Breaking Down SB Financial Group, Inc. (SBFG) Financial Health: Key Insights for Investors

You're looking at SB Financial Group, Inc. (SBFG) and wondering if the regional bank story holds up against economic headwinds, and the numbers defintely suggest a closer look is warranted. The firm's nine-month 2025 performance shows a solid foundation, with year-to-date Net Income hitting $10.1 million, translating to a Diluted Earnings Per Share (EPS) of $1.56. This is not just noise; it's a tangible result of their strategic moves, like the Marblehead Bank acquisition earlier this year, which helped push total assets to $1.50 billion as of September 2025. Here's the quick math: with the consensus full-year 2025 EPS forecast at $2.35, the market is expecting a strong finish, and analysts have recently upgraded their current year earnings estimates by 5.4%. But the question is, can they maintain the Q3 momentum-which saw net income jump to $4.0 million-while managing nonperforming assets, or is the recent 'Strong Buy' consensus just chasing a short-term beat? Let's break down the balance sheet and see where the real risks and opportunities lie for your portfolio.

Revenue Analysis

You need to know where the money is coming from at SB Financial Group, Inc. (SBFG) to understand its stability, and the short answer is that the revenue mix is healthy, but heavily skewed toward traditional banking. The key takeaway from the Q3 2025 results is that the company is successfully driving top-line growth, with total operating revenue hitting $16.6 million, marking a solid 15.9% rise year-over-year.

This growth is defintely a good sign, but it's crucial to see the engine powering it. Here's the quick math for the third quarter of 2025:

• Net Interest Income (NII): $12.3 million.
• Noninterest Income: $4.2 million.

Net Interest Income (NII)-the difference between interest earned on loans and interest paid on deposits-is the primary revenue source, contributing about 74% of the total operating revenue in Q3 2025. This is a classic community bank model, and the NII segment saw a powerful 21.1% year-over-year increase, which is the main driver of the overall revenue lift. For the nine months ended September 30, 2025, NII reached $35.7 million, a 23.1% improvement from the same period in 2024.

The remaining roughly 26% of revenue comes from diversified fee-based businesses (Noninterest Income), which provides a necessary buffer against interest rate volatility. The total Noninterest Income for the nine months ended September 30, 2025, was $13.4 million, up from $12.5 million in the prior year.

The diversification strategy is showing traction in specific areas. The company's fee-based businesses include:

• Mortgage Banking: Net mortgage banking revenue was $1.5 million in Q3 2025.
• Title Services (Peak Title): Revenue contribution is up nearly $400,000, or 32%, on a year-to-date basis in 2025, with internal referrals providing 28% of the title company's total revenue.
• Wealth Management: Services for private clients, which is a key part of the diversified model.

What this breakdown hides is the impact of a significant strategic move: the Marblehead Bank acquisition, which closed in January 2025. This deal added modest revenue of $0.4 million in Q3 2025 but, more importantly, expanded the market presence in Northern Ohio and bolstered the deposit base. Still, the third quarter saw a reduction in noninterest income due to a $460,000 impairment on mortgage servicing rights, which accounted for approximately 60% of the sequential decline from Q2 2025. The core business is strong, but the mortgage segment remains sensitive to market shifts. To dig deeper into who is betting on this model, you should be Exploring SB Financial Group, Inc. (SBFG) Investor Profile: Who's Buying and Why?

Here is a summary of the Q3 2025 revenue performance:

The clear action for investors is to monitor NII, as it's the primary profit engine, but also watch the noninterest segments-especially title services-as they are providing outsized growth and diversification against the headwinds of mortgage servicing rights volatility.

Profitability Metrics

You need a clear picture of how SB Financial Group, Inc. (SBFG) is actually making and keeping money, not just how much revenue they bring in. The direct takeaway is that while the core business-lending-is highly profitable with an excellent Net Interest Margin (NIM), the overall Net Profit Margin is lagging the peer group, signaling a need for tighter control on non-interest expenses.

For a bank, we look at Net Interest Income (NII) as the primary indicator of Mission Statement, Vision, & Core Values of SB Financial Group, Inc. (SBFG)'s core, or 'gross,' profitability. The bank's NII for the nine months ended September 30, 2025, rose to $35.7 million, a significant jump from $29.0 million in the same period last year. This is a strong signal. The Net Interest Margin (NIM), which measures the difference between interest earned and interest paid, stood at 3.48% in the third quarter of 2025. This is right at the low end of the typical 3.5% to 4.5% range for community banks, which means their lending and funding spread is solid, but not best-in-class.

Operating and Net Profit Margins: The Reality Check

The real test of efficiency comes in the Operating Profit Margin, which for a bank is essentially the Pre-Provision Net Revenue (PPNR) margin. For the first nine months of the 2025 fiscal year, SB Financial Group, Inc.'s total operating revenue (NII plus non-interest income) was approximately $49.1 million. Subtracting the $35.8 million in noninterest expenses gives us an Operating Profit of roughly $13.3 million. This translates to an Operating Profit Margin of about 27.1%.

Now, let's look at the bottom line. The company's year-to-date Net Income through Q3 2025 was $10.1 million, up sharply from $7.8 million a year prior. This impressive absolute growth is what drives investor excitement. But the trailing twelve months (TTM) Net Profit Margin has actually slipped to 19.5%, down from 21.5% last year. That's a red flag you can't ignore.

• Net Income for Q3 2025 was $4.0 million, up 71.9% year-over-year.
• TTM Net Profit Margin is 19.5%, down from 21.5%.
• Regional bank peer average Net Profit Margin was around 24.89% as of Q2 2024.

Operational Efficiency and Cost Management

The core issue is operational efficiency. The company's Net Profit Margin of 19.5% is notably below the regional bank industry average, which sat around 24.89% in Q2 2024. Here's the quick math: if SBFG achieved the peer average margin on its $49.1 million YTD revenue, Net Income would be closer to $12.2 million, not $10.1 million. That's a $2.1 million difference.

The Noninterest Expense for the nine months ended September 30, 2025, was $35.8 million, a rise from $32.0 million in the prior year period. This increase is partly due to the Marblehead acquisition and investments in digital banking, but it's still dragging down profitability. The Efficiency Ratio, which measures non-interest expense as a percentage of total revenue, was 68.9% in Q2 2025, an improvement from the prior quarter and year. You want this number lower; a lower ratio means the bank is spending less to generate each dollar of revenue. The trend is positive, but the absolute level shows non-interest costs are still too high relative to their revenue base.

The opportunity is clear: the core lending business is robust, but management needs to defintely accelerate the cost-control initiatives to close that 5-point margin gap with peers. The trend in the Efficiency Ratio is moving in the right direction, but faster action on expense management will translate directly into a higher Net Profit and a better valuation multiple.

Debt vs. Equity Structure

You're looking at SB Financial Group, Inc. (SBFG) and trying to gauge its financial risk profile, which rightly starts with how the company funds its operations: debt versus equity. The direct takeaway is that SB Financial Group, Inc. maintains a notably conservative capital structure for a regional bank, relying less on debt than its peers.

As of the third quarter of 2025, SB Financial Group, Inc.'s debt-to-equity (D/E) ratio stood at just 0.40. This is a strong indicator of financial stability, especially when you compare it to the regional bank industry average, which is closer to 0.58. Simply put, for every dollar of shareholder equity, the company has only 40 cents of debt, which gives them a significant cushion against economic downturns.

Here's the quick math on their primary wholesale funding components as of September 30, 2025, which represent their key debt obligations (amounts in thousands of U.S. Dollars):

• Short-term borrowings: $10,976
• Federal Home Loan Bank (FHLB) advances: $35,000
• Trust preferred securities: $10,310

The total of these explicit debt-like instruments is approximately $56.3 million. The FHLB advances are a common, stable source of wholesale funding for banks, and the company has immediate access to an additional $190 million in FHLB capacity, plus $500 million in contingent funding, which is a massive liquidity buffer. That's a good sign for managing any unexpected funding needs.

Balancing Debt and Equity Funding

SB Financial Group, Inc. clearly leans toward equity for its capital base, but they are also strategic with their debt. The current wholesale borrowings of $35 million carry a low-4% average coupon, which helps keep their overall cost of capital down. They recently incurred approximately $0.5 million in debt issuance costs to place new Notes, which suggests a strategic, long-term approach to funding rather than relying solely on short-term debt. This balance is key: use low-cost debt to enhance returns, but keep the D/E ratio low to manage risk.

On the equity side, the company is actively returning capital to shareholders. In the third quarter of 2025 alone, they repurchased 101,000 shares, and year-to-date repurchases total 252,000 shares, utilizing 45% of their earnings for buybacks. This signals management's belief that the stock is undervalued and demonstrates a commitment to enhancing shareholder value through capital return, a classic move for a well-capitalized bank.

To dive deeper into who is buying these shares and the broader investor sentiment, you should check out Exploring SB Financial Group, Inc. (SBFG) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You're looking at SB Financial Group, Inc. (SBFG) and asking the right question: can they meet their short-term obligations? The quick answer is yes, they can, but you have to look past the traditional metrics because SBFG is a bank.

For a financial institution like SBFG, the standard Current Ratio (Current Assets divided by Current Liabilities) is practically useless-it often registers near 0 because their loans are long-term assets and customer deposits are their current liabilities. Instead, we focus on the Loan-to-Deposit (L/D) ratio and their access to emergency funding.

As of September 30, 2025, SBFG's L/D ratio stood at a healthy 87.96%. This means that for every dollar of customer deposits, the bank has lent out about 88 cents, leaving a solid buffer. A high L/D ratio can sometimes signal a squeeze, but SBFG's ratio is manageable and shows effective deployment of capital.

Assessing SB Financial Group, Inc. (SBFG)'s Liquidity

The real strength of SBFG's liquidity position is in its balance sheet growth and contingent funding. Total assets expanded to $1.50 billion as of September 2025, up from $1.38 billion at the end of 2024, showing a clear upward trend. Plus, SBFG has immediate access to substantial off-balance-sheet liquidity (contingent funding) that you can't ignore.

• Immediate FHLB (Federal Home Loan Bank) capacity: $190 million.
• Total contingent funding available: $500 million.

This level of backup funding is defintely a major liquidity strength, ensuring they can cover unexpected deposit withdrawals or fund new loan demand without distress. This is a critical safety net.

Cash Flow Statement Overview and Trends

Looking at the cash flow statement for the nine months ended September 30, 2025, we see a very positive trend, especially in core operations. This is where the rubber meets the road-a bank must generate cash from its main business.

Here's the quick math on their cash flow activities (nine months ended September 30, 2025):

The operating cash flow of $15.8 million is a massive improvement from the prior year, showing their core business is generating cash more efficiently. The cash flow from financing activities is also strong, with deposit growth of $103 million year-over-year, demonstrating they are successfully attracting and retaining customer funds. Cash itself increased by $35.7 million from the prior year, which is a clear liquidity boost. If you want to dive deeper into the strategic drivers behind this performance, you can review the Mission Statement, Vision, & Core Values of SB Financial Group, Inc. (SBFG).

Valuation Analysis

You're looking at SB Financial Group, Inc. (SBFG) and wondering if the market has it right, and honestly, the numbers suggest a compelling case for undervaluation right now. The consensus view is a Strong Buy, driven by valuation metrics that are significantly discounted compared to peers and the company's own intrinsic value.

The core of the argument lies in the price-to-earnings (P/E) ratio. SB Financial Group, Inc.'s forward P/E sits around 8.35x, which is considerably cheaper than the US Banks industry average of 11.2x. This valuation gap suggests the market is pricing in more risk or less growth than analysts anticipate, especially considering the company's discounted cash flow (DCF) fair value estimate is $29.21. That's a huge potential upside, but you have to look past the near-term noise.

Here's the quick math on the key valuation multiples as of late 2025:

For a bank, the Price-to-Tangible Book Value (P/TBV) is defintely a more precise metric than the standard price-to-book (P/B). With a Q3 2025 tangible book value per share of $17.21, the stock price of $19.91 means you're paying about 1.16 times tangible book. That's a reasonable price for a regional bank that is successfully integrating acquisitions and showing good credit quality, as evidenced by the 345% coverage of nonperforming assets.

The stock price trend over the last 12 months shows volatility, but also a clear range. The 52-week trading range is between a low of $17.10 and a high of $24.48. The current price of $19.91 is closer to the low end, which presents an opportunity if you believe the company can execute its strategy and close the gap to the analyst target price of $23.00. The share repurchase program, where 252,000 shares were bought back year-to-date at just under $20 per share, shows management also believes the stock is cheap.

You also get paid to wait for the valuation to correct. SB Financial Group, Inc. is a dividend-paying stock with a forward annual payout of $0.62 per share, translating to a dividend yield of approximately 3.1%. The payout ratio is a very healthy 28.4% of earnings, which means the dividend is well-covered and has room to grow, which they've done for 12 consecutive years. A low payout ratio like this is a strong sign of financial stability, particularly in the banking sector where capital preservation is key.

To dive deeper into the institutional interest, you can check out Exploring SB Financial Group, Inc. (SBFG) Investor Profile: Who's Buying and Why?

So, the takeaway is simple: the stock is trading at a discount, the dividend is safe, and the Street is bullish. What this estimate hides, of course, is the risk from potential future revenue declines, which analysts are forecasting at -13.4% per year over the next three years, even as earnings per share (EPS) is expected to grow. That tension between falling sales and rising EPS (thanks to margin expansion and cost control) is the real risk you need to monitor.

• Monitor the net interest margin (NIM) closely; management projects a peak of 3.48%.
• Watch for updates on the cost controls driving the expected margin expansion.
• Use the $17.10 52-week low as a key support level.

Risk Factors

You're looking for the unvarnished truth about what could trip up SB Financial Group, Inc. (SBFG), and as a seasoned analyst, I can tell you the risks are real, but manageable if you understand the context. The direct takeaway is that while SBFG's credit quality metrics are improving, the primary near-term risks revolve around external macroeconomic pressures, specifically interest rate volatility and the integration of their recent acquisition.

External and Macroeconomic Risks

The biggest risks for any regional bank like SB Financial Group, Inc. are often outside their control. They are exposed to the broader economic, credit, and interest rate environment. Honestly, this is the case for everyone, but for SBFG, it means keeping a close eye on a few key areas.

• Interest Rate Volatility: The bank's reliance on mortgage banking means their revenue stream is sensitive to rate swings. Even though the net interest margin (NIM) improved to 3.48% in the third quarter of 2025, a sudden shift in the Federal Reserve's policy could squeeze that margin, especially if funding costs rise faster than asset yields.
• Credit Quality Deterioration: If the regional economy weakens, loan quality could suffer. While the company's asset quality is strong right now-nonaccruing loans were down to $4.6 million as of September 30, 2025-any prolonged recessionary environment would stress their commercial real estate and residential portfolios.
• Regulatory and Geopolitical Instability: Changes in banking regulations or unexpected geopolitical events can rapidly alter the cost of doing business and capital requirements. You can't predict a crisis, but you can see how the bank's Mission Statement, Vision, & Core Values of SB Financial Group, Inc. (SBFG). guides their conservative approach.

Operational and Strategic Challenges

Internally, the firm faces a few specific, near-term challenges that management is actively working on. The goal is to grow while keeping costs in check. It's a tricky balancing act.

• Acquisition Integration Risk: The successful integration of Marblehead Bancorp, which closed in January 2025, is a strategic focus. The deal added over $59.2 million in assets, but integrating systems and cultures always carries risk. The company recorded $3.9 million of goodwill from the transaction, and if the expected synergies don't materialize, that goodwill could be impaired.
• Operational Efficiency: The efficiency ratio (noninterest expense as a percentage of revenue) was 68.9% in the second quarter of 2025. Management has a strategic goal of getting this ratio down to 65%, so there's still work to do on constraining managerial oversight costs and improving scale. That's a clear benchmark for you to watch.
• Cybersecurity and IT Risk: Like all financial institutions, SB Financial Group, Inc. is vulnerable to sophisticated cyberattacks and technological disruptions. They must defintely continue to invest heavily in robust security measures to protect the $1.50 billion in total assets and customer data they hold as of September 30, 2025.

Mitigation Strategies and Key Metrics

Here's the quick math on how the bank is trying to contain these risks. They aren't just sitting still; they have concrete plans and strong capital buffers.

The most important mitigation is their conservative credit management. They are well-capitalized, with a Total Risk-Based Capital Ratio of 13.73% as of September 30, 2025, which comfortably exceeds the 'well-capitalized' regulatory threshold. They also have a dedicated Risk Management Committee that reviews everything from credit to IT operational risks.

Take a look at the credit loss coverage, which is a great indicator of preparedness:

The high coverage ratio of 345.4% means they have over three dollars reserved for every dollar of non-performing loans. That's a strong cushion against unexpected credit losses. Plus, they are actively working to reduce non-performing assets to a target of 25 basis points of total assets, which would put them in the top quartile of their peer group. That's a clear, actionable goal.

Growth Opportunities

You need to know if SB Financial Group, Inc. (SBFG) can sustain its momentum, and the short answer is yes, but the path requires careful execution. The company's future growth is hinged on its strategic market expansion and the successful integration of recent acquisitions, which is already showing up in the 2025 numbers.

The core of their strategy is a relentless pursuit of five key initiatives: diversifying revenue, achieving organic growth for scale, deepening client relationships, delivering operational excellence, and maintaining strong asset quality. This focus is defintely paying off in their net interest income (NII), which was a main driver of growth, rising over 21% year-over-year in the third quarter of 2025 to $12.3 million. That's a strong signal of margin strength. Exploring SB Financial Group, Inc. (SBFG) Investor Profile: Who's Buying and Why?

Future Revenue and Earnings Estimates

Analysts are projecting a solid fiscal year 2025 for SB Financial Group, Inc. (SBFG), especially when compared to the regional bank industry average. The consensus forecast for annual revenue is a substantial $433,920,946, reflecting a projected annual revenue growth rate of 13.32%, which is forecast to significantly beat the US Banks - Regional industry's average forecast of 2.91%.

In terms of profitability, the outlook is even more compelling. The consensus forecast for annual earnings in 2025 is approximately $14,551,033, translating to a forecast annual earnings growth rate of 31.18%. For the full fiscal year, analysts expect the company to post an Earnings Per Share (EPS) of $2.00. Here's the quick math on their Q3 performance, which shows the momentum:

• Q3 2025 Diluted EPS: $0.64
• Q3 2025 Net Income: $4 million, an 83% increase from the prior-year quarter

Key Growth Drivers: Expansion and Product Diversity

The Marblehead Bank acquisition, which was integrated in 2025, is a primary near-term growth driver, expanding SB Financial Group, Inc.'s (SBFG) market presence and adding nearly 2,500 deposit accounts with a low weighted average cost. This strategic move, along with organic expansion into new markets like Napoleon, Ohio, and a mortgage loan production office in Cincinnati, Ohio, is helping to drive loan and deposit growth. Loan growth over the prior year quarter was approximately 7.8%, totaling $80.6 million in new outstandings.

Plus, the company's diversified business model-spanning community banking, mortgage banking, wealth management, and title insurance-provides multiple revenue streams (noninterest income) that offer resilience against interest rate volatility. Noninterest income for the third quarter of 2025 was $4.2 million, up 2.9% year-over-year, driven by increased mortgage loan servicing fees and title service fees.

Competitive Advantages and Actionable Insights

SB Financial Group, Inc. (SBFG) maintains a strong competitive edge through its superior asset quality and disciplined credit management. Their charge-offs returned to more historic levels in Q3 2025, and they successfully reduced nonperforming loans by nearly $1.3 million from the linked quarter. This focus on asset quality is a critical differentiator in a challenging lending environment.

What this estimate hides is the execution risk in a highly competitive regional market, especially in growth areas like Columbus. Still, the stock's current valuation appears compelling; it trades at a significant discount to its Discounted Cash Flow (DCF) fair value of $29.21, with the share price around $19.56 as of November 2025.

For a quick summary of the growth drivers, look at this table:

Your next step should be to monitor the Q4 2025 results for continued loan and deposit growth, specifically looking for organic growth outside of the Marblehead acquisition. That will confirm the internal growth engine is running efficiently.