UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 27, 2020 (April 23, 2020)

SB FINANCIAL GROUP, INC

(Exact name of registrant as specified in its charter)

Ohio		0-13507		34-1395608
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

401 Clinton Street, Defiance, OH		43512
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (419) 783-8950

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registererd

Common Shares, No Par Value

7,746,640 Outstanding at April 27, 2020

SBFG

The NASDAQ Stock Market, LLC

(NASDAQ Capital Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On April 23, 2020, SB Financial Group, Inc. (the “Company”) issued a news release reporting financial results for the first quarter 2020. A copy of the April 23, 2020 news release is furnished as Exhibit 99.1 and is incorporated herein by reference.

The information in this Item 2.02, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.

Item 9.01. Financial Statements and Exhibits.

(a) Not Applicable

(b) Not Applicable

(d) Exhibits

Exhibit No.		Description
99.1		News release issued by SB Financial Group, Inc. on April 23, 2020, reporting financial results for the first quarter 2020.

-1-

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SB FINANCIAL GROUP, INC.

Dated: April 27, 2020	By:	/s/ Anthony V. Cosentino
		Anthony V. Cosentino
		Chief Financial Officer

-2-

INDEX TO EXHIBITS

Current Report on Form 8-K

Dated April 27, 2020

SB Financial Group, Inc.

Exhibit No.		Description
99.1		News release issued by SB Financial Group, Inc. on April 23, 2020, reporting financial results for the first quarter 2020.

-3-

Exhibit 99.1

SB Financial Group, Inc. Announces First Quarter 2020 Results

DEFIANCE, Ohio, April 23, 2020 -- 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 first quarter ended March 31, 2020.

First quarter 2020 highlights over prior year first quarter include:

●

Net income of $0.7 million; diluted earnings per share (EPS) of $0.09

●

Adjusted net income, excluding the impact of the OMSR impairment of $2.2 million (pre-tax), of $2.4 million with EPS of $0.31

●

Mortgage origination volume of $101.4 million, an increase of $49.9 million, or 97.1 percent

First quarter 2020 trailing twelve-month highlights include:

●

Loan growth of $48.2 million, or 6.2 percent

●

Deposit growth of $36.2 million, or 4.4 percent

●

Mortgage origination volume of $495.3 million, an increase of $160.3 million, or 47.8 percent; servicing portfolio of $1.22 billion, up $0.12 billion, or 11.2 percent

Highlights	Three Months Ended
($ in thousands, except per share & ratios)	Mar. 2020			Mar. 2019			% Change
Operating revenue	$	10,709		$	11,340			-5.6	%
Interest income		10,644			10,498			1.4	%
Interest expense		2,096			2,158			-2.9	%
Net interest income		8,548			8,340			2.5	%
Provision for loan losses		600			-			N/A
Noninterest income		2,161			3,000			-28.0	%
Noninterest expense		9,406			8,626			9.0	%
Net income		681			2,226			-69.4	%
Earnings per diluted share		0.09			0.28			-67.9	%
Return on average assets		0.26	%		0.89	%		-70.8	%
Return on average equity		1.99	%		6.76	%		-70.6	%

Non-GAAP Measures
Adjusted net income	$	2,428		$	2,785			-12.8	%
Adjusted diluted EPS		0.31			0.35			-11.4	%
Adjusted return on average assets		0.92	%		0.95	%		-3.2	%
Adjusted pre-tax, pre-provision income		3,514			3,422			2.7	%

“SB Financial’s first quarter GAAP results were impacted by the rapid decline in market rates driven by the Federal Reserve in response to the pandemic, which resulted in a large impairment to our mortgage servicing rights. Adjusting for that impairment, pre-tax pre-provision earnings were up three percent compared to 2019,” said Mark A. Klein, Chairman, President, and CEO of SB Financial. “Mortgage volume accelerated in the quarter as we originated over $100 million in volume. In response to the unprecedented economic impact of the pandemic, we are actively working with our clients on both forbearance solutions as well as the new Paycheck Protection Program (“PPP”) small business lending facility.”

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income adjusted for the impairment, was up 7.2 percent from the first quarter of 2019, and down 9.3 percent to the linked quarter.

●

Net interest income was up 2.5 percent from the year-ago quarter, but down 0.6 percent from the linked quarter.

●

Net interest margin on a fully taxable equivalent basis (FTE) was down from both year-ago and linked quarters by 33 and 22 basis points, respectively as more balances were held in cash due to liquidity needs.

●

Adjusting for the OMSR impairment, noninterest income would be up 18 and down 23 percent, respectively.

Mortgage Loan Business

Mortgage loan originations for the first quarter of 2020 were $101.4 million, up $49.9 million, or 97.1 percent, from the year-ago quarter. Total sales of originated loans were $84.5 million, up $41.0 million, or 94.3 percent from the year-ago quarter. Refinance activity accelerated in the quarter, with total refinance volume of $24.7 million or 24 percent, compared to 19 percent for all of 2019.

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was a negative $0.1 million for the first quarter of 2020, compared to $0.9 million for the year-ago quarter. The mortgage servicing valuation adjustment for the first quarter of 2020 was a negative $2.2 million, compared to a negative adjustment of $0.7 million for the first quarter of 2019. The aggregate servicing valuation impairment ended the quarter at $3.5 million. The servicing portfolio at March 31, 2020, was $1.22 billion, up $0.12 billion, or 11.2 percent, from $1.09 billion at March 31, 2019. Normal amortization is up 135 percent from the prior year due to higher refinance activity.

Mr. Klein noted, “We experienced a rapid increase in mortgage activity late in the quarter as our clients reacted to the market rate declines. As we look at our prior rolling 12 months, we have originated nearly $500 million in total volume for our clients throughout our footprint. As expected, impairment to our servicing rights had an outsized impact on our results. Our newest region, Indianapolis, contributed seven percent to our quarterly volume.”

Mortgage Banking
($ in thousands)	Mar. 2020			Dec. 2019			Sep. 2019			Jun. 2019			Mar. 2019
Mortgage originations	$	101,365		$	137,528		$	157,947		$	98,447		$	51,417
Mortgage sales		84,476			127,441			125,386			70,993			43,472
Mortgage servicing portfolio		1,216,292			1,199,107			1,153,020			1,112,857			1,094,060
Mortgage servicing rights		8,974			11,017			10,447			10,264			10,838

Mortgage servicing revenue
Loan servicing fees		756			740			709			691			682
OMSR amortization		(597	)		(709	)		(701	)		(460	)		(254	)
Net administrative fees		159			31			8			231			428
OMSR valuation adjustment		(2,212	)		303			-			(690	)		(708	)
Net loan servicing fees		(2,053	)		334			8			(459	)		(280	)
Gain on sale of mortgages		1,949			3,048			2,495			1,678			1,192
Mortgage banking revenue, net	$	(104	)	$	3,382		$	2,503		$	1,219		$	912

Noninterest Income and Noninterest Expense

SB Financial’s noninterest income includes revenue from a diverse group of services, such as wealth management, deposit fees, residential loan sales and the sale of Small Business Administration (SBA) and US Department of Agriculture (USDA) loans. SBA and USDA activity for the quarter consisted of total origination volume of $1.0 million with sales volume of $0.4 million resulting in gains of $0.07 million. Wealth management assets under the Company’s care fell to $427.1 million as of March 31, 2020 due to the market decline. For the first quarter of 2020, noninterest income as a percentage of total operating revenue was 20.2 percent (33.8 percent when adjusting for the OMSR impairment). Results for 2020 include a full quarter from our Title Agency compared to the prior year.

For the first quarter of 2020, noninterest expense of $9.4 million was up $0.8 million compared to the prior year or 9.0 percent. Higher mortgage production volumes increased compensation expense and title agency expenses are up compared to the prior year. Data processing expenses are up due to higher activity levels from our digital banking channels.

Mr. Klein stated, “We are actively participating in the SBA’s PPP program and anticipate total funding in the second quarter of $75 million. Fee income levels from mortgage lending were up this quarter, but OMSR impairment had a significant impact on our operating results. Our title agency acquisition in March of 2019, makes comparative results difficult; however; Peak took part in the increased mortgage activity in the quarter. We continue to pay close attention to expenses and have begun to implement a number of actions in response to the pandemic headwinds affecting our business.”

Noninterest Income / Noninterest Expense
($ in thousands, except ratios)	Mar. 2020			Dec. 2019			Sep. 2019			Jun. 2019			Mar. 2019
Noninterest Income (NII)	$	2,161		$	5,959		$	5,366		$	3,691		$	3,000
NII / Total Revenue		20.2	%		40.9	%		37.2	%		29.5	%		26.5	%
NII / Average Assets		0.8	%		2.3	%		2.1	%		1.5	%		1.2	%

Noninterest Expense (NIE)	$	9,406		$	10,176		$	9,500		$	9,108		$	8,626
Efficiency Ratio		87.8	%		69.9	%		65.9	%		72.7	%		76.1	%
NIE / Average Assets		3.5	%		3.9	%		3.6	%		3.6	%		3.5	%
Net Noninterest Expense/Avg. Assets		-2.7	%		-1.6	%		-1.6	%		-2.1	%		-2.3	%

Balance Sheet

Total assets as of March 31, 2020, were $1.09 billion, up $67.0 million, or 6.6 percent, from a year ago. Total equity as of March 31, 2020, was $135.9 million, up 3.4 percent from a year ago, and comprised 12.5 percent of total assets. Over the last twelve months, SB Financial repurchased 319,000 shares of common stock, for an aggregate of $5.4 million.

Total loans held for investment were $830.8 million at March 31, 2020, up $48.2 million, or 6.2 percent, from March 31, 2019. Commercial real estate loans were up $34.2 million, or 10.0 percent, with commercial loans rising $15.3 million, or 11.3 percent.

The investment portfolio of $107.7 million, including shares in the Federal Reserve Bank and Federal Home Loan Bank, represented 9.9 percent of assets at March 31, 2020, and was up 12.4 percent from the year-ago period. Deposit balances of $863.9 million at March 31, 2020, increased by $36.2 million or 4.4 percent, since March 31, 2019. Growth from the prior year included $26.2 million in checking and $10.0 million in savings and time deposit balances.

Mr. Klein continued, “Both loan and deposit volumes were up over the prior year although business activity slowed in March and lending activity beyond the U.S. Treasury programs will likely be constrained in the near term. Nonperforming assets to total assets increased as we had an asset based commercial line that we downgraded at year end. We ended the quarter at 61 basis points of NPA’s, up 19 basis points from the prior year.”

Loan Balances																Annual
($ in thousands, except ratios)	Mar. 2020			Dec. 2019			Sep. 2019			Jun. 2019			Mar. 2019			Growth
Commercial	$	151,538		$	151,018		$	145,147		$	143,798		$	136,201		$	15,337
% of Total		18.2	%		18.3	%		17.6	%		17.7	%		17.4	%		11.3	%
Commercial RE		378,212			369,962			362,580			360,491			343,900			34,312
% of Total		45.5	%		44.8	%		44.0	%		44.2	%		43.9	%		10.0	%
Agriculture		47,660			50,994			51,946			54,317			50,620			(2,960	)
% of Total		5.7	%		6.2	%		6.3	%		6.7	%		6.5	%		-5.8	%
Residential RE		189,738			189,290			199,036			191,642			187,548			2,190
% of Total		22.9	%		22.9	%		24.2	%		23.5	%		24.0	%		1.2	%
Consumer & Other		63,616			64,246			64,658			64,261			64,254			-638
% of Total		7.7	%		7.8	%		7.9	%		7.9	%		8.2	%		-1.0	%
Total Loans	$	830,764		$	825,510		$	823,367		$	814,509		$	782,523		$	48,241
Total Growth Percentage																	6.2	%

Deposit Balances																Annual
($ in thousands, except ratios)	Mar. 2020			Dec. 2019			Sep. 2019			Jun. 2019			Mar. 2019			Growth
Non-Int DDA	$	170,920		$	158,357		$	152,932		$	141,216		$	146,327		$	24,593
% of Total		19.8	%		18.8	%		18.0	%		16.8	%		17.7	%		16.8	%
Interest DDA		133,722			131,084			131,655			129,710			132,101			1,621
% of Total		15.5	%		15.6	%		15.5	%		15.5	%		16.0	%		1.2	%
Savings		138,863			119,359			121,991			118,931			115,272			23,591
% of Total		16.0	%		14.1	%		14.3	%		14.1	%		13.8	%		20.5	%
Money Market		169,209			173,666			173,237			175,455			175,334			(6,125	)
% of Total		19.6	%		20.7	%		20.4	%		20.9	%		21.2	%		-3.5	%
Time Deposits		251,177			257,753			268,139			274,062			258,624			(7,447	)
% of Total		29.1	%		30.8	%		31.8	%		32.7	%		31.3	%		-2.9	%
Total Deposits	$	863,891		$	840,219		$	847,954		$	839,374		$	827,658		$	36,233
Total Growth Percentage																	4.4	%

Asset Quality

SB Financial reported nonperforming assets of $6.7 million as of March 31, 2020, up $2.4 million from the year-ago quarter. The Company took a $0.4 million charge-off on this credit in the quarter and expects further pressure on the portfolio due to the COVID-19 impact. SB Financial’s nonperforming assets to total assets ratio of 0.61 percent is up 56 percent from the prior year. The coverage of problem loans by the loan loss allowance was at 136 percent at March 31, 2020, down from 204 percent at March 31, 2019.

Nonperforming Assets																Annual
($ in thousands, except ratios)	Mar. 2020			Dec. 2019			Sep. 2019			Jun. 2019			Mar. 2019			Change
Commercial & Agriculture	$	1,309		$	1,772		$	834		$	674		$	998		$	311
% of Total Com./Ag. loans		0.66	%		0.88	%		0.42	%		0.34	%		0.53	%		31.2	%
Commercial RE		1,816			1,826			262			208			212			1,604
% of Total CRE loans		0.48	%		0.49	%		0.07	%		0.06	%		0.06	%		756.6	%
Residential RE		2,330			1,635			1,763			1,768			1,612			718
% of Total Res. RE loans		1.23	%		0.86	%		0.89	%		0.92	%		0.86	%		44.5	%
Consumer & Other		327			267			416			456			325			2
% of Total Con./Oth. loans		0.51	%		0.42	%		0.64	%		0.71	%		0.51	%		0.6	%
Total Nonaccruing Loans		5,782			5,500			3,275			3,106			3,147			2,635
% of Total loans		0.70	%		0.67	%		0.40	%		0.38	%		0.40	%		83.7	%
Accruing Restructured Loans		816			874			825			814			827			(11	)
Total Change (%)																	-1.3	%
Total Nonaccruing & Restructured Loans		6,598			6,374			4,100			3,920			3,974			2,624
% of Total loans		0.79	%		0.77	%		0.50	%		0.48	%		0.51	%		66.0	%
Foreclosed Assets		85			305			489			530			313			(228	)
Total Change (%)																	-72.8	%
Total Nonperforming Assets	$	6,683		$	6,679		$	4,589		$	4,450		$	4,287		$	2,396
% of Total assets		0.61	%		0.64	%		0.44	%		0.43	%		0.42	%		55.9	%

SB FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS - (Unaudited)

	March			December			September			June			March
($ in thousands)	2020			2019			2019			2019			2019

ASSETS
Cash and due from banks	$	56,393		$	27,064		$	49,824		$	42,786		$	62,962
Available-for-sale securities		107,727			100,948			77,029			85,261			95,802
Loans held for sale		11,328			7,258			13,655			9,579			4,346
Loans, net of unearned income		830,764			825,510			823,367			814,509			782,523
Allowance for loan losses		(8,958	)		(8,755	)		(8,492	)		(8,306	)		(8,121	)
Premises and equipment, net		23,599			23,385			23,898			23,150			23,270
Federal Reserve and FHLB Stock, at cost		4,648			4,648			4,648			4,648			4,123
Foreclosed assets held for sale, net		85			305			489			530			313
Interest receivable		2,940			3,106			3,176			3,209			3,123
Goodwill and other intangibles		17,830			17,832			17,834			17,836			17,838
Cash value of life insurance		17,299			17,221			17,137			17,051			16,966
Mortgage servicing rights		8,974			11,017			10,447			10,264			10,838
Other assets		15,684			9,038			9,749			8,606			7,288

Total assets	$	1,088,313		$	1,038,577		$	1,042,761		$	1,029,123		$	1,021,271

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non interest bearing demand	$	170,920		$	158,357		$	152,932		$	141,216		$	146,327
Interest bearing demand		133,722			131,084			131,655			129,710			132,101
Savings		138,863			119,359			121,991			118,931			115,272
Money market		169,209			173,666			173,237			175,455			175,334
Time deposits		251,177			257,753			268,139			274,062			258,624

Total deposits		863,891			840,219			847,954			839,374			827,658

Short-term borrowings		36,881			12,945			14,659			13,968			12,255
Federal Home Loan Bank advances		16,000			16,000			16,000			16,000			24,000
Trust preferred securities		10,310			10,310			10,310			10,310			10,310
Interest payable		1,131			1,191			1,391			1,188			1,123
Other liabilities		24,195			21,818			18,201			14,346			14,419

Total liabilities		952,408			902,483			908,515			895,186			889,765

Shareholders' Equity
Preferred stock		-			-			13,241			13,978			13,978
Common stock		54,463			54,463			41,223			40,486			40,486
Additional paid-in capital		14,655			15,023			15,219			15,259			15,143
Retained earnings		72,641			72,704			70,184			67,236			65,438
Accumulated other comprehensive income (loss)		2,049			659			900			801			124
Treasury stock		(7,903	)		(6,755	)		(6,521	)		(3,823	)		(3,663	)

Total shareholders' equity		135,905			136,094			134,246			133,937			131,506

Total liabilities and shareholders' equity	$	1,088,313		$	1,038,577		$	1,042,761		$	1,029,123		$	1,021,271

SB FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)

($ in thousands, except per share & ratios)	At and for the Three Months Ended
	March			December		September		June			March
	2020			2019		2019		2019			2019
Interest income
Loans
Taxable	$	9,795		$	10,313	$	10,607	$	10,182		$	9,427
Tax exempt		79			83		82		73			62
Securities
Taxable		692			737		776		802			911
Tax exempt		78			72		81		94			98

Total interest income		10,644			11,205		11,546		11,151			10,498

Interest expense
Deposits		1,880			2,392		2,258		2,092			1,918
Repurchase agreements & other		28			17		22		17			26
Federal Home Loan Bank advances		100			101		101		100			100
Trust preferred securities		88			99		107		110			114

Total interest expense		2,096			2,609		2,488		2,319			2,158

Net interest income		8,548			8,596		9,058		8,832			8,340

Provision for loan losses		600			300		300		200			-

Net interest income after provision for loan losses		7,948			8,296		8,758		8,632			8,340

Noninterest income
Wealth management fees		768			801		775		783			734
Customer service fees		682			712		729		689			631
Gain on sale of mtg. loans & OMSR		1,949			3,048		2,495		1,678			1,192
Mortgage loan servicing fees, net		(2,052	)		334		8		(459	)		(280	)
Gain on sale of non-mortgage loans		104			250		462		216			327
Title insurance income		265			393		400		308			19
Net gain on sales of securities		-			-		-		206			-
Gain (loss) on sale of assets		(46	)		1		1		(5	)		(2	)
Other		491			420		496		275			379

Total noninterest income		2,161			5,959		5,366		3,691			3,000

Noninterest expense
Salaries and employee benefits		5,427			6,142		5,715		5,305			4,902
Net occupancy expense		698			675		656		627			645
Equipment expense		700			764		688		665			711
Data processing fees		548			543		499		488			443
Professional fees		757			639		571		649			617
Marketing expense		208			171		239		246			239
Telephone and communication expense		115			121		118		112			115
Postage and delivery expense		115			86		89		81			84
State, local and other taxes		254			347		243		247			255
Employee expense		184			207		199		236			153
Other expenses		400			481		483		452			462

Total noninterest expense		9,406			10,176		9,500		9,108			8,626

Income before income tax expense		703			4,079		4,624		3,215			2,714

Income tax expense		22			721		862		588			488

Net income	$	681		$	3,358	$	3,762	$	2,627		$	2,226

Preferred share dividends		-			230		233		243			244

Net income available to common shareholders		681			3,128		3,529		2,384			1,982

Common share data:
Basic earnings per common share	$	0.09		$	0.48	$	0.55	$	0.37		$	0.31
Diluted earnings per common share	$	0.09		$	0.42	$	0.48	$	0.33		$	0.28

Average shares outstanding (in thousands):
Basic:		7,756			6,445		6,397		6,454			6,482
Diluted:		7,756			7,799		7,876		7,967			7,994

SB FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

($ in thousands, except per share & ratios)	At and for the Three Months Ended
	March			December			September			June			March
	2020			2019			2019			2019			2019
SUMMARY OF OPERATIONS
Net interest income	$	8,548		$	8,596		$	9,058		$	8,832		$	8,340
Tax-equivalent adjustment		42			41			43			44			43
Tax-equivalent net interest income		8,590			8,637			9,101			8,876			8,383
Provision for loan loss		600			300			300			200			-
Noninterest income		2,161			5,959			5,366			3,691			3,000
Total operating revenue		10,709			14,555			14,424			12,523			11,340
Noninterest expense		9,406			10,176			9,500			9,108			8,626
Pre-tax pre-provision income		1,303			4,379			4,924			3,415			2,714
Pretax income		703			4,079			4,624			3,215			2,714
Net income		681			3,358			3,762			2,627			2,226
Net income available to common shareholders		681			3,128			3,529			2,384			1,982

PER SHARE INFORMATION:
Basic earnings per share (EPS)		0.09			0.48			0.55			0.37			0.31
Diluted earnings per share		0.09			0.42			0.48			0.33			0.28
Common dividends		0.095			0.095			0.090			0.090			0.085
Book value per common share		17.64			17.53			17.28			16.89			16.57
Tangible book value per common share (TBV)		15.32			15.23			16.23			15.83			15.43
Fully converted TBV per common share		-			-			14.98			14.64			14.32
Market price per common share		11.12			19.69			16.72			16.46			18.02
Market price per preferred share		-			-			16.50			16.10			19.00
Market price to TBV		72.6	%		129.2	%		103.0	%		104.0	%		116.8	%
Market price to fully converted TBV		-			-			111.6	%		112.4	%		125.8	%
Market price to trailing 12 month EPS		8.4			13.0			11.5			12.1			12.6

PERFORMANCE RATIOS:
Return on average assets (ROAA)		0.26	%		1.28	%		1.44	%		1.03	%		0.89	%
Pre-tax pre-provision ROAA		0.49	%		1.67	%		1.89	%		1.34	%		1.08	%
Return on average equity		1.99	%		9.93	%		11.24	%		7.92	%		6.76	%
Return on average tangible equity		2.29	%		12.83	%		14.67	%		10.41	%		8.83	%
Efficiency ratio		87.81	%		69.90	%		65.85	%		72.71	%		76.05	%
Earning asset yield		4.32	%		4.80	%		4.98	%		4.88	%		4.78	%
Cost of interest bearing liabilities		1.12	%		1.42	%		1.33	%		1.28	%		1.20	%
Net interest margin		3.47	%		3.68	%		3.91	%		3.86	%		3.79	%
Tax equivalent effect		0.01	%		0.02	%		0.02	%		0.02	%		0.02	%
Net interest margin, tax equivalent		3.48	%		3.70	%		3.93	%		3.88	%		3.81	%
Non interest income/Average assets		0.81	%		2.27	%		2.06	%		1.45	%		1.20	%
Non interest expense/Average assets		3.54	%		3.87	%		3.64	%		3.58	%		3.45	%
Net noninterest expense/Average assets		-2.73	%		-1.60	%		-1.58	%		-2.13	%		-2.25	%

ASSET QUALITY RATIOS:
Gross charge-offs		400			51			128			20			60
Recoveries		3			14			15			5			13
Net charge-offs		397			37			113			15			47
Nonaccruing loans/Total loans		0.70	%		0.67	%		0.40	%		0.38	%		0.40	%
Nonperforming loans/Total loans		0.79	%		0.77	%		0.50	%		0.48	%		0.51	%
Nonperforming assets/Loans & OREO		0.80	%		0.81	%		0.56	%		0.55	%		0.55	%
Nonperforming assets/Total assets		0.61	%		0.64	%		0.44	%		0.43	%		0.42	%
Allowance for loan loss/Nonperforming loans		135.77	%		137.35	%		207.12	%		211.89	%		204.35	%
Allowance for loan loss/Total loans		1.08	%		1.06	%		1.03	%		1.02	%		1.04	%
Net loan charge-offs/Average loans (ann.)		0.19	%		0.02	%		0.05	%		0.01	%		0.02	%
Loan loss provision/Net charge-offs		151.13	%		810.81	%		265.49	%		1333.33	%		0.00	%

CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		96.17	%		98.25	%		97.10	%		97.04	%		94.55	%
Equity/ Assets		12.49	%		13.10	%		12.87	%		13.01	%		12.88	%
Tangible equity/Tangible assets		11.03	%		11.59	%		10.07	%		10.10	%		9.93	%
Tangible equity adjusted for conversion		11.03	%		11.59	%		11.36	%		11.48	%		11.33	%
Common equity tier 1 ratio (Bank) 3/20 estimate		12.25	%		12.46	%		12.07	%		12.53	%		12.71	%

END OF PERIOD BALANCES
Total assets		1,088,313			1,038,577			1,042,761			1,029,123			1,021,271
Total loans		830,764			825,510			823,367			814,509			782,523
Deposits		863,891			840,219			847,954			839,374			827,658
Stockholders equity		135,905			136,094			134,246			133,937			131,506
Goodwill & intangibles		17,830			17,832			17,834			17,836			17,838
Preferred equity		-			-			13,241			13,978			13,978
Tangible equity		118,075			118,262			103,171			102,123			99,690
Mortgage servicing portfolio		1,216,292			1,199,107			1,153,020			1,112,857			1,094,060
Wealth/Brokerage assets under care		427,129			507,670			484,295			479,442			462,580
Total assets under care		2,731,734			2,745,354			2,680,076			2,621,422			2,577,911
Full-time equivalent employees (actual)		253			252			247			250			256
Period end basic shares outstanding		7,705			7,763			6,357			6,451			6,460
Period end outstanding (Series A Converted)		-			-			1,414			1,478			1,475
Market capitalization (all)		85,680			152,853			129,620			130,324			144,898

AVERAGE BALANCES
Total assets		1,061,365			1,051,071			1,043,791			1,016,493			1,001,282
Total earning assets		986,216			934,540			927,360			914,652			879,394
Total loans		832,975			828,108			829,699			804,716			775,280
Deposits		855,272			856,961			849,984			827,615			812,190
Stockholders equity		136,930			135,267			133,891			132,734			131,691
Intangibles		17,831			17,833			17,835			17,837			16,880
Preferred equity		-			12,707			13,459			13,978			13,979
Tangible equity		119,099			104,727			102,597			100,919			100,832
Average basic shares outstanding		7,756			6,445			6,397			6,454			6,482
Average diluted shares outstanding		7,756			7,799			7,876			7,967			7,994

SB FINANCIAL GROUP, INC.

Rate Volume Analysis - (Unaudited)

At and for the Three Months Ended March 31, 2020 and 2019

($ in thousands)	Three Months Ended Mar. 31, 2020								Three Months Ended Mar. 31, 2019
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
Assets
Taxable securities/Cash	$	146,678		$	692		1.89	%	$	94,623		$	911		3.85	%
Nontaxable securities		6,563			78		4.75	%		9,491			98		4.13	%
Loans, net		832,975			9,874		4.74	%		775,280			9,489		4.90	%

Total earning assets		986,216			10,644		4.32	%		879,394			10,498		4.78	%

Cash and due from banks		5,512								56,976
Allowance for loan losses		(8,867	)							(8,284	)
Premises and equipment		23,698								22,650
Other assets		54,806								50,546

Total assets	$	1,061,365							$	1,001,282

Liabilities

Savings, MMDA and interest bearing demand	$	442,438		$	1,083		0.98	%	$	422,649		$	722		0.68	%
Time deposits		254,342			797		1.25	%		249,655			1,196		1.92	%
Repurchase agreements & other		22,537			28		0.50	%		17,704			26		0.59	%
Advances from Federal Home Loan Bank		16,132			100		2.48	%		16,267			100		2.46	%
Trust preferred securities		10,310			88		3.41	%		10,310			114		4.42	%

Total interest bearing liabilities		745,759			2,096		1.12	%		716,585			2,158		1.20	%

Non interest bearing demand		158,492			-					139,886			-

Total funding		904,251					0.93	%		856,471					1.01	%

Other liabilities		20,184								13,120

Total liabilities		924,435								869,591

Equity		136,930								131,691

Total liabilities and equity	$	1,061,365							$	1,001,282

Net interest income				$	8,548							$	8,340

Net interest income as a percent of average interest-earning assets - GAAP measure							3.47	%							3.79	%

Net interest income as a percent of average interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis							3.48	%							3.81	%

	Six Months Ended Jun. 30, 2020									Six Months Ended Jun. 30, 2019
	Average						Average			Average					Average
	Balance			Interest			Rate			Balance			Interest		Rate
Assets
Taxable securities	$	95,216		$	692			0.73	%	$	98,203		$	2,618		2.67	%
Nontaxable securities		10,108			78			0.77	%		9,328			439		4.71	%
Loans, net		809,651			9,874			1.22	%		790,080			36,422		4.61	%

Total earning assets		914,975			10,644			1.16	%		897,611			39,479		4.40	%

Cash and due from banks		47,135									41,724
Allowance for loan losses		(8,370	)								(8,361	)
Premises and equipment		23,779									21,795
Other assets		50,413									49,170

Total assets	$	1,027,932								$	1,001,939

Liabilities

Savings, MMDA and interest bearing demand	$	427,858		$	2,846			0.67	%	$	401,577		$	1,754		0.44	%
Time deposits		262,040			(966	)		-0.37	%		225,467			3,560		1.58	%
Repurchase agreements & Other		15,288			28			0.18	%		16,458			37		0.22	%
Advances from Federal Home Loan Bank		16,066			100			0.62	%		22,108			460		2.08	%
Trust preferred securities		10,310			88			0.85	%		10,310			401		3.89	%

Total interest bearing liabilities		731,562			2,096			0.29	%		675,920			6,212		0.92	%

Non interest bearing demand		146,401						0.24	%		137,253					0.76	%

Total funding		877,963									813,173

Other liabilities		16,779									12,999

Total liabilities		894,742									826,172

Equity		133,190									121,094

Total liabilities and equity	$	1,027,932								$	947,266

Net interest income				$	8,548								$	33,267

Net interest income as a percent of average interest-earning assets - GAAP measure								0.93	%							3.71	%

Net interest income as a percent of average interest-earning assets - non GAAP - Computed on a fully tax equivalent (FTE) basis								0.95	%							3.72	%

Non-GAAP reconciliation	Three Months Ended						Twelve Months Ended

($ in thousands, except per share & ratios)	Mar. 31, 2020			Mar. 31, 2019			Dec. 31, 2019			Dec. 31, 2018

Total Operating Revenue	$	10,709		$	11,340		$	10,709		$	23,863
Adjustment to (deduct)/add OMSR impairment*		2,212			708			1,094			61

Adjusted Total Operating Revenue		12,921			12,048			11,803			23,924

Income before Income Taxes		703			2,714			703			5,929
Adjustment to (deduct)/add OMSR impairment		2,212			708			1,094			61

Adjusted Income before Income Taxes		2,915			3,422			1,797			5,990

Provision for Income Taxes		22			488			22			1,076
Adjustment to (deduct)/add OMSR impairment		465			149			230			13

Adjusted Provision for Income Taxes		487			637			252			1,089

Net Income		681			2,226			681			4,853
Adjustment to (deduct)/add OMSR impairment		1,747			559			864			48

Adjusted Net Income		2,428			2,785			1,545			4,901

Diluted Earnings per Share		0.09			0.28			0.09			0.61
Adjustment to (deduct)/add OMSR impairment		0.22			0.07			0.11			0.01

Adjusted Diluted Earnings per Share	$	0.31		$	0.35		$	0.20		$	0.62

Return on Average Assets		0.26	%		0.89	%		0.07	%		0.96	%
Adjustment to (deduct)/add OMSR impairment		0.66	%		0.06	%		0.08	%		0.00	%

Adjusted Return on Average Assets		0.92	%		0.95	%		0.15	%		0.97	%

*valuation adjustment to the Company's mortgage servicing rights