SB Financial Group (SBFG) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $2.4 million, down 12.4% year-over-year; adjusted net income was $2.4 million, with adjusted EPS up 3.0% after excluding mortgage servicing rights impairment.

• Diluted EPS was $0.35, while adjusted diluted EPS rose to $0.41, up 3.3% year-over-year; tangible book value per share increased 26% to $16.49.

• Net interest income grew 6.8% year-over-year to $10.2 million; margin revenue up 22% annualized from the prior quarter.

• Loan portfolio reached $1.03 billion, up 4.1% year-over-year; deposits expanded to $1.16 billion, up 6.8% year-over-year.

• Total assets increased 5.1% year-over-year to $1.39 billion.

Financial highlights

• Year-to-date net income was $7.8 million, with full-year EPS of $1.17; adjusted EPS slightly higher than prior year.

• Operating revenue for Q3 2024 was $14.3 million, up 4.5% year-over-year.

• Net interest margin improved to 3.19%, up 10 basis points year-over-year; Q3 net interest margin was 3.17%.

• Noninterest income for Q3 2024 was $4.1 million, slightly down due to mortgage servicing rights impairment.

• Noninterest expense for Q3 2024 was $11.0 million, up 5.0% year-over-year, mainly due to higher salaries and data processing fees.

Outlook and guidance

• Management expects continued pressure on funding costs and net interest margin due to rising interest rates.

• Expecting 2025 loan growth in the high single digits, with strong pipelines in key markets.

• Mortgage originations projected to be 20%-30% higher in 2025 versus 2024, targeting $350-$400 million.

• Net interest margin anticipated to reach 3.30%-3.35% by end of 2025, driven by loan growth and stable funding costs.

• Marblehead acquisition expected to close late January/early February 2025, accretive to earnings and expanding the regional footprint.