Keeta Diller - Senior Vice President and Corporate Secretary Mark Klein - President and Chief Executive Officer Tony Cosentino - Chief Financial Officer Jon Gathman - Senior Lending Officer

Good morning and welcome to the SB Financial Group Fourth Quarter and Full Year 2014 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Keeta Diller, Senior Vice President and Corporate Secretary. Please go ahead.

Good morning, everyone. I would like to remind you that this conference call is being broadcast live over the Internet and will also be archived and available on our website at www.yoursbfinancial.com under Investor Relations. Joining me today are Mark Klein, President and Chief Executive Officer; Tony Cosentino, Chief Financial Officer; and Jon Gathman, Senior Lending Officer. Before I turn the call over to Mr. Klein, let me add that this call may contain forward-looking statements regarding SB Financial Group’s financial 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 and you are encouraged to review those factors. SB Financial Group undertakes no obligation to update any forward-looking statement, 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 certain non-GAAP financial measures. I will now turn the call over to Mark Klein. Mark?

Thank you, Keeta, and good morning everyone. Thank you all for joining us on our fourth quarter and year end 2014 conference call. As a reminder, we just issued our earnings release yesterday and of course those details can be accessed on our website as well as the 8-K we filed with the SEC. I would first like to make some high level comments on our overall performance this past quarter, including our full year 2014 performance. And then as with prior quarters, Tony Cosentino, our CFO will dive a bit deeper, not only into the metrics, but the numbers of our financial performance as well. I will close with our outlook for 2015 and reconfirm some of our key performance metrics that we feel will deliver our vision of performance at or above the 75th percentile of our peer group. Highlights for the quarter and full year include net income for the quarter was $1.5 million or $0.30 per diluted share and $1.07 earnings per diluted share or $5.26 million in net income for the full year 2014 representing a slight increase over the prior year. Total return for our common stockholder for the year was a healthy 21%. Mortgage volume was again sound for the year at $220 million driving total loan sale gains for the year of $4.2 million. Asset quality metrics continue to be that key driver of our overall performance. Our loan portfolio increased more than $39 million or 8.2% from year end 2013. And finally, we completed a very successful $15 million preferred stock offering in December that enabled us to reduce interest cost and potentially provides capital to leverage our brand deeper into newer markets. Net income for the quarter was $5.2 million in line with linked quarter and a solid contribution for…

Thanks Mark. Good morning. Let’s start with a few high level comments on our results. First, total revenue on a fully taxable equivalent basis was up 9.9% from the prior year and up 2.8% from the linked quarter. Loan growth up $39 million over the prior year or 8.2% and compared to the linked quarter, we were able to grow loans by $10.4 million. Third, the impact of the early payoff on our trust preferred securities in the third quarter was realized and improved net interest margin by 15 basis points. Now, let’s look at our results in the context of Mark’s comments on strategic initiatives and overall industry conditions. We start with the income statement. And on the revenue front, specifically margin, net interest income as I said on a fully taxable equivalent basis was up from the linked quarter by 2.8% and up 9.9% from the prior year driven by end-of-period loan balances, which were up $39 million from the prior year, an increase of 8.2% and up $10.4 million from the linked quarter. This loan growth allowed our earning asset yield to compress by only 11 basis points from the linked quarter. On the funding side, we continue to reduce our cost of interest bearing liabilities, which came in at 53 basis points for the quarter. This was down 23 basis points from the 76 basis points in both the third quarter of 2014 and the fourth quarter of 2013. Net interest margin at 3.73% was up 16 basis points from the prior year and up 9 basis points from the linked quarter. As we said, we retired a 10.6% fixed rate trough in the third quarter, which allowed us to realize significant savings in interest costs in the fourth quarter. Turning now to fee income, for…

Thank you, Tony. In closing, we continue our pursuit of top quartile performance by concentrating on these following areas: improving profitability, efficiency and capital position; expanding sources of non-interest income, gaining operational scale as we grow our balance sheet and client base in existing and new markets; maintaining that top tier asset quality we have worked so hard to achieve; and positioning our company for strategic acquisitions. Overall, it was a great year for our company, the best since 2003. Our strengths remain our ability to identify more and geographically diverse sources of non-interest income, increase our organizational scale through that organic loan growth deposit and household growth from all five diverse regional markets, maintain our low level of retail funding cost at just 42 basis points, improve that overall efficiency of our operation and achieve top quartile asset quality measures. Our challenges remain gaining the even greater scale required to achieve and maintain top quartile efficiency and top line revenue expansion in the midst of margin compression and a marginally improving economy. Our results for the entire year were confirmation of not only the merits of our strategies, to leverage our strength and mitigate our weaknesses, but perhaps more importantly of our collective level of commitment to execute on those strategies. For 2015, our focus remains to improve our performance with a greater companywide commitment to better execution. Economically, we welcome the improvement in GDP and unemployment as this improvement has a direct and systemic effect on all financial institutions, including SB Financial Group. This momentum has the fuel to our fire and improves our overall level of execution. While this expansion appears on the surface to be relatively broad-based, our success clearly rest on a systemic expansion that lifts all sectors. That epicenter includes an overall healthy consumer. We have our product line identified, market presence established with strong leadership, and now what appears to be an expanding economy to drive stronger performance into 2015. We welcome the challenge and the opportunity. Now, I would like to turn the call back to Keeta for questions and answers. Keeta?

Thank you. Denise, we are now ready for our first question.

Thank you, Denise. Once again, thank you all for joining us this morning on our quarterly and year end conference call. We certainly look forward to speaking with you in April for a review of our first quarter 2015 results. Goodbye.

Ladies and gentlemen, the conference has now concluded. We thank you for attending today’s presentation. You may now disconnect your lines.