What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-03-07 compared with 2021-03-08 · 26 added, 532 removed, 8 unchanged (99% of the section changed)

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 7,407,034 common shares outstanding as of December 31, 2020, which

were held by approximately 1,236 record holders.

The Company paid quarterly dividends on

its common shares in the aggregate amounts of $0.40 per share and $0.36 per share in 2020 and 2019, 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.

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.

These provisions could have the effect of limiting the Company’s ability to pay dividends

on its outstanding shares.

Moreover, the Federal Reserve Board expects the Company to serve as a source of strength to its subsidiary

banks, which may require it to retain capital for further investment in State Bank, rather than for dividends to shareholders of

Our common shares are traded on the NASDAQ Capital Market under the symbol “SBFG”.

There were 6,884,330 common shares outstanding as of December 31, 2021, which were held by approximately 1,203 record holders.

The Company paid quarterly dividends on its common shares in the aggregate amounts of $0.44 per share and $0.40 per share in 2021 and 2020, 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.

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.

These provisions could have the effect of limiting the Company’s ability to pay dividends on its outstanding shares.

Moreover, the Federal Reserve Board expects the Company to serve as a source of strength to its subsidiary banks, which may require it to retain capital for further investment in State Bank, rather than for dividends to shareholders of the Company.

The Company’s ability to pay dividends on its shares is also conditioned upon the payment, on a current basis, of quarterly interest payments on the subordinated debentures underlying the Company’s trust preferred securities.

In addition, under the terms of the Company’s fixed-to-floating rate subordinated debt, the Company’s ability to pay dividends on its shares is conditioned upon the Company continuing to make required principal and interest payments, and not incurring an event of default, with respect to the subordinated debt.

Period Ending

1 unchanged sentence

NASDAQ Composite Index

Bank NASDAQ Index

KBW NASDAQ Bank Index

The table below reflects the common shares

repurchased by the Company during the three months ended December 31, 2020.

The Company has 253,360 shares remaining of the 500,000

approved under the existing share repurchase program which was authorized on July 21, 2020 and expires December 31, 2021.

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

The table below reflects the common shares repurchased by the Company during the three months ended December 31, 2021.

As of December 31, 2021, the Company had 495,639 shares remaining of the 750,000 approved under the Company’s existing share repurchase program which was authorized on May 25, 2021 and expires May 31, 2022.

Total Number of

Shares Purchased

Weighted Average

Price Paid per

Total Number of

Shares Purchased

as Part of Publicly

Announced Plans

Maximum Number

of Shares that May

Yet be Purchased

Under the Plans or

10/01/21 - 10/31/21

1 unchanged sentence

12/01/21 - 12/31/21

Selected Financial Data.

Financial Highlights

Year Ended December 31,

($ in thousands, except per share data)

Interest income

Interest expense

Net interest income

Provision for loan losses

Noninterest income

Noninterest expense

Provision for income taxes

Preferred stock dividends

Net income available to common

Per Common Share Data

Basic earnings

Diluted earnings

Cash dividends declared

Total equity per share

Total tangible equity per share

Average Balances

Average total assets

Average equity

Return on average total assets

Return on average equity

Cash dividend payout ratio 1

Average equity to average assets

Period End Totals

Total investments;

fed funds sold

Loans held for sale

Total loans & leases

Allowance for loan losses

Total deposits

Advances from FHLB

Trust preferred securities

dividends on common shares divided by net income available to common.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

SB Financial Group, Inc.

(“SB Financial”),

is a financial holding company registered with the Federal Reserve Board and subject to regulation under the Bank Holding Company

Act of 1956, as amended.

Through its direct and indirect subsidiaries, SB Financial is engaged in commercial and retail banking,

wealth management and private client financial services.

The following discussion provides a review

of the consolidated financial condition and results of operations of SB Financial and its subsidiaries (collectively, the “Company”).

This discussion should be read in conjunction with the Company’s consolidated financial statements and related footnotes

as of and for the years ended December 31, 2020 and 2019.

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.

Increase profitability through ongoing

diversification of revenue streams:

For the twelve months ended December 31, 2020, the Company generated $30.1 million in noninterest

income, or 45.6 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, 2019, the Company generated $18.0 million

in revenue from fee-based products, or 34.1 percent of total operating revenue.

Strengthen our penetration in all markets

Over our 118-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.

Wayne (Indiana), our current market penetration is minimal but we believe our potential for growth

is significant.

We have expanded and committed additional resources to our presence in the Findlay and Wauseon markets.

to seek to expand the presence and penetration in all of our markets.

Expand product utilization by new and

existing customers:

As of December 31, 2020, we served 32,519 households and provided 95,210 products and services (2.93 products

& services per household) to these households.

Our strategy is to continue to expand the scope of our relationship with each

household via our dynamic “on-boarding”

Proactively identifying client needs is a key ingredient of our value

As of December 31, 2019, we served 30,377 households and provided 91,154 products and services (3.00 products &

services per household) to these households.

Deliver gains in operational excellence:

Our management team believes that becoming and remaining a high-performance financial services company will depend upon seamlessly

and consistently delivering operational excellence, as demonstrated by the Company’s leadership in the origination and servicing

of residential mortgage loans.

As of December 31, 2020, the Company serviced 8,543 residential mortgage loans with a principal

balance of $1.3 billion.

As of December 31, 2019, the Company serviced 8,155 loans with a principal balance of $1.2 billion.

Sustain asset quality:

As of December

31, 2020, the Company’s asset quality metrics remained strong.

Specifically, total nonperforming assets were $7.3 million,

or 0.58 percent of total assets.

Total delinquent loans at December 31, 2020 were 0.75 percent of total loans.

As of December 31,

2019, the Company had total nonperforming assets of $5.3 million, or 0.51 percent of total assets.

Total delinquent loans at December

31, 2019 were 0.28 percent of total loans.

Critical Accounting Policies

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.

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, 2020 and 2019.

The preparation of financial statements in conformity

with generally accepted accounting principles requires management to make estimates and assumptions.

The Company’s financial

position and results of operations can be affected by these estimates and assumptions and are integral to the understanding of

reported results.

Critical accounting policies are those policies that management believes are the most important to the portrayal

of the Company’s financial condition and results, and they require management to make estimates that are difficult, subjective

Allowance for Loan Losses:

The allowance

for loan losses provides coverage for probable losses inherent in the Company’s loan portfolio.

Management evaluates the

adequacy of the allowance for loan losses each quarter based on changes, if any, in the nature and amount of problem assets and

associated collateral, underwriting activities, loan portfolio composition (including product mix and geographic, industry or customer-specific

concentrations), trends in loan performance, regulatory guidance and economic factors.

This evaluation is inherently subjective,

as it requires the use of significant management estimates.

Many factors can affect management’s estimates of specific and

expected losses, including volatility of default probabilities, rating migrations, loss severity and economic and political conditions.

The allowance is increased through provisions charged to operating earnings and reduced by net charge offs.

The Company determines the amount of the

allowance based on relative risk characteristics of the loan portfolio.

The allowance recorded for commercial loans is based on

reviews of individual credit relationships and an analysis of the migration of commercial loans and actual loss experience.

allowance recorded for homogeneous consumer loans is based on an analysis of loan mix, risk characteristics of the portfolio, fraud

loss and bankruptcy experiences, and historical losses, adjusted for current trends, for each homogeneous category or group of

The allowance for credit losses relating to impaired loans is based on each impaired loan’s observable market price,

the collateral for certain collateral-dependent loans, or the discounted cash flows using the loan’s effective interest rate.

Regardless of the extent of the Company’s

analysis of customer performance, portfolio trends or risk management processes, certain inherent, but undetected, losses are probable

within the loan portfolio.

This is due to several factors including inherent delays in obtaining information regarding a customer’s

financial condition or changes in their unique business conditions, the subjective nature of individual loan valuations, collateral

assessments and the interpretation of economic trends.

Volatility of economic or customer-specific conditions affecting the identification

and estimation of losses for larger non-homogeneous credits and the sensitivity of assumptions utilized to establish allowances

for homogenous groups of loans are also factors.

The Company estimates a range of inherent losses related to the existence of these

The estimates are based upon the Company’s evaluation of imprecise risk associated with the commercial and consumer

allowance levels and the estimated impact of the current economic environment.

Goodwill and Other Intangibles:

Company records all assets and liabilities acquired in purchase acquisitions, including goodwill and other intangibles, at fair

value as required.

Goodwill is subject, at a minimum, to annual tests for impairment.

Other intangible assets are amortized over

their estimated useful lives using straight-line and accelerated methods, and are subject to impairment if events or circumstances

indicate a possible inability to realize the carrying amount.

The initial goodwill and other intangibles recorded and subsequent

impairment analysis requires management to make subjective judgments concerning estimates of how the acquired asset will perform

in the future.

Events and factors that may significantly affect the estimates include, among others, customer attrition, changes

in revenue growth trends, specific industry conditions and changes in competition.

Deferred Tax Liability:

has evaluated its deferred tax liability to determine if it is more likely than not that the liability will be realized in the

The Company’s most recent evaluation has determined that the Company will more likely than not be able to realize

the remaining deferred tax liability.

Income Tax Accounting:

files a consolidated federal income tax return.

The provision for income taxes is based upon income in the consolidated financial

statements, rather than amounts reported on our income tax return.

Deferred tax assets and liabilities are recognized for future

tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities

and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable

income in the years in which those temporary differences are expected to be recovered or settled.

The effect of a change in rates

on the deferred tax assets and liabilities is recognized as income or expense in the period that includes the enactment date.

Changes in Financial Condition

Total assets at December 31, 2020, were

$1.26 billion, compared to $1.04 billion at December 31, 2019.

Loans (excluding loans held for sale) were $872.7 million at December

31, 2020, compared to $825.5 million at December 31, 2019.

Total deposits were $1.05 billion at December 31, 2020, compared to

$840.2 million at December 31, 2019.

Deposit and loan balances were elevated due to the PPP initiative and the acquisition of the

Edon State Bank.

Total equity was $142.9 million at December

31, 2020, up 5.0 percent from $136.1 million at December 31, 2019.

Net income less dividends increase retained earnings by $11.8

million for 2020.

($ in thousands)

Years Ended December 31,

Commercial business & agriculture

Commercial real estate

Residential real estate

Consumer & other

Loans held for investment

Loans held for sale

Total deposits

Noninterest bearing demand

Interest-bearing demand

Savings & money market

Time deposits

Total deposits

Total shareholders’

Loans held for investment increased $47.2

million, or 5.7 percent, to $872.7 million at December 31, 2020.

The largest component of this increase was in commercial business

loans, which rose $55.7 million.

The 2020 results were impacted by the Company’s participation in the PPP, which increased

commercial balances by approximately $70.5 million.

In addition, the Company acquired the Edon State Bank in June of 2020 that

increased loan balances by $16.4 million.

Deposits increased $208.8 million, or 24.9

percent, to $1.05 billion at December 31, 2020.

Deposit growth for the year included $139.0 million in demand deposits and $98.0

million in savings and money market deposits.

The Company added approximately $51.0 million in deposit balances from the Edon State

Bank acquisition in 2020.

Stockholders’

equity at December

31, 2020, was $142.9 million or 11.4 percent of total assets compared to $136.1 million or 13.1 percent of total assets at December

Asset Quality

Years Ended December 31,

($ in thousands)

Nonaccruing loans

Accruing restructured loans (TDRs)

OREO & repossessed assets

Nonperforming assets

Net charge offs

Loan loss provision

Allowance for loan losses

Nonperforming assets/total assets

Net charge offs/average loans

Allowance/loans

Allowance/nonperforming loans

Nonperforming assets consisting of loans,

Other Real Estate Owned (“OREO”) and accruing TDRs totaled $7.3 million, or 0.58 percent of total assets at December

31, 2020, an increase of $0.6 million or 8.7 percent from 2019.

Net charge offs were up during 2020, at $0.68 million, which was

a $0.47 million increase compared to 2019.

The Company’s loan loss allowance at December 31, 2020, now covers nonperforming

loans at 174 percent, up from 137 percent at December 31, 2019.

As detailed in the risk factors, the CARES

Act provided for significant consumer and small business relief due to the impact of the COVID-19 pandemic.

The Company provided

payment relief to a number of consumer and small business customers throughout 2020.

As detailed in the table below, loans in forbearance/deferral

status as of December 31, 2020 were $23.2 million.

An additional $11.7 million of sold mortgage relationships were also in deferral

Loans in Deferral Status

($ in thousands, except ratios)

Total Commercial

Total Consumer

Total Portfolio Mortgage

Total Balance Sheet Deferrals

% of Total loans

Total Sold Mortgage

Regulatory capital reporting is required

for State Bank only, as the Company is now exempt from quarterly regulatory capital level measurement pursuant to the Small Bank

Holding Company Policy Statement.

As of December 31, 2020, State Bank met all regulatory capital levels required to be considered

well-capitalized (See Note 17 to the Consolidated Financial Statements).

Earnings Summary –

Net income for 2020 was $14.9 million,

or $1.96 per diluted share, compared with net income of $12.0 million and net income available to common of $11.0 million, or $1.51

per diluted share, for 2019.

State Bank reported net income for 2020 of $16.0 million, which was up from the $12.5 million in net

income in 2019.

SBFG Title reported net income for 2020 of $0.6 million, which was up from the $0.3 million in 2019.

Positive results for 2020 included loan

growth of $47.2 million, and deposit growth of $208.8 million.

The mortgage banking business line continues to contribute significant

revenues, with residential real estate loan production of $694.2 million for the year, resulting in $25.4 million of revenue from

gains on sale.

The level of mortgage origination was up from the $445.3 million in 2019.

The Company’s loans serviced for

others ended the year at $1.3 billion, up from $1.2 billion at December 31, 2019.

The Company realized over $1.4 million in revenue

from the PPP initiative.

Operating revenue was up compared to the

prior year by $13.2 million, or 25.0 percent, which was impacted by a $3.6 million temporary OMSR impairment.

Our 2020 results

include the full year impact from SBFG Title with net income of $0.6 million, and SB Captive, with net income of $0.9 million.

Net interest margin on a fully tax equivalent basis (“FTE”) for 2020 was 3.36 percent, down 46 basis points from 2019.

Operating expense was up compared to the

prior year by $5.7 million, or 15.2 percent, due to compensation and fringe benefit cost increases as a result of higher mortgage

commission levels.

Operating leverage (growth in revenue divided by growth in operating expense) for the year was a positive 1.6

Net charge offs for 2020 of $0.68 million

resulted in a loan loss provision of $4.5 million, compared to net charge offs of $0.21 million and a $0.8 million loan loss provision

Results of Operations

Years Ended December 31,

($ in thousands, except per share data)

Total investments

Loans held for sale

Loans, net of unearned income

Allowance for loan losses

Total deposits

Total operating revenue 1

Net interest income

Loan loss provision

Noninterest income

Noninterest expense

Net income available to common shareholders

Diluted earnings per share

revenue equals net interest income plus noninterest income.

Net Interest Income

Years Ended December 31,

($ in thousands)

Total net interest income

Net interest income was $35.9 million for

2020 compared to $34.8 million for 2019, an increase of $1.1 million or 3.2 percent.

Average earning assets increased to $1.07

billion in 2020, compared to $915.0 million in 2019, an increase of $157.4 million or 17.2 percent due to higher loan volume.

consolidated 2020 full year net interest margin on an FTE basis decreased 46 basis points to 3.36 percent compared to 3.82 percent

for the full year of 2019.

PPP activity during 2020 increased margin revenue by $2.0 million for the full year of 2020.

continue to realize fee income from the forgiveness of these Phase I PPP loans throughout 2021 and we are beginning Phase II of

the program in early 2021.

Provision for loan losses of $4.5 million

was taken in 2020 compared to $0.8 million taken for 2019.

For 2020, net charge offs totaled $0.68 million, or 0.08 percent of

average loans.

This charge off level was higher than 2019, in which net charge offs were $0.21 million or 0.03 percent of average

Noninterest Income

Years Ended December 31,

($ in thousands)

Wealth management fees

Customer service fees

Gains on sale of residential loans & OMSR’s

Mortgage loan servicing fees, net

Gain on sale of non-mortgage loans

Title Insurance income

Net gain on sale of securities

Gain (loss) on sale/disposal of assets

Total noninterest income

Total noninterest income was $30.1 million

for 2020 compared to $18.0 million for 2019, representing an increase of $12.1 million, or 67.0 percent, year-over-year.

This increase

was driven by a 201.3 percent increase in gains on sale of residential real estate loans and the addition of our title agency.

The Company sold $598.5 million of originated mortgages into the secondary market in 2020, which allowed our serviced loan portfolio

to grow to $1.3 billion at December 31, 2020 from $1.2 billion at December 31, 2019.

The higher servicing balance of the portfolio

led to the 13.7 percent increase in mortgage loan servicing income.

Sales of non-mortgage loans (small business and farm credits)

decreased in 2020 as compared to 2019, as SBA activity was focused on the PPP initiative.

The Company continued to expand its wealth

management assets under care, which resulted in a 4.9 percent increase in wealth fee income.

Noninterest Expense

Years Ended December 31,

($ in thousands)

Salaries & employee benefits

Net occupancy expense

Equipment expense

Data processing fees

Professional fees

Marketing expense

Telephone and communications

Postage and delivery expense

State, local and other taxes

Employee expense

Other expense

Total noninterest expense

Total noninterest expense was $43.1 million

for 2020 compared to $37.4 million for 2019, representing a $5.7 million, or 15.2 percent, increase year-over-year.

Total full-time

equivalent employees ended 2020 at 244, which was down 8 from year end 2019.

Salaries and benefits were driven by higher

compensation costs in the mortgage division.

Professional fees were higher due to higher spending on legal in connection with acquisition

The addition of our title agency added $0.5 million in operating expense for the year.

Our acquisition of The Edon

State Bank Company of Edon, Ohio in June 2020 added $1.2 million in merger related non-recurring expense and a minimal amount of

ongoing operating expense.

(See Notes 3 and 8 to the Consolidated Financial Statements for additional information)

Earnings Summary –

Net income for 2019 was $12.0 million,

and net income available to common shareholders was $11.0 million, or $1.51 per diluted share, compared with net income of $11.6

million and net income available to common of $10.7 million, or $1.51 per diluted share, for 2018.

State Bank reported net income

for 2019 of $12.5 million, which was down from the $12.9 million in net income in 2018.

SBFG Title reported net income for 2019

of $0.3 million.

Positive results for 2019 included loan

growth of $53.6 million, and deposit growth of $37.7 million.

The mortgage banking business line continues to contribute significant

revenues, with residential real estate loan production of $445.3 million for the year, resulting in $8.4 million of revenue from

gains on sale.

The level of mortgage origination was up from the $342.1 million in 2018.

The Company’s loans serviced for

others ended the year at $1.2 billion, up from $1.1 billion at December 31, 2018.

Operating revenue was up compared to the

prior year by $3.0 million, or 5.9 percent, which was impacted by a $1.1 million temporary OMSR impairment.

Our 2019 results include

the impact from our two new subsidiaries:

SBFG Title with net income of $0.3 million and SB Captive with net income of $0.9 million.

Net interest margin on a fully tax equivalent basis (“FTE”) for 2019 was 3.82 percent, down 13 basis points from 2018.

Operating expense was up compared to the

prior year by $2.6 million, or 7.4 percent, due to compensation and fringe benefit cost increases as a result of higher mortgage

commission levels.

Net charge offs for 2019 of $0.21 million

resulted in a loan loss provision of $0.8 million, compared to net charge offs of $0.36 million and a $0.6 million loan loss provision

Goodwill, Intangibles and Capital

The Company completed its most recent annual

goodwill impairment test as of December 31, 2020.

At December 31, 2020, the Company’s reporting unit was more likely than

not that the fair value of the reporting unit exceeded its carrying value, including goodwill.

The qualitative assessment indicated

that it was more likely than not that the fair value of the reporting unit exceeded its carrying value, resulting in no impairment.

The main changes to goodwill for the year included the purchase of the Edon State Bank.

The Company’s goodwill is further

reviewed in Note 8 to the Consolidated Financial Statements.

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.

expects that cash on hand and cash generated from current operations will fund these capital expenditures and purchases.

Liquidity relates primarily to the Company’s

ability to fund loan demand, meet deposit customers’

withdrawal requirements and provide for operating expenses.

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.

Liquid assets were $303.2 million at December 31, 2020, compared to $135.3 million at December 31,

The Company’s commercial real estate,

first mortgage residential, agricultural and multi-family mortgage portfolio of $608.4 million at December 31, 2020, 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.

At December 31, 2020,

all eligible commercial real estate, residential first, multi-family mortgage and agricultural loans were pledged under a Federal

Home Loan Bank (“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.

Management expects the risk of changes in off-balance-sheet arrangements to be immaterial to earnings.

on the current collateralization requirements of the FHLB, approximately $103.5 million of additional borrowing capacity existed

at December 31, 2020.

At December 31, 2020 and 2019, the Company

had $41.0 million in federal funds lines available.

The Company also had $67.5 million in unpledged securities at December 31,

2020 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.

A discussion of the cash flow statements for 2020 and 2019 follows:

The Company experienced positive cash flows

from operating activities in 2020 and 2019.

Net cash from operating activities was $23.9 million and $18.8 million for the years

ended December 31, 2020 and 2019, respectively.

Significant operating items for 2020 included gain on sale of loans of $25.8 million

and net income of $14.9 million.

Cash provided by the sale of loans held for sale were $603.2 million.

Cash used in the origination

of loans held for sale were $582.5 million.

The Company experienced negative cash flows

from investing activities in 2020 and 2019.

Net cash used in investing activities was $57.2 million and $67.6 million for the years

ended December 31, 2020 and 2019, respectively.

The changes for 2020 include the purchase of available-for-sale securities of $129.8

million, and net increase in loans of $31.7 million.

The changes for 2019 include the purchase of available-for-sale securities

of $22.5 million and net increase in loans of $65.5 million.

The Company had proceeds from repayments, maturities, sales and calls

of securities of $84.0 million and $22.5 million in 2020 and 2019, respectively.

The Company experienced positive cash flows

from financing activities in 2020 and 2019.

Net cash from financing activities was $146.9 million and $27.5 million for the years

ended December 31, 2020 and 2019, respectively.

Positive cash flows of $157.7 million and $37.7 million is attributable to the

change in deposits for 2020 and 2019, 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 EVE analysis calculates the net present value of the Company’s assets

and liabilities in rate shock environments that range from -400 basis points to +400 basis points.

The results of this analysis

are reflected in the following table.

Economic Value of Equity

December 31, 2020

($ in thousands)

Change in rates

+400 basis points

+300 basis points

+200 basis points

+100 basis points

-100 basis points

Economic Value of Equity

December 31, 2019

($ in thousands)

Change in rates

+400 basis points

+300 basis points

+200 basis points

+100 basis points

-100 basis points

-200 basis points

Tabular Disclosure of Contractual Obligations

The following table details the Company’s

contractual obligations as of December 31, 2020, which were comprised of long-term debt obligations, other debt obligations, operating

lease obligations and other long-term liabilities.

Long-term debt obligations are comprised of FHLB Advances of $8.0 million.

debt obligations are comprised of Trust Preferred securities of $10.3 million and operating leases of $1.6 million.

The other long-term

liabilities include time deposits of $229.5 million.

Payment due by period

($ in thousands)

Contractual obligations

Long-term debt obligations

Other debt obligations

Operating lease obligations

Other long-term liabilities Reflected on the registrant’s balance sheet under GAAP

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity