SBFG SB Finanical Group Inc

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, 2022.

Third quarter 2022 highlights:

• Net income of $3.3 million; diluted earnings per share (“EPS”) of $0.47 or a 19.0 percent decrease compared to the prior year third quarter as increased Net Interest Income was offset by Noninterest Income headwinds
• Noninterest expense of $10.4 million declined 3.9 percent from the linked quarter
• Loan growth of $29.6 million from the linked quarter, or 13.2 percent annualized
• Deposit growth of $14.1 million from the linked quarter, or 5.3 percent annualized
• Margin expansion of 8.7 percent from the linked quarter
• Strong asset quality with Nonperforming assets at 40 basis points and net recoveries in the quarter

Nine months ended September 30, 2022, highlights over prior-year nine months include:

• Net income of $9.0 million and diluted EPS of $1.27, compared to $14.9 million, or $2.08 per share or a 38.9 percent decrease

Third quarter 2022 trailing twelve-month highlights include:

• Loans excluding Paycheck Protection Program (“PPP”) loans, increased $81.5 million, or 9.6 percent from the prior year
• Deposits decreased by $25.8 million, or 2.3 percent to $1.09 billion
• Mortgage origination volume of $388.0 million; servicing portfolio of $1.36 billion up 1.6 percent

Highlights	Three Months Ended										Nine Months Ended
($ in thousands, except per share & ratios)	Sep. 2022			Sep. 2021			% Change				Sep. 2022			Sep. 2021			% Change
Operating revenue	$	14,473		$	16,673		-13.2	%			$	43,017		$	52,914		-18.7	%
Interest income		11,764			11,033		6.6	%				31,632			31,901		-0.8	%
Interest expense		1,334			1,009		32.2	%				3,133			3,095		1.2	%
Net interest income		10,430			10,024		4.1	%				28,499			28,806		-1.1	%
Provision for loan losses		-			300		0.0	%				-			1,050		-100.0	%
Noninterest income		4,043			6,649		-39.2	%				14,518			24,108		-39.8	%
Noninterest expense		10,384			11,256		-7.7	%				32,046			33,241		-3.6	%
Net income		3,342			4,103		-18.5	%				8,988			14,945		-39.9	%
Earnings per diluted share		0.47			0.58		-19.0	%				1.27			2.08		-38.9	%
Return on average assets		1.03	%		1.23	%	-16.3	%				0.91	%		1.51	%	-39.7	%
Return on average equity		10.89	%		11.35	%	-4.1	%				9.21	%		13.84	%	-33.5	%
Non-GAAP Measures
Adjusted net income	$	3,291		$	3,565		-7.7	%			$	8,046		$	12,690		-36.6	%
Adjusted diluted EPS		0.47			0.56		-16.1	%				1.13			1.77		-36.2	%
Adjusted return on average assets		1.01	%		1.17	%	-13.7	%				0.84	%		1.34	%	-37.3	%
Adjusted pre-tax, pre-provision income		4,023			4,869		-17.4	%				9,778			15,769		-38.0	%

“In the third quarter of 2022 we achieved another strong loan origination performance as loans grew $30 million, or 3.3 percent from the second quarter of 2022, or 13.2 percent annualized” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “Compared to prior year, net of PPP, organic loan growth was up $81.5 million or 9.6 percent. Strong loan growth and the increase in loan yields led to net interest margin expansion which partially offset the decline in mortgage revenue. Deposit balances stabilized during the quarter, however as short-term rates continue to rapidly increase our funding costs are beginning to rise.”

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, up 1.5% from the linked quarter and down 13.2 percent from the third quarter of 2021. Operating revenue was negatively impacted by the expected decline in mortgage banking revenue.

• Net interest income was up 8.7 percent from the linked quarter and up 4.1 percent from the year ago quarter.
• Net interest margin on a fully taxable equivalent basis (FTE) was up from both the linked and year-ago quarters by 30 and 25 basis points, respectively, primarily from the increase in loan balances of $29.6 million from the linked quarter. Net of PPP, net interest margin is higher by 55 basis points compared to the prior year.   
• Noninterest income was down 13 and 39 percent from the linked and year ago quarters, respectively, due to lower mortgage volume and OMSR recapture.      

Mortgage Loan Business

Mortgage loan originations for the third quarter of 2022 were $68.6 million, down $84.1 million, or 55.1 percent, from the year-ago quarter; likewise, total sales of originated loans were $39.2 million, down $83.9 million, or 68.2 percent.   For the first nine months of 2022, SB Financial had total volume of $261.4 million, of which $202.5 million (77.5 percent) was new purchase/construction lending, $39.0 million was external refinance (14.9 percent), and the remaining $19.9 million (7.6 percent) was internal refinance.

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.4 million for the third quarter of 2022, compared to $4.1 million for the year-ago quarter. The mortgage servicing valuation adjustment for the third quarter of 2022 was a positive $0.1 million, compared to a positive adjustment of $0.2 million for the third quarter of 2021. For the first nine months of 2022, the recapture of servicing rights was $1.2 million compared to a recapture of $2.9 million for the prior year nine months. The aggregate servicing valuation impairment ended the quarter at $0.3 million.   The servicing portfolio at September 30, 2022, was $1.36 billion, up $0.02 billion, or 1.6 percent, from $1.34 billion at September 30, 2021.

Mr. Klein noted, “Refinance activity declined to just 10.9 percent of mortgage originations in the quarter from 52.0 percent in the prior year as higher rates continue to significantly impact our Residential mortgage business line. We continue to believe that this business segment offers us the opportunity to drive new households as a number of our competitors have begun to abandon the residential market.”  

Mortgage Banking
($ in thousands)	Sep. 2022			Jun. 2022			Mar. 2022			Dec. 2021			Sep. 2021				AnnualGrowth
Mortgage originations	$	68,557		$	95,454		$	97,394		$	126,611		$	152,623			$	(84,066	)
Mortgage sales		39,176			49,915			72,154			110,543			123,083				(83,907	)
Mortgage servicing portfolio		1,362,666			1,369,732			1,375,554			1,362,962			1,341,439				21,227
Mortgage servicing rights		13,473			13,408			13,135			12,034			11,194				2,279
Mortgage servicing revenue
Loan servicing fees		858			863			861			850			850				8
OMSR amortization		(396	)		(496	)		(547	)		(807	)		(943	)			547
Net administrative fees		462			367			314			43			(93	)			555
OMSR valuation adjustment		65			239			890			581			248				(183	)
Net loan servicing fees		527			606			1,204			624			155				372
Gain on sale of mortgages		876			1,196			1,676			3,194			3,947				(3,071	)
Mortgage banking revenue, net	$	1,403		$	1,802		$	2,880		$	3,818		$	4,102			$	(2,699	)

Noninterest Income and Noninterest Expense

SB Financial’s noninterest income for the quarter was down from the prior year and the linked quarter by 39 and 13 percent, respectively. Gain on sale yields on mortgage loans were down nearly 100 basis points from the prior year and the total dollars of sales were down nearly $84 million. Wealth management revenue was down slightly from the prior year as market declines have had an adverse effect on the market value of assets under management. SB Financial’s title agency, Peak Title, was down just 6 percent from the prior year, as commercial transaction volume increased despite the residential mortgage slowdown.  

For the third quarter of 2022, noninterest expense of $10.4 million was down $0.9 million or 7.7 percent compared to the prior year.

Reduced expenses due to lower mortgage volume, has offset higher equipment expense related to technology improvements.

Mr. Klein stated, “We executed on a number of FTE reductions in our residential mortgage business line in the third quarter as we thoughtfully right sized resources to combat lower volume. We continue to believe that fee income across all of our other business lines remains strong and has reduced our reliance on mortgage sale gains.”

Noninterest Income / Noninterest Expense
($ in thousands, except ratios)	Sep. 2022			Jun. 2022			Mar. 2022			Dec. 2021			Sep. 2021				AnnualGrowth
Noninterest Income (NII)	$	4,043		$	4,673		$	5,802		$	6,589		$	6,649			$	(2,606)
NII / Total Revenue		27.9	%		32.8	%		40.6	%		42.1	%		39.9	%			-12.0%
NII / Average Assets		1.2	%		1.4	%		1.7	%		2.0	%		2.0	%			-0.8%
Total Revenue Growth		-13.2	%		-9.1	%		-46.9	%		-13.7	%		-15.3	%			2.1%
Noninterest Expense (NIE)	$	10,384		$	10,802		$	10,859		$	11,567		$	11,256			$	(872)
Efficiency Ratio		71.6	%		75.6	%		75.9	%		73.7	%		67.4	%			4.2%
NIE / Average Assets		3.2	%		3.3	%		3.2	%		3.5	%		3.4	%			-0.2%
Net Noninterest Expense/Avg. Assets		-2.0	%		-1.9	%		-1.5	%		-1.5	%		-1.4	%			-0.6%
Total Expense Growth		-7.7	%		-2.5	%		-0.5	%		8.3	%		-0.7	%			-7.0%

Balance Sheet

Total assets as of September 30, 2022, were $1.3 billion, or down 2.0 percent from the year ago quarter primarily due to the decrease in the investment portfolio. Total shareholders’ equity as of September 30, 2022, was $114.6 million, down 20.6 percent from a year ago due to the valuation adjustment on the Company’s bond portfolio, which has increased $32.7 million. Absent that negative impact, equity increased $3.1 million or 2.1 percent. SB Financial bought back 77,326 shares of our stock in the quarter at an average price of $17.27 or 132.1 percent of tangible book value per share.  

The investment portfolio of $248.5 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 19.1 percent of assets at September 30, 2022, and was down 2.2 percent from the year-ago period. Compared to the linked quarter, the investment portfolio was down $23.0 million as the amortization cash flow was used to fund higher margin loan growth.

Total loans held for investment were $925.2 million at September 30, 2022, up $78.7 million, or 9.3 percent, from September 30, 2021. Excluding PPP activity from both years, loan balances were up $81.5 million, or 9.6 percent.

Deposit balances of $1.09 billion at September 30, 2022, decreased by $0.03 billion, or 2.3 percent, since September 30, 2021. Deposits grew $14.1 million from the linked quarter.  

Mr. Klein continued, “The loan growth from closing deals from our strong pipelines improved the mix of our balance sheet as we also reduced the investment portfolio and funded additional growth with higher cost deposits. Our ability to grow interest bearing liabilities in the quarter was a positive while increasing those rates by just 19 bps from the linked quarter. We continue to see solid asset quality and are on pace to achieve zero net charge-offs for the full year of 2022.”

Loan Balances
($ in thousands, except ratios)	Sep. 2022			Jun. 2022			Mar. 2022			Dec. 2021			Sep. 2021			AnnualGrowth
Commercial	$	128,565		$	127,711		$	124,857		$	122,373		$	138,085		$	(9,520	)
% of Total		13.9	%		14.3	%		14.7	%		14.9	%		16.3	%		-6.9	%
Commercial RE		404,710			404,260			400,101			381,387			387,858			16,852
% of Total		43.7	%		45.1	%		47.0	%		46.4	%		45.8	%		4.3	%
Agriculture		60,522			60,586			55,741			57,473			57,374			3,148
% of Total		6.5	%		6.8	%		6.6	%		7.0	%		6.8	%		5.5	%
Residential RE		267,135			241,614			214,015			206,324			207,571			59,564
% of Total		28.9	%		27.0	%		25.2	%		25.1	%		24.5	%		28.7	%
Consumer & Other		64,317			61,440			55,957			55,157			55,660			8,657
% of Total		7.0	%		6.9	%		6.6	%		6.7	%		6.6	%		15.6	%
Total Loans	$	925,249		$	895,611		$	850,671		$	822,714		$	846,548		$	78,701
Total Growth Percentage																	9.3	%
Deposit Balances
($ in thousands, except ratios)	Sep. 2022			Jun. 2022			Mar. 2022			Dec. 2021			Sep. 2021			Annual Growth
Non-Int DDA	$	250,791		$	239,676		$	252,273		$	247,044		$	258,857		$	(8,066	)
% of Total		23.1	%		22.4	%		22.2	%		22.2	%		23.3	%		-3.1	%
Interest DDA		199,523			198,286			211,152			195,464			189,130			10,393
% of Total		18.4	%		18.5	%		18.6	%		17.6	%		17.0	%		5.5	%
Savings		201,402			215,285			236,394			237,571			246,414			(45,012	)
% of Total		18.5	%		20.1	%		20.8	%		21.3	%		22.2	%		-18.3	%
Money Market		258,975			276,274			289,699			276,462			258,741			234
% of Total		23.8	%		25.8	%		25.5	%		24.8	%		23.3	%		0.1	%
Time Deposits		175,202			142,258			148,553			156,504			158,518			16,684
% of Total		16.1	%		13.3	%		13.1	%		14.1	%		14.3	%		10.5	%
Total Deposits	$	1,085,893		$	1,071,779		$	1,138,071		$	1,113,045		$	1,111,660		$	(25,767	)
Total Growth Percentage																	-2.3	%

Asset Quality

SB Financial reported nonperforming assets of $5.2 million as of September 30, 2022, down $0.4 million or 7.6 percent from the year-ago quarter. The Company had net recoveries in the quarter, and for the year-to-date, the Company had $19,000 in net recoveries. The coverage ratio of problem loans to the loan loss allowance was at 313.3 percent at September 30, 2022.

Nonperforming Assets
($ in thousands, except ratios)	Sep. 2022			Jun. 2022			Mar. 2022			Dec. 2021			Sep. 2021			Annual Change
Commercial & Agriculture	$	114		$	140		$	142		$	143		$	144		$	(30	)
% of Total Com./Ag. loans		0.06	%		0.07	%		0.08	%		0.08	%		0.07	%		-20.8	%
Commercial RE		223			359			544			554			566			(343	)
% of Total CRE loans		0.06	%		0.09	%		0.14	%		0.15	%		0.15	%		-60.6	%
Residential RE		3,129			3,176			3,198			2,484			2,056			1,073
% of Total Res. RE loans		1.17	%		1.31	%		1.49	%		1.20	%		0.99	%		52.2	%
Consumer & Other		280			323			409			471			422			(142	)
% of Total Con./Oth. loans		0.44	%		0.53	%		0.73	%		0.85	%		0.76	%		-33.6	%
Total Nonaccruing Loans		3,746			3,998			4,293			3,652			3,188			558
% of Total loans		0.40	%		0.45	%		0.50	%		0.44	%		0.38	%		17.5	%
Accruing Restructured Loans		668			683			762			725			805			(137	)
Total Change (%)																	-17.0	%
Total Nonaccruing & Restructured Loans		4,414			4,681			5,055			4,377			3,993			421
% of Total loans		0.48	%		0.52	%		0.59	%		0.53	%		0.47	%		10.5	%
Foreclosed Assets and Other Assets		756			730			527			2,104			1,601			(845	)
Total Change (%)																	-52.8	%
Total Nonperforming Assets	$	5,170		$	5,411		$	5,582		$	6,481		$	5,594		$	(424	)
% of Total assets		0.40	%		0.42	%		0.42	%		0.49	%		0.42	%		-7.6	%

Webcast and Conference Call

The Company will hold the third quarter 2022 earnings conference call and webcast on November 2, 2022, 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 title opinions throughout the Tri-State region. SB Financial’s common stock is listed on the NASDAQ Capital Market with the ticker symbol “SBFG”.

In April 2022, SB Financial was named to the Keefe, Bruyette & Woods, Inc. “Bank Honor Roll” of superior performers that consistently reported increases in earnings per share over the last decade. The honor roll review determined that just 17 banks in the U.S., including SB Financial, or five percent of all 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)		2022				2022				2022				2021				2021
ASSETS
Cash and due from banks	$	27,934			$	29,567			$	130,003			$	149,511			$	138,015
Interest bearing time deposits		2,134				1,691				1,894				2,643				2,651
Available-for-sale securities		243,233				266,162				265,311				263,259				248,815
Loans held for sale		2,979				4,242				4,737				7,472				10,335
Loans, net of unearned income		925,249				895,611				850,671				822,714				846,548
Allowance for loan losses		(13,824	)			(13,801	)			(13,804	)			(13,805	)			(13,812	)
Premises and equipment, net		22,842				23,122				23,039				23,212				23,874
Federal Reserve and FHLB Stock, at cost		5,230				5,303				5,303				5,303				5,303
Foreclosed assets and other assets		756				730				527				2,104				1,601
Interest receivable		3,556				3,256				2,815				2,920				2,954
Goodwill		23,239				23,239				23,239				23,191				22,091
Cash value of life insurance		28,713				28,556				17,932				17,867				17,795
Mortgage servicing rights		13,473				13,408				13,135				12,034				11,194
Other assets		17,863				12,886				10,328				12,430				12,361
Total assets	$	1,303,377			$	1,293,972			$	1,335,130			$	1,330,855			$	1,329,725
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non interest bearing demand	$	250,791			$	239,676			$	252,273			$	247,044			$	258,857
Interest bearing demand		199,523				198,286				211,152				195,464				189,130
Savings		201,402				215,285				236,394				237,571				246,414
Money market		258,975				276,274				289,699				276,462				258,741
Time deposits		175,202				142,258				148,553				156,504				158,518
Total deposits		1,085,893				1,071,779				1,138,071				1,113,045				1,111,660
Short-term borrowings		19,754				30,772				19,035				15,320				20,771
Federal Home Loan Bank advances		35,000				25,000				5,500				5,500				5,500
Trust preferred securities		10,310				10,310				10,310				10,310				10,310
Subordinated debt net of issuance costs		19,582				19,570				19,558				19,546				19,534
Interest payable		623				307				536				299				576
Other liabilities		17,587				11,678				9,483				21,906				17,082
Total liabilities		1,188,749				1,169,416				1,202,493				1,185,926				1,185,433
Shareholders' Equity
Common stock		61,319				61,319				61,319				54,463				54,463
Additional paid-in capital		15,000				15,069				14,872				14,944				14,875
Retained earnings		99,309				96,809				94,833				99,716				97,183
Accumulated other comprehensive income (loss)		(33,426	)			(22,210	)			(13,659	)			(1,845	)			(699	)
Treasury stock		(27,574	)			(26,431	)			(24,728	)			(22,349	)			(21,530	)
Total shareholders' equity		114,628				124,556				132,637				144,929				144,292
Total liabilities and shareholders' equity	$	1,303,377			$	1,293,972			$	1,335,130			$	1,330,855			$	1,329,725

SB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
($ in thousands, except per share & ratios)			At and for the Three Months Ended																Nine Months Ended
			September				June			March			December			September			September			September
Interest income				2022				2022			2022			2021			2021			2022			2021
	Loans
	Taxable		$	10,084			$	8,880		$	8,052		$	8,889		$	9,948		$	27,016		$	29,070
	Tax exempt			92				73			61			59			52			226			147
	Securities
	Taxable			1,536				1,469			1,235			969			939			4,239			2,417
	Tax exempt			52				52			47			86			94			151			267
		Total interest income		11,764				10,474			9,395			10,003			11,033			31,632			31,901
Interest expense
	Deposits			852				567			618			640			709			2,037			2,489
	Repurchase agreements & other			8				11			13			7			12			32			35
	Federal Home Loan Bank advances			180				38			39			41			40			257			147
	Trust preferred securities			99				71			53			49			49			223			150
	Subordinated debt			195				194			195			188			199			584			274
		Total interest expense		1,334				881			918			925			1,009			3,133			3,095
Net interest income				10,430				9,593			8,477			9,078			10,024			28,499			28,806
	Provision for loan losses			-				-			-			-			300			-			1,050
Net interest income after provision
for loan losses				10,430				9,593			8,477			9,078			9,724			28,499			27,756
Noninterest income
	Wealth management fees			930				936			955			988			959			2,821			2,826
	Customer service fees			844				860			794			827			812			2,498			2,390
	Gain on sale of mtg. loans & OMSR			876				1,196			1,676			3,194			3,947			3,748			14,061
	Mortgage loan servicing fees, net			527				606			1,204			624			155			2,337			2,316
	Gain on sale of non-mortgage loans			125				167			169			44			52			461			114
	Title insurance revenue			476				697			602			528			508			1,775			1,561
	Gain (loss) on sale of assets			(12	)			-			55			1			1			43			1
	Other			277				211			347			383			215			835			839
		Total noninterest income		4,043				4,673			5,802			6,589			6,649			14,518			24,108
Noninterest expense
	Salaries and employee benefits			5,858				6,418			6,189			6,648			6,689			18,465			20,190
	Net occupancy expense			769				719			742			846			714			2,230			2,202
	Equipment expense			918				827			854			899			872			2,599			2,382
	Data processing fees			664				643			576			721			671			1,883			1,858
	Professional fees			766				760			950			872			817			2,476			2,155
	Marketing expense			200				222			231			228			201			653			556
	Telephone and communication expense			134				105			111			148			140			350			433
	Postage and delivery expense			75				110			116			106			100			301			308
	State, local and other taxes			250				277			278			288			286			805			887
	Employee expense			145				175			136			163			186			456			500
	Other expenses			605				546			676			648			580			1,828			1,770
		Total noninterest expense		10,384				10,802			10,859			11,567			11,256			32,046			33,241
Income before income tax expense				4,088				3,464			3,420			4,100			5,117			10,971			18,623
	Income tax expense			746				630			607			768			1,014			1,983			3,678
Net income			$	3,342			$	2,834		$	2,813		$	3,332		$	4,103		$	8,988		$	14,945
Common share data:
	Basic earnings per common share		$	0.48			$	0.40		$	0.40		$	0.49		$	0.59		$	1.28		$	2.09
	Diluted earnings per common share		$	0.47			$	0.40		$	0.40		$	0.49		$	0.58		$	1.27		$	2.08
Average shares outstanding (in thousands):
	Basic:			6,968				7,075			7,035			6,906			6,966			7,026			7,142
	Diluted:			7,033				7,149			7,100			6,970			7,017			7,098			7,167

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		2022				2022				2022				2021				2021				2022				2021
Net interest income	$	10,430			$	9,593			$	8,477			$	9,078			$	10,024			$	28,499			$	28,806
Tax-equivalent adjustment		38				33				29				39				39				100				110
Tax-equivalent net interest income		10,468				9,626				8,506				9,117				10,063				28,599				28,916
Provision for loan loss		-				-				-				-				300				-				1,050
Noninterest income		4,043				4,673				5,802				6,589				6,649				14,518				24,108
Total operating revenue		14,473				14,266				14,279				15,667				16,673				43,017				52,914
Noninterest expense		10,384				10,802				10,859				11,567				11,256				32,045				33,241
Pre-tax pre-provision income		4,089				3,464				3,420				4,100				5,417				10,972				19,673
Pretax income		4,089				3,464				3,420				4,100				5,117				10,972				18,623
Net income		3,342				2,834				2,813				3,332				4,103				8,988				14,945
PER SHARE INFORMATION:
Basic earnings per share (EPS)		0.48				0.40				0.40				0.49				0.59				1.28				2.09
Diluted earnings per share		0.47				0.40				0.40				0.49				0.58				1.27				2.08
Common dividends		0.120				0.120				0.115				0.115				0.110				0.355				0.325
Book value per common share		16.49				17.75				18.65				21.05				20.83				16.49				20.83
Tangible book value per common share (TBV)		13.07				14.36				15.31				17.60				17.55				13.07				17.55
Market price per common share		16.85				17.26				19.91				19.67				18.18				16.85				18.18
Market price to TBV		128.9	%			120.2	%			130.1	%			111.8	%			103.6	%			128.9	%			103.6	%
Market price to trailing 12 month EPS		9.6				9.3				10.0				7.7				6.5				9.6				6.5
PERFORMANCE RATIOS:
Return on average assets (ROAA)		1.03	%			0.87	%			0.83	%			0.99	%			1.23	%			0.91	%			1.51	%
Pre-tax pre-provision ROAA		1.26	%			1.06	%			1.01	%			1.22	%			1.63	%			1.19	%			2.12	%
Return on average equity		10.89	%			8.89	%			8.08	%			9.21	%			11.35	%			9.21	%			13.84	%
Return on average tangible equity		13.51	%			10.93	%			9.75	%			10.92	%			13.47	%			11.28	%			16.43	%
Efficiency ratio		71.63	%			75.60	%			75.93	%			73.72	%			67.40	%			74.38	%			62.72	%
Earning asset yield		3.89	%			3.45	%			2.96	%			3.17	%			3.25	%			3.42	%			3.44	%
Cost of interest bearing liabilities		0.58	%			0.39	%			0.39	%			0.40	%			0.44	%			0.45	%			0.46	%
Net interest margin		3.45	%			3.15	%			2.67	%			2.87	%			3.20	%			3.08	%			3.11	%
Tax equivalent effect		0.01	%			0.01	%			0.01	%			0.02	%			0.01	%			0.01	%			0.01	%
Net interest margin, tax equivalent		3.46	%			3.16	%			2.68	%			2.89	%			3.21	%			3.09	%			3.12	%
Non interest income/Average assets		1.24	%			1.43	%			1.72	%			1.96	%			1.99	%			1.47	%			2.44	%
Non interest expense/Average assets		3.19	%			3.31	%			3.22	%			3.45	%			3.38	%			3.24	%			3.37	%
Net noninterest expense/Average assets		-1.95	%			-1.88	%			-1.50	%			-1.48	%			-1.38	%			-1.77	%			-0.93	%
ASSET QUALITY RATIOS:
Gross charge-offs		9				9				9				34				24				27				102
Recoveries		32				6				8				27				230				46				290
Net charge-offs		(23	)			3				1				7				(206	)			(19	)			(188	)
Nonaccruing loans/Total loans		0.40	%			0.45	%			0.50	%			0.44	%			0.38	%			0.40	%			0.38	%
Nonperforming loans/Total loans		0.48	%			0.52	%			0.59	%			0.53	%			0.47	%			0.48	%			0.47	%
Nonperforming assets/Loans & OREO		0.56	%			0.60	%			0.66	%			0.79	%			0.66	%			0.56	%			0.66	%
Nonperforming assets/Total assets		0.40	%			0.42	%			0.42	%			0.49	%			0.42	%			0.40	%			0.42	%
Allowance for loan loss/Nonperforming loans		313.26	%			294.83	%			273.08	%			315.40	%			345.91	%			313.26	%			345.91	%
Allowance for loan loss/Total loans		1.49	%			1.54	%			1.62	%			1.68	%			1.63	%			1.49	%			1.63	%
Net loan charge-offs/Average loans (ann.)		(0.01	%)			0.00	%			0.00	%			0.00	%			(0.10	%)			(0.00	%)			(0.03	%)
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		85.21	%			83.56	%			74.75	%			73.92	%			76.15	%			85.21	%			76.15	%
Equity/ Assets		8.79	%			9.63	%			9.93	%			10.89	%			10.85	%			8.79	%			10.85	%
Tangible equity/Tangible assets		7.10	%			7.93	%			8.30	%			9.27	%			9.30	%			7.10	%			9.30	%
Common equity tier 1 ratio (Bank)		13.23	%			13.21	%			13.71	%			13.94	%			13.23	%			13.21	%			13.23	%
END OF PERIOD BALANCES
Total assets		1,303,377				1,293,972				1,335,130				1,330,855				1,329,725				1,303,377				1,329,725
Total loans		925,249				895,611				850,671				822,714				846,548				925,249				846,548
Deposits		1,085,893				1,071,779				1,138,071				1,113,045				1,111,660				1,085,893				1,111,660
Stockholders equity		114,628				124,556				132,637				144,929				144,292				114,628				144,292
Goodwill and intangibles		23,770				23,787				23,804				23,774				22,692				23,770				22,692
Tangible equity		90,858				100,769				108,833				121,155				121,600				90,858				121,600
Mortgage servicing portfolio		1,362,666				1,369,732				1,375,554				1,362,962				1,341,439				1,362,666				1,341,439
Wealth/Brokerage assets under care		480,947				500,487				560,698				618,279				588,319				480,947				588,319
Total assets under care		3,146,990				3,164,191				3,271,382				3,312,096				3,259,483				3,146,990				3,259,483
Full-time equivalent employees		271				267				256				269				264				271				264
Period end common shares outstanding		6,950				7,017				7,111				6,884				6,927				6,950				6,927
Market capitalization (all)		117,113				121,105				141,575				135,415				125,935				117,113				125,935
AVERAGE BALANCES
Total assets		1,302,297				1,305,815				1,350,982				1,342,202				1,333,369				1,319,668				1,315,521
Total earning assets		1,209,958				1,216,124				1,270,218				1,263,431				1,253,722				1,231,865				1,236,227
Total loans		909,909				870,439				832,825				845,078				856,486				871,340				857,703
Deposits		1,085,821				1,108,890				1,134,234				1,123,843				1,109,491				1,109,345				1,099,892
Stockholders equity		122,738				127,519				139,214				144,749				144,565				130,069				144,020
Goodwill and intangibles		23,778				23,796				23,801				22,701				22,701				23,791				22,718
Tangible equity		98,960				103,723				115,413				122,048				121,864				106,278				121,302
Average basic shares outstanding		6,968				7,075				7,035				6,906				6,966				7,026				7,142
Average diluted shares outstanding		7,033				7,149				7,100				6,970				7,017				7,098				7,167

SB FINANCIAL GROUP, INC.
	Rate Volume Analysis - (Unaudited)
	For the Three and Nine Months Ended Sep. 30, 2022 and 2021
	($ in thousands)	Three Months Ended Sep. 30, 2022								Three Months Ended Sep. 30, 2021
		Average					Average			Average					Average
Assets		Balance			Interest		Rate			Balance			Interest		Rate
	Taxable securities/cash	$	291,712		$	1,536	2.11	%		$	388,800		$	939	0.97	%
	Nontaxable securities		8,337			52	2.49	%			8,436			94	4.46	%
	Loans, net		909,909			10,176	4.47	%			856,486			10,000	4.67	%
	Total earning assets		1,209,958			11,764	3.89	%			1,253,722			11,033	3.52	%
	Cash and due from banks		6,782								6,975
	Allowance for loan losses		(13,802	)							(13,475	)
	Premises and equipment		23,762								25,820
	Other assets		75,597								60,327
	Total assets	$	1,302,297							$	1,333,369
Liabilities
	Savings, MMDA and interest bearing demand	$	681,209		$	542	0.32	%		$	695,801		$	441	0.25	%
	Time deposits		155,979			310	0.79	%			164,432			268	0.65	%
	Repurchase agreements & other		20,160			8	0.16	%			24,672			12	0.19	%
	Advances from Federal Home Loan Bank		26,739			180	2.69	%			5,500			40	2.91	%
	Trust preferred securities		10,310			99	3.84	%			10,310			49	1.90	%
	Subordinated debt		19,576			195	3.98	%			19,528			199	4.08	%
	Total interest bearing liabilities		913,973			1,334	0.58	%			920,243			1,009	0.44	%
	Non interest bearing demand		248,633			-					249,258			-
	Total funding		1,162,606				0.46	%			1,169,501				0.35	%
	Other liabilities		16,952								19,303
	Total liabilities		1,179,558								1,188,804
	Equity		122,738								144,565
	Total liabilities and equity	$	1,302,296							$	1,333,369
	Net interest income				$	10,430							$	10,024
	Net interest income as a percent of average interest-earning assets - GAAP measure						3.45	%							3.20	%
	Net interest income as a percent of average interest-earning assets - non GAAP						3.46	%							3.21	%
	- Computed on a fully tax equivalent (FTE) basis
		Nine Months Ended Sep. 30, 2022								Nine Months Ended Sep. 30, 2021
		Average					Average			Average					Average
Assets		Balance			Interest		Rate			Balance			Interest		Rate
	Taxable securities/cash	$	352,405		$	4,239	1.60	%		$	370,743		$	2,417	0.87	%
	Nontaxable securities		8,120			151	2.48	%			7,781			267	4.58	%
	Loans, net		871,340			27,242	4.17	%			857,703			29,217	4.54	%
	Total earning assets		1,231,865			31,632	3.42	%			1,236,227			31,901	3.44	%
	Cash and due from banks		7,331								7,554
	Allowance for loan losses		(13,804	)							(13,297	)
	Premises and equipment		24,265								24,442
	Other assets		70,011								60,595
	Total assets	$	1,319,668							$	1,315,521
Liabilities
	Savings, MMDA and interest bearing demand	$	709,033		$	1,293	0.24	%		$	661,433		$	1,413	0.28	%
	Time deposits		152,230			744	0.65	%			184,668			1,076	0.78	%
	Repurchase agreements & Other		21,298			32	0.20	%			24,139			35	0.19	%
	Advances from Federal Home Loan Bank		12,154			257	2.82	%			6,846			147	2.86	%
	Trust preferred securities		10,310			223	2.88	%			10,310			150	1.94	%
	Subordinated debt		19,564			584	3.98	%			9,811			274	3.72	%
	Total interest bearing liabilities		924,589			3,133	0.45	%			897,207			3,095	0.46	%
	Non interest bearing demand		248,082				0.36	%			253,791				0.36	%
	Total funding		1,172,671								1,150,998
	Other liabilities		16,928								20,503
	Total liabilities		1,189,599								1,171,501
	Equity		130,069								144,020
	Total liabilities and equity	$	1,319,668							$	1,315,521
	Net interest income				$	28,499							$	28,806
	Net interest income as a percent of average interest-earning assets - GAAP measure						3.08	%							3.11	%
	Net interest income as a percent of average interest-earning assets - non GAAP						3.09	%							3.12	%
	- Computed on a fully tax equivalent (FTE) basis

Non-GAAP reconciliation	Three Months Ended								Nine Months Ended
($ in thousands, except per share & ratios)	Sep. 30, 2022				Sep. 30, 2021				Sep. 30, 2022				Sep. 30, 2021
Total Operating Revenue	$	14,473			$	16,673			$	43,017			$	52,914
Adjustment to (deduct)/add OMSR recapture/impairment*		(65	)			(248	)			(1,193	)			(2,854	)
Adjusted Total Operating Revenue		14,408				16,425				41,824				50,060
Income before Income Taxes		4,088				5,117				10,971				18,623
Adjustment for OMSR		(65	)			(248	)			(1,193	)			(2,854	)
Adjusted Income before Income Taxes		4,023				4,869				9,778				15,769
Provision for Income Taxes		746				1,014				1,983				3,678
Adjustment for OMSR **		(14	)			(52	)			(251	)			(599	)
Adjusted Provision for Income Taxes		732				962				1,732				3,080
Net Income		3,342				3,761				8,988				14,945
Adjustment for OMSR		(51	)			(196	)			(942	)			(2,255	)
Adjusted Net Income		3,291				3,565				8,046				12,690
Diluted Earnings per Share		0.47				0.58				1.27				2.08
Adjustment for OMSR		(0.01	)			(0.03	)			(0.13	)			(0.31	)
Adjusted Diluted Earnings per Share	$	0.47			$	0.55			$	1.13			$	1.77
Return on Average Assets		1.03	%			1.23	%			0.91	%			1.51	%
Adjustment for OMSR		-0.02	%			-0.06	%			-0.07	%			-0.17	%
Adjusted Return on Average Assets		1.01	%			1.17	%			0.84	%			1.34	%
*valuation adjustment to the Company's mortgage servicing rights
**tax effect is calculated using a 21% statutory federal corporate income tax rate