09


$        0.42



$        1.96


$        1.51


















Average shares outstanding (in thousands):
















Basic:

7,487


7,607


7,708


7,749


6,445



7,635


6,456


Diluted: 

7,487


7,607


7,708


7,756


7,799



7,635


7,935























SB FINANCIAL GROUP, INC.







CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)






















($ in thousands, except per share & ratios)


At and for the Three Months Ended



Twelve Months Ended



















December


September


June


March


December



December


December

SUMMARY OF OPERATIONS


2020


2020


2020


2020


2019



2020


2019

















   Net interest income 


$        9,251


$        9,259


$        8,872


$        8,548


$        8,596



$       35,930


$       34,826

         Tax-equivalent adjustment


37


36


37


42


41



152


171

   Tax-equivalent net interest income 


9,288


9,295


8,909


8,590


8,637



36,082


34,997

   Provision for loan loss 


800


1,800


1,300


600


300



4,500


800

   Noninterest income


8,902


10,418


8,615


2,161


5,959



30,096


18,016

   Total operating revenue


18,153


19,677


17,487


10,709


14,555



66,026


52,842

   Noninterest expense


10,684


11,335


11,662


9,406


10,176



43,087


37,410

   Pre-tax pre-provision income


7,469


8,342


5,825


1,303


4,379



22,939


15,432

   Pretax income


6,669


6,542


4,525


703


4,079



18,439


14,632

   Net income 


5,358


5,250


3,655


681


3,358



14,944


11,973

   Net income available to common shareholders 

5,358


5,250


3,655


681


3,128



14,944


11,023

















PER SHARE INFORMATION:
















   Basic earnings per share (EPS)


0.71


0.69


0.47


0.09


0.48



1.96


1.71

   Diluted earnings per share


0.71


0.69


0.47


0.09


0.42



1.96


1.51

   Common dividends


0.105


0.100


0.100


0.095


0.095



0.400


0.360

   Book value per common share


19.39


18.73


17.97


17.64


17.53



19.39


17.53

   Tangible book value per common share (TBV)


16.30


15.72


15.09


15.33


15.24



16.30


15.24

   Market price per common share


18.28


13.49


16.62


11.12


19.69



18.28


19.69

   Market price to TBV


112.1%


85.8%


110.1%


72.5%


129.2%



112.1%


129.2%

   Market price to trailing 12 month EPS


9.3


8.0


11.4


8.4


13.0



9.3


13.0

















PERFORMANCE RATIOS:
















   Return on average assets (ROAA)


1.73%


1.73%


1.25%


0.26%


1.28%



1.29%


1.16%

   Pre-tax pre-provision ROAA


2.41%


2.74%


1.99%


0.49%


1.67%



2.14%


1.50%

   Return on average equity


15.05%


15.01%


10.31%


1.99%


9.93%



10.74%


8.99%

   Return on average tangible equity


17.91%


17.93%


11.91%


2.29%


12.83%



12.59%


11.73%

   Efficiency ratio 


58.76%


57.48%


66.68%


87.81%


69.90%



65.25%


70.79%

   Earning asset yield


3.66%


3.96%


3.95%


4.32%


4.80%



3.98%


4.85%

   Cost of interest bearing liabilities


0.64%


0.75%


0.89%


1.12%


1.42%



0.85%


1.31%

   Net interest margin


3.20%


3.39%


3.30%


3.47%


3.68%



3.35%


3.81%

   Tax equivalent effect


0.01%


0.02%


0.02%


0.01%


0.02%



0.01%


0.01%

   Net interest margin, tax equivalent 


3.21%


3.41%


3.32%


3.48%


3.70%



3.36%


3.82%

   Non interest income/Average assets


2.87%


3.42%


2.95%


0.81%


2.27%



2.59%


1.75%

   Non interest expense/Average assets


3.45%


3.73%


3.99%


3.54%


3.87%



3.71%


3.64%

   Net noninterest expense/Average assets


-0.58%


-0.30%


-1.04%


-2.73%


-1.60%



-1.12%


-1.89%

















ASSET QUALITY RATIOS:
















   Gross charge-offs


57


32


254


400


51



743


259

   Recoveries


39


11


10


3


14



63


47

   Net charge-offs


18


21


244


397


37



680


212

   Nonaccruing loans/Total loans


0.74%


0.72%


0.72%


0.70%


0.67%



0.74%


0.67%

   Nonperforming loans/Total loans


0.83%


0.81%


0.81%


0.79%


0.77%



0.83%


0.77%

   Nonperforming assets/Loans & OREO


0.83%


0.82%


0.86%


0.80%


0.81%



0.83%


0.81%

   Nonperforming assets/Total assets


0.58%


0.60%


0.64%


0.61%


0.64%



0.58%


0.64%

   Allowance for loan loss/Nonperforming loans


173.77%


163.84%


136.45%


135.77%


137.35%



173.77%


137.35%

   Allowance for loan loss/Total loans


1.44%


1.33%


1.11%


1.08%


1.06%



1.44%


1.06%

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


0.01%


0.01%


0.11%


0.19%


0.02%



0.08%


0.03%

   Loan loss provision/Net charge-offs


4444.44%


8571.43%


532.79%


151.13%


810.81%



661.76%


377.36%

















CAPITAL & LIQUIDITY RATIOS:
















   Loans/ Deposits


83.19%


87.36%


91.01%


96.17%


98.25%



83.19%


98.25%

   Equity/ Assets


11.36%


11.60%


11.46%


12.49%


13.10%



11.36%


13.10%

   Tangible equity/Tangible assets


9.73%


9.97%


9.80%


11.03%


11.59%



9.73%


11.59%

   Common equity tier 1 ratio (Bank)


12.91%


12.71%


11.97%


12.17%


12.46%



12.91%


12.46%

















END OF PERIOD BALANCES
















   Total assets


1,257,839


1,218,241


1,202,936


1,088,313


1,038,577



1,257,839


1,038,577

   Total loans 


872,723


885,850


901,548


830,764


825,510



872,723


825,510

   Deposits


1,049,011


1,014,015


990,587


863,891


840,219



1,049,011


840,219

   Stockholders equity


142,923


141,347


137,881


135,905


136,094



142,923


136,094

   Goodwill and intangibles


22,745


22,091


22,117


17,792


17,792



22,745


17,792

   Tangible equity


120,178


119,256


115,764


118,113


118,302



120,178


118,302

   Mortgage servicing portfolio


1,299,698


1,293,037


1,261,746


1,216,292


1,199,107



1,299,698


1,199,107

   Wealth/Brokerage assets under care


558,409


522,360


495,025


427,129


507,670



558,409


507,670

   Total assets under care


3,115,946


3,033,638


2,959,707


2,731,734


2,745,354



3,115,946


2,745,354

   Full-time equivalent employees 


244


251


254


253


252



244


252

   Period end common shares outstanding


7,372


7,545


7,672


7,705


7,763



7,372


7,763

   Market capitalization (all)


134,760


101,782


127,509


85,680


152,853



134,760


152,853

















AVERAGE BALANCES
















   Total assets


1,238,790


1,216,843


1,169,030


1,061,365


1,051,071



1,161,396


1,027,932

   Total earning assets 


1,156,718


1,090,386


1,073,490


986,216


934,540



1,072,443


914,975

   Total loans 


893,244


907,483


898,216


832,975


828,108



880,338


809,651

   Deposits


1,031,649


1,007,679


946,053


855,272


856,961



951,226


836,299

   Stockholders equity


142,418


139,908


141,821


136,930


135,267



139,197


133,190

   Goodwill and intangibles


22,754


22,787


19,066


17,831


17,833



20,491


17,597

   Preferred equity


-


-


-


-


12,707



-


13,484

   Tangible equity


119,664


117,121


122,755


119,099


104,727



118,706


102,109

   Average basic shares outstanding


7,487


7,607


7,708


7,749


6,445



7,635


6,456

   Average diluted shares outstanding


7,487


7,607


7,708


7,756


7,799



7,635


7,935




SB FINANCIAL GROUP, INC.


Rate Volume Analysis - (Unaudited)


At and for the Three Months Ended December 31, 2020 and 2019









($ in thousands)


Three Months Ended Dec. 31, 2020



Three Months Ended Dec. 31, 2019




Average


Average



Average


Average

Assets


Balance

Interest

Rate



Balance

Interest

Rate













Taxable securities/Cash


$           256,068

$                 632

0.99%



$            99,149

$                 737

2.97%


Nontaxable securities


7,406

87

4.70%



7,283

72

3.95%


Loans, net


893,244

9,870

4.42%



828,108

10,396

5.02%













       Total earning assets


1,156,718

10,589

3.66%



934,540

11,205

4.80%













Cash and due from banks


7,463





48,289




Allowance for loan losses


(12,045)





(8,566)




Premises and equipment


23,841





24,183




Other assets


62,813





52,625















      Total assets


$        1,238,790





$        1,051,071














Liabilities











Savings, MMDA and interest bearing demand


$           552,018

$                 841

0.61%



$           432,077

$                 614

0.57%


Time deposits


238,284

377

0.63%



264,054

1,778

2.69%


Repurchase agreements & other


21,610

10

0.19%



13,891

17

0.49%


Advances from Federal Home Loan Bank


8,000

58

2.90%



16,000

101

2.53%


Trust preferred securities


10,310

52

2.02%



10,310

99

3.84%













      Total interest bearing liabilities


830,222

1,338

0.64%



736,332

2,609

1.42%













Non interest bearing demand


241,347

-




160,830

-














      Total funding


1,071,569


0.50%



897,162


1.16%













Other liabilities


24,803





18,642















      Total liabilities


1,096,372





915,804















Equity


142,418





135,267















      Total liabilities and equity


$        1,238,790





$        1,051,071















Net interest income



$              9,251





$              8,596














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

3.20%





3.68%













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

3.21%





3.70%


 - Computed on a fully tax equivalent (FTE) basis























Twelve Months Ended Dec. 31, 2020



Twelve Months Ended Dec. 31, 2019




Average


Average



Average


Average

Assets


Balance

Interest

Rate



Balance

Interest

Rate













Taxable securities/Cash


$           185,480

$              2,328

1.26%



$            95,216

$              3,226

3.39%


Nontaxable securities


6,625

333

5.03%



10,108

345

3.41%


Loans, net


880,338

39,974

4.54%



809,651

40,829

5.04%













       Total earning assets


1,072,443

42,635

3.98%



914,975

44,400

4.85%













Cash and due from banks


14,553





47,135




Allowance for loan losses


(10,165)





(8,370)




Premises and equipment


23,776





23,779




Other assets


60,789





50,413















      Total assets


$        1,161,396





$        1,027,932














Liabilities











Savings, MMDA and interest bearing demand


$           492,267

$              3,152

0.64%



$           427,858

$              2,846

0.67%


Time deposits


247,955

2,918

1.18%



262,040

5,814

2.22%


Repurchase agreements & Other


22,832

70

0.31%



15,288

82

0.54%


Advances from Federal Home Loan Bank


14,186

309

2.18%



16,066

402

2.50%


Trust preferred securities


10,310

256

2.48%



10,310

430

4.17%













      Total interest bearing liabilities


787,550

6,705

0.85%



731,562

9,574

1.31%













Non interest bearing demand


211,004


0.67%



146,401


1.09%













      Total funding


998,554





877,963















Other liabilities


23,645





16,779















      Total liabilities


1,022,199





894,742















Equity


139,197





133,190















      Total liabilities and equity


$        1,161,396





$        1,027,932















Net interest income



$            35,930





$            34,826














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

3.35%





3.81%













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

3.36%





3.82%


 - Computed on a fully tax equivalent (FTE) basis









Non-GAAP reconciliation


 Three Months Ended 


 Twelve Months Ended 










($ in thousands, except per share & ratios)


 Dec. 31, 2020 


 Dec. 31, 2019 


 Dec. 31, 2020 


 Dec. 31, 2019 










Total Operating Revenue


$         18,153


$         14,555


$         66,026


$         52,842

 Adjustment to (deduct)/add OMSR impairment*


611


(303)


3,585


1,094










Adjusted Total Operating Revenue


18,764


14,252


69,611


53,936










Total Operating Expense


$         10,684


$           9,500


$         43,087


$         37,410

 Adjustment for merger expenses**


-


-


(1,241)


-










Adjusted Total Operating Expense


10,684


9,500


41,846


37,410










Income before Income Taxes


6,669


4,079


18,439


14,632

 Adjustment for OMSR & merger expense


611


(303)


4,826


1,094










Adjusted Income before Income Taxes


7,280


3,776


23,265


15,726



















Provision for Income Taxes


1,311


721


3,495


2,659

 Adjustment for OMSR & merger expense***


128


(64)


1,013


230










Adjusted Provision for Income Taxes


1,439


657


4,508


2,890



















Net Income


5,358


3,358


14,944


11,973

 Adjustment for OMSR & merger expense


483


(239)


3,813


864










Adjusted Net Income


5,841


3,119


18,757


12,838



















Diluted Earnings per Share


0.71


0.42


1.96


1.51

 Adjustment for OMSR & merger expense


0.06


(0.03)


0.48


0.11










Adjusted Diluted Earnings per Share


$            0.77


$            0.39


$            2.44


$            1.62



















Return on Average Assets


1.73%


1.28%


1.29%


1.16%

 Adjustment for OMSR & merger expense


0.16%


-0.02%


0.33%


0.08%










Adjusted Return on Average Assets


1.89%


1.26%


1.61%


1.24%










*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

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

 

Cision View original content:http://www.prnewswire.com/news-releases/sb-financial-group-announces-fourth-quarter-2020-results-301217593.html

SOURCE SB Financial Group, Inc.