SB Financial Group Announces Second Quarter 2025 Results
DEFIANCE, Ohio, July 24, 2025 (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 second quarter ended June 30, 2025.
Second Quarter 2025 Highlights compared to the second quarter of the prior year include:
GAAP net income and Diluted Earnings per Share ("DEPS") were $3.9 million, or $0.60 per DEPS, well above the $3.1 million, or $0.47 per DEPS in the prior year quarter. Net Income, adjusted for Originated Mortgage Servicing Rights ("OMSR"), was $3.7 million, up 20.9 percent compared to $3.1 million for the prior-year period. Adjusted DEPS of $0.58 was also up 25.4 percent, from the prior year.
Net interest income of $12.1 million increased by 25.6 percent from $9.7 million reported in the prior-year quarter.
Loan growth of $89.3 million, or 8.9 percent from the prior-year quarter, with growth from the linked quarter of $6.4 million, or 0.6 percent. This marks five consecutive quarters of sequential loan growth. Loan growth adjusted for the Marblehead acquisition, was $71.3 and $7.0 million, from the prior year and linked quarters, respectively.
Deposit growth of $134.6 million, or 12.1 percent from the prior-year quarter, with a decline from the linked quarter of $21.4 million, or 1.7 percent. Adjusted for the Marblehead acquisition, total deposits increased $83.8 million from the prior year.
Tangible book value ("TBV") per share ended the quarter at $16.44 up $1.18 per share or 7.7 percent from the prior year quarter.
Six months ended June 30, 2025 Highlights compared to the same period of the prior year:
Mortgage banking revenue totaled $3.6 million for the first half of 2025, reflecting an increase of 6.9 percent compared to $3.4 million for the first half of 2024.
Net interest income rose to $23.4 million, representing a year-over-year improvement of 24.3 percent from $18.8 million for the six months ending June 30,2024.
Total interest expense came in at $12.4 million, up slightly by 2.6 percent from $12.1 million in the prior year period.
Earnings Highlights
Three Months Ended
Six Months Ended
($ in thousands, except per share & ratios)
Jun. 2025
Jun. 2024
% Change
Jun. 2025
Jun. 2024
% Change
Operating revenue
$
17,176
$
14,045
22.3
%
$
32,562
$
27,176
19.8
%
Interest income
18,467
15,654
18.0
%
35,840
30,954
15.8
%
Interest expense
6,339
5,995
5.7
%
12,432
12,115
2.6
%
Net interest income
12,128
9,659
25.6
%
23,408
18,839
24.3
%
Provision for credit losses
597
-
N/M
984
-
N/M
Noninterest income
5,048
4,386
15.1
%
9,154
8,337
9.8
%
Noninterest expense
11,852
10,671
11.1
%
24,262
20,953
15.8
%
Net income
3,852
3,113
23.7
%
6,010
5,481
9.7
%
Adjusted Earnings per diluted share
0.58
0.46
26.1
%
1.00
0.79
26.6
%
Earnings per diluted share
0.60
0.47
27.7
%
0.93
0.82
13.4
%
Adjusted Return on Avg. Assets
1.00
%
0.92
%
8.7
%
0.85
%
0.81
%
4.9
%
Return on average assets
1.03
%
0.93
%
10.8
%
0.82
%
0.82
%
0.0
%
Adjusted Return on Avg. Equity
11.29
%
10.12
%
11.5
%
10.54
%
8.45
%
24.7
%
Return on average equity
11.67
%
10.22
%
14.2
%
9.19
%
9.02
%
1.9
%
"Our second quarter results highlight the execution of our growth strategy and disciplined operational management, and their positive impact on our results," said Mark A. Klein, Chairman, President, and CEO. "Net income for the quarter was $3.9 million, a 23.7 percent increase from the prior-year quarter, with the GAAP DEPS of $0.60 up 27.7 percent from the prior year. Our solid second quarter performance reflects the first full quarter of contribution from the Marblehead acquisition which strengthened our liquidity position and further expanded our market presence in Northern Ohio."
Net interest income for the quarter grew by 25.6 percent to $12.1 million compared to the previous year, driven by continued strong loan growth and stabilization of funding costs. Total loans increased by $89.3 million, compared to the prior year, and by $6.4 million from the linked quarter. Adjusted for the Marblehead acquisition, total loan growth would have been $71.3. Deposits rose $134.6 million, or 12.1 percent, to $1.25 billion, reflecting the impact of the acquisition and the strength of our new and existing client relationships. Adjusted for the acquisition, deposits increased $83.8 million from the prior year.
RESULTS OF OPERATIONS
In the second quarter of 2025, total operating revenue increased to $17.2 million, a 22.3 percent rise from $14.0 million in the prior year and an 11.6 percent increase from the linked quarter, driven by continued growth in both net interest income and noninterest income. Net interest income reached $12.1 million, a strong 25.6 percent year-over-year increase, reflecting higher interest income on loans, which rose by $2.2 million to $16.2 million. Deposit costs increased by 7.5 percent to $5.6 million but were partially offset by decreases in interest expense on other funding sources, resulting in a 5.7 percent increase in total interest expense compared to the prior year quarter. As a result, the net interest margin expanded by 36 basis points year-over-year to 3.48 percent, reflecting the continued strength of our interest-earning assets and stabilization of funding costs. Noninterest income for the quarter increased by 15.1 percent year-over-year to $5.0 million due primarily to improvements in gain on sale of mortgage loans and title insurance as well as modest increases in wealth management, mortgage loan servicing and customer service fees. These fees were partially offset by decreases in gain on sales of non-mortgage loans. "We continue to focus on maintaining a balanced growth strategy and diversified revenue stream coupled with effective cost management," said Mr. Klein.
Mortgage Loan Business
Net mortgage banking revenue for the quarter reached $2.2 million, up $317,000 from the prior-year quarter. Loan servicing fees added $904,000 to revenue, reflecting an increase of $42,000 from the prior-year quarter. The OMSR net valuation adjustment for the second quarter of 2025 was a positive $159,000 compared to a positive $38,000 in the second quarter of 2024.
Mortgage Banking
($ in thousands)
Jun. 2025
Mar. 2025
Dec. 2024
Sep. 2024
Jun. 2024
Prior Year Growth
Mortgage originations
$
97,901
$
39,775
$
72,534
$
70,715
$
75,110
$
22,791
Mortgage sales
74,313
39,279
62,301
61,271
55,835
18,478
Mortgage servicing portfolio
1,456,374
1,432,184
1,427,318
1,406,273
1,389,805
66,569
Mortgage servicing rights
15,896
14,965
14,868
14,357
14,548
1,348
Revenue
Loan servicing fees
904
894
886
874
862
42
OMSR amortization
(469
)
(294
)
(358
)
(370
)
(335
)
(134
)
Net administrative fees
435
600
528
504
527
(92
)
OMSR valuation adjustment
159
11
288
(465
)
38
121
Net loan servicing fees
594
611
816
39
565
29
Gain on sale of mortgages
1,565
849
1,196
1,311
1,277
288
Mortgage banking revenue, net
$
2,159
$
1,460
$
2,012
$
1,350
$
1,842
$
317
Noninterest Income and Noninterest Expense
"Noninterest income for the second quarter of 2025 totaled $5.0 million, up $661,000 or 15.1 percent from the prior-year quarter, primarily due to increased gains on sales of mortgage loans and OSMR, and increased title service and other revenue. Compared to the prior-year quarter, gains on sales of mortgage loans and OSMR grew modestly by $289,000 year over year, and title insurance revenue added $176,000, reflecting our revenue diversification strategy," Mr. Klein noted.
Noninterest Income/Noninterest Expense
($ in thousands, except ratios)
Jun. 2025
Mar. 2025
Dec. 2024
Sep. 2024
Jun. 2024
Prior Year Growth
Noninterest Income (NII)
$
5,048
$
4,107
$
4,557
$
4,123
$
4,386
$
662
NII / Total Revenue
29.4
%
26.7
%
29.5
%
28.8
%
31.5
%
-2.1
%
NII / Average Assets
1.4
%
1.1
%
1.3
%
1.2
%
1.3
%
0.1
%
Total Revenue Growth
22.3
%
17.2
%
2.2
%
4.5
%
-0.6
%
22.9
%
Noninterest Expense (NIE)
$
11,852
$
12,410
$
11,003
$
11,003
$
10,671
$
1,181
Efficiency Ratio
68.9
%
80.0
%
71.1
%
76.8
%
75.9
%
-7.0
%
NIE / Average Assets
3.2
%
3.4
%
3.2
%
3.2
%
3.2
%
0.0
%
Net Noninterest Expense/Avg. Assets
-1.8
%
-2.3
%
-1.8
%
-2.0
%
-1.9
%
0.1
%
Total Expense Growth
11.1
%
20.7
%
6.1
%
5.0
%
3.2
%
7.9
%
Noninterest expense for the second quarter of 2025 was $11.9 million, up 11.1 percent from the prior year, driven primarily by increased salary and benefit expenses, data processing and professional fees.
"Our efficiency ratio in the second quarter of 2025 was 68.9 percent marking a solid improvement compared to the linked quarter and the prior year," stated Mr. Klein.
Balance Sheet
As of June 30, 2025, SB Financial reported total assets of $1.49 billion, down slightly from the linked quarter but higher than the previous year. Year-over-year growth was primarily driven by a robust increase in the loan portfolio, which reached $1.09 billion, marking a $89.3 million or 8.9 percent increase year over year. Loan growth also included $18.0 million in loans added with the completion of the acquisition. Cash increased by $57.5 million from the prior year, including $35 million added from the liquidation of the acquired investment portfolio.
Total deposits increased to $1.25 billion, growing $134.6 million or 12.1 percent year over year, including $50.9 million in low-cost deposits from the acquisition and $83.8 million in organic deposit growth reflecting SB Financial's successful efforts in deposit gathering and customer engagement within dynamic markets. Shareholders' equity ended the quarter at $133.6 million, representing an $8.2 million increase from the prior year. This growth reflects management's ongoing commitment to enhancing shareholder value through solid earnings performance.
During the second quarter, SB Financial repurchased 124,000 shares, more than in the previous quarters as the Company made opportunistic purchases below our target range. This reflects the Company's commitment to returning value to shareholders through dividends and share repurchases while retaining adequate capital to support our long-term growth.
"As we progress through the second half of 2025, our balance sheet strength and strategic management of resources form a foundation to support our long-term strategic growth ambitions," said Mr. Klein. "Even in the current uncertain rate environment, we achieved our fifth consecutive quarter of sequential loan growth, with balances increasing by $89.3 million from the previous year, which included $71.3 million of organic loan growth. This performance underscores the strength of our deep client relationships and our sustained competitiveness in local markets as we pursue an innovative, "hybrid" office operating strategy. Our strong asset quality, supported by top-decile coverage ratios, remains a key component of our financial stability, which will enable us to take advantage of emerging opportunities while continuing to pursue operational excellence. Looking ahead, we are committed to driving shareholder value and sustaining robust financial performance as the economy evolves and stabilizes."
Loan Balances
($ in thousands, except ratios)
Jun. 2025
Mar. 2025
Dec. 2024
Sep. 2024
Jun. 2024
Annual Growth
Commercial
$
118,984
$
125,878
$
124,764
$
123,821
$
123,287
$
(4,303
)
% of Total
10.9
%
11.6
%
11.9
%
12.0
%
12.3
%
-3.5
%
Commercial RE
525,671
509,518
479,573
459,449
434,967
90,704
% of Total
48.0
%
46.8
%
45.8
%
44.6
%
43.3
%
20.9
%
Agriculture
60,924
61,443
64,680
64,887
64,329
(3,405
)
% of Total
5.6
%
5.6
%
6.2
%
6.3
%
6.4
%
-5.3
%
Residential RE
310,126
319,307
308,378
314,010
316,233
(6,107
)
% of Total
28.3
%
29.3
%
29.5
%
30.5
%
31.5
%
-1.9
%
Consumer & Other
79,014
72,128
69,340
67,788
66,574
12,440
% of Total
7.2
%
6.6
%
6.6
%
6.6
%
6.6
%
18.7
%
Total Loans
$
1,094,719
$
1,088,274
$
1,046,735
$
1,029,955
$
1,005,390
$
89,329
Total Growth Percentage
8.9
%
Deposit Balances
($ in thousands, except ratios)
Jun. 2025
Mar. 2025
Dec. 2024
Sep. 2024
Jun. 2024
Annual Growth
Non-Int DDA
$
241,245
$
240,446
$
232,155
$
222,425
$
208,244
$
33,001
% of Total
19.3
%
18.9
%
20.1
%
19.2
%
18.7
%
15.8
%
Interest DDA
205,581
208,583
201,085
202,097
190,857
14,724
% of Total
16.4
%
16.4
%
17.4
%
17.4
%
17.1
%
7.7
%
Savings
282,311
285,902
237,987
241,761
231,855
50,456
% of Total
22.6
%
22.5
%
20.6
%
20.8
%
20.8
%
21.8
%
Money Market
249,536
257,013
222,161
228,182
225,650
23,886
% of Total
20.0
%
20.2
%
19.3
%
19.7
%
20.2
%
10.6
%
Time Deposits
271,149
279,276
259,217
265,068
258,582
12,567
% of Total
21.7
%
22.0
%
22.5
%
22.9
%
23.2
%
4.9
%
Total Deposits
$
1,249,822
$
1,271,220
$
1,152,605
$
1,159,533
$
1,115,188
$
134,634
Total Growth Percentage
12.1
%
Asset Quality
As of June 30, 2025, SB Financial continued to focus on strong asset quality metrics. Nonperforming assets totaled $6.2 million, representing 0.42 percent of total assets, an increase of $944,000 compared to $5.2 million or 0.39 percent of total assets reported in the prior year, but relatively stable compared to the linked quarter balance of $6.1 million, representing 0.41 percent of total assets.
The allowance for credit losses remained strong at 1.43 percent of total loans, providing 265.0 percent coverage of nonperforming loans, a level consistent with the linked quarter and reflective of our conservative approach to risk management. The net loan charge-offs to average loans ratio remained modest at 2 basis points, declining from 3 basis points in the linked quarter but up from the 1 basis point net recoveries recorded in the prior year. These metrics reflect disciplined credit practices and effective collateral management.
"Our asset quality metrics embody our approach and commitment to disciplined risk management within a dynamic economic environment," stated Mr. Klein. "While we observed an uptick in nonperforming assets compared to the prior year, our reserve coverage ratio and continued low charge-off levels underscore the quality of our loan portfolio and the strength of our lending relationships. We are committed to balancing our conservative approach in managing credit risk with the need to effectively manage our growth to enhance shareholder returns."
Nonperforming Assets
Annual Change
($ in thousands, except ratios)
Jun. 2025
Mar. 2025
Dec. 2024
Sep. 2024
Jun. 2024
Commercial & Agriculture
$
3,306
$
3,418
$
2,927
$
2,899
$
2,781
$
525
% of Total Com./Ag. loans
1.84
%
1.82
%
1.55
%
1.54
%
1.48
%
18.9
%
Commercial RE
816
798
807
813
475
341
% of Total CRE loans
0.16
%
0.16
%
0.17
%
0.18
%
0.11
%
71.8
%
Residential RE
1,577
1,608
1,539
1,536
1,247
330
% of Total Res. RE loans
0.51
%
0.50
%
0.50
%
0.49
%
0.39
%
26.5
%
Consumer & Other
205
227
243
270
231
(26
)
% of Total Con./Oth. loans
0.26
%
0.31
%
0.35
%
0.40
%
0.35
%
-11.3
%
Total Nonaccruing Loans
5,904
6,051
5,516
5,518
4,734
1,170
% of Total loans
0.54
%
0.56
%
0.53
%
0.54
%
0.47
%
24.7
%
Foreclosed Assets and Other Assets
284
73
-
-
510
(226
)
Total Change (%)
-44.3
%
Total Nonperforming Assets
$
6,188
$
6,124
$
5,516
$
5,518
$
5,244
$
944
% of Total assets
0.42
%
0.41
%
0.40
%
0.40
%
0.39
%
18.00
%
Webcast and Conference Call
The Company will hold the second quarter 2025 earnings conference call and webcast on July 25, 2025, at 11:00 a.m. EDT. Interested parties may access the conference call by dialing 1-888-338-9469. The webcast can be accessed at ir.yourstatebank.com. An audio replay of the call will be available on the Company's website.
About SB Financial Group
Headquartered in Defiance, Ohio, SB Financial is a diversified financial services holding company for the State Bank & Trust Company (State Bank) 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 26 offices: 24 in ten Ohio counties and two in Northeast, Indiana, and 26 ATMs. State Bank has six loan production offices located throughout the Tri-State region of Ohio, Indiana and Michigan. 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 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. KleinChairman, President and Chief Executive
Anthony V. CosentinoExecutive Vice President and Chief Financial
SB FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS - (Unaudited)
June
March
December
September
June
($ in thousands)
2025
2025
2024
2024
2024
ASSETS
Cash and due from banks
$
79,463
$
105,145
$
25,928
$
49,348
$
21,983
Interest bearing time deposits
1,565
1,565
1,565
1,706
2,417
Available-for-sale securities
195,955
199,721
201,587
211,511
207,856
Loans held for sale
12,774
4,286
6,770
8,927
7,864
Loans, net of unearned income
1,094,719
1,088,274
1,046,735
1,029,955
1,005,390
Allowance for credit losses
(15,645
)
(15,391
)
(15,096
)
(15,278
)
(15,612
)
Premises and equipment, net
21,857
21,875
20,456
20,715
20,860
Federal Reserve and FHLB Stock, at cost
5,466
5,340
5,223
5,223
5,204
Foreclosed assets
284
73
-
-
510
Interest receivable
5,299
5,072
4,908
4,842
4,818
Goodwill
27,158
27,158
23,239
23,239
23,239
Cash value of life insurance
31,060
30,871
30,685
30,488
30,294
Mortgage servicing rights
15,458
14,965
14,868
14,357
14,548
Other assets
10,888
12,048
12,649
8,916
12,815
Total assets
$
1,486,301
$
1,501,002
$
1,379,517
$
1,393,949
$
1,342,186
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non interest bearing demand
$
241,245
$
240,446
$
232,155
$
222,425
$
208,244
Interest bearing demand
205,581
208,583
201,085
202,097
190,857
Savings
282,311
285,902
237,987
241,761
231,855
Money market
249,536
257,013
222,161
228,182
225,650
Time deposits
271,149
279,276
259,217
265,068
258,582
Total deposits
1,249,822
1,271,220
1,152,605
1,159,533
1,115,188
