DEFIANCE, Ohio, Jan. 25, 2024 (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 fourth quarter and twelve months ended December 31, 2023.

Fourth Quarter 2023 Highlights Over the Fourth Quarter Prior Year Include:

Net income of $3.9 million increased by 9.9 percent compared to the prior year with diluted Earnings Per Share ("EPS") of $0.57 and increased 44.5 percent compared to the linked quarter.
Interest income of $15.1 million increased by 16.9 percent from the prior year.
Loan growth of $38.1 million, or 4.0 percent from the prior year quarter, marks the eighth consecutive quarter of expanding loans.
Strong asset quality with nonperforming assets decreasing to 25 basis points of total assets, a marked improvement from 33 basis points in the same quarter of the previous year. Delinquency levels for loans 30 days or more past due ended the year at 15 basis points of total loans.

Twelve Months Ended December 31, 2023 Highlights Over the Prior Year Include:

Net income decreased slightly to $12.1 million, a 3.4 percent drop from the prior year's $12.5 million, and diluted EPS was $1.75, down 1.13 percent from $1.77. Adjusted EPS were up by $0.12 per share or 7.4 percent.
Deposits decreased by $16.5 million, or 1.5 percent to $1.07 billion.
Mortgage origination volume was $215.5 million for the trailing twelve months, with a servicing portfolio of $1.37 billion.


Earnings Highlights	Three Months Ended								Twelve Months Ended
($ in thousands, except per share & ratios)	Dec. 2023			Dec. 2022			% Change		Dec. 2023			Dec. 2022			% Change
Operating revenue	$	15,115		$	14,613		3.4	%	$	56,994		$	57,630		-1.1	%
Interest income		15,126			12,937		16.9	%		58,152			44,569		30.5	%
Interest expense		5,542			2,037		172.1	%		18,879			5,170		265.2	%
Net interest income		9,584			10,900		-12.1	%		39,273			39,399		-0.3	%
Provision for credit losses		(74	)		-		0.0	%		315			-		0.0	%
Noninterest income		5,531			3,713		49.0	%		17,721			18,231		-2.8	%
Noninterest expense		10,369			10,269		1.0	%		41,962			42,314		-0.8	%
Net income		3,883			3,533		9.9	%		12,095			12,521		-3.4	%
Earnings per diluted share		0.57			0.50		14.0	%		1.75			1.77		-1.1	%
Return on average assets		1.17	%		1.08	%	8.3	%		0.91	%		0.95	%	-4.2	%
Return on average equity		13.23	%		12.17	%	8.7	%		10.22	%		9.86	%	3.7	%

"We demonstrated our resilience and operational strength throughout the fourth quarter of 2023," stated Mark A. Klein, Chairman, President, and CEO. "In doing so, we achieved a 9.9 percent increase in net income over the prior year, underpinned by robust growth in our loan portfolio, which eclipsed the $1 billion mark for the first time in our history. This marks our eighth successive quarter of loan expansion, underscoring our commitment to disciplined and consistent growth in our loan portfolio. While we navigate the economic headwinds, these milestones underscore our capability to adapt and broaden our revenue base. Looking to the future, we remain dedicated to reinforcing our solid financial foundation and delivering outstanding value to our clients and shareholders."

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, which includes both net interest income and noninterest income, showed a notable increase of 10.3 percent compared to the linked quarter and a 3.4 percent increase over the same quarter last year. Specifically, net interest income rose by 0.5 percent from the linked quarter, although it decreased by 12.1 percent from the year-ago quarter. The net interest margin saw a slight increase of 2 basis points from the linked quarter but experienced a decrease of 50 basis points when compared to the prior-year quarter. These changes in net interest income and margin primarily resulted from higher costs associated with deposits and funding.

In terms of noninterest income, we observed significant growth, increasing by 32.9 percent from the linked quarter and by 49.0 percent from the prior year quarter, largely due to our opportunistic decision to sell equity securities , resulting in a $1.5 million gain. Mortgage servicing revenue and gain on sale from residential loans were stable in the quarter compared to the prior year with SBA gains of $177 thousand. Conversely, income from wealth management and customer service fees, along with title insurance revenue, showed a decrease compared to the figures from the previous year's corresponding quarter.

Mortgage Loan Business

Mortgage loan originations for the fourth quarter of 2023 stood at $39.6 million, a decrease of $11.7 million, or 22.8 percent, from the year-ago quarter. This decline reflects the cooling housing market, which aligns with broader economic trends. However, it's noteworthy that the total sales of originated loans reached $33.4 million, marking an increase of $9.8 million, or 41.4 percent from the prior year quarter. This increase underscores an effective sales strategy in the purchase market and indicates our commitment to emphasizing our traditional model of generation and sale.

For the full year of 2023, SB Financial reported mortgage originations totaling $215.5 million. Our originations reflected the changes in the market, with new purchase/construction lending constituting 92 percent of the business, up from 80 percent for all of 2022.

Net mortgage banking revenue for the quarter was $1.3 million, reflecting a steady performance with a marginal increase from the $1.2 million reported in the fourth quarter of 2022. Mortgage servicing operations demonstrated commendable stability, with a valuation adjustment resulting in a positive valuation adjustment of $12 thousand in the fourth quarter of 2023, a significant improvement from the $0.1 million decrease experienced in the same quarter of the prior year. The year 2023 concluded with a favorable adjustment, recapturing $0.1 million in servicing rights, in stark contrast to the previous year's $1.3 million impairment of these rights. The mortgage servicing portfolio experienced growth, closing at $1.37 billion as of December 31, 2023, an increase of $14.7 million, or 1.1 percent from the prior year.

"In a year marked by fluctuating interest rates and heightened market sensitivity, our mortgage loan business has showcased remarkable resilience," said Mr. Klein. "The increase in total sales of originated loans by over 40 percent compared to the same period last year, when originations faced significant headwinds, speaks to the agility, expertise and presence of our team. The steady net mortgage banking revenue and the growth of our servicing portfolio affirm our strategic focus and our dedication to delivering exceptional service and value to our clients."


Mortgage Banking
($ in thousands)	Dec. 2023			Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022			Prior Year Growth
Mortgage originations	$	39,566		$	61,200		$	65,387		$	49,366		$	51,219		$	(11,653	)
Mortgage sales		33,362			54,085			47,933			25,803			23,590			9,772
Mortgage servicing portfolio		1,366,667			1,367,209			1,353,904			1,344,158			1,352,016			14,651
Mortgage servicing rights		13,906			13,893			13,723			13,548			13,503			403


Mortgage servicing revenue
Loan servicing fees		855			850			844			844			851			4
OMSR amortization		(282	)		(334	)		(334	)		(292	)		(310	)		28
Net administrative fees		573			516			510			552			541			32
OMSR valuation adjustment		(12	)		(78	)		(16	)		56			86			(98	)
Net loan servicing fees		561			438			494			608			627			(66	)
Gain on sale of mortgages		747			1,207			1,056			599			550			197
Mortgage banking revenue, net	$	1,308		$	1,645		$	1,550		$	1,207		$	1,177		$	131

Noninterest Income and Noninterest Expense

Noninterest income for the quarter increased from the prior year quarter by 49.0 percent and increased by 32.9 percent from the linked quarter, reflective of the equity sale discussed earlier. Gain-on-sale yields on mortgage loans increased $0.2 million, or 35.8 percent from the prior year. Similarly, gain-on-sale yields of non-mortgage loans also saw a notable increase from both the prior year and the linked quarter, primarily driven by favorable market conditions and our focused efforts to capitalize on emerging lending opportunities.

For the fourth quarter of 2023, SB Financial reported a noninterest expense of $10.4 million, reflecting a slight increase from the prior year but a decrease from the linked quarter. The increase over the prior year was the direct result of a $0.2 million increase in professional fees and an increase of $0.1 million in data processing fees. These increases were partially offset by a $0.1 million decrease in marketing expenses and a marginal decrease of $25 thousand in salaries and employee benefits. As a result, total headcount for the Company is down over 6 percent compared to the prior year.

"Our noninterest income, always one of our strengths, was up over the same period last year and compared to the linked quarter," Mr. Klein noted. "Significant contributions came from our gain-on-sale yields, which saw a substantial increase in both mortgage and non-mortgage loans compared to the same quarter of the previous year. On the expense side, we've maintained a disciplined approach, with noninterest expenses witnessing a modest year-over-year increase due to targeted investments in professional and data processing services. These investments are critical in supporting our growth and enhancing our operational efficiency. Even with these necessary expenditures, we've managed to realize savings in marketing and personnel costs, underscoring our commitment to control costs and improve our efficiency."


Noninterest Income/Noninterest Expense
($ in thousands, except ratios)	Dec. 2023			Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022			Prior Year Growth
Noninterest Income (NII)	$	5,531		$	4,163		$	4,361		$	3,666		$	3,713		$	1,818
NII / Total Revenue		36.6	%		30.4	%		30.7	%		26.2	%		25.4	%		11.2	%
NII / Average Assets		1.7	%		1.2	%		1.3	%		1.1	%		1.1	%		0.6	%
Total Revenue Growth		3.4	%		-5.3	%		-0.5	%		-2.0	%		-6.7	%		3.4	%

Noninterest Expense (NIE)	$	10,369		$	10,481		$	10,339		$	10,773		$	10,269		$	100
Efficiency Ratio		68.4	%		76.4	%		72.7	%		76.9	%		70.2	%		-1.8	%
NIE / Average Assets		3.1	%		3.1	%		3.1	%		3.2	%		3.1	%		0.0	%
Net Noninterest Expense/Avg. Assets		-1.4	%		-1.9	%		-1.8	%		-2.1	%		-2.0	%		0.6	%
Total Expense Growth		1.0	%		0.9	%		-4.3	%		-0.8	%		-11.2	%		1.0	%

Balance Sheet

As of December 31, 2023, SB Financial reported total assets of $1.34 billion, reflecting a growth of 1.2 percent from the linked quarter and an increase of 0.5 percent from the previous year. The growth in assets is primarily attributed to the increase in the loan portfolio, which has reached $1 billion, marking a historic milestone, with a $38.1 million or 4.0 percent increase over the year. The strategic reallocation of liquidity, reflected in a decrease in cash and investments, has been instrumental in this growth, demonstrating the ability to prudently manage resources to maximize shareholder returns while maintaining a solid financial position.

Total shareholders' equity increased to $124.3 million, up $5.9 million from the prior-year quarter. This increase is a direct reflection of our commitment to enhancing shareholder value and management's confidence in the Company's long-term strategy. The active capital management approach, including the repurchase of 53,000 shares in the fourth quarter, as part of the ongoing buyback program, reflects SB Financial's dedication to delivering returns to its shareholders.

"As we cap off 2023, our commitment to disciplined growth and robust asset quality has once again proven effective," said Mr. Klein. "The fourth quarter saw our loan balances grow by $38.1 million, securing a full year of continuous quarterly loan growth. Our dynamic approach to build strong lending relationships has borne fruit, despite commercial pipelines feeling the squeeze in a fairly competitive landscape. Our asset quality remains a cornerstone of our operations, with top decile coverage ratios, reinforcing the bank's financial health. Over the year, we've generated an increase in our loan portfolio, demonstrating our capacity to drive organic growth amidst fluctuating interest rates and a challenging economic environment. This growth represents our deepening relationships with our customers and our ability to meet their evolving needs. Looking forward, we remain committed to leveraging our strong asset base while we maintain our focus on strategic initiatives that enhance shareholder value and position us for continued success in the coming years."


Loan Balances
($ in thousands, except ratios)	Dec. 2023			Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022			Annual Growth
Commercial	$	126,718		$	120,325		$	123,226		$	126,066		$	128,393		$	(1,675	)
% of Total		12.7	%		12.2	%		12.5	%		12.9	%		13.3	%		-1.3	%
Commercial RE		424,041			421,736			417,412			419,024			412,809			11,232
% of Total		42.4	%		42.6	%		42.4	%		42.9	%		42.9	%		2.7	%
Agriculture		65,657			60,928			58,222			57,761			64,505			1,152
% of Total		6.6	%		6.2	%		5.9	%		5.9	%		6.7	%		1.8	%
Residential RE		318,123			320,306			321,365			309,684			291,368			26,755
% of Total		31.8	%		32.4	%		32.6	%		31.7	%		30.3	%		9.2	%
Consumer & Other		65,673			65,726			64,599			63,777			65,000			673
% of Total		6.6	%		6.6	%		6.6	%		6.5	%		6.8	%		1.0	%
Total Loans	$	1,000,212		$	989,021		$	984,824		$	976,312		$	962,075		$	38,137
Total Growth Percentage																	4.0	%


Deposit Balances
($ in thousands, except ratios)	Dec. 2023			Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022			Annual Growth
Non-Int DDA	$	228,713		$	224,182		$	218,411		$	237,175		$	256,799		$	(28,086	)
% of Total		21.4	%		20.7	%		20.4	%		21.4	%		23.6	%		-10.9	%
Interest DDA		166,413			174,729			170,282			188,497			191,719			(25,306	)
% of Total		15.5	%		16.1	%		15.9	%		17.0	%		17.6	%		-13.2	%
Savings		216,965			226,077			225,065			227,974			191,272			25,693
% of Total		20.3	%		20.8	%		21.0	%		20.5	%		17.6	%		13.4	%
Money Market		202,605			216,565			217,681			222,203			255,995			(53,390	)
% of Total		18.9	%		20.0	%		20.3	%		20.0	%		23.6	%		-20.9	%
Time Deposits		255,509			243,766			239,717			234,295			190,880			64,629
% of Total		23.9	%		22.5	%		22.4	%		21.1	%		17.6	%		33.9	%
Total Deposits	$	1,070,205		$	1,085,319		$	1,071,156		$	1,110,144		$	1,086,665		$	(16,460	)
Total Growth Percentage																	-1.5	%

Asset Quality

SB Financial has demonstrated a strong commitment to maintaining high standards of asset quality. As of December 31, 2023, SB Financial reported nonperforming assets totaling $3.3 million, a significant decrease of $1.1 million or 25.3 percent from the same quarter last year, driven primarily by a decline in Residential Real Estate. This notable reduction in nonperforming assets is a clear indicator of the effectiveness of our risk management strategies and the overall health of the loan portfolio.

Furthermore, the coverage ratio for problem loans has seen a remarkable improvement, up by 185 basis points from the previous year to 560 percent. This improvement in the coverage ratio is a direct result of proactive measures in asset quality management. It includes the expansion of the allowance for credit losses, which followed a Current Expected Credit Loss (CECL) adjustment of $1.4 million. Additionally, this improvement coincides with a concurrent reduction in problem loans, underscoring our focused efforts on maintaining a robust and healthy loan portfolio.


Nonperforming Assets																Annual Change
($ in thousands, except ratios)	Dec. 2023			Sep. 2023			Jun. 2023			Mar. 2023			Dec. 2022			Annual Change
Commercial & Agriculture	$	748		$	717		$	170		$	185		$	114		$	634
% of Total Com./Ag. loans		0.39	%		0.40	%		0.09	%		0.10	%		0.06	%		556.1	%
Commercial RE		168			222			192			199			210			(42	)
% of Total CRE loans		0.04	%		0.05	%		0.05	%		0.05	%		0.05	%		-20.0	%
Residential RE		1,690			2,182			2,266			2,742			3,020			(1,330	)
% of Total Res. RE loans		0.53	%		0.68	%		0.71	%		0.89	%		1.04	%		-44.0	%
Consumer & Other		212			208			282			270			338			(126	)
% of Total Con./Oth. loans		0.32	%		0.32	%		0.44	%		0.42	%		0.52	%		-37.3	%
Total Nonaccruing Loans		2,818			3,329			2,910			3,396			3,682			(864	)
% of Total loans		0.28	%		0.34	%		0.30	%		0.35	%		0.38	%		-23.5	%
Foreclosed Assets and Other Assets		511			629			625			650			777			(266	)
Total Change (%)																	-34.2	%
Total Nonperforming Assets	$	3,329		$	3,958		$	3,535		$	4,046		$	4,459		$	(1,130	)
% of Total assets		0.25	%		0.30	%		0.26	%		0.30	%		0.33	%		-25.34	%

Webcast and Conference Call

The Company will hold the fourth quarter 2023 earnings conference call and webcast on January 26, 2024, 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 23 offices: 22 in nine Ohio counties and one in Fort Wayne, Indiana, and 23 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 region. SB Financial's common stock is listed on the NASDAQ Capital Market with the ticker symbol "SBFG".

In May 2023, SB Financial was valued #163 on the American Banker Magazine's list of top 200 publicly traded Community Bank and Thrifts based on three-year average return on equity.

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 impairment 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

Mark.Klein@YourStateBank.com

Anthony V. Cosentino

Executive Vice President and

Chief Financial Officer

Tony.Cosentino@YourStateBank.com

SB FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS - (Unaudited)

				December			September			June			March			December
			($ in thousands)		2023			2023			2023			2023			2022

ASSETS
	Cash and due from banks			$	22,965		$	19,049		$	20,993		$	21,625		$	27,817
	Interest bearing time deposits				1,535			1,180			1,180			1,380			2,131
	Available-for-sale securities				219,708			212,768			227,996			237,607			238,780
	Loans held for sale				2,525			3,206			5,684			5,592			2,073
	Loans, net of unearned income				1,000,212			989,021			984,824			976,312			962,075
	Allowance for credit losses				(15,786	)		(15,790	)		(15,795	)		(15,442	)		(13,818	)
	Premises and equipment, net				21,378			21,934			22,230			22,621			22,829
	Federal Reserve and FHLB Stock, at cost				7,279			6,261			7,634			6,054			6,326
	Foreclosed assets and other assets				511			629			625			650			777
	Interest receivable				4,657			4,457			4,079			3,926			4,091
	Goodwill				23,239			23,239			23,239			23,239			23,239
	Cash value of life insurance				29,121			29,291			29,183			29,024			28,870
	Mortgage servicing rights				13,906			13,893			13,723			13,548			13,503
	Other assets				11,137			17,336			15,840			15,157			16,940

			Total assets	$	1,342,387		$	1,326,474		$	1,341,435		$	1,341,293		$	1,335,633



LIABILITIES AND SHAREHOLDERS' EQUITY
	Deposits
		Non interest bearing demand		$	228,713		$	224,182		$	218,411		$	237,175		$	256,799
		Interest bearing demand			166,413			174,729			170,282			188,497			191,719
		Savings			216,965			226,077			225,065			227,974			191,272
		Money market			202,605			216,565			217,681			222,203			255,995
		Time deposits			255,509			243,766			239,717			234,295			190,880

			Total deposits		1,070,205			1,085,319			1,071,156			1,110,144			1,086,665

	Short-term borrowings				13,387			16,519			21,118			15,998			14,923
	Federal Home Loan Bank advances				83,600			59,500			81,300			44,500			60,000
	Trust preferred securities				10,310			10,310			10,310			10,310			10,310
	Subordinated debt net of issuance costs				19,642			19,630			19,618			19,606			19,594
	Interest payable				2,443			2,216			1,866			1,441			769
	Other liabilities				18,458			20,632			18,401			19,535			24,944

			Total liabilities		1,218,045			1,214,126			1,223,769			1,221,534			1,217,205

	Shareholders' Equity
		Common stock			61,319			61,319			61,319			61,319			61,319
		Additional paid-in capital			15,124			15,037			15,154			14,953			15,087
		Retained earnings			108,486			105,521			103,725			101,548			101,966
		Accumulated other comprehensive loss			(29,831	)		(39,517	)		(32,894	)		(29,671	)		(32,120	)
		Treasury stock			(30,756	)		(30,012	)		(29,638	)		(28,390	)		(27,824	)

			Total shareholders' equity		124,342			112,348			117,666			119,759			118,428

			Total liabilities and shareholders' equity	$	1,342,387		$	1,326,474		$	1,341,435		$	1,341,293		$	1,335,633

SB FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

($ in thousands, except per share & ratios)			At and for the Three Months Ended													Twelve Months Ended

			December			September			June		March			December		December		December
Interest income				2023			2023		2023			2023		2022		2023		2022
	Loans
	Taxable		$	13,438		$	13,128		$	12,715	$	12,126		$	11,222	$	51,407	$	38,238
	Tax exempt			124			122			121		116			109		483		335
	Securities
	Taxable			1,526			1,507			1,524		1,535			1,559		6,092		5,798
	Tax exempt			38			39			46		47			47		170		198

		Total interest income		15,126			14,796			14,406		13,824			12,937		58,152		44,569

Interest expense
	Deposits			4,398			4,194			3,538		2,578			1,440		14,708		3,477
	Repurchase agreements & other			39			16			9		10			7		74		39
	Federal Home Loan Bank advances			720			666			664		553			258		2,603		515
	Trust preferred securities			191			189			172		164			138		716		361
	Subordinated debt			194			195			194		195			194		778		778

		Total interest expense		5,542			5,260			4,577		3,500			2,037		18,879		5,170


Net interest income				9,584			9,536			9,829		10,324			10,900		39,273		39,399

	Provision for credit losses			(74	)		(6	)		145		250			-		315		-

Net interest income after provision
for loan losses				9,658			9,542			9,684		10,074			10,900		38,958		39,399

Noninterest income
	Wealth management fees			838			837			940		917			907		3,532		3,728
	Customer service fees			844			863			871		825			880		3,403		3,378
	Gain on sale of mtg. loans & OMSR			747			1,207			1,056		599			550		3,609		4,298
	Mortgage loan servicing fees, net			561			438			494		608			627		2,101		2,964
	Gain on sale of non-mortgage loans			177			10			218		24			105		429		566
	Title insurance revenue			378			429			455		373			454		1,635		2,229
	Net gain on sales of securities			1,453			-			-		-			-		1,453		-
	Gain (loss) on sale of assets			16			-			15		(11	)		18		20		61
	Other			517			379			312		331			172		1,539		1,007

		Total noninterest income		5,531			4,163			4,361		3,666			3,713		17,721		18,231

Noninterest expense
	Salaries and employee benefits			5,652			5,491			5,721		5,913			5,677		22,777		24,142
	Net occupancy expense			746			764			802		784			763		3,096		2,993
	Equipment expense			1,027			1,068			1,002		981			1,017		4,078		3,616
	Data processing fees			680			648			685		646			627		2,659		2,510
	Professional fees			926			623			612		863			738		3,024		3,214
	Marketing expense			182			189			213		198			258		782		911
	Telephone and communication expense			132			124			124		121			124		501		474
	Postage and delivery expense			167			100			78		87			121		432		422
	State, local and other taxes			285			218			218		228			277		949		1,082
	Employee expense			146			141			156		188			157		631		613
	Other expenses			426			1,115			728		764			510		3,033		2,337

		Total noninterest expense		10,369			10,481			10,339		10,773			10,269		41,962		42,314


Income before income tax expense				4,820			3,224			3,706		2,967			4,345		14,717		15,315

	Income tax expense			937			537			631		517			812		2,622		2,794

Net income			$	3,883		$	2,687		$	3,075	$	2,450		$	3,533	$	12,095	$	12,521

Common share data:
	Basic earnings per common share		$	0.58		$	0.40		$	0.45	$	0.35		$	0.51	$	1.77	$	1.79

	Diluted earnings per common share		$	0.57		$	0.39		$	0.44	$	0.35		$	0.50	$	1.75	$	1.77

Average shares outstanding (in thousands):
	Basic:			6,748			6,791			6,847		6,933			6,945		6,829		7,005
	Diluted:			6,851			6,878			6,910		7,008			7,021		6,917		7,078

SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

($ in thousands, except per share & ratios)	At and for the Three Months Ended															Twelve Months Ended

	December			September			June			March			December			December			December
SUMMARY OF OPERATIONS		2023			2023			2023			2023			2022			2023			2022

Net interest income	$	9,584		$	9,536		$	9,829		$	10,324		$	10,900		$	39,273		$	39,399
Tax-equivalent adjustment		43			43			44			43			41			174			142
Tax-equivalent net interest income		9,627			9,579			9,873			10,367			10,941			39,447			39,541
Provision for credit loss		(74	)		(6	)		145			250			-			315			-
Noninterest income		5,531			4,163			4,361			3,666			3,713			17,721			18,231
Total operating revenue		15,115			13,699			14,190			13,990			14,613			56,994			57,630
Noninterest expense		10,369			10,481			10,339			10,773			10,269			41,962			42,314
Pre-tax pre-provision income		4,746			3,218			3,851			3,217			4,344			15,032			15,316
Pretax income		4,820			3,224			3,706			2,967			4,344			14,717			15,316
Net income		3,883			2,687			3,075			2,450			3,533			12,095			12,521

PER SHARE INFORMATION:
Basic earnings per share (EPS)		0.58			0.40			0.45			0.35			0.51			1.77			1.79
Diluted earnings per share		0.57			0.39			0.44			0.35			0.50			1.75			1.77
Common dividends		0.135			0.130			0.130			0.125			0.125			0.520			0.480
Book value per common share		18.50			16.59			17.30			17.37			17.08			18.50			17.08
Tangible book value per common share (TBV)		14.98			13.09			13.81			13.93			13.65			14.98			13.65
Market price per common share		15.35			13.50			12.62			14.13			16.95			15.35			16.95
Market price to TBV		102.5	%		103.1	%		91.4	%		101.4	%		124.2	%		102.5	%		124.2	%
Market price to trailing 12 month EPS		8.8			8.0			7.1			8.2			9.6			8.8			9.6

PERFORMANCE RATIOS:
Return on average assets (ROAA)		1.17	%		0.80	%		0.91	%		0.73	%		1.07	%		0.91	%		0.95	%
Pre-tax pre-provision ROAA		1.43	%		0.96	%		1.14	%		0.96	%		1.32	%		1.21	%		1.25	%
Return on average equity		13.23	%		9.25	%		10.32	%		8.22	%		12.17	%		10.22	%		9.86	%
Return on average tangible equity		16.57	%		11.62	%		12.89	%		10.26	%		15.30	%		12.78	%		12.14	%
Efficiency ratio		68.44	%		76.34	%		72.71	%		76.85	%		70.16	%		73.47	%		73.31	%
Earning asset yield		4.89	%		4.78	%		4.61	%		4.49	%		4.27	%		4.67	%		3.63	%
Cost of interest bearing liabilities		2.33	%		2.18	%		1.90	%		1.46	%		0.90	%		1.97	%		0.56	%
Net interest margin		3.10	%		3.08	%		3.15	%		3.35	%		3.60	%		3.15	%		3.21	%
Tax equivalent effect		0.01	%		0.01	%		0.01	%		0.02	%		0.01	%		0.01	%		0.01	%
Net interest margin, tax equivalent		3.11	%		3.09	%		3.16	%		3.37	%		3.61	%		3.16	%		3.22	%
Non interest income/Average assets		1.67	%		1.24	%		1.30	%		1.10	%		1.13	%		1.33	%		1.38	%
Non interest expense/Average assets		3.12	%		3.13	%		3.07	%		3.23	%		3.13	%		3.14	%		3.21	%
Net noninterest expense/Average assets		-1.46	%		-1.89	%		-1.78	%		-2.13	%		-2.00	%		-1.82	%		-1.83	%

ASSET QUALITY RATIOS:
Gross charge-offs		5			12			32			69			7			118			34
Recoveries		1			7			10			8			1			26			47
Net charge-offs		4			5			22			61			6			92			(13	)
Nonperforming loans/Total loans		0.28	%		0.34	%		0.30	%		0.35	%		0.38	%		0.28	%		0.38	%
Nonperforming assets/Loans & OREO		0.33	%		0.40	%		0.36	%		0.41	%		0.46	%		0.33	%		0.46	%
Nonperforming assets/Total assets		0.25	%		0.30	%		0.26	%		0.30	%		0.33	%		0.25	%		0.33	%
Allowance for credit loss/Nonperforming loans		560.18	%		474.32	%		542.78	%		454.71	%		375.29	%		560.18	%		375.29	%
Allowance for credit loss/Total loans		1.58	%		1.60	%		1.60	%		1.58	%		1.44	%		1.58	%		1.44	%
Net loan charge-offs/Average loans (ann.)		0.00	%		0.00	%		0.01	%		0.03	%		0.00	%		0.01	%		(0.00	%)

CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		93.46	%		91.13	%		91.94	%		87.94	%		88.53	%		93.46	%		88.53	%
Equity/ Assets		9.26	%		8.47	%		8.77	%		8.93	%		8.87	%		9.26	%		8.87	%
Tangible equity/Tangible assets		7.63	%		6.81	%		7.13	%		7.29	%		7.22	%		7.63	%		7.22	%
Common equity tier 1 ratio (Bank)		13.42	%		13.56	%		13.18	%		13.44	%		13.42	%		13.42	%		13.42	%

END OF PERIOD BALANCES
Total assets		1,342,387			1,326,474			1,341,435			1,341,293			1,335,633			1,342,387			1,335,633
Total loans		1,000,212			989,021			984,824			976,312			962,075			1,000,212			962,075
Deposits		1,070,205			1,085,319			1,071,156			1,110,144			1,086,665			1,070,205			1,086,665
Shareholders equity		124,342			112,348			117,666			119,759			118,428			124,342			118,428
Goodwill and intangibles		23,662			23,687			23,710			23,732			23,753			23,662			23,753
Tangible equity		100,680			88,661			93,956			96,027			94,675			100,680			94,675
Mortgage servicing portfolio		1,366,667			1,367,209			1,353,904			1,344,158			1,352,016			1,366,667			1,352,016
Wealth/Brokerage assets under care		501,829			478,236			499,255			518,009			507,093			501,829			507,093
Total assets under care		3,210,883			3,171,919			3,194,594			3,203,460			3,194,742			3,210,883			3,194,742
Full-time equivalent employees		251			252			253			255			268			251			268
Period end common shares outstanding		6,720			6,773			6,803			6,894			6,935			6,720			6,935
Market capitalization (all)		103,147			91,437			85,857			97,419			117,556			103,147			117,556

AVERAGE BALANCES
Total assets		1,327,415			1,339,870			1,346,010			1,335,056			1,314,419			1,334,644			1,318,781
Total earning assets		1,236,165			1,239,145			1,248,813			1,232,018			1,211,674			1,246,531			1,226,771
Total loans		992,337			989,089			988,348			970,813			937,898			985,217			888,116
Deposits		1,084,939			1,095,414			1,100,344			1,098,935			1,094,491			1,094,547			1,105,571
Shareholders equity		117,397			116,165			119,177			119,237			116,114			118,315			126,963
Goodwill and intangibles		23,675			23,698			23,721			23,743			23,761			23,709			23,783
Tangible equity		93,722			92,467			95,456			95,494			92,353			94,606			103,180
Average basic shares outstanding		6,748			6,791			6,847			6,933			6,945			6,829			7,005
Average diluted shares outstanding		6,851			6,878			6,910			7,008			7,021			6,917			7,078

SB FINANCIAL GROUP, INC.
	Rate Volume Analysis - (Unaudited)
	For the Three & Twelve Months Ended Dec. 31, 2023 and 2022

	($ in thousands)	Three Months Ended Dec. 31, 2023							Three Months Ended Dec. 31, 2022
		Average					Average		Average					Average
Assets		Balance			Interest		Rate		Balance			Interest		Rate

	Taxable securities/cash	$	237,203		$	1,526	2.57	%	$	265,711		$	1,559	2.35	%
	Nontaxable securities		6,625			38	2.29	%		8,065			47	2.33	%
	Loans, net		992,337			13,562	5.47	%		937,898			11,331	4.83	%

	Total earning assets		1,236,165			15,126	4.89	%		1,211,674			12,937	4.27	%

	Cash and due from banks		4,077							7,052
	Allowance for loan losses		(15,787	)						(13,820	)
	Premises and equipment		22,205							23,757
	Other assets		80,755							85,756

	Total assets	$	1,327,415						$	1,314,419

Liabilities
	Savings, MMDA and interest bearing demand	$	601,034		$	2,232	1.49	%	$	646,498		$	965	0.60	%
	Time deposits		247,382			2,166	3.50	%		180,678			475	1.05	%
	Repurchase agreements & other		13,359			39	1.17	%		18,058			7	0.16	%
	Advances from Federal Home Loan Bank		58,330			720	4.94	%		29,078			258	3.55	%
	Trust preferred securities		10,310			191	7.41	%		10,310			138	5.35	%
	Subordinated debt		19,634			194	3.95	%		19,588			194	3.96	%

	Total interest bearing liabilities		950,049			5,542	2.33	%		904,210			2,037	0.90	%

	Non interest bearing demand		236,523			-				267,315			-

	Total funding		1,186,572				1.87	%		1,171,525				0.70	%

	Other liabilities		23,446							26,780

	Total liabilities		1,210,018							1,198,305

	Equity		117,397							116,114

	Total liabilities and equity	$	1,327,415						$	1,314,419

	Net interest income				$	9,584						$	10,900

	Net interest income as a percent of average interest-earning assets - GAAP measure						3.10	%						3.60	%

	Net interest income as a percent of average interest-earning assets - non GAAP						3.11	%						3.61	%
	- Computed on a fully tax equivalent (FTE) basis

		Twelve Months Ended Dec. 31, 2023							Twelve Months Ended Dec. 31, 2022
		Average					Average		Average					Average
Assets		Balance			Interest		Rate		Balance			Interest		Rate

	Taxable securities/cash	$	254,133		$	6,092	2.40	%	$	330,549		$	5,798	1.75	%
	Nontaxable securities		7,181			170	2.37	%		8,106			198	2.44	%
	Loans, net		985,217			51,890	5.27	%		888,116			38,573	4.34	%

	Total earning assets		1,246,531			58,152	4.67	%		1,226,771			44,569	3.63	%

	Cash and due from banks		4,035							7,296
	Allowance for loan losses		(15,478	)						(13,808	)
	Premises and equipment		22,990							24,137
	Other assets		76,566							74,385

	Total assets	$	1,334,644						$	1,318,781

Liabilities
	Savings, MMDA and interest bearing demand	$	619,906		$	7,599	1.23	%	$	693,271		$	2,258	0.33	%
	Time deposits		236,665			7,109	3.00	%		159,401			1,219	0.76	%
	Repurchase agreements & Other		15,765			74	0.47	%		20,481			39	0.19	%
	Advances from Federal Home Loan Bank		55,044			2,603	4.73	%		16,420			515	3.14	%
	Trust preferred securities		10,310			716	6.94	%		10,310			361	3.50	%
	Subordinated debt		19,616			778	3.97	%		19,570			778	3.98	%

	Total interest bearing liabilities		957,306			18,879	1.97	%		919,453			5,169	0.56	%

	Non interest bearing demand		237,976				1.58	%		252,899				0.44	%

	Total funding		1,195,282							1,172,352

	Other liabilities		21,047							19,466

	Total liabilities		1,216,329							1,191,818

	Equity		118,315							126,963

	Total liabilities and equity	$	1,334,644						$	1,318,781

	Net interest income				$	39,273						$	39,400

	Net interest income as a percent of average interest-earning assets - GAAP measure						3.15	%						3.21	%

	Net interest income as a percent of average interest-earning assets - non GAAP						3.16	%						3.22	%
	- Computed on a fully tax equivalent (FTE) basis

Non-GAAP reconciliation	Three Months Ended						Twelve Months Ended

($ in thousands, except per share & ratios)	Dec. 31, 2023			Dec. 31, 2022			Dec. 31, 2023			Dec. 31, 2022

Total Operating Revenue	$	15,115		$	14,613		$	56,994		$	57,630
Adjustment to (deduct)/add OMSR recapture/impairment *		12			(86	)		51			(1,279	)

Adjusted Total Operating Revenue		15,127			14,527			57,045			56,351


Income before Income Taxes		4,820			4,345			14,717			15,316
Adjustment for OMSR *		12			(86	)		51			(1,279	)

Adjusted Income before Income Taxes		4,832			4,259			14,768			14,037


Provision for Income Taxes		937			812			2,622			2,795
Adjustment for OMSR **		3			(18	)		11			(269	)

Adjusted Provision for Income Taxes		940			794			2,633			2,527


Net Income		3,883			3,533			12,095			12,521
Adjustment for OMSR *		9			(68	)		40			(1,010	)

Adjusted Net Income		3,892			3,465			12,135			11,511


Diluted Earnings per Share		0.57			0.50			1.75			1.77
Adjustment for OMSR *		0.00			(0.01	)		0.01			(0.14	)

Adjusted Diluted Earnings per Share	$	0.57		$	0.49		$	1.75		$	1.63


Return on Average Assets		1.17	%		1.08	%		0.91	%		0.95	%
Adjustment for OMSR *		0.00	%		-0.02	%		0.00	%		-0.08	%

Adjusted Return on Average Assets		1.17	%		1.05	%		0.91	%		0.87	%

*valuation adjustment to the Company's mortgage servicing rights

**tax effect is calculated using a 21% statutory federal corporate income tax rate

SB Financial Group Announces Fourth Quarter and Full Year 2023 Results