SB Financial (SBFG) 8-K SB Financial Group, Inc. Announces Third-Quarter and Nine-Month 2018 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 2018 Results

Year-over-year third-quarter net income growth of 14% and trailing twelve-month loan growth of 14%

DEFIANCE, Ohio, October 18, 2018 -- SB Financial Group, Inc. (NASDAQ: SBFG)(“SB Financial” or the “Company”),a diversified financial services company providing full-service community banking, mortgage banking and wealth management, today reported earnings for the third-quarter and nine months ended September 30, 2018.

Third-quarter 2018 highlights over prior-year third quarter include:

● Net income of $3.1 million, an increase of 14.5 percent

● Operating revenue of $12.7 million, up $0.6 million, or 5.0 percent

● Return on average assets of 1.30 percent, up 3 basis points, or 2.4 percent

● Diluted earnings per share (EPS) of $0.39, a decrease of $0.04 per share, or 9.3 percent

● Mortgage origination volume of $95.3 million, an increase of $6.1 million, or 6.8 percent

Nine-month 2018 highlights over prior-year nine months include:

● Net income of $8.7 million, an increase of $1.6 million, or 23.4 percent

● Operating revenue of $37.3 million, up $3.5 million, or 10.3 percent

● Return on average assets of 1.24 percent, up 13 basis points, or 11.7 percent

● Diluted EPS of $1.14, an increase of $0.03 per share, or 2.7 percent

● Mortgage origination volume of $263.2 million, an increase of $19.5 million, or 8.0 percent

Third-quarter 2018, trailing twelve-month highlights include:

● Total assets increased to $979.2 million, up $118.7 million, or 13.8 percent

● Loan growth of $96.6 million, or 14.3 percent

● Deposit growth of $72.6 million, or 10.1 percent

● Mortgage origination volume of $335.3 million, an increase of $8.1 million, or 2.5 percent; servicing portfolio of $1.07 billion, up $0.09 billion, or 8.9 percent

Highlights

	Three Months Ended									Nine Months Ended
($ in thousands, except per share & ratios)	Sep. 2018			Sep. 2017			% Change			Sep. 2018			Sep. 2017			% Change
Operating revenue	$	12,731		$	12,124			5.0	%	$	37,348		$	33,857			10.3	%
Interest income		10,258			8,338			23.0			28,840			23,718			21.6
Interest expense		1,729			1,075			60.8			4,187			2,986			40.2
Net interest income		8,529			7,263			17.4			24,653			20,732			18.9
Noninterest income		4,202			4,861			(13.6	)		12,695			13,125			(3.3	)
Noninterest expense		8,789			8,284			6.1			25,995			23,472			10.7
Net income		3,118			2,723			14.5			8,679			7,033			23.4
Earnings per diluted share		0.39			0.43			(9.3	)		1.14			1.11			2.7
Net interest margin (FTE)		3.96	%		3.81	%		3.9			3.96	%		3.71	%		6.7
Return on average assets		1.30	%		1.27	%		2.4			1.24	%		1.11	%		11.7
Return on average equity		9.89	%		12.11	%		(18.3	)		9.75	%		10.57	%		(7.8	)

“SB Financial’s third-quarter net income was up 14 percent compared to the prior-year quarter,” said Mark A. Klein, Chairman, President and CEO of SB Financial. Loan volume was again strong, as we added $18 million in the quarter and $75 million for the nine months, while our non-performing assets held steady at 35 basis points.”

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was up 5.0 percent from the third quarter of 2017, and flat to the linked quarter.

● Net interest income was up 17.4 percent from the year-ago quarter, and up 1.2 percent from the linked quarter.

● Net interest margin (FTE) was up 15 basis points from the year-ago quarter, but down 18 basis points from the linked quarter.

● Noninterest income was down 13.5 percent from the year-ago quarter, and flat to the linked quarter.

Mortgage Loan Business

Mortgage loan originations for the third quarter of 2018 were $95.3 million, up $6.1 million, or 6.8 percent, from the year-ago quarter. Total sales of originated loans were $80.6 million, up $3.7 million, or 4.8 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 $2.3 million for the third quarter of 2018, compared to $2.4 million for the year-ago quarter. The mortgage servicing valuation adjustment for the third quarter 2018 was a negative $0.06 million, compared to a negative adjustment of $0.04 million for the third quarter of 2017. The aggregate servicing valuation impairment ended the quarter at $0.14 million. The mortgage-servicing portfolio at September 30, 2018, was $1.07 billion, up $0.09 billion, or 8.9 percent, from $0.98 billion at September 30, 2017.

Mr. Klein noted, “Mortgage volumes were down from the linked quarter but up nearly 7 percent from the year ago quarter. To ensure we remain on plan, we have recently leveraged our regional real estate expertise into one of the Midwest’s most dynamic markets – Indianapolis, which should add another productive mortgage region to the Company.”

Mortgage Banking

($ in thousands)	Sep. 2018			Jun. 2018			Mar. 2018			Dec. 2017			Sep. 2017
Mortgage originations	$	95,289		$	109,466		$	58,485		$	72,102		$	89,217
Mortgage sales		80,555			79,162			40,589			53,825			76,919
Mortgage servicing portfolio		1,066,402			1,030,780			1,004,728			994,915			979,251
Mortgage servicing rights		11,129			10,634			10,195			9,907			9,560
Mortgage servicing revenue:
Loan servicing fees		653			636			625			617			605
OMSR amortization		(318	)		(367	)		(246	)		(269	)		(343	)
Net administrative fees		335			269			379			348			262
OMSR valuation adjustment		(62	)		(22	)		92			118			(36	)
Net loan servicing fees		273			247			471			466			227
Gain on sale of mortgages		2,066			2,058			1,100			1,608			2,211
Mortgage banking revenue, net	$	2,339		$	2,305		$	1,571		$	2,074		$	2,438

2

Noninterest Income and Noninterest Expense

SB Financial’s noninterest income includes revenue from a diverse group of services, such as wealth management, deposit fees, residential loan sales and the sale of Small Business Administration (SBA) loans. SBA activity for the quarter consisted of total sold loan volume of $0.9 million and gains of $0.1 million. Wealth management assets under the Company’s care stood at $412.2 million as of September 30, 2018. For the third quarter of 2018, noninterest income as a percentage of total revenue was 33.0 percent.

For the third quarter of 2018, noninterest expense (NIE) of $8.8 million was up $0.5 million, or 6.1 percent, compared to the same quarter last year. Compared to the linked quarter, NIE was up $0.2 million. Mr. Klein stated, “Fee income levels have slowed this year with lower mortgage sales and in the quarter we had some timing issues with the sale of several SBA credits.”

Noninterest Income / Noninterest Expense

($ in thousands, except ratios)	Sep. 2018			Jun. 2018			Mar. 2018			Dec. 2017			Sep. 2017
Noninterest Income (NII)	$	4,202		$	4,249		$	4,243		$	4,092		$	4,861
NII / Total Revenue		33.0	%		33.5	%		35.5	%		34.8	%		40.1	%
NII / Average Assets		1.8	%		1.8	%		1.9	%		1.9	%		2.3	%
Noninterest Expense (NIE)	$	8,789		$	8,579		$	8,627		$	8,106		$	8,284
Efficiency Ratio		69.0	%		67.7	%		72.2	%		69.0	%		68.3	%
NIE / Average Assets		3.7	%		3.7	%		3.8	%		3.7	%		3.9	%
Net Noninterest Expense		-1.9			-1.9			-1.9			-1.8			-1.6

Balance Sheet

Total assets as of September 30, 2018, were $979.2 million, up $118.7 million, or 13.8 percent, from a year ago. Total equity as of September 30, 2018, was $127.1 million, up 39.8 percent from a year ago, and comprised 13.0 percent of total assets. Both the equity and total assets reflect the $30 million common capital raise completed in the first quarter of 2018.

Total loans held for investment were $771.7 million at September 30, 2018, up $96.6 million, or 14.3 percent, from September 30, 2017. Commercial real estate loans were up $36.8 million, or 11.5 percent, with residential real estate rising $36.7 million, or 26.0 percent.

The investment portfolio of $88.2 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 9.0 percent of assets at September 30, 2018, and was down 0.9 percent from the year-ago period. Deposit balances of $789.4 million at September 30, 2018, increased by $72.6 million, or 10.1 percent, since September 30, 2017. Growth from the prior year included $10.3 million in checking and $62.3 million in savings and time deposit balances.

Mr. Klein continued, “Loan volumes have been strong for us all year, with total growth of $97 million, or 14 percent, from the prior year. Our loan pipelines remain consistent and we ended the quarter just short of the $1 billion total asset level. Additionally, we maintained strong asset quality in the quarter, with net charge offs only $6,000 and nonperforming assets at 35 basis points.”

3

Loan Balance

																Annual
($ in thousands, except ratios)	Sep. 2018			Jun. 2018			Mar. 2018			Dec. 2017			Sep. 2017			Growth
Commercial	$	119,810		$	115,140		$	107,579		$	102,041		$	104,723		$	15,087
% of Total		15.5	%		15.3	%		15.2	%		14.6	%		15.5	%		14.4	%
Commercial RE		356,563			350,266			338,586			332,154			319,764			36,799
% of Total		46.2	%		46.5	%		47.9	%		47.7	%		47.4	%		11.5	%
Agriculture		52,814			52,466			50,266			51,947			51,140			1,674
% of Total		6.8	%		7.0	%		7.1	%		7.5	%		7.6	%		3.3	%
Residential RE		178,033			172,773			151,820			150,854			141,296			36,737
% of Total		23.1	%		22.9	%		21.5	%		21.6	%		20.9	%		26.0	%
Consumer & Other		64,478			62,640			58,956			59,619			58,152			6,326
% of Total		8.4	%		8.3	%		8.3	%		8.6	%		8.6	%		10.9	%
Total Loans	$	771,698		$	753,285		$	707,207		$	696,615		$	675,075		$	96,623
Total Growth Percentage																	14.3	%

Deposit Balance
($ in thousands, except ratios)	Sep. 2018			Jun. 2018			Mar. 2018			Dec. 2017			Sep. 2017			Annual Growth
Non-Int DDA	$134,747			$131,125			$132,919			$135,592			$124,840			$9,907
% of Total		17.1	%		17.4	%		17.8	%		18.6	%		17.4	%		7.9	%
Interest DDA		130,897			129,486			137,893			131,079			130,513			384
% of Total		16.6	%		17.2	%		18.4	%		18.0	%		18.2	%		0.3	%
Savings		114,213			118,108			116,820			103,267			103,530			10,683
% of Total		14.4	%		15.7	%		15.6	%		14.1	%		14.5	%		10.3	%
Money Market		170,190			151,228			143,679			141,844			140,647			29,543
% of Total		21.6	%		20.1	%		19.2	%		19.4	%		19.6	%		21.0	%
Certificates		239,379			222,932			217,484			217,818			217,277			22,102
% of Total		30.3	%		29.6	%		29.0	%		29.9	%		30.3	%		10.2	%
Total Deposits	$	789,426		$	752,879		$	748,795		$	729,600		$	716,807		$	72,619
Total Growth Percentage																	10.1	%

Asset Quality

SB Financial maintained its high performance among its peers in asset quality levels for the quarter, reporting nonperforming assets of $3.4 million as of September 30, 2018, down $0.3 million, or 8.2 percent, from the year-ago quarter. SB Financial’s nonperforming assets to total assets ratio of 0.35 percent is in the top quartile of its 65-bank peer group. The coverage of problem loans by the loan loss allowance was at 256 percent at September 30, 2018, up from 213 percent at September 30, 2017.

4

Summary of Nonperforming Assets

($ in thousands, except ratios)	Sep. 2018			Jun. 2018			Mar. 2018			Dec. 2017			Sep. 2017			Annual Growth
Commercial & Agriculture	$	360		$	33		$	35		$	121		$	125		$	235
% of Total Com./Ag. loans		0.21	%		0.02	%		0.02	%		0.08	%		0.08	%		188.0	%
Commercial RE		228			234			487			1,322			1,029			(801	)
% of Total CRE loans		0.06	%		0.07	%		0.14	%		0.40	%		0.32	%		-77.8	%
Residential RE		1,541			1,634			1,714			1,123			1,074			467
% of Total Res. RE loans		0.87	%		0.95	%		1.13	%		0.74	%		0.76	%		43.5	%
Consumer & Other		252			221			85			138			153			99
% of Total Con./Oth. loans		0.39	%		0.35	%		0.14	%		0.23	%		0.26	%		64.7	%
Total Nonaccruing Loans		2,381			2,122			2,321			2,704			2,381			-
% of Total loans		0.31	%		0.28	%		0.33	%		0.39	%		0.35	%		0.0	%
Accruing Restructured Loans		940			1,101			1,115			1,129			1,258			(318	)
Total Growth (%)																	-25.3	%
Total Nonaccruing & Restructured Loans	$	3,321		$	3,223		$	3,436		$	3,833		$	3,639		($	318	)
% of Total loans		0.43	%		0.43	%		0.49	%		0.55	%		0.54	%		-8.7	%
Foreclosed Assets		105			16			70			26			94			11
Total Growth (%)																	11.7	%
Total Nonperforming Assets	$	3,426		$	3,239		$	3,506		$	3,859		$	3,733		($	307	)
% of Total assets		0.35	%		0.34	%		0.38	%		0.44	%		0.43	%		-8.2	%

Webcast and Conference Call

The Company will hold a related conference call and webcast on October 19, 2018, at 11:00 a.m. EDT. Interested parties may access the conference call by dialing 1-888-338-9469. The webcast can be accessed at 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 for the State Bank & Trust Company (State Bank). State Bank provides a full range of financial services for consumers and small businesses, including wealth management, private client services, mortgage banking and commercial and agricultural lending, operating through a total of 20 banking centers; 19 in nine Ohio counties and one center in Fort Wayne, Indiana, and 26 full-service ATMs. The Company has six loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. SB Financial’s common stock is listed on the NASDAQ Capital Market under the symbol “SBFG”.  SB Financial’s preferred stock is listed on the NASDAQ Capital Market under the symbol “SBFGP”.  

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

Forward-Looking Statements

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

Non-GAAP Financial Measures

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.

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5

SB FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS - (Unaudited)

	September			June			March			December			September
($ in thousands)	2018			2018			2018			2017			2017
ASSETS
Cash and due from banks	$	45,515		$	24,413			48,329			26,616			28,258
Securities available for sale, at fair value		84,114			89,911			91,987			82,790			85,304
Other securities - FRB and FHLB Stock		4,123			3,748			3,748			3,748			3,748
Total investment securities		88,237			93,659			95,735			86,538			89,052
Loans held for sale		6,888			7,551			8,893			3,940			7,663
Loans, net of unearned income		771,698			753,285			707,207			696,615			675,075
Allowance for loan losses		(8,489	)		(8,494	)		(8,219	)		(7,930	)		(7,760	)
Net loans		763,209			744,791			698,988			688,685			667,315
Premises, equipment and software, net		21,900			21,683			21,776			21,277			21,271
Cash surrender value of life insurance		16,745			16,656			16,567			16,479			13,692
Goodwill & other intangibles		16,404			16,406			16,409			16,411			16,414
Foreclosed assets held for sale, net		105			16			70			26			94
Mortgage servicing rights		11,129			10,633			10,196			9,907			9,560
Accrued interest receivable		2,433			2,000			1,925			1,825			1,880
Other assets		6,615			6,977			6,753			4,923			5,263
Total assets	$	979,180		$	944,785			925,641			876,627			860,462
LIABILITIES AND EQUITY
Deposits
Non interest bearing demand	$	134,747		$	131,125			132,919			135,592			124,840
Interest bearing demand		130,897			129,486			137,893			131,079			130,513
Savings deposits		114,213			118,108			116,820			103,267			103,530
Money market deposits		170,190			151,228			143,679			141,844			140,647
Time deposits		239,379			222,932			217,484			217,818			217,277
Total deposits		789,426			752,879			748,795			729,600			716,807
Repurchase agreements		15,539			18,191			14,505			15,082			11,343
Advances from Federal Home Loan Bank		24,500			26,500			18,500			18,500			20,500
Trust preferred securities		10,310			10,310			10,310			10,310			10,310
Accrued interest payable		891			685			633			592			611
Other liabilities		11,405			11,116			9,999			8,543			9,982
Total liabilities		852,071			819,681			802,742			782,627			769,553
Equity
Preferred shares		13,979			13,983			13,983			13,983			13,983
Common shares		40,485			40,481			40,481			12,569			12,569
Additional paid-in capital		15,160			15,098			15,189			15,405			15,335
Retained earnings		61,854			59,503			57,162			55,439			51,991
Accumulated other comprehensive income (loss)		(1,654	)		(1,240	)		(941	)		(141	)		335
Treasury shares		(2,715	)		(2,721	)		(2,975	)		(3,255	)		(3,304	)
Total equity		127,109			125,104			122,899			94,000			90,909
Total liabilities and equity	$	979,180		$	944,785			925,641			876,627			860,462

6

SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

	At and for the Three Months Ended												Nine Months Ended
($ in thousands, except per share & ratios)	September		June		March			December			September		September		September
	2018		2018		2018			2017			2017		2018		2017
Interest income
Loans
Taxable	$	9,499	$	8,968		8,140			8,096			7,653		26,607		21,696
Nontaxable		42		36		21			23			21		99		62
Securities Taxable		610		612		573			514			532		1,795		1,562
Nontaxable		107		115		117			129			132		339		398
Total interest income		10,258		9,731		8,851			8,762			8,338		28,840		23,718
Interest expense
Deposits		1,472		1,091		975			938			907		3,538		2,518
Repurchase Agreements & Other		11		6		10			2			4		27		10
Federal Home Loan Bank advances		140		110		79			85			86		329		235
Trust preferred securities		106		100		87			83			78		293		223
Total interest expense		1,729		1,307		1,151			1,108			1,075		4,187		2,986
Net interest income		8,529		8,424		7,700			7,654			7,263		24,653		20,732
Provision for loan losses		-		300		300			200			-		600		200
Net interest income after provision for loan losses		8,529		8,124		7,400			7,454			7,263		24,053		20,532
Noninterest income
Wealth Management Fees		705		710		739			718			688		2,155		2,059
Customer service fees		672		675		644			690			674		1,991		1,981
Gain on sale of mtg. loans & OMSR’s		2,066		2,058		1,100			1,608			2,211		5,224		5,524
Mortgage loan servicing fees, net		273		247		471			465			227		991		851
Gain on sale of non-mortgage loans		125		150		660			179			294		935		1,093
Data service fees		-		-		-			179			182		-		559
Net gain on sales of securities		70		-		-			-			119		70		119
Gain/(loss) on sale/disposal of assets		-		60		(39	)		(4	)		8		21		10
Other income		291		349		668			257			458		1,308		929
Total non-interest income		4,202		4,249		4,243			4,092			4,861		12,695		13,125
Noninterest expense
Salaries and employee benefits		5,372		5,201		4,939			4,749			4,844		15,513		13,897
Net occupancy expense		588		561		649			582			566		1,797		1,678
Equipment expense		667		637		829			748			688		2,133		2,012
Data processing fees		489		418		438			363			429		1,345		1,195
Professional fees		393		504		419			492			502		1,316		1,282
Marketing expense		197		203		221			153			180		622		581
Telephone and communication		124		128		122			113			120		374		349
Postage and delivery expense		83		63		74			118			103		221		336
State, local and other taxes		177		176		186			164			198		538		535
Employee expense		243		220		166			227			242		629		570
Other expenses		456		468		584			397			412		1,507		1,037
Total non-interest expense		8,789		8,579		8,627			8,106			8,284		25,995		23,472
Income before income tax expense		3,942		3,794		3,016			3,440			3,840		10,753		10,185
Income tax expense (benefit)		824		687		563			(592	)		1,117		2,074		3,152
Net income	$	3,118	$	3,107		2,453			4,032			2,723		8,679		7,033
Preferred Share Dividends		244		244		244			244			244		731		731
Net income available to common shares		2,874		2,863		2,209			3,788			2,479		7,947		6,302
Common share data:
Basic earnings per common share	$	0.45	$	0.45		0.40			0.79			0.52		1.30		1.31
Diluted earnings per common share	$	0.39	$	0.40		0.35			0.64			0.43		1.14		1.11
Average shares outstanding ($ in thousands):
Basic:		6,503		6,489		5,519			4,790			4,797		6,106		4,825
Diluted:		8,022		8,003		7,055			6,329			6,326		7,626		6,356

7

SB FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

($ in thousands, except per share & ratios)	At and for the Three Months Ended															Nine Months Ended
	September			June			March			December			September			September			September
SUMMARY OF OPERATIONS	2018			2018			2018			2017			2017			2018			2017
Net interest income	$	8,529			8,424			7,700			7,654			7,263			24,653			20,732
Tax-equivalent adjustment		40			40			37			78			79			116			237
Tax-equivalent net interest income		8,569			8,464			7,737			7,732			7,342			24,769			20,969
Provision for loan loss		-			300			300			200			-			600			200
Noninterest income		4,202			4,249			4,243			4,092			4,861			12,695			13,125
Total operating revenue		12,731			12,673			11,943			11,746			12,124			37,348			33,857
Noninterest expense		8,789			8,579			8,627			8,106			8,284			25,995			23,472
Pre-tax pre-provision income		3,942			4,094			3,316			3,640			3,840			11,353			10,385
Pretax income		3,942			3,794			3,016			3,440			3,840			10,753			10,185
Net income		3,118			3,107			2,453			4,032			2,723			8,678			7,033
Income available to common shareholders		2,874			2,863			2,209			3,788			2,479			7,947			6,302
PER SHARE INFORMATION:
Basic earnings per share	$	0.45			0.45			0.40			0.79			0.52			1.30			1.31
Diluted earnings per share		0.39			0.40			0.35			0.64			0.43			1.14			1.11
Common dividends		0.080			0.080			0.075			0.075			0.070			0.235			0.205
Book value per common share		15.94			15.73			15.49			15.05			14.57			15.94			14.57
Tangible book value per common share		14.87			14.57			14.27			13.27			12.64			14.87			12.64
Fully converted TBV per common share		13.88			13.66			13.42			12.42			11.94			13.88			11.94
Market price per common share		20.35			20.32			18.51			18.49			17.16			20.35			17.16
Market price per preferred share		20.25			19.82			18.20			17.90			16.45			20.25			16.45
Market price to tangible book value		136.8	%		139.5	%		129.7	%		139.3	%		135.8	%		136.8	%		135.8	%
Market price to trailing 12 month EPS		11.5			11.2			10.3			10.6			11.6			11.5			11.6
PERFORMANCE RATIOS:
Return on average assets (ROAA)		1.30	%		1.35	%		1.08	%		1.83	%		1.27	%		1.24	%		1.11	%
Pre-tax pre-provision ROAA		1.64	%		1.78	%		1.46	%		1.65	%		1.79	%		1.62	%		1.64	%
Return on average equity		9.89	%		10.02	%		9.03	%		17.52	%		12.11	%		9.75	%		10.57	%
Return on average tangible equity		13.02	%		13.28	%		12.54	%		26.16	%		18.28	%		13.10	%		16.09	%
Efficiency ratio		69.01	%		67.67	%		72.22	%		68.99	%		68.30	%		69.59	%		69.31	%
Earning asset yield		4.75	%		4.76	%		4.41	%		4.52	%		4.36	%		4.61	%		4.24	%
Cost of interest bearing liabilities		1.00	%		0.80	%		0.71	%		0.69	%		0.68	%		0.84	%		0.64	%
Net interest margin		3.95	%		4.12	%		3.84	%		3.92	%		3.77	%		3.94	%		3.67	%
Tax equivalent effect		0.01	%		0.02	%		0.02	%		0.04	%		0.04	%		0.02	%		0.04	%
Net interest margin, tax equivalent		3.96	%		4.14	%		3.86	%		3.96	%		3.81	%		3.96	%		3.71	%
Non interest income/Average assets		1.75	%		1.84	%		1.87	%		1.86	%		2.27	%		1.82	%		2.07	%
Non interest expense/Average assets		3.65	%		3.72	%		3.81	%		3.68	%		3.87	%		3.72	%		3.70	%
Net noninterest expense/Average assets		1.91	%		1.88	%		1.93	%		1.82	%		1.60	%		1.90	%		1.63	%
ASSET QUALITY RATIOS:
Gross charge-offs	$	12			54			19			36			75			85			195
Recoveries		6			29			9			5			10			44			30
Net charge-offs		6			25			10			31			65			41			165
Nonaccruing loans/ Total loans		0.31	%		0.28	%		0.33	%		0.39	%		0.35	%		0.31	%		0.35	%
Nonperforming loans/ Total loans		0.43	%		0.43	%		0.49	%		0.55	%		0.54	%		0.43	%		0.54	%
Nonperforming assets/ Loans & OREO		0.44	%		0.43	%		0.50	%		0.55	%		0.55	%		0.44	%		0.55	%
Nonperforming assets/ Total assets		0.35	%		0.34	%		0.38	%		0.44	%		0.43	%		0.35	%		0.43	%
Allowance for loan loss/ Nonperforming loans		255.62	%		263.54	%		239.20	%		206.89	%		213.25	%		255.62	%		213.25	%
Allowance for loan loss/ Total loans		1.10	%		1.13	%		1.16	%		1.14	%		1.15	%		1.10	%		1.15	%
Net loan charge-offs/ Average loans (ann.)		0.00	%		0.01	%		0.01	%		0.02	%		0.04	%		0.01	%		0.03	%
Loan loss provision/ Net charge-offs		0.00	%		1200.00	%		3000.00	%		645.16	%		0.00	%		1463.41	%		121.21	%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		97.75	%		100.05	%		94.45	%		95.48	%		94.18	%		97.75	%		94.18	%
Equity/ Assets		12.98	%		13.24	%		13.28	%		10.72	%		10.57	%		12.98	%		10.57	%
Tangible equity/ Tangible assets		10.05	%		10.20	%		10.17	%		7.39	%		7.17	%		10.05	%		7.17	%
Tangible equity adjusted for conversion		11.50	%		11.71	%		11.71	%		9.02	%		8.83	%		11.50	%		8.83	%
Common equity tier 1 ratio (Bank) - 9/18 est.		12.31	%		11.91	%		12.23	%		10.53	%		10.39	%		12.31	%		10.39	%
END OF PERIOD BALANCES
Total assets	$	979,180			944,785			925,641			876,627			860,462			979,180			860,462
Total loans		771,698			753,285			707,207			696,615			675,075			771,698			675,075
Deposits		789,426			752,879			748,795			729,600			716,807			789,426			716,807
Stockholders equity		127,109			125,104			122,899			94,000			90,909			127,109			90,909
Goodwill & intangibles		16,404			16,406			16,409			16,411			16,414			16,404			16,414
Preferred equity		13,979			13,983			13,983			13,983			13,983			13,979			13,983
Tangible equity		96,726			94,715			92,507			63,606			60,512			96,726			60,512
Mortgage servicing portfolio		1,066,402			1,030,780			1,004,728			994,915			979,251			1,066,402			979,251
Wealth/Brokerage assets under care		412,218			407,592			411,654			437,034			429,777			412,218			429,777
Total assets under care		2,457,800			2,383,157			2,342,023			2,308,576			2,269,490			2,457,800			2,269,490
Full-time equivalent employees (actual)		250			241			240			240			237			250			237
Period end basic shares outstanding		6,503			6,502			6,483			4,793			4,788			6,503			4,788
Period end outstanding (Series A Converted)		1,470			1,453			1,453			1,453			1,452			1,470			1,452
AVERAGE BALANCES
Total assets	$	962,369			922,355			906,281			880,446			857,147			931,507			845,836
Total earning assets		864,490			817,270			802,358			781,795			771,722			833,942			752,753
Total loans		770,948			724,710			711,733			691,929			667,943			740,292			650,142
Deposits		769,266			739,877			738,867			731,992			712,614			751,156			704,638
Stockholders equity		126,144			123,990			108,662			92,036			89,974			118,718			88,676
Intangibles		16,405			16,407			16,410			16,412			16,415			16,407			16,418
Preferred equity		13,983			13,983			13,983			13,983			13,983			13,983			13,983
Tangible equity		95,756			93,600			78,269			61,641			59,576			88,328			58,275
Average basic shares outstanding		6,503			6,489			5,519			4,790			4,797			6,106			4,825
Average diluted shares outstanding		8,022			8,003			7,055			6,329			6,326			7,626			6,356

8

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

At and for the Three Months Ended September 30, 2018 and 2017

($ in thousands)	Three Months Ended Sep. 30, 2018								Three Months Ended Sep. 30, 2017
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
Assets
Taxable securities	$	82,250			610		2.97	%	$	89,512			532		2.38	%
Nontaxable securities		11,292			107		3.79	%		14,267			132		3.70	%
Loans, net		770,948			9,541		4.95	%		667,943			7,674		4.60	%
Total earning assets		864,490			10,258		4.75	%		771,722			8,338		4.32	%
Cash and due from banks		33,545								25,011
Allowance for loan losses		(8,593	)							(7,914	)
Premises and equipment		21,850								21,243
Other assets		51,077								47,085
Total assets	$	962,369							$	857,147
Liabilities
Savings and interest bearing demand	$	403,236			504		0.50	%	$	368,080			210		0.23	%
Time deposits		231,884			968		1.67	%		218,561			697		1.28	%
Repurchase agreements & Other		19,293			11		0.23	%		12,655			4		0.13	%
Advances from Federal Home Loan Bank		24,609			140		2.28	%		20,772			86		1.66	%
Trust preferred securities		10,310			106		4.11	%		10,310			78		3.03	%
Total interest bearing liabilities		689,332			1,729		1.00	%		630,378			1,075		0.68	%
Non interest bearing demand		134,146			-					125,973			-
Total funding		823,478					0.84	%		756,351					0.57	%
Other liabilities		12,747								10,822
Total liabilities		836,225								767,173
Equity		126,144					559,131			89,974
Total liabilities and equity	$	962,369							$	857,147
Net interest income				$	8,529							$	7,263
Net interest income as a percent of average interest-earning assets - GAAP measure							3.95	%							3.76	%
Net interest income as a percent of average interest-earning assets - non GAAP- Computed on a fully tax equivalent (FTE) basis							3.96	%							3.81	%

9

	Nine Months Ended Sep. 30, 2018								Nine Months Ended Sep. 30, 2017
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
Assets
Taxable securities	$	81,835			1,795		2.92	%	$	88,358			1,562		2.36	%
Nontaxable securities		11,815			339		3.83	%		14,253			398		3.72	%
Loans, net		740,292			26,706		4.81	%		650,142			21,758		4.46	%
Total earning assets		833,942			28,840		4.61	%		752,753			23,718		4.20	%
Cash and due from banks		33,137								34,204
Allowance for loan losses		(8,318	)							(7,824	)
Premises and equipment		21,656								20,969
Other assets		51,090								45,734
Total assets	$	931,507							$	845,836
Liabilities
Savings and interest bearing demand	$	395,948			1,063		0.36	%	$	366,026			576		0.21	%
Time deposits		220,642			2,475		1.50	%		213,853			1,942		1.21	%
Repurchase agreements & Other		16,875			27		0.21	%		12,057			10		0.11	%
Advances from Federal Home Loan Bank		21,987			329		2.00	%		19,905			235		1.57	%
Trust preferred securities		10,310			293		3.79	%		10,310			223		2.88	%
Total interest bearing liabilities		665,762			4,187		0.84	%		622,151			2,986		0.64	%
Non interest bearing demand		134,566					0.70	%		124,759					0.53	%
Total funding		800,328								746,910
Other liabilities		12,461								10,250
Total liabilities		812,789								757,160
Equity		118,718								88,676
Total liabilities and equity	$	931,507							$	845,836
Net interest income				$	24,653							$	20,732
Net interest income as a percent of average interest-earning assets - GAAP measure							3.94	%							3.67	%
Net interest income as a percent of average interest-earning assets - non GAAP  - Computed on a fully tax equivalent (FTE) basis							3.96	%							3.71	%

10