UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________to___________________________ Commission file number 1-36785 SB FINANCIAL GROUP, INC. (Exact name of registrant as specified in its charter) Ohio 34-1395 ...

Image source: The Motley Fool. Friday, July 25, 2025 at 3:00 p.m. ET Call participants Chairman, President, and CEO — Mark A. Klein Executive Vice President and CFO — Anthony R. Cosentino Executive Vice President, Chief Lending Officer — Steven J. Walz For analyst quotes or media inquiries, email [email protected] Takeaways Net income: Net income was $3.9 million, with diluted EPS (GAAP) of $0.60, representing an increase of nearly 28% compared to Q2 2024. Adjusted EPS: $0.58 adjusted EPS, factoring in serv ...

Group 1: Company Highlights - Celestica (CLS) is one of the largest electronics manufacturing services companies globally, serving various industries, with a 9.9% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - SB Financial Group (SBFG) is a financial services holding company providing a full range of services for consumers and small businesses, also experiencing a 9.9% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - HomeTrust Bancshares (HTB) focuses on attracting deposits and investing in loans secured by mortgages, with a 7.9% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3] - Houlihan Lokey (HLI) is a global investment bank specializing in mergers and acquisitions, with a 6.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [4] - Udemy (UDMY) offers online courses across various subjects, with a 4.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [5]

[Financial and Operational Highlights](index=1&type=section&id=Financial_and_Operational_Highlights) SB Financial Group reported strong Q2 2025 results, with net income up 23.7% to $3.9 million and diluted EPS rising 27.7% to $0.60, driven by robust loan growth Q2 & H1 2025 Earnings Highlights (YoY) | Earnings Highlights ($ in thousands, except per share) | Three Months Ended Jun. 2025 | Three Months Ended Jun. 2024 | % Change | Six Months Ended Jun. 2025 | Six Months Ended Jun. 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Operating revenue** | $17,176 | $14,045 | 22.3% | $32,562 | $27,176 | 19.8% | | **Net interest income** | $12,128 | $9,659 | 25.6% | $23,408 | $18,839 | 24.3% | | **Net income** | $3,852 | $3,113 | 23.7% | $6,010 | $5,481 | 9.7% | | **Earnings per diluted share** | $0.60 | $0.47 | 27.7% | $0.93 | $0.82 | 13.4% | - GAAP net income was **$3.9 million**, or **$0.60** per diluted share, a significant increase from **$3.1 million**, or **$0.47** per diluted share, in the prior-year quarter[6](index=6&type=chunk) - Loan portfolio grew by **$89.3 million (8.9%)** and deposits grew by **$134.6 million (12.1%)** year-over-year, partly driven by the Marblehead acquisition[6](index=6&type=chunk)[7](index=7&type=chunk) - Tangible book value (TBV) per share increased by **7.7%** year-over-year to **$16.44**[6](index=6&type=chunk) [Results of Operations](index=2&type=section&id=Results_of_Operations) Total operating revenue grew 22.3% year-over-year to $17.2 million in Q2 2025, driven by a 25.6% increase in net interest income and a 36 basis point expansion in net interest margin - Total operating revenue increased **22.3%** YoY to **$17.2 million**, driven by growth in both net interest income and noninterest income[8](index=8&type=chunk) - Net interest margin expanded by **36 basis points** year-over-year to **3.48%**, reflecting stronger interest-earning asset performance and stabilized funding costs[8](index=8&type=chunk) [Mortgage Loan Business](index=2&type=section&id=Mortgage_Loan_Business) The mortgage loan business showed strong Q2 2025 performance, with net mortgage banking revenue reaching $2.2 million and originations increasing to $97.9 million Mortgage Banking Highlights (Q2 2025 vs Q2 2024) | Metric ($ in thousands) | Jun. 2025 | Jun. 2024 | Prior Year Growth | | :--- | :--- | :--- | :--- | | Mortgage originations | $97,901 | $75,110 | $22,791 | | Mortgage sales | $74,313 | $55,835 | $18,478 | | Mortgage banking revenue, net | $2,159 | $1,842 | $317 | - The mortgage servicing portfolio grew to **$1.46 billion**, an increase of **$66.6 million** from the prior year[10](index=10&type=chunk) [Noninterest Income and Noninterest Expense](index=3&type=section&id=Noninterest_Income_and_Noninterest_Expense) Noninterest income rose 15.1% to $5.0 million in Q2 2025, while noninterest expense increased 11.1% to $11.9 million, leading to an improved efficiency ratio of 68.9% - Noninterest income totaled **$5.0 million**, up **$0.661 million (15.1%)** YoY, primarily due to increased gains on sales of mortgage loans and title service revenue[11](index=11&type=chunk)[12](index=12&type=chunk) - Noninterest expense was **$11.9 million**, an **11.1%** increase from the prior year, driven by higher salary and benefit expenses, data processing, and professional fees[12](index=12&type=chunk) - The efficiency ratio improved to **68.9%** in Q2 2025, compared to **80.0%** in the linked quarter and **75.9%** in the prior-year quarter[12](index=12&type=chunk)[13](index=13&type=chunk) [Balance Sheet Analysis](index=3&type=section&id=Balance_Sheet_Analysis) As of June 30, 2025, total assets were $1.49 billion, with loans growing 8.9% to $1.09 billion and deposits increasing 12.1% to $1.25 billion, supported by acquisitions and share repurchases - Total assets stood at **$1.49 billion** as of June 30, 2025, with loan growth of **$89.3 million (8.9%)** and deposit growth of **$134.6 million (12.1%)** year-over-year[14](index=14&type=chunk)[15](index=15&type=chunk) - The loan growth included **$18.0 million** from the Marblehead acquisition, while organic loan growth was **$71.3 million**[14](index=14&type=chunk)[17](index=17&type=chunk) - Shareholders' equity increased by **$8.2 million** from the prior year to **$133.6 million**[15](index=15&type=chunk) - The company repurchased **124,000 shares** during Q2 2025, demonstrating a commitment to returning value to shareholders[16](index=16&type=chunk) [Loan Portfolio](index=4&type=section&id=Loan_Portfolio) Total loans reached $1.09 billion in Q2 2025, an 8.9% year-over-year increase, primarily driven by a 20.9% growth in the Commercial Real Estate portfolio Loan Balances by Type (June 30, 2025) | Loan Type | Balance ($ in thousands) | % of Total | Annual Growth (%) | | :--- | :--- | :--- | :--- | | Commercial RE | $525,671 | 48.0% | 20.9% | | Residential RE | $310,126 | 28.3% | -1.9% | | Commercial | $118,984 | 10.9% | -3.5% | | Consumer & Other | $79,014 | 7.2% | 18.7% | | Agriculture | $60,924 | 5.6% | -5.3% | | **Total Loans** | **$1,094,719** | **100.0%** | **8.9%** | [Deposit Portfolio](index=4&type=section&id=Deposit_Portfolio) Total deposits grew to $1.25 billion, a 12.1% increase year-over-year, with notable growth in Savings (21.8%) and Non-Interest bearing DDA (15.8%) Deposit Balances by Type (June 30, 2025) | Deposit Type | Balance ($ in thousands) | % of Total | Annual Growth (%) | | :--- | :--- | :--- | :--- | | Savings | $282,311 | 22.6% | 21.8% | | Time Deposits | $271,149 | 21.7% | 4.9% | | Money Market | $249,536 | 20.0% | 10.6% | | Non-Int DDA | $241,245 | 19.3% | 15.8% | | Interest DDA | $205,581 | 16.4% | 7.7% | | **Total Deposits** | **$1,249,822** | **100.0%** | **12.1%** | [Asset Quality](index=4&type=section&id=Asset_Quality) SB Financial maintained strong asset quality in Q2 2025, with nonperforming assets at $6.2 million (0.42% of total assets) and a robust allowance for credit losses at 1.43% of total loans - Nonperforming assets totaled **$6.2 million**, or **0.42%** of total assets, compared to **$5.2 million (0.39%)** in the prior year[20](index=20&type=chunk) - The allowance for credit losses stood at **1.43%** of total loans, covering nonperforming loans by **265.0%**, reflecting a conservative risk management approach[21](index=21&type=chunk) Nonperforming Assets (June 30, 2025 vs June 30, 2024) | Metric ($ in thousands) | Jun. 2025 | Jun. 2024 | Annual Change | | :--- | :--- | :--- | :--- | | Total Nonaccruing Loans | $5,904 | $4,734 | $1,170 | | Foreclosed Assets and Other | $284 | $510 | ($226) | | **Total Nonperforming Assets** | **$6,188** | **$5,244** | **$944** | | % of Total assets | 0.42% | 0.39% | 18.0% | [Financial Statements and Supplementary Data](index=7&type=section&id=Financial_Statements_and_Supplementary_Data) This section presents SB Financial Group's unaudited consolidated financial statements and supplementary data for periods ended June 30, 2025, including balance sheets, income statements, and key financial highlights [Consolidated Balance Sheets](index=7&type=section&id=Consolidated_Balance_Sheets) The Consolidated Balance Sheet as of June 30, 2025, shows total assets of $1.486 billion, total liabilities of $1.353 billion, and shareholders' equity of $133.6 million Key Balance Sheet Items (As of June 30) | ($ in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total assets | $1,486,301 | $1,342,186 | | Loans, net of allowance | $1,079,074 | $989,778 | | Total deposits | $1,249,822 | $1,115,188 | | Total liabilities | $1,352,653 | $1,216,707 | | Total shareholders' equity | $133,648 | $125,479 | [Consolidated Statements of Income](index=8&type=section&id=Consolidated_Statements_of_Income) The Consolidated Statement of Income details Q2 2025 performance, with net interest income of $12.1 million and net income of $3.85 million Key Income Statement Items | ($ in thousands) | Three Months Ended Jun. 30, 2025 | Six Months Ended Jun. 30, 2025 | | :--- | :--- | :--- | | Net interest income | $12,128 | $23,407 | | Provision for credit losses | $597 | $984 | | Noninterest income | $5,048 | $9,155 | | Noninterest expense | $11,852 | $24,262 | | **Net income** | **$3,852** | **$6,010** | [Consolidated Financial Highlights](index=10&type=section&id=Consolidated_Financial_Highlights) This section provides key performance metrics for Q2 2025, including ROAA of 1.03%, ROE of 11.67%, net interest margin of 3.48%, and tangible book value per share of $16.44 Key Performance Ratios (Q2 2025 vs Q2 2024) | Performance Ratio | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Return on average assets (ROAA) | 1.03% | 0.93% | | Return on average equity (ROE) | 11.67% | 10.22% | | Net interest margin | 3.48% | 3.12% | | Efficiency ratio | 68.90% | 75.86% | | Tangible book value per share | $16.44 | $15.26 | [Rate Volume Analysis](index=12&type=section&id=Rate_Volume_Analysis) The rate volume analysis shows Q2 2025 GAAP net interest margin at 3.48%, a 36 basis point improvement, with yield on earning assets at 5.29% and cost of interest-bearing liabilities at 2.33% - The yield on total earning assets for Q2 2025 was **5.29%**, up from **5.05%** in Q2 2024[38](index=38&type=chunk) - The cost of total interest-bearing liabilities for Q2 2025 was **2.33%**, down from **2.48%** in Q2 2024[38](index=38&type=chunk) [Non-GAAP Reconciliation](index=14&type=section&id=Non-GAAP_Reconciliation) This table reconciles GAAP earnings to adjusted non-GAAP figures, showing Q2 2025 adjusted net income of $3.7 million ($0.58 diluted EPS) versus GAAP net income of $3.9 million ($0.60 diluted EPS) GAAP to Non-GAAP Reconciliation (Q2 2025) | ($ in thousands, except per share) | GAAP | Adjustments | Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Net Income | $3,852 | ($126) | $3,726 | | Diluted EPS | $0.60 | ($0.02) | $0.58 | | Return on Avg. Assets | 1.03% | -0.03% | 1.00% | | Return on Avg. Equity | 11.67% | -0.38% | 11.29% |

Financial Data and Key Metrics Changes - For Q2 2025, net income was $3,900,000 with diluted earnings per share of $0.60, an increase of nearly 28% compared to the prior year quarter [5] - Tangible book value per share increased to $16.44, up from $15.26 last year, representing a 7.7% increase [5] - Net interest income totaled $12,100,000, an increase of over 25% from $9,700,000 in the second quarter of last year [5] - Operating expenses decreased approximately 4.5% from the linked quarter [7] - Noninterest income rose 15.1% from the prior year quarter to $5,000,000 [11] Business Line Data and Key Metrics Changes - Mortgage originations for the quarter were just short of $98,000,000, reflecting a strong rebound [9] - Loan growth for the quarter was approximately $90,000,000, up 8.9% from the prior year [5] - The wealth management division faced challenges but remains a valued part of the product suite [12] - Commercial real estate loans grew by approximately $91,000,000, while consumer loans increased by over $12,000,000 [18] Market Data and Key Metrics Changes - Deposits grew by over 12% year-over-year, including Marblehead deposits of £51,000,000 [6] - Excluding Marblehead deposits, deposit growth was approximately 7.5% [14] - The loan book grew $89,000,000 or approximately 9% from the prior year [15] Company Strategy and Development Direction - The company focuses on five key initiatives: revenue diversity, organic growth, deepening client relationships, operational excellence, and top-tier asset quality [8] - The company aims to capitalize on market disruptions to drive organic growth and maintain operational efficiency [17] - The integration of the Marblehead acquisition has been successful, retaining legacy relationships and community connections [13] Management Comments on Operating Environment and Future Outlook - Management expressed optimism for the second half of 2025, anticipating positive resolutions to several nonperforming credits [30] - The company expects continued solid loan growth and stable to slightly lower funding costs, which should support margin expansion [30] - Management highlighted the potential for increased residential mortgage volume with anticipated rate reductions [30] Other Important Information - The company was added to the Russell 2000 Index during the recent rebalancing, reflecting strong financial performance [8] - The allowance for credit losses remained robust at 1.43% of total loans, providing 265% coverage of nonperforming assets [20] Q&A Session Summary Question: Mortgage outlook and potential for $300,000,000 in volume - Management remains optimistic about achieving $300,000,000 in mortgage volume, especially with strong performance in key markets like Indianapolis [36][38] Question: Gain on sale margin consistency - The gain on sale margin is expected to remain stable, projected in the range of $2.15 to $2.25 for the rest of 2025 [40] Question: Loan growth outlook and pipeline status - Management is optimistic about loan growth, with a strong pipeline and some modest payoffs noted [42][47] Question: Margin stabilization and future expectations - The margin is expected to improve slightly, potentially reaching around 3.70% [56][57] Question: Capital management and M&A considerations - The company is exploring M&A opportunities while also focusing on organic growth, with a potential slowdown in share buybacks [62][64] Question: Expense management and future run rates - Management indicated that expenses are expected to rise with increased mortgage production, but overall efficiency is improving [66][68]

Company Performance - SB Financial Group, Inc. (SBFG) reported quarterly earnings of $0.58 per share, exceeding the Zacks Consensus Estimate of $0.54 per share, and up from $0.46 per share a year ago, representing an earnings surprise of +7.41% [1] - The company posted revenues of $17.18 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.85%, compared to year-ago revenues of $14.05 million [2] - Over the last four quarters, SB Financial Group has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance and Outlook - SB Financial Group shares have declined approximately 5.6% since the beginning of the year, while the S&P 500 has gained 8.1% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at $0.54 for the coming quarter and $2.03 for the current fiscal year [4][7] - The estimate revisions trend for SB Financial Group was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Zacks Industry Rank for Banks - Northeast, to which SB Financial Group belongs, is currently in the top 23% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Viewpoint - SB Financial Group, Inc. reported strong financial results for the second quarter of 2025, highlighting significant growth in net income, operating revenue, and loan balances, driven by strategic acquisitions and effective operational management [1][4][5]. Financial Performance - Operating revenue for Q2 2025 was $17.2 million, a 22.3% increase from $14.0 million in Q2 2024 [4][7]. - Net interest income rose to $12.1 million, reflecting a 25.6% year-over-year increase, attributed to strong loan growth and stabilized funding costs [4][5][7]. - Net income for the quarter was $3.9 million, up 23.7% from $3.1 million in the prior year, with diluted earnings per share (DEPS) increasing to $0.60, a 27.7% rise [4][5][7]. Loan and Deposit Growth - Total loans increased by $89.3 million, or 8.9%, year-over-year, with a sequential growth of $6.4 million from the previous quarter [5][14][18]. - Deposits grew by $134.6 million, or 12.1%, year-over-year, reaching $1.25 billion, bolstered by the Marblehead acquisition [5][15][19]. Noninterest Income and Expenses - Noninterest income for Q2 2025 was $5.0 million, a 15.1% increase from the prior year, driven by gains on mortgage loans and title insurance [10][11]. - Noninterest expenses rose to $11.9 million, an 11.1% increase from the previous year, primarily due to higher salary and benefit costs [12][13]. Asset Quality - Nonperforming assets totaled $6.2 million, representing 0.42% of total assets, an increase from 0.39% in the prior year [21][22]. - The allowance for credit losses was 1.43% of total loans, providing 265% coverage of nonperforming loans, indicating a conservative risk management approach [22][23]. Balance Sheet Highlights - As of June 30, 2025, total assets were $1.49 billion, with a robust loan portfolio of $1.09 billion, marking an 8.9% year-over-year increase [14][15]. - Shareholders' equity increased to $133.6 million, reflecting a commitment to enhancing shareholder value through solid earnings performance [15][30]. Strategic Outlook - The company aims to leverage its balance sheet strength and strategic resource management to support long-term growth ambitions, even amid uncertain economic conditions [17].

Company Overview - SB Financial Group, Inc. (SBFG) is located in Defiance and operates within the Finance sector. The stock has experienced a price decline of 9.47% since the beginning of the year [3]. Dividend Information - The company currently pays a dividend of $0.15 per share, resulting in a dividend yield of 3.17%, which is higher than the Banks - Northeast industry's yield of 2.72% and the S&P 500's yield of 1.55% [3]. - SBFG's annualized dividend of $0.60 has increased by 7.1% compared to the previous year. Over the past five years, the company has raised its dividend five times, achieving an average annual increase of 9.81% [4]. - The current payout ratio for SBFG is 32%, indicating that the company distributes 32% of its trailing 12-month earnings per share as dividends [4]. Earnings Growth Expectations - For the fiscal year 2025, SBFG anticipates solid earnings growth, with the Zacks Consensus Estimate projecting earnings of $2.03 per share, reflecting a year-over-year growth rate of 18.71% [5]. Investment Considerations - SBFG is considered a compelling investment opportunity due to its strong dividend profile and the current Zacks Rank of 3 (Hold). The company is positioned well for income investors, especially in a market where high-yielding stocks may face challenges during rising interest rates [6].

Core Points - SB Financial Group, Inc. has been included in the Russell 3000 and Russell 2000 indices, marking a significant recognition of its financial performance and business resilience [1][3] - The Russell 3000 Index includes the 4,000 largest US stocks ranked by total market capitalization, with membership lasting for one year [2] - The inclusion in the Russell indices enhances SB Financial's visibility within the investment community and reflects its commitment to delivering consistent financial results and long-term value [3] Company Overview - SB Financial Group is headquartered in Defiance, Ohio, and operates as a diversified financial services holding company for The State Bank and Trust Company and SBFG Title, LLC [4] - The State Bank offers a comprehensive range of financial services, including wealth management, mortgage banking, and commercial lending, through 26 offices and 26 ATMs across Ohio and Indiana [4] - SB Financial Group's common stock is listed on the NASDAQ Capital Market under the ticker symbol "SBFG" [4] Industry Context - FTSE Russell, a global index leader, provides benchmarking and analytics solutions for investors, with approximately $18.1 trillion benchmarked to its indexes [5] - FTSE Russell's indexes cover 98% of the investable market globally, making them a preferred choice for asset owners and investment banks [5]

Core Points - SB Financial Group, Inc. is set to release its second quarter 2025 financial results on July 24, 2025, after market close [1] - A conference call and webcast will follow on July 25, 2025, at 11:00 a.m. EDT [1][2] Company Overview - SB Financial Group is headquartered in Defiance, Ohio, and operates as a diversified financial services holding company for State Bank & Trust Company and SBFG Title, LLC [3] - The company offers a full range of financial services including wealth management, private client services, mortgage banking, and commercial and agricultural lending through 26 offices across Ohio and Indiana [3] - SB Financial's common stock is listed on the NASDAQ Capital Market under the ticker symbol "SBFG" [3]