EX-99.1 2 ea149612ex99-1_sbfinancial.htm NEWS RELEASE ISSUED BY SB FINANCIAL GROUP, INC. ON OCTOBER 28, 2021, REPORTING FINANCIAL RESULTS FOR THE THIRD QUARTER 2021

Exhibit 99.1

SB Financial Group Announces Third Quarter 2021 Results

DEFIANCE, OH, October 28, 2021 -- 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, 2021.

Third quarter 2021 highlights over prior-year third quarter include:

●

Net income of $4.1 million; diluted earnings per share (“EPS”) of $0.58 or a 15.9 percent decrease

●

Adjusted net income, excluding the impact of the Originated Mortgage Servicing Rights (“OMSR”) impairment of $250,000 was $3.9 million, with EPS of $0.56

●

Mortgage origination volume of $152.6 million, reflects a decrease of $47.5 million, or 23.8 percent

Third quarter 2021 highlights over the linked quarter include:

●

Net income up $342,000 with EPS increasing $0.06 or 11.5 percent

●

Loan growth excluding the impact of Paycheck Protection Program (“PPP”) was up $20.6 million or 10 percent annualized

Nine months ended September 30, 2021, highlights over prior-year nine months include:

●

Net income of $14.9 million and diluted EPS of $2.08, compared to $9.6 million, or $1.25 per share or a 66.4 percent increase

●

Adjusted net income, excluding the impact of OMSR activity and merger costs, was $12.7 million, down $227,000 or 1.8 percent with EPS of $1.76, up $0.09 or 5.4 percent

Third quarter 2021 trailing twelve-month highlights include:

●

Loans, excluding the impact of PPP loan balances from both years of $10.2 and $82.1 million, respectively, increased $32.6 million, or 4.1 percent from the prior year

●

Deposits grew by $97.7 million, or 9.6 percent to $1.11 billion at quarter end

●

Mortgage origination volume of $642.3 million; servicing portfolio of $1.34 billion, which is up $48.4 million, or 3.7 percent

Highlights	Three Months Ended									Nine Months Ended
($ in thousands, except per share & ratios)	Sep. 2021			Sep. 2020			% Change			Sep. 2021			Sep. 2020			% Change
Operating revenue	$	16,673		$	19,677			-15.3	%	$	52,914		$	47,873			10.5	%
Interest income		11,033			10,807			2.1	%		31,901			32,046			-0.5	%
Interest expense		1,009			1,548			-34.8	%		3,095			5,367			-42.3	%
Net interest income		10,024			9,259			8.3	%		28,806			26,679			8.0	%
Provision for loan losses		300			1,800			-83.3	%		1,050			3,700			-71.6	%
Noninterest income		6,649			10,418			-36.2	%		24,108			21,194			13.7	%
Noninterest expense		11,256			11,335			-0.7	%		33,241			32,403			2.6	%
Net income		4,103			5,250			-21.8	%		14,945			9,586			55.9	%
Earnings per diluted share		0.58			0.69			-15.9	%		2.08			1.25			66.4	%
Return on average assets		1.23	%		1.73	%		-28.9	%		1.51	%		1.12	%		34.8	%
Return on average equity		11.35	%		15.01	%		-24.4	%		13.84	%		9.74	%		42.1	%

Non-GAAP Measures
Adjusted net income	$	3,907		$	4,992			-21.7	%	$	12,690		$	12,917			-1.8	%
Adjusted diluted EPS		0.56			0.65			-13.8	%		1.76			1.67			5.4	%
Adjusted return on average assets		1.17	%		1.64	%		-28.7	%		1.34	%		1.41	%		-5.0	%
Adjusted pre-tax, pre-provision income		5,169			8,016			-35.5	%		17,569			18,444			-4.7	%

“The third quarter saw significant PPP forgiveness, which drove our EPS up nearly 12 percent from the linked quarter” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “Loan growth net of PPP was up compared to the prior year quarter and we have now had positive loan growth, excluding PPP, in each of the last two quarters.”

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was down 15.3 percent from the third quarter of 2020, but up 6.2 percent from the linked quarter.

●

Net interest income was up from the year-ago quarter by 8.3 percent, and up 9.5 percent from the linked quarter.

●

Net interest margin on a fully taxable equivalent basis (FTE) was down from the year-ago quarter by 20 basis points and flat to the linked quarter, as cash balances continued to be higher than normal, which was offset by higher PPP forgiveness.

●

Noninterest income was down 36 percent from the year ago quarter as mortgage volume and gain on sale yields trended lower. This compares to a two percent increase from the linked quarter.

Mortgage Loan Business

Mortgage loan originations for the third quarter of 2021 were $152.6 million, down $47.5 million, or 23.8 percent, from the year-ago quarter. Total sales of originated loans were $123.1 million, down $43.1 million, or 25.9 percent, from the year-ago quarter. For the first nine months of 2021, SB Financial had total volume of $473.8 million, of which $236.2 million (50 percent) was new purchase/construction lending, $118.5 million was external refinance (25 percent), and the remaining $119.1 million (25 percent) was internal refinance.

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $4.1 million for the third quarter of 2021, compared to $7.9 million for the year-ago quarter. The mortgage servicing valuation adjustment for the third quarter of 2021 was a positive $248,000, compared to a positive adjustment of $326,000 for the third quarter of 2020. For the first nine months of 2021, the recapture of servicing rights was $2.9 million compared to impairment of $3.0 million for the prior year nine months. The aggregate servicing valuation impairment ended the quarter at $2.0 million. The servicing portfolio at September 30, 2021, was $1.34 billion, up $48.4 million, or 3.7 percent, from $1.29 billion at September 30, 2020.

Mr. Klein noted, “This quarter had relatively strong mortgage origination of $153 million, which while down 24 percent from the prior year, was down just seven percent from the linked quarter. We continue to be positive about our mortgage pipeline as construction and private client activity remain strong. We now have a total of 24 Mortgage Originators that represents an increase of four from the prior year which includes the addition of two originators in our Ft. Wayne growth market.”

Mortgage Banking
($ in thousands)	Sep. 2021			Jun. 2021			Mar. 2021			Dec. 2020			Sep. 2020
Mortgage originations	$	152,623		$	164,883		$	155,836		$	168,997		$	200,158
Mortgage sales		123,083			119,064			136,708			143,151			166,201
Mortgage servicing portfolio		1,341,439			1,323,804			1,304,097			1,299,698			1,293,037
Mortgage servicing rights		11,194			10,678			10,490			7,759			8,535

Mortgage servicing revenue
Loan servicing fees		850			830			859			857			813
OMSR amortization		(943	)		(948	)		(1,187	)		(1,283	)		(1,308	)
Net administrative fees		(93	)		(118	)		(328	)		(426	)		(495	)
OMSR valuation adjustment		248			(99	)		2,706			(611	)		326
Net loan servicing fees		155			(217	)		2,378			(1,037	)		(169	)
Gain on sale of mortgages		3,947			4,255			5,859			7,197			8,085
Mortgage banking revenue, net	$	4,102		$	4,038		$	8,237		$	6,160		$	7,916

Noninterest Income and Noninterest Expense

SB Financial’s noninterest income for the quarter was down 36 percent from the prior year but up compared to the linked quarter by approximately two percent. The gain on sale mortgage loan yields were down 165 basis points from the prior year with the total dollars of sales down $43.1 million. Wealth management revenue was up over 14 percent from the prior year due to higher retention levels and growth in the equity sector. SB Financial’s Title Agency provided revenue in the quarter of $508,000.

For the third quarter of 2021, noninterest expense of $11.3 million was flat to the prior year and up slightly to the linked quarter. For the first nine months, noninterest expense of $33.2 million was up $838,000 or 2.6 percent compared to the prior year first nine months. Operating leverage for the nine months of 2021 compared to the prior year was positive with revenue growth of 10.5 percent exceeding expense growth of 2.6 percent by 4.1 times.

Noninterest Income / Noninterest Expense
($ in thousands, except ratios)	Sep. 2021			Jun. 2021			Mar. 2021			Dec. 2020			Sep. 2020
Noninterest Income (NII)	$	6,649		$	6,537		$	10,922		$	8,902		$	10,418
NII / Total Revenue		39.9	%		41.7	%		53.2	%		49.0	%		52.9	%
NII / Average Assets		2.0	%		2.0	%		3.4	%		2.9	%		3.4	%
Total Revenue Growth		-15.3	%		-10.3	%		91.9	%		24.7	%		36.4	%

Noninterest Expense (NIE)	$	11,256		$	11,076		$	10,909		$	10,684		$	11,335
Efficiency Ratio		67.4	%		70.5	%		53.0	%		58.8	%		57.5	%
NIE / Average Assets		3.4	%		3.3	%		3.4	%		3.5	%		3.7	%
Net Noninterest Expense/Avg. Assets		-1.4	%		-1.4	%		0.0	%		-0.6	%		-0.3	%
Total Expense Growth		-0.7	%		-5.0	%		16.0	%		5.0	%		19.3	%
Operating Leverage		-21.5			-2.1			5.7			4.9			1.9

Balance Sheet

Total assets as of September 30, 2021, were $1.33 billion, up $111.5 million, or 9.2 percent, from the year ago quarter due to higher liquidity levels and PPP activity. Total shareholders’ equity as of September 30, 2021, was $144.3 million, up 2.1 percent from a year ago, and comprised 10.9 percent of total assets.

Total loans held for investment were $846.5 million at September 30, 2021, down $39.3 million, or 4.4 percent, from September 30, 2020. Excluding PPP activity from both years, loan balances were up $32.6 million, or 4.1 percent.

The investment portfolio of $254.1 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 19.1 percent of assets at September 30, 2021, and was up 87.4 percent from the year-ago period. Deposit balances of $1.11 billion at September 30, 2021, increased by $97.6 million, or 9.6 percent, since September 30, 2020. Growth from the prior year included $58.7 million in checking and $38.9 million in savings and time deposit balances.

Mr. Klein continued, “Our lending teams were very busy in the quarter as we had solid loan growth for the second consecutive quarter and we assisted a number of clients in submitting PPP forgiveness applications. We also had two non-performing credits that paid off in the quarter, resulting in lower NPA balances and recapture of prior non-accrual interest. Our coverage of non-performing loans is now above 350 percent and we continue to have no loans on COVID deferral.”

Loan Balances																Annual
($ in thousands, except ratios)	Sep. 2021			Jun. 2021			Mar. 2021			Dec. 2020			Sep. 2020			Growth
Commercial	$	138,085		$	149,998		$	179,157		$	203,256		$	216,667		$	(78,582	)
% of Total		16.3	%		17.6	%		21.1	%		23.3	%		24.5	%		-36.3	%
Commercial RE		387,858			389,287			385,403			370,984			371,947			15,911
% of Total		45.8	%		45.8	%		45.4	%		42.5	%		42.0	%		4.3	%
Agriculture		57,374			50,895			48,405			55,251			57,420			(46	)
% of Total		6.8	%		6.0	%		5.7	%		6.3	%		6.5	%		-0.1	%
Residential RE		207,571			203,294			176,998			182,076			178,393			29,178
% of Total		24.5	%		23.9	%		20.9	%		20.9	%		20.1	%		16.4	%
Consumer & Other		55,660			57,039			58,213			61,156			61,423			(5,763	)
% of Total		6.6	%		6.7	%		6.9	%		7.0	%		6.9	%		-9.4	%
Total Loans	$	846,548		$	850,513		$	848,176		$	872,723		$	885,850		$	(39,302	)
Total Growth Percentage																	-4.4	%

Deposit Balances																Annual
($ in thousands, except ratios)	Sep. 2021			Jun. 2021			Mar. 2021			Dec. 2020			Sep. 2020			Growth
Non-Int DDA	$	258,857		$	240,572		$	273,026		$	251,649		$	225,003		$	33,854
% of Total		23.3	%		22.0	%		24.4	%		24.0	%		22.2	%		15.0	%
Interest DDA		189,130			187,023			191,593			176,785			164,248			24,882
% of Total		17.0	%		17.1	%		17.1	%		16.9	%		16.2	%		15.1	%
Savings		246,414			235,231			218,260			174,864			169,474			76,940
% of Total		22.2	%		21.6	%		19.5	%		16.7	%		16.7	%		45.4	%
Money Market		258,741			255,512			249,088			216,164			204,862			53,879
% of Total		23.3	%		23.4	%		22.2	%		20.6	%		20.2	%		26.3	%
Time Deposits		158,518			172,696			188,229			229,549			250,428			(91,910	)
% of Total		14.3	%		15.8	%		16.8	%		21.9	%		24.7	%		-36.7	%
Total Deposits	$	1,111,660		$	1,091,034		$	1,120,196		$	1,049,011		$	1,014,015		$	97,645
Total Growth Percentage																	9.6	%

Asset Quality

SB Financial reported nonperforming assets of $5.6 million as of September 30, 2021, down $1.7 million or 23.1 percent from the year-ago quarter. The Company took $206,000 in net recoveries in the quarter. The coverage of problem loans by the loan loss allowance was at 351 percent at September 30, 2021, up from 164 percent at September 30, 2020.

Nonperforming Assets ($ in thousands, except ratios)	Sep. 2021			Jun. 2021			Mar. 2021			Dec. 2020			Sep. 2020			Annual Change
Commercial & Agriculture	$	144		$	375		$	615		$	902		$	1,140		$	(996	)
% of Total Com./Ag. loans		0.07	%		0.19	%		0.27	%		0.35	%		0.42	%		-87.4	%
Commercial RE		566			1,026			2,402			2,412			2,475			(1,909	)
% of Total CRE loans		0.15	%		0.26	%		0.62	%		0.65	%		0.67	%		-77.1	%
Residential RE		2,056			1,751			2,138			2,704			2,481			(425	)
% of Total Res. RE loans		0.99	%		0.86	%		1.21	%		1.49	%		1.39	%		-17.1	%
Consumer & Other		422			463			480			408			313			109
% of Total Con./Oth. loans		0.76	%		0.81	%		0.82	%		0.67	%		0.51	%		34.8	%
Total Nonaccruing Loans		3,188			3,615			5,635			6,426			6,409			(3,221	)
% of Total loans		0.38	%		0.43	%		0.66	%		0.74	%		0.72	%		-50.3	%
Accruing Restructured Loans		805			758			794			810			789			16
Total Change (%)																	2.0	%
Total Nonaccruing & Restructured Loans		3,993			4,373			6,429			7,236			7,198			(3,205	)
% of Total loans		0.47	%		0.51	%		0.76	%		0.83	%		0.81	%		-44.5	%
Foreclosed Assets		1,601			1,603			43			23			76			1,525
Total Change (%)																	2006.6	%
Total Nonperforming Assets	$	5,594		$	5,976		$	6,472		$	7,259		$	7,274		$	(1,680	)
% of Total assets		0.42	%		0.46	%		0.49	%		0.58	%		0.60	%		-23.1	%

Webcast and Conference Call

The Company will hold a related conference call and webcast on October 29, 2021, 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 24 full-service ATMs. State Bank has five 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”.

In May 2021, SB Financial was named to the Keefe, Bruyette & Woods, Inc. “Bank Honor Roll” of superior performers as revealed in EPS increases for 10 consecutive years. The honor roll review determined that just 16 banks, including SB Financial, or 4% of the nearly 400 banks screened, qualified for inclusion.

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, the duration and scope of the COVID-19 outbreak in the United States and the market areas in which SB Financial and its subsidiaries operate, including the impact to the state and local economies of prolonged shelter in place orders and the pandemic generally, 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 non-GAAP items of OMSR impairment and merger related costs from net income to report an 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. Klein

Chairman, President and

Chief Executive Officer

Mark.Klein@YourStateBank.com

Anthony V. Cosentino

Executive Vice President and

Chief Financial Officer

Tony.Cosentino@YourStateBank.com

###

SB FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS - (Unaudited)

	September			June			March			December			September
($ in thousands)	2021			2021			2021			2020			2020

ASSETS
Cash and due from banks	$	138,015		$	154,993		$	206,036		$	140,690		$	94,641
Interest bearing time deposits		2,651			2,906			3,562			5,823			8,956
Available-for-sale securities		248,815			211,756			177,918			149,406			130,315
Loans held for sale		10,335			8,731			8,689			7,234			13,943
Loans, net of unearned income		846,548			850,513			848,176			872,723			885,850
Allowance for loan losses		(13,812	)		(13,306	)		(13,326	)		(12,574	)		(11,793	)
Premises and equipment, net		23,874			24,343			23,233			23,557			23,785
Federal Reserve and FHLB Stock, at cost		5,303			5,303			5,303			5,303			5,303
Foreclosed assets held for sale, net		1,601			1,603			43			23			76
Interest receivable		2,954			3,000			3,371			3,799			4,159
Goodwill		22,091			22,091			22,091			22,091			22,091
Cash value of life insurance		17,795			17,721			17,651			17,530			17,453
Mortgage servicing rights		11,194			10,678			10,490			7,759			8,535
Other assets		12,361			12,175			12,630			14,475			14,927
Total assets	$	1,329,725		$	1,312,507		$	1,325,867		$	1,257,839		$	1,218,241

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Non interest bearing demand	$	258,857		$	240,572		$	273,026		$	251,649		$	225,003
Interest bearing demand		189,130			187,023			191,593			176,785			164,248
Savings		246,414			235,231			218,260			174,864			169,474
Money market		258,741			255,512			249,088			216,164			204,862
Time deposits		158,518			172,696			188,229			229,549			250,428
Total deposits		1,111,660			1,091,034			1,120,196			1,049,011			1,014,015

Short-term borrowings		20,771			25,096			24,321			20,189			20,710
Federal Home Loan Bank advances		5,500			5,500			8,000			8,000			8,000
Trust preferred securities		10,310			10,310			10,310			10,310			10,310
Subordinated debt net of issuance costs		19,534			19,522			-			-			-
Interest payable		576			417			489			616			946
Other liabilities		17,082			16,611			18,585			26,790			22,913
Total liabilities		1,185,433			1,168,490			1,181,901			1,114,916			1,076,894

Shareholders’ Equity
Common stock		54,463			54,463			54,463			54,463			54,463
Additional paid-in capital		14,875			14,906			14,755			14,845			14,782
Retained earnings		97,183			93,851			90,883			84,578			80,012
Accumulated other comprehensive income (loss)		(699	)		499			(457	)		2,210			2,221
Treasury stock		(21,530	)		(19,702	)		(15,678	)		(13,173	)		(10,131	)
Total shareholders’ equity		144,292			144,017			143,966			142,923			141,347

Total liabilities and shareholders’ equity	$	1,329,725		$	1,312,507		$	1,325,867		$	1,257,839		$	1,218,241

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
	2021		2021			2021			2020			2020			2021		2020
Interest income
Loans
Taxable	$	9,948	$	9,196		$	9,926		$	9,816		$	10,179		$	29,070	$	29,919
Tax exempt		52		47			48			54			47			147		185
Securities
Taxable		939		835			643			632			494			2,417		1,696
Tax exempt		94		85			88			87			87			267		246
Total interest income		11,033		10,163			10,705			10,589			10,807			31,901		32,046

Interest expense
Deposits		709		818			962			1,218			1,423			2,489		4,852
Repurchase agreements & other		12		12			11			10			12			35		60
Federal Home Loan Bank advances		40		51			56			58			59			147		251
Trust preferred securities		49		50			51			52			54			150		204
Subordinated debt		199		75			-			-			-			274		-
Total interest expense		1,009		1,006			1,080			1,338			1,548			3,095		5,367

Net interest income		10,024		9,157			9,625			9,251			9,259			28,806		26,679

Provision for loan losses		300		-			750			800			1,800			1,050		3,700

Net interest income after provision for loan losses		9,724		9,157			8,875			8,451			7,459			27,756		22,979

Noninterest income
Wealth management fees		959		955			912			863			839			2,826		2,382
Customer service fees		812		820			758			728			730			2,390		2,079
Gain on sale of mtg. loans & OMSR		3,947		4,255			5,859			7,197			8,085			14,061		18,153
Mortgage loan servicing fees, net		155		(217	)		2,378			(1,037	)		(169	)		2,316		(4,101	)
Gain on sale of non-mortgage loans		52		45			17			123			119			114		330
Title insurance revenue		508		532			521			522			517			1,561		1,391
Gain (loss) on sale of assets		1		2			(2	)		181			(52	)		1		(178	)
Other		215		145			479			325			349			839		1,138
Total noninterest income		6,649		6,537			10,922			8,902			10,418			24,108		21,194

Noninterest expense
Salaries and employee benefits		6,689		6,881			6,620			6,556			6,995			20,190		18,841
Net occupancy expense		714		748			740			782			736			2,202		2,109
Equipment expense		872		778			732			818			888			2,382		2,368
Data processing fees		671		653			534			633			586			1,858		2,422
Professional fees		817		574			764			631			695			2,155		2,676
Marketing expense		201		220			135			172			137			556		486
Telephone and communication expense		140		139			154			156			142			433		379
Postage and delivery expense		100		97			111			108			96			308		307
State, local and other taxes		286		278			323			299			331			887		847
Employee expense		186		161			153			103			155			500		432
Other expenses		580		547			643			426			574			1,770		1,536
Total noninterest expense		11,256		11,076			10,909			10,684			11,335			33,241		32,403

Income before income tax expense		5,117		4,618			8,888			6,669			6,542			18,623		11,770
Income tax expense		1,014		857			1,807			1,311			1,292			3,678		2,184

Net income	$	4,103	$	3,761		$	7,081		$	5,358		$	5,250		$	14,945	$	9,586

Common share data:
Basic earnings per common share	$	0.59	$	0.53		$	0.97		$	0.71		$	0.69		$	2.09	$	1.25
Diluted earnings per common share	$	0.58	$	0.52		$	0.97		$	0.71		$	0.69		$	2.08	$	1.25

Average shares outstanding (in thousands):
Basic:		6,966		7,148			7,317			7,487			7,607			7,142		7,700
Diluted:		7,017		7,200			7,335			7,487			7,607			7,167		7,700

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	2021			2021			2021			2020			2020			2021			2020

Net interest income	$	10,024		$	9,157		$	9,625		$	9,251		$	9,259		$	28,806		$	26,679
Tax-equivalent adjustment		39			35			36			37			36			110			115
Tax-equivalent net interest income		10,063			9,192			9,661			9,288			9,295			28,916			26,794
Provision for loan loss		300			-			750			800			1,800			1,050			3,700
Noninterest income		6,649			6,537			10,922			8,902			10,418			24,108			21,194
Total operating revenue		16,673			15,694			20,547			18,153			19,677			52,914			47,873
Noninterest expense		11,256			11,076			10,909			10,684			11,335			33,241			32,403
Pre-tax pre-provision income		5,417			4,618			9,638			7,469			8,342			19,673			15,470
Pretax income		5,117			4,618			8,888			6,669			6,542			18,623			11,770
Net income		4,103			3,761			7,081			5,358			5,250			14,945			9,586

PER SHARE INFORMATION:
Basic earnings per share (EPS)		0.59			0.53			0.97			0.71			0.69			2.09			1.25
Diluted earnings per share		0.58			0.52			0.97			0.71			0.69			2.08			1.25
Common dividends		0.110			0.110			0.105			0.105			0.100			0.325			0.295
Book value per common share		20.83			20.50			19.88			19.39			18.73			20.83			18.73
Tangible book value per common share (TBV)		17.55			17.27			16.74			16.30			15.72			17.55			15.72
Market price per common share		18.18			18.50			18.26			18.28			13.49			18.18			13.49
Market price to TBV		103.6	%		107.2	%		109.1	%		112.1	%		85.8	%		103.6	%		85.8	%
Market price to trailing 12 month EPS		6.5			6.4			6.4			9.3			8.0			6.5			8.0

PERFORMANCE RATIOS:
Return on average assets (ROAA)		1.23	%		1.13	%		2.21	%		1.73	%		1.73	%		1.51	%		1.12	%
Pre-tax pre-provision ROAA		1.63	%		1.39	%		3.01	%		2.41	%		2.74	%		2.12	%		1.81	%
Return on average equity		11.35	%		10.42	%		19.78	%		15.05	%		15.01	%		13.84	%		9.74	%
Return on average tangible equity		13.47	%		12.37	%		23.52	%		17.91	%		17.93	%		16.43	%		11.48	%
Efficiency ratio		67.40	%		70.46	%		53.01	%		58.76	%		57.48	%		62.72	%		67.63	%
Earning asset yield		3.52	%		3.25	%		3.56	%		3.66	%		3.96	%		3.44	%		4.08	%
Cost of interest bearing liabilities		0.44	%		0.44	%		0.50	%		0.64	%		0.75	%		0.46	%		0.91	%
Net interest margin		3.20	%		2.93	%		3.20	%		3.20	%		3.39	%		3.11	%		3.39	%
Tax equivalent effect		0.01	%		0.01	%		0.01	%		0.01	%		0.02	%		0.01	%		0.02	%
Net interest margin, tax equivalent		3.21	%		2.94	%		3.21	%		3.21	%		3.41	%		3.12	%		3.41	%
Non interest income/Average assets		1.99	%		1.97	%		3.41	%		2.87	%		3.42	%		2.44	%		2.48	%
Non interest expense/Average assets		3.38	%		3.33	%		3.40	%		3.45	%		3.73	%		3.37	%		3.79	%
Net noninterest expense/Average assets		-1.38	%		-1.37	%		0.00	%		-0.58	%		-0.31	%		-0.93	%		-1.31	%

ASSET QUALITY RATIOS:
Gross charge-offs		24			26			52			57			32			102			686
Recoveries		230			6			54			39			11			290			24
Net charge-offs		(206	)		20			(2	)		18			21			(188	)		662
Nonaccruing loans/Total loans		0.38	%		0.43	%		0.66	%		0.74	%		0.72	%		0.38	%		0.72	%
Nonperforming loans/Total loans		0.47	%		0.51	%		0.76	%		0.83	%		0.81	%		0.47	%		0.81	%
Nonperforming assets/Loans & OREO		0.66	%		0.70	%		0.76	%		0.83	%		0.82	%		0.66	%		0.82	%
Nonperforming assets/Total assets		0.42	%		0.46	%		0.49	%		0.58	%		0.60	%		0.42	%		0.60	%
Allowance for loan loss/Nonperforming loans		345.91	%		304.28	%		207.28	%		173.77	%		163.84	%		345.91	%		163.84	%
Allowance for loan loss/Total loans		1.63	%		1.56	%		1.57	%		1.44	%		1.33	%		1.63	%		1.33	%
Net loan charge-offs/Average loans (ann.)		(0.10	%)		0.01	%		(0.00	%)		0.01	%		0.01	%		(0.03	%)		0.10	%
Loan loss provision/Net charge-offs		(145.63	%)		0.00	%		(37500.00	%)		4444.44	%		8571.43	%		(558.51	%)		558.91	%

CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		76.15	%		77.95	%		75.72	%		83.19	%		87.36	%		76.15	%		87.36	%
Equity/ Assets		10.85	%		10.97	%		10.86	%		11.36	%		11.60	%		10.85	%		11.60	%
Tangible equity/Tangible assets		9.30	%		9.41	%		9.30	%		9.73	%		9.92	%		9.30	%		9.92	%
Common equity tier 1 ratio (Bank)		13.23	%		13.11	%		13.08	%		12.91	%		12.71	%		13.23	%		12.71	%

END OF PERIOD BALANCES
Total assets		1,329,725			1,312,507			1,325,867			1,257,839			1,218,241			1,329,725			1,218,241
Total loans		846,548			850,513			848,176			872,723			885,850			846,548			885,850
Deposits		1,111,660			1,091,034			1,120,196			1,049,011			1,014,015			1,111,660			1,014,015
Stockholders equity		144,292			144,017			143,966			142,923			141,347			144,292			141,347
Goodwill and intangibles		22,692			22,710			22,728			22,745			22,813			22,692			22,813
Tangible equity		121,600			121,307			121,238			120,178			118,534			121,600			118,534
Mortgage servicing portfolio		1,341,439			1,323,804			1,304,097			1,299,698			1,293,037			1,341,439			1,293,037
Wealth/Brokerage assets under care		588,319			600,904			576,503			558,409			522,360			588,319			522,360
Total assets under care		3,259,483			3,237,215			3,206,467			3,115,946			3,033,638			3,259,483			3,033,638
Full-time equivalent employees		264			256			246			244			251			264			251
Period end common shares outstanding		6,927			7,026			7,242			7,372			7,545			6,927			7,545
Market capitalization (all)		125,935			129,984			132,239			134,760			101,782			125,935			101,782

AVERAGE BALANCES
Total assets		1,333,369			1,329,348			1,281,635			1,238,790			1,216,843			1,315,521			1,141,008
Total earning assets		1,253,722			1,251,213			1,203,284			1,156,718			1,090,386			1,236,227			1,047,846
Total loans		856,486			853,794			862,898			893,244			907,483			857,703			879,536
Deposits		1,109,491			1,115,186			1,073,641			1,031,649			1,007,679			1,099,892			936,805
Stockholders equity		144,565			144,315			143,167			142,418			139,908			144,020			131,156
Goodwill and intangibles		22,701			22,718			22,736			22,754			22,787			22,718			19,813
Tangible equity		121,864			121,597			120,431			119,664			117,121			121,302			111,343
Average basic shares outstanding		6,966			7,148			7,317			7,487			7,607			7,142			7,700
Average diluted shares outstanding		7,017			7,200			7,335			7,487			7,607			7,167			7,700

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

At and for the Three and Nine Months Ended September 30, 2021 and 2020

($ in thousands)	Three Months Ended Sep. 30, 2021								Three Months Ended Sep. 30, 2020
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate

Assets
Taxable securities/cash	$	388,800		$	939		0.97	%	$	176,821		$	494		1.12	%
Nontaxable securities		8,436			94		4.46	%		6,082			87		5.72	%
Loans, net		856,486			10,000		4.67	%		907,483			10,226		4.51	%
Total earning assets		1,253,722			11,033		3.52	%		1,090,386			10,807		3.96	%
Cash and due from banks		6,975								53,532
Allowance for loan losses		(13,475	)							(10,448	)
Premises and equipment		25,820								23,968
Other assets		60,327								59,405
Total assets	$	1,333,369							$	1,216,843

Liabilities
Savings, MMDA and interest bearing demand	$	695,801		$	441		0.25	%	$	531,913		$	690		0.52	%
Time deposits		164,432			268		0.65	%		254,381			733		1.15	%
Repurchase agreements & other		24,672			12		0.19	%		23,811			12		0.20	%
Advances from Federal Home Loan Bank		5,500			40		2.91	%		8,272			59		2.85	%
Trust preferred securities		10,310			49		1.90	%		10,310			54		2.10	%
Subordinated debt		19,528			199		4.08	%		-			-		0.00	%
Total interest bearing liabilities		920,243			1,009		0.44	%		828,687			1,548		0.75	%
Non interest bearing demand		249,258			-					221,385			-
Total funding		1,169,501					0.35	%		1,050,072					0.59	%
Other liabilities		19,303								26,863
Total liabilities		1,188,804								1,076,935
Equity		144,565								139,908

Total liabilities and equity	$	1,333,369							$	1,216,843

Net interest income				$	10,024							$	9,259

Net interest income as a percent of average interest-earning assets - GAAP measure							3.20	%							3.40	%

Net interest income as a percent of average interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis							3.21	%							3.41	%

	Nine Months Ended Sep. 30, 2021								Nine Months Ended Sep. 30, 2020
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate

Assets
Taxable securities/cash	$	370,743		$	2,417		0.87	%	$	161,947		$	1,696		1.40	%
Nontaxable securities		7,781			267		4.58	%		6,363			246		5.15	%
Loans, net		857,703			29,217		4.54	%		879,536			30,104		4.56	%
Total earning assets		1,236,227			31,901		3.44	%		1,047,846			32,046		4.08	%
Cash and due from banks		7,554								28,040
Allowance for loan losses		(13,297	)							(9,560	)
Premises and equipment		24,442								23,855
Other assets		60,595								50,827
Total assets	$	1,315,521							$	1,141,008

Liabilities
Savings, MMDA and interest bearing demand	$	661,433		$	1,413		0.28	%	$	483,156		$	2,550		0.70	%
Time deposits		184,668			1,076		0.78	%		253,398			2,302		1.21	%
Repurchase agreements & Other		24,139			35		0.19	%		21,856			60		0.37	%
Advances from Federal Home Loan Bank		6,846			147		2.86	%		16,263			251		2.06	%
Trust preferred securities		10,310			150		1.94	%		10,310			204		2.64	%
Subordinated debt		9,811			274		3.72	%		-			-		0.00	%
Total interest bearing liabilities		897,207			3,095		0.46	%		784,983			5,367		0.91	%
Non interest bearing demand		253,791					0.36	%		200,251					0.73	%
Total funding		1,150,998								985,234
Other liabilities		20,503								24,618
Total liabilities		1,171,501								1,009,852
Equity		144,020								131,156

Total liabilities and equity	$	1,315,521							$	1,141,008

Net interest income				$	28,806							$	26,679

Net interest income as a percent of average interest-earning assets - GAAP measure							3.11	%							3.39	%

Net interest income as a percent of average interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis							3.12	%							3.41	%

	Three Months Ended						Nine Months Ended
Non-GAAP reconciliation ($ in thousands, except per share & ratios)	Sep. 30, 2021			Sep. 30, 2020			Sep. 30, 2021			Sep. 30, 2020

Total Operating Revenue	$	16,673		$	19,677		$	52,914		$	47,873
Adjustment to (deduct)/add OMSR recapture/impairment*		(248	)		(326	)		(2,854	)		2,974
Adjusted Total Operating Revenue		16,425			19,351			50,060			50,847

Total Operating Expense	$	11,256		$	11,335		$	33,241		$	32,403
Adjustment for merger expenses**		-			-			-			(1,241	)
Adjusted Total Operating Expense		11,256			11,335			33,241			31,162

Income before Income Taxes		5,117			6,542			18,623			11,770
Adjustment for OMSR & merger expenses		(248	)		(326	)		(2,854	)		4,215
Adjusted Income before Income Taxes		4,869			6,216			15,769			15,985

Provision for Income Taxes		1,014			1,292			3,678			2,184
Adjustment for OMSR & merger expenses***		(52	)		(68	)		(599	)		885
Adjusted Provision for Income Taxes		962			1,224			3,079			3,070

Net Income		4,103			5,250			14,945			9,586
Adjustment for OMSR & merger expenses		(196	)		(258	)		(2,255	)		3,330
Adjusted Net Income		3,907			4,992			12,690			12,917

Diluted Earnings per Share		0.58			0.69			2.08			1.25
Adjustment for OMSR & merger expenses		(0.03	)		(0.04	)		(0.31	)		0.42
Adjusted Diluted Earnings per Share	$	0.56		$	0.65		$	1.77		$	1.67

Return on Average Assets		1.23	%		1.73	%		1.51	%		1.12	%
Adjustment for OMSR & merger expenses		-0.06	%		-0.08	%		-0.17	%		0.29	%
Adjusted Return on Average Assets		1.17	%		1.64	%		1.34	%		1.41	%

valuation adjustment to the Company’s mortgage servicing rights

transaction costs related to the Edon acquisition

***

tax effect is calculated using a 21% statutory federal corporate income tax rate