Sb Financial Group, Inc. · NASDAQ:SBFG
Sb Financial — CFA Society of Cleveland's Midwest Investment Conference (November 2014)
37 slides from Sb Financial's conference presentation, Nov 18, 2014
Slide 1: SB Financial Group, Inc.
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Slide 2: Today's Objective
Today’s Objective » Performance of SB Financial Group, Inc. ° Trends-Key Performance Metrics e Median and Top-Quartile Peer Group —_—
Slide 3: 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 4: 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. —_—
Slide 5: Corporate Overview
Corporate Overview » NASDAQ: SBFG ese eaae Ofncee i _ | © Loan Production offices » Headquartered in Defiance, Ohio mince Detroit » 200 Staff Members » Operations: 16 Full-Service Banking Offices ° Three Loan Production Offices © IP (Lansing, Michigan) » Full Range of Financial Services: Tea ° Retai
Slide 6: Our Organization & Leadership
Our Organization & Leadership SB Financial Group State Bank RDSI/DCM Banking » Laura Kline—SVP Client Experience Officer » Kristen Nusbaum—SVP Chief Deposit Officer RDSIDCM » Yvonne Swayze-VP Operations » Bill Brandt-Outside Sales Corporate Leadership » Mark Klein — President and CEO » Tony Cosentin
Slide 7: Top-Quartile Performance Metrics
Top-Quartile Performance Metrics Peer Group Peer Top Group SBFG Quartile* Median* SBFG 2013 2013 2013 2012 Return On Assets Net Interest Margin Non-interest Income/Avg. Assets Efficiency Ratio Non-Interest Expense/Avg. Assets NPAs/Assets. Tangible Common Equity Risk-Based Capital Ratio * Peer group
Slide 8: Corporate Activity
Corporate Activity tna Fort Wayne, IN Purchased Two LPO to Full offices-Liberty Service I Toledo — Dublin - LPO LPO Purchased Exchange Bank 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Williams County — Purchased National Bank of Montpelier
Slide 9: Corporate Activity
Corporate Activity Montpelier | Holland office - Mont Chief In-Store Exchange Bank 2006 2007 2008 2009 2010 2011 2012 2013 2014 Eastside | Elida Road West Unity Defiance Lima Office * Annual savings $1 Million + Average Office Closures Deposits / Office $33 Million
Slide 10: SBFG — Unique Qualities
SBFG — Unique Qualities » Leveraging our Business-Line 2013 Assets under Our Expertise Management © Commercial Banking $1.6 Billion Residential Lending Wealth Management » Optimizing our Delivery Channels Net Income ° Regional Leadership Contributions » Scale our Brand Holistic Client Care » Balance
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 —_—
Slide 12: 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 —_—
Slide 13: Increase Profitability Through Ongoing Diversification of Revenue Streams
Increase Profitability Through Ongoing Diversification of Revenue Streams 2013 Non-Iint th » Non-Interest Income to Total $14.0 mnillion Revenue at 40% (95' Percentile) » Peer Median 20%, Top Quartile 26% Wealth Mortgage Manage! Banking 44.9%] » Earnings Momentum with $6.3MM Greater Scale B
Slide 14: Increase Profitability Through Ongoing Diversification of Revenue Streams
Increase Profitability Through Ongoing Diversification of Revenue Streams Millions $60 $50 $40 $30 $20 $10 $0 2009 2010 2011 Total Revenue 2012 2013 2Q2014 (Annualized) Dollars of Net Income (Millions) m=RDSI =aOther = Mortgage mm Service Charges m=aWealth Management ==Net Interest Margin -®Net Inco
Slide 15: 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 —_—
Slide 16: Strengthen Presence in All Markets Served
Strengthen Presence in All Markets Served Growth Markets » Defiance > Enhance and maintain our high deposit and commercial lending market share » Columbus © Retail expansion progressing New banking center in Dublin, OH © Significant number of mortgage households with limited relationships » Toledo ©
Slide 17: Strengthen Presence in All Markets Served
Strengthen Presence in All Markets Served Organic Loan Growth-All Markets neucell 2009 2010 2011 2012 2013 2Q2014 Ann. Dollars in Millions @Defiance/Paulding Lima “Toledo mColumbus mFt.Wayne sFulton/Williams —_—
Slide 18: Strengthen Presence in All Markets Served
Strengthen Presence in All Markets Served Mortgage Banking $6,000 350,000 $4,500 300,000 qe 94,000 3 3,500 - 250,000 B 7 $3,000 200,000 ®& $2,500 5 $2,000 150,000 5 1,500 100,000 $1,000 i 50,000 $0 0 2? ore oo’ rr rr a en 0? j=aGain on Sale-NW Ohio maiGain on Sale-Columbus -®-Total $ Originations To
Slide 19: Balance Sheet: Strength & Diversity
Balance Sheet: Strength & Diversity Total Assets = $632 Million Cash & Due, 2% Securities, 15% ther, 6% Intangibles, 3% Loan Portfolio = $477 Million HELOC, 8% 4.4 Family RE, 21% C&D, 3%, Loans (Net Consumer & Other, 2% and HFS, 74% Multi-Family RE, 119 Cl, 18% “7 . Agriculture, 8% CRE - Owner Data
Slide 20: Balance Sheet: Strength & Diversity
Balance Sheet: Strength & Diversity Deposit Mix: Strong Local Presence Borrowings, 9% Other, 1%, Deposit Portfolio = $518 million Capital, 8% Deposits, 82% Non-Interest DDA, 16% NOW, 23% Savings, 12% Time, 34% MMDA, 15% Data as of 12/31/2013 20
Slide 21: 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 —_—
Slide 22: Expand Product Utilization by New and Existing Customers
Expand Product Utilization by New and Existing Customers Total Services 23,730 Services and Households 24,067 26,015 26,716 27,196 27,910 2009 2010 2011 2012 2013 2Q2014 =Total Services ~® Total Households Increase in total number of services from 2009 to 2014--20% Increase of households from 2009 t
Slide 23: Expand Product Utilization by New and Existing Customers
Expand Product Utilization by New and Existing Customers Households 100.00% 30,000 0.0% 88.45% 87.21% = 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 78.56% 77.95% 77.52% 25,000 20,000 15,000 10,000 19.32% fMN21.44% Ee? 75% 22.45% 2.79% | 5,000 2009 2010 2011 2012 2013 2Q2014 mma3 Services
Slide 24: Expand Product Utilization by New and Existing Customers
Expand Product Utilization by New and Existing Customers Referrals 2,683 Gross Closed 2009 2010 2011 2012 2013 2Q2014 $86.9MM $60.4MM $64.8MM $78.3MM $59.9MM $35.6MM Annualized
Slide 25: 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 —_—
Slide 26: Deliver Gains in Operational Excellence
Deliver Gains in Operational Excellence » Closed 7 offices in 9 years » Noninterest Expense down 16% from 2011 SB Financial Total Noninterest Expense - 5 YR _ 85,000 19 18 48 48 20 2 50,000 18 B 45,000 168 z 40,000 146 S 35,000 2 i 30,000 108 % 25,000 2 # 20,000 85 © 15,000 & 3 = 10,000 4e $ 5,000 2
Slide 27: Deliver Gains in Operational Excellence
Deliver Gains in Operational Excellence » Acceleration of electronic transactions versus in-store transactions 5 2 : 5 Qa Q iJ g 6 8 5 £ 2 & £ 3 8 Ww Electronic Transactions vs In-Store Transactions 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 4,000,000 500,000 45.3% increase 2009 201
Slide 28: Deliver Gains in Operational Excellence
Deliver Gains in Operational Excellence Mortgage Servicing Portfolio $700,000 4,549 4,710 5,000 > 4,500 5 g $600,000 400 2 $ $500,000 3,600 § = $400,000 Bee) 3,000 2 é 2,500 § g $200,000 2,000 % § $200,000 1,500 $ 6 1,000 § ® $100,000 500 2 30 | 0 2009 2010 2011 2012 2013 = 2Q2014 tiServicing Portfo
Slide 29: 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 —_—
Slide 30: Sustain Asset Quality
Sustain Asset Quality Non-Performing Assets/Total Assets 3:60 3.03 3.00 - 2.50 Bo 00 1.91 8 1.50 2 1.26 ia 1.00 - 0.50 0.00 2009 2010 2011 2012 2013 je 2014 s=aSBFG —™ Peer Group Median* Top Quartile* * Peer group consists of SNL June 2014 data for 62 publicly traded bank holding companies in the U.
Slide 31: Sustain Asset Quality
Sustain Asset Quality » Since 2011, Net NCOs/Avg. Loans Charge-Offs better 3.00% than Peer Median 2.50% 2.00% » Nearing Top-Quartile 150% Performance 1.00% 0.50% » Proactive Portfolio 9-90 M SH gh gh gh ge gh janagement ere PD Ss ->SBFG -# Peer Median* --Top Quartile* * Peer group consists of SNL Ju
Slide 32: Sustain Asset Quality
Sustain Asset Quality Reserves/NPAs (%) » Reserve $6.6MM 120.00% 106.16% 100.00% 96.27% » NPAs $6.2MM 80.00% 7 64.87% » Three relationships 60.00% comprise 31% ($1.9MM) of Total Non-Performing 40.00% a Assets soa 20.00% » Peer Median 49.46%, 0.00% Top Quartile 69.25% 2009 2010 «2011 «2012 2013 _ 2Q2
Slide 33: 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 —_—
Slide 34: Overview of Preferred Share Offering
2 q 4 @ financialyoup Overview of Preferred Share Offering
Slide 35: Offering Overview
Offering Overview Securities Offered 1,500,000 depositary shares, each representing a Price per Depositary Share: Offering Range: Dividends: Maturity: Redemption: Voting Rights: Conversion Price: Conversion Date: Expected Exchange Symbol": Bookrunning Manager: 1/100" interest s A Preferred Share $10
Slide 36: Community Invitation
Community Invitation ’ * An investmentin the depositary You’re Invited! sharesis subjectto investmentrisks, You are cordially invited to an informational meeting to learn more about the offering of SB Financial Group, Inc. depositary shares and the business of SB Financial including possible loss of
Slide 37: Mark Klein — President and CEO
Mark Klein — President and CEO Mark.Klein@YourStateBank.com Anthony Cosentino — EVP and CFO Tony.Cosentino@YourStateBank.com
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