SBFG

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Achieved the 63rd consecutive quarter of profitability, driven by a diversified operating model that balances commercial lending with fee-based business lines. - Extended sequential loan growth to 10 consecutive quarters, reaching $1.22 billion, primarily fueled by commercial production capacity in Columbus and Northern Ohio. - Maintained a stable deposit cost of funds at 1.81% through a core relationship model, despite the anticipated runoff of a large wholesale relationship. - Leveraged mortgage banking and wealth management to provide structural resilience, with noninterest income accounting for nearly 26% of total operating revenue. - Invested intentionally in core system upgrades and commercial leadership, resulting in temporarily elevated expenses to support long-term scaling objectives. - Sustained top-tier asset quality with nonperforming assets at 0.27% and a significant 24% year-over-year decline in classified loans. - Targeting high single-digit loan growth for 2027, supported by a robust $53 million commercial pipeline and additional construction funding opportunities. - Projecting a 10% to 15% increase in mortgage production for 2027, contingent on the 10-year Treasury yield and broader interest rate moderation. - Anticipating net interest margin to remain between 3.50% and 3.51%, with potential for acceleration in mid-2027 based on conservative rate hike assumptions. - Planning to cross the $100 million agricultural lending portfolio goal within the next several quarters as part of specialized sector expansion. - Executing a methodical transition of wealth management portfolios to an enhanced platform via the Advisory Alpha alliance to improve client investment solutions. - Operating expenses rose 14.4% year-over-year, reflecting front-loaded implementation and consulting costs for credit card and core platform outsourcing conversions. - Experienced rising costs in medical benefits and personnel, with management noting that people-related expenses are taking a larger share of margin revenue. - Maintained strict granular credit management with office space exposure limited to less than 5.5% of the total loan portfolio. - Moderated share buyback activity to preserve capital flexibility for organic growth as the stock price reached 1.5x tangible book value. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management expects to maintain high single-digit growth, with the Columbus market contributing roughly 70% of recent expansion. - The pipeline is bolstered by medical and educational sectors in Columbus, which are viewed as less sensitive to interest rate fluctuations. - The bank holds $65 million in excess liquidity, which management believes is sufficient to fund the current pipeline without aggressive rate leadership. - Growth is being driven by new Treasury Management talent rather than high-cost deposit acquisition. - Every 25 basis point rate increase is estimated to have a $600,000 to $700,000 positive annualized impact, assuming stable deposit behavior. - Management expects a slight margin dip in Q4 followed by stabilization and potential acceleration in mid-2027. - Q3 expenses were described as an "aberration" due to technology spend and hiring; management targets a normalized 4% to 5% base expense growth for 2027. - Management expressed a willingness to accept higher expense growth if it continues to deliver operating leverage in the 2.0x to 2.5x range.

This article first appeared on GuruFocus. Release Date: October 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - SB Financial Group Inc (NASDAQ:SBFG) achieved its 63rd consecutive quarter of profitability with net income of $3.9 million and diluted EPS of $0.63. - Total operating revenue increased 9% year over year to $18.1 million, driven by an 8.8% rise in net interest income to $13.4 million. - Loan balances grew 9.8% year over year to $1.22 billion, marking 10 consecutive quarters of sequential loan growth. - Noninterest income rose 9.6% year over year to $4.7 million, representing nearly 26% of total operating revenue and demonstrating revenue diversity. - Asset quality remains strong with nonperforming assets at just 0.27% of total assets, and coverage of nonperforming loans exceeding 500%. - Operating expenses increased 14.4% year over year to $13.2 million, driven by personnel additions, higher medical costs, and technology conversion expenses. - The efficiency ratio for the quarter was above the recent average of 68%, reflecting elevated conversion and personnel investments. - Total deposits contracted modestly by $8.3 million from the linked quarter due to the anticipated runoff of a large wholesale relationship. - Mortgage banking faced headwinds from mortgage rates above 7%, limiting industry-wide refinance activity and constraining origination momentum. - The agricultural lending portfolio reached $84 million, slightly below the original 12-month timeline to reach the $100 million goal. - Warning! GuruFocus has detected 10 Warning Signs with SBFG. - Is SBFG fairly valued? Test your thesis with our free DCF calculator. Q: How is SB Financial thinking about loan growth heading into the fourth quarter and 2027, and what is driving it? A: CEO Mark Klein said the company typically targets high single-digit growth of roughly 8% to 8.5%, and that is the plan for 2027 as well. Columbus has been the standout, providing roughly 70% of growth, with other markets expected to contribute in Q4 and next year. He noted a solid commercial pipeline plus a construction/C&D pipeline that could add $20 million to $40 million net after some credits exit for permanent agency financing. Chief Lending Officer Steve Walz added that CRE is the primary driver, though the bank continues to pursue C&I opportunities and the deposits that come with those relationships. Q: How does SB Financial plan to fund loan growth given deposit competition, and how much excess liquidity does it have? A: CFO Tony Cosentino said he has been surprised by the level of deposit growth, helped by market disruption from acquisitions. He believes the bank could raise rates 25 to 30 basis points if needed to fund growth but has not had to be a market leader on rate. SB Financial currently has about $65 million of excess liquidity, which covers most of its current pipeline, and normalized deposit growth into 2027 should fund anything else. Klein added that the growth reflects treasury management talent hires rather than high-cost deposits. Q: How sensitive is the net interest margin to rate changes, and what is the outlook for the margin? A: Cosentino estimated that each 25 basis point move is worth roughly $600,000 to $700,000 annualized, given the bank's prime-rate-linked financing, assuming nothing else changes, though deposit pricing will offset some of that. The base model assumes two rate increases through the end of 2027. He expects the margin ratio to tick down a couple of basis points in Q4 as is typical, stay flat in Q1, then accelerate by midpoints next year, with 3.50% to 3.51% at the upper end of where the margin will go. Q: What is the outlook for the mortgage banking business given elevated rates? A: Klein said rates above 7% have been a major constraint, but the bank still sees activity in 3-1 construction lending that eventually goes to Freddie and Fannie, plus higher-end private client variable-rate mortgages. He looks for a 10% to 15% increase in 2027 over 2026, depending on where the 10-year Treasury goes. Cosentino expects a $50 million to $60 million mortgage quarter in Q4, bringing the year to about $280 million, and low-3% growth in 2027 on the base model. Both noted that a small group of star MLOs drives a disproportionate share of volume. Q: What is the expense outlook for the fourth quarter and 2027? A: Cosentino said Q3 expenses were elevated by hiring, open positions, and technology spend that will level out over the next two quarters, so year-over-year is the better way to frame the trend, perhaps adding a point or two. He expects normalized expense growth of 4% to 5% in 2027, higher than his view six months ago due to rising people and medical costs plus expanded technology costs. He added he would accept double-digit expense growth if operating leverage reaches 2 to 2.5 times, a trade-off the bank has used for years. Q: What drove the linked-quarter decline in total deposits? A: Klein said total deposits of $1.38 billion were up $120 million, or 9.5%, year over year, but contracted $8.3 million from the linked quarter due to the anticipated runoff of a large wholesale relationship discussed on the prior call. Cosentino noted the migration of a large rate-sensitive institutional deposit into the wholesale market sector. Core deposit strength offset this, with non-interest-bearing checking accounts up $11.5 million from the linked quarter to $270 million, nearly 20% of the deposit base, and a cost of funds of 1.81%, up just 2 basis points year over year. Q: How did net interest income and margin perform in the third quarter? A: Cosentino said total interest income rose 9.1% to $20.5 million, outpacing interest expense growth of $627,000 to $7.1 million, allowing net interest income to advance 8.8% year over year to $13.4 million. The net interest margin rebounded 2 basis points year over year to 3.50% and 7 basis points sequentially from 3.43%, driven by earning asset yields expanding 15 basis points from the linked quarter as assets reprice upward. Q: What drove the increase in noninterest income, and how did mortgage banking and hedging contribute? A: Cosentino said noninterest income was $4.7 million, up 9.6% year over year and nearly 26% of total operating revenue. Core mortgage banking contributed $1.8 million, up nearly 20%, including $946,000 in loan servicing fees and $1.26 million in gain on sale at a 1.9% margin. The hedging program generated $319,000 in the quarter and over $500,000 year to date, and there was a $43,000 OMSR valuation recapture versus a $301,000 impairment a year earlier. Q: How would you characterize asset quality and credit metrics this quarter? A: Klein said nonperforming assets were $4.3 million, just 0.27% of total assets and down 5 basis points from the linked quarter. Criticized loans fell sharply year over year to $331,000, and classified loans declined more than 24% to $3.6 million. Cosentino added that the allowance for credit losses was 1.34%, coverage of nonperforming loans exceeded 500%, net charge-offs were under 1 basis point, and total delinquency was under 34 basis points, effectively zero excluding non-accrual loans. Q: What is the status of the agricultural and SBA lending initiatives? A: Klein said the agricultural lending portfolio reached nearly $84 million, up 28% year over year. While slightly behind the original 12-month timeline, the bank remains committed to the sector and expects to cross its $100 million portfolio goal within the For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Thursday, Oct. 22, 2026 - Chairman, President and Chief Executive Officer - Mark Klein - Chief Financial Officer - Anthony Cosentino - Chief Lending Officer - Steven Walz Operator: Good afternoon, and welcome to the SB Financial Third Quarter 2026 Conference Call and Webcast. I would like to inform you that this conference call is being recorded. [Operator Instructions] I will now turn the conference over to Sarah Mekus with SB Financial. Please go ahead, Sarah. Sarah Mekus: Good afternoon, everyone. I'd like to remind you that this conference call is being broadcast live over the Internet and will be archived and available on our website at ir.yourstatebank.com. Joining me today are Mark Klein, Chairman, President and CEO; Tony Cosentino, Chief Financial Officer; and Steve Walz, Chief Lending Officer. Today's presentation may contain forward-looking information. Cautionary statements about this information, as well as reconciliations of non-GAAP financial measures, are included in today's earnings release materials as well as our SEC filings. These materials are available on our website, and we encourage participants to refer to them for a complete discussion of risk factors and forward-looking statements. These statements speak only as of the date made, and SB Financial undertakes no obligation to update them. I will now turn the call over to Mr. Klein. Mark Klein: Thank you, Sarah, and good afternoon, everyone. Welcome to our third quarter 2026 conference call and webcast. This quarter represented another period of disciplined execution and sustained momentum across our franchise. As we navigate the current interest rate environment, our diversified operating revenue model continued to deliver the structural resilience required to gather scale, expand our top line revenue and protect core profitability. We experienced balanced performance across our commercial lending operations and fee-based business lines, anchored by proactive margin management and sound credit administration. While planned investments in core systems and commercial services temporarily increased expenses this quarter, our strong fee generation and measured margin expansion provided a constructive offset. We are pleased with our quarterly performance, always with a keen eye on prudent capital management and deployment, organic scale and long-term shareholder value creation. Highlights for this quarter include net income at $3.9 million with diluted earnings per share of $0.63 compared to $4 million or $0.64 per diluted share last quarter (sic) [ prior-year quarter ], marking now our 63rd consecutive quarter of profitability. Total operating revenue reached $18.1 million, an increase of 9% from $16.6 million for the year ago quarter, driven by net interest income that advanced 8.8% to $13.4 million. Loan balances reached $1.22 billion, reflecting an increase of $108 million or 9.8% (sic) [ 9.7% ] from the prior year quarter and an increase of $29 million or 2.5% from the linked quarter. This performance extends our trend of sequential loan growth now to 10 consecutive quarters. Total deposits finished at $1.38 billion, up $120 million or 9.5% year-over-year. Our core relationship model continues to provide positive momentum. However, total balances contracted modestly by $8.3 million from the linked quarter due to the anticipated runoff of a rather large wholesale relationship that Tony discussed on our call last quarter. Noninterest income finished at $4.7 million, up 9.6% year-over-year and accounted for nearly 26% of our total operating revenue, demonstrating the ongoing value of our diversified fee-based business lines. Tangible book value per share ended the quarter at $18.65, up $1.44 or 8.3% year-over-year with our adjusted tangible book value per share, when excluding AOCI, expanding now to $23.03. Asset quality remains a key benchmark in our quarterly performance. As such, total nonperforming assets finished at $4.3 million, representing just 0.27% of total assets, and down 5 basis points from the linked quarter. We continue our journey to deliver on our 5 key strategic initiatives we discussed in many prior quarters. Revenue growth and diversity for improved performance, greater scale for efficiency improvement, expanded scope for additional services in each household, operational excellence for a stronger brand and always top-tier asset quality. Taking a little closer look at our revenue diversity, our first initiative focuses on revenue diversity that serves as our structural defense across all economic cycles. Our fee-based teams driven primarily by our 25 mortgage lending officers executed with precision throughout the quarter. However, with mortgage interest rates at or above the 7% mark for much of the quarter, industry-wide refinance activity has certainly been limited. Given this headwind, we were pleased to deliver mortgage originations for the quarter of nearly $78 million, noting an improvement of nearly 15% over the prior year period. Entering the fourth quarter, our residential pipeline remains consistent at $20 million to $25 million level. Complementing our constrained origination momentum was our steady annual income from our sold residential servicing portfolio that reached now $1.52 billion this quarter, delivering nearly $1 million in servicing fees with $2.8 million earned year-to-date. When combined with our proactive servicing rights hedge, they provide a vital buffer to earnings momentum. Beyond mortgage banking, Peak Title delivered $514,000 in revenue, supported by internal commercial lending referrals. And our wealth management team delivered solid top line support that helped offset mounting margin pressure. Our second key initiative is greater scale to improve efficiency. A broader market presence identifies opportunities to scale up. In the interim, core deposit retention and expansion remain a priority as the industry broadly deals with funding pressures and mounting competition. Our teams delivered exceptional execution this quarter, highlighted by our noninterest-bearing checking accounts that expanded by $11.5 million from the linked quarter to reach $270 million, representing nearly 20% of our total deposit base. All of this core deposit activity has provided a very stable deposit cost of funds coming in for the quarter at 1.81%, up just 2 basis points from the prior year. This level of high quality core deposit growth reflects our strong community bank brand and proactive approach to client care. Ongoing consolidation and market disruption across our footprint continue to create significant organic in-market balance sheet growth opportunities. Our commercial lending and treasury management teams have been on the street and engaging with clients and prospects that seek a more responsive relationship-based banking partner amid all the disruption. Campaign to date, we have obtained approximately 586 new relationships, including balances at nearly 30% of our longer-term goal of securing organic growth of $500 million in new loans, deposits, mortgages and wealth assets. Furthermore, our targeted de novo office expansions are demonstrating constructive measured progress. Both our Angola, Indiana and Napoleon, Ohio offices continue to exceed expectations and have combined to deliver now over $25 million in local, lower-cost core deposits and $21 million in market-yielding loan balances. Our third initiative centers on deepening existing client relationships for greater scope. Of course, by scope, we mean capturing a larger share of the client's wallet through the identification of comprehensive multiproduct solutions. In fact, our hybrid office strategy is specifically designed to facilitate this approach, driving cross-functional internal referrals between our commercial and retail lending teams, mortgage originators and wealth management advisers. Within this framework, our Wealth Management division continues to provide a robust array of advisory services with total wealth and brokerage assets under management finishing the quarter at $578 million. Our alliance with Advisory Alpha, we discussed in prior quarters, is progressing exactly as planned, allowing for a methodical transition of client portfolios to an enhanced platform and one that provides our clients with direct access to institutional-grade investment solutions. Finally, as we continue to seek a higher level of engagement with our client base to provide a greater level of services per household. This strategy includes more robust data analytics that enables our sales staff to work smarter and more intentionally with their client base and their unique book of loans and deposits. Measuring growth initiatives per producer is a continuous function at their fingertips and provides immediate feedback on productivity and their level of goal attainment. Our level of engagement has enabled us to expand our number of households now to over 33,000, inclusive of our wealth relationships, our credit card portfolio and our 9,000 household sold mortgage portfolio. Fourth initiative is excellence in operational activity. Achieving scale requires not just top line growth, but disciplined alignment with our operational activity. The robust $29 million linked quarter loan expansion we achieved this quarter was driven by commercial lending production capacity we have intentionally built over the past several years across greater Columbus, Northern Ohio and Eastern Indiana markets. Entering the fourth quarter, our production capacity is apparent as we now have an active commercial pipeline of over $53 million. When we include our commercial construction pipeline, we will have another $15 million to $25 million of growth net of projects that we funded in prior years that will be seeking long-term permanent agency financing. Our operating expenses were slightly elevated this quarter at $13 million, reflecting deliberate investments to support our expanding operational footprint. They are tied to 3 operational drivers: adding talented commercial and TM leadership in growth markets, seasonal performance incentive accruals aligned with our loan portfolio expansion and front-loaded implementation and consulting expenditures required to support our credit card and core platform outsourcing conversions. These technology expenditures are clearly project-driven, nonrecurring and lay the groundwork for greater operating efficiency as we continue to scale up. Despite these elevated transition costs, our underlying financial foundation remains exceptionally solid. Balance sheet capital strength is robust, providing the necessary support for our growth initiatives. Total shareholders' equity ended the quarter at over $144 million, representing a 5.4% increase from the $137 million reported a year ago. When we exclude the temporary AOCI adjustment, capital is up $11.1 million or 6.9%. And finally, asset quality. Our fifth and final strategic initiative is maintaining top-tier asset quality. Our nonperforming assets remain near historic lows at just 27 basis points of total assets. Our disciplined credit oversight is further reflected in the level of our core criticized and classified loan portfolios. Criticized loans dropped sharply year-over-year to $331,000, while our classified loans year-over-year declined by over 24% to just $3.6 million. We also continue to see measured progress in our specialized lending sectors. Our agricultural lending portfolio reached nearly $84 million at quarter end, expanding 28% year-over-year. While slightly below our original 12-month time line identified last year, we remain firmly committed to growing this key sector and expect to cross our $100 million portfolio goal within the next several quarters. Likewise, SBA lending production has escalated to now this year $5.2 million or a 24% increase over the prior year. While production is below our expectations, we have added $3 million to our balance sheet growth, while gain on sale revenue has now risen to $235,000 and 124% over the same period last year. With that, I will turn the call over to Tony Cosentino, our CFO, to expand on the quarter's financial performance. Tony? Anthony Cosentino: Thanks, Mark, and again, good afternoon, everyone. Let me outline some highlights and important details regarding the third quarter. On the income statement, as Mark indicated, total operating revenue expanded to $18.1 million or 9% over the year ago quarter and up 5% annualized from the $17.9 million recorded in the linked quarter. With a strong loan pipeline Mark has mentioned, we expect continued growth in interest income. Net interest income was driven primarily by our growth of top line revenue with total interest income advancing to $20.5 million, an increase of 9.1% from $18.8 million recorded in the prior year. This easily outpaced our interest expense growth of $627,000, which reached $7.1 million, allowing net interest income to advance 8.8% year-over-year to $13.4 million. Our net interest margin ratio rebounded this quarter, expanding by 2 basis points year over year to 3.5%, and up 7 basis points sequentially from 3.43% in the linked quarter. This margin recovery was driven by our earning asset yields expanding by 15 basis points from the linked quarter. We continue to see the benefits of our expanded balance sheet that includes ongoing upward repricing across our interest-earning assets. Noninterest income finished the quarter at $4.7 million, up 9.6% from the prior year quarter. Our core mortgage banking contribution reached $1.8 million, up nearly 20%, compared to the third quarter of 2025. Mortgage banking was supported by core loan servicing fees contributing $946,000, while gain on sale of mortgages finished at $1.26 million, generating a gain on sale margin of 1.9%. This quarter, our hedging program was instrumental in managing our in-market's interest rate volatility, generating $319,000 in revenue with over $500,000 produced year-to-date. And lastly, we had an OMSR valuation recapture of $43,000 compared to a negative $301,000 impairment in the prior year. Operating expenses totaled $13.2 million for the quarter, up 14.4% from $11.5 million in the prior year. This change reflects the impact of adding talented producers across our footprint alongside higher employee medical expenses and seasonal performance incentive accruals. Collectively, salaries and employee benefits rose to $7.3 million. Additionally, our year-over-year expense comparison was impacted by higher data processing fees, rising to $1.12 million from $723,000 in the prior year and $693,000 in the linked quarter. These line items absorbed the necessary consulting and implementation costs for our upcoming credit card and core outsourcing conversions. The efficiency ratio for the quarter was above our recent range, which has averaged 68% over the last 4 quarters. The efficiency aberration is reflective of these conversion and personnel investments. However, when we look at operating leverage for the 9-month period, revenue has expanded 8.8% compared to operating expense growth of 4.1% for an operating leverage of 2.1x. Turning again to the balance sheet. Loan growth continued to outpace our peer banks and ended the quarter at $1.22 billion, pushing our loans-to-asset ratio up to a healthy 75.5% compared to 73.4% from the linked quarter. Commercial real estate outstandings continue to drive our loan portfolio balance at $643 million. But we maintain strict granular credit management protocols. Specifically, our exposure to office space remains under 5.5% of our total loan portfolio and, excluding residential mortgage portfolio balance, no other segment is higher than 10% of our current loan book. The loan-to-deposit ratio at quarter end was 88.1%. This included total deposits rising to $1.38 billion. As we highlighted on our last call, we finally realized the migration of a large rate-sensitive institutional deposit into the wholesale market sector. Overall, balance sheet liquidity stayed at a healthy level, and we can comfortably fund our anticipated loan closings well into the fourth quarter and beyond without reliance on wholesale markets for funding. On capital management, during the quarter, we continued to adjust our share buyback to just 6,700 shares at an average cost of $26.71. Our approach conserved capital flexibility and avoided shareholder dilution due to our recent market appreciation that exceeded tangible book value of $18.65 at month end by $9.96. As we discussed on our last call, our stock is now trading at over 1.5x tangible book, up from 1.3x in the second quarter and just 1.1x over the same quarter last year. Moderating our buyback pace from the 28,000 shares repurchased last quarter is a deliberate strategy that preserves the balance sheet flexibility required to support our organic loan growth while continuing to provide a firm floor for our market price. And lastly, to asset quality, our allowance for credit losses was 1.34% compared to 1.38% in the linked quarter and 1.44% in the prior year. Coverage of nonperforming loans now exceeds 500%, consistent with the linked quarter and well above the 345% reported in the prior year period. Net charge-offs as a percentage of average loans returned to historical lows at less than 1 basis point, down from 6 basis points in the linked quarter and comparable to the prior year. Total loan delinquency ended the period under 34 basis points, and when we exclude those loans on nonaccrual, our delinquency rate is effectively zero. I will now turn the call back over to Mark. Mark Klein: Thank you, Tony. We entered the final quarter of 2026 encouraged by the sustained momentum across our commercial lending operations and core deposit gathering. With total assets under our care now exceeding $3.7 billion, our diversified business model continues to provide the resilient foundation necessary to navigate shifting rate cycles as we scale our bank toward the $2 billion-plus balance sheet objective. This quarter, we're also pleased to announce the increase of our quarterly dividend to $0.165 per share and in line with our longer-term goal to elevate our payout as scheduled every other quarter. This dividend represents an annualized yield of approximately 2.2% and a conservative 26% payout ratio. This keeps us firmly on track for our 14th consecutive year of increased annual dividend payouts. Now Sarah, let's open the call up to questions from our investment community. Operator: [Operator Instructions] And the first question comes from Brian Martin with Brean Capital. Please go ahead. Brian Martin: Nice quarter. Just maybe a couple items for me. The loan growth you guys talked about has obviously been a nice track record here in recent quarters. And just wondering how you're thinking about that where the pipeline sits today heading into fourth quarter and kind of next year and any impact you'd expect given the rate environment. Any thoughts on that would be helpful. Mark Klein: Yes, we're looking -- of course, we're in the throes of budgeting as we speak. As we've done in prior years, we've averaged around 8%, 8.5%, I think, high single digit. Generally, Brian, I think that's where we're looking at in 2027. Clearly, Columbus has been the all-star, providing 70% roughly of our growth. Other markets hopefully are going to kick in here this fourth quarter as well as on in the next year. But we have a solid -- Steve can speak to the pipeline, but we have a solid commercial pipeline and also a construction C&D pipeline that could be in the $20 million to $30 million, $40 million net after a few credits exit that have been generally poised for institution kind of financing as they stabilize. So we've got a really strong pipeline when you include both facets. Any comments, Steve? Steven Walz: Yes, sure. Just to piggyback on that, Brian. I think we feel very good about the pipeline referenced in the earlier comments. Those pulling through the interest rate environment going forward into the year ahead. Obviously, many folks expect that those longer term rates will moderate or at least not continue to grow too aggressively. As we referenced earlier, Columbus is a big deal, a big part of our growth and one of the reasons that market remains robust and not impervious to rates, but perhaps less influenced by rates. A big piece of the puzzle down there is medical as well as educational. And those expenditures tend to support that local economy in a way that interest rates don't necessarily impact greatest. We feel good about the following year as well. Mark Klein: So good pipeline. Brian Martin: Yes. Okay. And more on the commercial side. C&I and CRE is that -- I know you also mentioned the Ag, Mark, but CRE and C&I is kind of the primary drivers of the growth? Mark Klein: Yes, certainly. CRE primarily. If you look at our balance sheet, you can see that. But we continue to explore C&I opportunities and the associated deposits that come with those core relationships. Brian Martin: Got you. Okay. Perfect. And then just on the funding side, just -- Tony, you talked about the liquidity. So I guess just in terms of deposit growth, how are you -- given the competition out there today and your current balance sheet structure, I mean, how are you thinking about deposits in the next quarter or next couple of quarters just in terms of funding the growth? Anthony Cosentino: Yes. As I've stated probably every quarter on this call this year, I've been surprised by our level of deposit growth. Clearly we've had disruption in our markets through acquisition and other things that have inured to our benefit. I do think we've been able to grow substantially without being a market leader on rate. So I think at any time, we probably could tick it up 25 to 30 basis points if needed to fund where we are. So we have about $65 million of excess liquidity as we sit today. I think that covers most of our current pipeline plus. And if we have normalized deposit growth on into '27, I feel pretty good about funding anything else. Mark Klein: And Brian, just one follow-up comment. It's not like we've been attracting high-cost deposits well above the margin. It's a general direct reflection of our TM talent that we've hired. We have a new gentleman, Sean, down in Columbus, and individuals across Ohio and Northeast Indiana. So that conscious strategy to bring on TM talent is paying dividends. Brian Martin: Yes. No, that's a good point, Mark. So -- okay. How about just last 2 for me is just the on the margin, Tony, I guess, in terms of just kind of big picture if we expect a few potential rate hikes here. Just broadly, how you'd expect the margin to kind of -- to absorb those hikes? Or just how to think about them in the coming quarters here? Anthony Cosentino: Yes. So relative to what our current portfolio is, call it, every 25 basis points is probably, call it, a $600,000, $700,000 annualized impact to the good for us given where we are in terms of prime rate financing, assuming nothing else happens. Obviously, there's going to be a reaction on the deposit side there. So how well we manage that delivers that going forward. Our base model is kind of 2 rate increases from now until the end of '27, which I think is fairly conservative and in line with our expectation that still our margin ratio is going to be probably a couple basis points tick down in Q4 as it traditionally does, kind of stay flat in Q1 and then accelerate in the midpoints next year, kind of our typical model. But I would think -- I still believe 3.50% to 3.51% is kind of at the upper end of where we're going to achieve going forward. Brian Martin: Got you. Okay. That's helpful. And how about last 2, just on -- maybe just touch on the mortgage outlook? I mean, obviously, with rates where they are, it's a tough market out there. But in terms of how you're thinking about kind of production and yields in that business, what would you -- kind of what's your big picture outlook there and how we think about fourth quarter and then really more heading into '27? Mark Klein: Well, clearly, Brian, the 7%, 7.5% has put a major constraint on that business line. That said, we still continue to see some nice activity in the 3/1, 5/1 construction lending that we put on our books that eventually goes Freddie Fannie. And of course, we continue to field some requests on the higher-end private client mortgages that we put on our books on a variable basis. But Tony's got one number. I always have a more optimistic number because I think we're going to get a play on the 10-year, which hasn't come yet. But looking into next year from this year, we're clearly looking for a 10% to 15% increase of where we found ourselves in 2026 and into 2027. But as you know, that's going to be dictated by where the 10-year goes and where rates go. But it's definitely taken the pressure off the business line because a bigger balance sheet, more operating revenue, more NIM is paying dividends because it's the gift that keeps on giving versus doing mortgages of $500 million every year, every time to generate that fee-based revenue. Anthony Cosentino: I would just add, Brian, I think, we're probably looking at a $50 million to $60 million quarter in Q4, which lends the year, call it, 280. We call 10% to 15% that tells us we're in the low 3s for 2027. I think on a base model. I still think if we had full disclosure, I think most of the people out there would be shocked at some of our MLOs and the volume they're doing. We have some real stars that even in very tough markets can do significant mortgage volume. And unfortunately, it's just not -- the depth of all of our MLOs is not to that level, but it is an impressive performance by a number of our people. Mark Klein: And Brian, the old adage, and we certainly are reflective of this, 80% of our volume comes from 20% of our producers. So like Tony said, we've got some people that do $20 million and $35 million every year, whether rates are 12% or 6% or 5%. We certainly want to find more of those kind of people. But in the interim, we like our positioning, and we're looking for a better 2027. Brian Martin: Got you. Okay. And last one for me was just on expenses. Obviously, a little noise. You talked about it Mark. Just as we think into '27 given the current run rate or just how to think about a decent run rate heading into 4Q and then next year, what -- how are you thinking about that in terms of other additional spends you may have? Or any thoughts there would be helpful. Mark Klein: Before Tony fields that question, Brian, at a high level, people, technology and benefits are taking an inordinate bigger bite of the margin revenue. So much like all banks, scale continues to be a big deal for us, but they're increasing at an increasing pace. Anthony Cosentino: Yes. I think to add on to Mark's comments, I've been relatively positive that our expense levels can be kind of under control as we look at Q4 and into '27. I'm turning a bit. I mean we're seeing more and more on the ground of people costs and medical that is rising at a pretty alarming rate. I do think we're still going to have, call it, a normalized 4% to 5% base level of expense growth in 2027, but that's certainly higher than where I was, call it, 6 months ago. And we do have some expanded technology costs that are going to take a little bit of a bite. And we've improved our people IQ out there with some of the staff we've hired. And with that comes a little bit higher level of pay to compensate them, but that's kind of the game we're in. Mark Klein: And Tony, the bet is we'll get higher levels of production from a broader talent base. Anthony Cosentino: Yes. And I hate to say this out loud, Brian, but I'll take a double-digit expense growth if we can grow operating leverage 2 to 2.5x, and that's kind of the game we played for a number of years, and it seemed to have worked out more or less. Brian Martin: Yes. And just to your point about the expenses, Tony, kind of the run rate that we saw in the third quarter here, just kind of framing it with maybe if it's a little bit higher growth rate than you have in the past going into '27, it's best to look at it kind of maybe more year-over-year. So full year '26 to '27 being a higher growth rate or just use something more along the lines of the current run rate is a better given you had some of that impact in there. Just what's the best way to think about it in terms of kind of building going forward? Anthony Cosentino: Yes, Q3 was clearly an aberration. We hired a number of people. We had some open spots. We had some technology spend that kind of will level out as we get through the next 2 quarters. So I think it is really more about a year-over-year expense level, and then kind of maybe add a point or two as we see what we look at. Mark Klein: Conversion, Tony, is taking a big bite. Anthony Cosentino: Yes. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mark Klein for any closing remarks. Mark Klein: Once again, thanks for joining us this afternoon. Appreciate your participation in our growth of our franchise. We look forward to speaking with you in January to update you on our full 2026 operation performance. Thanks, and have a good day. Operator: The conference has now concluded. Thank you for attending today's presentation. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. SB Financial Group (SBFG) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

DEFIANCE, Ohio, Oct. 22, 2026 (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, private client and title insurance services today reported earnings for the quarter ended September 30, 2026. Third Quarter 2026 Highlights compared to the third quarter of the prior year and linked quarter include: - GAAP net income and Diluted Earnings per Share ("DEPS") were $3.9 million, or $0.63 per DEPS, a slight decline from the $4.0 million, or $0.64 per DEPS in the prior-year quarter. - Total loans reached $1.22 billion, reflecting an increase of $108.2 million, or 9.7 percent, from the prior-year quarter and an improvement of $29.2 million, or 2.5 percent, from the linked quarter. The performance this quarter marks SBFG's tenth consecutive quarter of expansion in our loan portfolio. - Total deposits climbed to $1.38 billion, increasing by $120.3 million, or 9.5 percent, from the prior year quarter, and down $8.3 million, or 0.6 percent, from the linked quarter. - Tangible book value ("TBV") per common share finished the quarter at $18.65, climbing $1.44 per share, or 8.3 percent, from $17.21 in the prior-year quarter. Adjusted tangible book value excluding AOCI advanced to $23.03 at quarter end. Nine months ended September 30, 2026 Highlights compared to the same period of the prior-year: - GAAP net income increased to $12.7 million, a 26.7 percent expansion compared to $10.1 million reported for the previous nine months, and diluted EPS was $2.04, an improvement of 31.1 percent from $1.56, same period last year. - Net interest income rose to $39.1 million, representing a 9.4 percent improvement from the $35.7 million reported in the prior-year period. - Noninterest income increased by 7.1 percent to $14.4 million compared to $13.4 million reported in the previous nine months. - Noninterest expense expanded, increasing by 4.1 percent to $37.2 million from $35.8 million in the prior-year period. YTD operating leverage was strong at 1.7 times. Earnings Highlights | Three Months Ended | | Nine Months Ended ($ in thousands, except per share & ratios) | Sep. 2026 | Sep. 2025 | % Change | | Sep. 2026 | Sep. 2025 | % Change Operating revenue | $ | 18,075 | | $ | 16,578 | | 9.0 | % | | $ | 53,440 | | $ | 49,140 | | 8.8 | % Interest income | | 20,526 | | | 18,809 | | 9.1 | % | | | 59,653 | | | 54,648 | | 9.2 | % Interest expense | | 7,102 | | | 6,475 | | 9.7 | % | | | 20,563 | | | 18,907 | | 8.8 | % Net interest income | | 13,424 | | | 12,334 | | 8.8 | % | | | 39,090 | | | 35,741 | | 9.4 | % Provision for credit losses | | 127 | | | 124 | | -2.4 | % | | | 640 | | | 1,108 | | -42.2 | % Noninterest income | | 4,651 | | | 4,244 | | 9.6 | % | | | 14,350 | | | 13,399 | | 7.1 | % Noninterest expense | | 13,157 | | | 11,498 | | 14.4 | % | | | 37,223 | | | 35,760 | | 4.1 | % Net income | | 3,946 | | | 4,046 | | -2.5 | % | | | 12,739 | | | 10,056 | | 26.7 | % Adjusted Earnings per diluted share | | 0.63 | | | 0.68 | | -7.4 | % | | | 1.99 | | | 1.67 | | 19.2 | % Earnings per diluted share | | 0.63 | | | 0.64 | | -1.6 | % | | | 2.04 | | | 1.56 | | 30.8 | % Adjusted Return on Avg. Assets | | 0.95 | % | | 1.13 | % | -15.9 | % | | | 1.03 | % | | 0.96 | % | 7.3 | % Return on average assets | | 0.96 | % | | 1.07 | % | -10.3 | % | | | 1.06 | % | | 0.90 | % | 17.8 | % Adjusted Return on Avg. Equity | | 10.44 | % | | 12.79 | % | -18.4 | % | | | 11.34 | % | | 10.84 | % | 4.6 | % Return on average equity | | 10.53 | % | | 12.08 | % | -12.8 | % | | | 11.62 | % | | 10.15 | % | 14.5 | % | | | | | | | | | | | | | | | | | "Net income for the third quarter of 2026 was stable at $3.9 million, a 2.5 percent decrease from the prior-year quarter, with GAAP DEPS of $0.63, a decrease of 1.6 percent," said Mark A. Klein, Chairman, President, and Chief Executive Officer. While our bottom-line results were slightly lower compared to the prior year, this marks our 63rd consecutive quarter of profitability. Our performance this quarter reflects the continued resilience of our core community banking operations—highlighted by our tenth consecutive quarter of loan growth—and dynamic contributions from our fee-based business lines, which helped mitigate the impact of elevated operating expenses and broader economic pressures. RESULTS OF OPERATIONS Total operating revenue for the third quarter of 2026 was $18.1 million, an increase of 9.0 percent year-over-year and slightly improved from the linked quarter. This revenue growth was primarily driven by steady gains in our loan portfolio and resilience in noninterest income categories. Net interest income was $13.4 million for the third quarter of 2026, an increase from $12.3 million in the third quarter of 2025 and $13.0 million in the second quarter of 2026. Total interest income rose to $20.5 million, propelled by robust loan volume and repricing dynamics. Total interest expense was $7.1 million, a 9.7 percent increase from the prior-year period as deposit costs adjusted to the current rate environment. As a result, net interest margin was 3.50 percent, expanding 2 basis points from the third quarter of 2025. Total loans increased $108.2 million, or 9.7 percent, from the prior-year quarter and $29.2 million, or 2.5 percent, from the linked quarter. Total deposits at quarter end expanded $120.3 million, or 9.5 percent, year-over-year to $1.38 billion, anchored by durable core customer relationships and ongoing deposit gathering initiatives across our footprint, despite a minor linked-quarter decrease of $8.3 million. Overall quarterly performance demonstrated disciplined balance sheet management, robust credit quality, and the strategic resilience of our diversified revenue streams. Mortgage Loan Business Net mortgage banking revenue for the quarter reached $1.8 million, an increase of $293,000 from the prior-year quarter. Loan servicing fees added $946,000 for the quarter, an increase from the prior-year period. The OMSR valuation adjustment for the third quarter of 2026 was a recapture of $43,000, compared to a negative adjustment of $301,000 in the third quarter of 2025. Mortgage Banking | | | | | | | ($ in thousands) | Sep. 2026 | Jun. 2026 | Mar. 2026 | Dec. 2025 | Sep. 2025 | | Prior Year Growth Mortgage originations | $ | 77,678 | | $ | 79,346 | | $ | 65,768 | | $ | 72,398 | | $ | 67,609 | | | $ | 10,069 | Mortgage sales | | 66,529 | | | 70,253 | | | 53,420 | | | 70,361 | | | 66,408 | | | | 121 | Mortgage servicing portfolio | | 1,517,593 | | | 1,504,657 | | | 1,482,052 | | | 1,479,982 | | | 1,470,360 | | | | 47,233 | Mortgage servicing rights | | 16,204 | | | 15,953 | | | 15,728 | | | 15,254 | | | 15,347 | | | | 857 | | | | | | | | | | | | | | | Revenue | | | | | | | Loan servicing fees | | 946 | | | 934 | | | 928 | | | 928 | | | 914 | | | | 32 | OMSR amortization | | (472 | ) | | (497 | ) | | (529 | ) | | (572 | ) | | (455 | ) | | | (17 | ) Net administrative fees | | 474 | | | 437 | | | 399 | | | 356 | | | 459 | | | | 15 | OMSR valuation adjustment | | 43 | | | (54 | ) | | 452 | | | (157 | ) | | (301 | ) | | | 344 | Net loan servicing fees | | 517 | | | 383 | | | 851 | | | 199 | | | 158 | | | | 359 | Gain on sale of mortgages | | 1,262 | | | 1,541 | | | 978 | | | 1,272 | | | 1,328 | | | | (66 | ) Mortgage banking revenue, net | $ | 1,779 | | $ | 1,924 | | $ | 1,829 | | $ | 1,471 | | $ | 1,486 | | | $ | 293 | | | | | | | | Noninterest Income and Noninterest Expense Total noninterest income for the third quarter of 2026 was $4.7 million, up 9.6 percent from the $4.2 million reported in the third quarter of 2025. The year-over-year expansion was driven primarily by higher net mortgage banking revenue, supported by increased loan servicing fees of $946,000 and a positive OMSR valuation recapture, alongside steady, consistent contributions from our Wealth Management and Title Insurance divisions. "The resilience of our fee based revenue stream validates our diversified business model, as cross-functional referral strategies continue to anchor our above median level of growth," Klein noted. | | | | | | | | Noninterest Income/Noninterest Expense | | | | | | | ($ in thousands, except ratios) | | Sep. 2026 | Jun. 2026 | Mar. 2026 | Dec. 2025 | Sep. 2025 | | Prior Year Growth Noninterest Income (NII) | | $ | 4,651 | | $ | 4,987 | | $ | 4,712 | | $ | 3,708 | | $ | 4,244 | | | $ | 407 | NII / Total Revenue | | | 25.7 | % | | 27.8 | % | | 27.0 | % | | 22.6 | % | | 25.6 | % | | | 0.1 | % NII / Average Assets | | | 1.1 | % | | 1.2 | % | | 1.2 | % | | 1.0 | % | | 1.1 | % | | | 0.0 | % Total Revenue Growth | | | 9.0 | % | | 4.5 | % | | 13.3 | % | | 6.3 | % | | 15.9 | % | | | -6.9 | % | | | | | | | | Noninterest Expense (NIE) | | $ | 13,157 | | $ | 12,137 | | $ | 11,929 | | $ | 11,239 | | $ | 11,498 | | | $ | 1,659 | Efficiency Ratio | | | 72.5 | % | | 67.3 | % | | 68.1 | % | | 68.1 | % | | 69.0 | % | | | 3.5 | % NIE / Average Assets | | | 3.2 | % | | 3.0 | % | | 3.1 | % | | 2.9 | % | | 3.0 | % | | | 0.2 | % Net Noninterest Expense/Avg. Assets | | | -2.1 | % | | -1.8 | % | | -1.9 | % | | -1.9 | % | | -1.9 | % | | | -0.2 | % Total Expense Growth | | | 14.4 | % | | 2.4 | % | | -3.9 | % | | 2.1 | % | | 4.5 | % | | | 9.9 | % | | | | | | | | Noninterest expense for the third quarter of 2026 increased 14.4 percent to $13.2 million from $11.5 million in the prior-year quarter, driven by an increase of $1.14 million in salaries and employee benefits, which totaled $7.3 million, reflecting higher incentive costs and medical expenses. Data processing fees for the quarter stood at $1.12 million compared to $723,000 in the prior-year quarter, while marketing expenses increased to $358,000 from $174,000 in 3Q25. Both of these categories reflect higher costs related to several pending client and product conversions. These increases were partially offset by disciplined reductions in other expenses, which declined $95,000, and employee expenses, which decreased $41,000 from the prior-year period. "Our core efficiency ratio for the third quarter of 2026 was 72.46 percent, compared to 69.00 percent in the third quarter of 2025 and 67.32 percent in the linked quarter," stated Mr. Klein. "While overhead was elevated this quarter, our fundamental focus on positive operating leverage and disciplined expense management remains a vital pillar as we proactively fund expansion across our growth markets." Balance Sheet As of September 30, 2026, SB Financial reported total assets of $1.61 billion, representing an increase of $69.1 million from December 31, 2025, and $118.2 million, or 7.9 percent, from September 30, 2025. The year-over-year asset growth was primarily driven by steady organic loan generation across our commercial and real estate lines. Cash and due from banks increased by $17.4 million from the prior-year period to $102.4 million, normalizing during the quarter as funds were strategically deployed into the loan portfolio. Key balance-sheet metrics for the quarter included a loan-to-deposit ratio of 88.1 percent and a loan-to-asset ratio of 75.5 percent, both of which remained well-aligned with our target operating bands. Total deposits at quarter end reached $1.38 billion, an increase of $120.3 million, or 9.5 percent, from the prior-year quarter, supported by a competitive community banking footprint and durable client retention efforts. Noninterest-bearing demand deposits totaled $270.0 million, accounting for 19.5 percent of the total deposit portfolio. Shareholders' equity finished the period at $144.3 million, representing an increase of $7.4 million, or 5.4 percent from the prior-year period, providing a solid foundation for ongoing organic loan growth initiatives. During the third quarter of 2026, SB Financial repurchased approximately 6,700 shares of its common stock, reflecting a measured approach to capital allocation and ongoing evaluation of corporate priorities during the period. The Company remains committed to a prudent capital allocation strategy, supporting shareholder returns through dividends and share buybacks while preserving the financial flexibility to fund organic expansion, strategic initiatives, and capital stability. "In summary, as we enter the final quarter of 2026, SB Financial continues to operate from a position of fundamental strength, anchored by robust capital levels, exceptional credit quality, and a durable core deposit franchise," stated Mr. Klein. "Achieving our tenth consecutive quarter of loan expansion demonstrates the strength of our relationship-based community banking model and localized lending expertise. Meanwhile, our nonperforming assets remain near historic lows at 0.27 percent of total assets, backed by strong reserve coverage that reflects our unyielding commitment to disciplined credit administration. Positioned with a resilient deposit base, growing fee-generating business lines, and careful overhead control, we remain focused on finishing 2026 with strong momentum and driving long-term value for our shareholders." Loan Balances | | | | | | ($ in thousands, except ratios) | Sep. 2026 | Jun. 2026 | Mar. 2026 | Dec. 2025 | Sep. 2025 | Annual Growth Commercial | $ | 106,915 | | $ | 111,128 | | $ | 112,226 | | $ | 113,878 | | $ | 117,581 | | $ | (10,666 | ) % of Total | | 8.8 | % | | 9.3 | % | | 9.5 | % | | 9.6 | % | | 10.6 | % | | -9.1 | % Commercial RE | | 640,127 | | | 611,274 | | | 601,556 | | | 596,983 | | | 535,307 | | | 104,820 | % of Total | | 52.5 | % | | 51.4 | % | | 50.9 | % | | 50.6 | % | | 48.2 | % | | 19.6 | % Agriculture | | 83,804 | | | 81,341 | | | 78,569 | | | 76,514 | | | 65,150 | | | 18,654 | % of Total | | 6.9 | % | | 6.8 | % | | 6.7 | % | | 6.5 | % | | 5.9 | % | | 28.6 | % Residential RE | | 294,321 | | | 295,481 | | | 299,741 | | | 304,741 | | | 309,140 | | | (14,819 | ) % of Total | | 24.1 | % | | 24.8 | % | | 25.4 | % | | 25.8 | % | | 27.8 | % | | -4.8 | % Consumer & Other | | 93,622 | | | 90,335 | | | 89,043 | | | 88,475 | | | 83,367 | | | 10,255 | % of Total | | 7.7 | % | | 7.6 | % | | 7.5 | % | | 7.5 | % | | 7.5 | % | | 12.3 | % Total Loans | $ | 1,218,789 | | $ | 1,189,559 | | $ | 1,181,135 | | $ | 1,180,591 | | $ | 1,110,545 | | $ | 108,244 | Total Growth Percentage | | | | | | | 9.7 | % | | | | | | | | | | | | Deposit Balances | | | | | | ($ in thousands, except ratios) | Sep. 2026 | Jun. 2026 | Mar. 2026 | Dec. 2025 | Sep. 2025 | Annual Growth Non-Int DDA | $ | 270,029 | | $ | 258,576 | | $ | 248,239 | | $ | 254,063 | | $ | 246,725 | | $ | 23,304 | % of Total | | 19.5 | % | | 18.6 | % | | 18.1 | % | | 19.4 | % | | 19.5 | % | | 9.4 | % Interest DDA | | 205,459 | | | 206,593 | | | 215,594 | | | 202,501 | | | 194,420 | | | 11,039 | % of Total | | 14.9 | % | | 14.9 | % | | 15.7 | % | | 15.5 | % | | 15.4 | % | | 5.7 | % Savings | | 312,212 | | | 325,675 | | | 333,662 | | | 296,484 | | | 290,111 | | | 22,101 | % of Total | | 22.6 | % | | 23.4 | % | | 24.3 | % | | 22.7 | % | | 23.0 | % | | 7.6 | % Money Market | | 322,395 | | | 315,363 | | | 300,028 | | | 280,896 | | | 261,953 | | | 60,442 | % of Total | | 23.3 | % | | 22.7 | % | | 21.9 | % | | 21.5 | % | | 20.7 | % | | 23.1 | % Time Deposits | | 272,769 | | | 284,940 | | | 274,300 | | | 273,300 | | | 269,313 | | | 3,456 | % of Total | | 19.7 | % | | 20.5 | % | | 20.0 | % | | 20.9 | % | | 21.3 | % | | 1.3 | % Total Deposits | $ | 1,382,864 | | $ | 1,391,147 | | $ | 1,371,823 | | $ | 1,307,244 | | $ | 1,262,522 | | $ | 120,342 | Total Growth Percentage | | | | | | | 9.5 | % | | | | | | Asset Quality As of September 30, 2026, SB Financial continued to focus on maintaining strong asset quality metrics. Nonperforming assets totaled $4.3 million, representing 0.27 percent of total assets, an improvement of $574,000 compared to $4.9 million, or 0.32 percent of total assets, in the prior-year quarter, and relatively stable compared to the linked-quarter balance of $4.4 million, or 0.27 percent of total assets. Total nonaccruing loans declined significantly to $3.2 million from $4.6 million in the prior-year period, while foreclosed properties and repossessed assets stood at $1.1 million. The allowance for credit losses remained strong at 1.34 percent of total loans, providing 508.9 percent coverage of nonperforming loans—a substantial increase from 345.4 percent in 3Q25 and consistent with 470.3 percent in the linked quarter, reflecting a conservative approach to risk management. Annualized net loan charge-offs to average loans remained exceptionally modest at less than 1 basis point, improving from 6 basis points in the linked quarter and comparable to less than 1 basis point in the prior year quarter, with net charge-offs totaling $17,000. "Our asset quality metrics embody our commitment to disciplined risk management within a dynamic economic environment," stated Mr. Klein. "With nonperforming assets down year-over-year and our allowance providing over 500 percent coverage of nonperforming loans, our reserve position underscores the inherent quality of our loan portfolio and the strength of our client relationships. We remain dedicated to balancing our conservative credit discipline with proactive support for high-quality loan growth across all nine of our major markets." Nonperforming Assets | | | | | | Annual Change ($ in thousands, except ratios) | Sep. 2026 | Jun. 2026 | Mar. 2026 | Dec. 2025 | Sep. 2025 Commercial & Agriculture | $ | 1,054 | | $ | 1,304 | | $ | 1,359 | | $ | 2,256 | | $ | 2,243 | | $ | (1,189 | ) % of Total Com./Ag. loans | | 0.55 | % | | 0.68 | % | | 0.71 | % | | 1.18 | % | | 1.23 | % | | -53.0 | % | | | | | | | | | | | | | | | | | | Commercial RE | | 195 | | | 339 | | | 668 | | | 771 | | | 778 | | | (583 | ) % of Total CRE loans | | 0.03 | % | | 0.06 | % | | 0.11 | % | | 0.13 | % | | 0.15 | % | | -74.9 | % | | | | | | | | | | | | | | | | | | Residential RE | | 1,493 | | | 1,476 | | | 1,439 | | | 1,322 | | | 1,400 | | | 93 | % of Total Res. RE loans | | 0.51 | % | | 0.50 | % | | 0.48 | % | | 0.43 | % | | 0.45 | % | | 6.6 | % | | | | | | | | | | | | | | | | | | Consumer & Other | | 476 | | | 367 | | | 233 | | | 230 | | | 195 | | | 281 | % of Total Con./Oth. loans | | 0.51 | % | | 0.41 | % | | 0.26 | % | | 0.26 | % | | 0.23 | % | | 144.1 | % Total Nonaccruing Loans | | 3,218 | | | 3,486 | | | 3,699 | | | 4,579 | | | 4,616 | | | (1,398 | ) % of Total loans | | 0.26 | % | | 0.29 | % | | 0.31 | % | | 0.39 | % | | 0.42 | % | | -30.3 | % | | | | | | | | | | | | | | | | | | Foreclosed Assets and Other Assets | | 1,061 | | | 936 | | | 974 | | | 104 | | | 237 | | | 824 | Total Change (%) | | | | | | N/M Total Nonperforming Assets | $ | 4,279 | | $ | 4,422 | | $ | 4,673 | | $ | 4,683 | | $ | 4,853 | | $ | (574 | ) % of Total assets | | 0.27 | % | | 0.27 | % | | 0.29 | % | | 0.30 | % | | 0.32 | % | | -11.83 | % | | | | | | Webcast and Conference Call The Company will hold the third quarter 2026 earnings conference call and webcast on October 22, 2026, at 3:30 p.m. EST. 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) and SBFG Title, LLC dba Peak Title (Peak Title). 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 27 offices: 25 in eleven Ohio counties and two in Northeast, Indiana, and 27 ATMs. State Bank has four Residential loan production offices located throughout Ohio and Indiana. Peak Title provides title insurance and title opinions throughout the Tri-State and Kentucky. SB Financial's common stock is listed on the NASDAQ Capital Market with the ticker 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 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 which 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 pre-tax, pre-provision income, 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. In addition, the Company excludes the OMSR valuation adjustment and any gain on sale of assets from net income to report a non-GAAP adjusted net income level. 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: Mark A. Klein Chairman, President and Chief Executive Officer [email protected] Anthony V. Cosentino Executive Vice President and Chief Financial Officer [email protected] | | SB FINANCIAL GROUP, INC. | | CONSOLIDATED BALANCE SHEETS - (Unaudited) | | | | | | | | | | | | | | | | | | September | | June | | March | | December | | September | | | ($ in thousands) | | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | | | | | | | | | | | | | | ASSETS | | | | | | | | | | | Cash and due from banks | | $ | 102,427 | | | $ | 138,152 | | | $ | 126,293 | | | $ | 71,543 | | | $ | 85,025 | | Interest bearing time deposits | | | 1,715 | | | | 2,455 | | | | 1,965 | | | | 1,140 | | | | 2,025 | | Available-for-sale securities | | | 177,767 | | | | 179,026 | | | | 183,626 | | | | 188,626 | | | | 193,190 | | Loans held for sale | | | 5,391 | | | | 7,438 | | | | 7,203 | | | | 1,761 | | | | 4,736 | | Loans, net of unearned income | | | 1,218,789 | | | | 1,189,559 | | | | 1,181,135 | | | | 1,180,591 | | | | 1,110,545 | | Allowance for credit losses | | | (16,377 | ) | | | (16,395 | ) | | | (16,388 | ) | | | (16,114 | ) | | | (15,943 | ) | Premises and equipment, net | | | 20,775 | | | | 21,088 | | | | 21,295 | | | | 21,688 | | | | 21,764 | | Federal Reserve and FHLB Stock, at cost | | | 5,674 | | | | 5,502 | | | | 5,463 | | | | 5,610 | | | | 5,466 | | Foreclosed assets | | | 1,061 | | | | 936 | | | | 974 | | | | 104 | | | | 237 | | Interest receivable | | | 5,989 | | | | 5,455 | | | | 5,499 | | | | 5,490 | | | | 5,455 | | Goodwill | | | 27,158 | | | | 27,158 | | | | 27,158 | | | | 27,158 | | | | 27,158 | | Cash value of life insurance | | | 32,469 | | | | 32,354 | | | | 32,401 | | | | 32,208 | | | | 32,004 | | Mortgage servicing rights | | | 16,204 | | | | 15,953 | | | | 15,728 | | | | 15,254 | | | | 15,347 | | Other assets | | | 15,449 | | | | 11,383 | | | | 12,246 | | | | 10,308 | | | | 9,254 | | | | Total assets | | $ | 1,614,491 | | | $ | 1,620,064 | | | $ | 1,604,598 | | | $ | 1,545,367 | | | $ | 1,496,263 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | Deposits | | | | | | | | | | | | Non interest bearing demand | | $ | 270,029 | | | $ | 258,576 | | | $ | 248,239 | | | $ | 254,063 | | | $ | 246,725 | | | Interest bearing demand | | | 205,459 | | | | 206,593 | | | | 215,594 | | | | 202,501 | | | | 194,420 | | | Savings | | | 312,212 | | | | 325,675 | | | | 333,662 | | | | 296,484 | | | | 290,111 | | | Money market | | | 322,395 | | | | 315,363 | | | | 300,028 | | | | 280,896 | | | | 261,953 | | | Time deposits | | | 272,769 | | | | 284,940 | | | | 274,300 | | | | 273,300 | | | | 269,313 | | | | Total deposits | | | 1,382,864 | | | | 1,391,147 | | | | 1,371,823 | | | | 1,307,244 | | | | 1,262,522 | | | | | | | | | | | | | | | Short-term borrowings | | | 6,285 | | | | 6,732 | | | | 9,433 | | | | 9,230 | | | | 10,976 | | Federal Home Loan Bank advances | | | 22,500 | | | | 22,500 | | | | 27,500 | | | | 35,000 | | | | 35,000 | | Trust preferred securities | | | 10,310 | | | | 10,310 | | | | 10,310 | | | | 10,310 | | | | 10,310 | | Subordinated debt net of issuance costs | | | 19,775 | | | | 19,763 | | | | 19,751 | | | | 19,739 | | | | 19,726 | | Interest payable | | | 2,572 | | | | 2,470 | | | | 2,553 | | | | 2,460 | | | | 2,739 | | Other liabilities | | | 25,841 | | | | 20,402 | | | | 19,573 | | | | 20,148 | | | | 18,051 | | | | Total liabilities | | | 1,470,147 | | | | 1,473,324 | | | | 1,460,943 | | | | 1,404,131 | | | | 1,359,324 | | | | | | | | | | | | | | | Shareholders' Equity | | | | | | | | | | | | Common stock | | | 61,319 | | | | 61,319 | | | | 61,319 | | | | 61,319 | | | | 61,319 | | | Additional paid-in capital | | | 15,178 | | | | 15,275 | | | | 15,065 | | | | 15,160 | | | | 15,086 | | | Retained earnings | | | 136,071 | | | | 133,125 | | | | 129,631 | | | | 126,311 | | | | 123,370 | | | Accumulated other comprehensive loss | | | (27,138 | ) | | | (21,854 | ) | | | (21,861 | ) | | | (21,481 | ) | | | (23,412 | ) | | Treasury stock | | | (41,086 | ) | | | (41,125 | ) | | | (40,499 | ) | | | (40,073 | ) | | | (39,424 | ) | | | Total shareholders' equity | | | 144,344 | | | | 146,740 | | | | 143,655 | | | | 141,236 | | | | 136,939 | | | | | | | | | | | | | | | | | Total liabilities and shareholders' equity | $ | 1,614,491 | | | $ | 1,620,064 | | | $ | 1,604,598 | | | $ | 1,545,367 | | | $ | 1,496,263 | | | | | | | | | | | | | | SB FINANCIAL GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME - (Unaudited) | | | | | | | | | | | | | | | | | | ($ in thousands, except per share & ratios) | | At and for the Three Months Ended | | Nine Months Ended | | | | | | | | | | | | | | | | | | | | | | September | | June | | March | | December | | September | | September | | September | Interest income | | 2026 | | 2026 | | 2026 | | 2025 | | 2025 | | 2026 | | 2025 | | Loans | | | | | | | | | | | | | | | | Taxable | | $ | 18,244 | | $ | 17,498 | | $ | 17,246 | | $ | 17,234 | | $ | 16,449 | | $ | 52,988 | | $ | 47,752 | | Tax exempt | | 97 | | 98 | | 99 | | 107 | | 117 | | 294 | | 348 | | Securities | | | | | | | | | | | | | | | | Taxable | | 1,004 | | 1,006 | | 1,029 | | 1,096 | | 1,097 | | 3,039 | | 3,399 | | Tax exempt | | 36 | | 36 | | 36 | | 36 | | 35 | | 108 | | 108 | | Other interest income | | 1,145 | | 1,182 | | 897 | | 799 | | 1,111 | | 3,224 | | 3,041 | | | Total interest income | | 20,526 | | 19,820 | | 19,307 | | 19,272 | | 18,809 | | 59,653 | | 54,648 | | | | | | | | | | | | | | | | | | Interest expense | | | | | | | | | | | | | | | | Deposits | | 6,369 | | 6,237 | | 5,957 | | 5,820 | | 5,721 | | 18,563 | | 16,670 | | Repurchase agreements & other | | 6 | | 7 | | 14 | | 22 | | 28 | | 27 | | 73 | | Federal Home Loan Bank advances | 230 | | 234 | | 285 | | 370 | | 369 | | 749 | | 1,097 | | Trust preferred securities | | 146 | | 145 | | 144 | | 154 | | 162 | | 435 | | 483 | | Subordinated debt | | 351 | | 243 | | 195 | | 194 | | 195 | | 789 | | 584 | | | Total interest expense | | 7,102 | | 6,866 | | 6,595 | | 6,560 | | 6,475 | | 20,563 | | 18,907 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net interest income | | 13,424 | | 12,954 | | 12,712 | | 12,712 | | 12,334 | | 39,090 | | 35,741 | | | | | | | | | | | | | | | | | | | Provision for credit losses | | 127 | | 299 | | 214 | | 198 | | 124 | | 640 | | 1,108 | | | | | | | | | | | | | | | | | | Net interest income after provision | | | | | | | | | | | | | | | for credit losses | | 13,297 | | 12,655 | | 12,498 | | 12,514 | | 12,210 | | 38,450 | | 34,633 | | | | | | | | | | | | | | | | | | Noninterest income | | | | | | | | | | | | | | | | Wealth management fees | | 954 | | 955 | | 941 | | 900 | | 912 | | 2,850 | | 2,635 | | Customer service fees | | 932 | | 917 | | 910 | | 892 | | 887 | | 2,759 | | 2,652 | | Gain on sale of mtg. loans & OMSR | 1,262 | | 1,541 | | 978 | | 1,272 | | 1,328 | | 3,781 | | 3,743 | | Mortgage loan servicing fees, net | | 517 | | 383 | | 851 | | 199 | | 158 | | 1,751 | | 1,363 | | Gain on sale of non-mortgage loans | 29 | | 62 | | 144 | | 38 | | 8 | | 235 | | 105 | | Title insurance revenue | | 514 | | 577 | | 485 | | 525 | | 544 | | 1,576 | | 1,523 | | Gain (loss) on sale of assets | | (32) | | (9) | | 8 | | - | | - | | (33) | | - | | Other | | 475 | | 561 | | 395 | | (118) | | 407 | | 1,431 | | 1,378 | | | Total noninterest income | | 4,651 | | 4,987 | | 4,712 | | 3,708 | | 4,244 | | 14,350 | | 13,399 | | | | | | | | | | | | | | | | | | Noninterest expense | | | | | | | | | | | | | | | | Salaries and employee benefits | | 7,339 | | 7,005 | | 6,096 | | 6,047 | | 6,198 | | 20,440 | | 19,030 | | Net occupancy expense | | 831 | | 802 | | 882 | | 822 | | 801 | | 2,515 | | 2,487 | | Equipment expense | | 1,205 | | 1,226 | | 1,244 | | 1,154 | | 1,188 | | 3,675 | | 3,381 | | Data processing fees | | 1,124 | | 693 | | 726 | | 790 | | 723 | | 2,543 | | 3,050 | | Professional fees | | 854 | | 844 | | 1,016 | | 805 | | 863 | | 2,714 | | 2,789 | | Marketing expense | | 358 | | 255 | | 277 | | 122 | | 174 | | 890 | | 529 | | Telephone and communication expense | | 119 | | 126 | | 118 | | 124 | | 123 | | 363 | | 387 | | Postage and delivery expense | | 149 | | 146 | | 187 | | 140 | | 157 | | 482 | | 401 | | State, local and other taxes | | 311 | | 221 | | 288 | | 331 | | 268 | | 820 | | 760 | | Employee expense | | 214 | | 177 | | 184 | | 158 | | 255 | | 575 | | 605 | | Other expenses | | 653 | | 642 | | 911 | | 746 | | 748 | | 2,206 | | 2,341 | | | Total noninterest expense | | 13,157 | | 12,137 | | 11,929 | | 11,239 | | 11,498 | | 37,223 | | 35,760 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Income before income tax expense | | 4,791 | | 5,505 | | 5,281 | | 4,983 | | 4,956 | | 15,577 | | 12,272 | | Income tax expense | | 845 | | 1,008 | | 985 | | 1,065 | | 910 | | 2,838 | | 2,216 | | | | | | | | | | | | | | | | | | Net income | | $ | 3,946 | | $ | 4,497 | | $ | 4,296 | | $ | 3,918 | | $ | 4,046 | | $ | 12,739 | | $ | 10,056 | | | | | | | | | | | | | | | | | | Common share data: | | | | | | | | | | | | | | | | Basic earnings per common share | | $ | 0.64 | | $ | 0.72 | | $ | 0.69 | | $ | 0.63 | | $ | 0.64 | | $ | 2.05 | | $ | 1.57 | | Diluted earnings per common share | $ | 0.63 | | $ | 0.72 | | $ | 0.69 | | $ | 0.63 | | $ | 0.64 | | $ | 2.04 | | $ | 1.56 | | | | | | | | | | | | | | | | | | Average shares outstanding (in thousands): | | | | | | | | | | | | | | | | Basic: | | 6,194 | | 6,205 | | 6,230 | | 6,252 | | 6,297 | | 6,210 | | 6,408 | | Diluted: | | 6,218 | | 6,220 | | 6,243 | | 6,266 | | 6,311 | | 6,230 | | 6,427 | | | | | | | | | | | | | | | | | SB FINANCIAL GROUP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited) | | | | | | | | | | | | | | | | ($ in thousands, except per share & ratios) | At and for the Three Months Ended | | Nine Months Ended | | | | | | | | | | | | | | | | | | September | | June | | March | | December | | September | | September | | September | SUMMARY OF OPERATIONS | | | 2026 | | | | 2026 | | | | 2026 | | | | 2025 | | | | 2025 | | | | 2026 | | | | 2025 | | | | | | | | | | | | | | | | | Net interest income | | $ | 13,424 | | | $ | 12,954 | | | $ | 12,712 | | | $ | 12,712 | | | $ | 12,334 | | | $ | 39,090 | | | $ | 35,741 | | Tax-equivalent adjustment | | | 35 | | | | 36 | | | | 36 | | | | 38 | | | | 40 | | | | 107 | | | | 121 | | Tax-equivalent net interest income | | | 13,459 | | | | 12,990 | | | | 12,748 | | | | 12,750 | | | | 12,374 | | | | 39,197 | | | | 35,862 | | Provision for credit loss | | | 127 | | | | 299 | | | | 214 | | | | 198 | | | | 124 | | | | 640 | | | | 1,108 | | Noninterest income | | | 4,651 | | | | 4,987 | | | | 4,712 | | | | 3,708 | | | | 4,244 | | | | 14,350 | | | | 13,399 | | Total operating revenue | | | 18,075 | | | | 17,941 | | | | 17,424 | | | | 16,420 | | | | 16,578 | | | | 53,440 | | | | 49,140 | | Noninterest expense | | | 13,157 | | | | 12,137 | | | | 11,929 | | | | 11,239 | | | | 11,498 | | | | 37,223 | | | | 35,760 | | Pre-tax pre-provision income | | | 4,918 | | | | 5,804 | | | | 5,495 | | | | 5,181 | | | | 5,080 | | | | 16,217 | | | | 13,380 | | Net income | | | 3,946 | | | | 4,497 | | | | 4,296 | | | | 3,918 | | | | 4,046 | | | | 12,739 | | | | 10,056 | | | | | | | | | | | | | | | | | PER SHARE INFORMATION: | | | | | | | | | | | | | | | Basic earnings per share (EPS) | | | 0.64 | | | | 0.72 | | | | 0.69 | | | | 0.63 | | | | 0.64 | | | | 2.05 | | | | 1.57 | | Diluted earnings per share | | | 0.63 | | | | 0.72 | | | | 0.69 | | | | 0.63 | | | | 0.64 | | | | 2.04 | | | | 1.56 | | Common dividends | | | 0.160 | | | | 0.160 | | | | 0.155 | | | | 0.155 | | | | 0.150 | | | | 0.475 | | | | 0.450 | | Book value per common share | | | 23.30 | | | | 23.70 | | | | 23.10 | | | | 22.65 | | | | 21.85 | | | | 23.30 | | | | 21.85 | | Tangible book value per common share (TBV) | | | 18.65 | | | | 19.04 | | | | 18.45 | | | | 18.00 | | | | 17.21 | | | | 18.65 | | | | 17.21 | | Market price per common share | | | 28.61 | | | | 25.27 | | | | 21.00 | | | | 22.27 | | | | 19.29 | | | | 28.61 | | | | 19.29 | | Market price to TBV | | | 153.4 | % | | | 132.7 | % | | | 113.8 | % | | | 123.7 | % | | | 112.1 | % | | | 153.4 | % | | | 112.1 | % | Market price to trailing 12 month EPS | | | 10.7 | | | | 9.4 | | | | 8.2 | | | | 10.1 | | | | 9.1 | | | | 10.7 | | | | 9.1 | | | | | | | | | | | | | | | | | PERFORMANCE RATIOS: | | | | | | | | | | | | | | | Return on average assets (ROAA) | | | 0.96 | % | | | 1.12 | % | | | 1.10 | % | | | 1.01 | % | | | 1.07 | % | | | 1.06 | % | | | 0.90 | % | Pre-tax pre-provision ROAA | | | 1.20 | % | | | 1.45 | % | | | 1.41 | % | | | 1.34 | % | | | 1.34 | % | | | 1.44 | % | | | 1.29 | % | Return on average equity (ROE) | | | 10.34 | % | | | 12.44 | % | | | 12.04 | % | | | 11.08 | % | | | 12.08 | % | | | 11.51 | % | | | 10.15 | % | Return on average tangible equity | | | 12.77 | % | | | 15.53 | % | | | 15.06 | % | | | 13.97 | % | | | 15.47 | % | | | 14.31 | % | | | 12.89 | % | Efficiency ratio | | | 72.46 | % | | | 67.32 | % | | | 68.12 | % | | | 68.09 | % | | | 69.00 | % | | | 69.32 | % | | | 72.41 | % | Earning asset yield | | | 5.35 | % | | | 5.20 | % | | | 5.29 | % | | | 5.32 | % | | | 5.31 | % | | | 5.31 | % | | | 5.27 | % | Cost of interest bearing liabilities | | | 2.38 | % | | | 2.31 | % | | | 2.31 | % | | | 2.34 | % | | | 2.33 | % | | | 2.35 | % | | | 2.33 | % | Net interest margin | | | 3.50 | % | | | 3.43 | % | | | 3.48 | % | | | 3.51 | % | | | 3.48 | % | | | 3.47 | % | | | 3.44 | % | Tax equivalent effect | | | 0.01 | % | | | 0.01 | % | | | 0.01 | % | | | 0.01 | % | | | 0.02 | % | | | 0.02 | % | | | 0.02 | % | Net interest margin, tax equivalent | | | 3.51 | % | | | 3.44 | % | | | 3.49 | % | | | 3.52 | % | | | 3.50 | % | | | 3.49 | % | | | 3.46 | % | Non interest income/Average assets | | | 1.13 | % | | | 1.24 | % | | | 1.21 | % | | | 0.96 | % | | | 1.12 | % | | | 1.19 | % | | | 1.20 | % | Non interest expense/Average assets | | | 3.21 | % | | | 3.03 | % | | | 3.06 | % | | | 2.90 | % | | | 3.04 | % | | | 3.10 | % | | | 3.21 | % | Net noninterest expense/Average assets | | | -2.07 | % | | | -1.78 | % | | | -1.85 | % | | | -1.94 | % | | | -1.92 | % | | | -1.90 | % | | | -2.01 | % | | | | | | | | | | | | | | | | ASSET QUALITY RATIOS: | | | | | | | | | | | | | | | Gross charge-offs | | | 133 | | | | 196 | | | | 33 | | | | 133 | | | | 11 | | | | 362 | | | | 146 | | Recoveries | | | 116 | | | | 3 | | | | 8 | | | | 3 | | | | 9 | | | | 126 | | | | 14 | | Net charge-offs | | | 17 | | | | 193 | | | | 25 | | | | 130 | | | | 2 | | | | 236 | | | | 132 | | Nonperforming loans/Total loans | | | 0.26 | % | | | 0.29 | % | | | 0.31 | % | | | 0.39 | % | | | 0.42 | % | | | 0.26 | % | | | 0.42 | % | Nonperforming assets/Loans & OREO | | | 0.35 | % | | | 0.37 | % | | | 0.40 | % | | | 0.40 | % | | | 0.44 | % | | | 0.35 | % | | | 0.44 | % | Nonperforming assets/Total assets | | | 0.27 | % | | | 0.27 | % | | | 0.29 | % | | | 0.30 | % | | | 0.32 | % | | | 0.27 | % | | | 0.32 | % | Allowance for credit loss/Nonperforming loans | | | 508.92 | % | | | 470.31 | % | | | 443.04 | % | | | 351.91 | % | | | 345.39 | % | | | 508.92 | % | | | 345.39 | % | Allowance for credit loss/Total loans | | | 1.34 | % | | | 1.38 | % | | | 1.39 | % | | | 1.36 | % | | | 1.44 | % | | | 1.34 | % | | | 1.44 | % | Net loan charge-offs/Average loans (ann.) | | | 0.01 | % | | | 0.06 | % | | | 0.01 | % | | | 0.04 | % | | | 0.00 | % | | | 0.03 | % | | | 0.02 | % | | | | | | | | | | | | | | | | CAPITAL & LIQUIDITY RATIOS: | | | | | | | | | | | | | | | Loans/ Deposits | | | 88.14 | % | | | 85.51 | % | | | 86.10 | % | | | 90.31 | % | | | 87.96 | % | | | 88.14 | % | | | 87.96 | % | Equity/ Assets | | | 8.94 | % | | | 9.06 | % | | | 8.95 | % | | | 9.14 | % | | | 9.15 | % | | | 8.94 | % | | | 9.15 | % | Tangible equity/Tangible assets | | | 7.29 | % | | | 7.41 | % | | | 7.28 | % | | | 7.40 | % | | | 7.35 | % | | | 7.29 | % | | | 7.35 | % | Common equity tier 1 ratio (Bank) | | | 12.09 | % | | | 12.37 | % | | | 12.11 | % | | | 11.78 | % | | | 12.48 | % | | | 12.09 | % | | | 12.48 | % | | | | | | | | | | | | | | | | END OF PERIOD BALANCES | | | | | | | | | | | | | | | Total assets | | | 1,614,491 | | | | 1,620,064 | | | | 1,604,598 | | | | 1,545,367 | | | | 1,496,263 | | | | 1,614,491 | | | | 1,496,263 | | Total loans | | | 1,218,789 | | | | 1,189,559 | | | | 1,181,135 | | | | 1,180,591 | | | | 1,110,545 | | | | 1,218,789 | | | | 1,110,545 | | Deposits | | | 1,382,864 | | | | 1,391,147 | | | | 1,371,823 | | | | 1,307,244 | | | | 1,262,522 | | | | 1,382,864 | | | | 1,262,522 | | Shareholders equity | | | 144,344 | | | | 146,740 | | | | 143,655 | | | | 141,236 | | | | 136,939 | | | | 144,344 | | | | 136,939 | | Goodwill and intangibles | | | 28,811 | | | | 28,870 | | | | 28,929 | | | | 28,989 | | | | 29,048 | | | | 28,811 | | | | 29,048 | | Tangible equity | | | 115,533 | | | | 117,870 | | | | 114,726 | | | | 112,247 | | | | 107,891 | | | | 115,533 | | | | 107,891 | | Mortgage servicing portfolio | | | 1,517,593 | | | | 1,504,657 | | | | 1,482,052 | | | | 1,479,982 | | | | 1,470,360 | | | | 1,517,593 | | | | 1,470,360 | | Wealth/Brokerage assets under care | | | 578,292 | | | | 585,919 | | | | 556,930 | | | | 566,004 | | | | 563,036 | | | | 578,292 | | | | 563,036 | | Total assets under care | | | 3,710,376 | | | | 3,710,640 | | | | 3,643,580 | | | | 3,591,353 | | | | 3,529,659 | | | | 3,710,376 | | | | 3,529,659 | | Full-time equivalent employees | | | 266 | | | | 258 | | | | 258 | | | | 252 | | | | 253 | | | | 266 | | | | 253 | | Period end common shares outstanding | | | 6,196 | | | | 6,191 | | | | 6,219 | | | | 6,236 | | | | 6,268 | | | | 6,196 | | | | 6,268 | | Market capitalization (all) | | | 177,274 | | | | 156,436 | | | | 130,597 | | | | 138,883 | | | | 120,907 | | | | 177,274 | | | | 120,907 | | | | | | | | | | | | | | | | | AVERAGE BALANCES | | | | | | | | | | | | | | | Total assets | | | 1,628,195 | | | | 1,608,355 | | | | 1,579,781 | | | | 1,536,215 | | | | 1,502,389 | | | | 1,606,315 | | | | 1,487,251 | | Total earning assets | | | 1,521,057 | | | | 1,521,057 | | | | 1,479,667 | | | | 1,436,207 | | | | 1,404,330 | | | | 1,502,326 | | | | 1,387,258 | | Total loans | | | 1,217,995 | | | | 1,193,207 | | | | 1,186,225 | | | | 1,158,567 | | | | 1,104,175 | | | | 1,199,258 | | | | 1,091,670 | | Deposits | | | 1,393,085 | | | | 1,381,439 | | | | 1,347,351 | | | | 1,299,512 | | | | 1,270,783 | | | | 1,373,977 | | | | 1,256,732 | | Shareholders equity | | | 151,417 | | | | 145,034 | | | | 144,659 | | | | 140,315 | | | | 132,866 | | | | 147,936 | | | | 132,426 | | Goodwill and intangibles | | | 28,840 | | | | 28,899 | | | | 28,959 | | | | 29,027 | | | | 29,077 | | | | 28,899 | | | | 28,140 | | Tangible equity | | | 122,577 | | | | 116,135 | | | | 115,700 | | | | 111,288 | | | | 103,789 | | | | 119,037 | | | | 104,286 | | Average basic shares outstanding | | | 6,194 | | | | 6,205 | | | | 6,230 | | | | 6,252 | | | | 6,297 | | | | 6,210 | | | | 6,408 | | Average diluted shares outstanding | | | 6,218 | | | | 6,220 | | | | 6,243 | | | | 6,266 | | | | 6,311 | | | | 6,230 | | | | 6,427 | | | | | | | | | | | | | | | | SB FINANCIAL GROUP, INC. | Rate Volume Analysis - (Unaudited) | For the Three & Nine Months Ended Sep. 30, 2026 and 2025 | | | | | | ($ in thousands) | | Three Months Ended Sep. 30, 2026 | | Three Months Ended Sep. 30, 2025 | | | Average | | Average | | Average | | Average Assets | | Balance | Interest | Rate | | Balance | Interest | Rate | | | | | | | | | | Taxable securities | | $ | 177,850 | | $ | 1,004 | 2.24 | % | | $ | 193,893 | | $ | 1,097 | 2.24 | % | Overnight Cash | | | 120,444 | | | 1,145 | 3.77 | % | | | 100,164 | | | 1,111 | 4.40 | % | Nontaxable securities | | | 4,768 | | | 36 | 3.00 | % | | | 6,098 | | | 35 | 2.28 | % | Loans, net | | | 1,217,995 | | | 18,341 | 5.97 | % | | | 1,104,175 | | | 16,566 | 5.95 | % | Total earning assets | | | 1,521,057 | | | 20,526 | 5.35 | % | | | 1,404,330 | | | 18,809 | 5.31 | % | Cash on hand | | | 5,415 | | | | | | 5,044 | | | | Allowance for loan losses | | | (16,515 | ) | | | | | (15,750 | ) | | | Premises and equipment | | | 21,003 | | | | | | 21,854 | | | | Other assets | | | 97,235 | | | | | | 86,911 | | | | Total assets | | $ | 1,628,195 | | | | | $ | 1,502,389 | | | | | | | | | | | | Liabilities | | | | | | | | | Savings, MMDA and interest bearing demand | $ | 845,195 | | $ | 4,121 | 1.93 | % | | $ | 753,639 | | $ | 3,442 | 1.81 | % | Time deposits | | | 277,406 | | | 2,248 | 3.22 | % | | | 267,984 | | | 2,279 | 3.37 | % | Repurchase agreements & other | | | 7,689 | | | 6 | 0.31 | % | | | 14,015 | | | 28 | 0.79 | % | Advances from Federal Home Loan Bank | | | 22,500 | | | 230 | 4.06 | % | | | 35,000 | | | 369 | 4.18 | % | Trust preferred securities | | | 10,310 | | | 146 | 5.62 | % | | | 10,310 | | | 162 | 6.23 | % | Subordinated debt | | | 19,767 | | | 351 | 7.04 | % | | | 19,719 | | | 195 | 3.92 | % | Total interest bearing liabilities | | | 1,182,867 | | | 7,102 | 2.38 | % | | | 1,100,667 | | | 6,475 | 2.33 | % | Non interest bearing demand | | | 270,484 | | | - | | | | 249,160 | | | - | | Total funding | | | 1,453,351 | | | 1.94 | % | | | 1,349,827 | | | 1.90 | % | Other liabilities | | | 23,427 | | | | | | 19,696 | | | | Total liabilities | | | 1,476,778 | | | | | | 1,369,523 | | | | Equity | | | 151,417 | | | | | | 132,866 | | | | Total liabilities and equity | | $ | 1,628,195 | | | | | $ | 1,502,389 | | | | | | | | | | | | | Net interest income | | | $ | 13,424 | | | | $ | 12,334 | | | | | | | | | | | Net interest income as a percent of average interest-earning assets - GAAP measure | | | | 3.50 | % | | | | 3.48 | % | | | | | | | | | | Net interest income as a percent of average interest-earning assets - non GAAP | 3.51 | % | | | | 3.50 | % | - Computed on a fully tax equivalent (FTE) basis | | | | | | | | | | | | | | | | | | Nine Months Ended Sep. 30, 2026 | | Nine Months Ended Sep. 30, 2025 | | | Average | | Average | | Average | | Average Assets | | Balance | Interest | Rate | | Balance | Interest | Rate | | | | | | | | | | Taxable securities | | $ | 182,870 | | $ | 3,039 | 2.22 | % | | $ | 198,463 | | $ | 3,399 | 2.29 | % | Overnight Cash | | | 115,431 | | | 3,224 | 3.73 | % | | | 90,829 | | | 3,041 | 4.48 | % | Nontaxable securities | | | 4,767 | | | 108 | 3.03 | % | | | 6,296 | | | 108 | 2.29 | % | Loans, net | | | 1,199,258 | | | 53,282 | 5.94 | % | | | 1,091,670 | | | 48,100 | 5.89 | % | Total earning assets | | | 1,502,326 | | | 59,653 | 5.31 | % | | | 1,387,258 | | | 54,648 | 5.27 | % | Cash on hand | | | 5,429 | | | | | | 4,880 | | | | Allowance for loan losses | | | (16,398 | ) | | | | | (15,492 | ) | | | Premises and equipment | | | 21,245 | | | | | | 21,555 | | | | Other assets | | | 93,713 | | | | | | 89,050 | | | | | | | | | | | | | Total assets | | $ | 1,606,315 | | | | | $ | 1,487,251 | | | | | | | | | | | | Liabilities | | | | | | | | | Savings, MMDA and interest bearing demand | $ | 831,888 | | $ | 11,767 | 1.89 | % | | $ | 734,938 | | $ | 9,624 | 1.75 | % | Time deposits | | | 276,916 | | | 6,796 | 3.28 | % | | | 273,508 | | | 7,046 | 3.44 | % | Repurchase agreements & Other | | | 8,341 | | | 27 | 0.43 | % | | | 12,549 | | | 73 | 0.78 | % | Advances from Federal Home Loan Bank | | | 24,533 | | | 749 | 4.08 | % | | | 35,015 | | | 1,097 | 4.19 | % | Trust preferred securities | | | 10,310 | | | 435 | 5.64 | % | | | 10,310 | | | 483 | 6.26 | % | Subordinated debt | | | 19,755 | | | 789 | 5.34 | % | | | 19,707 | | | 584 | 3.96 | % | Total interest bearing liabilities | | | 1,171,743 | | | 20,563 | 2.35 | % | | | 1,086,027 | | | 18,907 | 2.33 | % | Non interest bearing demand | | | 265,173 | | | 1.91 | % | | | 248,286 | | | 1.89 | % | Total funding | | | 1,436,916 | | | | | | 1,334,313 | | | | Other liabilities | | | 21,463 | | | | | | 20,512 | | | | Total liabilities | | | 1,458,379 | | | | | | 1,354,825 | | | | Equity | | | 147,936 | | | | | | 132,426 | | | | Total liabilities and equity | | $ | 1,606,315 | | | | | $ | 1,487,251 | | | | | | | | | | | | | Net interest income | | | $ | 39,090 | | | | $ | 35,741 | | | | | | | | | | | Net interest income as a percent of average interest-earning assets - GAAP measure | | | | 3.48 | % | | | | 3.44 | % | | | | | | | | | | Net interest income as a percent of average interest-earning assets - non GAAP | 3.49 | % | | | | 3.46 | % | - Computed on a fully tax equivalent (FTE) basis | | | | | | | | | | | | | | | Non-GAAP reconciliation | | Three Months Ended | | Nine Months Ended | | | | | | | | ($ in thousands, except per share & ratios) | | Sep. 30, 2026 | | Sep. 30, 2025 | | Sep. 30, 2026 | | Sep. 30, 2025 | | | | | | | | Total Operating Revenue | | $ | 18,075 | | | $ | 16,578 | | | $ | 53,440 | | | $ | 49,140 | Adjustment to (deduct)/add OMSR recapture/impairment * | | (43 | ) | | | 301 | | | | (398 | ) | | | 131 | Adjusted Total Operating Revenue | | | 18,032 | | | | 16,879 | | | | 53,042 | | | | 49,271 | | | | | | | | | | | | | | | | | Total Operating Expense | | | 13,157 | | | | 11,498 | | | | 37,223 | | | | 35,760 | Adjustment for merger expenses | | | - | | | | - | | | | - | | | | (726 | ) Adjusted Total Operating Expense | | | 13,157 | | | | 11,498 | | | | 37,223 | | | | 35,034 | | | | | | | | | | | | | | | | | Income before Income Taxes | | | 4,791 | | | | 4,956 | | | | 15,577 | | | | 12,272 | Adjustment for OMSR*/Merger Expenses | | | (43 | ) | | | 301 | | | | (398 | ) | | | 857 | Adjusted Income before Income Taxes | | | 4,748 | | | | 5,257 | | | | 15,179 | | | | 13,129 | | | | | | | | | | | | | | | | | Provision for Income Taxes | | | 845 | | | | 910 | | | | 2,838 | | | | 2,216 | Adjustment for OMSR/Merger Expenses ** | | | (9 | ) | | | 63 | | | | (84 | ) | | | 180 | Adjusted Provision for Income Taxes | | | 836 | | | | 973 | | | | 2,754 | | | | 2,396 | | | | | | | | | | | | | | | | | Net Income | | | 3,946 | | | | 4,046 | | | | 12,739 | | | | 10,056 | Adjustment for OMSR*/Merger Expenses | | | (34 | ) | | | 238 | | | | (314 | ) | | | 677 | Adjusted Net Income | | | 3,912 | | | | 4,284 | | | | 12,425 | | | | 10,733 | | | | | | | | | | | | | | | | | Diluted Earnings per Share | | | 0.63 | | | | 0.64 | | | | 2.04 | | | | 1.56 | Adjustment for OMSR*/Merger Expenses | | | (0.01 | ) | | | 0.04 | | | | (0.05 | ) | | | 0.11 | Adjusted Diluted Earnings per Share | | $ | 0.63 | | | $ | 0.68 | | | $ | 1.99 | | | $ | 1.67 | | | | | | | | | | | | | | | | | Return on Average Assets | | | 0.96 | % | | | 1.07 | % | | | 1.06 | % | | | 0.90 | % Adjustment for OMSR*/Merger Expenses | | | (0.00 | ) | | | 0.06 | % | | | -0.03 | % | | | 0.06 | % Adjusted Return on Average Assets | | | 0.95 | % | | | 1.13 | % | | | 1.03 | % | | | 0.96 | % | | | | | | | | *valuation adjustment to the Company's mortgage servicing rights | | | | | | | | | | | | | | **tax effect is calculated using a 21% statutory federal corporate income tax rate | | | | | | | | | | | |

- Interested in SB Financial Group, Inc.? Here are five stocks we like better. - Third-quarter performance remained profitable: Net income was $3.9 million, or $0.63 per diluted share, while operating revenue rose 9% year over year to $18.1 million. Net interest margin improved to 3.50%, although expenses increased 14.4% due to hiring, technology investments and higher medical costs. - Loan growth continued to drive expansion: Loans increased 9.8% year over year to $1.22 billion, marking the 10th consecutive quarter of sequential growth, supported primarily by commercial real estate lending in Columbus. Deposits grew 9.5% year over year, despite a modest sequential decline tied to the runoff of a rate-sensitive institutional relationship. - Credit quality and shareholder returns remained strong: Nonperforming assets fell to 0.27% of total assets, net charge-offs were below 1 basis point, and allowance coverage of nonperforming loans exceeded 500%. SB Financial raised its quarterly dividend to $0.165 per share, targeting its 14th consecutive year of annual dividend increases. SB Financial Group (NASDAQ:SBFG) reported third-quarter net income of $3.9 million, or $0.63 per diluted share, compared with $4 million, or $0.64 per diluted share, in the preceding quarter. Chairman, President and CEO Mark Klein said the company's latest results marked its 63rd consecutive profitable quarter, supported by commercial lending growth, fee-based businesses and margin management. Total operating revenue rose 9% year over year to $18.1 million. Net interest income increased 8.8% to $13.4 million, while non-interest income grew 9.6% to $4.7 million and represented nearly 26% of operating revenue. → Aurora Rejects Curaleaf's Higher Bid, But the Takeover Fight Isn't Over Total loans ended the quarter at $1.22 billion, up $108 million, or 9.8%, from a year earlier and $29 million, or 2.5%, from the prior quarter. Klein said this was the company's 10th consecutive quarter of sequential loan growth. Commercial real estate loans totaled $643 million, according to CFO Tony Cosentino. The company entered the fourth quarter with an active commercial loan pipeline exceeding $53 million, along with a commercial construction pipeline that could provide another $15 million to $25 million of growth after expected exits of projects seeking permanent agency financing. → Could Quantinuum's Breakthrough Make Its Sell-Off a Bargain? During the question-and-answer session, Klein said the company was targeting high-single-digit loan growth in 2027, generally in the range of 8% to 8.5%. He identified Columbus as the primary contributor to recent expansion, accounting for roughly 70% of loan growth. Chief Lending Officer Steve Walz said commercial real estate remains the principal driver, although the company continues to pursue commercial-and-industrial lending opportunities and their associated deposit relationships. Total deposits were $1.38 billion, up $120 million, or 9.5%, from the prior-year period. Deposits declined $8.3 million sequentially, which management attributed to the anticipated runoff of a large rate-sensitive institutional relationship into the wholesale market. → IonQ's Bold Expansion Could Leave Shareholders Paying the Price Non-interest-bearing checking balances rose $11.5 million from the preceding quarter to $270 million, representing nearly 20% of total deposits. The cost of deposits was 1.81%, up 2 basis points from a year earlier. Cosentino said the company had about $65 million of excess liquidity and expected to fund anticipated loan closings without relying on wholesale funding. Net interest margin was 3.50%, up 2 basis points from a year earlier and 7 basis points sequentially. Cosentino said earning-asset yields expanded 15 basis points from the prior quarter, benefiting from balance-sheet growth and higher repricing across interest-earning assets. Management expects margin to decline by a few basis points in the fourth quarter, remain relatively flat in the first quarter, and improve by the middle of 2027. Cosentino said that, based on the company's current portfolio, each 25-basis-point increase in rates could provide an annualized benefit of approximately $600,000 to $700,000 before considering any changes in deposit pricing. Operating expenses increased 14.4% year over year to $13.2 million. Salaries and employee benefits rose to $7.3 million, while data processing expenses increased to $1.12 million from $723,000 a year earlier. Management cited hiring in commercial and treasury-management markets, higher employee medical costs, seasonal incentive accruals, and consulting and implementation costs related to credit-card and core-platform outsourcing conversions. Cosentino said the third-quarter expense level was an "aberration" due to hiring activity and technology spending that should level out over the next two quarters. For 2027, he projected a normalized base expense-growth rate of roughly 4% to 5%, while noting continued pressure from personnel and medical costs. For the first nine months, operating revenue increased 8.8% versus 4.1% growth in operating expenses, producing operating leverage of 2.1 times. Mortgage originations totaled nearly $78 million, up nearly 15% from the prior-year period despite mortgage rates remaining at or above 7% for much of the quarter. The residential mortgage pipeline entering the fourth quarter was between $20 million and $25 million. Core mortgage banking revenue was $1.8 million, up nearly 20% year over year. Mortgage servicing fees contributed $946,000, while gains on sale of mortgages totaled $1.26 million, for a gain-on-sale margin of 1.9%. The company's sold residential servicing portfolio reached $1.52 billion and generated nearly $1 million in servicing fees during the quarter. Cosentino said SB Financial expects fourth-quarter mortgage production of approximately $50 million to $60 million, which would place full-year volume near $280 million. Management is targeting a 10% to 15% increase in mortgage production during 2027, though Klein said results will depend on movements in longer-term rates. Other fee businesses included Peak Title, which generated $514,000 in revenue, and wealth management. Wealth and brokerage assets under management ended the quarter at $578 million. Asset quality remained strong, with nonperforming assets of $4.3 million, or 0.27% of total assets, down 5 basis points sequentially. Criticized loans declined year over year to $331,000, while classified loans fell more than 24% to $3.6 million. The allowance for credit losses was 1.34% of loans, compared with 1.38% in the prior quarter and 1.44% a year earlier. Allowance coverage of nonperforming loans exceeded 500%, while net charge-offs were less than 1 basis point of average loans. Total loan delinquency was below 34 basis points, and Cosentino said delinquency excluding nonaccrual loans was effectively zero. Total shareholders' equity exceeded $144 million, up 5.4% from a year earlier. Tangible book value per share was $18.65, up 8.3% year over year. The company repurchased 6,700 shares during the quarter at an average cost of $26.71, reducing its buyback pace from 28,000 shares in the prior quarter to preserve capital for organic growth. SB Financial also raised its quarterly dividend to $0.165 per share. Klein said the dividend equates to an annualized yield of approximately 2.2% and a payout ratio of 26%, keeping the company on track for its 14th consecutive year of annual dividend increases. SB Financial Group, Inc is a bank holding company headquartered in Defiance, Ohio. Through its principal subsidiary, The State Bank and Trust Company, the company provides community banking services to individuals, families, farmers, professionals and businesses. The bank offers a range of financial products, including checking and savings accounts, certificates of deposit, commercial and residential real estate lending, consumer loans, agricultural financing and business loans. Its services also include mortgage banking, treasury management, online and mobile banking, wealth management and trust services. SB Financial Group's banking operations primarily serve communities in northwest Ohio and northeast Indiana through a local branch network and digital channels. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "SB Financial Group Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

SB Financial Group, Inc. (SBFG) came out with quarterly earnings of $0.63 per share, beating the Zacks Consensus Estimate of $0.62 per share. This compares to earnings of $0.68 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +1.61%. A quarter ago, it was expected that this company would post earnings of $0.69 per share when it actually produced earnings of $0.73, delivering a surprise of +5.8%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. SB Financial Group, which belongs to the Zacks Banks - Northeast industry, posted revenues of $18.08 million for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 3.29%. This compares to year-ago revenues of $16.58 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. SB Financial Group shares have added about 35% since the beginning of the year versus the S&P 500's gain of 13.3%. While SB Financial Group has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for SB Financial Group was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.58 on $17.1 million in revenues for the coming quarter and $2.56 on $69.5 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Northeast is currently in the top 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Bankwell Financial Group, Inc. (BWFG), another stock in the same industry, has yet to report results for the quarter ended September 2026. The results are expected to be released on October 29. This company is expected to post quarterly earnings of $1.41 per share in its upcoming report, which represents a year-over-year change of +11%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Bankwell Financial Group, Inc.'s revenues are expected to be $33.39 million, up 17.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SB Financial Group, Inc. (SBFG) : Free Stock Analysis Report Bankwell Financial Group, Inc. (BWFG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Nicolet Bankshares (NIC) came out with quarterly earnings of $3.15 per share, beating the Zacks Consensus Estimate of $3.06 per share. This compares to earnings of $2.66 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.94%. A quarter ago, it was expected that this bank holding company would post earnings of $2.96 per share when it actually produced earnings of $2.99, delivering a surprise of +1.01%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Nicolet Bankshares, which belongs to the Zacks Banks - Northeast industry, posted revenues of $175.93 million for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 1.34%. This compares to year-ago revenues of $103.32 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Nicolet Bankshares shares have added about 34% since the beginning of the year versus the S&P 500's gain of 12.4%. While Nicolet Bankshares has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Nicolet Bankshares was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.23 on $174.35 million in revenues for the coming quarter and $12.02 on $661.5 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Northeast is currently in the top 27% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, SB Financial Group, Inc. (SBFG), has yet to report results for the quarter ended September 2026. The results are expected to be released on October 22. This company is expected to post quarterly earnings of $0.62 per share in its upcoming report, which represents a year-over-year change of -8.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. SB Financial Group, Inc.'s revenues are expected to be $17.5 million, up 5.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Nicolet Bankshares Inc. (NIC) : Free Stock Analysis Report SB Financial Group, Inc. (SBFG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by a diversified revenue model and strong execution in organic loan growth, which has now seen nine consecutive quarters of sequential expansion. The company is successfully capitalizing on regional market disruption from larger players, capturing $130 million in cumulative balances toward a $500 million long-term goal. Management made a deliberate strategic decision to keep mortgage processing infrastructure intact during low-volume cycles to ensure capacity for future market capture without adding incremental overhead. Operational stability was bolstered by the 18-month milestone of the Marblehead transaction, which has become a significant contributor to the firm's funding base in Northern Ohio. Asset quality remains a core competitive advantage, with nonperforming assets declining to 0.27% of total assets due to proactive management and rigorous internal reviews. The agricultural sector has become a strategic focus, with balances growing by over $20 million year-over-year as the firm tracks toward a $100 million portfolio goal. Management expects loan growth to accelerate in the second half of 2026, with a projected balance sheet increase of $50 million to $70 million. Net interest margin is anticipated to stabilize or slightly improve, with a target range of 3.45% to 3.55% as excess liquidity is deployed into higher-yielding loans. The company anticipates losing approximately $40 million in wholesale deposits in Q3 2026 but expects this to be non-material due to high existing liquidity and retail growth. Mortgage volume expectations remain sensitive to interest rates, with management noting that rates below 6% are likely required to unlock significant refinance and purchase activity. Expense run rates are projected to trend slightly higher to the $12.3 million to $12.4 million range in Q3 due to performance-based incentives and new hires. The efficiency ratio improved to 67.3%, supported by lower data processing fees as one-time merger integration costs cleared the run rate. Commercial real estate exposure is diversified, with office space specifically representing less than 5.5% of the total loan portfolio. The company adjusted its share buyback posture to be more conservative as the market price reached 1.4x tangible book value, prioritizing capital flexibility. A long-standing credit problem was addressed during the quarter; it was fully allocated in the model and is moving toward resolution with minimal earnings impact. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects the margin to move higher from current levels as $70 million in excess liquidity is used to fund a strengthening loan pipeline. The shift from 90% Columbus-based growth to a 50/50 split with legacy markets is expected to improve the funding mix by bringing in more low-cost transactional accounts. Management confirmed the current infrastructure can handle $400 million to $500 million in volume without adding staff, providing significant operating leverage when rates drop. New MLO hires in Cincinnati and Columbus are expected to drive volume even if market rates remain stuck near 6.875%. Despite a projected $40 million wholesale deposit exit, management is bullish on deposit growth due to outsized success in De Novo markets like Angola and Napoleon. Disruption from a $28 billion regional competitor continues to provide a steady stream of new commercial and retail relationship opportunities.

This article first appeared on GuruFocus. Release Date: July 24, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. SB Financial Group Inc (NASDAQ:SBFG) reported a net income of $4.5 million with diluted earnings per share of $0.72, marking a significant increase from $0.60 in the prior year quarter. The company achieved its 62nd consecutive quarter of operational profitability, demonstrating consistent financial performance. Loan balances increased by approximately $95 million or 8.7% from the prior year quarter, extending the trend of sequential loan growth to nine consecutive quarters. Total deposits climbed to $1.39 billion, an increase of 11% from the prior year quarter, showcasing strong deposit growth. Asset quality remains a competitive advantage with total nonperforming assets declining to 0.27% of total assets, a reduction of over 28% compared to the prior year. Mortgage originations for the quarter, although rebounding from the first quarter, were down compared to the prior year period, reflecting challenges in the mortgage market. The company's net interest margin slightly decreased to 3.43% from the previous quarter, indicating pressure on interest income. Operating expenses increased to $12.1 million, up 2.4% from the prior year, reflecting higher costs associated with adding new lenders. The company anticipates losing about $40 million in wholesale deposits in the upcoming quarter, which could impact liquidity. Despite strong loan growth, the linked-quarter loan growth was below expectations, indicating potential challenges in maintaining growth momentum. Warning! GuruFocus has detected 6 Warning Sign with SBFG. Is SBFG fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more details on the margin outlook and how you see it evolving in the coming quarters? A: Tony Cosentino, CFO: We anticipated that the margin percentage peaked in Q1 and would stabilize or decrease slightly. However, due to liquidity and deposit growth at favorable pricing, we expect margins to remain stable or slightly increase. We foresee loan growth in the second half of the year, which should support margins. The average cost of deposits remains favorable, which is a positive factor for margins. Q: How do you view deposit growth and its sustainability moving forward? A: Mark Klein, CEO: We are optimistic about deposit growth, especially in our new markets like Angola and Napoleon. Despite potential losses of some wholesale deposits, we expect to continue growing deposits by leveraging market disruptions and capturing low-cost deposits. We anticipate a 3-5% growth per quarter in deposits. Q: What is the outlook for loan growth in the second half of the year? A: Tony Cosentino, CFO: We expect a balance sheet increase of $50 to $70 million in loans by year-end, with about 50% of growth from Columbus and the rest from other markets. This represents a more balanced geographic spread compared to previous years. Q: Can you discuss the mortgage outlook given the current rate environment? A: Mark Klein, CEO: The high rate environment presents challenges, but we have hired high-producing MLOs and are optimistic about reaching near $300 million in mortgage originations. However, achieving this target will be challenging unless rates decrease. We are prepared to handle increased volume without adding significant overhead. Q: How do you expect expenses to trend in the second half of the year? A: Tony Cosentino, CFO: Expenses are expected to trend higher than Q2 due to filling open positions and increased compensation linked to company performance. We anticipate expenses in the range of $12.3 to $12.4 million in Q3, with a slight decrease in Q4 as mortgage volume declines. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in SB Financial Group, Inc.? Here are five stocks we like better. SB Financial Group reported second-quarter net income of $4.5 million, or $0.72 per diluted share, up from $0.60 a year ago, driven by higher net interest income and fee revenue. The company also marked its 62nd consecutive quarter of operational profitability. Loan and deposit growth remained strong, with loans up 8.7% year over year to about $1.19 billion and deposits up more than 11% to $1.39 billion. Management said it expects stronger loan production in the second half and sees margins staying near current levels. Asset quality stayed solid, with nonperforming assets falling to 0.27% of total assets and charge-offs remaining low. The bank also continued rewarding shareholders, declaring a $0.16 quarterly dividend and staying on pace for its 14th straight annual dividend increase. SB Financial Group (NASDAQ:SBFG) reported second-quarter 2026 net income of $4.5 million, or $0.72 per diluted share, compared with $0.60 per diluted share a year earlier, as higher net interest income and fee revenue supported profitability. Chairman, President and CEO Mark Klein said the company’s results reflected loan and deposit growth, controlled expenses and continued improvement in asset quality. The company said it has now recorded 62 consecutive quarters of operational profitability. Tangible book value per share rose about 16% from a year earlier to $19.04, while adjusted tangible book value excluding accumulated other comprehensive income was $22.57. → Could Truth API Become Trump Media’s First Meaningful Revenue Driver? Total operating revenue increased 4.5% year over year to $17.9 million and rose 3% from the prior quarter, according to Chief Financial Officer Tony Cosentino. Net interest income increased 6.8% to $13 million from $12.1 million in the second quarter of 2025, as interest income growth outpaced higher interest expense. Net interest margin was 3.43%, compared with 3.48% in both the prior-year and linked quarters. Cosentino said the decline partly reflected elevated liquidity during the period, but management expects loan growth and low-cost deposit gathering to support margins in the second half. He said the company expects margin to remain at or above current levels and potentially trend toward a range of roughly 3.45% to 3.55%. → GE Vernova Just Sent a Mixed AI Signal to Investors Non-interest income totaled $5 million, representing approximately 28% of operating revenue. Mortgage banking contributed $1.9 million, down from $2.2 million a year earlier but up from $1.8 million in the first quarter. Mortgage servicing fees were $934,000, while mortgage gain-on-sale revenue was $1.5 million. The company said its mortgage gain-on-sale percentage improved to 2.19%, its highest level since the second quarter of 2024. Adjusted diluted earnings per share, excluding mortgage servicing rights valuation adjustments, rose nearly 26% to $0.73 from $0.58 a year earlier, Cosentino said. → D-Wave Quantum or a Quantum ETF: Which Is the Better Bet? Loans ended the quarter at approximately $1.19 billion, up about $95 million, or 8.7%, from a year earlier and $8.4 million from the first quarter. The company said this marked its ninth consecutive quarter of sequential loan growth. Commercial real estate loans totaled $611 million, while office exposure accounted for less than 5.5% of the loan portfolio. During the question-and-answer session, management said it expects stronger loan production in the second half of the year. Cosentino said the company could generate approximately $50 million to $70 million of balance-sheet loan growth through year-end before normal repayments, with roughly half expected from Columbus and half from other markets. Total deposits rose $141 million, or more than 11%, from a year earlier to $1.39 billion, including a $19.3 million sequential increase. Noninterest-bearing checking balances increased $17.3 million year over year to nearly $260 million. Klein said the company has captured $130 million in cumulative deposits from regional banking-market disruption as it works toward a longer-term target of $500 million. Management also highlighted its de novo markets in Angola, Indiana, and Napoleon, Ohio. The two offices recorded $19.3 million in loans and $22.5 million in deposits during the first quarter, according to Klein. Cosentino said the company expects a large institutional deposit relationship of roughly $40 million to move to the wholesale market later in 2026, but said the anticipated loss should not be material to earnings and could be covered by current excess liquidity and retail deposit growth. Mortgage originations increased 21% sequentially to $79.3 million but remained below the $97.9 million reported a year ago. Purchase and construction activity represented 81% of mortgage volume. Klein said mortgage rates above 6% have constrained refinancing activity, although the residential pipeline has stabilized in a range of $25 million to $30 million. The company sold 88.5% of mortgage production during the quarter and ended with a mortgage servicing portfolio of $1.5 billion. Klein said SB Financial has maintained its mortgage processing infrastructure and could handle substantially higher production without adding significant overhead. He also cited growth in Cincinnati, where mortgage volume totaled nearly $20 million in the first half, more than 50% above the comparable 2025 period. Peak Title generated $577,000 in revenue, up nearly 20% sequentially and flat from a year earlier. Wealth management fees increased to $955,000, while assets under management approached $557 million. Klein said the company’s relationship with Advisory Health is now operational and is intended to broaden investment offerings for clients. Non-interest expense totaled $12.1 million, up 2.4% from a year earlier, primarily reflecting lender hires and $7 million in salaries and benefits. Lower data-processing costs partially offset those increases. The efficiency ratio improved to 67.3%, while pre-tax, pre-provision income rose 9% year over year to $5.8 million. Nonperforming assets declined to $4.4 million, or 0.27% of total assets, from $6.2 million a year earlier. The allowance for credit losses was $16.4 million, or 1.38% of loans, and covered nonperforming loans by 470%. Gross delinquencies were below 35 basis points, while net charge-offs were six basis points during the quarter. Total shareholders’ equity increased 9.8% from a year earlier to nearly $147 million. The company repurchased more than 28,000 shares at an average price of $22.06, though Cosentino said buybacks have been moderated in 2026 to preserve capital flexibility. SB Financial declared a quarterly dividend of $0.16 per share payable in August. Klein said the payout ratio was approximately 22% and that the company remains on track for its 14th consecutive year of annual dividend increases. SB Financial Group, Inc (NASDAQ: SBFG) is the bank holding company for Star Financial Bank, a full-service community bank headquartered in Fort Wayne, Indiana. Through its wholly owned subsidiary, the company offers a broad portfolio of commercial and consumer banking products, including deposit accounts, lending solutions, mortgage origination and servicing, and cash management services. In its commercial banking division, SB Financial Group provides working capital loans, equipment financing, commercial real estate lending and treasury management solutions designed for small- and mid-sized businesses. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "SB Financial Group Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.