SB Financial (SBFG) 8-K SB Financial Group, Inc. Announces First-Quarter 2014 Results

Exhibit 99.1

Investor Contact Information:

Anthony V. Cosentino

Executive Vice President and

Chief Financial Officer

Tony.Cosentino@YourStateBank.com

SB Financial Group, Inc. Announces First-Quarter 2014 Results

Continued improvements in asset quality and expense reduction

DEFIANCE, Ohio, April 21, 2014  -- SB Financial Group, Inc. (NASDAQ: SBFG), a diversified financial services company providing full-service community banking, mortgage banking, wealth management and item processing services, today reported earnings for the first quarter ended March 31, 2014.

· First quarter earnings per share of 20 cents, a reflection of slowdown in mortgage originations industry-wide

· Loan growth of 5.8 percent, up $26.5 million from the prior year

· Nonperforming assets at 1.05 percent of total assets

· Operating expenses declined 8.9 percent from the prior year

Highlights*	Three Months Ended
(in $000’s except ratios and per share data)	Mar. 2014			Mar. 2013
Net interest income (FTE)	$	4,923		$	5,392
Noninterest income		2,559			3,567
Noninterest expense		6,079			6,670
Net income		980			1,318
Earnings per share		0.20			0.27
Net interest margin (FTE)		3.46	%		3.86	%
Return on assets		0.61			0.83
Return on equity		6.88			9.82

* Consolidated earnings for SB Financial include the results of the Company’s Banking Group, consisting primarily of The State Bank and Trust Company (“State Bank” or the “Bank”), and the Company’s data services subsidiary, Rurbanc Data Services, Inc. (dba “RDSI Banking Systems” or “RDSI”).

“Despite the hurdles facing the entire banking industry that constrained our performance in the first quarter, we were pleased to continue to make progress against our strategic plan to expand our loan portfolio, reduce our expenses and to improve our asset quality,” said Mark Klein, President and Chief Executive Officer of SB Financial Group.

Mr. Klein added, “We remain committed to becoming a top-quartile performing financial services company through the ongoing execution of our key strategies: to strengthen our revenue diversity by developing additional sources of non-interest income; to grow our market share by committing more resources to newer, lower-share, higher-growth-potential markets; to increase our product service utilization through expanded relationships with new and existing customers; to deliver gains in operational excellence through organic growth within the current infrastructure; and, to sustain asset quality by maintaining a high-quality loan portfolio.”

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RESULTS OF OPERATIONS

Consolidated Revenue

Total revenue, consisting of net interest income on a fully tax equivalent (FTE) basis and noninterest income, was down 16.5 percent from the first quarter of 2013 and down 7.0 percent from the linked quarter.

· Net interest income (FTE) was down 8.7 percent for the first quarter and down 3.4 percent compared to the linked quarter

· Net interest margin (FTE) was down 40 basis points for the first quarter and down 11 basis points to the linked quarter

· Noninterest income was down $1.0 million, or 28.3 percent, for the first quarter, and $0.4 million, or 13.2 percent, for the linked quarter

Mr. Klein commented, “Our first quarter results were impacted by the headwinds affecting the overall banking industry: interest rate pressure, sluggish mortgage loan originations and the inclement weather here in the Midwest, as we will discuss in the following sections.”

Mortgage Loan Business

For the first quarter of 2014, mortgage loan originations were $33.6 million, down $38.4 million, or 53.3 percent, from the year-ago first quarter, and down $6.1 million, or 15.3 percent, from the linked quarter.

Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $0.8 million for the first quarter of 2014, compared to $1.7 million for the year-ago quarter. The mortgage servicing valuation adjustment for first-quarter 2014 was a negative $0.02 million, in line with the linked quarter. The mortgage servicing portfolio at March 31, 2014, was $609.4 million, up $60.9 million, or 11.1 percent, from March 31, 2013.

Mr. Klein noted, “We remained focused on pursuing more opportunities in newer, lower-market-share regions, with more originators on the ground across our footprint, and new facilities in markets like Columbus. We have just signed an agreement to sell fixed rate construction loans to a correspondent bank that will allow us to compete in this expanding market while eliminating our interest rate risk.”

Mortgage Banking ($000’s)	Three Months Ended
	Mar. 2014			Dec. 2013			Sep. 2013			Jun. 2013			Mar. 2013
Mortgage originations	$	33,602		$	39,679		$	55,192		$	81,945		$	71,967
Mortgage sales		27,961			33,921			58,101			67,050			68,431
Mortgage servicing portfolio		609,419			605,993			597,030			575,091			548,493
Mortgage servicing rights		5,228			5,180			5,076			4,613			4,068
Mortgage servicing revenue:
Loan servicing fees		380			388			367			350			338
OMSR amortization		(117	)		(126	)		(164	)		(205	)		(330	)
Net administrative fees		263			262			203			145			8
OMSR valuation adjustment		(18	)		(21	)		205			273			171
Net loan servicing fees		245			241			408			418			179
Gain on sale of mortgages		572			776			1,356			1,450			1,484
Mortgage banking revenue, net	$	817		$	1,017		$	1,764		$	1,868		$	1,663

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Fee Income and Noninterest Expense

SB Financial’s fee income includes revenue from a diverse group of services, such as wealth management, deposit fees and income from bank-owned life insurance. Wealth management assets under management stood at $335.9 million as of the first quarter of 2014.  For the quarter, fee income as a percent of total revenue was 34.7 percent, down slightly from the prior year.

For the first quarter of 2014, noninterest expense (NIE) was down $0.6 million, or 8.9 percent, compared to the first quarter of 2013, and was down 1.9 percent from the linked quarter.  Costs related to credit and collection have declined from the prior year and our FDIC assessment was down 16.5 percent.

“Our fee income continues to be a competitive strength, particularly in the current interest-rate environment.” Mr. Klein noted.  “In addition, strategic decisions made during the past year to reduce our expense levels are helping us make progress towards our goal of operational excellence.  For example, we will be closing our one and only “in-store” office here in Defiance in the third quarter.”

Fee Income / Noninterest Expense (000’s)
	Mar. 2014			Dec. 2013			Sep. 2013			Jun. 2013			Mar. 2013
Fee Income	$	2,559		$	2,949		$	3,710		$	3,820		$	3,567
Fee Income / Total Revenue		34.7	%		37.1	%		41.8	%		41.7	%		40.3	%
Fee Income / Average Assets		1.6	%		1.8	%		2.3	%		2.4	%		2.2	%
Noninterest Expense	$	6,079		$	6,199		$	6,562		$	7,080		$	6,670
Efficiency Ratio		80.6	%		76.4	%		72.4	%		75.5	%		73.6	%
NIE / Average Assets		3.8	%		3.8	%		4.1	%		4.4	%		4.2	%

Balance Sheet

Total assets as of March 31, 2014, were $646.3 million, up 1.0 percent from the year-ago quarter.  Total deposits as of March 31, 2014, were $532.7 million, flat from the prior-year quarter.

Total loans held for investment (HFI) were $481.9 million at March 31, 2014, up $26.5 million, or 5.8 percent, from the year-ago quarter.  Commercial real estate loans accounted for the majority of growth, up $12.9 million, or 6.5 percent. Commercial and residential real estate loans rose $5.3 million and $8.2 million, respectively.  Consumer loans included the growth in our branded credit card portfolio, with $0.9 million in balances and $5.6 million in available credit lines.

The investment portfolio of $97.1 million represented 15.0 percent of assets at March 31, 2014, which was down slightly from the prior year.  Deposit balances of $532.7 million at March 31, 2014 have increased by $14.5 million since December 31, 2013.  Growth for the quarter included $9.7 million in checking and $4.8 million in time deposit balances.

Mr. Klein stated, “Our growth in total loans of nearly 6 percent was certainly a bright spot. Additionally, we are focused on the sales of other government guaranteed credits, like the SBA and USDA. We were just granted preferred lending status from the Small Business Administration allowing us to increase our production from that lending product.”

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Loan Portfolio ($000’s)	Mar. 2014			Dec. 2013			Sep. 2013			Jun. 2013			Mar. 2013			Variance YOY
Commercial	$	85,701		$	85,368		$	81,571		$	84,766		$	80,431		$	5,270
% of Total		17.8	%		17.9	%		17.2	%		18.3	%		17.7	%		6.6	%
Commercial RE		212,502			205,301			209,739			199,795			199,615			12,887
% of Total		44.1	%		43.0	%		44.1	%		43.1	%		43.8	%		6.5	%
Agriculture		39,028			39,210			39,636			38,552			37,950			1,078
% of Total		8.1	%		8.2	%		8.3	%		8.3	%		8.3	%		2.8	%
Residential RE		97,857			99,620			96,477			93,292			89,669			8,188
% of Total		20.3	%		20.9	%		20.3	%		20.1	%		19.7	%		9.1	%
Consumer & Other		46,836			47,804			47,810			47,630			47,778			(942	)
% of Total		9.7	%		10.0	%		10.1	%		10.3	%		10.5	%		(2.0	%)
Total Loans	$	481,924		$	477,303		$	475,233		$	464,035		$	455,443		$	26,481
Total Growth Percentage																	5.8%

Asset Quality

SB Financial continues to improve its asset quality, reporting nonperforming assets of $6.8 million as of March 31, 2014, declining by $1.5 million, or 18.4 percent, from the year-ago quarter.  Our 1.05 percent level of nonperforming to total assets was the lowest since the fourth quarter of 2008.  Delinquency levels have declined, with the 30-89 day category totaling $0.1 million at the end of the first quarter of 2014, compared to $0.7 million at prior-year first quarter.  Coverage of problem loans by the loan loss allowance was 109 percent at March 31, 2014.

Summary of Nonperforming Assets ($000’s)
Nonperforming Loan Category	Mar. 2014			Dec. 2013			Sep. 2013			Jun. 2013			Mar. 2013
Commercial	$	1,818		$	2,316		$	2,738		$	982		$	1,135
% of Total Commercial loans		2.1	%		2.7	%		3.4	%		1.2	%		1.4	%
Commercial RE loans		753			532			642			519			457
% of Total CRE loans		0.4	%		0.3	%		0.3	%		0.3	%		0.2	%
Residential RE		1,555			1,651			1,837			2,285			2,614
% of Total Res. RE loans		1.6	%		1.7	%		1.9	%		2.5	%		2.9	%
Consumer & Other		280			345			363			600			605
% of Consumer & Other loans		0.6	%		0.7	%		0.8	%		1.3	%		1.3	%
Total Nonaccruing Loans		4,406			4,844			5,580			4,386			4,811
% of Total Loans		0.9	%		1.0	%		1.2	%		1.0	%		1.0	%
Accruing Restructured Loans		1,793			1,739			1,756			1,262			1,273
Total Nonaccruing & Restructured	$	6,199		$	6,583		$	7,336		$	5,648		$	6,084
% of Total Loans		1.3	%		1.4	%		1.5	%		1.2	%		1.3	%
OREO & Repossessed Vehicles		615			651			1,430			1,955			2,270
Total Nonperforming Assets	$	6,814		$	7,233		$	8,766		$	7,603		$	8,354
% of Total Assets		1.1	%		1.1	%		1.4	%		1.2	%		1.3	%

-4-

Capitalization

Improving capital ratios remains an important focus of management. The tangible equity ratio improved by 52 basis points over the past year and stood at 6.4 percent as of March 31, 2014. All bank regulatory ratios remain in excess of "well-capitalized" levels. At March 31, 2014, State Bank's Total Risk-Based Capital was estimated to be $61.1 million, $22.3 million above the “well-capitalized” level. The Total Risk-Based Capital Ratio is estimated at 12.6 percent.

About SB Financial Group

Headquartered in Defiance, Ohio, SB Financial Group, Inc. is a diversified financial services holding company with two wholly-owned operating subsidiaries: State Bank and RDSI Banking Systems (RDSI). State Bank provides a full range of financial services for consumers and small businesses, including wealth management, mortgage banking and commercial and agricultural lending, operating through 17 banking centers in seven northwestern Ohio counties and one center in Fort Wayne, Indiana, as well as three loan production offices located in Columbus, Ohio, and Angola, Indiana. RDSI provides item processing services to community banks located primarily in the Midwest. SB Financial Group, Inc.’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.

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SB FINANCIAL GROUP, INC.  & SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - (Unaudited)

	March			December			September			June			March
($ in Thousands)	2014			2013			2013			2013			2013
ASSETS
Cash and due from banks	$	14,860		$	13,137		$	19,016		$	10,750		$	28,031
Securities available for sale, at fair value		93,305			89,793			86,620			95,379			98,390
Other securities - FRB and FHLB Stock		3,748			3,748			3,748			3,748			3,748
Total investment securities		97,053			93,541			90,368			99,127			102,138
Loans held for sale		7,165			3,366			2,407			10,715			8,560
Loans, net of unearned income		481,924			477,303			475,233			464,035			455,443
Allowance for loan losses		(6,726	)		(6,964	)		(7,120	)		(7,013	)		(6,992	)
Net loans		475,198			470,339			468,113			457,022			448,451
Premises and equipment, net		13,027			12,186			12,399			12,483			12,738
Purchased software		387			421			320			289			300
Cash surrender value of life insurance		12,982			12,906			12,826			12,742			12,659
Goodwill		16,353			16,353			16,353			16,353			16,353
Core deposits and other intangibles		524			655			784			913			1,066
Foreclosed assets held for sale, net		615			651			1,430			1,955			2,270
Mortgage servicing rights		5,228			5,180			5,076			4,613			4,068
Accrued interest receivable		1,423			1,281			1,694			1,575			1,618
Other assets		1,487			1,738			2,626			2,955			3,048
Total assets	$	646,302		$	631,754		$	633,412		$	631,492		$	641,300
LIABILITIES AND EQUITY
Deposits
Non interest bearing demand	$	84,265		$	81,570		$	78,217		$	76,355		$	79,579
Interest bearing demand		126,520			119,551			124,860			118,957			123,748
Savings		64,306			61,652			61,899			61,513			62,404
Money market		85,731			79,902			78,406			78,487			81,130
Time deposits		171,897			175,559			178,161			176,066			185,398
Total deposits		532,719			518,234			521,543			511,378			532,259
Notes payable		-			589			680			1,148			1,424
Advances from Federal Home Loan Bank		14,000			16,000			16,000			30,000			17,500
Repurchase agreements		16,905			14,696			14,836			9,314			10,983
Trust preferred securities		20,620			20,620			20,620			20,620			20,620
Accrued interest payable		425			639			448			715			515
Other liabilities		4,198			4,707			3,748			3,930			3,704
Total liabilities		588,867			575,485			577,875			577,105			587,005
Equity
Preferred stock		-			-			-			-			-
Common stock		12,569			12,569			12,569			12,569			12,569
Additional paid-in capital		15,391			15,412			15,399			15,392			15,381
Retained earnings		30,708			29,899			28,846			27,648			26,476
Accumulated other comprehensive income		407			74			415			496			1,623
Treasury stock		(1,640	)		(1,685	)		(1,692	)		(1,718	)		(1,754	)
Total equity		57,435			56,269			55,537			54,387			54,295
Total liabilities and equity	$	646,302		$	631,754		$	633,412		$	631,492		$	641,300

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SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

($ in thousands, except share data)	Three Months Ended
	March			December			September		June			March
	2014			2013			2013		2013			2013
Interest income
Loans
Taxable	$	5,241		$	5,428		$	5,649	$	5,874		$	5,883
Nontaxable		16			13			14		16			24
Securities
Taxable		309			313			305		296			330
Nontaxable		175			181			178		174			170
Total interest income		5,741			5,935			6,146		6,360			6,407
Interest expense
Deposits		498			513			539		573			606
Other borrowings		5			10			11		12			14
Repurchase Agreements		6			4			2		3			2
Federal Home Loan Bank advances		74			82			83		84			90
Trust preferred securities		333			330			336		338			403
Total interest expense		916			939			971		1,010			1,115
Net interest income		4,825			4,996			5,175		5,350			5,292
Provision for loan losses		-			-			401		200			299
Net interest income after provision for loan losses		4,825			4,996			4,774		5,150			4,993
Noninterest income
Wealth Management Fees		632			689			669		652			643
Customer service fees		610			673			659		639			616
Gain on sale of mtg. loans & OMSR's		572			776			1,356		1,450			1,484
Mortgage loan servicing fees, net		245			241			408		418			179
Gain on sale of non-mortgage loans		23			303			44		82			156
Data service fees		306			295			333		458			414
Net gain on sales of securities		-			-			28		-			20
Gain/(loss) on sale/disposal of assets		(34	)		(265	)		15		(129	)		(105	)
Other income		205			237			198		250			160
Total non-interest income		2,559			2,949			3,710		3,820			3,567
Noninterest expense
Salaries and employee benefits		3,120			3,027			3,343		3,688			3,439
Net occupancy expense		573			494			507		513			541
Equipment expense		639			651			701		703			755
FDIC insurance expense		91			108			98		94			109
Data processing fees		211			254			189		194			77
Professional fees		338			443			456		499			429
Marketing expense		123			136			135		92			108
Printing and office supplies		58			55			49		151			46
Telephone and communication		112			110			156		158			158
Postage and delivery expense		204			173			199		209			215
State, local and other taxes		92			138			140		138			134
Employee expense		115			154			125		126			152
Intangible amortization expense		131			129			129		153			153
OREO Impairment		-			-			-		-			33
Other expenses		272			327			335		362			321
Total non-interest expense		6,079			6,199			6,562		7,080			6,670
Income before income tax expense		1,306			1,746			1,922		1,890			1,890
Income tax expense		326			522			578		571			572
Net income	$	980		$	1,224		$	1,344	$	1,319		$	1,318
Common share data:
Basic earnings per common share	$	0.20		$	0.25		$	0.28	$	0.27		$	0.27
Diluted earnings per common share	$	0.20		$	0.25		$	0.28	$	0.27		$	0.27
Average shares outstanding ($ in thousands):
Basic:		4,871			4,870			4,867		4,866			4,863
Diluted:		4,894			4,882			4,881		4,870			4,870

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SB FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

($ in thousands, except per share data)	Three Months Ended
	March			December			September			June			March
SUMMARY OF OPERATIONS	2014			2013			2013			2013			2013
Net interest income	$	4,825			4,996			5,175			5,350			5,292
Tax-equivalent adjustment	$	98			100			99			98			100
Tax-equivalent net interest income	$	4,923			5,096			5,274			5,448			5,392
Provision for loan loss	$	-			-			401			200			299
Noninterest income	$	2,559			2,949			3,710			3,820			3,567
Total revenue, tax-equivalent	$	7,482			8,045			8,984			9,268			8,959
Noninterest expense	$	6,079			6,199			6,562			7,080			6,670
Pre provision pretax income	$	1,306			1,746			2,323			2,090			2,189
Pretax income	$	1,306			1,746			1,922			1,890			1,890
Net income	$	980			1,224			1,344			1,319			1,318
PER SHARE INFORMATION:
Basic & diluted earnings per share	$	0.20			0.25			0.28			0.27			0.27
Common dividends	$	0.035			0.035			0.03			0.055			-
Book value per common share	$	11.78			11.55			11.42			11.17			11.16
Tangible book value per common share	$	8.24			7.98			7.83			7.57			7.52
PERFORMANCE RATIOS:
Return on average assets		0.61	%		0.76	%		0.84	%		0.82	%		0.83	%
Return on average common equity		6.88	%		8.75	%		9.82	%		9.70	%		9.82	%
Return on avg. tangible common equity		9.89	%		12.71	%		14.43	%		14.35	%		14.68	%
Efficiency ratio		80.55	%		76.40	%		72.40	%		75.54	%		73.56	%
Earning asset yield		4.10	%		4.31	%		4.40	%		4.58	%		4.65	%
Cost of interest bearing liabilities		0.74	%		0.76	%		0.79	%		0.81	%		0.90	%
Net interest margin		3.39	%		3.50	%		3.65	%		3.79	%		3.78	%
Tax equivalent effect		0.07	%		0.07	%		0.07	%		0.07	%		0.08	%
Net interest margin - fully tax equivalent basis		3.46	%		3.57	%		3.72	%		3.86	%		3.86	%
ASSET QUALITY RATIOS:
Gross charge-offs	$	323			163			307			213			136
Recoveries	$	85			7			13			34			18
Net charge-offs	$	238			156			294			179			118
Nonaccruing loans/ Total loans		0.91	%		1.01	%		1.14	%		0.95	%		1.06	%
Nonperforming loans/ Total loans		1.29	%		1.38	%		1.51	%		1.22	%		1.34	%
Nonperforming assets/ Loans & OREO		1.41	%		1.51	%		1.80	%		1.63	%		1.83	%
Nonperforming assets/ Total assets		1.05	%		1.14	%		1.36	%		1.20	%		1.30	%
Allowance for loan loss/ Nonperforming loans		108.5	%		105.8	%		99.4	%		124.2	%		114.9	%
Allowance for loan loss/ Total loans		1.40	%		1.46	%		1.50	%		1.51	%		1.54	%
Net loan charge-offs/ Average loans (ann.)		0.20	%		0.13	%		0.25	%		0.15	%		0.10	%
Loan loss provision/ Net charge-offs		0.00	%		0.00	%		136.39	%		111.73	%		253.39	%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		90.46	%		92.10	%		91.12	%		90.74	%		85.57	%
Equity/ Assets		8.89	%		8.91	%		8.77	%		8.61	%		8.47	%
Tangible equity/ Tangible assets		6.39	%		6.32	%		6.18	%		6.00	%		5.87	%
END OF PERIOD BALANCES
Total loans	$	481,924			477,303			475,233			464,035			455,443
Total assets	$	646,302			631,754			633,412			631,492			641,300
Deposits	$	532,719			518,234			521,543			511,378			532,259
Stockholders equity	$	57,435			56,269			55,537			54,387			54,295
Intangibles	$	17,264			17,429			17,457			17,555			17,719
Tangible equity	$	40,171			38,840			38,080			36,832			36,576
Full-time equivalent employees		197			200			196			198			204
Period end basic shares outstanding		4,874			4,870			4,864			4,867			4,863
AVERAGE BALANCES
Total loans	$	476,553			479,701			474,349			464,105			459,988
Total earning assets	$	569,524			571,332			567,787			564,050			559,383
Total assets	$	646,864			645,148			636,437			640,382			638,801
Deposits	$	524,145			525,334			516,669			520,259			524,901
Stockholders equity	$	56,977			55,925			54,758			54,398			53,711
Intangibles	$	17,347			17,404			17,504			17,633			17,810
Tangible equity	$	39,630			38,521			37,254			36,765			35,901
Average basic shares outstanding		4,871			4,870			4,867			4,866			4,863

-8-

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

For the Three Months Ended March 31, 2014 and 2013

($ in Thousands)	Three Months Ended March 31, 2014								Three Months Ended March 31, 2013
	Average					Average			Average					Average
Assets	Balance			Interest		Rate			Balance			Interest		Rate
Taxable securities	$	75,686			309		1.63	%	$	83,512			330		1.59	%
Non-taxable securities		17,285			265		6.14	%		15,883			258		6.49	%
Federal funds sold		-			-		N/A			-			-		N/A
Loans, net		476,553			5,265		4.42	%		459,988			5,919		5.15	%
Total earning assets		569,524			5,839		4.10	%		559,383			6,507		4.65	%
Cash and due from banks		26,880								24,167
Allowance for loan losses		(6,984	)							(6,862	)
Premises and equipment		13,547								15,120
Other assets		43,897								46,993
Total assets	$	646,864							$	638,801
Liabilities
Savings and interest-bearing demand	$	266,158			19		0.03	%	$	259,809			21		0.03	%
Time deposits		173,753			479		1.10	%		188,195			585		1.24	%
Repurchase agreements		18,439			6		0.13	%		9,970			2		0.08	%
Advances from FHLB		15,289			74		1.94	%		17,606			90		2.04	%
Junior subordinated debentures		20,620			333		6.46	%		20,620			403		7.82	%
Notes payable & other borrowed funds		286			5		6.99	%		1,516			14		3.69	%
Total interest-bearing liabilities		494,545			916		0.74	%		497,716			1,115		0.90	%
Non interest-bearing demand		84,234								76,897
Other liabilities		11,108								10,477
Total liabilities		589,887								585,090
Equity		56,977								53,711
Total liabilities and equity	$	646,864							$	638,801
Net interest income (tax equivalent basis)				$	4,923							$	5,392
Net interest income as a percent of average interest-earning assets							3.46	%							3.86	%

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