- Net Income: $3.6 million for the quarter.
- Diluted EPS: $0.55, down slightly compared to the prior year.
- Tangible Book Value Per Share: $16, up 7% from $14.98.
- Net Interest Income: $10.9 million, a 13.7% increase from $9.6 million in Q4 2023.
- Loan Growth: $46.5 million for the quarter, up 4.7%.
- Deposits: Increased by over $82 million to $1.15 billion.
- Mortgage Originations: $73 million for the quarter; $261 million for the year, up 21% from 2023.
- Servicing Portfolio: $1.43 billion, up 4.4% year-over-year.
- Operating Expenses: Up 6.1% compared to Q4 2023.
- Charge-offs: 7 basis points for the quarter.
- Noninterest Income: $4.6 million, up 11.8% year-over-year when adjusted for prior year sales.
- Efficiency Ratio: 71.1% for the quarter.
- Net Interest Margin: 3.35%, up 18 basis points from the linked quarter.
- Share Buyback: 130,000 shares repurchased in the quarter.
- Dividend: $0.145 per share, totaling $0.56 for the year.
- Warning! GuruFocus has detected 4 Warning Signs with MYFW.
Release Date: January 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SB Financial Group Inc (NASDAQ:SBFG) successfully closed the acquisition of The Marblehead Bank, expanding its presence in Ottawa County, Ohio.
- Net interest income increased by 13.7% in the fourth quarter compared to the same quarter last year, reflecting higher loan balances and improved asset yields.
- Loan growth for the full quarter was $46.5 million, marking the third consecutive quarter of sequential loan growth.
- The mortgage business line delivered a 21% higher volume than 2023, with significant contributions from the Indiana and Cincinnati markets.
- Tangible book value per share increased by 7% to $16, demonstrating strong capital management and strategic capital deployment.
Negative Points
- Net income for the quarter was $3.6 million, with diluted EPS of $0.55, slightly down compared to the prior year.
- Operating expenses were up 6.1% compared to the fourth quarter of 2023, indicating rising costs.
- Noninterest income declined by 4% for the full year compared to the prior year, despite improvements in wealth management and other fee-based business lines.
- Charge-offs spiked to 7 basis points in the quarter, although they remained low for the year at 2 basis points overall.
- The residential real estate portfolio was down nearly $10 million for the year, reflecting a conscious shift away from growing this segment.
Q & A Highlights
Q: Can you discuss the expected mortgage production for 2025, especially with new talent in Indiana and Cincinnati? A: Mark Klein, Chairman, President, and CEO, stated that they are aiming for around $400 million in mortgage production for 2025, up from $260-$270 million in 2024. They plan to expand their team in Cincinnati and expect significant contributions from both Cincinnati and Indianapolis markets.
Q: What is the outlook for loan growth in 2025, particularly in the residential and commercial sectors? A: Mark Klein indicated that residential real estate loans might decrease slightly, while commercial growth will drive overall loan growth. They are optimistic about achieving high single-digit growth, with significant contributions expected from the Columbus market.
Q: How do you anticipate the net interest margin to evolve in 2025, especially with the Marblehead acquisition? A: Anthony Cosentino, CFO, expects the net interest margin to improve slightly from the current 3.35%, potentially reaching 3.50% to 3.55% by the end of 2025. The Marblehead acquisition will contribute positively with higher loan yields and additional liquidity.
Q: Can you provide an update on credit quality and any expected resolutions of nonperforming loans? A: Steven Walz, Chief Lending Officer, mentioned that they expect resolution of some nonperforming loans by mid-2025, with minimal financial impact. They have a strong collateral position and anticipate improvement in credit quality metrics.
Q: What is the expected impact of the Marblehead acquisition on expenses and overall financial performance? A: Anthony Cosentino noted that while Marblehead will add some expenses, they are relatively low. The focus for 2025 will be on revenue growth, aiming for positive operating leverage. The acquisition is expected to be EPS accretive by $0.15 to $0.20 per share in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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