SB Financial Group (SBFG) investor relations material

Executive summary

• Q3 net income was $3.946M, down 2.5% YoY, and diluted EPS was $0.63, down 1.6%; profitability reached a 63rd consecutive quarter.

• Nine-month net income rose 26.7% to $12.739M and diluted EPS increased 30.8% to $2.04.

• Loan growth and fee income supported results, while higher operating expenses weighed on quarterly earnings.

Financial highlights

• Q3 operating revenue was $18.075M, up 9.0% YoY; nine-month revenue was $53.440M, up 8.8%.

• Q3 net interest income rose 8.8% to $13.424M; nine-month net interest income increased 9.4% to $39.090M.

• Q3 noninterest income increased 9.6% to $4.651M; nine-month noninterest income rose 7.1% to $14.350M.

• Q3 noninterest expense rose 14.4% to $13.157M; nine-month expense increased 4.1% to $37.223M, producing 1.7x operating leverage.

• Q3 provision for credit losses was $127K versus $124K YoY; nine-month provision totaled $640K versus $1.108M.

Outlook and guidance

• Management is budgeting for 2027 loan growth in the high single digits, citing a strong commercial and construction pipeline; historical growth averaged 8%-8.5%.

• Base rate model assumes two increases through end-2027; NIM may dip a couple of bps in Q4, stay flat in Q1, then accelerate, with 3.50%-3.51% viewed as the upper end.

• Mortgage production outlook: $50-$60M in Q4 and $280M for 2026; management expects 10%-15% growth in 2027, contingent on long-term rates.

• Normalized 2027 expense growth expected at 4%-5%; conversion spending is expected to level out over the next two quarters.