Earnings call transcript Q3 2022

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Operator

Good morning, and welcome to the SB Financial third quarter 2022 conference call and webcast. I’d like to inform you that this conference call is being recorded, and all participants are in listen-only mode.

We will begin with remarks by management, then open the conference to the investment community for questions and answers.

I’ll now turn the conference over to Sarah Mekus with SB Financial. Please go ahead, Sarah.

Sarah Mekus

everyone. morning, Good remind broadcast to archived this call conference available I’d over you the being ir.yourstatebank.com. at live our be internet, is on like website that and and will

Financial Chairman, today me CEO; Cosentino, are Klein, Officer. Joining President Mark and and Tony Chief

This regarding Financial’s plans, forward-looking performance, statements objectives. results, and contain call anticipated may SB operational

implied Forward-looking a actual and or risks could cause our number results those based differ on uncertainties management’s from and expectations on are today. of statements are to materially to subject call that expressed

We a the statements forward-looking encouraged any no identified of date which our number have undertakes within of update after are the at earnings statements this call. different except forward-looking to you of Financial to factors review. as SB the required end obligation law release, by

the is in reconciliation earnings measures. in financial GAAP, addition accordance certain also measures financial A release. will In presented non-GAAP with included contain to results call this non-GAAP our of GAAP to

call to Klein. I will over Mr. now the turn

Mark Klein

$X.XX the per morning, a Thank At be with $X.X last X% $X.XX would $XXX XXXX off from webcast. but you, and net On Sarah, and quarter, quarter for conference call include, year the year, third prior and and of when everyone. PPP you Thanks or for the down decline our share. me from income joining small year-to-date net EPS up level, EPS quarter income down diluted $X.XX, highlights Cosentino exclude base, program a high a million, recapture. OMSR $X million, Tony for XX% good

of from Deposits headwinds for down XX.X%. up assets months, million, Return was last X.X% this million, line $XX.X prior income up interest have by year. year Net of X.X% year PPP Loan the year, million XX%. Return XX% to $XX and mortgage the million. rate million, on the last, X.X% trailing $XX from originated were environment. and quarter the first the rising now of a adjust year-over-year. balances, XX.X equity prior Loan the million healthy year. the from linked quarter quarter, this same XX%. linked Expenses the $XX.X prior XX million, by origination When growth would compared and prior for X.XX%. both The we year, rapidly of from nearly linked average revenue million, mortgage this share per first the a of offset they’ve year for $XX.X in from costs. our and months linked quarter X.X%. funding effects up the but effects Annualized, Excluding compared grew both business on the by $XX of buying nine for nearly was year. Mortgage were balances nine down $X.XX were the to a increases higher despite $XXX quarter and nearly loans was rate been lending $X.X for have months reduction in total loan period interest contributed from growth the rose ordinarily our the EPS

with stand now XX,XXX. non-performing four at of And metrics a for recovery assets quality strong, just net the loan Asset basis remain losses year XX net points. at

technology. in is lastly, more better services, households. growth, of diversify scope, of and our business we've interest of for services And fee-based cross-sales And us and more through is deployment with net continuing our five attribute that success We which for to products and initiatives more those continue about households strategic that's excellence continued more and our scale, talked asset quarters, products more to to organic which balancing and course, revenue, our in to number our operations key commitment lines, quality. a income course,

diversity. revenue First,

were is compared gains with gains of sale This of we market. past higher paying loan to rates $X and includes a from year when year third this of the quarter volume XX%, decreased last decade to $XXX,XXX. of the volume XX% mortgage the the nearly to are to and the dividends the total obviously XX%, the with down plus on impact purchase on construction to and below to between and relationships pivot mortgage prior evidence of $XX The from more year was of to split last well at balanced. quarter, $XX,XXX XX%. volume but realtors percentage million still our refinance the traditional XX%, just significantly Non-interest current million. million, purchase the in year. of of have quarter near servicing over of of a prior XX% This strong mix purchasing third in volume XX%, compares for revenue quarter refinance year built at business The of and quarter for income income $X.X quarter XX%. level $XXX,XXX The recapture recapture the Non-interest remains

our wealth consistent under annual index. pace and management our than deliver our down continues revenue wealth nearly NASDAQ now down we management team S&P $XX the to have different but Our and provide still was performed and NASDAG to down with baseline in XX.X, $XXX,XXX, $X quarter and better of the stable and XX%. XXX the risk in the on line decline assets Clearly, index of index XX.X%, Index, million XXX continued Despite S&P profiles, year-to-date, revenue million.

prior PPP as Loan the from growth in from quarter. $XX more we up linked initiative, the up Second strong, quarter were the net quarter, and million XX quite year was scale. million of

this reflective our quarters, to noted, or continue to drive grown one our of and prospect pipelines, million from our Indianapolis, we of over of in newer commercial five the balances, organic higher We is that arena enter to been million welcome the has current XXX to Indiana. be our potential in With to intend reaching to and continue and model, growth and this our XX.X%. we and touch Wayne, We The have million market quarterly up portfolio regional feel markets as Columbus, linked client $XXX like our last we aggressively. work quarter with. call markets in growth confident of growth to our prospects All going $XXX executed growth relationship-based out proactive Finley. and our six of now was hard and similar have complementary have deposit to Fort over bankers solid markets of

funding non-bank remain each our grow this cost see continue seek but retail-driven to and our strong markets, funding bank space to We to both for relevant to lower in we clearly competition, we intend continue as competition of loan book. in

was to enter we was quarter closer a result and which in XX%, and the historical ratio would increased X.X levels, The deposit points a somewhere to to XXs. again increase this loan percentage as just of deposits the loans bit mentioned. I Our our of up be

households. more Third more in is our those deeper strategy scope, services relationships, to develop

we driving As the existing success our in program us discussed scope. more quarters, SBA in PPP prior expand we enabled on strategy over ones, relationships, capture XXX garnered to post-pandemic the accelerated. And each new and XXX has

SBA our the traction as line in quarter, more X(a) have to for begun witness we This revenue demand $XXX,XXX enhancements. business contributed

drive of year us have producers loans. to and that We quartile SBA nationwide to this top beyond, SBA originations and high will continue for ones of expectations the

program than we PPP from it’s expected. transition slower year, X(a) this - program our been to than Although originated lower

referrals volume. and proactive pipeline at to this We million business over since All year-to-date interdependently After million, total by seen to $XX have business and another ever as of strong work the quarter, our making stands the quarter the in originated lines continuing benefited is onset different this pandemic. $X we've from lines. one

To Salesforce. our made now teammate, over million collaborative another our initiatives corporate business. CRN to leading and strategies our closure sales In an a expand best goals new hired X,XXX with new have a additional one, fact, $XX for drive referrals to sales recently nearly today, culture XXX to complement champion bankers associated to impending we incremental remains practices in ensure platform, sales key

Operational excellence, theme. fourth our

saleable in metrics of XX% over an Our portfolio average growth last mortgage approximately income stands line total now $X.X reduction as and our servicing we've business is residential income gain households non-interest servicing margin continue reflected also to This supplement non-interest on generates of With the nearly duration prior us we billion, enabled and lower to originated on risk, peer-leading, portfolio $X.X mentioned with interest years. X,XXX to our sale, of seven at annually. net a revenue quarters. success mild revenue million the with in and products some products, in in has that with albeit drive

capitalize feel are appear. we the positioned of to potentially wave normalizes, well should they However, refinancing the market opportunities, next on we as eventually

from $XX individual annually are deliver As near of our declining such, to from variable-based With MLO stack continue we that million production that quarter pay the per million, $XX MLO an today. our to average more pay-for-performance to approximately producers to last something $XXX million today, to million XX XX production producers we average expanding year. path of end on deliver XX at identifying ‘XX to $XXX

from our production. will mentioned, levels complement I X,XXX the loan With historical mortgage consumer households we Our reduced we line linked as capacity principally home again, and expenses the average. balance cross-selling related retail processing quarter, lower continue path we grow. the organic our year-over-year, staff Once mortgages to volume lines to sheet first improve discussed declined identify the continue mortgage we to deliver near delivering business through our associated have that when compared equity second new operational producer with platform, a greater to to opportunities potentially and as in by quarter, to expenses scale. to last to consider those clearer continue the expense something CRM Plus,

to efficient channel. moderate activity walk-in of strong more digital a office very Retail commitment the delivery in continues to face a

telephonic on As last our center. greater number I by digital improve mentioned, our the to service When transaction growth consolidating we stand understand there we client daily of optimizing our asset our and We CRM finally, much quality. we of contact as organic potential. a deliver Salesforce, with we associated clarity new and new are economy. into are And intimacy quarter, level reported uncertainties both commitments client

customers’ we deterioration However, have in to any yet our position. identify finance

strength any not of have that last in set quarter. million the part a despite that comfortable due provision thus Coverage of that loans, remained growth, current aside our of at the reserve portfolio, level, demonstrates XXX% metric $XXX the couple in the million year, we've years. to feel of far loan which end we $X.X stood is we with non-performing at set our over key in aside we this While our

process underwriting Our we pay prepare strong dividends continue should the as as pivot cycle matures. credit to to

give performance. And Tony? a us little on more Tony detail will our now quarterly

Tony Cosentino

we the for first then million Mark, income nine of $X.X for morning, $X good had and GAAP net quarter Again, months. everyone. Thanks, the and million,

down was of some for And XX.X in million quarter quarter. but highlights headwinds Total on business growth delivered and was revenue offset up linked operating a for mortgage Loan $X as sales for improved loan ’XX, the have the the X.X% gains been third And for Margin mortgage by by when and quarter, to for have the margins. interest nine $X.X we the small revenue prior the or higher for loan loan months, million. quarter, business. year $XXX,XXX was income up adjust from $X.X PPP, or was XX.X%. sale total linked X.X% been million gains of

In revenue remove quarter, we mortgage prior growth revenue, impact the year linked we positive of operating have respectively. and PPP, the addition, and XX.X% the business line, XX.X% of from and if adjust entire

quarter, to As as quarter down PPP statement, looking the we third the break impact at initiative the of down remaining margin income credit. first, one minimal was we just are further in the

just comparison prior out to up in yields year periods linked similar points in months. securities, prior point year-over-year both still the earning and year, asset drove nine the similar for yields. million added and first while period. would yields adding $X.X result the to quarter. from XXX,XXX the material of Adjusting However, The our for in results, XXXX a the shifted improvement XX-basis margin mixed is the in improvement from loan a the average improvement and XX PPP cash basis loan

digits, double accelerated have loan in our low funding XXXX. growth of With needs

and margin needed have growth deposit the that retail with options. We wholesale offerings funding selective fund to at

plan we time require to amortization, scheduled with our over allow While loan investment decline will continue deposits expected to borrowing higher and growth for our to portfolio funding.

quarter. yields funding, cost interest-bearing to asset cost will with in to beta at our and funding XX As of points, points, earning cost our look on From of coming respectively, XX compares funding continue the points, beta was liability came that at basis the the in linked quarter, linked Clearly, a basis for quarter, costs deposit basis the funds and interest-bearing rise in third liabilities that XX and XX. has expect the deposit XX XX. the competition intensified was This we we overall and the for quarter.

total was from sheet, the balance XX change of improvement allocated and linked in is expanded activity. points non-interest the was mortgage X.XX, fees, service rights Year-over-year income, impact XX the compromised compared up swap servicing driven was we the at have we year, OMSR income with are as mortgage look for levels the basis the prior in growth cash on the quarter, the revenue gain and up when on mix expected NIM down sale was would the XX%, on for exclude loans, the points, income, If non-interest and by by quarter the the linked basis year, which cash. quarter XX% over The by for deposit margin and to servicing XX better up be at positive customer from of basis points adjusted side driven asset comparisons captured, and would and a to interest the higher Net declines PPP significant better interest-bearing excluded. declined. was prior

income X.X% the for Our first still nine was average quarter, for X.X% to XXXX. of the a assets and strong months fee

both we of not we average, and is net which While our only XX-bank still a swaps earlier, above are one diversity historical and and prior income our mortgage, our Mark the strengths of fee the indicated XXth down wealth with revenue from key as year peer but initiative service discussed. had percentile group,

was much X.XX% and gain stabilize, in came was client quarter, percentage at XX%, private residential sale continued with calculated Market quarter, servicing small for three X.XX%/ linked This XX million percentage. the XX% to value origination. servicing off prior basis of sale and a We our for fair $XXX,XXX. quarter, up loan we've and temporary yield of the improved XXX to the balance sale a now from be This year, have our a value for slightly up XX% and at continue of done just rights last quarter, basis basis points. points traditional of well remaining are of mortgage and value discussed more $XX.X the quarter, our year originated this I These As impairment fair from loans portfolio and points levels the year. on as rights

prior business for both $XX.X linked levels the and year, volume moved as Expense million of our down quarter concert. the Expenses were declined. in

our the X.X%. reduction growth to revenue expense year line our was X.X%, if XX.X% However, prior nearly X.X%. tick But declined expenses double of compare at from was we that revenue linked while quarter,

to compares or The sheet, a We at lower expect million, up loan total year. be or slightly September balance growth continue million the margins, that at on level revenue prior this the will return stood XX% $XX.X quarter-over-quarter, better at $XXX assets, the will expenses from quarter. XXth XX% than of with which outstandings improve while to

over and linked $XX quarter, million. while $XX quarter declined by grew cash mix million, as securities third deposits from our The million grew $XX assets, another loans saw earning shift significant and within the

ended Our cash prior to on bond the percentage from we and remain excess We ratio of we of the points value to year. assets for invested. deterioration. to loan XXXX, the us XX yield, less but shorter higher our duration XX% XX%, up cash investment to loan over subjected of market limited cognizant have flow focus current in was has than to quarter but have allow were that our in as higher December growth, deposit portfolio Historically, moved our from instead

over expend We cash expected with provide to flow duration are should to an growth. five now fund and the portfolio, loan years, just ample average comfortable with of

$XXX.X and quarter or year, the our XX.X the at from per finished staying at million, down we ratio position, capital equity XX.X% asset our at with Looking X.X%.

buyback the million However, valuation would exclude over of asset an when our equity stock year, we adjustment even on equity million, and the from OCCI $XX.X in temporary million X.X% $X.X and after dividends. basis, be grew $X in XX.X% prior

to of year-to-date, repurchased. XXX,XXX buy outstanding. repurchased XX,XXX shares back And total X.X% with the we have over We in shares quarter, continued or shares

these funded continue organic our to prices of income. our net at with expect shares current buyback We

prior to Finally, controlled of and well of both spheres. quarter X.XX%, quality level our in buy than the down and rate from allowance year-to-date. the XXX the linked stable to and metrics Total total our basis the Currently, billion year. one delinquency are both all points and be loans major continue for and is are XX just were levels quarter, the charge-offs positive quarter is XX exchange better to which from asset

now the to back turn over will I Mark. call

Mark Klein

the made want conclude, the and represents decline have and in X.XX%. acknowledging in we our we've Thank XX% dividend announcement payout quarters, share, you, helped ratio, months, residential to arena. a $X.XXXX rates nine as a last of we've loan the higher dividend which certainly offset of Through I done expected to growth prior Tony. week mortgage per yield that realized

feel to strong, balance prospects continue we our are good Consumer the sheet we X.X% debt and generated, ratios, in pipelines and with disposable have, markets, we overall continued unemployment income a by to resulting lower fueled income leverage, lineup growth. market. Additionally, product for the cost the about lower robust households

resistance growth to inflation should persist. positive stronger absent continue We much economic see Fed

Now Sarah? for any to I'll questions. call over the back Sarah turn

Sarah Mekus

we're ready question. our and for first now you, Thank

Operator

Please go [Operator from First ahead. Martin Janney Brian instructions] comes question with Montgomery.

Brian Martin

Hey, guys. level. high for a good morning, just couple Hey, just on me

the as think that don't next far whomever, and some about the the I as given you're on over the of you're and kind the on - sale just and to But Just far on of the kind the guess on outlook to outlook looking just thinking mortgage, just MLOs maybe mortgage, sale changes on. as we've talked and your seen about far dynamics lenders about seen? just you the as we've of Tony, the as gain know couple about - just kind the on percentages, general look the rates forward outlook or here just of think just can here. as Mark, margins offer of commentary how you I quarters bring to shift looking I and volume you're - any how of kind with here

Mark Klein

on household. Yes, X,XXX a probably Brian. We remain to services of We comments, just households. the X.X bullish like Obviously, have X.X couple maybe it. per

utilizing about substantially stateable That have excited So, higher I we're is at seven, market indicated, that and relationship. where and deepen as both were. pretty than Salesforce Tony the said, we

is which would on, number our So, producer plus mortgage is product. the to that's high-level of But X.XX support And we're the doing on Indianapolis the albeit the down hired number dropping Again, math, number. because XXX we've just record is and is and to that going - producers, some of sold us landed. $XX would a substantially X.X two keeping variable it do minus. that kind books in probably that us to the as It's on have million producers I've secondary six, product, portfolio in But or we've for that potential that our there. quarters which number less you of market, XX efforts market the per we gone concentrated producers of positioning where not the of refinancing. the near

have the So, line. and we're have quarter. begun I in Tony, for that's be the people exit don’t some we And we know what because ones of numbers business to there where those to other seem finding headed, like

Tony Cosentino

Yes.

XX% year, We're ‘XX. out static being is that sale from to Clearly, total going we to is overall Brian, through of see of between market. down we've slightly looking ‘XX the slightly the $XXX to pretty think, think remain opposed got to to to refinance some full end to picked maybe XXX we're in originations. in ’XX bigger competition flat through the how QX. moderation to So, for be of up until would going in share volume, away, up roll falling somewhere We'll just X.XX as number XXX to XX% in that certainly, see depending nine here things about XXX think going kind to of We say going rate. total about is get on in up of how And million to we I X% our maybe market QX, that in months We end improving. a on here goes. the we improve yield that a by on be XX%. going some what

Brian Martin

the comfortable Tony, that Okay. you’re And books of sale guess guess I don't continuing peaks I guess the put for to kind as still to with your just you about know the - much do now? see I versus out to is But percentage, I I Or that guess, as on how we products where how it appetite are you should to far to ARM just grow? have fixed rate. continue continue that that generally think

Tony Cosentino

think I Yes, unopen question. one the really that's

clients. think I quality we're still getting

the do think because Mac attractive to rates I more think now product is rate. bit, ARM people shock impact I I of, a and get come fixed used the Freddie X% down a will will think of think it. I those

I get because to to be to XX% probably going of is In I do going would No, XX% think inch sale So, which an an currently that percentage? think think wouldn't that in XX% we're we're XX% long-term. to towards low to kind XX% that I range, that anomaly ’XX, back so. we're

Brian Martin

Yes.

That's perfect. that's Okay, helpful.

it hiring of like number. sounds to fair hire a that do there's potentially think And - how ‘XX, in mortgage so, about plans amount to is

is but folks. there's this to recently, add seems couple those - a hired continue opportunity like good to You've

Mark Klein

realtors back we have, I read hire market, the FTEs. going purchase for. pivot we this after to going play as have. the we're of think I at our and on capitalized continue going to we market, some we good refinance with that strong the we've to cut really good into built get we we're what these because well have, that's that relationships happy and going perfect market, that we're Brian, with again, got when potential Well, going have what's expenses done just to to the Healthwise, places and go lenders on markets, the about to in to producers we're that average cards we've We're the and in Quicken

Brian Martin

Yes.

And then two kind two others. - I perfect. Okay, of just guess

So, good guys particularly really just I outlook, year-to-date. growth have as on the been mean, outlined, loan you it's

of up, Just like Is the are how the - being that? kind in think rates kind that the Is Fed concerns indicators seeing should outlook leading active market. it of the positive? pipeline seems suggest pretty we about how growth, your is still outlook With you flowing? still curious loan very kind there. it Just is and just outlook of actions are impacting for your

Mark Klein

aggressively. is of rates, we take kept But little that that lot have think mentioned, to as duration make the with have profit lower I a said, and off stabilized, deals, with which to and some year, last risk have have cap Yes, in it, fact table a Brian, I rates. a calls, begun we the rates cap that some seems of people those half, continue people the lower lower and taken to albeit some in year the

household because we're X.X because and organically. As households the we're of started into including line, I the hopefully our expand mentioned, speaking, stepping But we the in mortgage seeing brakes and intentional business I'm market. thing per that's today. markets again, have, take slow, bullish is of slowdown platform build nice in we with that on and Fed arena two lines, largely going we the number some Indianapolis and the down platform commercial service opportunities. we're done. We’ve where a and in to can and them still for the a get CRM the albeit the have them take came just in. just good from generally And those economy to in we they diverse the new the of all we're some so there, X,XXX and of hired get with salespeople gain all nice the little a more traction with digital what got now That's three. sales weeds to our champion But business again, we've times on that going we've corporate

it's into think I playing our overall well model. all

Brian Martin

pipelines I positive And the but like still optimistic at potential put you've obviously mean, XXXX. maybe you're today, on it pretty sounds still year, up not growth there. the Okay. for so pretty the about this pace

Mark Klein

Yes.

going think generally, moves can are think here the into ‘XX, positive. to they be going think I again, I that'll off data-dependent, Fed’s the be ease if I of brakes and

some the to sales our it clients if really are are going going depends up we're unemployment. I Car think work a And little to think the come albeit well, got on people the to economy reacts. still. I know got duration responds want We’ve where I but how still economy down from don't they’ve to do. work, X.X% bit, continue find with little to on that lever a side. risk to

Brian Martin

just trying betas trends catch the kind about on of four kind betas next But overtake think the maybe just you've Yes, over do margin a couple kind up or pause I expansion just in do next Tony, of to a okay. it continue the - the the betas That's got talk a to loan see just up does to helpful. the betas if a the - by just so, over the Fed, catch of how guess quarter the then Tony And and we expansion, maybe you of deposit and the about you reacts for little to start to those where decline if as quarters. margin margin continue the two quarters how in catch maybe just bit can beta. here see just - more maybe maybe I don’t margin. and of know, deposit, margin -

Tony Cosentino

Yes, I on. think that's spot

by afternoon, and three betas expect expect We did maybe in I and - XX would of pause. here to points of basis improved to somewhat one a some the fully be of one kind I this betas loan of be think more quarter. we're in QX. what times one kind number, here we'll there other then

- - on here year-over-year basis, the maybe would obviously our call few as of think going we're QX, driven expectations. we is I of we on the half growth residential to are it think pipelines us to of a are do I maybe as expansion I that XX%, I XX%. with mortgage. loans a level XXX loan is most we'll slightly of think it kind up QX. a to going keep drop good. But our it going We residential growth, on have. to did go that by call mortgage don't payoffs million much expect forward, have margin percentage certainly as portfolios really to in in

So, margin's I be, as deposit funding that improve relatively costs to going into in and to stable and up QX then think asset I and catch margin costs in cut going to improvement. think, continue it's QX,

Brian Martin

of combination That's the like just the about, upward then just growth the you're Tony, cash plan remix flows talking - most a you're And from the sounds this assets funding the the Okay. if portfolio. and repricing of you're the on it's of funding securities improvement, most at point?

Tony Cosentino

and a to margins. stable little mix currently But just of slightly big portfolio, obviously, growth. Yes. from it growth the I it fairly we're a what I in million, good to be that QX won't deposit which paying. bond bit than over. be up XX still million to XX side, we overall in that have flow I feel have mean, driving maybe we're we roll higher think We'll on going can loan the call the is cash fund function

Brian Martin

you. Got

last one quarter. the were just this just favorable very maybe side. the I And one, perfect. expense trends on Okay. mean,

into of think some Is just, to you growth best how a you pressures, year? those lot quarter, of the year, on fair? comes look capture - sounds a not actions expenses the kind expenses of given the you like just, you - appears - level mortgage. where little that we Just, off inflationary from the just efficiency this rate you're that. the took just what's of think like baseline if standpoint a less just and next Or to when this way bit as at level the quarter, if will, next production of this expense inflationary drags, from being we standpoint just the But on - expecting base about if about

Mark Klein

on side, We've you eliminated going some a change Brian, expect, as have open be slots, the of all overtime. them, which in obviously to is seen up open whether biggest as as narrative. expense filled refill deliberate hard from might be positions going the expense all our personnel. to personnel we've fairly that at but which is we're We're a side, we we looking bit to

we're know to efficient. need we at we We everything So, looking more speak. as be

which growth, the which Our to we're we think higher, adding only to ratio our needs done where nice fairly on our to on come management balance The it we're medium it growth treasury find job and to have sheet. to is that it loans, commercial We be. margins a going average we've incremental but a the we improving the going piece upper not the continue growing said, expand. concentration to try quartile going scale, not But the through on with critical side. deposits bullish growing efficiency to on. with I ourself. incrementally what improve need That's the we be okay our the of make that because to to is remain concentrate to how is We a on by need we're where C&I which continue that's certainly

Brian Martin

Got you.

really just a reserve. reserving with that's the - the of last going just guess just I of line credit helpful. has handful or strength And the quarters the given forward into Okay. of provision here just and kind guess I it growth, No, provision, with the on the one was it is quality had no growing -

we on is just and going some you feel now expect still start provisioning sustainable we for guess, how bit - kind or at level a Is about reserve? this there the reserve a like is little at to more should that to think level is it, on think forward, growth I - we’re I As point? guess that about of recapture the

Mark Klein

we're on had great again, bullish process. results. Well, pretty our We've underwriting

think so say to some pretty That and down a the what Fed does economy consider we'll X.X, or to to which addressing at we I what path it's we the a think a ’XX, going Of the Depending think be We've to course, to But be little into in I'm little X.X everybody would we going continue how to dividends we that do from before. content going as need that's intimately the size PPP a has reserve bit really the said, we be where released reacts, on in today. never in increase. pleased bit probably XXXX, do X.XX, of I paying some were the it is contribution will market. to into intend reserve. of We're goodwill million intend continue this the on I forward. dictate need there from I the but to any, of we to XXXX took X.X we because stuck reserve and program that grow. But realized speak

Brian Martin

given Yes, has I seems bullish year little sounds business, should it's you, seem makes been. and like you're going outlook your guess see out bit than was as of but a the that comments, It trends Okay. kind next guess you're more I Mark, that's optimistic maybe bit of there. pipeline And sense. more that pretty strong SBA. your your a Is just to mentioned It the revenue now. just - I you seeing we maybe it misunderstood That on like as expectation, been, growth

Mark Klein

traction. had again, great we Well,

did in pause US. and the SBA. As be you We seven top years years five button the years, $XX XXX in million we to ago, and know, the Brian, a we PPP, PPP. in $XXX six wanted We strategy ago, million developed in in did in hit probably

don't in get as out the that that I quartile a in in think to the country. $X produce mentioned, this We got million again, where And environment we've we with do marginally of love back far the bit, the but enhancements are of people And they equity yields the balance the love in we've driver's as we We're mentioned replacing kind the do financing. financing higher. on doesn't sheet. side deposits. little This for CRE, gathering year economy before, we program, I we're project-based give want a this X(a). got right in We're We anything is project banks teetering to debt SBA us. liability and is of which of back market. the right seat we're think top the market. The get decent the Now deposits. X(a) year, on we those the so can We at love

So, and our that make do good yes, on them. bullish We of great we're happen on we care take things producers can SBA. that,

$XX to, get million least million back $XX even more and So, of us more XXXX, to markets our in markets, now us gives in that potential. to got at I'd we've like because great Indy

Brian Martin

Right.

quarter. and Okay. the Perfect. Thank you, guys, nice for taking questions

Operator

time, we you. closing instructions]. ahead. have Please call We'll turn At over Thank for Klein this back to Mark questions. remarks. the further no [Operator go Mr.

Mark Klein

you. We in our us. fourth care. again look forward good thanks to for Thank joining Take Again, you results. January again with joining Have day. quarter joining. of a for Thanks all XXXX

Operator

conference The attending you concluded. has for Thank now today's presentation.

disconnect. now may You

SB Financial (SBFG) 2 Nov 222022 Q3 Earnings call transcript