SBFG SB Finanical Group Inc

SB Financial Group, Inc. (NASDAQ: SBFG) (“SB Financial” or the “Company”), a diversified financial services company providing full-service community banking, mortgage banking, wealth management, private client and title insurance services today reported earnings for the second quarter ended June 30, 2024.

Second Quarter 2024 Highlights compared to the second quarter of the prior year:

• Net income of $3.1 million, up 1.2 percent and in line with the same quarter last year. Diluted Earnings Per Share (“EPS”) increased to $0.47 or 6.8% from $0.44;
• Net interest income totaled $9.7 million, a 1.7 percent decrease from the $9.8 million;
• Loan growth increased to $1.01 billion, up by $20.6 million or 2.1 percent from the $984.8 million;
• Return on Average Assets (“ROAA”) increased to 0.93%, up 2 basis points from the previous year, while Return on Average Equity (“ROAE”) declined slightly to 10.16%, down 16 basis points from 10.32%.

Six Months Ended June 30, 2024 Highlights compared to the same period of the prior year:

• Mortgage Banking Revenue increased to $3.4 million, up by 22.8 percent from $2.8 million.

Trailing Twelve Months Ended June 30, 2024 Highlights compared to the prior year:

• EPS was $1.78 for the twelve months ended June 2024, an increase of 1.1 percent from the prior twelve months of $1.76.
• Total deposits were $1.12 billion at the end of June 2024, representing an increase of 4.1 percent from $1.07 billion at the end of June 2023.
• Mortgage origination volume was $218.8 million for the trailing twelve months, with the servicing portfolio of $1.39 billion, which increased by 2.7 percent. 

Earnings Highlights	Three Months Ended									Six Months Ended
($ in thousands, except per share & ratios)	Jun. 2024			Jun. 2023			% Change			Jun. 2024			Jun. 2023			% Change
Operating revenue	$	14,045		$	14,190		-1.0	%		$	27,176		$	28,180		-3.6	%
Interest income		15,654			14,406		8.7	%			30,954			28,230		9.6	%
Interest expense		5,995			4,577		31.0	%			12,115			8,077		50.0	%
Net interest income		9,659			9,829		-1.7	%			18,839			20,153		-6.5	%
Provision for credit losses		-			145		-100.0	%			-			395		0.0	%
Noninterest income		4,386			4,361		0.6	%			8,337			8,027		3.9	%
Noninterest expense		10,671			10,339		3.2	%			20,953			21,112		-0.8	%
Net income		3,113			3,075		1.2	%			5,481			5,525		-0.8	%
Earnings per diluted share		0.47			0.44		6.8	%			0.82			0.79		3.8	%
Return on average assets		0.93	%		0.91	%	2.2	%			0.82	%		0.82	%	0.0	%
Return on average equity		10.16	%		10.32	%	-1.6	%			9.02	%		9.01	%	0.1	%

"We demonstrated solid execution and financial stability in the quarter ended June 30, 2024," stated Mark A. Klein, Chairman, President, and CEO. "We maintained a net income of $3.1 million, a testament to our operational resilience and our relentless focus on profitability. Notably, our diluted earnings per share increased by 6.8% to $0.47, reflecting our unwavering commitment to delivering shareholder value amidst economic uncertainties."

"Our loan portfolio expanded to $1.01 billion, an increase of $20.6 million, showcasing our disciplined growth strategy and the strong confidence our clients place in our partnership. Despite ongoing market challenges, our deposit base grew by $44.0 million or 4.1% year-over-year to $1.12 billion, underscoring our margin oversight and the sustained trust of our customers. We continue to maintain a conservative risk profile, with peer leading asset quality and no loan charge-offs," added Mr. Klein.

RESULTS OF OPERATIONS

Consolidated Revenue

In the second quarter of 2024, SB Financial Group demonstrated operational resilience with a slight year-over-year decline in operating revenue of only 1.0%, coupled with an increase of 7.0% from the preceding quarter. Despite a 1.7% decrease in net interest income—largely attributable to elevated deposit costs—our financial management mitigated the impact, resulting in a nominal 5 basis point reduction in our net interest margin when compared to the second quarter of 2023.

Noninterest income recorded a 0.6% increase over the same quarter last year, fueled by a substantial 20.9% surge in gains from the sale of mortgages and OMSR, alongside a 14.4% increase in mortgage loan servicing fees. Consistent customer service fees further improved our solid revenue base. However, we noted variances in performance across other noninterest income areas, such as wealth management and title insurance services, which saw declines. For the first time in over 2 years, interest expenses decreased on a linked quarter basis, highlighting the stabilization of funding costs.

Mortgage Loan Business

In the second quarter of 2024, SB Financial Group’s mortgage loan business recorded a 14.9% increase in loan originations, reaching $75.1 million from $65.4 million in the corresponding period last year. This notable growth underscores some strengthening in the housing market and hopefully signals broader positive economic trends.

Mortgage sales demonstrated significant expansion this quarter, reaching $55.8 million, or 74% of total originations. This higher level of sales volume, marked a 16.5% year-over-year increase from $47.9 million, underscores our successful market penetration and strategic positioning, particularly in a competitive lending environment. Our mortgage banking net revenue saw an increase to $1.8 million, up 18.8% from the previous year, reflecting our strong operational efficiency. Additionally, the mortgage servicing portfolio expanded by 2.7%, reaching $1.39 billion, which reinforces our dedication to sustainable growth and enhanced servicing capabilities.

Mr. Klein, Chairman, President, and CEO of SB Financial Group, stated, “This quarter has showcased improved efficiency in our mortgage operations. Although our results slightly missed our internal targets, the shortfall primarily reflects the heightened competitiveness and shifting dynamics within the mortgage market. Despite these challenges, our proactive measures, most notably the expansion of our origination teams, have positioned us to capitalize on market opportunities and maintain our growth momentum.” 

Mortgage Banking
($ in thousands)	Jun. 2024			Mar. 2024			Dec. 2023			Sep. 2023			Jun. 2023				Prior Year Growth
Mortgage originations	$	75,110		$	42,912		$	39,566		$	61,200		$	65,387			$	9,723
Mortgage sales		55,835			36,623			33,362			54,085			47,933				7,902
Mortgage servicing portfolio		1,389,805			1,371,713			1,366,667			1,367,209			1,353,904				35,901
Mortgage servicing rights		14,548			14,191			13,906			13,893			13,723				825
Revenue
Loan servicing fees		862			855			855			850			844				18
OMSR amortization		(335	)		(273	)		(282	)		(334	)		(334	)			(1	)
Net administrative fees		527			582			573			516			510				17
OMSR valuation adjustment		38			181			(12	)		(78	)		(16	)			54
Net loan servicing fees		565			763			561			438			494				71
Gain on sale of mortgages		1,277			781			747			1,207			1,056				221
Mortgage banking revenue, net	$	1,842		$	1,544		$	1,308		$	1,645		$	1,550			$	292

Noninterest Income and Noninterest Expense

For the second quarter of 2024, noninterest income at SB Financial Group increased slightly to $4.4 million compared to the prior year quarter, marking a modest increase of 0.6%. This growth is primarily attributable to strategic initiatives, including enhanced gain-on-sale yields from mortgage loans and higher recapture of servicing rights, which significantly contributed to our financial performance. Additionally, customer service fees rose marginally, reinforcing our attention in this area. Noninterest expenses for the second quarter were reported at $10.7 million, reflecting a 3.2% increase from the previous year's $10.3 million, as higher commission costs from mortgage volume drove compensation higher. 

Noninterest Income/Noninterest Expense
($ in thousands, except ratios)	Jun. 2024			Mar. 2024			Dec. 2023			Sep. 2023			Jun. 2023				Prior Year Growth
Noninterest Income (NII)	$	4,386		$	3,951		$	5,531		$	4,163		$	4,361			$	25
NII / Total Revenue		31.5	%		30.1	%		36.6	%		30.4	%		30.7	%			0.8	%
NII / Average Assets		1.3	%		1.2	%		1.7	%		1.2	%		1.3	%			0.0	%
Total Revenue Growth		-0.6	%		-6.1	%		3.4	%		-5.3	%		-0.5	%			-0.6	%
Noninterest Expense (NIE)	$	10,671		$	10,282		$	10,369		$	10,481		$	10,339			$	332
Efficiency Ratio		75.9	%		78.2	%		68.4	%		79.0	%		72.7	%			3.2	%
NIE / Average Assets		3.2	%		3.1	%		3.1	%		3.1	%		3.1	%			0.1	%
Net Noninterest Expense/Avg. Assets		-1.9	%		-1.9	%		-1.4	%		-1.9	%		-1.8	%			-0.1	%
Total Expense Growth		3.2	%		-4.6	%		1.0	%		0.9	%		-4.3	%			3.2	%

Mr. Klein commented on the financial performance, stating, “Our noninterest income has shown consistent resilience, supported by significant gains from mortgage and mortgage servicing fees, reflecting our agility and expertise in capitalizing on favorable market conditions. Regarding expenses, the increase this quarter is driven by revenue generation activities. Our focus remains on optimizing our cost structure and ensuring operational efficiency, which is paramount in delivering sustained value to our stakeholders.”

Balance Sheet

As of June 30, 2024, SB Financial Group has continued to demonstrate financial stability, with total assets reporting a marginal increase to $1.34 billion, up by 0.06% year-over-year. Our loan portfolio again crossed the $1 billion threshold and now stands at $1.01 billion, marking an increase of $20.6 million or 2.1% compared to the previous year. This growth is indicative of our effective lending practices in a dynamic economic landscape. Furthermore, an increase in cash and cash equivalents has provided enhanced liquidity, further strengthening our financial position.

Shareholders’ equity experienced a slight quarterly expansion of 1.4% to $125.5 million compared to the linked quarter and also showed positive growth of 6.6% on a year-over-year basis. This growth underscores our consistent efforts to enhance shareholder value amidst fluctuating market conditions.

"In 2024, we have maintained a disciplined and proactive approach to our growth and capital management, aligning closely with our objectives. Our ability to sustain and grow our loan portfolio, even in a highly competitive market, demonstrates the resilience of our business model and the effectiveness of our relationship-driven lending practices. Moreover, the year-over-year increase in shareholders' equity highlights our continued commitment to driving shareholder value. We remain poised to leverage any opportunities that will fortify our financial position and ensure long-term prosperity for our stakeholders," commented Mr. Klein. 

Loan Balances
($ in thousands, except ratios)	Jun. 2024			Mar. 2024			Dec. 2023			Sep. 2023			Jun. 2023			Annual Growth
Commercial	$	123,287		$	120,016		$	126,716		$	120,325		$	123,226		$	61
% of Total		12.3	%		12.1	%		12.7	%		12.2	%		12.5	%		0.0	%
Commercial RE		434,967			429,362			424,041			421,736			417,412			17,555
% of Total		43.3	%		43.3	%		42.4	%		42.6	%		42.4	%		4.2	%
Agriculture		64,329			62,365			65,659			60,928			58,222			6,107
% of Total		6.4	%		6.3	%		6.6	%		6.2	%		5.9	%		10.5	%
Residential RE		316,233			314,668			318,123			320,306			321,365			(5,132	)
% of Total		31.5	%		31.7	%		31.8	%		32.4	%		32.6	%		-1.6	%
Consumer & Other		66,574			65,141			65,673			65,726			64,599			1,975
% of Total		6.6	%		6.6	%		6.6	%		6.6	%		6.6	%		3.1	%
Total Loans	$	1,005,390		$	991,552		$	1,000,212		$	989,021		$	984,824		$	20,566
Total Growth Percentage																	2.1	%
Deposit Balances
($ in thousands, except ratios)	Jun. 2024			Mar. 2024			Dec. 2023			Sep. 2023			Jun. 2023			Annual Growth
Non-Int DDA	$	208,244		$	219,395		$	228,713		$	224,182		$	218,411		$	(10,167	)
% of Total		18.7	%		19.7	%		21.4	%		20.7	%		20.4	%		-4.7	%
Interest DDA		190,857			169,171			166,413			174,729			170,282			20,575
% of Total		17.1	%		15.2	%		15.5	%		16.1	%		15.9	%		12.1	%
Savings		231,855			244,157			216,965			226,077			225,065			6,790
% of Total		20.8	%		21.9	%		20.3	%		20.8	%		21.0	%		3.0	%
Money Market		225,650			221,362			202,605			216,565			217,681			7,969
% of Total		20.2	%		19.9	%		18.9	%		20.0	%		20.3	%		3.7	%
Time Deposits		258,582			258,257			255,509			243,766			239,717			18,865
% of Total		23.2	%		23.2	%		23.9	%		22.5	%		22.4	%		7.9	%
Total Deposits	$	1,115,188		$	1,112,342		$	1,070,205		$	1,085,319		$	1,071,156		$	44,032
Total Growth Percentage																	4.1	%

Asset Quality

SB Financial Group's dedication to maintaining exceptional asset quality remains evident through the second quarter of 2024. As of June 2024, nonperforming loans constituted 0.47% of total loans, reflecting an increase from 0.25% in the previous quarter. Despite the slight increase in nonperforming loans to total loans, our criticized loan categories are down nearly 23% compared to the prior year and our reserve coverage remains above 325%.

Moreover, the net loan charge-offs to average loans ratio, annualized at -0.01%, highlights our effective management of loan repayments and the high quality of our credit portfolio. These metrics reinforce our reputation for rigorous risk management and credit excellence.

Mark A. Klein, Chairman, President, and CEO of SB Financial, commented, “Our second-quarter performance underscores our unwavering commitment to asset quality. Despite a slight increase in nonperforming loans, our substantial allowance for credit losses and effective loan management practices reflects our measured approach to risk management. We are steadfast in ensuring the strength and stability of our loan portfolio, even in the face of economic fluctuations.” 

Nonperforming Assets																Annual Change
($ in thousands, except ratios)	Jun. 2024			Mar. 2024			Dec. 2023			Sep. 2023			Jun. 2023
Commercial & Agriculture	$	2,781		$	897		$	748		$	717		$	170		$	2,611
% of Total Com./Ag. loans		1.48	%		0.49	%		0.39	%		0.40	%		0.09	%		1535.9	%
Commercial RE		475			49			168			222			192			283
% of Total CRE loans		0.11	%		0.01	%		0.04	%		0.05	%		0.05	%		147.4	%
Residential RE		1,247			1,295			1,690			2,182			2,266			(1,019	)
% of Total Res. RE loans		0.39	%		0.41	%		0.53	%		0.68	%		0.71	%		-45.0	%
Consumer & Other		231			193			212			208			282			(51	)
% of Total Con./Oth. loans		0.35	%		0.30	%		0.32	%		0.32	%		0.44	%		-18.1	%
Total Nonaccruing Loans		4,734			2,434			2,818			3,329			2,910			1,824
% of Total loans		0.47	%		0.25	%		0.28	%		0.34	%		0.30	%		62.7	%
Foreclosed Assets and Other Assets		510			510			511			629			625			(115	)
Total Change (%)																	-18.4	%
Total Nonperforming Assets	$	5,244		$	2,944		$	3,329		$	3,958		$	3,535		$	1,709
% of Total assets		0.39	%		0.22	%		0.25	%		0.30	%		0.26	%		48.35	%

Webcast and Conference Call

The Company will hold the second quarter 2024 earnings conference call and webcast on July 19, 2024, 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”.

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 valuation adjustment from net income to report a non-GAAP 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. KleinChairman, President and Chief Executive OfficerMark.Klein@YourStateBank.com

Anthony V. CosentinoExecutive Vice President and Chief Financial OfficerTony.Cosentino@YourStateBank.com

SB FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS - (Unaudited)
		June				March				December				September				June
($ in thousands)		2024				2024				2023				2023				2023
ASSETS
Cash and due from banks		$	21,983			$	26,602			$	22,965			$	19,049			$	20,993
Interest bearing time deposits			2,417				2,417				1,535				1,180				1,180
Available-for-sale securities			208,156				213,239				219,708				212,768				227,996
Loans held for sale			7,864				4,730				2,525				3,206				5,684
Loans, net of unearned income			1,005,390				991,552				1,000,212				989,021				984,824
Allowance for credit losses			(15,612	)			(15,643	)			(15,786	)			(15,790	)			(15,795	)
Premises and equipment, net			20,860				20,985				21,378				21,934				22,230
Federal Reserve and FHLB Stock, at cost			5,204				6,512				7,279				6,261				7,634
Foreclosed assets and other assets			510				510				511				629				625
Interest receivable			4,821				3,706				4,657				6,673				4,079
Goodwill			23,239				23,239				23,239				23,239				23,239
Cash value of life insurance			30,294				30,103				29,121				29,291				29,183
Mortgage servicing rights			14,548				14,191				13,906				13,893				13,723
Other assets			12,512				13,869				11,999				15,120				15,840
Total assets		$	1,342,186			$	1,336,012			$	1,343,249			$	1,326,474			$	1,341,435
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non interest bearing demand		$	208,244			$	219,395			$	228,713			$	224,182			$	218,411
Interest bearing demand			190,857				169,171				166,413				174,729				170,282
Savings			231,855				244,157				216,965				226,077				225,065
Money market			225,650				221,362				202,605				216,565				217,681
Time deposits			258,582				258,257				255,509				243,766				239,717
Total deposits			1,115,188				1,112,342				1,070,205				1,085,319				1,071,156
Short-term borrowings			15,178				12,916				13,387				16,519				21,118
Federal Home Loan Bank advances			35,000				35,000				83,600				59,500				81,300
Trust preferred securities			10,310				10,310				10,310				10,310				10,310
Subordinated debt net of issuance costs			19,666				19,654				19,642				19,630				19,618
Interest payable			2,944				2,772				2,443				2,216				1,866
Other liabilities			18,421				19,295				19,320				20,632				18,401
Total liabilities			1,216,707				1,212,289				1,218,907				1,214,126				1,223,769
Shareholders' Equity
Common stock			61,319				61,319				61,319				61,319				61,319
Additional paid-in capital			15,195				14,978				15,124				15,037				15,154
Retained earnings			112,104				109,938				108,486				105,521				103,725
Accumulated other comprehensive loss			(31,801	)			(31,547	)			(29,831	)			(39,517	)			(32,894	)
Treasury stock			(31,338	)			(30,965	)			(30,756	)			(30,012	)			(29,638	)
Total shareholders' equity			125,479				123,723				124,342				112,348				117,666
Total liabilities and shareholders' equity		$	1,342,186			$	1,336,012			$	1,343,249			$	1,326,474			$	1,341,435

SB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
($ in thousands, except per share & ratios)		At and for the Three Months Ended																	Six Months Ended
		June			March			December				September				June			June			June
Interest income		2024			2024			2023				2023				2023			2024			2023
Loans
Taxable		$	13,883		$	13,547		$	13,438			$	13,128			$	12,715		$	27,430		$	24,841
Tax exempt			124			123			124				122				121			247			237
Securities
Taxable			1,610			1,593			1,526				1,507				1,524			3,203			3,059
Tax exempt			37			37			38				39				46			74			93
Total interest income			15,654			15,300			15,126				14,796				14,406			30,954			28,230
Interest expense
Deposits			5,208			5,090			4,398				4,194				3,538			10,298			6,116
Repurchase agreements & other			36			34			39				16				9			70			19
Federal Home Loan Bank advances			370			613			720				666				664			983			1,217
Trust preferred securities			187			188			191				189				172			375			336
Subordinated debt			194			195			194				195				194			389			389
Total interest expense			5,995			6,120			5,542				5,260				4,577			12,115			8,077
Net interest income			9,659			9,180			9,584				9,536				9,829			18,839			20,153
Provision for credit losses			-			-			(74	)			(6	)			145			-			395
Net interest income after provision
for loan losses			9,659			9,180			9,658				9,542				9,684			18,839			19,758
Noninterest income
Wealth management fees			848			865			838				837				940			1,713			1,857
Customer service fees			875			880			844				863				871			1,755			1,696
Gain on sale of mtg. loans & OMSR			1,277			781			747				1,207				1,056			2,058			1,655
Mortgage loan servicing fees, net			565			763			561				438				494			1,328			1,102
Gain on sale of non-mortgage loans			105			10			177				10				218			115			242
Title insurance revenue			406			266			378				429				455			672			828
Net gain on sales of securities			-			-			1,453				-				-			-			-
Gain (loss) on sale of assets			-			-			16				-				15			-			4
Other			310			386			517				379				312			696			643
Total interest income			4,386			3,951			5,531				4,163				4,361			8,337			8,027
Noninterest expense
Salaries and employee benefits			6,009			5,352			5,652				5,491				5,721			11,361			11,634
Net occupancy expense			707			769			746				764				802			1,476			1,586
Equipment expense			1,060			1,077			1,027				1,068				1,002			2,137			1,983
Data processing fees			727			769			680				648				685			1,496			1,331
Professional fees			615			758			926				623				612			1,373			1,475
Marketing expense			176			197			182				189				213			373			411
Telephone and communication expense			156			105			132				124				124			261			245
Postage and delivery expense			89			97			167				100				78			186			165
State, local and other taxes			230			245			285				218				218			475			446
Employee expense			159			178			146				141				156			337			344
Other expenses			743			735			426				1,115				728			1,478			1,492
Total interest expense			10,671			10,282			10,369				10,481				10,339			20,953			21,112
Income before income tax expense			3,374			2,849			4,820				3,224				3,706			6,223			6,673
Income tax expense			261			481			937				537				631			742			1,148
		$	3,113		$	2,368		$	3,883			$	2,687			$	3,075		$	5,481		$	5,525
Common share data:
Basic earnings per common share		$	0.47		$	0.35		$	0.58			$	0.40			$	0.45		$	0.82		$	0.80
Diluted earnings per common share		$	0.47		$	0.35		$	0.57			$	0.39			$	0.44		$	0.82		$	0.79
Average shares outstanding (in thousands):
Basic:			6,692			6,715			6,748				6,791				6,847			6,703			6,890
Diluted:			6,700			6,723			6,851				6,878				6,910			6,715			6,976

SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
($ in thousands, except per share & ratios)		At and for the Three Months Ended																				Six Months Ended
		June				March				December				September				June				June				June
SUMMARY OF OPERATIONS		2024				2024				2023				2023				2023				2024				2023
Net interest income		$	9,659			$	9,180			$	9,584			$	9,536			$	9,829			$	18,839			$	20,153
Tax-equivalent adjustment			43				43				43				43				44				85				88
Tax-equivalent net interest income			9,702				9,223				9,627				9,579				9,873				18,924				20,241
Provision for credit loss			-				-				(74	)			(6	)			145				-				395
Noninterest income			4,386				3,951				5,531				4,163				4,361				8,337				8,027
Total operating revenue			14,045				13,131				15,115				13,699				14,190				27,176				28,180
Noninterest expense			10,671				10,282				10,369				10,481				10,339				20,953				21,112
Pre-tax pre-provision income			3,374				2,849				4,746				3,218				3,851				6,223				7,068
Net income			3,113				2,368				3,883				2,687				3,075				5,481				5,525
PER SHARE INFORMATION:
Basic earnings per share (EPS)			0.47				0.35				0.58				0.40				0.45				0.82				0.80
Diluted earnings per share			0.47				0.35				0.57				0.39				0.44				0.82				0.79
Common dividends			0.140				0.135				0.135				0.130				0.130				0.275				0.255
Book value per common share			18.80				18.46				18.50				16.59				17.30				18.80				17.30
Tangible book value per common share (TBV)			15.26				14.93				14.98				13.09				13.81				15.26				13.81
Market price per common share			14.00				13.78				15.35				13.50				12.62				14.00				12.62
Market price to TBV			91.8	%			92.3	%			102.5	%			103.1	%			91.4	%			91.8	%			91.4	%
Market price to trailing 12 month EPS			7.9				7.9				8.8				8.0				7.1				7.9				7.1
PERFORMANCE RATIOS:
Return on average assets (ROAA)			0.93	%			0.71	%			1.17	%			0.80	%			0.91	%			0.82	%			0.82	%
Pre-tax pre-provision ROAA			1.01	%			0.85	%			1.43	%			0.96	%			1.14	%			1.00	%			1.14	%
Return on average equity (ROE)			10.16	%			7.70	%			13.23	%			9.25	%			10.32	%			9.02	%			9.01	%
Return on average tangible equity			12.59	%			9.53	%			16.57	%			11.62	%			12.89	%			11.21	%			11.18	%
Efficiency ratio			75.86	%			78.17	%			68.44	%			79.00	%			72.71	%			76.98	%			74.77	%
Earning asset yield			5.02	%			4.97	%			4.89	%			4.78	%			4.61	%			4.96	%			4.54	%
Cost of interest bearing liabilities			2.47	%			2.55	%			2.33	%			2.18	%			1.90	%			2.51	%			1.69	%
Net interest margin			3.10	%			2.98	%			3.10	%			3.08	%			3.15	%			3.02	%			3.24	%
Tax equivalent effect			0.01	%			0.01	%			0.01	%			0.01	%			0.01	%			0.02	%			0.02	%
Net interest margin, tax equivalent			3.11	%			2.99	%			3.11	%			3.09	%			3.16	%			3.04	%			3.26	%
Non interest income/Average assets			1.31	%			1.19	%			1.67	%			1.24	%			1.30	%			1.25	%			1.20	%
Non interest expense/Average assets			3.18	%			3.08	%			3.12	%			3.13	%			3.07	%			3.13	%			3.15	%
Net noninterest expense/Average assets			-1.87	%			-1.90	%			-1.46	%			-1.89	%			-1.78	%			-1.89	%			-1.95	%
ASSET QUALITY RATIOS:
Gross charge-offs			-				66				5				12				32				66				101
Recoveries			16				9				1				7				10				25				18
Net charge-offs			(16	)			57				4				5				22				41				83
Nonperforming loans/Total loans			0.47	%			0.25	%			0.28	%			0.34	%			0.30	%			0.47	%			0.30	%
Nonperforming assets/Loans & OREO			0.52	%			0.30	%			0.33	%			0.40	%			0.36	%			0.52	%			0.36	%
Nonperforming assets/Total assets			0.39	%			0.22	%			0.25	%			0.30	%			0.26	%			0.39	%			0.26	%
Allowance for credit loss/Nonperforming loans			329.78	%			642.69	%			560.18	%			474.32	%			542.78	%			329.78	%			542.78	%
Allowance for credit loss/Total loans			1.55	%			1.58	%			1.58	%			1.60	%			1.60	%			1.55	%			1.60	%
Net loan charge-offs/Average loans (ann.)			(0.01	%)			0.02	%			0.00	%			0.00	%			0.01	%			0.01	%			0.02	%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits			90.15	%			89.14	%			93.46	%			91.13	%			91.94	%			90.15	%			91.94	%
Equity/ Assets			9.35	%			9.26	%			9.26	%			8.47	%			8.77	%			9.35	%			8.77	%
Tangible equity/Tangible assets			7.72	%			7.63	%			7.63	%			6.81	%			7.13	%			7.72	%			7.13	%
Common equity tier 1 ratio (Bank)			13.89	%			13.84	%			13.42	%			13.56	%			13.18	%			13.89	%			13.18	%
END OF PERIOD BALANCES
Total assets			1,342,186				1,336,012				1,343,249				1,326,474				1,341,435				1,342,186				1,341,435
Total loans			1,005,390				991,552				1,000,212				989,021				984,824				1,005,390				984,824
Deposits			1,115,188				1,112,342				1,070,205				1,085,319				1,071,156				1,115,188				1,071,156
Shareholders equity			125,479				123,723				124,342				112,348				117,666				125,479				117,666
Goodwill and intangibles			23,630				23,646				23,662				23,687				23,710				23,630				23,710
Tangible equity			101,849				100,077				100,680				88,661				93,956				101,849				93,956
Mortgage servicing portfolio			1,389,805				1,371,713				1,366,667				1,367,209				1,353,904				1,389,805				1,353,904
Wealth/Brokerage assets under care			525,713				525,517				501,829				478,236				499,255				525,713				499,255
Total assets under care			3,257,704				3,233,242				3,211,745				3,171,919				3,194,594				3,257,704				3,194,594
Full-time equivalent employees			249				245				251				252				253				249				253
Period end common shares outstanding			6,676				6,702				6,720				6,773				6,803				6,676				6,803
Market capitalization (all)			93,458				92,359				103,147				91,437				85,857				93,458				85,857
AVERAGE BALANCES
Total assets			1,342,847				1,333,236				1,327,415				1,339,870				1,346,010				1,337,244				1,341,918
Total earning assets			1,246,099				1,230,736				1,236,165				1,239,145				1,248,813				1,246,956				1,243,540
Total loans			1,005,018				993,310				992,337				989,089				988,348				999,164				979,629
Deposits			1,120,367				1,091,803				1,084,939				1,095,414				1,100,344				1,106,633				1,098,647
Shareholders equity			122,510				123,058				117,397				116,165				119,177				121,474				122,601
Goodwill and intangibles			23,638				23,654				23,675				23,698				23,721				23,646				23,732
Tangible equity			98,872				99,404				93,722				92,467				95,456				97,828				98,869
Average basic shares outstanding			6,692				6,715				6,748				6,791				6,847				6,703				6,890
Average diluted shares outstanding			6,700				6,723				6,851				6,878				6,910				6,715				6,976

SB FINANCIAL GROUP, INC.
Rate Volume Analysis - (Unaudited)
For the Three Months Ended June 30, 2024 and 2023
($ in thousands)		Three Months Ended June 30, 2024									Three Months Ended June 30, 2023
		Average					Average				Average					Average
Assets		Balance			Interest		Rate				Balance			Interest		Rate
Taxable securities/cash		$	236,320		$	1,610	2.73	%			$	252,899		$	1,524	2.41	%
Nontaxable securities			4,761			37	3.11	%				7,566			46	2.43	%
Loans, net			1,005,018			14,007	5.57	%				988,348			12,836	5.19	%
Total earning assets			1,246,099			15,654	5.02	%				1,248,813			14,406	4.61	%
Cash and due from banks			4,448									3,952
Allowance for loan losses			(15,647	)								(15,556	)
Premises and equipment			20,978									22,529
Other assets			86,969									86,272
Total assets		$	1,342,847								$	1,346,010
Liabilities
Savings, MMDA and interest bearing demand		$	637,561		$	2,776	1.74	%			$	621,999		$	1,850	1.19	%
Time deposits			257,359			2,432	3.78	%				239,532			1,688	2.82	%
Repurchase agreements & other			12,050			36	1.20	%				15,064			9	0.24	%
Advances from Federal Home Loan Bank			35,374			370	4.18	%				57,495			664	4.62	%
Trust preferred securities			10,310			187	7.26	%				10,310			172	6.67	%
Subordinated debt			19,658			194	3.95	%				19,610			194	3.96	%
Total interest bearing liabilities			972,312			5,995	2.47	%				964,010			4,577	1.90	%
Non interest bearing demand			225,447			-						238,813			-
Total funding			1,197,759				2.00	%				1,202,823				1.52	%
							44.20	%							1
Other liabilities			22,578									20,301
Total liabilities			1,220,337									1,223,124
Equity			122,510									122,886
Total liabilities and equity		$	1,342,847								$	1,346,010			-
Net interest income					$	9,659								$	9,829
Net interest income as a percent of average interest-earning assets - GAAP measure							3.10	%								3.15	%
Net interest income as a percent of average interest-earning assets - non GAAP							3.11	%								3.16	%
- Computed on a fully tax equivalent (FTE) basis
		Six Months Ended June 30, 2024									Six Months Ended June 30, 2023
		Average					Average				Average					Average
Assets		Balance			Interest		Rate				Balance			Interest		Rate
Taxable securities/cash		$	243,032		$	3,203	2.64	%			$	256,250		$	3,059	2.39	%
Nontaxable securities			4,760			74	3.11	%				7,661			93	2.43	%
Loans, net			999,164			27,677	5.54	%				979,629			25,078	5.12	%
Total earning assets			1,246,956			30,954	4.96	%				1,243,540			28,230	4.54	%
Cash and due from banks			4,479									4,019
Allowance for loan losses			(15,739	)								(15,162	)
Premises and equipment			21,130									22,692
Other assets			80,418									86,829
Total assets		$	1,337,244								$	1,341,918
Liabilities
Savings, MMDA and interest bearing demand		$	621,950		$	5,301	1.70	%			$	629,061		$	3,135	1.00	%
Time deposits			257,975			4,997	3.87	%				227,343			2,981	2.62	%
Repurchase agreements & Other			14,021			70	1.00	%				16,832			19	0.23	%
Advances from Federal Home Loan Bank			43,202			983	4.55	%				53,359			1,217	4.56	%
Trust preferred securities			10,310			375	7.27	%				10,310			336	6.52	%
Subordinated debt			19,652			389	3.96	%				19,604			389	3.97	%
Total interest bearing liabilities			967,110			12,115	2.51	%				956,509			8,077	1.69	%
Non interest bearing demand			226,708				2.03	%				242,243				1.35	%
Total funding			1,193,818									1,198,752
Other liabilities			27,863									20,565
Total liabilities			1,221,681									1,219,317
Equity			121,474									122,601
Total liabilities and equity		$	1,343,155								$	1,341,918
Net interest income					$	18,839								$	20,153
Net interest income as a percent of average interest-earning assets - GAAP measure							3.02	%								3.24	%
Net interest income as a percent of average interest-earning assets - non GAAP							3.04	%								3.26	%
- Computed on a fully tax equivalent (FTE) basis

Non-GAAP reconciliation		Three Months Ended								Six Months Ended
($ in thousands, except per share & ratios)		June 30, 2024				June 30, 2023				June 30, 2024				June 30, 2023
Total Operating Revenue		$	14,045			$	14,190			$	27,176			$	28,180
Adjustment to (deduct)/add OMSR recapture/impairment *			(38	)			16				(219	)			(39	)
Adjusted Total Operating Revenue			14,007				14,206				26,957				28,141
Income before Income Taxes			3,374				3,706				6,223				6,673
Adjustment for OMSR *			(38	)			16				(219	)			(39	)
Adjusted Income before Income Taxes			3,336				3,722				6,004				6,634
Provision for Income Taxes			261				631				742				1,148
Adjustment for OMSR **			(8	)			3				(46	)			(8	)
Adjusted Provision for Income Taxes			253				634				696				1,140
Net Income			3,113				3,075				5,481				5,525
Adjustment for OMSR *			(30	)			13				(173	)			(31	)
Adjusted Net Income			3,083				3,088				5,308				5,494
Diluted Earnings per Share			0.47				0.44				0.82				0.79
Adjustment for OMSR *			(0.01	)			0.01				(0.03	)			(0.00	)
Adjusted Diluted Earnings per Share		$	0.46			$	0.45			$	0.79			$	0.79
Return on Average Assets			0.93	%			0.91	%			0.82	%			0.82	%
Adjustment for OMSR *			-0.01	%			0.00	%			-0.01	%			-0.00	%
Adjusted Return on Average Assets			0.92	%			0.92	%			0.81	%			0.82	%
*valuation adjustment to the Company's mortgage servicing rights
**tax effect is calculated using a 21% statutory federal corporate income tax rate