SB Financial Group Announces Fourth Quarter and Full Year 2023 Results
SB Financial Group, Inc. reported earnings for the fourth quarter and twelve months ended December 31, 2023, with highlights including a 9.9% increase in net income, a 4.0% loan growth, and strong asset quality. However, net income decreased slightly for the twelve months ended December 31, 2023. Mortgage origination volume was $215.5 million for the trailing twelve months, with a servicing portfolio of $1.37 billion.
Positive
9.9% increase in net income for the fourth quarter
4.0% loan growth for the fourth quarter
Strong asset quality with nonperforming assets decreasing to 25 basis points of total assets
Negative
Net income decreased slightly to $12.1 million for the twelve months ended December 31, 2023
The reported increase in SB Financial Group's net income by 9.9% for Q4 2023, compared to the prior year, indicates a positive performance trajectory, particularly noting the 44.5% increase from the linked quarter. This performance is underscored by a 16.9% rise in interest income and a substantial loan growth, which is a strong indicator of the company's operational efficiency and market competitiveness. The loan portfolio expansion for eight consecutive quarters, reaching over $1 billion, is a significant milestone that reflects the company's strategic focus on lending as a core revenue driver.
However, the 3.4% drop in net income for the twelve months ended December 31, 2023 and a slight decrease in diluted EPS suggest that the company may have faced challenges that offset some of its gains throughout the year. The 172.1% increase in interest expense year-over-year is a concern, as it considerably outpaces the growth in interest income, potentially squeezing net interest margins. Investors should monitor how the bank manages its interest rate risk and cost of funds going forward, especially in an environment where the Federal Reserve may alter interest rates.
Moreover, the decrease in deposits by 1.5% to $1.07 billion could signify a shift in consumer behavior or competitive dynamics in the market. This could impact the bank's liquidity and funding costs, which are crucial for ongoing operations and loan origination capabilities.
SB Financial's decision to sell equity securities , resulting in a $1.5 million gain, demonstrates an opportunistic approach to capitalizing on market conditions to bolster noninterest income, which surged by 49.0% from the prior year quarter. This strategic move, along with the 41.4% increase in total sales of originated loans, indicates the company's agility in navigating a cooling housing market . It also highlights the importance of diversification in revenue streams to mitigate sector-specific risks.
The company's mortgage origination volume decline reflects broader economic trends, such as rising interest rates and a potential slowdown in the housing market. However, the growth in the mortgage servicing portfolio to $1.37 billion, an increase of 1.1% from the prior year, suggests that SB Financial is successfully managing its mortgage servicing operations, which can provide a stable source of fee-based income and enhance customer retention.
The reported asset quality improvement , with nonperforming assets decreasing to 25 basis points of total assets, is a positive signal of the bank's risk management efficacy. In an economic climate where loan defaults can be a concern, such improvements in asset quality can be indicative of a healthier loan portfolio and potentially lower future credit losses.
SB Financial's provision for credit losses being essentially flat suggests that the company is not foreseeing significant deterioration in loan performance. However, it is essential to note the broader economic context, including inflationary pressures and the potential for economic slowdown, which could affect loan performance in the future. The bank's ability to maintain strong asset quality in such an environment would be a testament to its underwriting standards and risk management practices.
01/25/2024 - 04:15 PM
DEFIANCE, Ohio, Jan. 25, 2024 (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, 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 $1.4 million . Additionally, this improvement coincides with a concurrent reduction in problem loans, underscoring our focused efforts on maintaining a robust and healthy loan portfolio.
Nonperforming Assets Annual ($ 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. KleinMark.Klein@YourStateBank.com
Anthony V. CosentinoTony.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
What was the net income increase for the fourth quarter?
The net income increased by 9.9% for the fourth quarter.
What was the loan growth for the fourth quarter?
The loan growth was 4.0% for the fourth quarter.
What was the mortgage origination volume for the trailing twelve months?
The mortgage origination volume was $215.5 million for the trailing twelve months.
What was the servicing portfolio for the trailing twelve months?
The servicing portfolio was $1.37 billion for the trailing twelve months.
