Sb Financial Group, Inc. · NASDAQ:SBFG
Sb Financial — Shareholder Meeting (April 2016)
36 slides from Sb Financial's shareholder meeting presentation, Apr 20, 2016
Slide 1: 2016 Annual Meeting of Shareholders
— {9|financialaroup 2016 ANNUAL MEETING OF SHAREHOLDERS S April 20, 2016
Slide 2: Business Overview: Taking Charge of Change
Slide 3: Safe Harbor Statement
SB FINANCIAL GROUP. 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
Slide 4: Taking Charge of Change
TAKING CHARGE OF CHANGE + Improved performance to the 88" percentile — 40.2015 performance SBFG 15t in nation + Rank 163 out of 200 Banks according to ABA + Rank 13" in Ohio/Indiana/Michigan in SBA lending + Assets grew to $733 Million * Became 8" largest mortgage producer in the greater Columbus ma
Slide 5: Return on Average Assets (ROAA)
SB FINANCIAL GROUP. RETURN ON AVERAGE ASSETS (ROAA) 1.38 1.10 0.83 0.55 0.28 0.00 2012 2013 2014 2015 mmSBFG -@Peer Group 75th Percentile * Peer group consists of SNL 2015 data for 65 publicly traded bank holding companies in the US. on a major exchange with assets between $500 million and $1.05 bil
Slide 6: Our Vision
OUR VISION Our Vision over the next three years is to become a high-performing (90th percentile) $1 Billion, independent financial services company set apart by our staff and their passion for service, our holistic approach to client care, and our commitment to the communities and investors we serve
Slide 7: Key Initiatives
KEY INITIATIVES Become a Top-Quartile, Independent Financial Services Company GD '2r028¢ profitability through ongoing PALIN) diversification of revenue streams Strengthen penetration in all markets served Expand product service utilization by new and existing customers Deliver gains in operational
Slide 8: Top-Quartile Performance Metrics
TOP-QUARTILE PERFORMANCE METRICS Peer Group Top Peer Group Quartile* Median* sero sarc 2015 2015 2015 2014 Return On Assets Net Interest Margin Noninterest Income/Avg. Assets Noninterest Expense/Avg. Assets. Net NIE/Avg. Assets (Low) Efficiency Ratio (Low) NPAs/Assets Tangible Common Equity * Peer g
Slide 9: Corporate Overview
SB FINANCIAL GROUP CORPORATE OVERVIEW @ FULL SERVICE BANKING OFFICES > LOAN PRODUCTION OFFICES MICHIGAN + NASDAQ: SBFG + Defiance, Ohio - Headquarters Since 1902 + Services * Retail/Private Client Group (PCG) wits © Commercial Lending/SBA FULTON * Mortgage Banking Wealth Management/Brokerage Au eaow
Slide 10: Our Organization & Leadership
OUR ORGANIZATION & LEADERSHIP CORPORATE LEADERSHIP * Mark Klein - Chairman, President and CEO SB FINANCIAL + Tony Cosentino - EVP and CFO GROUP. * Keeta Diller - SVP, Corporate Secretary (Dir. of Operations - State Bank) REGIONAL/COMMERCIAL LEADERSHIP + Jon Gathman, EVP and Senior Lender + David Hom
Slide 11: State Bank Business Line Leaders
SB FINANCIAL GROUP. STATE BANK BUSINESS LINE LEADERS RETAIL BANKING PRIVATE CLIENT GROUP MORTGAGE BANKING + Laura Kline—SVP Client + Crystal Ellerbrock— VP - Dir. + Pam Benedict — SVP RRE Experience Officer PCG-Findlay/Lima Manager — NW Ohio/NE Indiana + Kristen Nusbaum—SVP Chief + Mickey Cooper--VP
Slide 12: Our Organization & Leadership: RDSI/DCM
OUR ORGANIZATION & LEADERSHIP SB FINANCIAL GROUP RDSI/DCM LEADERSHIP * Mark Klein — President and CEO * Gary Saxman, IT Technology Manager + Yvonne Swayze, VP-Operations * Bill Brandt, Sales STATE BANK
Slide 13: Unique Qualities
SB FINANCIAL GROUP. UNIQUE QUALITIES LEVERAGE OUR BUSINESS-LINE EXPERTISE. + Retail/PCG + Commercial/SBA + Mortgage Banking « Wealth Management «Item Processing/Statement Production OPTIMIZE OUR DELIVERY CHANNELS + Regional Leadership SCALE OUR BRAND * Holistic Client Care BALANCE OUR NET INCOME + H
Slide 14: Key Initiatives
KEY INITIATIVES 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 15: Increase Profitability Through Diversification of Revenue Streams
INCREASE PROFITABILITY THROUGH DIVERSIFICATION OF REVENUE STREAMS Non-Interest Income to Total Revenue at 40% (95% Percentile) - Peer Median 19% - Top Quartile 26% 2015 NON-INTEREST INCOME $15.7 MILLION ™ Mortgage Banking mService Fees = Wealth Management Item Processing =SBA m Other
Slide 16: Increase Profitability: Revenue/Net Income
INCREASE PROFITABILITY THROUGH DIVERSIFICATION OF REVENUE STREAMS. REVENUE/NET INCOME $50 8 caw $45 67 ; $40 081 6 $35 = a 5 Savorgace = $30 i 3 925 45 scree Zz oma = ig $20 3 $15 ge eget $10 1 titi $5 Margin $0 0 mmeiet income 2011 2012 2013 2014 2015
Slide 17: Increase Profitability: SBA Gain on Sale
INCREASE PROFITABILITY THROUGH DIVERSIFICATION OF REVENUE STREAMS. GAIN ON SALE (MIL) $1.0 $0.8 s & a ed = $0.2 $0.0 SBA GAIN ON SALE 2011 2012 2013 2014 2015, 1SBA Gains s#eLoan Volume SOLD VOLUME (MIL)
Slide 18: Key Initiatives
KEY INITIATIVES Become a Top-Quartile, Independent Financial Services Company WA increase profitability through ongoing RAI diversification of revenue streams Strengthen penetration in all markets served Expand product service utilization by new and existing customers Deliver gains in operational ex
Slide 19: Strengthen Market Penetration in All Markets Served
STRENGTHEN MARKET PENETRATION IN ALL MARKETS SERVED. MICHIGAN seme Toledo 16% eee FULTON ences ae a saveca seats havcoae Ft. Wayne 23% | INDIANA Columbus 22%
Slide 20: Strengthen Market Penetration: Mortgage Gain on Sale
STRENGTHEN MARKET PENETRATION IN ALL MARKETS SERVED MORTGAGE GAIN ON SALE (MIL) we & ee a MORTGAGE GAIN ON SALE/VOLUME, 1$3331 e 2011 2012 2013 2014 2015 $350 $300 $250 $200 $150 $100 $50 - $0 EINW Ohio mmColumbus uFindlay <**Total $ Originations MORTGAGE VOLUME (MIL) 29
Slide 21: Balance Sheet Strength & Diversity
STRENGTHEN MARKET PENETRATION BALANCE SHEET STRENGTH & DIVERSITY LOAN PORTFOLIO = $558 MILLION TOTAL ASSETS = $773 MILLION Comsumer & Cash & Other Due 9% tl Securitie 3% Commercial s RE 13% 43% Agriculture, 1-4 Family. 23% Loan to Deposit December 2015 ~ 95% Top Quartile Performance
Slide 22: Deposit Mix: Strong Local Presence
STRENGTHEN MARKET PENETRATION DEPOSIT MIX: STRONG LOCAL PRESENCE Capital Other 1% 1% Borrowings I 8% DEPOSIT PORTFOLIO = $586 MILLION Non- Interest, 19% Deposits Savings Transactional deposits = 73% of total deposits 14% Weighted average cost of dep 4 bps Daeteeor 2/015
Slide 23: Key Initiatives
KEY INITIATIVES Become a Top-Quartile, Independent Financial Services Company Increase profitability through ongoing diversification of revenue streams IGPMID Strengthen penetration in all markets served Expand product service utilization by new and existing customers Deliver gains in operational ex
Slide 24: Expand Product Utilization: Products and Households
EXPAND PRODUCT UTILIZATION BY NEW AND EXISTING CUSTOMERS, PRODUCTS & SERVICES PRODUCTS AND HOUSEHOLDS 73,665 75,756 25,490 75,154 76,847 40,000 26,076 2011 2012 2013 mmProducts & Services e in total number of products of households fr 14 2014 Households 2015 HOUSEHOLDS,
Slide 25: Expand Product Utilization: Referrals/New Business
EXPAND PRODUCT UTILIZATION BY NEW AND EXISTING CUSTOMERS, REFERRALS/NEW BUSINESS REFERRALS, 909 2011 2012 2013 2014 maGross mmiClosed -New Business 1,099 2015
Slide 26: Key Initiatives
KEY INITIATIVES Become a Top-Quartile, Independent Financial Services Company YM increase profitability through ongoing LJ diversification of revenue streams Strengthen penetration in all markets served Expand product service utilization by new and existing customers Deliver gains in operational exc
Slide 27: Deliver Gains in Operational Excellence
DELIVER GAINS IN OPERATIONAL EXCELLENCE 4.7% NONINTEREST EXPENSE 4.3% 37% 2011 2012 2013 2014 mmNoninterest Expense “NIE/Avg. Assets 2015, NIE/AVG. ASSETS
Slide 28: Electronic vs In-Store Transactions
DELIVER GAINS IN OPERATIONAL EXCELLENCE ELECTRONIC TRANSACTION /IN-STORE TRANSACTIONS 4,750 3,800 @2,850 (000'S: fy 1.900 YEAR ELECTRONIC TRANSACTIONS PER 2 8 SE 2009 2009 2010 2011 -# Electronic Transactions 2012 2013 2014 2015, -@ In-Store Transactions IN-STORE TRANSACTIONS PER YEAR (000'S)
Slide 29: Mortgage Servicing Portfolio
DELIVER GAINS IN OPERAT $1,000,000 ONAL EXCELLENCE MORTGAGE SERVICING PORTFOLIO. 4,950 = $800,000 ($000s) & $600,000 + $400,000 $ OF LOANS $200,000 $0 2011 2012 2013 2014 mEEServicing Portioio Number of Loans Serviced 2015 JUMBER OF LOANS.
Slide 30: Key Initiatives
KEY INITIATIVES Become a Top-Quartile, Independent Financial Services Company Increase profitability through ongoing “itl diversification of revenue streams } Strengthen penetration in all markets served Expand product service utilization by new and existing customers {I Deliver gains in operational
Slide 31: Sustain Asset Quality: Non-Performing Assets / Total Assets
SUSTAIN ASSET QUALITY NON-PERFORMING ASSETS / TOTALASSETS. 3.50 280 2.66 on co < 2.10 rs a id 1.40 iT a 0.70 o00 | 1.60 140 114 2011 2012 2013 2014 2015 mm SBFG “Peer Group Median* Top Quartile* * Pear group consists of SNL 2015 data for 65 publicly traded bank holding companies in the U.S. on a maj
Slide 32: Sustain Asset Quality: NCOs/Avg. Loans
SUSTAIN ASSET QUALITY NCOs/AVG. LOANS 0.90% 0.68% 0.45% 0.23% 0.00% 2011201220138. 2014S 2018 -SBFG Peer Median Top Quartile* * Peer group consists of SNL 2015 data for 65 publicly tracled bank holding companies in the U.S, on a major exchange with assets between $500 milion and $1.05 billion,
Slide 33: Key Initiatives
KEY INITIATIVES 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 excelle
Slide 34: SBFG Stock History
SB FINANCIAL GROUP SBFG STOCK HISTORY TABLE 1.2 ‘SB FINANCIAL GROUP, INC. Daly Stock Price and Volume Graph rom 123172011 to 0182018 ¢ fi Eno] [meg um 2 (eon : i i aa sno — Closing Picea ofoarens: 1055 teeter me Savcek igh radngPree, Sth? esta eat Sprite S2Week Low Trading Price: S031 tesa Sa =e t.r
Slide 35: Large Banks Trade at (Significant) Premiums to Smaller Banks
LARGE BANKS TRADE AT (SIGNIFICANT) PREMIUMS TO SMALLER BANKS —SNL US. Bank $250M-$500M —SNLU.S. Bank $500M-$18 —SNLUS. Bank $18-$5B —SNL U.S. Bank $58-$10B
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