EX-99.1 2 f8k102819ex99-1_sbfinancial.htm NEWS RELEASE ISSUED BY SB FINANCIAL GROUP, INC. ON OCTOBER 28, 2019, REPORTING FINANCIAL RESULTS FOR THE THIRD QUARTER 2019

Exhibit 99.1

SB Financial Group, Inc. Announces Third-Quarter and Nine-Month 2019 Earnings

DEFIANCE, Ohio, October 28, 2019 -- 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
($ in thousands, except ratios)	Sep. 2019			Jun. 2019			Mar. 2019			Dec. 2018			Sep. 2018			Annual Change
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

Tony.Cosentino@yoursbfinancial.com

###

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
	2019		2019			2019			2018		2018		2019			2018
Interest income
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

Non interest 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

Non interest 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
	Balance			Interest		Rate			Balance			Interest		Rate
Assets
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
	Balance			Interest		Rate			Balance			Interest		Rate
Assets
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

Preferred Shares - 3 Month Average			13,459				13,983
Preferred Shares - YTD Average			13,771				13,983

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