SB Financial Group(SBFG) - 2025 Q2 - Quarterly Results

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] - 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][7] - Tangible book value (TBV) per share increased by 7.7% year-over-year to $16.44[6] 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] - 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] 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] 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][12] - 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] - 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][13] 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][15] - The loan growth included $18.0 million from the Marblehead acquisition, while organic loan growth was $71.3 million[14][17] - Shareholders' equity increased by $8.2 million from the prior year to $133.6 million[15] - The company repurchased 124,000 shares during Q2 2025, demonstrating a commitment to returning value to shareholders[16] 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 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 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 $5.2 million (0.39%) in the prior year[20] - The allowance for credit losses stood at 1.43% of total loans, covering nonperforming loans by 265.0%, reflecting a conservative risk management approach[21] Nonperforming Assets (June 30, 2025 vs June 30, 2024) | Metric ($ 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 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 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 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 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 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] - The cost of total interest-bearing liabilities for Q2 2025 was 2.33%, down from 2.48% in Q2 2024[38] 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% |