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 fourth quarter and twelve months ended December 31, 2023.

Fourth Quarter 2023 Highlights Over the Fourth Quarter Prior Year Include:

• Net income of $3.9 million increased by 9.9 percent compared to the prior year with diluted Earnings Per Share (“EPS”) of $0.57 and increased 44.5 percent compared to the linked quarter.
• Interest income of $15.1 million increased by 16.9 percent from the prior year.
• Loan growth of $38.1 million, or 4.0 percent from the prior year quarter, marks the eighth consecutive quarter of expanding loans.
• Strong asset quality with nonperforming assets decreasing to 25 basis points of total assets, a marked improvement from 33 basis points in the same quarter of the previous year.   Delinquency levels for loans 30 days or more past due ended the year at 15 basis points of total loans.

Twelve Months Ended December 31, 2023 Highlights Over the Prior Year Include:

• Net income decreased slightly to $12.1 million, a 3.4 percent drop from the prior year's $12.5 million, and diluted EPS was $1.75, down 1.13 percent from $1.77. Adjusted EPS were up by $0.12 per share or 7.4 percent.
• Deposits decreased by $16.5 million, or 1.5 percent to $1.07 billion.
• Mortgage origination volume was $215.5 million for the trailing twelve months, with a servicing portfolio of $1.37 billion.

Earnings Highlights	Three Months Ended										Twelve Months Ended
($ in thousands, except per share & ratios)	Dec. 2023			Dec. 2022			% Change				Dec. 2023			Dec. 2022			% Change
Operating revenue	$	15,115		$	14,613		3.4	%			$	56,994		$	57,630		-1.1	%
Interest income		15,126			12,937		16.9	%				58,152			44,569		30.5	%
Interest expense		5,542			2,037		172.1	%				18,879			5,170		265.2	%
Net interest income		9,584			10,900		-12.1	%				39,273			39,399		-0.3	%
Provision for credit losses		(74	)		-		0.0	%				315			-		0.0	%
Noninterest income		5,531			3,713		49.0	%				17,721			18,231		-2.8	%
Noninterest expense		10,369			10,269		1.0	%				41,962			42,314		-0.8	%
Net income		3,883			3,533		9.9	%				12,095			12,521		-3.4	%
Earnings per diluted share		0.57			0.50		14.0	%				1.75			1.77		-1.1	%
Return on average assets		1.17	%		1.08	%	8.3	%				0.91	%		0.95	%	-4.2	%
Return on average equity		13.23	%		12.17	%	8.7	%				10.22	%		9.86	%	3.7	%

“We demonstrated our resilience and operational strength throughout the fourth quarter of 2023," stated Mark A. Klein, Chairman, President, and CEO. "In doing so, we achieved a 9.9 percent increase in net income over the prior year, underpinned by robust growth in our loan portfolio, which eclipsed the $1 billion mark for the first time in our history. This marks our eighth successive quarter of loan expansion, underscoring our commitment to disciplined and consistent growth in our loan portfolio. While we navigate the economic headwinds, these milestones underscore our capability to adapt and broaden our revenue base. Looking to the future, we remain dedicated to reinforcing our solid financial foundation and delivering outstanding value to our clients and shareholders.”

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, which includes both net interest income and noninterest income, showed a notable increase of 10.3 percent compared to the linked quarter and a 3.4 percent increase over the same quarter last year. Specifically, net interest income rose by 0.5 percent from the linked quarter, although it decreased by 12.1 percent from the year-ago quarter. The net interest margin saw a slight increase of 2 basis points from the linked quarter but experienced a decrease of 50 basis points when compared to the prior-year quarter. These changes in net interest income and margin primarily resulted from higher costs associated with deposits and funding.

In terms of noninterest income, we observed significant growth, increasing by 32.9 percent from the linked quarter and by 49.0 percent from the prior year quarter, largely due to our opportunistic decision to sell equity securities , resulting in a $1.5 million gain. Mortgage servicing revenue and gain on sale from residential loans were stable in the quarter compared to the prior year with SBA gains of $177 thousand. Conversely, income from wealth management and customer service fees, along with title insurance revenue, showed a decrease compared to the figures from the previous year’s corresponding quarter.

Mortgage Loan Business

Mortgage loan originations for the fourth quarter of 2023 stood at $39.6 million, a decrease of $11.7 million, or 22.8 percent, from the year-ago quarter. This decline reflects the cooling housing market, which aligns with broader economic trends. However, it's noteworthy that the total sales of originated loans reached $33.4 million, marking an increase of $9.8 million, or 41.4 percent from the prior year quarter. This increase underscores an effective sales strategy in the purchase market and indicates our commitment to emphasizing our traditional model of generation and sale.

For the full year of 2023, SB Financial reported mortgage originations totaling $215.5 million. Our originations reflected the changes in the market, with new purchase/construction lending constituting 92 percent of the business, up from 80 percent for all of 2022.

Net mortgage banking revenue for the quarter was $1.3 million, reflecting a steady performance with a marginal increase from the $1.2 million reported in the fourth quarter of 2022. Mortgage servicing operations demonstrated commendable stability, with a valuation adjustment resulting in a positive valuation adjustment of $12 thousand in the fourth quarter of 2023, a significant improvement from the $0.1 million decrease experienced in the same quarter of the prior year. The year 2023 concluded with a favorable adjustment, recapturing $0.1 million in servicing rights, in stark contrast to the previous year's $1.3 million impairment of these rights. The mortgage servicing portfolio experienced growth, closing at $1.37 billion as of December 31, 2023, an increase of $14.7 million, or 1.1 percent from the prior year.

"In a year marked by fluctuating interest rates and heightened market sensitivity, our mortgage loan business has showcased remarkable resilience," said Mr. Klein. "The increase in total sales of originated loans by over 40 percent compared to the same period last year, when originations faced significant headwinds, speaks to the agility, expertise and presence of our team. The steady net mortgage banking revenue and the growth of our servicing portfolio affirm our strategic focus and our dedication to delivering exceptional service and value to our clients."

Mortgage Banking
($ in thousands)	Dec. 2023			Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022				Prior Year Growth
Mortgage originations	$	39,566		$	61,200		$	65,387		$	49,366		$	51,219			$	(11,653	)
Mortgage sales		33,362			54,085			47,933			25,803			23,590				9,772
Mortgage servicing portfolio		1,366,667			1,367,209			1,353,904			1,344,158			1,352,016				14,651
Mortgage servicing rights		13,906			13,893			13,723			13,548			13,503				403
Mortgage servicing revenue
Loan servicing fees		855			850			844			844			851				4
OMSR amortization		(282	)		(334	)		(334	)		(292	)		(310	)			28
Net administrative fees		573			516			510			552			541				32
OMSR valuation adjustment		(12	)		(78	)		(16	)		56			86				(98	)
Net loan servicing fees		561			438			494			608			627				(66	)
Gain on sale of mortgages		747			1,207			1,056			599			550				197
Mortgage banking revenue, net	$	1,308		$	1,645		$	1,550		$	1,207		$	1,177			$	131

Noninterest Income and Noninterest Expense

Noninterest income for the quarter increased from the prior year quarter by 49.0 percent and increased by 32.9 percent from the linked quarter, reflective of the equity sale discussed earlier. Gain-on-sale yields on mortgage loans increased $0.2 million, or 35.8 percent from the prior year. Similarly, gain-on-sale yields of non-mortgage loans also saw a notable increase from both the prior year and the linked quarter, primarily driven by favorable market conditions and our focused efforts to capitalize on emerging lending opportunities.

For the fourth quarter of 2023, SB Financial reported a noninterest expense of $10.4 million, reflecting a slight increase from the prior year but a decrease from the linked quarter. The increase over the prior year was the direct result of a $0.2 million increase in professional fees and an increase of $0.1 million in data processing fees. These increases were partially offset by a $0.1 million decrease in marketing expenses and a marginal decrease of $25 thousand in salaries and employee benefits. As a result, total headcount for the Company is down over 6 percent compared to the prior year.

"Our noninterest income, always one of our strengths, was up over the same period last year and compared to the linked quarter," Mr. Klein noted. “Significant contributions came from our gain-on-sale yields, which saw a substantial increase in both mortgage and non-mortgage loans compared to the same quarter of the previous year. On the expense side, we've maintained a disciplined approach, with noninterest expenses witnessing a modest year-over-year increase due to targeted investments in professional and data processing services. These investments are critical in supporting our growth and enhancing our operational efficiency. Even with these necessary expenditures, we've managed to realize savings in marketing and personnel costs, underscoring our commitment to control costs and improve our efficiency."

Noninterest Income/Noninterest Expense
($ in thousands, except ratios)		Dec. 2023			Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022				Prior Year Growth
Noninterest Income (NII)		$	5,531		$	4,163		$	4,361		$	3,666		$	3,713			$	1,818
NII / Total Revenue			36.6	%		30.4	%		30.7	%		26.2	%		25.4	%			11.2	%
NII / Average Assets			1.7	%		1.2	%		1.3	%		1.1	%		1.1	%			0.6	%
Total Revenue Growth			3.4	%		-5.3	%		-0.5	%		-2.0	%		-6.7	%			3.4	%
Noninterest Expense (NIE)		$	10,369		$	10,481		$	10,339		$	10,773		$	10,269			$	100
Efficiency Ratio			68.4	%		76.4	%		72.7	%		76.9	%		70.2	%			-1.8	%
NIE / Average Assets			3.1	%		3.1	%		3.1	%		3.2	%		3.1	%			0.0	%
Net Noninterest Expense/Avg. Assets			-1.4	%		-1.9	%		-1.8	%		-2.1	%		-2.0	%			0.6	%
Total Expense Growth			1.0	%		0.9	%		-4.3	%		-0.8	%		-11.2	%			1.0	%

Balance Sheet

As of December 31, 2023, SB Financial reported total assets of $1.34 billion, reflecting a growth of 1.2 percent from the linked quarter and an increase of 0.5 percent from the previous year. The growth in assets is primarily attributed to the increase in the loan portfolio, which has reached $1 billion, marking a historic milestone, with a $38.1 million or 4.0 percent increase over the year. The strategic reallocation of liquidity, reflected in a decrease in cash and investments, has been instrumental in this growth, demonstrating the ability to prudently manage resources to maximize shareholder returns while maintaining a solid financial position.

Total shareholders’ equity increased to $124.3 million, up $5.9 million from the prior-year quarter. This increase is a direct reflection of our commitment to enhancing shareholder value and management’s confidence in the Company's long-term strategy. The active capital management approach, including the repurchase of 53,000 shares in the fourth quarter, as part of the ongoing buyback program, reflects SB Financial’s dedication to delivering returns to its shareholders.

"As we cap off 2023, our commitment to disciplined growth and robust asset quality has once again proven effective," said Mr. Klein. "The fourth quarter saw our loan balances grow by $38.1 million, securing a full year of continuous quarterly loan growth. Our dynamic approach to build strong lending relationships has borne fruit, despite commercial pipelines feeling the squeeze in a fairly competitive landscape. Our asset quality remains a cornerstone of our operations, with top decile coverage ratios, reinforcing the bank's financial health. Over the year, we've generated an increase in our loan portfolio, demonstrating our capacity to drive organic growth amidst fluctuating interest rates and a challenging economic environment. This growth represents our deepening relationships with our customers and our ability to meet their evolving needs. Looking forward, we remain committed to leveraging our strong asset base while we maintain our focus on strategic initiatives that enhance shareholder value and position us for continued success in the coming years."

Loan Balances
($ in thousands, except ratios)	Dec. 2023			Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022			Annual Growth
Commercial	$	126,718		$	120,325		$	123,226		$	126,066		$	128,393		$	(1,675	)
% of Total		12.7	%		12.2	%		12.5	%		12.9	%		13.3	%		-1.3	%
Commercial RE		424,041			421,736			417,412			419,024			412,809			11,232
% of Total		42.4	%		42.6	%		42.4	%		42.9	%		42.9	%		2.7	%
Agriculture		65,657			60,928			58,222			57,761			64,505			1,152
% of Total		6.6	%		6.2	%		5.9	%		5.9	%		6.7	%		1.8	%
Residential RE		318,123			320,306			321,365			309,684			291,368			26,755
% of Total		31.8	%		32.4	%		32.6	%		31.7	%		30.3	%		9.2	%
Consumer & Other		65,673			65,726			64,599			63,777			65,000			673
% of Total		6.6	%		6.6	%		6.6	%		6.5	%		6.8	%		1.0	%
Total Loans	$	1,000,212		$	989,021		$	984,824		$	976,312		$	962,075		$	38,137
Total Growth Percentage																	4.0	%
Deposit Balances
($ in thousands, except ratios)	Dec. 2023			Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022			Annual Growth
Non-Int DDA	$	228,713		$	224,182		$	218,411		$	237,175		$	256,799		$	(28,086	)
% of Total		21.4	%		20.7	%		20.4	%		21.4	%		23.6	%		-10.9	%
Interest DDA		166,413			174,729			170,282			188,497			191,719			(25,306	)
% of Total		15.5	%		16.1	%		15.9	%		17.0	%		17.6	%		-13.2	%
Savings		216,965			226,077			225,065			227,974			191,272			25,693
% of Total		20.3	%		20.8	%		21.0	%		20.5	%		17.6	%		13.4	%
Money Market		202,605			216,565			217,681			222,203			255,995			(53,390	)
% of Total		18.9	%		20.0	%		20.3	%		20.0	%		23.6	%		-20.9	%
Time Deposits		255,509			243,766			239,717			234,295			190,880			64,629
% of Total		23.9	%		22.5	%		22.4	%		21.1	%		17.6	%		33.9	%
Total Deposits	$	1,070,205		$	1,085,319		$	1,071,156		$	1,110,144		$	1,086,665		$	(16,460	)
Total Growth Percentage																	-1.5	%

Asset Quality

SB Financial has demonstrated a strong commitment to maintaining high standards of asset quality. As of December 31, 2023, SB Financial reported nonperforming assets totaling $3.3 million, a significant decrease of $1.1 million or 25.3 percent from the same quarter last year, driven primarily by a decline in Residential Real Estate. This notable reduction in nonperforming assets is a clear indicator of the effectiveness of our risk management strategies and the overall health of the loan portfolio.

Furthermore, the coverage ratio for problem loans has seen a remarkable improvement, up by 185 basis points from the previous year to 560 percent. This improvement in the coverage ratio is a direct result of proactive measures in asset quality management. It includes the expansion of the allowance for credit losses, which followed a Current Expected Credit Loss (CECL) adjustment of $1.4 million. Additionally, this improvement coincides with a concurrent reduction in problem loans, underscoring our focused efforts on maintaining a robust and healthy loan portfolio.

Nonperforming Assets																Annual Change
($ in thousands, except ratios)	Dec. 2023			Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022
Commercial & Agriculture	$	748		$	717		$	170		$	185		$	114		$	634
% of Total Com./Ag. loans		0.39	%		0.40	%		0.09	%		0.10	%		0.06	%		556.1	%
Commercial RE		168			222			192			199			210			(42	)
% of Total CRE loans		0.04	%		0.05	%		0.05	%		0.05	%		0.05	%		-20.0	%
Residential RE		1,690			2,182			2,266			2,742			3,020			(1,330	)
% of Total Res. RE loans		0.53	%		0.68	%		0.71	%		0.89	%		1.04	%		-44.0	%
Consumer & Other		212			208			282			270			338			(126	)
% of Total Con./Oth. loans		0.32	%		0.32	%		0.44	%		0.42	%		0.52	%		-37.3	%
Total Nonaccruing Loans		2,818			3,329			2,910			3,396			3,682			(864	)
% of Total loans		0.28	%		0.34	%		0.30	%		0.35	%		0.38	%		-23.5	%
Foreclosed Assets and Other Assets		511			629			625			650			777			(266	)
Total Change (%)																	-34.2	%
Total Nonperforming Assets	$	3,329		$	3,958		$	3,535		$	4,046		$	4,459		$	(1,130	)
% of Total assets		0.25	%		0.30	%		0.26	%		0.30	%		0.33	%		-25.34	%

Webcast and Conference Call

The Company will hold the fourth quarter 2023 earnings conference call and webcast on January 26, 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”.

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 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)
					December				September				June				March				December
			($ in thousands)			2023				2023				2023				2023				2022
ASSETS
	Cash and due from banks				$	22,965			$	19,049			$	20,993			$	21,625			$	27,817
	Interest bearing time deposits					1,535				1,180				1,180				1,380				2,131
	Available-for-sale securities					219,708				212,768				227,996				237,607				238,780
	Loans held for sale					2,525				3,206				5,684				5,592				2,073
	Loans, net of unearned income					1,000,212				989,021				984,824				976,312				962,075
	Allowance for credit losses					(15,786	)			(15,790	)			(15,795	)			(15,442	)			(13,818	)
	Premises and equipment, net					21,378				21,934				22,230				22,621				22,829
	Federal Reserve and FHLB Stock, at cost					7,279				6,261				7,634				6,054				6,326
	Foreclosed assets and other assets					511				629				625				650				777
	Interest receivable					4,657				4,457				4,079				3,926				4,091
	Goodwill					23,239				23,239				23,239				23,239				23,239
	Cash value of life insurance					29,121				29,291				29,183				29,024				28,870
	Mortgage servicing rights					13,906				13,893				13,723				13,548				13,503
	Other assets					11,137				17,336				15,840				15,157				16,940
			Total assets		$	1,342,387			$	1,326,474			$	1,341,435			$	1,341,293			$	1,335,633
LIABILITIES AND SHAREHOLDERS' EQUITY
	Deposits
		Non interest bearing demand			$	228,713			$	224,182			$	218,411			$	237,175			$	256,799
		Interest bearing demand				166,413				174,729				170,282				188,497				191,719
		Savings				216,965				226,077				225,065				227,974				191,272
		Money market				202,605				216,565				217,681				222,203				255,995
		Time deposits				255,509				243,766				239,717				234,295				190,880
			Total deposits			1,070,205				1,085,319				1,071,156				1,110,144				1,086,665
	Short-term borrowings					13,387				16,519				21,118				15,998				14,923
	Federal Home Loan Bank advances					83,600				59,500				81,300				44,500				60,000
	Trust preferred securities					10,310				10,310				10,310				10,310				10,310
	Subordinated debt net of issuance costs					19,642				19,630				19,618				19,606				19,594
	Interest payable					2,443				2,216				1,866				1,441				769
	Other liabilities					18,458				20,632				18,401				19,535				24,944
			Total liabilities			1,218,045				1,214,126				1,223,769				1,221,534				1,217,205
	Shareholders' Equity
		Common stock				61,319				61,319				61,319				61,319				61,319
		Additional paid-in capital				15,124				15,037				15,154				14,953				15,087
		Retained earnings				108,486				105,521				103,725				101,548				101,966
		Accumulated other comprehensive loss				(29,831	)			(39,517	)			(32,894	)			(29,671	)			(32,120	)
		Treasury stock				(30,756	)			(30,012	)			(29,638	)			(28,390	)			(27,824	)
			Total shareholders' equity			124,342				112,348				117,666				119,759				118,428
			Total liabilities and shareholders' equity		$	1,342,387			$	1,326,474			$	1,341,435			$	1,341,293			$	1,335,633

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					2023				2023			2023				2023			2022			2023			2022
	Loans
	Taxable			$	13,438			$	13,128			$	12,715		$	12,126			$	11,222		$	51,407		$	38,238
	Tax exempt				124				122				121			116				109			483			335
	Securities
	Taxable				1,526				1,507				1,524			1,535				1,559			6,092			5,798
	Tax exempt				38				39				46			47				47			170			198
		Total interest income			15,126				14,796				14,406			13,824				12,937			58,152			44,569
Interest expense
	Deposits				4,398				4,194				3,538			2,578				1,440			14,708			3,477
	Repurchase agreements & other				39				16				9			10				7			74			39
	Federal Home Loan Bank advances				720				666				664			553				258			2,603			515
	Trust preferred securities				191				189				172			164				138			716			361
	Subordinated debt				194				195				194			195				194			778			778
		Total interest expense			5,542				5,260				4,577			3,500				2,037			18,879			5,170
Net interest income					9,584				9,536				9,829			10,324				10,900			39,273			39,399
	Provision for credit losses				(74	)			(6	)			145			250				-			315			-
Net interest income after provision
for loan losses					9,658				9,542				9,684			10,074				10,900			38,958			39,399
Noninterest income
	Wealth management fees				838				837				940			917				907			3,532			3,728
	Customer service fees				844				863				871			825				880			3,403			3,378
	Gain on sale of mtg. loans & OMSR				747				1,207				1,056			599				550			3,609			4,298
	Mortgage loan servicing fees, net				561				438				494			608				627			2,101			2,964
	Gain on sale of non-mortgage loans				177				10				218			24				105			429			566
	Title insurance revenue				378				429				455			373				454			1,635			2,229
	Net gain on sales of securities				1,453				-				-			-				-			1,453			-
	Gain (loss) on sale of assets				16				-				15			(11	)			18			20			61
	Other				517				379				312			331				172			1,539			1,007
		Total noninterest income			5,531				4,163				4,361			3,666				3,713			17,721			18,231
Noninterest expense
	Salaries and employee benefits				5,652				5,491				5,721			5,913				5,677			22,777			24,142
	Net occupancy expense				746				764				802			784				763			3,096			2,993
	Equipment expense				1,027				1,068				1,002			981				1,017			4,078			3,616
	Data processing fees				680				648				685			646				627			2,659			2,510
	Professional fees				926				623				612			863				738			3,024			3,214
	Marketing expense				182				189				213			198				258			782			911
	Telephone and communication expense				132				124				124			121				124			501			474
	Postage and delivery expense				167				100				78			87				121			432			422
	State, local and other taxes				285				218				218			228				277			949			1,082
	Employee expense				146				141				156			188				157			631			613
	Other expenses				426				1,115				728			764				510			3,033			2,337
		Total noninterest expense			10,369				10,481				10,339			10,773				10,269			41,962			42,314
Income before income tax expense					4,820				3,224				3,706			2,967				4,345			14,717			15,315
	Income tax expense				937				537				631			517				812			2,622			2,794
Net income				$	3,883			$	2,687			$	3,075		$	2,450			$	3,533		$	12,095		$	12,521
Common share data:
	Basic earnings per common share			$	0.58			$	0.40			$	0.45		$	0.35			$	0.51		$	1.77		$	1.79
	Diluted earnings per common share			$	0.57			$	0.39			$	0.44		$	0.35			$	0.50		$	1.75		$	1.77
Average shares outstanding (in thousands):
	Basic:				6,748				6,791				6,847			6,933				6,945			6,829			7,005
	Diluted:				6,851				6,878				6,910			7,008				7,021			6,917			7,078

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			2023				2023				2023				2023				2022				2023				2022
Net interest income		$	9,584			$	9,536			$	9,829			$	10,324			$	10,900			$	39,273			$	39,399
Tax-equivalent adjustment			43				43				44				43				41				174				142
Tax-equivalent net interest income			9,627				9,579				9,873				10,367				10,941				39,447				39,541
Provision for credit loss			(74	)			(6	)			145				250				-				315				-
Noninterest income			5,531				4,163				4,361				3,666				3,713				17,721				18,231
Total operating revenue			15,115				13,699				14,190				13,990				14,613				56,994				57,630
Noninterest expense			10,369				10,481				10,339				10,773				10,269				41,962				42,314
Pre-tax pre-provision income			4,746				3,218				3,851				3,217				4,344				15,032				15,316
Pretax income			4,820				3,224				3,706				2,967				4,344				14,717				15,316
Net income			3,883				2,687				3,075				2,450				3,533				12,095				12,521
PER SHARE INFORMATION:
Basic earnings per share (EPS)			0.58				0.40				0.45				0.35				0.51				1.77				1.79
Diluted earnings per share			0.57				0.39				0.44				0.35				0.50				1.75				1.77
Common dividends			0.135				0.130				0.130				0.125				0.125				0.520				0.480
Book value per common share			18.50				16.59				17.30				17.37				17.08				18.50				17.08
Tangible book value per common share (TBV)			14.98				13.09				13.81				13.93				13.65				14.98				13.65
Market price per common share			15.35				13.50				12.62				14.13				16.95				15.35				16.95
Market price to TBV			102.5	%			103.1	%			91.4	%			101.4	%			124.2	%			102.5	%			124.2	%
Market price to trailing 12 month EPS			8.8				8.0				7.1				8.2				9.6				8.8				9.6
PERFORMANCE RATIOS:
Return on average assets (ROAA)			1.17	%			0.80	%			0.91	%			0.73	%			1.07	%			0.91	%			0.95	%
Pre-tax pre-provision ROAA			1.43	%			0.96	%			1.14	%			0.96	%			1.32	%			1.21	%			1.25	%
Return on average equity			13.23	%			9.25	%			10.32	%			8.22	%			12.17	%			10.22	%			9.86	%
Return on average tangible equity			16.57	%			11.62	%			12.89	%			10.26	%			15.30	%			12.78	%			12.14	%
Efficiency ratio			68.44	%			76.34	%			72.71	%			76.85	%			70.16	%			73.47	%			73.31	%
Earning asset yield			4.89	%			4.78	%			4.61	%			4.49	%			4.27	%			4.67	%			3.63	%
Cost of interest bearing liabilities			2.33	%			2.18	%			1.90	%			1.46	%			0.90	%			1.97	%			0.56	%
Net interest margin			3.10	%			3.08	%			3.15	%			3.35	%			3.60	%			3.15	%			3.21	%
Tax equivalent effect			0.01	%			0.01	%			0.01	%			0.02	%			0.01	%			0.01	%			0.01	%
Net interest margin, tax equivalent			3.11	%			3.09	%			3.16	%			3.37	%			3.61	%			3.16	%			3.22	%
Non interest income/Average assets			1.67	%			1.24	%			1.30	%			1.10	%			1.13	%			1.33	%			1.38	%
Non interest expense/Average assets			3.12	%			3.13	%			3.07	%			3.23	%			3.13	%			3.14	%			3.21	%
Net noninterest expense/Average assets			-1.46	%			-1.89	%			-1.78	%			-2.13	%			-2.00	%			-1.82	%			-1.83	%
ASSET QUALITY RATIOS:
Gross charge-offs			5				12				32				69				7				118				34
Recoveries			1				7				10				8				1				26				47
Net charge-offs			4				5				22				61				6				92				(13	)
Nonperforming loans/Total loans			0.28	%			0.34	%			0.30	%			0.35	%			0.38	%			0.28	%			0.38	%
Nonperforming assets/Loans & OREO			0.33	%			0.40	%			0.36	%			0.41	%			0.46	%			0.33	%			0.46	%
Nonperforming assets/Total assets			0.25	%			0.30	%			0.26	%			0.30	%			0.33	%			0.25	%			0.33	%
Allowance for credit loss/Nonperforming loans			560.18	%			474.32	%			542.78	%			454.71	%			375.29	%			560.18	%			375.29	%
Allowance for credit loss/Total loans			1.58	%			1.60	%			1.60	%			1.58	%			1.44	%			1.58	%			1.44	%
Net loan charge-offs/Average loans (ann.)			0.00	%			0.00	%			0.01	%			0.03	%			0.00	%			0.01	%			(0.00	%)
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits			93.46	%			91.13	%			91.94	%			87.94	%			88.53	%			93.46	%			88.53	%
Equity/ Assets			9.26	%			8.47	%			8.77	%			8.93	%			8.87	%			9.26	%			8.87	%
Tangible equity/Tangible assets			7.63	%			6.81	%			7.13	%			7.29	%			7.22	%			7.63	%			7.22	%
Common equity tier 1 ratio (Bank)			13.42	%			13.56	%			13.18	%			13.44	%			13.42	%			13.42	%			13.42	%
END OF PERIOD BALANCES
Total assets			1,342,387				1,326,474				1,341,435				1,341,293				1,335,633				1,342,387				1,335,633
Total loans			1,000,212				989,021				984,824				976,312				962,075				1,000,212				962,075
Deposits			1,070,205				1,085,319				1,071,156				1,110,144				1,086,665				1,070,205				1,086,665
Shareholders equity			124,342				112,348				117,666				119,759				118,428				124,342				118,428
Goodwill and intangibles			23,662				23,687				23,710				23,732				23,753				23,662				23,753
Tangible equity			100,680				88,661				93,956				96,027				94,675				100,680				94,675
Mortgage servicing portfolio			1,366,667				1,367,209				1,353,904				1,344,158				1,352,016				1,366,667				1,352,016
Wealth/Brokerage assets under care			501,829				478,236				499,255				518,009				507,093				501,829				507,093
Total assets under care			3,210,883				3,171,919				3,194,594				3,203,460				3,194,742				3,210,883				3,194,742
Full-time equivalent employees			251				252				253				255				268				251				268
Period end common shares outstanding			6,720				6,773				6,803				6,894				6,935				6,720				6,935
Market capitalization (all)			103,147				91,437				85,857				97,419				117,556				103,147				117,556
AVERAGE BALANCES
Total assets			1,327,415				1,339,870				1,346,010				1,335,056				1,314,419				1,334,644				1,318,781
Total earning assets			1,236,165				1,239,145				1,248,813				1,232,018				1,211,674				1,246,531				1,226,771
Total loans			992,337				989,089				988,348				970,813				937,898				985,217				888,116
Deposits			1,084,939				1,095,414				1,100,344				1,098,935				1,094,491				1,094,547				1,105,571
Shareholders equity			117,397				116,165				119,177				119,237				116,114				118,315				126,963
Goodwill and intangibles			23,675				23,698				23,721				23,743				23,761				23,709				23,783
Tangible equity			93,722				92,467				95,456				95,494				92,353				94,606				103,180
Average basic shares outstanding			6,748				6,791				6,847				6,933				6,945				6,829				7,005
Average diluted shares outstanding			6,851				6,878				6,910				7,008				7,021				6,917				7,078

SB FINANCIAL GROUP, INC.
	Rate Volume Analysis - (Unaudited)
	For the Three & Twelve Months Ended Dec. 31, 2023 and 2022
	($ in thousands)		Three Months Ended Dec. 31, 2023									Three Months Ended Dec. 31, 2022
			Average					Average				Average					Average
Assets			Balance			Interest		Rate				Balance			Interest		Rate
	Taxable securities/cash		$	237,203		$	1,526	2.57	%			$	265,711		$	1,559	2.35	%
	Nontaxable securities			6,625			38	2.29	%				8,065			47	2.33	%
	Loans, net			992,337			13,562	5.47	%				937,898			11,331	4.83	%
	Total earning assets			1,236,165			15,126	4.89	%				1,211,674			12,937	4.27	%
	Cash and due from banks			4,077									7,052
	Allowance for loan losses			(15,787	)								(13,820	)
	Premises and equipment			22,205									23,757
	Other assets			80,755									85,756
	Total assets		$	1,327,415								$	1,314,419
Liabilities
	Savings, MMDA and interest bearing demand		$	601,034		$	2,232	1.49	%			$	646,498		$	965	0.60	%
	Time deposits			247,382			2,166	3.50	%				180,678			475	1.05	%
	Repurchase agreements & other			13,359			39	1.17	%				18,058			7	0.16	%
	Advances from Federal Home Loan Bank			58,330			720	4.94	%				29,078			258	3.55	%
	Trust preferred securities			10,310			191	7.41	%				10,310			138	5.35	%
	Subordinated debt			19,634			194	3.95	%				19,588			194	3.96	%
	Total interest bearing liabilities			950,049			5,542	2.33	%				904,210			2,037	0.90	%
	Non interest bearing demand			236,523			-						267,315			-
	Total funding			1,186,572				1.87	%				1,171,525				0.70	%
	Other liabilities			23,446									26,780
	Total liabilities			1,210,018									1,198,305
	Equity			117,397									116,114
	Total liabilities and equity		$	1,327,415								$	1,314,419
	Net interest income					$	9,584								$	10,900
	Net interest income as a percent of average interest-earning assets - GAAP measure							3.10	%								3.60	%
	Net interest income as a percent of average interest-earning assets - non GAAP							3.11	%								3.61	%
	- Computed on a fully tax equivalent (FTE) basis
			Twelve Months Ended Dec. 31, 2023									Twelve Months Ended Dec. 31, 2022
			Average					Average				Average					Average
Assets			Balance			Interest		Rate				Balance			Interest		Rate
	Taxable securities/cash		$	254,133		$	6,092	2.40	%			$	330,549		$	5,798	1.75	%
	Nontaxable securities			7,181			170	2.37	%				8,106			198	2.44	%
	Loans, net			985,217			51,890	5.27	%				888,116			38,573	4.34	%
	Total earning assets			1,246,531			58,152	4.67	%				1,226,771			44,569	3.63	%
	Cash and due from banks			4,035									7,296
	Allowance for loan losses			(15,478	)								(13,808	)
	Premises and equipment			22,990									24,137
	Other assets			76,566									74,385
	Total assets		$	1,334,644								$	1,318,781
Liabilities
	Savings, MMDA and interest bearing demand		$	619,906		$	7,599	1.23	%			$	693,271		$	2,258	0.33	%
	Time deposits			236,665			7,109	3.00	%				159,401			1,219	0.76	%
	Repurchase agreements & Other			15,765			74	0.47	%				20,481			39	0.19	%
	Advances from Federal Home Loan Bank			55,044			2,603	4.73	%				16,420			515	3.14	%
	Trust preferred securities			10,310			716	6.94	%				10,310			361	3.50	%
	Subordinated debt			19,616			778	3.97	%				19,570			778	3.98	%
	Total interest bearing liabilities			957,306			18,879	1.97	%				919,453			5,169	0.56	%
	Non interest bearing demand			237,976				1.58	%				252,899				0.44	%
	Total funding			1,195,282									1,172,352
	Other liabilities			21,047									19,466
	Total liabilities			1,216,329									1,191,818
	Equity			118,315									126,963
	Total liabilities and equity		$	1,334,644								$	1,318,781
	Net interest income					$	39,273								$	39,400
	Net interest income as a percent of average interest-earning assets - GAAP measure							3.15	%								3.21	%
	Net interest income as a percent of average interest-earning assets - non GAAP							3.16	%								3.22	%
	- 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, 2023				Dec. 31, 2022				Dec. 31, 2023				Dec. 31, 2022
Total Operating Revenue		$	15,115			$	14,613			$	56,994			$	57,630
Adjustment to (deduct)/add OMSR recapture/impairment *			12				(86	)			51				(1,279	)
Adjusted Total Operating Revenue			15,127				14,527				57,045				56,351
Income before Income Taxes			4,820				4,345				14,717				15,316
Adjustment for OMSR *			12				(86	)			51				(1,279	)
Adjusted Income before Income Taxes			4,832				4,259				14,768				14,037
Provision for Income Taxes			937				812				2,622				2,795
Adjustment for OMSR **			3				(18	)			11				(269	)
Adjusted Provision for Income Taxes			940				794				2,633				2,527
Net Income			3,883				3,533				12,095				12,521
Adjustment for OMSR *			9				(68	)			40				(1,010	)
Adjusted Net Income			3,892				3,465				12,135				11,511
Diluted Earnings per Share			0.57				0.50				1.75				1.77
Adjustment for OMSR *			0.00				(0.01	)			0.01				(0.14	)
Adjusted Diluted Earnings per Share		$	0.57			$	0.49			$	1.75			$	1.63
Return on Average Assets			1.17	%			1.08	%			0.91	%			0.95	%
Adjustment for OMSR *			0.00	%			-0.02	%			0.00	%			-0.08	%
Adjusted Return on Average Assets			1.17	%			1.05	%			0.91	%			0.87	%
*valuation adjustment to the Company's mortgage servicing rights
**tax effect is calculated using a 21% statutory federal corporate income tax rate