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What changed in SB FINANCIAL GROUP, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SB FINANCIAL GROUP, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+220 added−240 removedSource: 10-K (2026-03-06) vs 10-K (2025-03-07)

Top changes in SB FINANCIAL GROUP, INC.'s 2025 10-K

220 paragraphs added · 240 removed · 194 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

40 edited+7 added−25 removed105 unchanged
Biggest changeWe seek to retain our employees by using their feedback to create and continually enhance programs that support their needs. We use company-wide surveys to solicit feedback from our employees. We have a formal annual goal setting and performance review process for our employees. We promote a values-based culture, an important factor in retaining our employees.
Biggest changeWe have a formal annual goal setting and performance review process for our employees. We promote a values-based culture, an important factor in retaining our employees. Our training, to share and communicate our culture to all employees, plays an important part in this process.
Consumer Protection Laws and Regulations Banks are subject to regular examination to ensure compliance with federal consumer protection statutes and regulations, including, but not limited to, the following: ● The Equal Credit Opportunity Act (prohibiting discrimination in any credit transaction on the basis of any of various criteria); ● The Truth in Lending Act (requiring that credit terms are disclosed in a manner that permits a consumer to understand and compare credit terms more readily and knowledgeably); ● The Fair Housing Act (making it unlawful for a lender to discriminate in housing-related lending activities against any person on the basis of certain criteria); ● The Home Mortgage Disclosure Act (requiring financial institutions to collect data that enables regulatory agencies to determine whether financial institutions are serving the housing credit needs of the communities in which they are located); ● The Real Estate Settlement Procedures Act (requiring that lenders provide borrowers with disclosures regarding the nature and cost of real estate settlements and prohibits abusive practices that increase borrowers’ costs); and ● Privacy provisions of the Gramm-Leach-Bliley Act (requiring financial institutions to establish policies and procedures to restrict the sharing of non-public customer data with non-affiliated parties and to protect customer information from unauthorized access).
Consumer Protection Laws and Regulations Banks are subject to regular examinations to ensure compliance with federal consumer protection statutes and regulations, including, but not limited to, the following: ● The Equal Credit Opportunity Act (prohibiting discrimination in any credit transaction on the basis of any of various criteria); ● The Truth in Lending Act (requiring that credit terms are disclosed in a manner that permits a consumer to understand and compare credit terms more readily and knowledgeably); ● The Fair Housing Act (making it unlawful for a lender to discriminate in housing-related lending activities against any person on the basis of certain criteria); ● The Home Mortgage Disclosure Act (requiring financial institutions to collect data that enables regulatory agencies to determine whether financial institutions are serving the housing credit needs of the communities in which they are located); ● The Real Estate Settlement Procedures Act (requiring that lenders provide borrowers with disclosures regarding the nature and cost of real estate settlements and prohibits abusive practices that increase borrowers’ costs); and ● Privacy provisions of the Gramm-Leach-Bliley Act (requiring financial institutions to establish policies and procedures to restrict the sharing of non-public customer data with non-affiliated parties and to protect customer information from unauthorized access).
A change in statutes, regulations or regulatory policies applicable to the Company could have a material effect on our business. 2 Regulation of Bank Holding Companies and Their Subsidiaries in General SB Financial is a financial holding company and, as such, is subject to regulation under the Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”).
A change in statutes, regulations or regulatory policies applicable to the Company could have a material effect on our business. Regulation of Bank Holding Companies and Their Subsidiaries in General SB Financial is a financial holding company and, as such, is subject to regulation under the Bank Holding Company Act of 1956, as amended (the “Bank Holding Company Act”).
State Bank has established policies and procedures that State Bank believes comply with the requirements of the Patriot Act. 8 The Anti-Money Laundering Act of 2020 (the “AMLA”), which amends the Bank Secrecy Act of 1970 (the “BSA”), was enacted in January 2021.
State Bank has established policies and procedures that State Bank believes comply with the requirements of the Patriot Act. The Anti-Money Laundering Act of 2020 (the “AMLA”), which amends the Bank Secrecy Act of 1970 (the “BSA”), was enacted in January 2021.
These regulations affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors. State Bank is also subject to regulatory guidelines establishing standards for safeguarding customer information.
These regulations affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors. 9 State Bank is also subject to regulatory guidelines establishing standards for safeguarding customer information.
Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization’s safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies. 9 Public company compensation committee members must meet heightened independence requirements and consider the independence of compensation consultants, legal counsel and other advisors to the compensation committee.
Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization’s safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies. 8 Public company compensation committee members must meet heightened independence requirements and consider the independence of compensation consultants, legal counsel and other advisors to the compensation committee.
State Bank’s capital at December 31, 2024, met the standards for the highest capital category, a “well-capitalized” bank. In April 2015, the FRB issued a final rule which increased the size limitation for qualifying bank holding companies under the FRB’s Small Bank Holding Company Policy Statement from $500 million to $1 billion of total consolidated assets.
State Bank’s capital at December 31, 2025, met the standards for the highest capital category, a “well-capitalized” bank. In April 2015, the FRB issued a final rule which increased the size limitation for qualifying bank holding companies under the FRB’s Small Bank Holding Company Policy Statement from $500 million to $1 billion of total consolidated assets.
Item 1. Business . Certain statements contained in this Annual Report on Form 10-K which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. See “Cautionary Statement Regarding Forward-Looking Information” under Item 1A. Risk Factors on page 13 of this Annual Report on Form 10-K.
Item 1. Business. Certain statements contained in this Annual Report on Form 10-K which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. See “Cautionary Statement Regarding Forward-Looking Information” under Item 1A. Risk Factors on page 12 of this Annual Report on Form 10-K.
At December 31, 2024, State Bank was in compliance with all of the regulatory capital requirements to which it was subject. For State Bank’s capital ratios, see Note 16 to the Consolidated Financial Statements under Item 8 of this Report on Form 10-K (the “Consolidated Financial Statements”).
At December 31, 2025, State Bank was in compliance with all of the regulatory capital requirements to which it was subject. For State Bank’s capital ratios, see Note 16 to the Consolidated Financial Statements under Item 8 of this Report on Form 10-K (the “Consolidated Financial Statements”).
These SEC rules, and related regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking laws and regulations. 11 In the ordinary course of business, the Company relies on electronic communications and information systems to conduct its operations and to store sensitive data.
These SEC rules, and related regulatory guidance, are in addition to notification and disclosure requirements under state and federal banking laws and regulations. 10 In the ordinary course of business, the Company relies on electronic communications and information systems to conduct its operations and to store sensitive data.
SB Captive is a self-insurance company that provides coverage to State Bank and SB Financial. The purpose of the SB Captive is to mitigate insurance risk by participating in a pool with other banks. At December 31, 2024, SB Captive had no employees.
SB Captive is a self-insurance company that provides coverage to State Bank and SB Financial . The purpose of SB Captive is to mitigate insurance risk by participating in a pool with other banks. At December 31, 2025, SB Captive had no employees.
The executive offices of the SB Financial are located at 401 Clinton Street, Defiance, Ohio 43512. Through its direct and indirect subsidiaries, SB Financial is engaged in a variety of financial activities, including commercial banking, and wealth management services, as explained in more detail below.
The executive offices of SB Financial are located at 401 Clinton Street, Defiance, Ohio 43512. Through its direct and indirect subsidiaries, SB Financial is engaged in a variety of financial activities, including commercial banking, trust and wealth management services, and title insurance, as explained in more detail below.
SBI is an insurance company that engages in the sale of insurance products to retail and commercial customers of State Bank. At December 31, 2024, SBI had no employees. SB Captive SB Captive, Inc. (“SB Captive”) is a Nevada corporation and wholly owned subsidiary of SB Financial.
SBI is an insurance company that engages in the sale of insurance products to retail and commercial customers of State Bank. At December 31, 2025, SBI had no employees. 1 SB Captive SB Captive, Inc. (“SB Captive”) is a Nevada corporation and wholly owned subsidiary of SB Financial.
This clawback policy is intended to apply to compensation paid within the three completed fiscal years immediately preceding the date the issuer is required to prepare a restatement and would cover all executives who received incentive awards. The Company’s clawback policy adopted in accordance with these listing standards is included as Exhibit 97.
This clawback policy is intended to apply to compensation paid within the three completed fiscal years immediately preceding the date the issuer is required to prepare a restatement and would cover all executives who received incentive awards. The Company’s clawback policy adopted in accordance with these listing standards is included as Exhibit 97 to this Annual Report on Form 10-K.
SBFG Title is a wholly owned subsidiary of SB Financial. SBFG Title provides title insurance and operates two locations within the Ohio Counties of Franklin and Williams. At December 31, 2024, SBFG Title had 8 full-time equivalent employees. 1 SBT Insurance SBT Insurance, LLC (“SBI”) is an Ohio corporation and wholly owned subsidiary of State Bank.
SBFG Title provides title insurance and operates two locations within the Ohio Counties of Franklin and Williams. At December 31, 2025, SBFG Title had 8 full-time equivalent employees. SBT Insurance SBT Insurance, LLC (“SBI”) is an Ohio corporation and wholly owned subsidiary of State Bank.
The FDIC rules further changed the method of determining risk-based assessment rates for established banks with less than $10 billion in assets to better ensure that banks taking on greater risks pay more for deposit insurance than banks that take on less risk. As of September 30, 2022, the DRR was 1.26%.
The FDIC rules further changed the method of determining risk-based assessment rates for established banks with less than $10 billion in assets to better ensure that banks taking on greater risks pay more for deposit insurance than banks that take on less risk.
This insurance is backed by the full faith and credit of the United States government. 6 As insurer, the FDIC is authorized to conduct examinations of and to require reporting by insured institutions, including State Bank, to prohibit any insured institution from engaging in any activity the FDIC determines to pose a threat to the Deposit Insurance Fund (the “DIF”), and to take enforcement actions against insured institutions.
As insurer, the FDIC is authorized to conduct examinations of and to require reporting by insured institutions, including State Bank, to prohibit any insured institution from engaging in any activity the FDIC determines to pose a threat to the Deposit Insurance Fund (the “DIF”), and to take enforcement actions against insured institutions.
The standards set forth in the guidelines are intended to ensure the security and confidentiality of customer records and information, protect against any anticipated threats or hazards to the security or integrity of such records and protect against unauthorized access to or use of such records or information that could result in substantial harm or inconvenience to any customer. 10 Cybersecurity In March 2015, federal regulators issued two related statements regarding cybersecurity.
The standards set forth in the guidelines are intended to ensure the security and confidentiality of customer records and information, protect against any anticipated threats or hazards to the security or integrity of such records and protect against unauthorized access to or use of such records or information that could result in substantial harm or inconvenience to any customer.
We also offer our employees the opportunity to participate in a variety of professional and leadership development programs. Our programs include a variety of industry, product, technical, professional, business development, leadership and regulatory topics. These programs are available online and in-person. In addition, we encourage all employees to be involved in the communities we serve through various volunteer activities.
We also offer our employees the opportunity to participate in a variety of professional and leadership development programs. Our programs include a variety of industry, product, technical, professional, business development, leadership and regulatory topics. These programs are available online and in-person.
The FRB assigns one of four ratings: outstanding, satisfactory; needs to improve or substantial noncompliance. The rating assigned to a financial institution is considered in connection with various applications submitted by the financial institution or its holding company to its banking regulators, including applications to acquire another financial institution or to open or close a branch office.
The rating assigned to a financial institution is considered in connection with various applications submitted by the financial institution or its holding company to its banking regulators, including applications to acquire another financial institution or to open or close a branch office.
In July 2013, the United States banking regulators issued new capital rules applicable to smaller banking organizations which also implement certain of the provisions of the Dodd-Frank Act (the “Basel III Capital Rules”). Community banking organizations, including the Company and State Bank, began transitioning to the new rules on January 1, 2015.
In July 2013, the United States banking regulators issued new capital rules applicable to smaller banking organizations which also implement certain of the provisions of the Dodd-Frank Act (the “Basel III Capital Rules”).
Because the DRR remained below the statutory minimum, the FDIC adopted a final rule in October 2022 increasing the assessment rate from three basis points to five basis points beginning with the first quarterly assessment period of 2023.
The FDIC then adopted a final rule in October 2022 increasing the assessment rate from three basis points to five basis points beginning with the first quarterly assessment period of 2023. As of December 31, 2025, the DRR was above the statutory minimum of 1.35%.
The Federal Home Loan Bank (the “FHLB”) provide credit to their members in the form of advances. As a member of the FHLB of Cincinnati, State Bank must maintain certain minimum investments in the capital stock of the FHLB of Cincinnati.
The Federal Home Loan Banks ( “FHLBs”) provide credit to their members in the form of advances. As a member of the FHLB of Cincinnati, State Bank must maintain certain minimum investments in the capital stock of the FHLB of Cincinnati. State Bank was in compliance with these requirements at December 31, 2025.
State Bank presently operates 25 banking centers, located within the Ohio counties of Allen, Defiance, Franklin, Fulton, Hancock, Lucas, Paulding, Ottawa, Williams and Wood, and one banking center located in Allen County, Indiana. State Bank also presently operates seven loan production offices, located in Franklin and Lucas Counties, Ohio, Boone, Hamilton and Steuben Counties, Indiana, and Monroe County, Michigan.
State Bank presently operates 27 banking centers, located within the Ohio counties of Allen, Defiance, Franklin, Fulton, Hancock, Henry, Lucas, Ottawa, Paulding, Williams and Wood, with one banking center located in Allen County, Indiana and one located in Steuben County, Indiana.
The Bank Holding Company Act requires the prior approval of the FRB before a financial or bank holding company may acquire direct or indirect ownership or control of more than 5 percent of the voting shares of any bank (unless the bank is already majority owned by the bank holding company), acquire all or substantially all of the assets of another bank or another financial or bank holding company, or merge or consolidate with any other bank holding company.
A bank holding company and its subsidiaries are prohibited from engaging in certain tying arrangements in connection with extensions of credit and/or the provision of other property or services to a customer by the bank holding company or its subsidiaries. 2 The Bank Holding Company Act requires the prior approval of the FRB before a financial or bank holding company may acquire direct or indirect ownership or control of more than 5 percent of the voting shares of any bank (unless the bank is already majority owned by the bank holding company), acquire all or substantially all of the assets of another bank or another financial or bank holding company, or merge or consolidate with any other bank holding company.
At December 31, 2024, State Bank had $24.7 million of excess earnings over the preceding three years. Payment of dividends by State Bank may be restricted at any time at the discretion of the regulatory authorities, if they deem such dividends to constitute an unsafe and/or unsound banking practice.
At December 31, 2025, State Bank had $12.1 million of excess earnings that would be available for dividends without approval of the FRB and the ODFI. Payment of dividends by State Bank may be restricted at any time at the discretion of the regulatory authorities, if they deem such dividends to constitute an unsafe and/or unsound banking practice.
The Basel III Capital Rules also place restrictions on the payment of capital distributions, including dividends, and certain discretionary bonus payments to executive officers if the banking organization does not hold a capital conservation buffer of greater than 2.5 percent composed of common equity tier 1 capital above its minimum risk-based capital requirements, or if its eligible retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5 percent at the beginning of the quarter. 5 In September 2019, the FRB, along with other federal bank regulatory agencies, issued a final rule, effective January 1, 2020, that gave community banks, including State Bank, the option to calculate a simple leverage ratio to measure capital adequacy if the community banks met certain requirements.
The Basel III Capital Rules also place restrictions on the payment of capital distributions, including dividends, and certain discretionary bonus payments to executive officers if the banking organization does not hold a capital conservation buffer of greater than 2.5 percent composed of common equity tier 1 capital above its minimum risk-based capital requirements, or if its eligible retained income is negative in that quarter and its capital conservation buffer ratio was less than 2.5 percent at the beginning of the quarter. 5 In December 2018, the federal banking agencies issued a final rule to address regulatory capital treatment of credit loss allowances under the current expected credit loss (“CECL”) model (accounting standard).
Economic Growth, Regulatory Relief and Consumer Protection Act On May 25, 2018, the Economic Growth, Regulatory Relief and Consumer Protection Act (the “Regulatory Relief Act”) was enacted, which repealed or modified certain provisions of the Dodd-Frank Act and eased restrictions on all but the largest banks (those with consolidated assets in excess of $250 billion).
The reserve requirement ratio remained at 0 percent as of December 31, 2025. 3 Economic Growth, Regulatory Relief and Consumer Protection Act The Economic Growth, Regulatory Relief and Consumer Protection Act (the “Regulatory Relief Act”) repealed or modified certain provisions of the Dodd-Frank Act and eased restrictions on all but the largest banks (those with consolidated assets in excess of $250 billion).
At December 31, 2024, State Bank had 244 full-time equivalent employees. SBFG Title, LLC SBFG Title, LLC dba Peak Title Agency (“SBFG Title”) was formed as an Ohio limited liability company in January 2019 and purchased all of the assets and real estate of an Ohio-based title agency effective March 15, 2019.
SBFG Title, LLC SBFG Title, LLC dba Peak Title Agency (“SBFG Title”) was formed as an Ohio limited liability company in January 2019 and purchased all of the assets and real estate of an Ohio-based title agency effective March 15, 2019. SBFG Title is a wholly owned subsidiary of SB Financial.
USA Patriot Act and Anti-Money Laundering Act The Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”) gives the United States government powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing and broadened anti-money laundering requirements.
The Company has also adopted charters of the Audit Committee, the Compensation Committee and the Governance and Nominating Committee, which charters are available on the Company’s website at www.YourSBFinancial.com by first clicking “Corporate Overview” and then “Governance Documents”. 7 USA Patriot Act and Anti-Money Laundering Act The Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”) gives the United States government powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing and broadened anti-money laundering requirements.
We are committed to ensuring that all our employees feel welcomed, valued, respected and heard so that they can fully contribute their unique talents for the benefit of our customers, their careers, our company and our communities. We monitor and evaluate various turnover and attrition metrics throughout our organization.
We are committed to having a diverse workforce, and an inclusive work environment is a natural extension of our culture. We are committed to ensuring that all our employees feel welcomed, valued, respected and heard so that they can fully contribute their unique talents for the benefit of our customers, their careers, our company and our communities.
The FDIC may also terminate the deposit insurance of any institution that has engaged in or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, order or condition imposed by the FDIC. 7 Community Reinvestment Act The Community Reinvestment Act (the “CRA”) requires State Bank’s primary federal regulatory agency, the FRB, to assess State Bank’s record in meeting the credit needs of the communities served by State Bank.
The FDIC may also terminate the deposit insurance of any institution that has engaged in or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, order or condition imposed by the FDIC.
Covered transactions, including extensions of credit, sales of securities or assets and provision of services, also must be on terms and conditions consistent with safe and sound banking practices, including credit standards, that are substantially the same or at least as favorable to State Bank as those prevailing at the time for transactions with unaffiliated companies.
Covered transactions, including extensions of credit, sales of securities or assets and provision of services, also must be on terms and conditions consistent with safe and sound banking practices, including credit standards, that are substantially the same or at least as favorable to State Bank as those prevailing at the time for transactions with unaffiliated companies. 4 A bank’s authority to extend credit to executive officers, directors and greater than 10 percent shareholders, as well as entities such persons control, is subject to Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O promulgated thereunder by the FRB.
Our annualized voluntary turnover is relatively low, as is the case for turnover of our top performers, a record which we attribute to our strong values-based culture, commitment to career development, and attractive compensation and benefit programs. At December 31, 2024, the Company employed approximately 252 full-time equivalent employees to whom a variety of benefits are provided.
We monitor and evaluate various turnover and attrition metrics throughout our organization. Our annualized voluntary turnover is relatively low, as is the case for turnover of our top performers, a record which we attribute to our strong values-based culture, commitment to career development, and attractive compensation and benefit programs.
In addition, such banks are prohibited from engaging in certain tying arrangements in connection with any extension of credit or the providing of any property or service. 4 Regulatory Capital The risk-based capital guidelines adopted by the federal banking agencies are based on the “International Convergence of Capital Measurement and Capital Standard” (Basel I), published by the Basel Committee on Banking Supervision (the “Basel Committee”).
Regulatory Capital The risk-based capital guidelines adopted by the federal banking agencies are based on the “International Convergence of Capital Measurement and Capital Standard” (Basel I), published by the Basel Committee on Banking Supervision (the “Basel Committee”).
As a result, the FDIC adopted a restoration plan requiring the restoration of the DRR to 1.35% within eight years (September 30, 2028).
In March 2016, the FDIC adopted final rules designed to meet the statutory minimum DRR of 1.35 percent. 6 Because the DRR fell below the minimum DRR, the FDIC adopted a restoration plan requiring the restoration of the DRR to 1.35% within eight years (September 30, 2028).
In response to the COVID-19 pandemic, the FRB reduced reserve requirement ratios to 0 percent effective on March 26, 2020, to support lending to households and businesses. The reserve requirement ratio remained at 0 percent as of December 31, 2024.
Federal Reserve System The FRB requires all depository institutions to maintain reserves at specified levels against their transaction accounts, primarily checking accounts. In response to the COVID-19 pandemic, the FRB reduced reserve requirement ratios to 0 percent effective on March 26, 2020, to support lending to households and businesses.
The FDIC has established 2 percent as the Designated Reserve Ratio (“DRR”), which is the amount in the DIF as a percentage of all DIF insured deposits. In March 2016, the FDIC adopted final rules designed to meet the statutory minimum DRR of 1.35 percent by September 30, 2020, the deadline imposed by the Dodd-Frank Act.
The FDIC has established 2 percent as the Designated Reserve Ratio (“DRR”), which is the amount in the DIF as a percentage of all DIF insured deposits.
Although a final rule has not been issued, the Company has undertaken efforts to ensure that the Company’s incentive compensation plans do not encourage inappropriate risks, consistent with the principles identified above.
No final rule implementing this provision of the Dodd-Frank Act has, as of the date of the filing of this Annual Report on Form 10-K, been adopted. Although a final rule has not been issued, the Company has undertaken efforts to ensure that the Company’s incentive compensation plans do not encourage inappropriate risks.
In general, the FRB may initiate enforcement actions for violations of laws and regulations and for unsafe or unsound practices. A bank holding company and its subsidiaries are prohibited from engaging in certain tying arrangements in connection with extensions of credit and/or the provision of other property or services to a customer by the bank holding company or its subsidiaries.
In general, the FRB may initiate enforcement actions for violations of laws and regulations and for unsafe or unsound practices.
Removed
State Bank was in compliance with these requirements at December 31, 2024. 3 Federal Reserve System The FRB requires all depository institutions to maintain reserves at specified levels against their transaction accounts, primarily checking accounts.
Added
State Bank also presently operates four loan production offices, located in Franklin, Lucas and Warren Counties, Ohio, and Hamilton County, Indiana. At December 31, 2025, State Bank had 246 full-time equivalent employees.
Removed
A bank’s authority to extend credit to executive officers, directors and greater than 10 percent shareholders, as well as entities such persons control, is subject to Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O promulgated thereunder by the FRB.
Added
In addition, such banks are prohibited from engaging in certain tying arrangements in connection with any extension of credit or the providing of any property or service.
Removed
The new minimum capital requirements became effective on January 1, 2015, whereas a new capital conservation buffer and deductions from common equity capital phased in from January 1, 2016 through January 1, 2019, and most deductions from common equity tier 1 capital phased in from January 1, 2015 through January 1, 2019.
Added
This insurance is backed by the full faith and credit of the United States government.
Removed
Under the rule, a community bank was eligible to elect the Community Bank Leverage Ratio (“CBLR”) framework if it had less than $10 billion in total consolidated assets, limited amounts of certain assets and off-balance sheet exposures, and a leverage ratio greater than 9.0%.
Added
Community Reinvestment Act The Community Reinvestment Act (the “CRA”) requires State Bank’s primary federal regulatory agency, the FRB, to assess State Bank’s record in meeting the credit needs of the communities served by State Bank. The FRB assigns one of four ratings: outstanding, satisfactory; needs to improve or substantial noncompliance.
Removed
Qualifying institutions that elected to use the CBLR framework (each, a “CBLR Bank”) and that maintain a leverage ratio of greater than 9.0% will be considered to have satisfied the risk-based and leverage capital requirements in the regulatory agencies’ generally applicable capital rules and to have met the well-capitalized ratio requirements.
Added
Cybersecurity In March 2015, federal regulators issued two related statements regarding cybersecurity.
Removed
No CBLR Bank was required to calculate or report risk-based capital, and each CBLR Bank could opt out of the framework at any time, without restriction, by reverting to the generally applicable risk-based capital rule.
Added
In addition, we encourage all employees to be involved in the communities we serve through various volunteer activities. 11 We seek to retain our employees by using their feedback to create and continually enhance programs that support their needs. We use company-wide surveys to solicit feedback from our employees.
Removed
Pursuant to the CARES Act, on August 26, 2020, the federal banking agencies adopted a final rule that temporarily lowered the CBLR threshold and provided a gradual transition back to the prior level. Specifically, the CBLR threshold was reduced to 8.0% for the remainder of 2020, increased to 8.5% for 2021, and returned to 9.0% on January 1, 2022.
Added
At December 31, 2025, the Company employed approximately 254 full-time equivalent employees to whom a variety of benefits are provided. Management considers its relationship with its employees to be good.
Removed
This final rule became effective on October 1, 2020. The Company did not utilize the CBLR in assessing capital adequacy and continued to follow existing capital rules. In December 2018, the federal banking agencies issued a final rule to address regulatory capital treatment of credit loss allowances under the current expected credit loss (“CECL”) model (accounting standard).
Removed
The Dodd-Frank Act required the FDIC to offset the effect on insured institutions with assets of less than $10 billion of the increase in the statutory minimum DRR to 1.35% from the former statutory minimum of 1.15%.
Removed
Although the FDIC’s rules reduced assessment rates on all banks, they imposed a surcharge on banks with assets of $10 billion or more to be paid until the DRR reached 1.35%. The DRR met the statutory minimum of 1.35% on September 30, 2018.
Removed
As a result, the previous surcharge imposed on banks with assets of $10 billion or more was lifted. In addition, preliminary assessment credits have been determined by the FDIC for banks with assets of less than $10 billion, which had previously contributed to the increase of the DRR to 1.35%.
Removed
On June 30, 2019, the DRR reached 1.40%, and the FDIC applied credits for banks with assets of less than $10 billion (“small bank credits”) beginning September 30, 2019. As of June 30, 2020, the DRR fell below the minimum DRR to 1.30%.
Removed
In the FDIC’s most recent semiannual update for the Amended Restoration Plan in October 2024, the FDIC noted a 6 basis point increase in the reserve ratio, from 1.15% as of December 31, 2023 to 1.21% as of June 30, 2024.
Removed
The FDIC staff projected that the reserve ratio remains on track to reach the statutory minimum of 1.35% ahead of the deadline of September 30, 2028. As a result, the FDIC staff recommended no changes to the Amended Restoration Plan and all scheduled assessment rates were maintained.
Removed
On November 16, 2023, the FDIC adopted a final rule implementing a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the failures of Silicon Valley Bank and Signature Bank.
Removed
The assessment base for the special assessment is equal to an insured depository institution’s estimated uninsured deposits reported for the quarter ended December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits.
Removed
The FDIC began collecting the special assessment at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods, beginning with the first quarter of 2024. Because State Bank’s uninsured deposits were less than $5 billion for the quarter ended December 31, 2022, State Bank is not subject to this special assessment.
Removed
On October 24, 2023, the federal banking agencies, including the FRB, issued a final rule designed to strengthen and modernize the regulations implementing the CRA.
Removed
The changes are designed to encourage banks to expand access to credit, investment and banking services in low- and moderate-income communities, adapt to changes in the banking industry, including mobile and internet banking, provide greater clarity and consistency in the application of the CRA regulations, and tailor CRA evaluations and data collection to bank size and type.
Removed
The applicability date for the majority of the changes to the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027. The Company is still evaluating and cannot predict the impact the changes to the CRA may have on its operations at this time.
Removed
The Company has also adopted charters of the Audit Committee, the Compensation Committee and the Governance and Nominating Committee, which charters are available on the Company’s website at www.YourSBFinancial.com by first clicking “Corporate Overview” and then “Governance Documents”.
Removed
No final rule implementing this provision of the Dodd-Frank Act has, as of the date of the filing of this Annual Report on Form 10-K, been adopted, but a proposed rule was published in 2016, and again in 2024, that expanded upon a prior proposed rule published in 2011.
Removed
The proposed rule is intended to: (i) prohibit incentive-based payment arrangements that the banking agencies determine could encourage certain financial institutions to take inappropriate risks by providing excessive compensation or that could lead to material financial loss; (ii) require the board of directors of those financial institutions to take certain oversight actions related to incentive-based compensation; and (iii) require those financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate federal regulator.
Removed
Our training, to share and communicate our culture to all employees, plays an important part in this process. We are committed to having a diverse workforce, and an inclusive work environment is a natural extension of our culture.
Removed
Management considers its relationship with its employees to be good. 12

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeEnvironmental laws and evolving regulation may require us to incur substantial expenses and may materially reduce the affected property’s value or limit our ability to use or sell the affected property. In addition, future laws and regulations or more stringent interpretations or enforcement policies with respect to existing laws or regulations may increase our exposure to environmental liability.
Biggest changeIf hazardous or toxic substances are found, we may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws and evolving regulation may require us to incur substantial expenses and may materially reduce the affected property’s value or limit our ability to use or sell the affected property.
We rely heavily on communications and information systems to conduct our business. Any failure, interruption or breach in security of these systems could result in failures or disruptions in our customer relationship management, general ledger, deposit, loan and other systems.
We rely heavily on communications and information systems to conduct our business. Any failure, interruption or breach in security of these systems could result in failures or disruptions in our customer relationship management, general ledger, deposit, loan and other systems.
The Company will continue to monitor future potential bank failures and/or volatility within the banking industry in general, along with any responsive measures taken by the banking regulators to mitigate or manage potential turmoil in the banking industry. We could experience an unexpected inability to obtain needed liquidity which could adversely affect our business, profitability, and viability a going concern.
The Company will continue to monitor future potential bank failures and/or volatility within the banking industry in general, along with any responsive measures taken by the banking regulators to mitigate or manage potential turmoil in the banking industry. 16 We could experience an unexpected inability to obtain needed liquidity which could adversely affect our business, profitability, and viability a going concern.
Any such acquisition or expansion of our business will involve a number of expenses and risks, which may include some or all of the following: ● the time and expense associated with identifying and evaluating potential acquisitions or expansions; ● the potential inaccuracy of estimates and judgments used to evaluate credit, operations, management and market risk with respect to target institutions; 16 ● the time and costs of evaluating new markets, hiring local management and opening new offices, and the delay between commencing these activities and the generation of profits from the expansion; ● any financing required in connection with an acquisition or expansion; ● the diversion of management’s attention to the negotiation of a transaction and the integration of the operations and personnel of the combining businesses; ● entry into unfamiliar markets and the introduction of new products and services into our existing business; ● the possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations; and ● the risk of loss of key employees and customers.
Any such acquisition or expansion of our business will involve a number of expenses and risks, which may include some or all of the following: ● the time and expense associated with identifying and evaluating potential acquisitions or expansions; 15 ● the potential inaccuracy of estimates and judgments used to evaluate credit, operations, management and market risk with respect to target institutions; ● the time and costs of evaluating new markets, hiring local management and opening new offices, and the delay between commencing these activities and the generation of profits from the expansion; ● any financing required in connection with an acquisition or expansion; ● the diversion of management’s attention to the negotiation of a transaction and the integration of the operations and personnel of the combining businesses; ● entry into unfamiliar markets and the introduction of new products and services into our existing business; ● the possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations; and ● the risk of loss of key employees and customers.
Like other large financial institutions, we are also subject to risk from potential employee misconduct, including non-compliance with policies and improper use or disclosure of confidential information. Our insurance may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation.
Like other large financial institutions, we are also subject to risk from potential employee misconduct, including non-compliance with policies and improper use or disclosure of confidential information. 21 Our insurance may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation.
Negative public opinion could adversely affect our ability to attract and keep customers, could expose us to potential litigation and regulatory action, and could have a material adverse effect on the price of our common shares or result in heightened volatility of our stock price. 17 Recent and future bank failures may adversely affect the Company’s business, earnings and financial condition.
Negative public opinion could adversely affect our ability to attract and keep customers, could expose us to potential litigation and regulatory action, and could have a material adverse effect on the price of our common shares or result in heightened volatility of our stock price. Recent and future bank failures may adversely affect the Company’s business, earnings and financial condition.
In addition to the other risk factors contained or incorporated by reference herein, factors that could affect our trading price: ● our actual or anticipated operating and financial results, including how those results vary from the expectations of management, securities analysts and investors; ● changes in financial estimates or publications of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to us or other financial institution; ● failure to declare dividends on our common shares from time to time; ● reports in the press or investment community generally or relating to our reputation or the financial services industry; ● developments in our business or operations or in the financial sector generally; ● any future offerings by us of our common shares; ● any future offerings by us of debt or preferred shares, which would be senior to our common shares upon liquidation and for purposes of dividend distributions; ● legislative or regulatory changes affecting our industry generally or our business and operations specifically; ● the operating and share price performance of companies that investors consider to be comparable to us; ● announcements of strategic developments, acquisitions, restructurings, dispositions, financings and other material events by us or our competitors; ● actions by our current shareholders, including future sales of common shares by existing shareholders, including our directors and executive officers; ● proposed or final regulatory changes or developments; ● anticipated or pending regulatory investigations, proceedings, or litigation that may involve or affect us; and ● other changes in U.S. or global financial markets, global economies and general market conditions, such as interest or foreign exchange rates, stock, commodity, credit or asset valuations or volatility.
In addition to the other risk factors contained or incorporated by reference herein, factors that could affect our trading price: ● our actual or anticipated operating and financial results, including how those results vary from the expectations of management, securities analysts and investors; ● changes in financial estimates or publications of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to us or other financial institutions; ● failure to declare dividends on our common shares from time to time; ● reports in the press or investment community generally or relating to our reputation or the financial services industry; ● developments in our business or operations or in the financial sector generally; ● any future offerings by us of our common shares; 22 ● any future offerings by us of debt or preferred shares, which would be senior to our common shares upon liquidation and for purposes of dividend distributions; ● legislative or regulatory changes affecting our industry generally or our business and operations specifically; ● the operating and share price performance of companies that investors consider to be comparable to us; ● announcements of strategic developments, acquisitions, restructurings, dispositions, financings and other material events by us or our competitors; ● actions by our current shareholders, including future sales of common shares by existing shareholders, including our directors and executive officers; ● proposed or final regulatory changes or developments; ● anticipated or pending regulatory investigations, proceedings, or litigation that may involve or affect us; and ● other changes in U.S. or global financial markets, global economies and general market conditions, such as interest or foreign exchange rates, stock, commodity, credit or asset valuations or volatility.
While we maintain specific “cyber” insurance coverage, which would apply in the event of various breach scenarios, the amount of coverage may not be adequate in any particular case. Furthermore, because cyber threat scenarios are inherently difficult to predict and can take many forms, some breaches may not be covered under our cyber insurance coverage.
While we maintain specific “cyber” insurance coverage, which would apply in the event of various breach scenarios, the amount of coverage may not be adequate in any particular case. Furthermore, because cyber threat scenarios are inherently difficult to predict and can take many forms, some breaches may not be covered under our cyber insurance policies.
If we cannot raise additional capital when needed, it may have a material adverse effect on our financial condition, results of operations and prospects. General Risk Factors: Our earnings are significantly affected by the fiscal and monetary policies of the federal government and its agencies. The policies of the FRB impact us significantly.
If we cannot raise additional capital when needed, it may have a material adverse effect on our financial condition, results of operations and prospects. 23 General Risk Factors: Our earnings are significantly affected by the fiscal and monetary policies of the federal government and its agencies. The policies of the FRB impact us significantly.
We are also at risk of the impact of natural disasters, terrorism and international hostilities on our systems or for the effects of outages or other failures involving power or communications systems operated by others. Misconduct by employees could include fraudulent, improper or unauthorized activities on behalf of clients or improper use of confidential information.
We are also at risk of the impact of natural disasters, terrorism and international hostilities on our systems or for the effects of outages or other failures involving power or communications systems operated by others. 17 Misconduct by employees could include fraudulent, improper or unauthorized activities on behalf of clients or improper use of confidential information.
Any of the above-mentioned events or disruptions could affect our business, financial condition and operating results, and may also magnify the impact of other risks described in this Form 10-K. We may be unable to manage interest rate risks, which could reduce our net interest income.
Any of the above-mentioned events or disruptions could affect our business, financial condition and operating results, and may also magnify the impact of other risks described in this Form 10-K. 13 We may be unable to manage interest rate risks, which could reduce our net interest income.
Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for the Company. 22 We may be the subject of litigation, which could result in legal liability and damage to our business and reputation.
Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for the Company. We may be the subject of litigation, which could result in legal liability and damage to our business and reputation.
Even the reduction of regulatory restrictions could have an adverse effect on us and our shareholders if such lessening of restrictions increases competition within our industry or our market area. Changes in accounting standards could influence our results of operations.
Even the reduction of regulatory restrictions could have an adverse effect on us and our shareholders if such lessening of restrictions increases competition within our industry or our market area. 20 Changes in accounting standards could influence our results of operations.
In addition, even if a more active market of our shares should develop, we cannot guarantee that such a market will continue. 23 The market price of our common shares may be subject to fluctuations and volatility.
In addition, even if a more active market of our shares should develop, we cannot guarantee that such a market will continue. The market price of our common shares may be subject to fluctuations and volatility.
In addition, the Company established a related reserve for unfunded commitments of $1.1 million as of January 1, 2023. 15 If real estate markets or the economy in general deteriorate, State Bank may experience increased delinquencies and credit losses. The ACL may not be sufficient to cover actual loan-related losses.
In addition, the Company established a related reserve for unfunded commitments of $1.1 million as of January 1, 2023. 14 If real estate markets or the economy in general deteriorate, State Bank may experience increased delinquencies and credit losses. The ACL may not be sufficient to cover actual loan-related losses.
Management’s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 31 of this Annual Report on Form 10-K. 25 We may experience increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to the Company’s environmental, social and governance (“ESG”) practices.
Management’s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 31 of this Annual Report on Form 10-K. 24 We may experience increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to the Company’s environmental, social and governance (“ESG”) practices.
Moreover, the Financial Accounting Standards Board (the “FASB”) has changed its requirements for establishing the ACL. On June 16, 2016, the FASB issued Accounting Standard Update (“ASU”) 2016-13 “Financial Instruments - Credit Losses”, which replaced the incurred loss model with an expected loss model and is referred to as the CECL model.
Moreover, the Financial Accounting Standards Board (the “FASB”) has changed its requirements for establishing the ACL. On June 16, 2016, the FASB issued Accounting Standard Update (“ASU”) 2016-13 “Financial Instruments - Credit Losses”, which replaced the incurred loss model with an expected loss model that is referred to as the CECL model.
The transition to the CECL model requires significantly greater data requirements and changes to methodologies to accurately account for expected losses under the new parameters.
The CECL model requires significantly greater data requirements and changes to methodologies to accurately account for expected losses under the new parameters.
Conditions such as inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling and/or possible future U.S. government shutdowns over budget disagreements, slowing gross domestic product, tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements, trade wars, and other factors beyond our control may adversely affect our deposit levels and composition, the quality of investment securities available for purchase, demand for loans, the ability of our borrowers to repay their loans, and the value of the collateral securing loans made by us.
Conditions such as inflation, recession, unemployment, changes in interest rates, fiscal and monetary policy, an increasing federal government budget deficit, the failure of the federal government to raise the federal debt ceiling and/or possible future U.S. government shutdowns over budget disagreements, slowing gross domestic product, potential or imposed tariffs, a U.S. withdrawal from or significant renegotiation of trade agreements and other changes in the relationship of the U.S. and U.S. global partners, trade wars, and other factors beyond our control may adversely affect our deposit levels and composition, the quality of investment securities available for purchase, demand for loans, the ability of our borrowers to repay their loans, and the value of the collateral securing loans made by us.
Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations often impose additional compliance costs.
GAAP. Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations often impose additional compliance costs.
Because of the inherent nature of these estimates, we cannot provide complete assurance that we will not be required to adjust earnings for significant unexpected loan losses, nor that we will not recognize a material provision for impairment of our goodwill. For additional information regarding these critical estimates, see Item 7.
Because of the inherent nature of these estimates, we cannot provide assurance that we will not be required to adjust earnings for significant unexpected loan losses, nor that we will not recognize a material provision for impairment of our goodwill in the future. For additional information regarding these critical estimates, see Item 7.
We are exposed to a number of operational risks. We are exposed to many types of operational risk, including reputational risk, legal and compliance risk, cybersecurity risk, the risk of fraud or theft by employees or outsiders, unauthorized transactions by employees or operational errors, including clerical or record-keeping errors or those resulting from faulty or disabled computer or telecommunications systems.
We are exposed to many types of operational risk, including reputational risk, legal and compliance risk, cybersecurity risk, the risk of fraud or theft by employees or outsiders, unauthorized transactions by employees or operational errors, including clerical or record-keeping errors or those resulting from faulty or disabled computer or telecommunications systems.
The banking industry is highly regulated. We are subject to supervision, regulation and examination by various federal and state regulators, including the FRB, the ODFI, the SEC, the CFPB, the FDIC, Financial Industry Regulatory Authority, Inc. (“FINRA”), and various state regulatory agencies.
We are subject to supervision, regulation and examination by various federal and state regulators, including the FRB, the ODFI, the SEC, the CFPB, the FDIC, Financial Industry Regulatory Authority, Inc. (“FINRA”), and various state regulatory agencies.
Although the length, impact and outcome of the ongoing war in Ukraine and the conflict in the Middle East are highly unpredictable, these conflicts have resulted, and could continue to result, in significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences, as well as increases in cyberattacks and espionage.
Although the length, impact and outcome of global conflicts are highly unpredictable, these conflicts have resulted, and could continue to result, in significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences, as well as increases in cyberattacks and espionage.
In some cases, we could be required to apply a new or revised standard retroactively, which would result in the restatement of our financial statements for prior periods. The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make significant estimates that affect the financial statements.
In some cases, we could be required to apply a new or revised standard retroactively, which would result in the restatement of our financial statements for prior periods. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make significant estimates that affect the financial statements.
The payment of dividends by us is also subject to regulatory restrictions. As a result, any payment of dividends in the future will be dependent, in large part, on our ability to satisfy these regulatory restrictions and our subsidiaries’ earnings, capital requirements, financial condition and other factors.
As a result, any payment of dividends in the future will be dependent, in large part, on our ability to satisfy these regulatory restrictions and our subsidiaries’ earnings, capital requirements, financial condition and other factors.
For example, in deciding whether to extend credit to a business, we may assume that the customer’s audited financial statements conform to generally accepted accounting principles and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer, and we may also rely on the audit report covering those financial statements.
For example, in deciding whether to extend credit to a business, we may assume that the customer’s audited financial statements conform to U.S. GAAP and present fairly, in all material respects, the financial condition, results of operations and cash flows of the customer, and we may also rely on the audit report covering those financial statements.
These laws and regulations, among other matters, prescribe minimum capital requirements, impose limitations on our business activities (including foreclosure and collection practices), limit the dividends or distributions that we can pay, and impose certain specific accounting requirements that may be more restrictive and may result in greater or earlier charges to earnings or reductions in capital than would otherwise be required under generally accepted accounting principles in the United States of America.
These laws and regulations, among other matters, prescribe minimum capital requirements, impose limitations on our business activities (including foreclosure and collection practices), limit the dividends or distributions that we can pay, and impose certain specific accounting requirements that may be more restrictive and may result in greater or earlier charges to earnings or reductions in capital than would otherwise be required under U.S.
Our financial condition and results of operations could be negatively impacted to the extent we rely on financial statements that do not comply with generally accepted accounting principles or that are materially misleading. We may not be able to grow, and if we do, we may have difficulty managing that growth.
Our financial condition and results of operations could be negatively impacted to the extent we rely on financial statements that do not comply with U.S. GAAP or that are materially misleading. We may not be able to grow, and if we do, we may have difficulty managing that growth.
All of the types of cybersecurity incidents discussed above could result in damage to the Company’s reputation, loss of customer business, litigation, increased regulatory scrutiny and potential enforcement actions, repairs of system damage, increased investments in cybersecurity (such as obtaining additional technology, making organizational changes, deploying additional personnel, training personnel and engaging consultants), increased insurance premiums, and loss of investor confidence and a reduction in the price of our common shares, all of which could result in financial loss and material adverse effects on the Company’s results of operations and financial condition. 19 Our business could be adversely affected through third parties who perform significant operational services on our behalf.
All of the types of cybersecurity incidents discussed above could result in damage to the Company’s reputation, loss of customer business, litigation, increased regulatory scrutiny and potential enforcement actions, repairs of system damage, increased investments in cybersecurity (such as obtaining additional technology, making organizational changes, deploying additional personnel, training personnel and engaging consultants), increased insurance premiums, and loss of investor confidence and a reduction in the price of our common shares, all of which could result in financial loss and material adverse effects on the Company’s results of operations and financial condition.
The Company recognized a one-time cumulative effect adjustment (increase) to the ACL of $1.4 million upon adoption as of January 1, 2023.
The Company adopted the new CECL guidance effective as of January 1, 2023. The Company recognized a one-time cumulative effect adjustment (increase) to the ACL of $1.4 million upon adoption as of January 1, 2023.
In accordance with accounting principles generally accepted in the United States, we maintain an ACL to provide for loan defaults and non-performance, which when combined, we refer to as the ACL. Our ACL may not be adequate to cover actual credit losses, and future provisions for credit losses could have a material adverse effect on our operating results.
GAAP”), we maintain an ACL to provide for loan defaults and non-performance, which when combined, we refer to as the ACL. Our ACL may not be adequate to cover actual credit losses, and future provisions for credit losses could have a material adverse effect on our operating results.
The macroeconomic environment in the U.S. is susceptible to global events and volatility in financial markets. In addition, trade negotiations between the U.S. and other nations, including negotiations related to recent tariffs and threats of tariffs by the U.S., remain uncertain and could adversely impact economic and market conditions for the Company and our clients and counterparties.
In addition, trade negotiations between the U.S. and other nations, including negotiations related to recent tariffs and threats of tariffs by the U.S., remain uncertain and could adversely impact economic and market conditions for the Company and our clients and counterparties.
Our loan customers may not repay their loans according to their terms, and the collateral securing the payment of these loans may be insufficient to pay any remaining loan balance. We may experience significant credit losses, which could have a material adverse effect on our operating results.
Our loan customers may not repay their loans according to their terms, and the collateral securing the payment of these loans may be insufficient to pay any remaining loan balance. We may experience significant credit losses, which could have a material adverse effect on our operating results. In accordance with accounting principles generally accepted in the United States (“U.S.
As a result, our success depends in large part on the general economic conditions of these areas, particularly given that a significant portion of our lending relates to real estate located in this region.
As a result, our success depends in large part on the general economic conditions of these areas, particularly given that a significant portion of our lending relates to real estate located in this region. Therefore, adverse changes in the economic conditions in these areas could adversely impact our earnings and cash flows.
Risks Related to Our Capital and Common Shares: Our ability to pay cash dividends is limited, and we may be unable to pay cash dividends in the future even if we elect to do so. We are dependent primarily upon the earnings of our operating subsidiaries for funds to pay dividends on our common shares.
Risks Related to Our Capital and Common Shares: Our ability to pay cash dividends is limited, and we may be unable to pay cash dividends in the future. We are dependent primarily upon the earnings of our operating subsidiaries for funds to pay dividends on our common shares. The payment of dividends by us is also subject to regulatory restrictions.
There can be no assurance, however, that assessments will not be changed in the future. We operate in a highly regulated industry, and the laws and regulations that govern our operations, corporate governance, executive compensation and financial accounting, or reporting, including changes in, or failure to comply with the same, may adversely affect the Company.
We operate in a highly regulated industry, and the laws and regulations that govern our operations, corporate governance, executive compensation and financial accounting, or reporting, including changes in, or failure to comply with the same, may adversely affect the Company. The banking industry is highly regulated.
We may incur substantial costs to expand, and we can give no assurance that such expansion will result in the levels of profits we expect. Neither can we assure that integration efforts for any future acquisitions will be successful. We may issue equity securities in connection with acquisitions, which could dilute the economic and voting interests of our existing shareholders.
We may incur substantial costs to expand, and we can give no assurance that such expansion will result in the levels of profits we expect. Neither can we assure that integration efforts for any future acquisitions will be successful.
The third parties performing operational services for the Company are subject to risks similar to those faced by the Company relating to cybersecurity, breakdowns or failures of their own systems, or misconduct of their employees.
Our business could be adversely affected through third parties who perform significant operational services on our behalf. The third parties performing operational services for the Company are subject to risks similar to those faced by the Company relating to cybersecurity, breakdowns or failures of their own systems, or misconduct of their employees.
Consequently, a takeover attempt may prove difficult, and shareholders may not realize the highest possible price for their securities. We may be compelled to seek additional capital in the future, but capital may not be available when needed. We are required by federal and state regulatory authorities to maintain adequate levels of capital to support our operations.
We may be compelled to seek additional capital in the future, but capital may not be available when needed. We are required by federal and state regulatory authorities to maintain adequate levels of capital to support our operations.
Except as may be required by law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made. All forward-looking statements attributable to the Company or any person acting on our behalf are qualified in their entirety by the following cautionary statements.
Except as may be required by law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made.
Additional risks that are not presently known or that we currently deem to be immaterial could also have a material adverse impact on our business, financial condition, or results of operations.
These risk factors are not presented in any particular order and do not constitute all of the risks that may affect our business. Additional risks that are not presently known or that we currently deem to be immaterial could also have a material adverse impact on our business, financial condition, or results of operations.
While we have underwriting policies and procedures designed to avoid breaches of representations and warranties as well as borrower fraud, there can be no assurance that no breach or fraud will ever occur.
While we have underwriting policies and procedures designed to avoid breaches of representations and warranties as well as borrower fraud, there can be no assurance that no breach or fraud will ever occur. Required repurchases, substitutions or indemnifications could have an adverse impact on our liquidity, results of operations and financial statements.
The effect on our net interest income from a change in interest rates will ultimately depend on the extent to which the aggregate impact of loan re-pricings exceeds the impact of increases in our cost of funds. 14 Changes in interest rates may affect the level of voluntary prepayments on our loans and may also affect the level of financing or refinancing by customers.
The effect on our net interest income from a change in interest rates will ultimately depend on the extent to which the aggregate impact of loan re-pricings exceeds the impact of increases in our cost of funds.
The preparation of our financial statements requires the use of estimates that may vary from actual results. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make significant estimates that affect the financial statements.
The preparation of our financial statements requires the use of estimates that may vary from actual results. The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make significant estimates that affect the financial statements. Two of our most critical estimates are the level of the ACL and the accounting for goodwill and other intangibles.
Some of these factors include: inflation, recession, unemployment, money supply, international disorders, and instability in domestic and foreign financial markets.
Interest rates are highly sensitive to many factors that are beyond our control. Some of these factors include: inflation, recession, unemployment, money supply, international disorders, and instability in domestic and foreign financial markets.
The impact of any changes to laws and regulations or other actions by regulatory agencies may negatively impact us or our ability to increase the value of our business.
Regulations affecting banks and financial services businesses are undergoing continuous change, and management cannot predict the effect of these changes. The impact of any changes to laws and regulations or other actions by regulatory agencies may negatively impact us or our ability to increase the value of our business.
Changes in interest rates may also negatively affect the ability of the Company’s borrowers to repay their loans, particularly as interest rates rise and adjustable rate loans become more expensive. Interest rates are highly sensitive to many factors that are beyond our control.
Changes in interest rates may affect the level of voluntary prepayments on our loans and may also affect the level of financing or refinancing by customers. Changes in interest rates may also negatively affect the ability of the Company’s borrowers to repay their loans, particularly as interest rates rise and adjustable rate loans become more expensive.
Required repurchases, substitutions or indemnifications could have an adverse impact on our liquidity, results of operations and financial statements. 20 We are subject to environmental liability risk associated with lending activities. A significant portion of our loan portfolio is secured by real property. During the ordinary course of business, we foreclose on and take title to properties securing certain loans.
We are subject to environmental liability risk associated with lending activities. A significant portion of our loan portfolio is secured by real property. During the ordinary course of business, we foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties.
Therefore, adverse changes in the economic conditions in these areas could adversely impact our earnings and cash flows. 13 Instability in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have a material adverse effect on our results of operations and financial condition.
Instability in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have a material adverse effect on our results of operations and financial condition. The macroeconomic environment in the U.S. is susceptible to global events and volatility in financial markets.
During 2008 and 2009, there were higher levels of bank failures which dramatically increased resolution costs of the FDIC and depleted the deposit insurance fund. The FDIC collected a special assessment in 2009 to replenish the DIF and also required a prepayment of an estimated amount of future deposit insurance premiums.
The FDIC charges the insured financial institutions premiums to maintain the DIF at a certain level. During 2008 and 2009, there were higher levels of bank failures which dramatically increased resolution costs of the FDIC and depleted the deposit insurance fund.
Under the federal Change in Bank Control Act, a person may be required to obtain prior approval from the Federal Reserve Board before acquiring 10 percent or more of our common shares or the power to directly or indirectly control our management, operations, or policies. 24 We have implemented anti-takeover devices that could make it more difficult for another company to purchase us, even though such a purchase may increase shareholder value.
Investors could become subject to regulatory restrictions upon ownership of our common shares. Under the federal Change in Bank Control Act, a person may be required to obtain prior approval from the Federal Reserve Board before acquiring 10 percent or more of our common shares or the power to directly or indirectly control our management, operations, or policies.
One or more of the third parties utilized by us may experience a cybersecurity event or operational disruption and, if any such event does occur, it may not be adequately addressed, either operationally or financially, by such third party.
Like many other community banks, State Bank also relies, in significant part, on a single vendor for the systems which allow State Bank to provide banking services to State Bank’s customers. 18 One or more of the third parties utilized by us may experience a cybersecurity event or operational disruption and, if any such event does occur, it may not be adequately addressed, either operationally or financially, by such third party.
In many cases, shareholders may receive a premium for their shares if we were purchased by another company. Ohio law and our Amended Articles of Incorporation, as amended, and Amended and Restated Regulations, as amended, make it difficult for anyone to purchase us without the approval of our Board of Directors.
Ohio law and our Amended Articles of Incorporation, as amended, and Amended and Restated Regulations, as amended, make it difficult for anyone to purchase us without the approval of our Board of Directors. Consequently, a takeover attempt may prove difficult, and shareholders may not realize the highest possible price for their securities.
Other businesses and organizations have been victims of ransomware attacks in which the business becomes unable to access its own information and is presented with a demand to pay a ransom in order to once again have access to its information. 18 We could be adversely affected if one of our employees or a third-party service provider causes a significant operational breakdown or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates our operations or systems.
We could be adversely affected if one of our employees or a third-party service provider causes a significant operational breakdown or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates our operations or systems.
Legislative, Legal and Regulatory Risks: FDIC insurance premiums may increase materially, which could negatively affect our profitability. The FDIC insures deposits at FDIC insured financial institutions, including State Bank. The FDIC charges the insured financial institutions premiums to maintain the DIF at a certain level.
The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our business, financial condition and results of operations. 19 Legislative, Legal and Regulatory Risks: FDIC insurance premiums may increase materially, which could negatively affect our profitability. The FDIC insures deposits at FDIC insured financial institutions, including State Bank.
Laws and regulations may change from time to time and are primarily intended for the protection of consumers, depositors, borrowers, the DIF and the banking system as a whole, and not to benefit our shareholders. 21 Regulations affecting banks and financial services businesses are undergoing continuous change, and management cannot predict the effect of these changes.
We are subject to extensive state and federal regulation, supervision and legislation that govern almost all aspects of our operations. Laws and regulations may change from time to time and are primarily intended for the protection of consumers, depositors, borrowers, the DIF and the banking system as a whole, and not to benefit our shareholders.
In October 2022, the FDIC adopted a final rule increasing the assessment rate from three basis points to five basis points beginning with the first quarterly assessment period of 2023. The FDIC recently adopted rules revising the assessments in a manner benefiting banks with assets totaling less than $10 billion.
The FDIC collected a special assessment in 2009 to replenish the DIF and also required a prepayment of an estimated amount of future deposit insurance premiums. In October 2022, the FDIC adopted a final rule increasing the assessment rate from three basis points to five basis points beginning with the first quarterly assessment period of 2023.
Risk Factors The following sets forth certain risk factors that we are believe are relevant to the Company and its business. These risk factors are not presented in any particular order and do not constitute all of the risks that may affect our business.
All forward-looking statements attributable to the Company or any person acting on our behalf are qualified in their entirety by the following cautionary statements. 12 Risk Factors The following sets forth certain risk factors that we believe are relevant to the Company and its business.
Environmental reviews of real property before initiating foreclosure actions may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our business, financial condition and results of operations.
In addition, future laws and regulations or more stringent interpretations or enforcement policies with respect to existing laws or regulations may increase our exposure to environmental liability. Environmental reviews of real property before initiating foreclosure actions may not be sufficient to detect all potential environmental hazards.
Removed
The new CECL accounting guidance is effective for annual reporting periods and interim reporting periods within those annual periods, beginning after December 15, 2019. However, the FASB deferred the effective date for this ASU for smaller reporting companies, such as the Company, to annual reporting periods and interim reporting periods within those annual periods, beginning after December 15, 2022.
Added
Further, there has been increased tension with Venezuela in recent months as well as increased trade competition with China.
Removed
Like many other community banks, State Bank also relies, in significant part, on a single vendor for the systems which allow State Bank to provide banking services to State Bank’s customers.
Added
We may also issue equity securities in connection with acquisitions, which could dilute the economic and voting interests of our existing shareholders. We are exposed to a number of operational risks.
Removed
In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous or toxic substances are found, we may be liable for remediation costs, as well as for personal injury and property damage.
Added
Other businesses and organizations have been victims of ransomware attacks in which the business becomes unable to access its own information and is presented with a demand to pay a ransom in order to once again have access to its information.
Removed
We are subject to extensive state and federal regulation, supervision and legislation that govern almost all aspects of our operations.
Added
The FDIC recently adopted rules revising the assessments in a manner benefiting banks with assets totaling less than $10 billion. There can be no assurance, however, that assessments will not be changed in the future.
Removed
Investors could become subject to regulatory restrictions upon ownership of our common shares.
Added
We have implemented anti-takeover devices that could make it more difficult for another company to purchase us, even though such a purchase may increase shareholder value. In many cases, shareholders may receive a premium for their shares if we were purchased by another company.
Removed
Two of our most critical estimates are the level of the ACL and the accounting for goodwill and other intangibles.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Audit Committee and the Board of Directors provides structured oversight of the Company’s risk management program, which focuses on the most significant short, intermediate, and long-term risks the Company faces.
Biggest changeOur Board of Directors oversees the Company’s risk management process, including cybersecurity risks, directly and through its committees, specifically the Risk Management Committee of the Board. The Audit Committee and the Board of Directors provide structured oversight of the Company’s risk management program, which focuses on the most significant short, intermediate, and long-term risks the Company faces.
Our information security team uses a multifaceted approach to monitor, assess, identify, and manage material risks to the Company from cybersecurity threats, including testing of the effectiveness of our cybersecurity incident prevention and response systems; conducting routine vulnerability scanning of information systems assets; network/endpoint detection and response coupled with advanced identification-enhanced logging capabilities powered by artificial intelligence software; discovery through collaboration with the Company’s internal audit team; monitoring of threat intelligence feeds provided by industry associations/groups, service providers, and federal/state authorities; and professional service engagements, such as retaining the services of an external 24/7 security operations center and partnering with third parties in testing our information systems for vulnerabilities from external, internal, and social engineering perspectives and assessing the effectiveness of our cybersecurity controls. 26 The Company partners with third-party service providers and employs processes to assess, identify, and manage material risks from cybersecurity threats arising from the use of such third-party service providers.
Our information security team uses a multifaceted approach to monitor, assess, identify, and manage material risks to the Company from cybersecurity threats, including testing of the effectiveness of our cybersecurity incident prevention and response systems; conducting routine vulnerability scanning of information systems assets; network/endpoint detection and response coupled with advanced identification-enhanced logging capabilities powered by artificial intelligence software; discovery through collaboration with the Company’s internal audit team; monitoring of threat intelligence feeds provided by industry associations/groups, service providers, and federal/state authorities; and professional service engagements, such as retaining the services of an external 24/7 security operations center and partnering with third parties in testing our information systems for vulnerabilities from external, internal, and social engineering perspectives and assessing the effectiveness of our cybersecurity controls. 25 The Company partners with third-party service providers and employs processes to assess, identify, and manage material risks from cybersecurity threats arising from the use of such third-party service providers.
We have adopted aspects of the NIST cybersecurity framework, to which risk management in relation to our information systems is aligned. We categorize our information systems as either Tier 1 (critical) or Tier 2 or Tier 3 (essential), depending on business value and/or risk of financial or compliance impact of cybersecurity incidents.
We have adopted aspects of the National Institute of Standards and Technology (“NIST”) cybersecurity framework, to which risk management in relation to our information systems is aligned. We categorize our information systems as either Tier 1 (critical) or Tier 2 or Tier 3 (essential), depending on business value and/or risk of financial or compliance impact of cybersecurity incidents.
Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company, including its business strategy, results of operations, and financial condition. For more information about these and other risks, see ITEM 1A. RISK FACTORS. Our Board of Directors oversees the Company’s risk management process, including cybersecurity risks, directly and through its committees.
Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company, including its business strategy, results of operations, and financial condition. For more information about these and other risks, see ITEM 1A. RISK FACTORS.
Reports of the Council are shared regularly throughout the year with the Board of Directors. Furthermore, the Company conducts periodic cybersecurity assessments and preparedness analyses, supervised by our designated Chief Technology & Innovation Officer (“CTIO”). The Company routinely engages third-party industry experts to perform risk assessments of the Program.
Reports of the Council are shared regularly throughout the year with the Board of Directors. Furthermore, the Company conducts periodic cybersecurity assessments and preparedness analyses, supervised by our designated Chief Technology Innovation Officer (“CTIO”).
At least annually, our internal audit team conducts a formal risk assessment and develops an audit plan that identifies, assesses, and prioritizes risks that include cybersecurity. The results of the risk assessment and the proposed audit plan are communicated to various leaders within the Company as well as the Audit Committee for input.
The results of the risk assessment and the proposed audit plan are communicated to various leaders within the Company as well as the Audit Committee for input.
Added
Our CTIO has extensive systems and network experience at a global scale including work as Network and Telecommunications Leader for GE Corporate in the Latin America group and Manager of Global Networks for GE Lighting. His experience involved managing systems, development, and operations for GE Insurance Solutions, Swiss Re, and GE Capital Treasury.
Added
He holds a Cybersecurity Certification from Harvard since 2021 Cybersecurity: Managing Risk in the Information Age. The Company routinely engages third-party industry experts to perform risk assessments of the Program. At least annually, our internal audit team conducts a formal risk assessment and develops an audit plan that identifies, assesses, and prioritizes risks that include cybersecurity.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperty List as of December 31, 2024 ($ in thousands) Description/Address Leased/ Owned Total Deposits 12/31/24 Main Banking Center & Corporate Office 401 Clinton Street, Defiance, OH Owned $ 301,890 Banking Centers/Drive-Thru’s 1419 West High Street, Bryan, OH Owned 63,596 510 Third Street, Defiance, OH (Drive-thru) Owned N/A 1600 North Clinton Street, Defiance, OH Leased 34,140 312 Main Street, Delta, OH Owned 19,953 4080 West Dublin Granville Road, Dublin, OH Owned 88,108 104 North Michigan Avenue, Edgerton, OH Owned 11,091 201 East Lincoln Street, Findlay, OH Owned 25,926 408 South Main Street Suite A, Findlay, OH Leased 133 12832 Coldwater Road, Fort Wayne, IN Owned 29,979 1232 North Main Street, Bowling Green, OH Owned 24,782 235 Main Street, Luckey, OH Owned 29,604 133 East Morenci Street, Lyons, OH Owned 24,437 930 West Market Street, Lima, OH Owned 66,383 1201 East Main Street, Montpelier, OH Owned 43,168 218 North First Street, Oakwood, OH Owned 23,915 220 North Main Street, Paulding, OH Owned 84,437 610 East South Boundary Street, Perrysburg, OH Owned 12,689 119 South State Street, Pioneer, OH Owned 37,896 6401 Monroe Street, Sylvania, OH Owned 56,438 311 Main Street, Walbridge, OH Owned 28,278 101 North Michigan Street, Edon, OH Owned 58,790 1379 North Shoop Avenue, Wauseon, OH Owned 86,972 Loan Production Offices 307 North Wayne Street, Angola, IN Owned N/A 10100 Lantern Road, Suite 240, Fishers, IN Leased N/A 94 Granville Street, Gahanna, OH Owned N/A 8204 Secor Road, Lambertville, MI Leased N/A 1900 Monroe Street, Suite 108, Toledo, OH Leased N/A 100 South Main Street, Suite 102, Zionsville, IN Leased N/A Service Facilities (SBT/ SBFG Title) 105 East Holland Street, Archbold, OH Leased N/A 125 West Butler Street, Bryan OH Owned N/A 9101 Antares Avenue, Columbus, OH Owned N/A 1911 Baltimore Road, Defiance, OH Leased N/A Total deposits $ 1,152,605 SB Captive operates from office space located at 101 Convention Center Dr.,Suite 850, Las, Vegas, NV 89109. 28 The Company’s subsidiaries have several noncancellable leases for business use that expire over the next five years.
Biggest changeProperty List as of December 31, 2025 ($ in thousands) Description/Address Leased/ Owned Total Deposits 12/31/25 Main Banking Center & Corporate Office 401 Clinton Street, Defiance, OH Owned $ 327,688 Banking Centers/Drive-Thru’s 1419 West High Street, Bryan, OH Owned 63,704 510 Third Street, Defiance, OH (Drive-thru) Owned N/A 1600 North Clinton Street, Defiance, OH Leased 35,795 312 Main Street, Delta, OH Owned 20,151 4080 West Dublin Granville Road, Dublin, OH Owned 87,163 104 North Michigan Avenue, Edgerton, OH Owned 6,431 201 East Lincoln Street, Findlay, OH Owned 24,449 408 South Main Street Suite A, Findlay, OH Leased 209 12832 Coldwater Road, Fort Wayne, IN Owned 32,768 1232 North Main Street, Bowling Green, OH Owned 28,883 235 Main Street, Luckey, OH Owned 31,588 133 East Morenci Street, Lyons, OH Owned 25,262 930 West Market Street, Lima, OH Owned 72,253 1201 East Main Street, Montpelier, OH Owned 43,275 218 North First Street, Oakwood, OH Owned 25,964 220 North Main Street, Paulding, OH Owned 88,159 610 East South Boundary Street, Perrysburg, OH Owned 12,905 119 South State Street, Pioneer, OH Owned 41,004 6401 Monroe Street, Sylvania, OH Owned 64,258 709 W Main Street, Marblehead, OH Owned 37,312 259 S Bridge Road, Marblehead, OH Owned 9,822 311 Main Street, Walbridge, OH Owned 27,421 101 North Michigan Street, Edon, OH Owned 73,083 1379 North Shoop Avenue, Wauseon, OH Owned 115,370 1414 North Scott St, Suite 120, Napoleon, OH Leased 1,873 307 North Wayne Street, Angola, IN Owned 10,453 Loan Production Offices 10100 Lantern Road, Suite 240, Fishers, IN Leased N/A 94 Granville Street, Gahanna, OH Owned N/A 9313 Mason-Montgomery Road, Suite 125, Mason, OH Leased N/A 1900 Monroe Street, Suite 108, Toledo, OH Leased N/A Service Facilities (SBT/ SBFG Title) 9275 Haggerty Road, Belleville, MI Leased N/A 125 West Butler Street, Bryan OH Owned N/A 9101 Antares Avenue, Columbus, OH Owned N/A 1911 Baltimore Road, Defiance, OH Leased N/A Total deposits $ 1,307,244 SB Captive operates from office space located at 101 Convention Center Dr., Suite 850, Las Vegas, NV 89109.
Item 2. Properties . The Company’s principal executive offices are located at 401 Clinton Street, Defiance, Ohio. State Bank owns this facility, with a portion of the facility utilized as a retail banking center. In addition, State Bank owns the land and buildings occupied by 23 of its banking centers and leases two other properties used as banking centers.
Item 2. Properties . The Company’s principal executive offices are located at 401 Clinton Street, Defiance, Ohio. State Bank owns this facility, with a portion of the facility utilized as a retail banking center. In addition, State Bank owns the land and buildings occupied by 24 of its banking centers and leases three other properties used as banking centers.
There is no outstanding mortgage debt on any of the properties which are owned by State Bank. 27 Listed below are the banking centers, loan production offices and service facilities of the Company and their addresses, all of which are located in Allen, Defiance, Delaware, Franklin, Fulton, Hancock, Lucas, Paulding, Williams and Wood counties of Ohio; Allen, Boone, Hamilton and Steuben counties of Indiana; and Monroe county of Michigan: SB Financial Group, Inc.
There is no outstanding mortgage debt on any of the properties which are owned by State Bank. 26 Listed below are the banking centers, loan production offices and service facilities of the Company and their addresses, all of which are located in Allen, Defiance, Delaware, Franklin, Fulton, Hancock, Henry, Lucas, Ottawa, Paulding, Warren, Williams and Wood counties of Ohio; Allen, Hamilton and Steuben counties of Indiana; and Wayne County of Michigan: SB Financial Group, Inc.
Aggregate rental expense for these leases was $0.20 million and $0.19 million for the years ended December 31, 2024, and 2023, respectively. Future minimum lease payments under operating leases are: ($ in thousands) 2025 $ 275 2026 197 2027 158 2028 122 2029 116 Thereafter 487 Total minimum lease payments $ 1,355
Aggregate rental expense for these leases was $0.3 million and $0.2 million for the years ended December 31, 2025, and 2024, respectively. 27 Future minimum lease payments under operating leases are: ($ in thousands) 2026 $ 308 2027 271 2028 187 2029 178 2030 120 Thereafter 407 Total minimum lease payments $ 1,470
Added
The Company’s subsidiaries have several noncancellable leases for business use that expire over the next five years.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeCosentino 63 Executive Vice President and Chief Financial Officer of the Company and State Bank since March 2010; Chief Financial Officer of RDSI since October 2011; Member of State Bank Trust Investment Review Committee since June 2010. Ernesto Gaytan 53 Executive Vice President and Chief Technology Innovation Officer of the Company and State Bank since November 2017. Steven R.
Biggest changeCosentino 64 Executive Vice President and Chief Financial Officer of the Company and State Bank since March 2010; Member of State Bank Trust Investment Review Committee since June 2010. Ernesto Gaytan 54 Executive Vice President and Chief Technology Innovation Officer of the Company and State Bank since November 2017. Steven R.
Item 4. Mine Safety Disclosures. Not Applicable Supplemental Item: Information about our Executive Officers The following table lists the names and ages of the executive officers of the Company as of February 21, 2025, the positions presently held by each executive officer, and the principal occupation(s) and business experience of each executive officer during the past five years.
Item 4. Mine Safety Disclosures. Not Applicable Supplemental Item: Information about our Executive Officers The following table lists the names and ages of the executive officers of the Company as of February 21, 2026, the positions presently held by each executive officer, and the principal occupation(s) and business experience of each executive officer during the past five years.
Walz 54 Executive Vice President and Chief Lending Officer of State Bank since December 2021; Senior Vice President and Chief Lending Officer of State Bank from September 2021 through December 2021; Senior Vice President and Chief Credit Officer of State Bank from November 2017 through November 2019; Vice President and Senior Credit Analyst of State Bank from September 2012 through November 2017; Assistant Vice President and Commercial Services Officer of State Bank from September 2011 to September 2012; Assistant Vice President and Credit Analyst of State Bank from January 2010 through September 2012; Began working for State Bank in October 2007 as a Credit Analyst; Mr.
Walz 55 Executive Vice President and Chief Lending Officer of State Bank since December 2021; Senior Vice President and Chief Lending Officer of State Bank from September 2021 through December 2021; Senior Vice President and Chief Credit Officer of State Bank from November 2017 through November 2019; Vice President and Senior Credit Analyst of State Bank from September 2012 through November 2017; Assistant Vice President and Commercial Services Officer of State Bank from September 2011 to September 2012; Assistant Vice President and Credit Analyst of State Bank from January 2010 through September 2012; Began working for State Bank in October 2007 as a Credit Analyst; Mr.
Diller 68 Executive Vice President of the Company since July 2019; Executive Vice President and Chief Operations Officer of State Bank since August 2024; Executive Vice President and Chief Risk Officer from July 2019 to August 2024; Senior Vice President and Chief Enterprise Risk Management Officer of State Bank from August 2018 through July 2019; Senior Vice President and Audit Coordinator and Director of Operations of State Bank from December 2011 through August 2018; Vice President and Internal Auditor of State Bank from January 2010 through December 2011; Corporate Secretary for the Company since 1996; Began working for State Bank in February 1990 as the Accounting Supervisor.
Diller 69 Executive Vice President of the Company since July 2019; Executive Vice President and Chief Operations Officer of State Bank since August 2024; Executive Vice President and Chief Risk Officer from July 2019 to August 2024; Senior Vice President and Chief Enterprise Risk Management Officer of State Bank from August 2018 through July 2019; Senior Vice President and Audit Coordinator and Director of Operations of State Bank from December 2011 through August 2018; Vice President and Internal Auditor of State Bank from January 2010 through December 2011; Corporate Secretary for the Company since 1996; Began working for State Bank in February 1990 as the Accounting Supervisor. 28 PART II
Klein 70 Chairman of the Company since April 2015; Director of the Company since February 2010; President and Chief Executive Officer of the Company since January 2010 and of State Bank since January 2006; Director of State Bank since 2006; President of RDSI since October 2011; Member of State Bank Trust Investment Review Committee since March 2007. Anthony V.
Klein 71 Chairman of the Company since April 2015; Director of the Company since February 2010; President and Chief Executive Officer of the Company since January 2010 and of State Bank since January 2006; Director of State Bank since 2006; Member of State Bank Trust Investment Review Committee since March 2007. Anthony V.
Removed
David A. Homoelle 57 Residential Real Estate Executive of State Bank since April 2024; Columbus Regional President and Residential Real Estate Executive of State Bank from May 2021 through April 2024; Columbus Regional President of State Bank from November 2007 through May 2021; Began working for State Bank in November 2007 as a Columbus Regional President. 29 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 SB Financial Group, Inc. 100.00 95.27 104.99 97.59 91.79 129.56 NASDAQ Composite Index 100.00 144.92 177.06 119.45 172.77 223.87 KBW NASDAQ Bank Index 100.00 89.69 124.06 97.52 96.65 132.60 Source: S&P Global Market Intelligence © 2025 30 Issuer Purchases of Equity Securities The table below reflects the common shares repurchased by the Company during the three months ended December 31, 2024.
Biggest changeThe following performance graph compares the five-year total shareholder return of the Company’s common shares, based on an initial investment on December 31, 2020, and assuming reinvestment of dividends, against two indices – the NASDAQ Composite Index and the KBW NASDAQ Bank Index. 29 Period Ending Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 SB Financial Group, Inc. 100.00 110.21 102.44 96.35 136.00 148.96 NASDAQ Composite Index 100.00 122.18 82.43 119.22 154.48 187.14 KBW NASDAQ Bank Index 100.00 138.33 108.73 107.76 147.85 196.00 Source: S&P Global Market Intelligence © 2026 Issuer Purchases of Equity Securities The table below reflects the common shares repurchased by the Company during the three months ended December 31, 2025.
This Performance Graph shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be deemed to be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates this Performance Graph by reference into such filing.
Performance Graph The following Performance Graph and related information shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be deemed to be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates this Performance Graph by reference into such filing.
The Company paid quarterly dividends on its common shares in the aggregate amounts of $0.56 per share and $0.52 per share in 2024 and 2023, respectively. The Company presently anticipates continuing to pay quarterly dividends in the future at similar levels. However, there is no guarantee that dividends on our common shares will continue in the future.
The Company paid quarterly dividends on its common shares in the aggregate amounts of $0.60 per share and $0.56 per share in 2025 and 2024, respectively. The Company presently anticipates continuing to pay quarterly dividends in the future at similar levels. However, there is no guarantee that dividends on our common shares will continue in the future.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . Market Information Our common shares are traded on the NASDAQ Capital Market under the symbol “SBFG”. There were 6,493,526 common shares outstanding as of December 31, 2024, which were held by approximately 1,115 record holders.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . Market Information Our common shares are traded on the NASDAQ Capital Market under the symbol “SBFG”. There were 6,275,958 common shares outstanding as of December 31, 2025, which were held by approximately 1,092 record holders.
(a) (b) (c) (d) Period Total Number of Shares Purchased Weighted Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs 10/01/24 - 10/31/24 25,651 $ 19.79 25,651 87,354 11/01/24 - 11/30/24 33,296 20.59 33,296 54,058 12/01/24 - 12/31/24 71,518 21.69 71,518 482,540 Total 130,465 $ 21.04 130,465 482,540 Item 6. [Reserved].
(a) (b) (c) (d) Period Total Number of Shares Purchased Weighted Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs 10/01/25 - 10/31/25 14,083 $ 19.10 14,083 216,486 11/01/25 - 11/30/25 5,085 20.54 5,085 211,401 12/01/25 - 12/31/25 12,351 22.34 12,351 199,050 Total 31,519 $ 20.60 31,519 199,050 30 Item 6. [Reserved].
On December 18, 2024, the Company’s Board of Directors approved a share repurchase program authorizing the repurchase of 500,000 shares through December 31, 2026. As of December 31, 2024, the Company had repurchased 17,460 shares, and 482,540 shares remained available for purchase under this program.
As of December 31, 2025, the Company had 199,050 shares remaining of the 500,000 approved under the Company’s existing share repurchase program which was authorized by the Company’s Board of Directors on December 18, 2024, and expires December 31, 2026.
Removed
Performance Graph The following performance graph compares the five-year total shareholder return of the Company’s common shares, based on an initial investment on December 31, 2019, and assuming reinvestment of dividends, against two indices – the NASDAQ Composite Index and the KBW NASDAQ Bank Index.
Removed
The December 18, 2024, share repurchase program replaced the Company’s prior repurchase program announced on December 21, 2022, under which an aggregate 500,000 common shares of the Company were repurchased through December 2024.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+2 added−0 removed0 unchanged
Biggest changeItem 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 44 Item 8. Financial Statements and Supplementary Data F-1 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 46 Item 9A. Controls and Procedures 46 Item 9B.
Biggest changeItem 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 44 Item 8. Financial Statements and Supplementary Data F-1 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 45 Item 9A. Controls and Procedures 45 Item 9B.
Added
Other Information 46 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 46 PART III 47 Item 10. Directors, Executive Officers and Corporate Governance 47 Item 11. Executive Compensation 48 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 48 Item 13. Certain Relationships and Related Transactions, and Director Independence 48 Item 14.
Added
Principal Accountant Fees and Services 48 PART IV 49 Item 15. Exhibits and Financial Statement Schedules 49 Item 16. Form 10-K Summary 49 Signatures 53 i PART I

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

68 edited+9 added−12 removed24 unchanged
Biggest changeThe Company continued to allocate the reductions in our bond portfolio, from scheduled amortization, into higher yielding loan balances. 33 The following are the condensed average balance sheets of the Company for the years ending December 31 and includes the interest earned or paid, and the average interest rate, on each asset and liability: 2024 2023 2022 ($ in thousands) Average Average Average Average Average Average Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets Taxable securities/cash $ 247,026 $ 6,844 2.77 % $ 254,133 $ 6,092 2.40 % $ 330,549 $ 5,798 1.75 % Non-taxable securities 6,393 146 2.28 % 7,181 170 2.37 % 8,106 198 2.44 % Loans, net 1 1,014,375 57,359 5.65 % 985,217 51,890 5.27 % 888,116 38,573 4.34 % Total earning assets 1,267,794 64,349 5.08 % 1,246,531 58,152 4.67 % 1,226,771 44,569 3.63 % Cash and due from banks 4,388 4,035 7,296 Allowance for credit losses (15,536 ) (15,478 ) (13,808 ) Premises and equipment 20,929 22,990 24,137 Other assets 83,699 76,566 74,385 Total assets $ 1,361,274 $ 1,334,644 $ 1,318,781 Liabilities Savings and interest-bearing demand deposits $ 643,710 $ 11,073 1.72 % $ 619,906 $ 7,599 1.23 % $ 693,271 $ 2,258 0.33 % Time deposits 259,818 9,962 3.83 % 236,665 7,109 3.00 % 159,401 1,219 0.76 % Repurchase agreements & other 14,336 154 1.07 % 15,765 74 0.47 % 20,481 39 0.19 % Advances from FHLB 39,092 1,721 4.40 % 55,044 2,603 4.73 % 16,420 515 3.14 % Trust preferred securities 10,310 739 7.17 % 10,310 716 6.94 % 10,310 361 3.50 % Subordianted debt 19,655 778 3.96 % 19,616 778 3.97 % 19,570 778 3.98 % Total interest-bearing liabilities 986,921 24,427 2.48 % 957,306 18,879 1.97 % 919,453 5,170 0.56 % Demand deposits 227,445 237,976 252,899 Other liabilities 22,156 21,047 19,466 Total liabilities 1,236,522 1,216,329 1,191,818 Shareholders’ equity 124,742 118,315 126,963 Total liabilities and shareholders’ equity $ 1,361,264 $ 1,334,644 $ 1,318,781 Net interest income (tax equivalent basis) $ 39,922 $ 39,273 $ 39,399 Net interest income as a percent of average interest-earning assets - GAAP measure 3.15 % 3.15 % 3.21 % Net interest income as a percent of average interest-earning assets - Non-GAAP measure 2 3.16 % 3.16 % 3.22 % -- Computed on a fully tax equivalent basis (FTE) 1 Nonaccruing loans and loans held for sale are included in the average balances. 2 Interest on tax exempt securities and loans is computed on a tax equivalent basis using a 21 percent statutory tax rate, and added to the net interest income.
Biggest changeThe Company continued to allocate the reductions in our bond portfolio, from scheduled amortization, into higher yielding loan balances. 33 The following are the condensed average balance sheets of the Company for the years ending December 31, which include the interest earned or paid, and the average interest rate, on each asset and liability: 2025 2024 2023 ($ in thousands) Average Average Average Average Average Average Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets Taxable securities/cash $ 196,831 $ 4,495 2.28 % $ 247,026 $ 5,490 2.22 % $ 254,133 $ 6,092 2.40 % Non-taxable securities 6,243 144 2.31 % 6,393 146 2.28 % 7,181 170 2.37 % Overnight Cash 87,283 3,840 4.40 % 43,171 1,354 3.14 % - - 0.00 % Loans, net 1 1,108,531 65,441 5.90 % 1,014,375 57,359 5.65 % 985,217 51,890 5.27 % Total earning assets 1,398,888 73,920 5.28 % 1,310,965 64,349 4.91 % 1,246,531 58,152 4.67 % Cash and due from banks 5,390 4,388 4,035 Allowance for credit losses (15,631 ) (15,536 ) (15,478 ) Premises and equipment 21,624 20,929 22,990 Other assets 89,052 40,528 76,566 Total assets $ 1,499,323 $ 1,361,274 $ 1,334,644 Liabilities Savings and interest-bearing demand deposits $ 742,153 $ 13,092 1.76 % $ 643,710 $ 11,073 1.72 % $ 619,906 $ 7,599 1.23 % Time deposits 273,228 9,398 3.44 % 259,818 9,962 3.83 % 236,665 7,109 3.00 % Repurchase agreements & other 12,085 95 0.79 % 14,336 154 1.07 % 15,765 74 0.47 % Advances from FHLB 35,011 1,467 4.19 % 39,092 1,721 4.40 % 55,044 2,603 4.73 % Trust preferred securities 10,310 637 6.18 % 10,310 739 7.17 % 10,310 716 6.94 % Subordinated debt 19,713 778 3.95 % 19,655 778 3.96 % 19,616 778 3.97 % Total interest-bearing liabilities 1,092,500 25,467 2.33 % 986,921 24,427 2.48 % 957,306 18,879 1.97 % Demand deposits 251,820 227,445 237,976 Other liabilities 20,397 22,156 21,047 Total liabilities 1,364,717 1,236,522 1,216,329 Shareholders’ equity 134,606 124,742 118,315 Total liabilities and shareholders’ equity $ 1,499,323 $ 1,361,264 $ 1,334,644 Net interest income (tax equivalent basis) $ 48,453 $ 39,922 $ 39,273 Net interest income as a percent of average interest-earning assets - GAAP measure 3.46 % 3.05 % 3.15 % Net interest income as a percent of average interest-earning assets - Non-GAAP measure 2 3.47 % 3.06 % 3.16 % -- Computed on a fully tax equivalent basis (FTE) 1 Nonaccruing loans and loans held for sale are included in the average balances. 2 Interest on tax exempt securities and loans is computed on a tax equivalent basis using a 21 percent statutory tax rate, and added to the net interest income.
Commercial loans include loans collateralized by commercial real estate, business assets and, in the case of agricultural loans, crops and farm equipment and the loans are expected to be repaid from cash flow from operations of businesses.
Commercial loans are expected to be repaid from cash flow from operations of businesses and include loans collateralized by commercial real estate, business assets and, in the case of agricultural loans, crops and farm equipment.
Earnings Summary – 2024 vs. 2023 Net income for 2024 was $11.5 million, or $1.72 per diluted share, compared with net income of $12.1 million, or $1.75 per diluted share, for 2023. State Bank reported net income for 2024 of $13.0 million, which was down slightly from the $13.3 million of net income in 2023.
Earnings Summary – 2024 vs. 2023 Net income for 2024 was $11.5 million, or $1.72 per diluted common share, compared with net income of $12.1 million, or $1.75 per diluted common share, for 2023. State Bank reported net income for 2024 of $13.0 million, which was down slightly from the $13.3 million of net income in 2023.
Due to declines in the Company’s share price, a quantitative evaluation of goodwill was completed as of September 30, 2024, which revealed that impairment was not warranted. No events have occurred since that assessment, which would warrant impairment.
Due to declines in the Company’s share price, a quantitative evaluation of goodwill was completed as of September 30, 2024, which revealed that impairment was not warranted. No triggering events have occurred since that assessment, which would warrant impairment.
The weighted-average interest rates are based on coupon rates for securities purchased at par value and on effective interest rates considering amortization or accretion if the securities were purchased at a premium or discount: Maturing Weighted Weighted Weighted Weighted Weighted Within Average 1-5 Average 5-10 Average After Average Average ($ in thousands) 1 Year Yield Years Yield Years Yield 10 Years Yield Total Yield Available-for-sale: U.S.
The weighted-average interest rates are based on coupon rates for securities purchased at par value and on effective interest rates considering amortization or accretion for securities purchased at a premium or discount: Maturing Weighted Weighted Weighted Weighted Weighted Within Average 1-5 Average 5-10 Average After Average Average ($ in thousands) 1 Year Yield Years Yield Years Yield 10 Years Yield Total Yield Available-for-sale: U.S.
At December 31, 2024, the Company concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying value, resulting in no impairment. The Company’s goodwill is further discussed in Note 6 to the Consolidated Financial Statements.
At December 31, 2025, the Company concluded that it was more likely than not that the fair value of the reporting unit exceeded its carrying value, resulting in no impairment. The Company’s goodwill is further discussed in Note 6 to the Consolidated Financial Statements.
Strengthen our penetration in all markets served: Over our 122-year history of continuous operation in Northwest Ohio, we have established a significant presence in our traditional markets in Defiance, Fulton, Paulding and Williams counties in Ohio. In our newer markets of Bowling Green, Columbus, Findlay, Toledo (Ohio) and Ft.
Strengthen our penetration in all markets served: Over our 123-year history of continuous operation in Northwest Ohio, we have established a significant presence in our traditional markets in Defiance, Fulton, Paulding and Williams counties in Ohio. In our newer markets of Bowling Green, Columbus, Findlay, Toledo (Ohio) and Ft.
This discussion should be read in conjunction with the Company’s Consolidated Financial Statements and related Notes as of and for the years ended December 31, 2024, and 2023 included in this Annual Report on Form 10-K.
This discussion should be read in conjunction with the Company’s Consolidated Financial Statements and related Notes as of and for the years ended December 31, 2025, and 2024 included in this Annual Report on Form 10-K.
As of December 31, 2024, State Bank met all regulatory capital levels required to be considered well-capitalized (see Note 16 to the Consolidated Financial Statements).
As of December 31, 2025, State Bank met all regulatory capital levels required to be considered well-capitalized (see Note 16 to the Consolidated Financial Statements).
The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Changes in Financial Condition Total assets at December 31, 2024, were $1.38 billion, compared to $1.34 billion at December 31, 2023.
The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Changes in Financial Condition Total assets at December 31, 2025, were $1.55 billion, compared to $1.38 billion at December 31, 2024.
A discussion of the cash flow statements for 2024 and 2023 follows: The Company experienced positive cash flows from operating activities in 2024 and 2023. Net cash from operating activities was $9.5 million and $14.0 million for the years ended December 31, 2024 and 2023, respectively.
A discussion of the cash flow statements for 2025 and 2024 follows: The Company experienced positive cash flows from operating activities in 2025 and 2024. Net cash from operating activities was $24.0 million and $9.5 million for the years ended December 31, 2025, and 2024, respectively.
These revenue sources include fees generated from saleable residential mortgage loans, retail deposit products, wealth management services, saleable business-based loans (small business and farm service) and title agency revenue. For the twelve months ended December 31, 2023, the Company generated $17.7 million in noninterest income, or 31.1 percent of total operating revenue from fee-based products.
These revenue sources include fees generated from saleable residential mortgage loans, retail deposit products, wealth management services, saleable business-based loans (small business and farm service) and title agency revenue. For the twelve months ended December 31, 2024, the Company generated $17.0 million in noninterest income, or 29.9 percent of total operating revenue, from fee-based products.
Retained earnings increased during the year due to earnings of $11.5 million less dividends paid to common shareholders of $3.8 million and repurchases of Company common shares of $4.7 million.
Retained earnings increased during the year due to earnings of $14.0 million less dividends paid to common shareholders of $3.8 million and repurchases of Company common shares of $5.4 million.
The Company allowed the residential real estate to amortize and minimal new production on the balance sheet was generated. Concentrations of Credit Risk : The Company makes commercial, real estate and installment loans to customers located mainly in the Tri-State region of Ohio, Indiana and Michigan.
The Company allowed its residential real estate portfolio to amortize with minimal new production generated on the balance sheet during 2025. Concentrations of Credit Risk : The Company makes commercial, real estate and installment loans to customers located mainly in the Tri-State region of Ohio, Indiana and Michigan.
The Company also had $66.8 million in unpledged securities at December 31, 2024 available for additional borrowings. The cash flow statements for the periods presented provide an indication of the Company’s sources and uses of cash as well as an indication of the ability of the Company to maintain an adequate level of liquidity.
The Company also had $47.4 million in unpledged securities at December 31, 2025, available for additional borrowings. 42 The cash flow statements for the periods presented provide an indication of the Company’s sources and uses of cash as well as an indication of the ability of the Company to maintain an adequate level of liquidity.
As of December 31, 2024, the Company serviced 8,750 residential mortgage loans with an aggregate principal balance of $1.43 billion. As of December 31, 2023, the Company serviced 8,549 loans with an aggregate principal balance of $1.37 billion. 31 Sustain asset quality: As of December 31, 2024, the Company’s asset quality metrics remained strong.
As of December 31, 2025, the Company serviced 8,886 residential mortgage loans with an aggregate principal balance of $1.48 billion. As of December 31, 2024, the Company serviced 8,750 loans with an aggregate principal balance of $1.43 billion. Sustain asset quality: As of December 31, 2025, the Company’s asset quality metrics remained strong.
Accordingly, the allowance is maintained by management at a level considered adequate to cover losses that are currently anticipated based on past loss experience, economic conditions, information about specific borrower situations, including their financial position and collateral values, and other factors and estimates which are subject to change over time.
Accordingly, the allowance is maintained by management at a level considered adequate to cover losses that are currently anticipated based on past loss experience, economic conditions, information about specific borrower situations, including their financial position and collateral values, and other factors and estimates which are subject to change over time. 38 The Company has substantially increased its reserve level over the last several years.
Increase profitability through ongoing diversification of revenue streams: For the twelve months ended December 31, 2024, the Company generated $17.0 million in noninterest income, or 29.9 percent of total operating revenue, from fee-based products.
Increase profitability through ongoing diversification of revenue streams: For the twelve months ended December 31, 2025, the Company generated $17.1 million in noninterest income, or 26.1 percent of total operating revenue, from fee-based products.
The Company had total net charge-offs on loans of $250,000 in 2024, as compared to net charge-offs of $92,000 in 2023.
The Company had total net charge-offs on loans of $261,000 in 2025, as compared to net charge-offs of $250,000 in 2024.
For 2024, net charge-offs totaled $0.25 million or 0.02 percent of average loans, compared to net charge-offs of $0.01 million or 0.01 percent of average loans, for 2023.
For 2025, net charge-offs totaled $0.26 million, or 0.02 percent of average loans, compared to net charge-offs of $0.25 million, or 0.02 percent of average loans, for 2024.
Strategic expansion has also occurred during the period with the acquisition of a small community bank (The Edon State Bank of Edon, Ohio) in 2020, the opening of three branch offices and the acquisition of two full-service title agencies.
Strategic expansion has also occurred during the period with the acquisition of two small community banks (The Edon State Bank of Edon, Ohio in 2020 and The Marblehead Bank in January 2025), the opening of five branch offices and the acquisition of two full-service title agencies.
The consolidated 2024 full year net interest margin on a fully-taxable equivalent (“FTE”) basis was 3.16 percent compared to 3.16 percent for the full year of 2023. Provision for credit losses was taken in 2024 in the amount of $0.12 million compared to $0.32 million taken during 2023.
The consolidated 2025 full year net interest margin on a fully-taxable equivalent (“FTE”) basis was 3.47 percent compared to 3.06 percent for the full year of 2024. Provision for credit losses was taken in 2025 in the amount of $1.31 million compared to $0.12 million taken during 2024.
Loans (excluding loans held for sale) were $1.05 billion at December 31, 2024, compared to $1.00 billion at December 31, 2023. Total deposits were $1.15 billion at December 31, 2024, compared to $1.07 billion at December 31, 2023.
Loans (excluding loans held for sale) were $1.18 billion at December 31, 2025, compared to $1.05 billion at December 31, 2024. Total deposits were $1.31 billion at December 31, 2025, compared to $1.15 billion at December 31, 2024.
The increase in deposits of $82.4 million attributed to the positive cash flows in 2024 and the decrease in deposits of $16.5 million attributed to the negative cash flows in 2023. 43 The Company uses an Economic Value of Equity (“EVE”) analysis to measure risk in the balance sheet incorporating all cash flows over the estimated remaining life of all balance sheet positions.
The increase in deposits of $101.6 million and $82.4 million attributed to the positive cash flows in 2025 and 2024, respectively. The Company uses an Economic Value of Equity (“EVE”) analysis to measure risk in the balance sheet incorporating all cash flows over the estimated remaining life of all balance sheet positions.
The Company sold $216.0 million of originated mortgages into the secondary market in 2024, which due to being higher than the amortization on the serviced portfolio, increased the size of our serviced loan portfolio to $1.428 billion at December 31, 2024 from $1.367 billion at December 31, 2023.
The Company sold $250.4 million of originated mortgages into the secondary market in 2025, which due to being higher than the amortization on the serviced portfolio, increased the size of our serviced loan portfolio to $1.48 billion at December 31, 2025 from $1.43 billion at December 31, 2024.
Financial Highlights Year Ended December 31, ($ in thousands, except per share data) Earnings 2024 2023 2022 2021 2020 Interest income $ 64,349 $ 58,152 $ 44,569 $ 41,904 $ 42,635 Interest expense 24,427 18,879 5,170 4,020 6,705 Net interest income 39,922 39,273 39,399 37,884 35,930 Provision for loan losses 124 315 - 1,050 4,500 Noninterest income 17,017 17,721 18,231 30,697 30,096 Noninterest expense 42,959 41,962 42,314 44,808 43,087 Provision for income taxes 2,386 2,622 2,795 4,446 3,495 Net income 11,470 12,095 12,521 18,277 14,944 Net income available to common shareholders 11,470 12,095 12,521 18,277 14,944 Per Common Share Data Basic earnings $ 1.72 $ 1.77 $ 1.79 $ 2.58 $ 1.96 Diluted earnings 1.72 1.75 1.77 2.56 1.96 Cash dividends declared 0.56 0.52 0.48 0.44 0.40 Total equity per share 19.64 18.50 17.08 21.05 19.39 Average Balances Average total assets $ 1,361,274 $ 1,334,644 $ 1,318,781 $ 1,322,253 $ 1,161,396 Average equity 124,742 118,315 126,963 144,223 139,197 Ratios Return on average total assets 0.84 % 0.91 % 0.95 % 1.38 % 1.29 % Return on average equity 9.19 10.22 9.86 12.67 10.74 Cash dividend payout ratio 1 32.87 29.62 27.25 17.18 20.54 Average equity to average assets 9.16 8.86 9.63 10.91 11.99 Period End Totals Total assets $ 1,379,517 $ 1,343,249 $ 1,335,633 $ 1,330,854 $ 1,257,839 Available-for-sale securities 201,587 219,708 238,780 263,259 149,406 Loans held for sale 6,770 2,525 2,073 7,472 7,234 Total loans & leases 1,046,735 1,000,212 962,075 822,714 872,723 Allowance for credit losses 15,096 15,786 13,818 13,805 12,574 Total deposits 1,152,605 1,070,205 1,086,665 1,113,045 1,049,011 Advances from FHLB 35,000 83,600 60,000 5,500 8,000 Trust preferred securities 10,310 10,310 10,310 10,310 10,310 Subordinated debt, net 19,690 19,642 19,594 19,546 - Total equity 127,508 124,342 118,428 144,929 142,923 1 Cash dividends on common shares divided by net income available to common. 32 Critical Accounting Policies and Estimates The accounting and reporting policies of the Company are in accordance with generally accepted accounting principles in the United States and conform to general practices within the banking industry.
Financial Highlights Year Ended December 31, ($ in thousands, except per share data) 2025 2024 2023 2022 2021 Earnings Interest income $ 73,920 $ 64,349 $ 58,152 $ 44,569 $ 41,904 Interest expense 25,467 24,427 18,879 5,170 4,020 Net interest income 48,453 39,922 39,273 39,399 37,884 Provision for loan losses 1,306 124 315 - 1,050 Noninterest income 17,107 17,017 17,721 18,231 30,697 Noninterest expense 46,999 42,959 41,962 42,314 44,808 Provision for income taxes 3,281 2,386 2,622 2,795 4,446 Net income 13,974 11,470 12,095 12,521 18,277 Net income available to common shareholders 13,974 11,470 12,095 12,521 18,277 Per Common Share Data Basic earnings $ 2.19 $ 1.72 $ 1.77 $ 1.79 $ 2.58 Diluted earnings 2.19 1.72 1.75 1.77 2.56 Cash dividends declared 0.60 0.56 0.52 0.48 0.44 Total equity per share 22.65 19.64 18.50 17.08 21.05 Average Balances Average total assets $ 1,499,323 $ 1,361,274 $ 1,334,644 $ 1,318,781 $ 1,322,253 Average equity 134,606 124,742 118,315 126,963 144,223 Ratios Return on average total assets 0.93 % 0.84 % 0.91 % 0.95 % 1.38 % Return on average equity 10.38 9.19 10.22 9.86 12.67 Cash dividend payout ratio 1 27.54 32.87 29.62 27.25 17.18 Average equity to average assets 8.98 9.16 8.86 9.63 10.91 Period End Totals Total assets $ 1,545,367 $ 1,379,517 $ 1,343,249 $ 1,335,633 $ 1,330,854 Available-for-sale securities 188,626 201,587 219,708 238,780 263,259 Loans held for sale 1,761 6,770 2,525 2,073 7,472 Total loans & leases 1,180,591 1,046,735 1,000,212 962,075 822,714 Allowance for credit losses 16,114 15,096 15,786 13,818 13,805 Total deposits 1,307,244 1,152,605 1,070,205 1,086,665 1,113,045 Advances from FHLB 35,000 35,000 83,600 60,000 5,500 Trust preferred securities 10,310 10,310 10,310 10,310 10,310 Subordinated debt, net 19,739 19,690 19,642 19,594 19,546 Total equity 141,236 127,508 124,342 118,428 144,929 1 Cash dividends on common shares divided by net income available to common. 32 Critical Accounting Policies and Estimates The accounting and reporting policies of the Company are in accordance with U.S.
The tax equivalent adjustment was $0.14, $0.14 and $0.11 million in 2024, 2023 and 2022, respectively. 34 The following tables set forth the effect of volume and rate changes on interest income and expense for the periods indicated.
The tax equivalent adjustment was $0.13, $0.14 and $0.14 million in 2025, 2024 and 2023, respectively. The following table sets forth the effect of volume and rate changes on interest income and expense for the periods indicated.
Strategic Discussion The focus and strategic goal of the Company is to grow into and remain a top decile (>90 th percentile) independent financial services company. The Company intends to achieve and maintain that goal by executing our five key initiatives.
Strategic Discussion The focus and strategic goal of the Company is to grow into and remain a top decile (>90 th percentile) independent financial services company, as measured by annual return on average assets compared to our defined peer group. The Company intends to achieve and maintain that goal by executing our five key initiatives.
Management plans to continue from time to time to purchase additional premises and equipment and improve current facilities to meet the current and future needs of the Company’s customers. These purchases will include buildings, leasehold improvements, furniture and equipment.
Management plans to continue from time to time to purchase additional premises and equipment and improve current facilities to meet the current and future needs of the Company’s customers. These purchases will include buildings, leasehold improvements, furniture and equipment. Management expects that cash on hand and cash generated from current operations will fund these capital expenditures and purchases.
Significant operating items for 2024 included gain on sale of loans of $4.7 million and net income of $11.5 million. Cash provided by the sale of loans held for sale were $216.0 million. Cash used in the origination of loans held for sale were $217.8 million. The Company experienced negative cash flows from investing activities in 2024 and 2023.
Significant operating items for 2025 included gain on sale of loans of $5.2 million and net income of $14.0 million. Cash provided by the sale of loans held for sale was $251.7 million. Cash used in the origination of loans held for sale were $244.0 million. The Company experienced negative cash flows from investing activities in 2025 and 2024.
Net cash used in investing activities was $28.9 million and $17.4 million for the years ended December 31, 2024 and 2023, respectively. A net increase in loans of $46.8 million was the primary change in 2024. The primary change for 2023 was a net increase in loans of $38.7 million.
Net cash used in investing activities was $68.1 million and $28.9 million for the years ended December 31, 2025, and 2024, respectively. A net increase in loans of $115.6 million was the primary change in 2025. The primary change for 2024 was a net increase in loans of $46.8 million.
The average amount of deposits and weighted-average rates paid are summarized as follows for the years ended December 31: 2024 2023 2022 Average Average Average Average Average Average ($ in thousands) Amount Rate Amount Rate Amount Rate Savings and interest bearing demand deposits $ 643,710 1.72 % $ 619,906 1.23 % $ 693,271 0.33 % Time deposits 259,818 3.83 % 236,665 3.00 % 159,401 0.76 % Non interest bearing demand deposits 227,445 - 237,976 - 252,899 - Totals $ 1,130,973 1.86 % $ 1,094,547 1.35 % $ 1,105,571 0.31 % 37 Time deposits that exceeded the FDIC insurance limit of $250,000 are summarized as follows: ($ in thousands) 2024 2023 Three months or less $ 4,912 $ 6,637 Over three months through six months 7,249 1,599 Over six months and through twelve months 6,533 5,209 Over twelve months 4,750 8,935 Total $ 23,444 $ 22,380 Shareholders’ equity at December 31, 2024, was $127.5 million, or 9.2 percent of total assets compared to $124.3 million or 9.3 percent of total assets at December 31, 2023.
The average amount of deposits and weighted-average rates paid are summarized as follows for the years ended December 31: 2025 2024 2023 Average Average Average Average Average Average ($ in thousands) Amount Rate Amount Rate Amount Rate Savings and interest bearing demand deposits $ 742,153 1.76 % $ 643,710 1.72 % $ 619,906 1.23 % Time deposits 273,228 3.44 % 259,818 3.83 % 236,665 3.00 % Non interest bearing demand deposits 251,820 - 227,445 - 237,976 - Totals $ 1,267,201 1.77 % $ 1,130,973 1.86 % $ 1,094,547 1.35 % Time deposits that exceeded the FDIC insurance limit of $250,000 are summarized as follows: ($ in thousands) 2025 2024 Three months or less $ 6,813 $ 4,912 Over three months through six months 8,420 7,249 Over six months and through twelve months 3,370 6,533 Over twelve months 5,258 4,750 Total $ 23,861 $ 23,444 Shareholders’ equity at December 31, 2025, was $141.2 million, or 9.1 percent of total assets compared to $127.5 million or 9.2 percent of total assets, at December 31, 2024.
Operating expense decreased by $0.35 million, or 0.8 percent, from $42.3 million in 2022 to $42.0 million in 2023, due to lower incentive and commission levels, which were partially offset by higher medical costs and increased spending on technology. Goodwill, Intangibles and Capital Purchases The Company completed its most recent annual goodwill impairment review as of December 31, 2024.
Operating expense increased by $1.0 million, or 2.4 percent, from $42.0 million in 2023 to $43.0 million in 2024, due to higher incentive and commission levels, which were partially offset by moving higher medical costs to SB Captive. Goodwill, Intangibles and Capital Purchases The Company completed its most recent annual goodwill impairment review as of December 31, 2025.
Sales of non-mortgage loans (small business and farm credits) in 2024 was just $0.7 million. The Company saw its wealth management assets under management increase by $45.9 million to $547.7 million at December 31, 2024, with total wealth management fees of $3.5 million.
Sales of non-mortgage loans (small business and farm credits) in 2025 was just $1.0 million, resulting in gain on sale of $0.14 million. The Company saw its wealth management assets under management increase by $18.3 million to $566.0 million at December 31, 2025, with total wealth management fees of $3.5 million.
The reserve increased during 2023 due to the one-time CECL adjustment of $1.4 million taken in January of 2023 upon the Company’s adoption of the CECL methodology. 39 The following schedule provides a breakdown of the ACL allocated by type of loan and related ratios at December 31 for the years indicated: Allowance Amount Percentage of Loans In Each Category to Total Loans Allowance Amount Percentage of Loans In Each Category to Total Loans Allowance Amount Percentage of Loans In Each Category to Total Loans ($ in thousands) 2024 2023 2022 Commercial & industrial $ 2,666 17.7 % $ 2,003 12.7 % $ 1,663 12.0 % Commercial real estate - owner occupied 1,806 12.0 % 1,952 12.4 % 1,696 12.3 % Commercial real estate - nonowner occupied 5,721 37.9 % 5,718 36.2 % 4,584 33.2 % Agricultural 884 5.9 % 440 2.8 % 611 4.4 % Residential real estate 3,330 22.1 % 4,936 31.3 % 4,438 32.1 % HELOC 520 3.4 % 510 3.2 % 547 4.0 % Consumer 169 1.1 % 227 1.4 % 279 2.0 % $ 15,096 100.0 % $ 15,786 100.0 % $ 13,818 100.0 % Regulatory capital reporting is required for State Bank only, as the Company is currently exempt from quarterly regulatory capital level measurement pursuant to the Small Bank Holding Company Policy Statement.
The following schedule provides a breakdown of the ACL allocated by type of loan and related ratios at December 31 for the years indicated: Percentage Percentage Percentage of Loans of Loans of Loans In Each In Each In Each Category Category Category Allowance to Total Allowance to Total Allowance to Total Amount Loans Amount Loans Amount Loans ($ in thousands) 2025 2024 2023 Commercial & industrial $ 1,821 11.3 % $ 2,666 17.7 % $ 2,003 12.7 % Commercial real estate - owner occupied 2,233 13.9 % 1,806 12.0 % 1,952 12.4 % Commercial real estate - nonowner occupied 6,846 42.5 % 5,721 37.9 % 5,718 36.2 % Agricultural 308 1.9 % 884 5.9 % 440 2.8 % Residential real estate 3,931 24.4 % 3,330 22.1 % 4,936 31.3 % HELOC 673 4.2 % 520 3.4 % 510 3.2 % Consumer 302 1.9 % 169 1.1 % 227 1.4 % $ 16,114 100.0 % $ 15,096 100.0 % $ 15,786 100.0 % Regulatory capital reporting is required for State Bank only, as the Company is currently exempt from quarterly regulatory capital level measurement pursuant to the Small Bank Holding Company Policy Statement.
For the full year of 2024, residential real estate loan production was $261.3 million, with $4.6 million of revenue from gains on sale. The level of mortgage origination was up from the $215.5 million in 2023. The Company’s loans serviced for others ended the year at $1.427 billion, up slightly from $1.367 billion at December 31, 2023.
For the full year of 2024, residential real estate loan production was $261.3 million, with $4.6 million of revenue from gains on sale. The level of mortgage origination was up from the $215.5 million in 2023.
The Company’s ACL at December 31, 2024, now covers nonperforming loans at 274 percent, down from 560 percent at December 31, 2023. 38 The following schedule presents an analysis of the ACL, average loan data and related ratios at December 31 for the years indicated: ($ in thousands) Provision for Credit Losses Net (Chargeoffs) Recoveries Average Loans Ratio of annualized net (chargeoffs) recoveries to average loans December 31, 2024 Commercial & industrial $ 891 $ (228 ) $ 123,238 -0.19 % Commercial real estate - owner occupied (146 ) - 131,168 0.00 % Commercial real estate - nonowner occupied 3 - 311,855 0.00 % Agricultural 444 - 63,580 0.00 % Residential real estate (1,603 ) (3 ) 314,066 0.00 % HELOC 10 - 50,240 0.00 % Consumer (39 ) (19 ) 13,204 -0.14 % Total $ (440 ) $ (250 ) $ 1,007,351 -0.02 % December 31, 2023 Commercial & industrial $ 110 $ - $ 124,435 0.00 % Commercial real estate - owner occupied 202 - 118,583 0.00 % Commercial real estate - nonowner occupied 119 - 301,072 0.00 % Agricultural 23 - 59,720 0.00 % Residential real estate 190 (52 ) 313,034 -0.02 % HELOC 39 - 46,576 0.00 % Consumer 5 (40 ) 15,470 -0.26 % Total $ 688 $ (92 ) $ 978,890 -0.01 % December 31, 2022 Commercial & industrial $ (227 ) $ - $ 126,496 0.00 % Commercial real estate - owner occupied (868 ) - 122,031 0.00 % Commercial real estate - nonowner occupied 367 - 276,805 0.00 % Agricultural 12 - 58,745 0.00 % Residential real estate 923 - 239,162 0.00 % HELOC (45 ) 13 43,210 0.03 % Consumer (162 ) - 14,039 0.00 % Total $ - $ 13 $ 880,488 0.00 % The ACL balance and the provision for credit losses are determined by management based upon periodic reviews of the loan portfolio.
The Company’s ACL at December 31, 2025, now covers nonperforming loans at 351.9 percent, up from 273.7 percent at December 31, 2024. 37 The following schedule presents an analysis of the ACL, average loan data and related ratios at December 31 for the years indicated: ($ in thousands) Provision for Credit Losses Net (Chargeoffs) Recoveries Average Loans Ratio of annualized net (chargeoffs) recoveries to average loans December 31, 2025 Commercial & industrial $ (673 ) $ (177 ) $ 120,891 -0.15 % Commercial real estate - owner occupied 427 - 142,734 0.00 % Commercial real estate - nonowner occupied 1,123 2 386,153 0.00 % Agricultural (576 ) - 63,260 0.00 % Residential real estate 617 (16 ) 311,773 -0.01 % HELOC 154 (1 ) 60,770 0.00 % Consumer 202 (69 ) 14,760 -0.47 % Total $ 1,274 $ (261 ) $ 1,100,341 -0.02 % December 31, 2024 Commercial & industrial $ 891 $ (228 ) $ 123,238 -0.19 % Commercial real estate - owner occupied (146 ) - 131,168 0.00 % Commercial real estate - nonowner occupied 3 - 311,855 0.00 % Agricultural 444 - 63,580 0.00 % Residential real estate (1,603 ) (3 ) 314,066 0.00 % HELOC 10 - 50,240 0.00 % Consumer (39 ) (19 ) 13,204 -0.14 % Total $ (440 ) $ (250 ) $ 1,007,351 -0.02 % December 31, 2023 Commercial & industrial $ 110 $ - $ 124,435 0.00 % Commercial real estate - owner occupied 202 - 118,583 0.00 % Commercial real estate - nonowner occupied 119 - 301,072 0.00 % Agricultural 23 - 59,720 0.00 % Residential real estate 190 (52 ) 313,034 -0.02 % HELOC 39 - 46,576 0.00 % Consumer 5 (40 ) 15,470 -0.26 % Total $ 688 $ (92 ) $ 978,890 -0.01 % The ACL balance and the provision for credit losses are determined by management based upon periodic reviews of the loan portfolio.
Specifically, total nonperforming assets were $5.5 million, or 0.40 percent of total assets. Total delinquent loans at December 31, 2024 were 0.63 percent of total loans. As of December 31, 2023, the Company had total nonperforming assets of $3.3 million, or 0.25 percent of total assets. Total delinquent loans at December 31, 2023 were 0.15 percent of total loans.
Specifically, total nonperforming assets were $4.7 million, or 0.30 percent of total assets. Total delinquent loans at December 31, 2025, were 0.49 percent of total loans. As of December 31, 2024, the Company had total nonperforming assets of $5.5 million, or 0.40 percent of total assets.
As of December 31, 2024, commercial business and agricultural loans made up approximately 18.0 percent of the HFI loan portfolio while commercial real estate loans accounted for approximately 43.9 percent of the HFI loan portfolio.
As of December 31, 2025, commercial business and agricultural loans made up approximately 16.1 percent of the HFI loan portfolio while commercial real estate loans accounted for approximately 50.6 percent of the HFI loan portfolio.
The Company’s significant accounting policies are described in detail in the Notes to the Company’s Consolidated Financial Statements for the years ended December 31, 2024 and 2023. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions.
GAAP and conform to general practices within the banking industry. The Company’s significant accounting policies are described in detail in the Notes to the Company’s Consolidated Financial Statements for the years ended December 31, 2025, and 2024. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions.
Gains on sale of residential mortgage loans was up from 2023 by $0.96 million, or 26.5 percent.
Gains on sale of residential mortgage loans was up from 2024 by $0.45 million, or 9.9 percent.
Noninterest Income Years Ended December 31, ($ in thousands) 2024 2023 % Change Wealth management fees $ 3,511 $ 3,532 -0.6 % Customer service fees 3,467 3,403 1.9 % Gains on sale of residential loans & OMSR’s 4,564 3,609 26.5 % Mortgage loan servicing fees, net 2,183 2,101 -3.9 % Gain on sale of non-mortgage loans 146 429 -66.0 % Title insurance income 1,635 1,635 0.0 % Other 1,511 3,012 -49.8 % Total noninterest income $ 17,017 $ 17,721 -4.0 % 41 Total noninterest income was $17.0 million for 2024 compared to $17.7 million for 2023, representing a decrease of $0.7 million, or 4.0 percent, year-over-year.
Noninterest Income Years Ended December 31, ($ in thousands) 2025 2024 % Change Wealth management fees $ 3,535 $ 3,511 0.7 % Customer service fees 3,544 3,467 2.2 % Gains on sale of residential loans & OMSR’s 5,015 4,564 9.9 % Mortgage loan servicing fees, net 1,562 2,183 28.4 % Gain on sale of non-mortgage loans 143 146 -2.1 % Title insurance income 2,048 1,635 25.3 % Other 1,260 1,511 -16.6 % Total noninterest income $ 17,107 $ 17,017 0.5 % 40 Total noninterest income was $17.1 million for 2025 compared to $17.0 million for 2024, representing an increase of $0.17 million, or 0.5 percent, year-over-year.
Specifically, the Company repurchased 253,817 shares during 2024 at an average price of $18.43 per share. On December 18, 2024, the Company’s Board of Directors approved a share repurchase program authorizing the repurchase of 500,000 shares through December 31, 2026.
The Company continued to repurchase its own common shares during the year under the Company’s publicly announced share repurchase program. Specifically, the Company repurchased 283,490 shares during 2025 at an average price of $19.47 per share. On December 18, 2024, the Company’s Board of Directors approved a share repurchase program authorizing the repurchase of 500,000 shares through December 31, 2026.
Noninterest Expense Years Ended December 31, ($ in thousands) 2024 2023 % Change Salaries & employee benefits $ 23,603 $ 22,777 3.6 % Net occupancy expense 2,884 3,096 -6.8 % Equipment expense 4,333 4,078 6.3 % Data processing fees 3,075 2,659 15.6 % Professional fees 2,927 3,024 -3.2 % Marketing expense 821 782 5.0 % Telephone and communications 525 501 4.8 % Postage and delivery expense 447 432 3.5 % State, local and other taxes 907 949 -4.4 % Employee expense 733 631 16.2 % Other expense 2,704 3,033 -10.8 % Total noninterest expense $ 42,959 $ 41,962 2.4 % Total noninterest expense was $43.0 million for 2024 compared to $42.0 million for 2023, representing a $1.0 million, or 2.4 percent, increase year-over-year.
Noninterest Expense Years Ended December 31, ($ in thousands) 2025 2024 % Change Salaries & employee benefits $ 25,077 $ 23,603 6.2 % Net occupancy expense 3,309 2,884 14.7 % Equipment expense 4,535 4,333 4.7 % Data processing fees 3,840 3,075 24.9 % Professional fees 3,594 2,927 22.8 % Marketing expense 651 821 -20.7 % Telephone and communications 511 525 -2.7 % Postage and delivery expense 541 447 21.0 % State, local and other taxes 1,091 907 20.3 % Employee expense 763 733 4.1 % Other expense 3,087 2,704 14.2 % Total noninterest expense $ 46,999 $ 42,959 9.4 % Total noninterest expense was $47.0 million for 2025 compared to $43.0 million for 2024, representing a $4.0 million, or 9.4 percent, increase year-over-year.
Net interest income was $39.9 million for 2024 and increased slightly from net interest income of $39.3 million for 2023. Average earning assets increased slightly to $1.27 billion in 2024, compared to $1.25 billion in 2023, primarily due to the increase in our loan portfolio, partially offset by lower cash and securities.
Net interest income was $48.4 million for 2025 and increased by 21 percent from net interest income of $40.0 million for 2024. Average earning assets increased to $1.40 billion in 2025, compared to $1.31 billion in 2024, primarily due to the increase in our loan portfolio, with higher overnight cash offset by lower securities.
The successful execution of these five strategies has enabled the Company to improve financial performance across a broad series of metrics. These metrics over the last five years are outlined in the following table. Specifically, the Company has increased total assets by $121.7 million, or 9.7 percent.
Total delinquent loans at December 31, 2024, were 0.63 percent of total loans. 31 The successful execution of these five strategies has enabled the Company to improve financial performance across a broad series of metrics. These metrics over the last five years are outlined in the following table.
Management expects the risk of changes in off-balance-sheet arrangements to be immaterial to earnings. Based on the current collateralization requirements of the FHLB, approximately $142.5 million of additional borrowing capacity existed at December 31, 2024. At December 31, 2024 and 2023, the Company had $41.0 million in federal funds lines available.
Based on the current collateralization requirements of the FHLB, approximately $159.9 million of additional borrowing capacity existed at December 31, 2025. At December 31, 2025, and 2024, the Company had $41.0 million in federal funds lines available.
The Company had proceeds from repayments, maturities, sales and calls of securities of $18.8 million and $22.2 million in 2024 and 2023, respectively. The Company experienced positive cash flows from financing activities in 2024 and negative cash flows in 2023.
The Company had proceeds from repayments, maturities, sales and calls of securities of $53.8 million and $18.8 million in 2025 and 2024, respectively. The Company experienced positive cash flows from financing activities in 2025 and 2024. Net cash provided by financing activities was $89.7 million and $22.5 million for the years ended December 31, 2025, and 2024, respectively.
Results of Operations Years Ended December 31, ($ in thousands, except per share data) 2024 2023 % Change Total assets $ 1,379,517 $ 1,343,249 2.7 % Total investments 201,588 219,708 -8.2 % Loans held for sale 6,770 2,525 168.1 % Loans, net of unearned income 1,046,735 1,000,212 4.7 % Allowance for credit losses 15,096 15,786 -4.4 % Total deposits 1,152,605 1,070,205 7.7 % Total operating revenue 1 $ 56,939 $ 56,994 -0.1 % Net interest income 39,922 39,273 1.7 % Loan loss provision 124 315 -60.6 % Noninterest income 17,017 17,721 -4.0 % Noninterest expense 42,959 41,962 2.4 % Net income 11,470 12,095 -5.2 % Diluted earnings per share 1.72 1.75 -1.7 % 1 Operating revenue equals net interest income plus noninterest income.
Results of Operations Years Ended December 31, ($ in thousands, except per share data) 2025 2024 % Change Total assets $ 1,545,367 $ 1,379,517 12.0 % Total investments 188,626 201,588 -6.4 % Loans held for sale 1,761 6,770 -74.0 % Loans, net of unearned income 1,180,591 1,046,735 12.8 % Allowance for credit losses 16,114 15,096 6.7 % Total deposits 1,307,244 1,152,605 13.4 % Total operating revenue 1 $ 65,560 $ 56,939 15.1 % Net interest income 48,453 39,922 21.4 % Loan loss provision 1,306 124 953.2 % Noninterest income 17,107 17,017 0.5 % Noninterest expense 46,999 42,959 9.4 % Net income 13,974 11,470 21.8 % Diluted earnings per share 2.19 1.72 27.3 % 1 Operating revenue equals net interest income plus noninterest income.
The results of this analysis are reflected in the following table, which reflects the Company’s neutral balance sheet that directionally is trending to a liability sensitive position: Economic Value of Equity December 31, 2024 ($ in thousands) Change in rates $ Amount $ Change % Change +400 basis points $ 258,979 $ 10,652 4.29 % +300 basis points 258,247 9,920 3.99 % +200 basis points 253,713 5,386 2.17 % +100 basis points 250,545 2,218 0.89 % Base Case 248,327 - - -100 basis points 240,798 (7,529 ) -3.03 % -200 basis points 229,540 (18,787 ) -7.57 % -300 basis points 213,379 (34,948 ) -14.07 % -400 basis points 190,188 (58,139 ) -23.41 % Economic Value of Equity December 31, 2023 ($ in thousands) Change in rates $ Amount $ Change % Change +400 basis points $ 206,660 $ (9,716 ) -4.49 % +300 basis points 211,240 (5,136 ) -2.37 % +200 basis points 211,639 (4,737 ) -2.19 % +100 basis points 213,900 (2,476 ) -1.14 % Base Case 216,376 - - -100 basis points 213,526 (2,850 ) -1.32 % -200 basis points 206,761 (9,616 ) -4.44 % -300 basis points 195,925 (20,452 ) -9.45 % -400 basis points 196,802 (19,574 ) -9.05 %
The results of this analysis are reflected in the following table, which reflects the Company’s neutral balance sheet that directionally is trending to a liability sensitive position: Economic Value of Equity December 31, 2025 ($ in thousands) Change in rates $ Amount $ Change % Change +400 basis points $ 287,836 $ 29,143 11.27 % +300 basis points 283,095 24,402 9.43 % +200 basis points 275,227 16,534 6.39 % +100 basis points 267,386 8,693 3.36 % Base Case 258,693 - - -100 basis points 245,130 (13,563 ) -5.24 % -200 basis points 226,992 (31,701 ) -12.25 % -300 basis points 206,265 (52,428 ) -20.27 % -400 basis points 212,241 (46,452 ) -17.96 % Economic Value of Equity December 31, 2024 ($ in thousands) Change in rates $ Amount $ Change % Change +400 basis points $ 258,979 $ 10,652 4.29 % +300 basis points 258,247 9,920 3.99 % +200 basis points 253,713 5,386 2.17 % +100 basis points 250,545 2,218 0.89 % Base Case 248,327 - - -100 basis points 240,798 (7,529 ) -3.03 % -200 basis points 229,540 (18,787 ) -7.57 % -300 basis points 213,379 (34,948 ) -14.07 % -400 basis points 190,188 (58,139 ) -23.41 % 43
As of December 31, 2024, residential first mortgage loans, which are secured by first mortgages on residential real estate, made up approximately 30.0 percent of the HFI portfolio, while consumer loans to individuals, which are primarily secured by consumer assets, made up approximately 6.5 percent of the HFI loan portfolio. 36 Maturities and Sensitivities of Loans to Changes in Interest Rates: The following table shows the maturity distribution of loans outstanding as of December 31, 2024.
As of December 31, 2025, residential first mortgage loans, which are secured by first mortgages on residential real estate, made up approximately 25.8 percent of the HFI portfolio, while consumer loans to individuals, which are primarily secured by consumer assets, made up approximately 7.5 percent of the HFI loan portfolio.
Liquid assets were $235.9 million at December 31, 2024, which included pledged available-for-sale securities of $132.8 million, compared to liquid assets of $246.7 million at December 31, 2023. The Company does not have material cash requirements for capital expenditures over the next year. Any cash needs for capital requirements would be funded by cash existing at the Company.
These assets, excluding the borrowings, are commonly referred to as liquid assets. Liquid assets were $263.1 million at December 31, 2025, which included pledged available-for-sale securities of $141.2 million, compared to liquid assets of $235.9 million at December 31, 2024. The Company does not have material cash requirements for capital expenditures over the next year.
Asset Quality Years Ended December 31, ($ in thousands) 2024 2023 % Change Nonaccruing loans $ 5,516 $ 2,818 95.7 % Foreclosed assets and other assets held for sale, net - 511 N/M Nonperforming assets 5,516 3,329 65.7 % Net charge-offs/(recoveries) 250 92 171.7 % Provision for credit losses 124 315 -60.6 % Allowance for credit losses 15,096 15,786 -4.4 % Nonaccruing loans/total loans 0.53 % 0.28 % 87.0 % Allowance/nonaccruing loans 273.7 % 560.2 % -51.1 % Nonperforming assets/total assets 0.40 % 0.25 % 61.3 % Net charge offs/average loans 0.01 % 0.01 % 0.0 % Allowance/loans 1.44 % 1.58 % -8.6 % Allowance/nonperforming loans 273.68 % 560.18 % -51.1 % Nonperforming assets totaled $5.5 million, or 0.40 percent of total assets at December 31, 2024, an increase of $2.2 million, or 65.7 percent from 2023.
Asset Quality Years Ended December 31, ($ in thousands) 2025 2024 % Change Nonaccruing loans $ 4,579 $ 5,516 -17.0 % Foreclosed assets and other assets held for sale, net 104 - N/M Nonperforming assets 4,683 5,516 -15.1 % Net charge-offs/(recoveries) 261 250 4.4 % Provision for credit losses 1,306 124 953.2 % Allowance for credit losses 16,114 15,096 6.7 % Nonaccruing loans/total loans 0.39 % 0.53 % -26.4 % Allowance/nonaccruing loans 351.9 % 273.7 % 28.6 % Nonperforming assets/total assets 0.30 % 0.40 % -24.2 % Net charge offs/average loans 0.02 % 0.01 % 100.0 % Allowance/loans 1.36 % 1.44 % -5.4 % Allowance/nonperforming loans 351.9 % 273.7 % 28.6 % Nonperforming assets totaled $4.7 million, or 0.30 percent of total assets, at December 31, 2025, a decrease of $0.8 million, or 15.1 percent, from December 31, 2024.
The growth has been on both sides of the balance sheet over the five-year period, with loans growing $174.0 million or 19.9 percent and deposits growing $103.6 million or 9.9 percent.
Specifically, the Company has increased total assets by $286.2 million, or 22.7 percent. The growth has been on both sides of the balance sheet over the five-year period, with loans growing $307.9 million, or 35.3 percent and deposits growing $258.2 million, or 24.6 percent.
Sources used to satisfy these needs consist of cash and due from banks, interest-bearing deposits in other financial institutions, securities available-for-sale, loans held for sale and borrowings from various sources. These assets, excluding the borrowings, are commonly referred to as liquid assets.
Liquidity Liquidity relates primarily to the Company’s ability to fund loan demand, meet deposit customers’ withdrawal requirements and provide for operating expenses. Sources used to satisfy these needs consist of cash and due from banks, interest-bearing deposits in other financial institutions, securities available-for-sale, loans held for sale, and borrowings from various sources.
The amounts have been categorized between loans with a fixed or floating interest rate (floating rate loans have an adjustable interest rate that changes based on a rate index).
Maturities and Sensitivities of Loans to Changes in Interest Rates: The following table shows the maturity distribution of loans outstanding as of December 31, 2025. The amounts have been categorized between loans with a fixed or floating interest rate (floating rate loans have an adjustable interest rate that changes based on a rate index).
The Company’s commercial real estate, first mortgage residential, agricultural and multi-family mortgage portfolio of $852.6 million at December 31, 2024, can and is readily used to collateralize borrowings, which is an additional source of liquidity. Management believes the Company’s current liquidity level, without these borrowings, is sufficient to meet its current and anticipated liquidity needs.
Management believes the Company’s current liquidity level, without these borrowings, is sufficient to meet its current and anticipated liquidity needs. At December 31, 2025, all eligible commercial real estate, residential first, multi-family mortgage and agricultural loans were pledged under a FHLB blanket lien.
Operating revenue was steady at $57.0 million as increased mortgage volume offset the sale of Visa B shares that occurred in 2023 of $1.4 million.
The Company’s loans serviced for others ended the year at $1.427 billion, up slightly from $1.367 billion at December 31, 2023. 41 Operating revenue for 2024 was steady at $57.0 million, as increased mortgage volume offset the sale of Visa B shares that occurred in 2023 of $1.4 million. SBFG Title revenue also remained level at $1.64 million.
Combined in the 14 counties of operation, we command 0.94 percent of the deposit market share, which has steadily grown. In our traditional markets of Northwest Ohio, the deposit market share is 4.40 percent.
In our traditional markets of Northwest Ohio, the deposit market share is 4.63 percent, which is up from 4.40 percent in 2024.
The fair market value of the bond portfolio declined slightly during 2024 due to the valuation adjustment on the portfolio, which resulted in accumulated other comprehensive loss (“AOCI”) rising to $30.2 million from $29.8 million. The Company continued to repurchase its own common shares during the year under the Company’s publicly announced share repurchase programs.
The fair market value of the bond portfolio increased during 2025 due to the valuation adjustment on the portfolio, which resulted in accumulated other comprehensive loss (“AOCI”) declining to $21.5 million at December 31, 2025, from $30.2 million at December 31, 2024.
On January 17, 2025, we established our presence in Ottawa County with the acquisition of The Marblehead Bank located in Marblehead, Ohio. Expand product utilization by new and existing customers: As of December 31, 2024, we operated in 14 counties in Northwest Ohio, Central Ohio and Northeast Indiana with 23 full-service offices, 23 ATM’s and seven loan production offices.
Expand product utilization by new and existing customers: As of December 31, 2025, we operated in 15 counties in Northwest Ohio, Central Ohio and Northeast Indiana with 27 full-service offices, 27 ATM’s and four loan production offices. Combined in the 15 counties of operation, we command 0.93 percent of the deposit market share, which has steadily grown.
This increase was the result of $6.8 million in provision expense during the period and $1.0 million in net charge-offs over the five-year period.
Specifically, the Company’s ACL balance has increased from $12.6 million at December 31, 2020, to $16.1 million at December 31, 2025, which reflects an increase of $3.5 million, or 28 percent. This increase was the result of $2.8 million in provision expense during the period and $0.4 million in net charge-offs over the five-year period.
Total Variance Variance Attributable To ($ in thousands) 2024/2023 Volume Rate Interest income Taxable securities $ 752 $ (170 ) $ 922 Non-taxable securities 1 (24 ) (19 ) (5 ) Loans, net of unearned income and deferred fees 1 5,469 1,536 3,933 Total interest income 6,197 1,346 4,851 Interest expense Savings and interest-bearing demand deposits 3,474 292 3,182 Time deposits 2,853 695 2,158 Repurchase agreements & other 80 (7 ) 87 Advances from FHLB (882 ) (754 ) (128 ) Trust preferred securities 23 - 23 Subordinated debt - - - Total interest expense 5,548 226 5,322 Net interest income $ 649 $ 1,119 $ (470 ) 1 Interest on non-taxable securities and loans has been adjusted to fully tax equivalent 35 The maturity distribution and weighted-average interest rates of debt securities available-for-sale at December 31, 2024, are set forth in the table below.
This variance allocates the volume variance and rate variance in proportion to the relationship of the absolute dollar amount of the change in each. 34 Total Variance Variance Attributable To ($ in thousands) 2025/2024 Volume Rate Interest income Taxable securities $ (995 ) $ (1,116 ) $ 121 Overnight Cash 2,486 1,384 1,102 Non-taxable securities 1 (2 ) (3 ) 1 Loans, net of unearned income and deferred fees 1 8,082 5,324 2,758 Total interest income 9,571 5,589 3,982 Interest expense Savings and interest-bearing demand deposits 2,019 1,693 326 Time deposits (564 ) 514 (1,078 ) Repurchase agreements & other (59 ) (24 ) (35 ) Advances from FHLB (254 ) (180 ) (74 ) Trust preferred securities (102 ) - (102 ) Subordinated debt - - - Total interest expense 1,040 2,003 (963 ) Net interest income $ 8,531 $ 3,586 $ 4,945 1 Interest on non-taxable securities and loans has been adjusted to fully tax equivalent The maturity distribution and weighted-average interest rates of debt securities available-for-sale at December 31, 2025, are set forth in the table below.
At December 31, 2024, all eligible commercial real estate, residential first, multi-family mortgage and agricultural loans were pledged under a FHLB blanket lien. Significant additional off balance-sheet liquidity is available in the form of FHLB advances, unused federal funds lines from correspondent banks and the national certificate of deposit market.
Significant additional off balance-sheet liquidity is available in the form of FHLB advances, unused federal funds lines from correspondent banks and the national certificate of deposit market. Management expects the risk of changes in off-balance-sheet arrangements to be immaterial to earnings.
Treasury and Government agencies $ 2,138 4.08 % $ 817 3.39 % $ 4,434 1.46 % - $ 7,389 1.84 % Mortgage-backed securities 756 2.95 % 16,536 1.38 % 8,645 1.97 % 143,683 1.90 % 169,620 1.86 % State and political subdivisions - 276 2.61 % 3,446 3.75 % 5,685 2.35 % 9,407 2.83 % Other corporate securities - - 15,171 3.69 % - 15,171 3.69 % Total securities by maturity $ 2,894 3.78 % $ 17,629 1.49 % $ 31,696 2.92 % $ 149,368 1.92 % $ 201,587 2.04 % ($ in thousands) Years Ended December 31, Total loans 2024 2023 % Change Commercial business & agriculture $ 189,298 $ 191,932 -1.4 % Commercial real estate 479,573 424,041 13.1 % Residential real estate 308,378 318,123 -3.1 % Consumer & other 69,340 65,673 5.6 % Total loans 1,046,589 999,769 4.7 % Net deferred costs (fees) 146 443 -67.0 % Total loans, net deferred costs (fees) 1,046,735 1,000,212 4.7 % Loans held for sale $ 6,770 $ 2,525 168.1 % Total deposits 2024 2023 % Change Noninterest bearing demand $ 232,155 $ 228,713 1.5 % Interest-bearing demand 201,085 166,413 20.8 % Savings & money market 460,148 419,570 9.7 % Time deposits 259,217 255,509 1.5 % Total deposits 1,152,605 1,070,205 7.7 % Total shareholders’ equity $ 127,508 $ 124,342 2.5 % Loans held for investment (“HFI”) increased $46.5 million, or 4.7 percent, to $1.05 billion at December 31, 2024, which was due to an increase in commercial real estate lending during 2024.
Treasury and Government agencies $ - $ 782 3.51 % $ 4,421 1.46 % - $ 5,203 1.77 % Mortgage-backed securities - 17,044 1.38 % 16,041 1.78 % 126,867 1.89 % 159,952 1.82 % State and political subdivisions 275 4.99 % 1,119 3.82 % 2,461 3.72 % 5,994 2.35 % 9,849 2.93 % Other corporate securities - - 13,622 3.64 % - 13,622 3.64 % Total securities by maturity $ 275 4.99 % $ 18,945 1.61 % $ 36,545 2.57 % $ 132,861 1.91 % $ 188,626 2.01 % ($ in thousands) Years Ended December 31, Total loans 2025 2024 % Change Commercial business & agriculture $ 190,942 $ 189,298 0.9 % Commercial real estate 596,983 479,573 24.5 % Residential real estate 304,741 308,378 -1.2 % Consumer & other 88,475 69,340 27.6 % Total loans 1,181,141 1,046,589 12.9 % Net deferred costs (fees) (550 ) 146 -476.7 % Total loans, net deferred costs (fees) 1,180,591 1,046,735 12.8 % Loans held for sale $ 1,761 $ 6,770 -74.0 % 35 Total deposits 2025 2024 % Change Noninterest bearing demand $ 254,063 $ 232,155 9.4 % Interest-bearing demand 202,501 201,085 0.7 % Savings & money market 577,380 460,148 25.5 % Time deposits 273,300 259,217 5.4 % Total deposits 1,307,244 1,152,605 13.4 % Total shareholders’ equity $ 141,236 $ 127,508 10.8 % Loans held for investment (“HFI”) increased $133.9 million, or 12.8 percent, to $1.18 billion at December 31, 2025, which was due to an increase in commercial real estate and agricultural lending during 2025.
SBFG Title revenue also remained level at $1.64 million. 40 Operating expense increased by $1.0 million, or 2.4 percent, from $42.0 million in 2023 to $43.0 million in 2024, due to higher incentive and commission levels, which were partially offset by moving higher medical costs to the Captive.
SBFG Title revenue expanded by $0.4 million compared to the prior year. Operating expense increased by $4.0 million, or 9.4 percent, from $43.0 million in 2024 to $47.0 million in 2025, due to higher incentive and commission levels. Operating expense included conversion expenses of $0.8 million and almost a full year of Marblehead operations.
As of December 31, 2024, the Company had repurchased a total of 17,460 shares, and 482,540 shares remained available for purchase, under this program. The December 18, 2024, share repurchase program replaced the Company’s prior repurchase program announced on December 21, 2022, under which an aggregate of 500,000 common shares of the Company were repurchased through December 2024.
As of December 31, 2025, the Company had repurchased a total of 300,950 shares, and 199,050 shares remained available for purchase, under this program.
Total full-time equivalent employees ended 2024 at 252, which was up 1 from year end 2023. Earnings Summary – 2023 vs. 2022 Net income for 2023 was $12.1 million, or $1.75 per diluted share, compared with net income of $12.5 million, or $1.77 per diluted share, for 2022.
Earnings Summary – 2025 vs. 2024 Net income for 2025 was $14.0 million, or $2.19 per diluted common share, compared with net income of $11.5 million, or $1.72 per diluted common share, for 2024. State Bank reported net income for 2025 of $15.9 million, which was up from the $13.0 million of net income in 2024.
Removed
As detailed in Note 23, we closed on an acquisition of another small community bank in Marblehead, Ohio on January 17, 2025.
Added
On January 17, 2025, we established our presence in Ottawa County with the acquisition of The Marblehead Bank located in Marblehead, Ohio. In late 2025, we expanded our Loan Production office in Angola, Indiana into a full service retail location and we expanded into the neighboring community of Napoleon, Ohio with a hybrid retail location.
Removed
This variance allocates the volume variance and rate variance in proportion to the relationship of the absolute dollar amount of the change in each.
Added
Maturities and Sensitivities of Loans to Changes in Interest Rates As of December 31, 2025 ($ in thousands) Within one year After one, but within five years After five, but within fifteen years After fifteen years Total Loans with fixed interest rates: Commercial & industrial $ 1,137 $ 30,979 $ 13,017 $ 15 $ 45,148 Commercial real estate - owner occupied 3,803 7,395 5,418 - 16,616 Commercial real estate - nonowner occupied 5,585 62,637 2,268 201 70,691 Agricultural 1,264 4,873 6,093 1,558 13,788 Residential real estate 2,819 885 10,824 31,459 45,987 HELOC 2 3 150 153 308 Consumer 3,699 7,206 2,889 499 14,293 Total $ 18,309 $ 113,978 $ 40,659 $ 33,885 $ 206,831 Loans with floating interest rates: Commercial & industrial $ 22,405 $ 12,939 $ 31,306 $ 2,080 $ 68,730 Commercial real estate - owner occupied 11,087 15,961 57,416 60,006 144,470 Commercial real estate - nonowner occupied 12,176 99,865 109,650 143,515 365,206 Agricultural 4,547 3,322 22,375 32,482 62,726 Residential real estate 1,118 1,678 7,429 248,529 258,754 HELOC 22 364 43,041 25,438 68,865 Consumer 877 2,911 1,221 - 5,009 Total $ 52,232 $ 137,040 $ 272,438 $ 512,050 $ 973,760 Total loans: Commercial & industrial $ 23,542 $ 43,918 $ 44,323 $ 2,095 $ 113,878 Commercial real estate - owner occupied 14,890 23,356 62,834 60,006 161,086 Commercial real estate - nonowner occupied 17,761 162,502 111,918 143,716 435,897 Agricultural 5,811 8,195 28,468 34,040 76,514 Residential real estate 3,937 2,563 18,253 279,988 304,741 HELOC 24 367 43,191 25,591 69,173 Consumer 4,576 10,117 4,110 499 19,302 Total loans $ 70,541 $ 251,018 $ 313,097 $ 545,935 $ 1,180,591 36 Total deposits increased $154.6 million, or 13.4 percent, to $1.31 billion at December 31, 2025.
Removed
Maturities and Sensitivities of Loans to Changes in Interest Rates As of December 31, 2024 ($ in thousands) Within one year After one, but within five years After five, but within fifteen years After fifteen years Total Loans with fixed interest rates: Commercial & industrial $ 1,063 $ 31,732 $ 17,717 $ 17 $ 50,529 Commercial real estate - owner occupied 2,962 6,044 6,889 - 15,895 Commercial real estate - nonowner occupied 4,012 32,770 8,217 216 45,215 Agricultural 775 4,979 7,014 1,525 14,293 Residential real estate 1,300 929 12,550 29,277 44,056 HELOC - - - - - Consumer 4,026 7,177 907 - 12,110 Total $ 14,138 $ 83,631 $ 53,294 $ 31,035 $ 182,098 Loans with floating interest rates: Commercial & industrial $ 23,696 $ 16,178 $ 32,533 $ 1,828 $ 74,235 Commercial real estate - owner occupied 5,768 10,013 48,570 54,185 118,536 Commercial real estate - nonowner occupied 1,016 65,696 97,472 135,743 299,927 Agricultural 505 3,954 20,444 25,484 50,387 Residential real estate 363 436 10,198 253,325 264,322 HELOC 18 367 40,791 12,635 53,811 Consumer 1,981 1,438 - - 3,419 Total $ 33,347 $ 98,082 $ 250,008 $ 483,200 $ 864,637 Total loans: Commercial & industrial $ 24,759 $ 47,910 $ 50,250 $ 1,845 $ 124,764 Commercial real estate - owner occupied 8,730 16,057 55,459 54,185 134,431 Commercial real estate - nonowner occupied 5,028 98,466 105,689 135,959 345,142 Agricultural 1,280 8,933 27,458 27,009 64,680 Residential real estate 1,663 1,365 22,748 282,602 308,378 HELOC 18 367 40,791 12,635 53,811 Consumer 6,007 8,615 907 - 15,529 Total loans $ 47,485 $ 181,713 $ 303,302 $ 514,235 $ 1,046,735 Total deposits increased $82.4 million, or 7.7 percent, to $1.15 billion at December 31, 2024.
Added
Inclusive of that growth was approximately $47 million in acquired deposits.
Removed
The State of Ohio Homebuyer Plus program impacted transactional deposit growth during 2024, as the Company added approximately $50 million in lower cost deposits from this program.
Added
The reserve increased during 2023 due to the one-time CECL adjustment of $1.4 million taken in January of 2023 upon the Company’s adoption of the CECL methodology.
Removed
The Company has substantially increased its reserve level over the last several years. Specifically, the Company’s ACL balance has increased from $8.8 million at December 31, 2019 to $15.1 million at December 31, 2024, which reflects an increase of $6.3 million, or 72 percent.
Added
SBFG Title reported net income for 2025 of $0.58 million, which was up from net income of $0.36 million for 2024. 39 Positive results for 2025 included loan growth of $133.9 million, with deposits higher by $154.6 million.
Removed
State Bank reported net income for 2023 of $13.3 million, which was down slightly from the $13.4 million of net income in 2022. SBFG Title reported net income for 2023 of $0.24 million, which was down from net income of $0.39 million for 2022.
Added
Loan and deposit growth were supplemented by our acquisition of The Marblehead Bank in the first quarter of 2025, adding $18 million and $47 million of loans and deposits, respectively. Residential real estate loan production was $277.7 million, with $5.0 million of revenue from gains on sale. The level of mortgage origination was up from the $261.3 million in 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed18 unchanged
Biggest changeThe Company has not purchased derivative financial instruments in the past, but during 2024 and 2023 the Company entered into interest rate swap agreements as an accommodation to certain loan customers (see Note 8 to the Consolidated Financial Statements). The Company may purchase such instruments in the future if market conditions are favorable.
Biggest changeThe Company has not purchased derivative financial instruments in the past, but during 2025 and 2024 the Company entered into interest rate swap agreements as an accommodation to certain loan customers (see Note 8 to the Consolidated Financial Statements). The Company may purchase such instruments in the future if market conditions are favorable.
Accordingly, effective risk management that maintains interest rate risks at prudent levels is essential to the Company’s safety and soundness. 44 Evaluating a financial institution’s exposure to changes in interest rates includes assessing both the adequacy of the management process used to control interest rate risk and the organization’s quantitative level of exposure.
Accordingly, effective risk management that maintains interest rate risks at prudent levels is essential to the Company’s safety and soundness. Evaluating a financial institution’s exposure to changes in interest rates includes assessing both the adequacy of the management process used to control interest rate risk and the organization’s quantitative level of exposure.
For additional quantitative and qualitative information regarding the Company’s interest rate risk, refer to the section captioned “Liquidity” under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K, which is incorporated herein by reference. 45
For additional quantitative and qualitative information regarding the Company’s interest rate risk, refer to the section captioned “Liquidity” under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K, which is incorporated herein by reference. 44
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Asset liability management involves developing, executing and monitoring strategies to maintain appropriate liquidity, maximize net interest income and minimize the impact that significant fluctuations in market interest rates would have on current and future earnings.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Asset liability management involves developing, executing and monitoring strategies to maintain appropriate liquidity, maximizing net interest income and minimizing the impact that significant fluctuations in market interest rates would have on current and future earnings.

Other SBFG 10-K year-over-year comparisons