SB FINANCIAL GROUP, INC.

Previous wording

Net Income: Net income for the second quarter of 2025 was $3.9 million compared to net income of $3.1 million for the second quarter of 2024, an increase of $0.7 million or 23.7 percent. Diluted earnings per share (“DEPS”) of $0.60 for the second quarter of 2025 were higher compared to the DEPS of $0.47 for the second quarter of 2024. Net income for the second quarter of 2025 was positively impacted by higher interest income on loans, which was partially offset by higher interest expense on deposits and wholesale borrowings. Total interest income continues to improve and was up $2.8 million, or 18.0 percent, compared to the prior year second quarter. Mortgage loan volume was up 30.3 percent compared to the prior year second quarter, with sales of originated loans up 33.1 percent when compared to the second quarter of 2024.

Current wording

Net Income: Net income for the third quarter of 2025 was $4.0 million compared to net income of $2.4 million for the third quarter of 2024, an increase of $1.6 million or 71.9 percent. Diluted earnings per share (“DEPS”) of $0.64 for the third quarter of 2025 were higher compared to the DEPS of $0.35 for the third quarter of 2024. Net income for the third quarter of 2025 was positively impacted by higher interest income on loans, including a recapture of nonaccrual interest, partially offset by higher interest expense on deposits and wholesale borrowings. The quarter included an impairment on Mortgage Servicing Rights (“OMSR”) of $0.3 million. Total noninterest income increased slightly compared to the prior year to $4.2 million. Mortgage loan volume was down slightly as compared to the prior year, however sales of originated mortgages were up 8.4 percent for the same period.

Previous wording

Provision for Credit Losses: The second quarter provision for credit losses was $597,000 as compared to a zero provision for the prior year second quarter. The Company had net charge-offs of $46,000 for the second quarter of 2025 compared to net recoveries of $16,000 for the year-ago quarter. The provision expense included $297,000 for unfunded commitments, and $300,000 of growth-related provision. Total delinquent loans ended the quarter at $5.6 million, or 0.51 percent of total loans.

Current wording

Provision for Credit Losses: The third quarter provision for credit losses was $124,000 as compared to a $200,000 provision for the prior year third quarter. The Company had net chargeoffs of $2,000 for the third quarter of 2025 compared to net chargeoffs of $27,000 for the year-ago quarter. The provision expense included $300,000 of growth-related provision, partially offset by a recapture of $176,000 for unfunded commitments. Total delinquent loans ended the quarter at $5.0 million, or 0.45 percent of total loans.

Previous wording

Consolidated Revenue: Operating revenue, consisting of net interest income (“NII”) and noninterest income, was $17.2 million for the second quarter of 2025, an increase of $3.1 million, or 22.3 percent, from the $14.0 million generated during the second quarter of 2024.

Current wording

Consolidated Revenue: Operating revenue, consisting of net interest income (“NII”) and noninterest income, was $16.6 million for the third quarter of 2025, an increase of $2.3 million, or 15.9 percent, from the $14.3 million generated during the third quarter of 2024.

Previous wording

NII for the second quarter of 2025 was $12.1 million, which was up $2.5 million from the prior year second quarter’s $9.7 million. Comparing the second quarter of 2025 to the prior year second quarter, the Company’s earning assets increased $152.5 million, and the average yield on earning assets increased by 24 basis points. The net interest margin for the second quarter of 2025 was 3.48 percent compared to 3.12 percent for the second quarter of 2024. Funding costs (interest paid to consumers and other entities) for deposits and other interest-bearing liabilities for the second quarter of 2025 were 2.33 percent compared to 2.48 percent for the prior year second quarter.

Current wording

NII for the third quarter of 2025 was $12.3 million, which was up $2.1 million from the prior year third quarter’s $10.2 million. Comparing the third quarter of 2025 to the prior year third quarter, the Company’s earning assets increased $120.0 million, and the average yield on earning assets increased by 18 basis points. The net interest margin for the third quarter of 2025 was 3.48 percent compared to 3.16 percent for the third quarter of 2024. Funding costs (interest paid to consumers and other entities) for deposits and other interest-bearing liabilities for the third quarter of 2025 were 2.33 percent compared to 2.52 percent for the prior year third quarter.

Previous wording

Total noninterest income was $5.0 million for the second quarter of 2025, which increased compared to $4.4 million for the prior year second quarter. Mortgage revenue increase during the second quarter of 2025, as detailed below, while wealth management revenue was flat compared to the prior year. Recapture of mortgage servicing rights increased noninterest income by $0.16 million in the quarter, compared to a recapture of $0.04 million in the prior year second quarter. SBFG Title contributed revenue of $0.6 million in the second quarter of 2025, up $0.18 million from the prior year. Noninterest income as a percentage of average assets for the second quarter of 2025 was 1.35 percent compared to 1.31 percent for the prior year second quarter.

Current wording

Total noninterest income was $4.2 million for the third quarter of 2025, which increased compared to $4.1 million for the prior year third quarter. Mortgage revenue increased during the third quarter of 2025, as detailed below, while wealth management revenue was up slightly compared to the prior year. Impairment of mortgage servicing rights decreased noninterest income by $0.3 million in the quarter, compared to an impairment of $0.46 million in the prior year third quarter. SBFG Title contributed revenue of $0.54 million in the third quarter of 2025, up $0.06 million from the prior year. Noninterest income as a percentage of average assets for the third quarter of 2025 was 1.12 percent compared to 1.19 percent for the prior year third quarter.

Previous wording

State Bank originated $97.9 million of mortgage loans during the second quarter of 2025 and sold $74.3 million, with $23.6 million of loans held for investment. This compares to $75.1 million originated for the second quarter of 2024, of which $55.8 million were sold with the remainder of loans held for investment. These second quarter 2025 originations and subsequent sales resulted in $1.6 million of gains, up $0.3 million from the gains for the second quarter of 2024. Net mortgage banking revenue was $2.16 million for the second quarter of 2025 compared to $1.84 million for the second quarter of 2024.

Current wording

State Bank originated $67.6 million of mortgage loans during the third quarter of 2025 and sold $66.4 million, with $1.2 million of loans held for investment. This compares to $70.7 million originated for the third quarter of 2024, of which $61.3 million were sold with the remainder of loans held for investment. The third quarter 2025 originations and subsequent sales resulted in $1.3 million of gains, in line with the gains for the third quarter of 2024. Net mortgage banking revenue was $1.49 million for the third quarter of 2025 compared to $1.35 million for the third quarter of 2024.

Previous wording

Consolidated Noninterest Expense: Total noninterest expense for the second quarter of 2025 was $11.9 million, which was up $1.2 million compared to $10.7 million in the prior-year second quarter. The quarter included higher expenses related to increased mortgage activity. Compared to the prior year, the 2025 second quarter included operating expenses for the entire quarter’s activity of Marblehead.

Current wording

Consolidated Noninterest Expense: Total noninterest expense for the third quarter of 2025 was $11.5 million, which was up $0.5 million compared to $11.0 million in the prior-year third quarter. The quarter included higher expenses related to increased mortgage activity and one-time professional fees that drove expenses higher.

Previous wording

Income Taxes: Income taxes for the second quarter of 2025 were $0.88 million (18.5 percent) compared to $0.26 million (7.7 percent) for the second quarter of 2024.

Current wording

Income Taxes: Income taxes for the third quarter of 2025 were $0.91 million (18.4 percent) compared to $0.75 million (24.2 percent) for the third quarter of 2024.

Previous wording

Net Income: Net income for the first six months of 2025 was $6.0 million compared to net income of $5.5 million for the first six months of 2024, an increase of $0.5 million, or 9.7 percent. Diluted earnings per share (“DEPS”) of $0.93 for the first six months of 2025 were 13.4 percent higher compared to DEPS of $0.82 for the first six months of 2024. Net income for the first six months of 2025 was positively impacted by higher interest income on loans, which was partially offset by higher interest expense on deposits and wholesale borrowings. Total interest income continues to improve and was up $4.9 million or 15.8 percent compared to the prior year first six months. Mortgage loan volume was up $19.7 million, or 16.7 percent compared to the prior year first six months, with sales of originated loans up $21.1 million, or 22.9 percent when compared to the first six months of 2024. Included in the 2025 six months results were $0.7 million of merger related expenses and a little more than five months of activity from the Marblehead acquisition.

Current wording

Net Income: Net income for the first nine months of 2025 was $10.1 million compared to net income of $7.8 million for the first nine months of 2024, an increase of $2.2 million, or 28.3 percent. DEPS of $1.56 for the first nine months of 2025 were 33.7 percent higher compared to DEPS of $1.17 for the first nine months of 2024. Net income for the first nine months of 2025 was positively impacted by higher interest income on loans, which was partially offset by higher interest expense on deposits and wholesale borrowings. Total noninterest income continues to improve and was up $0.9 million, or 7.5 percent, compared to the prior year first nine months. Mortgage loan volume was up $16.6 million, or 8.8 percent, compared to the prior year’s first nine months. Included in the 2025 nine months results were $0.7 million of merger related expenses and nearly a full year’s activity from the Marblehead acquisition.

Previous wording

Provision for Credit Losses: The provision for credit losses for the first six months of 2025 was $984,000 as compared to a zero provision for the prior year first six months. The Company had net charge-offs of $130,000 for the first six months of 2025 compared to net charge-offs of $41,000 for the year-ago first six months. The provision expense for the first six months of 2025 included $310,000 for unfunded commitments, $224,000 due to the Marblehead acquisition and $450,000 of growth-related provision.

Current wording

Provision for Credit Losses: The provision for credit losses for the first nine months of 2025 was $1.1 million as compared to $0.2 million for the prior year first nine months. The Company had net chargeoffs of $132,000 for the first nine months of 2025 compared to net chargeoffs of $68,000 for the year-ago first nine months. The provision expense for the first nine months of 2025 included $134,000 for unfunded commitments, $224,000 due to the Marblehead acquisition and $750,000 of growth-related provision.

Previous wording

Consolidated Revenue: Operating revenue, consisting of net interest income (“NII”) and noninterest income, was $32.6 million for the first six months of 2025, an increase of $5.4 million, or 19.8 percent, from the $27.2 million generated during the first six months of 2024.

Current wording

Consolidated Revenue: Operating revenue, consisting of NII and noninterest income, was $49.1 million for the first nine months of 2025, an increase of $7.7 million, or 18.5 percent, from the $41.5 million generated during the first nine months of 2024.

Previous wording

NII for the first six months of 2025 was $23.4 million, which was up $4.6 million from NII of $18.8 million for the prior year first six months. Comparing the first six months of 2025 to the prior year first six months, the Company’s earning assets increased $133.7 million, and the average yield on earning assets increased by 25 basis points. The net interest margin for the first six months of 2025 was 3.43 percent compared to 3.05 percent for the first six months of 2024. Funding costs (interest paid to consumers and other entities) for deposits and other interest-bearing liabilities for the first six months of 2025 were 2.30 percent compared to 2.52 percent for the prior year first six months.

Current wording

NII for the first nine months of 2025 was $35.7 million, which was up $6.7 million from NII of $29.0 million for the prior year first nine months. Comparing the first nine months of 2025 to the prior year’s first nine months, the Company’s earning assets increased $130.4 million, and the average yield on earning assets increased by 22 basis points. The net interest margin for the first nine months of 2025 was 3.44 percent compared to 3.08 percent for the first nine months of 2024. Funding costs (interest paid to consumers and other entities) for deposits and other interest-bearing liabilities for the first nine months of 2025 were 2.33 percent compared to 2.52 percent for the prior year first nine months.

Previous wording

Total non-interest income was $9.2 million for the first six months of 2025, which increased by $0.8 million compared to $8.3 million for the prior year first six months. Mortgage revenue increased for the first six months of 2025, as detailed below, wealth management revenue was flat compared to the prior year. Recapture of mortgage servicing rights increased noninterest income by $0.17 million in the first six months, compared to a recapture of $0.22 million in the prior year first six months. SBFG Title contributed revenue of $0.98 million in the first six months of 2025, up $0.31 million from the prior year. Noninterest income as a percentage of average assets was 1.25 percent for both the six months ended June 30, 2025, and 2024.

Current wording

Total noninterest income was $13.4 million for the first nine months of 2025, which increased by $0.9 million compared to $12.5 million for the prior year first nine months. Mortgage revenue increased for the first nine months of 2025, as detailed below, while wealth management revenue was flat compared to the prior year. Impairment of mortgage servicing rights decreased noninterest income by $0.13 million in the first nine months, compared to an impairment of $0.25 million in the prior year first nine months. SBFG Title contributed revenue of $1.52 million in the first nine months of 2025, up $0.37 million from the prior year. Noninterest income as a percentage of average assets was 1.20 percent for the first nine months ended September 30, 2025, compared to 1.23 percent for the prior year first nine months.

Previous wording

State Bank originated $137.7 million of mortgage loans during the first six months of 2025 and sold $113.6 million, with $24.1 million of loans held for investment. This compares to $118.0 million originated for the first six months of 2024, of which $92.5 million were sold with the remainder of loans held for investment. These first six months 2025 originations and subsequent sales resulted in $2.4 million of gains, up $0.36 million from the gains for the first six months of 2024. Net mortgage banking revenue was $3.62 million for the first six months of 2025 compared to $3.39 million for the first six months of 2024.

Current wording

State Bank originated $205.3 million of mortgage loans during the first nine months of 2025 and sold $180.0 million, with $25.3 million of loans held for investment. This compares to $188.7 million originated for the first nine months of 2024, of which $153.7 million were sold with the remainder of loans held for investment. The first nine months 2025 originations and subsequent sales resulted in $3.7 million of gains, up $0.37 million from the gains for the first nine months of 2024. Net mortgage banking revenue was $5.11 million for the first nine months of 2025 compared to $4.76 million for the first nine months of 2024.

Previous wording

Consolidated Noninterest Expense: Total noninterest expense for the first six months of 2025 was $24.3 million, which was up $3.3 million compared to $21.0 million in the prior-year first six months. The 2025 first six months included over $0.7 million in one-time merger-related expenses. Compared to the prior year, the 2025 first six months included operating expenses for approximately five and one half months of activity for Marblehead.

Current wording

Consolidated Noninterest Expense: Total noninterest expense for the first nine months of 2025 was $35.8 million, which was up $3.8 million compared to $32.0 million in the prior-year first nine months. The 2025 first nine months included over $0.7 million in one-time merger-related expenses in addition to continued operational expenses related to Marblehead.

Previous wording

Income Taxes: Income taxes for the first six months of 2025 were $1.31 million (17.9 percent) compared to $0.74 million (11.9 percent) for the first six months of 2024.

Current wording

Income Taxes: Income taxes for the first nine months of 2025 were $2.22 million (18.1 percent) compared to $1.49 million (16.0 percent) for the first nine months of 2024.

Previous wording

Total assets at June 30, 2025, were $1.5 billion, up $106.8 million, or 7.7 percent, since December 31, 2024. Total loans, net of unearned income, were $1.09 billion as of June 30, 2025, up $48.0 million, or 4.6 percent, from year-end. Total deposits at June 30, 2025, were $1.25 billion, an increase of $97.2 million, or 8.4 percent, since 2024 year-end.

Current wording

Total assets at September 30, 2025, were $1.50 billion, up $116.7 million, or 8.5 percent, since December 31, 2024. Total loans, net of unearned income, were $1.11 billion as of September 30, 2025, up $63.8 million, or 6.1 percent, from year-end. Total deposits at September 30, 2025, were $1.26 billion, an increase of $109.9 million, or 9.5 percent, since 2024 year end.

Previous wording

Borrowed funds (consisting of FHLB advances, repurchase (“REPO”) agreements, trust preferred securities and subordinated debt) totaled $80.7 million at June 30, 2025. This is up slightly from year-end 2024 when borrowed funds totaled $75.6 million. Total shareholders’ equity for the Company of $133.6 million now stands at 9.0 percent of total assets compared to the December 31, 2024, level of $127.5 million, or 9.2 percent of total assets. Adjusting for the temporary impairment of Accumulated Other Comprehensive Loss, total equity would increase to $159.1 million, or 10.7 percent of total assets.

Current wording

Borrowed funds (consisting of FHLB advances, repurchase (“REPO”) agreements, trust preferred securities and subordinated debt) totaled $76.0 million at September 30, 2025. This was up slightly from year-end 2024 when borrowed funds totaled $75.6 million. Total shareholders’ equity for the Company of $136.9 million now stands at 9.15 percent of total assets compared to the December 31, 2024, level of $127.5 million, or 9.24 percent of total assets. Adjusting for the temporary impairment of Accumulated Other Comprehensive Loss, total equity would increase to $160.4 million, or 10.72 percent of total assets. The allowance for credit losses of $15.9 million is up $0.85 million from the December 2024 year-end level.

Previous wording

Liquidity relates primarily to the Company’s ability to fund loan demand, meet deposit customers’ withdrawal requirements and provide for operating expenses. Assets used to satisfy these needs consist of cash and due from banks, federal funds sold, interest-earning deposits in other financial institutions, securities available-for-sale and loans held for sale. These assets are commonly referred to as liquid assets. Liquid assets totaled $289.8 million at June 30, 2025, compared to $235.9 million at December 31, 2024.

Current wording

Liquidity relates primarily to the Company’s ability to fund loan demand, meet deposit customers’ withdrawal requirements and provide for operating expenses. Assets used to satisfy these needs consist of cash and due from banks, federal funds sold, interest-earning deposits in other financial institutions, securities available-for-sale and loans held for sale. These assets are commonly referred to as liquid assets. Liquid assets totaled $285.0 million at September 30, 2025, compared to $235.9 million at December 31, 2024.

Previous wording

The Company’s commercial real estate, first mortgage residential, agricultural and multi-family mortgage portfolio of $896.7 million at June 30, 2025, and $852.6 million at December 31, 2024, which can and has been used to collateralize borrowings, is an additional source of liquidity. Management believes the Company’s current liquidity level, without these borrowings, is sufficient to meet its liquidity needs. At June 30, 2025, all eligible commercial real estate, first mortgage residential, agricultural and multi-family mortgage loans were pledged under an FHLB blanket lien.

Current wording

The Company’s commercial real estate, first mortgage residential, agricultural and multi-family mortgage portfolio of $909.6 million at September 30, 2025, and $852.6 million at December 31, 2024, which can and has been used to collateralize borrowings, is an additional source of liquidity. Management believes the Company’s current liquidity level, without these borrowings, is sufficient to meet its liquidity needs. At September 30, 2025, all eligible commercial real estate, first mortgage residential, agricultural and multi-family mortgage loans were pledged under an FHLB blanket lien.

Previous wording

The cash flow statements for the periods presented provide an indication of the Company’s sources and uses of cash, as well as an indication of the ability of the Company to maintain an adequate level of liquidity. A discussion of the cash flow statements for the six months ended June 30, 2025, and June 30, 2024, follows.

Current wording

The cash flow statements for the periods presented provide an indication of the Company’s sources and uses of cash, as well as an indication of the ability of the Company to maintain an adequate level of liquidity. A discussion of the cash flow statements for the nine months ended September 30, 2025, and September 30, 2024, follows.

Previous wording

The Company experienced positive cash flows from operating activities for the six months ended June 30, 2025, and negative cash flows from operating activities for the six months ended June 30, 2024. Net cash provided by operating activities was $3.1 million for the six months ended June 30, 2025, and net cash used was $0.1 million for the six months ended June 30, 2024. Highlights for the current year include $113.6 million in proceeds from the sale of loans, which is up $21.1 million from the prior year. Originations of loans held for sale was a use of cash of $118.3 million, which is up $21.6 million from the prior year. For the six months ended June 30, 2025, there was a gain on sale of loans of $2.5 million, and depreciation and amortization on premises and equipment of $1.1 million.

Current wording

The Company experienced positive cash flows from operating activities for the nine months ended September 30, 2025, and September 30, 2024. Net cash provided by operating activities was $15.8 million for the nine months ended September 30, 2025, and $3.5 million for the nine months ended September 30, 2024. Highlights for the current year include $180.0 million in proceeds from the sale of loans, which is up $26.3 million from the prior year. Originations of loans held for sale was a use of cash of $175.9 million, which is up $17.6 million from the prior year . For the nine months ended September 30, 2025, there was a gain on sale of loans of $3.8 million, and depreciation and amortization on premises and equipment of $1.6 million.

Previous wording

The Company experienced positive cash flows from investing activities for the six months ended June 30, 2025, and June 30, 2024. Net cash provided by investing activities was $7.2 million for the six months ended June 30, 2025, and $3.7 million for the six months ended June 30, 2024. Highlights for the current year include an increase of $29.7 million in loans, which is up $24.5 million from the prior year six-month period, and $3.0 million paid for the Marblehead acquisition, net of cash acquired. These cash payments were offset by $11.5 million in proceeds from maturing securities, and $30.1 million in proceeds from the sale of securities which were acquired from Marblehead.

Current wording

The Company experienced negative cash flows from investing activities for the nine months ended September 30, 2025, and September 30, 2024. Net cash used by investing activities was $5.0 million for the nine months ended September 30, 2025, and $14.9 million for the nine months ended September 30, 2024. Highlights for the current year include an increase of $45.6 million in loans, which is up $15.8 million from the prior year nine-month period, and $3.0 million paid for the Marblehead acquisition, net of cash acquired. These cash payments were offset by $16.8 million in proceeds from maturing securities, and $30.1 million in proceeds from the sale of securities which were acquired from Marblehead.

Previous wording

The Company experienced positive cash flows from financing activities for the six months ended June 30, 2025, and negative cash flows from financing activities for the six months ended June 30, 2024. Net cash provided by financing activities was $43.2 million for the six months ended June 30, 2025, and net cash used in financing activities was $4.6 million for the six months ended June 30, 2024. Highlights for the current period include a $32.2 million increase in transaction deposits and a $11.9 million increase in time deposits for the six months ended June 30, 2025. This reflects a $9.7 million decrease in transaction deposits from the prior year six-month period and a $8.9 million increase in time deposits. Net repayments of Federal Home Loan Bank advances for the six months ended June 30, 2025, were $1.0 million, compared to $48.6 million for the prior year six-month period.

Current wording

The Company experienced positive cash flows from financing activities for the nine months ended September 30, 2025, and September 30, 2024. Net cash provided by financing activities was $48.3 million for the nine months ended September 30, 2025, and $37.8 million for the nine months ended September 30, 2024. Highlights for the current period include a $46.7 million increase in transaction deposits and a $11.1 million increase in time deposits for the nine months ended September 30, 2025. This reflects a $33.0 million decrease in transaction deposits from the prior year nine-month period. Net repayments of Federal Home Loan Bank advances for the nine months ended September 30, 2025, were $1.0 million, compared to $48.6 million for the prior year nine-month period.

Previous wording

The Company’s commercial real estate, first mortgage residential, agricultural and multi-family mortgage portfolios in the total amount of $896.7 million were pledged to meet FHLB collateralization requirements as of June 30, 2025. Based on the current collateralization requirements of the FHLB, the Company had approximately $157.0 million of additional borrowing capacity at June 30, 2025. The Company also had $57.8 million in unpledged securities available to pledge for additional borrowings.

Current wording

The Company’s commercial real estate, first mortgage residential, agricultural and multi-family mortgage portfolios in the total amount of $909.6 million were pledged to meet FHLB collateralization requirements as of September 30, 2025. Based on the current collateralization requirements of the FHLB, the Company had approximately $162.8 million of additional borrowing capacity at September 30, 2025. The Company also had $44.2 million in unpledged securities available to pledge for additional borrowings.

Previous wording

The Company has contractual obligations consisting of long-term debt obligations and operating lease obligations. In addition, as of June 30, 2025, the Company had commitments to sell mortgage loans totaling $19.5 million. The Company believes that it has adequate resources to fund commitments as they arise and that it can adjust the rate on savings and time deposits to retain deposits in changing interest rate environments. If the Company requires funds beyond its internal funding capabilities, advances from the FHLB of Cincinnati and other financial institutions are available.

Current wording

The Company has contractual obligations consisting of long-term debt obligations and operating lease obligations. In addition, as of September 30, 2025, the Company had commitments to sell mortgage loans totaling $27.5 million. The Company believes that it has adequate resources to fund commitments as they arise and that it can adjust the rate on savings and time deposits to retain deposits in changing interest rate environments. If the Company requires funds beyond its internal funding capabilities, advances from the FHLB of Cincinnati and other financial institutions are available.