SB Financial : Announces Fourth Quarter and Twelve Month 2018 Results

DEFIANCE, Ohio, Jan. 24, 2019 /PRNewswire/ -- SB Financial Group, Inc. (NASDAQ: SBFG) ('SB Financial' or the 'Company'), a diversified financial services company providing full-service community banking, mortgage banking and wealth management, today reported earnings for the fourth quarter and twelve months ended December 31, 2018.

Fourth quarter 2018 highlights over prior year fourth quarter, excluding the positive impact to our 2017 fourth quarter net income of the one-time $1.7 million deferred tax liability include:

• Net income of $3.0 million, up $0.6 million or 27.2 percent
• Diluted EPS of $0.37, flat to the prior year
• Return on average assets of 1.19 percent, up 13 basis points, or 12.6 percent
• Operating revenue of $12.5 million, up $0.8 million, or 6.8 percent
• Mortgage origination volume of $78.8 million, an increase of $6.7 million, or 9.3 percent

Twelve month 2018 highlights over prior year twelve months, excluding the positive impact to our 2017 net income of the one-time $1.7 million deferred tax liability include:

• Net income of $11.6 million, an increase of $2.3 million, or 24.3 percent
• Diluted EPS of $1.51, an increase of $0.04 per share, or 2.5 percent, as a result of the higher share count associated with the $30 million common capital raise completed in the first quarter of 2018
• Return on average assets of 1.23 percent, up 13 basis points, or 12.3 percent
• Operating revenue of $49.9 million, up $4.3 million, or 9.4 percent
• Loan growth of $75.3 million, or 10.8 percent
• Deposit growth of $73.0 million, or 10.0 percent
• Mortgage origination volume of $342.1 million, an increase of $26.3 million, or 8.3 percent

Highlights	Three Months Ended			Twelve Months Ended
($ in thousands, except per share & ratios)	Dec. 2018	Dec. 2017	% Change	Dec. 2018	Dec. 2017	% Change
Operating revenue	$12,544	$11,746	6.8%	$49,891	$45,603	9.4%
Interest income	10,638	8,762	21.4	39,479	32,480	21.5
Interest expense	2,024	1,108	82.7	6,212	4,094	51.7
Net interest income	8,614	7,654	12.5	33,267	28,386	17.2
Noninterest income	3,930	4,092	(4.0)	16,624	17,217	(3.4)
Noninterest expense	8,852	8,106	9.2	34,847	31,578	10.4
Net income	2,960	4,032	(26.6)	11,638	11,065	5.2
Earnings per diluted share	0.37	0.64	(42.2)	1.51	1.74	(13.2)
Net interest margin (FTE)	3.95%	3.96%	(0.3)	3.95%	3.78%	4.5
Return on average assets	1.19%	1.83%	(35.0)	1.23%	1.29%	(4.7)
Return on average equity	9.21%	17.52%	(47.4)	9.61%	12.36%	(22.2)
Net income - adjusted for 2017 DTL	2,960	2,327	27.2	11,638	9,360	24.3
Earnings per diluted share - adj. for DTL	0.37	0.37	0.6	1.51	1.47	2.5
Return on average assets - adj. for DTL	1.19%	1.06%	12.6	1.23%	1.10%	12.3

'SB Financial's fourth quarter and full year net income was an improvement over the prior year of 27 and 24 percent respectively excluding the 2017 deferred tax benefit,' said Mark A. Klein, Chairman, President and CEO of SB Financial. 'Organic balance sheet loan growth of $75 million for the year was our strong suit in 2018, despite some late pay downs at year end.'

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was up 6.8 percent from the fourth quarter of 2017, but down 1.5 percent to the linked quarter.

• Net interest income was up 12.5 percent from the year-ago quarter, and up 1.0 percent from the linked quarter.
• Net interest margin (FTE) was down 1 basis point from both the year-ago and linked quarter.
• Noninterest income for the quarter and the year were down slightly at 4.0 and 3.4 percent respectively.
• Total revenue for the full year of 2018 was $49.9 million, compared to $45.6 million for the full year of 2017, which is a 9.4 percent increase.

Mortgage Loan Business

Mortgage loan originations for the fourth quarter of 2018 were $78.8 million, up $6.7 million, or 9.3 percent, from the year-ago quarter. Total sales of originated loans were $60.3 million, up $6.5 million, or 12.1 percent from the year-ago quarter.

Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $2.0 million for the fourth quarter of 2018, compared to $2.1 million for the year-ago quarter. The mortgage servicing valuation adjustment for the fourth quarter of 2018 was a negative $0.07 million, compared to a positive adjustment of $0.12 million for the fourth quarter of 2017. The aggregate servicing valuation impairment ended the quarter at $0.21 million. The mortgage servicing portfolio at December 31, 2018, was $1.08 billion, up $0.09 billion, or 9.0 percent, from $0.99 billion at December 31, 2017.

Mr. Klein noted, 'Despite rising rates and inventory pressure, we increased our mortgage production this quarter compared to the prior year. Our full year production level of $342 million is the second highest in our history and included our first loan closing from our new Indianapolis office.'

Mortgage Banking
($ in thousands)	Dec. 2018	Sep. 2018	Jun. 2018	Mar. 2018	Dec. 2017
Mortgage originations	$78,829	$95,289	$109,466	$58,485	$72,102
Mortgage sales	60,345	80,555	79,162	40,589	53,825
Mortgage servicing portfolio	1,084,678	1,066,402	1,030,780	1,004,728	994,915
Mortgage servicing rights	11,347	11,129	10,634	10,195	9,907
Mortgage servicing revenue:
Loan servicing fees	673	653	636	625	617
OMSR amortization	(301)	(318)	(367)	(246)	(269)
Net administrative fees	372	335	269	379	348
OMSR valuation adjustment	(68)	(62)	(22)	92	118
Net loan servicing fees	304	273	247	471	466
Gain on sale of mortgages	1,646	2,066	2,058	1,100	1,608
Mortgage banking revenue, net	$1,950	$2,339	$2,305	$1,571	$2,074

Noninterest Income and Noninterest Expense

SB Financial's noninterest income includes revenue from a diverse group of services, such as wealth management, deposit fees, residential loan sales and the sale of Small Business Administration (SBA) loans. SBA activity for the quarter consisted of total origination volume of $1.7 million with higher sales volume resulting in gains of $0.3 million. Wealth management assets under the Company's care stood at $423.3 million as of December 31, 2018, up $11 million from the linked quarter. For the fourth quarter of 2018, noninterest income as a percentage of total revenue was 31.3 percent. For the fourth quarter of 2018, noninterest expense (NIE) of $8.9 million was up $0.8 million, or 9.2 percent, compared to the same quarter last year. Compared to the linked quarter, NIE was up $0.1 million.

Mr. Klein stated, 'Fee income levels from mortgage and SBA loan sale gains have tempered a bit this year with slightly higher rates. Likewise, our larger balance sheet and resulting higher net interest margin, has constrained our percentage of non-interest income as a percentage of total revenue.'

Noninterest Income / Noninterest Expense
($ in thousands, except ratios)	Dec. 2018	Sep. 2018	Jun. 2018	Mar. 2018	Dec. 2017
Noninterest Income (NII)	$3,930	$4,202	$4,249	$4,243	$4,092
NII / Total Revenue	31.3%	33.0%	33.5%	35.5%	34.8%
NII / Average Assets	1.6%	1.8%	1.8%	1.9%	1.9%
Noninterest Expense (NIE)	$8,852	$8,789	$8,579	$8,627	$8,106
Efficiency Ratio	70.6%	69.0%	67.7%	72.2%	69.0%
NIE / Average Assets	3.6%	3.7%	3.7%	3.8%	3.7%
Net Noninterest Expense	-2.0%	-1.9%	-1.9%	-1.9%	-1.8%

Balance Sheet

Total assets as of December 31, 2018, were $985.9 million, up $109.3 million, or 12.5 percent, from a year ago. Total equity as of December 31, 2018, was $130.4 million, up 38.7 percent from a year ago, and comprised 13.2 percent of total assets. Both the equity and total assets reflect the $30 million common capital raise completed in the first quarter of 2018.

Total loans held for investment were $771.9 million at December 31, 2018, up $75.3 million, or 10.8 percent, from December 31, 2017. Residential real estate loans were up $36.3 million, or 24.0 percent, with commercial loans rising $25.6 million, or 25.1 percent.

The investment portfolio of $95.2 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 9.7 percent of assets at December 31, 2018, and was up 10.1 percent from the year-ago period. Deposit balances of $802.6 million at December 31, 2018, increased by $73.0 million, or 10.0 percent, since December 31, 2017. Growth from the prior year included $8.5 million in checking and $64.5 million in savings and time deposit balances.

Mr. Klein continued, 'Loan volumes have been strong for us all year, with consistent growth across all quarters until the pay downs this quarter. We also had a robust deposit growth performance in the quarter and for the full year, with a double-digit growth in deposits from December of 2017. Nonperforming assets ended the year at 40 basis points, down 4 basis points from the prior year.'

Loan Balance
($ in thousands, except ratios)	Dec. 2018	Sep. 2018	Jun. 2018	Mar. 2018	Dec. 2017	Annual Growth
Commercial	$127,640	$119,810	$115,140	$107,579	$102,041	$25,599
% of Total	16.5%	15.5%	15.3%	15.2%	14.6%	25.1%
Commercial RE	340,791	356,563	350,266	338,586	332,154	8,637
% of Total	44.2%	46.2%	46.5%	47.9%	47.7%	2.6%
Agriculture	52,012	52,814	52,466	50,266	51,947	65
% of Total	6.7%	6.8%	7.0%	7.1%	7.5%	0.1%
Residential RE	187,104	178,033	172,773	151,820	150,854	36,250
% of Total	24.2%	23.1%	22.9%	21.5%	21.6%	24.0%
Consumer & Other	64,336	64,478	62,640	58,956	59,619	4,717
% of Total	8.3%	8.4%	8.3%	8.3%	8.6%	7.9%
Total Loans	$771,883	$771,698	$753,285	$707,207	$696,615	$75,268
Total Growth Percentage						10.8%
Deposit Balance
($ in thousands, except ratios)	Dec. 2018	Sep. 2018	Jun. 2018	Mar. 2018	Dec. 2017	Annual Growth
Non-Int DDA	$144,592	$134,747	$131,125	$132,919	$135,592	$9,000
% of Total	18.0%	17.1%	17.4%	17.8%	18.6%	6.6%
Interest DDA	130,628	130,897	129,486	137,893	131,079	-451
% of Total	16.3%	16.6%	17.2%	18.4%	18.0%	-0.3%
Savings	104,444	114,213	118,108	116,820	103,267	1,177
% of Total	12.9%	14.4%	15.7%	15.6%	14.1%	1.1%
Money Market	181,426	170,190	151,228	143,679	141,844	39,582
% of Total	22.6%	21.6%	20.1%	19.2%	19.4%	27.9%
Certificates	241,462	239,379	222,932	217,484	217,818	23,644
% of Total	30.1%	30.3%	29.6%	29.0%	29.9%	10.9%
Total Deposits	$802,552	$789,426	$752,879	$748,795	$729,600	$72,952
Total Growth Percentage						10.0%

Asset Quality

SB Financial maintained its high-performance among its peers in asset quality levels for the quarter, reporting nonperforming assets of $4.0 million as of December 31, 2018, up $0.1 million, or 2.7 percent, from the year-ago quarter. SB Financial's nonperforming assets to total assets ratio of 0.40 percent is in the top quartile of its 65-bank peer group. The coverage of problem loans by the loan loss allowance was at 213 percent at December 31, 2018, up from 207 percent at December 31, 2017.

Summary of Nonperforming Assets						Annual Growth
($ in thousands, except ratios)	Dec. 2018	Sep. 2018	Jun. 2018	Mar. 2018	Dec. 2017
Commercial & Agriculture	$731	$360	$33	$35	$121	$610
% of Total Com./Ag. loans	0.41%	0.21%	0.02%	0.02%	0.08%	504.1%
Commercial RE	218	228	234	487	1,322	(1,104)
% of Total CRE loans	0.06%	0.06%	0.07%	0.14%	0.40%	-83.5%
Residential RE	1,738	1,541	1,634	1,714	1,123	615
% of Total Res. RE loans	0.93%	0.87%	0.95%	1.13%	0.74%	54.8%
Consumer & Other	219	252	221	85	138	81
% of Total Con./Oth. loans	0.34%	0.39%	0.35%	0.14%	0.23%	58.7%
Total Nonaccruing Loans	2,906	2,381	2,122	2,321	2,704	202
% of Total loans	0.38%	0.31%	0.28%	0.33%	0.39%	7.5%
Accruing Restructured Loans	928	940	1,101	1,115	1,129	(201)
Total Growth (%)						-17.8%
Total Nonaccruing & Restructured Loans	$3,834	$3,321	$3,223	$3,436	$3,833	$1
% of Total loans	0.50%	0.43%	0.43%	0.49%	0.55%	0.0%
Foreclosed Assets	131	105	16	70	26	105
Total Growth (%)						403.8%
Total Nonperforming Assets	$3,965	$3,426	$3,239	$3,506	$3,859	$106
% of Total assets	0.40%	0.35%	0.34%	0.38%	0.44%	2.7%

Webcast and Conference Call

The Company will hold a related conference call and webcast on January 25, 2019, at 10:00 a.m. EST. Interested parties may access the conference call by dialing 1-888-338-9469. The webcast can be accessed at www.yoursbfinancial.com/investorrelations.html. An audio replay of the call will be available on the SB Financial website.

About SB Financial Group

Headquartered in Defiance, Ohio, SB Financial is a diversified financial services holding company for the State Bank & Trust Company (State Bank). State Bank provides a full range of financial services for consumers and small businesses, including wealth management, private client services, mortgage banking and commercial and agricultural lending, operating through a total of 20 offices; 19 in nine Ohio counties and one in Fort Wayne, Indiana, and 26 full-service ATMs. The Company has seven loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. SB Financial's common stock is listed on the NASDAQ Capital Market under the symbol 'SBFG'. SB Financial's preferred stock is listed on the NASDAQ Capital Market under the symbol 'SBFGP'.

In May 2018, SB Financial was ranked #72 on the American Banker Magazine's list of Top 200 Publicly Traded Community Banks and Thrifts based on three-year average return on equity ('ROE').

Forward-Looking Statements

Certain statements within this document, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties and actual results may differ materially from those predicted by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties inherent in the national and regional banking industry, changes in economic conditions in the market areas in which SB Financial and its subsidiaries operate, changes in policies by regulatory agencies, changes in accounting standards and policies, changes in tax laws, fluctuations in interest rates, demand for loans in the market areas in SB Financial and its subsidiaries operate, increases in FDIC insurance premiums, changes in the competitive environment, losses of significant customers, geopolitical events, the loss of key personnel and other risks identified in SB Financial's Annual Report on Form 10-K and documents subsequently filed by SB Financial with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made, and SB Financial undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, except as required by law. All subsequent written and oral forward-looking statements attributable to SB Financial or any person acting on its behalf are qualified by these cautionary statements.

Non-GAAP Financial Measures

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

SB FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS - (Unaudited)
					December		September		June		March		December
			($ in thousands)		2018		2018		2018		2018		2017
ASSETS
	Cash and due from banks				$ 48,363		$ 45,515		$ 24,413		48,329		26,616
	Available-for-sale securities				91,039		84,114		89,911		91,987		82,790
	Loans held for sale				4,445		6,888		7,551		8,893		3,940
	Loans, net of unearned income				771,883		771,698		753,285		707,207		696,615
	Allowance for loan losses				(8,167)		(8,489)		(8,494)		(8,219)		(7,930)
	Premises and equipment, net				22,084		21,900		21,683		21,776		21,277
	Federal Reserve and FHLB Stock, at cost				4,123		4,123		3,748		3,748		3,748
	Foreclosed assets held for sale, net				131		105		16		70		26
	Interest receivable				1,892		2,433		2,000		1,925		1,825
	Goodwill and other intangibles				16,401		16,404		16,406		16,409		16,411
	Cash value of life insurance				16,834		16,745		16,656		16,567		16,479
	Mortgage servicing rights				11,365		11,129		10,633		10,196		9,907
	Other assets				5,505		6,615		6,977		6,753		4,923
			Total assets		$ 985,898		$ 979,180		$ 944,785		$ 925,641		$ 876,627
LIABILITIES AND EQUITY
	Deposits
		Non interest bearing demand			$ 144,592		$ 134,747		$ 131,125		132,919		135,592
		Interest bearing demand			130,628		130,897		129,486		137,893		131,079
		Savings			104,444		114,213		118,108		116,820		103,267
		Money market			181,426		170,190		151,228		143,679		141,844
		Time deposits			241,462		239,379		222,932		217,484		217,818
			Total deposits		802,552		789,426		752,879		748,795		729,600
	Repurchase agreements				15,184		15,539		18,191		14,505		15,082
	Federal Home Loan Bank advances				16,000		24,500		26,500		18,500		18,500
	Trust preferred securities				10,310		10,310		10,310		10,310		10,310
	Interest payable				909		891		685		633		592
	Other liabilities				10,508		11,405		11,116		9,999		8,543
			Total liabilities		855,463		852,071		819,681		802,742		782,627
	Stockholders' Equity
		Preferred stock			13,979		13,979		13,983		13,983		13,983
		Common stock			40,485		40,485		40,481		40,481		12,569
		Additional paid-in capital			15,226		15,160		15,098		15,189		15,405
		Retained earnings			64,012		61,854		59,503		57,162		55,439
		Accumulated other comprehensive loss			(552)		(1,654)		(1,240)		(941)		(141)
		Treasury stock			(2,715)		(2,715)		(2,721)		(2,975)		(3,255)
			Total equity		130,435		127,109		125,104		122,899		94,000
			Total liabilities and stockholders' equity		$ 985,898		$ 979,180		$ 944,785		925,641		876,627

SB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
($ in thousands, except per share & ratios)				At and for the Three Months Ended											Twelve Months Ended
				December		September		June		March		December			December		December
Interest income				2018		2018		2018		2018		2017			2018		2017
	Loans
	Taxable			$ 9,661		9,499		8,968		8,140		8,096			36,268		29,792
	Tax exempt			55		42		36		21		23			154		85
	Securities
	Taxable			822		610		613		573		514			2,618		2,076
	Tax exempt			100		107		115		117		129			439		527
		Total interest income		10,638		10,258		9,732		8,851		8,762			39,479		32,480
Interest expense
	Deposits			1,776		1,472		1,091		975		938			5,314		3,456
	Repurchase agreements & other			10		11		6		10		2			37		16
	Federal Home Loan Bank advances			131		140		110		79		85			460		320
	Trust preferred securities			107		106		101		87		83			401		302
		Total interest expense		2,024		1,729		1,308		1,151		1,108			6,212		4,094
Net interest income				8,614		8,529		8,424		7,700		7,654			33,267		28,386
	Provision for loan losses			-		-		300		300		200			600		400
Net interest income after provision
for loan losses				8,614		8,529		8,124		7,400		7,454			32,667		27,986
Noninterest income
	Wealth Management Fees			717		705		710		739		718			2,871		2,777
	Customer service fees			679		672		675		644		690			2,670		2,671
	Gain on sale of mtg. loans & OMSR's			1,646		2,066		2,058		1,100		1,608			6,870		7,132
	Mortgage loan servicing fees, net			304		273		247		471		465			1,295		1,316
	Gain on sale of non-mortgage loans			295		125		150		660		179			1,230		1,272
	Data service fees			-		-		-		-		179			-		738
	Net gain on sales of securities			-		70		-		-		-			70		119
	Gain/(loss) on sale of assets			14		-		60		(39)		(4)			35		6
	Other			275		291		349		668		257			1,583		1,186
		Total noninterest income		3,930		4,202		4,249		4,243		4,092			16,624		17,217
Noninterest expense
	Salaries and employee benefits			5,108		5,372		5,201		4,939		4,749			20,620		18,646
	Net occupancy expense			600		588		560		649		582			2,397		2,260
	Equipment expense			756		667		637		829		748			2,889		2,760
	Data processing fees			466		489		418		438		363			1,811		1,558
	Professional fees			532		393		504		419		492			1,848		1,774
	Marketing expense			262		197		204		221		153			884		734
	Telephone and communication			121		124		128		122		113			495		462
	Postage and delivery expense			66		83		63		74		118			286		454
	State, local and other taxes			180		177		176		186		164			719		699
	Employee expense			283		243		220		166		227			912		797
	Other expenses			478		456		468		584		397			1,986		1,434
		Total noninterest expense		8,852		8,789		8,579		8,627		8,106			34,847		31,578
Income before income tax expense				3,692		3,942		3,794		3,016		3,440			14,444		13,625
	Income tax expense (benefit)			732		824		687		563		(592)			2,806		2,560
Net income				$ 2,960		3,118		3,107		2,453		4,032			11,638		11,065
Preferred Share Dividends				243		244		244		244		244			974		975
Net income available to common shares				2,717		2,874		2,863		2,209		3,788			10,663		10,090
Common share data:
	Basic earnings per common share			$ 0.42		0.45		0.45		0.40		0.79			1.72		2.10
	Diluted earnings per common share			$ 0.37		0.39		0.40		0.35		0.64			1.51		1.74
Average shares outstanding ($ in thousands):
	Basic:			6,503		6,503		6,489		5,519		4,790			6,198		4,817
	Diluted:			8,030		8,022		8,003		7,055		6,329			7,719		6,351

SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
($ in thousands, except per share & ratios)		At and for the Three Months Ended											Twelve Months Ended
		December		September		June		March		December			December		December
SUMMARY OF OPERATIONS		2018		2018		2018		2018		2017			2018		2017
Net interest income		$ 8,614		8,529		8,424		7,700		7,654			33,267		28,386
Tax-equivalent adjustment		41		40		40		37		78			158		315
Tax-equivalent net interest income		8,655		8,569		8,464		7,737		7,732			33,425		28,701
Provision for loan loss		-		-		300		300		200			600		400
Noninterest income		3,930		4,202		4,249		4,243		4,092			16,624		17,217
Total operating revenue		12,544		12,731		12,673		11,943		11,746			49,891		45,603
Noninterest expense		8,852		8,789		8,579		8,627		8,106			34,847		31,578
Pre-tax pre-provision income		3,692		3,942		4,094		3,316		3,640			15,044		14,025
Pretax income		3,692		3,942		3,794		3,016		3,440			14,444		13,625
Net income		2,960		3,118		3,107		2,453		4,032			11,638		11,065
Income available to common shareholders		2,717		2,874		2,863		2,209		3,788			10,663		10,090
PER SHARE INFORMATION:
Basic earnings per share		$ 0.42		0.45		0.45		0.40		0.79			1.72		2.10
Diluted earnings per share		0.37		0.39		0.40		0.35		0.64			1.51		1.74
Common dividends		0.085		0.080		0.080		0.075		0.075			0.320		0.280
Book value per common share		16.36		15.94		15.73		15.49		15.05			16.36		15.05
Tangible book value per common share		15.39		14.87		14.57		14.27		13.27			15.39		13.27
Fully converted TBV per common share		14.30		13.88		13.66		13.42		12.42			14.30		12.42
Market price per common share		16.45		20.35		20.32		18.51		18.49			16.45		18.49
Market price per preferred share		17.90		20.25		19.82		18.20		17.90			17.90		17.90
Market price to tangible book value		106.9%		136.8%		139.5%		129.7%		139.3%			106.9%		139.3%
Market price to trailing 12 month EPS		11.0		11.5		11.2		10.3		10.6			11.0		10.6
PERFORMANCE RATIOS:
Return on average assets (ROAA)		1.19%		1.30%		1.35%		1.08%		1.83%			1.23%		1.29%
Pre-tax pre-provision ROAA		1.48%		1.64%		1.78%		1.46%		1.65%			1.59%		1.64%
Return on average equity		9.21%		9.89%		10.02%		9.03%		17.52%			9.61%		12.36%
Return on average tangible equity		12.06%		13.02%		13.28%		12.54%		26.16%			12.83%		18.71%
Efficiency ratio		70.55%		69.01%		67.67%		72.22%		68.99%			69.83%		69.22%
Earning asset yield		4.86%		4.75%		4.76%		4.41%		4.52%			4.67%		4.28%
Cost of interest bearing liabilities		1.15%		1.00%		0.80%		0.71%		0.69%			0.92%		0.65%
Net interest margin		3.93%		3.95%		4.12%		3.84%		3.92%			3.93%		3.74%
Tax equivalent effect		0.02%		0.01%		0.02%		0.02%		0.04%			0.02%		0.04%
Net interest margin, tax equivalent		3.95%		3.96%		4.14%		3.86%		3.96%			3.95%		3.78%
Non interest income/Average assets		1.58%		1.75%		1.84%		1.87%		1.86%			1.75%		2.01%
Non interest expense/Average assets		3.56%		3.65%		3.72%		3.81%		3.68%			3.68%		3.70%
Net noninterest expense/Average assets		1.98%		1.91%		1.88%		1.93%		1.82%			1.92%		1.68%
ASSET QUALITY RATIOS:
Gross charge-offs		$ 322		12		54		19		36			407		231
Recoveries		1		6		29		9		5			45		35
Net charge-offs		321		6		25		10		31			362		196
Nonaccruing loans/ Total loans		0.38%		0.31%		0.28%		0.33%		0.39%			0.38%		0.39%
Nonperforming loans/ Total loans		0.50%		0.43%		0.43%		0.49%		0.55%			0.50%		0.55%
Nonperforming assets/ Loans & OREO		0.51%		0.44%		0.43%		0.50%		0.55%			0.51%		0.55%
Nonperforming assets/ Total assets		0.40%		0.35%		0.34%		0.38%		0.44%			0.40%		0.44%
Allowance for loan loss/ Nonperforming loans		213.02%		255.62%		263.54%		239.20%		206.89%			213.02%		206.89%
Allowance for loan loss/ Total loans		1.06%		1.10%		1.13%		1.16%		1.14%			1.06%		1.14%
Net loan charge-offs/ Average loans (ann.)		0.17%		0.00%		0.01%		0.01%		0.02%			0.05%		0.03%
Loan loss provision/ Net charge-offs		0.00%		0.00%		1200.00%		3000.00%		645.16%			165.75%		204.08%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		96.18%		97.75%		100.05%		94.45%		95.48%			96.18%		95.48%
Equity/ Assets		13.23%		12.98%		13.24%		13.28%		10.72%			13.23%		10.72%
Tangible equity/ Tangible assets		10.32%		10.05%		10.20%		10.17%		7.39%			10.32%		7.39%
Tangible equity adjusted for conversion		11.76%		11.50%		11.71%		11.71%		9.02%			11.76%		9.02%
Common equity tier 1 ratio (Bank) - 12/18 est.		12.22%		12.16%		11.91%		12.23%		10.53%			12.22%		10.53%
END OF PERIOD BALANCES
Total assets		$ 985,898		979,180		944,785		925,641		876,627			985,898		876,627
Total loans		771,883		771,698		753,285		707,207		696,615			771,883		696,615
Deposits		802,552		789,426		752,879		748,795		729,600			802,552		729,600
Stockholders equity		130,435		127,109		125,104		122,899		94,000			130,435		94,000
Goodwill & intangibles		16,401		16,404		16,406		16,409		16,411			16,401		16,411
Preferred equity		13,979		13,979		13,983		13,983		13,983			13,979		13,983
Tangible equity		100,055		96,726		94,715		92,507		63,606			100,055		63,606
Mortgage servicing portfolio		1,084,678		1,066,402		1,030,780		1,004,728		994,915			1,084,678		994,915
Wealth/Brokerage assets under care		423,289		412,218		407,592		411,654		437,034			423,289		437,034
Total assets under care		2,493,865		2,457,800		2,383,157		2,342,023		2,308,576			2,493,865		2,308,576
Full-time equivalent employees (actual)		250		250		241		240		240			250		240
Period end basic shares outstanding		6,503		6,503		6,502		6,483		4,793			6,503		4,793
Period end outstanding (Series A Converted)		1,472		1,470		1,453		1,453		1,453			1,472		1,453
AVERAGE BALANCES
Total assets		$ 994,977		962,369		922,355		906,281		880,446			947,266		854,569
Total earning assets		875,747		864,490		817,270		802,358		781,795			845,672		759,681
Total loans		775,060		770,948		724,710		711,733		691,929			749,055		660,675
Deposits		803,928		769,266		739,877		738,867		731,992			764,297		711,500
Stockholders equity		128,539		126,144		123,990		108,662		92,036			121,094		89,538
Intangibles		16,403		16,405		16,407		16,410		16,412			16,406		16,417
Preferred equity		13,979		13,983		13,983		13,983		13,983			13,982		13,983
Tangible equity		98,157		95,756		93,600		78,269		61,641			90,706		59,138
Average basic shares outstanding		6,503		6,503		6,489		5,519		4,790			6,198		4,817
Average diluted shares outstanding		8,030		8,022		8,003		7,055		6,329			7,719		6,351

SB FINANCIAL GROUP, INC.
	Rate Volume Analysis - (Unaudited)
	At and for the Three Months Ended December 31, 2018 and 2017
	($ in thousands)		Three Months Ended Dec. 31, 2018					Three Months Ended Dec. 31, 2017
			Average		Average			Average		Average
Assets			Balance	Interest	Rate			Balance	Interest	Rate
	Taxable securities		$ 90,602	822	3.63%			$ 76,268	514	2.70%
	Nontaxable securities		10,085	100	3.97%			13,598	129	3.80%
	Loans, net		775,060	9,716	5.01%			691,929	8,119	4.69%
	Total earning assets		875,747	10,638	4.86%			781,795	8,762	4.48%
	Cash and due from banks		56,358					37,141
	Allowance for loan losses		(8,490)					(7,842)
	Premises and equipment		22,200					21,424
	Other assets		49,162					47,928
	Total assets		$ 994,977					$ 880,446
Liabilities
	Savings and interest bearing demand		$ 418,284	691	0.66%			$ 378,278	219	0.23%
	Time deposits		239,787	1,085	1.81%			216,969	719	1.33%
	Repurchase agreements & Other		15,222	10	0.26%			13,220	2	0.06%
	Advances from Federal Home Loan Bank		22,467	131	2.33%			20,283	85	1.68%
	Trust preferred securities		10,310	107	4.15%			10,310	83	3.22%
	Total interest bearing liabilities		706,070	2,024	1.15%			639,060	1,108	0.69%
	Non interest bearing demand		145,857	-				136,745	-
	Total funding		851,927		0.95%			775,805		0.57%
	Other liabilities		14,511					12,605
	Total liabilities		866,438					788,410
	Equity		128,539		559,131			92,036
	Total liabilities and equity		$ 994,977					$ 880,446
	Net interest income			$ 8,614					$ 7,654
	Net interest income as a percent of average interest-earning assets - GAAP measure				3.93%					3.92%
	Net interest income as a percent of average interest-earning assets - non GAAP				3.95%					3.96%
	- Computed on a fully tax equivalent (FTE) basis
			Twelve Months Ended Dec. 31, 2018					Twelve Months Ended Dec. 31, 2017
			Average		Average			Average		Average
Assets			Balance	Interest	Rate			Balance	Interest	Rate
	Taxable securities		$ 85,238	2,618	3.07%			$ 84,918	2,076	2.44%
	Nontaxable securities		11,379	439	3.86%			14,088	527	3.75%
	Loans, net		749,055	36,422	4.86%			660,675	29,877	4.52%
	Total earning assets		845,672	39,479	4.67%			759,681	32,480	4.28%
	Cash and due from banks		38,990					35,337
	Allowance for loan losses		(8,361)					(7,828)
	Premises and equipment		21,795					21,084
	Other assets		49,170					46,295
	Total assets		$ 947,266					$ 854,569
Liabilities
	Savings and interest bearing demand		$ 401,577	1,754	0.44%			$ 369,114	795	0.22%
	Time deposits		225,467	3,560	1.58%			214,639	2,661	1.24%
	Repurchase agreements & Other		16,458	37	0.22%			12,350	16	0.13%
	Advances from Federal Home Loan Bank		22,108	460	2.08%			20,000	320	1.60%
	Trust preferred securities		10,310	401	3.89%			10,310	302	2.93%
	Total interest bearing liabilities		675,920	6,212	0.92%			626,413	4,094	0.65%
	Non interest bearing demand		137,253		0.76%			127,747		0.54%
	Total funding		813,173					754,160
	Other liabilities		12,999					10,871
	Total liabilities		826,172					765,031
	Equity		121,094					89,538
	Total liabilities and equity		$ 947,266					$ 854,569
	Net interest income			$ 33,267					$ 28,386
	Net interest income as a percent of average interest-earning assets - GAAP measure				3.93%					3.74%
	Net interest income as a percent of average interest-earning assets - non GAAP				3.95%					3.78%
	- Computed on a fully tax equivalent (FTE) basis

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SOURCE SB Financial Group, Inc.