SB Financial : Announces Third-Quarter and Nine-Month 2019 Earnings

DEFIANCE, Ohio, Oct. 28, 2019 /PRNewswire/ -- SB Financial Group, Inc. (NASDAQ: SBFG) ('SB Financial' or the 'Company'), a diversified financial services company providing full-service community banking, mortgage banking, wealth management, private client and title insurance services, today reported earnings for the third-quarter and nine months ended September 30, 2019.

Third-quarter 2019 highlights over prior-year third quarter include:

• Total assets increased to $1.04 billion, up $63.6 million, or 6.5 percent
• Net income of $3.8 million, up $0.7 million, or 20.7 percent
• Diluted earnings per share (EPS) of $0.48, up $0.09 per share, or 23.1 percent
• Tangible book value (TBV) per share increased 9.1 percent to $16.23 per share

Nine months ended September 30, 2019, highlights over prior-year nine months include:

• Net income of $8.6 million, which is flat to the prior year
• Net income, adjusted for the mortgage servicing rights impairment of $9.7 million, which is up $1.0 million or 12.1 percent
• Adjusted EPS of $1.22, which is up $0.08 per share, or 7.0 percent
• Net interest margin (NIM) of 3.87 percent on a fully tax equivalent basis ('FTE') down 9 basis points

Third quarter 2019, trailing twelve-month highlights include:

• Loan growth of $51.7 million, or 6.7 percent
• Deposit growth of $58.5 million, or 7.4 percent
• Mortgage origination volume of $386.6 million; servicing portfolio of $1.15 billion

Highlights	Three Months Ended		Nine Months Ended
($ in thousands, except per share & ratios)	Sep. 2019	Sep. 2018	% Change		Sep. 2019	Sep. 2018	% Change
Operating revenue	$ 14,424	$ 12,731	13.3%		$ 38,287	$ 37,348	2.5%
Interest income	11,546	10,258	12.6%		33,195	28,840	15.1%
Interest expense	2,488	1,729	43.9%		6,965	4,187	66.3%
Net interest income	9,058	8,529	6.2%		26,230	24,653	6.4%
Provision for loan losses	300	-	N/M		500	600	-16.7%
Noninterest income	5,366	4,202	27.7%		12,057	12,695	-5.0%
Noninterest expense	9,500	8,789	8.1%		27,234	25,995	4.8%
Net income	3,762	3,118	20.7%		8,615	8,679	-0.7%
Earnings per diluted share	0.48	0.39	23.1%		1.08	1.14	-5.3%
Return on average assets	1.44%	1.30%	10.8%		1.13%	1.24%	-8.9%
Return on average equity	11.24%	9.89%	13.7%		8.67%	9.75%	-11.1%
Non-GAAP Measures
Adjusted net income	$ 3,762	$ 3,167	18.8%		$ 9,719	$ 8,672	12.1%
Adjusted diluted EPS	0.48	0.40	20.0%		1.22	1.14	7.0%
Adjusted return on average assets	1.44%	1.31%	9.9%		1.23%	1.24%	-0.8%
Net interest margin (FTE)	3.93%	3.96%	-0.8%		3.87%	3.96%	-2.3%

'This quarter, we delivered record core quarterly earnings of $0.48 per diluted share, which is up 23 percent from the prior year,' said Mark A. Klein, Chairman, President and CEO of SB Financial. 'We originated $158 million in residential mortgage loans, also a quarter record, while growing our loan portfolio nearly $9 million.'

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was up 13.3 percent from the third quarter of 2018, and up 15.2 percent from the linked quarter.

• Net interest income was up 6.2 percent from the year-ago quarter, and up 2.6 percent from the linked quarter.
• Net interest margin (FTE) was down 3 basis points from the year-ago quarter, but up 5 basis points from the linked quarter.
• Noninterest income was up 27.7 percent from the year-ago quarter, and up 45.4 percent from the linked quarter.

Funding costs, primarily from retail deposits have increased from the prior year and from the linked quarter. Deposit cost of funds for the most recent quarter of 1.06 percent are up from 0.77 percent in the prior-year quarter. From the linked quarter, deposit cost of funds are up five basis points from 1.01 percent.

Mortgage Loan Business

Mortgage loan originations for the third quarter of 2019 were $157.9 million, up $62.6 million, or 65.7 percent, from the year-ago quarter. Total sales of originated loans were $125.4 million, up $44.8 million, or 55.6 percent from the year-ago quarter.

Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $2.5 million for the third quarter of 2019, compared to $2.3 million for the year-ago quarter. The mortgage servicing valuation adjustment for the third quarter of 2019 was zero, compared to a negative adjustment of $0.01 million for the third quarter of 2018. The aggregate servicing valuation impairment ended the quarter at $1.6 million. The mortgage servicing portfolio at September 30, 2019, was $1.15 billion, up $0.09 billion, or 8.1 percent, from $1.07 billion at September 30, 2018.

Mr. Klein noted, 'Our origination and processing teams achieved record numbers in the quarter as we originated $158 million in volume from nearly 700 clients. The number of closings in the quarter was higher by 44 percent from the linked quarter and 27 percent higher compared to the prior year third quarter. We did not book any temporary impairment this quarter, as compared to the $1.4 million we incurred in the first half of 2019. We are encouraged by current trends and expect the strong volume in the residential business to continue for the remainder of this year.'

Mortgage Banking
($ in thousands)	Sep. 2019	Jun. 2019	Mar. 2019	Dec. 2018	Sep. 2018
Mortgage originations	$ 157,947	$ 98,447	$ 51,417	$ 78,829	$ 95,289
Mortgage sales	125,386	70,993	43,472	60,345	80,555
Mortgage servicing portfolio	1,153,020	1,112,857	1,094,060	1,084,678	1,066,402
Mortgage servicing rights	10,447	10,264	10,838	11,365	11,129
Mortgage servicing revenue:
Loan servicing fees	709	691	682	673	653
OMSR amortization	(701)	(460)	(254)	(300)	(318)
Net administrative fees	8	231	428	373	335
OMSR valuation adjustment	-	(690)	(708)	(68)	(62)
Net loan servicing fees	8	(459)	(280)	305	273
Gain on sale of mortgages	2,495	1,678	1,192	1,646	2,066
Mortgage banking revenue, net	$ 2,503	$ 1,219	$ 912	$ 1,951	$ 2,339

Noninterest Income and Noninterest Expense

SB Financial's noninterest income includes revenue from a diverse group of services, such as wealth management, deposit fees, residential loan sales, title insurance revenue and the sale of Small Business Administration (SBA) loans. SBA activity for the quarter consisted of total loan sales of $2.8 million generating gains of $0.3 million. Wealth management assets under the Company's care stood at $484.3 million as of September 30, 2019, and the title insurance business delivered revenue of $0.4 million. For the third quarter of 2019, noninterest income as a percentage of total revenue was 37.2 percent, with the YTD percentage at 33.9 percent when adjusted for the impairment.

For the third quarter of 2019, noninterest expense (NIE) of $9.5 million was up $0.7 million, or 8.1 percent, compared to the same quarter last year. Compared to the linked quarter, NIE was also up $0.4 million. Expense growth was the result of higher mortgage commissions and the addition of our title agency. We continue to add resources of both technology and personnel in order to meet the expanded needs of our operations, information technology and risk management functions.

Noninterest Income / Noninterest Expense
($ in thousands, except ratios)	Sep. 2019	Jun. 2019	Mar. 2019	Dec. 2018	Sep. 2018
Noninterest Income (NII)	$ 5,366	$ 3,691	$ 3,000	$ 3,930	$ 4,202
NII / Total Revenue	37.2%	29.5%	26.5%	31.3%	33.0%
NII / Average Assets	2.1%	1.5%	1.2%	1.6%	1.8%
Noninterest Expense (NIE)	$ 9,500	$ 9,108	$ 8,626	$ 8,852	$ 8,789
Efficiency Ratio	65.9%	72.7%	76.1%	70.6%	69.0%
NIE / Average Assets	3.6%	3.6%	3.5%	3.6%	3.7%
Net Noninterest Expense/Avg. Assets	-1.6%	-2.1%	-2.3%	-2.0%	-1.9%

Balance Sheet

Total assets as of September 30, 2019, were $1.04 billion, up $63.6 million, or 6.5 percent, from a year ago. Total equity as of September 30, 2019, was $134.2 million, up 5.6 percent from a year ago, and comprised 12.9 percent of total assets.

Total loans held for investment were $823.4 million at September 30, 2019, up $51.7 million, or 6.7 percent, from September 30, 2018, and up $8.9 million for the quarter. From the prior year, commercial loans were up $25.3 million, or 21.1 percent, with residential real estate rising $21.0 million, or 11.8 percent.

The investment portfolio of $81.7 million, including Federal Reserve Bank and Federal Home Loan Bank stock, represented 7.8 percent of assets at September 30, 2019. Deposit balances of $848.0 million at September 30, 2019, increased by $58.5 million, or 7.4 percent, since September 30, 2018. Growth from the prior year included $18.9 million in checking and $39.6 million in savings, money market and time deposit balances.

Mr. Klein stated, 'We took payoffs in our commercial real estate portfolio due to competitive pressure on loan pricing. We expect to see additional challenges in matching pricing over the coming quarters and continue to experience peer- leading metrics in asset quality, despite a small number of SBA credits that weakened in the quarter.'

Loan Balances
($ in thousands, except ratios)	Sep. 2019	Jun. 2019	Mar. 2019	Dec. 2018	Sep. 2018	Annual Growth
Commercial	$ 145,147	$ 143,798	$ 136,201	$ 127,640	$ 119,810	$ 25,337
% of Total	17.6%	17.7%	17.4%	16.5%	15.5%	21.1%
Commercial RE	362,580	360,491	343,900	340,791	356,563	6,017
% of Total	44.0%	44.2%	43.9%	44.2%	46.2%	1.7%
Agriculture	51,946	54,317	50,620	52,012	52,814	(868)
% of Total	6.3%	6.7%	6.5%	6.7%	6.8%	-1.6%
Residential RE	199,036	191,642	187,548	187,104	178,033	21,003
% of Total	24.2%	23.5%	24.0%	24.2%	23.1%	11.8%
Consumer & Other	64,658	64,261	64,254	64,336	64,478	180
% of Total	7.9%	7.9%	8.2%	8.3%	8.4%	0.3%
Total Loans	$ 823,367	$ 814,509	$ 782,523	$ 771,883	$ 771,698	$ 51,669
Total Growth Percentage						6.7%
Deposit Balances
($ in thousands, except ratios)	Sep. 2019	Jun. 2019	Mar. 2019	Dec. 2018	Sep. 2018	Annual Growth
Non-Int DDA	$ 152,932	$ 141,216	$ 146,327	$ 144,592	$ 134,747	$ 18,185
% of Total	18.0%	16.8%	17.7%	18.0%	17.1%	13.5%
Interest DDA	131,655	129,710	132,101	130,628	130,897	758
% of Total	15.5%	15.5%	16.0%	16.3%	16.6%	0.6%
Savings	121,991	118,931	115,272	104,444	114,213	7,778
% of Total	14.3%	14.1%	13.8%	12.9%	14.4%	6.8%
Money Market	173,237	175,455	175,334	181,426	170,190	3,047
% of Total	20.4%	20.9%	21.2%	22.6%	21.6%	1.8%
Time Deposits	268,139	274,062	258,624	241,462	239,379	28,760
% of Total	31.6%	32.7%	31.2%	30.1%	30.3%	12.0%
Total Deposits	$ 847,954	$ 839,374	$ 827,658	$ 802,552	$ 789,426	$ 58,528
Total Growth Percentage						7.4%

Asset Quality

SB Financial's nonperforming assets to total assets ratio of 0.44 percent continues to be in the top quartile of its 65-bank peer group. The coverage of non performing loans by the loan loss allowance was at 207 percent at September 30, 2019, down from 256 percent at September 30, 2018.

Nonperforming Assets						Annual Change
($ in thousands, except ratios)	Sep. 2019	Jun. 2019	Mar. 2019	Dec. 2018	Sep. 2018
Commercial & Agriculture	$ 834	$ 674	$ 998	$ 731	$ 360	$ 474
% of Total Com./Ag. loans	0.42%	0.34%	0.53%	0.41%	0.21%	131.7%
Commercial RE	262	208	212	218	228	34
% of Total CRE loans	0.07%	0.06%	0.06%	0.06%	0.06%	14.9%
Residential RE	1,763	1,768	1,612	1,738	1,541	222
% of Total Res. RE loans	0.89%	0.92%	0.86%	0.93%	0.87%	14.4%
Consumer & Other	416	456	325	219	252	164
% of Total Con./Oth. loans	0.64%	0.71%	0.51%	0.34%	0.39%	65.1%
Total Nonaccruing Loans	3,275	3,106	3,147	2,906	2,381	894
% of Total loans	0.40%	0.38%	0.40%	0.38%	0.31%	37.5%
Accruing Restructured Loans	825	814	827	928	940	(115)
Total Change (%)						-12.2%
Total Nonaccruing & Restructured Loans	4,100	3,920	3,974	3,834	3,321	779
% of Total loans	0.50%	0.48%	0.51%	0.50%	0.43%	23.5%
Foreclosed Assets	489	530	313	131	105	384
Total Change (%)						365.7%
Total Nonperforming Assets	$ 4,589	$ 4,450	$ 4,287	$ 3,965	$ 3,426	$ 1,163
% of Total assets	0.44%	0.43%	0.42%	0.40%	0.35%	33.9%

Webcast and Conference Call

The Company will hold a related conference call and webcast on October 29, 2019, at 9:30 a.m. EDT. Interested parties may access the conference call by dialing 1-888-338-9469. The webcast can be accessed at http://www.yoursbfinancial.com/investorrelations.html. An audio replay of the call will be available on the SB Financial 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 20 offices; 19 in nine Ohio counties and one in Fort Wayne, Indiana, and 25 full-service ATMs. State Bank has seven loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. Peak Title provides title insurance and opinions throughout the Tri-State region. SB Financial's common stock is listed on the NASDAQ Capital Market under the symbol 'SBFG'. SB Financial's preferred stock is listed on the NASDAQ Capital Market under the symbol 'SBFGP'.

In May 2019, SB Financial was ranked #94 on the American Banker Magazine's list of Top 200 Publicly Traded Community Banks and Thrifts based on three-year average return on equity ('ROE').

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

In addition to results presented in accordance with GAAP, this release contains certain non-GAAP financial measures. Management believes that including certain non-GAAP financial measures will provide investors with information useful in understanding the Company's financial performance, its performance trends and financial position. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results.

Investor Contact Information:
Anthony V. Cosentino
Executive Vice President and
Chief Financial Officer
[e-mail]

		SB FINANCIAL GROUP, INC.
		CONSOLIDATED BALANCE SHEETS - (Unaudited)
					September		June		March		December		September
			($ in thousands)		2019		2019		2019		2018		2018
ASSETS
	Cash and due from banks		$ 49,824		$ 42,786		$ 62,962		$ 48,363		$ 45,515
	Available-for-sale securities		77,029		85,261		95,802		90,969		84,114
	Loans held for sale		13,655		9,579		4,346		4,445		6,888
	Loans, net of unearned income		823,367		814,509		782,523		771,883		771,698
	Allowance for loan losses		(8,492)		(8,306)		(8,121)		(8,167)		(8,489)
	Premises and equipment, net		23,898		23,150		23,270		22,084		21,900
	Federal Reserve and FHLB Stock, at cost		4,648		4,648		4,123		4,123		4,123
	Foreclosed assets held for sale, net		489		530		313		131		105
	Interest receivable		3,176		3,209		3,123		2,822		2,433
	Goodwill and other intangibles		17,834		17,836		17,838		16,401		16,404
	Cash value of life insurance		17,137		17,051		16,966		16,834		16,745
	Mortgage servicing rights		10,447		10,264		10,838		11,365		11,129
	Other assets		9,749		8,606		7,288		5,575		6,615
			Total assets		$ 1,042,761		$ 1,029,123		$ 1,021,271		$ 986,828		$ 979,180
LIABILITIES AND SHAREHOLDERS' EQUITY
	Liabilities
		Non interest bearing demand		$ 152,932		$ 141,216		$ 146,327		$ 144,592		$ 134,747
		Interest bearing demand		131,655		129,710		132,101		130,628		130,897
		Savings		121,991		118,931		115,272		104,444		114,213
		Money market		173,237		175,455		175,334		181,426		170,190
		Time deposits		268,139		274,062		258,624		241,462		239,379
			Total deposits		847,954		839,374		827,658		802,552		789,426
	Repurchase agreements		14,659		13,968		12,255		15,184		15,539
	Federal Home Loan Bank advances		16,000		16,000		24,000		16,000		24,500
	Trust preferred securities		10,310		10,310		10,310		10,310		10,310
	Interest payable		1,391		1,188		1,123		909		891
	Other liabilities		18,201		14,346		14,419		11,438		11,405
			Total liabilities		908,515		895,186		889,765		856,393		852,071
	Shareholders' Equity
		Preferred stock		13,241		13,978		13,978		13,979		13,979
		Common stock		41,223		40,486		40,486		40,485		40,485
		Additional paid-in capital		15,219		15,259		15,143		15,226		15,160
		Retained earnings		70,184		67,236		65,438		64,012		61,854
		Accumulated other comprehensive income (loss)	900		801		124		(552)		(1,654)
		Treasury stock		(6,521)		(3,823)		(3,663)		(2,715)		(2,715)
			Total equity		134,246		133,937		131,506		130,435		127,109
			Total liabilities and shareholders' equity		$ 1,042,761		$ 1,029,123		$ 1,021,271		$ 986,828		$ 979,180

	SB FINANCIAL GROUP, INC.
	CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
($ in thousands, except per share & ratios)		At and for the Three Months Ended			Nine Months Ended
				September		June		March		December		September			September		September
Interest income			2019		2019		2019		2018		2018			2019		2018
	Loans
	Taxable		$ 10,607		$ 10,182		$ 9,427		$ 9,661		$ 9,499			$ 30,216		$ 26,607
	Tax exempt		82		73		62		55		42			217		99
	Securities
	Taxable		776		802		911		822		610			2,489		1,795
	Tax exempt		81		94		98		100		107			273		339
		Total interest income		11,546		11,151		10,498		10,638		10,258			33,195		28,840
Interest expense
	Deposits		2,258		2,092		1,918		1,776		1,472			6,268		3,538
	Repurchase agreements & other		22		17		26		10		11			65		27
	Federal Home Loan Bank advances		101		100		100		131		140			301		329
	Trust preferred securities		107		110		114		107		106			331		293
		Total interest expense		2,488		2,319		2,158		2,024		1,729			6,965		4,187
Net interest income		9,058		8,832		8,340		8,614		8,529			26,230		24,653
	Provision for loan losses		300		200		-		-		-			500		600
Net interest income after provision
for loan losses			8,758		8,632		8,340		8,614		8,529			25,730		24,053
Noninterest income
	Wealth management fees		775		783		734		717		705			2,292		2,155
	Customer service fees		729		689		631		679		672			2,049		1,991
	Gain on sale of mtg. loans & OMSR		2,495		1,678		1,192		1,646		2,066			5,365		5,224
	Mortgage loan servicing fees, net		8		(459)		(280)		305		273			(731)		991
	Gain on sale of non-mortgage loans		462		216		327		295		125			1,005		935
	Title insurance income		400		308		19		-		-			727		-
	Net gain on sales of securities		-		206		-		-		70			206		70
	Gain (loss) on sale of assets		1		(5)		(2)		14		-			(6)		21
	Other		496		275		379		274		291			1,150		1,308
		Total noninterest income		5,366		3,691		3,000		3,930		4,202			12,057		12,695
Noninterest expense
	Salaries and employee benefits		5,715		5,305		4,902		5,108		5,372			15,922		15,513
	Net occupancy expense		656		627		645		600		588			1,928		1,797
	Equipment expense		688		665		711		756		667			2,064		2,133
	Data processing fees		499		488		443		466		489			1,430		1,345
	Professional fees		571		649		617		532		393			1,837		1,316
	Marketing expense		239		246		239		262		197			724		622
	Telephone and communication expense	118		112		115		121		124			345		374
	Postage and delivery expense		89		81		84		66		83			254		221
	State, local and other taxes		243		247		255		180		177			745		538
	Employee expense		199		236		153		283		243			588		629
	Other expenses		483		452		462		478		456			1,397		1,507
		Total noninterest expense		9,500		9,108		8,626		8,852		8,789			27,234		25,995
Income before income tax expense		4,624		3,215		2,714		3,692		3,942			10,553		10,753
	Income tax expense		862		588		488		732		824			1,938		2,074
Net income				$ 3,762		$ 2,627		$ 2,226		$ 2,960		$ 3,118			$ 8,615		$ 8,679
Preferred share dividends		233		243		244		243		244			720		732
Net income available to common shareholders		3,529		2,384		1,982		2,717		2,874			7,895		7,947
Common share data:
	Basic earnings per common share		$ 0.55		$ 0.37		$ 0.31		$ 0.42		$ 0.45			$ 1.22		$ 1.30
	Diluted earnings per common share		$ 0.48		$ 0.33		$ 0.28		$ 0.37		$ 0.39			$ 1.08		$ 1.14
Average shares outstanding (in thousands):
	Basic:		6,397		6,454		6,482		6,503		6,503			6,459		6,106
	Diluted:		7,876		7,967		7,994		8,030		8,022			7,955		7,626

SB FINANCIAL GROUP, INC.
	Rate Volume Analysis - (Unaudited)
	At and for the Three and Nine Months Ended September 30, 2019 and 2018
	($ in thousands)		Three Months Ended Sep. 30, 2019			Three Months Ended Sep. 30, 2018
			Average		Average			Average		Average
Assets		Balance	Interest	Rate			Balance	Interest	Rate
	Taxable securities		$ 89,782	$ 776	3.46%			$ 82,250	$ 610	2.97%
	Nontaxable securities		7,879	81	4.11%			11,292	107	3.79%
	Loans, net		829,699	10,689	5.15%			770,948	9,541	4.95%
	Total earning assets		927,360	11,546	4.98%			864,490	10,258	4.75%
	Cash and due from banks		55,039					33,545
	Allowance for loan losses		(8,392)					(8,593)
	Premises and equipment		23,855					21,850
	Other assets		45,929					51,077
	Total assets		$ 1,043,791					$ 962,369
Liabilities
	Savings, MMDA and interest bearing demand		$ 434,190	$ 769	0.71%			$ 403,236	$ 504	0.50%
	Time deposits		272,433	1,489	2.19%			231,884	968	1.67%
	Repurchase agreements & other		15,948	22	0.55%			19,293	11	0.23%
	Advances from Federal Home Loan Bank		16,000	101	2.53%			24,609	140	2.28%
	Trust preferred securities		10,310	107	4.15%			10,310	106	4.11%
	Total interest bearing liabilities		748,881	2,488	1.33%			689,332	1,729	1.00%
	Non interest bearing demand		143,361	-				134,146	-
	Total funding		892,242		1.12%			823,478		0.84%
	Other liabilities		17,658					12,747
	Total liabilities		909,900					836,225
	Equity		133,891					126,144
	Total liabilities and equity		$ 1,043,791					$ 962,369
	Net interest income			$ 9,058					$ 8,529
	Net interest income as a percent of average interest-earning assets - GAAP measure	3.91%					3.95%
	Net interest income as a percent of average interest-earning assets - non GAAP	3.93%					3.96%
	- Computed on a fully tax equivalent (FTE) basis
			Nine Months Ended Sep. 30, 2019			Nine Months Ended Sep. 30, 2018
			Average		Average			Average		Average
Assets		Balance	Interest	Rate			Balance	Interest	Rate
	Taxable securities		$ 96,013	$ 2,489	3.46%			$ 81,835	$ 1,795	2.92%
	Nontaxable securities		8,840	273	4.12%			11,815	339	3.83%
	Loans, net		803,431	30,433	5.05%			740,292	26,706	4.81%
	Total earning assets		908,284	33,195	4.87%			833,942	28,840	4.61%
	Cash and due from banks		46,797					33,137
	Allowance for loan losses		(8,303)					(8,318)
	Premises and equipment		23,643					21,656
	Other assets		49,653					51,090
	Total assets		$ 1,020,074					$ 931,507
Liabilities
	Savings, MMDA and interest bearing demand		$ 426,436	$ 2,232	0.70%			$ 395,948	$ 1,063	0.36%
	Time deposits		261,362	4,036	2.06%			220,642	2,475	1.50%
	Repurchase agreements & Other		15,760	65	0.55%			16,875	27	0.21%
	Advances from Federal Home Loan Bank		16,088	301	2.49%			21,987	329	2.00%
	Trust preferred securities		10,310	331	4.28%			10,310	293	3.79%
	Total interest bearing liabilities		729,956	6,965	1.27%			665,762	4,187	0.84%
	Non interest bearing demand		141,537		1.07%			134,566		0.70%
	Total funding		871,493					800,328
	Other liabilities		16,116					12,461
	Total liabilities		887,609					812,789
	Equity		132,465					118,718
	Total liabilities and equity		$ 1,020,074					$ 931,507
	Net interest income			$ 26,230					$ 24,653
	Net interest income as a percent of average interest-earning assets - GAAP measure	3.85%					3.94%
	Net interest income as a percent of average interest-earning assets - non GAAP	3.87%					3.96%
	- Computed on a fully tax equivalent (FTE) basis

	SB FINANCIAL GROUP, INC.
	CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
($ in thousands, except per share & ratios)			At and for the Three Months Ended			Nine Months Ended
			September		June		March		December		September			September		September
SUMMARY OF OPERATIONS			2019		2019		2019		2018		2018			2019		2018
Net interest income			$ 9,058		$ 8,832		$ 8,340		$ 8,614		$ 8,529			$ 26,230		$ 24,653
Tax-equivalent adjustment			43		44		43		41		40			130		116
Tax-equivalent net interest income			9,101		8,876		8,383		8,655		8,569			26,360		24,769
Provision for loan loss			300		200		-		-		-			500		600
Noninterest income			5,366		3,691		3,000		3,930		4,202			12,057		12,695
Total operating revenue			14,424		12,523		11,340		12,544		12,731			38,287		37,348
Noninterest expense			9,500		9,108		8,626		8,852		8,789			27,234		25,995
Pre-tax pre-provision income			4,924		3,415		2,714		3,692		3,942			11,053		11,353
Pretax income			4,624		3,215		2,714		3,692		3,942			10,553		10,753
Net income			3,762		2,627		2,226		2,960		3,118			8,615		8,679
Income available to common shareholders			3,529		2,384		1,982		2,717		2,874			7,895		7,947
PER SHARE INFORMATION:
Basic earnings per share (EPS)			0.55		0.37		0.31		0.42		0.45			1.22		1.30
Diluted earnings per share			0.48		0.33		0.28		0.37		0.39			1.08		1.14
Common dividends			0.090		0.090		0.085		0.085		0.080			0.265		0.235
Book value per common share			17.28		16.89		16.57		16.36		15.94			17.28		15.94
Tangible book value per common share (TBV)			16.23		15.83		15.43		15.39		14.87			16.23		14.87
Fully converted TBV per common share			14.98		14.64		14.32		14.30		13.88			14.98		13.88
Market price per common share			16.72		16.46		18.02		16.45		20.35			16.72		20.35
Market price per preferred share			16.50		16.10		19.00		17.90		20.25			16.50		20.25
Market price to TBV			103.0%		104.0%		116.8%		106.9%		136.8%			103.0%		136.8%
Market price to fully converted TBV			111.6%		112.4%		125.8%		115.0%		146.6%			111.6%		146.6%
Market price to trailing 12 month EPS			11.5		12.1		12.6		11.0		11.5			11.5		11.5
PERFORMANCE RATIOS:
Return on average assets (ROAA)			1.44%		1.03%		0.89%		1.19%		1.30%			1.13%		1.24%
Pre-tax pre-provision ROAA			1.89%		1.34%		1.08%		1.48%		1.64%			1.44%		1.62%
Return on average equity			11.24%		7.92%		6.76%		9.21%		9.89%			8.67%		9.75%
Return on average tangible equity			14.67%		10.41%		8.83%		12.06%		13.02%			11.35%		13.10%
Efficiency ratio			65.85%		72.71%		76.05%		70.55%		69.01%			71.12%		69.58%
Earning asset yield			4.98%		4.88%		4.78%		4.86%		4.75%			4.87%		4.61%
Cost of interest bearing liabilities			1.33%		1.28%		1.20%		1.15%		1.00%			1.27%		0.84%
Net interest margin			3.91%		3.86%		3.79%		3.93%		3.95%			3.85%		3.94%
Tax equivalent effect			0.02%		0.02%		0.02%		0.02%		0.01%			0.02%		0.02%
Net interest margin, tax equivalent			3.93%		3.88%		3.81%		3.95%		3.96%			3.87%		3.96%
Non interest income/Average assets			2.06%		1.45%		1.20%		1.58%		1.75%			1.58%		1.82%
Non interest expense/Average assets			3.64%		3.58%		3.45%		3.56%		3.65%			3.56%		3.72%
Net noninterest expense/Average assets			-1.58%		-2.13%		-2.25%		-1.98%		-1.91%			-1.98%		-1.90%
ASSET QUALITY RATIOS:
Gross charge-offs			128		20		60		322		12			208		85
Recoveries			15		5		13		1		6			33		44
Net charge-offs			113		15		47		321		6			175		41
Nonaccruing loans/Total loans			0.40%		0.38%		0.40%		0.38%		0.31%			0.40%		0.31%
Nonperforming loans/Total loans			0.50%		0.48%		0.51%		0.50%		0.43%			0.50%		0.43%
Nonperforming assets/Loans & OREO			0.56%		0.55%		0.55%		0.51%		0.44%			0.56%		0.44%
Nonperforming assets/Total assets			0.44%		0.43%		0.42%		0.40%		0.35%			0.44%		0.35%
Allowance for loan loss/Nonperforming loans			207.12%		211.89%		204.35%		213.02%		255.62%			207.12%		255.62%
Allowance for loan loss/Total loans			1.03%		1.02%		1.04%		1.06%		1.10%			1.03%		1.10%
Net loan charge-offs/Average loans (ann.)			0.05%		0.01%		0.02%		0.17%		0.00%			0.03%		0.01%
Loan loss provision/Net charge-offs			265.49%		1333.33%		0.00%		0.00%		0.00%			285.71%		1463.41%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits			97.10%		97.04%		94.55%		96.18%		97.75%			97.10%		97.75%
Equity/ Assets			12.87%		13.01%		12.88%		13.22%		12.98%			12.87%		12.98%
Tangible equity/Tangible assets			10.07%		10.10%		9.93%		10.31%		10.05%			10.07%		10.05%
Tangible equity adjusted for conversion			11.36%		11.48%		11.33%		11.75%		11.50%			11.36%		11.50%
Common equity tier 1 ratio (Bank)			12.18%		12.53%		12.71%		12.57%		12.16%			12.18%		12.16%
END OF PERIOD BALANCES
Total assets			1,042,761		1,029,123		1,021,271		986,828		979,180			1,042,761		979,180
Total loans			823,367		814,509		782,523		771,883		771,698			823,367		771,698
Deposits			847,954		839,374		827,658		802,552		789,426			847,954		789,426
Stockholders equity			134,246		133,937		131,506		130,435		127,109			134,246		127,109
Goodwill & intangibles			17,834		17,836		17,838		16,401		16,404			17,834		16,404
Preferred equity			13,241		13,978		13,978		13,979		13,979			13,241		13,979
Tangible equity			103,171		102,123		99,690		100,055		96,726			103,171		96,726
Mortgage servicing portfolio			1,153,020		1,112,857		1,094,060		1,084,678		1,066,402			1,153,020		1,066,402
Wealth/Brokerage assets under care			484,295		479,442		462,580		423,289		412,218			484,295		412,218
Total assets under care			2,680,076		2,621,422		2,577,911		2,494,795		2,457,800			2,680,076		2,457,800
Full-time equivalent employees (actual)			247		250		256		250		250			247		250
Period end basic shares outstanding			6,357		6,451		6,460		6,503		6,503			6,357		6,503
Period end outstanding (Series A Converted)			1,414		1,478		1,475		1,472		1,470			1,414		1,470
Market capitalization (all)			129,620		130,324		144,898		133,824		162,711			129,620		162,711
AVERAGE BALANCES
Total assets			1,043,791		1,016,493		1,001,282		994,977		962,369			1,020,074		931,507
Total earning assets			927,360		914,652		879,394		875,747		864,490			908,284		833,942
Total loans			829,699		804,716		775,280		775,060		770,948			803,431		740,292
Deposits			849,984		827,615		812,190		803,928		769,266			829,335		751,156
Stockholders equity			133,891		132,734		131,691		128,539		126,144			132,465		118,718
Intangibles			17,835		17,837		16,880		16,403		16,405			17,518		16,407
Preferred equity			13,459		13,978		13,979		13,979		13,983			13,771		13,983
Tangible equity			102,597		100,919		100,832		98,157		95,756			101,176		88,328
Average basic shares outstanding			6,397		6,454		6,482		6,503		6,503			6,459		6,106
Average diluted shares outstanding			7,876		7,967		7,994		8,030		8,022			7,955		7,626

Non-GAAP reconciliation		Three Months Ended		Nine Months Ended
($ in thousands, except per share & ratios)		Sep. 30, 2019		Sep. 30, 2018		Sep. 30, 2019		Sep. 30, 2018
Total Revenues		$ 14,424		$ 12,731		$ 38,287		$ 37,348
Adjustment to remove temporary impairment*		-		62		1,398		(8)
Adjusted Total Revenues		14,424		12,793		39,685		37,340
Income before Income Taxes		4,624		3,942		10,553		10,753
Adjustment to remove temporary impairment		-		62		1,398		(8)
Adjusted Income before Income Taxes		4,624		4,004		11,951		10,745
Provision for Income Taxes		862		824		1,938		2,074
Adjustment to remove temporary impairment		-		13		294		(2)
Adjusted Provision for Income Taxes		862		837		2,232		2,072
Net Income		3,762		3,118		8,615		8,679
Adjustment to remove temporary impairment		-		49		1,104		(6)
Adjusted Net Income		3,762		3,167		9,719		8,672
Diluted Earnings per Share		0.48		0.39		1.08		1.14
Adjustment to remove temporary impairment		-		0.01		0.14		(0.00)
Adjusted Diluted Earnings per Share		$ 0.48		$ 0.40		$ 1.22		$ 1.14
Return on Average Assets		1.44%		1.30%		1.13%		1.24%
Adjustment to remove temporary impairment		0.00%		0.01%		0.11%		0.00%
Adjusted Return on Average Assets		1.44%		1.31%		1.23%		1.24%
* temporary valuation adjustment to the
Company's mortgage servicing rights

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SOURCE SB Financial Group, Inc.