DEFIANCE, Ohio, April 20, 2023 (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 first quarter ended March 31, 2023.

First quarter 2023 highlights:

Net income of $2.5 million decreased 12.9 percent compared to the prior year with diluted earnings per share ("EPS") of $0.35
Adjusted for Mortgage Servicing Rights recapture ("OMSR"), net income is higher by 14.0 percent compared to the prior year
Noninterest expense of $10.8 million declined 0.8 percent from the prior year
Loan growth of $14.2 million from the linked quarter, or 5.9 percent annualized
Deposit growth of $23.5 million from the linked quarter, or 8.6 percent annualized
Stable asset quality with nonperforming assets at 35 basis points

Earnings Highlights	Three Months Ended
($ in thousands, except per share & ratios)	Mar. 2023		Mar. 2022		% Change
Operating revenue	$	13,990	$	14,279	-2.0%
Interest income		13,824		9,395	47.1%
Interest expense		3,500		918	281.3%
Net interest income		10,324		8,477	21.8%
Provision for credit losses		250		-	0.0%
Noninterest income		3,666		5,802	-36.8%
Noninterest expense		10,773		10,859	-0.8%
Net income		2,450		2,813	-12.9%
Earnings per diluted share		0.35		0.40	-12.5%
Return on average assets		0.73%		0.83%	-12.0%
Return on average equity		8.37%		8.08%	3.6%

"Our Company experienced the volatility of the banking sector this quarter and it has impacted our earnings results," said Mark A. Klein, Chairman, President, and CEO of SB Financial. "Liquidity concerns resulted in a much more competitive arena for deposits and funding in the quarter, which drove our deposit beta significantly higher and reduced margin income. We still were able to add loan balances in the quarter even as we have begun to examine all of our credit underwriting standards."

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income and noninterest income, was down from both the linked quarter and the prior year quarter by 4.3 and 2.0 percent, respectively. Operating revenue was negatively impacted by the decline in mortgage banking revenue and higher funding costs.

Net interest income was down 5.3 percent from the linked quarter but up 21.8 percent from the year ago quarter.
Net interest margin was up from the prior year by 68 basis points, primarily from the shift in mix of our balance sheet with cash and securities reallocated to the loan portfolio offset by the shift in our funding mix to higher cost term deposits.
Noninterest income was down 36.8 percent from the year ago quarter, due to lower mortgage volume and OMSR recapture.

Mortgage Loan Business

Mortgage loan originations for the first quarter of 2023 were $49.3 million, down $48.0 million, or 49.3 percent, from the year-ago quarter; likewise, total sales of originated loans were $22.6 million, down $49.5 million, or 68.7 percent.

Net mortgage banking revenue, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.2 million for the first quarter of 2023, compared to $2.9 million for the year-ago quarter. The mortgage servicing valuation adjustment for the first quarter of 2023 was a positive $0.1 million, compared to a positive adjustment of $0.9 million for the first quarter of 2022. The servicing portfolio at March 31, 2023, was $1.34 billion, which was down 2.3 percent to the prior year.

Mr. Klein noted, "While we added producers in our high growth markets of Indianapolis and Columbus, mortgage origination volume was constrained by the rate environment. Our pipelines are improving and notably nearly 75 percent of the pipeline is saleable product, which is back to our more normal business model."

Mortgage Banking
($ in thousands)	Mar. 2023			Dec. 2022			Sep. 2022			Jun. 2022			Mar. 2022			Annual Growth
Mortgage originations	$	49,366		$	51,219		$	68,557		$	95,454		$	97,394		$	(48,028	)
Mortgage sales		25,803			23,590			39,176			49,915			72,154			(46,351	)
Mortgage servicing portfolio		1,344,158			1,352,016			1,362,666			1,369,732			1,375,554			(31,396	)
Mortgage servicing rights		13,548			13,503			13,473			13,408			13,135			413


Mortgage servicing revenue
Loan servicing fees		844			851			858			863			861			(17	)
OMSR amortization		(292	)		(310	)		(396	)		(496	)		(547	)		255
Net administrative fees		552			541			462			367			314			238
OMSR valuation adjustment		56			86			65			239			890			(834	)
Net loan servicing fees		608			627			527			606			1,204			(596	)
Gain on sale of mortgages		599			550			876			1,196			1,676			(1,077	)
Mortgage banking revenue, net	$	1,207		$	1,177		$	1,403		$	1,802		$	2,880		$	(1,673	)

Noninterest Income and Noninterest Expense

Noninterest income declined for the first quarter, from both the linked quarter and prior year. Gain-on-sale from mortgage loans were down significantly from the prior year and total sales were down over $46 million. The Title insurance business was off nearly 40 percent, reflecting the lower level of residential volume.

For the first quarter of 2023, noninterest expense of $10.8 million was down $0.1 million or 0.8 percent compared to the prior year quarter. Overall head count is down from the linked quarter by 4.9 percent as we continue to right size the mortgage business line. Commission expense for both mortgage and SBA is down compared to the prior year due to the lower total origination volume.

Mr. Klein stated, "We have undertaken a full scale review of our expense structure as we understand the headwinds that revenue growth will encounter in 2023. Our mortgage business line infrastructure has been reduced and we are looking at other areas to provide meaningful expense reductions."

Noninterest Income / Noninterest Expense
($ in thousands, except ratios)	Mar. 2023		Dec. 2022		Sep. 2022		Jun. 2022		Mar. 2022		Annual Growth
Noninterest Income (NII)	$	3,666	$	3,713	$	4,043	$	4,673	$	5,802	$	(2,136	)
NII / Total Revenue		26.2%		25.4%		27.9%		32.8%		40.6%		-14.4%
NII / Average Assets		1.1%		1.1%		1.2%		1.4%		1.7%		-0.6%
Total Revenue Growth		-2.0%		-6.7%		-13.2%		-9.1%		-46.9%		44.9%

Noninterest Expense (NIE)	$	10,773	$	10,269	$	10,384	$	10,802	$	10,859	$	(86	)
Efficiency Ratio		76.9%		70.2%		71.6%		75.6%		75.9%		1.0%
NIE / Average Assets		3.2%		3.1%		3.2%		3.3%		3.2%		0.0%
Net Noninterest Expense/Avg. Assets		-2.1%		-2.0%		-2.0%		-1.9%		-1.5%		-0.6%
Total Expense Growth		-0.8%		-11.2%		-7.7%		-2.5%		-0.5%		-0.3%

Balance Sheet

Total assets as of March 31, 2023, were $1.34 billion, or in line with the year ago quarter primarily due to the increase in the loan portfolio which was offset by declines in cash and investments. Total shareholders' equity as of March 31, 2023, was $119.8 million, down from the prior year but compared to the linked quarter was higher due to the declining impairment of our bond portfolio. Excluding the impact of the valuation adjustment, equity increased $3.1 million or 2.1 percent. Our adoption of CECL on January 1^st resulted in a reduction of equity that was transferred into our allowance for credit losses. SB Financial repurchased 56,000 shares of our stock during the quarter.

The investment portfolio of $237.9 million, represented 17.7 percent of assets at March 31, 2023, and was down $27.4 million or 10.3 percent from the year-ago period. Total loans held for investment were $976.3 million at March 31, 2023, up $125.6 million, or 14.8 percent, from March 31, 2022.

Deposit balances of $1.11 billion at March 31, 2023, decreased by $27.9 million, or 2.5 percent, since March 31, 2022. However, deposits have increased from the linked quarter by $23.5 million and have increased for three consecutive quarters. The growth in deposits has come with a significant shift in the mix as time deposits now comprise 21.1 percent of the total compared to 13.1 percent at March 31, 2022.

Mr. Klein continued, "Loan growth continued in the quarter and compared to the prior year we have increased our loan portfolio by over $125 million which has led to a positive mix shift on the asset side of the balance sheet. Like every community bank, the quest for deposits and low-cost funding was challenging. We are pleased that we have been able to grow deposits over the last three quarters, albeit at a higher cost."

Loan Balances
($ in thousands, except ratios)	Mar. 2023		Dec. 2022		Sep. 2022		Jun. 2022		Mar. 2022		Annual Growth
Commercial	$	126,065	$	128,534	$	128,565	$	127,711	$	124,857	$	1,208
% of Total		12.9%		13.4%		13.9%		14.3%		14.7%		1.0%
Commercial RE		419,024		412,636		404,710		404,260		400,101		18,923
% of Total		42.9%		42.9%		43.7%		45.1%		47.0%		4.7%
Agriculture		57,761		64,388		60,522		60,586		55,741		2,020
% of Total		5.9%		6.7%		6.5%		6.8%		6.6%		3.6%
Residential RE		309,684		291,512		267,135		241,614		214,015		95,669
% of Total		31.7%		30.3%		28.9%		27.0%		25.2%		44.7%
Consumer & Other		63,778		65,005		64,317		61,440		55,957		7,821
% of Total		6.5%		6.8%		7.0%		6.9%		6.6%		14.0%
Total Loans	$	976,312	$	962,075	$	925,249	$	895,611	$	850,671	$	125,641
Total Growth Percentage												14.8%


Deposit Balances
($ in thousands, except ratios)	Mar. 2023		Dec. 2022		Sep. 2022		Jun. 2022		Mar. 2022		Annual Growth
Non-Int DDA	$	237,175	$	256,799	$	250,791	$	239,676	$	252,273	$	(15,098	)
% of Total		21.4%		23.6%		23.1%		22.4%		22.2%		-6.0%
Interest DDA		188,497		191,719		199,523		198,286		211,152		(22,655	)
% of Total		17.0%		17.6%		18.4%		18.5%		18.6%		-10.7%
Savings		227,974		191,272		201,402		215,285		236,394		(8,420	)
% of Total		20.5%		17.6%		18.5%		20.1%		20.8%		-3.6%
Money Market		222,203		255,995		258,975		276,274		289,699		(67,496	)
% of Total		20.0%		23.6%		23.8%		25.8%		25.5%		-23.3%
Time Deposits		234,295		190,880		175,202		142,258		148,553		85,742
% of Total		21.1%		17.6%		16.1%		13.3%		13.1%		57.7%
Total Deposits	$	1,110,144	$	1,086,665	$	1,085,893	$	1,071,779	$	1,138,071	$	(27,927	)
Total Growth Percentage												-2.5%

Asset Quality

SB Financial reported nonperforming assets of $4.7 million as of March 31, 2023, down $0.9 million or 16.0 percent from the year-ago quarter. The coverage ratio of problem loans to the allowance for credit losses was at 382.4 percent at March 31, 2023, which was up over 100 basis points from the prior year due in large part to the expansion of the allowance from the CECL adjustment of $1.4 million.

Nonperforming Assets											Annual Change
($ in thousands, except ratios)	Mar. 2023		Dec. 2022		Sep. 2022		Jun. 2022		Mar. 2022		Annual Change
Commercial & Agriculture	$	185	$	114	$	114	$	140	$	142	$	43
% of Total Com./Ag. loans		0.10%		0.06%		0.06%		0.07%		0.08%		30.3%
Commercial RE		199		210		223		359		544		(345	)
% of Total CRE loans		0.05%		0.05%		0.06%		0.09%		0.14%		-63.4%
Residential RE		2,742		2,967		3,129		3,176		3,198		(456	)
% of Total Res. RE loans		0.89%		1.02%		1.17%		1.31%		1.49%		-14.3%
Consumer & Other		270		391		280		323		409		(139	)
% of Total Con./Oth. loans		0.42%		0.60%		0.44%		0.53%		0.73%		-34.0%
Total Nonaccruing Loans		3,396		3,682		3,746		3,998		4,293		(897	)
% of Total loans		0.35%		0.38%		0.40%		0.45%		0.50%		-20.9%
Accruing Restructured Loans		642		654		668		683		762		(120	)
Total Change (%)												-15.7%
Total Nonaccruing & Restructured Loans		4,038		4,336		4,414		4,681		5,055		(1,017	)
% of Total loans		0.41%		0.45%		0.48%		0.52%		0.59%		-20.1%
Foreclosed Assets and Other Assets		650		777		756		730		527		123
Total Change (%)												23.3%
Total Nonperforming Assets	$	4,688	$	5,113	$	5,170	$	5,411	$	5,582	$	(894	)
% of Total assets		0.35%		0.38%		0.40%		0.42%		0.42%		-16.0%

Webcast and Conference Call

The Company will hold the first quarter 2023 earnings conference call and webcast on April 21, 2023, 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".

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, the duration and scope of the COVID-19 outbreak in the United States and the market areas in which SB Financial and its subsidiaries operate, including the impact to the state and local economies of prolonged shelter in place orders and the pandemic generally, 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 anon-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)

	March			December			September			June			March
($ in thousands)		2023			2022			2022			2022			2022
ASSETS
Cash and due from banks	$	21,625		$	27,817		$	27,934		$	29,567		$	130,003
Interest bearing time deposits		1,380			2,131			2,134			1,691			1,894
Available-for-sale securities		237,917			238,780			243,233			266,162			265,311
Loans held for sale		5,592			2,073			2,979			4,242			4,737
Loans, net of unearned income		976,312			962,075			925,249			895,611			850,671
Allowance for credit losses		(15,442	)		(13,818	)		(13,824	)		(13,801	)		(13,804	)
Premises and equipment, net		22,621			22,829			22,842			23,122			23,039
Federal Reserve and FHLB Stock, at cost		6,054			6,326			5,230			5,303			5,303
Foreclosed assets and other assets		650			777			756			730			527
Interest receivable		3,926			4,091			3,556			3,256			2,815
Goodwill		23,239			23,239			23,239			23,239			23,239
Cash value of life insurance		29,024			28,870			28,713			28,556			17,932
Mortgage servicing rights		13,548			13,503			13,473			13,408			13,135
Other assets		14,847			16,940			17,863			12,886			10,328
Total assets	$	1,341,293		$	1,335,633		$	1,303,377		$	1,293,972		$	1,335,130

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non interest bearing demand	$	237,175		$	256,799		$	250,791		$	239,676		$	252,273
Interest bearing demand		188,497			191,719			199,523			198,286			211,152
Savings		227,974			191,272			201,402			215,285			236,394
Money market		222,203			255,995			258,975			276,274			289,699
Time deposits		234,295			190,880			175,202			142,258			148,553
Total deposits		1,110,144			1,086,665			1,085,893			1,071,779			1,138,071

Short-term borrowings		15,998			14,923			19,754			30,772			19,035
Federal Home Loan Bank advances		44,500			60,000			35,000			25,000			5,500
Trust preferred securities		10,310			10,310			10,310			10,310			10,310
Subordinated debt net of issuance costs		19,606			19,594			19,582			19,570			19,558
Interest payable		1,441			769			623			307			536
Other liabilities		19,535			24,944			17,587			11,678			9,483
Total liabilities		1,221,534			1,217,205			1,188,749			1,169,416			1,202,493

Shareholders' Equity
Common stock		61,319			61,319			61,319			61,319			61,319
Additional paid-in capital		14,953			15,087			15,000			15,069			14,872
Retained earnings		101,548			101,966			99,309			96,809			94,833
Accumulated other comprehensive income (loss)		(29,671	)		(32,120	)		(33,426	)		(22,210	)		(13,659	)
Treasury stock		(28,390	)		(27,824	)		(27,574	)		(26,431	)		(24,728	)
Total shareholders' equity		119,759			118,428			114,628			124,556			132,637

Total liabilities and shareholders' equity	$	1,341,293		$	1,335,633		$	1,303,377		$	1,293,972		$	1,335,130

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

($ in thousands, except per share & ratios)	At and for the Three Months Ended												Six Months Ended
	March			December		September			June		March		June			June
Interest income		2023			2022		2022			2022		2022		2023			2022
Loans
Taxable	$	12,126		$	11,222	$	10,084		$	8,880	$	8,052	$	12,126		$	16,932
Tax exempt		116			109		92			73		61		116			134
Securities
Taxable		1,535			1,559		1,536			1,469		1,235		1,535			2,704
Tax exempt		47			47		52			52		47		47			99
Total interest income		13,824			12,937		11,764			10,474		9,395		13,824			19,869

Interest expense
Deposits		2,578			1,440		852			567		618		2,578			1,185
Repurchase agreements & other		10			7		8			11		13		10			24
Federal Home Loan Bank advances		553			258		180			38		39		553			77
Trust preferred securities		164			138		99			71		53		164			124
Subordinated debt		195			194		195			194		195		195			389
Total interest expense		3,500			2,037		1,334			881		918		3,500			1,799

Net interest income		10,324			10,900		10,430			9,593		8,477		10,324			18,070
Provision for credit losses		250			-		-			-		-		250			-

Net interest income after provision for loan losses		10,074			10,900		10,430			9,593		8,477		10,074			18,070

Noninterest income
Wealth management fees		917			907		930			936		955		917			1,891
Customer service fees		825			880		844			860		794		825			1,654
Gain on sale of mtg. loans & OMSR		599			550		876			1,196		1,676		599			2,872
Mortgage loan servicing fees, net		608			627		527			606		1,204		608			1,810
Gain on sale of non-mortgage loans		24			105		125			167		169		24			336
Title insurance revenue		373			454		476			697		602		373			1,299
Gain (loss) on sale of assets		(11	)		18		(12	)		-		55		(11	)		55
Other		331			172		277			211		347		331			558
Total noninterest income		3,666			3,713		4,043			4,673		5,802		3,666			10,475

Noninterest expense
Salaries and employee benefits		5,913			5,677		5,858			6,418		6,189		5,913			12,607
Net occupancy expense		784			763		769			719		742		784			1,461
Equipment expense		981			1,017		918			827		854		981			1,681
Data processing fees		646			627		664			643		576		646			1,219
Professional fees		863			738		766			760		950		863			1,710
Marketing expense		198			258		200			222		231		198			453
Telephone and communication expense		121			124		134			105		111		121			216
Postage and delivery expense		87			121		75			110		116		87			226
State, local and other taxes		228			277		250			277		278		228			555
Employee expense		188			157		145			175		136		188			311
Other expenses		764			510		605			546		676		764			1,222
Total noninterest expense		10,773			10,269		10,384			10,802		10,859		10,773			21,661

Income before income tax expense		2,967			4,344		4,088			3,464		3,420		2,967			6,884
Income tax expense		517			811		746			630		607		517			1,237

Net income	$	2,450		$	3,533	$	3,342		$	2,834	$	2,813	$	2,450		$	5,647

Common share data:
Basic earnings per common share	$	0.35		$	0.51	$	0.48		$	0.40	$	0.40	$	0.35		$	0.80
Diluted earnings per common share	$	0.35		$	0.50	$	0.47		$	0.40	$	0.40	$	0.35		$	0.79

Average shares outstanding (in thousands):
Basic:		6,933			6,945		6,968			7,075		7,035		6,933			7,055
Diluted:		7,008			7,021		7,033			7,149		7,100		7,008			7,116

SB FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
($ in thousands, except per share & ratios)	At and for the Three Months Ended															Six Months Ended
	March			December			September			June			March			June			June
SUMMARY OF OPERATIONS		2023			2022			2022			2022			2022			2023			2022
Net interest income	$	10,324		$	10,900		$	10,430		$	9,593		$	8,477		$	10,324		$	18,070
Tax-equivalent adjustment		43			41			38			33			29			43			62
Tax-equivalent net interest income		10,367			10,941			10,468			9,626			8,506			10,367			18,132
Provision for credit loss		250			-			-			-			-			-			-
Noninterest income		3,666			3,713			4,043			4,673			5,802			3,666			10,475
Total operating revenue		13,990			14,613			14,473			14,266			14,279			13,990			28,545
Noninterest expense		10,773			10,269			10,384			10,802			10,859			10,773			21,661
Pre-tax pre-provision income		3,217			4,344			4,088			3,464			3,420			3,217			6,884
Pretax income		2,967			4,344			4,088			3,464			3,420			3,217			6,884
Net income		2,450			3,533			3,342			2,834			2,813			2,450			5,647

PER SHARE INFORMATION:
Basic earnings per share (EPS)		0.35			0.51			0.48			0.40			0.40			0.35			0.80
Diluted earnings per share		0.35			0.50			0.47			0.40			0.40			0.35			0.79
Common dividends		0.125			0.125			0.120			0.120			0.115			0.125			0.235
Book value per common share		17.37			17.08			16.49			17.75			18.65			17.37			17.75
Tangible book value per common share (TBV)		13.93			13.65			13.07			14.36			15.31			13.93			14.36
Market price per common share		14.16			16.95			16.85			17.26			19.91			14.16			17.26
Market price to TBV		101.7	%		124.2	%		128.9	%		120.2	%		130.1	%		101.7	%		120.2	%
Market price to trailing 12 month EPS		8.2			9.6			9.6			9.3			10.0			8.2			9.3

PERFORMANCE RATIOS:
Return on average assets (ROAA)		0.73	%		1.08	%		1.03	%		0.87	%		0.83	%		0.73	%		0.85	%
Pre-tax pre-provision ROAA		0.96	%		1.32	%		1.26	%		1.06	%		1.01	%		1.04	%		1.11	%
Return on average equity		8.37	%		12.17	%		10.89	%		8.89	%		8.08	%		8.37	%		8.46	%
Return on average tangible equity		10.50	%		15.30	%		13.51	%		10.93	%		9.75	%		10.51	%		10.30	%
Efficiency ratio		76.85	%		70.16	%		71.63	%		75.60	%		75.93	%		76.85	%		75.76	%
Earning asset yield		4.49	%		4.27	%		3.89	%		3.45	%		2.96	%		4.49	%		3.20	%
Cost of interest bearing liabilities		1.46	%		0.90	%		0.58	%		0.39	%		0.39	%		1.46	%		0.38	%
Net interest margin		3.35	%		3.60	%		3.45	%		3.15	%		2.67	%		3.36	%		2.91	%
Tax equivalent effect		0.02	%		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%		0.01	%
Net interest margin, tax equivalent		3.37	%		3.61	%		3.46	%		3.16	%		2.68	%		3.37	%		2.92	%
Non interest income/Average assets		1.10	%		1.13	%		1.24	%		1.43	%		1.72	%		1.10	%		1.58	%
Non interest expense/Average assets		3.23	%		3.13	%		3.19	%		3.31	%		3.22	%		3.23	%		3.26	%
Net noninterest expense/Average assets		-2.13	%		-2.00	%		-1.95	%		-1.88	%		-1.50	%		-2.13	%		-1.68	%

ASSET QUALITY RATIOS:
Gross charge-offs		69			7			9			9			9			69			18
Recoveries		8			1			32			6			8			8			14
Net charge-offs		61			6			(23	)		3			1			61			4
Nonaccruing loans/Total loans		0.35	%		0.38	%		0.40	%		0.45	%		0.50	%		0.35	%		0.45	%
Nonperforming loans/Total loans		0.41	%		0.45	%		0.48	%		0.52	%		0.59	%		0.41	%		0.52	%
Nonperforming assets/Loans & OREO		0.48	%		0.53	%		0.56	%		0.60	%		0.66	%		0.48	%		0.60	%
Nonperforming assets/Total assets		0.35	%		0.38	%		0.40	%		0.42	%		0.42	%		0.35	%		0.42	%
Allowance for credit loss/Nonperforming loans		382.42	%		318.68	%		313.26	%		294.83	%		273.08	%		382.42	%		294.83	%
Allowance for credit loss/Total loans		1.58	%		1.44	%		1.49	%		1.54	%		1.62	%		1.58	%		1.54	%
Net loan charge-offs/Average loans (ann.)		0.03	%		0.00	%		(0.01	%)		0.00	%		0.00	%		0.03	%		0.00	%

CAPITAL & LIQUIDITY RATIOS:
Loans/ Deposits		87.94	%		88.53	%		85.21	%		83.56	%		74.75	%		87.94	%		83.56	%
Equity/ Assets		8.93	%		8.87	%		8.79	%		9.63	%		9.93	%		8.93	%		9.63	%
Tangible equity/Tangible assets		7.29	%		7.22	%		7.10	%		7.93	%		8.30	%		7.29	%		7.93	%
Common equity tier 1 ratio (Bank)		13.47	%		13.42	%		13.23	%		13.21	%		13.71	%		13.47	%		13.21	%

END OF PERIOD BALANCES
Total assets		1,341,293			1,335,633			1,303,377			1,293,972			1,335,130			1,341,293			1,293,972
Total loans		976,312			962,075			925,249			895,611			850,671			976,312			895,611
Deposits		1,110,144			1,086,665			1,085,893			1,071,779			1,138,071			1,110,144			1,071,779
Stockholders equity		119,759			118,428			114,628			124,556			132,637			119,759			124,556
Goodwill and intangibles		23,732			23,753			23,770			23,787			23,804			23,732			23,787
Tangible equity		96,027			94,675			90,858			100,769			108,833			96,027			100,769
Mortgage servicing portfolio		1,344,158			1,352,016			1,362,666			1,369,732			1,375,554			1,344,158			1,369,732
Wealth/Brokerage assets under care		518,009			507,093			480,947			500,487			560,698			518,009			500,487
Total assets under care		3,203,460			3,194,742			3,146,990			3,164,191			3,271,382			3,203,460			3,164,191
Full-time equivalent employees		255			268			271			267			256			255			267
Period end common shares outstanding		6,894			6,935			6,950			7,017			7,111			6,894			7,017
Market capitalization (all)		97,626			117,556			117,113			121,105			141,575			97,626			121,105

AVERAGE BALANCES
Total assets		1,335,056			1,314,419			1,302,297			1,305,815			1,350,982			1,335,056			1,328,216
Total earning assets		1,232,018			1,211,674			1,209,958			1,216,124			1,270,218			1,232,018			1,243,017
Total loans		970,813			937,898			909,909			870,439			832,825			970,813			851,736
Deposits		1,098,935			1,094,491			1,085,821			1,108,890			1,134,234			1,098,935			1,121,373
Stockholders equity		117,071			116,114			122,738			127,519			139,214			117,071			133,471
Goodwill and intangibles		23,743			23,761			23,778			23,796			23,801			23,783			23,798
Tangible equity		93,328			92,353			98,960			103,723			115,413			93,288			109,673
Average basic shares outstanding		6,933			6,945			6,968			7,075			7,035			6,933			7,055
Average diluted shares outstanding		7,008			7,021			7,033			7,149			7,100			7,008			7,116

SB FINANCIAL GROUP, INC.
Rate Volume Analysis - (Unaudited)
For the Three Months Ended Mar. 31, 2023 and 2022
($ in thousands)	Three Months Ended Mar. 31, 2023							Three Months Ended Mar. 31, 2022
	Average					Average		Average					Average
Assets	Balance			Interest		Rate		Balance			Interest		Rate
Taxable securities/cash	$	253,449		$	1,535	2.42	%	$	429,839		$	1,235	1.15	%
Nontaxable securities		7,756			47	2.42	%		7,554			47	2.49	%
Loans, net		970,813			12,242	5.04	%		832,825			8,113	3.90	%
Total earning assets		1,232,018			13,824	4.49	%		1,270,218			9,395	2.96	%
Cash and due from banks		11,067							8,156
Allowance for loan losses		(14,763	)						(13,807	)
Premises and equipment		22,858							25,317
Other assets		83,876							61,098
Total assets	$	1,335,056						$	1,350,982

Liabilities
Savings, MMDA and interest bearing demand	$	643,081		$	1,285	0.80	%	$	733,095		$	398	0.22	%
Time deposits		214,978			1,293	2.41	%		155,006			220	0.57	%
Repurchase agreements & other		18,618			10	0.21	%		25,115			13	0.21	%
Advances from Federal Home Loan Bank		49,177			553	4.50	%		5,500			39	2.84	%
Trust preferred securities		10,310			164	6.36	%		10,310			53	2.06	%
Subordinated debt		19,598			195	3.98	%		19,552			195	3.99	%
Total interest bearing liabilities		955,762			3,500	1.46	%		948,578			918	0.39	%
Non interest bearing demand		240,876			-				246,133			-
Total funding		1,196,638				1.17	%		1,194,711				0.31	%
Other liabilities		21,347							17,057
Total liabilities		1,217,985							1,211,768
Equity		117,071							139,214
Total liabilities and equity	$	1,335,056						$	1,350,982
Net interest income				$	10,324						$	8,477

Net interest income as a percent of average interest-earning assets - GAAP measure						3.35	%						2.67	%

Net interest income as a percent of average interest-earning assets - non GAAP						3.37	%						2.68	%
- Computed on a fully tax equivalent (FTE) basis

Non-GAAP reconciliation	Three Months Ended						Twelve Months Ended
($ in thousands, except per share & ratios)	Mar. 31, 2023			Mar. 31, 2022			Mar. 31, 2023			Mar. 31, 2022
Total Operating Revenue	$	13,990		$	14,279		$	13,990		$	68,581
Adjustment to (deduct)/add OMSR recapture/impairment *		(56	)		(889	)		(1,279	)		(3,436	)
Adjusted Total Operating Revenue		13,934			13,390			12,711			65,145

Income before Income Taxes		2,967			3,420			2,967			22,723
Adjustment for OMSR *		(56	)		(889	)		(1,279	)		(3,436	)
Adjusted Income before Income Taxes		2,911			2,531			1,688			19,287

Provision for Income Taxes		517			607			517			4,446
Adjustment for OMSR **		(12	)		(187	)		(269	)		(722	)
Adjusted Provision for Income Taxes		505			420			248			3,725

Net Income		2,450			2,813			2,450			18,277
Adjustment for OMSR *		(44	)		(703	)		(1,010	)		(2,714	)
Adjusted Net Income		2,406			2,110			1,440			15,563

Diluted Earnings per Share		0.35			0.40			0.35			2.56
Adjustment for OMSR *		(0.01	)		(0.10	)		(0.14	)		(0.38	)
Adjusted Diluted Earnings per Share	$	0.34		$	0.30		$	0.21		$	2.18

Return on Average Assets		0.73	%		0.83	%		0.73	%		1.38	%
Adjustment for OMSR *		-0.01	%		-0.21	%		-0.08	%		-0.21	%
Adjusted Return on Average Assets		0.72	%		0.62	%		0.66	%		1.18	%

*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 First Quarter 2023 Results