SB Financial Group, Inc.

is being broadcast live over the internet. It will be archived and available on our website at ir.yourstatebank.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 materials, as well as our SEC filings. These materials are also 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, Sarah, and good morning, everyone. Welcome to our fourth quarter 2024 conference call and webcast. 2024 was definitely a year of expansion, one of some resilience and disciplined execution of our company. Despite a challenging economic environment marked by rising funding costs and evolving market dynamics, we delivered solid results, underscoring the strength of our diversified revenue business model and our commitment to our key strategic initiatives. Let me begin by highlighting some of our key achievements for the quarter and for the full year. However, before I begin, I would like to congratulate the SB Financial and Marblehead teams on successfully closing on the acquisition of the Marblehead Bank that was achieved this past Friday. We look forward to a very productive 2025 where we can provide the Marblehead clients and employees with all that State Bank team and our business lines have to offer. Highlights for the quarter include net income of 3.6 million with diluted EPS of 55 cents, which is down slightly compared to the prior year. However, when we adjust for the servicing rights impairment and the visa B share sale in 2023, EPS would be up 7 cents over the prior quarter, or 16.7%. Tangible book value per share ended the quarter at $16, up from $14.98, or a 7% increase. Net interest income totaled $10.9 million, an increase of 13.7% from the $9.6 million in the fourth quarter of 2023. from the linked quarter margin revenue accelerated at a 28% annualized pace. Loan growth for the full quarter was 46.5 million, up 4.7%, and this quarter marked the third consecutive quarter of sequential loan growth. Our Columbus region, led by our newer regional president, Adam Gressel, delivered the bulk of that growth, or 57 million, and ironically, 113% of our net growth. The pods were stable to the link quarter and more up over 82 million to 1.15 billion. Growth in our deposit base was consistent with 80% of our offices reporting higher deposit levels as compared to the prior year. This growth demonstrates the benefit of our relationship driven approach and our ability to attract and retain clients in a highly competitive rate environment. Mortgage originations for the quarter were $73 million, and for the year we originated $261 million. Northwest Ohio area, $74 million. Our Indiana market, $70 million. Columbus, $114 million. And our new Cincinnati market, $3 million. The $261 million growth, while still arguably well below our capacity, was an increase over 2023 by $45 million, or 21%, as the second half of 2024 delivered over 55% of our total 2024 volume. The servicing portfolio improved to $1.43 billion, which was up from both the prior year by 4.4% and the length quarter by 6%. Operating expenses were flat to the length quarter and up 6.1% compared to the fourth quarter of 2023. And finally, while charge-offs Levels were slightly elevated in the quarter of seven base points. Our remaining asset quality metrics were consistent with prior quarter. Our strategic path forward remains hinged on those five key strategic initiatives we mentioned in prior quarters. That's growing and diversifying revenue, more scale for efficiency, more scope for more households, more services in those households, certainly operational activity, and finally, asset quality. Looking a little closer at revenue diversity, the mortgage business line into 2024 on a relatively high note, delivering volume, as I mentioned, to 73 million, higher than the link quarter and up substantially from the prior year. Most importantly, as I mentioned, we were able to deliver 21% higher volume than 2023 in what was still a fairly tough year for this business line. Strategically in 2024, we achieved several milestones, With our Indiana team nearly becoming our second highest volume region in just five years. And are well on their way to delivering a $100 million year in 2025. And our newest region of Cincinnati was able to generate 12 loans or 2.6 million in volume in just a very few short months. We expect to add originators originators in that market and generate substantial volume in 2025. Non interest income was up slightly from the link order at 4.6 million and when we adjust the prior year for the sale of our visa B shares year over year increase with 479,000 or 11.8%. The wealth and title businesses have improved throughout 2024 as they've been the beneficiary of our internal referral process. We've seen commercial title revenues supplant the reduced residential volume and allow peak title to remain flat to the prior year as residential volume reflected stress. Likewise, positive results from our brokerage business, which relies a great deal on client and internal referrals, delivered an increase in brokerage revenue of over 73% compared to the prior year. Let's go to scale. A key highlight for the year was the successful acquisition, as I mentioned, of Marblehead Bancorp that we completed January 17th. This all cashed James Rattling Leafs, Acquisition expands our presence into Ottawa county Ohio strengthening our market positioning and a higher growth area, while creating new opportunities to deepen marble heads existing client relationships and deliver a more diverse palette of tailored financial solutions for their existing and new clients. James Rattling Leafs, This milestone reflects our deep commitment to serving our growing customer base and driving long term shareholder value. I'm proud of our team as we were able to close on this transaction very quickly, given the execution of the merger agreement in just August. Again, as I indicated earlier, deposits from the linked quarter were stable and were up substantially from the prior year by over $82 million. Our ability this past year to quickly pivot and expand our client deposit relationships via the State of Ohio Homebuyer Plus program was certainly meaningful to our results. We anticipate 2025 to be another solid year of deposit growth as we add the 50-plus million from Marblehead and return to more intentional C&I-based growth in both our legacy markets as well as our new growth markets. Overall, loan growth for 2024 was below our pre-COVID traditional levels of approximately 8%, but we saw the second half of the year improve dramatically, especially in our newer Columbus markets. Since June of 2024, total loans have improved by $41 million, or an 8.2% on an annualized basis. Also to note, we have consciously placed less emphasis on growing residential real estate portfolio loans, instead concentrating on a higher saleable strategy and allow portfolio amortization to better mature. In fact, for the year, the residential portfolio was down nearly $10 million. Normalizing our portfolio to exclude residential real estate would result in our loan growth rising from $47 million to over $57 million, again, an adjusted 8.3% growth rate. We continue to balance capital needs for growth and the return of capital via dividends and share buybacks to our stockholders. This quarter, we were fairly aggressive on our buyback with over 130,000 shares being repurchased. For all of 2024, we returned nearly $8.5 million to our shareholders via buyback and dividends, or approximately 74% of our net income. In terms of deeper relationships, more scope, as we have discussed in our prior quarters, our expanded contact center is up and fully operational. For all of 2024, we had more than 105,000 client interactions. Long term, we think this strategy will build both brand awareness and greater brand loyalty. Organic expansion was a key part of the conversation for us in 2024. We added MLOs in several of our legacy marks to take advantage of competitors leaving the business line, and we also added six MLOs in our growth regions of Indianapolis and Cincinnati. We expect that the addition of the Two offices of Marblehead this year will provide additional opportunities to deliver even greater organic balance sheet growth and saleable mortgage originations. Operational excellence. As we discussed, total mortgage volume was 21% higher compared to 2023 and $261 million. And equally important to the success of our business model, we sold 83% of the volume in the secondary market. The purchase market was the dominant player again this year, like 2023, as we saw purchase and construction volume encompass 88% of our total down slightly from 92% in 2023. In addition, our internal refinance volume was just 3.4% of our 2024 production. Finally, asset quality. Charge-offs spiked a bit in the quarter to seven basis points, but were still quite low for the year at just two basis points overall. We also expect that the three commercial credits that increased our non-performing loan levels beginning in the third quarter will resolve themselves in the first half of 2025. Our current expectations are for those credits to be unwound with minimal financial impact, We continued also to see significant improvement in our criticized and classified loans, which were down to $6.4 million from $9 million the prior year, or a reduction of $2.6 million, or 29%. I now ask Tony Cosentino, our CFO, to give us a little more information on our quarterly performance and annual performance. Tony?

Thanks, Mark. And again, good morning, everyone. Let me outline some additional highlights of our fourth quarter and full year results. First, let's take a look at the income statement and net interest income. In the fourth quarter, net interest income was $10.9 million, up $1.3 million, or 13.7% compared to the same quarter last year. This growth reflects the higher loan balances and improved asset yields, even as funding costs rose slightly. For the full year, net interest income totaled $39.9 million, a 1.7% increase over 2023. The stabilization of funding costs, and to a lesser extent, loan growth, has driven that margin improvement. For the quarter, cost of interest-bearing liabilities was 2.36%, up just three basis points from the prior year, and from the linked quarter was down 17 basis points. And our deposit cost of funds has likewise improved to 1.78%, down 16 basis points from the linked quarter, however, up 16 basis points from the prior year. As we look at non-interest income, for the quarter it was $4.6 million, down from $5.5 million in the prior year, but up 10.5% from the linked quarter. I would note that results for the fourth quarter last year included $1.5 million in gains on the sale of securities, which did not occur in the fourth quarter of 2024. Gains on mortgage loan servicing rights and wealth management fees contributed to the sequential improvement, reinforcing the value of our diversified revenue streams. For the full year, non-interest income declined by 4% compared to the prior year, but still accounted for 29.5% of total revenue. This performance was supported by wealth management and other fee-based business lines despite challenges in the mortgage, SBA, and title insurance sectors. As we look at the provision for credit losses, we recorded an actual credit of $76,000 in the fourth quarter due to the reduction in our unfunded commitments. Our CECL model is reflective of the improvement in the economic factors, which drove no increase in our allowance level this quarter. And our non-performing levels continue to include no OREO or OAO. And as Mark indicated, we believe this level is the high watermark we will experience for the coming three to six quarters. On efficiency, the efficiency ratio for the quarter was 71.1%, slightly up from 68.4% last year due to the rising funding costs. However, operating expenses remain well controlled, totaling 42.9 million for the year, just slightly higher than the 23 levels. This reflects our commitment to balancing growth investments with disciplined expense management. As we turn to the balance sheet, On loans, as Mark mentioned, total loans ended the year at $1.05 billion. And with 20% of our portfolio set to reprice over the next 12 months, we anticipate that our yield and earning assets will improve, along with the higher anticipated new loan volume and pricing. Deposits. Deposit growth followed suit and grew to $1.15 billion. On a granular basis, low-cost transactional deposits accounted for 100% of this growth. as higher-cost time deposits were level to the prior year. Even with that deposit growth, we managed to increase our loan-to-deposit ratio to nearly 91%. And as a result of our growth, our overall cost of deposits of 1.86% was well-maintained. Going forward, I would expect that the liquidity coming from the Marblehead acquisition and the scheduled amortization of our bond portfolio will fund the majority of our 2025 loan growth. On capital management during the quarter, as Mark indicated, we purchased 130,000 shares at an average price of 21, just slightly above the adjusted tangible book value. For the full year, we repurchased over 250,000 shares, which was on par with what we have done over the last three years. Tangible book value per share increased to $16, up 6.8% year over year, reflecting the strength of our capital position in our strategic capital deployments. On asset quality and taking a little future look, non-performing loans remained low at 53 basis points of total loans with net charge off to just seven basis points for the quarter. The allowance for credit losses provided coverage of 274% of non-performing loans, underscoring the robustness of our risk management framework. And as we look forward, you know, net interest margin improved in the fourth quarter to 3.35%, up 18 basis points from the linked quarter. With a substantial portion of loans repricing in 2025 and funding costs continuing to moderate, we anticipate gradual margin expansion throughout the year, even with some anticipated Fed rate decreases at the short end of the curve. I'll now turn the call back over to Mark.