SB Financial Group, Inc. (NASDAQ:SBFG) Q2 2020 Earnings Conference Call - Final Transcript

Jul 28, 2020 • 11:00 am ET

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SB Financial Group, Inc. (NASDAQ:SBFG) Q2 2020 Earnings Conference Call - Final Transcript

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Operator
Operator

Good morning, and welcome to the SB Financial Group's Second Quarter 2020 Conference Call and Webcast. I would like to inform you that this conference call is being recorded, and that all participants are in a listen-only mode. We will begin with remarks by management and then open the conference up to the investment community for questions and answers.

I will now turn the conference over to Sarah Mekus with SB Financial. Please go ahead.

Executive
Sarah S. Mekus

Good morning, everyone. I would like to remind you that this conference call is being broadcast live over the Internet and will be archived and available on our website at ir.yourstatebank.com. Joining me today are Mark Klein, Chairman, President and CEO; Tony Cosentino, Chief Financial Officer; Ernesto Gaytan, Chief Technology Innovation and Operations Officer; and Jon Gathman, Senior Lending Officer.

This call may contain forward-looking statements regarding SB Financial's performance, anticipated plans, operational results and objectives. Forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied on our call today. We have identified a number of different factors within the forward-looking statements at the end of our earnings release, which you are encouraged to review. SB financial undertakes no obligation to update any forward-looking statements except as required by law, after the date of this call. In addition to the financial results presented in accordance with GAAP, this call will also contain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our earnings release.

I will now turn the call over to Mr. Klein.

Executive
Mark A. Klein

Thank you, Sarah, and good morning, everyone. Great to have you all with us. Welcome to our second quarter 2020 conference call and webcast. Once again, our comments today, as with prior quarters, supplement our earnings release we filed yesterday.

It certainly has been a challenge this past quarter for our company as we've navigated this pandemic. Even as we were able to close over $224 million in residential mortgage loans, processing $83 million in PPP loans that helped save nearly 9,000 local jobs, while successfully closing our first acquisition in over 12 years. By all measures, a great quarter. Ensuring that all of our customers could have their financial needs met in a safe and efficient manner require the dedication of each of our staff members, and I must say they've responded quite well.

Highlights for this quarter, including a $1.1 million pretax mortgage servicing rights impairment and $1.2 million in merger-related costs include: Net income of $3.7 million, up $1.1 million or 39% increase over the prior year quarter, and when adjusted for non-GAAP items, net income was $5.5 million, up $2.3 million or 73%; adjusted return on average assets was a robust 188 basis points, up from the prior year quarter of just 109; net interest income of $8.9 million was flat to the prior year as our 5% reduction in interest income was offset