Sb Financial Group, Inc. · NASDAQ:SBFG
Sb Financial — Shareholder Meeting (April 2015)
35 slides from Sb Financial's shareholder meeting presentation, Apr 29, 2015
Slide 1: 2015 Annual Meeting of Shareholders
2015 Annual Meeting of Shareholders “Building a High-Performance Company” April 29, 2015
Slide 2: Safe Harbor Statement
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 uncertainties and actual results
Slide 3: Our Vision
Our Vision • Our Vision over the next three years is to become a high- performing (75th percentile) independent financial services company set apart by our passion for service, our holistic approach to client care, and our commitment to the communities and investors we serve. * Peer group consists o
Slide 4: Vision: Become a Top-Quartile, Independent Financial Services Company
Vision: Become a Top-Quartile, 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 gains in operational excellenc
Slide 5: SBFG Peer Group Comparison
Peer Group Peer Top Group SBFG Quartile* Median* SBFG SBFG 2014 2014 2014 2013 2012 Return On Assets 0.78% 0.97% 0.74% 0.81% 0.75% Net Interest Margin 3.73 3.96 3.68 3.57 3.72 Noninterest Income/Avg. Assets 1.78 0.95 0.61 2.19 2.33 Efficiency Ratio 73.50 64.27 70.38 74.43 75.48 Noninterest Expense/A
Slide 6: Company overview: Defiance, Ohio headquarters
NASDAQ: SBFG Headquartered in Defiance, Ohio 200 Staff Members Operations: ◦ 17 Full-Service Banking Offices ◦ Three Loan Production Offices ◦ IP (Lansing, Michigan) Full Range of Financial Services: ◦ Retail and Commercial Banking ◦ Mortgage Banking ◦ Wealth Management/Brokerage ◦ Item Pr
Slide 7: Corporate Leadership
Corporate Leadership Mark Klein – President and CEO SB Financial Group Tony Cosentino – EVP and CFO Jon Gathman, EVP and Senior Lender Keeta Diller – SVP, Corporate Secretary (Director of Operations – State Bank) Regional Leadership State Bank RDSI/DCM David Homoelle – Regional President,
Slide 8: Expansions
Lima – Fort Wayne, IN Findlay, OH – Purchased Two - LPO to Full De Novo offices-Liberty Service Angola, IN - Toledo- Dublin - LPO LPO Exchange Bank Expansions 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Lansing, MI – Williams County New Albany - DCM – Purchased LPO National Bank of Montpelier
Slide 9: Office Closures
Holland office - Montpelier office Chief In-Store Exchange Bank Ney office Office Closures 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Eastside Elida Road West Unity Defiance Lima Office • Annual savings: $1 Million • Average Deposits/Office: $33 Million
Slide 10: Leveraging our Business-Line Expertise
Leveraging our Business-Line 2014 Assets under Our Expertise Management ◦ Commercial Banking $1.7 Billion ◦ Residential Lending Comprised of: ◦ Wealth Management • $684 MM Commercial Bank • $666 MM Residential Sold Portfolio • $331 MM Wealth Management Optimizing our Delivery Channels Net Income
Slide 11: Our Performance-Strategic Initiatives
Our Performance-Strategic Initiatives • Increase profitability through ongoing diversification of revenue streams • Strengthen penetration in all markets served • Expand product service utilization by new and existing customers • Deliver gains in operational excellence • Sustain asset quality 11
Slide 12: Non-Interest Income to Total Revenue at 38% (95th Percentile)
2014 Non-Interest Income Non-Interest Income to Total $12.8 million Revenue at 38% (95th Percentile) Service Fees 21.0% / $2.7 MM Peer Median 20%, Top Quartile 26% Mortgage Wealth Banking Management 38.7% / 20.5% / Earnings Momentum with $4.9MM $2.6 MM Greater Scale Item Processing 10.0% / Oth
Slide 13: Total Revenue and Net Income
Total Revenue RDSI Dollars of Net Income (Millions) $60 $6 $50.30 Other $50 $5 $40.78 Mortgage $40 $35.58 $34.86 $4 $34.57 Millions $33.76 Service Charges $30 $3 Wealth $20 $2 Management Net Interest $10 $1 Margin Net Income $0 $- 2009 2010 2011 2012 2013 2014
Slide 14: Our Performance-Strategic Initiatives
Our Performance-Strategic Initiatives • Increase profitability through ongoing diversification of revenue streams • Strengthen penetration in all markets served • Expand product service utilization by new and existing customers • Deliver gains in operational excellence • Sustain asset quality 14
Slide 15: Growth Markets
Growth Markets Defiance 180,000 170,059 35.4% 40.0% ◦ Enhance and maintain our high deposit and commercial lending 35.0% Total Loans – Dollars ($000s) 150,000 market share 30.0% Growth Percentage 120,000 Columbus 103,392 25.0% ◦ Retail expansion progressing 87,436 90,000 20.0% New banking cent
Slide 16: Organic Loan Growth-All Markets
Organic Loan Growth-All Markets $70,000 $60,000 Dollars in Millions $50,000 $40,000 $30,000 $20,000 $10,000 $0 2009 2010 2011 2012 2013 2014 Ann. Defiance/Paulding Lima Toledo Columbus Ft. Wayne Fulton/Williams
Slide 17: Mortgage Banking
Mortgage Banking $5,000 350,000 $4,500 Total $ Originations ($000s) 300,000 $4,000 Gain on Sale ($000s) $3,500 250,000 $3,000 200,000 $2,500 150,000 $2,000 $1,500 100,000 $1,000 50,000 $500 $0 0 Gain on Sale-NW Ohio Gain on Sale-Columbus Total $ Originations
Slide 18: Total Assets and Loan Portfolio
Total Assets = $684 Million Cash & Due, 4% Securities, 13% Other, 6% Intangibles, 2% Loan Portfolio = $516 Million HELOC, 8% 1-4 Family RE, 22% C&D, 3% Loans (Net), 75% Consumer & Other, 2% Multi-Family RE, 11% C&I, 18% Agriculture, 9% CRE – Owner Data as of Occupied, 13% CRE – Investor 12/31/2014 O
Slide 19: Deposit Mix: Strong Local Presence
Deposit Mix: Strong Local Presence Borrowings, 7% Other, 1% Deposit Portfolio = Capital, 11% $551 million Deposits, 81% Non-Interest DDA, 18% NOW, 22% Non-maturity deposits = 71% of total deposits Savings, 12% Weighted average cost of deposits = 37 bps Time, 29% MMDA, 19% Data as of 12/31/2014
Slide 20: Our Performance-Strategic Initiatives
Our Performance-Strategic Initiatives • Increase profitability through ongoing diversification of revenue streams • Strengthen penetration in all markets served • Expand product service utilization by new and existing customers • Deliver gains in operational excellence • Sustain asset quality 20
Slide 21: Services and Households
Services and Households 80,000 40,000 23,730 24,067 26,015 26,716 27,196 27,821 70,000 35,000 Total Households 60,000 30,000 Total Services 50,000 25,000 40,000 20,000 30,000 15,000 20,000 10,000 10,000 5,000 57,328 58,548 61,982 64,093 68,127 69,647 - - 2009 2010 2011 2012 2013 2014 Total Services
Slide 22: Household Mix
Household Mix 100.00% 30,000 88.45% 87.21% 90.00% 80.68% 78.56% 77.25% 25,000 Percentage of Households 80.00% Total Households 70.12% 70.00% 20,000 60.00% 50.00% 15,000 40.00% 29.88% 10,000 30.00% 21.44% 22.75% 19.32% 20.00% 11.55% 12.79% 5,000 10.00% 0.00% - 2009 2010 2011 2012 2013 2014 3 Services
Slide 23: Referrals
Referrals 3000 2,683 2,328 2500 2,242 2,158 1,941 1,920 2000 1500 Gross 1,050 1,100 Closed 872 839 954 909 1000 500 0 2009 2010 2011 2012 2013 2014 $86.9MM $60.4MM $64.8MM $78.3MM $59.9MM $48 MM
Slide 24: Our Performance-Strategic Initiatives
Our Performance-Strategic Initiatives • Increase profitability through ongoing diversification of revenue streams • Strengthen penetration in all markets served • Expand product service utilization by new and existing customers • Deliver gains in operational excellence • Sustain asset quality 24
Slide 25: Total Noninterest Expense
Closed 7 offices in 10 years Noninterest Expense down 14% from 2011 SB Financial Total Noninterest Expense – 5 YR 55,000 19 18 18 18 20 Total Noninterest Expense ($000s) 50,000 17 18 16 45,000 16 Total Number of Offices 40,000 14 35,000 12 30,000 10 25,000 8 20,000 15,000 6 10,000 4 5,000 2 44,8
Slide 26: Electronic Transaction vs In-Store Transactions
Acceleration of electronic transactions versus in-store transactions Electronic Transaction vs In-Store Transactions 4,000,000 1,400,000 Electronic Transactions per Year In-Store Transactions per Year 3,500,000 1,200,000 3,000,000 1,000,000 2,500,000 800,000 2,000,000 50.9% 600,000 1,500,000 incre
Slide 27: Mortgage Servicing Portfolio
Mortgage Servicing Portfolio $700,000 6,000 $ of Loans Serviced ($000s) 4,950 Number of Loans Serviced $600,000 5,000 4,549 $500,000 3,988 $665,710 4,000 $400,000 3,161 2,606 $605,993 3,000 $300,000 $528,086 1,753 2,000 $402,062 $200,000 $328,435 $100,000 $204,810 1,000 $0 0 2009 2010 2011 2012 2013
Slide 28: Our Performance-Strategic Initiatives
Our Performance-Strategic Initiatives • Increase profitability through ongoing diversification of revenue streams • Strengthen penetration in all markets served • Expand product service utilization by new and existing customers • Deliver gains in operational excellence • Sustain asset quality 28
Slide 29: Non-Performing Assets/Total Assets
Non-Performing Assets/Total Assets 3.50 3.03 3.00 2.67 2.66 2.77 2.50 2.26 Percentage 1.95 1.88 1.91 2.00 1.72 1.69 1.40 1.26 1.50 1.00 0.50 3.27 2.26 1.60 1.40 1.14 0.92 0.00 2009 2010 2011 2012 2013 2014 SBFG Peer Group Median* Top Quartile* * Peer group consists of SNL 2014 data for 64 publicly t
Slide 30: Net Charge-Offs better than Peer Median
Since 2011, Net NCOs/Avg. Loans Charge-Offs better 3.00% than Peer Median 2.50% 2.00% Nearing Top-Quartile 1.50% Performance 1.00% 0.50% Proactive Portfolio Management 0.00% 2009 2010 2011 2012 2013 2014 SBFG Peer Median* Top Quartile* * Peer group consists of SNL 2014 data for 64 publicly tra
Slide 31: Reserves/NPAs
Reserves/NPAs (%) Reserve $6.8MM 120.00% 107.85% 100.00% 96.27% NPAs $6.3MM 80.00% 76.27% 64.87% Three relationships 60.00% comprise 47% ($3.0MM) of 44.98% Total Non-Performing 40.00% 31.94% Assets 20.00% Peer Median 49.46%, 0.00% Top Quartile 69.25% 2009 2010 2011 2012 2013 2014 Reserves/NP
Slide 32: Vision: Become a Top-Quartile, Independent Financial Services Company
Vision: Become a Top-Quartile, 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 gains in operational excellenc
Slide 33: SBFG Stock History
SBFG Stock History 2eittntcut orour, me Daily Stock Price and Volume Graph from 12/34/2010 to 03/30/2015 $12.00 120,000 "SEFG High Closing Prise = $11.00 +, (0324/2015) wf $9.00 a 90,000 | eel z PN pyran Wo : < = hI L 5 S00 Leyte Nh or & pra , Lam [ hem) oo) $3.00 hr 30,000 \ SBFS Low Giang Pics = (
Slide 34: P/TBV (%)
250 225 215.1 200 P/TBV (%) 175 167.3 Larger than 150 $1B 125 Smaller than 119.9 $1B 117.5 100 75 Banks $250M-$500M Banks $500M-$1B Banks $1B-$5B Banks $5B-$10B Source: SNL Financial; Data through 4/10/2015
Slide 35: Mark Klein — President and CEO
Mark Klein — President and CEO Mark.Klein@YourStateBank.com Anthony Cosentino — EVP and CFO Tony.Cosentino@YourStateBank.com
SB Financial Group — Shareholder Meeting (April 2015) on 6ix