×

SB Financial Group, Inc. Second Quarter 2013 Results Reported

  • Consolidated earnings up 30 percent year over year, up 33 percent YTD
  • YTD ROA at 82 basis points
  • Nonperforming assets declined to 1.20 percent of total assets
  • Portfolio loans increased $11.9 million, or 2.6 percent, year over year
  • Tangible leverage of 6.00 percent, up 15.2 percent year over year
  • Revenue growth of 8.2 percent year over year
  • Net interest margin at 3.86 percent, up 5 basis points year over year

DEFIANCE, Ohio, July 22, 2013 (GLOBE NEWSWIRE) -- SB Financial Group, Inc. (Nasdaq:SBFG) ("SB Financial" or the "Company"), a diversified financial services company providing full-service community banking, mortgage banking, wealth management and item processing services, today reported earnings for the second quarter ended June 30, 2013.

Consolidated earnings for SB Financial include the results of the Company's Banking Group, consisting primarily of State Bank ("State Bank" or the "Bank"), and the Company's data services subsidiary, Rurbanc Data Services, Inc. (dba "RDSI Banking Systems" or "RDSI"). For the quarter ended June 30, 2013, SB Financial reported net income of $1.32 million, or $0.27 per diluted share, compared to net income of $1.01 million, or $0.21 per diluted share for the quarter ended June 30, 2012, and net income of $1.32 million, or $0.27 per diluted share, for the quarter ended March 31, 2013.

For the six months of 2013, net income was $2.64 million, or $0.54 per common share, compared to $1.99 million, or $0.41 per common share, for the prior-year six month period.

Mark Klein, President and CEO of SB Financial Group, stated, "Our second quarter results were strong and represent our fifth consecutive quarter of net income exceeding $1 million. Mortgage origination continues to provide significant fee income growth and we have been pleased to increase our net interest margin from the prior year. Asset quality continues to improve and our charge-off ratio of 13 basis points for the year reflects that improvement. Also, during the quarter we completed the transition to our new brand and it has been well-received by our employees, customers and in the communities we serve."

RESULTS OF OPERATIONS

Consolidated Revenue

Total revenue, consisting of net interest income fully tax equivalent (FTE) and noninterest income, was $9.27 million for the second quarter of 2013, up $0.70 million, or 8.2 percent, from the second quarter of 2012, and higher by $0.31 million, or 3.4 percent, from the linked quarter. Revenue was impacted in the quarter by the 13.9 percent increase in mortgage originations from the linked quarter.

Net interest income (FTE) for the 2013 second quarter was $5.45 million, up 1.7 percent year over year, from the combined impact of increases in earning assets and lower funding costs. The net interest margin (FTE) was 3.86 percent for the second quarter of 2013 compared to 3.81 percent for the second quarter of 2012. Mr. Klein continued, "We know that revenue growth in today's banking environment is a challenge. The diversity of our revenue stream has resulted in a year-over-year growth rate of 8 percent."

Noninterest Income

Noninterest income was $3.82 million for the second quarter of 2013, up $0.61 million, or 19.1 percent, from the second quarter of 2012. Mortgage loan originations for the second quarter of 2013 were $81.9 million, up $2.04 million, or 2.6 percent, from the $79.9 million generated in the second quarter of 2012. For the six months ended June 30, 2013, mortgage originations were $153.9 million, up $5.7 million, or 3.9 percent, over the six months ended June 30, 2012.

Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.87 million for the second quarter of 2013 compared to $1.66 million for the linked quarter and $1.23 million for the year-ago second quarter. The mortgage servicing valuation adjustment in the second quarter of 2013 was a favorable $0.27 million, compared to $0.17 million for the linked quarter. The mortgage servicing portfolio at the end of the second quarter 2013 was $576.9 million, up $117.6 million, or 25.6 percent, from the end of the second quarter 2012.

Mortgage Banking ($000's) Three Months Ended
Jun.
2013
Mar.
2013
Dec.
2012
Sep.
2012
Jun.
2012
Mortgage originations $ 81,945 $ 71,967 $ 93,619 $ 90,685 $ 79,901
Mortgage sales 67,050 68,431 93,993 81,862 75,227
Mortgage servicing portfolio 576,938 548,493 528,086 488,930 459,380
Mortgage servicing rights 4,613 4,068 3,775 3,346 3,359
Mortgage servicing revenue:
Loan servicing fees 350 338 319 297 274
OMSR amortization (205) (330) (362) (369) (254)
Net administrative fees 145 8 (43) (72) 20
OMSR valuation adjustment 273 171 195 (120) (185)
Net loan servicing fees 418 179 152 (192) (165)
Gain on sale of mortgages 1,450 1,484 2,136 1,572 1,395
Mortgage banking revenue, net $1,868 $1,663 $2,288 $1,380 $1,230

Our fee income diversity also includes wealth management, deposit fees and income from bank owned life insurance. Wealth management increased revenue by 7.4 percent from the year-ago quarter as assets under management grew by $33.3 million, or 11.1 percent, from the second quarter of 2012. Noninterest income contributed 41.2 percent of second quarter 2013 revenue (FTE); this compares to a 37.5 percent contribution of revenue (FTE) for second quarter 2012.

Gross revenue generated by RDSI, including services provided to SB Financial/State Bank, was $0.70 million for the second quarter of 2013. Net data services fees, excluding SB Financial/State Bank intercompany transactions, were $0.46 million in the second quarter of 2013, down $0.12 million from the year-ago quarter. Mr. Klein added, "Year to date, our wealth management team has garnered a number of new relationships as well as expanded existing ones. Our revenue diversity with mortgages, wealth management and retail has positioned us well to offset the decline in our technology subsidiary, RDSI."

Data Services ($000's) Jun. 2013 Mar. 2013 Dec. 2012 Sep. 2012 Jun. 2012
Data Processing & Network Services $ 207 $ 270 $ 179 $ 229 $ 194
Payment Solutions 493 484 549 488 633
Contract Buyout -- -- -- 53 --
Vendor Settlement -- -- 334 -- --
RDSI Gross Revenue 700 754 1,062 780 827
Less: Intercompany (242) (340) (251) (285) (251)
Net Data Services Fees $ 458 $ 414 $ 811 $ 485 $ 576
Core Data Service Fees $ 458 $ 414 $ 477 $ 432 $ 576

Loan Loss Provision

The loan loss provision was $0.20 million for the second quarter of 2013, which is flat to the second quarter of 2012. The provision expense reflects a 13.9 percent decline in nonperforming loans and a 5.8 percent reduction in net charge-offs from the prior year. The loan loss reserve at second quarter-end 2013 was 1.51 percent of total loans, providing 124.2 percent coverage of nonperforming loans; this compares to reserve coverage of 92.5 percent at second quarter-end 2012.

Noninterest Expense

For the second quarter of 2013, noninterest expense was $7.08 million, up $0.21 million, or 3.0 percent, from the 2012 second quarter. Year to date noninterest expense was $13.8 million, up $0.20 million, or 1.5 percent, from the first six months of 2012. Compensation expense has increased reflecting the higher level of mortgage originations. Expenses related to the rebranding project have been offset by the costs for FDIC insurance, which are down $0.23 million, or 54.0 percent, from the prior year.

"We are extremely pleased with the improvements we have made in expense control; growing our revenue by nearly three times our expense growth rate is gratifying," said Mr. Klein.

Balance Sheet

Total assets as of June 30, 2013 were $631.5 million, a decline of $1.04 million, or 0.2 percent, from second quarter-end 2012. Total deposits as of second quarter-end 2013 were $511.4 million, lower by $7.28 million than at second quarter-end 2012.

Total loans held for investment (HFI) were $464.0 million at June 30, 2013 compared to $452.1 million for the prior-year quarter-end, up $11.9 million, or 2.6 percent. Commercial loans accounted for the majority of growth, up $8.8 million, or 11.6 percent, and residential real estate loans, up $8.25 million, or 9.7 percent. For the six months ended June 30, 2013, loans have increased by $0.65 million, primarily from increases in commercial and residential real estate, offsetting declines in agricultural lending. Mr. Klein stated, "We were encouraged this quarter by our loan growth, especially in our commercial portfolio. Our decentralized strategy of our markets continues to give us a competitive advantage."

Loan Portfolio ($000's) Jun. 2013 Mar. 2013 Dec. 2012 Sep. 2012 Jun. 2012 Variance
YOY
Commercial $ 84,766 $ 80,431 $ 81,491 $ 76,043 $ 75,964 $ 8,802
% of Total 18.3% 17.7% 17.6% 16.7% 16.8% 11.6%
Commercial RE 199,795 199,615 201,392 198,682 199,918 (123)
% of Total 43.1% 43.8% 43.5% 43.6% 44.2% (0.1%)
Agriculture 38,552 37,950 42,276 42,988 41,093 (2,541)
% of Total 8.3% 8.3% 9.1% 9.4% 9.1% (6.2%)
Residential RE 93,292 89,669 87,859 85,727 85,046 8,246
% of Total 20.1% 19.7% 19.0% 18.8% 18.8% 9.7%
Consumer & Other 47,630 47,778 50,371 51,581 50,089 (2,459)
% of Total 10.3% 10.5% 10.9% 11.3% 11.1% (4.9%)
Total Loans $464,035 $455,443 $463,389 $455,021 $452,110 $ 11,925
2.6%

Asset Quality

SB Financial continues to improve its asset quality, reporting nonperforming assets of $7.60 million for the current quarter, lower by $1.26 million, or 14.2 percent, than the prior year second quarter. Net charge-offs of $0.18 million were just 15 basis points for the quarter and were down from the prior year second quarter. Delinquency levels have remained steady, with the 30-89 day category totaling $0.93 million at the end of the 2013 second quarter compared to $2.16 million for the prior year second quarter. Mr. Klein continued, "All of our asset quality measures have shown improvement. Total delinquencies are just 0.63 percent of our portfolio and nonperforming assets are at 1.2 percent of total assets. We have continued to add to our loan loss reserve, up 6.0 percent over the prior year, while decreasing our problem assets by 14 percent."

Summary of Nonperforming Assets ($000's)
Nonperforming Loan Category Jun. 2013 Mar. 2013 Dec. 2012 Sep. 2012 Jun. 2012
Commercial $ 982 $ 1,135 $ 1,246 $ 1,362 $ 1,467
% of Total Commercial loans 1.16% 1.41% 1.53% 1.78% 1.93%
Commercial RE loans 519 457 782 448 1,345
% of Total CRE loans 0.26% 0.23% 0.39% 0.23% 0.67%
Agriculture -- -- -- 3 --
% of Total Ag loans -- -- -- 0.01% --
Residential RE 2,285 2,614 2,631 2,607 1,958
% of Total Res. RE loans 2.45% 2.92% 2.99% 3.04% 2.30%
Consumer & Other 600 605 646 829 545
% of Consumer & Other loans 1.26% 1.27% 1.28% 1.61% 1.09%
Total Nonaccruing Loans 4,386 4,811 5,305 5,249 5,315
% of Total Loans 0.95% 1.06% 1.14% 1.15% 1.18%
Accruing Restructured Loans 1,262 1,273 1,258 1,735 1,837
Total Nonaccruing & Restructured $ 5,648 $ 6,084 $ 6,563 $ 6,984 $ 7,152
% of Total Loans 1.22% 1.34% 1.42% 1.53% 1.58%
OREO & Repossessed Vehicles 1,955 2,270 2,367 2,415 1,708
Total Nonperforming Assets $ 7,603 $ 8,354 $ 8,930 $ 9,399 $ 8,860
% of Total Assets 1.20% 1.30% 1.40% 1.49% 1.40%

Capitalization

Capital ratios continue to improve, however it still remains a primary focus of management. The Tangible equity ratio improved by 79 basis points over the past twelve months, and now stands at 6.00 percent. All bank regulatory ratios remain in excess of "well-capitalized" levels. At June 30, 2013, State Bank's Total Risk-based Capital was estimated to be $59.0 million, $20.8 million above the well-capitalized level. The Total Risk-based Capital Ratio is estimated at 12.4 percent.

About SB Financial Group

Based in Defiance, Ohio, SB Financial Group, Inc. is a financial services holding company with two wholly-owned operating subsidiaries: State Bank and RDSI Banking Systems (RDSI). State Bank operates through 17 banking centers in seven Northwestern Ohio counties, one center in Fort Wayne, Indiana; and three loan production offices: two in Columbus, Ohio and one in Angola, Indiana. State Bank offers a full range of financial services for consumers and small businesses, including wealth management, mortgage banking, commercial and agricultural lending. RDSI provides item processing services to community banks located in the Midwest. The Company's common stock is listed on the NASDAQ Global Market under the symbol SBFG.

Forward-Looking Statements

Certain statements within this document, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties and actual results may differ materially from those predicted by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties inherent in the national and regional banking, insurance and mortgage industries, competitive factors specific to markets in which SB Financial Group and its subsidiaries operate, future interest rate levels, legislative and regulatory actions, capital market conditions, general economic conditions, geopolitical events, the loss of key personnel and other factors. Additional factors that could cause results to differ from those described above can be found in the Company's Annual Report on Form 10-K and documents subsequently filed by SB Financial Group with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made, and SB Financial Group undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made except as required by law. All subsequent written and oral forward-looking statements attributable to SB Financial Group or any person acting on its behalf are qualified by these cautionary statements.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this release contains certain non-GAAP financial measures. Management believes that providing certain non-GAAP financial measures provides investors with information useful in understanding the Company's financial performance, its performance trends and financial position. Specifically, SB Financial Group provides measures based on "core operating earnings," which excludes merger, integration and restructuring expenses that are not reflective of on-going operations or not expected to recur. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results.

SB FINANCIAL GROUP & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - (Unaudited)
June March December September June
($ in Thousands) 2013 2013 2012 2012 2012
ASSETS
Cash and due from banks $ 10,750 $ 28,031 $ 19,144 $ 10,289 $ 14,636
Securities available for sale, at fair value 95,379 98,390 98,702 101,247 102,537
Other securities - FRB and FHLB Stock 3,748 3,748 3,748 3,748 3,748
Total investment securities 99,127 102,138 102,450 104,995 106,285
Loans held for sale 10,715 8,560 6,147 11,584 10,595
Loans, net of unearned income 464,035 455,443 463,389 455,021 452,110
Allowance for loan losses (7,013) (6,992) (6,811) (6,696) (6,618)
Net loans 457,022 448,451 456,578 448,325 445,492
Premises and equipment, net 12,483 12,738 12,633 12,898 13,190
Purchased software 289 300 330 334 355
Cash surrender value of life insurance 12,742 12,659 12,577 12,491 12,401
Goodwill 16,353 16,353 16,353 16,353 16,353
Core deposits and other intangibles 913 1,066 1,219 1,376 1,534
Foreclosed assets held for sale, net 1,955 2,270 2,367 2,415 1,708
Mortgage servicing rights 4,613 4,068 3,775 3,346 3,359
Accrued interest receivable 1,575 1,618 1,235 1,832 1,597
Other assets 2,955 3,048 3,426 3,967 5,026
Total assets $ 631,492 $ 641,300 $ 638,234 $ 630,205 $ 632,531
LIABILITIES AND EQUITY
Deposits
Non interest bearing demand $ 76,355 $ 79,579 $ 77,799 $ 69,250 $ 68,918
Interest bearing demand 118,957 123,748 117,289 112,230 109,268
Savings 61,513 62,404 57,461 53,505 53,777
Money market 78,487 81,130 80,381 78,006 81,114
Time deposits 176,066 185,398 194,071 202,259 205,584
Total deposits 511,378 532,259 527,001 515,250 518,661
Notes payable 1,148 1,424 1,702 1,975 2,249
Advances from Federal Home Loan Bank 30,000 17,500 21,000 18,500 17,500
Repurchase agreements 9,314 10,983 10,333 13,735 15,824
Trust preferred securities 20,620 20,620 20,620 20,620 20,620
Accrued interest payable 715 515 138 4,223 3,836
Other liabilities 3,930 3,704 4,156 3,972 3,567
Total liabilities 577,105 587,005 584,950 578,275 582,257
Equity
Preferred stock -- -- -- -- --
Common stock 12,569 12,569 12,569 12,569 12,569
Additional paid-in capital 15,392 15,381 15,374 15,363 15,350
Retained earnings 27,648 26,476 25,280 23,755 22,452
Accumulated other comprehensive income 496 1,623 1,830 2,012 1,672
Treasury stock (1,718) (1,754) (1,769) (1,769) (1,769)
Total equity 54,387 54,295 53,284 51,930 50,274
Total liabilities and equity $ 631,492 $ 641,300 $ 638,234 $ 630,205 $ 632,531
SB FINANCIAL GROUP & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
($ in thousands, except share data) Three Months Ended Six Months Ended
June March December September June June June
Interest income 2013 2013 2012 2012 2012 2013 2012
Loans
Taxable $ 5,874 $ 5,883 $ 5,840 $ 6,106 $ 6,037 $ 11,757 $ 11,965
Nontaxable 16 24 22 21 24 40 47
Securities
Taxable 296 330 330 383 403 626 802
Nontaxable 174 170 157 156 146 344 293
Total interest income 6,360 6,407 6,349 6,666 6,610 12,767 13,107
Interest expense
Deposits 573 606 653 694 768 1,179 1,622
Other borrowings 12 14 15 17 (2) 26 32
Repurchase Agreements 3 2 3 11 60 5 128
Federal Home Loan Bank advances 84 90 92 92 75 174 149
Trust preferred securities 338 403 431 418 441 741 1,033
Total interest expense 1,010 1,115 1,194 1,232 1,342 2,125 2,964
Net interest income 5,350 5,292 5,155 5,434 5,268 10,642 10,143
Provision for loan losses 200 299 400 300 200 499 650
Net interest income after provision for loan losses 5,150 4,993 4,755 5,134 5,068 10,143 9,493
Noninterest income
Data service fees 458 414 811 485 576 872 1,219
Trust fees 652 643 606 646 607 1,295 1,249
Customer service fees 639 616 648 677 668 1,255 1,299
Gain on sale of mtg. loans & OMSR's 1,450 1,484 2,136 1,572 1,395 2,934 2,576
Mortgage loan servicing fees, net 418 179 152 (192) (165) 597 164
Gain on sale of non-mortgage loans 82 156 94 170 -- 238 --
Net gain on sales of securities -- 20 -- -- -- 20 --
Loss on sale or disposal of assets (129) (105) (54) (151) (50) (234) (106)
Other income 250 160 255 201 177 410 388
Total non-interest income 3,820 3,567 4,648 3,408 3,208 7,387 6,789
Noninterest expense
Salaries and employee benefits 3,688 3,439 3,825 3,597 3,597 7,127 7,096
Net occupancy expense 513 541 494 515 528 1,054 1,076
Equipment expense 703 755 692 722 712 1,458 1,423
FDIC insurance expense 94 109 100 91 223 203 437
Fixed asset and software impairment -- -- 65 -- -- -- --
Data processing fees 194 77 132 103 121 271 234
Professional fees 499 429 686 451 390 928 775
Marketing expense 92 108 115 85 103 200 193
Printing and office supplies 151 46 46 39 67 197 145
Telephone and communication 158 158 146 151 139 316 283
Postage and delivery expense 209 215 204 223 200 424 429
State, local and other taxes 138 134 136 128 118 272 238
Employee expense 126 152 113 118 119 278 225
Other intangible amortization expense 153 153 158 157 158 306 315
OREO Impairment -- 33 -- -- 58 33 58
Other expenses 362 321 300 345 338 683 620
Total non-interest expense 7,080 6,670 7,212 6,725 6,871 13,750 13,547
Income before income tax expense 1,890 1,890 2,191 1,817 1,405 3,780 2,735
Income tax expense 571 572 667 513 391 1,143 749
Net income $ 1,319 $ 1,318 $ 1,524 $ 1,304 $ 1,014 $ 2,637 $ 1,986
Common share data:
Basic earnings per common share $ 0.27 $ 0.27 $ 0.31 $ 0.27 $ 0.21 $ 0.54 $ 0.41
Diluted earnings per common share $ 0.27 $ 0.27 $ 0.31 $ 0.27 $ 0.21 $ 0.54 $ 0.41
Average shares outstanding ($ in thousands):
Basic: 4,866 4,863 4,862 4,862 4,862 4,863 4,862
Diluted: 4,870 4,870 4,862 4,862 4,862 4,870 4,862
SB FINANCIAL GROUP & SUBSIDIARIES
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
($ in thousands, except per share data) Three Months Ended Six Months Ended
June March December September June June June
SUMMARY OF OPERATIONS 2013 2013 2012 2012 2012 2013 2012
Net interest income $ 5,350 5,292 5,155 5,434 5,268 10,642 10,143
Tax-equivalent adjustment $ 98 100 92 91 88 198 175
Tax-equivalent net interest income $ 5,448 5,392 5,247 5,525 5,356 10,840 10,318
Provision for loan loss $ 200 299 400 300 200 499 650
Noninterest income $ 3,820 3,567 4,648 3,408 3,208 7,387 6,789
Total revenue, tax-equivalent $ 9,268 8,959 9,895 8,933 8,564 18,227 17,107
Noninterest expense $ 7,080 6,670 7,212 6,725 6,871 13,750 13,547
Pre provision pretax income $ 2,090 2,189 2,591 2,117 1,605 4,279 3,385
Pretax income $ 1,890 1,890 2,191 1,817 1,405 3,780 2,735
Net income $ 1,319 1,318 1,524 1,304 1,014 2,637 1,986
PER SHARE INFORMATION:
Basic & diluted earnings per share $ 0.27 0.27 0.31 0.27 0.21 0.54 0.41
Common dividends $ 0.055 -- -- -- -- 0.055 --
Book value per common share $ 11.18 11.16 10.96 10.68 10.34 11.18 10.34
Tangible book value per common share $ 7.57 7.52 7.28 6.97 6.59 7.57 6.59
PERFORMANCE RATIOS:
Return on average assets 0.82% 0.83% 0.95% 0.82% 0.63% 0.82% 0.62%
Return on average common equity 9.70% 9.82% 11.64% 10.25% 8.20% 9.76% 8.12%
Return on avg. tangible common equity 14.25% 14.56% 17.57% 15.91% 13.01% 14.42% 12.86%
Efficiency ratio 75.54% 73.56% 71.96% 74.28% 79.20% 74.57% 78.15%
Earning asset yield 4.58% 4.65% 4.50% 4.78% 4.76% 4.62% 4.77%
Cost of interest bearing liabilities 0.81% 0.90% 0.96% 0.98% 1.05% 0.85% 1.16%
Net interest margin 3.79% 3.78% 3.65% 3.85% 3.75% 3.79% 3.64%
Tax equivalent effect 0.07% 0.08% 0.07% 0.06% 0.06% 0.07% 0.06%
Net interest margin - fully tax equivalent basis 3.86% 3.86% 3.72% 3.91% 3.81% 3.86% 3.70%
ASSET QUALITY RATIOS:
Gross charge-offs $ 213 136 300 302 252 349 726
Recoveries $ 34 18 15 78 62 52 166
Net charge-offs $ 179 118 285 223 190 297 560
Nonaccruing loans/ Total loans 0.95% 1.06% 1.14% 1.15% 1.18% 0.95% 1.18%
Nonperforming loans/ Total loans 1.22% 1.34% 1.42% 1.53% 1.58% 1.22% 1.58%
Nonperforming assets/ Loans & OREO 1.79% 1.95% 2.02% 2.05% 1.95% 1.79% 1.95%
Nonperforming assets/ Total assets 1.20% 1.30% 1.40% 1.49% 1.40% 1.20% 1.40%
Allowance for loan loss/ Nonperforming loans 124.2% 114.9% 103.8% 95.9% 92.5% 124.2% 92.5%
Allowance for loan loss/ Total loans 1.51% 1.54% 1.47% 1.47% 1.46% 1.51% 1.46%
Net loan charge-offs/ Average loans (ann.) 0.15% 0.10% 0.25% 0.20% 0.17% 0.13% 0.25%
Loan loss provision/ Net charge-offs 111.73% 253.39% 140.56% 134.46% 105.22% 168.01% 115.99%
CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits 90.74% 85.57% 87.93% 88.31% 87.17% 90.74% 87.17%
Equity/ Assets 8.61% 8.47% 8.35% 8.24% 7.95% 8.61% 7.95%
Tangible equity/ Tangible assets 6.00% 5.87% 5.70% 5.53% 5.21% 6.00% 5.21%
END OF PERIOD BALANCES
Total loans $ 464,035 455,443 463,389 455,021 452,110 464,035 452,110
Total assets $ 631,492 641,300 638,234 630,205 632,531 631,492 632,531
Deposits $ 511,378 532,259 527,001 515,250 518,661 511,378 518,661
Stockholders equity $ 54,387 54,295 53,284 51,930 50,274 54,387 50,274
Intangibles $ 17,555 17,719 17,902 18,063 18,242 17,555 18,242
Tangible equity $ 36,832 36,576 35,382 33,867 32,032 36,832 32,032
Full-time equivalent employees 198 204 204 199 204 198 204
Period-end basic shares outstanding 4,867 4,863 4,862 4,862 4,862 4,867 4,862
AVERAGE BALANCES
Total loans $ 464,105 459,988 455,705 454,634 446,786 462,058 448,642
Total earning assets $ 564,050 559,383 564,564 565,144 562,169 561,665 557,371
Total assets $ 640,382 638,801 639,048 635,012 643,859 639,698 639,926
Deposits $ 520,259 524,901 522,970 515,795 527,992 522,585 525,313
Stockholders equity $ 54,398 53,711 52,351 50,905 49,464 54,020 48,946
Intangibles $ 17,361 17,512 17,665 18,126 18,299 17,437 18,057
Tangible equity $ 37,037 36,199 34,686 32,779 31,165 36,583 30,889
SB FINANCIAL GROUP
Rate Volume Analysis - (Unaudited)
For the Three Months Ended June 30, 2013 and 2012
($ in Thousands) Three Months Ended June 30, 2013 Three Months Ended June 30, 2012
Average Average Average Average
Assets Balance Interest Rate Balance Interest Rate
Taxable securities $ 83,152 296 1.42% $ 93,458 403 1.73%
Non-taxable securities 16,793 264 6.28% 14,357 221 6.16%
Federal funds sold -- -- N/A -- -- N/A
Loans, net 464,105 5,898 5.08% 454,354 6,074 5.35%
Total earning assets 564,050 6,458 4.58% 562,169 6,698 4.77%
Cash and due from banks 21,248 24,109
Allowance for loan losses (6,960) (6,368)
Premises and equipment 15,162 15,119
Other assets 46,882 48,830
Total assets $ 640,382 $ 643,859
Liabilities
Savings and interest-bearing demand $ 264,530 18 0.03% $ 250,496 52 0.08%
Time deposits 178,162 555 1.25% 208,205 716 1.37%
Repurchase agreements 10,535 3 0.11% 17,957 60 1.34%
Advances from FHLB 21,571 84 1.56% 13,134 74 2.25%
Junior subordinated debentures 20,620 338 6.56% 20,620 421 8.17%
Notes payable & other borrowed funds 1,239 12 3.87% 2,178 19 3.52%
Total interest-bearing liabilities 496,657 1,010 0.81% 512,590 1,342 1.05%
Non interest-bearing demand 77,567 69,291
Other liabilities 11,760 12,514
Total liabilities 585,984 594,395
Equity 54,398 49,464
Total liabilities and equity $ 640,382 $ 643,859
Net interest income (tax equivalent basis) $ 5,448 $ 5,356
Net interest income as a percent of average interest-earning assets 3.86% 3.81%
Six Months Ended June 30, 2013 Six Months Ended June 30, 2012
Average Average Average Average
Assets Balance Interest Rate Balance Interest Rate
Taxable securities $ 83,336 626 1.50% $ 89,234 802 1.80%
Non-taxable securities 16,271 521 6.41% 19,495 444 4.56%
Federal funds sold -- -- N/A -- -- N/A
Loans, net 462,058 11,818 5.12% 448,642 12,036 5.37%
Total earning assets 561,665 12,965 4.62% 557,371 13,282 4.77%
Cash and due from banks 22,867 25,793
Allowance for loan losses (6,912) (6,405)
Premises and equipment 15,142 15,336
Other assets 46,936 47,831
Total assets $ 639,698 $ 639,926
Liabilities
Savings and interest-bearing demand $ 262,183 39 0.03% $ 245,623 120 0.10%
Time deposits 183,151 1,140 1.24% 211,445 1,502 1.42%
Repurchase agreements 10,254 5 0.10% 17,543 128 1.46%
Advances from FHLB 19,599 174 1.78% 12,901 149 2.31%
Junior subordinated debentures 20,620 741 7.19% 20,620 1,033 10.02%
Notes payable & other borrowed funds 1,371 26 3.79% 2,670 32 2.40%
Total interest-bearing liabilities 497,178 2,125 0.85% 510,802 2,964 1.16%
Non interest-bearing demand 77,251 68,245
Other liabilities 11,249 11,932
Total liabilities 585,678 590,979
Equity 54,020 48,946
Total liabilities and equity $ 639,698 $ 639,925
Net interest income (tax equivalent basis) $ 10,840 $ 10,318
Net interest income as a percent of average interest-earning assets 3.86% 3.70%

CONTACT: Investor Contact Information: Anthony V. Cosentino Executive Vice President and Chief Financial Officer 419.785.3663 Tony.Cosentino@YourStateBank.comSource:SB Financial Group