SB Financial Group Q2 Earnings Call Highlights

SB Financial Group reported second-quarter net income of $4.5 million, or $0.72 per diluted share, up from $0.60 a year ago, driven by higher net interest income and fee revenue. The company also marked its 62nd consecutive quarter of operational profitability. Loan and deposit growth remained strong, with loans up 8.7% year over year to about $1.19 billion and deposits up more than 11% to $1.39 billion. Management said it expects stronger loan production in the second half and sees margins staying near current levels. Asset quality stayed solid, with nonperforming assets falling to 0.27% of total assets and charge-offs remaining low. The bank also continued rewarding shareholders, declaring a $0.16 quarterly dividend and staying on pace for its 14th straight annual dividend increase. SB Financial Group NASDAQ: SBFG reported second-quarter 2026 net income of $4.5 million, or $0.72 per diluted share, compared with $0.60 per diluted share a year earlier, as higher net interest income and fee revenue supported profitability. Chairman, President and CEO Mark Klein said the company’s results reflected loan and deposit growth, controlled expenses and continued improvement in asset quality. The company said it has now recorded 62 consecutive quarters of operational profitability. Tangible book value per share rose about 16% from a year earlier to $19.04, while adjusted tangible book value excluding accumulated other comprehensive income was $22.57. Revenue and margin performance Total operating revenue increased 4.5% year over year to $17.9 million and rose 3% from the prior quarter, according to Chief Financial Officer Tony Cosentino. Net interest income increased 6.8% to $13 million from $12.1 million in the second quarter of 2025, as interest income growth outpaced higher interest expense. Net interest margin was 3.43%, compared with 3.48% in both the prior-year and linked quarters. Cosentino said the decline partly reflected elevated liquidity during the period, but management expects loan growth and low-cost deposit gathering to support margins in the second half. He said the company expects margin to remain at or above current levels and potentially trend toward a range of roughly 3.45% to 3.55%. Non-interest income totaled $5 million, representing approximately 28% of operating revenue. Mortgage banking contributed $1.9 million, down from $2.2 million a year earlier but up from $1.8 million in the first quarter. Mortgage servicing fees were $934,000, while mortgage gain-on-sale revenue was $1.5 million. The company said its mortgage gain-on-sale percentage improved to 2.19%, its highest level since the second quarter of 2024. Adjusted diluted earnings per share, excluding mortgage servicing rights valuation adjustments, rose nearly 26% to $0.73 from $0.58 a year earlier, Cosentino said. Loans, deposits and expansion markets Loans ended the quarter at approximately $1.19 billion, up about $95 million, or 8.7%, from a year earlier and $8.4 million from the first quarter. The company said this marked its ninth consecutive quarter of sequential loan growth. Commercial real estate loans totaled $611 million, while office exposure accounted for less than 5.5% of the loan portfolio. During the question-and-answer session, management said it expects stronger loan production in the second half of the year. Cosentino said the company could generate approximately $50 million to $70 million of balance-sheet loan growth through year-end before normal repayments, with roughly half expected from Columbus and half from other markets. Total deposits rose $141 million, or more than 11%, from a year earlier to $1.39 billion, including a $19.3 million sequential increase. Noninterest-bearing chec...