SB FINANCIAL GROUP, INC.

Previous wording

State Bank Insurance, LLC (“SBI”) is an Ohio corporation and a wholly owned subsidiary of State Bank incorporated in June 2010. SBI is an insurance company that engages in the sale of insurance products to retail and commercial customers of State Bank.

Current wording

SBT Insurance, LLC (“SBI”) is an Ohio limited liability company and a wholly owned subsidiary of State Bank incorporated in June 2010. SBI is an insurance company that engages in the sale of insurance products to retail and commercial customers of State Bank.

Previous wording

SBFG Title, LLC (“SBFG Title”) is an Ohio corporation that was formed in March 2019. SBFG Title engages in the sale of title insurance services.

Current wording

SBFG Title, LLC (“SBFG Title”) is an Ohio limited liability company that was formed in March 2019. SBFG Title engages in the sale of title insurance services.

Previous wording

Net Income: Net income for the second quarter of 2026 was $4.5 million compared to net income of $3.9 million for the second quarter of 2025, an increase of $0.6 million, or 16.7 percent. Diluted earnings per share (“DEPS”) of $0.72 for the second quarter of 2026 were higher compared to the DEPS of $0.60 for the second quarter of 2025. Net income for the second quarter of 2026 was positively impacted by higher interest income on loans, partially offset by higher interest expense on deposits and wholesale borrowings. The quarter included a small impairment on Mortgage Servicing Rights (“OMSR”) of $0.05 million. Total noninterest income was $5.0 million and decreased slightly compared to the prior year second quarter. Mortgage loan volume was lower as compared to the prior year by 19 percent, with sales of originated mortgages for the second quarter of 2026 also down by 5 percent as compared to the same period in 2025.

Current wording

Net Income: Net income for the third quarter of 2026 was $3.9 million compared to net income of $4.0 million for the third quarter of 2025, a decrease of $0.1 million, or 2.5 percent. Diluted earnings per share (“DEPS”) of $0.63 for the third quarter of 2026 were lower compared to the DEPS of $0.64 for the third quarter of 2025. Net income for the third quarter of 2026 was positively impacted by higher interest income on loans, partially offset by higher interest expense on deposits and wholesale borrowings. The quarter included a small recapture of Mortgage Servicing Rights (“OMSR”) of $0.04 million. Total noninterest income was $4.7 million and increased slightly compared to the prior year third quarter. Mortgage loan volume was higher as compared to the prior year by 15 percent, with sales of originated mortgages for the third quarter of 2026 also up slightly as compared to the same period in 2025.

Previous wording

Provision for Credit Losses: The second quarter provision for credit losses was $299,000 as compared to a $597,000 provision for the prior year second quarter. The Company had net chargeoffs of $193,000 for the second quarter of 2026 compared to net chargeoffs of $46,000 for the year-ago quarter. The provision expense included $200,000 of growth-related provision, and a provision $99,000 for the growth in unfunded commitments. Total delinquent loans ended the quarter at $3.8 million, or 0.32 percent of total loans.

Current wording

Provision for Credit Losses: The third quarter provision for credit losses was $127,000 as compared to a $124,000 provision for the prior year third quarter. The Company had net charge offs of $18,000 for the third quarter of 2026 compared to net charge offs of $2,000 for the year-ago quarter. The provision expense included zero-growth related provision, and a provision of $127,000 for the growth in unfunded commitments. Total delinquent loans ended the quarter at $4.1 million, or 0.34 percent of total loans, with nonperforming assets down 12 percent from the prior year.

Previous wording

Consolidated Revenue: Operating revenue, consisting of net interest income (“NII”) and noninterest income, was $17.9 million for the second quarter of 2026, an increase of $0.7 million, or 4.5 percent, from the $17.2 million generated during the second quarter of 2025.

Current wording

Consolidated Revenue: Operating revenue, consisting of net interest income (“NII”) and noninterest income, was $18.1 million for the third quarter of 2026, an increase of $1.5 million, or 9.0 percent, from the $16.6 million generated during the third quarter of 2025.

Previous wording

NII for the second quarter of 2026 was $13.0 million, which was up $0.8 million from the prior year second quarter’s $12.1 million. Comparing the second quarter of 2026 to the prior year second quarter, the Company’s earning assets increased $112.5 million, but the average yield on earning assets decreased by 3 basis points. The net interest margin for the second quarter of 2026 was 3.43 percent compared to 3.48 percent for the second quarter of 2025. Funding costs (interest paid to consumers and other entities) for deposits and other interest-bearing liabilities for the second quarter of 2026 were 2.34 percent compared to 2.33 percent for the prior year second quarter.

Current wording

NII for the third quarter of 2026 was $13.4 million, which was up $1.1 million from the prior year third quarter’s $12.3 million. Comparing the third quarter of 2026 to the prior year third quarter, the Company’s earning assets increased $116.7 million, with the average yield on earning assets increasing by 4 basis points. The net interest margin for the third quarter of 2026 was 3.50 percent compared to 3.48 percent for the third quarter of 2025. Funding costs (interest paid to consumers and other entities) for deposits and other interest-bearing liabilities for the third quarter of 2026 were 2.38 percent compared to 2.33 percent for the prior year third quarter.

Previous wording

Total noninterest income was $5.0 million for the second quarter of 2026, which decreased minimally compared to the prior year second quarter. Mortgage revenue decreased during the second quarter of 2026, as detailed below, however wealth management and customer service revenue were up compared to the prior year. Impairment of mortgage servicing rights decreased noninterest income by $0.05 million in the quarter, compared to a recapture of $0.16 million in the prior year second quarter. SBFG Title contributed revenue of $0.58 million in the second quarter of 2026, level compared to the prior year. Noninterest income as a percentage of average assets for the second quarter of 2026 was 1.24 percent compared to 1.35 percent for the prior year second quarter.

Current wording

Total noninterest income was $4.7 million for the third quarter of 2026, which increased slightly compared to the prior year third quarter. Mortgage revenue decreased during the third quarter of 2026, as detailed below, however wealth management and customer service revenue were up compared to the prior year. Recapture of mortgage servicing rights increased noninterest income by $0.04 million in the quarter, compared to an impairment of $0.30 million in the prior year third quarter. SBFG Title contributed revenue of $0.51 million in the third quarter of 2026, just below the prior year. Noninterest income as a percentage of average assets for the third quarter of 2026 was 1.13 percent compared to 1.12 percent for the prior year third quarter.

Previous wording

State Bank originated $79.3 million of mortgage loans during the second quarter of 2026 and sold $70.3 million, with $9.0 million of loans held for investment. This compares to $97.9 million originated for the second quarter of 2025, of which $74.3 million were sold with the remainder of loans held for investment. The second quarter 2026 originations and subsequent sales resulted in $1.5 million of gains, in line with the gains for the second quarter of 2025. Net mortgage banking revenue was $1.92 million for the second quarter of 2026 compared to $2.16 million for the second quarter of 2025.

Current wording

State Bank originated $77.7 million of mortgage loans during the third quarter of 2026 and sold $66.5 million, with $11.0 million of loans held for investment. This compares to $67.6 million originated during the third quarter of 2025, of which $66.4 million were sold with the remainder of loans held for investment. The third quarter 2026 originations and subsequent sales resulted in $1.3 million of gains, compared to $1.6 million of gains for the third quarter of 2025. Net mortgage banking revenue was $1.78 million for the third quarter of 2026 compared to $1.49 million for the third quarter of 2025.

Previous wording

Consolidated Noninterest Expense: Total noninterest expense for the second quarter of 2026 was $12.1 million, which was up $0.3 million compared to $11.9 million in the prior-year second quarter. The quarter included higher expenses related to incentive accruals and other employee benefits.

Current wording

Consolidated Noninterest Expense: Total noninterest expense for the third quarter of 2026 was $13.1 million, which was up $1.7 million compared to $11.5 million in the prior year third quarter. The quarter included higher expenses related to incentive accruals and other employee benefits as well as costs related to our pending client and product conversions.

Previous wording

Income Taxes: Income taxes for the second quarter of 2026 were $1.01 million (18.3 percent) compared to $0.88 million (18.5 percent) for the second quarter of 2025.

Current wording

Income Taxes: Income taxes for the third quarter of 2026 were $0.85 million (17.6 percent) compared to $0.91 million (18.4 percent) for the third quarter of 2025.

Previous wording

Net Income: Net income for the first six months of 2026 was $8.8 million compared to net income of $6.0 million for the first six months of 2025, an increase of $2.8 million, or 46 percent. DEPS of $1.41 for the first six months of 2026 were higher compared to the DEPS of $0.93 for the first six months of 2025. Net income for the first six months of 2026 was positively impacted by higher interest income on loans, partially offset by higher interest expense on deposits and wholesale borrowings. Total noninterest income increased slightly compared to the prior year at $9.7 million. Mortgage loan volume was higher as compared to the prior year by 7 percent, with sales of originated mortgages for the first six months of 2026 also higher by 9 percent as compared to the same period in 2025.

Current wording

Net Income: Net income for the first nine months of 2026 was $12.7 million compared to net income of $10.1 million for the first nine months of 2025, an increase of $2.7 million, or 27 percent. DEPS of $2.04 for the first nine months of 2026 were higher compared to the DEPS of $1.56 for the first nine months of 2025. Net income for the first nine months of 2026 was positively impacted by higher interest income on loans, partially offset by higher interest expense on deposits and wholesale borrowings. Total noninterest income of $14.4 million increased by $5.2 million compared to the prior year first nine months. Mortgage loan volume was higher as compared to the prior year by 8.5 percent, with sales of originated mortgages for the first nine months of 2026 also higher by 5.7 percent as compared to the same period in 2025.

Previous wording

Provision for Credit Losses: The provision for credit losses for the first six months of 2026 was $513,000 as compared to a $984,000 provision for the prior year first six months. The Company had net chargeoffs of $219,000 for the first six months of 2026 compared to net chargeoffs of $130,000 for the year-ago first six months. The provision expense included $500,000 of growth-related provision, and a provision $13,000 for the growth in unfunded commitments.

Current wording

Provision for Credit Losses: The provision for credit losses for the first nine months of 2026 was $640,000 as compared to a $1,108,000 provision for the prior year first nine months. The Company had net chargeoffs of $236,000 for the first nine months of 2026 compared to net chargeoffs of $132,000 for the year-ago first nine months. The provision expense included $500,000 of growth-related provision, and a provision $140,000 for the growth in unfunded commitments.

Previous wording

Consolidated Revenue: Operating revenue, consisting of NII and noninterest income, was $35.4 million for the first six months of 2026, an increase of $2.8 million, or 9 percent, from the $32.6 million generated during the first six months of 2025.

Current wording

Consolidated Revenue: Operating revenue, consisting of NII and noninterest income, was $53.4 million for the first nine months of 2026, an increase of $4.3 million, or 8.8 percent, from the $49.1 million generated during the first nine months of 2025.

Previous wording

NII for the first six months of 2026 was $25.7 million, which was up $2.3 million from the prior year first six months’ $23.4 million. Comparing the first six months of 2026 to the prior year, the Company’s earning assets increased $121.0 million, with the average yield on earning assets increasing by 1 basis point. The net interest margin for the first six months of 2026 was 3.45 percent compared to 3.43 percent for the first six months of 2025. Funding costs (interest paid to consumers and other entities) for deposits and other interest-bearing liabilities for the first six months of 2026 were 2.31 percent compared to 2.30 percent for the prior year first six months.

Current wording

NII for the first nine months of 2026 was $39.1 million, which was up $3.4 million from $35.7 million for the prior year first nine months. Comparing the first nine months of 2026 to the prior year, the Company’s earning assets increased $115.1 million, with the average yield on earning assets increasing by 4 basis points. The net interest margin for the first nine months of 2026 was 3.48 percent compared to 3.44 percent for the first nine months of 2025. Funding costs (interest paid to consumers and other entities) for deposits and other interest-bearing liabilities for the first nine months of 2026 were 2.35 percent compared to 2.33 percent for the prior year first nine months.

Previous wording

Total noninterest income was $9.7 million for the first six months of 2026, which increased 6 percent compared to the prior year first six months. Mortgage revenue increased during the first six months of 2026, as detailed below, with wealth management and customer service revenue also up compared to the prior year. Noninterest income as a percentage of average assets for the first six months of 2026 was 1.23 percent compared to 1.25 percent for the prior year first six months.

Current wording

Total noninterest income was $14.4 million for the first nine months of 2026, which increased 7 percent compared to the prior year first nine months. Mortgage revenue was flat during the first nine months of 2026, as detailed below, with wealth management and customer service revenue up compared to the prior year. Noninterest income as a percentage of average assets for the first nine months of 2026 was 1.19 percent compared to 1.20 percent for the prior year first nine months.

Previous wording

State Bank originated $145.7 million of mortgage loans during the first six months of 2026 and sold $123.7 million, with $22.0 million of loans held for investment. This compares to $137.7 million originated for the first six months of 2025, of which $113.6 million were sold with the remainder of loans held for investment. The 2026 YTD originations and subsequent sales resulted in $2.5 million of gains, up slightly from the gains for the first six months of 2025. Net mortgage banking revenue YTD was $3.75 million for 2026 compared to $3.62 million for YTD 2025.

Current wording

State Bank originated $222.8 million of mortgage loans during the first nine months of 2026 and sold $190.2 million, with $32.6 million of loans held for investment. This compares to $205.3 million of originated mortgage loans for the first nine months of 2025, of which $180.0 million were sold with the remainder of loans held for investment. The 2026 YTD originations and subsequent sales resulted in $3.8 million of gains, flat compared to the gains for the first nine months of 2025. Net mortgage banking revenue YTD was $5.5 million for 2026 compared to $5.1 million for YTD 2025.

Previous wording

Consolidated Noninterest Expense: Total noninterest expense for the first six months of 2026 was $24.1 million, which was down $0.2 million compared to $24.3 million in the prior-year first six months. The prior year included $0.75 million in expenses related to the conversion of Marblehead Bank.

Current wording

Consolidated Noninterest Expense: Total noninterest expense for the first nine months of 2026 was $37.2 million, which was up $1.4 million compared to $35.8 million in the prior-year first nine months. The prior year included $0.75 million in expenses related to the conversion of Marblehead Bank.

Previous wording

Income Taxes: Income taxes for the first six months of 2026 were $1.99 million (18.5 percent) compared to $1.31 million (17.9 percent) for the first six months of 2025.

Current wording

Income Taxes: Income taxes for the first nine months of 2026 were $2.84 million (18.2 percent) compared to $2.22 million (18.1 percent) for the first nine months of 2025.

Previous wording

Total assets at June 30, 2026, were $1.62 billion, up $74.7 million, or 4.8 percent, since December 31, 2025. Total loans, net of unearned income, were $1.19 billion as of June 30, 2026, up $9.0 million, or 0.8 percent, from year-end. Total deposits at June 30, 2026, were $1.39 billion, an increase of $83.9 million, or 6.4 percent, since 2025 year end.

Current wording

Total assets at September 30, 2026, were $1.61 billion, up $69.1 million, or 4.5 percent, since December 31, 2025. Total loans, net of unearned income, were $1.22 billion as of September 30, 2026, up $38.2 million, or 3.2 percent, from year-end. Total deposits at September 30, 2026, were $1.38 billion, an increase of $75.6 million, or 5.8 percent, since 2025 year end.

Previous wording

Borrowed funds (consisting of FHLB advances, repurchase (“REPO”) agreements, trust preferred securities and subordinated debt) totaled $59.3 million at June 30, 2026. This was down from year-end 2025 when borrowed funds totaled $74.3 million. Total shareholders’ equity for the Company of $146.7 million now stands at 9.06 percent of total assets compared to the level at December 31, 2025, of $141.2 million, or 9.14 percent of total assets. Adjusting for the temporary impairment of Accumulated other comprehensive loss, total equity would increase to $168.6 million, or 10.41 percent of total assets. The allowance for credit losses of $16.4 million is up $0.28 million, or 1.7 percent from the December 2025 year-end level.

Current wording

Borrowed funds (consisting of FHLB advances, repurchase (“REPO”) agreements, trust preferred securities and subordinated debt) totaled $58.9 million at September 30, 2026. This was down from year-end 2025 when borrowed funds totaled $74.3 million. Total shareholders’ equity for the Company of $144.3 million now stands at 8.94 percent of total assets compared to the level at December 31, 2025, of $141.2 million, or 9.14 percent of total assets. Adjusting for the temporary impairment of Accumulated other comprehensive loss, total equity would increase to $171.5 million, or 10.62 percent of total assets. The allowance for credit losses of $16.4 million is up $0.26 million, or 1.6 percent from the December 2025 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 $327.1 million at June 30, 2026, compared to $263.1 million at December 31, 2025.

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 $287.3 million at September 30, 2026, compared to $263.1 million at December 31, 2025.

Previous wording

The Company’s commercial real estate, first mortgage residential, agricultural and multi-family mortgage portfolio of $988.1 million at June 30, 2026, and $978.2 million at December 31, 2025, 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, 2026, 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 $1.02 billion at September 30, 2026, and $978.2 million at December 31, 2025, 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, 2026, 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, 2026, and June 30, 2025, 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, 2026, and September 30, 2025, follows.

Previous wording

The Company experienced positive cash flows from operating activities for the six months ended June 30, 2026, and June 30, 2025. Net cash provided by operating activities was $3.8 million for the six months ended June 30, 2026, and $3.1 million for the six months ended June 30, 2025. Highlights for the current year include $125.4 million in proceeds from the sale of loans, which is up $11.8 million from the prior year. Originations of loans held for sale was a use of cash of $129.4 million, which is up $11.1 million from the prior year . For the six months ended June 30, 2026, there was a gain on sale of loans of $2.7 million, and depreciation and amortization on premises and equipment of $1.2 million.

Current wording

The Company experienced positive cash flows from operating activities for the nine months ended September 30, 2026, and September 30, 2025. Net cash provided by operating activities was $12.6 million for the nine months ended September 30, 2026, and $15.8 million for the nine months ended September 30, 2025. Highlights for the current year include $192.3 million in proceeds from the sale of loans, which is up $12.3 million from the prior year. Originations of loans held for sale was a use of cash of $193.6 million, which is up $17.7 million from the prior year. For the nine months ended September 30, 2026, there was a gain on sale of loans of $4.0 million, and depreciation and amortization on premises and equipment of $1.7 million.

Previous wording

The Company experienced negative cash flows from investing activities for the six months ended June 30, 2026, and positive cash flows from investing activities for the six months ended June 30, 2025. Net cash used in investing activities was $2.9 million for the six months ended June 30, 2026, and net cash provided by investing activities was $7.2 million for the six months ended June 30, 2025. Highlights for the current year include a $10.3 million increase in loans and $2.5 million interest bearing time deposits purchased, mostly offset by $8.9 million in proceeds from maturing securities. The prior year activities include a $29.7 million increase in loans and $3.0 million paid for the Marblehead acquisition, net of cash acquired, 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, 2026, and September 30, 2025. Net cash used in investing activities was $37.4 million for the nine months ended September 30, 2026, and $5.0 million for the nine months ended September 30, 2025. Highlights for the current year include a $39.7 million increase in loans, $11.0 million in securities purchased, and $2.5 million interest bearing time deposits purchased, partially offset by $14.4 million in proceeds from maturing securities. The prior year activities include a $45.6 million increase in loans and $3.0 million paid for the Marblehead acquisition, net of cash acquired, 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, 2026, and June 30, 2025. Net cash provided by financing activities was $65.6 million for the six months ended June 30, 2026, and $43.2 million for the six months ended June 30, 2025. Highlights for the current period include a $72.3 million increase in transaction deposits compared to a $32.2 million increase for the six months ended June 30, 2025. Repayments of Federal Home Loan Bank advances for the six months ended June 30, 2026, were $12.5 million, compared to $1.0 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, 2026, and September 30, 2025. Net cash provided by financing activities was $55.7 million for the nine months ended September 30, 2026, and $48.3 million for the nine months ended September 30, 2025. Highlights for the current period include a $76.2 million increase in transaction deposits compared to a $46.7 million increase for the nine months ended September 30, 2025. Repayments of Federal Home Loan Bank advances for the nine months ended September 30, 2026, were $12.5 million, compared to $1.0 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 $988.1 million were pledged to meet FHLB collateralization requirements as of June 30, 2026. Based on the current collateralization requirements of the FHLB, the Company had approximately $180.9 million of additional borrowing capacity at June 30, 2026. The Company also had $41.0 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 $1.02 billion were pledged to meet FHLB collateralization requirements as of September 30, 2026. Based on the current collateralization requirements of the FHLB, the Company had approximately $182.3 million of additional borrowing capacity at September 30, 2026. The Company also had $41.0 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, 2026, the Company had commitments to sell mortgage loans totaling $19.9 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, 2026, the Company had commitments to sell mortgage loans totaling $12.7 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.