Third Quarter 2025 Highlights compared to the third quarter of the prior year include:
GAAP net income and Diluted Earnings per Share ("DEPS") were $4.0 million, or $0.64 per DEPS, well above the $2.4 million, or $0.35 per DEPS in the prior year quarter. Net Income, adjusted for Originated Mortgage Servicing Rights ("OMSR"), was $4.3 million, up 57.4 percent compared to $2.7 million for the prior-year period. Adjusted DEPS of $0.68 was also up 65.3 percent, from the prior year.
Net interest income of $12.3 million increased by 21.1 percent from $10.2 million reported in the prior-year quarter.
Loan growth of $80.6 million, or 7.8 percent from the prior-year quarter, with growth from the linked quarter of $15.8 million, or 1.4 percent. This marks six consecutive quarters of sequential loan growth. Loan growth adjusted for the Marblehead acquisition was $62.7 and $15.9 million, from the prior year and linked quarters, respectively.
Deposit growth of $103 million, or 8.9 percent from the prior-year quarter, with an increase from the linked quarter of $12.7 million, or 1.0 percent. Adjusted for the Marblehead acquisition, total deposits increased $52.1 million from the prior year.
Tangible book value ("TBV") per share ended the quarter at $17.21 up $0.72 per share or 4.4 percent from the prior year quarter.
Nine months ended September 30, 2025 Highlights compared to the same period of the prior year:
Mortgage Banking Revenue increased to $5.1 million, up by 7.8 percent from $4.7 million.
Net interest income rose to $35.7 million, representing a year-over-year improvement of 23.1 percent from $29.0 million for the nine months ending September 30, 2024.
Total interest expense came in at $18.9 million, up slightly by 2.3 percent from $18.5 million in the prior year period.
Earnings Highlights
Three Months Ended
Nine Months Ended
($ in thousands, except per share & ratios)
Sep. 2025
Sep. 2024
% Change
Sep. 2025
Sep. 2024
% Change
Operating revenue
$
16,578
$
14,309
15.9
%
$
49,140
$
41,485
18.5
%
Interest income
18,809
16,548
13.7
%
54,648
47,502
15.0
%
Interest expense
6,475
6,362
1.8
%
18,907
18,477
2.3
%
Net interest income
12,334
10,186
21.1
%
35,741
29,025
23.1
%
Provision for credit losses
124
200
-38.0
%
1,108
200
454.0
%
Noninterest income
4,244
4,123
2.9
%
13,399
12,460
7.5
%
Noninterest expense
11,498
11,003
4.5
%
35,760
31,956
11.9
%
Net income
4,046
2,354
71.9
%
10,056
7,835
28.3
%
Adjusted Earnings per diluted share
0.68
0.41
65.9
%
1.67
1.20
39.2
%
Earnings per diluted share
0.64
0.35
82.9
%
1.56
1.17
33.3
%
Adjusted Return on Avg. Assets
1.13
%
0.79
%
43.0
%
0.96
%
0.79
%
21.5
%
Return on average assets
1.07
%
0.68
%
57.4
%
0.90
%
0.77
%
16.9
%
Adjusted Return on Avg. Equity
12.79
%
8.42
%
51.9
%
10.84
%
8.62
%
25.8
%
Return on average equity
12.08
%
7.28
%
65.9
%
10.15
%
8.41
%
20.7
%
"Net income for the third quarter was $4.0 million, a 71.9 percent increase from the prior-year quarter, with the GAAP DEPS of $0.64 up 82.9 percent from the prior year," said Mark A. Klein, Chairman, President, and CEO. This marks our 59th consecutive quarter of profitability, which also included the second full quarter of contribution from the Marblehead acquisition, which strengthened our liquidity profile and further extended our market presence in Northern Ohio.
Net interest income for the quarter grew by $2.1 million to $12.3 million compared to the previous year, driven by sustained loan growth and stabilization of funding costs. Total loans increased by $80.6 million, compared to the prior year, and by $15.8 million from the linked quarter. On an organic basis, excluding the Marblehead acquisition, loan balances increased $62.7 million from the prior year. Deposits rose $103.0 million, or 8.9 percent, to $1.26 billion, reflecting both acquired balances and solid client retention. Excluding acquired deposits, organic growth totaled $52.1 million, underscoring the strength of our client relationships and the resiliency of our franchise."
RESULTS OF OPERATIONS
In the third quarter of 2025, total operating revenue increased to $16.6 million, a 15.9 percent rise from $14.3 million in the prior year and a 3.5 percent decrease from the linked quarter. The year-over-year increase reflected higher net interest income and continued growth in non-interest income. Net interest income reached $12.3 million, a strong 21 percent year-over-year increase, reflecting higher interest income on loans, which rose by $1.9 million to $16.6 million along with a marginal increase in interest expense of $113,000 to $6.5 million. Deposit costs increased by 2.7 percent to $5.7 million but were partially offset by decreases in interest expenses on other funding sources, resulting in a 1.8 percent increase in total interest expense compared to the prior year quarter. As a result, the net interest margin expanded by 32 basis points year-over-year to 3.48 percent, reflecting disciplined balance sheet management and moderation in funding cost pressures. Noninterest income for the quarter increased by 2.9 percent year-over-year to $4.2 million due primarily to improvements in wealth management fees, mortgage loan servicing fees, title insurance, other non-interest income fees as well as modest increases in customer service fees and gain on sale of mortgage loans. These fees were partially offset by decreases in gain on sales of non-mortgage loans and loss on sale of assets. "We remain focused on executing a balanced growth strategy, maintaining diversified sources of revenue, and exercising disciplined expense management," said Mr. Klein.
Mortgage Loan Business
Net mortgage banking revenue for the quarter reached $1.5 million, up $136,000 from the prior-year quarter. Loan servicing fees added $914,000 to revenue, reflecting an increase of $40,000 from the prior-year quarter. The OMSR net valuation adjustment for the third quarter of 2025 was a negative $301,000 compared to a negative $465,000 in the third quarter of 2024.
Mortgage Banking
($ in thousands)
Sep. 2025
Jun. 2025
Mar. 2025
Dec. 2024
Sep. 2024
Prior Year Growth
Mortgage originations
$
67,609
$
97,901
$
39,775
$
72,534
$
70,715
$
(3,106
)
Mortgage sales
66,408
74,313
39,279
62,301
61,271
5,137
Mortgage servicing portfolio
1,470,360
1,456,374
1,432,184
1,427,318
1,406,273
64,087
Mortgage servicing rights
15,347
15,458
14,965
14,868
14,357
990
Revenue
Loan servicing fees
914
904
894
886
874
40
OMSR amortization
(455
)
(469
)
(294
)
(358
)
(370
)
(85
)
Net administrative fees
459
435
600
528
504
(45
)
OMSR valuation adjustment
(301
)
159
11
288
(465
)
164
Net loan servicing fees
158
594
611
816
39
119
Gain on sale of mortgages
1,328
1,565
849
1,196
1,311
17
Mortgage banking revenue, net
$
1,486
$
2,159
$
1,460
$
2,012
$
1,350
$
136
Noninterest Income and Noninterest Expense
"Noninterest income for the third quarter of 2025 totaled $4.2 million, up $121,000 or 2.9 percent from the prior-year quarter, primarily due to increased mortgage loan servicing fees and other noninterest income fees, underscoring the continued strength of our fee-based businesses. Compared to the prior-year quarter, mortgage loan services fees, improved by $119,000 year over year, and other noninterest income fees added $91,000, reflecting the benefits of our diversified revenue base," Mr. Klein noted.
Noninterest Income/Noninterest Expense
($ in thousands, except ratios)
Sep. 2025
Jun. 2025
Mar. 2025
Dec. 2024
Sep. 2024
Prior Year Growth
Noninterest Income (NII)
$
4,244
$
5,048
$
4,107
$
4,557
$
4,123
$
121
NII / Total Revenue
25.6
%
29.4
%
26.7
%
29.5
%
28.8
%
-3.2
%
NII / Average Assets
1.1
%
1.4
%
1.1
%
1.3
%
1.2
%
-0.1
%
Total Revenue Growth
15.9
%
22.3
%
17.2
%
2.2
%
4.5
%
11.4
%
Noninterest Expense (NIE)
$
11,498
$
11,852
$
12,410
$
11,003
$
11,003
$
495
Efficiency Ratio
69.0
%
68.9
%
80.0
%
71.1
%
76.8
%
-7.8
%
NIE / Average Assets
3.0
%
3.2
%
3.4
%
3.2
%
3.2
%
-0.2
%
Net Noninterest Expense/Avg. Assets
-1.9
%
-1.8
%
-2.3
%
-1.8
%
-2.0
%
0.1
%
Total Expense Growth
4.5
%
11.1
%
20.7
%
6.1
%
5.0
%
-0.5
%
Noninterest expense for the third quarter of 2025 was $11.5 million, up 4.5 percent from the prior year, driven primarily by increased salary and benefit expenses, equipment expenses and professional fees.
"Our efficiency ratio in the third quarter of 2025 was 69.0 percent highlighting our commitment to disciplined expense management and balanced revenue growth," stated Mr. Klein.
Balance Sheet
As of September 30, 2025, SB Financial reported total assets of $1.50 billion, higher than the linked quarter and the previous year. Year-over-year growth was primarily driven by a robust increase in the loan portfolio, which reached $1.11 billion, marking an $80.6 million or 7.8 percent increase year over year. Loan growth also included $18.0 million in loans added with the completion of the Marblehead acquisition. Cash increased by $35.7 million from the prior year, driven by investment portfolio runoff and deposit growth. Key metrics this quarter included our loan-to-deposit ratio of 88 percent and our loan to asset ratio of 74 percent, both of which were in the upper range of our target levels.
Total deposits increased to $1.26 billion, growing $103.0 million or 8.9 percent year over year, including $50.9 million in low-cost deposits from the acquisition and $52.1 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 $137.0 million, representing a $4.1 million increase from the prior year. The increase highlights management's consistent efforts to deliver sustainable growth and enhance shareholder returns.
During the third quarter, SB Financial repurchased approximately 101,000 shares, a slight decrease from the prior quarter, reflecting management's disciplined and opportunistic approach to capital deployment when the share price trades below the target range. This activity demonstrates the Company's balanced approach to capital management, prioritizing shareholder returns through dividends and share repurchases while maintaining sufficient capital to fund future growth.
"As we progress through the fourth quarter of 2025, the Company's solid balance sheet and prudent capital management provide a strong foundation to navigate the current environment and support future growth," said Mr. Klein. "We were pleased to achieve our sixth consecutive quarter of sequential loan growth, supported by sound credit quality and consistent execution across our markets, with total loan balances rising $80.6 million from the prior year, including $62.7 million of organic loan growth. This continued trajectory reflects the depth of our client relationships, the resiliency of our business model, and the disciplined manner in which we deploy capital across our markets. Our strong asset quality metrics and top-tier reserve coverage remain central to our financial strength and position us well to navigate the current operating environment. As we look ahead, we remain focused on driving organic growth, maintaining disciplined expense management, and delivering long-term value for our shareholders."
Loan Balances
($ in thousands, except ratios)
Sep. 2025
Jun. 2025
Mar. 2025
Dec. 2024
Sep. 2024
AnnualGrowth
Commercial
$
117,581
$
118,984
$
125,878
$
124,764
$
123,821
$
(6,240
)
% of Total
10.6
%
10.9
%
11.6
%
11.9
%
12.0
%
-5.0
%
Commercial RE
535,307
525,671
509,518
479,573
459,449
75,858
% of Total
48.2
%
48.0
%
46.8
%
45.8
%
44.6
%
16.5
%
Agriculture
65,150
60,924
61,443
64,680
64,887
263
% of Total
5.9
%
5.6
%
5.6
%
6.2
%
6.3
%
0.4
%
Residential RE
309,140
310,126
319,307
308,378
314,010
(4,870
)
% of Total
27.8
%
28.3
%
29.3
%
29.5
%
30.5
%
-1.6
%
Consumer & Other
83,367
79,014
72,128
69,340
67,788
15,579
% of Total
7.5
%
7.2
%
6.6
%
6.6
%
6.6
%
23.0
%
Total Loans
$
1,110,545
$
1,094,719
$
1,088,274
$
1,046,735
$
1,029,955
$
80,590
Total Growth Percentage
7.8
%
Deposit Balances
($ in thousands, except ratios)
Sep. 2025
Jun. 2025
Mar. 2025
Dec. 2024
Sep. 2024
AnnualGrowth
Non-Int DDA
$
246,725
$
241,245
$
240,446
$
232,155
$
222,425
$
24,300
% of Total
19.5
%
19.3
%
18.9
%
20.1
%
19.2
%
10.9
%
Interest DDA
194,420
205,581
208,583
201,085
202,097
(7,677
)
% of Total
15.4
%
16.4
%
16.4
%
17.4
%
17.4
%
-3.8
%
Savings
290,111
282,311
285,902
237,987
241,761
48,350
% of Total
23.0
%
22.6
%
22.5
%
20.6
%
20.8
%
20.0
%
Money Market
261,953
249,536
257,013
222,161
228,182
33,771
% of Total
20.7
%
20.0
%
20.2
%
19.3
%
19.7
%
14.8
%
Time Deposits
269,313
271,149
279,276
259,217
265,068
4,245
% of Total
21.3
%
21.7
%
22.0
%
22.5
%
22.9
%
1.6
%
Total Deposits
$
1,262,522
$
1,249,822
$
1,271,220
$
1,152,605
$
1,159,533
$
102,989
Total Growth Percentage
8.9
%
Asset Quality
As of September 30, 2025, SB Financial continued to focus on strong asset quality metrics. Nonperforming assets totaled $4.9 million, representing 0.32 percent of total assets, a decrease of $665,000 compared to $5.5 million or 0.40 percent of total assets reported in the prior year, and a continued improvement from linked quarter balance of $6.2 million, representing 0.41 percent of total assets.
The allowance for credit losses remained strong at 1.44 percent of total loans, providing 345.4 percent coverage of non-performing loans, a level consistent with the linked quarter and reflective of our conservative approach to risk management. The net loan charge-offs to average loans ratio remained modest at 0 basis points, declining from 2 basis points in the linked quarter and 1 basis point recorded in the prior year. These metrics reflect our continued focus on disciplined credit practices and effective collateral management.
"Our asset quality metrics continue to reflect the strength of our portfolio and disciplined approach to risk management", stated Mr. Klein. "We were especially pleased with the improvement in non-performing loans, which were the result of our determined efforts to resolve several longer-term problem credits. We remain focused on maintaining conservative credit practices while supporting prudent growth and delivering long-term value for our shareholders."
Nonperforming Assets
AnnualChange
($ in thousands, except ratios)
Sep. 2025
Jun. 2025
Mar. 2025
Dec. 2024
Sep. 2024
Commercial & Agriculture
$
2,243
$
3,274
$
3,418
$
2,927
$
2,899
$
(656
)
% of Total Com./Ag. loans
1.23
%
1.82
%
1.82
%
1.55
%
1.54
%
-22.6
%
Commercial RE
778
816
798
807
813
(35
)
% of Total CRE loans
0.15
%
0.16
%
0.16
%
0.17
%
0.18
%
-4.3
%
Residential RE
1,400
1,577
1,608
1,539
1,536
(136
)
% of Total Res. RE loans
0.45
%
0.51
%
0.50
%
0.50
%
0.49
%
-8.9
%
Consumer & Other
195
205
227
243
270
(75
)
% of Total Con./Oth. loans
0.23
%
0.26
%
0.31
%
0.35
%
0.40
%
-27.8
%
Total Nonaccruing Loans
4,616
5,872
6,051
5,516
5,518
(902
)
% of Total loans
0.42
%
0.54
%
0.56
%
0.53
%
0.54
%
-16.3
%
Foreclosed Assets and Other Assets
237
284
73
-
-
237
Total Change (%)
N/M
Total Nonperforming Assets
$
4,853
$
6,156
$
6,124
$
5,516
$
5,518
$
(665
)
% of Total assets
0.32
%
0.41
%
0.41
%
0.40
%
0.40
%
-12.05
%
Webcast and Conference Call
The Company will hold the third quarter 2025 earnings conference call and webcast on October 31, 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 four loan production offices located throughout the Tri-State region of Ohio and Indiana. 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)
September
June
March
December
September
($ in thousands)
2025
2025
2025
2024
2024
ASSETS
Cash and due from banks
$
85,025
$
79,463
$
105,145
$
25,928
$
49,348
Interest bearing time deposits
2,025
1,565
1,565
1,565
1,706
Available-for-sale securities
193,190
195,955
199,721
201,587
211,511
Loans held for sale
4,736
12,774
4,286
6,770
8,927
Loans, net of unearned income
1,110,545
1,094,719
1,088,274
1,046,735
1,029,955
Allowance for credit losses
(15,943
)
(15,645
)
(15,391
)
(15,096
)
(15,278
)
Premises and equipment, net
21,764
21,857
21,875
20,456
20,715
Federal Reserve and FHLB Stock, at cost
5,466
5,466
5,340
5,223
5,223
Foreclosed assets
237
284
73
-
-
Interest receivable
5,455
5,299
5,072
4,908
4,842
Goodwill
27,158
27,158
27,158
23,239
23,239
Cash value of life insurance
32,004
31,060
30,871
30,685
30,488
Mortgage servicing rights
15,347
15,458
14,965
14,868
14,357
Other assets
9,254
10,888
12,048
12,649
8,916
Total assets
$
1,496,263
$
1,486,301
$
1,501,002
$
1,379,517
$
1,393,949
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non interest bearing demand
$
246,725
$
241,245
$
240,446
$
232,155
$
222,425
Interest bearing demand
194,420
205,581
208,583
201,085
202,097
Savings
290,111
282,311
285,902
237,987
241,761
Money market
261,953
249,536
257,013
222,161
228,182
Time deposits
269,313
271,149
279,276
259,217
265,068
