0001213900-26-024471
SEC filingSB Financial Group, Inc. reported net income of $14.0 million for FY 2025, a 21.8% increase from $11.5 million in FY 2024. This growth was driven by a 21.4% increase in net interest income to $48.5 million, supported by loan growth of $133.9 million (12.8%) and deposit growth of $154.6 million (13.4%). The company's net interest margin on a fully-taxable equivalent basis improved to 3.47% from 3.06%. Noninterest income remained stable at $17.1 million, while noninterest expense increased by 9.4% to $47.0 million, partly due to acquisition-related costs. Asset quality improved, with nonperforming assets decreasing to 0.30% of total assets from 0.40%. The company's strategic execution, including the acquisition of The Marblehead Bank, contributed to balance sheet expansion and profitability gains.
SB Financial Group reported strong financial results for FY 2025, with net income increasing 21.8% to $14.0 million compared to $11.5 million in FY 2024. Total operating revenue grew 15.1% to $65.6 million, driven by a 21.4% increase in net interest income to $48.5 million. The company's net interest margin on a fully-taxable equivalent basis improved to 3.47% from 3.06% in the prior year. Diluted earnings per share rose to $2.19 from $1.72. Balance sheet expansion was significant, with total assets increasing 12.0% to $1.55 billion, loans growing 12.8% to $1.18 billion, and deposits increasing 13.4% to $1.31 billion. The acquisition of The Marblehead Bank in January 2025 contributed approximately $18 million in loans and $47 million in deposits.
The company's revenue growth was primarily driven by net interest income, which increased by $8.5 million year-over-year. This improvement resulted from higher average earning assets ($1.40 billion in 2025 vs. $1.31 billion in 2024) and margin expansion. Loan growth of $133.9 million was concentrated in commercial real estate and agricultural lending, while residential real estate production was primarily sold into the secondary market. Noninterest income remained relatively flat at $17.1 million, with gains on sale of residential mortgage loans increasing 9.9% to $5.0 million, offset by lower mortgage loan servicing fees. Title insurance income grew 25.3% to $2.0 million. The company sold $250.4 million of originated mortgages into the secondary market in 2025.
The company's profitability metrics showed improvement across several measures. Return on average assets increased to 0.93% from 0.84%, while return on average equity improved to 10.38% from 9.19%. The net interest margin expansion to 3.47% reflected both balance sheet growth and favorable rate dynamics. Operating expenses increased 9.4% to $47.0 million, including $0.8 million in one-time conversion expenses and a full year of Marblehead operations. The efficiency ratio (noninterest expense to total revenue) was 71.7% in 2025. Provision for credit losses was $1.3 million compared to $0.1 million in 2024, reflecting loan growth and economic conditions.
The company generated $24.0 million in net cash from operating activities, primarily from net income of $14.0 million and proceeds from loan sales. Investing activities used $68.1 million, mainly for net loan growth of $115.6 million. Financing activities provided $89.7 million, driven by deposit growth of $101.6 million. The balance sheet remained well-capitalized, with total shareholders' equity of $141.2 million (9.1% of assets). The allowance for credit losses covered nonperforming loans at 351.9%, up from 273.7% in 2024. Liquidity remained strong with $263.1 million in liquid assets and approximately $159.9 million in additional FHLB borrowing capacity.
Management's strategic focus includes growing into a top decile independent financial services company as measured by return on average assets. Key initiatives include diversifying revenue streams, strengthening market penetration, expanding product utilization, delivering operational excellence, and sustaining asset quality. The company plans to continue organic growth while evaluating strategic expansion opportunities. Risk factors include interest rate sensitivity, with the Economic Value of Equity analysis showing the balance sheet trending to a liability-sensitive position. Cybersecurity risk management remains a priority, with regular assessments and oversight by the Board's Risk Management Committee. The company has authorization to repurchase up to 199,050 additional shares under its current program.