SB Financial Group, Inc.

Good morning and welcome to the SB Financial first quarter 2025 conference call and webcast. I would like to inform you that this conference call is being recorded and that all participants are in a listen-only mode. We will begin with remarks by the management and then open the conference up to the investment community for questions and answers. I will now turn the conference over to Carol Robbins with SB Financial. Please go ahead.

Thank you. 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.yourstatebank.com. Joining me today are Mark Klein, Chairman, President, and CEO, Tony Cosentino, Chief Financial Officer, and Steve Walz, 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 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'll now turn the call over to Mr. Klein.

Thank you, Carol, and good morning, everyone. Welcome to our first quarter 2025 conference call webcast. We started the year with a continued focus on growth amid an economic environment with a fair amount of uncertainty. Despite current conditions, we executed on the growth plan, closed on the Marblehead acquisition while delivering solid results, underscoring the strength of our diversified revenue business model and solid efforts by our team. I'd like to begin by giving a few highlights and key achievements for our company this first quarter. NETICOM was $2.7 million with diluted earnings per share of $0.42, up $0.09, or approximately 27% compared to the prior year quarter. When considering the $726,000 in acquisition-related costs for Marblehead and servicing rights recapture, EPS was $0.33 on a GAAP basis. Tandem book value per share ended the quarter at $15.79, up from $14.93 last year, or a 5.8% increase. Net interest income totaled $11.3 million, an increase of approximately 23%. from $9.2 million in the first quarter of 2024. From the link quarter, margin revenue accelerated at a healthy 14% annualized pace. Loan growth for the quarter was right at $97 million, up 9.8% from the prior year. And this marks the fourth consecutive quarter of sequential loan growth. Deposits grew over 10%, including Marblehead deposits of $56 million, excluding Marblehead, 5.4%. This growth demonstrates the strategic benefits of the acquisition, as well as our relationship-driven approach to attract and retain clients in a fairly highly competitive rate environment. Mortgage origination for the quarter were $40 million, down from the prior year and the linked quarters. However, the pipeline is currently sitting at approximately $50 million, and we look a more vigorous summer volume than in past years, particularly with our new expansion team of producers in the new Cincinnati market. Operating expenses increased approximately 3.5% from the linked quarter. And finally, charge-off levels returned to more historical levels in the quarter at approximately three basis points. And our remaining asset quality metrics were consistent with linked quarter. Our strategic path forward, as we've reported on in a number of quarters, remains our five key initiatives. Growing and diversifying revenue, a broader footprint for more scale, more households and more services in those households for more scope, operational excellence, and of course, always asset quality. First, revenue diversity. Our mortgage group had a fairly slow start to the year, as I mentioned, closing this $40 million in volume. We were encouraged that we did see a bit of refinance value, and that current pipeline is now well in excess of that 40 million first quarter number. We remain committed to the residential real estate business line as it continues to provide us with a stronger foothold in the esteemed Columbus metropolitan market. In fact, we now service nearly one half of our 9,000 total mortgage households out of the Central Ohio market. Over the past several years, we've reduced operating costs in this residential arena to better match resources with revenue. Also, we continue to assess departmental efficiency, and we intend to delay adding more support staff until volume puts us closer to at least the $400 million production mark, or approximately 80% of our processing capacity today. Non-nursed income was up 3.9% from the prior year quarter at $4.1 million, but down slightly from the linked quarter. The increase from the first quarter of 2024 was driven by increased gains on sale of mortgage loans and significant commercial loan swap revenue. The title business had a very strong quarter, exceeding the prior year revenue by nearly 50%. We continue to expand PEAK's title revenue business beyond traditional mortgage title policies. In fact, this quarter we had several large commercial title policy referrals from the state bank commercial team that helped drive their contribution percentage of peaks total revenue this quarter to 31%. The goal here is not only expand state banks contribution level to peak, but also expand their third party global revenue base. On scale. A key highlight for the first quarter was the completion of the acquisition of Marblehead Bank Corp on January 17th. As we've discussed in our annual meeting, this all-case acquisition benefits both entities as it expands our presence in Ottawa County, Ohio and strengthens our market position in a higher growth area, while Marblehead will benefit from a more diverse palette of tailored financial solutions, allowing them to deepen their long-standing relationship with their current client base. As we discussed in our annual meeting, this acquisition brought in an additional $56 million in low-cost deposits, as well as a $19 million loan book. This expansion reflects our commitment to both serving and growing our client base and prospects to drive long-term shareholder value. Again, as I noted earlier, deposits were up from the link quarter and year over year. For the link quarter, we saw balances rise by over $119 million, and for the Prior year quarter, 159 million. Significant contributions were made and were accelerated by higher tax revenue from our public fund entities, as well as more traditional seasonal growth. As I mentioned, we added 56 million from Marblehead and adjusting for the acquisition deposit growth would have been 103 million from the prior year and 63 million to the length quarter. The Marblehead staff and the current client base have been extremely loyal. And we're excited to bring a full slate of products to their clients and that community. When we break down our deposit base to get to the core state bank retail presence, it is clear that we've made some meaningful progress in growing our deposit relationships in the company thus far in 2025. Specifically, when we exclude public funds, those home buyer plus funds, and the Marblehead book, The core deposit base has grown just under 5% this year for an annualized growth rate of 15%. As I mentioned, overall loan growth for the quarter was strong with additional support from the Marblehead acquisition. Our loan portfolio grew $97 million or 9.8% from the first quarter of 2024 and $42 million or 4% from the linked quarter. Adjusted for that marblehead growth of 19 million loan growth would have been 78 million up 7.9% and up 23% or 2.2%. From the length quarter 23 million or 2.2% from the length quarter. The Columbus lending team continues to provide the bulk of our loan growth and we fully expect a strong full year performance from our team of now four seasons commercial lenders in that market. Closing from the second half of 2024, yet to be fully funded, and once complete, we'll add nearly a third of our overall budget of growth for all of 2025. Although pricing has become certainly more competitive, we've seen neither a pullback in this growth market nor any of our other significant growth markets for our company. In terms of deepening existing relationships and more scope, as we have commented on in prior webcasts, we understand that despite our size, our digital presence must keep us relevant to the offerings of the larger regional banks in our markets. In that vein, we recently identified a new position in our technology sector by naming a digital banking officer to drive our digital innovation to identify new clients, expand cybersecurity practices, and forge a more intentional path forward. Our overarching goal is to ensure we customize our client care initiatives while accelerating the growth of each of our unique client segments 24-7. And in addition, we have recently recommitted to our current core provider, Fiserv. As part of that contract negotiation, we will be heightening our data security measures, working to reduce client rub, and delivering a more intentional palette of banking services to include a broader offering of credit cards while enhancing the client's online banking experience, to name a few. On operational excellence, commercial real estate loans grew $80 million, C&I balances $7 million, and consumer balances another $7 million. The efforts of our regional production teams in these areas helped to offset softness within the mortgage market. Despite the lower mortgage originations, total loan production for all categories in our company in the quarter was $107 million, which was up nearly 40% from the prior year quarters. Finally, asset quality. Chargeoffs fell to just three basis points from the fairly level number in the fourth quarter. Non-performing assets totaled 6.1 million, representing 41 basis points of total assets, an increase of 600,000 compared to 5.5 million, over 40 basis points of total assets reported in the linked quarter. We remain focused on maintaining strong asset quality, as demonstrated by the continued improvement in our criticized and classified loans, which declined to $7.1 million from $8.7 million in the prior year, a reduction of $1.5 million, or 18%. Our allowance for credit losses remained robust at 1.41% of total loans, not providing 254% coverage of non-performing loans. Also, by restructuring our asset quality department in the first quarter, we are now even better positioned in this arena to remain a high performer among our peer group. Now I'd like to ask Tony Costantino, our CFO, to give us a few more details, Tony, on our quarterly performance.