First Quarter 2026 Highlights compared to the first quarter of the prior year include:
GAAP net income and Diluted Earnings per Share ("DEPS") were $4.3 million, or $0.69 per DEPS, an improvement from the $2.2 million, or $0.33 per DEPS in the prior-year quarter. Net Income, adjusted for Originated Mortgage Servicing Rights ("OMSR") and merger costs, was $3.9 million, up 44.7% percent compared to $2.7 million for the prior-year period. Adjusted DEPS of $0.63 was also up 50.0 percent, from the adjusted prior year.
Net interest income of $12.7 million increased by 12.7 percent from $11.3 million reported in the prior-year quarter.
Loan growth of $92.9 million, or 8.5 percent from the prior-year quarter, with growth from the linked quarter of $544,000, or 0.05 percent. This marks the eighth consecutive quarter of sequential loan growth.
Deposit growth of $100.6 million, or 7.9 percent from the prior-year quarter, with an increase from the linked quarter of $64.6 million, or 4.9 percent.
Adjusted tangible book value ("ATBV") per share excluding AOCI increased to $21.96 at quarter end. Tangible book value ("TBV") per share ended the quarter at $18.45 up $2.66 per share or 16.8 percent from the prior-year quarter.
Earnings Highlights
Three Months Ended
($ in thousands, except per share & ratios)
Mar. 2026
Mar. 2025
% Change
Operating revenue
$
17,424
$
15,386
13.2
%
Interest income
19,307
17,372
11.1
%
Interest expense
6,595
6,093
8.2
%
Net interest income
12,712
11,279
12.7
%
Provision for credit losses
214
387
44.7
%
Noninterest income
4,712
4,107
14.7
%
Noninterest expense
11,929
12,410
-3.9
%
Net income
4,296
2,158
99.1
%
Adjusted Earnings per diluted share
0.63
0.42
50.0
%
Earnings per diluted share
0.69
0.33
109.1
%
Adjusted Return on Avg. Assets
1.01
%
0.76
%
32.9
%
Return on average assets
1.10
%
0.60
%
83.3
%
Adjusted Return on Avg. Equity
11.04
%
8.35
%
32.2
%
Return on average equity
12.04
%
6.63
%
81.6
%
"Net income for the first quarter of 2026 was $4.3 million, a 99.1 percent increase from the prior-year quarter, with GAAP DEPS of $0.69, up 109.1 percent from the prior-year period," said Mark A. Klein, Chairman, President, and Chief Executive Officer. "This marks our 61st consecutive quarter of profitability and reflects the continued benefits of not only the Marblehead acquisition, but the wider margins and robust balance sheet growth we experienced over the last four quarters."
For the quarter, net interest income increased to $12.7 million, up 12.7 percent from the prior-year quarter, primarily driven by solid loan growth, higher loan yields, and stable funding costs. Total loans increased $92.9 million from the prior-year quarter and $544,000 from the linked quarter. Total deposits at quarter end increased $100.6 million, or 7.9% percent, to $1.37 billion, supported by stable core deposit relationships and continued customer deposit gathering activities across our markets. Overall results for the quarter reflected continued balance sheet discipline, stable credit performance, and the benefit of our diversified revenue business model.
RESULTS OF OPERATIONS
In the first quarter of 2026, total operating revenue increased to $17.4 million, up 13.2 percent from $15.4 million in the prior-year quarter and 6.1 percent from $16.4 million in the linked quarter. The year-over-year increase was driven by higher net interest income and improved noninterest income, partially offset by a modest increase in total interest expense. Net interest income for the quarter totaled $12.7 million, compared to $11.3 million in the prior-year period and consistent with $12.7 million in the linked quarter. The year-over-year improvement was driven by an increase in interest income on loans, which increased by 13 percent, rising from $15.4 million in the prior-year quarter to $17.3 million. Total interest expense increased modestly from the prior-year quarter, as slightly higher deposit costs were partially offset by lower costs across other funding sources. As a result, net interest margin increased approximately 8 basis points from 3.41 percent in the prior-year quarter to 3.49 percent.
Mortgage Loan Business
Net mortgage banking revenue for the quarter reached $1.8 million, an increase of $369,000 from the prior-year quarter. Loan servicing fees added $928,000 to revenue, reflecting an increase of $34,000 from the prior-year quarter. The OMSR net valuation adjustment for the first quarter of 2026 was a recapture of $452,000, compared to a recapture of $11,000 in the first quarter of 2025.
Mortgage Banking
($ in thousands)
Mar. 2026
Dec. 2025
Sep. 2025
Jun. 2025
Mar. 2025
Prior Year Growth
Mortgage originations
$
65,768
$
72,398
$
67,609
$
97,901
$
39,775
$
25,993
Mortgage sales
53,420
70,361
66,408
74,313
39,279
14,141
Mortgage servicing portfolio
1,482,052
1,479,982
1,470,360
1,456,374
1,432,184
49,868
Mortgage servicing rights
15,728
15,254
15,347
15,458
14,965
763
Revenue
Loan servicing fees
928
928
914
904
894
34
OMSR amortization
(529
)
(572
)
(455
)
(469
)
(294
)
(235
)
Net administrative fees
399
356
459
435
600
(201
)
OMSR valuation adjustment
452
(157
)
(301
)
159
11
441
Net loan servicing fees
851
199
158
594
611
240
Gain on sale of mortgages
978
1,272
1,328
1,566
849
129
Mortgage banking revenue, net
$
1,829
$
1,471
$
1,486
$
2,160
$
1,460
$
369
Noninterest Income and Noninterest Expense
"Noninterest income for the first quarter of 2026 totaled $4.7 million, an increase of $605,000, or 14.7 percent, from the prior-year quarter, primarily driven by higher mortgage loan servicing fees, increased gains on sale of mortgage loans, and stronger gain on sale of non-mortgage loans, partially offset by a $97,000 decrease in other noninterest income. The year-over-year improvement reflects the Company's continued progress in strengthening the diversity of its noninterest revenue base," Mr. Klein noted.
Noninterest Income/Noninterest Expense
($ in thousands, except ratios)
Mar. 2026
Dec. 2025
Sep. 2025
Jun. 2025
Mar. 2025
Prior YearGrowth
Noninterest Income (NII)
$
4,712
$
3,708
$
4,244
$
5,048
$
4,107
$
605
NII / Total Revenue
27.0
%
22.6
%
25.6
%
29.4
%
26.7
%
0.3
%
NII / Average Assets
1.2
%
1.0
%
1.1
%
1.4
%
1.1
%
0.1
%
Total Revenue Growth
13.3
%
6.3
%
15.9
%
22.3
%
17.2
%
-3.9
%
Noninterest Expense (NIE)
$
11,929
$
11,239
$
11,498
$
11,852
$
12,410
$
(481
)
Efficiency Ratio
68.1
%
68.1
%
69.0
%
68.9
%
80.0
%
-11.9
%
NIE / Average Assets
3.1
%
2.9
%
3.0
%
3.2
%
3.4
%
-0.3
%
Net Noninterest Expense/Avg. Assets
-1.9
%
-1.9
%
-1.9
%
-1.8
%
-2.3
%
0.4
%
Total Expense Growth
-3.9
%
2.1
%
4.5
%
11.1
%
20.7
%
-24.6
%
Noninterest expense for the first quarter of 2026 totaled $11.9 million, a decrease of 3.9 percent from the prior-year quarter, driven primarily by lower data processing expense of $713,000 due to the 2025 merger expenses and a reduction in salaries and employee benefits of $141,000. These decreases were partially offset by higher marketing expense of $112,000 and a modest increase in state, local and other taxes of $64,000. "We remain focused on maintaining disciplined control over noninterest expense. Our efficiency ratio for the first quarter of 2026 was 68.12 percent, a strong improvement from the prior-year period and largely consistent with the linked quarter, reflecting continued discipline in expense management as we balanced targeted investments with revenue performance," stated Mr. Klein.
Balance Sheet
As of March 31, 2026, SB Financial reported total assets of $1.60 billion, an increase of $59.2 million from December 31, 2025, and $103.6 million, or 6.9 percent, from March 31, 2025. The year-over-year increase reflects continued growth in the loan portfolio, as well as the ongoing benefit of the Marblehead acquisition, which has further expanded the Company's market presence and funding base in Northern Ohio. Cash increased by $21.1 million from the prior-year period to $126.3 million, driven by deposit growth and investment portfolio runoff. Key metrics for the quarter included a loan-to-deposit ratio of 86.10 percent and a loan-to-asset ratio of 73.6 percent, both of which remained within the Company's target range.
Total deposits at quarter end increased to $1.37 billion, up $100.6 million, or 7.9 percent, from the prior-year quarter, reflecting continued organic deposit growth and stable client relationships across the franchise. Shareholders' equity totaled $143.7 million at quarter end, representing an increase of $12.1 million, or 9.2 percent, from the prior-year period, equivalent to an increase of $2.81 per share.
During the first quarter, SB Financial repurchased approximately 29,000 shares, a slight decrease from the prior quarter, reflecting management's disciplined capital deployment and its assessment of market conditions and capital priorities during the period. The Company remains focused on a balanced approach to capital management, prioritizing shareholder returns through dividends and share repurchases while maintaining flexibility to support organic growth, strategic opportunities, and capital strength.
"As we enter the second quarter of 2026, we believe the Company is operating from a position of strength, supported by a solid balance sheet, healthy credit metrics, and a stable funding base," said Mr. Klein. "Loan growth over the past year reflects steady client activity and disciplined execution across our markets, while reserve coverage and overall credit performance remained sound during the quarter. We continue to benefit from a diversified business model and a consistent approach to capital management, which we believe positions us well to support prudent growth and long-term shareholder value."
Loan Balances
($ in thousands, except ratios)
Mar. 2026
Dec. 2025
Sep. 2025
Jun. 2025
Mar. 2025
Annual Growth
Commercial
$
111,606
$
113,878
$
117,581
$
118,984
$
125,878
$
(14,272
)
% of Total
9.4
%
9.6
%
10.6
%
10.9
%
11.6
%
-11.3
%
Commercial RE
601,678
596,983
535,307
525,671
509,518
92,160
% of Total
50.9
%
50.6
%
48.2
%
48.0
%
46.8
%
18.1
%
Agriculture
78,297
76,514
65,150
60,924
61,443
16,854
% of Total
6.6
%
6.5
%
5.9
%
5.6
%
5.6
%
27.4
%
Residential RE
300,491
304,741
309,140
310,126
319,307
(18,816
)
% of Total
25.4
%
25.8
%
27.8
%
28.3
%
29.3
%
-5.9
%
Consumer & Other
89,063
88,475
83,367
79,014
72,128
16,935
% of Total
7.5
%
7.5
%
7.5
%
7.2
%
6.6
%
23.5
%
Total Loans
$
1,181,135
$
1,180,591
$
1,110,545
$
1,094,719
$
1,088,274
$
92,861
Total Growth Percentage
8.5
%
Deposit Balances
($ in thousands, except ratios)
Mar. 2026
Dec. 2025
Sep. 2025
Jun. 2025
Mar. 2025
Annual Growth
Non-Int DDA
$
248,239
$
254,063
$
246,725
$
241,245
$
240,446
$
7,793
% of Total
18.1
%
19.4
%
19.5
%
19.3
%
18.9
%
3.2
%
Interest DDA
215,594
202,501
194,420
205,581
208,583
7,011
% of Total
15.7
%
15.5
%
15.4
%
16.4
%
16.4
%
3.4
%
Savings
333,662
296,484
290,111
282,311
285,902
47,760
% of Total
24.3
%
22.7
%
23.0
%
22.6
%
22.5
%
16.7
%
Money Market
300,028
280,896
261,953
249,536
257,013
43,015
% of Total
21.9
%
21.5
%
20.7
%
20.0
%
20.2
%
16.7
%
Time Deposits
274,300
273,300
269,313
271,149
279,276
(4,976
)
% of Total
20.0
%
20.9
%
21.3
%
21.7
%
22.0
%
-1.8
%
Total Deposits
$
1,371,823
$
1,307,244
$
1,262,522
$
1,249,822
$
1,271,220
$
100,603
Total Growth Percentage
7.9
%
Asset Quality
As of March 31, 2026, SB Financial continued to report strong asset quality metrics. Nonperforming assets totaled $4.8 million representing 0.30 percent of total assets, a decrease of $1.4 million from $6.1 million, or 0.41 percent of total assets in the prior-year quarter, and a modest increase from the linked quarter, which reported nonperforming assets of $4.7 million, or 0.30 percent of total assets. The allowance for credit losses remained strong at 1.39 percent of total loans, providing coverage of 432.2 percent of nonperforming loans. This level was broadly consistent with the linked quarter and represented an improvement from the prior-year period, reflecting the Company's disciplined credit risk framework. Net loan charge-offs to average loans remained modest at 1 basis point, compared to 4 basis points in the linked quarter and 3 basis points in the prior-year quarter. Collectively, these metrics reflect SB Financial's continued emphasis on disciplined underwriting and effective credit administration.
"Our credit results this quarter continued to reflect stability across the loan portfolio and disciplined management of problem assets," said Mr. Klein. "While nonperforming assets increased modestly from the linked quarter, overall credit performance remained sound, and reserve coverage continued to reflect our conservative approach to risk management. We remain focused on disciplined underwriting and proactive credit administration as we support measured growth across our markets."
Nonperforming Assets
Annual Change
($ in thousands, except ratios)
Mar. 2026
Dec. 2025
Sep. 2025
Jun. 2025
Mar. 2025
Commercial & Agriculture
$
1,357
$
2,256
$
2,243
$
3,306
$
3,418
$
(2,061
)
% of Total Com./Ag. loans
0.71
%
1.18
%
1.23
%
1.84
%
1.82
%
-60.3
%
Commercial RE
764
771
778
784
798
(34
)
% of Total CRE loans
0.13
%
0.13
%
0.15
%
0.15
%
0.16
%
-4.3
%
Residential RE
1,431
1,322
1,400
1,585
1,608
(177
)
% of Total Res. RE loans
0.48
%
0.43
%
0.45
%
0.51
%
0.50
%
-11.0
%
Consumer & Other
240
230
195
197
227
13
% of Total Con./Oth. loans
0.27
%
0.26
%
0.23
%
0.25
%
0.31
%
5.7
%
Total Nonaccruing Loans
3,792
4,579
4,616
