SB Financial Group, Inc. Announces First Quarter 2020 Results
DEFIANCE, Ohio, April 23, 2020 /PRNewswire/ -- 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, private client and title insurance services today reported earnings for the first quarter ended March 31, 2020.
First quarter 2020 highlights over prior year first quarter include:
- Net income of $0.7 million; diluted earnings per share (EPS) of $0.09
- Adjusted net income, excluding the impact of the OMSR impairment of $2.2 million (pre-tax), of $2.4 million with EPS of $0.31
- Mortgage origination volume of $101.4 million, an increase of $49.9 million, or 97.1 percent
First quarter 2020 trailing twelve-month highlights include:
- Loan growth of $48.2 million, or 6.2 percent
- Deposit growth of $36.2 million, or 4.4 percent
- Mortgage origination volume of $495.3 million, an increase of $160.3 million, or 47.8 percent; servicing portfolio of $1.22 billion, up $0.12 billion, or 11.2 percent
Highlights |
Three Months Ended |
||
($ in thousands, except per share & ratios) |
Mar. 2020 |
Mar. 2019 |
% Change |
Operating revenue |
$ 10,709 |
$ 11,340 |
-5.6% |
Interest income |
10,644 |
10,498 |
1.4% |
Interest expense |
2,096 |
2,158 |
-2.9% |
Net interest income |
8,548 |
8,340 |
2.5% |
Provision for loan losses |
600 |
- |
N/A |
Noninterest income |
2,161 |
3,000 |
-28.0% |
Noninterest expense |
9,406 |
8,626 |
9.0% |
Net income |
681 |
2,226 |
-69.4% |
Earnings per diluted share |
0.09 |
0.28 |
-67.9% |
Return on average assets |
0.26% |
0.89% |
-70.8% |
Return on average equity |
1.99% |
6.76% |
-70.6% |
Non-GAAP Measures |
|||
Adjusted net income |
$ 2,428 |
$ 2,785 |
-12.8% |
Adjusted diluted EPS |
0.31 |
0.35 |
-11.4% |
Adjusted return on average assets |
0.92% |
0.95% |
-3.2% |
Adjusted pre-tax, pre-provision income |
3,514 |
3,422 |
2.7% |
"SB Financial's first quarter GAAP results were impacted by the rapid decline in market rates driven by the Federal Reserve in response to the pandemic, which resulted in a large impairment to our mortgage servicing rights. Adjusting for that impairment, pre-tax pre-provision earnings were up three percent compared to 2019," said Mark A. Klein, Chairman, President, and CEO of SB Financial. "Mortgage volume accelerated in the quarter as we originated over $100 million in volume. In response to the unprecedented economic impact of the pandemic, we are actively working with our clients on both forbearance solutions as well as the new Paycheck Protection Program ("PPP") small business lending facility."
RESULTS OF OPERATIONS
Consolidated Revenue
Total operating revenue, consisting of net interest income and noninterest income adjusted for the impairment, was up 7.2 percent from the first quarter of 2019, and down 9.3 percent to the linked quarter.
- Net interest income was up 2.5 percent from the year-ago quarter, but down 0.6 percent from the linked quarter.
- Net interest margin on a fully taxable equivalent basis (FTE) was down from both year-ago and linked quarters by 33 and 22 basis points, respectively as more balances were held in cash due to liquidity needs.
- Adjusting for the OMSR impairment, noninterest income would be up 18 and down 23 percent, respectively.
Mortgage Loan Business
Mortgage loan originations for the first quarter of 2020 were $101.4 million, up $49.9 million, or 97.1 percent, from the year-ago quarter. Total sales of originated loans were $84.5 million, up $41.0 million, or 94.3 percent from the year-ago quarter. Refinance activity accelerated in the quarter, with total refinance volume of $24.7 million or 24 percent, compared to 19 percent for all of 2019.
Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was a negative $0.1 million for the first quarter of 2020, compared to $0.9 million for the year-ago quarter. The mortgage servicing valuation adjustment for the first quarter of 2020 was a negative $2.2 million, compared to a negative adjustment of $0.7 million for the first quarter of 2019. The aggregate servicing valuation impairment ended the quarter at $3.5 million. The servicing portfolio at March 31, 2020, was $1.22 billion, up $0.12 billion, or 11.2 percent, from $1.09 billion at March 31, 2019. Normal amortization is up 135 percent from the prior year due to higher refinance activity.
Mr. Klein noted, "We experienced a rapid increase in mortgage activity late in the quarter as our clients reacted to the market rate declines. As we look at our prior rolling 12 months, we have originated nearly $500 million in total volume for our clients throughout our footprint. As expected, impairment to our servicing rights had an outsized impact on our results. Our newest region, Indianapolis, contributed seven percent to our quarterly volume."
Mortgage Banking |
|||||
($ in thousands) |
Mar. 2020 |
Dec. 2019 |
Sep. 2019 |
Jun. 2019 |
Mar. 2019 |
Mortgage originations |
$ 101,365 |
$ 137,528 |
$ 157,947 |
$ 98,447 |
$ 51,417 |
Mortgage sales |
84,476 |
127,441 |
125,386 |
70,993 |
43,472 |
Mortgage servicing portfolio |
1,216,292 |
1,199,107 |
1,153,020 |
1,112,857 |
1,094,060 |
Mortgage servicing rights |
8,974 |
11,017 |
10,447 |
10,264 |
10,838 |
Mortgage servicing revenue |
|||||
Loan servicing fees |
756 |
740 |
709 |
691 |
682 |
OMSR amortization |
(597) |
(709) |
(701) |
(460) |
(254) |
Net administrative fees |
159 |
31 |
8 |
231 |
428 |
OMSR valuation adjustment |
(2,212) |
303 |
- |
(690) |
(708) |
Net loan servicing fees |
(2,053) |
334 |
8 |
(459) |
(280) |
Gain on sale of mortgages |
1,949 |
3,048 |
2,495 |
1,678 |
1,192 |
Mortgage banking revenue, net |
$ (104) |
$ 3,382 |
$ 2,503 |
$ 1,219 |
$ 912 |
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) and US Department of Agriculture (USDA) loans. SBA and USDA activity for the quarter consisted of total origination volume of $1.0 million with sales volume of $0.4 million resulting in gains of $0.07 million. Wealth management assets under the Company's care fell to $427.1 million as of March 31, 2020 due to the market decline. For the first quarter of 2020, noninterest income as a percentage of total operating revenue was 20.2 percent (33.8 percent when adjusting for the OMSR impairment). Results for 2020 include a full quarter from our Title Agency compared to the prior year.
For the first quarter of 2020, noninterest expense of $9.4 million was up $0.8 million compared to the prior year or 9.0 percent. Higher mortgage production volumes increased compensation expense and title agency expenses are up compared to the prior year. Data processing expenses are up due to higher activity levels from our digital banking channels.
Mr. Klein stated, "We are actively participating in the SBA's PPP program and anticipate total funding in the second quarter of $75 million. Fee income levels from mortgage lending were up this quarter, but OMSR impairment had a significant impact on our operating results. Our title agency acquisition in March of 2019, makes comparative results difficult; however; Peak took part in the increased mortgage activity in the quarter. We continue to pay close attention to expenses and have begun to implement a number of actions in response to the pandemic headwinds affecting our business."
Noninterest Income / Noninterest Expense |
|||||
($ in thousands, except ratios) |
Mar. 2020 |
Dec. 2019 |
Sep. 2019 |
Jun. 2019 |
Mar. 2019 |
Noninterest Income (NII) |
$ 2,161 |
$ 5,959 |
$ 5,366 |
$ 3,691 |
$ 3,000 |
NII / Total Revenue |
20.2% |
40.9% |
37.2% |
29.5% |
26.5% |
NII / Average Assets |
0.8% |
2.3% |
2.1% |
1.5% |
1.2% |
Noninterest Expense (NIE) |
$ 9,406 |
$ 10,176 |
$ 9,500 |
$ 9,108 |
$ 8,626 |
Efficiency Ratio |
87.8% |
69.9% |
65.9% |
72.7% |
76.1% |
NIE / Average Assets |
3.5% |
3.9% |
3.6% |
3.6% |
3.5% |
Net Noninterest Expense/Avg. Assets |
-2.7% |
-1.6% |
-1.6% |
-2.1% |
-2.3% |
Balance Sheet
Total assets as of March 31, 2020, were $1.09 billion, up $67.0 million, or 6.6 percent, from a year ago. Total equity as of March 31, 2020, was $135.9 million, up 3.4 percent from a year ago, and comprised 12.5 percent of total assets. Over the last twelve months, SB Financial repurchased 319,000 shares of common stock, for an aggregate of $5.4 million.
Total loans held for investment were $830.8 million at March 31, 2020, up $48.2 million, or 6.2 percent, from March 31, 2019. Commercial real estate loans were up $34.2 million, or 10.0 percent, with commercial loans rising $15.3 million, or 11.3 percent.
The investment portfolio of $107.7 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 9.9 percent of assets at March 31, 2020, and was up 12.4 percent from the year-ago period. Deposit balances of $863.9 million at March 31, 2020, increased by $36.2 million or 4.4 percent, since March 31, 2019. Growth from the prior year included $26.2 million in checking and $10.0 million in savings and time deposit balances.
Mr. Klein continued, "Both loan and deposit volumes were up over the prior year although business activity slowed in March and lending activity beyond the U.S. Treasury programs will likely be constrained in the near term. Nonperforming assets to total assets increased as we had an asset based commercial line that we downgraded at year end. We ended the quarter at 61 basis points of NPA's, up 19 basis points from the prior year."
Loan Balances |
||||||
($ in thousands, except ratios) |
Mar. 2020 |
Dec. 2019 |
Sep. 2019 |
Jun. 2019 |
Mar. 2019 |
Annual |
Commercial |
$ 151,538 |
$ 151,018 |
$ 145,147 |
$ 143,798 |
$ 136,201 |
$ 15,337 |
% of Total |
18.2% |
18.3% |
17.6% |
17.7% |
17.4% |
11.3% |
Commercial RE |
378,212 |
369,962 |
362,580 |
360,491 |
343,900 |
34,312 |
% of Total |
45.5% |
44.8% |
44.0% |
44.2% |
43.9% |
10.0% |
Agriculture |
47,660 |
50,994 |
51,946 |
54,317 |
50,620 |
(2,960) |
% of Total |
5.7% |
6.2% |
6.3% |
6.7% |
6.5% |
-5.8% |
Residential RE |
189,738 |
189,290 |
199,036 |
191,642 |
187,548 |
2,190 |
% of Total |
22.9% |
22.9% |
24.2% |
23.5% |
24.0% |
1.2% |
Consumer & Other |
63,616 |
64,246 |
64,658 |
64,261 |
64,254 |
-638 |
% of Total |
7.7% |
7.8% |
7.9% |
7.9% |
8.2% |
-1.0% |
Total Loans |
$ 830,764 |
$ 825,510 |
$ 823,367 |
$ 814,509 |
$ 782,523 |
$ 48,241 |
Total Growth Percentage |
6.2% |
|||||
Deposit Balances |
||||||
($ in thousands, except ratios) |
Mar. 2020 |
Dec. 2019 |
Sep. 2019 |
Jun. 2019 |
Mar. 2019 |
Annual |
Non-Int DDA |
$ 170,920 |
$ 158,357 |
$ 152,932 |
$ 141,216 |
$ 146,327 |
$ 24,593 |
% of Total |
19.8% |
18.8% |
18.0% |
16.8% |
17.7% |
16.8% |
Interest DDA |
133,722 |
131,084 |
131,655 |
129,710 |
132,101 |
1,621 |
% of Total |
15.5% |
15.6% |
15.5% |
15.5% |
16.0% |
1.2% |
Savings |
138,863 |
119,359 |
121,991 |
118,931 |
115,272 |
23,591 |
% of Total |
16.0% |
14.1% |
14.3% |
14.1% |
13.8% |
20.5% |
Money Market |
169,209 |
173,666 |
173,237 |
175,455 |
175,334 |
(6,125) |
% of Total |
19.6% |
20.7% |
20.4% |
20.9% |
21.2% |
-3.5% |
Time Deposits |
251,177 |
257,753 |
268,139 |
274,062 |
258,624 |
(7,447) |
% of Total |
29.1% |
30.8% |
31.8% |
32.7% |
31.3% |
-2.9% |
Total Deposits |
$ 863,891 |
$ 840,219 |
$ 847,954 |
$ 839,374 |
$ 827,658 |
$ 36,233 |
Total Growth Percentage |
4.4% |
|||||
Asset Quality
SB Financial reported nonperforming assets of $6.7 million as of March 31, 2020, up $2.4 million from the year-ago quarter. The Company took a $0.4 million charge-off on this credit in the quarter and expects further pressure on the portfolio due to the COVID-19 impact. SB Financial's nonperforming assets to total assets ratio of 0.61 percent is up 56 percent from the prior year. The coverage of problem loans by the loan loss allowance was at 136 percent at March 31, 2020, down from 204 percent at March 31, 2019.
Nonperforming Assets |
Annual |
|||||
($ in thousands, except ratios) |
Mar. 2020 |
Dec. 2019 |
Sep. 2019 |
Jun. 2019 |
Mar. 2019 |
|
Commercial & Agriculture |
$ 1,309 |
$ 1,772 |
$ 834 |
$ 674 |
$ 998 |
$ 311 |
% of Total Com./Ag. loans |
0.66% |
0.88% |
0.42% |
0.34% |
0.53% |
31.2% |
Commercial RE |
1,816 |
1,826 |
262 |
208 |
212 |
1,604 |
% of Total CRE loans |
0.48% |
0.49% |
0.07% |
0.06% |
0.06% |
756.6% |
Residential RE |
2,330 |
1,635 |
1,763 |
1,768 |
1,612 |
718 |
% of Total Res. RE loans |
1.23% |
0.86% |
0.89% |
0.92% |
0.86% |
44.5% |
Consumer & Other |
327 |
267 |
416 |
456 |
325 |
2 |
% of Total Con./Oth. loans |
0.51% |
0.42% |
0.64% |
0.71% |
0.51% |
0.6% |
Total Nonaccruing Loans |
5,782 |
5,500 |
3,275 |
3,106 |
3,147 |
2,635 |
% of Total loans |
0.70% |
0.67% |
0.40% |
0.38% |
0.40% |
83.7% |
Accruing Restructured Loans |
816 |
874 |
825 |
814 |
827 |
(11) |
Total Change (%) |
-1.3% |
|||||
Total Nonaccruing & Restructured Loans |
6,598 |
6,374 |
4,100 |
3,920 |
3,974 |
2,624 |
% of Total loans |
0.79% |
0.77% |
0.50% |
0.48% |
0.51% |
66.0% |
Foreclosed Assets |
85 |
305 |
489 |
530 |
313 |
(228) |
Total Change (%) |
-72.8% |
|||||
Total Nonperforming Assets |
$ 6,683 |
$ 6,679 |
$ 4,589 |
$ 4,450 |
$ 4,287 |
$ 2,396 |
% of Total assets |
0.61% |
0.64% |
0.44% |
0.43% |
0.42% |
55.9% |
Webcast and Conference Call
The Company will hold a related conference call and webcast on April 24, 2020, 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 ir.yourstatebank.com. An audio replay of the call will be available on the Company's 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 offices; 19 in nine Ohio counties and one in Fort Wayne, Indiana, and 22 full-service ATMs. The Company has six loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. SB Financial's common stock is listed on the NASDAQ Capital Market under the symbol "SBFG".
In May 2019, SB Financial was ranked #94 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, the duration and scope of the COVID-19 outbreak in the United States and the market areas in which SB Financial and its subsidiaries operate, including the impact to the state and local economies of prolonged shelter in place orders and the pandemic generally, 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
This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles ("GAAP"). Non-GAAP financial measures, specifically tangible common equity, tangible assets, tangible book value per common share, tangible common equity to tangible assets, return on average tangible common equity, total interest income – FTE, net interest income – FTE and net interest margin – FTE are used by the Company's management to measure the strength of its capital and analyze profitability, including its ability to generate earnings on tangible capital invested by its shareholders. Although management believes these non-GAAP measures are useful to investors by providing a greater understanding of its business, they should not be considered a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Investor Contact Information:
Anthony V. Cosentino
Executive Vice President and
Chief Financial Officer
[email protected]
SB FINANCIAL GROUP, INC. |
|||||||||||||
CONSOLIDATED BALANCE SHEETS - (Unaudited) |
|||||||||||||
March |
December |
September |
June |
March |
|||||||||
($ in thousands) |
2020 |
2019 |
2019 |
2019 |
2019 |
||||||||
ASSETS |
|||||||||||||
Cash and due from banks |
$ 56,393 |
$ 27,064 |
$ 49,824 |
$ 42,786 |
$ 62,962 |
||||||||
Available-for-sale securities |
107,727 |
100,948 |
77,029 |
85,261 |
95,802 |
||||||||
Loans held for sale |
11,328 |
7,258 |
13,655 |
9,579 |
4,346 |
||||||||
Loans, net of unearned income |
830,764 |
825,510 |
823,367 |
814,509 |
782,523 |
||||||||
Allowance for loan losses |
(8,958) |
(8,755) |
(8,492) |
(8,306) |
(8,121) |
||||||||
Premises and equipment, net |
23,599 |
23,385 |
23,898 |
23,150 |
23,270 |
||||||||
Federal Reserve and FHLB Stock, at cost |
4,648 |
4,648 |
4,648 |
4,648 |
4,123 |
||||||||
Foreclosed assets held for sale, net |
85 |
305 |
489 |
530 |
313 |
||||||||
Interest receivable |
2,940 |
3,106 |
3,176 |
3,209 |
3,123 |
||||||||
Goodwill and other intangibles |
17,830 |
17,832 |
17,834 |
17,836 |
17,838 |
||||||||
Cash value of life insurance |
17,299 |
17,221 |
17,137 |
17,051 |
16,966 |
||||||||
Mortgage servicing rights |
8,974 |
11,017 |
10,447 |
10,264 |
10,838 |
||||||||
Other assets |
15,684 |
9,038 |
9,749 |
8,606 |
7,288 |
||||||||
Total assets |
$ 1,088,313 |
$ 1,038,577 |
$ 1,042,761 |
$ 1,029,123 |
$ 1,021,271 |
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||||||
Deposits |
|||||||||||||
Non interest bearing demand |
$ 170,920 |
$ 158,357 |
$ 152,932 |
$ 141,216 |
$ 146,327 |
||||||||
Interest bearing demand |
133,722 |
131,084 |
131,655 |
129,710 |
132,101 |
||||||||
Savings |
138,863 |
119,359 |
121,991 |
118,931 |
115,272 |
||||||||
Money market |
169,209 |
173,666 |
173,237 |
175,455 |
175,334 |
||||||||
Time deposits |
251,177 |
257,753 |
268,139 |
274,062 |
258,624 |
||||||||
Total deposits |
863,891 |
840,219 |
847,954 |
839,374 |
827,658 |
||||||||
Short-term borrowings |
36,881 |
12,945 |
14,659 |
13,968 |
12,255 |
||||||||
Federal Home Loan Bank advances |
16,000 |
16,000 |
16,000 |
16,000 |
24,000 |
||||||||
Trust preferred securities |
10,310 |
10,310 |
10,310 |
10,310 |
10,310 |
||||||||
Interest payable |
1,131 |
1,191 |
1,391 |
1,188 |
1,123 |
||||||||
Other liabilities |
24,195 |
21,818 |
18,201 |
14,346 |
14,419 |
||||||||
Total liabilities |
952,408 |
902,483 |
908,515 |
895,186 |
889,765 |
||||||||
Shareholders' Equity |
|||||||||||||
Preferred stock |
- |
- |
13,241 |
13,978 |
13,978 |
||||||||
Common stock |
54,463 |
54,463 |
41,223 |
40,486 |
40,486 |
||||||||
Additional paid-in capital |
14,655 |
15,023 |
15,219 |
15,259 |
15,143 |
||||||||
Retained earnings |
72,641 |
72,704 |
70,184 |
67,236 |
65,438 |
||||||||
Accumulated other comprehensive income (loss) |
2,049 |
659 |
900 |
801 |
124 |
||||||||
Treasury stock |
(7,903) |
(6,755) |
(6,521) |
(3,823) |
(3,663) |
||||||||
Total shareholders' equity |
135,905 |
136,094 |
134,246 |
133,937 |
131,506 |
||||||||
Total liabilities and shareholders' equity |
$ 1,088,313 |
$ 1,038,577 |
$ 1,042,761 |
$ 1,029,123 |
$ 1,021,271 |
||||||||
SB FINANCIAL GROUP, INC. |
||||||||||||
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited) |
||||||||||||
($ in thousands, except per share & ratios) |
At and for the Three Months Ended |
|||||||||||
March |
December |
September |
June |
March |
||||||||
Interest income |
2020 |
2019 |
2019 |
2019 |
2019 |
|||||||
Loans |
||||||||||||
Taxable |
$ 9,795 |
$ 10,313 |
$ 10,607 |
$ 10,182 |
$ 9,427 |
|||||||
Tax exempt |
79 |
83 |
82 |
73 |
62 |
|||||||
Securities |
||||||||||||
Taxable |
692 |
737 |
776 |
802 |
911 |
|||||||
Tax exempt |
78 |
72 |
81 |
94 |
98 |
|||||||
Total interest income |
10,644 |
11,205 |
11,546 |
11,151 |
10,498 |
|||||||
Interest expense |
||||||||||||
Deposits |
1,880 |
2,392 |
2,258 |
2,092 |
1,918 |
|||||||
Repurchase agreements & other |
28 |
17 |
22 |
17 |
26 |
|||||||
Federal Home Loan Bank advances |
100 |
101 |
101 |
100 |
100 |
|||||||
Trust preferred securities |
88 |
99 |
107 |
110 |
114 |
|||||||
Total interest expense |
2,096 |
2,609 |
2,488 |
2,319 |
2,158 |
|||||||
Net interest income |
8,548 |
8,596 |
9,058 |
8,832 |
8,340 |
|||||||
Provision for loan losses |
600 |
300 |
300 |
200 |
- |
|||||||
Net interest income after provision |
||||||||||||
for loan losses |
7,948 |
8,296 |
8,758 |
8,632 |
8,340 |
|||||||
Noninterest income |
||||||||||||
Wealth management fees |
768 |
801 |
775 |
783 |
734 |
|||||||
Customer service fees |
682 |
712 |
729 |
689 |
631 |
|||||||
Gain on sale of mtg. loans & OMSR |
1,949 |
3,048 |
2,495 |
1,678 |
1,192 |
|||||||
Mortgage loan servicing fees, net |
(2,052) |
334 |
8 |
(459) |
(280) |
|||||||
Gain on sale of non-mortgage loans |
104 |
250 |
462 |
216 |
327 |
|||||||
Title insurance income |
265 |
393 |
400 |
308 |
19 |
|||||||
Net gain on sales of securities |
- |
- |
- |
206 |
- |
|||||||
Gain (loss) on sale of assets |
(46) |
1 |
1 |
(5) |
(2) |
|||||||
Other |
491 |
420 |
496 |
275 |
379 |
|||||||
Total noninterest income |
2,161 |
5,959 |
5,366 |
3,691 |
3,000 |
|||||||
Noninterest expense |
||||||||||||
Salaries and employee benefits |
5,427 |
6,142 |
5,715 |
5,305 |
4,902 |
|||||||
Net occupancy expense |
698 |
675 |
656 |
627 |
645 |
|||||||
Equipment expense |
700 |
764 |
688 |
665 |
711 |
|||||||
Data processing fees |
548 |
543 |
499 |
488 |
443 |
|||||||
Professional fees |
757 |
639 |
571 |
649 |
617 |
|||||||
Marketing expense |
208 |
171 |
239 |
246 |
239 |
|||||||
Telephone and communication expense |
115 |
121 |
118 |
112 |
115 |
|||||||
Postage and delivery expense |
115 |
86 |
89 |
81 |
84 |
|||||||
State, local and other taxes |
254 |
347 |
243 |
247 |
255 |
|||||||
Employee expense |
184 |
207 |
199 |
236 |
153 |
|||||||
Other expenses |
400 |
481 |
483 |
452 |
462 |
|||||||
Total noninterest expense |
9,406 |
10,176 |
9,500 |
9,108 |
8,626 |
|||||||
Income before income tax expense |
703 |
4,079 |
4,624 |
3,215 |
2,714 |
|||||||
Income tax expense |
22 |
721 |
862 |
588 |
488 |
|||||||
Net income |
$ 681 |
$ 3,358 |
$ 3,762 |
$ 2,627 |
$ 2,226 |
|||||||
Preferred share dividends |
- |
230 |
233 |
243 |
244 |
|||||||
Net income available to common shareholders |
681 |
3,128 |
3,529 |
2,384 |
1,982 |
|||||||
Common share data: |
||||||||||||
Basic earnings per common share |
$ 0.09 |
$ 0.48 |
$ 0.55 |
$ 0.37 |
$ 0.31 |
|||||||
Diluted earnings per common share |
$ 0.09 |
$ 0.42 |
$ 0.48 |
$ 0.33 |
$ 0.28 |
|||||||
Average shares outstanding (in thousands): |
||||||||||||
Basic: |
7,756 |
6,445 |
6,397 |
6,454 |
6,482 |
|||||||
Diluted: |
7,756 |
7,799 |
7,876 |
7,967 |
7,994 |
|||||||
SB FINANCIAL GROUP, INC. |
||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited) |
||||||||||
($ in thousands, except per share & ratios) |
At and for the Three Months Ended |
|||||||||
March |
December |
September |
June |
March |
||||||
SUMMARY OF OPERATIONS |
2020 |
2019 |
2019 |
2019 |
2019 |
|||||
Net interest income |
$ 8,548 |
$ 8,596 |
$ 9,058 |
$ 8,832 |
$ 8,340 |
|||||
Tax-equivalent adjustment |
42 |
41 |
43 |
44 |
43 |
|||||
Tax-equivalent net interest income |
8,590 |
8,637 |
9,101 |
8,876 |
8,383 |
|||||
Provision for loan loss |
600 |
300 |
300 |
200 |
- |
|||||
Noninterest income |
2,161 |
5,959 |
5,366 |
3,691 |
3,000 |
|||||
Total operating revenue |
10,709 |
14,555 |
14,424 |
12,523 |
11,340 |
|||||
Noninterest expense |
9,406 |
10,176 |
9,500 |
9,108 |
8,626 |
|||||
Pre-tax pre-provision income |
1,303 |
4,379 |
4,924 |
3,415 |
2,714 |
|||||
Pretax income |
703 |
4,079 |
4,624 |
3,215 |
2,714 |
|||||
Net income |
681 |
3,358 |
3,762 |
2,627 |
2,226 |
|||||
Net income available to common shareholders |
681 |
3,128 |
3,529 |
2,384 |
1,982 |
|||||
PER SHARE INFORMATION: |
||||||||||
Basic earnings per share (EPS) |
0.09 |
0.48 |
0.55 |
0.37 |
0.31 |
|||||
Diluted earnings per share |
0.09 |
0.42 |
0.48 |
0.33 |
0.28 |
|||||
Common dividends |
0.095 |
0.095 |
0.090 |
0.090 |
0.085 |
|||||
Book value per common share |
17.64 |
17.53 |
17.28 |
16.89 |
16.57 |
|||||
Tangible book value per common share (TBV) |
15.32 |
15.23 |
16.23 |
15.83 |
15.43 |
|||||
Fully converted TBV per common share |
- |
- |
14.98 |
14.64 |
14.32 |
|||||
Market price per common share |
11.12 |
19.69 |
16.72 |
16.46 |
18.02 |
|||||
Market price per preferred share |
- |
- |
16.50 |
16.10 |
19.00 |
|||||
Market price to TBV |
72.6% |
129.2% |
103.0% |
104.0% |
116.8% |
|||||
Market price to fully converted TBV |
- |
- |
111.6% |
112.4% |
125.8% |
|||||
Market price to trailing 12 month EPS |
8.4 |
13.0 |
11.5 |
12.1 |
12.6 |
|||||
PERFORMANCE RATIOS: |
||||||||||
Return on average assets (ROAA) |
0.26% |
1.28% |
1.44% |
1.03% |
0.89% |
|||||
Pre-tax pre-provision ROAA |
0.49% |
1.67% |
1.89% |
1.34% |
1.08% |
|||||
Return on average equity |
1.99% |
9.93% |
11.24% |
7.92% |
6.76% |
|||||
Return on average tangible equity |
2.29% |
12.83% |
14.67% |
10.41% |
8.83% |
|||||
Efficiency ratio |
87.81% |
69.90% |
65.85% |
72.71% |
76.05% |
|||||
Earning asset yield |
4.32% |
4.80% |
4.98% |
4.88% |
4.78% |
|||||
Cost of interest bearing liabilities |
1.12% |
1.42% |
1.33% |
1.28% |
1.20% |
|||||
Net interest margin |
3.47% |
3.68% |
3.91% |
3.86% |
3.79% |
|||||
Tax equivalent effect |
0.01% |
0.02% |
0.02% |
0.02% |
0.02% |
|||||
Net interest margin, tax equivalent |
3.48% |
3.70% |
3.93% |
3.88% |
3.81% |
|||||
Non interest income/Average assets |
0.81% |
2.27% |
2.06% |
1.45% |
1.20% |
|||||
Non interest expense/Average assets |
3.54% |
3.87% |
3.64% |
3.58% |
3.45% |
|||||
Net noninterest expense/Average assets |
-2.73% |
-1.60% |
-1.58% |
-2.13% |
-2.25% |
|||||
ASSET QUALITY RATIOS: |
||||||||||
Gross charge-offs |
400 |
51 |
128 |
20 |
60 |
|||||
Recoveries |
3 |
14 |
15 |
5 |
13 |
|||||
Net charge-offs |
397 |
37 |
113 |
15 |
47 |
|||||
Nonaccruing loans/Total loans |
0.70% |
0.67% |
0.40% |
0.38% |
0.40% |
|||||
Nonperforming loans/Total loans |
0.79% |
0.77% |
0.50% |
0.48% |
0.51% |
|||||
Nonperforming assets/Loans & OREO |
0.80% |
0.81% |
0.56% |
0.55% |
0.55% |
|||||
Nonperforming assets/Total assets |
0.61% |
0.64% |
0.44% |
0.43% |
0.42% |
|||||
Allowance for loan loss/Nonperforming loans |
135.77% |
137.35% |
207.12% |
211.89% |
204.35% |
|||||
Allowance for loan loss/Total loans |
1.08% |
1.06% |
1.03% |
1.02% |
1.04% |
|||||
Net loan charge-offs/Average loans (ann.) |
0.19% |
0.02% |
0.05% |
0.01% |
0.02% |
|||||
Loan loss provision/Net charge-offs |
151.13% |
810.81% |
265.49% |
1333.33% |
0.00% |
|||||
CAPITAL & LIQUIDITY RATIOS: |
||||||||||
Loans/ Deposits |
96.17% |
98.25% |
97.10% |
97.04% |
94.55% |
|||||
Equity/ Assets |
12.49% |
13.10% |
12.87% |
13.01% |
12.88% |
|||||
Tangible equity/Tangible assets |
11.03% |
11.59% |
10.07% |
10.10% |
9.93% |
|||||
Tangible equity adjusted for conversion |
11.03% |
11.59% |
11.36% |
11.48% |
11.33% |
|||||
Common equity tier 1 ratio (Bank) 3/20 estimate |
12.25% |
12.46% |
12.07% |
12.53% |
12.71% |
|||||
END OF PERIOD BALANCES |
||||||||||
Total assets |
1,088,313 |
1,038,577 |
1,042,761 |
1,029,123 |
1,021,271 |
|||||
Total loans |
830,764 |
825,510 |
823,367 |
814,509 |
782,523 |
|||||
Deposits |
863,891 |
840,219 |
847,954 |
839,374 |
827,658 |
|||||
Stockholders equity |
135,905 |
136,094 |
134,246 |
133,937 |
131,506 |
|||||
Goodwill & intangibles |
17,830 |
17,832 |
17,834 |
17,836 |
17,838 |
|||||
Preferred equity |
- |
- |
13,241 |
13,978 |
13,978 |
|||||
Tangible equity |
118,075 |
118,262 |
103,171 |
102,123 |
99,690 |
|||||
Mortgage servicing portfolio |
1,216,292 |
1,199,107 |
1,153,020 |
1,112,857 |
1,094,060 |
|||||
Wealth/Brokerage assets under care |
427,129 |
507,670 |
484,295 |
479,442 |
462,580 |
|||||
Total assets under care |
2,731,734 |
2,745,354 |
2,680,076 |
2,621,422 |
2,577,911 |
|||||
Full-time equivalent employees (actual) |
253 |
252 |
247 |
250 |
256 |
|||||
Period end basic shares outstanding |
7,705 |
7,763 |
6,357 |
6,451 |
6,460 |
|||||
Period end outstanding (Series A Converted) |
- |
- |
1,414 |
1,478 |
1,475 |
|||||
Market capitalization (all) |
85,680 |
152,853 |
129,620 |
130,324 |
144,898 |
|||||
AVERAGE BALANCES |
||||||||||
Total assets |
1,061,365 |
1,051,071 |
1,043,791 |
1,016,493 |
1,001,282 |
|||||
Total earning assets |
986,216 |
934,540 |
927,360 |
914,652 |
879,394 |
|||||
Total loans |
832,975 |
828,108 |
829,699 |
804,716 |
775,280 |
|||||
Deposits |
855,272 |
856,961 |
849,984 |
827,615 |
812,190 |
|||||
Stockholders equity |
136,930 |
135,267 |
133,891 |
132,734 |
131,691 |
|||||
Intangibles |
17,831 |
17,833 |
17,835 |
17,837 |
16,880 |
|||||
Preferred equity |
- |
12,707 |
13,459 |
13,978 |
13,979 |
|||||
Tangible equity |
119,099 |
104,727 |
102,597 |
100,919 |
100,832 |
|||||
Average basic shares outstanding |
7,756 |
6,445 |
6,397 |
6,454 |
6,482 |
|||||
Average diluted shares outstanding |
7,756 |
7,799 |
7,876 |
7,967 |
7,994 |
|||||
SB FINANCIAL GROUP, INC. |
||||||||||
Rate Volume Analysis - (Unaudited) |
||||||||||
At and for the Three Months Ended March 31, 2020 and 2019 |
||||||||||
($ in thousands) |
Three Months Ended Mar. 31, 2020 |
Three Months Ended Mar. 31, 2019 |
||||||||
Average |
Average |
Average |
Average |
|||||||
Assets |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
||||
Taxable securities/Cash |
$ 146,678 |
$ 692 |
1.89% |
$ 94,623 |
$ 911 |
3.85% |
||||
Nontaxable securities |
6,563 |
78 |
4.75% |
9,491 |
98 |
4.13% |
||||
Loans, net |
832,975 |
9,874 |
4.74% |
775,280 |
9,489 |
4.90% |
||||
Total earning assets |
986,216 |
10,644 |
4.32% |
879,394 |
10,498 |
4.78% |
||||
Cash and due from banks |
5,512 |
56,976 |
||||||||
Allowance for loan losses |
(8,867) |
(8,284) |
||||||||
Premises and equipment |
23,698 |
22,650 |
||||||||
Other assets |
54,806 |
50,546 |
||||||||
Total assets |
$ 1,061,365 |
$ 1,001,282 |
||||||||
Liabilities |
||||||||||
Savings, MMDA and interest bearing demand |
$ 442,438 |
$ 1,083 |
0.98% |
$ 422,649 |
$ 722 |
0.68% |
||||
Time deposits |
254,342 |
797 |
1.25% |
249,655 |
1,196 |
1.92% |
||||
Repurchase agreements & other |
22,537 |
28 |
0.50% |
17,704 |
26 |
0.59% |
||||
Advances from Federal Home Loan Bank |
16,132 |
100 |
2.48% |
16,267 |
100 |
2.46% |
||||
Trust preferred securities |
10,310 |
88 |
3.41% |
10,310 |
114 |
4.42% |
||||
Total interest bearing liabilities |
745,759 |
2,096 |
1.12% |
716,585 |
2,158 |
1.20% |
||||
Non interest bearing demand |
158,492 |
- |
139,886 |
- |
||||||
Total funding |
904,251 |
0.93% |
856,471 |
1.01% |
||||||
Other liabilities |
20,184 |
13,120 |
||||||||
Total liabilities |
924,435 |
869,591 |
||||||||
Equity |
136,930 |
131,691 |
||||||||
Total liabilities and equity |
$ 1,061,365 |
$ 1,001,282 |
||||||||
Net interest income |
$ 8,548 |
$ 8,340 |
||||||||
Net interest income as a percent of average interest-earning assets - GAAP measure |
3.47% |
3.79% |
||||||||
Net interest income as a percent of average interest-earning assets - non GAAP |
3.48% |
3.81% |
||||||||
- Computed on a fully tax equivalent (FTE) basis |
||||||||||
Non-GAAP reconciliation |
Three Months Ended |
Twelve Months Ended |
||||||
($ in thousands, except per share & ratios) |
Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
Dec. 31, 2018 |
||||
Total Operating Revenue |
$ 10,709 |
$ 11,340 |
$ 10,709 |
$ 23,863 |
||||
Adjustment to (deduct)/add OMSR impairment* |
2,212 |
708 |
1,094 |
61 |
||||
Adjusted Total Operating Revenue |
12,921 |
12,048 |
11,803 |
23,924 |
||||
Income before Income Taxes |
703 |
2,714 |
703 |
5,929 |
||||
Adjustment to (deduct)/add OMSR impairment |
2,212 |
708 |
1,094 |
61 |
||||
Adjusted Income before Income Taxes |
2,915 |
3,422 |
1,797 |
5,990 |
||||
Provision for Income Taxes |
22 |
488 |
22 |
1,076 |
||||
Adjustment to (deduct)/add OMSR impairment |
465 |
149 |
230 |
13 |
||||
Adjusted Provision for Income Taxes |
487 |
637 |
252 |
1,089 |
||||
Net Income |
681 |
2,226 |
681 |
4,853 |
||||
Adjustment to (deduct)/add OMSR impairment |
1,747 |
559 |
864 |
48 |
||||
Adjusted Net Income |
2,428 |
2,785 |
1,545 |
4,901 |
||||
Diluted Earnings per Share |
0.09 |
0.28 |
0.09 |
0.61 |
||||
Adjustment to (deduct)/add OMSR impairment |
0.22 |
0.07 |
0.11 |
0.01 |
||||
Adjusted Diluted Earnings per Share |
$ 0.31 |
$ 0.35 |
$ 0.20 |
$ 0.62 |
||||
Return on Average Assets |
0.26% |
0.89% |
0.07% |
0.96% |
||||
Adjustment to (deduct)/add OMSR impairment |
0.66% |
0.06% |
0.08% |
0.00% |
||||
Adjusted Return on Average Assets |
0.92% |
0.95% |
0.15% |
0.97% |
||||
*valuation adjustment to the Company's |
||||||||
mortgage servicing rights |
||||||||
SOURCE SB Financial Group, Inc.
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