SB Financial (SBFG) 8-K SB Financial Group, Inc. Announces Third-Quarter and Nine-Month 2016 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 Third-Quarter and Nine-Month 2016 Results

Year-over-year earnings per share growth of 14% and loan growth of 15%

DEFIANCE, Ohio, October 20, 2016 -- 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, item and statement processing services, today reported earnings for the third-quarter and nine-months ended September 30, 2016.

Third-quarter 2016 highlights over prior-year third quarter include:

● Net income of $2.5 million, an increase of 12.5 percent, or $0.3 million

● Diluted earnings per share (EPS) of $0.40, an increase of 14.3 percent, or $0.05 per share

● Loan growth of $78.5 million, or 14.5 percent

● Deposit growth of $88.6 million, or 15.4 percent

● Fully Taxable Equivalent (FTE) net interest margin of 3.82 percent, down 5 basis points

● Mortgage origination volume of $117.2 million, an increase of 34.8 percent, or $30.2 million; servicing portfolio of $868.8 million, up 15.7 percent, or $117.8 million

Nine-months ended September 30, 2016, highlights over prior-year nine months include:

● Net income of $6.5 million, an increase of 12.5 percent, or $0.7 million

● Diluted earnings per share of $1.01, an increase of 14.6 percent, or $0.13 per share

● Return on average assets of 1.10 percent

Highlights	Three Months Ended									Nine Months Ended
($000’s except ratios and share data)	Sep. 2016			Sep. 2015			% Change			Sep. 2016			Sep. 2015			% Change
Operating revenue (FTE)	$	11,772		$	10,119			16.3	%	$	32,227		$	29,641			8.7	%
Interest income (FTE)		7,585			6,811			11.4			21,799			19,588			11.3
Interest expense		828			644			28.6			2,333			1,938			20.4
Net interest income (FTE)		6,757			6,167			9.6			19,466			17,650			10.3
Noninterest income		5,015			3,952			26.9			12,761			11,991			6.4
Noninterest expense		7,930			6,626			19.7			22,232			20,088			10.7
Net income		2,547			2,264			12.5			6,467			5,751			12.5
Earnings per diluted share		0.40			0.35			14.3			1.01			0.89			14.6
Net interest margin (FTE)		3.82	%		3.87	%		(1.3	)		3.72	%		3.78	%		(1.6	)
Return on average assets		1.28	%		1.26	%		1.6			1.10	%		1.07	%		2.8
Return on average equity		11.90	%		11.42	%		4.2			10.27	%		9.84	%		4.4

“Our third quarter performance was highlighted by our strongest mortgage origination quarter ever, and included double-digit loan and deposit growth and the resolution of a $3.5 million non-performing credit,” said Mark Klein, Chairman, President, and CEO of SB Financial. “Additionally this quarter, our $0.40 per share earnings represented a meaningful contribution from each of our six primary business lines. This strong performance further highlights our successful execution of our key strategic initiatives to drive growth for our company and value for our shareholders.”

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income (FTE) and noninterest income, was up 16.3 percent from the third quarter of 2015, and up 8.8 percent from the linked quarter.

● Net interest income (FTE) was up 9.6 percent from the year-ago quarter, and up 3.8 percent from the linked quarter.

● Net interest margin (FTE) was down 5 basis points from the year-ago quarter, but up 7 basis points from the linked quarter.

● Noninterest income was up 26.9 percent from the year-ago quarter, and up 16.4 percent from the linked quarter.

● Total revenue (FTE) for the first nine months of 2016 was $32.2 million, compared to $29.6 million for the first nine months of 2015, which is an 8.7 percent increase.

Mortgage Loan Business

Mortgage loan originations for the third quarter of 2016 were $117.2 million, up $30.2 million, or 34.8 percent, from the year-ago quarter. Total sales of originated loans were $101.1 million, up $31.1 million, or 44.3 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 $2.7 million for the third quarter of 2016, compared to $1.8 million for the year-ago quarter, or a 51.6 percent increase. The mortgage servicing valuation adjustment for the third-quarter 2016 was a positive $0.1 million, compared to a negative adjustment for the third quarter of 2015 of $0.1 million. The aggregate servicing valuation impairment ended the quarter at $1.5 million. The mortgage servicing portfolio at September 30, 2016, was $868.8 million, up $117.8 million, or 15.7 percent, from $751.0 million at September 30, 2015.

Mr. Klein noted, “The entire mortgage production team turned in the best quarter in our history. We have again maintained a high level of new money production in the quarter, at 88 percent of total volume. Construction volume has been a key factor in our success this year, and we continue to see momentum in this area.”

Mortgage Banking ($000’s)
	Sep. 2016			Jun. 2016			Mar. 2016			Dec. 2015			Sep. 2015
Mortgage originations	$	117,209		$	110,210		$	71,941		$	67,149		$	86,965
Mortgage sales		101,147			95,150			59,383			56,302			70,081
Mortgage servicing portfolio		868,783			831,781			792,666			772,533			750,958
Mortgage servicing rights		6,887			6,494			6,608			7,152			6,798
Mortgage servicing revenue:
Loan servicing fees		531			505			491			476			459
OMSR amortization		(397	)		(309	)		(170	)		(157	)		(223	)
Net administrative fees		134			196			321			319			236
OMSR valuation adjustment		71			(469	)		(767	)		64			(138	)
Net loan servicing fees		205			(273	)		(446	)		383			98
Gain on sale of mortgages		2,503			2,284			1,383			1,372			1,687
Mortgage banking revenue, net	$	2,708		$	2,011		$	937		$	1,755		$	1,785

2

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 from sales of small business loans (SBA). Wealth management assets under our management stood at $375.8 million as of September 30, 2016. For the third quarter of 2016, fee income as a percentage of total revenue was 42.9 percent. The servicing rights recapture positively impacted the quarter by $0.1 million.

For the third quarter of 2016, noninterest expense (NIE) of $7.9 million, was up $1.3 million, or 19.7 percent, compared to the same quarter last year. Total staffing levels were up 7.2 percent, due to our new branch locations and increased support in our compliance and mortgage divisions. We also had higher commission expenses related to our mortgage loan volume. Compared to the linked quarter, NIE was up $0.5 million, or 7.1 percent.

Mr. Klein stated, “Once again, total fee income was above 40 percent of total revenue. Mortgage banking delivered record levels of both origination and sales during the quarter. We continued to diversify our fee income, with both SBA lending and wealth management turning in strong quarters.”

Fee Income / Noninterest Expense ($000’s)
	Sep. 2016			Jun. 2016			Mar. 2016			Dec. 2015			Sep. 2015
Fee Income	$	5,015		$	4,307		$	3,439		$	3,716		$	3,952
Fee Income / Total Revenue		42.9	%		40.1	%		36.0	%		38.3	%		39.4	%
Fee Income / Average Assets		2.5	%		2.2	%		1.8	%		2.0	%		2.2	%
Noninterest Expense	$	7,930		$	7,407		$	6,895		$	6,839		$	6,626
Efficiency Ratio		67.8	%		69.0	%		72.2	%		70.2	%		65.6	%
NIE / Average Assets		4.0	%		3.8	%		3.6	%		3.7	%		3.7	%
Net Noninterest Expense		(1.5	)		(1.6	)		(1.8	)		(1.7	)		(1.5	)

Balance Sheet

Total assets as of September 30, 2016, were $801.8 million, up $82.6 million, or 11.5 percent, from a year ago. Total equity as of September 30, 2016, was $86.3 million, up 7.4 percent, from a year ago, and was at 10.8 percent of total assets.

Total loans held for investment were $619.4 million at September 30, 2016, up $78.5 million, or 14.5 percent, from September 30, 2015. Commercial real estate loans were up $37.2 million, or 16.1 percent, and accounted for the majority of the total loan growth., Commercial and Residential real estate loans also rose $17.5 million and $12.9 million, or 20.9 percent and 10.2 percent, respectively.

3

The investment portfolio, including Federal Reserve Bank and Federal Home Loan Bank stock, of $96.4 million represented 12.0 percent of assets at September 30, 2016, and was down 2.8 percent from the year-ago period. Deposit balances of $662.1 million at September 30, 2016, increased by $88.6 million, or 15.4 percent, since September 30, 2015. Growth from the prior year included $23.4 million in checking and $65.2 million in savings and time deposit balances.

Mr. Klein said, “We continued to add high-quality loan volume this quarter, with growth from the linked quarter of $15 million and from the prior year we are up $79 million. Our net interest margin came in at 3.82 percent, reflecting that growth as well as the recapture of interest from the large, non-performing credit that paid off during the quarter.”

Loan Portfolio ($000’s)	Sep. 2016			Jun. 2016			Mar. 2016			Dec. 2015			Sep. 2015			Variance YOY
Commercial	$	101,245		$	100,651		$	92,086		$	86,586		$	83,741		$	17,504	��
% of Total		16.4	%		16.6	%		16.0	%		15.5	%		15.5	%		20.9	%
Commercial RE		268,408			261,923			256,461			242,208			231,249			37,159
% of Total		43.3	%		43.3	%		44.4	%		43.4	%		42.8	%		16.1	%
Agriculture		54,609			52,375			42,467			43,835			46,102			8,507
% of Total		8.8	%		8.7	%		7.4	%		7.9	%		8.5	%		18.5	%
Residential RE		139,757			135,506			132,627			130,806			126,840			12,917
% of Total		22.6	%		22.4	%		23.0	%		23.5	%		23.5	%		10.2	%
Consumer & Other		55,333			54,321			53,493			54,224			52,957			2,376
% of Total		8.9	%		9.0	%		9.3	%		9.7	%		9.7	%		4.5	%
Total Loans	$	619,352		$	604,776		$	577,134		$	557,659		$	540,889		$	78,463
Total Growth Percentage																	14.5	%

Deposit Bal. ($000’s)		Sep. 2016			Jun. 2016			Mar. 2016			Dec. 2015			Sep. 2015			Variance YOY
Non-Int DDA	$	116,976		$	110,899		$	112,209		$	113,113		$	102,460		$	14,516
% of Total		17.7	%		17.1	%		17.6	%		19.3	%		17.9	%		14.2	%
Interest DDA		135,729			129,658			138,235			126,443			126,816			8,913
% of Total		20.5	%		20.0	%		21.7	%		21.6	%		22.1	%		7.0	%
Savings		89,265			84,975			86,038			83,447			77,809			11,456
% of Total		13.5	%		13.1	%		13.5	%		14.2	%		13.6	%		14.7	%
Money Market		126,501			134,365			120,672			104,412			107,538			18,963
% of Total		19.1	%		20.7	%		18.9	%		17.8	%		18.7	%		17.6	%
Certificates		193,673			188,403			180,874			159,038			158,945			34,728
% of Total		29.3	%		29.1	%		28.4	%		27.1	%		27.7	%		21.9	%
Total Deposits	$	662,144		$	648,300		$	638,028		$	586,453		$	573,568		$	88,576
Total Growth Percentage																	15.4	%

Asset Quality

SB Financial returned to high-performing peer asset quality during the quarter, reporting non-performing assets of $4.6 million as of September 30, 2016, down $4.0 million, or 46.5 percent, from the year-ago quarter, and down $3.7 million, or 44.7 percent, from the linked quarter. The decrease from the prior year was the result of an existing delinquent commercial real estate credit that moved through foreclosure with full principal payoff. SB Financial’s 0.6 percent of nonperforming assets to total assets is above the top quartile in its 65-bank peer group. The coverage of problem loans by the loan loss allowance was at 163.5 percent at September 30, 2016, up from the 85.1 percent at September 30, 2015.

4

Summary of Nonperforming Assets ($000’s)
Nonperforming Category		Sep. 2016			Jun. 2016			Mar. 2016			Dec. 2015			Sep. 2015			Variance YOY
Commercial & Agriculture	$	151		$	158		$	164		$	196		$	453		$	(302	)
% of Total Com./Ag. loans		0.10	%		0.12	%		0.12	%		0.15	%		0.35	%		(66.7	%)
Commercial RE		1,393			5,309			5,218			5,670			5,393			(4,000	)
% of Total CRE loans		0.52	%		2.02	%		2.03	%		2.34	%		2.33	%		(74.2	%)
Residential RE		1,152			1,088			1,156			749			795			357
% of Total Res. RE loans		0.82	%		0.80	%		0.87	%		0.57	%		0.63	%		44.9	%
Consumer & Other		193			138			46			32			101			92
% of Total Con./Oth. loans		0.35	%		0.25	%		0.09	%		0.06	%		0.20	%		91.1	%
Total Nonaccruing Loans		2,889			6,693			6,584			6,646			6,742			(3,853	)
% of Total loans		0.47	%		1.11	%		1.14	%		1.19	%		1.25	%		(57.2	%)
Accruing Restructured Loans		1,588			1,381			1,482			1,500			1,576
Total Nonaccruing & Restructured Loans	$	4,477		$	8,074		$	8,066		$	8,146		$	8,318		$	(3,841	)
% of Total loans		0.72	%		1.34	%		1.40	%		1.46	%		1.54	%		(46.2	%)
Foreclosed Assets		73			157			406			286			188
Total Nonperforming Assets	$	4,550		$	8,231		$	8,472		$	8,432		$	8,506		$	(3,956	)
% of Total assets		0.57	%		1.04	%		1.09	%		1.15	%		1.18	%		(46.5	%)

Webcast and Conference Call

The Company will hold a related conference call and webcast on October 21, 2016, at 11:00 a.m. EDT. Interested parties may access the conference call by dialing 1-888-338-9469. The webcast can be accessed athttp://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 operating subsidiaries: State Bank and DCM. 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 a total of 19 banking centers; 18 in nine Ohio counties and one center in Fort Wayne, Indiana, and 22 full-service ATMs. The Company has six loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. DCM provides item processing services to community banks located primarily in the Midwest. 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 2016, SB Financial was ranked #160 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”).

5

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 including certain non-GAAP financial measures will provide 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.

###

6

SB FINANCIAL GROUP, INC.  

CONSOLIDATED BALANCE SHEETS - (Unaudited)

	September			June			March			December			September
($ in Thousands)	2016			2016			2016			2015			2015
ASSETS
Cash and due from banks	$	25,167			29,945			35,529			20,459			18,372
Securities available for sale, at fair value		92,689			92,472			97,990			89,789			95,482
Other securities - FRB and FHLB Stock		3,748			3,748			3,748			3,748			3,748
Total investment securities		96,437			96,220			101,738			93,537			99,230
Loans held for sale		5,865			8,441			6,890			7,516			8,517
Loans, net of unearned income		619,352			604,776			577,134			557,659			540,889
Allowance for loan losses		(7,320	)		(7,450	)		(7,205	)		(6,990	)		(7,076	)
Net loans		612,032			597,326			569,929			550,669			533,813
Premises, equipment and software, net		18,673			18,806			18,994			19,010			17,619
Cash surrender value of life insurance		13,653			13,581			13,509			13,437			13,364
Goodwill & other intangibles		16,426			16,429			16,432			16,435			16,473
Foreclosed assets held for sale, net		73			157			406			286			188
Mortgage servicing rights		6,887			6,494			6,608			7,152			6,798
Accrued interest receivable		1,641			1,397			1,489			1,260			1,817
Other assets		4,946			4,367			3,296			3,310			3,046
Total assets	$	801,800			793,163			774,820			733,071			719,237
LIABILITIES AND EQUITY
Deposits
Non interest bearing demand	$	116,976			110,899			112,209			113,113			102,460
Interest bearing demand		135,729			129,658			138,235			126,443			126,816
Savings		89,265			84,975			86,038			83,447			77,809
Money market		126,501			134,365			120,672			104,412			107,538
Time deposits		193,673			188,403			180,874			159,038			158,945
Total deposits		662,144			648,300			638,028			586,453			573,568
Advances from Federal Home Loan Bank		23,000			23,000			21,000			35,000			30,000
Repurchase agreements		11,363			17,797			14,524			12,406			16,911
Trust preferred securities		10,310			10,310			10,310			10,310			10,310
Accrued interest payable		427			384			343			264			341
Other liabilities		8,293			8,422			7,564			7,397			7,782
Total liabilities		715,537			708,213			691,769			651,830			638,912
Equity
Preferred stock		13,983			13,983			13,983			13,983			13,983
Common stock		12,569			12,569			12,569			12,569			12,569
Additional paid-in capital		15,370			15,367			15,365			15,438			15,444
Retained earnings		44,933			42,925			41,199			40,059			38,705
Accumulated other comprehensive income		1,237			1,552			1,296			650			1,157
Treasury stock		(1,829	)		(1,446	)		(1,361	)		(1,458	)		(1,533	)
Total equity		86,263			84,950			83,051			81,241			80,325
Total liabilities and equity	$	801,800			793,163			774,820			733,071			719,237

7

SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

($ in thousands - except share data)	At and for the Three Months Ended													Nine Months Ended
	September			June			March			December		September		September			September
	2016			2016			2016			2015		2015		2016			2015
Interest income
Loans
Taxable	$	6,954			6,648			6,260			6,086		6,152		19,862			17,606
Nontaxable		22			24			9			10		10		55			25
Securities
Taxable		378			392			402			357		382		1,172			1,149
Nontaxable		145			149			156			169		173		450			525
Total interest income		7,499			7,213			6,827			6,622		6,717		21,539			19,305
Interest expense
Deposits		677			647			545			492		492		1,869			1,487
Repurchase Agreements & Other		5			4			5			3		5		14			14
Federal Home Loan Bank advances		83			77			106			95		94		266			280
Trust preferred securities		63			62			59			56		53		184			157
Total interest expense		828			790			715			646		644		2,333			1,938
Net interest income		6,671			6,423			6,112			5,976		6,073		19,206			17,367
Provision for loan losses		-			-			250			150		100		250			950
Net interest income after provision for loan losses		6,671			6,423			5,862			5,826		5,973		18,956			16,417
Noninterest income
Wealth Management Fees		695			643			633			645		636		1,971			1,961
Customer service fees		692			680			680			711		734		2,052			2,068
Gain on sale of mtg. loans & OMSR's		2,503			2,284			1,383			1,372		1,687		6,170			4,892
Mortgage loan servicing fees, net		205			(273	)		(446	)		383		98		(514	)		642
Gain on sale of non-mortgage loans		327			151			449			75		296		927			872
Data service fees		223			233			277			273		294		733			917
Net gain on sales of securities		59			92			111			-		-		262			-
Gain/(loss) on sale/disposal of assets		(31	)		186			22			38		-		177			(20	)
Other income		342			311			330			219		207		983			659
Total non-interest income		5,015			4,307			3,439			3,716		3,952		12,761			11,991
Noninterest expense
Salaries and employee benefits		4,672			4,314			3,779			3,855		3,650		12,765			11,062
Net occupancy expense		523			524			565			479		481		1,612			1,464
Equipment expense		649			639			595			566		568		1,883			1,657
Data processing fees		352			339			305			264		286		996			796
Professional fees		380			326			316			381		416		1,022			1,282
Marketing expense		123			199			171			157		146		493			437
Telephone and communication		101			102			99			103		96		302			284
Postage and delivery expense		154			162			197			168		198		513			633
State, local and other taxes		170			171			99			130		130		440			387
Employee expense		117			128			118			126		126		363			417
Intangible amortization expense		3			3			3			37		54		9			163
Other expenses		686			500			648			573		475		1,834			1,506
Total non-interest expense		7,930			7,407			6,895			6,839		6,626		22,232			20,088
Income before income tax expense		3,756			3,323			2,406			2,703		3,299		9,485			8,320
Income tax expense		1,209			1,058			751			835		1,035		3,018			2,569
Net income	$	2,547			2,265			1,655			1,868		2,264		6,467			5,751
Preferred Stock Dividends		244			244			244			244		244		731			712
Net income available to common shares		2,303			2,021			1,411			1,624		2,020		5,736			5,039
Common share data:
Basic earnings per common share	$	0.47			0.41			0.29			0.33		0.41		1.17			1.03
Diluted earnings per common share	$	0.40			0.35			0.26			0.29		0.35		1.01			0.89
Average shares outstanding ($ in thousands):
Basic:		4,874			4,893			4,896			4,890		4,884		4,888			4,882
Diluted:		6,376			6,390			6,401			6,396		6,390		6,384			6,422

8

SB FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

($ in thousands, except per share data)	At and for the Three Months Ended															Nine Months Ended
	September			June			March			December			September			September			September
SUMMARY OF OPERATIONS	2016			2016			2016			2015			2015			2016			2015
Net interest income	$	6,671			6,423			6,112			5,976			6,073			19,206			17,367
Tax-equivalent adjustment	$	86			89			85			92			94			260			283
Tax-equivalent net interest income	$	6,757			6,512			6,197			6,068			6,167			19,466			17,650
Provision for loan loss	$	-			-			250			150			100			250			950
Noninterest income	$	5,015			4,307			3,439			3,716			3,952			12,761			11,991
Total revenue, tax-equivalent	$	11,772			10,819			9,636			9,784			10,119			32,227			29,641
Noninterest expense	$	7,930			7,407			6,895			6,839			6,626			22,232			20,088
Pre-tax pre-provision income	$	3,756			3,323			2,656			2,853			3,399			9,735			9,270
Pretax income	$	3,756			3,323			2,406			2,703			3,299			9,485			8,320
Net income	$	2,547			2,265			1,655			1,868			2,264			6,466			5,751
Income available to common shareholders	$	2,303			2,021			1,411			1,624			2,020			5,735			5,039
PER SHARE INFORMATION:
Basic earnings per share	$	0.47			0.41			0.29			0.33			0.41			1.17			1.03
Diluted earnings per share	$	0.40			0.35			0.26			0.29			0.35			1.01			0.89
Common dividends	$	0.060			0.060			0.055			0.055			0.050			0.175			0.145
Book value per common share	$	13.66			13.39			13.07			12.81			12.68			13.66			12.68
Tangible book value per common share	$	11.49			11.15			10.74			10.39			10.21			11.49			10.21
Market price per common share	$	12.53			10.87			10.31			11.14			10.27			12.53			10.27
Market price per preferred share	$	13.50			11.83			11.19			12.65			13.00			13.50			13.00
PERFORMANCE RATIOS:
Return on average assets (ROAA)		1.28	%		1.15	%		0.87	%		1.02	%		1.26	%		1.10	%		1.07	%
Pre-tax pre-provision ROAA		1.89	%		1.69	%		1.40	%		1.56	%		1.89	%		1.66	%		1.73	%
Return on average equity		11.90	%		10.80	%		8.03	%		9.23	%		11.42	%		10.27	%		9.84	%
Return on average tangible equity		18.45	%		16.94	%		12.74	%		14.80	%		18.55	%		16.10	%		16.20	%
Efficiency ratio		67.83	%		69.00	%		72.16	%		70.18	%		65.56	%		69.52	%		67.87	%
Earning asset yield		4.29	%		4.20	%		4.18	%		4.17	%		4.27	%		4.22	%		4.20	%
Cost of interest bearing liabilities		0.56	%		0.55	%		0.51	%		0.49	%		0.49	%		0.54	%		0.49	%
Net interest margin		3.77	%		3.69	%		3.69	%		3.71	%		3.81	%		3.72	%		3.72	%
Tax equivalent effect		0.05	%		0.06	%		0.06	%		0.05	%		0.06	%		0.05	%		0.06	%
Net interest margin, tax equivalent		3.82	%		3.75	%		3.75	%		3.76	%		3.87	%		3.77	%		3.78	%
Non interest income/Average assets		2.52	%		2.20	%		1.81	%		2.03	%		2.20	%		2.18	%		2.23	%
Non interest expense/Average assets		3.98	%		3.78	%		3.62	%		3.74	%		3.69	%		3.80	%		3.74	%
Net noninterest expense/Average assets		1.46	%		1.58	%		1.82	%		1.71	%		1.49	%		1.62	%		1.51	%
ASSET QUALITY RATIOS:
Gross charge-offs	$	136			2			94			241			58			232			711
Recoveries	$	6			247			59			5			29			312			66
Net charge-offs	$	130			(245	)		35			236			29			(80	)		645
Nonaccruing loans/ Total loans		0.47	%		1.11	%		1.14	%		1.19	%		1.25	%		0.47	%		1.25	%
Nonperforming loans/ Total loans		0.72	%		1.34	%		1.40	%		1.46	%		1.54	%		0.72	%		1.54	%
Nonperforming assets/ Loans & OREO		0.73	%		1.36	%		1.47	%		1.51	%		1.57	%		0.73	%		1.57	%
Nonperforming assets/ Total assets		0.57	%		1.04	%		1.09	%		1.15	%		1.18	%		0.57	%		1.18	%
Allowance for loan loss/ Nonperforming loans		163.50	%		92.27	%		89.33	%		85.81	%		85.07	%		163.50	%		85.07	%
Allowance for loan loss/ Total loans		1.18	%		1.23	%		1.25	%		1.25	%		1.31	%		1.18	%		1.31	%
Net loan charge-offs/ Average loans (ann.)		0.08	%		(0.16	%)		0.02	%		0.17	%		0.02	%		(0.02	%)		0.15	%
Loan loss provision/ Net charge-offs		0.00	%		0.00	%		714.29	%		63.56	%		344.83	%		(312.50	%)		147.29	%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		93.54	%		93.29	%		90.46	%		95.09	%		94.30	%		93.54	%		94.30	%
Equity/ Assets		10.76	%		10.71	%		10.72	%		11.08	%		11.17	%		10.76	%		11.17	%
Tangible equity/ Tangible assets		7.11	%		7.02	%		6.94	%		7.09	%		7.10	%		7.11	%		7.10	%
Tangible equity adjusted for conversion		8.89	%		8.82	%		8.78	%		9.04	%		9.09	%		8.89	%		9.09	%
END OF PERIOD BALANCES
Total assets	$	801,800			793,163			774,820			733,071			719,237			801,800			719,237
Total loans	$	619,352			604,776			577,134			557,659			540,889			619,352			540,889
Deposits	$	662,144			648,300			638,028			586,453			573,568			662,144			573,568
Stockholders equity	$	86,263			84,950			83,051			81,241			80,325			86,263			80,325
Goodwill & intangibles	$	16,426			16,429			16,432			16,435			16,473			16,426			16,473
Preferred equity	$	13,983			13,983			13,983			13,983			13,983			13,983			13,983
Tangible equity	$	55,854			54,538			52,636			50,823			49,869			55,854			49,869
Mortgage servicing portfolio	$	868,783			831,781			792,666			772,533			750,958			868,783			750,958
Wealth/Brokerage assets under care	$	375,787			367,223			357,531			353,488			347,136			375,787			347,136
Total assets under care	$	2,046,370			1,992,167			1,925,017			1,859,092			1,817,331			2,046,370			1,817,331
Full-time equivalent employees		224			223			218			214			209			224			209
Period end basic shares outstanding		4,860			4,892			4,900			4,891			4,884			4,860			4,884
Period end outstanding (Series A Converted)		1,455			1,453			1,452			1,451			1,451			1,455			1,451
AVERAGE BALANCES
Total assets	$	796,027			784,353			761,143			731,198			718,591			780,583			715,670
Total earning assets	$	707,679			694,629			661,891			644,783			638,266			688,139			622,407
Total loans	$	614,731			596,724			568,925			549,877			538,646			593,538			525,459
Deposits	$	650,751			644,429			616,124			585,922			572,801			637,055			572,500
Stockholders equity	$	85,616			83,894			82,378			80,911			79,301			83,955			77,871
Intangibles	$	16,427			16,431			16,434			16,450			16,500			16,431			16,555
Preferred equity	$	13,983			13,983			13,983			13,983			13,983			13,983			13,983
Tangible equity	$	55,206			53,480			51,961			50,478			48,818			53,541			47,333
Average basic shares outstanding		4,874			4,893			4,896			4,890			4,884			4,888			4,882
Average diluted shares outstanding		6,376			6,390			6,401			6,396			6,390			6,384			6,422

9

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

At and for the Three and Nine Months Ended September 30, 2016 and 2015

($ in Thousands)	Three Months Ended Sep. 30, 2016								Three Months Ended Sep. 30, 2015
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
Assets
Taxable securities	$	78,174			378		1.93	%	$	82,015			382		1.86	%
Nontaxable securities		14,774			220		5.95	%		17,605			262		5.96	%
Loans, net		614,731			6,987		4.55	%		538,646			6,167		4.58	%
Total earning assets		707,679			7,585		4.29	%		638,266			6,811		4.27	%
Cash and due from banks		32,760								27,300
Allowance for loan losses		(7,494	)							(7,023	)
Premises and equipment		18,921								17,173
Other assets		44,161								42,875
Total assets	$	796,027							$	718,591
Liabilities
Savings and interest bearing demand	$	348,944			141		0.16	%	$	311,337			91		0.12	%
Time deposits		188,768			536		1.14	%		160,519			401		1.00	%
Repurchase agreements & Other		17,046			5		0.12	%		17,573			5		0.11	%
Advances from Federal Home Loan Bank		23,000			83		1.44	%		30,043			94		1.25	%
Trust preferred securities		10,310			63		2.44	%		10,310			53		2.06	%
Total interest bearing liabilities		588,068			828		0.56	%		529,782			644		0.49	%
Non interest bearing demand		113,039			-					100,945			-
Total funding		701,107					0.47	%		630,727					0.41	%
Other liabilities		9,304								8,563
Total liabilities		710,411								639,290
Equity		85,616								79,301
Total liabilities and equity	$	796,027							$	718,591
Net interest income (tax equivalent basis)				$	6,757							$	6,167
Net interest income as a percent of average interest-earning assets							3.82	%							3.87	%

10

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

At and for the Three and Nine Months Ended September 30, 2016 and 2015 - (Continued)

	Nine Months Ended Sep. 30, 2016								Nine Months Ended Sep. 30, 2015
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
Assets
Taxable securities	$	78,683			1,172		1.99	%	$	79,141			1,149		1.94	%
Nontaxable securities		15,918			682		5.71	%		17,807			795		5.95	%
Loans, net		593,538			19,945		4.48	%		525,459			17,644		4.48	%
Total earning assets		688,139			21,799		4.22	%		622,407			19,588		4.20	%
Cash and due from banks		36,905								41,123
Allowance for loan losses		(7,348	)							(6,938	)
Premises and equipment		19,172								15,899
Other assets		43,715								43,179
Total assets	$	780,583							$	715,670
Liabilities
Savings and interest bearing demand	$	343,761			381		0.15	%	$	310,542			251		0.11	%
Time deposits		180,609			1,488		1.10	%		163,076			1,236		1.01	%
Repurchase agreements & Other		16,213			14		0.12	%		16,160			14		0.12	%
Advances from Federal Home Loan Bank		23,379			266		1.52	%		30,029			280		1.24	%
Trust preferred securities		10,310			184		2.38	%		10,310			157		2.03	%
Total interest bearing liabilities		574,272			2,333		0.54	%		530,117			1,938		0.49	%
Non interest bearing demand		112,685					0.45	%		98,882					0.41	%
Total funding		686,957								628,999
Other liabilities		9,671								8,800
Total liabilities		696,628								637,799
Equity		83,955								77,871
Total liabilities and equity	$	780,583							$	715,670
Net interest income (tax equivalent basis)				$	19,466							$	17,650
Net interest income as a percent of average interest-earning assets							3.77	%							3.78	%

11