PART I [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's total assets grew to $1.33 billion by September 30, 2021, with nine-month net income increasing 56% to $14.9 million, though third-quarter net income declined 21.8% due to lower mortgage loan sale gains Condensed Consolidated Balance Sheet Highlights | ($ in thousands) | September 2021 (unaudited) | December 2020 (audited) | Change | | :--- | :--- | :--- | :--- | | Total assets | $ 1,329,725 | $ 1,257,839 | +5.7% | | Loans, net | $ 832,736 | $ 860,149 | -3.2% | | Available-for-sale securities | $ 248,815 | $ 149,406 | +66.5% | | Total deposits | $ 1,111,660 | $ 1,049,011 | +6.0% | | Total shareholders' equity | $ 144,292 | $ 142,923 | +1.0% | Condensed Consolidated Income Statement Highlights | ($ in thousands, except per share data) | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $ 10,024 | $ 9,259 | $ 28,806 | $ 26,679 | | Provision for loan losses | $ 300 | $ 1,800 | $ 1,050 | $ 3,700 | | Total noninterest income | $ 6,649 | $ 10,418 | $ 24,108 | $ 21,194 | | Net Income | $ 4,103 | $ 5,250 | $ 14,945 | $ 9,586 | | Diluted earnings per common share | $ 0.58 | $ 0.69 | $ 2.08 | $ 1.25 | Condensed Consolidated Statements of Cash Flows Highlights (Nine Months Ended) | ($ in thousands) | September 30, 2021 | September 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $ 6,010 | $ 5,369 | | Net cash used in investing activities | $ (77,909) | $ (54,086) | | Net cash provided by financing activities | $ 69,224 | $ 116,294 | | Increase (Decrease) in cash and cash equivalents | $ (2,675) | $ 67,577 | [Note 3 – Business Combination](index=16&type=section&id=NOTE%203%20%E2%80%93%20BUSINESS%20COMBINATION) On June 5, 2020, the Company acquired Edon Bancorp for $15.5 million in cash, recording $4.3 million in goodwill and $0.7 million in core deposit intangibles to expand its Northwest Ohio presence - The Company acquired Edon Bancorp and its subsidiary, The Edon State Bank Company of Edon, Ohio, effective **June 5, 2020**[38](index=38&type=chunk) Edon Bancorp Acquisition Details | Metric | Value ($ in millions) | | :--- | :--- | | Total Purchase Price (cash) | $15.5 | | Goodwill Recorded | $4.3 | | Core Deposit Intangible Recorded | $0.7 | | Direct Acquisition Costs Expensed | $1.2 | [Note 5 – Loans and Allowance for Loan Losses](index=19&type=section&id=NOTE%205%20%E2%80%93%20LOANS%20AND%20ALLOWANCE%20FOR%20LOAN%20LOSSES) Total loans decreased to $846.5 million by September 30, 2021, while the allowance for loan losses increased to $13.8 million, and nonaccrual loans significantly declined to $3.2 million, indicating improved credit quality Loan Portfolio Composition | ($ in thousands) | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Commercial & industrial | $ 138,377 | $ 204,767 | | Commercial real estate | $ 387,720 | $ 370,820 | | Agricultural | $ 57,318 | $ 55,235 | | Residential real estate | $ 207,675 | $ 182,165 | | Consumer & HELOC | $ 55,660 | $ 61,157 | | **Total loans** | **$ 846,750** | **$ 874,144** | Allowance for Loan Losses (ALLL) Activity (Nine Months Ended Sep 30, 2021) | ($ in thousands) | Amount | | :--- | :--- | | Beginning balance (Jan 1, 2021) | $ 12,574 | | Charge offs | $ (102) | | Recoveries | $ 290 | | Provision | $ 1,050 | | **Ending balance (Sep 30, 2021)** | **$ 13,812** | - Nonaccrual loans decreased significantly from **$6.4 million** at the end of 2020 to **$3.2 million** as of September 30, 2021[59](index=59&type=chunk) - As of **September 30, 2021**, the Company had **no loans on COVID-related deferral**, down from the relief provided under the CARES Act[87](index=87&type=chunk) [Note 7 – Mortgage Servicing Rights](index=32&type=section&id=NOTE%207%20%E2%80%93%20MORTGAGE%20SERVICING%20RIGHTS) Mortgage servicing rights increased to $11.2 million by September 30, 2021, driven by capitalized MSRs and a $2.9 million recapture of impairment, with $1.3 billion in unpaid principal balance of serviced mortgage loans - The unpaid principal balance of mortgage loans serviced for others was approximately **$1.3 billion** at both **September 30, 2021**, and **December 31, 2020**[90](index=90&type=chunk) Mortgage Servicing Rights Activity (Nine Months Ended Sep 30) | ($ in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Balance at beginning of period | $ 7,759 | $ 11,017 | | MSRs capitalized | $ 3,658 | $ 3,971 | | MSRs amortization | $ (3,078) | $ (3,479) | | Net change in valuation allowance | $ 2,855 | $ (2,974) | | **Balance at end of period** | **$ 11,194** | **$ 8,535** | [Note 13 – Subordinated Debt](index=36&type=section&id=NOTE%2013%20%E2%80%93%20SUBORDINATED%20DEBT) On May 27, 2021, the Company issued $20.0 million in 3.65% Fixed to Floating Rate Subordinated Notes due 2031, with net proceeds of approximately $19.5 million - On **May 27, 2021**, the Company issued **$20.0 million** in aggregate principal amount of its **3.65% Fixed to Floating Rate Subordinated Notes due 2031**[111](index=111&type=chunk) - The interest rate is fixed at **3.65%** through **May 31, 2026**, and then resets quarterly to **SOFR + 296 basis points**. Net proceeds were approximately **$19.5 million** after **$0.5 million** in issuance costs[111](index=111&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income for the first nine months of 2021 increased 56% to $14.9 million, despite a 21.8% decline in Q3 net income, while total assets grew 5.7% to $1.33 billion and the bank maintained a 'well capitalized' status [Results of Operations](index=48&type=section&id=Results%20of%20Operations) Third-quarter 2021 net income decreased 21.8% to $4.1 million due to lower mortgage banking revenue, while nine-month net income increased 56% to $14.9 million, driven by a lower provision for loan losses and MSR impairment recapture Q3 2021 vs Q3 2020 Performance | Metric | Q3 2021 | Q3 2020 | Change | | :--- | :--- | :--- | :--- | | Net Income | $4.1M | $5.3M | -21.8% | | Diluted EPS | $0.58 | $0.69 | -15.9% | | Provision for Loan Losses | $0.3M | $1.8M | -83.3% | | Net Mortgage Banking Revenue | $4.1M | $7.9M | -48.1% | Nine Months 2021 vs 2020 Performance | Metric | Nine Months 2021 | Nine Months 2020 | Change | | :--- | :--- | :--- | :--- | | Net Income | $14.9M | $9.6M | +56.0% | | Diluted EPS | $2.08 | $1.25 | +66.4% | | Provision for Loan Losses | $1.1M | $3.7M | -70.3% | | MSR Impairment (Recapture) | $2.9M Recapture | ($3.0M) Impairment | Favorable | - The company continued its participation in the PPP lending program, processing **$24.6 million** in forgiveness during **Q3 2021** and holding an outstanding balance of **$10.2 million** at **September 30, 2021**[159](index=159&type=chunk) [Changes in Financial Condition](index=50&type=section&id=Changes%20in%20Financial%20Condition) Total assets increased 5.7% to $1.33 billion by September 30, 2021, supported by a 6.0% rise in deposits, while total loans decreased 3.0% to $846.5 million Financial Condition at Sep 30, 2021 vs Dec 31, 2020 | ($ in billions) | Sep 30, 2021 | Dec 31, 2020 | % Change | | :--- | :--- | :--- | :--- | | Total Assets | $1.33 | $1.26 | +5.7% | | Total Loans | $0.847 | $0.873 | -3.0% | | Total Deposits | $1.11 | $1.05 | +6.0% | | Total Equity | $0.144 | $0.143 | +1.0% | - The allowance for loan loss increased by **$1.2 million** from year-end 2020 to reach **$13.8 million**[178](index=178&type=chunk) [Capital Resources](index=50&type=section&id=Capital%20Resources) As of September 30, 2021, State Bank was classified as 'well capitalized,' with all capital ratios exceeding minimum regulatory requirements, demonstrating a strong capital position - State Bank was classified as '**well capitalized**' under the regulatory framework for prompt corrective action as of **September 30, 2021**[179](index=179&type=chunk) State Bank Capital Ratios (September 30, 2021) | Capital Ratio | Actual Ratio | 'Well Capitalized' Minimum | | :--- | :--- | :--- | | Tier I Capital to average assets | 9.98% | 5.0% | | Tier I Common equity capital to risk-weighted assets | 13.23% | 6.5% | | Tier I Capital to risk-weighted assets | 13.23% | 8.0% | | Total Risk-based capital to risk-weighted assets | 14.48% | 10.0% | [Liquidity](index=51&type=section&id=LIQUIDITY) The company maintained a strong liquidity position with liquid assets increasing to $399.8 million by September 30, 2021, supplemented by significant off-balance-sheet borrowing capacity and unpledged securities - Liquid assets increased to **$399.8 million** at **September 30, 2021**, from **$303.2 million** at **December 31, 2020**[181](index=181&type=chunk) - The company has significant additional off-balance-sheet liquidity, including approximately **$105.2 million** in additional FHLB borrowing capacity and **$161.0 million** in unpledged securities available to pledge for borrowings[194](index=194&type=chunk) - For the nine months ended **September 30, 2021**, net cash from financing activities was **$69.2 million**, primarily from a **$133.7 million** increase in transaction deposits and **$19.5 million** in proceeds from new subordinated debt, partially offset by a **$71.0 million** decrease in time deposits[187](index=187&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Management states that there has been no material change in the Company's market risk since the information provided in its Annual Report on Form 10-K for the year ended December 31, 2020 - There has been **no material change** in the Company's market risk from the information contained in the Annual Report on Form 10-K for the year ended **December 31, 2020**[203](index=203&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's principal executive officer and principal financial officer concluded that as of the end of the quarter, the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were **effective** as of the end of the quarterly period[204](index=204&type=chunk)[206](index=206&type=chunk) - No changes occurred during the fiscal quarter ended **September 30, 2021**, that have **materially affected**, or are reasonably likely to materially affect, the Company's internal control over financial reporting[205](index=205&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions incidental to its ordinary course of business, with management believing their ultimate resolution will not materially adversely affect financial position or results - In the opinion of management, any liability from pending legal actions is **not likely to have a material adverse effect** on the Company's consolidated financial position, results of operations or cash flows[208](index=208&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed, referring to the detailed discussion in prior Form 10-K and Form 10-Q reports - The report states there are **no material changes** to the risk factors from those disclosed in the **2020 Form 10-K** and the **Q2 2021 Form 10-Q**[209](index=209&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2021, the company repurchased 106,911 common shares at a weighted average price of $18.32, as part of a new program authorizing up to 750,000 shares, with 539,258 shares remaining available - On **May 25, 2021**, the board of directors approved a new share repurchase program for up to **750,000 common shares** through **May 31, 2022**[210](index=210&type=chunk) Share Repurchases for Q3 2021 | Period | Total Shares Purchased | Weighted Average Price Paid per Share | | :--- | :--- | :--- | | July 2021 | 54,542 | $18.49 | | August 2021 | 29,542 | $18.15 | | September 2021 | 22,827 | $18.15 | | **Total Q3** | **106,911** | **$18.32** | - As of **September 30, 2021**, a maximum of **539,258 shares** may yet be purchased under the current plan[211](index=211&type=chunk) [Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL data files

Financial Data and Key Metrics Changes - For Q3 2021, net income was $4.1 million, yielding a return on assets (ROA) of 1.23% and a pre-tax pre-provision ROA of 1.63% [6] - Net interest income increased by 8.3% year-over-year to $10 million, driven by PPP forgiveness, loan growth, and a 35% reduction in interest expense [6][14] - Total assets and total deposits expanded by nearly double-digit percentages year-to-date, with a decline in delinquencies to an all-time low [5][21] - Tangible book value rose to $17.55, an 11.6% increase year-over-year [7] Business Line Data and Key Metrics Changes - Mortgage origination volume decreased by 24% year-over-year to $153 million, with loan sale gains down by 51% [8] - Non-interest income fell to $6.6 million from $10.4 million in the prior year quarter, but was slightly up compared to the linked quarter [9] - Wealth management revenue increased by nearly 19% year-to-date, with assets under management up by $66 million or nearly 13% from the prior year [9] Market Data and Key Metrics Changes - Loan balances, excluding PPP effects, increased by $21 million or 10% annualized from the linked quarter [6] - Deposit levels continued to grow, with a quarter-over-quarter increase of $21 million and a year-over-year increase of $97 million [6][10] Company Strategy and Development Direction - The company focuses on five key strategic initiatives: diversifying net revenue, expanding scale organically and through M&A, enhancing product offerings, deploying technology for client care, and maintaining asset quality [8] - The company aims to capture market share in rural markets and expand into urban markets like Columbus and Indianapolis [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth, with a pipeline of $90 million to $100 million and expectations for continued client engagement and expansion [31][34] - The company anticipates a shift in mortgage production towards purchase and construction lending, which represented 61% of total activity in the quarter [12] - Management expects to see a decline in refinance volume from 45% to approximately 30% in 2022, impacting origination levels [29] Other Important Information - The company announced a dividend of $0.115 per share, equating to a payout ratio of roughly 21% and a dividend yield of approximately 2.4% [23] - The company repurchased 107,000 shares at an average price slightly above tangible book value, with 520,000 shares remaining in the buyback program [42] Q&A Session Summary Question: Outlook on mortgage production and gain-on-sale margins - Management expects to maintain mortgage production between $600 million to $650 million, with gain-on-sale margins settling in the mid-2% range [28][29] Question: Thoughts on expenses moving into 2022 - Elevated expenses are anticipated due to increased headcount and technology investments, but the company has shifted to a more variable cost structure [30] Question: Outlook on loan growth - Management is optimistic about loan growth, with a target of $75 million to $100 million and a robust pipeline [31][34] Question: Drivers on margin and future expectations - Funding costs are expected to remain stable, while asset yields may improve by 5 to 10 basis points over the next few quarters [36][37] Question: Update on PPP revenues - The company expects to realize the remaining PPP fees by the end of the year, with minimal loans left [38] Question: Thoughts on balance sheet and deposits - The company is seeing increased client interest in leveraging liquidity, leading to a positive outlook for future loan production [40] Question: Share repurchase program and future strategy - The company plans to continue its buyback program aggressively, viewing it as a strong use of capital given current earnings [41][42] Question: M&A activity and market opportunities - Management is engaged in discussions for potential M&A opportunities but remains disciplined in their approach [45][46]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regu ...

SB Financial Group, Inc. (NASDAQ:SBFG) Q2 2021 Earnings Conference Call July 27, 2021 11:00 AM ET Company Participants Sarah Mekus - Investor Relations Mark Klein - Chairman, President and Chief Executive Officer Tony Cosentino - Chief Financial Officer Jon Gathman - Senior Lending Officer Conference Call Participants Selena Xia - Janney Montgomery Scott Operator Good morning and welcome to the SB Financial Second Quarter 2021 Conference Call and Webcast. I would like to inform you that this conference call ...

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 March 31, 2021 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 34-139 ...

SB Financial Group, Inc. (NASDAQ:SBFG) Q1 2021 Earnings Conference Call May 3, 2021 11:00 AM ET Company Participants Sarah Mykus - Investor Relations Mark Klein - Chairman, President & Chief Executive Officer Tony Cosentino - Executive Vice President & Chief Financial Officer Jon Gathman - Executive Vice President & Senior Lending Officer Conference Call Participants Brian Martin - Janney Montgomery Operator Good day, and welcome to the SB Financial Group First Quarter 2021 Conference Call. All participants ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 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 001-36785 SB FINANCIAL GROUP, INC. (Exact name of Registrant as specified in its charter) | Ohio | 34-1395608 | ...

SB Financial Group, Inc. (NASDAQ:SBFG) Q4 2020 Earnings Conference Call January 29, 2021 11:00 AM ET Company Participants Sarah Mykus - Investor Relations Mark Klein - Chairman, President & Chief Executive Officer Tony Cosentino - Chief Financial Officer Jon Gathman - Senior Lending Officer Conference Call Participants Brian Martin - Janney Montgomery Operator Good day, and welcome to the SB Financial Group Fourth Quarter 2020 Conference Call. All participants will be in a listen-only mode. [Operator Instru ...

SB Financial Group, Inc. (NASDAQ:SBFG) Q3 2020 Earnings Conference Call October 30, 2020 11:00 AM ET Company Participants Sarah Mykus - IR Mark Klein - Chairman, President and CEO Anthony Cosentino - CFO Jonathan Gathman - Senior Lending Officer Conference Call Participants Brian Martin - Jannie Montgomery Operator Good morning everyone and welcome to the SB Financial Third Quarter 2020 Conference Call and Webcast. I would like to inform you that this conference call is being recorded, and that all particip ...

SB Financial Group, Inc. (NASDAQ:SBFG) Q2 2020 Results Earnings Conference Call July 28, 2020 11:00 AM ET Company Participants Mark Klein - Chairman, President and CEO Tony Cosentino - Chief Financial Officer Ernesto Gaytan - Chief Technology Innovation and Operations Officer Jon Gathman - Senior Lending Officer Conference Call Participants Brian Joseph Martin - Janney Montgomery Operator Good morning, and welcome to the SB Financial Group's second quarter 2020 conference call and webcast. I would like to i ...