Sb Financial Group, Inc. · NASDAQ:SBFG
Sb Financial — Shareholder Meeting (April 2018)
31 slides from Sb Financial's shareholder meeting presentation, Apr 18, 2018
Slide 1: Business Overview: Building a high-performance company
• Now, I would like to give you a brief overview of SB Financial Group and our operating results for this past year. • I am very pleased to report we achieved a 1.29% return on average assets, or a 1.1% return, before a one-time “deferred tax liability” adjustment of $1.7 million, as a result of the
Slide 2: Safe Harbor Statement
• But first, our safe harbor statement that requires all potential investors in SB Financial to perform appropriate due diligence. SAFE HARBOR STATEMENT Certain statements within this document, which are not statements of historical fact, constitute forward - looking statements within the meaning of
Slide 3: Our Vision
• Our Vision continues toward a goal of “high-Performance” at a rank of something greater than the 90th percentile in our peer group. • Now that we have delivered this key “performance metric” at the 94th percentile, we continue our journey toward the goal to achieve $1 Billion in total assets and b
Slide 4: Footprint and market capitalization
• Our footprint continues to expand, now with 20 full-service offices, 24 ATMs, and six Loan Production Offices across Ohio, Indiana and Michigan. • As of year end, our market capitalization, including our preferred stock, stood at $115 Million. When you include our recent $30 million, 1.7 million c
Slide 5: Our Organization & Leadership
• Aspiring, high-performing financial institutions like SB Financial require a flatter, more effective managerial structure to deliver operational efficiency. • (---)With the recent divestiture of DCM I just mentioned, our organization continues to include a small staff at the holding company level
Slide 6: State Bank Business Line Leaders
• Supporting our market executives’ presence this past year continued to be our six, key business line leaders; that included… • Retail-by Laura Kline • Private Client Group-John Cates, • Mortgage Banking-Pam Benedict, Steve Watson, and Tony Konecny, • Wealth Management-Chris Jakyma, • Commercial Le
Slide 7: Unique Qualities: 2017 Assets Under Management
• The diverse slate of assets under our care continues to make SB Financial unique. • In addition to our $877 million balance sheet, we have built a mortgage servicing portfolio of nearly $1 Billion representing over 7,000 households while caring for another $437 million in wealth assets for our cli
Slide 8: Key Initiatives
• These five key initiatives have enabled us to move our performance from the 20th percentile in 2011, to the 94th percentile; • They are: • Growing and diversifying our revenue streams; • Adding scale to the organization; (Broader Market base) • Driving greater Scope; (Broader product set in each h
Slide 9: Return on Average Assets (ROAA)
• With the relentless pursuit of our key initiatives and Vision of high-performance, have come marked improvement in our profitability; • From 81 basis points in 2013, representing net income of $5.2 million, to 1.29% representing net income of $11.1 million. • The momentum revealed here has come fr
Slide 10: Market Capitalization
• Our Management and Board all agree that execution beats strategy everyday; • The execution of our key initiatives has delivered over $77 million in additional market cap from 2013, or a 200% improvement, to $115 million when you include our Preferred stock. • As I mentioned earlier(---), when you
Slide 11: High Performance: peer group percentile
• So, what does the 94th percentile look like among our peer group? • (---)Start with 65-publically-traded banks in the U.S. between $500 million and $1.3 Billion that includes SB Financial; • (---)Take the top half (33 banks) performing at peer Median or better; • (---)Then, take a third of those t
Slide 12: High-Level Performance Drivers
• Some of our key performance metrics this past year include: • (---)Net Income growth to $11.1 million for a 26% improvement over 2016; • (---)Loan growth of $52 Million or 8%; • (---)Deposit Growth of $57 Million or 8%; • (---)SBA Volume of $16 Million; • (---)And, Residential Real Estate producti
Slide 13: Key Initiatives: revenue diversity
• The first initiative I’d like to touch on is revenue diversity. Become a Top - Dec ile, Independent Financial Services Company KEY INITIATIVES 23 Sustain asset quality Expand product service utilization by new and existing customers Strengthen penetration in all markets served Deliver gains in ope
Slide 14: Revenue growth and diversity
• This graph represents the growth and diversity of our revenue over the last five years. • Last year, we grew our total revenue to over $45 Million from organic balance sheet growth and margin expansion. • On the left is total revenue represented by the bar-graph; • Here, NET-Interest Margin is on
Slide 15: Mortgage banking
• Mortgage banking continues to be a key gateway to the household for our company. • This past year, our 20 mortgage lending professionals delivered $316 million in loan volume and over $7 million in loan sale gains. • For 2017, our Northwest Ohio market delivered approximately 25% of the volume, th
Slide 16: SBA lending
• In an effort to drive net income to a higher level while achieving greater diversity in our revenue stream, we developed a more in-depth SBA lending strategy in 2014; we are pleased with our progress. • This past year, we generated nearly $16 million in loan volume, sold $11.6 million, and generat
Slide 17: Wealth Management
• Another source of non-interest income comes from managing wealth assets. • In 2017, we improved the level of total assets under our care to a new all-time high of $437 million. • With over 10,000 individuals turning 65 every day over the next 20 years, we intend to capitalize on our knowledge-base
Slide 18: Key Initiatives: Scale
• Our second key initiative was to add Scale to our operation with organic growth. Strengthen penetration in all markets served Increase profitability through ongoing diversification of revenue streams Sustain asset quality Deliver gains in operational excellence Expand product service utilization b
Slide 19: Strengthen market penetration in all markets served
• We delivered greater scale by expanding our presence in our lower-share, higher-growth markets • (---)Our Columbus region grew to $173 Million in loans reflecting a 10% expansion; • (---)Our three-year-old Findlay market expanded to over $48 million, or 70% growth; • (---)The Toledo region increas
Slide 20: Key Initiatives: Scope
• Our Third Initiative was to: • Add more Scope to our operation with a broader product set in each household. Expand product service utilization by new and existing customers Increase profitability through ongoing diversification of revenue streams Sustain asset quality Deliver gains in operational
Slide 21: Products and Households
• Our efforts to cross-sell and onboard our clients have worked. • This slide reflects the expansion in products and services to over 83,500 or 10% from 2013; • And, our number of households have also increased to over 28,500 or 12% from the same period. • Our goal continues to be providing 100% of
Slide 22: Referrals and New Business
• Cross-selling and onboarding reveal opportunities to assist our clients and enable our staff to work interdependently. • This slide reflects the number of referrals in light blue; the number of closed transactions in dark blue. • The yellow line reveals the incremental dollars of improvement in ou
Slide 23: Key Initiatives: customized service levels
• Our Fourth Initiative was to: • Drive brand loyalty with customized service levels. Become a Top - Dec ile, Independent Financial Services Company KEY INITIATIVES 33 Deliver gains in operational excellence Increase profitability through ongoing diversification of revenue streams Sustain asset qual
Slide 24: Residential mortgages serviced
• Our individualized service levels resonated with our clients. • This slide, representing our residential real estate portfolio, reflects those service levels which have enabled us to grow this past year by another $100 million. • In fact, our balances of $995 million were just shy of our $1 Billio
Slide 25: Electronic versus in-store transactions
• As client preferences and demographics evolve, face-to-face interactions with our clients have become more scarce as electronic transactions continue to become more prevalent. • “Electronic” transactions per year are represented by the gray line, that have increased 72% since 2009, and “In-Store”
Slide 26: Key Initiatives: loan portfolio quality
• And finally, a well-managed loan portfolio. Increase profitability through ongoing diversification of revenue streams Deliver gains in operational excellence Expand product service utilization by new and existing customers Strengthen penetration in all markets served Sustain asset quality Become a
Slide 27: Sustain Asset Quality: Non-performing assets
• Even as we have grown our loan portfolio by over $219 million the last five years, our asset quality continues to improve. • Here, Non-Performing Assets to total assets have declined to just 44 basis points, which represents achievement at the 88th percentile of our peer group; • And, right in lin
Slide 28: Sustain Asset Quality: Net charge-offs
• This slide represents net charge-offs. • This past year, we realized charge-offs of $196,000 or just 3 basis points. • To ensure this trend continues, we remain committed to a well-defined, portfolio review process meant to keep our eye on the horizon for the arrival of the next credit cycle. SUST
Slide 29: Key Initiatives summary
So, in summary: • We’ve built our performance around these five key initiatives. • Emphasis on revenue growth and diversity; • Commitment of resources to growth markets; • Development of initiatives to broaden the product set in each household; • Structural changes to heighten operational excellence
Slide 30: Stock Performance
• The market has recognized our performance and has rewarded all of us with strong demand for our shares; • The result was a Total Shareholder Return of 311%, or a 51% compound annual growth rate, since 2012. • We are proud of our past performance and we have positioned our company quite well to con
Slide 31: Closing remarks and adjournment
• We are pleased that you could join us today for our annual meeting including an update on our progress toward our Vision of growth and high-performance. • At this time, with no other business to be conducted, I declare the 2018 Annual Meeting of SB Financial adjourned. • Thank you, and Good-bye. M
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