10-21-13 4:30 PM EDT | Email Article
  • Consolidated earnings up 3.1 percent year over year, up 21.0 percent YTD
  • Nonperforming assets declined to 1.4 percent of total assets; down 6.7 percent from 2012
  • Revenue expanded despite slowing mortgage origination environment; up 4.5 percent YTD
  • Portfolio loans increased $20.2 million, or 4.4 percent, year over year
  • Tangible common equity of 6.2 percent, up 11.6 percent year over year
  • Operating expense down 2.4 percent year over year
  • YTD Return on Assets at 83 basis points, Return on Equity at 9.8 percent

DEFIANCE, Ohio, October 21, 2013 (GLOBE NEWSWIRE) -- SB Financial Group, Inc. (Nasdaq:SBFG) ("SB Financial" or the "Company"), a diversified financial services company providing full-service community banking, mortgage banking, wealth management and item processing services, today reported earnings for the third quarter ended September 30, 2013.

Consolidated earnings for SB Financial include the results of the Company's Banking Group, consisting primarily of State Bank ("State Bank" or the "Bank"), and the Company's data services subsidiary, Rurbanc Data Services, Inc. (dba "RDSI Banking Systems" or "RDSI"). For the quarter ended September 30, 2013, SB Financial reported net income of $1.3 million, or $0.28 per diluted share, compared to net income of $1.3 million, or $0.27 per diluted share for the quarter ended September 30, 2012, and net income of $1.3 million, or $0.27 per diluted share, for the quarter ended June 30, 2013.

For the nine months of 2013, net income was $4.0 million, or $0.82 per common share, compared to $3.3 million, or $0.68 per common share, for the prior-year nine month period.

Mark Klein, President and CEO of SB Financial Group, stated, "We are pleased with our third quarter results, which delivered earnings improvement compared to both the prior-year third quarter and the linked quarter. Additionally, over the past five quarters, SB Financial has demonstrated a consistent, positive earnings trend. Overall, despite a slowdown in mortgage origination volume, we continue to make progress in the execution of our key initiatives for the year by delivering steady revenue growth, improving asset quality and expanding our service offering utilization within our existing client base."

RESULTS OF OPERATIONS

Consolidated Revenue

Total revenue, consisting of net interest income fully tax equivalent (FTE) and noninterest income, was $9.0 million for the third quarter of 2013, up 0.1 percent, from the third quarter of 2012, and lower by $0.3 million, or 3.1 percent, from the linked quarter. Revenue was impacted in the quarter by the 32.6 percent decline in mortgage originations from the linked quarter.

Net interest income (FTE) for the 2013 third quarter was $5.3 million, down 4.5 percent year over year, reflecting the impact of declining yields on the loan portfolio, which was partially offset by lower funding costs. The net interest margin (FTE) was 3.7 percent for the third quarter of 2013, compared to 3.9 percent for the third quarter of 2012. Mr. Klein continued, "The current rising interest rate environment affects the banking industry as a whole, and is resulting in pressure on the yield of our loan portfolio and the volumes of our mortgage loan originations. Despite this headwind, we are confident in our ability to build on our existing mortgage business for the remainder of the year and into 2014."

Noninterest Income

Noninterest income was $3.7 million for the third quarter of 2013, up $0.3 million, or 8.9 percent, from the third quarter of 2012. Mortgage loan originations for the third quarter of 2013 were $55.2 million, a decrease of $35.5 million, or 39.1 percent, from the $90.6 million generated in the third quarter of 2012. For the nine months ended September 30, 2013, mortgage originations were $209.1 million, down $29.8 million, or 12.5 percent, from the nine months ended September 30, 2012.

Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.8 million for the third quarter of 2013, compared to $1.9 million for the linked quarter and $1.4 million for the year-ago third quarter. The mortgage servicing valuation adjustment in the third quarter of 2013 was a favorable $0.2 million, compared to $0.3 million for the linked quarter. The mortgage servicing portfolio at the end of the third quarter 2013 was $597.0 million, up $108.1 million, or 22.1 percent, from the end of the third quarter 2012.

Mortgage Banking ($000's)Three Months Ended
 Sep. 2013Jun. 2013Mar. 2013Dec. 2012Sep. 2012
Mortgage originations $55,192 $81,945 $71,967 $93,619 $90,685
Mortgage sales 58,101 67,050 68,431 93,993 81,862
Mortgage servicing portfolio 597,030 575,091 548,493 528,086 488,930
Mortgage servicing rights 5,076 4,613 4,068 3,775 3,346
           
Mortgage servicing revenue:          
Loan servicing fees 367 350 338 319 297
OMSR amortization (164) (205) (330) (362) (369)
Net administrative fees 203 145 8 (43) (72)
OMSR valuation adjustment 205 273 171 195 (120)
Net loan servicing fees 408 418 179 152 (192)
Gain on sale of mortgages 1,356 1,450 1,484 2,136 1,572
Mortgage banking revenue, net$1,764 $1,868 $1,663 $2,288 $1,380

SB Financial's fee income includes a diversity of services, such as wealth management, deposit fees and income from bank-owned life insurance. Wealth management increased revenue by 3.6 percent from the year-ago quarter as assets under management, which currently stand at $339.7 million, grew by $30.2 million, or 9.8 percent, from the third quarter of 2012. Noninterest income contributed 41.3 percent of third quarter 2013 revenue (FTE); this compares to a 38.2 percent contribution of revenue (FTE) for third quarter 2012.

Gross revenue generated by RDSI, including services provided to SB Financial/State Bank, was $0.5 million for the third quarter of 2013. Net data services fees, excluding SB Financial/State Bank intercompany transactions, were $0.3 million in the third quarter of 2013, down $0.2 million from the year-ago quarter. Mr. Klein added, "We made the decision this quarter to exit the network services business and concentrate our technology efforts in item and statement processing. We believe the reallocation of resources will better serve the Company in its long-term growth strategy."

Data Services ($000's)Sep. 2013Jun. 2013Mar. 2013Dec. 2012Sep. 2012
Data Processing & Network Services $104 $207 $270 $179 $229
Payment Solutions 403 493 484 549 488
Contract Buyout  -- -- -- -- 53
Vendor Settlement -- -- -- 334 --
RDSI Gross Revenue 507 700 754 1,062 780
Less: Intercompany (174) (242) (340) (251) (285)
Net Data Services Fees $333 $458 $414 $811 $485
Core Data Service Fees $333 $458 $414 $477 $432

Loan Loss Provision

The loan loss provision was $0.4 million for the third quarter of 2013, which covers the net charge-offs for the quarter of $0.3 million. Asset quality metrics include a 21.9 percent decline in non-accruing and restructured loans, and a 24.6 percent reduction in year-to-date net charge-offs from the prior-year nine-month period.  The loan loss reserve at third quarter-end 2013 was 1.5 percent of total loans, providing 97.1 percent coverage of nonperforming loans; this compares to reserve coverage of 95.9 percent at third quarter-end 2012.

Noninterest Expense

For the third quarter of 2013, noninterest expense was $6.6 million, down $0.2 million, or 2.4 percent, from the 2012 third quarter. Year-to-date noninterest expense was $20.3 million, up 0.2 percent, from the first nine months of 2012. Compensation expense was down from the linked quarter reflecting the lower level of mortgage originations. Year-to-date FDIC insurance is down 43.0 percent, from the prior year, which reflects State Bank's improved risk profile.

"Expense control continues to be a major focus for management and we continue to reduce our fixed costs each quarter. It is especially gratifying to have significantly lower FDIC premiums, reflecting the improvement in State Bank's asset quality and risk profile." said Mr. Klein.

Balance Sheet

Total assets as of September 30, 2013 were $633.4 million, an increase of $3.2 million, or 0.5 percent, from the third quarter-end 2012. Total deposits as of third quarter 2013 were $521.5 million, higher by $6.3 million than the third quarter-end 2012.

Total loans held for investment (HFI) were $475.2 million at September 30, 2013 compared to $455.0 million for the prior-year quarter-end, up $20.2 million, or 4.4 percent. Commercial real estate loans accounted for the majority of growth, up $11.1 million, or 5.6 percent, and residential real estate loans, up $10.8 million, or 12.5 percent. For the nine months ended September 30, 2013, loans have increased by $11.8 million, primarily from increases in commercial and residential real estate, offsetting declines in agricultural lending.

Mr. Klein stated, "We have been pleased with our consistent loan growth over the past year, and we find the additional loan growth opportunities we are seeing across our markets encouraging. We believe that as a regionally-focused bank that we are well positioned to capture successfully these new business opportunities."

Loan Portfolio ($000's) Sep. 2013Jun. 2013Mar. 2013Dec. 2012Sep. 2012Variance YOY
Commercial $81,571 $84,766 $80,431 $81,491 $76,043 $5,528
% of Total 17.2% 18.3% 17.7% 17.6% 16.7% 7.3%
Commercial RE 209,739 199,795 199,615 201,392 198,682 11,057
% of Total 44.1% 43.1% 43.8% 43.5% 43.6% 5.6%
Agriculture 39,636 38,552 37,950 42,276 42,988 (3,352)
% of Total 8.3% 8.3% 8.3% 9.1% 9.4% (7.8%)
Residential RE 96,477 93,292 89,669 87,859 85,727 10,750
% of Total 20.3% 20.1% 19.7% 19.0% 18.8% 12.5%
Consumer & Other 47,810 47,630 47,778 50,371 51,581 (3,771)
% of Total 10.1% 10.3% 10.5% 10.9% 11.3% (7.3%)
             
Total Loans$475,233 $464,035 $455,443 $463,389 $455,021 $20,212
         4.4%

Asset Quality

SB Financial continues to improve its asset quality, reporting nonperforming assets of $8.8 million for the current quarter, lower by $0.6 million, or 6.7 percent, than the prior-year third quarter. From the linked quarter, nonperforming assets increased due to an agricultural equipment dealer bankruptcy. Net charge-offs of $0.3 million were just 25 basis points for the quarter and up slightly from the prior-year third quarter. Delinquency levels have declined, with the 30-89 day category totaling $0.4 million at the end of the 2013 third quarter, compared to $0.7 million for the prior-year third quarter. Mr. Klein continued, "All of our asset quality measures, especially delinquency, have shown improvement. We have continued to add to our loan loss reserve, resisting thus far in 2013 to release loan loss reserves to impact our earnings."

Summary of Nonperforming Assets ($000's)
           
Nonperforming Loan CategorySep. 2013Jun. 2013Mar. 2013Dec. 2012Sep. 2012
Commercial $2,738 $982 $1,135 $1,246 $1,362
% of Total Commercial loans 3.4% 1.2% 1.4% 1.5% 1.8%
Commercial RE loans 642 519 457 782 448
% of Total CRE loans 0.3% 0.3% 0.2% 0.4% 0.2%
Agriculture -- -- -- -- 3
% of Total Ag loans -- -- -- -- 0.01%
Residential RE 1,837 2,285 2,614 2,631 2,607
% of Total Res. RE loans 1.9% 2.5% 2.9% 3.0% 3.0%
Consumer & Other 363 600 605 646 829
% of Consumer & Other loans 0.8% 1.3% 1.3% 1.3% 1.6%
Total Nonaccruing Loans  5,580 4,386 4,811 5,305 5,249
% of Total Loans 1.2% 1.0% 1.0% 1.1% 1.2%
Accruing Restructured Loans 1,756 1,262 1,273 1,258 1,735
Total Nonaccruing & Restructured $7,336 $5,648 $6,084 $6,563 $6,984
% of Total Loans 1.5% 1.2% 1.3% 1.4% 1.5%
OREO & Repossessed Vehicles 1,430 1,955 2,270 2,367 2,415
Total Nonperforming Assets $8,766 $7,603 $8,354 $8,930 $9,399
% of Total Assets 1.4% 1.2% 1.3% 1.4% 1.5%
           

Capitalization

Improving capital ratios remains an important focus of management. The Tangible equity ratio improved by 65 basis points over the past twelve months, and now stands at 6.2 percent. All bank regulatory ratios remain in excess of "well-capitalized" levels. At September 30, 2013, State Bank's Total Risk-based Capital was estimated to be $60.0 million, $21.6 million above the well-capitalized level. The Total Risk-based Capital Ratio is estimated at 12.6 percent.

About SB Financial Group

Based in Defiance, Ohio, SB Financial Group, Inc. is a financial services holding company with two wholly-owned operating subsidiaries: State Bank and RDSI Banking Systems (RDSI). State Bank operates through 17 banking centers in seven Northwestern Ohio counties, one center in Fort Wayne, Indiana; and three loan production offices: two in Columbus, Ohio and one in Angola, Indiana. State Bank offers a full range of financial services for consumers and small businesses, including wealth management, mortgage banking, commercial and agricultural lending. RDSI provides item processing services to community banks located in the Midwest. The Company's common stock is listed on the NASDAQ Global Market under the symbol SBFG.

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, insurance and mortgage industries, competitive factors specific to markets in which SB Financial Group and its subsidiaries operate, future interest rate levels, legislative and regulatory actions, capital market conditions, general economic conditions, geopolitical events, the loss of key personnel and other factors. Additional factors that could cause results to differ from those described above can be found in the Company's Annual Report on Form 10-K and documents subsequently filed by SB Financial Group with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made, and SB Financial Group 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 Group 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 providing certain non-GAAP financial measures provides investors with information useful in understanding the Company's financial performance, its performance trends and financial position. Specifically, SB Financial Group provides measures based on "core operating earnings," which excludes merger, integration and restructuring expenses that are not reflective of on-going operations or not expected to recur. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results.

SB FINANCIAL GROUP, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - (Unaudited)
           
 SeptemberJuneMarchDecemberSeptember
($ in Thousands)20132013201320122012
           
ASSETS          
Cash and due from banks $19,016  $10,750  $28,031  $19,144 $10,289
           
Securities available for sale, at fair value  86,620  95,379  98,390  98,702  101,247
Other securities - FRB and FHLB Stock  3,748  3,748  3,748  3,748  3,748
Total investment securities  90,368  99,127  102,138  102,450  104,995
           
Loans held for sale  2,407  10,715  8,560  6,147  11,584
           
Loans, net of unearned income  475,233  464,035  455,443  463,389  455,021
Allowance for loan losses  (7,120)  (7,013)  (6,992)  (6,811)  (6,696)
Net loans  468,113  457,022  448,451  456,578  448,325
           
Premises and equipment, net  12,399  12,483  12,738  12,633  12,898
Purchased software  320  289  300  330  334
Cash surrender value of life insurance  12,826  12,742  12,659  12,577  12,491
Goodwill  16,353  16,353  16,353  16,353  16,353
Core deposits and other intangibles  784  913  1,066  1,219  1,376
Foreclosed assets held for sale, net  1,430  1,955  2,270  2,367  2,415
Mortgage servicing rights  5,076  4,613  4,068  3,775  3,346
Accrued interest receivable  1,694  1,575  1,618  1,235  1,832
Other assets  2,626  2,955  3,048  3,426  3,967
Total assets  $633,412 $631,492 $641,300 $638,234 $630,205
           
           
           
LIABILITIES AND EQUITY          
Deposits          
Non interest bearing demand $78,217  $76,355  $79,579 $77,799 $69,250
Interest bearing demand  124,860  118,957  123,748  117,289  112,230
Savings  61,899  61,513  62,404  57,461  53,505
Money market  78,406  78,487  81,130  80,381  78,006
Time deposits  178,161  176,066  185,398  194,071  202,259
Total deposits  521,543  511,378  532,259  527,001  515,250
           
Notes payable  680  1,148  1,424  1,702  1,975
Advances from Federal Home Loan Bank  16,000  30,000  17,500  21,000  18,500
Repurchase agreements  14,836  9,314  10,983  10,333  13,735
Trust preferred securities  20,620  20,620  20,620  20,620  20,620
Accrued interest payable  448  715  515  138  4,223
Other liabilities  3,748  3,930  3,704  4,156  3,972
Total liabilities  577,875  577,105  587,005  584,950  578,275
           
Equity          
Preferred stock  --   --   --   --   -- 
Common stock   12,569  12,569  12,569  12,569  12,569
Additional paid-in capital  15,399  15,392  15,381  15,374  15,363
Retained earnings  28,846  27,648  26,476  25,280  23,755
Accumulated other comprehensive income  415  496  1,623  1,830  2,012
Treasury stock  (1,692)  (1,718)  (1,754)  (1,769)  (1,769)
Total equity  55,537  54,387  54,295  53,284  51,930
           
Total liabilities and equity  $633,412  $631,492  $641,300 $638,234 $630,205
           
 
SB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
               
($ in thousands, except share data)Three Months EndedNine Months Ended
 SeptemberJuneMarchDecemberSeptemberSeptemberSeptember
Interest income2013201320132012201220132012
Loans              
Taxable  $ 5,649 $ 5,874 $ 5,883 $ 5,840 $ 6,106 $ 17,406 $ 18,071
Nontaxable  14  16  24  22  21  54  68
Securities              
Taxable   305  296  330  330  383  931  1,185
Nontaxable  178  174  170  157  156  522  449
Total interest income  6,146  6,360  6,407  6,349  6,666  18,913  19,773
               
Interest expense              
Deposits  539  573  606  653  694  1,718  2,316
Other borrowings  11  12  14  15  17  37  49
Repurchase Agreements  2  3  2  3  11  7  139
Federal Home Loan Bank advances  83  84  90  92  92  257  241
Trust preferred securities  336  338  403  431  418  1,077  1,451
Total interest expense  971  1,010  1,115  1,194  1,232  3,096  4,196
               
Net interest income  5,175  5,350  5,292  5,155  5,434  15,817  15,577
               
Provision for loan losses   401  200  299  400  300  900  950
               
Net interest income after provision for loan losses  4,774  5,150  4,993  4,755  5,134  14,917  14,627
               
Noninterest income              
Trust fees  669  652  643  606  646  1,964  1,895
Customer service fees  659  639  616  648  677  1,914  1,976
Gain on sale of mtg. loans & OMSR's  1,356  1,450  1,484  2,136  1,572  4,290  4,148
Mortgage loan servicing fees, net  408  418  179  152  (192)  1,005  (28)
Gain on sale of non-mortgage loans  44  82  156  94  170  282  170
Data service fees  333  458  414  811  485  1,205  1,704
Net gain on sales of securities  28  --   20  --   --   48  -- 
Gain/(loss) on sale/disposal of assets  15  (129)  (105)  (54)  (151)  (219)  (257)
Other income  198  250  160  255  201  608  589
Total non-interest income  3,710  3,820  3,567  4,648  3,408  11,097  10,197
               
Noninterest expense              
Salaries and employee benefits  3,343  3,688  3,439  3,825  3,597  10,470  10,693
Net occupancy expense  507  513  541  494  515  1,561  1,591
Equipment expense  701  703  755  692  722  2,159  2,145
FDIC insurance expense  98  94  109  100  91  301  528
Fixed asset and software impairment  --   --   --   65  --   --   -- 
Data processing fees  189  194  77  132  103  460  337
Professional fees  456  499  429  686  451  1,384  1,226
Marketing expense  135  92  108  115  85  335  278
Printing and office supplies  49  151  46  46  39  246  184
Telephone and communication  156  158  158  146  151  472  434
Postage and delivery expense  199  209  215  204  223  623  652
State, local and other taxes  140  138  134  136  128  412  366
Employee expense  125  126  152  113  118  403  343
Other intangible amortization expense  129  153  153  158  157  435  472
OREO Impairment  --   --   33  --   --   33  58
Other expenses  335  362  321  300  345  1,018  965
Total non-interest expense  6,562  7,080  6,670  7,212  6,725  20,312  20,272
               
Income before income tax expense  1,922  1,890  1,890  2,191  1,817  5,702  4,552
Income tax expense   578  571  572  667  513  1,721  1,262
               
Net income  $1,344  $1,319  $1,318 $1,524  $1,304 $3,981  $3,290
               
Common share data:              
Basic earnings per common share $0.28 $0.27 $0.27 $0.31 $0.27 $0.82 $0.68
               
Diluted earnings per common share $0.28 $0.27 $0.27 $0.31 $0.27 $0.82 $0.68
               
Average shares outstanding ($ in thousands):              
Basic:  4,867  4,866  4,863  4,862  4,862  4,865  4,862
Diluted:   4,881  4,870  4,870  4,862  4,862  4,877  4,862
               
 
SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
               
($ in thousands, except per share data)Three Months EndedNine Months Ended
 SeptemberJuneMarchDecemberSeptemberSeptemberSeptember
SUMMARY OF OPERATIONS2013201320132012201220132012
               
               
 Net interest income  $5,175 5,350  5,292  5,155  5,434  15,817  15,577
 Tax-equivalent adjustment $ 99  98  100  92  91  297  266
 Tax-equivalent net interest income   $5,274  5,448  5,392  5,247  5,525  16,114  15,843
 Provision for loan loss  $401 200  299  400  300  900  950
 Noninterest income $3,710 3,820  3,567  4,648  3,408  11,097  10,197
 Total revenue, tax-equivalent  $8,984  9,268  8,959  9,895  8,933  27,211  26,040
 Noninterest expense $6,562 7,080  6,670  7,212  6,725  20,312  20,272
 Pre provision pretax income  $2,323  2,090  2,189  2,591  2,117  6,602  5,502
 Pretax income  $1,922  1,890  1,890  2,191  1,817  5,702  4,552
 Net income  $1,344 1,319  1,318  1,524  1,304  3,981  3,290
               
               
PER SHARE INFORMATION:              
 Basic & diluted earnings per share $0.28 0.27 0.27 0.31 0.27 0.82 0.68
 Common dividends  $0.03 0.055  --   --   --   0.085  -- 
 Book value per common share  $11.41  11.18  11.16  10.96  10.68  11.41  10.68
 Tangible book value per common share $7.89 7.63 7.58 7.35 7.03 7.89 7.03
               
               
PERFORMANCE RATIOS:              
 Return on average assets  0.84% 0.82% 0.83% 0.95% 0.82% 0.83% 0.69%
 Return on average common equity 9.82% 9.70% 9.82% 11.64% 10.25% 9.78% 8.84%
 Return on avg. tangible common equity 14.31% 14.25% 14.56% 17.57% 15.91% 14.36% 13.96%
 Efficiency ratio  72.40% 75.54% 73.56% 71.96% 74.28% 73.85% 76.82%
 Earning asset yield 4.40% 4.58% 4.65% 4.50% 4.78% 4.54% 4.77%
 Cost of interest bearing liabilities 0.79% 0.81% 0.90% 0.96% 0.98% 0.83% 1.10%
 Net interest margin 3.65% 3.79% 3.78% 3.65% 3.85% 3.74% 3.71%
 Tax equivalent effect 0.07% 0.07% 0.08% 0.07% 0.06% 0.07% 0.06%
 Net interest margin - fully tax equivalent basis  3.72% 3.86% 3.86% 3.72% 3.91% 3.81% 3.77%
               
               
ASSET QUALITY RATIOS:              
 Gross charge-offs  $307  213  136  300  302  656  1,028
 Recoveries $13  34  18  15  78  65  244
 Net charge-offs  $294  179  118  285  223  591  784
 Nonaccruing loans/ Total loans 1.17% 0.95% 1.06% 1.14% 1.15% 1.17% 1.15%
 Nonperforming loans/ Total loans 1.54% 1.22% 1.34% 1.42% 1.53% 1.54% 1.53%
 Nonperforming assets/ Loans & OREO 1.84% 1.63% 1.83% 1.92% 2.05% 1.84% 2.05%
 Nonperforming assets/ Total assets 1.38% 1.20% 1.30% 1.40% 1.49% 1.38% 1.49%
 Allowance for loan loss/ Nonperforming loans 97.1% 124.2% 114.9% 103.8% 95.9% 97.06% 95.88%
 Allowance for loan loss/ Total loans 1.50% 1.51% 1.54% 1.47% 1.47% 1.50% 1.47%
 Net loan charge-offs/ Average loans (ann.) 0.25% 0.15% 0.10% 0.25% 0.20% 0.17% 0.23%
 Loan loss provision/ Net charge-offs 136.39% 111.73% 253.39% 140.56% 134.46% 152.28% 121.25%
               
               
CAPITAL & LIQUIDITY RATIOS:              
 Loans/ Deposits 91.12% 90.74% 85.57% 87.93% 88.31% 91.12% 88.31%
 Equity/ Assets 8.77% 8.61% 8.47% 8.35% 8.24% 8.77% 8.24%
 Tangible equity/ Tangible assets 6.23% 6.04% 5.91% 5.75% 5.58% 6.23% 5.58%
               
END OF PERIOD BALANCES              
 Total loans  $475,233 464,035  455,443  463,389  455,021  475,233 455,021
 Total assets  $633,412 631,492  641,300  638,234  630,205  633,412 630,205
 Deposits  $521,543 511,378  532,259  527,001  515,250  521,543 515,250
 Stockholders equity $55,537 54,387  54,295  53,284  51,930  55,537 51,930
 Tangible equity  $38,400  37,121  36,876  35,712  34,201  38,400 34,201
 Full-time equivalent employees  196 198 204 204  199  196 199
 Period-end basic shares outstanding  4,869  4,867  4,863  4,862  4,862  4,869 4,862
               
               
AVERAGE BALANCES              
 Total loans  $474,349 464,105  459,988  455,705  454,634  466,200  452,967
 Total earning assets  $567,787 564,050  559,383  564,564  565,144  563,730  559,795
 Total assets $636,437 640,382  638,801  639,048  635,012  638,667  638,276
 Deposits $516,669 520,259  524,901  522,970  515,795  520,359  522,150
 Stockholders equity $54,758 54,398  53,711  52,351  50,905  54,287  49,622
 Tangible equity  $37,556  37,037  36,199  34,686  32,779  36,964  31,405
               
 
SB FINANCIAL GROUP, INC.
Rate Volume Analysis - (Unaudited)
For the Three Months Ended September 30, 2013 and 2012
             
($ in Thousands)Three Months Ended September 30, 2013Three Months Ended September 30, 2012
  Average   Average Average   Average
Assets Balance Interest Rate Balance Interest Rate
             
Taxable securities $74,918  305 1.63% $87,528  383 1.76%
Non-taxable securities  18,520  270 5.82%  15,566  236 6.06%
Federal funds sold  --   --   N/A  --   --   N/A
Loans, net  474,349  5,670 4.78%  462,050  6,138 5.31%
             
 Total earning assets  567,787  6,245 4.40%  565,144  6,757 4.78%
             
Cash and due from banks  15,270      13,407    
Allowance for loan losses  (6,947)      (6,707)    
Premises and equipment  14,461      15,390    
Other assets  45,866      47,778    
             
 Total assets $636,437      $635,012    
             
Liabilities            
Savings and interest-bearing demand $262,166  19 0.03% $243,004  47 0.08%
Time deposits  177,802  520 1.17%  203,104  647 1.26%
Repurchase agreements  12,347  2 0.06%  13,972  11 0.31%
Advances from FHLB  19,038  83 1.74%  18,082  92 2.04%
Junior subordinated debentures  20,620  336 6.52%  20,620  403 7.82%
Notes payable & other borrowed funds  914  11 4.81%  2,076  31 6.00%
 Total interest-bearing liabilities  492,887  971 0.79%  500,858  1,232 0.98%
             
Non interest-bearing demand  76,701      69,687    
Other liabilities  12,091      13,562    
             
 Total liabilities  581,679      584,107    
             
Equity  54,758      50,905    
             
 Total liabilities and equity $636,437      $635,012    
             
Net interest income (tax equivalent basis)    $ 5,274      $ 5,525  
             
Net interest income as a percent of average interest-earning assets  3.72%    3.91%
             
 Nine Months Ended September 30, 2013Nine Months Ended September 30, 2012
  Average   Average Average   Average
Assets Balance Interest Rate Balance Interest Rate
             
Taxable securities $80,553  931 1.54% $91,917  1,185 1.72%
Non-taxable securities  16,977  791 6.21%  14,911  680 6.08%
Federal funds sold  --   --   N/A  --   --   N/A
Loans, net  466,200  17,488 5.00%  452,967  18,174 5.35%
             
 Total earning assets  563,730  19,210 4.54%  559,795  20,039 4.77%
             
Cash and due from banks  20,307      21,740    
Allowance for loan losses  (6,924)      (6,506)    
Premises and equipment  14,913      14,962    
Other assets  46,641      48,285    
             
 Total assets $638,667      $638,276    
             
Liabilities            
Savings and interest-bearing demand $262,177  58 0.03% $244,744  167 0.09%
Time deposits  181,348  1,660 1.22%  208,645  2,149 1.37%
Repurchase agreements  10,959  7 0.09%  16,344  139 1.14%
Advances from FHLB  19,410  257 1.76%  14,641  241 2.19%
Junior subordinated debentures  20,620  1,077 6.96%  20,620  1,396 9.03%
Notes payable & other borrowed funds  1,211  37 4.07%  2,315  103 5.94%
             
 Total interest-bearing liabilities  495,725  3,096 0.83%  507,308  4,196 1.10%
             
Non interest-bearing demand  76,834      68,761    
Other liabilities  11,821      12,584    
             
 Total liabilities  584,380      588,653    
             
Equity  54,287      49,622    
             
 Total liabilities and equity $638,667      $638,275    
             
Net interest income (tax equivalent basis)    $ 16,114      $ 15,843  
             
             
Net interest income as a percent of average interest-earning assets  3.81%    3.77%
             
CONTACT: Investor Contact Information:
         Anthony V. Cosentino
         Executive Vice President and
         Chief Financial Officer
         419.785.3663
         Tony.Cosentino@YourStateBank.com
GlobeNewswire, Inc. 2013
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Morningstar - - SB Financial Group, Inc. Announces Improved Third Quarter 2013 Results
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