SB Financial Group Announces Third Quarter 2023 Results

DEFIANCE, Ohio, Oct. 30, 2023 (GLOBE NEWSWIRE) -- 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 ended September 30, 2023.

Third quarter 2023 highlights over the third quarter prior year include:

• Net income of $2.7 million decreased 19.6 percent with diluted earnings per share (“EPS”) of $0.39 and down to the linked quarter by 12.6 percent

• Asset quality remained stable, with 30 basis points of non-performing assets and net charge-offs of just $5 thousand in the quarter

• Coverage of our non-performing loans by the allowance improved by 29 percent to 474 percent

• Loans were higher from both the prior year and linked quarters and the portfolio has now grown for 7 consecutive quarters

Nine months ended September 30, 2023, highlights over prior-year nine months include:

• Net income of $8.2 million, down 8.6 percent

• Adjusted for OMSR recapture, net income is higher by 2.4 percent

• Noninterest expense of $31.6 million declined 1.4 percent

• Total net charge-offs year-to-date of just $88 thousand or 0.01 percent of total loans

Third quarter 2023 trailing twelve-month highlights include:

• Loan growth of $63.8 million, or 6.9 percent

• Deposit growth remained steady compared to the prior year but increased over the linked quarter by $14.2 million. Deposit costs have increased from the prior year by $8.3 million with the deposit cost of funds reaching 1.53 percent

Earnings Highlights	Three Months Ended									Nine Months Ended
($ in thousands, except per share & ratios)	Sep. 2023			Sep. 2022			% Change			Sep. 2023			Sep. 2022			% Change
Operating revenue	$	13,699		$	14,473		-5.3%			$	41,879		$	43,017		-2.6%
Interest income		14,796			11,764		25.8%				43,026			31,632		36.0%
Interest expense		5,260			1,334		294.3%				13,337			3,133		325.7%
Net interest income		9,536			10,430		-8.6%				29,689			28,499		4.2%
Provision for credit losses		(6	)		-		0.0%				389			-		0.0%
Noninterest income		4,163			4,043		3.0%				12,190			14,518		-16.0%
Noninterest expense		10,481			10,384		0.9%				31,593			32,046		-1.4%
Net income		2,687			3,343		-19.6%				8,212			8,988		-8.6%
Earnings per diluted share		0.39			0.47		-17.0%				1.18			1.27		-7.1%
Return on average assets		0.80%			1.03%		-22.3%				0.81%			0.91%		-11.0%
Return on average equity		8.73%			10.89%		-19.8%				8.72%			9.21%		-5.3%

“Funding costs continued to be headwinds for us in the quarter, however we are pleased that we were still able to grow our deposit base from the linked quarter, despite that higher cost” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “Our asset quality continued to be peer leading and our allowance percentage at 1.60 percent provides critical stability and strength as we move forward into a potentially tougher economic environment.”

RESULTS OF OPERATIONS

Consolidated Revenue

Total interest income for the third quarter was up $3.0 million or 25.8 percent from the prior year and from the linked quarter was up nearly 11 percent on an annualized basis, as the yield on earning assets increased 89 basis points to 4.78 percent.   However, deposit and other funding costs have risen at a faster pace, reducing net interest margin to 3.08 percent, down 37 basis points compared to the prior year and 7 basis points compared to the linked quarter.

Noninterest income was up from the prior year but down compared to the linked quarter, reflecting higher margins from gain on sale and relative growth in the mortgage sector, offset by weakness in our SBA volume and gain on sale. Wealth management revenues are under pressure from weaker equity markets and a reduction in client assets. For the full year, adjusting for the OMSR recapture, total noninterest income decreased $1.1 million or 8.2 percent due to our mortgage origination and sale volume being lower by 32.7 and 20.7 percent, respectively.

Mortgage Loan Business

Mortgage loan originations for the third quarter of 2023 were $61.2 million, down $7.4 million, or 10.7 percent, from the prior year quarter. Total sales of originated loans increased compared to the prior year, reaching $54.1 million, up $14.9 million, or 38.1 percent as we adjusted pricing and reduced duration risk in order to transition from portfolio production.

Net mortgage banking revenue, comprising gains on the sale of mortgage loans and net loan servicing fees, totaled $1.6 million for the third quarter, up from $1.4 million for the prior year quarter and slightly higher from the linked quarter. The mortgage servicing valuation adjustment was a negative $0.1 million, compared to a positive adjustment of $0.1 million for the prior year quarter. The servicing portfolio at September 30, 2023, was $1.37 billion, an increase of $4.5 million compared to the prior year.

Mr. Klein noted, “Our mortgage volume has remained below historical levels as we adjust to a much higher interest rate environment and limited movement of housing inventory and resulting mortgage activity. Historically, we have seen 20 to 30 percent of our volume from refinance transactions, which is down this year to just 9 percent, further impacting production levels.”

Mortgage Banking
($ in thousands)	Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022			Sep. 2022				Annual Growth
Mortgage originations	$	61,200		$	65,387		$	49,366		$	51,219		$	68,557			$	(7,357	)
Mortgage sales		54,085			47,933			25,803			23,590			39,176				14,909
Mortgage servicing portfolio		1,367,209			1,353,904			1,344,158			1,352,016			1,362,666				4,543
Mortgage servicing rights		13,893			13,723			13,548			13,503			13,473				420
Mortgage servicing revenue
Loan servicing fees		850			844			844			851			858				(8	)
OMSR amortization		(334	)		(334	)		(292	)		(310	)		(396	)			62
Net administrative fees		516			510			552			541			462				54
OMSR valuation adjustment		(78	)		(16	)		56			86			65				(143	)
Net loan servicing fees		438			494			608			627			527				(89	)
Gain on sale of mortgages		1,207			1,056			599			550			876				331
Mortgage banking revenue, net	$	1,645		$	1,550		$	1,207		$	1,177		$	1,403			$	242

Noninterest Income and Noninterest Expense

Noninterest income for the quarter increased from the prior year quarter by 3.0 percent and was just slightly below the linked quarter. Gain-on-sale from mortgage loans, was up $0.3 million or 37.8 percent from the prior year. Our sale percentage of originated volume returned to more historical levels with the 88 percent achieved for the quarter marking our highest since early 2020.

For the third quarter of 2023, noninterest expense of $10.5 million was slightly higher than both the prior year and linked quarters. We encountered some one-time expenses in the quarter related to check fraud, which elevated expense levels above our current run rate.

Mr. Klein stated, “As revenue levels have declined, we have been focused on reducing resources and controllable expenses throughout the Company. Our total headcount is down over 7 percent and expenses have declined 1.4 percent for the nine months compared to the prior nine month period.”

Noninterest Income/Noninterest Expense
($ in thousands, except ratios)		Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022			Sep. 2022				Annual Growth
Noninterest Income (NII)		$	4,163		$	4,361		$	3,666		$	3,713		$	4,043			$	120
NII / Total Revenue			30.4%			30.7%			26.2%			25.4%			27.9%				2.5%
NII / Average Assets			1.2%			1.3%			1.1%			1.1%			1.2%				0.0%
Total Revenue Growth			-5.3%			-0.5%			-2.0%			-6.7%			-13.2%				-5.3%
Noninterest Expense (NIE)		$	10,481		$	10,339		$	10,773		$	10,269		$	10,384			$	97
Efficiency Ratio			76.4%			72.7%			76.9%			70.2%			71.6%				4.8%
NIE / Average Assets			3.1%			3.1%			3.2%			3.1%			3.2%				-0.1%
Net Noninterest Expense/Avg. Assets			-1.9%			-1.8%			-2.1%			-2.0%			-2.0%				0.1%
Total Expense Growth			0.9%			-4.3%			-0.8%			-11.2%			-7.7%				0.9%

Balance Sheet

As of September 30, 2023, total assets were $1.33 billion, a slight decrease from the linked quarter, and 1.8 percent higher compared to the prior year. Total shareholders’ equity at September 30, 2023, was $112.3 million. Excluding the impact of the investment portfolio net unrealized losses, equity rose to $151.9 million, reflecting a 2.6 percent increase. During the quarter, we repurchased 43,814 shares of our Company stock and we have declared cash dividends of $0.39 per share for the nine-month period, an 8.5 percent increase from the prior period.   The investment portfolio of $212.8 million was down $30.5 million or 12.5 percent from a year ago and now constitutes 16.0 percent of total assets.

Total loans held for investment were up $63.8 million or 6.9 percent compared to the prior year. The Allowance for Credit Losses ended the quarter at $15.8 million or 1.60 percent of total loans. The reserve is higher by $2.0 million, or 14.2 percent compared to the prior year due to CECL and negligible charge-offs in the current year. Deposit balances of $1.09 billion at September 30, 2023, were level to the prior year, but were higher compared to the linked quarter by $14.2 million.

Mr. Klein continued, “Loan balances were higher compared to the linked quarter, and we have now grown loans quarter over quarter for seven consecutive quarters.   Our commercial pipelines of $44 million remain under pressure in most of our markets, but we continue to aggressively call to expand relationships from both internal and external clients. Asset quality continues to remain stable, and our coverage of non-performing loans has increased to nearly five times at quarter end.”

Loan Balances
($ in thousands, except ratios)	Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022			Sep. 2022			Annual Growth
Commercial	$	120,325		$	123,226		$	126,066		$	128,393		$	128,565		$	(8,240	)
% of Total		12.2%			12.5%			12.9%			13.3%			13.9%			-6.4%
Commercial RE		421,736			417,412			419,024			412,809			404,710			17,026
% of Total		42.6%			42.4%			42.9%			42.9%			43.7%			4.2%
Agriculture		60,928			58,222			57,761			64,505			60,522			406
% of Total		6.2%			5.9%			5.9%			6.7%			6.5%			0.7%
Residential RE		320,306			321,365			309,684			291,368			267,135			53,171
% of Total		32.4%			32.6%			31.7%			30.3%			28.9%			19.9%
Consumer & Other		65,726			64,599			63,777			65,000			64,317			1,409
% of Total		6.6%			6.6%			6.5%			6.8%			7.0%			2.2%
Total Loans	$	989,021		$	984,824		$	976,312		$	962,075		$	925,249		$	63,772
Total Growth Percentage																	6.9%
Deposit Balances
($ in thousands, except ratios)	Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022			Sep. 2022			Annual Growth
Non-Int DDA	$	224,182		$	218,411		$	237,175		$	256,799		$	250,791		$	(26,609	)
% of Total		20.7%			20.4%			21.4%			23.6%			23.1%			-10.6%
Interest DDA		174,729			170,282			188,497			191,719			199,523			(24,794	)
% of Total		16.1%			15.9%			17.0%			17.6%			18.4%			-12.4%
Savings		226,077			225,065			227,974			191,272			201,402			24,675
% of Total		20.8%			21.0%			20.5%			17.6%			18.5%			12.3%
Money Market		216,565			217,681			222,203			255,995			258,975			(42,410	)
% of Total		20.0%			20.3%			20.0%			23.6%			23.8%			-16.4%
Time Deposits		243,766			239,717			234,295			190,880			175,202			68,564
% of Total		22.5%			22.4%			21.1%			17.6%			16.1%			39.1%
Total Deposits	$	1,085,319		$	1,071,156		$	1,110,144		$	1,086,665		$	1,085,893		$	(574	)
Total Growth Percentage																	-0.1%

Asset Quality

SB Financial reported nonperforming assets totaling $4.0 million as of September 30, 2023, marking a decrease of $0.5 million or 12.1 percent from the same quarter last year, despite a slight increase from the linked quarter. The coverage ratio for problem loans, has notably strengthened, improving nearly 100 basis points from the previous year. The enhancement is attributed to both the expansion of the allowance, following a CECL adjustment of $1.4 million, and a concurrent reduction in problem loans.

Nonperforming Assets
($ in thousands, except ratios)	Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022			Sep. 2022			Annual Change
Commercial & Agriculture	$	717		$	170		$	185		$	114		$	114		$	603
% of Total Com./Ag. loans		0.40%			0.09%			0.10%			0.06%			0.06%			528.9%
Commercial RE		222			192			199			210			223			(1	)
% of Total CRE loans		0.05%			0.05%			0.05%			0.05%			0.06%			-0.4%
Residential RE		2,182			2,266			2,742			3,020			3,129			(947	)
% of Total Res. RE loans		0.68%			0.71%			0.89%			1.04%			1.17%			-30.3%
Consumer & Other		208			282			270			338			280			(72	)
% of Total Con./Oth. loans		0.32%			0.44%			0.42%			0.52%			0.44%			-25.7%
Total Nonaccruing Loans		3,329			2,910			3,396			3,682			3,746			(417	)
% of Total loans		0.34%			0.30%			0.35%			0.38%			0.40%			-11.1%
Foreclosed Assets and Other Assets		629			625			650			777			756			(127	)
Total Change (%)																	-16.8%
Total Nonperforming Assets	$	3,958		$	3,535		$	4,046		$	4,459		$	4,502		$	(544	)
% of Total assets		0.30%			0.26%			0.30%			0.33%			0.35%			-12.08%

Webcast and Conference Call

The Company will hold the third quarter 2023 earnings conference call and webcast on October 31, 2023, 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 23 offices: 22 in nine Ohio counties and one in Fort Wayne, Indiana, and 23 ATMs. State Bank has six loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. Peak Title provides title insurance and title opinions throughout the Tri-State region. SB Financial’s common stock is listed on the NASDAQ Capital Market with the ticker symbol “SBFG”.

In May 2023, SB Financial was valued #163 on the American Banker Magazine’s list of top 200 publicly traded Community Bank and Thrifts based on three-year average return on equity.

Forward-Looking Statements

Certain statements within this document, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, and actual results may differ materially from those predicted by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties inherent in the national and regional banking industry, changes in economic conditions in the market areas in which SB Financial and its subsidiaries operate, changes in policies by regulatory agencies, changes in accounting standards and policies, changes in tax laws, fluctuations in interest rates, demand for loans in the market areas in SB Financial and its subsidiaries operate, increases in FDIC insurance premiums, changes in the competitive environment, losses of significant customers, geopolitical events, the loss of key personnel and other risks identified in SB Financial’s Annual Report on Form 10-K and documents subsequently filed by SB Financial with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made, and SB Financial undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, except as required by law. All subsequent written and oral forward-looking statements attributable to SB Financial or any person acting on its behalf are qualified by these cautionary statements.

Non-GAAP Financial Measures

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 OMSR impairment from both net income and non-interest income to report non-GAAP adjusted levels. 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)			2023				2023				2023				2022				2022
ASSETS
	Cash and due from banks				$	19,049			$	20,993			$	21,625			$	27,817			$	27,934
	Interest bearing time deposits					1,180				1,180				1,380				2,131				2,134
	Available-for-sale securities					212,768				227,996				237,607				238,780				243,233
	Loans held for sale					3,206				5,684				5,592				2,073				2,979
	Loans, net of unearned income					989,021				984,824				976,312				962,075				925,249
	Allowance for credit losses					(15,790	)			(15,795	)			(15,442	)			(13,818	)			(13,824	)
	Premises and equipment, net					21,934				22,230				22,621				22,829				22,842
	Federal Reserve and FHLB Stock, at cost					6,261				7,634				6,054				6,326				5,230
	Foreclosed assets and other assets					629				625				650				777				756
	Interest receivable					4,457				4,079				3,926				4,091				3,556
	Goodwill					23,239				23,239				23,239				23,239				23,239
	Cash value of life insurance					29,291				29,183				29,024				28,870				28,713
	Mortgage servicing rights					13,893				13,723				13,548				13,503				13,473
	Other assets					17,336				15,840				15,157				16,940				17,863
			Total assets		$	1,326,474			$	1,341,435			$	1,341,293			$	1,335,633			$	1,303,377
LIABILITIES AND SHAREHOLDERS' EQUITY
	Deposits
		Non interest bearing demand			$	224,182			$	218,411			$	237,175			$	256,799			$	250,791
		Interest bearing demand				174,729				170,282				188,497				191,719				199,523
		Savings				226,077				225,065				227,974				191,272				201,402
		Money market				216,565				217,681				222,203				255,995				258,975
		Time deposits				243,766				239,717				234,295				190,880				175,202
			Total deposits			1,085,319				1,071,156				1,110,144				1,086,665				1,085,893
	Short-term borrowings					16,519				21,118				15,998				14,923				19,754
	Federal Home Loan Bank advances					59,500				81,300				44,500				60,000				35,000
	Trust preferred securities					10,310				10,310				10,310				10,310				10,310
	Subordinated debt net of issuance costs					19,630				19,618				19,606				19,594				19,582
	Interest payable					2,216				1,866				1,441				769				623
	Other liabilities					20,632				18,401				19,535				24,944				17,587
			Total liabilities			1,214,126				1,223,769				1,221,534				1,217,205				1,188,749
	Shareholders' Equity
		Common stock				61,319				61,319				61,319				61,319				61,319
		Additional paid-in capital				15,037				15,154				14,953				15,087				15,000
		Retained earnings				105,521				103,725				101,548				101,966				99,309
		Accumulated other comprehensive loss				(39,517	)			(32,894	)			(29,671	)			(32,120	)			(33,426	)
		Treasury stock				(30,012	)			(29,638	)			(28,390	)			(27,824	)			(27,574	)
			Total shareholders' equity			112,348				117,666				119,759				118,428				114,628
			Total liabilities and shareholders' equity		$	1,326,474			$	1,341,435			$	1,341,293			$	1,335,633			$	1,303,377

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					2023				2023				2023				2022				2022				2023				2022
	Loans
	Taxable			$	13,128			$	12,715			$	12,126			$	11,222			$	10,084			$	37,969			$	27,016
	Tax exempt				122				121				116				109				92				359				226
	Securities
	Taxable				1,507				1,524				1,535				1,559				1,536				4,566				4,239
	Tax exempt				39				46				47				47				52				132				151
		Total interest income			14,796				14,406				13,824				12,937				11,764				43,026				31,632
Interest expense
	Deposits				4,194				3,538				2,578				1,440				852				10,310				2,037
	Repurchase agreements & other				16				9				10				7				8				35				32
	Federal Home Loan Bank advances				666				664				553				258				180				1,883				257
	Trust preferred securities				189				172				164				138				99				525				223
	Subordinated debt				195				194				195				194				195				584				584
		Total interest expense			5,260				4,577				3,500				2,037				1,334				13,337				3,133
Net interest income					9,536				9,829				10,324				10,900				10,430				29,689				28,499
	Provision for credit losses				(6	)			145				250				-				-				389				-
Net interest income after provision
for loan losses					9,542				9,684				10,074				10,900				10,430				29,300				28,499
Noninterest income
	Wealth management fees				837				940				917				907				930				2,694				2,821
	Customer service fees				863				871				825				880				844				2,559				2,498
	Gain on sale of mtg. loans & OMSR				1,207				1,056				599				550				876				2,862				3,748
	Mortgage loan servicing fees, net				438				494				608				627				527				1,540				2,337
	Gain on sale of non-mortgage loans				10				218				24				105				125				252				461
	Title insurance revenue				429				455				373				454				476				1,257				1,775
	Gain (loss) on sale of assets				-				15				(11	)			18				(12	)			4				43
	Other				379				312				331				172				277				1,022				835
		Total noninterest income			4,163				4,361				3,666				3,713				4,043				12,190				14,518
Noninterest expense
	Salaries and employee benefits				5,491				5,721				5,913				5,677				5,858				17,125				18,465
	Net occupancy expense				764				802				784				763				769				2,350				2,230
	Equipment expense				1,068				1,002				981				1,017				918				3,051				2,599
	Data processing fees				648				685				646				627				664				1,979				1,883
	Professional fees				623				612				863				738				766				2,098				2,476
	Marketing expense				189				213				198				258				200				600				653
	Telephone and communication expense				124				124				121				124				134				369				350
	Postage and delivery expense				100				78				87				121				75				265				301
	State, local and other taxes				218				218				228				277				250				664				805
	Employee expense				141				156				188				157				145				485				456
	Other expenses				1,115				728				764				510				605				2,607				1,828
		Total noninterest expense			10,481				10,339				10,773				10,269				10,384				31,593				32,046
Income before income tax expense					3,224				3,706				2,967				4,344				4,089				9,897				10,971
	Income tax expense				537				631				517				811				746				1,685				1,983
Net income				$	2,687			$	3,075			$	2,450			$	3,533			$	3,343			$	8,212			$	8,988
Common share data:
	Basic earnings per common share			$	0.40			$	0.45			$	0.35			$	0.51			$	0.48			$	1.20			$	1.28
	Diluted earnings per common share			$	0.39			$	0.44			$	0.35			$	0.50			$	0.47			$	1.18			$	1.27
Average shares outstanding (in thousands):
	Basic:				6,791				6,847				6,933				6,945				6,968				6,857				7,026
	Diluted:				6,878				6,910				7,008				7,021				7,033				6,944				7,098

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			2023				2023				2023				2022				2022				2023				2022
Net interest income		$	9,536			$	9,829			$	10,324			$	10,900			$	10,430			$	29,689			$	28,499
Tax-equivalent adjustment			43				44				43				41				38				131				100
Tax-equivalent net interest income			9,579				9,873				10,367				10,941				10,468				29,820				28,599
Provision for credit loss			(6	)			145				250				-				-				389				-
Noninterest income			4,163				4,361				3,666				3,713				4,043				12,190				14,518
Total operating revenue			13,699				14,190				13,990				14,613				14,473				41,879				43,017
Noninterest expense			10,481				10,339				10,773				10,269				10,384				31,593				32,046
Pre-tax pre-provision income			3,218				3,851				3,217				4,344				4,088				10,286				10,971
Pretax income			3,224				3,706				2,967				4,344				4,088				9,897				10,971
Net income			2,687				3,075				2,450				3,533				3,343				8,212				8,988
PER SHARE INFORMATION:
Basic earnings per share (EPS)			0.40				0.45				0.35				0.51				0.48				1.20				1.28
Diluted earnings per share			0.39				0.44				0.35				0.50				0.47				1.18				1.27
Common dividends			0.130				0.130				0.125				0.125				0.120				0.385				0.355
Book value per common share			16.59				17.30				17.37				17.08				16.49				16.59				16.49
Tangible book value per common share (TBV)			13.09				13.81				13.93				13.65				13.07				13.09				13.07
Market price per common share			13.50				12.62				14.13				16.95				16.85				13.50				16.85
Market price to TBV			103.1%				91.4%				101.4%				124.2%				128.9%				103.1%				128.9%
Market price to trailing 12 month EPS			8.0				7.1				8.2				9.6				9.6				8.0				9.6
PERFORMANCE RATIOS:
Return on average assets (ROAA)			0.80%				0.91%				0.73%				1.08%				1.03%				0.81%				0.91%
Pre-tax pre-provision ROAA			0.96%				1.14%				0.96%				1.32%				1.26%				1.10%				1.19%
Return on average equity			8.73%				10.01%				8.37%				12.17%				10.89%				8.72%				9.21%
Return on average tangible equity			10.82%				12.40%				10.50%				15.30%				13.51%				10.75%				11.28%
Efficiency ratio			76.34%				72.71%				76.85%				70.16%				71.63%				75.28%				74.38%
Earning asset yield			4.78%				4.61%				4.49%				4.27%				3.89%				4.61%				3.42%
Cost of interest bearing liabilities			2.18%				1.90%				1.46%				0.90%				0.58%				1.85%				0.45%
Net interest margin			3.08%				3.15%				3.35%				3.60%				3.45%				3.18%				3.08%
Tax equivalent effect			0.01%				0.01%				0.02%				0.01%				0.01%				0.02%				0.01%
Net interest margin, tax equivalent			3.09%				3.16%				3.37%				3.61%				3.46%				3.20%				3.09%
Non interest income/Average assets			1.24%				1.30%				1.10%				1.13%				1.24%				1.21%				1.47%
Non interest expense/Average assets			3.13%				3.07%				3.23%				3.13%				3.19%				3.13%				3.24%
Net noninterest expense/Average assets			-1.89%				-1.78%				-2.13%				-2.00%				-1.95%				-1.92%				-1.77%
ASSET QUALITY RATIOS:
Gross charge-offs			12				32				69				7				9				113				27
Recoveries			7				10				8				1				32				25				46
Net charge-offs			5				22				61				6				(23	)			88				(19	)
Nonperforming loans/Total loans			0.34%				0.30%				0.35%				0.38%				0.40%				0.34%				0.40%
Nonperforming assets/Loans & OREO			0.40%				0.36%				0.41%				0.46%				0.49%				0.40%				0.49%
Nonperforming assets/Total assets			0.30%				0.26%				0.30%				0.33%				0.35%				0.30%				0.35%
Allowance for credit loss/Nonperforming loans			474.32%				542.78%				454.71%				375.29%				369.03%				474.32%				369.03%
Allowance for credit loss/Total loans			1.60%				1.60%				1.58%				1.44%				1.49%				1.60%				1.49%
Net loan charge-offs/Average loans (ann.)			0.00%				0.01%				0.03%				0.00%				(0.01%	)			0.01%				(0.00%	)
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits			91.13%				91.94%				87.94%				88.53%				85.21%				91.13%				85.21%
Equity/ Assets			8.47%				8.77%				8.93%				8.87%				8.79%				8.47%				8.79%
Tangible equity/Tangible assets			6.81%				7.13%				7.29%				7.22%				7.10%				6.81%				7.10%
Common equity tier 1 ratio (Bank)			13.56%				13.18%				13.44%				13.42%				13.23%				13.56%				13.23%
END OF PERIOD BALANCES
Total assets			1,326,474				1,341,435				1,341,293				1,335,633				1,303,377				1,326,474				1,303,377
Total loans			989,021				984,824				976,312				962,075				925,249				989,021				925,249
Deposits			1,085,319				1,071,156				1,110,144				1,086,665				1,085,893				1,085,319				1,085,893
Stockholders equity			112,348				117,666				119,759				118,428				114,628				112,348				114,628
Goodwill and intangibles			23,687				23,710				23,732				23,753				23,770				23,687				23,770
Tangible equity			88,661				93,956				96,027				94,675				90,858				88,661				90,858
Mortgage servicing portfolio			1,367,209				1,353,904				1,344,158				1,352,016				1,362,666				1,367,209				1,362,666
Wealth/Brokerage assets under care			478,236				499,255				518,009				507,093				480,947				478,236				480,947
Total assets under care			3,171,919				3,194,594				3,203,460				3,194,742				3,146,990				3,171,919				3,146,990
Full-time equivalent employees			252				253				255				268				271				252				271
Period end common shares outstanding			6,773				6,803				6,894				6,935				6,950				6,773				6,950
Market capitalization (all)			91,437				85,857				97,419				117,556				117,113				91,437				117,113
AVERAGE BALANCES
Total assets			1,339,870				1,346,010				1,335,056				1,314,419				1,302,297				1,344,467				1,319,668
Total earning assets			1,239,145				1,248,813				1,232,018				1,211,674				1,209,958				1,243,094				1,231,865
Total loans			989,089				988,348				970,813				937,898				909,909				982,817				871,340
Deposits			1,095,414				1,100,344				1,098,935				1,094,491				1,085,821				1,098,593				1,109,345
Stockholders equity			123,070				122,886				117,071				116,114				122,738				125,580				130,069
Goodwill and intangibles			23,698				23,721				23,743				23,761				23,778				23,720				23,791
Tangible equity			99,372				99,165				93,328				92,353				98,960				101,860				106,278
Average basic shares outstanding			6,791				6,847				6,933				6,945				6,968				6,857				7,026
Average diluted shares outstanding			6,878				6,910				7,008				7,021				7,033				6,944				7,098
Tangible equity/Tangible assets - No AOCI			9.84%				9.63%				9.54%				9.67%				9.71%

SB FINANCIAL GROUP, INC.
	Rate Volume Analysis - (Unaudited)
	For the Three Months Ended Sep. 30, 2023 and 2022
	($ in thousands)		Three Months Ended Sep. 30, 2023									Three Months Ended Sep. 30, 2022
			Average						Average			Average						Average
Assets			Balance			Interest			Rate			Balance			Interest			Rate
	Taxable securities/cash		$	243,261		$	1,507		2.48%			$	291,712		$	1,536		2.11%
	Nontaxable securities			6,795			39		2.30%				8,337			52		2.49%
	Loans, net			989,089			13,250		5.36%				909,909			10,176		4.47%
	Total earning assets			1,239,145			14,796		4.78%				1,209,958			11,764		3.89%
	Cash and due from banks			4,022									6,782
	Allowance for loan losses			(15,791	)								(13,802	)
	Premises and equipment			22,120									23,762
	Other assets			90,374									75,597
	Total assets		$	1,339,870								$	1,302,297
Liabilities
	Savings, MMDA and interest bearing demand		$	620,092		$	2,232		1.44%			$	681,209		$	542		0.32%
	Time deposits			244,289			1,962		3.21%				155,979			310		0.79%
	Repurchase agreements & other			16,319			16		0.39%				20,160			8		0.16%
	Advances from Federal Home Loan Bank			55,073			666		4.84%				26,739			180		2.69%
	Trust preferred securities			10,310			189		7.33%				10,310			99		3.84%
	Subordinated debt			19,622			195		3.98%				19,576			195		3.98%
	Total interest bearing liabilities			965,705			5,260		2.18%				913,973			1,334		0.58%
	Non interest bearing demand			231,033			-						248,633			-
	Total funding			1,196,738					1.76%				1,162,606					0.46%
	Other liabilities			20,062									16,952
	Total liabilities			1,216,800									1,179,558
	Equity			123,070									122,738
	Total liabilities and equity		$	1,339,870								$	1,302,296
	Net interest income					$	9,536								$	10,430
	Net interest income as a percent of average interest-earning assets - GAAP measure								3.08%									3.45%
	Net interest income as a percent of average interest-earning assets - non GAAP								3.09%									3.46%
	- Computed on a fully tax equivalent (FTE) basis
			Nine Months Ended Sep. 30, 2023									Nine Months Ended Sep. 30, 2022
			Average						Average			Average						Average
Assets			Balance			Interest			Rate			Balance			Interest			Rate
	Taxable securities/cash		$	252,908		$	4,566		2.41%			$	352,405		$	4,239		1.60%
	Nontaxable securities			7,369			132		2.39%				8,120			151		2.48%
	Loans, net			982,817			38,328		5.20%				871,340			27,242		4.17%
	Total earning assets			1,243,094			43,026		4.61%				1,231,865			31,632		3.42%
	Cash and due from banks			4,020									7,331
	Allowance for loan losses			(15,374	)								(13,804	)
	Premises and equipment			22,500									24,265
	Other assets			90,227									70,011
	Total assets		$	1,344,467								$	1,319,668
Liabilities
	Savings, MMDA and interest bearing demand		$	627,074		$	5,367		1.14%			$	709,033		$	1,293		0.24%
	Time deposits			233,054			4,943		2.83%				152,230			744		0.65%
	Repurchase agreements & Other			16,576			35		0.28%				21,298			32		0.20%
	Advances from Federal Home Loan Bank			53,936			1,883		4.65%				12,154			257		2.82%
	Trust preferred securities			10,310			525		6.79%				10,310			223		2.88%
	Subordinated debt			19,610			584		3.97%				19,564			584		3.98%
	Total interest bearing liabilities			960,560			13,337		1.85%				924,589			3,132		0.45%
	Non interest bearing demand			238,465					1.48%				248,082					0.36%
	Total funding			1,199,025									1,172,671
	Other liabilities			19,862									16,928
	Total liabilities			1,218,887									1,189,599
	Equity			125,580									130,069
	Total liabilities and equity		$	1,344,467								$	1,319,668
	Net interest income					$	29,689								$	28,500
	Net interest income as a percent of average interest-earning assets - GAAP measure								3.18%									3.08%
	Net interest income as a percent of average interest-earning assets - non GAAP								3.20%									3.09%
	- 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, 2023				Sep. 30, 2022				Sep. 30, 2023				Sep. 30, 2022
Total Operating Revenue		$	13,699			$	14,473			$	41,879			$	43,017
Adjustment to (deduct)/add OMSR recapture/impairment *			78				(65	)			39				(1,193	)
Adjusted Total Operating Revenue			13,777				14,408				41,918				41,824
Income before Income Taxes			3,224				4,088				9,897				10,971
Adjustment for OMSR *			78				(65	)			39				(1,193	)
Adjusted Income before Income Taxes			3,302				4,023				9,936				9,778
Provision for Income Taxes			537				746				1,685				1,983
Adjustment for OMSR **			16				(14	)			8				(251	)
Adjusted Provision for Income Taxes			553				732				1,693				1,733
Net Income			2,687				3,342				8,212				8,988
Adjustment for OMSR *			62				(51	)			31				(942	)
Adjusted Net Income			2,749				3,291				8,243				8,046
Diluted Earnings per Share			0.39				0.47				1.18				1.27
Adjustment for OMSR *			0.01				(0.00	)			0.00				(0.13	)
Adjusted Diluted Earnings per Share		$	0.40			$	0.47			$	1.19			$	1.13
Return on Average Assets			0.80%				1.03%				0.81%				0.91%
Adjustment for OMSR *			0.02%				-0.02%				0.00%				-0.07%
Adjusted Return on Average Assets			0.82%				1.01%				0.82%				0.84%
*valuation adjustment to the Company's mortgage servicing rights
**tax effect is calculated using a 21% statutory federal corporate income tax rate