SB Financial | 8-K: FY2025 Q2 EPS Beats Estimate at USD 0.6

EPS: As of FY2025 Q2, the actual value is USD 0.6, beating the estimate of USD 0.54.

Net Income

• Net income for the second quarter of 2025 was $3.9 million, with diluted earnings per share of $0.60, up $0.13 or nearly 28% compared to the prior year quarter. Adjusted EPS, considering the servicing rights recapture, was $0.58 for the quarter.

Tangible Book Value

• Tangible book value per share ended the quarter at $16.44, up from $15.26 last year, representing a 7.7% increase.

Net Interest Income

• Net interest income totaled $12.1 million, an increase of over 25% from the $9.7 million in the second quarter of last year. From the linked quarter, net interest income accelerated at a 30% annualized pace.

Loan Growth

• Loan growth for the quarter was approximately $90 million, up 8.9% from the prior year, marking the fifth consecutive quarter of sequential loan growth.

Deposit Growth

• Deposits grew by over 12%, including Marblehead deposits of $51 million. Excluding Marblehead deposits, deposit growth would have been approximately 7.5%.

Assets Under Care

• Assets under care now exceed $3.5 billion, including bank assets of $1.5 billion, a residential servicing portfolio of approximately $1.5 billion, and wealth assets under care of $537 million.

Mortgage Originations

• Mortgage originations for the quarter were just short of $98 million, up from both the prior year and linked quarters. The pipeline remains strong at nearly $34 million.

Operating Expenses

• Operating expenses decreased approximately 4.5% from the linked quarter due to onetime conversion costs in the first quarter. Charge-off levels returned to historic levels at less than 2 basis points.

Noninterest Income

• Noninterest income was up 15.1% from the prior year quarter at $5 million and up 22.9% from the linked quarter. The increase was driven by gains on the sale of mortgage loans and mortgage servicing rights, as well as increased title service fees and other related revenue.

Wealth Management

• The Wealth Management division faced challenges due to market volatility and unexpected annuitizations and amortizations, affecting net asset growth. However, the business line remains additive to the brand and a differentiator for the bank.

Capital Management

• During the quarter, 124,000 shares were repurchased at an average price of just under $19. Tangible book value per share increased by $0.65 from the linked quarter, driven by a $1.4 million benefit on AOCI, higher earnings, and a slight reduction in share count.

Asset Quality

• Charge-offs fell to less than 2 basis points. Nonperforming assets totaled $6.2 million, with criticized and classified loans at $7.2 million. The allowance for credit losses remained robust at 1.43% of total loans, providing 265% coverage of nonperforming assets.

Outlook / Guidance

• SB Financial Group, Inc. anticipates positive resolutions to several nonperforming credits in Q3, with a stabilized expense base. Continued solid loan growth and stable to slightly lower funding costs are expected to drive margin expansion. The potential for rate reductions in the near term could further expand residential mortgage volume.