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 Third-Quarter and Nine-Month 2014 Results
6.5% year-over-year loan growth and 22% linked-quarter earnings growth
DEFIANCE, Ohio, October 22, 2014 -- SB Financial Group, Inc. (NASDAQ: SBFG)(“SB Financial” or the “Company”), a diversified financial services company providing full-service community banking, mortgage banking, wealth management and item processing services, today reported earnings for the third quarter and nine months ended September 30, 2014.
Highlights include:
· | Net income of $1.5 million for the third quarter represented a 22 percent increase over the linked quarter and a 13 percent increase over the year-ago quarter |
· | Quarterly results included a $0.43 million prepayment penalty for the early redemption of fixed rate trust preferred securities which impacted net income by $0.06 per diluted share |
· | Loan growth is up $30.7 million, or 6.5 percent, from the prior year |
· | The ratio of nonperforming assets to total assets continued to decline to 0.81 percent |
· | Operating expenses, excluding prepayment penalty, were flat compared with year-ago and linked quarters |
Highlights* | Three Months Ended | Nine Months Ended | ||||||||||||||
(in $000’s except ratios and per share data) | Sep. 2014 | Sep. 2013 | Sep. 2014 | Sep. 2013 | ||||||||||||
Net interest income (FTE) | $ | 5,446 | $ | 5,274 | $ | 15,717 | $ | 16,114 | ||||||||
Noninterest income | 3,809 | 3,710 | 9,663 | 11,097 | ||||||||||||
Noninterest expense | 6,888 | 6,562 | 19,593 | 20,312 | ||||||||||||
Net income | 1,513 | 1,344 | 3,738 | 3,981 | ||||||||||||
Earnings per diluted share | 0.31 | 0.28 | 0.76 | 0.82 | ||||||||||||
Net interest margin (FTE) | 3.64 | % | 3.72 | % | 3.54 | % | 3.81 | % | ||||||||
Return on assets | 0.90 | % | 0.84 | % | 0.75 | % | 0.83 | % | ||||||||
Return on equity | 10.14 | % | 9.82 | % | 8.54 | % | 9.78 | % | ||||||||
Adjusted for TRUP Prepayment: ** | ||||||||||||||||
Net interest income (FTE) | $ | 5,540 | $ | 5,274 | $ | 15,811 | $ | 16,114 | ||||||||
Noninterest expense | 6,547 | 6,562 | 19,252 | 20,312 | ||||||||||||
Net income | 1,794 | 1,344 | 4,019 | 3,981 | ||||||||||||
Earnings per diluted share | 0.37 | 0.28 | 0.82 | 0.82 | ||||||||||||
Return on assets | 1.07 | % | 0.84 | % | 0.81 | % | 0.83 | % | ||||||||
*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 (RDSI)). |
**See Non-GAAP Reconciliation of Income on page 11 for discussion and reconciliation.
“We are quite pleased with our results this quarter,” said Mark Klein, President and Chief Executive Officer of SB Financial. “We continue to drive performance improvement in our company as we implement our strategic initiatives to diversify our revenue streams, achieve operational excellence and expand our market presence. We had strong results across several of our business lines, demonstrated by the $0.37** per share that we earned for the quarter, when we adjust for the one-time impact of the trust preferred securities prepayment.
Additionally, we are excited to take the next step in the development of our greater Columbus region with a new retail/private client presence to complement our existing residential and commercial lending divisions. This new full-service facility in Dublin, Ohio, will enable us to further develop our strategy to expand our number of households and strengthen our presence in existing ones. We look forward to the additional opportunities this greater commitment in a robust market brings to our franchise.”
RESULTS OF OPERATIONS
Consolidated Revenue
Total revenue, consisting of net interest income on a fully tax equivalent (FTE) basis and noninterest income, was up 3.0 percent from the third quarter of 2013, and up 7.1 percent from the linked quarter.
● | Net interest income (FTE) was up 3.3 percent for the third quarter, and up 1.9 percent compared to the linked quarter | |
● | Net interest margin (FTE) was down 8 basis points for the third quarter, but up 4 basis points from the linked quarter | |
● | Noninterest income was up $0.1 million, or 0.3 percent, for the third quarter, and up $0.5 million, or 15.6 percent, from the linked quarter |
Total revenue, consisting of net interest income on an FTE basis and noninterest income, for the first nine months of 2014 was $25.4 million, compared to $27.2 million for the first nine months of 2013. The nine-month results were impacted by lower mortgage origination volume during the first quarter of 2014 and the reduction in the yield on earning assets.
Mortgage Loan Business
In line with the linked quarter, mortgage loan originations for the third quarter of 2014 were $67.5 million, up $12.3 million, or 22.3 percent, from the year-ago third quarter. For the first nine months of 2014, mortgage loan originations were $167.7 million, down from $209.1 million for the first nine months of 2013.
Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.7 million for the third quarter of 2014, compared to $1.8 million for the year-ago quarter. The mortgage servicing valuation adjustment for the third-quarter 2014 was a positive $0.06 million, slightly improved from the linked quarter.The mortgage servicing portfolio at September 30, 2014, was $649.7 million, up $52.6 million, or 8.8 percent, from September 30, 2013.
Mr. Klein noted, “Our mortgage volumes during the quarter were strong, with $68 million in originations, driven by a higher number of originators who are helping us gain market share in the regions we serve. We expect this segment to continue to be one of our key business areas.”
**See Non-GAAP Reconciliation of Income on page 11 for discussion and reconciliation.
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Mortgage Banking ($000’s) | Three Months Ended | |||||||||||||||||||
Sep. 2014 | Jun. 2014 | Mar. 2014 | Dec. 2013 | Sep. 2013 | ||||||||||||||||
Mortgage originations | $ | 67,502 | $ | 66,563 | $ | 33,602 | $ | 39,679 | $ | 55,192 | ||||||||||
Mortgage sales | 60,982 | 49,091 | 27,961 | 33,921 | 58,101 | |||||||||||||||
Mortgage servicing portfolio | 649,669 | 627,215 | 609,419 | 605,993 | 597,030 | |||||||||||||||
Mortgage servicing rights | 5,720 | 5,375 | 5,228 | 5,180 | 5,076 | |||||||||||||||
Mortgage servicing revenue: | ||||||||||||||||||||
Loan servicing fees | 400 | 387 | 380 | 388 | 367 | |||||||||||||||
OMSR amortization | (175 | ) | (147 | ) | (117 | ) | (126 | ) | (164 | ) | ||||||||||
Net administrative fees | 225 | 240 | 263 | 262 | 203 | |||||||||||||||
OMSR valuation adjustment | 62 | (83 | ) | (18 | ) | (21 | ) | 205 | ||||||||||||
Net loan servicing fees | 287 | 156 | 245 | 241 | 408 | |||||||||||||||
Gain on sale of mortgages | 1,442 | 1,211 | 572 | 776 | 1,356 | |||||||||||||||
Mortgage banking revenue, net | $ | 1,729 | $ | 1,368 | $ | 817 | $ | 1,017 | $ | 1,764 |
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 $326.5 million as of September 30, 2014. For the third quarter of 2014, fee income as a percent of total revenue was 41.6 percent, down slightly from the prior year. For the first nine months of 2014, fee income as a percentage of total revenue was 38.5 percent.
For thethirdquarter of 2014, noninterest expense (NIE) was up $0.3 million, or 5.0 percent, compared to the third quarter of 2013. However, when adjusted for the $0.33 million in operating expense related to the trust preferred securities prepayment, expenses for the quarter were in line with the prior year. For the first nine months of 2014, operating expenses were down $0.7 million, or 3.6 percent, compared to the first nine months of 2013. When adjusted for the trust preferred securities prepayment, expenses for the first nine months of 2014 were down $1.1 million, or 5.2 percent, compared to the prior-year period.
“In the current interest-rate environment, our fee income continues to be a competitive strength,” Mr. Klein stated. “For the third quarter, our fee income as a percentage of total revenue was 41.6 percent. We were pleased to achieve our 40-percent target level for this metric. Going forward, we will continue to look for ways to diversify our sources of revenue further.”
Fee Income / Noninterest Expense (000’s) | ||||||||||||||||||||
Sep. 2014 | Jun. 2014 | Mar. 2014 | Dec. 2013 | Sep. 2013 | ||||||||||||||||
Fee Income | $ | 3,809 | $ | 3,295 | $ | 2,559 | $ | 2,949 | $ | 3,710 | ||||||||||
Fee Income / Total Revenue | 41.6 | % | 38.6 | % | 34.7 | % | 37.1 | % | 41.8 | % | ||||||||||
Fee Income / Average Assets | 2.3 | % | 2.0 | % | 1.6 | % | 1.8 | % | 2.3 | % | ||||||||||
Noninterest Expense | $ | 6,888 | $ | 6,627 | $ | 6,079 | $ | 6,199 | $ | 6,562 | ||||||||||
Efficiency Ratio | 74.6 | % | 76.0 | % | 80.6 | % | 76.4 | % | 72.4 | % | ||||||||||
NIE / Average Assets | 4.1 | % | 4.0 | % | 3.8 | % | 3.8 | % | 4.1 | % |
Balance Sheet
Total assets as of September 30, 2014, were $664.6 million, up 4.9 percent from a year ago. Total equity as of September 30, 2014, was $60.3 million, up 8.5 percent from a year ago.
Total loans held for investment (HFI) were $505.9 million at September 30, 2014, up $30.7 million, or 6.5 percent, from September 30, 2013. Residential real estate loans accounted for the majority of growth, up $11.2 million, or 11.6 percent. Commercial and commercial real estate loans rose $8.9 million and $3.2 million, respectively.
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The investment portfolio, including Federal Reserve Bank and Federal Home Loan Bank stock, of $84.9 million represented 12.8 percent of assets at September 30, 2014, and was down slightly from a year ago. Deposit balances of $535.3 million at September 30, 2014, increased by $13.7 million since September 30, 2013. Growth from the prior year included $7.0 million in checking and $6.7 million in savings and time deposit balances.
Mr. Klein said, “We continued to see solid growth in our loan portfolio during the third quarter, primarily as a result of higher residential real estate loan activity. We experienced increased loan volumes across all of our markets, particularly in our lower-share markets of Columbus and Toledo.”
Loan Portfolio ($000’s) | Sep. 2014 | Jun. 2014 | Mar. 2014 | Dec. 2013 | Sep. 2013 | Variance YOY | ||||||||||||||||||
Commercial | $ | 90,407 | $ | 92,424 | $ | 85,701 | $ | 85,368 | $ | 81,571 | $ | 8,836 | ||||||||||||
% of Total | 17.9 | % | 18.3 | % | 17.8 | % | 17.9 | % | 17.2 | % | 10.8 | % | ||||||||||||
Commercial RE | 212,964 | 215,824 | 212,502 | 205,301 | 209,739 | 3,225 | ||||||||||||||||||
% of Total | 42.1 | % | 42.6 | % | 44.1 | % | 43.0 | % | 44.1 | % | 1.5 | % | ||||||||||||
Agriculture | 44,162 | 43,475 | 39,028 | 39,210 | 39,636 | 4,526 | ||||||||||||||||||
% of Total | 8.7 | % | 8.6 | % | 8.1 | % | 8.2 | % | 8.3 | % | 11.4 | % | ||||||||||||
Residential RE | 107,712 | 105,054 | 97,857 | 99,620 | 96,477 | 11,235 | ||||||||||||||||||
% of Total | 21.3 | % | 20.8 | % | 20.3 | % | 20.9 | % | 20.3 | % | 11.6 | % | ||||||||||||
Consumer & Other | 50,679 | 49,350 | 46,836 | 47,804 | 47,810 | 2,869 | ||||||||||||||||||
% of Total | 10.0 | % | 9.7 | % | 9.7 | % | 10.0 | % | 10.1 | % | 6.0 | % | ||||||||||||
Total Loans | $ | 505,924 | $ | 506,127 | �� | $ | 481,924 | $ | 477,303 | $ | 475,233 | $ | 30,691 | |||||||||||
Total Growth Percentage | 6.5 | % | ||||||||||||||||||||||
Asset Quality
SB Financial continues to improve its asset quality, reporting nonperforming assets of $5.4 million as of September 30, 2014, down $3.4 million, or 38.8 percent, from the year-ago quarter. Already trending better than our key peer metrics, the 0.81 percent of nonperforming assets to total assets was the lowest we have recorded since the first quarter of 2007. Coverage of problem loans by the loan loss allowance was 139 percent at September 30, 2014. This quarter, our delinquency level did rise to 1.2 percent from 0.6 percent in the linked quarter. This increase is driven by one Commercial real estate loan that is in the process of restructure.
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Summary of Nonperforming Assets ($000’s) | ||||||||||||||||||||
Nonperforming Loan Category | Sep. 2014 | Jun. 2014 | Mar. 2014 | Dec. 2013 | Sep. 2013 | |||||||||||||||
Commercial | $ | 1,397 | $ | 1,485 | $ | 1,818 | $ | 2,316 | $ | 2,738 | ||||||||||
% of Total Commercial loans | 1.5 | % | 1.6 | % | 2.1 | % | 2.7 | % | 3.4 | % | ||||||||||
Commercial RE | 616 | 699 | 753 | 532 | 642 | |||||||||||||||
% of Total CRE loans | 0.3 | % | 0.3 | % | 0.4 | % | 0.3 | % | 0.3 | % | ||||||||||
Residential RE | 1,015 | 1,534 | 1,555 | 1,651 | 1,837 | |||||||||||||||
% of Total Res. RE loans | 0.9 | % | 1.5 | % | 1.6 | % | 1.7 | % | 1.9 | % | ||||||||||
Consumer & Other | 174 | 288 | 280 | 345 | 363 | |||||||||||||||
% of Total Cons. & Other loans | 0.3 | % | 0.6 | % | 0.6 | % | 0.7 | % | 0.8 | % | ||||||||||
Total Nonaccruing Loans | 3,202 | 4,006 | 4,406 | 4,844 | 5,580 | |||||||||||||||
% of Total Loans | 0.6 | % | 0.8 | % | 0.9 | % | 1.0 | % | 1.2 | % | ||||||||||
Accruing Restructured Loans | 1,620 | 1,665 | 1,793 | 1,739 | 1,756 | |||||||||||||||
Total Nonaccruing & Restructured Loans | $ | 4,822 | $ | 5,671 | $ | 6,199 | $ | 6,583 | $ | 7,336 | ||||||||||
% of Total Loans | 1.0 | % | 1.1 | % | 1.3 | % | 1.4 | % | 1.5 | % | ||||||||||
OREO & Repossessed Vehicles | 540 | 516 | 615 | 651 | 1,430 | |||||||||||||||
Total Nonperforming Assets | $ | 5,362 | $ | 6,187 | $ | 6,814 | $ | 7,233 | $ | 8,766 | ||||||||||
% of Total Assets | 0.8 | % | 0.9 | % | 1.1 | % | 1.1 | % | 1.4 | % |
Capitalization
Improving capital ratios remains an important focus of management. The tangible equity ratio improved by 50 basis points over the past year and stood at 6.7 percent as of September 30, 2014. All bank regulatory ratios remain in excess of "well-capitalized" levels. At September 30, 2014, State Bank's Total Risk-Based Capital was estimated to be $63.0 million, $21.6 million above the “well-capitalized” level. The Total Risk-Based Capital Ratio is estimated at 12.2 percent.
The Company will hold a related conference call and webcast on October 23, 2014, at 9:00 a.m. EDT. Interested parties may access the conference call by dialing 1-888-338-9469. The webcast can be accessed at http://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 with two wholly-owned operating subsidiaries: State Bank and 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 16 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’s common stock is listed on the NASDAQ Global Market under the symbol SBFG.
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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
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. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results.
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SB FINANCIAL GROUP, INC. | ||||||||||||||||||||||||
CONSOLIDATED BALANCE SHEETS - (Unaudited) | ||||||||||||||||||||||||
September | June | March | December | September | ||||||||||||||||||||
($ in Thousands) | 2014 | 2014 | 2014 | 2013 | 2013 | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Cash and due from banks | $ | 21,870 | $ | 13,778 | $ | 14,860 | $ | 13,137 | $ | 19,016 | ||||||||||||||
Securities available for sale, at fair value | 81,148 | 85,586 | 93,305 | 89,793 | 86,620 | |||||||||||||||||||
Other securities - FRB and FHLB Stock | 3,748 | 3,748 | 3,748 | 3,748 | 3,748 | |||||||||||||||||||
Total investment securities | 84,896 | 89,334 | 97,053 | 93,541 | 90,368 | |||||||||||||||||||
Loans held for sale | 6,736 | 8,290 | 7,165 | 3,366 | 2,407 | |||||||||||||||||||
Loans, net of unearned income | 505,924 | 506,127 | 481,924 | 477,303 | 475,233 | |||||||||||||||||||
Allowance for loan losses | (6,713 | ) | (6,568 | ) | (6,726 | ) | (6,964 | ) | (7,120 | ) | ||||||||||||||
Net loans | 499,211 | 499,559 | 475,198 | 470,339 | 468,113 | |||||||||||||||||||
Premises and equipment, net | 13,256 | 13,281 | 13,414 | 12,607 | 12,719 | |||||||||||||||||||
Cash surrender value of life insurance | 13,074 | 13,059 | 12,982 | 12,906 | 12,826 | |||||||||||||||||||
Goodwill | 16,353 | 16,353 | 16,353 | 16,353 | 16,353 | |||||||||||||||||||
Core deposits and other intangibles | 338 | 393 | 524 | 655 | 784 | |||||||||||||||||||
Foreclosed assets held for sale, net | 540 | 516 | 615 | 651 | 1,430 | |||||||||||||||||||
Mortgage servicing rights | 5,720 | 5,375 | 5,228 | 5,180 | 5,076 | |||||||||||||||||||
Accrued interest receivable | 1,853 | 1,456 | 1,423 | 1,281 | 1,694 | |||||||||||||||||||
Other assets | 709 | 1,106 | 1,487 | 1,738 | 2,626 | |||||||||||||||||||
Total assets | $ | 664,556 | $ | 662,500 | $ | 646,302 | $ | 631,754 | $ | 633,412 | ||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||
Non interest bearing demand | $ | 90,261 | $ | 87,706 | $ | 84,265 | $ | 81,570 | $ | 78,217 | ||||||||||||||
Interest bearing demand | 119,805 | 116,765 | 126,520 | 119,551 | 124,860 | |||||||||||||||||||
Savings | 61,770 | 63,199 | 64,306 | 61,652 | 61,899 | |||||||||||||||||||
Money market | 96,506 | 80,288 | 85,731 | 79,902 | 78,406 | |||||||||||||||||||
Time deposits | 166,919 | 176,109 | 171,897 | 175,559 | 178,161 | |||||||||||||||||||
Total deposits | 535,261 | 524,067 | 532,719 | 518,234 | 521,543 | |||||||||||||||||||
Notes payable | 7,000 | - | - | 589 | 680 | |||||||||||||||||||
Advances from Federal Home Loan Bank | 30,000 | 37,000 | 14,000 | 16,000 | 16,000 | |||||||||||||||||||
Repurchase agreements | 17,902 | 17,246 | 16,905 | 14,696 | 14,836 | |||||||||||||||||||
Trust preferred securities | 10,310 | 20,620 | 20,620 | 20,620 | 20,620 | |||||||||||||||||||
Accrued interest payable | 355 | 655 | 425 | 639 | 448 | |||||||||||||||||||
Other liabilities | 3,462 | 3,902 | 4,198 | 4,707 | 3,748 | |||||||||||||||||||
Total liabilities | 604,290 | 603,490 | 588,867 | 575,485 | 577,875 | |||||||||||||||||||
Equity | ||||||||||||||||||||||||
Preferred stock | - | - | - | - | - | |||||||||||||||||||
Common stock | 12,569 | 12,569 | 12,569 | 12,569 | 12,569 | |||||||||||||||||||
Additional paid-in capital | 15,418 | 15,403 | 15,391 | 15,412 | 15,399 | |||||||||||||||||||
Retained earnings | 33,075 | 31,757 | 30,708 | 29,899 | 28,846 | |||||||||||||||||||
Accumulated other comprehensive income | 831 | 908 | 407 | 74 | 415 | |||||||||||||||||||
Treasury stock | (1,627 | ) | (1,627 | ) | (1,640 | ) | (1,685 | ) | (1,692 | ) | ||||||||||||||
Total equity | 60,266 | 59,010 | 57,435 | 56,269 | 55,537 | |||||||||||||||||||
Total liabilities and equity | $ | 664,556 | $ | 662,500 | $ | 646,302 | $ | 631,754 | $ | 633,412 |
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SB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
($ in thousands, except share data) | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
September | June | March | December | September | September | September | ||||||||||||||||||||||
Interest income | 2014 | 2014 | 2014 | 2013 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Loans | ||||||||||||||||||||||||||||
Taxable | $ | 5,855 | $ | 5,654 | $ | 5,241 | $ | 5,428 | $ | 5,649 | $ | 16,750 | $ | 17,406 | ||||||||||||||
Nontaxable | 9 | 13 | 16 | 13 | 14 | 38 | 54 | |||||||||||||||||||||
Securities | ||||||||||||||||||||||||||||
Taxable | 279 | 310 | 309 | 313 | 305 | 898 | 931 | |||||||||||||||||||||
Nontaxable | 178 | 179 | 175 | 181 | 178 | 532 | 522 | |||||||||||||||||||||
Total interest income | 6,321 | 6,156 | 5,741 | 5,935 | 6,146 | 18,218 | 18,913 | |||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||||
Deposits | 500 | 503 | 498 | 513 | 539 | 1,501 | 1,718 | |||||||||||||||||||||
Repurchase Agreements & Other | 6 | 4 | 11 | 14 | 13 | 21 | 44 | |||||||||||||||||||||
Federal Home Loan Bank advances | 94 | 71 | 74 | 82 | 83 | 239 | 257 | |||||||||||||||||||||
Trust preferred securities | 371 | 330 | 333 | 330 | 336 | 1,034 | 1,077 | |||||||||||||||||||||
Total interest expense | 971 | 908 | 916 | 939 | 971 | 2,795 | 3,096 | |||||||||||||||||||||
Net interest income | 5,350 | 5,248 | 4,825 | 4,996 | 5,175 | 15,423 | 15,817 | |||||||||||||||||||||
Provision for loan losses | 150 | 150 | - | - | 401 | 300 | 900 | |||||||||||||||||||||
Net interest income after provision for loan losses | 5,200 | 5,098 | 4,825 | 4,996 | 4,774 | 15,123 | 14,917 | |||||||||||||||||||||
Noninterest income | ||||||||||||||||||||||||||||
Wealth Management Fees | 670 | 649 | 632 | 689 | 669 | 1,951 | 1,964 | |||||||||||||||||||||
Customer service fees | 730 | 665 | 610 | 673 | 659 | 2,005 | 1,914 | |||||||||||||||||||||
Gain on sale of mtg. loans & OMSR's | 1,442 | 1,211 | 572 | 776 | 1,356 | 3,225 | 4,290 | |||||||||||||||||||||
Mortgage loan servicing fees, net | 287 | 156 | 245 | 241 | 408 | 688 | 1,005 | |||||||||||||||||||||
Gain on sale of non-mortgage loans | 71 | 84 | 23 | 303 | 44 | 178 | 282 | |||||||||||||||||||||
Data service fees | 337 | 322 | 306 | 295 | 333 | 965 | 1,205 | |||||||||||||||||||||
Net gain on sales of securities | - | 56 | - | - | 28 | 56 | 48 | |||||||||||||||||||||
Gain/(loss) on sale/disposal of assets | (15 | ) | (15 | ) | (34 | ) | (265 | ) | 15 | (64 | ) | (219 | ) | |||||||||||||||
Other income | 287 | 167 | 205 | 237 | 198 | 659 | 608 | |||||||||||||||||||||
Total non-interest income | 3,809 | 3,295 | 2,559 | 2,949 | 3,710 | 9,663 | 11,097 | |||||||||||||||||||||
Noninterest expense | ||||||||||||||||||||||||||||
Salaries and employee benefits | 3,435 | 3,451 | 3,120 | 3,027 | 3,343 | 10,006 | 10,470 | |||||||||||||||||||||
Net occupancy expense | 508 | 485 | 573 | 494 | 507 | 1,566 | 1,561 | |||||||||||||||||||||
Equipment expense | 616 | 645 | 639 | 651 | 701 | 1,900 | 2,159 | |||||||||||||||||||||
Data processing fees | 238 | 249 | 211 | 254 | 189 | 698 | 460 | |||||||||||||||||||||
Professional fees | 435 | 465 | 338 | 443 | 456 | 1,238 | 1,384 | |||||||||||||||||||||
Marketing expense | 105 | 170 | 123 | 136 | 135 | 398 | 335 | |||||||||||||||||||||
Telephone and communication | 94 | 107 | 112 | 110 | 156 | 313 | 472 | |||||||||||||||||||||
Postage and delivery expense | 195 | 187 | 204 | 173 | 199 | 586 | 623 | |||||||||||||||||||||
State, local and other taxes | 89 | 95 | 92 | 138 | 140 | 276 | 412 | |||||||||||||||||||||
Employee expense | 122 | 140 | 115 | 154 | 125 | 377 | 403 | |||||||||||||||||||||
Intangible amortization expense | 55 | 131 | 131 | 129 | 129 | 317 | 435 | |||||||||||||||||||||
OREO Impairment | - | - | - | - | - | - | 33 | |||||||||||||||||||||
Other expenses | 996 | 502 | 421 | 490 | 482 | 1,918 | 1,565 | |||||||||||||||||||||
Total non-interest expense | 6,888 | 6,627 | 6,079 | 6,199 | 6,562 | 19,593 | 20,312 | |||||||||||||||||||||
Income before income tax expense | 2,121 | 1,767 | 1,306 | 1,746 | 1,922 | 5,193 | 5,702 | |||||||||||||||||||||
Income tax expense | 607 | 521 | 326 | 522 | 578 | 1,454 | 1,721 | |||||||||||||||||||||
Net income | $ | 1,513 | $ | 1,245 | $ | 980 | $ | 1,224 | $ | 1,344 | $ | 3,738 | $ | 3,981 | ||||||||||||||
Common share data: | ||||||||||||||||||||||||||||
Basic earnings per common share | $ | 0.31 | $ | 0.26 | $ | 0.20 | $ | 0.25 | $ | 0.28 | $ | 0.77 | $ | 0.82 | ||||||||||||||
Diluted earnings per common share | $ | 0.31 | $ | 0.25 | $ | 0.20 | $ | 0.25 | $ | 0.28 | $ | 0.76 | $ | 0.82 | ||||||||||||||
Average Shares outstanding ($ in thousands): | ||||||||||||||||||||||||||||
Basic: | 4,875 | 4,874 | 4,871 | 4,870 | 4,867 | 4,873 | 4,865 | |||||||||||||||||||||
Diluted: | 4,900 | 4,893 | 4,894 | 4,882 | 4,881 | 4,896 | 4,877 |
8 |
SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
($ in thousands, except per share data) | At and For the Three Months Ended | At and For the Nine Months Ended | |||||||||||||||||||||||||||
September | June | March | December | September | September | September | |||||||||||||||||||||||
SUMMARY OF OPERATIONS | 2014 | 2014 | 2014 | 2013 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Net interest income | $ | 5,350 | 5,248 | 4,825 | 4,996 | 5,175 | 15,423 | 15,817 | |||||||||||||||||||||
Tax-equivalent adjustment | $ | 96 | 99 | 98 | 100 | 99 | 294 | 297 | |||||||||||||||||||||
Tax-equivalent net interest income | $ | 5,446 | 5,347 | 4,923 | 5,096 | 5,274 | 15,717 | 16,114 | |||||||||||||||||||||
Provision for loan loss | $ | 150 | 150 | - | - | 401 | 300 | 900 | |||||||||||||||||||||
Noninterest income | $ | 3,809 | 3,295 | 2,559 | 2,949 | 3,710 | 9,663 | 11,097 | |||||||||||||||||||||
Total revenue, tax-equivalent | $ | 9,255 | 8,642 | 7,482 | 8,045 | 8,984 | 25,380 | 27,211 | |||||||||||||||||||||
Noninterest expense | $ | 6,888 | 6,627 | 6,079 | 6,199 | 6,562 | 19,593 | 20,312 | |||||||||||||||||||||
Pre provision pretax income | $ | 2,271 | 1,917 | 1,306 | 1,746 | 2,323 | 5,493 | 6,602 | |||||||||||||||||||||
Pretax income | $ | 2,121 | 1,767 | 1,306 | 1,746 | 1,922 | 5,193 | 5,702 | |||||||||||||||||||||
Net income | $ | 1,513 | 1,245 | 980 | 1,224 | 1,344 | 3,738 | 3,981 | |||||||||||||||||||||
PER SHARE INFORMATION: | |||||||||||||||||||||||||||||
Basic earnings per share | $ | 0.31 | 0.26 | 0.20 | 0.25 | 0.28 | 0.77 | 0.82 | |||||||||||||||||||||
Diluted earnings per share | $ | 0.31 | 0.25 | 0.20 | 0.25 | 0.28 | 0.76 | 0.82 | |||||||||||||||||||||
Common dividends | $ | 0.040 | 0.040 | 0.035 | 0.035 | 0.030 | 0.115 | 0.085 | |||||||||||||||||||||
Book value per common share | $ | 12.36 | 12.10 | 11.78 | 11.55 | 11.41 | 12.36 | 11.41 | |||||||||||||||||||||
Tangible book value per common share | $ | 8.94 | 8.67 | 8.32 | 8.06 | 7.89 | 8.94 | 7.89 | |||||||||||||||||||||
Market price per share | $ | 9.05 | 8.37 | 8.35 | 7.88 | 7.77 | 9.05 | 7.77 | |||||||||||||||||||||
PERFORMANCE RATIOS: | |||||||||||||||||||||||||||||
Return on average assets | 0.90 | % | 0.76 | % | 0.61 | % | 0.76 | % | 0.84 | % | 0.75 | % | 0.83 | % | |||||||||||||||
Return on average common equity | 10.14 | % | 8.55 | % | 6.88 | % | 8.75 | % | 9.82 | % | 8.54 | % | 9.78 | % | |||||||||||||||
Return on avg. tangible common equity | 14.09 | % | 12.01 | % | 9.89 | % | 12.71 | % | 14.43 | % | 12.00 | % | 14.36 | % | |||||||||||||||
Efficiency ratio | 74.61 | % | 76.03 | % | 80.55 | % | 76.40 | % | 72.40 | % | 76.84 | % | 73.85 | % | |||||||||||||||
Earning asset yield | 4.29 | % | 4.16 | % | 4.10 | % | 4.31 | % | 4.40 | % | 4.16 | % | 4.54 | % | |||||||||||||||
Cost of interest bearing liabilities | 0.76 | % | 0.72 | % | 0.74 | % | 0.76 | % | 0.79 | % | 0.74 | % | 0.83 | % | |||||||||||||||
Net interest margin | 3.58 | % | 3.53 | % | 3.39 | % | 3.50 | % | 3.65 | % | 3.47 | % | 3.74 | % | |||||||||||||||
Tax equivalent effect | 0.06 | % | 0.07 | % | 0.07 | % | 0.07 | % | 0.07 | % | 0.07 | % | 0.07 | % | |||||||||||||||
Net interest margin - fully tax equivalent basis | 3.64 | % | 3.60 | % | 3.46 | % | 3.57 | % | 3.72 | % | 3.54 | % | 3.81 | % | |||||||||||||||
ASSET QUALITY RATIOS: | |||||||||||||||||||||||||||||
Gross charge-offs | $ | 94 | 330 | 323 | 163 | 307 | 747 | 656 | |||||||||||||||||||||
Recoveries | $ | 90 | 21 | 85 | 7 | 13 | 196 | 65 | |||||||||||||||||||||
Net charge-offs | $ | 4 | 309 | 238 | 156 | 294 | 551 | 591 | |||||||||||||||||||||
Nonaccruing loans/ Total loans | 0.63 | % | 0.79 | % | 0.91 | % | 1.01 | % | 1.14 | % | 0.63 | % | 1.14 | % | |||||||||||||||
Nonperforming loans/ Total loans | 0.95 | % | 1.12 | % | 1.29 | % | 1.38 | % | 1.51 | % | 0.95 | % | 1.51 | % | |||||||||||||||
Nonperforming assets/ Loans & OREO | 1.06 | % | 1.22 | % | 1.41 | % | 1.51 | % | 1.80 | % | 1.06 | % | 1.80 | % | |||||||||||||||
Nonperforming assets/ Total assets | 0.81 | % | 0.93 | % | 1.05 | % | 1.14 | % | 1.36 | % | 0.81 | % | 1.36 | % | |||||||||||||||
Allowance for loan loss/ Nonperforming loans | 139.22 | % | 115.82 | % | 108.50 | % | 105.80 | % | 99.41 | % | 139.22 | % | 99.41 | % | |||||||||||||||
Allowance for loan loss/ Total loans | 1.33 | % | 1.30 | % | 1.40 | % | 1.46 | % | 1.50 | % | 1.33 | % | 1.50 | % | |||||||||||||||
Net loan charge-offs/ Average loans (ann.) | N/M | 0.25 | % | 0.20 | % | 0.13 | % | 0.25 | % | 0.15 | % | 0.17 | % | ||||||||||||||||
Loan loss provision/ Net charge-offs | N/M | 48.54 | % | 0.00 | % | 0.00 | % | 136.39 | % | 54.45 | % | 152.28 | % | ||||||||||||||||
CAPITAL & LIQUIDITY RATIOS: | |||||||||||||||||||||||||||||
Loans/ Deposits | 94.52 | % | 96.58 | % | 90.46 | % | 92.10 | % | 91.12 | % | 94.52 | % | 91.12 | % | |||||||||||||||
Equity/ Assets | 9.07 | % | 8.91 | % | 8.89 | % | 8.91 | % | 8.77 | % | 9.07 | % | 8.77 | % | |||||||||||||||
Tangible equity/ Tangible assets | 6.73 | % | 6.54 | % | 6.44 | % | 6.39 | % | 6.23 | % | 6.73 | % | 6.23 | % | |||||||||||||||
END OF PERIOD BALANCES | |||||||||||||||||||||||||||||
Total loans | $ | 505,924 | 506,127 | 481,924 | 477,303 | 475,233 | 505,924 | 475,233 | |||||||||||||||||||||
Total assets | $ | 664,556 | 662,500 | 646,302 | 631,754 | 633,412 | 664,556 | 633,412 | |||||||||||||||||||||
Deposits | $ | 535,261 | 524,067 | 532,719 | 518,234 | 521,543 | 535,261 | 521,543 | |||||||||||||||||||||
Stockholders equity | $ | 60,266 | 59,010 | 57,435 | 56,269 | 55,537 | 60,266 | 55,537 | |||||||||||||||||||||
Intangibles | $ | 16,691 | 16,746 | 16,877 | 17,008 | 17,137 | 16,691 | 17,137 | |||||||||||||||||||||
Tangible equity | $ | 43,575 | 42,264 | 40,558 | 39,261 | 38,400 | 43,575 | 38,400 | |||||||||||||||||||||
Full-time equivalent employees | 195 | 193 | 197 | 200 | 196 | 195 | 196 | ||||||||||||||||||||||
Period end basic shares outstanding | 4,875 | 4,875 | 4,874 | 4,870 | 4,869 | 4,875 | 4,869 | ||||||||||||||||||||||
AVERAGE BALANCES | |||||||||||||||||||||||||||||
Total loans | $ | 512,151 | 500,167 | 476,553 | 479,701 | 474,349 | 496,421 | 466,200 | |||||||||||||||||||||
Total earning assets | $ | 598,223 | 594,256 | 569,524 | 571,332 | 567,787 | 592,515 | 563,730 | |||||||||||||||||||||
Total assets | $ | 673,213 | 658,108 | 646,864 | 645,148 | 636,437 | 664,589 | 638,667 | |||||||||||||||||||||
Deposits | $ | 534,841 | 531,786 | 524,145 | 525,334 | 516,669 | 530,314 | 520,359 | |||||||||||||||||||||
Stockholders equity | $ | 59,684 | 58,276 | 56,977 | 55,925 | 54,758 | 58,330 | 54,287 | |||||||||||||||||||||
Intangibles | $ | 16,719 | 16,811 | 17,347 | 17,404 | 17,504 | 16,827 | 17,323 | |||||||||||||||||||||
Tangible equity | $ | 42,965 | 41,465 | 39,630 | 38,521 | 37,254 | 41,503 | 36,964 | |||||||||||||||||||||
Average basic shares outstanding | 4,875 | 4,874 | 4,871 | 4,870 | 4,867 | 4,873 | 4,865 | ||||||||||||||||||||||
Average diluted shares outstanding | 4,900 | 4,893 | 4,894 | 4,882 | 4,881 | 4,896 | 4,877 |
9 |
SB FINANCIAL GROUP, INC. | ||||||||||||||||||||||||
Rate Volume Analysis - (Unaudited) | ||||||||||||||||||||||||
For the Three & Nine Months Ended September 30, 2014 and 2013 | ||||||||||||||||||||||||
($ in Thousands) | Three Months Ended September 30, 2014 | Three Months Ended September 30, 2013 | ||||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||||||
Assets | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
Taxable securities | $ | 68,275 | 279 | 1.63 | % | $ | 74,918 | 305 | 1.63 | % | ||||||||||||||
Nontaxable securities | 17,797 | 270 | 6.06 | % | 18,520 | 270 | 5.82 | % | ||||||||||||||||
Federal funds sold | - | - | N/A | - | - | N/A | ||||||||||||||||||
Loans, net | 512,151 | 5,869 | 4.58 | % | 474,349 | 5,670 | 4.78 | % | ||||||||||||||||
Total earning assets | 598,223 | 6,417 | 4.29 | % | 567,787 | 6,245 | 4.40 | % | ||||||||||||||||
Cash and due from banks | 23,672 | 15,270 | ||||||||||||||||||||||
Allowance for loan losses | (6,652 | ) | (6,947 | ) | ||||||||||||||||||||
Premises and equipment | 13,791 | 14,461 | ||||||||||||||||||||||
Other assets | 44,179 | 45,866 | ||||||||||||||||||||||
Total assets | $ | 673,213 | $ | 636,437 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and interest bearing demand | $ | 271,848 | 40 | 0.06 | % | $ | 262,166 | 19 | 0.03 | % | ||||||||||||||
Time deposits | 172,886 | 460 | 1.06 | % | 177,802 | 520 | 1.17 | % | ||||||||||||||||
Repurchase agreements & Other | 20,639 | 6 | 0.12 | % | 13,261 | 13 | 0.39 | % | ||||||||||||||||
Advances from Federal Home Loan Bank | 30,000 | 94 | 1.25 | % | 19,038 | 83 | 1.74 | % | ||||||||||||||||
Trust preferred securities | 18,043 | 371 | 8.22 | % | 20,620 | 336 | 6.52 | % | ||||||||||||||||
Total interest bearing liabilities | 513,416 | 971 | 0.76 | % | 492,887 | 971 | 0.79 | % | ||||||||||||||||
Non interest bearing demand | 90,107 | 76,701 | ||||||||||||||||||||||
Other liabilities | 10,006 | 12,091 | ||||||||||||||||||||||
Total liabilities | 613,529 | 581,679 | ||||||||||||||||||||||
Equity | 59,684 | 54,758 | ||||||||||||||||||||||
Total liabilities and equity | $ | 673,213 | $ | 636,437 | ||||||||||||||||||||
Net interest income (tax equivalent basis) | $ | 5,446 | $ | 5,274 | ||||||||||||||||||||
Net interest income as a percent of average interest-earning assets | 3.64 | % | 3.72 | % |
Nine Months Ended September 30, 2014 | Nine Months Ended September 30, 2013 | |||||||||||||||||||||||
Average | Average | Average | Average | |||||||||||||||||||||
Assets | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||
Taxable securities | $ | 77,134 | 898 | 1.55 | % | $ | 80,553 | 931 | 1.54 | % | ||||||||||||||
Nontaxable securities | 18,960 | 806 | 5.67 | % | 16,977 | 791 | 6.21 | % | ||||||||||||||||
Federal funds sold | - | - | N/A | - | - | N/A | ||||||||||||||||||
Loans, net | 496,421 | 16,808 | 4.51 | % | 466,200 | 17,488 | 5.00 | % | ||||||||||||||||
Total earning assets | 592,515 | 18,512 | 4.16 | % | 563,730 | 19,210 | 4.54 | % | ||||||||||||||||
Cash and due from banks | 21,095 | 20,307 | ||||||||||||||||||||||
Allowance for loan losses | (6,804 | ) | (6,924 | ) | ||||||||||||||||||||
Premises and equipment | 13,739 | 14,913 | ||||||||||||||||||||||
Other assets | 44,044 | 46,641 | ||||||||||||||||||||||
Total assets | $ | 664,589 | $ | 638,667 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Savings and interest bearing demand | $ | 270,086 | 105 | 0.05 | % | $ | 262,177 | 58 | 0.03 | % | ||||||||||||||
Time deposits | 173,480 | 1,396 | 1.07 | % | 181,348 | 1,660 | 1.22 | % | ||||||||||||||||
Repurchase agreements & Other | 18,457 | 21 | 0.15 | % | 12,170 | 44 | 0.48 | % | ||||||||||||||||
Advances from Federal Home Loan Bank | 22,371 | 239 | 1.42 | % | 19,410 | 257 | 1.76 | % | ||||||||||||||||
Trust preferred securities | 19,589 | 1,034 | 7.04 | % | 20,620 | 1,077 | 6.96 | % | ||||||||||||||||
Total interest bearing liabilities | 503,983 | 2,795 | 0.74 | % | 495,725 | 3,096 | 0.83 | % | ||||||||||||||||
Non interest bearing demand | 86,748 | 76,834 | ||||||||||||||||||||||
Other liabilities | 15,528 | 11,821 | ||||||||||||||||||||||
Total liabilities | 606,259 | 584,380 | ||||||||||||||||||||||
Equity | 58,330 | 54,287 | ||||||||||||||||||||||
Total liabilities and equity | $ | 664,589 | $ | 638,667 | ||||||||||||||||||||
Net interest income (tax equivalent basis) | $ | 15,717 | $ | 16,114 | ||||||||||||||||||||
Net interest income as a percent of average interest-earning assets | 3.54 | % | 3.81 | % |
10 |
SB FINANCIAL GROUP, INC. | ||||||||||||||||
NON-GAAP RECONCILIATION OF INCOME - (Unaudited) | ||||||||||||||||
($ in thousands, except share data) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September | September | September | September | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Tax-equivalent net interest income | 5,446 | 5,274 | 15,717 | 16,114 | ||||||||||||
TRUP prepayment - interest expense | 94 | - | 94 | - | ||||||||||||
Adjusted Tax-equivalent net interest income | 5,540 | 5,274 | 15,811 | 16,114 | ||||||||||||
Noninterest income | 3,809 | 3,710 | 9,663 | 11,097 | ||||||||||||
Total revenue, tax-equivalent | 9,349 | 8,984 | 25,474 | 27,211 | ||||||||||||
Noninterest expense | 6,888 | 6,562 | 19,593 | 20,312 | ||||||||||||
TRUP prepayment - noninterest expense | 331 | - | 331 | - | ||||||||||||
Adjusted noninterest expense | 6,557 | 6,562 | 19,262 | 20,312 | ||||||||||||
Net income | 1,513 | 1,344 | 3,738 | 3,981 | ||||||||||||
TRUP prepayment | 281 | - | 281 | - | ||||||||||||
Adjusted net income | 1,794 | 1,344 | 4,018 | 3,981 | ||||||||||||
Diluted earnings per share | 0.31 | 0.28 | 0.76 | 0.82 | ||||||||||||
TRUP prepayment | 0.06 | - | 0.06 | - | ||||||||||||
Adjusted earnings per share | 0.37 | 0.28 | 0.82 | 0.82 | ||||||||||||
Return on average assets | 0.90 | % | 0.84 | % | 0.75 | % | 0.83 | % | ||||||||
TRUP prepayment | 0.17 | % | 0.00 | % | 0.17 | % | 0.00 | % | ||||||||
Adjusted return on average assets | 1.07 | % | 0.84 | % | 0.92 | % | 0.83 | % |
11