SB Financial Group, Inc.

Good morning and welcome to the SB Financial First Quarter 2024 conference call and webcast. I would like to inform you that this conference call is being recorded and that all participants are in listen-only mode. We will begin with remarks by management and then open the conference up to the investment community for questions and answers. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I will now turn the conference over to Carol Robbins with SB Financial. Please go ahead, Carol.

Thank you, Cindy. Good morning, everyone. I'd like to remind you that this conference call is being broadcast live over the Internet and will be archived and available on our website at ir.northstatebank.com. Joining me today are Mark Klein, Chairman, President, and CEO, Tony Cosentino, Chief Financial Officer, and Steve Wall, Chief Lending Officer. Today's presentation may contain forward-looking information. Cautionary statements about this information, as well as reconciliations of non-GAAP financial measures, are included in today's earnings release material, as well as in our SEC filings. These materials are available on our website, and we encourage participants to refer to them for a complete discussion of risk factors and forward-looking statements. These statements speak only as of the date made, and SB Financial undertakes no obligation to update them. I will now turn the call over to Mr. Klein.

Thank you, Carol, and good morning, everyone. Welcome to our first quarter 2024 conference call and webcast. Highlights for this quarter over the prior year quarter include net income $2.4 million down just $82,000 or 3.3% from $2.5 million. Return on average assets was 71 basis points, a marginal decrease of two basis points. Return on average tangible equity was 9.48%, a 79 basis point decrease. Net interest income reached $9.2 million, influenced obviously by the challenging rate environment. Loan balances saw an increase of $15.2 million or 1.6%. Deposits displayed stability ending in a quarter of $1.11 billion reflecting a marginal increase of two basis points. Our efficiency in operations led to a 4.6% reduction in expenses over the prior year. Mortgage origination volume reflects our strategic adjustment to market conditions with a strong quarter of sales noted a fairly challenging rate environment. Asset quality showed strong performance metrics and continued stability. Our path forward remains hinged on our five key strategic initiatives, revenue diversity, balancing net interest income with fee-based revenue remains a focus as we adapt to market shifts and seek to bolster non-interest income. Organic growth, we've experienced long growth in a tightened market Demonstrating our competitive edge and commitment to prudent underwriting. Deepening relationships. Our client relationships have been strengthened and evident in our stable deposit base and loan portfolio expansion. Operations. We've honed our operational efficiencies as demonstrated by our proactive management of our expense base. And finally, asset quality. We've maintained strong asset quality as highlighted by our low non-performing asset ratio and robust loan loss reserve coverage. Looking at our revenue diversity, our mortgage business originated $42.9 million in volume. While this represents a market downturn reflecting the cooling in the housing market, we've successfully navigated these waters with strategic mortgage sales and a focus on expansions into newer markets and more originators in those markets. In addition, we've made changes to the senior leadership of the business line that will certainly ensure that all opportunities to grow in both new and existing markets remain the focus. Non-interest income stood at $3.95 million, benefiting from increased mortgage servicing rights and a strong performance in customer service fees. Our title business and wealth management services, though faced with market challenges, continue to be areas of focus for future growth. We feel that the growth trajectory in both of these divisions will be positively impacted by our holistic approach of joint calling and client referrals across all 10 of our regions and seven business lines. On the scale front, we've managed deposit costs effectively despite an aggressive market that is reflected in the modest growth of our deposit base. The growth this quarter came from our public entities, a testament to our calling and relationship building efforts. We've also embraced the Ohio Home Buyer Plus program, which we feel has great potential to drive deposits higher at a much lower weighted average cost than what we've experienced that's available on the retail deposit arena. Loan growth was below our historical levels as we have begun to see some softness in several of our markets. We were also impacted by a large relationship payoff in the quarter, which had grown beyond our financial capacity to service. Given our diverse markets and capacity, growing our loan portfolio is certainly job one as we move on into the three quarters of 2024. Pipelines continue to grow, but I would still expect that our second quarter growth will challenge our expectations as clients take a more methodical approach to their leverage position. We've reassured our clients of our strong capital position, reflecting our preparedness to meet liquidity needs without over-reliance on external funding sources. In terms of deepening relationships, post-PPP, our focus has shifted back to organic growth and capitalizing on opportunities in SBA lending, now with a pipeline in excess of $10 million and set to contribute meaningfully to future revenues. We continue to believe in this product and that it can assist our clients to properly structure their company's balance sheet for growth and can make a good credit better. We have never, nor do we expect to use SBA to ever make an unbankable client bankable. As we discussed at length in our annual meeting and annual report, we are embracing technology to further our goals of providing relationship banking to all of our clients, whatever that might look like to each client. The integration of our corporate sales champion, our new contact center, and more FinTech platforms are poised to further our penetration across households and businesses alike. We continue to look at expansion opportunities, especially in the high-growth cities and counties within our footprint. We've added significant resources to our management team in the greater Columbus market, and we expect the growth from that region in 2024 to surpass any of the previous 15 years that we have been calling in this dynamic growing market. Speaking of operational excellence, the mortgage business line remains a key driver, despite the slowdown from higher rates. As our numbers reflect, we sold in excess of 85% of our original volume in the quarter. Given the continued pressure on liquidity and margins, this is clearly the correct strategy to not only help our clients but to ensure that we maintain a profitable residential mortgage business line. Ongoing expense review and leveraging our technology spend are expected to deliver a more robust tangible book value and as always ensure a higher probability that we remain on track to deliver positive operating leverage. And finally, asset quality. We again had a strong quarter in this arena with net charge-offs annualized at just two basis points and improvements in the key metrics of non-performing and criticized loans. Coverage of our non-performing loans reached an all-time high and now stands in excess of 640% at quarter end. Our internal loan review program continues to be robust and proactive to ensure early identification of any impending client stress. I'd like to now turn the call over to our CFO, Tony Costantino, for a little more detail on our financials. Tony?