Sb Financial Group, Inc. · NASDAQ:SBFG
Sb Financial — Shareholder Meeting (April 2019)
41 slides from Sb Financial's shareholder meeting presentation, Apr 17, 2019
Slide 1: Business Overview
balanced «oc preneurial innovat knowledgeable > neurial collaborative ‘ive consistency aging bal entrepreneurial @ financialg BUSINESS OVERVIEW
Slide 2: Safe Harbor Statement
SB FINANCIAL GROUP, INC. SAFE HARBOR STATEMENT Certain statements within this document, which are not statements of historical fact, constitute forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward - looking statements involve risks and unce
Slide 3: 2018 Highlights
SB FINANCIAL GROUP, INC. 2018 HIGHLIGHTS 3 • Net Income of $11.6 Million or $ 1.51/share • Achieved our Vision of a $1 Billion Balance Sheet • Grew net income 24.3% (Adjusted for DTL - 2017 ) • ROAA 1.23% -- 83rd percentile (11 th ) • Rank 72 out of 200 Banks according to ABA • Assets grew By $109 M
Slide 4: Our Vision
Our Vision over the next three years is to become a $2 Billion, Russell 2000, high - performing ( > 90th percentile), independent, diversified, financial services company. Our performance will be set apart by our staff and their passion for service, our holistic approach to client care, and our comm
Slide 5: Return on Average Assets (ROAA)
SB FINANCIAL GROUP, INC. RETURN ON AVERAGE ASSETS (ROAA) 0.00 0.25 0.50 0.75 1.00 1.25 1.50 2014 2015 2016 2017 2018 ROAA SBFG Peer Group Top Quartile* 1.23% 83 rd Percentile * Peer group consists of SNL 4Q 201 8 data for 65 publicly traded bank holding companies in the U.S. on a major exchange with
Slide 6: Corporate Overview
• NASDAQ: SBFG • Defiance , Ohio - Headquarters Since 1902 • Corporate Staff Members - 250 • Average Daily Volume for 2018 - 6,500; 6.5 Million Common shares; 1.5 Million shares of SBFGP • Institutional Ownership: 53.4% • Market Cap: $107 million ($16.45/share 12/31/2018) $ 134 million with preferre
Slide 7: Our Organization & Leadership
SB FINANCIAL GROUP, INC. OUR ORGANIZATION & LEADERSHIP CORPORATE LEADERSHIP • Mark Klein – Chairman, President and CEO • Tony Cosentino – EVP and CFO • Ernesto Gaytan – EVP and Chief Technology Innovation and Operations Officer • Keeta Diller – SVP, Chief Enterprise Risk Management Officer REGIONAL/
Slide 8: Unique Qualities
8 RRE $1.9 MM / 16% Retail/PCG $3.5 MM / 30% Commercial $5.1 MM / 44% WM $0.4 MM/ 4% SBA $0.7 MM / 6% NET INCOME CONTRIBUTIONS 201 8 NET INCOME $ 11.6 MILLION 201 8 ASSETS UNDER MANAGEMENT $ 2.5 BILLION COMPRISED OF: • $986 MM Commercial Bank • $1,085 MM Residential Sold Portfolio • $423 MM Wealth M
Slide 9: Key Initiatives
SB FINANCIAL GROUP, INC. KEY INITIATIVES 9 Become a Top - Decil e, Independent Financial Services Company Increase profitability through ongoing diversification of revenue streams Strengthen penetration in all markets served Expand product service utilization by new and existing customers Deliver ga
Slide 10: Key Initiatives
SB FINANCIAL GROUP, INC. KEY INITIATIVES 10 Become a Top - Decil e, Independent Financial Services Company Increase profitability through ongoing diversification of revenue streams Strengthen penetration in all markets served Expand product service utilization by new and existing customers Deliver g
Slide 11: Revenue Diversity Highlights
SB FINANCIAL GROUP, INC. REVENUE DIVERSITY HIGHLIGHTS 11 • Expanded Operating Revenue • Maintained an Asset Sensitive Balance Sheet • Grew our Fee - Based Business Lines • Generated market - leading Non - Interest Income
Slide 12: Increase Profitability Through Diversification of Revenue Streams
INCREASE PROFITABILITY THROUGH DIVERSIFICATION OF REVENUE STREAMS 12 $34.9 $33.8 $39.1 $43.7 $45.6 $49.9 $5.2 $5.3 $7.6 $8.8 $11.1 $11.6 $0 $2 $4 $6 $8 $10 $12 $14 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $55 2013 2014 2015 2016 2017 2018 NET INCOME (MIL) REVENUE (MIL) TOTAL REVENUE/NET INCOME Othe
Slide 13: Increase Profitability Through Diversification of Revenue Streams
INCREASE PROFITABILITY THROUGH DIVERSIFICATION OF REVENUE STREAMS * Peer group consists of SNL 4Q 201 8 data for 65 publicly traded bank holding companies in the U.S. on a major exchange with assets between $500 million and $1. 315 billion. 13 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0
Slide 14: Mortgage Gain on Sale
INCREASE PROFITABILITY THROUGH DIVERSIFICATION OF REVENUE STREAMS 14 $220 $323 $383 $316 $342 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $0 $1 $2 $3 $4 $5 $6 $7 $8 2014 2015 2016 2017 2018 MORTGAGE VOLUME (MIL) MORTGAGE GAIN ON SALE (MIL) MORTGAGE GAIN ON SALE/VOLUME NW Ohio Columbus Findlay Tot
Slide 15: SBA Gain on Sale
INCREASE PROFITABILITY THROUGH DIVERSIFICATION OF REVENUE STREAMS 15 $2.4 $7.5 $6.4 $11.6 $12.2 $0 $2 $4 $6 $8 $10 $12 $14 $0.0 $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 2014 2015 2016 2017 2018 SOLD VOLUME (MIL) GAIN ON SALE (MIL) SBA GAIN ON SALE SBA Gains Loan Volume
Slide 16: Wealth Management AUM
INCREASE PROFITABILITY THROUGH DIVERSIFICATION OF REVENUE STREAMS 16 $331 $353 $378 $437 $423 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2014 2015 2016 2017 2018 AUM in (MIL) Wealth Management
Slide 17: 2018 Non-Interest Income
INCREASE PROFITABILITY THROUGH DIVERSIFICATION OF REVENUE STREAMS 17 49% 16% 18% 7% 10% Mortgage Banking $8.2 M Service Fees $2.7 M Wealth Management $2.9 M SBA $1.1 M Other $1.7 M 201 8 NON - INTEREST INCOME $ 16.6 MILLION • Non - Interest Income to Total Revenue at 33% (92 nd Percentile) - Peer Me
Slide 18: Noninterest Income and Expense to Average Assets
18 2.0% 1.5% 1.5% 1.7% 1.9% 2.2% 2.2% 2.1% 2.1% 2.2% 1.0% 1.5% 2.0% 2.5% 3.0% 2014 2015 2016 2017 2018 NET NONINTEREST EXPENSE/ AVG. ASSETS SBFG Peer Median 3.9% 3.7% 3.8% 3.7% 3.7% 1.9% 2.2% 2.3% 2.0% 1.8% 1.0% 2.0% 3.0% 4.0% 5.0% 2014 2015 2016 2017 2018 NONINTEREST INCOME AND EXPENSE/AVG. ASSETS
Slide 19: Key Initiatives
SB FINANCIAL GROUP, INC. KEY INITIATIVES 19 Become a Top - Decil e, Independent Financial Services Company Increase profitability through ongoing diversification of revenue streams Strengthen penetration in all markets served Expand product service utilization by new and existing customers Deliver g
Slide 20: Scale Through Organic Growth Highlights
SB FINANCIAL GROUP, INC. SCALE THROUGH ORGANIC GROWTH HIGHLIGHTS 20 • Grew Balance Sheet • Expanded our Footprint • Grew Market Share
Slide 21: Strengthen Market Penetration in All Markets Served
STRENGTHEN MARKET PENETRATION IN ALL MARKETS SERVED 21
Slide 22: Loan and Deposit Growth by Market
STRENGTHEN MARKET PENETRATION IN ALL MARKETS SERVED 22 Toledo $120M Findlay $60M Columbus $175M Ft. Wayne $50M Defiance $100M Total Loan and Deposit Growth Over Last 5 Years : $580M
Slide 23: Loan Portfolio
STRENGTHEN MARKET PENETRATION IN ALL MARKETS SERVED 23 Loans (Net) 78% Securities 9% Cash & Due 5% Other 8% Commercial RE 44% HELOC 7% 1 - 4 Family 24% Agriculture 7% C&I 17% Consumer & Other 1% Loan to Deposit December 201 8 – 96 % Top Quartile Performance LOAN PORTFOLIO = $ 772 MILLION
Slide 24: Deposit Portfolio
STRENGTHEN MARKET PENETRATION IN ALL MARKETS SERVED 24 Borrowings 5% Deposits 81% Capital 13% Other 1% Time 30% MMDA 23% Savings 13% Inerest Bearing 16% Non - Interest 18% DEPOSIT PORTFOLIO = $803 MILLION Transactional deposits = 7 0 % of total deposits Weighted average cost of deposits = 70 bps
Slide 25: Key Initiatives
SB FINANCIAL GROUP, INC. KEY INITIATIVES 25 Become a Top - Decil e, Independent Financial Services Company Increase profitability through ongoing diversification of revenue streams Strengthen penetration in all markets served Expand product service utilization by new and existing customers Deliver g
Slide 26: Added Scope Highlights
SB FINANCIAL GROUP, INC. ADDED SCOPE HIGHLIGHTS 26 • Business Line Leadership • Added more Services and more Households • Defined Communication Channels • Worked Interdependently - Referrals • Client Interaction
Slide 27: Business Line Leadership
SB FINANCIAL GROUP, INC. BUSINESS LINE LEADERSHIP 27 RETAIL BANKING PRIVATE BANKING • Laura Kline – SVP, Client Experience Officer • Nancy Rankin – VP, Head of Retail MORTGAGE BANKING • John Cates – VP, Director of Private Banking • Mickey Cooper – SVP, Toledo • Kyle Frisch – AVP, Lima/Findlay • Sus
Slide 28: Products and Households
EXPAND PRODUCT UTILIZATION BY NEW AND EXISTING CUSTOMERS 28 75,154 76,847 80,513 83,593 87,202 25,381 26,076 27,368 28,590 29,562 '- 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 '- 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 2014 2015 2016 2017 2018 HOUSEHOLDS PRO
Slide 29: Electronic vs In-Office Transactions
EXPAND PRODUCT UTILIZATION BY NEW AND EXISTING CUSTOMERS 29 0 300 600 900 1,200 1,500 0 1,000 2,000 3,000 4,000 5,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 IN - OFFICE TRANSACTIONS PER YEAR (000’S) ELECTRONIC TRANSACTIONS PER YEAR (MIL) ELECTRONIC TRANSACTIONS / IN - OFFICE TRANSACTIONS Elect
Slide 30: Referrals and New Business
EXPAND PRODUCT UTILIZATION BY NEW AND EXISTING CUSTOMERS 30 1,920 2,182 2,416 1,805 1,857 909 1,099 1,140 1,006 1,021 $48.8 $61.9 $103.5 $64.9 $92.8 $0 $20 $40 $60 $80 $100 $120 0 700 1,400 2,100 2,800 2014 2015 2016 2017 2018 NEW BUSINESS (MIL) REFERRALS REFERRALS/NEW BUSINESS Gross Closed New Busi
Slide 31: Expand Product Utilization by New and Existing Customers
EXPAND PRODUCT UTILIZATION BY NEW AND EXISTING CUSTOMERS 31
Slide 32: Key Initiatives
SB FINANCIAL GROUP, INC. KEY INITIATIVES 32 Become a Top - Decil e, Independent Financial Services Company Increase profitability through ongoing diversification of revenue streams Strengthen penetration in all markets served Expand product service utilization by new and existing customers Deliver g
Slide 33: Deliver Gains in Operational Excellence
SB FINANCIAL GROUP, INC. DELIVER GAINS IN OPERATIONAL EXCELLENCE HIGHLIGHTS 33 • New Chief Technology Innovation Officer • Deeper Bench with New Talent • Key on Process Improvement and Resource Optimization • Strengthen “Brand” of each Business line Ecosystem
Slide 34: Mortgage Servicing Portfolio
DELIVER GAINS IN OPERATIONAL EXCELLENCE 34 $665,710 $772,533 $899,710 $994,915 $1,084,678 4,950 5,632 6,414 7,051 7,586 -500 1,200 2,900 4,600 6,300 8,000 $0 $250,000 $500,000 $750,000 $1,000,000 $1,250,000 2014 2015 2016 2017 2018 NUMBER OF LOANS $ OF LOANS ($ 000s) MORTGAGE SERVICING PORTFOLIO Ser
Slide 35: Loan Production and Loan Growth
DELIVER GAINS IN OPERATIONAL EXCELLENCE 35 $325,332 $468,627 $570,631 $509,633 $522,316 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 2014 2015 2016 2017 2018 LOAN GROWTH ($000s) LOAN PRODUCTION BY TYPE ($
Slide 36: Key Initiatives
SB FINANCIAL GROUP, INC. KEY INITIATIVES 36 Become a Top - Decil e, Independent Financial Services Company Increase profitability through ongoing diversification of revenue streams Strengthen penetration in all markets served Expand product service utilization by new and existing customers Deliver g
Slide 37: Asset Quality Highlights
SB FINANCIAL GROUP, INC. ASSET QUALITY HIGHLIGHTS 37 • Robust Loan - Review Process • Dynamic Loan - Approval Process • Portfolio Stress - Testing • Strong AQ Metrics with integration of CECL
Slide 38: Loan Review Process
SUSTAIN ASSET QUALITY 38 $313,786 $301,782 $339,229 $401,706 $415,864 602 682 702 748 841 0 100 200 300 400 500 600 700 800 900 $0 $100,000 $200,000 $300,000 $400,000 $500,000 2014 2015 2016 2017 2018 NUMBER OF LOANS REVIEWED $ LOANS REVIEWED (000s) LOAN REVIEW PROCESS $ Amount Loans Reviewed # of L
Slide 39: Non-Performing Assets to Total Assets
SUSTAIN ASSET QUALITY 39 * Peer group consists of SNL 4 Q 201 8 data for 65 publicly traded bank holding companies in the U.S. on a major exchange with assets between $500 million and $ 1. 315 billion. 0.92 1.15 0.65 0.44 0.40 1.91 1.41 1.26 1.00 0.76 1.26 1.07 0.76 0.68 0.43 0.00 0.70 1.40 2.10 201
Slide 40: Net Charge-Offs to Average Loans
SUSTAIN ASSET QUALITY 40 * Peer group consists of SNL 4 Q 201 8 data for 65 publicly traded bank holding companies in the U.S. on a major exchange with assets between $500 million and $ 1. 315 billion. 0.00% 0.23% 0.45% 2014 2015 2016 2017 2018 NCO’s/AVERAGE LOANS SBFG Peer Median* Top Quartile*
Slide 41: Key Initiatives
SB FINANCIAL GROUP, INC. KEY INITIATIVES 41 Become a Top - Decil e, Independent Financial Services Company Increase profitability through ongoing diversification of revenue streams Strengthen penetration in all markets served Expand product service utilization by new and existing customers Deliver g
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