SB Financial Group, Inc.

SB Financial reported net income of $4.5 million and diluted EPS of $0.07, compared with diluted EPS of $0.60 in the prior-year quarter. Adjusted diluted EPS, excluding MSR valuation adjustments, was $0.73 versus $0.58 a year ago. Total operating revenue was $17.9 million, up 4.5% from $17.2 million in the second quarter of 2025 and up 3% from $17.4 million in the linked quarter. Net interest income increased to $13 million, up 6.8% from $12.1 million in the prior-year quarter, while noninterest income was $5 million. Loans ended at $1.19 billion, up $95 million or 8.7% year over year, and deposits ended at $1.39 billion, up $141 million or just over 11% year over year. The net interest margin was 3.43%, versus 3.48% in both the prior-year and linked quarter. For guidance, management said margin should likely run in the 3.45% to 3.55% range in Q3 and for some time after; they also said Q3 expenses should be about $12.3 million to $12.4 million and Q4 about $12 million. In mortgages, management said Q2 originations were $79.3 million and expects about an $80 million quarter in Q3 and $50 million to $60 million in Q4 if rates stay where they are. They also said they are tracking toward roughly $50 million to $70 million of loan balance growth between now and year-end, with existing liquidity sufficient to fund it.

Mark A. Klein characterized the quarter as strong execution across a diversified franchise, with balanced performance in lending, deposits, fees, and expenses. He emphasized strategic breadth: growth markets like Angola, Napoleon, Cincinnati, and Columbus are all contributing, and the company is continuing to capture low-cost deposits from market disruption while preserving scale and flexibility. His tone was constructive and confident, especially on loan growth, core deposits, and the ability to keep adding business without much incremental overhead.

Anthony V. Cosentino focused on the financial mechanics behind the quarter: total operating revenue was $17.9 million, adjusted EPS was $0.73, the margin was 3.43%, and the efficiency ratio improved to 67.3%. He pointed out that interest income rose $1.35 million year over year, outpacing $527 thousand of interest expense growth, while expenses were $12.1 million and operating leverage was positive 1.9x. On capital and liquidity, he said the company bought back a little over 28 thousand shares at an average price of $22.06, had roughly $70 million of excess liquidity, and expects the loan pipeline to absorb that liquidity as second-half growth develops.

Analysts focused on margin direction, deposit durability, loan pipeline breadth, mortgage volume, and expense trends. Management said the margin likely peaked in Q1 and should stabilize in the 3.45% to 3.55% range, helped by low-cost deposits and better loan growth, while noting about $40 million of wholesale deposits may leave in Q3 but should not be material. On loans, management said the pipeline is stronger than expected, with growth becoming more balanced across markets instead of being overwhelmingly Columbus-driven; on mortgages, they said rate levels above about 6% are still limiting activity, but a move closer to 6% could add $30 million to $50 million of volume.