The following is a summary of the SB Financial Group, Inc. (SBFG) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 net income was reported as $2.7 million, adjusted for servicing rights impairment to $2.4 million.

• Diluted earnings per share increased to $0.41, up from $0.40 a year earlier.

• Tangible book value per share grew to $16.49, reflecting a 26% increase year-over-year.

• Net interest income increased to $10.2 million, a 6.8% rise from the previous year.

• Total loans reached $1.03 billion, showing a growth of 4.1% from last year.

• Mortgage originations totalled $71 million for the quarter, contributing to a cumulative $188 million year-to-date, marking a 12% increase from the previous year.

Business Progress:

• SB Financial continues to diversify revenue streams, with growth in both traditional margin revenue and fee-based revenue.

• The bank's focus remains on enhancing fee-based revenue to reach a target of 35%, with current levels at approximately 30%.

• Key strategic initiatives include scaling the loan portfolio, deepening customer relationships through technology and tailored approaches, and maintaining operational excellence through targeted investments in talent and technology.

Opportunities:

• SB Financial is committed to enhancing its mortgage and wealth management business lines, citing a projected increase in mortgage volume by 20% to 30% for 2025 based on current forecasts.

• Continued emphasis on organic growth and geographic expansion, particularly in growing markets like Columbus and Cincinnati, presents opportunities to bolster overall performance.

Risks:

• Challenges persist in the mortgage market due to high interest rates, impacting momentum in real estate lending.

• Economic and market conditions that lead to fluctuations in interest rates and loan demand present ongoing risks to revenue stability.

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