SB Financial Group Announces Fourth Quarter 2022 Results

来源: Nasdaq GlobeNewswire / 26 1月 2023 15:15:02 America/Chicago

DEFIANCE, Ohio, Jan. 26, 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 fourth quarter and twelve months ended December 31, 2022.

Fourth quarter 2022 highlights:

Net income of $3.5 million increased six percent compared to the prior year with diluted earnings per share (“EPS”) of $0.50
Noninterest expense of $10.3 million declined 11.2 percent from the prior year
Loan growth of $36.8 million from the linked quarter, or 15.9 percent annualized
Solid asset quality with nonperforming assets at 38 basis points

Twelve months ended December 31, 2022, highlights over the prior-year include:

Net income of $12.5 million and diluted EPS of $1.77, compared to $18.3 million, or $2.56 per share or a 30.9 percent decrease
Loans, increased $141.4 million, or 17.2 percent from the prior year, excluding Paycheck Protection Program (“PPP”) loans,
Deposits decreased by $26.4 million, or 2.4 percent to $1.09 billion
Mortgage origination volume of $312.6 million and a servicing portfolio of $1.35 billion
Net recoveries on loans for the year of $13,000

Highlights	Three Months Ended								Twelve Months Ended
($ in thousands, except per share & ratios)	Dec. 2022			Dec. 2021			% Change		Dec. 2022			Dec. 2021			% Change
Operating revenue	$	14,613		$	15,667		-6.7	%	$	57,630		$	68,581		-16.0	%
Interest income		12,937			10,003		29.3	%		44,569			41,904		6.4	%
Interest expense		2,037			925		120.2	%		5,170			4,020		28.6	%
Net interest income		10,900			9,078		20.1	%		39,399			37,884		4.0	%
Provision for loan losses		-			-		0.0	%		-			1,050		-100.0	%
Noninterest income		3,713			6,589		-43.6	%		18,231			30,697		-40.6	%
Noninterest expense		10,269			11,567		-11.2	%		42,314			44,808		-5.6	%
Net income		3,533			3,332		6.0	%		12,521			18,277		-31.5	%
Earnings per diluted share		0.50			0.49		2.0	%		1.77			2.56		-30.9	%
Return on average assets		1.08	%		0.99	%	9.1	%		0.95	%		1.38	%	-31.2	%
Return on average equity		12.17	%		9.21	%	32.1	%		9.86	%		12.67	%	-22.2	%

“In the fourth quarter of 2022 loan growth was strong with balances growing $37 million, or 4.0 percent from the third quarter of 2022,” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “And when we compare our growth to the prior year, organic loan growth was up $139.4 million or 16.9 percent. We continued to realize margin expansion as the pace of rate increases of our asset sensitive balance sheet provided greater expansion of interest income than the increased cost of funding, even as deposits repriced.”

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was up 1.0% from the linked quarter but down 6.7 percent from the fourth quarter of 2021. Operating revenue was negatively impacted by the decline in mortgage banking revenue.

Net interest income was up 4.5 percent from the linked quarter and up 20.1 percent from the year ago quarter.
Net interest margin on a fully taxable equivalent basis (FTE) was up from both the linked and year-ago quarters by 15 and 72 basis points, respectively, primarily from the shift in mix of our balance sheet with cash and securities reallocated to the loan portfolio. Net of PPP, net interest margin was higher by 86 basis points compared to the prior year.
Noninterest income was down 8 percent from the linked quarter and 44 percent from the year ago quarter, respectively, due to lower mortgage volume and OMSR recapture.

Mortgage Loan Business

Mortgage loan originations for the fourth quarter of 2022 were $51.2 million, down $75.4 million, or 59.6 percent, from the year-ago quarter; likewise, total sales of originated loans were $23.6 million, down $87.0 million, or 78.7 percent. For the full year of 2022, SB Financial had total volume of $312.6 million, of which $250.2 million (80 percent) was new purchase/construction lending, $41.0 million was external refinance (13 percent), and the remaining $21.4 million (7 percent) was internal refinance.

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.2 million for the fourth quarter of 2022, compared to $3.8 million for the year-ago quarter. The mortgage servicing valuation adjustment for the fourth quarter of 2022 was a positive $0.1 million, compared to a positive adjustment of $0.6 million for the fourth quarter of 2021. For all of 2022, the recapture of servicing rights was $1.3 million compared to a recapture of $3.4 million for the prior year. The aggregate servicing valuation impairment was $0.2 million at the end of the fourth quarter of 2022. The servicing portfolio at December 31, 2022, was $1.35 billion, which was flat to the prior year.

Mr. Klein noted, “Refinance activity for 2022 declined significantly to just 20 percent compared to 49 percent in the prior year. Our continued success in this key business line will hinge not only on the overall rate environment but our ability to attract high-producers in our expansion markets as well.”

Mortgage Banking
($ in thousands)	Dec. 2022			Sep. 2022			Jun. 2022			Mar. 2022			Dec. 2021			Annual Growth
Mortgage originations	$	51,219		$	68,557		$	95,454		$	97,394		$	126,611		$	(75,392	)
Mortgage sales		23,590			39,176			49,915			72,154			110,543			(86,953	)
Mortgage servicing portfolio		1,352,016			1,362,666			1,369,732			1,375,554			1,362,962			(10,946	)
Mortgage servicing rights		13,503			13,473			13,408			13,135			12,034			1,469

Mortgage servicing revenue
Loan servicing fees		851			858			863			861			850			1
OMSR amortization		(310	)		(396	)		(496	)		(547	)		(807	)		497
Net administrative fees		541			462			367			314			43			498
OMSR valuation adjustment		86			65			239			890			581			(495	)
Net loan servicing fees		627			527			606			1,204			624			3
Gain on sale of mortgages		550			876			1,196			1,676			3,194			(2,644	)
Mortgage banking revenue, net	$	1,177		$	1,403		$	1,802		$	2,880		$	3,818		$	(2,641	)

Noninterest Income and Noninterest Expense

Noninterest income declined for the fourth quarter, from the linked quarter and year over year. Gain-on-sale yields on mortgage loans were down significantly from the prior year and the total sales were down nearly $87 million. Wealth management revenue was down from both the prior year and linked quarter due to market declines. New sales in the wealth division were insufficient to overcome closed accounts and client distributions during 2022.

For the fourth quarter of 2022, noninterest expense of $10.3 million was down $1.3 million or 11.2 percent compared to the prior year quarter. We continue to have positive variance from our commission-based originators and medical costs eased a bit in the quarter. We continue to make headcount reductions and staffing realignment as retail transactions declined in several markets due to the continuing level of adoption of digital banking initiatives.

Mr. Klein stated, “We are committed to reducing our operating expenses to reflect not only the reduced revenue in residential mortgage lending but also, as economic expansion and contraction, dictates. Inflation concerns remain top of mind as we work to ensure our growth strategies deliver positive operating leverage.”

Noninterest Income / Noninterest Expense
($ in thousands, except ratios)	Dec. 2022			Sep. 2022			Jun. 2022			Mar. 2022			Dec. 2021			Annual Growth
Noninterest Income (NII)	$	3,713		$	4,043		$	4,673		$	5,802		$	6,589		$	(2,876	)
NII / Total Revenue		25.4	%		27.9	%		32.8	%		40.6	%		42.1	%		-16.7	%
NII / Average Assets		1.1	%		1.2	%		1.4	%		1.7	%		2.0	%		-0.9	%
Total Revenue Growth		-6.7	%		-13.2	%		-9.1	%		-46.9	%		-13.7	%		7.0	%

Noninterest Expense (NIE)	$	10,269		$	10,384		$	10,802		$	10,859		$	11,567		$	(1,298	)
Efficiency Ratio		70.2	%		71.6	%		75.6	%		75.9	%		73.7	%		-3.5	%
NIE / Average Assets		3.1	%		3.2	%		3.3	%		3.2	%		3.5	%		-0.4	%
Net Noninterest Expense/Avg. Assets		-2.0	%		-2.0	%		-1.9	%		-1.5	%		-1.5	%		-0.5	%
Total Expense Growth		-11.2	%		-7.7	%		-2.5	%		-0.5	%		8.3	%		-19.5	%

Balance Sheet

Total assets as of December 31, 2022, were $1.3 billion, or up 0.4 percent from the year ago quarter primarily due to the increase in the loan portfolio and partially offset by declines in cash and investments. Total shareholders’ equity as of December 31, 2022, was $118.4 million, down 18.3 percent from a year ago due to the valuation adjustment on the Company’s bond portfolio, which has regressed by $30.3 million. Excluding the impact of the valuation adjustment, equity increased $7.5 million or 5.2 percent. SB Financial bought back 317,000 shares of our stock during 2022 at an average price of $18.43 or 124.5 percent of tangible book value per share.

The investment portfolio of $238.8 million, represented 17.9 percent of assets at December 31, 2022, and was down $24.5 million or 9.3 percent from the year-ago period.

Total loans held for investment were $962.1 million at December 31, 2022, up $139.4 million, or 16.9 percent, from December 31, 2021.

Deposit balances of $1.09 billion at December 31, 2022, decreased by $30 million, or 2.4 percent, since December 31, 2021. Deposits have stabilized since mid-year as we have been aggressively pursuing deposit clients throughout our footprint; albeit at a higher marginal cost.

Mr. Klein continued, “Clearly, another quarter of strong loan growth was achieved even as rates continued to climb higher; loan yields are up by 78 basis points adjusted for PPP. Pressure to fund that growth increased with deposit balances rising at a slower pace; our average cost of deposits increased 30 basis points from the prior year quarter. Asset quality was stellar again this year, as we recorded net recoveries for all of 2022; our second consecutive year of this achievement.”

Loan Balances
($ in thousands, except ratios)	Dec. 2022			Sep. 2022			Jun. 2022			Mar. 2022			Dec. 2021			Annual Growth
Commercial	$	128,534		$	128,565		$	127,711		$	124,857		$	122,373		$	6,161
% of Total		13.4	%		13.9	%		14.3	%		14.7	%		14.9	%		5.0	%
Commercial RE		412,636			404,710			404,260			400,101			381,387			31,249
% of Total		42.9	%		43.7	%		45.1	%		47.0	%		46.4	%		8.2	%
Agriculture		64,388			60,522			60,586			55,741			57,473			6,915
% of Total		6.7	%		6.5	%		6.8	%		6.6	%		7.0	%		12.0	%
Residential RE		291,512			267,135			241,614			214,015			206,324			85,188
% of Total		30.3	%		28.9	%		27.0	%		25.2	%		25.1	%		41.3	%
Consumer & Other		65,005			64,317			61,440			55,957			55,157			9,848
% of Total		6.8	%		7.0	%		6.9	%		6.6	%		6.7	%		17.9	%
Total Loans	$	962,075		$	925,249		$	895,611		$	850,671		$	822,714		$	139,361
Total Growth Percentage																	16.9	%


Deposit Balances
($ in thousands, except ratios)	Dec. 2022			Sep. 2022			Jun. 2022			Mar. 2022			Dec. 2021			Annual Growth
Non-Int DDA	$	256,799		$	250,791		$	239,676		$	252,273		$	247,044		$	9,755
% of Total		23.6	%		23.1	%		22.4	%		22.2	%		22.2	%		3.9	%
Interest DDA		191,719			199,523			198,286			211,152			195,464			(3,745	)
% of Total		17.6	%		18.4	%		18.5	%		18.6	%		17.6	%		-1.9	%
Savings		191,272			201,402			215,285			236,394			237,571			(46,299	)
% of Total		17.6	%		18.5	%		20.1	%		20.8	%		21.3	%		-19.5	%
Money Market		255,995			258,975			276,274			289,699			276,462			(20,467	)
% of Total		23.6	%		23.8	%		25.8	%		25.5	%		24.8	%		-7.4	%
Time Deposits		190,880			175,202			142,258			148,553			156,504			34,376
% of Total		17.6	%		16.1	%		13.3	%		13.1	%		14.1	%		22.0	%
Total Deposits	$	1,086,665		$	1,085,893		$	1,071,779		$	1,138,071		$	1,113,045		$	(26,380	)
Total Growth Percentage																	-2.4	%

Asset Quality

SB Financial reported nonperforming assets of $5.1 million as of December 31, 2022, down $1.4 million or 21.1 percent from the year-ago quarter. The Company had small charge-offs in the quarter, but for the full year, the Company had $13,000 in net recoveries. The coverage ratio of problem loans to the loan loss allowance was at 318.6 percent at December 31, 2022.

Nonperforming Assets
($ in thousands, except ratios)	Dec. 2022			Sep. 2022			Jun. 2022			Mar. 2022			Dec. 2021			Annual Change
Commercial & Agriculture	$	114		$	114		$	140		$	142		$	143		$	(29	)
% of Total Com./Ag. loans		0.06	%		0.06	%		0.07	%		0.08	%		0.08	%		-20.3	%
Commercial RE		210			223			359			544			554			(344	)
% of Total CRE loans		0.05	%		0.06	%		0.09	%		0.14	%		0.15	%		-62.1	%
Residential RE		2,967			3,129			3,176			3,198			2,484			483
% of Total Res. RE loans		1.02	%		1.17	%		1.31	%		1.49	%		1.20	%		19.4	%
Consumer & Other		391			280			323			409			471			(80	)
% of Total Con./Oth. loans		0.60	%		0.44	%		0.53	%		0.73	%		0.85	%		-17.0	%
Total Nonaccruing Loans		3,682			3,746			3,998			4,293			3,652			30
% of Total loans		0.38	%		0.40	%		0.45	%		0.50	%		0.44	%		0.8	%
Accruing Restructured Loans		654			668			683			762			725			(71	)
Total Change (%)																	-9.8	%
Total Nonaccruing & Restructured Loans		4,336			4,414			4,681			5,055			4,377			(41	)
% of Total loans		0.45	%		0.48	%		0.52	%		0.59	%		0.53	%		-0.9	%
Foreclosed Assets and Other Assets		777			756			730			527			2,104			(1,327	)
Total Change (%)																	-63.1	%
Total Nonperforming Assets	$	5,113		$	5,170		$	5,411		$	5,582		$	6,481		$	(1,368	)
% of Total assets		0.38	%		0.40	%		0.42	%		0.42	%		0.49	%		-21.1	%

Webcast and Conference Call

The Company will hold the fourth quarter 2022 earnings conference call and webcast on January 27, 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 24 full-service 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 April 2022, SB Financial was named to the Keefe, Bruyette & Woods, Inc. “Bank Honor Roll” of superior performers that consistently reported increases in earnings per share over the last decade. The honor roll review determined that just 17 banks in the U.S., including SB Financial, or five percent of all banks screened, qualified for inclusion.

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)

	December			September			June			March			December
($ in thousands)		2022			2022			2022			2022			2021

ASSETS
Cash and due from banks	$	27,817		$	27,934		$	29,567		$	130,003		$	149,511
Interest bearing time deposits		2,131			2,134			1,691			1,894			2,643
Available-for-sale securities		238,780			243,233			266,162			265,311			263,259
Loans held for sale		2,073			2,979			4,242			4,737			7,472
Loans, net of unearned income		962,075			925,249			895,611			850,671			822,714
Allowance for loan losses		(13,818	)		(13,824	)		(13,801	)		(13,804	)		(13,805	)
Premises and equipment, net		22,829			22,842			23,122			23,039			23,212
Federal Reserve and FHLB Stock, at cost		6,326			5,230			5,303			5,303			5,303
Foreclosed assets and other assets		777			756			730			527			2,104
Interest receivable		4,091			3,556			3,256			2,815			2,920
Goodwill		23,239			23,239			23,239			23,239			23,191
Cash value of life insurance		28,870			28,713			28,556			17,932			17,867
Mortgage servicing rights		13,503			13,473			13,408			13,135			12,034
Other assets		16,940			17,863			12,886			10,328			12,429
Total assets	$	1,335,633		$	1,303,377		$	1,293,972		$	1,335,130		$	1,330,854



LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non interest bearing demand	$	256,799		$	250,791		$	239,676		$	252,273		$	247,044
Interest bearing demand		191,719			199,523			198,286			211,152			195,464
Savings		191,272			201,402			215,285			236,394			237,571
Money market		255,995			258,975			276,274			289,699			276,462
Time deposits		190,880			175,202			142,258			148,553			156,504
Total deposits		1,086,665			1,085,893			1,071,779			1,138,071			1,113,045

Short-term borrowings		14,923			19,754			30,772			19,035			15,320
Federal Home Loan Bank advances		60,000			35,000			25,000			5,500			5,500
Trust preferred securities		10,310			10,310			10,310			10,310			10,310
Subordinated debt net of issuance costs		19,594			19,582			19,570			19,558			19,546
Interest payable		769			623			307			536			299
Other liabilities		24,944			17,587			11,678			9,483			21,905
Total liabilities		1,217,205			1,188,749			1,169,416			1,202,493			1,185,925

Shareholders' Equity
Common stock		61,319			61,319			61,319			61,319			54,463
Additional paid-in capital		15,087			15,000			15,069			14,872			14,944
Retained earnings		101,966			99,309			96,809			94,833			99,716
Accumulated other comprehensive income (loss)		(32,120	)		(33,426	)		(22,210	)		(13,659	)		(1,845	)
Treasury stock		(27,824	)		(27,574	)		(26,431	)		(24,728	)		(22,349	)
Total shareholders' equity		118,428			114,628			124,556			132,637			144,929

Total liabilities and shareholders' equity	$	1,335,633		$	1,303,377		$	1,293,972		$	1,335,130		$	1,330,854

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		2022		2022			2022		2022		2021		2022		2021
Loans
Taxable	$	11,222	$	10,084		$	8,880	$	8,052	$	8,889	$	38,238	$	37,959
Tax exempt		109		92			73		61		59		335		206
Securities
Taxable		1,559		1,536			1,469		1,235		969		5,798		3,386
Tax exempt		47		52			52		47		86		198		353
Total interest income		12,937		11,764			10,474		9,395		10,003		44,569		41,904

Interest expense
Deposits		1,440		852			567		618		640		3,477		3,129
Repurchase agreements & other		7		8			11		13		7		39		42
Federal Home Loan Bank advances		258		180			38		39		41		515		188
Trust preferred securities		138		99			71		53		49		361		199
Subordinated debt		194		195			194		195		188		778		462
Total interest expense		2,037		1,334			881		918		925		5,170		4,020

Net interest income		10,900		10,430			9,593		8,477		9,078		39,399		37,884
Provision for loan losses		-		-			-		-		-		-		1,050

Net interest income after provision for loan losses		10,900		10,430			9,593		8,477		9,078		39,399		36,834

Noninterest income
Wealth management fees		907		930			936		955		988		3,728		3,814
Customer service fees		880		844			860		794		827		3,378		3,217
Gain on sale of mtg. loans & OMSR		550		876			1,196		1,676		3,194		4,298		17,255
Mortgage loan servicing fees, net		627		527			606		1,204		624		2,964		2,940
Gain on sale of non-mortgage loans		105		125			167		169		44		566		158
Title insurance revenue		454		476			697		602		528		2,229		2,089
Gain (loss) on sale of assets		18		(12	)		-		55		1		61		2
Other		172		277			211		347		383		1,007		1,222
Total noninterest income		3,713		4,043			4,673		5,802		6,589		18,231		30,697

Noninterest expense
Salaries and employee benefits		5,677		5,858			6,418		6,189		6,648		24,142		26,838
Net occupancy expense		763		769			719		742		846		2,993		3,048
Equipment expense		1,017		918			827		854		899		3,616		3,281
Data processing fees		627		664			643		576		721		2,510		2,579
Professional fees		738		766			760		950		872		3,214		3,027
Marketing expense		258		200			222		231		228		911		784
Telephone and communication expense		124		134			105		111		148		474		581
Postage and delivery expense		121		75			110		116		106		422		414
State, local and other taxes		277		250			277		278		288		1,082		1,175
Employee expense		157		145			175		136		163		613		663
Other expenses		510		605			546		676		648		2,337		2,418
Total noninterest expense		10,269		10,384			10,802		10,859		11,567		42,314		44,808

Income before income tax expense		4,344		4,088			3,464		3,420		4,100		15,315		22,723
Income tax expense		811		746			630		607		768		2,794		4,446

Net income	$	3,533	$	3,342		$	2,834	$	2,813	$	3,332	$	12,521	$	18,277

Common share data:
Basic earnings per common share	$	0.51	$	0.48		$	0.40	$	0.40	$	0.49	$	1.79	$	2.58
Diluted earnings per common share	$	0.50	$	0.47		$	0.40	$	0.40	$	0.49	$	1.77	$	2.56

Average shares outstanding (in thousands):
Basic:		6,945		6,968			7,075		7,035		6,906		7,005		7,083
Diluted:		7,021		7,033			7,149		7,100		6,970		7,078		7,130

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		2022			2022			2022			2022			2021			2022			2021

Net interest income	$	10,900		$	10,430		$	9,593		$	8,477		$	9,078		$	39,399		$	37,884
Tax-equivalent adjustment		41			38			33			29			39			142			149
Tax-equivalent net interest income		10,941			10,468			9,626			8,506			9,117			39,541			38,033
Provision for loan loss		-			-			-			-			-			-			1,050
Noninterest income		3,713			4,043			4,673			5,802			6,589			18,231			30,697
Total operating revenue		14,613			14,473			14,266			14,279			15,667			57,630			68,581
Noninterest expense		10,269			10,384			10,802			10,859			11,567			42,314			44,808
Pre-tax pre-provision income		4,344			4,088			3,464			3,420			4,100			15,315			23,773
Pretax income		4,344			4,088			3,464			3,420			4,100			15,315			22,723
Net income		3,533			3,342			2,834			2,813			3,332			12,521			18,277

PER SHARE INFORMATION:
Basic earnings per share (EPS)		0.51			0.48			0.40			0.40			0.49			1.79			2.58
Diluted earnings per share		0.50			0.47			0.40			0.40			0.49			1.77			2.56
Common dividends		0.125			0.120			0.120			0.115			0.115			0.480			0.440
Book value per common share		17.08			16.49			17.75			18.65			21.05			17.08			21.05
Tangible book value per common share (TBV)		13.65			13.07			14.36			15.31			17.60			13.65			17.60
Market price per common share		16.95			16.85			17.26			19.91			18.69			16.95			18.69
Market price to TBV		124.2	%		128.9	%		120.2	%		130.1	%		106.2	%		124.2	%		106.2	%
Market price to trailing 12 month EPS		9.6			9.6			9.3			10.0			7.7			9.6			7.7

PERFORMANCE RATIOS:
Return on average assets (ROAA)		1.08	%		1.03	%		0.87	%		0.83	%		0.99	%		0.95	%		1.38	%
Pre-tax pre-provision ROAA		1.32	%		1.26	%		1.06	%		1.01	%		1.22	%		1.25	%		1.91	%
Return on average equity		12.17	%		10.89	%		8.89	%		8.08	%		9.21	%		9.86	%		12.67	%
Return on average tangible equity		15.30	%		13.51	%		10.93	%		9.75	%		10.92	%		12.14	%		15.04	%
Efficiency ratio		70.16	%		71.63	%		75.60	%		75.93	%		73.72	%		73.31	%		65.23	%
Earning asset yield		4.27	%		3.89	%		3.45	%		2.96	%		3.17	%		3.63	%		3.37	%
Cost of interest bearing liabilities		0.90	%		0.58	%		0.39	%		0.39	%		0.40	%		0.56	%		0.45	%
Net interest margin		3.60	%		3.45	%		3.15	%		2.67	%		2.87	%		3.21	%		3.05	%
Tax equivalent effect		0.01	%		0.01	%		0.01	%		0.01	%		0.02	%		0.01	%		0.01	%
Net interest margin, tax equivalent		3.61	%		3.46	%		3.16	%		2.68	%		2.89	%		3.22	%		3.06	%
Non interest income/Average assets		1.13	%		1.24	%		1.43	%		1.72	%		1.96	%		1.38	%		2.32	%
Non interest expense/Average assets		3.13	%		3.19	%		3.31	%		3.22	%		3.45	%		3.21	%		3.39	%
Net noninterest expense/Average assets		-2.00	%		-1.95	%		-1.88	%		-1.50	%		-1.48	%		-1.83	%		-1.07	%

ASSET QUALITY RATIOS:
Gross charge-offs		7			9			9			9			34			34			136
Recoveries		1			32			6			8			27			47			317
Net charge-offs		6			(23	)		3			1			7			(13	)		(181	)
Nonaccruing loans/Total loans		0.38	%		0.40	%		0.45	%		0.50	%		0.44	%		0.38	%		0.44	%
Nonperforming loans/Total loans		0.45	%		0.48	%		0.52	%		0.59	%		0.53	%		0.45	%		0.53	%
Nonperforming assets/Loans & OREO		0.53	%		0.56	%		0.60	%		0.66	%		0.79	%		0.53	%		0.79	%
Nonperforming assets/Total assets		0.38	%		0.40	%		0.42	%		0.42	%		0.49	%		0.38	%		0.49	%
Allowance for loan loss/Nonperforming loans		318.68	%		313.26	%		294.83	%		273.08	%		315.40	%		318.68	%		315.40	%
Allowance for loan loss/Total loans		1.44	%		1.49	%		1.54	%		1.62	%		1.68	%		1.44	%		1.68	%
Net loan charge-offs/Average loans (ann.)		0.00	%		(0.01	%)		0.00	%		0.00	%		0.00	%		(0.00	%)		(0.02	%)

CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		88.53	%		85.21	%		83.56	%		74.75	%		73.92	%		88.53	%		73.92	%
Equity/ Assets		8.87	%		8.79	%		9.63	%		9.93	%		10.89	%		8.87	%		10.89	%
Tangible equity/Tangible assets		7.22	%		7.10	%		7.93	%		8.30	%		9.27	%		7.22	%		9.27	%
Common equity tier 1 ratio (Bank)		13.42	%		13.23	%		13.21	%		13.71	%		13.94	%		13.63	%		13.94	%

END OF PERIOD BALANCES
Total assets		1,335,633			1,303,377			1,293,972			1,335,130			1,330,854			1,335,633			1,330,854
Total loans		962,075			925,249			895,611			850,671			822,714			962,075			822,714
Deposits		1,086,665			1,085,893			1,071,779			1,138,071			1,113,045			1,086,665			1,113,045
Stockholders equity		118,428			114,628			124,556			132,637			144,929			118,428			144,929
Goodwill and intangibles		23,753			23,770			23,787			23,804			23,774			23,753			23,774
Tangible equity		94,675			90,858			100,769			108,833			121,155			94,675			121,155
Mortgage servicing portfolio		1,352,016			1,362,666			1,369,732			1,375,554			1,362,962			1,352,016			1,362,962
Wealth/Brokerage assets under care		507,093			480,947			500,487			560,698			618,279			507,093			618,279
Total assets under care		3,194,742			3,146,990			3,164,191			3,271,382			3,312,095			3,194,742			3,312,095
Full-time equivalent employees		268			271			267			256			269			268			269
Period end common shares outstanding		6,935			6,950			7,017			7,111			6,884			6,935			6,884
Market capitalization (all)		117,556			117,113			121,105			141,575			128,668			117,556			128,668

AVERAGE BALANCES
Total assets		1,314,419			1,302,297			1,305,815			1,350,982			1,342,202			1,318,781			1,322,253
Total earning assets		1,211,674			1,209,958			1,216,124			1,270,218			1,263,431			1,226,771			1,243,093
Total loans		937,898			909,909			870,439			832,825			845,078			888,116			854,521
Deposits		1,094,491			1,085,821			1,108,890			1,134,234			1,123,843			1,105,571			1,106,122
Stockholders equity		116,114			122,738			127,519			139,214			144,749			126,963			144,223
Goodwill and intangibles		23,761			23,778			23,796			23,801			22,701			23,783			22,718
Tangible equity		92,353			98,960			103,723			115,413			122,048			103,180			121,505
Average basic shares outstanding		6,945			6,968			7,075			7,035			6,906			7,005			7,083
Average diluted shares outstanding		7,021			7,033			7,149			7,100			6,970			7,078			7,130

SB FINANCIAL GROUP, INC.
Rate Volume Analysis - (Unaudited)
For the Three and Twelve Months Ended Dec. 31, 2022 and 2021

($ in thousands)	Three Months Ended Dec. 31, 2022							Three Months Ended Dec. 31, 2021
	Average					Average		Average					Average
Assets	Balance			Interest		Rate		Balance			Interest		Rate
Taxable securities/cash	$	265,711		$	1,559	2.35	%	$	410,489		$	969	0.94	%
Nontaxable securities		8,065			47	2.33	%		7,864			86	4.37	%
Loans, net		937,898			11,331	4.83	%		845,078			8,948	4.24	%
Total earning assets		1,211,674			12,937	4.27	%		1,263,431			10,003	3.17	%
Cash and due from banks		7,052							6,489
Allowance for loan losses		(13,820	)						(13,795	)
Premises and equipment		23,757							25,505
Other assets		85,756							60,572
Total assets	$	1,314,419						$	1,342,202

Liabilities
Savings, MMDA and interest bearing demand	$	646,498		$	965	0.60	%	$	704,534		$	400	0.23	%
Time deposits		180,678			475	1.05	%		157,888			240	0.61	%
Repurchase agreements & other		18,058			7	0.16	%		18,910			7	0.15	%
Advances from Federal Home Loan Bank		29,078			258	3.55	%		5,500			41	2.98	%
Trust preferred securities		10,310			138	5.35	%		10,310			49	1.90	%
Subordinated debt		19,588			194	3.96	%		19,539			188	3.85	%
Total interest bearing liabilities		904,210			2,037	0.90	%		916,681			925	0.40	%
Non interest bearing demand		267,315			-				261,421			-
Total funding		1,171,525				0.70	%		1,178,102				0.31	%
Other liabilities		26,780							19,351
Total liabilities		1,198,305							1,197,453
Equity		116,114							144,749

Total liabilities and equity	$	1,314,419						$	1,342,202

Net interest income				$	10,900						$	9,078

Net interest income as a percent of average interest-earning assets - GAAP measure						3.60	%						2.87	%

Net interest income as a percent of average interest-earning assets - non GAAP						3.61	%						2.89	%
- Computed on a fully tax equivalent (FTE) basis

	Twelve Months Ended Dec. 31, 2022							Twelve Months Ended Dec. 31, 2021
	Average					Average		Average					Average
Assets	Balance			Interest		Rate		Balance			Interest		Rate
Taxable securities/cash	$	330,549		$	5,798	1.75	%	$	380,770		$	3,386	0.89	%
Nontaxable securities		8,106			198	2.44	%		7,802			353	4.52	%
Loans, net		888,116			38,573	4.34	%		854,521			38,165	4.47	%
Total earning assets		1,226,771			44,569	3.63	%		1,243,093			41,904	3.37	%
Cash and due from banks		7,296							7,290
Allowance for loan losses		(13,808	)						(13,422	)
Premises and equipment		24,137							24,710
Other assets		74,385							60,582
Total assets	$	1,318,781						$	1,322,253

Liabilities
Savings, MMDA and interest bearing demand	$	693,271		$	2,258	0.33	%	$	672,296		$	1,813	0.27	%
Time deposits		159,401			1,219	0.76	%		177,918			1,316	0.74	%
Repurchase agreements & Other		20,481			39	0.19	%		22,821			42	0.18	%
Advances from Federal Home Loan Bank		16,420			515	3.14	%		6,507			188	2.89	%
Trust preferred securities		10,310			361	3.50	%		10,310			199	1.93	%
Subordinated debt		19,570			778	3.98	%		12,057			462	3.83	%
Total interest bearing liabilities		919,453			5,170	0.56	%		901,909			4,020	0.45	%
Non interest bearing demand		252,899				0.44	%		255,908				0.35	%
Total funding		1,172,352							1,157,817
Other liabilities		19,466							20,213
Total liabilities		1,191,818							1,178,030
Equity		126,963							144,223

Total liabilities and equity	$	1,318,781						$	1,322,253

Net interest income				$	39,399						$	37,884

Net interest income as a percent of average interest-earning assets - GAAP measure						3.21	%						3.05	%

Net interest income as a percent of average interest-earning assets - non GAAP						3.22	%						3.06	%
- 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, 2022			Dec. 31, 2021			Dec. 31, 2022			Dec. 31, 2021

Total Operating Revenue	$	14,613		$	15,667		$	57,630		$	68,581
Adjustment to (deduct)/add OMSR recapture/impairment *		(86	)		(581	)		(1,279	)		(3,436	)

Adjusted Total Operating Revenue		14,527			15,086			56,351			65,145


Income before Income Taxes		4,344			4,100			15,315			22,723
Adjustment for OMSR *		(86	)		(581	)		(1,279	)		(3,436	)

Adjusted Income before Income Taxes		4,258			3,519			14,036			19,287

Provision for Income Taxes		811			768			2,794			4,446
Adjustment for OMSR **		(18	)		(122	)		(269	)		(722	)

Adjusted Provision for Income Taxes		793			646			2,525			3,725

Net Income		3,533			3,332			12,521			18,277
Adjustment for OMSR *		(68	)		(459	)		(1,010	)		(2,714	)

Adjusted Net Income		3,465			2,873			11,511			15,563

Diluted Earnings per Share		0.50			0.49			1.77			2.56
Adjustment for OMSR *		(0.01	)		(0.07	)		(0.14	)		(0.38	)

Adjusted Diluted Earnings per Share	$	0.49		$	0.42		$	1.63		$	2.18

Return on Average Assets		1.08	%		0.99	%		0.95	%		1.38	%
Adjustment for OMSR *		-0.02	%		-0.14	%		-0.08	%		-0.21	%

Adjusted Return on Average Assets		1.05	%		0.86	%		0.87	%		1.18	%

*valuation adjustment to the Company's mortgage servicing rights

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

SB Financial Group Announces Fourth Quarter 2022 Results

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