SB Financial Group (NASDAQ: SBFG) reported Q1 EPS of $0.31, $0.07 better than the analyst estimate of $0.24. Revenue for the quarter came in at $10.71 million versus the consensus estimate of $8.51 million.

First quarter 2020 highlights over prior year first quarter include:

• Net income of $0.7 million; diluted earnings per share (EPS) of $0.09
• Adjusted net income, excluding the impact of the OMSR impairment of $2.2 million (pre-tax), of $2.4 million with EPS of $0.31
• Mortgage origination volume of $101.4 million, an increase of $49.9 million, or 97.1 percent

First quarter 2020 trailing twelve-month highlights include:

• Loan growth of $48.2 million, or 6.2 percent
• Deposit growth of $36.2 million, or 4.4 percent
• Mortgage origination volume of $495.3 million, an increase of $160.3 million, or 47.8 percent; servicing portfolio of $1.22 billion, up $0.12 billion, or 11.2 percent

"SB Financial's first quarter GAAP results were impacted by the rapid decline in market rates driven by the Federal Reserve in response to the pandemic, which resulted in a large impairment to our mortgage servicing rights. Adjusting for that impairment, pre-tax pre-provision earnings were up three percent compared to 2019," said Mark A. Klein, Chairman, President, and CEO of SB Financial. "Mortgage volume accelerated in the quarter as we originated over $100 million in volume. In response to the unprecedented economic impact of the pandemic, we are actively working with our clients on both forbearance solutions as well as the new Paycheck Protection Program ("PPP") small business lending facility."

Mr. Klein noted, "We experienced a rapid increase in mortgage activity late in the quarter as our clients reacted to the market rate declines. As we look at our prior rolling 12 months, we have originated nearly $500 million in total volume for our clients throughout our footprint. As expected, impairment to our servicing rights had an outsized impact on our results. Our newest region, Indianapolis, contributed seven percent to our quarterly volume."

Mr. Klein stated, "We are actively participating in the SBA's PPP program and anticipate total funding in the second quarter of $75 million. Fee income levels from mortgage lending were up this quarter, but OMSR impairment had a significant impact on our operating results. Our title agency acquisition in March of 2019, makes comparative results difficult; however; Peak took part in the increased mortgage activity in the quarter. We continue to pay close attention to expenses and have begun to implement a number of actions in response to the pandemic headwinds affecting our business."

Mr. Klein continued, "Both loan and deposit volumes were up over the prior year although business activity slowed in March and lending activity beyond the U.S. Treasury programs will likely be constrained in the near term. Nonperforming assets to total assets increased as we had an asset based commercial line that we downgraded at year end. We ended the quarter at 61 basis points of NPA's, up 19 basis points from the prior year."

For earnings history and earnings-related data on SB Financial Group (SBFG) click here.