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1. Company Snapshot

1.a. Company Description

SB Financial Group, Inc.provides a range of commercial banking and wealth management services to individual and corporate customers primarily in Ohio, Indiana, and Michigan.It offers checking, savings, money market accounts, as well as time certificates of deposit; and commercial, consumer, agricultural, and residential mortgage loans.


The company also provides automatic teller machine, personal and corporate trust, commercial leasing, bank credit card, safe deposit box rental, internet banking, private client group, and other personalized banking products and services; and various trust and financial services comprising asset management services for individuals and corporate employee benefit plans, as well as brokerage services.In addition, it sells insurance products to retail and commercial customers.As of December 31, 2021, the company operated a network of 22 banking centers in the Ohio counties of Allen, Defiance, Franklin, Fulton, Hancock, Lucas, Paulding, Wood, and Williams; and one banking center in Allen County, Indiana.


It also operated five loan production offices in Franklin and Lucas Counties, Ohio; Hamilton and Steuben Counties, Indiana; and Monroe County, Michigan.The company was formerly known as Rurban Financial Corp.and changed its name to SB Financial Group, Inc.


in April 2013.SB Financial Group, Inc.was incorporated in 1983 and is headquartered in Defiance, Ohio.

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1.b. Last Insights on SBFG

SB Financial Group, Inc.'s recent performance was positively driven by its Q3 2025 earnings beat, with quarterly earnings of $0.68 per share, surpassing the Zacks Consensus Estimate of $0.62 per share. This represents a significant year-over-year increase from $0.41 per share. The company's diversified financial services, including community banking, mortgage banking, and wealth management, likely contributed to the strong earnings. Additionally, SBFG was featured on the Zacks Rank #1 (Strong Buy) list for value, income, and momentum stocks, indicating a positive outlook from analysts.

1.c. Company Highlights

2. SB Financial's Q3 2025 Earnings: A Strong Performance

SB Financial reported a net income of $4 million, with diluted earnings per share of $0.68, beating analyst estimates of $0.62. Total operating revenue rose to $16.6 million, a 15.9% increase from the prior year, driven by a 21% growth in net interest income. The company's loan yields reached a new high of 5.95%, pushing the earning asset yield up 18 basis points to 5.31%. The net interest margin is expected to hold steady at 3.5% due to repricing on the asset portfolio, bond roll-off, and higher reuse of liquidity.

Publication Date: Nov -04

📋 Highlights
  • Net Income and EPS Growth:: Net income reached $4 million, with diluted earnings per share of $0.64, representing an 83% increase from the prior year quarter.
  • Deposit Expansion via Marblehead Integration:: Added 2,500 deposit accounts post-Marblehead integration at a weighted average cost of 1.2%.
  • Loan Growth Momentum:: Loan growth totaled $80.6 million (7.8% increase) for the sixth consecutive quarter, driven by ag and Columbus market expansion.
  • Tangible Book Value Increase:: Tangible book value per share rose to $17.21 (+4.4% YoY), boosted by a $2.1 million AOCI benefit and share buybacks.
  • Net Interest Income Surge:: Net interest income climbed 21% to $12.3 million, with loan yields hitting a record 5.95% and earning asset yield rising 18 bps to 5.31%.

Loan Growth and Asset Quality

The company reported loan growth of $80.6 million, or 7.8%, for the sixth consecutive quarter. Asset quality improved, with total delinquencies slightly lower than the linked quarter at 45 basis points. The allowance for credit losses remained robust at 1.44% of total loans, providing 345% coverage of nonperforming assets. According to Mark Klein, the company expects good growth in ag, Columbus, and other urban markets, with a $40 million pipeline of unused line commitments that will be funded in the next 6-12 months.

Capital Management and Share Buybacks

The company repurchased 101,000 shares at an average price of just under $20, roughly 115% of tangible book and 95% of tangible book adjusted for AOCI. The loan-to-deposit ratio remained consistent at 88%. Tony Cosentino noted that they will slow down share buybacks to retain capital for potential transactions, with excess earnings and options for debt refinancing or expansion next year.

Outlook and Valuation

The company remains optimistic about their performance in the last quarter and full year of 2025, expecting further reductions by the Federal Reserve, expanding mortgage volume, and a larger balance sheet. With a Price-to-Tangible Book Value (P/TBV) of approximately 1.16 (derived from 'P/B Ratio': 0.9 and considering tangible book value), the stock appears reasonably valued. The Dividend Yield stands at 3.15%, providing a relatively attractive return. Analysts estimate revenue growth at 3.9% for next year, indicating a stable outlook for the company.

3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.00%)

6. Segments

Banking and Wealth Management Services

Expected Growth: 1.0%

SB Financial Group's 1.0% growth in Banking and Wealth Management Services is driven by increasing demand for digital banking solutions, strategic partnerships, and expansion into new markets. Additionally, the company's focus on customer experience, investment in technology, and diversified product offerings have contributed to its growth.

7. Detailed Products

Commercial Banking

Provides financial solutions to businesses, including cash management, lending, and treasury management services.

Wealth Management

Offers investment and wealth management services to individuals, families, and institutions.

Mortgage Banking

Provides mortgage lending services to individuals and families, including purchase and refinance options.

Treasury Management

Offers cash management and treasury management services to businesses, including account management and payment processing.

Investment Services

Provides investment products and services, including brokerage and advisory services.

Insurance Services

Offers insurance products and services, including life insurance, disability insurance, and long-term care insurance.

8. SB Financial Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

SB Financial Group, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's diversified product offerings and strong brand recognition.

Bargaining Power Of Customers

SB Financial Group, Inc. has a large customer base, but the bargaining power of customers is high due to the availability of alternative financial services providers.

Bargaining Power Of Suppliers

SB Financial Group, Inc. has a diversified supplier base, and the bargaining power of suppliers is low due to the company's significant purchasing power.

Threat Of New Entrants

The threat of new entrants in the financial services industry is moderate, as there are barriers to entry, but new fintech companies are emerging, posing a threat to traditional financial institutions like SB Financial Group, Inc.

Intensity Of Rivalry

The intensity of rivalry in the financial services industry is high, with many established players competing for market share, and SB Financial Group, Inc. must differentiate itself to maintain its competitive edge.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 50.52%
Debt Cost 3.95%
Equity Weight 49.48%
Equity Cost 7.32%
WACC 5.62%
Leverage 102.09%

11. Quality Control: SB Financial Group, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Lakeland Financial

A-Score: 5.7/10

Value: 4.4

Growth: 5.7

Quality: 6.9

Yield: 5.0

Momentum: 4.5

Volatility: 7.7

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SB Financial Group

A-Score: 5.7/10

Value: 6.9

Growth: 4.0

Quality: 6.5

Yield: 6.0

Momentum: 4.0

Volatility: 6.7

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First Bancshares

A-Score: 5.5/10

Value: 5.5

Growth: 4.7

Quality: 6.9

Yield: 4.0

Momentum: 6.0

Volatility: 6.0

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Camden National

A-Score: 5.5/10

Value: 5.2

Growth: 5.1

Quality: 4.1

Yield: 8.0

Momentum: 3.5

Volatility: 7.0

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OceanFirst

A-Score: 5.4/10

Value: 4.8

Growth: 4.8

Quality: 4.6

Yield: 8.0

Momentum: 4.0

Volatility: 6.3

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Eagle Bancorp

A-Score: 5.4/10

Value: 9.1

Growth: 4.2

Quality: 4.2

Yield: 8.0

Momentum: 3.0

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

21.23$

Current Price

21.23$

Potential

-0.00%

Expected Cash-Flows