SB FINANCIAL GROUP, INC. (Form: S-1/A, Received: 11/06/2014 16:40:34)

As filed with the Securities and Exchange Commission on November 6, 2014

Registration No. 333-198879

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

PRE-EFFECTIVE AMENDMENT NO. 1

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

SB FINANCIAL GROUP, INC.

(Exact name of Registrant as specified in its charter)

Ohio

6022

34-1395608

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial Classification Code Number)

(I.R.S. Employer

Identification Number)

401 Clinton Street

Defiance, Ohio 43512

(419) 783-8950

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Mark A. Klein

President and Chief Executive Officer

SB Financial Group, Inc.

401 Clinton Street

Defiance, Ohio 43512

(419) 783-8950

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:


Anthony D. Weis, Esq.		M. Patricia Oliver, Esq.
Vorys, Sater, Seymour and Pease LLP		Tucker Ellis LLP
52 East Gay Street		950 Main Avenue
P.O. Box 1008		Suite 1100
Columbus, Ohio 43216		Cleveland, Ohio 44113
(614) 464-6400		(216) 696-4149

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: þ

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	þ

CALCULATION OF REGISTRATION FEE



Title of each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price (1)	Amount of Registration Fee
Depositary Shares of SB Financial Group, Inc. (each representing a 1/100th interest in a 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A, no par value)	$15,000,000	$1,932
6.50% Noncumulative Convertible Perpetual Preferred Shares, Series A, no par value (2)	—	—
Common Shares, no par value (3)	—	—
Total	$15,000,000	$1,932 (4)

(1)

Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to Rule 416 under the Securities Act, this registration statement also covers such indeterminate number of additional depositary shares, 6.50% Noncumulative Convertible Perpetual Preferred Shares, or Series A Preferred Shares, and common shares that may become issuable due to adjustments for changes resulting from stock dividends, stock splits, recapitalizations, reorganizations, mergers, combinations, exchanges or similar transactions and events.

(2)

All of the Series A Preferred Shares offered hereby will be sold as fractional interests in the form of depositary shares. Each depositary share will be issued pursuant to a depositary agreement, will represent a 1/100th ownership interest in a Series A Preferred Share and will be evidenced by a depositary receipt. Each holder of a depositary share will be entitled to all proportional rights and preferences of the Series A Preferred Shares represented thereby. No separate consideration will be received for the Series A Preferred Shares issued by SB Financial Group, Inc. represented by the depositary shares and, therefore, no separate registration fee will be paid in respect of any such Series A Preferred Shares.

(3)

Represents common shares issuable upon conversion of the Series A Preferred Shares. No additional consideration will be received for the common shares underlying the Series A Preferred Shares and, therefore, pursuant to Rule 457(i) under the Securities Act, no additional registration fee is required with respect to such common shares.

(4)	Previously paid.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where an offer or sale thereof is not permitted.

Subject to Completion, dated November 6, 2014

PROSPECTUS

LOGO

Up to 1,500,000 Depositary Shares Each Representing a 1/100th Interest in a

6.50% Noncumulative Convertible Perpetual Preferred Share, Series A

We are offering up to 1,500,000 depositary shares, each representing a 1/100th ownership interest in a 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A, of SB Financial Group, Inc. with a liquidation preference of $1,000.00 per share (equivalent to $10.00 per depositary share) (the “Series A Preferred Shares”). We are offering the depositary shares for sale to the public in the following descending order of priority: (1) to our existing shareholders; (2) to our customers and members of the local communities we serve; and (3) to the extent that depositary shares remain available for purchase, in a syndicated offering managed by Keefe, Bruyette & Woods, Inc. See “Plan of Distribution — Offering Priorities.”

We must sell a minimum of 1,000,000 depositary shares to complete the offering. The minimum number of depositary shares you may purchase in the offering is 100 depositary shares. The maximum number of depositary shares that you may purchase in the offering is the lesser of (i) 250,000 depositary shares or (ii) the number of depositary shares, assuming conversion of such depositary shares into our common shares, whereby your total beneficial ownership of our common shares (including any common shares currently owned) would not exceed 5% of our outstanding common shares after the offering.

The offering is expected to expire at 3:00 p.m., Eastern Time, on December 12, 2014. We may extend this expiration date without notice to you until January 26, 2015. Once submitted, orders are irrevocable. However, if the offering is extended beyond January 26, 2015, or the number of depositary shares to be sold is increased to more than 1,500,000 depositary shares or decreased to fewer than 1,000,000 depositary shares, we will resolicit subscribers, giving them an opportunity to change or cancel their orders. Funds received during the offering will be placed in a segregated account at U.S. Bank, which will serve as our escrow agent for the offering. If the closing of the offering does not occur for any reason, the funds will be promptly returned without interest. U.S. Bank is acting only as an escrow agent in connection with the offering of securities described herein, and has not endorsed, recommended or guaranteed the purchase, value or repayment of such securities.

As a holder of our depositary shares, you will be entitled to all proportional rights, preferences and privileges of the Series A Preferred Shares, including dividend, voting, conversion and liquidation rights. You must exercise these rights through the depositary.

We expect to pay noncumulative dividends on the Series A Preferred Shares (and, therefore, the depositary shares) at the rate of 6.50% of the liquidation preference per year. Such dividends will be payable quarterly in cash, when, as and if declared by our board of directors, on March 15, June 15, September 15 and December 15 of each year, commencing March 15, 2015. Dividends for the first dividend period ending March 15, 2015, if any, will be for less than a full quarter if the offering closes after December 15, 2014, and will be for greater than a full quarter if the offering closes before December 15, 2014. If our board of directors does not declare a dividend for any quarterly dividend period, you will not be entitled to receive any dividend for that quarterly dividend period and the undeclared dividend will not accumulate.

Each depositary share will be convertible at your option at any time into our common shares equal to the quotient achieved when $10.00 is divided by the conversion price then in effect. The initial conversion price is $10.34, which may be adjusted as described in this prospectus. We may, at our option, convert each depositary share into that number of our common shares equal to the quotient achieved when $10.00 is divided by the conversion price then in effect, on or after the fifth anniversary of the issue date of the Series A Preferred Shares. We may exercise this option only if (i) the closing sale price for our common shares equals or exceeds 120% of the conversion price then in effect for at least 20 trading days in a period of 30 consecutive trading days (including the last trading day of such period) ending on the fifth trading day immediately prior to our issuance of a press release announcing our exercise of this option; and (ii) we have paid full dividends on the depositary shares for four consecutive quarters prior to the issuance of the press release.

All of the depositary shares we are selling in this offering, and the common shares issued upon conversion of the depositary shares, if any, will be freely tradable without restriction under the Securities Act of 1933, as amended, except for shares purchased by our “affiliates.”

Our common shares are currently listed on the NASDAQ Capital Market under the symbol “SBFG.” The last reported sale price of our common shares on the NASDAQ Capital Market on November 5, 2014 was $8.80.

Investing in our depositary shares involves risks. You should read the “ Risk Factors ” section beginning on page 22 of this prospectus and in our Annual Report on Form 10-K for the year ended December 31, 2013, before making a decision to invest in the depositary shares.


	Per		Total
	Depositary Share		Minimum Offering		Maximum Offering
Public offering price	$	10.000	$	10,000,000	$	15,000,000
Placement agent fee in shareholder and customer/local community offerings ⁽¹⁾	$	0.175	$	175,000	$	262,500
Placement agent fee in syndicated offering ⁽¹⁾	$	0.275	$	275,000	$	412,500
Proceeds to us, before expenses	$	9.550	$	9,550,000	$	14,325,000

(1)

Represents fees payable to Keefe, Bruyette & Woods, Inc. equal to 3.5% of the aggregate dollar amount of depositary shares sold in the shareholder and customer/local community offerings and 5.5% of the aggregate dollar amount of depositary shares sold in the syndicated offering. We have assumed that 50% of the depositary shares will be sold in the shareholder and customer/local community offerings and 50% of the depositary shares will be sold in the syndicated offering. See “Plan of Distribution — Marketing and Distribution; Compensation” for a discussion of Keefe, Bruyette & Woods, Inc.’s compensation in this offering.

None of the Securities and Exchange Commission (the “SEC”), the Federal Deposit Insurance Corporation (the “FDIC”), the Board of Governors of the Federal Reserve System (the “Federal Reserve”), any state or other securities commission or any other federal or state bank regulatory agency has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The depositary shares are not savings accounts, deposits or other obligations of any bank, thrift or other depositary institution and are not insured or guaranteed by the FDIC or any other governmental agency or instrumentality.

The depositary shares are being offered and sold in a best efforts underwritten offering. We are offering the depositary shares through a placement agent, Keefe, Bruyette & Woods, Inc. (“KBW”). KBW is not required to sell any specific number or dollar amount of depositary shares but will use its best efforts to sell the depositary shares offered.

We will issue the depositary shares in book-entry or uncertificated form, except under limited circumstances. Our depositary and transfer agent, Computershare, Inc. and its wholly-owned subsidiary, Computershare Trust Company, N.A., will deliver written confirmation to purchasers of depositary shares in the offering.

Keefe, Bruyette & Woods

A Stifel Company

The date of this prospectus is November [ — ], 2014.

LOGO

TABLE OF CONTENTS


	Page
ABOUT THIS PROSPECTUS		i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		i
WHERE YOU CAN FIND MORE INFORMATION		ii
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE		ii
SUMMARY		1
SUMMARY CONSOLIDATED FINANCIAL DATA		20
RISK FACTORS		22
DESCRIPTION OF THE OFFERING		32
USE OF PROCEEDS		35
CAPITALIZATION		36
PRICE RANGE OF COMMON SHARES AND DIVIDENDS		37
BUSINESS		38
MANAGEMENT		47
BENEFICIAL OWNERSHIP OF COMMON SHARES		50
DESCRIPTION OF THE SERIES A PREFERRED SHARES		52
DESCRIPTION OF THE DEPOSITARY SHARES		63
DESCRIPTION OF COMMON SHARES		66
DESCRIPTION OF PREFERRED SHARES		71
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES		72
CERTAIN ERISA CONSIDERATIONS		77
PLAN OF DISTRIBUTION		79
LEGAL MATTERS		84
EXPERTS		84

ABOUT THIS PROSPECTUS

You should read this prospectus and the additional information described under the headings “Where You Can Find More Information” and “Incorporation of Certain Information by Reference” before you make a decision to invest in the depositary shares. In particular, you should review the information under the heading “Risk Factors” set forth on page 22 of this prospectus and the information under the heading “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2013, which is incorporated by reference herein. You should rely only on the information contained or incorporated by reference in this prospectus and any related free writing prospectus required to be filed with the SEC. We have not authorized any person to provide you with different or additional information. You should assume that the information in this prospectus, any such free writing prospectus and the documents incorporated by reference herein and therein is accurate only as of its date or the date which is specified in those documents. Our business, financial condition, results of operations and prospects may have changed since any such date.

Neither we nor the placement agent are making an offer to sell the depositary shares (or the underlying Series A Preferred Shares) in any manner in which, or in any jurisdiction where, the offer or sale thereof is not permitted.

Unless the context otherwise requires, references to “SB Financial,” the “Company,” “we,” “our” and “us” and similar terms mean SB Financial Group, Inc. and its subsidiaries. Also, as used in this prospectus, “State Bank” refers to our wholly-owned banking subsidiary, The State Bank and Trust Company.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus and the documents incorporated by reference herein may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Examples of forward-looking statements include: (a) projections of income or expense, earnings per share, the payment or non-payment of dividends, capital structure and other financial items; (b) statements of plans and objectives of the Company or our Board of Directors or management, including those relating to products and services; (c) statements of future economic performance; (d) statements regarding future customer attraction or retention; and (e) statements of assumptions underlying these statements. Forward-looking statements reflect our expectations, estimates or projections concerning future results or events. These statements are generally identified by the use of forward-looking words or phrases such as “anticipates”, “believes”, “plans”, “intends”, “expects”, “projects”, “estimates”, “should”, “may”, “would be”, “will allow”, “will likely result”, “will continue”, “will remain”, or similar expressions.

Forward-looking statements involve risks and uncertainties. Actual results may differ materially from those predicted by the forward-looking statements because of various factors and possible events, including those risk factors identified below. These risks and uncertainties include, but are not limited to, risks and uncertainties inherent in the national and regional banking industry, changes in economic conditions in the market areas in which the Company and its subsidiaries operate, changes in policies by regulatory agencies, changes in accounting standards and policies, changes in tax laws, fluctuations in interest rates, demand for loans in the market areas in which the Company and its subsidiaries operate, increases in FDIC insurance premiums, changes in the competitive environment, losses of significant customers, geopolitical events, the loss of key personnel and other risks identified from time-to-time in the Company’s other public documents on file with the SEC, including those risks set forth under the section captioned “Risk Factors” in this prospectus. There is also the risk that the Company’s management or Board of Directors incorrectly analyzes these risks and forces, or that the strategies the Company develops to address them are unsuccessful.

The forward-looking statements included or incorporated by reference in this prospectus are only made as of the date of this prospectus or the respective document incorporated by reference herein, as applicable, and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. See the section captioned “Where You Can Find More Information.”

-i-

All subsequent written and oral forward-looking statements concerning the matters addressed in this prospectus and attributable to us or any person acting on our behalf are qualified by these cautionary statements.

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the informational requirements of the Exchange Act and file with the SEC proxy statements, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as required of a U.S. listed company. You may read and copy any document we file at the SEC’s public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our SEC filings are also available to the public from the SEC’s web site at www.sec.gov or on our website at www.yoursbfinancial.com . However, the information on, or that can be accessible through, our website does not constitute a part of, and is not incorporated by reference in, this prospectus. Written requests for copies of the documents we file with the SEC should be directed to: SB Financial Group, Inc., P.O. Box 467, Defiance, Ohio 43512, Attention: Anthony V. Cosentino, telephone number (419) 785-3663, email SBFG.IR@YourStateBank.com.

This prospectus is part of a registration statement on Form S-1 filed by us with the SEC under the Securities Act. As permitted by the SEC, this prospectus does not contain all the information in the registration statement filed with the SEC. For a more complete understanding of this offering, you should refer to the complete registration statement, including exhibits, on Form S-1 that may be obtained as described above. Statements contained in this prospectus about the contents of any contract or other document are not necessarily complete. If we have filed any contract or other document as an exhibit to the registration statement or any other document incorporated by reference in the registration statement, you should read the exhibit for a more complete understanding of the contract or other document or matter involved. Each statement regarding a contract or other document is qualified in its entirety by reference to the actual contract or other document.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The SEC allows us to incorporate by reference the information that we file with it, and the information incorporated by reference is an important part of this prospectus. We incorporate by reference the following documents:

•

the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013;

•

the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014;

•

the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014;

•

the Company’s Current Reports on Form 8-K filed on February 24, 2014, April 24, 2014 (with respect to information reported under Item 5.07), September 11, 2014 and October 27, 2014 (with respect to information reported under Item 3.01); and

•

the Company’s Definitive Proxy Statement related to its 2014 annual meeting of shareholders, as filed with the SEC on March 19, 2014.

Any statement contained in a document incorporated by reference into this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any subsequently filed document that is also incorporated by reference in this prospectus modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

We will provide without charge, upon written or oral request, a copy of any or all of the documents that are incorporated by reference into this prospectus and a copy of any or all other contracts or documents which are referred to in this prospectus. Requests should be directed to: SB Financial Group, Inc., P.O. Box 467, Defiance, Ohio 43512, Attention: Anthony V. Cosentino, telephone number (419) 785-3663, email SBFG.IR@YourStateBank.com.

-ii-

SUMMARY

This summary highlights selected information contained elsewhere or incorporated by reference in this prospectus. Because it is a summary, it may not contain all the information that is important to you in making your investment decision to purchase the depositary shares. You should carefully read this entire prospectus, as well as the information incorporated by reference herein, before deciding whether to invest in the depositary shares. You should carefully consider the section entitled “Risk Factors” in this prospectus and the documents incorporated by reference herein to determine whether an investment in the depositary shares is appropriate for you.

The Company

SB Financial Group, Inc. (“SB Financial”) is an Ohio corporation and a bank holding company registered under the Bank Holding Company Act of 1956, as amended. We were incorporated under Ohio law in 1983, and we changed our name from Rurban Financial Corp. to SB Financial Group, Inc. effective April 18, 2013. Through our wholly-owned subsidiaries, we are engaged in a variety of activities, including commercial and retail banking, item processing, insurance, and wealth management and trust services.

Our banking subsidiary, State Bank, is an Ohio state-chartered bank that offers a full range of commercial banking services, including checking accounts, savings accounts, money market accounts and time certificates of deposit; automatic teller machines; commercial, consumer, agricultural and residential mortgage loans; personal and corporate trust services; commercial leasing; bank credit card services; safe deposit box rentals; Internet and telephone banking; and other personalized banking services. The trust and financial services division of State Bank offers various trust and financial services, including asset management services for individuals and corporate employee benefit plans, as well as brokerage services through Cetera Investment Services, an unaffiliated company. State Bank presently operates seventeen banking centers, all located within the Ohio counties of Allen, Defiance, Fulton, Lucas, Paulding, Wood and Williams, and one banking center located in Allen County, Indiana. State Bank also presently operates three loan production offices, two in Franklin County, Ohio and one in Steuben County, Indiana. At June 30, 2014, State Bank had 193 full-time equivalent employees.

Our item processing subsidiary, Rurbanc Data Services, Inc. dba RDSI Banking Systems (“RDSI”), has been in operation since 1964 and became an Ohio corporation in June 1976. RDSI has one operating location in Defiance, Ohio. In September 2006, RDSI acquired Diverse Computer Marketers, Inc. (“DCM”) which was merged into RDSI effective December 31, 2007 and now operates as a division of RDSI doing business as “DCM”. DCM has one operating location in Lansing, Michigan providing item processing and related services to community banks located primarily in the Midwest. At June 30, 2014, RDSI had 8 full-time equivalent employees.

Our principal executive offices are located at 401 Clinton Street, Defiance, Ohio 43512, and our telephone number is (419) 783-8950. Our website address is www.yoursbfinancial.com . The information on our website is not a part of or incorporated by reference in this prospectus.

Business and Strategy

We are a diversified financial services holding company with total consolidated assets of approximately $662.5 million, total net loans of approximately $499.6 million, total deposits of approximately $524.1 million and total shareholders’ equity of approximately $59.0 million at June 30, 2014. Through our banking subsidiary, State Bank, we provide a full range of financial services for consumers and small businesses, including wealth management, mortgage banking and commercial and agricultural lending, through 16 banking centers in seven Northwest Ohio counties and one center in Fort Wayne, Indiana, as well as three loan production offices, two located in Columbus, Ohio, and one in Angola, Indiana. Through RDSI, we provide item processing services to 23 community banks located primarily in the Midwest.

-1-

Our focus and strategic goal is to grow our organization into a top-quartile performing financial services company. The following is a summary of the key initiatives that we have adopted for the next three years to achieve our strategic goal:

Increase profitability through ongoing diversification of revenue streams. For the six months ended June 30, 2014, the Company generated approximately 37% of our revenue from “fee-based” business lines and other noninterest income. These revenue sources include fees generated from retail deposit products, assets under management (AUM) in State Bank’s wealth management division, saleable residential mortgage loans, saleable business-based loans (SBA and FSA), and fees generated by RDSI, our wholly-owned item processing subsidiary. The following is a break-down of our non-interest income sources for the six months ended June 30, 2014:

—

Deposit Products – 22%

—

Assets Under Management (AUM) Fees – 22%

—

Mortgage Lending – 37%

—

Data Service – 11%

—

Other – 8%

During 2014, we restructured the retail deposit products offered by State Bank to generate additional revenue and further increase our non-interest income while streamlining our product offerings. As part of this initiative, we launched four new Rewards Checking products in January 2014, and we migrated all of our retail checking accounts from 22 existing products to the four new Rewards Checking products in June 2014. Our new Rewards Checking product lineup provides State Bank the opportunity to reward its customers with ATM refunds, cash back and higher interest-rates if they use certain qualifying products and services (such as electronic banking) or if they maintain certain relationship balances. Customers who do not meet the utilization or balance requirements under the new Rewards Checking products are required to pay a monthly service fee. We plan to implement a similar strategy in the business account sector during the fourth quarter of 2014 to more efficiently and effectively service our approximately 3,000 commercial demand deposit accounts.

In our wealth management division, our assets under management (AUM) at December 31, 2013 were $345.5 million, generating $2.7 million in revenue, or 0.79% of average AUM, during the year ended December 31, 2013. We have experienced modest growth in our AUM over the past five years, increasing from $278.1 million at December 31, 2008 to $345.5 million at December 31, 2013, although our AUM decreased to $332.3 million at June 30, 2014. We are focused on increasing our efforts to grow this business line in each of our newer, higher-growth markets like Toledo and Columbus, Ohio and Ft. Wayne, Indiana, where our current market penetration is minimal. In the second quarter of this year, we added a seasoned executive to reorganize our wealth management division, drive sales leadership and grow AUM.

In 2006, State Bank’s servicing portfolio of sold residential mortgage loans totaled $26 million. As of June 30, 2014, this portfolio stands at $627 million and generates approximately $1.6 million in revenue annually. The increase in our residential mortgage loan volume has not only delivered progressively more non-interest income, but it has been and continues to be critical to expanding our franchise by providing a gateway into new households for which we can potentially deliver additional financial services such as retail deposit products, home equity lines of credit and credit cards. During the first six months of 2014, only 5% of our $100 million residential mortgage loan volume came from refinancing current clients. In contrast, during 2013, over 19% of our volume came from refinanced loans.

A strategy we have embraced, and one that has begun to yield results, is the production and sale of government guaranteed loans, including SBA and FSA guaranteed loans. In 2013, our gains on sale of these loans were $585,000. For the first six months of 2014, our gains on sale of these loans are significantly lower at

-2-

$107,000, but we have a pipeline of approximately $5 million that has the potential to generate additional gains of approximately $400,000, or in aggregate, $507,000 during 2014. We remain committed to growing this area of non-interest income and have dedicated additional personnel and resources to building this key piece of our business. These programs provide us the opportunity to continue to grow and diversify top-line revenue while also providing yet another service to clients to aid them in their own growth.

RDSI currently generates approximately $1.6 million in annualized fee-based revenue, based on year to date revenue as of June 30, 2014. These fees originate from servicing 23 client banks’ item processing needs and from converting electronic sources of data to paper statements for customers of our client banks. Prior to 2010, RDSI was a third-party data services provider for 70+ clients, which included network services. However, due to a failed divestiture in 2010, RDSI was unable to continue providing data processing and network services. This loss of data processing and network service clients and business resulted in a substantial reduction in RDSI’s revenue from its peak of $20.2 million in 2008 to the $1.6 million annual revenue business it represents as of June 30, 2014.

Collectively, the foregoing lines of business (i.e., fee-based products and other noninterest income) have generated, on average, 47% of the Company’s total consolidated revenue over the last five years (2009 – 2013). In view of the challenges associated with the decline of traditional net interest margins, we seek to continue to strengthen our position as a leader, among peers, in generating non-interest income.

Continued growth and diversification of our loan portfolio .

Our loan portfolio over the last several years has grown as follows:

Loan Growth by Loan Type

(Dollars in thousands)


	Six months ended June 30,						Year ended December 31,
	2014			2013			2013			2012			2011
		(unaudited)
Loan Type
Commercial real estate	$	10,523		$	(1,596	)	$	3,909		$	13,563		$	9,939
Residential real estate		5,434			5,433			11,761			203			2,881
Commercial (1)		7,056			3,312			3,877			3,680			5,598
Consumer & Other		1,546			(2,779	)		(2,567	)		(526	)		(1,007	)
Agriculture		4,265			(3,724	)		(3,066	)		3,915			(2,401	)
Portfolio Growth (%)		6.0	%		0.1	%		3.0	%		4.7	%		3.5	%

(1)	Includes deferred loan fees, premiums and discounts.

-3-

The above loan growth (less loans held-for-sale and in process) originated from the following markets (in thousands):

Loan Growth by Market

(Dollars in thousands)


	Six months ended June 30,						Year ended December 31,
	2014			2013			2013			2012			2011
Market		(unaudited)
Toledo Region	$	5,108		$	(1,423	)	$	11,188		$	6,398		$	(3,783	)
Fulton/Williams Region		4,450			(3,886	)		(2,971	)		(4,997	)		1,973
Defiance/Paulding Region		7,352			4,933			(2,553	)		8,831			2,363
Ft. Wayne Region		(1,752	)		(1,788	)		(4,138	)		(111	)		(2,914	)
Lima Region		(1,354	)		(6,002	)		(8,258	)		2,356			2,936
Columbus Region		15,020			8,812			20,646			8,358			14,435
Portfolio Growth (%)		6.0	%		0.1	%		3.0	%		4.7	%		3.5	%

We are focused on growing our loan portfolio not only in each of our more traditional markets (Northwest Ohio) but also in our newer, lower-share markets (Toledo, Ft. Wayne, and Columbus) which have higher growth potential. Our strategy has been to place higher-level market leaders in these distinctly unique markets with the expectation that a decentralized delivery of holistic client care will produce progressively better results than that of larger regional competitors who deploy a more centralized managerial approach. Our Columbus and Toledo Regions have comprised the majority of our loan growth in the past few years and have been a key initiative in the growth of our loan portfolio. Our expansions into each market have been key to our ability to grow our loan portfolio. We have also realized growth in some of our core markets, most notably in our Defiance/Paulding Region, since 2011, as reflected the table above. In addition to the diversity of growth across geographic regions, we have realized growth in a variety of loan segments, particularly as the economy continues to emerge from the financial crisis of a few years ago complementing our already diverse loan portfolio.

In addition to the segment and market growth identified above, a key initiative over the last several years has been to identify, originate and sell government enhanced credits. These include residential real estate loans for the secondary market, business loans enhanced with SBA guarantees and long-term agriculture credits bearing an FSA endorsement. This strategy has played a significant role in enabling us to deliver non-interest income for the six months ended June 30, 2014, as a percentage of total revenue, of approximately 37%. The following table identifies gross loans originated in our markets.

Loan Sale Gains by Type of Loan Sold

(Dollars in thousands)


	Six months ended June 30,				Year ended December 31,
	2014		2013		2013		2012		2011
Loan Type		(unaudited)
Residential	$	1,783	$	2,934	$	5,066	$	6,284	$	3,620
SBA		19		25		358		90		71
FSA		88		213		227		174		137

Total Gains	$	1,890	$	3,172	$	5,651	$	6,548	$	3,828

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Strengthen our penetration in all markets served . Our deposit market share is approximately as follows for the counties currently served by State Bank:


County	Deposit Market Share
Defiance County (Ohio)		23.2	%
Paulding County (Ohio)		21.0	%
Williams County (Ohio)		15.3	%
Fulton County (Ohio)		6.9	%
Wood County (Ohio)		4.6	%
Allen County (Ohio)		2.2	%
Lucas County (Ohio)		0.2	%
Allen County (Indiana)		0.1	%
Franklin County (Ohio)		0.0	%

Source: FDIC Deposit Market Share Report (June 30, 2013).

Over our 112-year history of continuous operation in Northwest Ohio, we have established a significant presence in our traditional markets in Defiance, Paulding, Fulton and Williams Counties in Ohio. Conversely, in our newer markets like Allen County (Ft. Wayne, Indiana), Franklin County (Columbus, Ohio), and Wood and Lucas Counties (Toledo, Ohio), our current market penetration is minimal but we believe our potential for growth is significant. In addition to our focus on increasing our lending, as discussed above, our goal is to continue to increase our deposit market share, particularly in our newer markets, with an emphasis on attracting the more traditional, lower-cost transactional deposit accounts.

Expand product service utilization by new and existing clients . A key strategy for our Company is to continue to deepen our relationship with each of our clients. As of June 30, 2014, we served 27,910 households and provided 68,659 services for a services-per-household (SPH) of 2.46. Our strategy is to continue to expand the scope of our relationship with each client household and increase our SPH. An initiative we have implemented this year to execute on this strategy is the appointment of a “Client Experience Officer.” The primary role for this new management position is for the Client Experience Officer to work interdependently with each of our business line leaders and regional executives in order to optimize the potential number of SPH. Should our efforts fall short on cross-sells at account inception, our dynamic “on-boarding” process, led by our Client Experience Officer, is tasked with bridging the gap. We have implemented well-defined parameters for methodical client contact to enable us to grow our franchise in our more mature, traditional markets. As of June 30, 2014, we had increased our number of households served to 27,910; up from 27,196 at year-end 2013.

Proactively identifying client needs is a key ingredient of our value proposition. Over the past several years, our State Bank team has adopted a “holistic” approach to client care. To this end, we are focused on providing 100% of our clients’ financial service needs. On average, over a six-year timeframe (2008 – 2013), we have identified 2,091 referrals to related lines of business, closed 885 of these referrals and generated approximately $64.8 million in bank business (loans, deposits, AUM) from these referrals. During the first six months of 2014, we identified 1,003 referrals, closed 453 of these referrals and generated approximately $17.8 million in new bank business (loans, deposits, AUM) from these referrals. Our culture and commitment to client care drives our passion for improving both the scale and scope of our operation.

Deliver gains in operational excellence. One of the key strategic themes identified by our management is to seamlessly and consistently deliver operational excellence. By executing on this theme, we believe that we are better positioned to deliver our vision of becoming and remaining a high-performance ( > 75 ^th Percentile) financial services company.

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At December 31, 2006, we serviced approximately $26 million in sold residential mortgage loans. As of June 30, 2014, we serviced 4,710 sold residential mortgage loans totaling over $627 million. We have established State Bank as a leader in our area in the origination of saleable residential mortgage loans and have put in place the support staff that we believe will sustain this initiative.

We continue to reassess our retail delivery channels. Since 2006, we have closed six retail offices as in-store transactions declined, on average, from over 100,000 to less than 74,000 monthly. Conversely, we have increased our investment in our electronic banking platform, which has yielded nearly 300,000 transactions monthly during the first six months of 2014, up from 225,000 transactions monthly for the first six months of 2011. This more cost-effective delivery channel provides the foundation for operational excellence with a more dynamic, robust, anywhere-anytime banking platform.

Sustain our asset quality . Asset quality is and continues to be the centerpost for all other initiatives at SB Financial. For the Company to become a top-quartile performing financial services company, it is imperative that we achieve and maintain top-quartile asset quality metrics. Reflecting our top-quartile performance, as of June 30, 2014, our nonperforming assets stood at $6.2 million, or 0.93% of total assets, our past due loans (past due 30 days or more) were 0.59% of total loans, and our loan loss reserve was 116% of non-performing loans. In addition, our net charge-offs for the first six months of 2014 totaled $546,000, or 0.22% annualized of total loans.

We believe that continued loan growth is critical for performance improvement at State Bank. Through the first six months of 2014, our organic loan growth (less held-for-sale mortgages) was $29 million, or 12% annualized over year-end. To ensure our portfolio performance remains a strength of our company, our loan quality officer annually reviews each relationship with aggregate debt greater than $250,000.

Improve efficiency and leverage our current expense structure. With our current 16-office infrastructure, our efficiency ratio (calculated as total noninterest expense less intangible expense as a percentage of net interest income plus noninterest income) was 78.1% as of June 30, 2014, which was marginally higher than our peer median, and higher than our efficiency ratio of 74.4% as of December 31, 2013 and 75.5% as of December 31, 2012. We have improved our level of expenses over the past several years, in part, by closing several of our less cost-effective retail offices, including a retail office in Defiance, Ohio which was closed in June 2014. Through continued loan growth and resulting margin revenue, coupled with a potential expansion of our fee-based revenue from our wealth management division and residential mortgage loan servicing portfolio, we believe that we can further leverage our current expense structure and improve our efficiency.

Market Area and Competition

We serve the markets of Northwest Ohio, Northeast Indiana and extreme southern Michigan. Our emphasis over the past several years has been to leverage our competitive strengths into newer markets with higher growth potential like Toledo, Ft. Wayne and Columbus, as many of our older, traditional markets in Northwest Ohio are more mature and reflect lower population growth potential and hence, opportunity . While some counties where we operate reflect little or no population growth, various towns and cities within those counties reveal population expansion. Below is a ranking of the population growth rate of the counties with State Bank locations according to 2010 U.S. Census Data.

-6-


*County*	*Population Growth (%)*		*State Rank(1)*
Ohio
Franklin		+8.8		12th
Wood		+3.7		31st
Fulton		+1.5		41st
Defiance		-1.2		63rd
Allen		-2.0		69th
Lucas		-2.9		71st
Paulding		-3.3		75th
Williams		-3.9		80th
Indiana
Allen		+7.1		20th

(1)

Out of 88 counties in Ohio and 92 counties in Indiana.

Ohio Economy/Market

Ohio’s geographic location has proven to be an asset for economic growth and expansion. Based on information reported by the Ohio Development Services Agency, Office of Research (available at http://development.ohio.gov ):

—

Ohio is seventh in the nation for total population with approximately 11,570,000 people concentrated in 14 metropolitan areas and 33 micropolitan areas. The largest metropolitan area in Ohio is the Cleveland-Elyria Metropolitan Statistical Area with 2,077,240 people. Other areas with an excess of 500,000 individuals are Akron, Cincinnati, Columbus, Dayton, Toledo, and Youngstown.

—

Ohio’s average per capita income for 2013 was $40,865. Ohio’s unemployment rate was 5.7% in July 2014 compared to 7.5% in July 2013. The U.S. national rate for July 2013 was 6.2%. Total employment in Ohio is expected to increase 9.3% over the 10-year period from 2010 to 2020, a projected gain of 498,100 jobs.

—

Ohio’s gross domestic product was $565.3 billion in 2013, making Ohio the seventh largest state economy.

—

Ohio ranks fourth among the 50 states in manufacturing gross domestic product. Ohio’s leading industry is manufacturing, employing 673,800 people, and leads the nation in the production of plastics and rubber, fabricated metals, and electrical equipment and appliances. Ohio is a leading producer of steel, autos and trucks. Roughly 54% of the state’s manufacturing output consists of durable goods. The state’s two leading export commodities are motor vehicles and machinery, shipping products to 210 countries, accounting for 3.1% of total U.S. exports. Ohio merchandise exports were $50.5 billion in 2013.

—

Ohio’s private sector is comprised of 730,393 self-employed firms and 190,184 employer firms, according to the U.S. Small Business Administration. About 3,700 firms employ 500+ workers. Small businesses employing one or more workers account for 20% of all firms and employ 48% of the workforce. Self-employed or non-employer firms comprise 78% of all businesses.

Competition

We experience significant competition in attracting depositors and borrowers in our markets. In our seven-county primary market area (consisting of Allen, Defiance, Fulton, Lucas, Paulding, Williams and Wood Counties in Ohio), State Bank ranks ninth in deposit market share (4.04%) and competes with a number of national, regional and community financial institutions, including the following:

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The Huntington National Bank – The Huntington National Bank is a large, regional financial institution headquartered in Columbus, Ohio with total assets of approximately $63.7 billion as of June 30, 2014. Huntington National Bank has a total of 47 offices located within our primary market area. The Huntington National Bank ranks first in deposit market share (20.00%) in our primary market area. Huntington National Bank acquired Sky Bank, headquartered in Bowling Green, Ohio, during the third quarter of 2007.

Fifth Third Bank – Fifth Third Bank is a large, regional financial institution headquartered in Cincinnati, Ohio with total assets of approximately $130.2 billion as of June 30, 2014. Fifth Third Bank has a total of 37 offices located within our primary market area. Fifth Third Bank ranks second in deposit market share (18.17%) in our primary market area.

Key Bank National Association – Key Bank is a large, regional financial institution headquartered in Cleveland, Ohio with total assets of approximately $89.0 billion as of June 30, 2014. Key Bank has a total of 26 offices located within our primary market area. Key Bank ranks third in deposit market share (9.74%) in our primary market area.

First Federal Bank of the Midwest – First Federal Bank of the Midwest is a community bank headquartered in Defiance, Ohio with total assets of approximately $2.1 billion as of June 30, 2014. First Federal Bank of the Midwest has a total of 16 offices located within our primary market area. First Federal Bank of the Midwest ranks fourth in deposit market share (7.98%) in our primary market area.

PNC Bank, National Association – PNC Bank is a large, regional/national financial institution headquartered in Pittsburgh, Pennsylvania with total assets of approximately $316.7 billion as of June 30, 2014. PNC has a total of 20 offices located in our primary market area. PNC Bank ranks fifth in deposit market share (6.66%) in our primary market area. PNC Bank acquired National City Bank, headquartered in Cleveland, Ohio, during the fourth quarter of 2008.

RBS Citizens, National Association – RBS Citizens is a large, regional financial institution based in Rhode Island with total assets of approximately $100.6 billion as of June 30, 2014. RBS Citizens has a total of 19 offices located in our primary market area. RBS Citizens ranks sixth in deposit market share (5.42%) in our primary market area.

The Farmers & Merchants State Bank – The Farmers & Merchants State Bank is a community bank headquartered in Archbold, Ohio with total assets of approximately $933.0 million as of June 30, 2014. The Farmers & Merchants State Bank has a total of 16 offices located within our primary market area. The Farmers & Merchants State Bank ranks seventh in deposit market share (5.31%) in our primary market area.

Signature Bank – Signature Bank is a community bank headquartered in Toledo, Ohio with total assets of approximately $677.0 million as of June 30, 2014. Signature Bank has one office and ranks eighth in deposit market share (4.05%) in our primary market area.

JP Morgan Chase Bank, National Association – JP Morgan Chase Bank is a large, national financial institution with total assets of approximately $2.0 trillion as of June 30, 2014. JP Morgan Chase Bank has a total of seven offices located within our primary market area. JP Morgan Chase Bank ranks tenth in deposit market share (3.87%) in our primary market area.

Waterford Bank, N.A. – Waterford Bank is a community bank headquartered in Toledo, Ohio with total assets of approximately $458.3 million as of June 30, 2014. Waterford Bank has two offices and ranks eleventh in deposit market share (3.12%) in our primary market area.

The Citizens National Bank of Bluffton – The Citizens National Bank of Bluffton is a community bank headquartered in Bluffton, Ohio with total assets of approximately $669.7 million as of June 30, 2014. The

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Citizens National Bank of Bluffton has a total of six offices located in our primary market area. The Citizens National Bank of Bluffton ranks twelfth in deposit market share (2.47%) in our primary market area.

Competitive Strengths

As compared to many of our larger competitors, we have a lower efficiency (scale) with numerous, smaller offices in rural locations but excellent depth of services (scope). To leverage the scope of our franchise and deliver on the business strategies noted above, a sales culture designed to address holistic client care was implemented in 2006. Business lines developed and/or expanded were Assets Under Management (AUM) in the wealth management arena, residential real estate lending, retail deposit services, commercial treasury services including cash management, electronic banking, insurance, commercial banking and retail banking. Binding each of these business lines is our holistic approach to client care. Each of the business lines refers business to the other in the spirit of addressing not just the identified, known client need but other, unknown needs as well. This process of working interdependently to achieve holistic client care and drive key growth initiatives is led by the market executive in charge of each of our markets. When this executive-led, robust process to expand services in existing households in traditional, more mature markets is combined with the identification and expansion of new households in lower-share, higher growth markets, our scale improves.

Our management team is seasoned and diverse. Our leadership group consists of 14 seasoned executives with combined banking experience in excess of 285 years. Since many of these executives had banking careers elsewhere before leading a business line, division and/or region at SB Financial, they are able to add strength to our management team through diversity, depth of knowledge and the application of best practices.

Our management team employs the “Balanced Scorecard Management Tools” to link strategy to execution. Many companies devise a business plan (such as a one-year tactical plan) as well as a longer-term strategic plan (typically three to five years) to attempt to align “what” they will accomplish and “how” they propose to accomplish it. However, we believe that few companies truly integrate these plans. We have put in place a dynamic process that we believe ensures that strategy is linked to execution. Specific initiatives are identified, tracked and measured under the direct leadership of our Chief Executive Officer.

Our deposit base is stable and lower cost as compared to our peer group, which is attributable in part to our ability to attract lower-cost deposits in our traditional, more rural markets. With a systemic decline in the yield curve, reflecting an overall slower-growing economy, a lower-cost deposit base provides the required liquidity and duration that allows us to price our loan opportunities more competitively.

Our loan portfolio is diverse by geography and segment. As noted above, even though our lending is concentrated in the Midwest (U.S.) and predominantly in Ohio and Northeast Indiana, our regional office dispersion provides a degree of diversity that delivers additional stability in economic contractions.

Recent Developments

Redemption of Trust Preferred Securities

Rurban Statutory Trust I (“RST I”) was established in August 2000 and, in September 2000, completed a pooled private offering of 10,000 trust preferred securities with a liquidation amount of $1,000 per security. The proceeds of the offering were loaned to the Company in exchange for $10 million in principal amount of 10.60% fixed-rate junior subordinated debentures of the Company. The terms of the junior subordinated debentures are substantially similar to the terms of the trust preferred securities issued by RST I.

-9-

of September 7, 2030. The Company subsequently redeemed the junior subordinated debentures on September 7, 2014 for an aggregate amount of $11.2 million, which included accrued interest to the redemption date and approximately $425,000 in prepayment penalties. The Company used cash and a term loan from a correspondent bank in the principal amount of $7.0 million to fund the redemption of the junior subordinated debentures. The loan has a term of five years and requires the Company to make quarterly payments of interest and principal based on a 7-year amortization schedule. The loan carries a variable interest rate equal to the 90-day LIBOR index rate plus 2.85%. As of September 18, 2014, the loan’s variable interest rate was 3.08%. The loan may be prepaid, in whole or in part, by the Company at any time without penalty or premium. The Company intends to use approximately $7.0 million of the net proceeds of this offering to prepay this term loan in full upon the completion of this offering.

The Company’s other trust preferred securities, issued by Rurban Statutory Trust II (“RST II”) on September 15, 2005, will remain outstanding following the redemption of the junior subordinated debentures held by RST I. The RST II debt securities, in an aggregate amount of $10.3 million, have a maturity date of September 15, 2035 and carry a variable interest rate that changes quarterly based on the 3-month LIBOR.

Transfer of Common Share Listing to the NASDAQ Capital Market

Effective as of October 29, 2014, the listing of the Company’s common shares was transferred from the NASDAQ Global Market to the NASDAQ Capital Market. This transfer was voluntarily requested by the Company based upon a determination by the Company that the NASDAQ Capital Market would place it among peer financial institutions of comparable size, while at the same time allowing the Company to achieve certain cost savings associated with the Company’s listing of the depositary shares as a second class of stock on NASDAQ. The transfer of the Company’s common share listing to the NASDAQ Capital Market is not expected to have any impact on the trading in the Company’s common shares, and the Company’s common shares continue to trade under the symbol “SBFG.”

Results of Operations for the Three and Nine Months Ended September 30, 2014

On October 22, 2014, the Company reported earnings for the third quarter and nine months ended September 30, 2014. Highlights included:

—

Net income of $1.5 million for the third quarter represented a 22% increase over the quarter ended June 30, 2014 (the “linked quarter”) and a 13% increase over the quarter ended September 30, 2013 (the “year-ago quarter”);

—

Quarterly results included a $0.43 million prepayment penalty for the early redemption of the junior subordinated debentures underlying the Company’s fixed-rate trust preferred securities, which impacted net income by $0.06 per diluted share;

—

Loan growth was up $30.7 million, or 6.5%, from the prior year;

—

The ratio of nonperforming assets to total assets continued to decline to 0.81%; and

—

Operating expenses, excluding the trust preferred prepayment penalty, were flat compared with the year-ago and linked quarters.

Results of Operations

Consolidated Revenue

Total revenue, consisting of net interest income on a fully tax equivalent (FTE) basis and noninterest income, was up 3.0% from the third quarter of 2013, and up 7.1% from the linked quarter.

—

Net interest income (FTE) was up 3.3% from the third quarter of 2013, and up 1.9% compared to the linked quarter

-10-

—

Net interest margin (FTE) was down 8 basis points from the third quarter of 2013, but up 4 basis points from the linked quarter

—

Noninterest income was up $0.1 million, or 2.7%, for the third quarter, and up $0.5 million, or 15.6%, from the linked quarter

Total revenue, consisting of net interest income on an FTE basis and noninterest income, for the first nine months of 2014, was $25.4 million compared to $27.2 million for the first nine months of 2013. The nine-month results were impacted by lower mortgage origination volume during the first quarter of 2014 and the reduction in the yield on earning assets.

Mortgage Loan Business

In line with the linked quarter, mortgage loan originations for the third quarter of 2014 were $67.0 million, up $11.8 million, or 21.4%, from the year-ago third quarter. For the first nine months of 2014, mortgage loan originations were $167.7 million, down from $209.1 million for the first nine months of 2013.

Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.7 million for the third quarter of 2014, compared to $1.8 million for the year-ago quarter. Net mortgage banking income was $3.9 million for the nine-months ended September 30, 2014 as compared to $5.3 million for the comparable period in 2013. The mortgage servicing portfolio at September 30, 2014, was $649.7 million, up $52.7 million, or 8.8%, from September 30, 2013.

Fee Income and Noninterest Expense

The Company’s fee income includes revenue from a diverse group of services, such as wealth management, deposit fees and income from bank-owned life insurance. Wealth management assets under management stood at $326.5 million as of September 30, 2014. For the third quarter of 2014, fee income as a percent of total revenue was 41.6%, down slightly from the prior year. For the first nine months of 2014, fee income as a percentage of total revenue was 38.5%.

For the third quarter of 2014, noninterest expense (NIE) was up $0.3 million, or 5.0%, compared to the third quarter of 2013. However, when adjusted for the $0.33 million in operating expense related to the trust preferred securities prepayment, expenses for the quarter were in line with the prior year. For the first nine months of 2014, operating expenses were down $0.7 million, or 3.5%, compared to the first nine months of 2013. When adjusted for the trust preferred securities prepayment, expenses for the first nine months of 2014 were down $1.1 million, or 5.2%, compared to the prior-year period.

Balance Sheet

Total assets as of September 30, 2014, were $664.6 million, up 4.9% from a year ago. Total equity as of September 30, 2014, was $60.3 million, up 8.5% from a year ago.

Total loans held for investment (HFI) were $505.9 million at September 30, 2014, up $30.7 million, or 6.5%, from September 30, 2013. Residential real estate loans accounted for the majority of the loan growth, up $11.2 million, or 11.6%. Commercial and commercial real estate loans also rose $8.9 million and $3.2 million, respectively.

The investment portfolio, including Federal Reserve Bank and Federal Home Loan Bank stock, of $84.9 million represented 12.8% of assets at September 30, 2014, and was down slightly from a year ago. Deposit balances of $535.3 million at September 30, 2014, increased by $13.7 million since September 30, 2013. Growth from the prior year included $7.0 million in checking and $6.7 million in savings and time deposit balances.

-11-

Asset Quality

The Company continues to improve its asset quality, reporting nonperforming assets of $5.4 million as of September 30, 2014, down $3.4 million, or 38.8%, from the year-ago quarter. Already trending better than our key peer metrics, the 0.81% of nonperforming assets to total assets was the lowest the Company has recorded since the first quarter of 2007. Coverage of problem loans by the loan loss allowance was 139% at September 30, 2014. During the third quarter, our delinquency level (loans past due 30 days or more) did rise to 1.2% from 0.6% in the linked quarter. This increase was driven by one commercial real estate loan for $3.7 million that is in the process of restructure.

Capitalization

Improving the Company’s capital ratios remains an important focus of management. The tangible equity ratio improved by 50 basis points over the past year and stood at 6.7% as of September 30, 2014. All bank regulatory ratios remained in excess of “well-capitalized” levels at September 30, 2014. At September 30, 2014, State Bank’s Total Risk-Based Capital was estimated to be $63.0 million, $21.6 million above the “well-capitalized” level. The Total Risk-Based Capital Ratio was estimated at 12.2% at September 30, 2014.

Highlights

(Dollars in thousands except ratios and per share data)


	At September 30, 2014			At December 31, 2013
Selected Financial Condition Data:
Cash and due from banks	$	21,870		$	13,137
Total investment securities (1)		84,896			93,541
Loans held for sale		6,736			3,366
Net loans receivable		499,211			470,339
Mortgage servicing rights		5,720			5,180
Total deposits		535,261			518,234
Notes payable		7,000			589
Advances from FHLB		30,000			16,000
Repurchase agreements		17,902			14,696
Trust preferred securities		10,310			20,620
Total Equity		60,266			56,269
Capital and Liquidity Ratios:
Loans / Deposits		94.52	%		92.10	%
Tangible equity / Tangible assets		6.73	%		6.39	%
Asset Quality Ratios:
Nonaccruing loans / Total loans		0.63	%		1.01	%
Nonperforming loans / Total loans		0.95	%		1.38	%
Nonperforming assets / Loans & OREO		1.06	%		1.51	%
Nonperforming assets / Total assets		0.81	%		1.15	%
Allowance for loan loss / Nonperforming loans		139.22	%		105.79	%
Allowance for loan loss / Total loans		1.33	%		1.46	%

-12-


	For the Three Months Ended						For the Nine Months Ended
	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Selected Operating Data:
Interest income	$	6,321		$	6,146		$	18,218		$	18,913
Interest expense		971			971			2,795			3,096

Net interest income		5,350			5,175			15,423			15,817
Provision for loan losses		150			401			300			900

Net interest income after provision		5,200			4,774			15,123			14,917
Non-interest income		3,809			3,710			9,663			11,097
Non-interest expenses		6,888			6,562			19,593			20,312

Income before income tax expense		2,121			1,922			5,193			5,702
Income tax expense		608			578			1,455			1,721

Net income	$	1,513		$	1,344		$	3,738		$	3,981

Diluted earnings per share	$	0.31		$	0.28		$	0.76		$	0.82
Adjusted for TRUP Prepayment: (2)
Net interest income after provision	$	5,294		$	4,774		$	15,217		$	14,917
Non-interest expenses		6,557			6,562			19,262			20,312
Net income		1,794			1,344			4,018			3,981
Diluted earnings per share		0.37			0.28			0.82			0.82
Performance Ratios:
Return on average assets		0.90	%		0.84	%		0.75	%		0.83	%
Return on average common equity		10.14	%		9.82	%		8.54	%		9.78	%
Efficiency ratio (3)		74.61	%		72.40	%		76.84	%		73.85	%
Net interest margin (FTE)		3.64	%		3.72	%		3.54	%		3.81	%

(1)

Includes available-for sale securities and Federal Reserve and Federal Home Loan Bank stock.

(2)

Adjustment/Reconciliation: Adjusted to exclude the impact of the repayment of the junior subordinated debentures underlying the Company’s fixed-rate trust preferred securities on September 7, 2014 for an aggregate amount of $11,200, which included approximately $425 in prepayment penalties. Line items adjusted were interest expense ($94) and non-interest expense ($331). An effective tax rate of 34.0% was used to compute impact on net income.

(3)

Calculation excludes intangible amortization.

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THE OFFERING


Issuer		SB Financial Group, Inc.

Securities offered		Depositary shares, each representing a 1/100th ownership interest in a Series A Preferred Share with a liquidation preference of $1,000.00 per share (equivalent to $10.00 per depositary share). Each holder of a depositary share will be entitled, through the depositary, in proportion to the applicable fraction of a Series A Preferred Share represented by such depositary share, to all of the rights, preferences and privileges of the Series A Preferred Shares represented thereby, including dividend, voting, conversion and liquidation rights. We are offering up to a maximum of 1,500,000 depositary shares in the offering. We must sell a minimum of 1,000,000 depositary shares to complete the offering.

Price per depositary share		$10.00.

Ranking		The Series A Preferred Shares (and, therefore, the depositary shares) will rank, with respect to dividends and upon liquidation, dissolution or winding-up: (i) junior to all of our existing and future debt obligations; (ii) junior to each class of capital stock or series of preferred shares, the terms of which expressly provide that it ranks senior to the Series A Preferred Shares; (iii) on parity with each other class of our capital stock or series of preferred shares, the terms of which expressly provide that it ranks on parity with the Series A Preferred Shares; and (iv) senior to all classes of our common shares or series of preferred shares, the terms of which do not expressly provide that it ranks senior to or on parity with the Series A Preferred Shares. See “Description of the Series A Preferred Shares — Ranking” beginning on page 52 of this prospectus.

Dividends		6.50% per annum of the liquidation preference, which is equivalent to $0.65 per year and $0.1625 per quarter per depositary share. Dividends are noncumulative and are payable only if, when and as declared by our board of directors. As a result, if no dividend is declared by our board of directors on the Series A Preferred Shares for a quarterly dividend period, holders of depositary shares will have no right to receive a dividend for that period. See “Description of the Series A Preferred Shares — Dividend Rights” beginning on page 52 of this prospectus.

Dividend payment dates		Dividends are payable quarterly, when, as and if declared by our board of directors, on March 15, June 15, September 15 and December 15 of each year (or if such day is not a business day, the next business day), commencing March 15, 2015. Dividends for the first dividend period ending March 15, 2015, if any, will be for less than a full quarter if the offering closes after December 15, 2014, and will be for greater than a full quarter if the offering closes before December 15, 2014.

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Dividend stopper		We are prohibited from paying dividends on our common shares or any other capital security which ranks junior to the Series A Preferred Shares unless the full dividends on all outstanding Series A Preferred Shares (and, therefore, the depositary shares) have been declared and paid (or set apart for payment) for the most recently completed dividend period. See “Description of the Series A Preferred Shares — Dividend Rights” beginning on page 52 of this prospectus.

No Redemption		The Series A Preferred Shares may not be redeemed at the option of the Company.

Liquidation rights		In the event we liquidate, dissolve or wind-up our business and affairs, either voluntarily or involuntarily, holders of the Series A Preferred Shares will be entitled to receive a liquidating distribution of $1,000.00 per share (equivalent to $10.00 per depositary share), plus any declared and unpaid dividends, without accumulation of any undeclared dividends, before we make any distribution of assets to the holders of our common shares or any other class or series of junior shares. Distributions will be made only to the extent of our assets that are available after satisfaction of all liabilities to creditors and subject to the rights of holders of any securities ranking senior to the Series A Preferred Shares and pro rata as to the Series A Preferred Shares and any other shares of our stock ranking equally as to such distribution. Holders of Series A Preferred Shares (and, therefore, holders of depositary shares) will not be entitled to any other amounts from us after they have received their full liquidating distribution. See “Description of the Series A Preferred Shares — Liquidation Preference” beginning on page 54 of this prospectus.

Voting rights		Except as otherwise required by Ohio law and as set forth below, a holder of Series A Preferred Shares (and, therefore, a holder of depositary shares) will have no voting rights. The consent of the holders of at least two-thirds (2/3) of the Series A Preferred Shares (and, therefore, the depositary shares), voting as a class, will be required to (i) amend, alter or repeal any provision of our Amended Articles of Incorporation, as amended (the “Articles”) or the attachment to the certificate of amendment by the directors setting forth the terms of the Series A Preferred Shares (the “Certificate of Amendment”) in a manner that would materially and adversely affect the rights, preferences, powers or privileges of the Series A Preferred Shares, (ii) create, authorize, issue or increase the authorized or issued amount of any class or series of our equity securities that is senior to or on parity with the Series A Preferred Shares as to dividend rights, or rights upon our liquidation, dissolution or winding-up (except that no consent will be required in the case of parity shares which do not have cumulative dividend rights) or (iii) enter into or consummate certain reclassifications of our common shares or certain business combinations. See “Description of the Series A Preferred Shares — Voting Rights” beginning on page 60 of this prospectus. The consent of the holders of the Series A Preferred Shares (and, therefore, the holders of depositary shares) will not be required in connection with any of the following: (i) any increase in the authorized number of Series A

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		Preferred Shares; (ii) any issuance of additional Series A Preferred Shares; or (iii) any increase, authorization or issuance of equity securities which are on parity with the Series A Preferred Shares as to dividend rights, or rights upon liquidation, dissolution or winding up, unless such equity securities have cumulative dividend rights.

No maturity		The Series A Preferred Shares do not have any maturity date, and we cannot redeem the Series A Preferred Shares at our option. Accordingly, the Series A Preferred Shares will remain outstanding indefinitely, unless and until we decide to exercise our right of mandatory conversion.

Conversion right		Each Series A Preferred Share, at the option of the holder, is convertible at any time into the number of our common shares equal to $1,000.00 divided by the conversion price then in effect, which initially will be $10.34. Accordingly, each depositary share is convertible at your option into the number of our common shares equal to $10.00 divided by the conversion price then in effect (initially $10.34). The initial conversion price of $10.34 is equivalent to a 17.5% premium over $8.80 per common share, the last reported sale price of our common shares on November 5, 2014. Except as otherwise provided, the Series A Preferred Shares (and, therefore, the depositary shares) will only be convertible into our common shares, and cash will be paid in lieu of issuing any fractional common share interest. The conversion price is also subject to anti-dilution adjustments upon the occurrence of certain events. See “Description of the Series A Preferred Shares — Adjustments to the Conversion Price” beginning on page 57 of this prospectus. All of the depositary shares we are selling in this offering, and the common shares issued upon any conversion of the depositary shares, will be freely tradable without restriction under the Securities Act, except for shares purchased by our “affiliates.” See “Description of the Series A Preferred Shares — Conversion Rights” beginning on page 54 of this prospectus.

Mandatory conversion at our option		On or after the fifth anniversary of the issue date of the Series A Preferred Shares, we may, at our option, require holders of the Series A Preferred Shares (and, therefore, the depositary shares) to convert each Series A Preferred Share into the number of our common shares equal to the quotient achieved when $1,000.00 is divided by the conversion price then in effect, which initially will be $10.34. Accordingly, each depositary share will be convertible into the number of our common shares equal to $10.00 divided by the conversion price then in effect (initially $10.34). We may exercise this option only if: (i) the closing sale price for our common shares equals or exceeds 120% of the conversion price then in effect for at least 20 trading days in a period of 30 consecutive trading days (including the last trading day of such period) ending on the fifth trading day immediately prior to our issuance of a press release announcing our exercise of this option; and (ii) we have declared and paid full dividends on the Series A Preferred Shares (and, therefore, the depositary shares) for four consecutive quarters prior to the issuance of the press release. See “Description of the Series A Preferred Shares — Mandatory Conversion at Our Option” beginning on page 56 of this prospectus.

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Material U.S. federal income tax consequences		Material U.S. federal income tax consequences relevant to the acquisition, ownership and disposition of the depositary shares and common shares issued upon conversion are described in “Material U.S. Federal Income Tax Consequences” beginning on page 71 of this prospectus. Prospective investors should consult their own tax advisors regarding the tax consequences of acquiring, holding and disposing of the depositary shares and common shares issued upon conversion in light of current tax laws, their particular personal tax and investment circumstances and the application of state, local and other tax laws.

Purchase priorities and limitations

We are offering the depositary shares for sale to the public in the following order of priority:

1. Shareholder Offering

Each shareholder of the Company who is a beneficial owner of our common shares will be given the opportunity to purchase, subject to the overall purchase limitations, up to the lesser of (a) 250,000 depositary shares ($2,500,000), or (b) the number of depositary shares, assuming conversion of such depositary shares into our common shares, whereby the purchaser’s total beneficial ownership of our common shares (including any common shares currently owned) would not exceed 5% of our outstanding common shares after the offering. The minimum number of depositary shares that an existing shareholder may purchase in the offering is 100 depositary shares.

If there are not sufficient depositary shares available to satisfy all subscriptions in the shareholder offering, shares will first be allocated so as to permit each shareholder subscriber to purchase a number of depositary shares equal to the lesser of (i) 10,000 depositary shares ($100,000) or (ii) the number of depositary shares for which the shareholder subscribed. The unallocated depositary shares will then be allocated to each shareholder subscriber whose subscription remains unsatisfied on a pro rata basis. See “Description of the Offering.”

2. Customer and Local Community Offering

To the extent that depositary shares remain available for purchase after satisfaction of all subscriptions in the shareholder offering, we may offer depositary shares to customers of State Bank and to residents of the local communities we serve. For this purpose, you will be considered to be a resident of the “local communities” we serve if you reside in any of the following counties: Allen, Defiance, Franklin, Fulton, Lucas, Paulding, Wood and Williams Counties, Ohio; and Allen and Steuben Counties, Indiana.

The same purchase limitations and pro rata allocations that apply in the shareholder offering will apply to purchases in the customer and local community offering to the extent there are not sufficient depositary shares available to satisfy all subscriptions. See “Description of the Offering.”

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		3. Syndicated Offering We may offer depositary shares for sale to interested investors (without regard to their status as an existing shareholder of the Company, a customer of State Bank, or a resident of our local communities) in a syndicated offering in a manner intended to achieve a widespread distribution of our depositary shares to the general public. The syndicated offering may begin concurrently with, during or after the commencement or termination of the shareholder and customer/local community offerings, but priority will be given to shareholder and customer/local community subscriptions in filling orders. If a syndicated offering is held, Keefe, Bruyette & Woods, Inc. will serve as sole placement agent and will assist us in selling our depositary shares on a best efforts basis. The same purchase limitations that apply in the shareholder offering will apply to purchases in the syndicated offering to the extent there are not sufficient depositary shares available to satisfy all subscriptions. See “Description of the Offering.”

Purchasing depositary shares in the offering		The shareholder offering and the customer and local community offering are expected to be conducted concurrently. The syndicated offering, if any, may be conducted concurrently with the shareholder and customer/local community offerings or as soon as practicable following the expiration of the shareholder and customer/local community offerings. In the shareholder and customer/local community offerings, you may subscribe for depositary shares by delivering a signed and completed order form, together with full payment payable to “U.S. Bank/SBFG – Escrow Account”; provided that the order form is received before 3:00 p.m., Eastern Time, on December 12, 2014, unless the expiration date of the offering is extended. Delivery of your order may be made by mail using the order reply envelope provided, by overnight delivery to the indicated address at the top of the order form, or by hand-delivery to the Company’s executive offices located at 401 Clinton Street, Defiance, Ohio. Order forms may not be delivered to any of the Company’s or State Bank’s other offices. Please do not mail order forms to the Company or any of State Bank’s branches. Payment in the shareholder and customer/local community offerings may be made by personal check, bank check or money order, payable to “U.S. Bank/SBFG – Escrow Account” . You may not use cash, wires or a check drawn on a State Bank line of credit, and third party checks will not be accepted. Checks and money orders will be immediately cashed and placed in the escrow account. Orders in the syndicated offering will be submitted in substantially the same manner as utilized in the shareholder and customer/local community offerings. Payments in the syndicated offering, however, must be made in immediately available funds (bank checks, money orders, or wire transfers). Personal checks will not be accepted. If the closing of the offering does not

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		occur for any reason, the funds will be promptly returned without interest. For a complete description of how to purchase depositary shares in the offering, see “Description of the Offering.”
Use of proceeds		We estimate that the net proceeds to us from the sale of the maximum number of depositary shares that we may sell in this offering will be $14.0 million after deducting estimated placement agent fees and other offering expenses. We intend to use approximately $7.0 million of the net proceeds of the sale of the depositary shares to prepay the term loan obtained by the Company in connection with the Company’s redemption, effective September 7, 2014, of the junior subordinated debentures underlying the trust preferred securities issued by RST I for an aggregate redemption amount (including accrued interest and prepayment penalties) of $11.2 million. See “Summary — Recent Developments” beginning on page 9 of this prospectus. We expect to use the remainder of the net proceeds from the sale of our depositary shares for general corporate purposes. See “Use of Proceeds” beginning on page 34 of this prospectus.

Risk factors		You should read this prospectus carefully before you invest. Investing in our securities involves a high degree of risk. See the section entitled “Risk Factors,” beginning on page 22 of this prospectus and in the documents we file with the Securities and Exchange Commission that are incorporated by reference into this prospectus for certain risks you should consider before investing in the depositary shares.

Listing		We have applied for the depositary shares to be listed on the NASDAQ Capital Market under the symbol “SBFGP.” If the application for listing is approved, trading of the depositary shares is expected to commence within 30 days following the initial issuance of the depositary shares.

Form		The depositary shares will be issued and maintained in book-entry form, except under limited circumstances. See “Description of the Depositary Shares — Book-Entry Issuance” beginning on page 64 of this prospectus.

Depositary, transfer agent and registrar		Computershare Inc. and its wholly-owned subsidiary, Computershare Trust Company, N.A. (“Computershare”)

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SUMMARY CONSOLIDATED FINANCIAL DATA

The following table shows summarized historical consolidated financial data for the Company as of and for the six months ended June 30, 2014 and 2013, and as of and for the years ended December 31, 2009 through 2013. Our summary consolidated financial data presented below as of December 31, 2013 and for each of the years in the five-year period ended December 31, 2013, are derived from our audited financial statements and related notes. The audited financial statements and related notes for the years ended December 31, 2013 and 2012 are incorporated by reference in this prospectus. Our summary consolidated financial data for the six months ended June 30, 2014 and 2013 are derived from our unaudited interim consolidated financial statements incorporated by reference in this prospectus. In the opinion of our management, such data contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly our financial position and results of operations for such periods in accordance with generally accepted accounting principles. Our results for the six months ended June 30, 2014 are not necessarily indicative of our results of operations that may be expected for any future period. You should read the following table in conjunction with the consolidated financial statements, related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 and in our Annual Report on Form 10-K for the year ended December 31, 2013, and the other information included in or incorporated by reference into this prospectus.

Five-Year Selected Consolidated Financial Data

(Dollars in thousands, except per share data)


	Six months ended June 30,				Year ended December 31,
	2014		2013		2013		2012		2011		2010			2009
	(unaudited)
Statements of Income:
Total interest income	$	11,897	$	12,767	$	24,848	$	26,122	$	27,509	$	29,564		$	32,591
Total interest expense		1,824		2,125		4,035		5,390		6,798		9,602			11,593

Net interest income		10,073		10,642		20,813		20,732		20,711		19,962			20,998
Provision for loan loss		150		499		900		1,350		1,994		10,588			5,738

Net interest income after provision for loan loss		9,923		10,143		19,913		19,382		18,717		9,374			15,260
Investment security gain (loss)		56		20		48		—		1,871		451			960
Other noninterest income		5,798		7,367		13,998		14,845		11,986		20,368			28,345

Total noninterest income		5,854		7,387		14,046		14,845		13,857		20,819			29,305
Goodwill and other intangibles impairment		—		—		—		—		381		6,273			—
Other noninterest expense		12,705		13,750		26,511		27,484		29,872		46,035			44,843

Total noninterest expense		12,705		13,750		26,511		27,484		30,253		52,308			44,843

Income (loss) before federal tax (benefit)		3,072		3,780		7,448		6,743		2,321		(22,115	)		(278	)
Federal income tax (benefit)		847		1,143		2,243		1,929		658		(6,502	)		(660	)

Net income (loss)	$	2,225	$	2,637	$	5,205	$	4,814	$	1,663	$	(15,613	)	$	382

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	Six months ended June 30,						Year ended December 31,
	2014			2013			2013			2012			2011			2010			2009
	(unaudited)
Per Common Share:
Earnings available to common shareholders (basic and diluted)	$	0.46		$	0.54		$	1.07		$	0.99		$	0.34		$	(3.21	)	$	0.07
Dividends paid		0.075			0.055			0.12			—			—			—			0.36
Book value		12.10			11.18			11.55			10.96			9.86			9.47			12.69
Average Common Shares Outstanding:
Basic		4,873,000			4,864,000			4,870,000			4,861,779			4,861,779			4,861,779			4,867,030
Diluted		4,894,000			4,870,000			4,882,000			4,861,779			4,861,779			4,861,779			4,870,403
Period-end Balances:
Loans, net (1)	$	499,559		$	457,022		$	470,339		$	456,578		$	436,025		$	420,829		$	445,528
Securities (2)		89,334			99,127			93,541			102,450			115,664			136,510			108,831
Total assets		662,500			631,492			631,754			638,234			628,664			660,288			673,049
Deposits		524,067			511,378			518,234			527,001			518,765			515,678			491,242
Borrowings		74,866			61,082			51,905			53,655			54,963			92,503			110,077
Shareholders’ equity		59,010			54,387			56,269			53,284			47,932			46,024			61,708
Average Balances:
Loans, net (3)	$	488,425		$	462,058		$	469,603		$	455,516		$	438,383		$	445,700		$	453,787
Securities		96,207			99,607			95,787			105,342			119,420			118,856			116,206
Total assets		659,187			639,698			639,920			638,035			643,528			673,781			667,470
Deposits		527,956			522,585			521,648			522,412			516,282			509,783			489,526
Borrowings		56,285			51,844			52,256			53,405			70,686			99,025			106,121
Shareholders’ equity		57,654			54,020			54,700			50,300			47,035			57,281			63,576
Selected Ratios and Other Data:
Return on average assets		0.68	%		0.82	%		0.81	%		0.75	%		0.26	%		-2.32	%		0.06	%
Return on average equity		7.72	%		9.76	%		9.52	%		9.57	%		3.54	%		-27.26	%		0.60	%
Average shareholders’ equity to average assets		8.75	%		8.44	%		8.55	%		7.88	%		7.31	%		8.50	%		9.52	%
Cash dividend payout ratio (dividends divided by net income)		16.49	%		10.20	%		11.26	%		0.00	%		0.00	%		0.00	%		458.64	%
Net interest margin (4)		3.51	%		3.86	%		3.75	%		3.76	%		3.81	%		3.67	%		3.79	%
Total net loans to total deposits		95.32	%		89.37	%		90.76	%		86.64	%		84.05	%		81.61	%		90.69	%
Nonperforming assets to total assets		0.93	%		1.20	%		1.15	%		1.40	%		1.60	%		2.26	%		3.22	%
Tangible common equity to tangible assets		6.54	%		6.04	%		6.39	%		5.75	%		4.87	%		4.17	%		5.46	%

(1)

Net of allowance for loan losses.

(2)

Includes available-for-sale securities and Federal Reserve and Federal Home Loan Bank stock.

(3)

Net of unearned income.

(4)

Fully tax-equivalent basis.

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RISK FACTORS

An investment in the depositary shares is subject to certain risks inherent in our business and certain risks relating to the depositary shares and the Series A Preferred Shares. The material risks and uncertainties that our management believes affect your investment in the depositary shares are described below and in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013, incorporated by reference herein. Before making an investment decision, you should carefully consider the risks and uncertainties described below and in the information included or incorporated by reference in this prospectus.

Risk Factors Related to Our Business

Changes in general economic conditions and real estate values in our primary market areas could adversely affect our earnings, financial condition and cash flows.

Our success depends to a large extent upon local and national economic conditions, as well as governmental fiscal and monetary policies. Conditions such as inflation, recession, unemployment, changes in interest rates, money supply and other factors beyond our control can adversely affect our asset quality, deposit levels and loan demand and, therefore, our earnings and our capital. Our lending and deposit gathering activities are concentrated primarily in Northwest Ohio. 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. Real estate values in our markets were negatively impacted by the recent economic crisis. Although there has been some improvement recently in a number of economic measures, including home prices and unemployment rates in Ohio, we continue to experience difficult economic conditions and high unemployment in many of our traditional market areas in Northwest Ohio. A prolonged continuation of these economic conditions and/or a significant decline in the economy in our market areas could impair our ability to collect payments on loans, increase loan delinquencies, increase problem assets and foreclosures, increase lawsuits and other claims by borrowers, decrease the demand for our products and services and decrease the value of collateral for loans, especially real estate values, which could have a material adverse effect on our financial condition, results of operations and cash flows.

Our earnings are significantly affected by the fiscal and monetary policies of the federal government and its agencies.

The policies of the Federal Reserve Board impact us significantly. The Federal Reserve Board regulates the supply of money and credit in the United States. Its policies directly and indirectly influence the rate of interest earned on loans and paid on borrowings and interest-bearing deposits, and can also affect the value of financial instruments we hold. Those policies determine to a significant extent our cost of funds for lending and investing. Changes in those policies are beyond our control and are difficult to predict. Federal Reserve Board policies can also affect our borrowers, potentially increasing the risk that they may fail to repay their loans. For example, a tightening of the money supply by the Federal Reserve Board could reduce the demand for a borrower’s products and services. This could adversely affect the borrower’s earnings and ability to repay its loan, which could have a material adverse effect on our financial condition and results of operations.

We may be unable to manage interest rate risks, which could reduce our net interest income.

Our results of operations are affected principally by net interest income, which is the difference between interest earned on loans and investments and interest expense paid on deposits and other borrowings. The spread between the yield on our interest-earning assets and our overall cost of funds has been compressed in the recent low interest rate environment, and our net interest income may continue to be adversely impacted by an extended period of continued low rates. We cannot predict or control changes in interest rates. National, regional and local economic conditions and the policies of regulatory authorities, including monetary policies of the Board of

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Governors of the Federal Reserve System, affect the movement of interest rates and our interest income and interest expense. If the interest rates paid on deposits and other borrowed funds increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore earnings, could be adversely affected. Earnings could also be adversely affected if the interest rates received on loans and other investments fall more quickly than the interest rates paid on deposits and other borrowed funds.

In addition, certain assets and liabilities may react in different degrees to changes in market interest rates. For example, interest rates on some types of assets and liabilities may fluctuate prior to changes in broader market interest rates, while interest rates on other types may lag behind. Some of our assets, such as adjustable rate mortgages, have features that restrict changes in their interest rates, including rate caps.

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.

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. We believe that the impact on our cost of funds from a rise in interest rates will depend on a number of factors, including but not limited to, the competitive environment in the banking sector for deposit pricing, opportunities for clients to invest in other markets such as fixed income and equity markets, and the propensity of customers to invest in their businesses. The effect on our net interest income from an increase 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.

If our actual loan losses exceed our allowance for loan losses, our net income will decrease.

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 loan losses, which could have a material adverse effect on our operating results. In accordance with accounting principles generally accepted in the United States, we maintain an allowance for loan losses to provide for loan defaults and non-performance, which when combined, we refer to as the allowance for loan losses. Our allowance for loan losses 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. Our allowance for loan losses is based on prior experience, as well as an evaluation of the risks in the current portfolio. The amount of future losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates that may be beyond our control, and these losses may exceed current estimates. Federal regulatory agencies, as an integral part of their examination process, review our loans and allowance for loan losses. We cannot assure you that we will not further increase the allowance for loan losses or that regulators will not require us to increase this allowance. Either of these occurrences could have a material adverse effect on our financial condition and results of operations.

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 Deposit Insurance Fund 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. The FDIC collected a special assessment in 2009 to replenish the Deposit Insurance Fund and also required a prepayment of an estimated amount of future deposit insurance premiums. If the costs of future bank failures increase, deposit insurance premiums may also increase.

Legislative or regulatory changes or actions could adversely impact our business.

The financial services industry is extensively regulated. We are subject to extensive state and federal regulation, supervision and legislation that govern almost all aspects of our operations. These laws and

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regulations are primarily intended for the protection of consumers, depositors, borrowers and the deposit insurance fund, not to benefit our shareholders. Changes to laws and regulations or other actions by regulatory agencies may negatively impact us, possibly limiting the services we provide, increasing the ability of non-banks to compete with us or requiring us to change the way we operate. Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the ability to impose restrictions on the operation of an institution and the ability to determine the adequacy of an institution’s allowance for loan losses. Failure to comply with applicable laws, regulations and policies could result in sanctions being imposed by the regulatory agencies, including the imposition of civil money penalties, which could have a material adverse effect on our operations and financial condition.

In light of current conditions in the global financial markets and the global economy, regulators have increased their focus on the regulation of the financial services industry. In the last several years, Congress and the federal bank regulators have acted on an unprecedented scale in responding to the stresses experienced in the global financial markets. Some of the laws enacted by Congress and regulations promulgated by federal bank regulators subject us and other financial institutions to additional restrictions, oversight and costs that may have an adverse impact on our business and results of operations.

The Dodd-Frank Act was signed into law on July 21, 2010 and, although it became generally effective in July 2010, many of its provisions have extended implementation periods and delayed effective dates and have required and will continue to require extensive rulemaking by regulatory authorities. In addition, we may be subjected to higher deposit insurance premiums to the FDIC. We may also be subject to additional regulations under the recently established Consumer Financial Protection Bureau, which was given broad authority to implement new consumer protection regulations. These and other provisions of the Dodd-Frank Act, including future rules implementing its provisions and the interpretation of those rules, may place significant additional costs on us, impede our growth opportunities and place us at a competitive disadvantage.

In July 2013, our primary federal regulator, the Federal Reserve, published final rules establishing a new comprehensive capital framework for U.S. banking organizations. The rules implement the Basel Committee’s December 2010 framework known as “Basel III” for strengthening international capital standards as well as certain provisions of the Dodd-Frank Act. The implementation of the final rules will lead to higher capital requirements and more restrictive leverage and liquidity ratios than those currently in place. In addition, in order to avoid limitations on capital distributions, such as dividend payments and certain bonus payments to executive officers, the rules require insured financial institutions to hold a capital conservation buffer of common equity tier 1 capital above the minimum risk-based capital requirements. The capital conservation buffer will be phased in over time, becoming effective on January 1, 2019, and will consist of an additional amount of common equity equal to 2.5% of risk-weighted assets. The rules will also revise the regulatory agencies’ prompt corrective action framework by incorporating the new regulatory capital minimums and updating the definition of common equity. The rules began to phase in on January 1, 2014 for larger institutions and will begin to phase in on January 1, 2015 for smaller, less complex banking organizations such as the Company, and will be fully phased in by January 1, 2019. Until the rules are fully phased in, we cannot predict the ultimate impact it will have upon the financial condition or results of operations of the Company.

Changes in tax laws could adversely affect our performance.

We are subject to extensive federal, state and local taxes, including income, excise, sales/use, payroll, franchise, withholding and ad valorem taxes. Changes to our taxes could have a material adverse effect on our results of operations. In addition, our customers are subject to a wide variety of federal, state and local taxes. Changes in taxes paid by our customers may adversely affect their ability to purchase homes or consumer products, which could adversely affect their demand for our loans and deposit products. In addition, such negative effects on our customers could result in defaults on the loans we have made.

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Our success depends upon our ability to attract and retain key personnel.

Our success depends upon the continued service of our senior management team and upon our ability to attract and retain qualified financial services personnel. Competition for qualified employees is intense. We cannot assure you that we will be able to retain our existing key personnel or attract additional qualified personnel. If we lose the services of our key personnel, or are unable to attract additional qualified personnel, our business, financial condition and results of operations could be adversely affected.

We depend upon the accuracy and completeness of information about customers.

In deciding whether to extend credit or enter into other transactions with customers, we may rely on information provided to us by customers, including financial statements and other financial information. We may also rely on representations of customers as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. For example, in deciding whether to extend credit to a business, we may assume that the customer’s audited financial statements conform with 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. 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.

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. Two of our most critical estimates are the level of the allowance for loan losses and the accounting for goodwill and other intangibles. 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. Management’s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 36 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013. See “Where You Can Find More Information” and “Incorporation of Certain Information by Reference” in this prospectus.

Changes in accounting standards could impact our results of operations.

The accounting standard setters, including the Financial Accounting Standards Board, the SEC and other regulatory bodies, periodically change the financial accounting and reporting standards that govern the preparation of our consolidated financial statements. These changes can be difficult to predict and can materially affect how we record and report our financial condition and results of operations. 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.

Our information systems may experience an interruption or security breach.

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. While we have policies and procedures designed to prevent or limit the effect of the possible failure, interruption or security breach of our information systems, there can be no assurance that any such failure, interruption or security breach will not occur or, if they do occur, that they will be adequately addressed. The occurrence of any failure, interruption or security breach of our information systems could damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny, or expose us to civil litigation and possible financial liability.

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We may elect or be compelled to seek additional capital in the future, but capital may not be available when it is needed.

We are required by federal and state regulatory authorities to maintain adequate levels of capital to support our operations. In addition, federal banking agencies have proposed extensive changes to their capital requirements, including raising required amounts and eliminating the inclusion of certain instruments from the calculation of capital. The final form of such regulations and their impact on the Company is unknown at this time, but may require us to raise additional capital. In addition, we may elect to raise additional capital to support our business or to finance acquisitions, if any, or we may otherwise elect to raise additional capital. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions and a number of other factors, many of which are outside our control, and on our financial performance. Accordingly, we cannot be assured of our ability to raise additional capital if needed or on terms acceptable to us. If we cannot raise additional capital if and when needed, it may have a material adverse effect on our financial condition, results of operations and prospects.

Strong competition within our market area may reduce our ability to attract and retain deposits and originate loans.

We face competition both in originating loans and in attracting deposits within our market area. We compete for clients by offering personal service and competitive rates on our loans and deposit products. The type of institutions we compete with include large regional financial institutions, community banks, thrifts and credit unions operating within our market areas. Nontraditional sources of competition for loan and deposit dollars come from captive auto finance companies, mortgage banking companies, internet banks, brokerage companies, insurance companies and direct mutual funds. As a result of their size and ability to achieve economies of scale, certain of our competitors offer a broader range of products and services than we offer. We expect competition to remain intense in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in the financial services industry. In addition, to stay competitive in our markets we may need to adjust the interest rates on our products to match the rates offered by our competitors, which could adversely affect our net interest margin. As a result, our profitability depends upon our continued ability to successfully compete in our market areas while achieving our investment objectives.

We may be the subject of litigation which could result in legal liability and damage to our business and reputation.

From time to time, we may be subject to claims or legal action from customers, employees or others arising out of our businesses. Financial institutions like the Company and State Bank are facing a growing number of significant class actions, including those based on the manner of calculation of interest on loans and the assessment of overdraft fees. Future litigation could include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. We are also involved from time to time in other reviews, investigations and proceedings (both formal and informal) by governmental and other agencies regarding our business. These matters also could result in adverse judgments, settlements, fines, penalties, injunctions or other relief. Like other 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. Should the ultimate judgments or settlements in any litigation exceed our insurance coverage, they could have a material adverse effect on our financial condition and results of operations. In addition, we may not be able to obtain appropriate types or levels of insurance in the future, nor may we be able to obtain adequate replacement policies with acceptable terms, if at all.

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Risk Factors Related to the Depositary Shares and the Series A Preferred Shares

The Series A Preferred Shares (and, therefore, the depositary shares) are equity and are junior to all of our existing and future indebtedness.

The Series A Preferred Shares (and, therefore, the depositary shares) are equity interests in the Company and do not constitute indebtedness. The depositary shares, which represent fractional interests in the Series A Preferred Shares, rank junior to all existing and future indebtedness and other non-equity claims on the Company with respect to assets available to satisfy claims on the Company, including in a liquidation of the Company. Additionally, unlike indebtedness, where principal and interest would customarily be payable on specified due dates, in the case of perpetual preferred stock like the Series A Preferred Shares, there is no stated maturity date and dividends are payable only if, when and as authorized and declared by our board of directors in its sole discretion and depend on, among other matters, our historical and projected results of operations, liquidity, cash flows, capital levels, financial condition, debt service requirements and other cash needs, financing covenants, applicable state law, federal and state regulatory prohibitions and other restrictions and any other factors our board of directors deems relevant at the time.

At June 30, 2014, the Company had outstanding $20.6 million of junior subordinated debentures which were issued to trusts formed by the Company for the purpose of issuing trust preferred securities. If (i) there has occurred and is continuing an event of default under the junior subordinated debentures or (ii) the Company has given notice of its election to defer payments of interest on the junior subordinated debentures or such a deferral has commenced and is continuing, then the Company, and in certain cases its affiliates, may not declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its, and in certain cases its affiliates’, capital stock (including the Series A Preferred Shares and, therefore, the depositary shares). The Company redeemed $10.3 million of its outstanding junior subordinated debentures on September 7, 2014. See “Use of Proceeds” beginning on page 34 of this prospectus.

In addition, the terms of the Series A Preferred Shares do not limit the amount of debt or other obligations we or our subsidiaries may incur in the future. Accordingly, we and our subsidiaries may incur substantial amounts of additional debt and other obligations that will rank senior to the Series A Preferred Shares or to which the Series A Preferred Shares will be structurally subordinated.

We are not required to declare dividends on the Series A Preferred Shares, and dividends on the Series A Preferred Shares are non-cumulative.

Dividends on the Series A Preferred Shares (and, therefore, the depositary shares) are discretionary and will not be cumulative. If our board of directors or a duly authorized committee of our board of directors does not declare a dividend on the Series A Preferred Shares in respect of a dividend period, then no dividend will be deemed to have accrued for such dividend period, be payable on the applicable dividend payment date or be cumulative, and we will have no obligation to pay any dividend for that dividend period, whether or not our board of directors or a duly authorized committee of our board of directors declares a dividend on the Series A Preferred Shares for any subsequent dividend period.

Our ability to pay dividends on the Series A Preferred Shares (and, therefore, the depositary shares) may be limited by federal regulatory considerations and the results of operations of State Bank.

Neither the depositary shares nor the Series A Preferred Shares are savings accounts, deposits or other obligations of any depository institution and are not insured or guaranteed by the FDIC or any other governmental agency or instrumentality. Furthermore, the Company is a legal entity that is separate and distinct from State Bank and its other subsidiaries, which have no obligation, contingent or otherwise, to make any payments in respect of the Series A Preferred Shares or the depositary shares, or to make funds available therefor. Because the Company is a holding company that maintains only limited cash, its ability to pay dividends on the Series A Preferred Shares (and, therefore, the depositary shares) will be highly dependent upon

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the receipt of dividends and other distributions from State Bank and its other subsidiaries, which, in turn, will be highly dependent upon the historical and projected results of operations, liquidity, cash flows and financial condition of State Bank and the Company’s other subsidiaries.

There are also various legal and regulatory prohibitions and other restrictions on the ability of State Bank to pay dividends, extend credit or otherwise transfer funds to the Company. Various federal and state statutory provisions and regulations limit the amount of dividends that State Bank may pay to the Company without regulatory approval. Generally, subject to certain minimum capital requirements, State Bank may declare a dividend without the approval of the State of Ohio Division of Financial Institutions so long as the total of the dividends in a calendar year does not exceed State Bank’s total net income for that year combined with its retained net income for the two preceding years. Dividend payments to the Company from State Bank may also be prohibited if such payments would impair the capital of State Bank and in certain other cases. See “Business — Supervision and Regulation” beginning on page 42 of this prospectus.

The Company also is subject to various legal and regulatory policies and requirements impacting the Company’s ability to pay accrued or future dividends on the Series A Preferred Shares. In addition, as a matter of policy, the Federal Reserve may restrict or prohibit the payment of dividends on the Series A Preferred Shares if (i) the Company’s net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) the Company’s prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; (iii) the Company will not meet, or is in danger of not meeting, its minimum regulatory capital ratios; or (iv) the Federal Reserve otherwise determines that the payment of dividends would constitute an unsafe or unsound practice. Recent and future regulatory developments may result in additional restrictions on the Company’s ability to pay dividends.

Investors in our depositary shares may experience losses and volatility, and we may reduce, delay or cancel payment of our dividends in a variety of circumstances.

Our earnings, cash flow, book value and dividends may fluctuate. Although we intend to pay a regular dividend on the Series A Preferred Shares (and, therefore, the depositary shares) at a specific rate, we may reduce, delay or cancel our dividend payments in the future for a variety of reasons. We may not provide public warnings of such dividend reductions, cancellations or payment delays prior to their occurrence.

In addition, the depositary shares may trade at prices higher or lower than their initial offering price, and investors may experience volatile returns and material losses. The trading price of the depositary shares may depend on many factors, including:

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the market price of our common shares;

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any changes in prevailing interest rates;

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the market for similar securities;

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additional issuances by us of other series or classes of preferred shares or debt;

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general economic conditions or conditions in the financial markets; and

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fluctuations in our current and prospective earnings, cash flow and dividends.

The Series A Preferred Shares may be junior in rights and preferences to our future preferred shares.

Subject to approval by the holders of at least two-thirds (2/3) of the Series A Preferred Shares then outstanding, voting as a separate class, we may issue preferred shares in the future the terms of which are expressly senior to the Series A Preferred Shares. The terms of any such future preferred shares expressly senior to the Series A Preferred Shares may prohibit or otherwise restrict dividend payments on the Series A Preferred

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Shares. For example, the terms of any such senior preferred shares may provide that, unless full dividends for all of our outstanding preferred shares senior to the Series A Preferred Shares have been paid for the relevant periods, no dividends will be paid on the Series A Preferred Shares, and no Series A Preferred Shares may be repurchased or otherwise acquired by us. In addition, in the event of our liquidation, dissolution or winding-up, the terms of any such senior preferred shares would likely prohibit us from making any payments on the Series A Preferred Shares until all amounts due to holders of such senior preferred shares are paid in full.

You are making an investment decision about both the depositary shares and the Series A Preferred Shares, which are different securities.

As described in this prospectus, we are issuing depositary shares representing fractional interests in our Series A Preferred Shares. The depositary will rely solely on the payments it receives on the Series A Preferred Shares to fund all payments on the depositary shares. You should carefully review the information in this prospectus regarding both of these securities because their rights and privileges are different.

There has been no prior market for the depositary shares and, although we intend to list the depositary shares on the NASDAQ Capital Market, we do not expect that an active trading market for depositary shares will develop, which means that you may not be able to sell your depositary shares promptly at desired prices or at all.

We have applied for the depositary shares to be listed on the NASDAQ Capital Market under the symbol “SBFGP.” If the application for listing is approved, trading of the depositary shares is expected to commence within 30 days following the initial issuance of the depositary shares. However, since the size of this offering is relatively small, we do not expect that an active and liquid trading market for depositary shares will develop or be sustained in the future. If an active trading market does not develop, you may not be able to sell your depositary shares promptly, or at all. You should consider carefully the limited liquidity of your investment before purchasing any of the depositary shares.

The offering price of depositary shares may bear no relationship to the price at which such shares will trade upon completion of this offering. The stock market has experienced significant price and volume fluctuations recently and you may not be able to resell your depositary shares promptly or at all at or above the initial public offering price.

Holders of the Series A Preferred Shares and depositary shares have only limited voting rights.

The holders of the Series A Preferred Shares (and, therefore, the depositary shares) will have no voting rights except with respect to certain fundamental changes in the terms of the Series A Preferred Shares and certain other matters and except as may be required by applicable law. See “Description of Series A Preferred Shares—Voting Rights” in this prospectus.

We are subject to extensive regulation, and ownership of the depositary shares may have regulatory implications for holders thereof.

We are subject to extensive federal and state banking laws, including the Bank Holding Company Act of 1956, as amended (the “BHCA”), and federal and state banking regulations, that impact the rights and obligations of owners of the Series A Preferred Shares (and, therefore, the depositary shares), including, for example, our ability to declare and pay dividends on the Series A Preferred Shares (and, therefore, the depositary shares). Although we do not believe the Series A Preferred Shares are considered “voting securities” currently, if they were to become voting securities for the purposes of the BHCA, a holder of 10% or more of the Series A Preferred Shares, or a holder of a lesser percentage of our Series A Preferred Shares that is deemed to exercise a “controlling influence” over us, may become subject to regulation under the BHCA. In addition, if the Series A Preferred Shares become “voting securities,” then (a) any bank holding company or foreign bank that is subject

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to the BHCA may need approval to acquire or retain more than 5% of the then outstanding Series A Preferred Shares, and (b) any holder (or group of holders acting in concert) may need regulatory approval to acquire or retain 10% or more of the Series A Preferred Shares. A holder or group of holders may also be deemed to control us if they own one-third or more of our total equity, both voting and non-voting, aggregating all shares held by the investor across all classes of stock. Holders of the depositary shares should consult their own counsel with regard to regulatory implications of the ownership thereof.

The conversion rights for the Series A Preferred Shares and the depositary shares may not have any value.

Each Series A Preferred Share, at the option of the holder, is convertible at any time into the number of our common shares equal to $1,000.00 divided by the conversion price then in effect, which initially will be $10.34. Accordingly, each depositary share is convertible at your option into the number of our common shares equal to $10.00 divided by the conversion price then in effect (initially $10.34). The initial conversion price of $10.34 is equivalent to a 17.5% premium over $8.80 per common share, the last reported sale price of our common shares on November 5, 2014. The right to convert the Series A Preferred Shares (and, therefore, the depositary shares) will only have value in the event that the value of our common shares exceeds the conversion price.

You may have to pay taxes if we make or fail to make certain adjustments to the conversion price of the Series A Preferred Shares (and, therefore, the depositary shares) even though you do not receive a corresponding distribution.

The conversion price of the Series A Preferred Shares (and, therefore, the depositary shares) is subject to adjustment in certain circumstances. If the conversion price is adjusted, under certain circumstances you may be treated as having received a constructive dividend from us, resulting in income to you for U.S. federal income tax purposes, even though you would not receive any cash related to that adjustment and even though you might not exercise your conversion right. In addition, if we fail to make (or adequately make) an adjustment to the conversion price after an event that increases your proportionate interest in us, you may be deemed to have received a taxable dividend.

Risk Factors Related to Our Common Shares

A limited trading market exists for our common shares which could lead to price volatility.

Your ability to sell our common shares depends upon the existence of an active trading market for our common shares. While our stock is quoted on the NASDAQ Capital Market, it trades infrequently. As a result, you may be unable to sell our common shares at the volume, price and time you desire. The limited trading market for our common shares may cause fluctuations in the market value of our common shares to be exaggerated, leading to price volatility in excess of that which would occur in a more active trading market.

The market price of our common shares may be subject to fluctuations and volatility.

The market price of our common shares may fluctuate significantly due to, among other things, changes in market sentiment regarding our operations, financial results or business prospects, the banking industry generally or the macroeconomic outlook. Factors that could impact our trading price include:

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our operating and financial results, including how those results vary from the expectations of management, securities analysts and investors;

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developments in our business or operations or in the financial sector generally;

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the sale of the depositary shares in this offering, and 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;

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legislative or regulatory changes affecting our industry generally or our business and operations specifically;

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the operating and stock price performance of companies that investors consider to be comparable to us;

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announcements of strategic developments, acquisitions and other material events by us or our competitors;

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expectations of (or actual) equity dilution, including the actual or expected dilution to various financial measures, including earnings per share, that may be caused by this offering;

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actions by our current shareholders, including future sales of common shares by existing shareholders, including our directors and executive officers; and

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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.

Equity markets in general and our common shares in particular have experienced considerable volatility over the past few years. The market price of our common shares may continue to be subject to volatility unrelated to our operating performance or business prospects. Increased volatility could result in a decline in the market price of our common shares.

The sale of substantial amounts of our common shares or securities convertible into our common shares, including the Series A Preferred Shares or the depositary shares, in the public market could depress the price of our common shares.

In recent years, the stock market has experienced a high level of price and volume volatility, and market prices for the stock of many companies have experienced wide fluctuations that have not necessarily been related to their operating performance. Therefore, our shareholders may not be able to sell their shares at the volumes, prices, or times that they desire. We cannot predict the effect, if any, that future sales of our common shares or securities convertible into our common shares, such as the Series A Preferred Shares (and, therefore, the depositary shares), in the market, or availability of shares of our common shares or securities convertible into our common shares for sale in the market, will have on the market price of our common shares. We can give no assurance that sales of substantial amounts of our common shares or securities convertible into our common shares in the market, or the potential for large amounts of sales in the market, would not cause the price of our securities to decline or impair our ability to raise capital through sales of our common shares.

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 before acquiring the power to directly or indirectly control our management, operations, or policy or before acquiring 10% or more of our common shares. Because the Series A Preferred Shares and depositary shares are convertible into our common shares, potential investors who seek to participate in this offering should evaluate whether they could become subject to the approval and other requirements of this federal statute and related rules and regulations.

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. Ohio law and our Articles and Amended and Restated Regulations, as amended (“Regulations”), 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. See “Description of Common Shares — Anti-Takeover Effects of our Articles and Regulations and Ohio Law” beginning on page 67 of this prospectus.

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DESCRIPTION OF THE OFFERING

Offering Priorities and Purchase Limitations

We are offering up to 1,500,000 depositary shares for sale to the public in the following order of priority: (1) to our existing shareholders; (2) to our customers and members of the local communities we serve; and (3) to the extent that depositary shares remain available for purchase, in a syndicated offering managed by KBW. The minimum number of depositary shares you may purchase in the offering is 100 depositary shares. The maximum number of depositary shares that you may purchase in the offering is the lesser of (i) 250,000 depositary shares or (ii) the number of depositary shares, assuming conversion of such depositary shares into our common shares, whereby your total beneficial ownership of our common shares (including any common shares currently owned) would not exceed 5% of our outstanding common shares after the offering. The filling of subscriptions received in the offering will depend on the availability of depositary shares after satisfaction of all subscriptions in descending order of priority in the offering and to the minimum, maximum and overall purchase limitations. All subscription orders submitted in the offering will be subject to our right, in our sole discretion, to accept or reject any such orders in whole or in part either at the time of receipt of an order or as soon as practicable following the expiration date of the offering.

Priority 1 – Existing Shareholders

If there are not sufficient depositary shares available to satisfy all subscriptions in the shareholder offering, shares will first be allocated so as to permit each shareholder subscriber to purchase a number of depositary shares equal to the lesser of (i) 10,000 depositary shares ($100,000) or (ii) the number of depositary shares for which he or she subscribed. The unallocated depositary shares will then be allocated to each shareholder subscriber whose subscription remains unsatisfied in the proportion in which the aggregate number of shares as to which each such shareholder subscription remains unsatisfied bears to the aggregate number of shares as to which all shareholder subscriptions remain unsatisfied.

Priority 2 – Customers and Residents of Local Community

If there are not sufficient depositary shares available to satisfy all subscriptions in customer and local community offering, shares will first be allocated so as to permit each customer/local community subscriber to purchase a number of depositary shares equal to the lesser of (i) 10,000 depositary shares ($100,000) or (ii) the number of depositary shares for which he or she subscribed. The unallocated depositary shares will then be allocated to each customer/local community subscriber whose subscription remains unsatisfied in the proportion in which the aggregate number of shares as to which each such customer/local community subscription remains unsatisfied bears to the aggregate number of shares as to which all customer/local community subscriptions remain unsatisfied.

Priority 3 – Syndicated Offering

We may offer depositary shares to interested investors without regard to the investor’s status as either an existing shareholder of SB Financial or customer of State Bank, and without regard to the investor’s place of residence, in a syndicated offering in a manner that will achieve a widespread distribution of our depositary shares to the general public. The syndicated offering may begin concurrently with, during or after the commencement or termination of the shareholder and customer/local community offerings, but priority will be given to shareholder and customer/local community subscriptions in filling orders.

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If a syndicated offering is held, KBW will serve as sole placement agent and will assist us in selling our depositary shares on a best efforts basis. In such capacity, KBW may form a syndicate of other broker-dealers who are Financial Industry Regulatory Authority member firms. Neither KBW nor any registered broker-dealer will have any obligation to take or purchase any of the depositary shares sold in the syndicated offering.

If there are not sufficient depositary shares available to satisfy all subscriptions received in the syndicated offering, shares will be allocated to each such subscriber whose subscription remains unsatisfied in the proportion in which the aggregate number of shares as to which each such syndicated offering subscription remains unsatisfied bears to the aggregate number of shares as to which all such syndicated offering subscriptions remain unsatisfied.

Procedure for Purchasing Shares in the Offering

Expiration Date . The offering will expire at 3:00 p.m., Eastern Time, on December 12, 2014, unless we extend it for up to 45 days. This extension may be approved by us, in our sole discretion, without further approval or additional notice to subscribers in the offering. If the offering is extended past January 26, 2015, we will resolicit subscribers. In such event, you will have the opportunity to confirm, change or cancel your order within a specified period of time. If you do not respond during that period, your subscription will be cancelled and the funds that you submitted will be returned promptly without interest. We will not accept any subscription until at least a minimum of 1,000,000 of depositary shares have been sold. If we have not sold the minimum of 1,000,000 depositary shares by the expiration date of the offering, or any extension thereof, we will terminate the offering and cancel all orders, and payment will be returned promptly to the subscribers without interest.

We reserve the right in our sole discretion to terminate the offering at any time and for any reason, in which case we will promptly return all funds submitted without interest. We have the right to reject, in our sole discretion, any subscription submitted in the offering.

Use of Order Forms . To purchase depositary shares in the offering, you must complete and sign an original order form and remit full payment. We will not be required to accept incomplete order forms, unsigned order forms, or orders submitted on photocopied or facsimiled order forms. All order forms must be received (not postmarked) prior to 3:00 p.m., Eastern Time, on December 12, 2014, unless the expiration date of the offering is extended as described above. We are not required to accept order forms that are not received by that deadline, are executed defectively or are received without full payment. We are not required to notify subscribers of incomplete or improperly executed order forms. We have the right to permit the correction of incomplete or improperly executed order forms or waive immaterial irregularities. We do not represent, however, that we will do so. You may submit your order form and payment by mail using the postage paid Order Reply Envelope provided, by overnight delivery to our Offering Information Center at the address indicated at the top of the order form or by hand-delivery to SB Financial’s executive offices located at 401 Clinton Street, Defiance, Ohio. Order forms may not be delivered to any of SB Financial’s or State Bank’s other offices. Please do not mail order forms to SB Financial or any of State Bank’s branches. Once tendered, an order form cannot be modified or revoked without our consent or unless the offering is terminated or is extended beyond January 26, 2015. We reserve the absolute right, in our sole discretion, to reject orders received in the offering, in whole or in part, at the time of receipt or at any time prior to completion of the offering.

By signing the order form, you will be acknowledging that the depositary shares being purchased, and the underlying Series A Preferred Shares, are not a deposit or savings account and are not federally insured or otherwise guaranteed by the Company or the federal government, and that you received a copy of this prospectus prior to making any investment decision. However, signing the order form will not result in you waiving your rights under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Payment for Shares . Payment for all depositary shares will be required to accompany all completed order forms for the subscription to be valid. Payment for depositary shares may be made by personal check, bank check

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or money order, payable to “U.S. Bank/SBFG – Escrow Account”. You may not use cash, wires or a check drawn on a State Bank line of credit, and we will not accept third-party checks ( i.e. , a check written by someone other than you) payable to you and endorsed over to U.S. Bank/SBFG – Escrow Account. Checks and money orders will be immediately cashed and placed in a segregated account at U.S. Bank, which will serve as our escrow agent for the offering. Wire transfers will not be accepted for payment during the shareholder and customer/local community offerings. U.S. Bank is acting only as an escrow agent in connection with the offering of securities described herein, and has not endorsed, recommended or guaranteed the purchase, value or repayment of such securities.

In the syndicated offering, payments must be made in immediately available funds ( i.e. , bank check, money order or wire transfer). Please contact the Offering Information Center for wire instructions. Personal checks will not be accepted.

We have the right, in our sole discretion, to permit institutional investors to submit irrevocable orders together with the legally binding commitment for payment and to thereafter pay for the depositary shares for which they subscribe at any time prior to 48 hours before the completion of the offering. This payment may be made by wire transfer.

Using Retirement Account Funds. If you are interested in using your individual retirement account funds to purchase depositary shares, you must do so through a self-directed individual retirement account such as a brokerage firm individual retirement account. By regulation, State Bank’s individual retirement accounts are not self-directed, so they cannot be invested in depositary shares. If you wish to use your funds that are currently in a State Bank individual retirement account or other retirement account, the funds you wish to use for the purchase of depositary shares will have to be transferred to a brokerage account with a broker who is willing and able to facilitate your purchase in the offering, before you place your order for depositary shares. It may take several weeks to transfer your State Bank individual retirement account to an independent custodian or trustee, so please allow yourself sufficient time to take this action. There will be no early withdrawal or Internal Revenue Service (“IRS”) interest penalties for these transfers. Depositors of State Bank interested in using funds in an individual retirement account or any other retirement account to purchase depositary shares should contact our Offering Information Center as soon as possible, preferably at least two weeks prior to the end of the offering period, because processing such transactions takes additional time, and whether such funds can be used may depend on limitations imposed by the institutions where such funds are currently held. We cannot guarantee that you will be able to use such funds. An annual administrative fee may be payable to the independent custodian or trustee.

How You Can Obtain Additional Information—Offering Information Center

Our banking personnel are prohibited by law from assisting with investment-related questions about the offering. If you have questions regarding the offering, please call our Offering Information Center. The toll-free telephone number is (877) 860-2070. The Offering Information Center is open Monday through Friday, between 10:00 a.m. and 4:00 p.m., Eastern Time. The Offering Information Center will be closed on bank holidays.

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USE OF PROCEEDS

We expect to receive net proceeds from the sale of depositary shares in this offering, after deducting estimated placement agent fees and other offering expenses payable by us, of (i) approximately $14.0 million if we sell the maximum of 1,500,000 depositary shares in this offering and (ii) approximately $9.2 million if we sell the minimum of 1,000,000 depositary shares in this offering.

We intend to use approximately $7.0 million of the net proceeds of the sale of the depositary shares to fund a portion of the cost of redemption of the Company’s junior subordinated debentures underlying the trust preferred securities issued by the Company’s subsidiary, RST I.

RST I was established in August 2000 and, in September 2000, completed a pooled private offering of 10,000 trust preferred securities with a liquidation amount of $1,000 per security. The proceeds of the offering were loaned to the Company in exchange for $10 million in principal amount of 10.60% fixed-rate junior subordinated debentures of the Company. The terms of the junior subordinated debentures are substantially similar to the terms of the trust preferred securities issued by RST I.

On July 3, 2014, the Company informed the trustee of RST I of the Company’s intention to redeem all of the junior subordinated debentures underlying the trust preferred securities prior to their contractual maturity date of September 7, 2030. The Company subsequently redeemed the junior subordinated debentures on September 7, 2014 for an aggregate amount of $11.2 million, which included accrued interest to the redemption date and approximately $425,000 in prepayment penalties. The Company used cash and a term loan from a correspondent bank in the principal amount of $7.0 million to fund the redemption of the junior subordinated debentures. The loan has a term of five years and requires the Company to make quarterly payments of interest and principal based on a 7-year amortization schedule. The loan carries a variable interest rate equal to the 90-day LIBOR index rate plus 2.85%. As of September 18, 2014, the loan’s variable interest rate was 3.08%. The loan may be prepaid, in whole or in part, by the Company at any time without penalty or premium. The Company intends to use approximately $7.0 million of the net proceeds of this offering to prepay this term loan in full upon the completion of this offering.

We expect to use the remainder of the net proceeds from the sale of the depositary shares, if any, for general corporate purposes, which may include (a) capital contributions to our bank subsidiary to increase regulatory capital and/or (b) investments at the holding company level.

Until we utilize the net proceeds of the offering, we expect to invest these funds temporarily in liquid, short-term high quality securities.

The precise amounts and timing of our use of the net proceeds from this offering will depend upon market conditions and the availability of other funds, among other factors.

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CAPITALIZATION

The following table sets forth our consolidated long-term indebtedness and capitalization at June 30, 2014, (i) on an actual basis, and (ii) as adjusted to give effect to the redemption of $10.3 million of our outstanding junior subordinated debentures effective September 7, 2014, and the sale of a maximum offering of 1,500,000 depositary shares at a public offering price of $10.00 per depositary share. For purposes of this table, our estimated net proceeds will be approximately $14.0 million, after deducting estimated placement agent fees and other offering expenses. No other change in our consolidated capitalization since June 30, 2014 is reflected in the table. This table should be read together with our consolidated financial statements and related notes incorporated by reference into this prospectus.


	As of June 30, 2014
	Actual			Adjustments			As Adjusted on a Pro Forma Basis
	(dollars in thousands, unaudited)
Long-term debt
Subordinated debentures	$	20,620		$	(10,310	) ⁽¹⁾	$	10,310
Federal Home Loan Bank advances		37,000			—			37,000

Total long-term debt	$	57,620		$	(10,310	)	$	47,310
Shareholders’ equity
Series A Preferred Shares, no par value, no shares authorized or issued; 15,000 pro forma shares authorized and issued	$	—		$	14,000	⁽²⁾	$	14,000
Common Shares, no par value, 5,027,433 shares issued, 5,027,433 pro forma shares issued		27,972			—
Retained earnings		31,757			—
Treasury shares, at cost—152,302 common shares		(1,627	)		—
Accumulated other comprehensive income		908			—

Total shareholders’ equity	$	59,010		$	14,000		$	73,010
Total long-term debt and shareholders’ equity	$	116,630		$	3,690		$	120,320
Capital Ratios
Tier 1 capital to risk-weighted assets		10.67	%					12.55	%
Total capital to risk-weighted assets		13.05	%					13.80	%
Tier 1 capital to average assets		8.60	%					10.06	%

(1)	Reflects the redemption, effective as of September 7, 2014, of approximately $10.3 million in principal amount of junior subordinated debentures underlying the trust preferred securities.

(2)	Reflects the sale of a maximum offering of 1,500,000 depositary shares representing fractional interests in 15,000 Series A Preferred Shares in the offering, net of estimated placement agent fees and other offering expenses.

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PRICE RANGE OF COMMON SHARES AND DIVIDENDS

Prior to this offering, there has been no established market for the depositary shares. We have applied for the depositary shares to be listed on the NASDAQ Capital Market under the symbol “SBFGP.” If the application for listing is approved, trading of the depositary shares is expected to commence within 30 days following the initial issuance of the depositary shares. However, we cannot assure you that purchasers of the depositary shares will be able to sell them at or above the offering price set forth on the cover page of this prospectus.

Our common shares are listed on the NASDAQ Capital Market under the symbol “SBFG.” At September 15, 2014, we had 4,875,131 common shares outstanding, which were held of record by approximately 1,417 shareholders.

The following table sets forth quarterly market price information and cash dividends paid per share for our common shares for periods indicated. The high and low sales prices of our common shares reflect prices reported on the NASDAQ Global Market (prior to October 29, 2014) and the NASDAQ Capital Market (on and after October 29, 2014) for trades occurring during normal trading hours.


	Market Price Range
	High		Low		Dividends Paid Per Share
2012
First Quarter	$	4.00	$	2.60	$	—
Second Quarter		7.22		3.80		—
Third Quarter		8.02		6.17		—
Fourth Quarter		7.25		6.20		—
2013
First Quarter	$	9.55	$	6.49	$	—
Second Quarter		8.98		7.14		0.055
Third Quarter		8.35		7.51		0.030
Fourth Quarter		8.45		7.45		0.035
2014
First Quarter	$	9.00	$	7.75	$	0.035
Second Quarter		8.75		7.71		0.040
Third Quarter		9.20		8.06		0.040
Fourth Quarter (through November 5, 2014)		9.25		8.50		0.045	⁽¹⁾

⁽¹⁾	On October 27, 2014, the Company announced the declaration of a quarterly cash dividend of $0.045 per common share, payable on November 21, 2014, to shareholders of record as of November 7, 2014.

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BUSINESS

Overview

SB Financial is an Ohio corporation and a bank holding company registered under the Bank Holding Company Act of 1956, as amended. We were incorporated under Ohio law in 1983, and we changed our name from Rurban Financial Corp. to SB Financial Group, Inc. effective April 18, 2013. Our principal executive offices are located at 401 Clinton Street, Defiance, Ohio 43512, and our telephone number is (419) 783-8950. Our website address is www.yoursbfinancial.com . The information on our website is not a part of or incorporated by reference in this prospectus.

Through our wholly-owned subsidiaries, we are engaged in a variety of activities, including commercial banking, item processing, insurance, and wealth management and trust services.

State Bank is our wholly-owned commercial bank subsidiary. State Bank was formed in 1902 as The State Bank of Defiance County and changed its name to The State Bank and Trust Company in 1956. SB Financial and State Bank have completed two acquisitions in the past 10 years. In December 2005, we acquired Exchange Bancshares, Inc. and its subsidiary, The Exchange Bank, with five branch offices and total assets with an approximate fair value of $85.2 million. In December 2008, we acquired NBM Bancorp, Incorporated and its subsidiary, National Bank of Montpelier, with five branch offices and total assets with an approximate fair value of $113.4 million.

State Bank is an Ohio state-chartered bank that offers a full range of commercial banking services, including checking accounts, savings accounts, money market accounts and time certificates of deposit; automatic teller machines; commercial, consumer, agricultural and residential mortgage loans; personal and corporate trust services; commercial leasing; bank credit card services; safe deposit box rentals; Internet and telephone banking; and other personalized banking services. The trust and financial services division of State Bank offers various trust and financial services, including asset management services for individuals and corporate employee benefit plans, as well as brokerage services through Cetera Investment Services, an unaffiliated company.

State Bank presently operates 16 banking centers, all located within the Ohio counties of Allen, Defiance, Fulton, Lucas, Paulding, Wood and Williams, and one banking center located in Allen County, Indiana. State Bank also presently operates three loan production offices, two in Franklin County, Ohio and one in Steuben County, Indiana. At June 30, 2014, State Bank had 193 full-time equivalent employees. At June 30, 2014, State Bank had total net loans of approximately $499.6 million and total deposits of approximately $531.8 million.

RDSI is our wholly-owned item processing subsidiary. RDSI has been in operation since 1964 and became an Ohio corporation in June 1976. RDSI has one operating location in Defiance, Ohio. In September 2006, RDSI acquired Diverse Computer Marketers, Inc. (“DCM”) which was merged into RDSI effective December 31, 2007 and now operates as a division of RDSI doing business as “DCM”. DCM has one operating location in Lansing, Michigan providing item processing and related services to community banks located primarily in the Midwest. At June 30, 2014, RDSI had 8 full-time equivalent employees.

For the year ended December 31, 2013, State Bank and RDSI accounted for substantially all of our consolidated revenue. The Company also owns and operates the following subsidiaries, which are all wholly-owned by the Company or State Bank:

—

RFCBC, Inc. (“RFCBC”) is an Ohio corporation and wholly owned subsidiary of SB Financial that was incorporated in August 2004. RFCBC operates as a loan subsidiary in servicing and working out problem loans.

—

Rurban Mortgage Company (“RMC”) is an Ohio corporation and wholly owned subsidiary of State Bank. RMC is a mortgage company; however, it is presently inactive.

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—

Rurban Investments, Inc. (“RII”) is a Delaware corporation and wholly owned subsidiary of State Bank. RII is an investment company that engages in the purchases and sale of investment securities.

—

SBT Insurance, LLC (“SBI”) is an Ohio corporation and wholly owned subsidiary of State Bank. SBI is an insurance company that engages in the sale of insurance products to retail and commercial customers of State Bank.

Competition

The Company experiences significant competition in attracting depositors and borrowers. Competition in lending activities comes principally from other commercial banks in State Bank’s geographic markets, and to a lesser extent, from savings associations, insurance companies, governmental agencies, credit unions, securities brokerage firms and pension funds. The primary factors in competing for loans are interest rates charged and overall banking services.

State Bank’s competition for deposits comes from other commercial banks, savings associations, money market funds and credit unions as well as from insurance companies and securities brokerage firms. The primary factors in competing for deposits are interest rates paid on deposits, account liquidity and convenience of office location. State Bank operates in the highly competitive trust services field and its competition consists primarily of other bank trust departments.

RDSI operates in the highly competitive check and statement processing service business, which consists primarily of data processing providers and commercial printers. The primary factors in competition are price and printing capability.

Lending Activities

We have developed a regional community bank model and have focused on putting in place high-performing lending personnel throughout our footprint. This model has enabled us to consistently grow our loan portfolio in each of the last five years, from total net loans of $420.8 million at December 31, 2010 to $499.6 million at June 30, 2014. Our total net loans outstanding have increased in each of the last five quarters, and in eight of the last ten quarters, all through organic growth.

Our primary lending focus has been and continues to be commercial real estate, residential real estate and commercial loans. Commercial real estate loans comprised 43% of our total loan portfolio at each of June 30, 2014, December 31, 2013 and December 31, 2012. Residential real estate loans comprised 21% of our total loan portfolio at June 30, 2014 and December 31, 2013, and 19% at December 31, 2012. Commercial loans comprised 18% of our total loan portfolio at each of June 30, 2014, December 31, 2013 and December 31, 2012.

The following table sets forth the amounts of our gross loans outstanding, by loan category, as of June 30, 2014:


Loan Category	Total Gross Loans As of June 30, 2014
	(Dollars in thousands)
Commercial real estate	$	215,824
Residential real estate		105,054
Commercial		92,424
Consumer & Other		49,350
Agriculture		43,475

Total loans	$	506,127

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The risk characteristics of each loan portfolio segment can be summarized as follows:

Commercial and Agricultural . Commercial and agricultural loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets, such as accounts receivable or inventory, and may include a personal guarantee. Short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

Commercial Real Estate including Construction . Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy than residential real estate loans. The characteristics of properties securing the Company’s commercial real estate portfolio are diverse, but with geographic location almost entirely in the Company’s market area. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. In general, the Company avoids financing single purpose projects unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied commercial real estate versus non-owner-occupied loans.

Construction loans are underwritten utilizing feasibility studies, independent appraisal reviews and financial analysis of the developers and property owners. Construction loans are generally based on estimates of costs and value associated with the completed project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing.

Residential and Consumer . Residential and consumer loans consist of two segments – residential mortgage loans and personal loans. Residential mortgage loans are secured by 1-4 family residences and are generally owner-occupied, and the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences, and consumer personal loans are secured by consumer personal assets, such as automobiles or recreational vehicles. Some consumer personal loans are unsecured, such as small installment loans and certain lines of credit. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas, such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that these loans are of smaller individual amounts and spread over a large number of borrowers.

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Allowance for Loan Losses

The following table sets forth our daily average amount of loans and changes in our allowance for loan losses for the periods indicated:


($ in thousands)	Six months ended June 30						Year ended December 31,
	2014			2013			2013			2012			2011			2010			2009
	(unaudited)
Daily average amount of loans net of unearned income	$	488,425		$	462,058		$	469,603		$	455,516		$	438,883		$	445,700		$	453,787
Allowance for loan losses at beginning of period		6,964			6,811			6,811			6,529			6,715			7,030			5,020
Loan charge-offs:
Commercial and agricultural		(607	)		(1	)		(1	)		(400	)		(642	)		(4,739	)		(1,248	)
Commercial real estate		(1	)		(5	)		(111	)		(287	)		(2,057	)		(4,748	)		(918	)
Residential real estate		(15	)		(98	)		(264	)		(129	)		(248	)		(1,210	)		(1,218	)
Consumer and other		(30	)		(245	)		(443	)		(512	)		(460	)		(637	)		(491	)

	$	(653	)	$	(349	)	$	(819	)	$	(1,328	)	$	(3,407	)	$	(11,334	)	$	(3,875	)
Recoveries of loan previously charged-off:
Commercial and agricultural	$	13		$	16		$	22		$	48		$	468		$	193		$	50
Commercial real estate		60			15			17			50			32			171			14
Residential real estate		14			19			21			86			700			53			54
Consumer and other		20			2			12			76			27			14			29

	$	107		$	52		$	72		$	260		$	1,227		$	431		$	147
Net charge-offs	$	(546	)	$	(297	)	$	(747	)	$	(1,068	)	$	(2,180	)	$	(10,903	)	$	(3,728	)
Provision for loan losses	$	150		$	499		$	900		$	1,350		$	1,994		$	10,588		$	5,738
Allowance for loan losses at end of period	$	6,568		$	7,013		$	6,964		$	6,811		$	6,529		$	6,715		$	7,030
Allowance for loan losses as a percent of loans at year-end		1.30	%		1.51	%		1.46	%		1.47	%		1.48	%		1.57	%		1.55	%
Ratio of net charge-offs (annualized) to average loans outstanding		0.22	%		0.13	%		0.16	%		0.23	%		0.50	%		2.45	%		0.82	%

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as new information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience and expected loss given default derived from the Company’s internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected on the historical loss or risk rating data.

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A loan is considered impaired when, based on current information and events, it is probable that State Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration each of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial, agricultural, and construction loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.

When State Bank moves a loan to non-accrual status, total unpaid interest accrued to date is reversed from income. Subsequent payments are applied to the outstanding principal balance with the interest portion of the payment recorded on the balance sheet as a contra-loan. Interest received on impaired loans may be realized once all contractual principal amounts are received or when a borrower establishes a history of six consecutive timely principal and interest payments. It is at the discretion of management to determine when a loan is placed back on accrual status upon receipt of six consecutive timely payments.

Large groups of smaller balance homogenous loans are collectively evaluated for impairment. Accordingly, State Bank does not separately identify individual consumer and residential loans for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower.

Deposit Activities

Our branch network is focused on customer service, generating referral opportunities and most importantly providing the Company with low-cost funding in order to grow our franchise. The checking account is our primary deposit product entry into the household while also providing stable fee income. Noninterest-bearing deposits ( i.e. , checking accounts) as a percentage of total deposits increased from 12% of total deposits at year end 2009 to 17% at June 30, 2014.

The average daily amount of deposits and average rates paid on such deposits is summarized for the periods indicated in the table below.


	2013					2012					2011
	Average		Average			Average		Average			Average		Average
($ in thousands)	Amount		Rate			Amount		Rate			Amount		Rate
Savings and interest-bearing demand deposits	$	262,954		0.05	%	$	245,528		0.09	%	$	234,497		0.16	%
Time deposits		180,154		1.16	%		206,135		1.34	%		217,546		1.66	%
Demand deposits (non-interest-bearing)		78,540		—			70,749		—			64,239		—

	$	521,648				$	522,412				$	516,282

Supervision and Regulation

General

The Company is a bank holding company and, as such, is subject to regulation under the BHCA. The BHCA requires the prior approval of the Federal Reserve before a bank holding company may acquire direct or indirect ownership or control of more than 5% 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 bank holding company, or merge or consolidate with any other bank holding company. Subject to certain exceptions,

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the BHCA also prohibits a bank holding company from acquiring 5% of the voting shares of any company that is not a bank and from engaging in any business other than banking or managing or controlling banks. The primary exception to this prohibition allows a bank holding company to own shares in any company the activities of which the Federal Reserve had determined, as of November 19, 1999, to be so closely related to banking as to be a proper incident thereto.

The Company is subject to the reporting requirements of, and examination and regulation by, the Federal Reserve. The Federal Reserve has extensive enforcement authority over bank holding companies, including, without limitation, the ability to assess civil money penalties, issue cease and desist or removal orders, and require that a bank holding company divest subsidiaries, including its subsidiary banks. In general, the Federal Reserve 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.

Various requirements and restrictions under the laws of the United States and the State of Ohio affect the operations of State Bank, including requirements to maintain reserves against deposits, restrictions on the nature and amount of loans which may be made and the interest that may be charged thereon, restrictions relating to investments and other activities, limitations on credit exposure to correspondent banks, limitations on activities based on capital and surplus, limitations on payment of dividends, and limitations on branching. Various consumer laws and regulations also affect the operations of State Bank.

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, 2013.

FDIC Regulation

The FDIC is an independent federal agency which insures the deposits of federally-insured banks and savings associations up to certain prescribed limits and safeguards the safety and soundness of financial institutions. State Bank’s deposits are subject to the deposit insurance assessments of the FDIC. Under the FDIC’s deposit insurance assessment system, the assessment rate for any insured institution may vary according to regulatory capital levels of the institution and other factors such as supervisory evaluations.

The FDIC is authorized to prohibit any insured institution from engaging in any activity that poses a serious threat to the insurance fund and may initiate enforcement actions against a bank, after first giving the institution’s primary regulatory authority an opportunity to take such action. 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.

Regulatory Capital

The Federal Reserve has adopted risk-based capital guidelines for bank holding companies and for state member banks, such as State Bank. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk weighted assets by assigning assets and off-balance-sheet items to broad risk categories. The minimum ratio of total capital to risk weighted assets (including certain off-balance-sheet items, such as standby letters of credit) is 8%. Of that 8%, at least 4% must be comprised of common shareholders’ equity (including retained earnings but excluding treasury stock), non-cumulative perpetual preferred stock, a limited amount of cumulative perpetual preferred stock, and minority interests in equity accounts of consolidated subsidiaries, less goodwill and certain other intangible assets (“Tier 1 capital”). The remainder of total risk-based capital (“Tier 2 capital”) may consist, among other things, of certain amounts of mandatory convertible debt securities, subordinated debt, preferred stock not qualifying as Tier 1 capital, allowance for loan and lease losses and net unrealized gains, after applicable taxes, on available-for-sale equity securities with readily determinable

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fair values, all subject to limitations established by the guidelines. Under the guidelines, capital is compared to the relative risk related to the balance sheet. To derive the risk included in the balance sheet, one of four risk weights (0%, 20%, 50%, and 100%) is applied to different balance sheet and off-balance sheet assets, primarily based on the relative credit risk of the counterparty. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

In July 2013, the Federal Reserve and the federal banking agencies published final rules that substantially amend the regulatory risk-based capital rules applicable to the Company and State Bank. These rules implement the “Basel III” regulatory capital reforms and changes required by the Dodd-Frank Act. “Basel III” refers to various documents released by the Basel Committee on Banking Supervision.

Effective in 2015, State Bank and the Company will be subject to new capital regulations (with some provisions transitioned into full effectiveness over two to four years). The new requirements create a new required ratio for common equity Tier 1 (“CET1”) capital, increases the leverage and Tier 1 capital ratios, changes the risk-weights of certain assets for purposes of the risk-based capital ratios, creates an additional capital conservation buffer over the required capital ratios and changes what qualifies as capital for purposes of meeting these various capital requirements. Beginning in 2016, failure to maintain the required capital conservation buffer will limit the ability of the Company to pay dividends, repurchase shares or pay discretionary bonuses.

When these new requirements become effective, certain of the minimum capital requirements for State Bank will change. The minimum leverage ratio of 4% of adjusted total assets and total capital ratio of 8% of risk-weighted assets will remain the same; however, the Tier 1 capital ratio will increase from 4.0% to 6.5% of risk-weighted assets. In addition, the Company will have to meet the new minimum CET1 capital ratio of 4.5% of risk-weighted assets. CET1 consists generally of common stock, retained earnings and accumulated other comprehensive income (AOCI), subject to certain adjustments.

Mortgage servicing rights, certain deferred tax assets and investments in unconsolidated subsidiaries over designated percentages of common stock will be deducted from capital, subject to a two-year transition period. In addition, Tier 1 capital will include AOCI, which includes all unrealized gains and losses on available for sale debt and equity securities, subject to a two-year transition period. Because of its asset size, State Bank has the one-time option of deciding in the first quarter of 2015 whether to permanently opt-out of the inclusion of AOCI in its capital calculations. State Bank is considering whether to take advantage of this opt-out to reduce the impact of market volatility on its regulatory capital levels.

The new requirements also include changes in the risk-weights of certain assets to better reflect credit risk and other risk exposures. These include a 150% risk weight (up from 100%) for certain high volatility commercial real estate acquisition, development and construction loans and for non-residential mortgage loans that are 90 days past due or otherwise in nonaccrual status; a 20% (up from 0%) credit conversion factor for the unused portion of a commitment with an original maturity of one year or less; a 250% risk weight (up from 100%) for mortgage servicing and deferred tax assets that are not deducted from capital; and increased risk-weights (0% to 600%) for equity exposures.

In addition to the minimum CET1, Tier 1 and total capital ratios, State Bank will have to maintain a capital conservation buffer consisting of additional CET1 capital equal to 2.5% of risk-weighted assets above each of the required minimum capital levels in order to avoid limitations on paying dividends, engaging in share repurchases and paying certain discretionary bonuses. This new capital conservation buffer requirement is phased in beginning in January, 2016 at 0.625% of risk-weighted assets and increasing each year until fully implemented in January, 2019.

The Federal Reserve’s prompt corrective action standards will change when these new capital ratios become effective. Under the new standards, in order to be considered well-capitalized, State Bank will be required to

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have at least a CET1 ratio of 6.5% (new), a Tier 1 ratio of 8% (increased from 6%), a total capital ratio of 10% (unchanged) and a leverage ratio of 5% (unchanged) and not be subject to specified requirements to meet and maintain a specific capital ratio for a capital measure.

State Bank conducted a proforma analysis of the application of these new capital requirements as of September 30, 2013. Based on that analysis, State Bank determined that it meets all of these new requirements, including the full 2.5% capital conservation buffer, and would remain well capitalized if these new requirements had been in effect on that date.

In addition, as noted above, beginning in 2016, if State Bank does not have the required capital conservation buffer, its ability to pay dividends to the Company would be limited.

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) was enacted into law on July 21, 2010. The Dodd-Frank Act is significantly changing the regulation of financial institutions and the financial services industry. Among the provisions already implemented pursuant to the Dodd-Frank Act, the following provisions have or may have an effect on the business of the Company and its subsidiaries:

—

the CFPB has been formed with broad powers to adopt and enforce consumer protection regulations;

—

the federal law prohibiting the payment of interest on commercial demand deposit accounts was eliminated effective July 21, 2011;

—

the standard maximum amount of deposit insurance per customer was permanently increased to $250,000;

—

the assessment base for determining deposit insurance premiums has been expanded from domestic deposits to average assets minus average tangible equity;

—

public companies in all industries are or will be required to provide shareholders the opportunity to cast a non-binding advisory vote on executive compensation;

—

new capital regulations for bank holding companies have been adopted, which will impose stricter requirements, and any new trust preferred securities issued after May 19, 2010 will no longer constitute Tier I capital; and

—

new corporate governance requirements applicable generally to all public companies in all industries require new compensation practices and disclosure requirements, including requiring companies to “claw back” incentive compensation under certain circumstances, to consider the independence of compensation advisors and to make additional disclosures in proxy statements with respect to compensation matters.

Many provisions of the Dodd-Frank Act have not yet been implemented and will require interpretation and rule making by federal regulators. As a result, the ultimate effect of the Dodd-Frank Act on the Company cannot yet be determined. However, it is likely that the implementation of these provisions will increase compliance costs and fees paid to regulators, along with possibly restricting the operations of the Company and its subsidiaries.

The Volcker Rule

In December 2013, five federal agencies adopted a final regulation implementing the Volcker Rule provision of the Dodd-Frank Act (the “Volcker Rule”). The Volcker Rule places limits on the trading activity of insured depository institutions and entities affiliated with a depository institution, subject to certain exceptions. The trading activity includes a purchase or sale as principal of a security, derivative, commodity future or option on any such instrument in order to benefit from short-term price movements or to realize short-term profits. The

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Volcker Rule exempts specified U.S. Government, agency and/or municipal obligations, and it excepts trading conducted in certain capacities, including as a broker or other agent, through a deferred compensation or pension plan, as a fiduciary on behalf of customers, to satisfy a debt previously contracted, repurchase and securities lending agreements and risk-mitigating hedging activities.

The Volcker Rule also prohibits a banking entity from having an ownership interest in, or certain relationships with, a hedge fund or private equity fund, with a number of exceptions. The Company does not engage in any of the trading activities or have any ownership interest in or relationship with any of the types of funds regulated by the Volcker Rule.

SEC and NASDAQ Regulation

The Company is subject to the jurisdiction of the Securities and Exchange Commission and certain state securities authorities relating to the offering and sale of its securities. The Company is subject to the registration, reporting and other regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules adopted by the SEC under those acts. The Company’s common shares are listed on the NASDAQ Capital Market under the symbol “SBFG”, and the Company is subject to the rules and regulations of the NASDAQ Stock Market, Inc. applicable to listed companies.

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MANAGEMENT

Our Directors

The table below provides certain information concerning each of our current directors, followed by an overview of certain specific skills that qualify each of our current directors to serve as a director. Unless otherwise indicated, each person has held his or her principal occupation for more than five years.


Name	Age	Position(s) Held	Director Since	Term Expires
George W. Carter	55	Director of SB Financial and State Bank	2013	2015
Gary M. Cates	54	Director of SB Financial and State Bank	2013	2015
Robert A. Fawcett, Jr.	73	Director of SB Financial and State Bank	1992	2017
Gaylyn J. Finn	66	Director of SB Financial and State Bank	2010	2017
Richard L. Hardgrove	76	Director and Chairman of the Board of SB Financial, State Bank and RDSI	2004	2016
Rita A. Kissner	69	Director of SB Financial, State Bank and RDSI	2004	2017
Mark A. Klein	60	Director, President and Chief Executive Officer of SB Financial, State Bank and RDSI	2010	2016
William G. Martin	48	Director of SB Financial and State Bank	2014	2016
Timothy J. Stolly	57	Director of SB Financial and State Bank	2010	2015

George W. Carter has over 25 years of experience in the utility industry. He currently serves as Chief Executive Officer of the Paulding Putnam Electric Cooperative, and has held that position since 2005. Mr. Carter is an active member of his community, currently serving on the Northwest Ohio Port Authority; the Buckeye Power Board; the Paulding Kiwanis Club and President of the United Way of Paulding County.

Gary M. Cates has been a senior level healthcare executive with 30 years of experience. He has a strong background in strategic planning, business development and human resource development in multiple industries. He brings a significant background in management, leadership and communication skills as well as experience with hospital acute care and post-acute care operations, marketing and board relationships. He currently serves as Chief Philanthropy Officer of ProMedica, a Toledo, Ohio based not-for-profit healthcare organization. Most recently, he lead two business units within a top nationally-ranked healthcare organization – a $50 million-a-year regional hospital and a $35 million-a-year air and ground medical transportation network. He also has significant board service experience, having served on the board of directors for numerous for-profit and non-profit organizations.

Robert A. Fawcett, Jr. has owned and operated a medium-sized insurance business for over 30 years. He brings entrepreneurial and business leadership to the Board. He also has significant board service experience, having served on the boards of directors of numerous for-profit and non-profit organizations. He served as a director of RFC Banking Company from 2001 to 2004, and as a director of SB Financial and State Bank since 1992.

Gaylyn J. Finn brings to the Board an extensive financial and risk management background. He served as Treasurer and Associate Vice President for Finance for Bowling Green State University until 2008. While serving at Bowling Green State University, Mr. Finn was responsible for receipts, disbursement, financial reporting and investing functions of the university as well as the risk management function. He has been a certified public accountant since 1974 (currently inactive) and previously worked for a large public accounting firm. Mr. Finn also served as a corporate controller for seven years. He has over 32 years of experience as a financial executive in the for-profit and non-profit arenas. Mr. Finn’s experience in finance has qualified him as an “audit committee financial expert” under SEC guidelines.

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Richard L. Hardgrove brings an extensive background in finance and financial institution management. He has over 45 years of banking experience, during which he served as the CEO of three different banks with assets of $500 million to $5 billion, as well as serving 16 years as the CEO of a bank holding company. As CEO of financial institutions, he led these financial institutions through a number of successful mergers. Mr. Hardgrove also formerly served as the Deputy Superintendent of Banks for the State of Ohio. He has served as a bank director for 39 years. Mr. Hardgrove currently serves as Chairman of the Board of each of SB Financial, State Bank and RDSI.

Rita A. Kissner has broad knowledge of finance and leadership in local government. Her diverse professional background includes serving as Mayor of Defiance, a mid-sized Northwest Ohio city, as well as finance director and auditor. She exercised her leadership skills as the Main Street Director of the Defiance Development and Visitors Bureau, and she also serves as a trustee and current Chair of the Board of Defiance College.

Mark A. Klein brings to the Board extensive experience in the financial institution industry. He has served as the President and CEO of State Bank since 2006, and as President and CEO of SB Financial since 2010. Prior to joining the Company and State Bank, Mr. Klein was Senior Vice President Private Banking of Sky Bank, Toledo, Ohio from 2004 to January 2006, and Vice President and Team Leader of Sky Bank, Toledo, Ohio from 2000 to 2004. From 1994 to 1999, Mr. Klein was Executive Vice President and Senior Lender at a $450 million Sky Bank affiliate. Currently, Mr. Klein is a board member of the Defiance City Schools where he has served the past 16 years while providing leadership as past president in 2001, 2006 and 2011. Mr. Klein was recently named Chairman of the ProMedica Defiance Regional Hospital Board and was subsequently appointed to the Toledo ProMedica Board of Trustees. Mr. Klein was also appointed by Governor Kasich in 2013 to serve the banking industry as a member of the State of Ohio Banking Commission. Mr. Klein is active in his community including his involvement in Defiance 2100; a diverse group of community leaders driving economic progress. He is also a past member of the Defiance Area Foundation, Defiance City School Foundation and past member and Chairman of the ProMedica Defiance Regional Hospital Foundation Board.

William G. Martin has extensive background in finance and leadership within his community. He has over 26 years experience in finance. He has been a certified public accountant since 1993 (currently inactive). He started his career at a “Big 8” accounting firm and held the position of Controller at a furniture company. Mr. Martin is currently President and Chief Financial Officer of Spangler Candy Company, a family-owned private candy making company headquartered in Bryan, Ohio where he has been employed for the past 15 years. Mr. Martin is very involved in his community and serves on the State Bank Williams County Advisory Board, is past treasurer of the Bryan Athletic Boosters, and is a member of the Bryan Area Foundation serving on both its Investment and Nominating Committees. He was recently named “2013 Business Person of the Year” by the Bryan Area Chamber of Commerce for his contribution of chairing the recent successful Bryan Schools bond issue. Mr. Martin was appointed as a director of SB Financial and State Bank in February 2014.

Timothy J. Stolly brings to the Board over 30 years of experience in the insurance industry, as well as a strong sales and services background as a true entrepreneur with a strong business acumen. Mr. Stolly is very involved in his community and serves on a variety of different boards of various organizations including the Lima Allen County Chamber of Commerce, Lima Insurance Board, Lima Area JC’s, Allen County Council on Aging, Lima Noon Optimist, St. Rita’s Hospital Development Committee and Motorist Insurance Group Advisory Board. Mr. Stolly is currently a board member of the Professional Insurance Agents Association of Ohio.

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Our Executive Officers

The following table lists the names and ages of the current executive officers of SB Financial, the positions held by each executive officer and the business experience of each executive officer during the past five years. Unless otherwise indicated, each person has held his principal occupation(s) for more than five years. All of the executive officers of SB Financial are elected annually and serve at the pleasure of the Board of Directors of SB Financial.


Name	Age	Position(s) Held with the Company and its Subsidiaries and Principal Occupation(s)
Mark A. Klein	60	President, and Chief Executive Officer of the Company since January 2010; Director of the Company since February 2010; President and Chief Executive Officer of State Bank since January 2006; Director of State Bank since 2006; President of RDSI since October 2011; Member of State Bank Investment Committee since March 2007. Senior Vice President Private Banking of Sky Bank, Toledo, Ohio from 2004 to January 2006; Vice President and Team Leader of Sky Bank, Toledo, Ohio from 2000 to 2004; Executive Vice President and Senior Lender of $450 million Sky Bank affiliate from 1994 to 1999.

Anthony V. Cosentino	53	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 RFS Investment Committee since 2010. Vice President for Financial Planning and Analysis at AmTrust Financial Corporation from June 2006 to December 2009. Chief Financial Officer of Fifth Third Bank of Northeastern Ohio, a subsidiary of Fifth Third Bancorp, from August 1994 to May 2006.

Jonathan R. Gathman	41	Executive Vice President and Senior Lending Officer of the Company since October 2005; Senior Vice President and Commercial Lending Manager from June 2005 through October 2005; Vice President and Commercial Lender from February 2003 through June 2005. Began working for The State Bank and Trust Company in May 1996.

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BENEFICIAL OWNERSHIP OF COMMON SHARES

The following table sets forth information concerning the only persons known to the Company to own beneficially more than 5% of the outstanding common shares of the Company as of October 31, 2014.


Name and Address of Beneficial Owner	Amount Beneficially Owned		Percent of Common Shares Outstanding
The State Bank and Trust Company, Trustee SB Financial Group Employee Stock Ownership Plan (ESOP) (1) 401 Clinton Street Defiance, Ohio 43512		447,322		9.2	%
Phronesis Partners, L.P. (2) James Wiggins 130 East Chestnut Street, Suite 403 Columbus, OH 43215		404,961		8.3	%

(1)

As reported in Schedule 13G/A filed with the SEC on February 10, 2014. All common shares reflected in the table are held by State Bank, as Trustee. Pursuant to the ESOP, the Trustee has the power to vote in its sole discretion all ESOP shares that have not been allocated to the accounts of participants. As of February 10, 2014, a total of 35,605 common shares of the Company had not been allocated to participants in the ESOP. The Trustee is permitted to dispose of shares held in the ESOP only under limited circumstances specified in the ESOP or by law.

(2)	As reported in Schedule 13G/A filed with the SEC on February 14, 2014.

The following table sets forth information regarding the beneficial ownership of the Company’s common shares for each of the current directors of the Company, each of the individuals named in the Summary Compensation Table set forth in the Company’s Definitive Proxy Statement on Schedule 14A filed on March 19, 2014, and all directors and executive officers of the Company as a group both (i) as of October 31, 2014 and (ii) on a pro forma basis upon the completion of this offering (assuming the sale of the maximum of 1,500,000 depositary shares in this offering).


							*Pro Forma*
Name of Beneficial Owner (1)	Amount and Nature of Beneficial Ownership			Percent of Class Before this Offering(2)			Depositary Shares Expected to be Purchased in this Offering(3)		Percent of Class After this Offering(4)
George W. Carter		470			*			2,500		*
Gary M. Cates		5,231	(6)		*			1,000		*
Anthony V. Cosentino (5)		14,053	(7)		*			10,000		*
Robert A. Fawcett, Jr.		20,817	(8)		*			2,500		*
Gaylyn J. Finn		9,338	(9)		*			1,500		*
Jonathan R. Gathman (5)		20,745	(10)		*			5,000		*
Richard L. Hardgrove		13,500	(11)		*			2,500		*
Rita A. Kissner		18,449	(12)		*			1,000		*
Mark A. Klein (5)		53,683	(13)		1.11	%		10,000		1.30	%
William G. Martin		1,432	(14)		*			1,500		*
Timothy J. Stolly		5,513	(15)		*			1,000		*
All executive officers and directors as a group (11 persons)		163,230			3.33	%		38,500		4.08	%

*	Indicates beneficial ownership of less than one percent of the outstanding common shares of the Company.

(1)

Unless otherwise noted, the beneficial owner has sole voting and investment power with respect to all of the common shares reflected in the table. All fractional common shares have been rounded to the nearest whole common share. The mailing address of each of the current executive officers and directors of the Company is 401 Clinton Street, Defiance, Ohio 43512.

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(2)

Percent of Class Before this Offering is computed based on the sum of (a) 4,875,131 common shares outstanding on October 31, 2014, and (b) the number of common shares, if any, as to which the named person or group has the right to acquire beneficial ownership upon the exercise of options which are currently exercisable or will first become exercisable within 60 days after October 31, 2014.

(3)	Represents the number of depositary shares as to which the named person or group has submitted an indication of interest to purchase.

(4)

Computed on a pro forma basis based on the sum of (a) 4,875,131 common shares outstanding on October 31, 2014, (b) the number of common shares, if any, as to which the named person or group has the right to acquire beneficial ownership upon the exercise of options which are currently exercisable or will first become exercisable within 60 days after October 31, 2014, and (c) the number of common shares, if any, as to which the named person or group has the right to acquire beneficial ownership upon the conversion of the depositary shares as to which the named person or group has submitted an indication of interest to purchase.

(5)	Individual named in the Summary Compensation Table. Mr. Klein also serves as a director of the Company.

(6)	Reflects common shares held jointly by Mr. Cates and his wife as to which Mr. Cates and his wife exercise shared voting and investment power.

(7)

Includes 100 common shares held jointly by Mr. Cosentino and his wife as to which Mr. Cosentino and his wife exercise shared voting and investment, 200 common shares held in the names of Mr. Cosentino’s children for which Mr. Cosentino is custodian, and 3,721 common shares held for the account of Mr. Cosentino in the ESOP. Also includes 4,000 common shares as to which Mr. Cosentino has the right to acquire beneficial ownership upon the exercise of options which are currently exercisable or will first become exercisable within 60 days after October 31, 2014.

(8)

Includes 7,723 common shares held by the Robert A. Fawcett Jr. Trust, as to which Mr. Fawcett exercises sole voting and investment power and 5,448 common shares held by the Brenda C. Fawcett Trust, as to which Mr. Fawcett’s wife exercises sole voting and investment power. Also includes 7,646 common shares as to which Mr. Fawcett has the right to acquire beneficial ownership upon the exercise of options which are currently exercisable or will first become exercisable within 60 days after October 31, 2014.

(9)	Reflects common shares held jointly by Mr. Finn and his wife as to which Mr. Finn and his wife exercise shared voting and investment power.

(10)

Includes 4,015 common shares held jointly by Mr. Gathman and his wife as to which Mr. Gathman and his wife exercise shared voting and investment power and 7,783 common shares held for the account of Mr. Gathman in the ESOP. Also includes 5,000 common shares as to which Mr. Gathman has the right to acquire beneficial ownership upon the exercise of options which are currently exercisable or will first become exercisable within 60 days after October 31, 2014.

(11)	Includes 6,000 common shares as to which Mr. Hardgrove has the right to acquire beneficial ownership upon the exercise of options which are currently exercisable or will first become exercisable within 60 days after October 31, 2014.

(12)	Includes 8,000 common shares as to which Ms. Kissner has the right to acquire beneficial ownership upon the exercise of options which are currently exercisable or will first become exercisable within 60 days after October 31, 2014.

(13)

Includes 9,071 common shares held for the account of Mr. Klein in the ESOP. Also includes 27,000 common shares as to which Mr. Klein has the right to acquire beneficial ownership upon the exercise of options which are currently exercisable or will first become exercisable within 60 days after October 31, 2014.

(14)	Reflects common shares held jointly by Mr. Martin and his wife as to which Mr. Martin and his wife exercise shared voting and investment power.

(15)	Includes 500 common shares as to which Mr. Stolly has the right to acquire beneficial ownership upon the exercise of options which are currently exercisable or will first become exercisable within 60 days after October 31, 2014.

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DESCRIPTION OF THE SERIES A PREFERRED SHARES

This section summarizes specific terms and provisions of the Series A Preferred Shares. The description of the Series A Preferred Shares contained in this section does not purport to be complete and is qualified in its entirety by the actual terms of the Series A Preferred Shares, as are stated in the “Certificate of Amendment to Articles” filed with the Ohio Secretary of State on November 6, 2014 to establish the express terms of the Series A Preferred Shares, the form of which is attached as Exhibit 3.7 to the Registration Statement of which this prospectus constitutes a part and incorporated by reference into this prospectus. See “Where You Can Find More Information” and “Incorporation of Certain Information by Reference” in this prospectus.

General

The Series A Preferred Shares are a single series of our authorized preferred shares. We are offering up to 1,500,000 depositary shares, representing 15,000 Series A Preferred Shares in the aggregate by this prospectus. Series A Preferred Shares, upon issuance against full payment of the purchase price for the depositary shares, will be fully paid and nonassessable. The depositary will be the sole holder of the Series A Preferred Shares. The holders of depositary shares will be required to exercise their proportional rights in the Series A Preferred Shares through the depositary, as described below under “Description of the Depositary Shares.”

The Series A Preferred Shares have no stated maturity and will not be subject to any sinking fund or other obligation of SB Financial to repurchase the Series A Preferred Shares. The Series A Preferred Shares will not be insured or guaranteed by the FDIC or any other government agency or instrumentality.

We reserve the right to reopen this series and issue additional Series A Preferred Shares either through public or private sales at any time and from time to time. The additional shares would form a single series with the Series A Preferred Shares offered by this prospectus.

Ranking

The Series A Preferred Shares will rank:

—

senior to our junior shares;

—

equally with each other class or series of parity shares; and

—

junior to any class or series of stock we may issue in the future that ranks senior to the Series A Preferred Shares in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding up of SB Financial, and to all of our existing and future debt obligations.

As used in this prospectus, “junior shares” means our common shares and any other class or series of shares of SB Financial hereafter authorized over which the Series A Preferred Shares have preference or priority in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding up of SB Financial.

As used in this prospectus, “parity shares” means any other class or series of shares of SB Financial that ranks on parity with the Series A Preferred Shares in the payment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of SB Financial.

All shares authorized by the Company in the future will be junior shares unless their express terms provide that they are parity shares or senior shares. The authorization and issuance of senior shares and certain parity shares will require the prior approval of the holders of the Series A Preferred Shares, as described herein under “Description of the Series A Preferred Shares — Voting Rights” beginning on page 60.

Dividend Rights

General. Subject to the rights of any holders of senior shares and parity shares, the holders of Series A Preferred Shares will be entitled to receive, when, as, and if declared by our board of directors, out of our assets

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legally available for payment, noncumulative cash dividends, payable quarterly, at the rate of 6.50% per annum of the $1,000 liquidation preference. This is equivalent to $65.00 per Series A Preferred Share per annum.

Dividends on the Series A Preferred Shares will be payable quarterly on the dividend payment dates which are March 15, June 15, September 15 and December 15 of each year, or if such day is not a business day, the next succeeding business day, commencing March 15, 2015. No additional dividend or interest will be paid if the regular payment date is not a business date. Dividends will be payable from the most recent dividend payment date or, in the case of the dividend payable on December 15, 2014, from the issue date of the Series A Preferred Shares. Dividends payable for any period less than a full quarterly dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends payable for each full dividend period will be computed by dividing the annual dividend rate by four. Dividends for the first dividend period ending March 15, 2015, if any, will be for less than a full quarter if the offering closes after December 15, 2014, and will be for greater than a full quarter if the offering closes before December 15, 2014.

Each declared dividend will be payable to holders of record of Series A Preferred Shares at the close of business on the 15 ^th day prior to the relevant dividend payment date. Regular quarterly dividend periods will commence on and include March 15, June 15, September 15 and December 15 of each year and will end on and include the date preceding the next dividend payment date.

Dividends on the Series A Preferred Shares are noncumulative. As a result, if our board of directors fails to declare a dividend for a dividend period, then the holders of the Series A Preferred Shares will have no right to receive a dividend related to that dividend period, and we will have no obligation to pay a dividend for the related dividend period or to pay any interest, whether or not dividends are declared for any future dividend period.

No dividends will be declared or paid or set apart for payment on any junior shares during any calendar quarter unless full dividends on the Series A Preferred Shares for such dividend period have been declared and we have not failed to pay a dividend in the full amount of the Series A Preferred Shares as declared with respect to the period in which such dividend payment to any junior shares would occur. When cash dividends are not paid in full upon the Series A Preferred Shares and other parity shares, if any, dividends upon Series A Preferred Shares and dividends on other parity shares, if any, payable during the dividend period will be declared pro rata so that the amount of dividends payable per share on the Series A Preferred Shares and any other parity shares will in all cases bear to each other the same ratio that full dividends for the then-current dividend period on the Series A Preferred Shares, including any accumulation related to declared and unpaid dividends for prior periods, and full dividends on shares of the other parity shares, including any accumulation related to declared and unpaid dividends for prior periods, bear to each other.

Unless full dividends on the Series A Preferred Shares have been declared and paid (or declared and a sum sufficient for the payment thereof has been set aside) for any dividend period, then during the dividend period the following restrictions will apply:

—

no dividend or distribution, other than in junior shares, may be declared, set aside or paid on any junior shares;

—

we may not repurchase, redeem or otherwise acquire any of our junior shares, and no monies may be paid to or made available for a sinking fund for the redemption of any of any junior shares, (other than (a) as a result of a reclassification of junior shares for or into other junior shares, (b) the exchange or conversion of one junior share for or into another junior share, (c) through the use of the proceeds of a substantially contemporaneous sale of other junior shares, (d) purchases, redemptions or other acquisitions of junior shares in connection with any employment contract, benefit plan or other similar arrangement or (e) the purchase of fractional interests in junior shares pursuant to the conversion or exchange provisions of such shares or the security being converted or exchanged); and

—

we may not repurchase, redeem or otherwise acquire any parity shares (except by conversion into or exchange of junior shares) other than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series A Preferred Shares and such parity shares.

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There can be no assurances that any dividends on the Series A Preferred Shares will be declared or, if declared, what the amounts of dividends will be or whether these dividends, if declared for any dividend period, will continue for any future dividend period. The declaration and payment of future dividends on the Series A Preferred Shares will be subject to, among other things, business conditions, regulatory considerations, our earnings and financial condition and the judgment of our board of directors.

We may not declare, pay or set aside for payment any dividends on the Series A Preferred Shares if such dividends would cause the Company to fail to comply with applicable laws and regulations, including applicable bank regulatory capital adequacy guidelines. Our ability to pay dividends is primarily dependent upon receiving cash in the form of dividends from State Bank. However, certain restrictions exist regarding the ability of State Bank to pay cash dividends. See “Business — Supervision and Regulation” beginning on page 42 of this prospectus.

Liquidation Preference

The amount which the holders of outstanding Series A Preferred Shares will be entitled to receive in the event of our liquidation, dissolution or winding up, whether voluntary or not, after payment or provision for payment of our debts and other liabilities, out of our assets available for distribution to shareholders, before any distribution of assets is made to the holders of our common shares or any junior shares as to distributions, will initially be $1,000 per share, plus any declared but unpaid dividends (subject to the prior approval of the Federal Reserve, if required), but without accumulation of any undeclared dividends, without interest to the date fixed for such liquidation, dissolution or winding up. The amount that holders of Series A Preferred Shares will be entitled to receive in the event of our liquidation, dissolution or winding up is subject to adjustment whenever there is a share split, combination, reclassification or other similar event involving the Series A Preferred Shares, as determined by the board of directors.

If, upon any voluntary or involuntary liquidation, dissolution or winding up, the amounts payable related to the Series A Preferred Shares and any parity shares shall be insufficient to pay in full the amount to which such holders are entitled, the holders of the Series A Preferred Shares and parity shares will share ratably in any distribution of assets in proportion to the full respective distributable amounts to which they are entitled. After payment of the full amount of the liquidating distribution to which they are entitled, the holders of the Series A Preferred Shares will not be entitled to any further participation in any distribution of our assets. All distributions made with respect to the Series A Preferred Shares in connection with any liquidation, dissolution or winding up will be made pro rata to the holders of Series A Preferred Shares.

Neither the sale, lease, exchange or conveyance for cash, shares of stock, other securities or other consideration of all or substantially all the assets or business of SB Financial (other than in connection with the voluntary or involuntary liquidation, winding-up or dissolution of SB Financial) nor the merger, consolidation or share exchange of SB Financial into or with any other person shall be deemed to be a liquidation, winding-up or dissolution, voluntary or involuntary, of SB Financial.

Conversion Rights

General. Each share of Series A Preferred Shares will be convertible at the option of the holder into the number of our common shares equal to the quotient achieved when $1,000 is divided by the conversion price as then in effect, see ‘‘— Adjustments to the Conversion Price” beginning on page 57 of this prospectus. The initial conversion price of $10.34 is equivalent to a 17.5% premium over $8.80 per share, the last reported sale price of our common shares on the NASDAQ Capital Market on November 5, 2014. Except as otherwise provided, (i) our Series A Preferred Shares will only be convertible into our common shares and (ii) each holder of Series A Preferred Shares will only be entitled to convert such shares to the extent that the conversion would not result in such holder and its affiliates, collectively, being deemed to own, control or have the power to vote 10% or more of any class of our then-outstanding voting securities for purposes of the BHCA, or the Change in Bank Control Act of 1978, as amended (“CIBC Act”), and any rules and regulations promulgated thereunder.

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In case any Series A Preferred Shares are to be converted at our option, the right of a holder of Series A Preferred Shares to voluntarily convert those Series A Preferred Shares will terminate if we have not received such holder’s conversion notice by 5:00 p.m., New York City time, on the trading day immediately preceding the applicable conversion date in the event we exercise our conversion option.

Conversion Procedures. The conversion right of a holder of Series A Preferred Shares shall be exercised by (i) the delivery to the transfer agent of a written notice (in the form provided by the transfer agent) that the holder elects to convert the number of shares of the Series A Preferred Shares specified in such notice, or the conversion notice, and (ii) if required, the payment by the holder of all transfer and similar taxes. If the Series A Preferred Shares that the holder wishes to convert are represented by one or more physical certificates, the holder will be required to surrender such physical certificate or certificates to us or the transfer agent (properly endorsed or assigned for transfer, if so required by us or the transfer agent).

Immediately prior to the close of business on the date of conversion, each converting holder shall be deemed to be the holder of record of common shares issuable upon conversion of such holder’s Series A Preferred Shares notwithstanding that our share register shall then be closed or that, if applicable, physical certificates representing such common shares shall not then be actually delivered to such holder. On the date of any conversion, all rights of any holder with respect to the Series A Preferred Shares, so converted, including the rights, if any, to receive distributions of our assets (including the liquidation preference) or notices from us, will terminate, except for the rights of any such holder to (i) receive physical certificates (if applicable) for the number of whole common shares into which such Series A Preferred Shares have been converted and cash in lieu of any fractional share, and (ii) exercise the rights to which he, she or it is entitled as a holder of common shares into which such Series A Preferred Shares have been converted.

The transfer agent will, on behalf of the converting holder, convert the holder’s Series A Preferred Shares into common shares, in accordance with the terms of the notice delivered by such holder. The common shares and cash in lieu of any fractional share due to a converting holder will be delivered to the holder and each surrendered physical certificate, if any, will be canceled and retired. If a holder surrenders more than one Series A Preferred Share for conversion at the same time, the number of whole common shares issuable to that holder on conversion of those Series A Preferred Shares will be computed on the basis of the total number of Series A Preferred Shares surrendered by the holder. While the Series A Preferred Shares are held by the depositary, the determination of whether any conversion of shares would result in a fraction of a common share will be made on the basis of the manner in which the common shares will be distributed to the holders of depositary shares.

Before the delivery of any securities upon conversion of the Series A Preferred Shares, we will comply with all applicable federal and state laws and regulations. All common shares delivered upon conversion of the Series A Preferred Shares will, upon delivery, be duly authorized, validly issued, fully paid and non-assessable, free of all liens and charges and not subject to any preemptive rights.

Holders of Series A Preferred Shares are not eligible to exercise any rights of a common shareholder until they have converted their Series A Preferred Shares into common shares.

Dividends. If the conversion date occurs on or before the close of business on a dividend record date, the holder of Series A Preferred Shares will not be entitled to receive any portion of the dividend payable, if any, on such converted Series A Preferred Shares on the corresponding dividend payment date.

If the conversion date occurs after the dividend record date but prior to the corresponding dividend payment date, the holder of record of the Series A Preferred Shares on the dividend record date will receive on that dividend payment date dividends declared and paid on those shares, notwithstanding the conversion of those shares prior to that dividend payment date, because such holder will have been the shareholder of record on the corresponding dividend record date. At the time that such holder surrenders the shares for conversion, however, it must pay to us an amount equal to the dividend that has been declared and that has been paid, or will be paid, on the related dividend payment date.

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If the holder of Series A Preferred Shares is a holder of record on a dividend record date who converts such Series A Preferred Shares into common shares on or after the corresponding dividend payment date, such holder will be entitled to receive the dividend payable on such shares on such dividend payment date, and such holder will not need to include payment of the amount of such dividend upon surrender for conversion of such shares.

Fractional Shares. No fractional common shares or securities representing fractional common shares will be issued upon any conversion of any shares of the Series A Preferred Shares. If the conversion of any share or shares results in a fraction of a common share, an amount equal to such fraction multiplied by the market value (described below) of our common shares, will be paid to such holder in cash by us. While the Series A Preferred Shares are held by the depositary, the determination of whether any conversion of shares would result in a fraction of a common share will be made on the basis of the manner in which the common shares will be distributed to the holders of depositary shares.

The market value of our common shares will be the average closing price of our common shares for a 30 consecutive trading day period prior to the date of measurement on the NASDAQ Capital Market or such other national securities exchange or automated quotation system on which the common shares are then listed or authorized for quotation or, if the common shares are not so listed or authorized for quotation, an amount determined in good faith by our board of directors to be the fair value of the common shares.

Mandatory Conversion at Our Option

General. On or after the fifth anniversary of the issue date we may, at our option, require all holders of Series A Preferred Shares to convert all of their shares into our common shares.

We may exercise our conversion option only if: (i) the closing sale price of our common shares equals or exceeds 120% of the then-prevailing conversion price for at least 20 trading days in a period of 30 consecutive trading days (including the last trading day of such period) ending on the fifth trading day immediately prior to our issuance of a press release announcing the exercise of our conversion option; and (ii) we have declared and paid full dividends for four consecutive quarters on the Series A Preferred Shares prior to the issuance of the press release.

If converted pursuant to our conversion option, the Series A Preferred Shares will be converted into the number of common shares equal to the quotient achieved when the liquidation preference (initially $1,000) is divided by the conversion price then in effect (initially $10.34).

Conversion Procedures. To exercise our conversion option, we will furnish written notification by issuing a press release for publication on a news wire service and by first-class mail to the holders of the Series A Preferred Shares providing the relevant information to the public prior to the opening of business on the fifth trading day following any date on which the conditions for our conversion option are met, announcing our intent to exercise the conversion option.

In addition to any information required by applicable law or regulation, the press release and notice of the exercise of our conversion option will state, as appropriate:

—

the conversion option date (which will be the day we issue the press release);

—

the number of our common shares to be issued upon conversion of each Series A Preferred Share; and

—

that dividends on the Series A Preferred Shares to be converted will cease to accrue on the conversion option date.

Upon the exercise of our conversion option and the surrender of shares by a holder, we will issue and deliver or cause to be issued and delivered to such holder, or to such other person on such holder’s written order (i) certificates representing the number of validly issued, fully paid and non-assessable whole common shares to

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which a holder of Series A Preferred Shares being converted, or a holder’s transferee, shall be entitled, and (ii) cash in lieu of any fractional interest in respect of a common share arising upon such conversion.

Each conversion shall be deemed to have been made at the close of business on the conversion option date so that the rights of the holder shall cease except for the right to receive the fully paid and non-assessable common shares and cash in lieu of fractional shares and the person entitled to receive common shares shall be treated for all purposes as having become the record holder of those common shares at that time.

Dividends. If we exercise our conversion option and the conversion option date is a date that is prior to the close of business on any record date for a dividend, the holder shall not be entitled to receive any portion of the dividend payable for such dividend period on such converted shares on the corresponding dividend payment date.

If we exercise our conversion option and the conversion option date is a date that is on, or after the close of business on, any dividend record date and prior to the close of business on the corresponding dividend payment date, all dividends for that dividend period with respect to the Series A Preferred Shares called for conversion on such date, which are declared and paid shall be payable on such dividend payment date to the record holder of such shares on such record date.

Fractional Shares. No fractional common shares or securities representing fractional common shares will be issued upon any conversion of any Series A Preferred Shares. If the conversion of any Series A Preferred Shares results in a fraction of a common share, an amount equal to such fraction multiplied by the market value, shall be paid to such holder in cash by us.

Adjustments to the Conversion Price

The conversion price will be subject to adjustment if, after the issue date, any of the following events occur:

—

we issue any of our common shares as a dividend or distribution on our common shares, subject to certain exceptions;

—

we subdivide, split or combine our common shares;

—

we issue to all holders of our common shares rights or warrants entitling them, for a period of up to 45 days from the date of issuance of such rights or warrants, to subscribe for or purchase our common shares at less than the then-current market value, subject to certain exceptions;

—

we make a distribution to all holders of our common shares of evidences of our indebtedness, cash or other assets, including securities, subject to certain exceptions;

—

we make a distribution to all holders of our common shares consisting only of cash, subject to certain exceptions including regular cash dividends on our common shares to the extent that the aggregate cash dividends per common share does not exceed $0.05 in any fiscal quarter; or

—

we complete a tender or exchange offer for our common shares where the cash and the value of any other consideration included in the payment per common share exceeds the closing sales price per common share on the trading day immediately succeeding the expiration of the tender or exchange offer.

No adjustment will be made, however, to the extent that the adjustment would cause or result in any holder of Series A Preferred Shares and its affiliates, collectively, being deemed to own, control or have the power to vote 10% or more of any class of our then-outstanding voting securities for purposes of the BHCA or the CIBC Act and any rules and regulations promulgated thereunder.

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Dividends and Distributions of Common Shares . In the case of any dividends or distributions of our common shares as described above in the first bullet point, the conversion price will be adjusted by multiplying the conversion price in effect at 5:00 p.m., New York City time, on the trading day immediately prior to the first date on which our common shares trade without the right to receive the issuance, dividend or distribution, or the ex-date, by the following fraction:


		OS ₀
		OS ₁

Where,



OS ₀	=	the number of our common shares outstanding immediately prior to the ex-date for such dividend or distribution.

OS ₁	=	the sum of the number of our common shares outstanding immediately prior to the ex-date for such dividend or distribution plus the total number of our common shares constituting such dividend or distribution.

This adjustment will become effective at 9:00 a.m., New York City time, on the record date for the determination of holders of common shares entitled to receive such dividend or distribution; provided, however, that if such dividend or distribution is declared but not paid or made, the conversion price will be readjusted as if such dividend or distribution had not occurred.

Subdivisions, Splits and Combination of Common Shares . In the case of any subdivision, split or combination of our common shares as described above in the second bullet point, the conversion price will be adjusted by multiplying the conversion price in effect at 5:00 p.m., New York City time, on the trading day immediately prior to the effective date of such subdivision, split or combination, by the following fraction:


		OS ₀
		OS ₁

Where,



OS ₀	=	the number of our common shares outstanding immediately prior to the effective date of such subdivision, split or combination.

OS ₁	=	the number of our common shares outstanding immediately after the opening of business on the effective date of such subdivision, split or combination.

This adjustment will become effective at 9:00 a.m., New York City time, on the effective date of such subdivision, split or combination; provided, however, that if our outstanding common shares are not subdivided, split or combined, the conversion price will be readjusted as if such subdivision, split or combination had not been announced.

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Issuance of Stock Purchase Rights . In the case of the issuance of any rights or warrants as described above in the third bullet point, the conversion price will be adjusted by multiplying the conversion price in effect at 5:00 p.m., New York City time, on the trading day immediately prior to the first date on which our common shares trade without the right to receive the issuance, or the ex-date, by the following fraction:


		OS ₀ + Y
		OS ₀ + X

Where,



OS ₀	=	the number of our common shares outstanding immediately prior to the ex-date for such distribution.

X	=	the total number of our common shares issuable pursuant to such rights or warrants.

Y	=	the number of our common shares equal to the aggregate price payable to exercise such rights or warrants divided by the market value as of the date immediately prior to the ex-date for such distribution.

This adjustment will become effective immediately prior to 9:00 a.m., New York City time, on the ex-date for such issuance; provided, however, that if (i) such rights or warrants described above are not so issued, the conversion price will be readjusted as if such issuance had not been declared and (ii) such rights or warrants are not exercised prior to their expiration or our common shares are not otherwise delivered pursuant to such rights or warrants upon the exercise of such rights or warrants, the conversion price will be readjusted to such conversion price that would have been in effect had the adjustment been made based on the number of common shares actually delivered.

Debt or Asset Distributions . In the case of any debt or asset distribution as described above in the fourth bullet point, the conversion price will be adjusted by multiplying the conversion price in effect at 5:00 p.m., New York City time, on the trading day immediately prior to the first date on which our common shares trade without the right to receive the distribution, or the ex-date, by the following fraction:


		SP ₀ - FMV
		SP ₀

Where,



SP ₀	=	the market value per common share on such date.

FMV	=	the fair market value of the portion of the distribution applicable to one common share on such date as reasonably determined by our board of directors.

This adjustment will become effective immediately prior to 9:00 a.m., New York City time, on the ex-date for such distribution; provided, however, that if such distribution is not paid or made, the conversion price will be readjusted as if such distribution had not been declared.

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Cash Distributions . In the case of any cash distribution described above in the fifth bullet point, the conversion price will be adjusted by multiplying the conversion price in effect at 5:00 p.m., New York City time, on the trading day immediately prior to the first date on which our common shares trade without the right to receive the distribution, or the ex-date, by the following fraction:


		SP ₀ - DIV
		SP ₀

Where,


SP ₀	=	the closing sales price per common share on the trading day immediately preceding the ex-date.

DIV	=	the amount per common share of the distribution (or, in the case of a regular cash dividend, the amount of the aggregate cash dividend in any quarter which is in excess of $0.05 per common share)

This adjustment will become effective immediately prior to 9:00 a.m., New York City time, on the ex-date for such distribution; provided, however, that if such distribution is not made, the conversion price will be readjusted as if such distribution had not been declared.

Tender Offers and Exchange Offers . In the case of any tender offers or exchange offers as described above in the sixth bullet point, the conversion price will be adjusted by multiplying the conversion price in effect at 5:00 p.m., New York City time, on the expiration date of the offer, by the following fraction:


		OS ₀ * SP ₀
		AC + (SP ₀ * OS ₁ )

Where,



SP ₀	=	the closing sales price per common share on the trading day immediately succeeding the expiration of the tender or exchange offer.

OS ₀	=	the number of our common shares outstanding immediately prior to the expiration of the tender or exchange offer, including any shares validly tendered and not withdrawn.

OS ₁	=	the number of our common shares outstanding immediately after the expiration of the tender or exchange offer.

AC	=	the aggregate cash and fair market value of the other consideration payable in the tender or exchange offer, as reasonably determined by our board of directors.

This adjustment will become effective immediately prior to 9:00 a.m., New York City time, on the trading day immediately following the expiration of the tender or exchange offer; provided, however, that if we are prevented by applicable law from effecting any purchases of our common shares pursuant to a tender offer or exchange offer, or all such purchases are rescinded, the conversion price will be readjusted as if such tender offer or exchange offer had not been made.

No adjustment in the conversion price will be required if such adjustment would be less than $0.01. Any adjustment not made due to this limitation must be carried forward, however, and taken into account in any subsequent adjustment determination.

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The market value of our common shares on a particular day will be the average closing price of our common shares for a 30 consecutive trading day period prior to the date of measurement on the NASDAQ Capital Market or such other national securities exchange or automated quotation system on which our common shares are then listed or authorized for quotation or, if our common shares are not so listed or authorized for quotation, an amount determined in good faith by our board of directors to be the fair value of our common shares.

In the event of a consolidation or merger or similar transaction in which our outstanding common shares are exchanged for, or changed, reclassified or converted into, other stock or securities, or cash or other property, or any combination of stock, cash or property, the outstanding Series A Preferred Shares will, after the transaction, be convertible at each holder’s option or upon the exercise of our conversion option, subject to certain exceptions, on the same terms and conditions into the consideration receivable by a holder of the number of common shares into which Series A Preferred Shares could have been converted immediately prior to the transaction.

The Series A Preferred Shares do not have rights protecting its holders against dilution resulting from the sale of additional common shares by us.

Voting Rights

The holders of our Series A Preferred Shares have no voting rights except as required by Ohio law and as set forth in the Certificate of Amendment. In any matter in which the Series A Preferred Shares may vote, each Series A Preferred Share will represent one vote.

The affirmative vote or consent of at least two-thirds (2/3) of the votes entitled to be cast by the holders of the outstanding Series A Preferred Shares, voting separately as a class, in addition to any other vote required by our certificate, the Certificate of Amendment or Ohio law, will be required to:

—

amend, alter or repeal any provision of our Articles or the Certificate of Amendment, if the amendment, alteration or repeal would materially and adversely affect the rights, preferences, powers or privileges of the Series A Preferred Shares;

—

create, authorize, issue or increase the authorized or issued amount of any class or series of any of our equity securities, or any warrants, options or other rights convertible or exchangeable into any class or series of any of our equity securities, which would constitute senior shares or parity shares (other than parity shares with noncumulative dividend rights) or reclassify any of our authorized shares into any such shares, or create, authorize or issue any obligation or security convertible into, exchangeable or exercisable for, or evidencing the right to purchase any such shares; or

—

enter into or consummate any (i) reclassification of our outstanding common shares (other than a change in par value, or from no par value to par value, or from par value to no par value), (ii) consolidation, merger or share exchange with or into another entity or any merger, consolidation or share exchange of another entity with or into us (other than a consolidation, merger or share exchange in which we are the resulting or surviving entity and which does not result in any reclassification of our outstanding common shares), or (iii) sale, lease or other disposition to another person or entity of all or substantially all of our assets; provided, however, that the holders of Series A Preferred Shares will have no right to vote regarding our entry into or consummation of such an event if, upon the consummation of the event, (A) the Series A Preferred Shares remain outstanding or, in the case of any such merger or consolidation with respect to which we are not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and (B) such Series A Preferred Shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the Series A Preferred Shares, taken as a whole.

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Except as otherwise required by law, we may, without the consent of any holder of Series A Preferred Shares, (y) increase the authorized number of Series A Preferred Shares or issue additional Series A Preferred Shares; or (z) authorize, increase the authorized amount of, or issue shares of parity shares (provided that dividend rights are noncumulative) and junior shares, provided that such parity or junior shares does not rank senior to the Series A Preferred Shares as to dividend rights, upon liquidation, winding-up or dissolution.

Redemption

The Series A Preferred Shares may not be redeemed at the option of the Company.

Preemptive Rights

No holder of any Series A Preferred Shares will have any preemptive right to subscribe to the Company’s capital stock, obligations, warrants or other securities of any class, whether now or authorized in the future.

No Other Rights

Neither our common shares nor our preferred shares, including the Series A Preferred Shares, will have any preferences, voting powers or relative, participating, option or other special rights, except as set forth in our Articles (including any applicable certificate of amendment to our Articles) or as otherwise required by law.

Transfer Agent

The transfer agent for the Series A Preferred Shares will be Computershare.

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DESCRIPTION OF THE DEPOSITARY SHARES

This section summarizes specific terms of the depositary shares. The description of the depositary shares contained in this section is not complete and is qualified in its entirety by reference to the provisions of the deposit agreement and the form of depositary receipt, which are filed as exhibits to, and incorporated by reference in, the Registration Statement of which this prospectus constitutes a part. See “Where You Can Find More Information” and “Incorporation of Certain Information by Reference” in this prospectus.

General

We are issuing depositary shares representing proportional fractional interests in the Series A Preferred Shares. Each depositary share represents a 1/100th fractional interest in a Series A Preferred Share and will be evidenced by depositary receipts, as described below under “— Book-Entry Issuance.” The Series A Preferred Shares underlying the depositary shares will be deposited with Computershare, as depositary, under a deposit agreement among us, the depositary and the holders from time to time of the depositary receipts evidencing the depositary shares. Subject to the terms of the deposit agreement, each holder of a depositary share will be entitled, through the depositary, in proportion to the applicable fraction of a Series A Preferred Share represented by such depositary share, to all of the rights, preferences and privileges of the Series A Preferred Shares represented thereby (including dividend, voting, conversion and liquidation rights).

In this prospectus, references to “holders” of depositary shares mean those who have depositary shares registered in their own names on the books that we or the depositary maintain for this purpose. You should review the special considerations that apply to indirect holders described below under “— Book-Entry Issuance.”

Immediately following our issuance of the Series A Preferred Shares, we will deposit the Series A Preferred Shares with the depositary. Initially, we will issue the depositary shares in book-entry only form through the direct registration system of our transfer agent and the depositary will deliver written confirmation to purchasers of depositary shares. Subsequently, depositary shares may (1) be issued in the form of physical depositary receipts, (2) be issued in book-entry form with the Depository Trust Company (“DTC”) or (3) continue to be held in book-entry form through the transfer agent. See “— Book-Entry Issuance” below.

We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements and all charges of the depositary in connection with the initial deposit of the Series A Preferred Shares, the initial issuance of the depositary shares, all withdrawals of Series A Preferred Shares by holders of depositary shares and the registration of transfers of title to any depositary shares. However, holders of depositary shares will pay any other applicable transfer and other taxes and governmental charges. In addition, if a holder of depositary shares requests the depositary to perform duties not required under the deposit agreement, the depositary will notify such holder of the charges and expenses related to such performance for which the Company is not otherwise liable, and, if the holder authorizes the depositary to proceed on that basis, the holder will be liable for those charges and expenses. All other fees and expenses of the depositary and its agents incident to the performance of their obligations under the deposit agreement will be paid by the Company in accordance with the terms of the deposit agreement.

Dividend Rights

Each dividend payable on a depositary share will be in an amount equal to 1/100th of the dividend declared and payable on the related Series A Preferred Share.

The depositary will distribute all cash dividends or other cash distributions received on the Series A Preferred Shares to the record holders of depositary shares in proportion to the number of depositary shares held by the holders on the record date for the cash dividend or other cash dividend on the Series A Preferred Shares. The depositary will distribute or make available for distribution, as the case may be, only such amount, however,

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as can be distributed without attributing to any record holder a fraction of one cent, and any balance not so distributable will be held by the depositary (without liability for interest thereon) and will be added to and be treated as part of the next sum received by the depositary for distribution to record holders of depositary shares then outstanding.

If we make a distribution other than in cash, the depositary will distribute the property it receives to the record holders of depositary receipts in proportion to the number of depositary shares evidenced by depositary receipts those holders own on the relevant record date, unless the depositary determines (after consultation with us) that the distribution cannot be made proportionately among those holders or that it is not feasible to make the distribution. In that event, the depositary may, with our approval, adopt any other method for such distribution as it deems equitable and appropriate, including the sale of such property (at such place or places and upon such terms as it may deem equitable and appropriate) and distribution of the net proceeds from such sale to such holders.

The amount distributed to holders of depositary shares will be reduced by any amounts required to be withheld by us or the depositary on account of taxes or other governmental charges. The depositary may refuse to make any payment or distribution, or any transfer, exchange, or withdrawal of any depositary shares or the Series A Preferred Shares until such taxes or other governmental charges are paid.

Voting Rights

Because each depositary share represents a 1/100th interest in a Series A Preferred Share, holders of depositary receipts will be entitled to 1/100th of a vote per depositary share under those limited circumstances in which holders of the Series A Preferred Shares are entitled to a vote. See “Description of the Series A Preferred Shares—Voting Rights.”

Upon receiving notice of any meeting at which the holders of the Series A Preferred Shares are entitled to vote, the depositary will mail the information contained in the notice of the meeting to the record holders of the depositary shares. Each record holder of the depositary shares on the record date, which will be the same date as the record date for the Series A Preferred Shares, may instruct the depositary how to exercise his or her voting rights. The depositary will endeavor, insofar as practicable, to vote or cause to be voted the maximum number of whole Series A Preferred Shares represented by those depositary shares in accordance with those instructions received sufficiently in advance of the meeting, and we will take all reasonable action that may be deemed necessary by the depositary in order to enable the depositary to do so. If the depositary does not receive specific instructions from the holders of any depositary shares representing the Series A Preferred Shares, it will not vote the amount of the Series A Preferred Shares represented by such depositary shares.

Conversion Rights

If we elect to exercise our conversion option, the depositary will convert all depositary shares into our common shares equal to the applicable fraction or multiple of the common shares into which the Series A Preferred Shares has been converted plus any cash for a fractional share interest.

If a holder elects to convert the holder’s depositary shares, the depositary will convert Series A Preferred Shares into a sufficient number of our common shares equal to the applicable fraction or multiple of the common shares represented by the depositary shares for which conversion has been elected plus any cash for any fractional share interest.

After the conversion, the depositary shares will no longer be deemed to be outstanding, and all rights of holders of the depositary shares will cease, except the right to receive the common shares and cash to which the holders are entitled to receive upon the conversion upon the surrender to the depositary of the depositary shares representing the depositary receipts. Any common shares and cash deposited by us with the depositary for any depositary shares that the holders fail to convert will be returned to us after a period of two years from the date they are deposited.

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Redemption

The depositary shares may not be redeemed at the option of the Company.

Miscellaneous

The depositary will forward to the holders of depositary shares all reports and communications from us which are delivered to the depositary and which we are required to furnish to the holders of the Series A Preferred Shares. In addition, the depositary will make available for inspection by holders of depositary shares at the principal office of the depositary, and at such other places as it may from time to time deem advisable, any reports and communications received from us which are received by the depositary as the holder of Series A Preferred Shares.

Listing

Depositary, Transfer Agent and Registrar

Computershare will be the depositary, transfer agent and registrar for the depositary shares.

Book-Entry Issuance

Upon the completion of this offering, we will initially issue all depositary shares in book-entry only form through the direct registration system of our transfer agent, and the depositary will deliver written confirmation to purchasers of depositary shares. Subsequently, depositary shares may (1) be issued in the form of physical depositary receipts, (2) be issued in book-entry form with the Depository Trust Company (“DTC”) or (3) continue to be held in book-entry form through the transfer agent.

Upon request, the depositary and the Company will make application to DTC for acceptance of all or a portion of the depositary shares for its book-entry settlement system. So long as the depositary shares are eligible for book-entry settlement with DTC, unless otherwise required by law, all depositary shares with book-entry settlement through DTC will be represented by a single receipt (the “DTC Receipt”), which will be deposited with DTC (or its custodian) evidencing all such depositary shares and registered in the name of the nominee of DTC (initially expected to be Cede & Co.). The depositary or our transfer agent or such other entity as is agreed to by DTC may hold the DTC Receipt as custodian for DTC. Ownership of beneficial interests in the DTC Receipt will be shown on, and the transfer of such ownership will be effected through, records maintained by (i) DTC or its nominee for such DTC Receipt, or (ii) institutions that have accounts with DTC.

If issued, the DTC Receipt will be exchangeable for depositary shares only if (i) DTC notifies the Company at any time that it is unwilling or unable to continue to make its book-entry settlement system available for the depositary shares and a successor to DTC is not appointed by the Company within 90 days of the date the Company is so informed in writing, (ii) DTC notifies the Company at any time that it has ceased to be a clearing agency registered under applicable law and a successor to DTC is not appointed by the Company within 90 days of the date the Company is so informed in writing or (iii) the Company executes and delivers to DTC a notice to the effect that such DTC Receipt shall be so exchangeable. If the beneficial owners of interests in depositary shares are entitled to exchange such interests for depositary shares as the result of an event described in clause (i), (ii) or (iii) of the preceding sentence, then the depositary will provide written instructions to DTC to deliver to the depositary for cancellation the DTC Receipt, and the Company will instruct the depositary to execute and issue to the beneficial owners of the depositary shares previously evidenced by the DTC Receipt depositary shares either in the form of physical depositary receipts or in book-entry form.

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DESCRIPTION OF COMMON SHARES

The following is a brief description of the terms of our common shares. This summary does not purport to be complete in all respects. This description is subject to and qualified in its entirety by reference to the relevant provisions of Ohio law and our Articles and Regulations, each of which is included as an exhibit to the Registration Statement of which this prospectus is a part. See “Where You Can Find More Information” and “Incorporation of Certain Information by Reference” in this prospectus.

General

We are authorized under our Articles to issue up to 10,000,000 common shares, each without par value. As of October 31, 2014, 4,875,131 common shares were outstanding and 152,302 common shares were held by us as treasury shares. The common shares issuable upon conversion of the Series A Preferred Shares will be issued by us from common shares held in treasury or from authorized but unissued common shares and will be fully paid and nonassessable.

Liquidation Rights

Each common share entitles the holder thereof to share ratably in SB Financial’s net assets legally available for distribution to shareholders in the event of our liquidation, dissolution or winding up, after payment in full of all amounts required to be paid to creditors or provision for such payment, subject to the rights of the holders of any of our outstanding preferred shares that rank senior to the common shares upon liquidation. With respect to the amounts to be paid upon liquidation, our Series A Preferred Shares rank senior to the common shares.

Preemptive Rights

Our Articles provide that no holder of shares of any class of SB Financial shall have, as a matter of right, the preemptive right to purchase or subscribe for shares of any class of SB Financial now or hereafter authorized.

Voting Rights

Each of our outstanding common shares entitles the holder thereof to one vote for the election of directors and for all other matters submitted to our shareholders for their consideration. Our Articles provide that shareholders do not have the right to vote cumulatively in the election of directors.

Dividend Rights

We may pay dividends on our outstanding common shares in accordance with the terms of the Ohio General Corporation Law (Chapter 1701 of the Ohio Revised Code). The Ohio General Corporation Law generally provides that the board of directors may declare and pay dividends to shareholders, provided that the dividend does not exceed the combination of the surplus of the corporation, which is defined generally as the excess of the corporation’s assets plus stated capital over its liabilities, and is not in violation of the rights of the holders of shares of any other class. In addition, no dividend may be paid when a corporation is insolvent or there is reasonable ground to believe that by payment of the dividend the corporation would be rendered insolvent.

Our ability to obtain funds for the payment of dividends and for other cash requirements largely depends on the amount of dividends that may be declared and paid by our subsidiaries. Thus, as a practical matter, any restrictions on the ability of our subsidiaries, including State Bank, to pay dividends will have the effect of restricting the amount of funds available to us for the payment of dividends on our common shares. The ability of State Bank to pay dividends is subject to limitations under various laws and regulations and to prudent and sound banking principles. In general, subject to certain minimum capital requirements, State Bank is permitted to declare and pay a dividend without the approval of the Ohio Division of Financial Institutions so long as the total

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of the dividends in a calendar year does not exceed State Bank’s total net income for that year combined with its retained net income for the two preceding years. The ability of our subsidiaries, including State Bank, to pay dividends to us is also conditioned upon their profitability, financial condition, capital expenditures and other cash flow requirements and contractual obligations.

The dividend rights of holders of our common shares are also qualified by and subject to the dividend rights of holders of any of our preferred shares. With respect to the payment of dividends, the Series A Preferred Shares rank senior to the common shares. So long as any Series A Preferred Shares are outstanding, we are prohibited from paying dividends on our common shares unless the full dividends on all outstanding Series A Preferred Shares (and, therefore, the depositary shares) have been declared and paid (or set apart for payment) for the most recently completed dividend period.

Board of Directors

General . Our Articles provide for a classified board of directors consisting of not less than nine directors, with the directors divided into three classes and elected for three-year terms. Each year the term of one class expires. As a result, approximately one-third of the directors are elected at each annual meeting of shareholders. This can delay the ability of a significant shareholder or group of shareholders to gain control of our board of directors.

Our Regulations provide that the number of directors cannot be fewer than nine nor more than 15. Currently, our board of directors consists of nine directors. Pursuant to our Regulations, no reduction in the number of our directors may have the effect of shortening the term of any incumbent director, and no action may be taken to increase the number of directors unless at least two-thirds of the directors then in office concur in such action.

Nominations . Our Regulations provide that shareholder nominations for election to the board of directors at an annual meeting of shareholders must be made in writing and must be delivered or mailed to the Secretary of SB Financial on or before the later of the February 1 immediately preceding the annual meeting or the 60th day prior to the first anniversary of the most recent annual meeting of shareholders held for the election of directors. However, if the annual meeting for the election of directors is not held before the 31 ^st day following such anniversary, then the written notice must be received by the Secretary within a reasonable time prior to the date of such annual meeting. In the case of the election of directors at a special meeting of shareholders, our Regulations provide that the written notice must be received by the Secretary no later than the close of business on seventh day following the day on which the notice of the special meeting was mailed to shareholders.

The written notification of a proposed nominee must contain the following information:

—

the name, age, business or residence address of the proposed nominee;

—

the principal occupation or employment of the proposed nominee; and

—

the total number of the Company’s common shares owned beneficially and/or of record by the proposed nominee, and the length of time any such shares have been so owned.

Removal . Our Regulations provide that a director or directors may be removed from office only by the vote of the holders of shares entitling them to exercise not less than 80% of the voting power of SB Financial entitling them to elect directors in place of those to be removed. Under the Ohio General Corporation Law, the removal of a director or directors of SB Financial may only be effected for cause. This will prevent a shareholder or group of shareholders from removing incumbent directors and simultaneously gaining control of the board of directors by filling the vacancies created by removals with their own nominees.

Vacancies . Failure to elect a director to fill the unexpired term of any director removed will be deemed to create a vacancy in the board. Under the Ohio General Corporation Law, unless a corporation’s articles of incorporation or regulations otherwise provide, the remaining directors of a corporation may fill any vacancy on

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the board by the affirmative vote of a majority of the remaining directors. Under our Regulations, vacancies in the board, and newly created directorships resulting from any increase in the authorized number of directors, may be filled by the affirmative vote of two-thirds of the whole authorized number of directors or by the affirmative vote of the holders of at least four-fifths of the outstanding voting power of the corporation voting at a meeting of the shareholders called for such purpose, or in any other manner provided by law.

Special meetings

Pursuant to our Regulations, special meetings of shareholders may be called only by the following: the chairman of the board, the president or, in case of the president’s absence, death, or disability, the vice president authorized to exercise the authority of the president; the secretary; a majority of the directors acting with or without a meeting; or the holders of at least 25% of all of our common shares outstanding and entitled to vote.

Anti-Takeover Effects of our Articles and Regulations and Ohio Law

Certain provisions in our Articles, Regulations and the Ohio General Corporation Law could discourage potential takeover attempts and make attempts by shareholders to change management more difficult. As a result, these provisions could have an adverse effect on the market price of our common shares. In addition to the provisions described above regarding the rights and preferences of our common shares, including the provisions of Ohio law and our Articles and Regulations relating to the classification of our board of directors, the requirements for the nomination of directors, and the restrictions on the removal or replacement of directors, the provisions described below could also have anti-takeover effects.

Supermajority voting requirement

Our Articles provide that, notwithstanding any provision of the Ohio General Corporation Law requiring for any purpose the vote, consent, waiver or release of holders of shares entitling them to exercise two-thirds or any other proportion of the voting power of SB Financial, such action, unless otherwise provided by statute, may be taken by the vote, consent, waiver or release of the holders of shares entitling them to exercise not less than a majority of the voting power of SB Financial. However, our Articles also provide that, unless two-thirds of the whole authorized number of directors recommends the approval of the following matters, such matters will require the affirmative vote of the holders of shares entitling them to exercise at least 80% of our voting power:

—

a proposed amendment to the articles;

—

proposed new regulations, or an alteration, amendment or repeal of the Regulations;

—

an agreement providing for the merger or consolidation of SB Financial with or into one or more other corporations;

—

a proposed combination or majority share acquisition involving the issuance of shares of SB Financial and requiring shareholder approval;

—

a proposal to sell, lease, or exchange all or substantially all of the property and assets of SB Financial;

—

a proposed dissolution of SB Financial; or

—

a proposal to fix or create the number of directors by action of the shareholders.

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Business Combinations with Controlling Persons

Our Articles require the affirmative vote of the holders of shares entitling them to exercise at least 80% of our voting power and the affirmative vote of at least two-thirds of the outstanding shares not held by a “Controlling Person,” to approve certain “Business Combinations.” A “Controlling Person” is any shareholder who beneficially owns shares entitling the shareholder to exercise 20% or more of the voting power of SB Financial in the election of directors. A “Business Combination is defined to include:

—

any merger or consolidation of SB Financial with or into a Controlling Person or an affiliate or associate of a Controlling Person;

—

any sale, lease, exchange, transfer or other disposition of all or any substantial part of the assets of SB Financial or any of its subsidiaries, including, without limitation, any voting securities of a subsidiary of SB Financial, to a Controlling Person or an affiliate or associate of a Controlling Person;

—

any merger into SB Financial or any of its subsidiaries of a Controlling Person or an affiliate or associate of a Controlling Person;

—

any sale, lease, exchange, transfer or other disposition of all or any part of the assets of a Controlling Person or an affiliate or associate of a Controlling Person to SB Financial or any of its subsidiaries, excluding certain insignificant sales or dispositions;

—

any reclassification of our common shares, or any recapitalization involving our common shares consummated within five years after the Controlling Person becomes a Controlling Person; and

—

any agreement, contract or other arrangement providing for any of the above transactions.

The shareholder vote requirements described above do not apply, however, if the Business Combination will result in an involuntary sale, redemption, cancellation or other termination of ownership of all of our common shares owned by shareholders who do not vote in favor of, or consent in writing to, the Business Combination and the consideration to be received by such shareholders is at least equal to the “Minimum Price Per Share,” as defined in our Articles.

Limited Shareholder Action by Written Consent

The Ohio General Corporation Law requires that an action by written consent of the shareholders in lieu of a meeting be unanimous, except that the code of regulations may be amended by an action by written consent of holders of shares entitling them to exercise two-thirds of the voting power of the corporation or, if the articles of incorporation or code of regulations otherwise provide, such greater or lesser amount, but not less than a majority. This provision may have the effect of delaying, deferring or preventing a tender offer or takeover attempt that a shareholder might consider to be in its best interest.

Ohio Control Share Acquisition Act

Section 1701.831 of the Ohio General Corporation Law (the “Control Share Acquisition Act”) provides that certain notice and informational filings, and special shareholder meeting and voting procedures, must occur prior to any person’s acquisition of an issuer’s shares that would entitle the acquirer to exercise or direct the voting power of the issuer in the election of directors within any of the following ranges:

—

one-fifth or more but less than one-third of such voting power;

—

one-third or more but less than a majority of such voting power; or

—

a majority or more of such voting power.

The Control Share Acquisition Act does not apply to a corporation if its articles of incorporation or code of regulations so provide. We have not opted out of the application of the Control Share Acquisition Act.

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Ohio Merger Moratorium Statute

Chapter 1704 of the Ohio Revised Code (the “Merger Moratorium Statute”) generally addresses a wide range of business combinations and other transactions (including mergers, consolidations, asset sales, loans, disproportionate distributions of property and disproportionate issuances or transfers of shares or rights to acquire shares) between an Ohio corporation and an “Interested Shareholder” who, alone or with others, may exercise or direct the exercise of at least 10% of the voting power of the corporation in the election of directors. The Merger Moratorium Statute prohibits such transactions between the corporation and the Interested Shareholder for a period of three years after a person becomes an Interested Shareholder, unless, prior to such date, the directors approved either the business combination or other transaction or approved the acquisition that caused the person to become an Interested Shareholder.

Following the three-year moratorium period, the corporation may engage in the covered transaction with the Interested Shareholder if:

—

the transaction receives the approval of the holders of shares entitling them to exercise at least two-thirds of the voting power of the corporation in the election of directors or the approval of the holders of a majority of the voting shares held by persons other than an Interested Shareholder; or

—

the remaining shareholders receive an amount for their shares equal to the higher of the highest amount paid in the past by the Interested Shareholder for the corporation’s shares or the amount that would be due to the shareholders if the corporation were to dissolve.

The Merger Moratorium Statute does not apply to a corporation if its articles of incorporation or code of regulations so provide. We have not opted out of the application of the Merger Moratorium Statute.

Anti-Greenmail Statute

Pursuant to the Ohio Anti-Greenmail Statute, a public corporation formed in Ohio may recover profits that a shareholder makes from the sale of the corporation’s securities within 18 months after making a proposal to acquire control or publicly disclosing the possibility of a proposal to acquire control. The corporation may not, however, recover from a person who proves either: (1) that his sole purpose in making the proposal was to succeed in acquiring control of the corporation and there were reasonable grounds to believe that he would acquire control of the corporation; or (2) that his purpose was not to increase any profit or decrease any loss in the stock. Also, before the corporation may obtain any recovery, the aggregate amount of the profit realized by such person must exceed $250,000. Any shareholder may bring an action on behalf of the corporation if a corporation refuses to bring an action to recover these profits. The party bringing such an action may recover his attorneys’ fees if the court having jurisdiction over such action orders recovery of any profits.

The Anti-Greenmail Statute does not apply to a corporation if its articles of incorporation or code of regulations so provide. We have not opted out of the application of the Anti-Greenmail Statute.

Transfer Agent and Registrar

The transfer agent and registrar for our common shares is Registrar and Transfer Company (or its successor, Computershare Trust Company, N.A.) located in Cranford, New Jersey.

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DESCRIPTION OF PREFERRED SHARES

The following is a brief description of the terms of our preferred shares. This summary does not purport to be complete in all respects. This description is subject to and qualified in its entirety by reference to the relevant provisions of Ohio law and our Articles and Regulations, each of which is included as an exhibit to the Registration Statement of which this prospectus is a part.

General

We are authorized under our Articles to issue up to 200,000 preferred shares, each without par value. Currently, we do not have any preferred shares outstanding, and the Series A Preferred Shares are the only series or class of our preferred shares currently authorized.

Our authorized but unissued preferred shares are typically referred to as “blank check” preferred shares. This term refers to preferred shares for which the rights and restrictions are determined by the board of directors of a corporation at the time the preferred shares are issued. Under our Articles, our board of directors has the authority, without any further shareholder vote or action, to provide for the issuance of, and to issue, the authorized preferred shares in one or more series, from time to time, with such rights, preferences and relative, participating, optional or other special rights and privileges of, and qualifications, limitations or restrictions upon, the preferred shares, as may be provided in the amendment or amendments to the Articles adopted by our board of directors.

The authority of our board of directors includes, but is not limited to, the determination or fixing of the following with respect to preferred shares of any series:

—

the division of the preferred shares into series and the designation and authorized number of shares in each series (up to the number of preferred shares authorized);

—

dividend or distribution rights and dividend rate;

—

liquidation rights, preference and price;

—

redemption rights and price;

—

any sinking fund requirements;

—

voting rights;

—

pre-emptive rights;

—

conversion rights;

—

any restrictions on the issuance of shares; and

—

any other relative, participating, optional or other special rights and privileges.

Under Ohio law, absent a determination by our board of directors to establish different voting rights, holders of preferred shares would be entitled to one vote per share on matters to be voted upon by the holders of common shares and preferred shares voting together as a single class. Ohio law would also entitle the holders of preferred shares to exercise a class vote on certain matters.

Series A Preferred Shares

For a detailed description of our Series A Preferred Shares, see “Description of the Series A Preferred Shares” beginning on page 52 of this prospectus and the Certificate of Amendment to Articles attached as Exhibit 3.7 to the Registration Statement of which this prospectus constitutes a part.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

The following discussion summarizes the material U.S. federal income tax consequences to U.S. holders (as defined below) with respect to the acquisition, ownership and disposition (by conversion, sale or redemption) of the depositary shares acquired pursuant to this offering and common shares issued upon conversion of such depositary shares. This summary is based upon current provisions of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), Treasury regulations and judicial and administrative authority, all as in effect as of the date hereof and all of which are subject to differing interpretations or change, possibly with retroactive effect. This summary is limited to investors who will hold the depositary shares and common shares issued upon conversion as capital assets and does not discuss all aspects of U.S. federal income taxation that may be important to particular investors in light of their individual circumstances. No ruling has been or will be sought from the IRS regarding any matter discussed herein, and we cannot assure you that the IRS will not challenge one or more of the tax consequences described below.

This discussion does not address the tax consequences to investors who are subject to special tax rules, such as banks and other financial institutions, insurance companies, real estate investment trusts, regulated investment companies, grantor trusts, governments and governmental entities, broker-dealers, employee stock purchase plans, partnerships and other pass-through entities, tax-exempt organizations, investors that will hold the depositary shares or common shares issued upon conversion as part of a straddle, hedge, conversion, constructive sale, or other integrated security transaction for U.S. federal income tax purposes, traders that elect to mark-to-market their securities, persons that acquire depositary shares in connection with employment or other performance of services, persons subject to the alternative minimum tax, U.S. expatriates, U.S. holders (as defined below) that have a functional currency that is not the U.S. dollar, controlled foreign corporations, or passive foreign investment companies, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this summary does not address any U.S. federal tax considerations other than income taxation (such as estate or gift taxation) or any state, local or non-U.S. tax consequences. You should consult your own tax advisor regarding the U.S. federal, state, local, and non-U.S. income and other tax considerations of the acquisition, ownership and disposition of the depositary shares and common shares issued upon conversion.

For purposes of this summary, you are a “U.S. holder” if you are a beneficial owner of the depositary shares or common shares issued upon conversion, as applicable, and you are for U.S. federal income tax purposes (i) an individual citizen or resident of the United States, (ii) a corporation (including any entity treated as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if it (A) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust, or (B) has a valid election in effect under applicable Treasury regulations to be treated as a United States person.

If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) is a holder of the depositary shares or common shares issued upon conversion, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. If you are a partnership or a partner of a partnership holding depositary shares or common shares issued upon conversion, you should consult your own tax advisor as to the particular U.S. federal income tax consequences of the purchase, ownership and disposition of the depositary shares and common shares issued upon conversion.

Beneficial owners of the depositary shares will be treated for U.S. federal income tax purposes as if they were owners of the underlying Series A Preferred Shares represented by such depositary shares.

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THIS DISCUSSION IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE DEPOSITARY SHARES. PROSPECTIVE INVESTORS SHOULD SEEK ADVICE FROM THEIR OWN INDEPENDENT TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE AND LOCAL, AS WELL AS NON-U.S. INCOME AND OTHER TAX CONSEQUENCES TO THEM, IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, OF PURCHASING, OWNING AND DISPOSING OF THE DEPOSITARY SHARES.

Distributions. In general, if distributions are made with respect to the depositary shares or common shares issued upon conversion, the distributions will be treated as dividends to the extent of our current and accumulated earnings and profits as determined for U.S. federal income tax purposes. Any portion of a distribution made with respect to the depositary shares or common shares issued upon conversion in excess of our current and accumulated earnings and profits is treated first as a nontaxable return of capital reducing your tax basis in such depositary shares or common shares issued upon conversion, as applicable. Any amount in excess of such tax basis is treated as capital gain, the tax treatment of which is discussed below under “— Sale or Redemption.”

Dividends received by individual holders of the depositary shares or common shares issued upon conversion will generally be subject to a reduced maximum tax rate of 20% if such dividends are treated as “qualified dividend income” for U.S. federal income tax purposes. The rate reduction does not apply to dividends that are paid to individual holders with respect to depositary shares or common shares issued upon conversion that are held for 60 days or less during the 121-day period beginning on the date which is 60 days before the date on which the depositary shares or common shares issued upon conversion become ex-dividend. Furthermore, the rate reduction does not apply to dividends received to the extent that an individual holder elects to treat the dividends as “investment income” for purposes of determining the holder’s limit for the deduction of investment interest under Section 163(d) of the Code. You should consult your own tax advisor regarding the implications of these rules in light of your particular circumstances.

Dividends received by corporate holders of the depositary shares or common shares issued upon conversion may be eligible for a dividends received deduction equal to 70% of the amount of the distribution treated as a dividend, subject to applicable limitations, including limitations related to “debt financed portfolio stock” under Section 246A of the Code and to the holding period requirements of Section 246(c) of the Code. In addition, any amount received by a corporate holder that is treated as a dividend may, if such dividend exceeds certain thresholds in relation to the holder’s adjusted tax basis in the depositary shares or common shares issued upon conversion and depending on other circumstances, constitute an “extraordinary dividend” subject to the provisions of Section 1059 of the Code. Under Section 1059, a corporate holder that has held shares for two years or less before the dividend announcement date generally must reduce the tax basis of the holder’s shares with respect to which such dividend was paid (but not below zero) by the “non-taxed portion” of any “extraordinary dividend” and, if the non-taxed portion exceeds the holder’s tax basis for the shares, must treat any excess as gain from the sale or exchange of the shares in the year the payment is received. Individual holders of depositary shares or common shares issued upon conversion who receive any “extraordinary dividends” that are treated as “qualified dividend income” (as discussed above) will be required to treat any losses on the sale of such depositary shares or common shares issued upon conversion as long-term capital losses to the extent of such dividends. You should consult your own tax advisor regarding the extent, if any, to which these provisions may apply to you in light of your particular facts and circumstances.

In general, for purposes of meeting the holding period requirements for both the dividends received deduction and the reduced maximum tax rate on dividends described above, holders may not count toward their holding period any period in which they (i) have the option to sell, are under a contractual obligation to sell, or have made (and not closed) a short sale of depositary shares or common shares issued upon conversion, or substantially identical stock or securities, (ii) are the grantor of an option to buy depositary shares or common shares issued upon conversion, or substantially identical stock or securities or (iii) otherwise have diminished

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their risk of loss by holding one or more other positions with respect to substantially similar or related property. Treasury regulations provide that a taxpayer has diminished its risk of loss on stock by holding a position in substantially similar or related property if the taxpayer is the beneficiary of a guarantee, surety agreement or similar arrangement that provides for payments that will substantially offset decreases in the fair market value of the stock. In addition, the Code disallows the dividends received deduction as well as the reduced maximum tax rate on dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met. You should consult your own tax advisor regarding the implications of these rules in light of your particular circumstances.

Conversion of Depositary Shares. A holder generally will not recognize gain or loss upon the conversion of the depositary shares into common shares, except with respect to any cash received in lieu of a fractional common share, as described below. Generally, a holder’s adjusted tax basis in the common shares received upon the conversion of the depositary shares will equal the adjusted tax basis of the converted depositary shares (reduced by the portion of the adjusted tax basis allocated to any fractional common share deemed exchanged for cash, as described below). The holding period of such common shares will include the holding period of the converted depositary shares.

Cash received in lieu of a fractional common share will generally be treated as a payment in a taxable exchange for such fractional common share, and capital gain or loss will be recognized on the receipt of cash in an amount equal to the difference between the amount of cash received and the amount of the adjusted tax basis of the converted depositary shares allocable to the fractional common share. The adjusted tax basis of the converted depositary shares will be allocated between the common shares received upon the conversion of the depositary shares and the fractional common share in accordance with their respective fair market values.

Adjustment of Conversion Price in Respect of Depositary Shares. The conversion price of the depositary shares is subject to adjustment under certain circumstances. A holder of the depositary shares may, in certain circumstances, be deemed to have received a distribution with respect to the depositary shares if the conversion price is adjusted and such adjustment has the effect of increasing such holder’s proportionate interest in our earnings and profits or assets. Such a deemed distribution would be includable in such holder’s income in the manner set forth above under “—Distributions.” For example, if the conversion price is adjusted as a result of a distribution that is taxable to holders of our common shares, such as a cash dividend, you may be deemed to have received a dividend subject to U.S. federal income tax even though you do not receive a corresponding cash distribution. In addition, an adjustment to the conversion price or a failure to make (or adequately make) such an adjustment may give rise to constructive distributions to holders of the depositary shares or holders of our common shares. Thus, under certain circumstances, holders may recognize income in the event of a constructive distribution even though they may not receive any cash or property. Adjustments to the conversion price made pursuant to a bona fide reasonable adjustment formula which has the effect of preventing the dilution of the interest of the holders of the depositary shares generally will not be deemed to result in a constructive distribution with respect to the depositary shares. Generally, a holder’s tax basis in the depositary shares will be increased to the extent that any such constructive distribution is treated as a dividend.

Sale or Redemption. On the sale or exchange of the depositary shares or common shares issued upon conversion to a party other than us, you generally will realize capital gain or loss in an amount equal to the difference between (i) the amount of cash and the fair market value of any property you receive on the sale or exchange and (ii) your tax basis in the depositary shares or common shares issued upon conversion. You should consult your own tax advisor regarding applicable rates, holding periods and netting rules for capital gains and losses in light of your particular facts and circumstances. Certain limitations exist on the deduction of capital losses by both corporate and non-corporate taxpayers.

On the redemption by us of depositary shares or common shares issued upon conversion, the redemption proceeds you receive upon surrender of the depositary shares or common shares issued upon conversion will be

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treated either as a payment received upon a sale or exchange of the depositary shares or common shares issued upon conversion or as a distribution with respect to your equity interests in us, depending upon whether and to what extent the redemption reduces your deemed percentage stock ownership in us.

A redemption will be treated as a sale or exchange of the depositary shares or common shares issued upon conversion (as discussed above) if:

—

the redemption is “substantially disproportionate” with respect to you within the meaning of Section 302(b)(2) of the Code;

—

the redemption results in a “complete redemption” of your equity interest in us (within the meaning of Section 302(b)(3) of the Code); or

—

the redemption is “not essentially equivalent to a dividend” with respect to you (within the meaning of Section 302(b)(1) of the Code).

In determining whether any of these tests has been met, you must take into account not only the depositary shares, common shares issued upon conversion and other equity interests in us that you actually own, but also shares and other equity interests that you constructively own within the meaning of Section 318 of the Code.

If none of the above tests giving rise to sale or exchange treatment is satisfied, then a payment made in redemption of the depositary shares or common shares issued upon conversion will be treated as a distribution that is subject to the tax treatment described above under “— Distributions.” The amount of the distribution will be equal to the amount of cash and the fair market value of property you receive without any offset for your tax basis in the depositary shares or common shares issued upon conversion. Your tax basis in the redeemed depositary shares or common shares issued upon conversion generally will be transferred to your remaining equity interests in us.

Any redemption proceeds that are attributable to any declared but unpaid dividends on the depositary shares or common shares issued upon conversion will generally be subject to the rules described above under “—Distributions.”

You should consult your own tax advisor regarding: (i) whether a redemption payment will be treated as received in connection with a sale or exchange under Section 302 of the Code or, alternatively, will be characterized as a distribution; and (ii) the resulting tax consequences to you in light of your individual facts and circumstances.

Medicare Contribution Tax. U.S. holders that are individuals, estates or certain trusts are required to pay a 3.8% tax (the “Medicare Contribution Tax”) on the lesser of (i) the U.S. holder’s “net investment income” in the case of an individual, or undistributed “net investment income” in the case of an estate or trust, in each case for the relevant taxable year and (ii) the excess of the U.S. holder’s modified adjusted gross income in the case of an individual, or adjusted gross income in the case of an estate or trust, in each case for the taxable year, over a certain threshold (which in the case of individuals will be between $125,000 and $250,000 depending on the individual’s circumstances). Net investment income generally includes dividends and net gains from the disposition of the depositary shares or common shares issued upon conversion, unless such income or gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). A U.S. holder that is an individual, estate or trust should consult its tax advisor regarding the applicability of the Medicare Contribution Tax to its income and gains in respect of its investment in the depositary shares and common shares issued upon conversion.

Information Reporting and Backup Withholding. Information reporting will generally apply to non-corporate U.S. holders with respect to payments of dividends on the depositary shares or common shares issued upon conversion and to certain payments of proceeds on the sale or other disposition of the depositary shares or common shares issued upon conversion. Certain non-corporate U.S. holders may be subject to U.S. backup

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withholding (currently at a rate of 28%) on payments of dividends on the depositary shares or common shares issued upon conversion and certain payments of proceeds on the sale or other disposition of the depositary shares or common shares issued upon conversion unless the beneficial owner of the depositary shares or common shares issued upon conversion furnishes the payor or its agent with a taxpayer identification number, certified under penalties of perjury, and certain other information, or otherwise establishes, in the manner prescribed by law, an exemption from backup withholding.

U.S. backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a credit against a U.S. holder’s U.S. federal income tax liability, which may entitle the U.S. holder to a refund, provided the U.S. holder timely furnishes the required information to the IRS.

Recent Legislation

The Foreign Account Tax Compliance Act, or FATCA, which was enacted in 2010, imposes a 30% withholding tax on certain types of payments made to “foreign financial institutions” and certain other non-U.S. entities unless certain due diligence, reporting, withholding, and certification requirements are satisfied.

As a general matter, FATCA imposes a 30% withholding tax on dividends on, and gross proceeds from the sale or other disposition of, the depositary shares or common shares issued upon conversion if paid to a foreign entity unless either (i) the foreign entity is a “foreign financial institution” that undertakes certain due diligence, reporting, withholding, and certification obligations, (ii) the foreign entity is not a “foreign financial institution” and identifies certain of its U.S. investors, or (iii) the foreign entity otherwise is excepted under FATCA.

Under a delayed effective date provided for in Treasury regulations, withholding would only be required with respect to gross proceeds from the sale or other disposition of the depositary shares or common shares issued upon conversion that occurs on or after January 1, 2017. If withholding is required under FATCA on a payment related to the depositary shares or common shares issued upon conversion, investors that otherwise would not be subject to withholding (or that otherwise would be entitled to a reduced rate of withholding) generally will be required to seek a refund or credit from the IRS to obtain the benefit of such exemption or reduction (provided that such benefit is available). Prospective investors should consult their own tax advisors regarding the possible implications of this legislation on their investment in the depositary shares and common shares issued upon conversion.

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CERTAIN ERISA CONSIDERATIONS

A fiduciary of a pension, profit-sharing or other employee benefit plan subject to the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (each, a “Plan”), should consider the fiduciary standards of ERISA in the context of the Plan’s particular circumstances before authorizing an investment in the depositary shares. Among other factors, the fiduciary should consider whether the investment would satisfy the prudence and diversification requirements of ERISA and would be consistent with the documents and instruments governing the Plan, and whether the investment would involve a prohibited transaction under ERISA or the Code.

Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well as individual retirement accounts, Keogh plans and any other plans that are subject to Section 4975 of the Code (also referred to herein as “Plans”) from engaging in certain transactions involving “plan assets” with persons who are “parties in interest” under ERISA or “disqualified persons” under the Code with respect to the Plan. A violation of these prohibited transaction rules may result in excise tax or other liabilities under ERISA or the Code for those persons, unless exemptive relief is available under an applicable statutory, regulatory or administrative exemption. Employee benefit plans that are governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and non-U.S. plans (as described in Section 4(b)(4) of ERISA) (“Non-ERISA Arrangements”) are not subject to the requirements of Section 406 of ERISA or Section 4975 of the Code but may be subject to similar provisions under applicable federal, state, local, non-U.S or other laws (“Similar Laws”).

The acquisition or holding of depositary shares by a Plan or any entity whose underlying assets include “plan assets” by reason of any Plan’s investment in the entity (a “Plan Asset Entity”) with respect to which we or certain of our affiliates is or becomes a party in interest or disqualified person may result in a prohibited transaction under ERISA or Section 4975 of the Code, unless the depositary shares are acquired and held pursuant to an applicable exemption. The U.S. Department of Labor has issued prohibited transaction class exemptions, or “PTCEs,” that may provide exemptive relief if required for direct or indirect prohibited transactions that may arise from the purchase or holding of depositary shares. These exemptions include PTCE 84-14 (for certain transactions determined by independent qualified professional asset managers), PTCE 90-1 (for certain transactions involving insurance company pooled separate accounts), PTCE 91-38 (for certain transactions involving bank collective investment funds), PTCE 95-60 (for transactions involving certain insurance company general accounts), and PTCE 96-23 (for transactions managed by in-house asset managers). In addition, ERISA Section 408(b)(17) and Section 4975(d)(20) of the Code may provide an exemption for the purchase and sale of the depositary shares, provided that neither the issuer of the depositary shares nor any of its affiliates have or exercise any discretionary authority or control or render any investment advice with respect to the assets of any Plan involved in the transaction, and provided further that the Plan pays no more and receives no less than “adequate consideration” in connection with the transaction to the nonfiduciary service provider (the “service provider exemption”). There can be no assurance that all of the conditions of any such exemptions will be satisfied.

Any purchaser or holder of depositary shares or any interest therein will be deemed to have represented by its purchase and holding of depositary shares offered hereby that it either (1) is not a Plan, a Plan Asset Entity or a Non-ERISA Arrangement and is not purchasing the depositary shares on behalf of or with the assets of any Plan, a Plan Asset Entity or Non-ERISA Arrangement or (2) the purchase and holding of the depositary shares will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a similar violation under any applicable Similar Laws.

The foregoing discussion is general in nature, is not intended to be all inclusive, and is based on laws in effect on the date hereof. Such discussion should not be construed as legal advice. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is important that fiduciaries or other persons considering purchasing depositary shares on behalf of or with the assets of any Plan, a Plan Asset Entity or Non-ERISA Arrangement consult with their counsel regarding the availability of

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exemptive relief under any of the PTCEs listed above, the service provider exemption or the potential consequences of any purchase or holding under Similar Laws, as applicable. Purchasers of depositary shares have exclusive responsibility for ensuring that their purchase and holding of depositary shares do not violate the fiduciary or prohibited transaction rules of ERISA or the Code or any similar provisions of Similar Laws. The sale of any depositary shares to a Plan, Plan Asset Entity or Non-ERISA Arrangement is in no respect a representation by us or any of our affiliates or representatives that such an investment meets all relevant legal requirements with respect to investments by, or is appropriate for, any such Plans, Plan Asset Entities or Non-ERISA Arrangements generally or any particular Plan, Plan Asset Entity or Non-ERISA Arrangement.

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PLAN OF DISTRIBUTION

The depositary shares are being offered and sold in a best efforts underwritten offering. We are offering the depositary shares through a placement agent, KBW. KBW will enter into an agency agreement with us pursuant to which it will agree to act as our exclusive financial advisor and placement agent in connection with this offering.

Under the agency agreement, KBW will agree to use its bests efforts to arrange for the sale of the depositary shares in a syndicated offering, if necessary. KBW is not purchasing or selling any depositary shares, nor is it required to arrange for the purchase or sale of any specific number or dollar amount of the depositary shares in the offering.

Offering Priorities and Purchase Limitations

Priority 1 – Existing Shareholders

If there are not sufficient depositary shares available to satisfy all subscriptions in the shareholder offering, shares will first be allocated so as to permit each shareholder subscriber to purchase a number of depositary shares equal to the lesser of (i) 10,000 depositary shares ($100,000) or (ii) the number of depositary shares for which he or she subscribed. The unallocated depositary shares will then be allocated to each shareholder subscriber whose subscription remains unsatisfied in the proportion in which the aggregate number of shares as to which each such shareholder subscription remains unsatisfied bears to the aggregate number of shares as to which all shareholder subscriptions remain unsatisfied.

Priority 2 – Customers and Residents of Local Community

If there are not sufficient depositary shares available to satisfy all subscriptions in the customer and local community offering, shares will first be allocated so as to permit each customer/local community subscriber to purchase a number of depositary shares equal to the lesser of (i) 10,000 depositary shares ($100,000) or (ii) the number of depositary shares for which he or she subscribed. The unallocated depositary shares will then be allocated to each customer/local community subscriber whose subscription remains unsatisfied in the proportion in which the aggregate number of shares as to which each such customer/local community subscription remains unsatisfied bears to the aggregate number of shares as to which all customer/local community subscriptions remain unsatisfied.

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Priority 3 – Syndicated Offering

Marketing and Distribution; Compensation

Offering materials have been initially distributed to certain persons by mail, with additional copies made available through our Offering Information Center.

We have engaged KBW to serve as a financial advisor and our exclusive placement agent in connection with the offering of our depositary shares. In its role as financial advisor and placement agent, KBW will:

—

provide advice on the financial and securities market implications of the offering;

—

assist in structuring our offering, including developing and assisting in implementing a marketing strategy for the offering;

—

review all offering documents, including this prospectus, order form and related offering materials (although we are responsible for the preparation and filing of such documents);

—

assist us in analyzing proposals from outside vendors retained in connection with the offering, including printers, escrow agents, etc.;

—

assist us in the drafting and distribution of press releases as required or appropriate in connection with the offering;

—

assist us in preparing for and scheduling meetings with potential investors and broker-dealers, as necessary;

—

establish and manage an Offering Information Center during the offering period;

—

process order forms and produce daily reports and analyses;

—

assist our transfer agent with the generation and mailing of statements of ownership;

—

meet with our board of directors and management to discuss any of these services; and

—

provide such other financial advisory and investment banking services in connection with the offering as may be agreed upon by KBW and us.

For these services, KBW will receive a fee equal to 3.5% of the aggregate dollar amount of depositary shares sold in the shareholder and customer/local community offerings, if the offering is consummated.

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As described above, if necessary, depositary shares not purchased in the shareholder and customer/local community offerings may be offered for sale to the general public in a syndicated offering to be managed by KBW. In such capacity, KBW may form a syndicate of other broker-dealers. Neither KBW nor any registered broker-dealer will have any obligation to take or purchase any depositary shares in the syndicated offering; however, KBW has agreed to use its best efforts in the sale of depositary shares in any syndicated offering. If there is a syndicated offering, KBW will receive a fee not to exceed 5.5% of the aggregate dollar amount of the depositary shares sold in the syndicated offering. Of this amount, KBW will pass on to selected broker-dealers, if any, who assist in the syndicated offering, an amount competitive with fees or commissions charged at such time for comparable amounts of securities sold at a comparable price per share in a similar market environment.

The following table sets forth the fee payable to KBW as a percentage of the aggregate offering proceeds at the minimum and maximum of the offering, and the proceeds payable to us after payment of such fee, before expenses. The offering expenses and other expenses incurred in connection with this offering are expected to be approximately $311,000.


	Per		Total
	Depositary Share		Minimum Offering		Maximum Offering
Public offering price	$	10.000	$	10,000,000	$	15,000,000
Placement agent fee in shareholder and customer/local community offerings ⁽¹⁾	$	0.175	$	175,000	$	262,500
Placement agent fee in syndicated offering ⁽¹⁾	$	0.275	$	275,000	$	412,500
Proceeds to us, before expenses	$	9.550	$	9,550,000	$	14,325,000

(1)

We also will reimburse KBW for its reasonable out-of-pocket expenses incurred in connection with its engagement hereunder, regardless of whether the offering is consummated, including, without limitation, legal fees and expenses not to exceed $50,000, and other expenses, including marketing, syndication and travel expenses, not to exceed $20,000. If the offering is not consummated or if KBW’s engagement is terminated in accordance with the provisions of the agency agreement, KBW will only receive reimbursement of its reasonable out-of-pocket expenses, including legal fees and expenses paid to its counsel.

We have agreed to indemnify KBW and certain other persons against certain liabilities, including liabilities under the Securities Act, related to or arising out of its engagement as our financial advisor and placement agent and performance of services in connection therewith. We have also agreed to contribute to payments KBW may be required to make with respect to any such liabilities.

KBW has not prepared any report or opinion constituting a recommendation or advice to us or to persons who subscribe for depositary shares in the offering, nor has it prepared an opinion as to the fairness to us of the purchase price or the terms of the depositary shares to be sold in the offering. KBW expresses no opinion as to the prices at which depositary shares to be issued may trade.

Our directors and executive officers may participate in the solicitation of offers to purchase depositary shares. These persons will be reimbursed for their reasonable out-of-pocket expenses incurred in connection with the solicitation. Other trained employees of SB Financial or its affiliates may assist in the offering in ministerial capacities, providing clerical work in effecting a sales transaction or answering questions of a ministerial nature. No offers or sales may be made by tellers or at the teller counters. Investment related questions of prospective

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purchasers will be directed to our executive officers or representatives of KBW. Our other employees have been instructed not to solicit offers to purchase depositary shares or provide advice regarding the purchase of depositary shares. We will rely on Rule 3a4-1 under the Securities Exchange Act of 1934, and sales of depositary shares will be conducted within the requirements of Rule 3a4-1, so as to permit officers, directors and employees to participate in the sale of the depositary shares. None of our officers, directors or employees will be compensated in connection with their participation in the offering by the payment of commissions or other remuneration based either directly or indirectly on the transactions in the depositary shares.

The offering will comply with the requirements of Rule 10b-9 under the Securities Exchange Act of 1934.

Escrow Agreement

We have entered into an escrow agreement with U.S. Bank pursuant to which the subscription funds received in the offering will be held in escrow until we have sold at least the minimum of 1,000,000 depositary shares in the offering and have met certain other closing conditions. We will not accept any subscription until at least a minimum of 1,000,000 of the depositary shares being offered have been sold. If we have not sold the minimum of 1,000,000 depositary shares by the expiration date of the offering, or any extension thereof, we will terminate the offering and cancel all orders, and payment will be returned promptly to the subscribers, without interest. We have agreed to pay U.S. Bank a fee of $8,000 for acting as escrow agent in connection with the offering. U.S. Bank is acting only as an escrow agent in connection with the offering of securities described herein, and has not endorsed, recommended or guaranteed the purchase, value or repayment of such securities.

Lock-up Arrangements

The Company, and each of its directors and executive officers in their individual capacities, have agreed with the placement agent, subject to certain exceptions, not to dispose of or hedge any of our common shares or securities convertible into or exchangeable for our common shares beneficially owned by them during the period from the date of this prospectus continuing through the offering and for 90 days following the closing of the offering, except with the prior written consent of KBW. This agreement does not apply to any of our existing employee benefit plans.

Selling Restrictions

Other than in the United States, no action has been taken by us or KBW or any other broker-dealer that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

Relationship with Placement Agent

KBW and certain of its affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain financial advisory, investment banking and other services for us and such affiliates in the ordinary course of its business, for which it has received and may continue to receive customary fees and commissions. In addition, from time to time, KBW may effect transactions for its own account or the account of customers, and hold on behalf of itself or its customers, long or short positions in our debt or equity securities.

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Delivery of Depositary Shares

We will issue the depositary shares in book-entry or uncertificated form. Subject to certain limited exceptions, you will not receive a certificated security that is or represents your depositary shares. Instead, our depositary and transfer agent, Computershare Trust Company, N.A., will mail a statement of ownership indicating the number of depositary shares issued to you in book-entry form.

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LEGAL MATTERS

The validity of the securities offered by this prospectus and certain other legal matters will be passed upon for us by Vorys, Sater, Seymour and Pease LLP, Columbus, Ohio. The underwriters are represented by Tucker Ellis LLP, Cleveland, Ohio.

EXPERTS

Our consolidated financial statements as of December 31, 2013 and 2012 and for each of the years in the two-year period ended December 31, 2013 have been incorporated by reference in this prospectus in reliance upon the report of BKD, LLP, registered independent public accountants, incorporated by reference herein and therein and upon the authority of said firm as experts in accounting and auditing.

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LOGO

Up to 1,500,000 Depositary Shares Each Representing a 1/100th Interest in a

6.50% Noncumulative Convertible Perpetual Preferred Share, Series A

PROSPECTUS

Keefe, Bruyette & Woods

A Stifel Company

November [ — ], 2014

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following is an itemized statement of the estimated fees and expenses in connection with the issuance and distribution of securities registered hereby.


Registration Fee — Securities and Exchange Commission	$	1,932
Transfer Agent and Registrar Fees		2,500
EDGAR, Printing and Mailing Expenses		30,000
Accounting Fees and Expenses		70,000
Placement Agent Fees ⁽¹⁾		675,000
Placement Agent Expenses		20,000
Legal Fees and Expenses		125,000
NASDAQ Listing Fees		50,000
Miscellaneous Expenses		8,000
FINRA Fees		2,750
Blue Sky Fees		1,000

Total	$	986,182

(1)

Represents fees payable to Keefe, Bruyette & Woods, Inc. equal to 3.5% of the aggregate dollar amount of depositary shares sold in the shareholder and customer/local community offerings and 5.5% of the aggregate dollar amount of depositary shares sold in the syndicated offering, assuming that 50% of the depositary shares will be sold in the shareholder and customer/local community offerings and 50% of the depositary shares will be sold in the syndicated offering. Assumes the sale of an aggregate of $15 million of depositary shares.

All of the above amounts, other than the SEC registration fee and FINRA fees, are estimates only.

Item 14. Indemnification of Directors and Officers.

(a)

Ohio General Corporation Law

Division (E) of Section 1701.13 of the Ohio Revised Code grants corporations broad powers to indemnify directors, officers, employees and agents. Division (E) of Section 1701.13 provides:

(1) A corporation may indemnify or agree to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation, by reason of the fact that the person is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture, trust, or other enterprise, against expenses, including attorney’s fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit, or proceeding, if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if the person had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, the person had reasonable cause to believe that the person’s conduct was unlawful.

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(2) A corporation may indemnify or agree to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor, by reason of the fact that the person is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture, trust, or other enterprise, against expenses, including attorney’s fees, actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit, if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any of the following:

(a) Any claim, issue, or matter as to which such person is adjudged to be liable for negligence or misconduct in the performance of the person’s duty to the corporation unless, and only to the extent that, the court of common pleas or the court in which such action or suit was brought determines, upon application, that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court of common pleas or such other court shall deem proper;

(b) Any action or suit in which the only liability asserted against a director is pursuant to section 1701.95 of the Revised Code.

(3) To the extent that a director, trustee, officer, employee, member, manager, or agent has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in division (E)(1) or (2) of this section, or in defense of any claim, issue, or matter in the action, suit, or proceeding, the person shall be indemnified against expenses, including attorney’s fees, actually and reasonably incurred by the person in connection with the action, suit, or proceeding.

(4) Any indemnification under division (E)(1) or (2) of this section, unless ordered by a court, shall be made by the corporation only as authorized in the specific case, upon a determination that indemnification of the director, trustee, officer, employee, member, manager, or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in division (E)(1) or (2) of this section. Such determination shall be made as follows:

(a) By a majority vote of a quorum consisting of directors of the indemnifying corporation who were not and are not parties to or threatened with the action, suit, or proceeding referred to in division (E)(1) or (2) of this section;

(b) If the quorum described in division (E)(4)(a) of this section is not obtainable or if a majority vote of a quorum of disinterested directors so directs, in a written opinion by independent legal counsel other than an attorney, or a firm having associated with it an attorney, who has been retained by or who has performed services for the corporation or any person to be indemnified within the past five years;

(d) By the court of common pleas or the court in which the action, suit, or proceeding referred to in division (E)(1) or (2) of this section was brought.

Any determination made by the disinterested directors under division (E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this section shall be promptly communicated to the person who threatened or brought the action or suit by or in the right of the corporation under division (E)(2) of this section, and, within ten days after receipt of that notification, the person shall have the right to petition the court of common pleas or the court in which the action or suit was brought to review the reasonableness of that determination.

(5) (a) Unless at the time of a director’s act or omission that is the subject of an action, suit, or proceeding referred to in division (E)(1) or (2) of this section, the articles or the regulations of a corporation state, by specific reference to this division, that the provisions of this division do not apply to the corporation and unless the only

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liability asserted against a director in an action, suit, or proceeding referred to in division (E)(1) or (2) of this section is pursuant to section 1701.95 of the Revised Code, expenses, including attorney’s fees, incurred by a director in defending the action, suit, or proceeding shall be paid by the corporation as they are incurred, in advance of the final disposition of the action, suit, or proceeding, upon receipt of an undertaking by or on behalf of the director in which the director agrees to do both of the following:

(i) Repay that amount if it is proved by clear and convincing evidence in a court of competent jurisdiction that the director’s action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the corporation or undertaken with reckless disregard for the best interests of the corporation;

(ii) Reasonably cooperate with the corporation concerning the action, suit, or proceeding.

(b) Expenses, including attorney’s fees, incurred by a director, trustee, officer, employee, member, manager, or agent in defending any action, suit, or proceeding referred to in division (E)(1) or (2) of this section, may be paid by the corporation as they are incurred, in advance of the final disposition of the action, suit, or proceeding, as authorized by the directors in the specific case, upon receipt of an undertaking by or on behalf of the director, trustee, officer, employee, member, manager, or agent to repay that amount, if it ultimately is determined that the person is not entitled to be indemnified by the corporation.

(6) The indemnification or advancement of expenses authorized by this section shall not be exclusive of, and shall be in addition to, any other rights granted to those seeking indemnification or advancement of expenses under the articles, the regulations, any agreement, a vote of shareholders or disinterested directors, or otherwise, both as to action in their official capacities and as to action in another capacity while holding their offices or positions, and shall continue as to a person who has ceased to be a director, trustee, officer, employee, member, manager, or agent and shall inure to the benefit of the heirs, executors, and administrators of that person. A right to indemnification or to advancement of expenses arising under a provision of the articles or the regulations shall not be eliminated or impaired by an amendment to that provision after the occurrence of the act or omission that becomes the subject of the civil, criminal, administrative, or investigative action, suit, or proceeding for which the indemnification or advancement of expenses is sought, unless the provision in effect at the time of that act or omission explicitly authorizes that elimination or impairment after the act or omission has occurred.

(7) A corporation may purchase and maintain insurance or furnish similar protection, including, but not limited to, trust funds, letters of credit, or self-insurance, on behalf of or for any person who is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture, trust, or other enterprise, against any liability asserted against the person and incurred by the person in any such capacity, or arising out of the person’s status as such, whether or not the corporation would have the power to indemnify the person against that liability under this section. Insurance may be purchased from or maintained with a person in which the corporation has a financial interest.

(8) The authority of a corporation to indemnify persons pursuant to division (E)(1) or (2) of this section does not limit the payment of expenses as they are incurred, indemnification, insurance, or other protection that may be provided pursuant to divisions (E)(5), (6), and (7) of this section. Divisions (E)(1) and (2) of this section do not create any obligation to repay or return payments made by the corporation pursuant to division (E)(5), (6), or (7).

(9) As used in division (E) of this section, “corporation” includes all constituent entities in a consolidation or merger and the new or surviving corporation, so that any person who is or was a director, officer, employee, trustee, member, manager, or agent of such a constituent entity, or is or was serving at the request of such constituent entity as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture, trust, or

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other enterprise, shall stand in the same position under this section with respect to the new or surviving corporation as the person would if the person had served the new or surviving corporation in the same capacity.

(b)

SB Financial’s Regulations

The Regulations of SB Financial contain the following provisions with respect to the indemnification of directors and officers:

Section 5.01. Indemnification . The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action threatened or instituted directly by the corporation) by reason of the fact that he is or was a director or officer of the corporation or any present or former director or officer of the corporation who is or was serving at the request of the corporation as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.

Section 5.02. Discretionary Indemnification . The corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative by reason of the fact that he is or was an employee or agent of the corporation or is or was serving at the request of the corporation as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.

The corporation may also indemnify or agree to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit which is threatened or instituted by the corporation directly (rather than a derivative action in the right of the corporation) to produce a judgment in its favor by reason of the fact that he is or was a director or officer of the corporation or any present or former director or officer of the corporation who is or was serving at the request of the corporation as a director, trustee, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by him, judgments and amounts paid in connection with such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, except that no such indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless and only to the extent that the Court of Common Pleas of Defiance County, Ohio or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as such Court of Common Pleas or such other court shall deem proper.

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Section 5.03. Indemnification for Expenses . To the extent that a director, trustee, officer, employee or agent has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 5.02 hereof, or in defense of any claim, issue or matter therein, he shall be promptly indemnified by the corporation against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith.

Section 5.04. Determination Required . Any indemnification under Sections 5.01 and 5.02 (unless ordered by a court) shall be made by the corporation only upon a determination that the indemnification of the director, trustee, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 5.01 and 5.02. Such determination shall be made (A) by the Board of Directors by a majority vote of a quorum consisting of directors who were not and are not parties to, or threatened with, such action, suit or proceeding or (B) if such a quorum is not obtainable or if a majority of a quorum of disinterested directors so directs, in a written opinion by independent legal counsel, or (C) by the shareholders. Any determination made by the disinterested directors or by independent legal counsel under this Section 5.04 to provide indemnity under Section 5.01 or 5.02 to a person threatened or sued in the right of the corporation (derivatively) shall be promptly communicated to the person who threatened or brought the derivative action or suit in the right of the corporation, and such person shall have the right, within 10 days after receipt of such notification, to petition the Court of Common Pleas of Defiance County, Ohio or the court in which action or suit was brought to review the reasonableness of such determination.

Section 5.05. Advances for Expenses . Expenses (including attorneys’ fees) incurred in defending any civil or criminal action, suit, or proceeding referred to in Sections 5.01 and 5.02 may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director, trustee, officer, employee, or agent to repays such amount, unless it shall ultimately be determined that he is entitled to be indemnified by the corporation as authorized in this Article Five.

Section 5.06. Article Five Not Exclusive . The indemnification provided by this Article Five shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under the Articles or the Regulations or any agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, trustee, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

Section 5.07. Insurance . The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this Article Five.

Section 5.08. Definition of “the Corporation” . As used in this Article Five, references to “the corporation” include all constituent corporations in a consolidation or merger and the new or surviving corporation, so that any person who is or was a director, trustee, officer, employee or agent of such a constituent corporation, or is or was serving at the request of such constituent corporation as a director, trustee, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, shall stand in the same position under the provisions of this Article Five with respect to the new or surviving corporation as he would if he had served the new or surviving corporation in the same capacity.

(c)

Insurance

In accordance with Section 5.07 of the Regulations, SB Financial has purchased and maintains insurance policies that insure its directors and officers against certain liabilities that might be incurred by them in their capacities as directors and officers.

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Item 15. Recent Sales of Unregistered Securities.

Not applicable.

Item 16. Exhibits.

The documents listed below are filed with this Registration Statement as exhibits or incorporated into this Registration Statement by reference as noted:


Exhibit Number		Description

1.1		Form of Agency Agreement *

3.1		Amended Articles of SB Financial as filed with the Ohio Secretary of State on May 23, 1986 (incorporated herein by reference to Exhibit 3(a)(i) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 1989 (File No. 0-13507))

3.2		Certificate of Amendment to the Amended Articles of SB Financial as filed with the Ohio Secretary of State on April 27, 1993 (incorporated herein by reference to Exhibit 3(b) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (File No. 0-13507))

3.3		Certificate of Amendment to the Amended Articles of SB Financial as filed with the Ohio Secretary of State on April 30, 1997 (incorporated herein by reference to Exhibit 3(c) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 0-13507))

3.4		Certificate of Amendment to the Amended Articles of SB Financial as filed with the Ohio Secretary of State on May 27, 2011 to evidence the amendment of Article FOURTH to authorize 10,000,000 common shares and 200,000 preferred shares, each without par value (incorporated herein by reference to Exhibit 3.1 to SB Financial’s Current Report on Form 8-K filed June 1, 2011))

3.5		Certificate of Amendment to the Amended Articles of SB Financial as filed with the Ohio Secretary of State on April 12, 2013 to evidence the amendment of Article FIRST to change the name of the corporation to SB Financial Group, Inc. (incorporated herein by reference to Exhibit 3.1 to SB Financial’s Current Report on Form 8-K filed April 18, 2013))

3.6		Amended Articles of SB Financial, as amended (reflecting amendments through April 12, 2013) [for SEC reporting compliance purposes only – not filed with the Ohio Secretary of State] **

3.7		Certificate of Amendment by Directors or Incorporators to Articles filed with the Secretary of State of the State of Ohio on November 6, 2014, evidencing the adoption of an amendment by the Board of Directors of SB Financial to Article FOURTH to establish the express terms of the 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A *

3.8		Amended and Restated Regulations of SB Financial (incorporated herein by reference to Exhibit 3.5 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 0-13507))

3.9		Certificate Regarding Adoption of Amendment to Section 2.01 of the Amended and Restated Regulations of SB Financial by the Shareholders on April 16, 2009 (incorporated herein by reference to Exhibit 3.1 to SB Financial’s Current Report on Form 8-K filed April 22, 2009 (File No. 0-13507))

4.1		Form of Certificate for 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A, of SB Financial *

4.2		Form of Depositary Receipt *

4.3		Deposit Agreement *

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Exhibit Number		Description

4.4		Indenture, dated as of September 15, 2005, by and between SB Financial and Wilmington Trust Company, as Debenture Trustee, relating to Floating Rate Junior Subordinated Deferrable Interest Debentures (incorporated herein by reference to Exhibit 4.1 to SB Financial’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 (File No. 0-13507))

4.5		Amended and Restated Declaration of Trust of Rurban Statutory Trust II, dated as of September 15, 2005 (incorporated herein by reference to Exhibit 4.2 to SB Financial’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 (File No. 0-13507))

4.6		Guarantee Agreement, dated as of September 15, 2005, by and between SB Financial and Wilmington Trust Company, as Guarantee Trustee (incorporated herein by reference to Exhibit 4.3 to SB Financial’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 (File No. 0-13507))

4.7		Agreement to furnish instruments and agreements defining rights of holders of long-term debt (incorporated herein by reference to Exhibit 4.4 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (File No. 0-13507))

5		Opinion of Vorys, Sater, Seymour and Pease LLP, as to the legality of the securities to be registered *

10.1		Plan to Allow Directors to Elect to Defer Compensation (incorporated herein by reference to Exhibit 10(v) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (File No. 0-13507))

10.2		1997 Stock Option Plan of SB Financial (incorporated herein by reference to Exhibit 10(v) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (File No. 0-13507))

10.3		Form of Non-Qualified Stock Option Agreement with Vesting After One Year of Employment under SB Financial’s 1997 Stock Option Plan (incorporated herein by reference to Exhibit 10(a) to SB Financial’s Current Report on Form 8-K filed March 21, 2005 (File No. 0-13507))

10.4		Form of Incentive Stock Option Agreement with Vesting After One Year of Employment under SB Financial’s 1997 Stock Option Plan (incorporated herein by reference to Exhibit 10(c) to SB Financial’s Current Report on Form 8-K filed March 21, 2005 (File No. 0-13507))

10.5		Form of Stock Appreciation Rights under SB Financial’s 1997 Stock Option Plan (incorporated herein by reference to Exhibit 10(b) to SB Financial’s Current Report on Form 8-K filed March 21, 2005 (File No. 0-13507))

10.6		2008 Stock Incentive Plan of SB Financial (incorporated herein by reference to Exhibit 10 to SB Financial’s Current Report on Form 8-K filed April 22, 2008 (File No. 0-13507))

10.7		Form of Restricted Stock Award Agreement (For Employees) under SB Financial’s 2008 Stock Option Plan (incorporated herein by reference to Exhibit 10.2 to SB Financial’s Current Report on Form 8-K filed April 22, 2008 (File No. 0-13507))

10.8		Form of Incentive Stock Option Agreement with Five-Year Vesting under SB Financial’s 2008 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.10 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 0-13507))

10.9		Form of Non-Qualified Stock Option Award Agreement with Five-Year Vesting under SB Financial’s 2008 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.11 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 0-13507))

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Exhibit Number		Description

10.10		Employees’ Stock Ownership and Savings Plan of SB Financial (incorporated herein by reference to Exhibit 10(y) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (File No. 0-13507))

10.11		Employee Stock Purchase Plan of SB Financial (incorporated herein by reference to Exhibit 10(z) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (File No. 0-13507))

10.12		Employment Agreement, dated July 30, 2010, between SB Financial and Mark A. Klein (incorporated herein by reference to Exhibit 10.1 to SB Financial’s Current Report on Form 8-K filed August 5, 2010 (File No. 0-13507))

10.13		Second Amended and Restated Change of Control Agreement, dated July 30, 2010, between SB Financial and Mark A. Klein (incorporated herein by reference to Exhibit 10.2 to SB Financial’s Current Report on Form 8-K filed August 5, 2010 (File No. 0-13507))

10.14		Change of Control Agreement, dated April 21, 2010, between SB Financial and Anthony V. Cosentino (incorporated herein by reference to Exhibit 10.16 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 0-13507))

10.15		Amended and Restated Supplemental Executive Retirement Plan Agreement, effective as of December 31, 2008, by and between SB Financial and Mark A. Klein (incorporated herein by reference to Exhibit 10.16 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 0-13507))

10.16		First Amendment to Amended and Restated Supplemental Executive Retirement Plan Agreement, dated as April 20, 2009, by and between SB Financial and Mark A. Klein (incorporated herein by reference to Exhibit 10.3 to SB Financial’s Current Report on Form 8-K filed April 22, 2009 (File No. 0-13507))

10.17		Non-Qualified Deferred Compensation Plan of SB Financial effective as of January 1, 2007 (incorporated herein by reference to Exhibit 10.20 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (File No. 0-13507))

10.18		Long-Term Incentive Compensation Plan for SB Financial and Affiliates (incorporated by reference to Exhibit 10.1 to SB Financial’s Current Report on Form 8-K filed August 20, 2012 (File No. 0-13507))

21		Subsidiaries of SB Financial *

23.1		Consent of BKD, LLP *

23.2		Consent of Vorys, Sater, Seymour and Pease LLP (included in Exhibit 5) *

24		Powers of Attorney **

99.1		Order Form and Instructions*

99.2		Question and Answer Pamphlet*

99.3		Form of Cover Letter to Shareholders of SB Financial Group, Inc.*

99.4		Form of Cover Letter to Selected Customers and Residents of Local Community*

99.5		Form of Cover Letter to Prospective Investors in the General Public*

99.6		Form of Letter from Keefe, Bruyette & Woods, Inc. to Shareholders, Customers and Friends*

99.7		Additional Solicitation Material*

*	Filed herewith.

**	Previously filed.

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Item 17. Undertakings.

(a)

The undersigned registrant hereby undertakes:

(1)

To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)

To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii)

To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii)

To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2)

That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof.

(3)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)

That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5)

That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)

Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii)

Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

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(iii)

The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv)

Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(b)

The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report, to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information is required to be presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.

(c)

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(d)

The undersigned registrant hereby undertakes that:

(1)

For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be a part of this registration statement as of the time it was declared effective; and

(2)

For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Pre-Effective Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Defiance, State of Ohio, on November 6, 2014.


SB FINANCIAL GROUP, INC.

By:		/s/ Mark A. Klein
Name:		Mark A. Klein
Title:		President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Pre-Effective Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities indicated on November 6, 2014.


Signature				Title

/s/ Mark A. Klein				Director, President and Chief Executive Officer (principal executive officer)
Mark A. Klein

/s/ Anthony V. Cosentino				Executive Vice President and Chief Financial Officer (principal financial and accounting officer)
Anthony V. Cosentino

/s/ George W. Carter				Director
George W. Carter*

/s/ Gary M. Cates				Director
Gary M. Cates*

/s/ Robert A. Fawcett, Jr.				Director
Robert A. Fawcett, Jr.*

/s/ Gaylyn J. Finn				Director
Gaylyn J. Finn*

/s/ Richard L. Hardgrove				Director
Richard L. Hardgrove*

/s/ Rita Kissner				Director
Rita Kissner*

/s/ William G. Martin				Director
William G. Martin*

/s/ Timothy J. Stolly				Director
Timothy J. Stolly*

The above-named directors of the Registrant sign this Pre-Effective Amendment No. 1 to the Registration Statement on Form S-1 by Mark A. Klein, their attorney-in-fact, pursuant to Powers of Attorney signed by the above-named directors, which Powers of Attorney are filed with this Registration Statement on Form S-1 as exhibits, in the capacities indicated and on the 6th day of November, 2014.


By:		/s/ Mark A. Klein
		Mark A. Klein
		President and Chief Executive Officer

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EXHIBIT INDEX


Exhibit Number		Description

1.1		Form of Agency Agreement *

3.1		Amended Articles of SB Financial as filed with the Ohio Secretary of State on May 23, 1986 (incorporated herein by reference to Exhibit 3(a)(i) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 1989 (File No. 0-13507))

3.2		Certificate of Amendment to the Amended Articles of SB Financial as filed with the Ohio Secretary of State on April 27, 1993 (incorporated herein by reference to Exhibit 3(b) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (File No. 0-13507))

3.3		Certificate of Amendment to the Amended Articles of SB Financial as filed with the Ohio Secretary of State on April 30, 1997 (incorporated herein by reference to Exhibit 3(c) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (File No. 0-13507))

3.4		Certificate of Amendment to the Amended Articles of SB Financial as filed with the Ohio Secretary of State on May 27, 2011 to evidence the amendment of Article FOURTH to authorize 10,000,000 common shares and 200,000 preferred shares, each without par value (incorporated herein by reference to Exhibit 3.1 to SB Financial’s Current Report on Form 8-K filed June 1, 2011))

3.5		Certificate of Amendment to the Amended Articles of SB Financial as filed with the Ohio Secretary of State on April 12, 2013 to evidence the amendment of Article FIRST to change the name of the corporation to SB Financial Group, Inc. (incorporated herein by reference to Exhibit 3.1 to SB Financial’s Current Report on Form 8-K filed April 18, 2013))

3.6		Amended Articles of SB Financial, as amended (reflecting amendments through April 12, 2013) [for SEC reporting compliance purposes only – not filed with the Ohio Secretary of State] **

3.7		Certificate of Amendment by Directors or Incorporators to Articles filed with the Secretary of State of the State of Ohio on November 6, 2014, evidencing the adoption of an amendment by the Board of Directors of SB Financial to Article FOURTH to establish the express terms of the 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A *

3.8		Amended and Restated Regulations of SB Financial (incorporated herein by reference to Exhibit 3.5 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 0-13507))

3.9		Certificate Regarding Adoption of Amendment to Section 2.01 of the Amended and Restated Regulations of SB Financial by the Shareholders on April 16, 2009 (incorporated herein by reference to Exhibit 3.1 to SB Financial’s Current Report on Form 8-K filed April 22, 2009 (File No. 0-13507))

4.1		Form of Certificate for 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A, of SB Financial *

4.2		Form of Depositary Receipt *

4.3		Deposit Agreement *

4.4		Indenture, dated as of September 15, 2005, by and between SB Financial and Wilmington Trust Company, as Debenture Trustee, relating to Floating Rate Junior Subordinated Deferrable Interest Debentures (incorporated herein by reference to Exhibit 4.1 to SB Financial’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 (File No. 0-13507))

4.5		Amended and Restated Declaration of Trust of Rurban Statutory Trust II, dated as of September 15, 2005 (incorporated herein by reference to Exhibit 4.2 to SB Financial’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 (File No. 0-13507))

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Exhibit Number		Description

4.6		Guarantee Agreement, dated as of September 15, 2005, by and between SB Financial and Wilmington Trust Company, as Guarantee Trustee (incorporated herein by reference to Exhibit 4.3 to SB Financial’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 (File No. 0-13507))

4.7		Agreement to furnish instruments and agreements defining rights of holders of long-term debt (incorporated herein by reference to Exhibit 4.4 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (File No. 0-13507))

5		Opinion of Vorys, Sater, Seymour and Pease LLP, as to the legality of the securities to be registered *

10.1		Plan to Allow Directors to Elect to Defer Compensation (incorporated herein by reference to Exhibit 10(v) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (File No. 0-13507))

10.2		1997 Stock Option Plan of SB Financial (incorporated herein by reference to Exhibit 10(v) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (File No. 0-13507))

10.3		Form of Non-Qualified Stock Option Agreement with Vesting After One Year of Employment under SB Financial’s 1997 Stock Option Plan (incorporated herein by reference to Exhibit 10(a) to SB Financial’s Current Report on Form 8-K filed March 21, 2005 (File No. 0-13507))

10.4		Form of Incentive Stock Option Agreement with Vesting After One Year of Employment under SB Financial’s 1997 Stock Option Plan (incorporated herein by reference to Exhibit 10(c) to SB Financial’s Current Report on Form 8-K filed March 21, 2005 (File No. 0-13507))

10.5		Form of Stock Appreciation Rights under SB Financial’s 1997 Stock Option Plan (incorporated herein by reference to Exhibit 10(b) to SB Financial’s Current Report on Form 8-K filed March 21, 2005 (File No. 0-13507))

10.6		2008 Stock Incentive Plan of SB Financial (incorporated herein by reference to Exhibit 10 to SB Financial’s Current Report on Form 8-K filed April 22, 2008 (File No. 0-13507))

10.7		Form of Restricted Stock Award Agreement (For Employees) under SB Financial’s 2008 Stock Option Plan (incorporated herein by reference to Exhibit 10.2 to SB Financial’s Current Report on Form 8-K filed April 22, 2008 (File No. 0-13507))

10.8		Form of Incentive Stock Option Agreement with Five-Year Vesting under SB Financial’s 2008 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.10 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 0-13507))

10.9		Form of Non-Qualified Stock Option Award Agreement with Five-Year Vesting under SB Financial’s 2008 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.11 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 0-13507))

10.10		Employees’ Stock Ownership and Savings Plan of SB Financial (incorporated herein by reference to Exhibit 10(y) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (File No. 0-13507))

10.11		Employee Stock Purchase Plan of SB Financial (incorporated herein by reference to Exhibit 10(z) to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (File No. 0-13507))

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Exhibit Number		Description

10.12		Employment Agreement, dated July 30, 2010, between SB Financial and Mark A. Klein (incorporated herein by reference to Exhibit 10.1 to SB Financial’s Current Report on Form 8-K filed August 5, 2010 (File No. 0-13507))

10.13		Second Amended and Restated Change of Control Agreement, dated July 30, 2010, between SB Financial and Mark A. Klein (incorporated herein by reference to Exhibit 10.2 to SB Financial’s Current Report on Form 8-K filed August 5, 2010 (File No. 0-13507))

10.14		Change of Control Agreement, dated April 21, 2010, between SB Financial and Anthony V. Cosentino (incorporated herein by reference to Exhibit 10.16 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 0-13507))

10.15		Amended and Restated Supplemental Executive Retirement Plan Agreement, effective as of December 31, 2008, by and between SB Financial and Mark A. Klein (incorporated herein by reference to Exhibit 10.16 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 0-13507))

10.16		First Amendment to Amended and Restated Supplemental Executive Retirement Plan Agreement, dated as April 20, 2009, by and between SB Financial and Mark A. Klein (incorporated herein by reference to Exhibit 10.3 to SB Financial’s Current Report on Form 8-K filed April 22, 2009 (File No. 0-13507))

10.17		Non-Qualified Deferred Compensation Plan of SB Financial effective as of January 1, 2007 (incorporated herein by reference to Exhibit 10.20 to SB Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (File No. 0-13507))

10.18		Long-Term Incentive Compensation Plan for SB Financial and Affiliates (incorporated by reference to Exhibit 10.1 to SB Financial’s Current Report on Form 8-K filed August 20, 2012 (File No. 0-13507))

21		Subsidiaries of SB Financial *

23.1		Consent of BKD, LLP *

23.2		Consent of Vorys, Sater, Seymour and Pease LLP (included in Exhibit 5) *

24		Powers of Attorney **

99.1		Order Form and Instructions*

99.2		Question and Answer Pamphlet*

99.3		Form of Cover Letter to Shareholders of SB Financial Group, Inc.*

99.4		Form of Cover Letter to Selected Customers and Residents of Local Community*

99.5		Form of Cover Letter to Prospective Investors in the General Public*

99.6		Form of Letter from Keefe, Bruyette & Woods, Inc. to Shareholders, Customers and Friends*

99.7		Additional Solicitation Material*

*	Filed herewith.

**	Previously filed.

II-14

Exhibit 1.1

SB FINANCIAL GROUP, INC.

(an Ohio corporation)

Up to 1,500,000 Depositary Shares

Each Representing a 1/100th Interest in a

6.50% Noncumulative Convertible Perpetual Preferred Share, Series A

Liquidation Preference of $10.00 Per Depositary Share

Offering Price $10.00 Per Depositary Share

FORM OF AGENCY AGREEMENT

November , 2014

Keefe, Bruyette & Woods, Inc.

70 West Madison Street

Suite 2401

Chicago, Illinois 60602

Ladies and Gentlemen:

SB Financial Group, Inc., an Ohio corporation (the “Company”) hereby confirms its agreement with Keefe, Bruyette & Woods, Inc. (the “Agent”) as set forth in this Agreement. Unless the context otherwise requires, all references to the Company include the Company and each of its subsidiaries, including The State Bank and Trust Company (the “Bank”).

Section 1. The Offering. The Company intends to offer and sell up to 1,500,000 Depositary Shares (the “Shares”), each representing a 1/100th interest in a 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A, no par value per share, and a liquidation preference of $1,000.00 per share (the “Series A Shares”), in an offering to subscribers in the following order of priority: (1) current common equity shareholders of the Company (the “Shareholder Offering”), (2) the Company’s customers and residents of the communities it serves (the “Community Offering”) and (3) to certain members of the general public on a best efforts basis by the Agent (the “Syndicated Offering,” and collectively with the Shareholder Offering and Community Offering, the “Offering”). The Syndicated Offering may begin concurrently with, during or after the commencement or termination of the Shareholder and Community Offerings, but priority in filling orders will be given first to the Shareholder Offering subscriptions and second to the Community Offering subscriptions. The Series A Shares will, when issued, be deposited by the Company against delivery of depositary receipts (“Depositary Receipts”) to be issued by Computershare Inc. and its wholly-owned subsidiary, Computershare Trust Company, N.A. (collectively, the “Depositary”), evidencing the Shares, under a Deposit Agreement dated November 6, 2014 (the “Deposit Agreement”), among the Company, the Depositary, and the holders from time to time of the Depositary Receipts issued thereunder. Each Depositary Receipt will evidence one or more Shares. The Series A Shares, the Shares and the Conversion Shares (as defined below) are herein collectively referred to as the “Securities.” The Series A Shares will have the terms and provisions set forth in a certificate of amendment to the Articles of Incorporation of the Company (the “Certificate of Amendment”) to be filed by the Company with the Secretary of State of the State of Ohio. It is acknowledged that the purchase

of Shares in the Offering is subject to the maximum and minimum purchase limitations as described in the Prospectus (as defined below) and that the Company may in its sole discretion reject, in whole or in part, any orders received in the Offering.

Subscription funds received in the offering prior to the satisfaction of all closing conditions contained herein will be delivered to U.S. Bank, as escrow agent (the “Escrow Agent”), by 12:00 P.M. on the next business day, and immediately deposited into a segregated account established at U.S. Bank for such purpose. If the Offering does not close or if the closing occurs but some or all of a subscriber’s funds are not accepted by the Company, the subscription funds will be promptly returned to the subscribers.

The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1 (File No. 333-198879) (the “Registration Statement”), containing a prospectus relating to the Offering, for the registration of the Securities under the Securities Act of 1933, as amended (the “1933 Act”), and has filed such amendments thereto and such amended prospectuses as may have been required to the date hereof. The term “Registration Statement” shall include any documents incorporated by reference therein and all financial schedules and exhibits thereto, as amended, including post-effective amendments. The prospectus, as amended, on file with the Commission at the time the Registration Statement initially became effective is hereinafter called the “Prospectus,” except that if any prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the rules and regulations of the Commission under the 1933 Act (the “1933 Act Regulations”) differing from the prospectus on file at the time the Registration Statement initially became effective, the term “Prospectus” shall refer to the prospectus filed pursuant to Rule 424(b) or (c) from and after the time said prospectus is filed with the Commission.

Section 2. Retention of Agent; Compensation. Subject to the terms and conditions herein set forth, the Company hereby appoints the Agent as its exclusive financial advisor and agent (i) to utilize its best efforts to solicit subscriptions for the Shares and to advise and assist the Company with respect to the sale by the Company of the Shares in the Offering and (ii) to participate in the Offering in the areas of market making and in syndicate formation (if necessary).

On the basis of the representations, warranties, and agreements herein contained, but subject to the terms and conditions herein set forth, the Agent accepts such appointment. The Company acknowledges that the Agent shall not be required to purchase any Shares or be obligated to take any action which is inconsistent with all applicable laws, regulations, decisions or orders or this Agreement.

Except as specifically provided for in Section 11 hereof, the obligations of the Agent pursuant to this Agreement shall terminate upon termination of the Offering. All fees or expenses due to the Agent but unpaid will be payable to the Agent in same day funds at the Closing Date (as hereinafter defined).

In the event the Company is unable to sell a minimum of 1,000,000 Shares by the date when such sales must be completed, in accordance with the Prospectus, this Agreement shall terminate and the Company shall promptly refund or cause the Escrow Agent to refund to any

persons who have subscribed for any of the Shares the full amount which it may have received from such subscriber, as set forth in the Prospectus, and none of the parties to this Agreement shall have any obligation to the other parties hereunder, except as set forth in subparagraph (d) below and in Sections 7, 9 and 10 hereof. In the event the Offering is terminated for any reason not attributable to the action or inaction of the Agent, the Agent shall be paid the fees due to the date of such termination pursuant to subparagraph (d) below.

The Agent shall receive the following compensation and expense reimbursement for its services hereunder:

(a) In the case of any and all Shares sold in the Shareholder Offering, a placement agent fee equal to 3.5% of the aggregate purchase price of the Shares sold in the Shareholder Offering;

(b) In the case of any and all Shares sold in the Community Offering, a placement agent fee equal to 3.5% of the aggregate purchase price of the Shares sold in the Community Offering.

(c) The Agent may offer Shares on a best efforts basis in the Syndicated Offering. The Agent may seek to form a syndicate of registered broker-dealers to assist in the Syndicated Offering. If it does so, the Agent will endeavor to distribute the Shares among dealers in a fashion which best meets the distribution objectives of the Company. In the case of any and all Shares sold in the Syndicated Offering, the Agent will be paid a fee of 5.5% of the aggregate purchase price of the Shares sold in the Syndicated Offering. If the Company and the Agent determine that other broker-dealers are to be utilized, a portion of the 5.5% fee payable by the Company under this Section 2(c) shall be reallowed by the Agent to the participating dealer as determined in the sole discretion of the Agent.

(d) The Company shall reimburse the Agent for its reasonable out-of-pocket expenses related to the Offering, regardless of whether the Offering is consummated, including, without limitation, legal, marketing, syndication and travel expenses in accordance with Section 7. The provisions of this paragraph or Section 7 are not intended to apply to or in any way impair or limit the indemnification provisions contained herein.

Section 3. Sale and Delivery of Shares. If all conditions precedent to the consummation of the Offering are satisfied, the Company agrees to issue, or have issued, the Series A Shares and to issue, or have issued, the Shares sold in the Offering and to direct the Depositary to release for delivery the Depositary Receipts in book-entry form on the Closing Date against payment to the Company by the Escrow Agent of funds received pursuant to the subscription agreements; provided, however, that no funds shall be released by the Escrow Agent to the Company until the conditions specified in Section 8 hereof shall have been complied with to the reasonable satisfaction of the Agent or its counsel. The release of Shares against payment therefor shall be made on a date and at a place acceptable to the Company and the Agent as set forth in Section 14. The Depositary Receipts shall initially be reflected in book-entry form reflected on the books and records of the Depositary and appropriate evidence thereof shall be delivered to the purchasers in accordance with their directions as provided by the Company to the Depositary. The date upon which the closing of the sale and issuance of the Shares takes place in accordance with Section 14 hereof is called the “Closing Date.”

Section 4. Representations and Warranties of the Company. The Company represents and warrants to and agrees with the Agent as of the date hereof, as of the Applicable Time (as defined below) and as of the Closing Date, as follows:

(a) The Registration Statement, which was prepared by the Company and filed with the Commission, has been declared effective by the Commission, no stop order has been issued with respect thereto and no proceedings therefor have been initiated or, to the best knowledge of the Company, threatened by the Commission. At the time the Registration Statement, including the Prospectus contained therein (including any amendment or supplement), became effective, at the Applicable Time (as defined in Section 4(c) hereof) and at the Closing Date, the Registration Statement complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the Registration Statement, including the Prospectus contained therein (including any amendment or supplement thereto), and any information regarding the Company contained in Sales Information (as such term is defined in Section 9 hereof) authorized by the Company for use in connection with the Offering, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (other than in the Registration Statement, in light of the circumstances under which they were made) not misleading, and at the time any Rule 424(b) or (c) Prospectus is filed with the Commission and at the Closing Date, the Prospectus (including any amendment or supplement thereto) and any information regarding the Company contained in Sales Information (as such term is defined in Section 9 hereof) authorized by the Company for use in connection with the Offering will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this Section 4(a) shall not apply to statements or omissions made in reliance upon and in conformity with the written information furnished to the Company by the Agent expressly regarding the Agent for use in the Registration Statement, which written information is only that set forth in the Prospectus in the second, third to last and last paragraphs under the subheading “Marketing and Distribution; Compensation” under the caption “Plan of Distribution”.

(b) The Company has not, directly or indirectly, distributed or otherwise used and will not, directly or indirectly, distribute or otherwise use any prospectus, any “free writing prospectus” (as defined in Rule 405 of the 1933 Act Regulations) or other offering material (including, without limitation, content on the Company’s or the Bank’s website that may be deemed to be a prospectus, free writing prospectus or other offering material) in connection with the offering and sale of the Shares other than any Permitted Free Writing Prospectus (as defined below) or the Prospectus or other materials permitted by the 1933 Act and the 1933 Act Regulations distributed by the Company and reviewed and approved in advance for distribution by the Agent. The Company has not, directly or indirectly, prepared or used and will not directly or indirectly, prepare or use, any Permitted Free Writing Prospectus except in compliance with the filing and other requirements of Rules 164 and 433 of the 1933 Act Regulations; assuming that such Permitted Free Writing Prospectus is so sent or given after the Registration Statement was filed with the Commission (and after such Permitted Free Writing Prospectus was, if

required pursuant to Rule 433(d) under the Act, filed with the Commission), the sending or giving, by the Agent, of any Permitted Free Writing Prospectus will satisfy the provisions of Rules 164 and 433 (without reliance on subsections (b), (c) and (d) for Rule 164); and the Company is not an “ineligible issuer” (as defined in Rule 405 of the 1933 Act Regulations) as of the eligibility determination date for purposes of Rules 164 and 433 of the 1933 Act Regulations with respect to the offering of the Shares or otherwise precluded under Rule 164 from using free writing prospectuses in connection with the offering of the Shares.

(c) As of the Applicable Time (as defined below), neither (i) the Issuer-Represented General Free Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time and the Statutory Prospectus (as defined below), all considered together (collectively, the “General Disclosure Package”), nor (ii) any individual Issuer-Represented Limited-Use Free Writing Prospectus (as defined below), when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Prospectus included in the Registration Statement relating to the offered Shares or any Issuer-Represented Free Writing Prospectus (as defined below) based upon and in conformity with written information furnished to the Holding Company by the Agent specifically for use therein. As used in this paragraph and elsewhere in this Agreement:

1. “ Applicable Time ” means each and every date when a potential purchaser submitted a subscription or otherwise committed to purchase Shares.

2. “ Statutory Prospectus ,” as of any time, means the Prospectus relating to the offered Shares that is included in the Registration Statement relating to the offered Shares immediately prior to the Applicable Time, including any document incorporated by reference therein.

3. “ Issuer-Represented Free Writing Prospectus ” means any “issuer free writing prospectus,” as defined in Rule 433 of the 1933 Act Regulations, relating to the offered Shares in the form filed or required to be filed or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the 1933 Act Regulations. The term does not include any writing exempted from the definition of prospectus pursuant to clause (a) of Section 2(a)(10) of the 1933 Act, without regard to Rule 172 or Rule 173 of the 1933 Act Regulations.

4. “ Issuer-Represented General Free Writing Prospectus ” means any Issuer-Represented Free Writing Prospectus that is intended for general distribution to prospective investors.

5. “ Issuer-Represented Limited-Use Free Writing Prospectus ” means any Issuer-Represented Free Writing Prospectus that is not an Issuer-Represented General Free Writing Prospectus. The term Issuer-Represented Limited-Use Free Writing Prospectus also includes any “bona fide electronic road show,” as defined in Rule 433 of the 1933 Act Regulations, that is made available without restriction pursuant to Rule 433(d)(8)(ii) of the 1933 Act Regulations or otherwise, even though not required to be filed with the Commission.

6. “ Permitted Free Writing Prospectus ” means any free writing prospectus as defined in Rule 405 of the 1933 Act Regulations that is consented to in writing by the Company and the Agent.

(d) Each Issuer-Represented Free Writing Prospectus, as of its date of first use and at all subsequent times through the completion of the Offering and sale of the offered Shares or until any earlier date that the Company notified or notifies the Agent (as described in the next sentence), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein, that has not been superseded or modified. If at any time following the date of first use of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or the Prospectus relating to the Shares or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company has notified or will notify promptly the Agent so that any use of such Issuer-Represented Free-Writing Prospectus may cease until it is amended or supplemented, and the Company has promptly amended or will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to statements in or omissions from any Issuer-Represented Free Writing Prospectus based upon and in conformity with written information expressly regarding the Agent furnished to the Company by the Agent specifically for use therein.

(e) The Company has filed, or will file at or prior to the time of their first use, the Prospectus and any Sales Information with the Commission and any other applicable regulator, to the extent required. The Prospectus and all Sales Information, as of the date the Registration Statement became effective and on the Closing Date, complied and will comply with the applicable requirements of the 1933 Act and the 1933 Act Regulations and, at or prior to the time of their first use, will have received all required authorizations from the Commission for use thereof in final form. No approval of any regulatory or supervisory or other public authority is required in connection with the distribution of the Prospectus and any Sales Information that has not been obtained, or will not be obtained at or prior to the time of first use, and a copy of which has been, or will be, delivered to the Agent. The Company has not distributed any offering material in connection with the Offering except for the Prospectus and any such Sales Information. The information contained in the Sales Information filed as an exhibit to the Registration Statement does not conflict with information contained in the Registration Statement.

(f) The Company is duly organized, validly existing and in good standing as a corporation under the laws of the State of Ohio with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus. The Company is, and at the Closing Date will be, qualified to do

business as a foreign corporation in each jurisdiction in which the conduct of its business requires such qualification, except where the failure to so qualify would not reasonably be expected to have a material adverse effect on the conduct of the business, financial condition, results of operations, affairs or prospects of the Company, taken as a whole (a “Material Adverse Effect”). The Company is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended. The Company has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business except those that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect; all such licenses, permits and governmental authorizations are in full force and effect, and the Company is in compliance therewith and with all laws, rules, regulations and orders applicable to the operation of its business, except where failure to be in compliance would not reasonably be expected to have a Material Adverse Effect. There are no outstanding warrants and, except as described in the Registration Statement and Prospectus, there are no outstanding options to purchase any securities of the Company.

(g) The Bank is duly registered as an Ohio state-chartered bank with the State of Ohio Department of Commerce, Division of Financial Institutions (the “ODFI”) under the laws of the State of Ohio, duly authorized to conduct its business and own its property as described in the Registration Statement and the Prospectus; the Bank is a member of the Federal Deposit Insurance Corporation (“FDIC”) and a member of the Federal Reserve System as a “state member bank”; the Bank has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business, except those that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect; all such licenses, permits and governmental authorizations are in full force and effect, and the Bank is in compliance with all laws, rules, regulations and orders applicable to the operation of its business, except where failure to be in compliance would not reasonably be expected to have a Material Adverse Effect; the Bank is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which its ownership of property or leasing of property or the conduct of its business requires such qualification, unless the failure to be so qualified in one or more of such jurisdictions would not reasonably be expected to have a Material Adverse Effect. The Bank does not own equity securities or any equity interest in any other business enterprise except as described in the Prospectus or as would not be material to the operations of the Company, taken as a whole. The authorized capital stock of the Bank consists of 300,000 common shares, par value $10.00 per share (the “Bank Common Stock”), of which 300,000 shares are issued and outstanding as of the date hereof and owned by the Company free and clear of all liens, claims or encumbrances.

(h) The only subsidiaries of the Company are (i) the subsidiaries listed on Exhibit 21 to the Company’s Annual Report on Form 10-K incorporated by reference into the Registration Statement (collectively the “Subsidiaries”) and (ii) certain other subsidiaries which, considered in the aggregate as a single subsidiary, do not constitute a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X. Either the Company or the Bank owns all of the issued and outstanding capital stock of each of the Subsidiaries free and clear of all liens, claims or encumbrances. Each of the Subsidiaries is duly organized, validly existing and in good standing as a corporation, limited liability company, or other form of organization under the laws of the State of Ohio or other applicable jurisdiction with full corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration

Statement and the Prospectus and is, and at the Closing Date will be, qualified to do business as a foreign corporation in each jurisdiction in which the conduct of its business requires such qualification, except where the failure to so qualify would not reasonably be expected to have a Material Adverse Effect. Each Subsidiary has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business except those that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect; all such licenses, permits and governmental authorizations are in full force and effect, and each Subsidiary is in compliance therewith and with all laws, rules, regulations and orders applicable to the operation of its business, except where failure to be in compliance would not reasonably be expected to have a Material Adverse Effect. There are no outstanding warrants or options to purchase any securities of the Subsidiaries. The activities of each of the Subsidiaries are permitted of a bank holding company registered under the Bank Holding Company Act of 1956, as amended.

(i) The authorized shares of the Company consist of: (1) 10,000,000 common shares, no par value per share (the “Common Shares”), of which 4,875,131 shares are issued and outstanding as of the date hereof; (2) 15,000 of the Series A Shares, no par value per share, liquidation preference $1,000 per share, of which no shares are issued and outstanding as of the date hereof; and (3) 185,000 undesignated preferred shares, no par value per share, of which no shares are issued and outstanding as of the date hereof. All of the shares of the Company’s issued and outstanding shares have been duly authorized and validly issued and are fully paid and non-assessable and none of such shares was issued in violation of any preemptive or other similar rights. No additional Common Shares or Series A Preferred Shares will be issued prior to the Closing Date except for Common Shares issuable upon exercise of options granted under equity incentive plans of the Company. The terms and provisions of the Shares, the Common Shares and the Series A Shares conform with the requirements of applicable law and to all statements relating thereto contained in the Prospectus. Each of the authorized Series A Shares to be issued and the Shares to be issued and sold by the Company in the Offering have been duly authorized for issuance and, when the Series A Shares have been issued and delivered by the Company to the Depositary, pursuant to the Certificate of Amendment relating thereto against payment of the consideration therefor, the Series A Shares will be duly and validly issued and fully paid and nonassessable, and the Series A Shares will be held for the benefit of the holders of the Shares by the Depositary, free and clear of any security interest, mortgage, pledge, lien, encumbrance or legal or equitable claim; and the receipts representing the Shares will conform with the requirements of applicable laws and regulations and to all statements thereto contained in the Prospectus. The Common Shares issuable upon conversion of the Series A Shares (the “Conversion Shares”) have been duly authorized and reserved for issuance by the Company in sufficient number to meet the current conversion requirements based on the conversion rate in effect as of the date hereof and as of the Closing Date and, when issued and delivered upon conversion and in accordance with the Certificate of Amendment will be duly and validly issued and fully-paid and non-assessable. Neither the issuance of the Series A Shares, the Shares nor the Conversion Shares is subject to any preemptive or similar rights.

(j) The deposit of the Series A Shares in respect of the Shares by the Company in accordance with the Deposit Agreement has been duly authorized and, when the Shares (evidenced by the related Depositary Receipts) are issued and delivered in accordance with the terms of the Registration Statement, the Prospectus, the subscription agreement, this

Agreement and the Deposit Agreement, the Shares will represent legal and valid interests in such Series A Shares, and the Shares (evidenced by the related Depositary Receipts) will entitle holders thereof to the benefits provided therein and in the Deposit Agreement. The Shares, the Series A Shares and the Conversion Shares conform in all material respects to the respective statements relating thereto contained in the Registration Statement, the General Disclosure Package and the Prospectus.

(k) Except as described in the Prospectus, there are no contractual encumbrances or restrictions or requirements or legal restrictions or requirements required to be described therein, on the ability of either the Company or the Bank, to pay dividends or make any other distributions on its capital stock. Except as described in the Prospectus, there are no restrictions, encumbrances or requirements affecting the payment of dividends or the making of any other distributions on any of the capital stock of the Company or the Bank.

(l) Each of the Company and the Bank has properly administered in all material respects all accounts for which it acts as a fiduciary, including but not limited to accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment adviser, in accordance with the terms of the governing documents and applicable state and federal law and regulation. Neither the Company, the Bank, nor any of their respective directors, officers or employees has committed any breach of trust with respect to any such fiduciary account, and the accountings for each such fiduciary account are true and correct in all material respects and accurately reflect the assets of such fiduciary account in all material respects.

(m) The Bank is a member in good standing of the Federal Home Loan Bank of Cincinnati. The deposit accounts of the Bank are insured by the FDIC up to the applicable limits, and no proceedings for the termination or revocation of such insurance are pending or, to the best knowledge of the Company, threatened.

(n) Each of the Company and its Subsidiaries has good and marketable title to all real property, and good title to all other assets, owned thereby and material to the business of the Company, taken as a whole, and to those properties and assets described in the Registration Statement and Prospectus as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Registration Statement and Prospectus or as are not material to the business of the Company, taken as a whole; and all of the leases and subleases material to the business of the Company, taken as a whole, under which each of the Company and its Subsidiaries holds properties, including those described in the Registration Statement and Prospectus, are in full force and effect.

(o) The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, when they became effective or at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the rules and regulations promulgated thereunder (the “1934 Act Regulations”), and, when read together with the other information in the Prospectus, at the time the Registration Statement became effective, at the time the Prospectus was issued and as of the Closing Date, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

(p) The Company has received an opinion of its counsel, Vorys, Sater, Seymour and Pease LLP, with respect to the legality of the Shares and the Series A Shares to be issued, and the Common Shares to be issued upon conversion of the Series A Shares, a copy of which is filed as an exhibit to the Registration Statement.

(q) The Company has all such corporate power and authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to issue the Series A Shares and to issue and sell the Shares to be sold as provided herein and as described in the Prospectus. The execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part of the Company. This Agreement has been validly executed and delivered by the Company and, assuming due execution and delivery by the Agent, is the valid, legal and binding agreement of the Company enforceable in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights generally, or by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law, and except to the extent, if any, that the provisions of Sections 9 and 10 hereof may be unenforceable as against public policy or pursuant to applicable Federal law and the rules, regulations and policy of the FDIC or the ODFI.

(r) The Deposit Agreement has been duly authorized by the Company and, when duly executed and delivered by the Company and the Depositary, will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally or by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). The Deposit Agreement conforms in all material respects to the description of the Deposit Agreement contained in the Registration Statement, the General Disclosure Package and the Prospectus.

(s) Effective as of February 8, 2013,the FRB terminated the Consent Order to Cease and Desist (the “Consent Order”) that the Company and its wholly-owned subsidiary, Rurbanc Data Services, Inc., dba RDSI Banking Systems, entered into on March 9, 2011 with the FRB. Since February 8, 2013, neither the Company nor the Bank has been a party to any cease and desist order, written agreement or memorandum of understanding with, or any commitment letter or similar undertaking to, or has been subject to any action, proceeding, order or directive by any federal or state governmental entity or regulatory authority, agency, court, commission, or other administrative entity (“Governmental Entity”), or has adopted any board resolutions relating to the business of the Company or the Bank, at the request of any Governmental Entity, or has been advised by any Governmental Entity that it is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such action, proceeding, order, directive, written agreement, memorandum of understanding, commitment letter, board resolutions or similar undertaking. There are no material unresolved violations, criticisms or exceptions by any Governmental Entity with respect to any report or statement relating to any examinations of the Company or the Bank.

(t) Neither the Company nor the Bank is in violation of any directive received from any Governmental Entity to make any change in the method of conducting its business so as to comply in all material respects with all applicable statutes and regulations (including, without limitation, regulations, decisions, directives and orders of the Board of Governors of the Federal Reserve System (the “FRB”), the FDIC and the ODFI) and, except as may be set forth in the Registration Statement, the General Disclosure Package and the Prospectus, there is no suit or proceeding or charge or action before or by any Governmental Entity, pending or, to the best knowledge of the Company, threatened, which might materially and adversely affect the Offering, or which might result in any Material Adverse Effect.

(u) The consolidated financial statements, schedules and notes related thereto which are included in the Registration Statement, the General Disclosure Package and the Prospectus fairly present the consolidated balance sheets, statements of operations, statements of comprehensive income (loss), statements of changes in shareholders’ equity and statements of cash flows of the Company on a consolidated basis at the respective dates indicated and for the respective periods covered thereby and comply as to form in all material respects with the applicable accounting requirements of the 1933 Act Regulations, the 1934 Act Regulations and Regulation S-X. Such consolidated financial statements, schedules and notes related thereto have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) consistently applied throughout the periods involved, present fairly in all material respects the information required to be stated therein. The other financial, statistical and pro forma information and related notes included in the Registration Statement and the Prospectus present fairly the information shown therein on a basis consistent with the audited and unaudited consolidated financial statements of the Company included in the Prospectus, and any adjustments made therein have been properly applied on the basis described therein. The selected financial data and the summary financial information included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement, the General Disclosure Package and the Prospectus, and the books and records of the Company. No other financial statements or schedules are required to be included in the Registration Statement. To the extent applicable, all disclosures contained in the Registration Statement or the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G of the 1934 Act, the 1934 Act Regulations and Item 10 of Regulation S-K under the 1933 Act, as applicable. The Prospectus contains all disclosures contemplated by the Commission’s Industry Guide 3, as currently in effect, except those not material to the Company.

(v) Each of the Company and its Subsidiaries carries, or is covered by, insurance in such amounts and covering such risks as is adequate for the conduct of its business and the value of its properties and as is customary for companies engaged in a similar industry; and the Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect.

(w) Since the respective dates as of which information is given in the Registration Statement including the Prospectus and except as disclosed in the General Disclosure Package and the Prospectus: (i) there has not been any material adverse change, financial or otherwise, in the condition of the Company and its Subsidiaries, taken as a whole, or in the earnings, capital, properties, business or prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business; (ii) there has not been any material increase in the long-term debt of the Company or in the principal amount of the Company’s consolidated assets which are classified as impaired, substandard, doubtful or loss or in loans past due 90 days or more or real estate acquired by foreclosure, by deed-in-lieu of foreclosure or deemed in-substance foreclosure or any material decrease in equity capital or total assets of the Company; nor has the Company issued any securities (other than pursuant to the Company’s equity compensation plans in existence as of the date hereof and as described in the Registration Statement, any such awards being consistent with past practices) or incurred any liability or obligation for borrowing other than in the ordinary course of business; (iii) there have not been any material transactions entered into by the Company; (iv) there has been no material adverse change in the Company’s relationship with its insurance carriers, including, without limitation, cancellation or other termination of the Company’s fidelity bond or any other type of insurance coverage; (v) there has been no material change in management of the Company or any of its subsidiaries; (vi) the Company has not sustained any material loss or interference with its business or properties from fire, flood, windstorm, earthquake, accident or other calamity, whether or not covered by insurance; (vii) the Company has not defaulted in the payment of principal or interest on any outstanding debt obligations; and (viii) the capitalization, liabilities, assets, properties and business of the Company conform in all material respects to the descriptions thereof contained in the General Disclosure Package and the Prospectus.

(x) Neither the Company nor any of the Subsidiaries is (i) in violation of its articles of incorporation, regulations, or comparable organizing or governing documents (and the Company will not be in violation of its articles of incorporation, regulations, or comparable organizing or governing documents, upon completion of the Offering), or (ii) in default (nor has any event occurred which, with notice or lapse of time or both, would constitute a default) in the performance or observance of any obligation, agreement, covenant, or condition contained in any contract, lease, loan agreement, indenture, mortgage, or other instrument to which it is a party or by which it or any of its property may be bound, or to which any of the property or assets of the Company is subject, except for defaults that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and there are no contracts or documents of the Company that are required to be filed as exhibits to the Registration Statement, the Prospectus or any Permitted Free Writing Prospectus or described in the Registration Statement, the Prospectus or any Permitted Free Writing Prospectus that have not been so filed or described, and such contracts and documents as are summarized in the Registration Statement, the Prospectus, and any Permitted Free Writing Prospectus are fairly summarized in all material respects. The execution and delivery of this Agreement and the consummation of the transactions herein contemplated will not: (i) constitute a breach of, or default under, or result in the creation of any lien, charge or encumbrance upon any of the assets of the Company pursuant to its articles of incorporation, regulations, or comparable organizing or governing documents, (ii) constitute a

breach of, or default under, or result in the creation of any lien, charge or encumbrance upon any of the assets of the Company pursuant to any contract, lease or other instrument in which the Company has a beneficial interest, or any applicable law, rule, regulation or order; or (iii) violate any authorization, approval, judgment, decree, order, statute, rule or regulation applicable to the Company.

(y) Except as disclosed in the Registration Statement, the General Disclosure Package, any preliminary prospectus and/or the Prospectus, the Company and its Subsidiaries conduct their respective businesses in compliance in all material respects with all federal, state, local and foreign statutes, laws, rules, regulations, decisions, directives and orders applicable to them (including, without limitation, all applicable regulations and orders of, or agreements with, the FRB, the FDIC and the ODFI, all applicable fair lending laws or other laws relating to discrimination, the Bank Secrecy Act, Title III of the USA Patriot Act, the Currency and Foreign Transaction Reporting Act of 1970, as amended, and the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency). Neither the Company nor its Subsidiaries has received any written communication from any Governmental Entity asserting that the Company or any Subsidiary is not in compliance in any material respect with any statute, law, rule, regulation, decision, directive or order and which asserted noncompliance has not been corrected or resolved in all material respects.

(z) All documents made available or delivered by, or to be made available to or delivered by the Company or its representatives in connection with the issuance of the Series A Shares and the issuance and sale of the Shares, including records of shareholders of the Company and customers of the Bank, or in connection with the Agent’s exercise of due diligence, except for those documents which were prepared by parties other than the Company or its representatives, were on the dates on which they were delivered or made available, or will be on the dates on which they are to be delivered or made available, true, complete and correct in all material respects.

(aa) Upon consummation of the Offering, the authorized, issued and outstanding equity capital of the Company will be within the range set forth in the General Disclosure Package and the Prospectus under the caption “Capitalization.” Each of the Series A Shares and the Shares will have been duly and validly authorized for issuance and, when issued and delivered by the Company against payment of the consideration calculated as set forth in the Prospectus, will be duly and validly issued, fully paid and non-assessable, no preemptive rights exist with respect to either of the Series A Shares or the Shares; and the terms and provisions of each of the Series A Shares and the Shares will conform to the description thereof contained in the Registration Statement and the Prospectus. Upon the issuance of the Series A Shares and the Shares, a valid interest in the Series A Shares and good title to the Shares will be transferred from the Company to the purchasers thereof against payment therefor.

(bb) No default exists, and no event has occurred which, with notice or lapse of time or both, would constitute a default, on the part of the Company or its Subsidiaries in the due performance and observance of any term, covenant, agreement, obligation, representation, warranty or condition of any indenture, mortgage, deed of trust, note, bank loan or credit agreement, lease, license, permit or any other instrument or agreement to which the Company or

its Subsidiaries, or by which they or any of their property is bound or affected which, in any such case, would reasonably be expected to have, individually or in the aggregate with other breaches, violations or defaults, a Material Adverse Effect; each of such agreements is in full force and effect and is the legal, valid and binding agreement of the Company, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of equity and no other party to any such agreement has instituted or, to the best knowledge of the Company, threatened any action or proceeding wherein the Company or any subsidiary thereof would or might be alleged to be in default thereunder where such action or proceeding, if determined adversely to the Company or its Subsidiaries, would reasonably be expected to have a Material Adverse Effect.

No party has sent or received any notice indicating the termination of or intention to terminate any of the material contracts or agreements referred to or described in the Registration Statement, the Prospectus, or any Permitted Free Writing Prospectus, or filed as an exhibit to the Registration Statement, and, to the best knowledge of the Company, no such termination has been threatened by any party to any such contract or agreement.

(cc) After the time the Registration Statement is declared effective by the Commission and prior to the Closing Date, except as otherwise may be indicated or contemplated in the Registration Statement, the Company has not or will not have issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except borrowings from the same or similar sources indicated in the Prospectus in the ordinary course of its business.

(dd) Neither the Company, the Bank nor any of the Subsidiaries maintains any “pension plan,” as defined in the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), other than the Company’s 401(k) plan and the Supplemental Executive Retirement Plan Agreements between the Company and each of Mark A. Klein and Anthony V. Cosentino. In addition, (i) the employee benefit plans, including employee welfare benefit plans, of the Company (the “Employee Plans”) have been operated in compliance with the applicable provisions of ERISA, the Internal Revenue Code of 1986, as amended (the “Code”), all regulations, rulings and announcements promulgated or issued thereunder and all other applicable laws and governmental regulations, (ii) no reportable event under Section 4043(c) of ERISA has occurred with respect to any Employee Plan of the Company for which the reporting requirements have not been waived by the Pension Benefit Guaranty Corporation, (iii) no prohibited transaction under Section 406 of ERISA, for which an exemption does not apply, has occurred with respect to any Employee Plan of the Company and (iv) all Employee Plans that are group health plans have been operated in compliance with the group health plan continuation coverage requirements of Section 4980B of the Code, except to the extent such noncompliance, reportable event or prohibited transaction would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. There are no pending or, to the best knowledge of the Company, threatened, claims by or on behalf of any Employee Plan, by any employee or beneficiary covered under any such Employee Plan or by any governmental authority, or otherwise involving such Employee Plans or any of their respective fiduciaries (other than for routine claims for benefits).

(ee) No approval of any Governmental Entity is required in connection with the execution and delivery of this Agreement or the issuance of the Shares, except for the declaration of effectiveness of the Registration Statement by of the Commission, and any necessary qualification, notification, registration or exemption under the securities or blue sky laws of the various states in which the Shares are to be offered, and except as may be required under the rules and regulations of the Financial Institution Regulatory Authority (“FINRA”).

(ff) BKD, LLP, which has certified the audited consolidated financial statements and supporting schedules of the Company included or incorporated by reference in the Prospectus, has advised the Company in writing that it is, with respect to the Company, an independent registered public accounting firm within the applicable rules of the Public Company Accounting Oversight Board (United States) and as required by the 1933 Act and 1933 Act Regulations and the 1934 Act and 1934 Act Regulations.

(gg) Each of the Company and its Subsidiaries has timely filed or extended all required federal, state and local income and franchise tax returns required to be filed; the Company has timely paid all taxes that have become due and payable in respect of such returns and no deficiency has been asserted with respect thereto by any taxing authority. All tax liabilities have been adequately provided for in the financial statements of the Company in accordance with GAAP. There are no transfer taxes or other similar fees or charges under Federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement by the Company or with the issuance by the Company of the Series A Shares or the issuance or sale by the Company of the Shares.

(hh) Each of the Company and the Bank is in compliance with the applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and the regulations and rules thereunder. The Bank has established compliance programs and is in compliance with the requirements of the USA PATRIOT Act and all applicable regulations promulgated thereunder, and except as disclosed in the Prospectus, there is no charge, investigation, action, suit or proceeding before any court, regulatory authority or governmental entity or body pending or, to the best knowledge of the Company, threatened regarding the Bank’s compliance with the USA PATRIOT Act or any regulations promulgated thereunder. None of the Company, the Bank nor, to the Company’s knowledge, any director, officer, employee or agent or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

(ii) None of the Company, the Bank or any Subsidiary, or to the best knowledge of the Company, any employee of the Company, the Bank or any Subsidiary, has made any payment of funds as a loan for the purchase of the Shares or made any other payment of funds prohibited by law with respect to the purchase of the Shares, and no funds have been set aside to be used for any payment prohibited by law with respect to the purchase of the Shares.

(jj) Neither the Company nor any affiliate of the Company has taken, nor will the Company or any affiliate take, directly or indirectly, any action which is designed to or which has constituted or which would be expected to cause or result in the unlawful stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.

(kk) None of the Company or its Subsidiaries have: (i) issued any securities within the 12 months prior to the date hereof (except for notes to evidence bank loans and reverse repurchase agreements or other liabilities in the ordinary course of business or as described in the Prospectus) to any FINRA member firm or any person related to or associated with such member; (ii) had any material dealings within the 12 months prior to the date hereof with any member of FINRA, or any person related to or associated with such member, other than discussions and meetings relating to the proposed Offering and routine purchases and sales of United States government and agency and other securities in the ordinary course of business; (iii) entered into a financial or management consulting agreement relating to the proposed Offering except as contemplated hereunder; or (iv) engaged any intermediary between the Agent and the Company in connection with the offering of the Shares, and no person is being compensated in any manner for such services.

(ll) No person has the right to require the Company or any of its Subsidiaries to register any securities for sale under the 1933 Act.

(mm) None of the Company or its Subsidiaries have relied upon the Agent or its legal counsel for any legal, tax or accounting advice in connection with the Offering.

(nn) The records used by the Company to determine the Company’s shareholders for purposes of the Shareholder Offering and the Company’s customers for purposes of the Community Offering are accurate and complete in all material respects.

(oo) The Company is not, and does not intend to conduct business in a manner which would cause it to become, and upon the issuance of the Series A Shares and the issuance and sale of the Shares as herein contemplated and the application of the net proceeds therefrom as described in the Registration Statement and Prospectus will not be, an “investment company,” an entity “controlled” by an “investment company” or an “investment adviser” within the meaning of the Investment Company Act of 1940, as amended, or the Investment Advisers Act of 1940, as amended.

(pp) The Registration Statement is not the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the 1933 Act, and the Company is not the subject of a pending proceeding under Section 8A of the 1933 Act in connection with the offering of the Securities.

(qq) Neither the Company, the Subsidiaries, nor any of their properties are in violation of or, to the best knowledge of the Company, liable under any Environmental Law (as defined below), except for such violations or liabilities that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. There are no actions, suits or proceedings, or demands, claims, notices or investigations (including, without limitation,

notices, demand letters or requests for information from any environmental agency) instituted or pending or, to the best knowledge of the Company, threatened relating to the liability of any property owned or operated by the Company under any Environmental Law. To the best knowledge of the Company, there are no events or circumstances that could form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company relating to any Environmental Law. For purposes of this subsection, the term “Environmental Law” means any federal, state, local or foreign law, statute, ordinance, rule, regulation, code, license, permit, authorization, approval, consent, order, judgment, decree, injunction or agreement with any regulatory authority relating to (i) the protection, preservation or restoration of the environment (including, without limitation, air, water, vapor, surface water, groundwater, drinking water supply, surface soil, subsurface soil, plant and animal life or any other natural resource), and/or (ii) the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of any substance presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, whether by type or by quantity, including any material containing any such substance as a component.

(rr) Each of the Company and its Subsidiaries (i) owns or possesses, or can acquire on reasonable terms, adequate patents, patent licenses, trademarks, service marks and trade names necessary to carry on its business as presently conducted and (ii) has not received any notice of infringement of or conflict with asserted rights of others with respect to any patents, patent licenses, trademarks, service marks or trade names that, in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has infringed or is infringing on the intellectual property of a third party, and, except as are described in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any of its Subsidiaries has received notice of a claim by a third party to the contrary, except in each case where such infringement would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(ss) Each of the Company and its Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accounts or assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The books, records and accounts and systems of internal accounting control of the Company and its Subsidiaries comply in all material respects with the requirements of Section 13(b)(2) of the 1934 Act. The Company has established and maintains “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the 1934 Act) that are effective in ensuring that the information the Company will be required to disclose in the reports it files or submits under the 1934 Act is accumulated and communicated to the Company’s management (including the Company’s chief executive officer and chief financial officer) in a timely manner and recorded, processed, summarized and reported within the periods specified in the Commission’s rules and forms, and that material information relating to the Company and its Subsidiaries is made known to the Company’s principal

executive officer and principal financial officer by others within the Company and its Subsidiaries to allow timely decisions regarding disclosure. BKD, LLP and the Audit Committee of the Board of Directors have been advised of any of the following of which the Company has knowledge: (i) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which could adversely affect the Company’s ability to record, process, summarize, and report financial data; and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal accounting controls. Except as described in the Registration Statement, the General Disclosure Package, any preliminary prospectus and/or the Prospectus, since the end of the Company’s most recently audited fiscal year, there has been (I) no material weakness, as defined in Rule 1-02 of Regulation S-X, in the Company’s internal control over financial reporting, as defined in Rule 13a-15(f) under the 1934 Act, (whether or not remediated) and (II) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

(tt) To the extent there are any errors, exceptions, discrepancies or other items noted by BKD, LLP in its comfort letter to be delivered to the Agent pursuant to Section 8(h) hereof relating to financial or other information included or incorporated by reference in the Registration Statement or the Prospectus (collectively the “exceptions”), the Company has reviewed such exceptions and determined that: (i) such exceptions are not, either individually or collectively, in the context of the report or filing in which such exception is noted or included, material to the Company’s financial statements or financial disclosures included in such report or filing; (2) such exceptions do not, either individually or collectively, cause the Company’s financial statements or financial disclosures included in such report or filing to be materially misstated or omit to include material information; and (3) are not the result of a significant deficiency or material weakness in the Company’s internal control over financial reporting.

(uu) To the best knowledge of the Company, there are no affiliations or associations between any FINRA member firm and any of the officers, directors or 5% or greater security holders of each of the Company or its Subsidiaries, except as set forth in the Registration Statement and the Prospectus. To the best knowledge of the Company, no relationship, direct or indirect, exists between or among the Company or any of the Subsidiaries, on the one hand, and the directors, officers, shareholders, customers or suppliers of the Company or any of the Subsidiaries, on the other, that is required by the 1933 Act or by the 1933 Act Regulations to be described in the Registration Statement and/or the Prospectus and that is not so described.

(vv) Any certificates signed by an officer of the Company pursuant to the conditions of this Agreement and delivered to the Agent or its counsel that refers to this Agreement shall be deemed to be a representation and warranty by the Company to the Agent as to the matters covered thereby with the same effect as if such representation and warranty were set forth herein.

(ww) The statistical and market related data contained in any Permitted Free Writing Prospectus, the Prospectus and the Registration Statement are based on or derived from sources which the Company believes were reliable and accurate at the time they were filed with the Commission. No forward-looking statement (within the meaning of Section 27A of the 1933

Act and Section 21E of the 1934 Act) contained in the Registration Statement, the Prospectus, or any Permitted Free Writing Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

(xx) The Company is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission thereunder. The Company has not incurred and does expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the Code; and each “pension plan” for which the Company would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, that would cause the loss of such qualification.

(yy) The Company filed an Additional Listing Application on October 24, 2014 with NASDAQ to list the shares to be sold by the Company on The NASDAQ Capital Market, and such Additional Listing Application is currently pending.

(zz) Neither the Company nor any of the Subsidiaries, nor, to the Company’s knowledge, any of its affiliates or any director, officer, agent or employee of, or other person associated with or acting on behalf of, the Company, is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”). The Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, partner or joint venture or other person or entity, for the purpose of financing the activities of any person currently subject to any United States sanctions administered by OFAC.

(aaa) Other than as contemplated by this Agreement, there is no broker, finder or other party that is entitled to receive from the Company or any of the Subsidiaries any brokerage or finder’s fee or commission as a result of the transactions contemplated by this Agreement.

Section 5. Representations, Warranties and Covenants of the Agent. The Agent represents, warrants and covenants to the Company as follows:

(a) The Agent is a corporation and is validly existing in good standing under the laws of the State of New York with full power and authority to provide the services to be furnished to the Company hereunder.

(b) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of the Agent, and this Agreement has been duly and validly executed and delivered by the Agent and is a legal, valid and binding agreement of the Agent, enforceable in accordance with its terms, except as the legality, validity, binding nature and enforceability thereof may be limited by (i) bankruptcy, insolvency, moratorium, reorganization, conservatorship, receivership or other similar laws relating to or affecting the enforcement of creditors’ rights generally, and (ii) general equity principles regardless of whether such enforceability is considered in a proceeding in equity or at law.

(c) The Agent has not, directly or indirectly, distributed or otherwise used and will not, directly or indirectly, distribute or otherwise use any prospectus, any “free writing prospectus” (as defined in Rule 405 of the 1933 Act Regulations) or other offering material in connection with the offering and sale of the Shares other than any Permitted Free Writing Prospectus or the Prospectus or other materials permitted by the 1933 Act and the 1933 Act Regulations distributed and/or approved in advance in writing by the Company.

(d) The Agent is not subject to any pending proceeding under Section 8A of the 1933 Act with respect to the Offering (and will promptly notify the Company if any such proceeding against it is initiated).

Section 6. Covenants of the Company. The Company hereby covenants and agrees with the Agent as follows:

(a) The Company will not, at any time prior to or after the date the Registration Statement is declared effective, file any amendment or supplement to the Registration Statement without providing the Agent and its counsel an opportunity to review such amendment or supplement or file any amendment or supplement to which amendment or supplement the Agent and its counsel shall reasonably object.

(b) If at any time following issuance of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in light of the circumstances prevailing at the subsequent time, not misleading, the Company has notified or will notify promptly the Agent so that any use of such Issuer-Represented Free Writing Prospectus may cease until it is amended or supplemented and the Company has promptly amended or will promptly amend or supplement such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission; provided, however, that this covenant shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by the Agent expressly for use therein.

(c) The Company represents and agrees that, unless it obtains the prior consent of the Agent, it has not made and will not make any offer relating to the offered Shares that would constitute an “issuer free writing prospectus” as defined in Rule 433 of the 1933 Act Regulations, or that would constitute a “free writing prospectus,” as defined in Rule 405 of the 1933 Act Regulations, required to be filed with the Commission. The Company represents that it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433 of the 1933 Act Regulations, and has complied and will comply in all material respects with the requirements of Rule 433 of the 1933 Act Regulations applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping. The Company need not treat any communication as a free writing prospectus if it is exempt from the definition of prospectus pursuant to clause (a) of Section 2(a)(10) of the 1933 Act without regard to Rule 172 or 173 of the 1933 Act Regulations.

(d) The Company will use its best efforts to cause any post-effective amendment to the Registration Statement to be declared effective by the Commission, and will immediately upon receipt of any information concerning the events listed below notify the Agent: (i) when the Registration Statement, as amended, has become effective; (ii) of any comments from the Commission or any other governmental entity with respect to the Registration Statement; (iii) of the request by the Commission for any amendment or supplement to the Registration Statement, or for additional information; (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of initiation or threat of any proceedings for that purpose; or (v) of the occurrence of any event mentioned in paragraph (h) below. The Company will make every reasonable effort (i) to prevent the issuance by the Commission of any such order and, (ii) if any such order shall at any time be issued, to obtain the lifting thereof at the earliest possible time.

(e) The Company will deliver to the Agent and to its counsel as many conformed copies of the Registration Statement as originally filed and of each amendment or supplement thereto, including all exhibits, as the Agent may reasonably request.

(f) The Company will furnish to the Agent, from time to time during the period when the Prospectus (or any later prospectus related to the Offering) is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of such Prospectus (as amended or supplemented) as the Agent may reasonably request for the purposes contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations. The Company authorizes the Agent to use the Prospectus (as amended or supplemented, if amended or supplemented) in any lawful manner contemplated by the Registration Statement, the Prospectus and this Agreement in connection with the sale of the Shares by the Agent.

(g) The Company will comply with any and all terms, conditions, requirements and provisions with respect to the Offering imposed by the Commission or any other applicable regulator and by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations to be complied with prior to or subsequent to the Closing Date and when the Prospectus is required to be delivered, and during such time period the Company will comply, at its own expense, with all requirements imposed upon it by the Commission or any other applicable regulator and by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, including, without limitation, Rule 10b-5 under the 1934 Act, in each case as from time to time in force, so far as necessary to permit the continuance of sales or dealing in the Shares during such period in accordance with the provisions hereof and the Prospectus. The Company will comply with all undertakings contained in the Registration Statement.

(h) If, at any time during the period when the Prospectus is required to be delivered, any event relating to or affecting any of the Company or its Subsidiaries shall occur, as a result of which it is necessary or appropriate, in the opinion of counsel for the Company and in the opinion of the Agent’s counsel, to amend or supplement the Registration Statement or Prospectus in order to make the Registration Statement or Prospectus not misleading in light of the circumstances existing at the time the Prospectus is delivered to a purchaser, the Company will immediately so inform the Agent and prepare and file, at its own expense, with the Commission, and furnish to the Agent a reasonable number of copies, of an amendment or amendments of, or a supplement or supplements to, the Registration Statement or Prospectus (in

form and substance reasonably satisfactory to the Agent and its counsel after a reasonable time for review) which will amend or supplement the Registration Statement or Prospectus so that as amended or supplemented it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time the Prospectus is delivered to a purchaser, not misleading. For the purpose of this Agreement, the Company will timely furnish to the Agent such information with respect to the Company as the Agent may from time to time reasonably request.

(i) The Company will take all necessary actions in cooperating with the Agent and furnish to whomever the Agent may direct such information as may be required to qualify or register the Shares for offering and sale by the Company or to exempt such Shares from registration, or to exempt the Company as a broker-dealer and its officers, directors and employees as broker-dealers or agents under the applicable securities or blue sky laws of such jurisdictions in which the Shares will be sold or as the Agent and the Company may reasonably agree upon; provided, however, that the Company shall not be obligated to file any general consent to service of process, to qualify to do business in any jurisdiction in which it is not so qualified, or to register its directors or officers as brokers, dealers, salesmen or agents in any jurisdiction. In each jurisdiction where any of the Shares shall have been qualified or registered as above provided, the Company will make and file such statements and reports in each fiscal period as are or may be required by the laws of such jurisdiction.

(j) The Company will not sell or issue, contract to sell or otherwise dispose of, for a period beginning on the date hereof and ending 90 days after the Closing Date, without the Agent’s prior written consent, any of the Series A Shares, the Shares, or its Common Shares, other than in connection with any plan or arrangement described in the Prospectus.

(k) As of the date of this Agreement, the Agent shall have received a lock-up agreement substantially in the form of Exhibit B hereto signed by the persons listed on Exhibit C hereto.

(l) Prior to the Closing Date, the Company will file a registration statement to register the Shares under Section 12(b) of the 1934 Act, which registration shall be subject only to certification by the NASDAQ Stock Market LLC. The Company shall maintain the effectiveness of such registration for not less than five years from the time of its effectiveness.

(m) On or prior to the date hereof, the Company shall have filed the Certificate of Amendment with the Secretary of State of the State of Ohio, and such Certificate of Amendment shall be in full force and effect.

(n) The Company, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act in connection with the offer and sale of the Securities, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934 Act Regulations.

(o) During the period of two years from the date hereof, the Company will furnish to the Agent: (i) to the extent not available on the Commission’s Next-Generation EDGAR filing system, as soon as practicable after such information is publicly available, a copy

of each report of the Company furnished to or filed with the Commission under the 1934 Act or any national securities exchange or system on which any class of securities of the Company is listed or quoted (including, but not limited to, reports on Forms 10-K, 10-Q and 8-K and all proxy statements and annual reports to shareholders); (ii) to the extent not available on the Commission’s Next-Generation EDGAR filing system, a copy of each other non-confidential report of the Company mailed to its shareholders or filed with the Commission or any other supervisory or regulatory authority or any national securities exchange or system on which any class of securities of the Company is listed or quoted, each press release and material news items and additional documents and information with respect to the Company as the Agent may reasonably request; and (iii) from time to time, such other nonconfidential information concerning the Company as the Agent may reasonably request.

(p) The Company will use the net proceeds from the sale of the Shares in the manner set forth in the Prospectus under the caption “Use of Proceeds.”

(q) The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.

(r) The Company will maintain appropriate arrangements for depositing all funds received from persons mailing or delivering subscriptions for or orders to purchase Shares in the Offering with the Escrow Agent, on a non-interest-bearing basis as described in the Prospectus until the Closing Date and satisfaction of all conditions precedent to the release or delivery of the Shares sold in the Offering in accordance with and as described in the Prospectus or until refunds of such funds have been made to the persons entitled thereto.

(s) The Company will take such actions and furnish such information as are reasonably requested by the Agent and/or its counsel in order for the Agent to ensure compliance with any and all FINRA rules and regulations applicable to the Offering.

(t) The Company shall assist the Agent, if necessary, in connection with the allocation of the Shares in the event of an oversubscription and shall provide the Agent with any information necessary to assist the Company in allocating the Shares in such event and such information shall be accurate and reliable in all material respects.

(u) Prior to the Closing Date, the Company will inform the Agent of any event or circumstances of which it is aware as a result of which the Registration Statement and/or Prospectus, as then amended or supplemented, would contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading.

(v) The Company will not deliver the Shares until the Company has satisfied or caused to be satisfied each condition set forth in Section 8 hereof, unless such condition is waived in writing by the Agent.

(w) After the time the Registration Statement is declared effective by the Commission and prior to the Closing Date, except as otherwise may be indicated or

contemplated therein or set forth in an amendment or supplement thereto, the Company will not have: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except borrowings from the same or similar sources indicated in the Prospectus in the ordinary course of its business, or (ii) entered into any transaction which is material in light of the business and properties of the Company and its Subsidiaries, taken as a whole.

(x) Until the Closing Date, the Company will conduct its businesses in compliance in all material respects with all applicable federal and state laws, rules, regulations, decisions, directives and orders, including all decisions, directives and orders of the Commission, the FRB, the FDIC and the ODFI.

(y) The facts and representations provided to Vorys, Sater, Seymour and Pease LLP and Tucker Ellis LLP by the Company and upon which each of Vorys, Sater, Seymour and Pease LLP and Tucker Ellis LLP will base their opinions under Sections 8(b) and (c), respectively, are and will be truthful, accurate and complete in all material respects.

(z) The Company will use all reasonable efforts to comply with, or cause to be complied with, the conditions precedent to the several obligations of the Agent specified in Section 8.

(aa) The Company will use its best efforts to effect and maintain the listing of the Shares on The NASDAQ Capital Market within 30 days of issuance of the Shares.

(bb) The Company will reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Shares for the purpose of enabling the Company to satisfy any obligation to issue the Conversion Shares.

Section 7. Payment of Expenses. Whether or not the Offering is completed or the sale of the Shares by the Company is consummated, the Company agrees to pay, or reimburse the Agent as the case may be, for: (i) all filing fees in connection with all filings related to the Offering with FINRA; (ii) any stock issue or transfer taxes which may be payable with respect to the sale of the Shares; and (iii) all expenses of the Offering, including but not limited to the Agent’s attorneys’ fees and expenses not to exceed $50,000, blue sky fees, FINRA filing and registration fees, transfer agent, registrar, escrow agent and depositary fees and charges, fees relating to auditing and accounting or other advisors, costs of printing and mailing all documents necessary in connection with the Offering, and the costs and expenses of the Agent, not to exceed $20,000, relating to investor presentations on any “road show” undertaken in connection with the marketing of the Shares, including without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged with the prior approval of the Company in connection with the road show presentations, reasonable travel and lodging expenses of the representatives and officers of the Agent and any such consultants, and the cost of aircraft and other transportation chartered with the prior approval of the Company in connection with the road show. In the event the Company is unable to sell the minimum number of Shares necessary to complete the Offering or the Offering is terminated or otherwise abandoned, the Company shall promptly reimburse the Agent in accordance with Section 2(d) hereof.

Section 8. Conditions to the Agent’s Obligations. The obligations of the Agent hereunder, as to the Shares to be delivered at the Closing Date, are subject, to the extent not waived in writing by the Agent, to the condition that all representations and warranties of the Company herein are, at and as of the commencement of the Offering and at and as of the Closing Date, true and correct in all material respects, the condition that the Company shall have performed all of its obligations hereunder to be performed on or before such dates, and to the following further conditions:

(a) The Registration Statement shall have been declared effective by the Commission not later than 5:30 p.m. Eastern Time on the date of this Agreement, or with the Agent’s consent at a later time and date; and at the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefore initiated or threatened by the Commission or any state authority, and no order or other action suspending the authorization of the Prospectus or the consummation of the Offering shall have been issued or proceedings therefore initiated or, to the Company’s knowledge, threatened by the Commission or any other federal or state authority.

(b) At the Closing Date, the Agent shall have received the favorable opinion, dated as of the Closing Date and addressed to the Agent and for its benefit, of Vorys, Sater, Seymour and Pease LLP, counsel for the Company, in form and substance as attached hereto as Exhibit A. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials.

(c) On Closing Date, the Agent shall have received the favorable opinion, dated as of the Closing Date, of Tucker Ellis LLP, counsel for the Agent, in form and substance satisfactory to the Agent. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York and the federal law of the United States, upon the opinions of counsel satisfactory to the Agent. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials.

(d) Each of the executive officers and directors of the Company which are listed on Exhibit C hereto has executed and delivered the lock-up agreements substantially in the form of Exhibit B hereto.

(e) At the Closing Date, the Agent shall receive a certificate of the Chief Executive Officer and the Chief Financial Officer of the Company in form and substance reasonably satisfactory to the Agent’s counsel, dated as of such Closing Date, to the effect that: (i) they have carefully examined the Prospectus and, in their opinion, at the time the Prospectus became authorized for final use, the Prospectus did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) since the date the Prospectus became authorized for final use, no event has occurred which should have been set forth in an amendment or supplement to the Prospectus which has not been so set forth, including specifically, but without limitation, any material adverse change in the condition,

financial or otherwise, or in the earnings, capital, properties or business of the Company and the conditions set forth in this Section 8 have been satisfied; (iii) since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, there has been no material adverse change in the condition, financial or otherwise, or in the earnings, capital, properties or business of the Company or the Subsidiaries independently, or of the Company and its Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business; (iv) the representations and warranties in Section 4 are true and correct in all material respects with the same force and effect as though expressly made at and as of the Closing Date; (v) the Company has complied in all material respects with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Date and will comply in all material respects with all obligations to be satisfied by it after the Closing Date; and (vi) no stop order suspending the effectiveness of the Registration Statement has been initiated or, to best the knowledge of the Company, threatened by the Commission or any state authority.

(f) Neither the Company nor the Subsidiaries shall have sustained, since the date of the latest financial statements included in the Registration Statement, the General Disclosure Package and Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the Registration Statement and the Prospectus, and since the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall not have been any Material Adverse Effect that is, in the Agent’s reasonable judgment, sufficiently material and adverse as to make it impracticable or inadvisable to proceed with the Offering or the delivery of the Shares on the terms and in the manner contemplated in the Prospectus.

(g) Prior to and at the Closing Date: (i) in the reasonable opinion of the Agent, there shall have been no material adverse change in the financial condition, results of operations or business of the Company and its subsidiaries considered as one enterprise, from that as of the latest dates as of which such condition is set forth in the Prospectus, other than transactions referred to or contemplated therein; (ii) none of the Company or its Subsidiaries shall have received from any Governmental Entity any direction (oral or written) to make any material change in the method of conducting its business with which it has not complied (which direction, if any, shall have been disclosed to the Agent) or which materially and adversely would affect the financial condition, results of operations or business of the Company and its Subsidiaries taken as a whole; (iii) none of the Company or its Subsidiaries shall have been in default (nor shall an event have occurred which, with notice or lapse of time or both, would constitute a default) under any provision of any agreement or instrument relating to any outstanding indebtedness; (iv) no action, suit or proceeding, at law or in equity or before or by any federal or state commission, board or other administrative agency, not disclosed in the Prospectus, shall be pending or, to the best knowledge of the Company, threatened against the Company, its Subsidiaries or affecting any of the properties thereof wherein an unfavorable decision, ruling or finding would materially and adversely affect the financial condition, results of operations or business of the Company and its Subsidiaries taken as a whole; (v) no Governmental Entity shall have instituted any proceeding for the purpose of enjoining or prohibiting the consummation of the Offering and no statute, rule or regulation shall have been enacted, entered, promulgated or enforced by any Governmental Entity which prohibits or makes illegal consummation of the

Offering; and (vi) each of the Series A Shares, the Shares and the Common Shares issuable upon conversion of the Series A Shares shall have been qualified or registered for offering and sale or exempted therefrom under the securities or blue sky laws of the jurisdictions as the Agent shall have reasonably requested and as agreed to by the Company.

(h) At the time of the execution of this Agreement, the Agent shall have received from BKD, LLP, the current independent registered public accounting firm for the Company, a letter dated such date, in form and substance satisfactory to the Agent containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus.

(i) At the Closing Date, the Agent shall receive a letter dated the Closing Date, addressed to the Agent, confirming the statements made by BKD, LLP in the letter delivered by it pursuant to subsection (h) of this Section 8.

(j) FINRA shall have confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements, if required.

(k) After the date hereof, there shall not have occurred any of the following: (i) any domestic or international event or act or occurrence has materially disrupted the United States securities market such as to make it, in the Agent’s reasonable opinion, impracticable or inadvisable to proceed with the Offering; (ii) a suspension or limitation in trading in securities generally by the Commission, the New York Stock Exchange or the NASDAQ Stock Market, or any setting of minimum or maximum prices or maximum ranges for trading thereon, or any halting of quotations generally by either of such exchanges or by order of the Commission or any other governmental authority; (iii) a general moratorium on the operations of commercial banks or federal savings and loan associations, or a general moratorium on the withdrawal of deposits from commercial banks or federal savings and loan associations declared by federal or state authorities, or a moratorium in foreign exchange trading by major international banks or persons has been declared; (iv) the engagement by the United States in major hostilities or escalation thereof or the declaration, on or after the date hereof, of a national emergency or war, or (v) a material decline in the price of equity or debt securities, if the effect of such declaration or decline, in the Agent’s reasonable judgment, makes it impracticable or inadvisable to proceed with the Offering or the delivery of the Shares on the terms and in the manner contemplated in the Registration Statement and the Prospectus.

(l) At or prior to the Closing Date, counsel to the Agent shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the sale of the Shares as herein contemplated and related proceedings or in order to evidence the occurrence or completeness of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the sale of the Shares as herein contemplated shall be satisfactory in form and substance to the Agent and its counsel.

(m) All such opinions, certificates, letters and documents will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to the Agent and to counsel for the Agent. Any certificate signed by an officer of any of the Company and delivered to the Agent or to counsel for the Agent shall be deemed a representation and warranty by the Company to the Agent as to the statements made therein.

Section 9. Indemnification.

(a) The Company agrees to indemnify and hold harmless the Agent, its officers and directors, employees and agents, and each person, if any, who controls the Agent within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss, liability, claim, damage or expense whatsoever (including, but not limited to, settlement expenses), joint or several, that the Agent or any of such persons may suffer or to which the Agent and any such persons may become subject under all applicable federal or state laws or otherwise, and to promptly reimburse the Agent and any such persons upon written demand for any expense (including reasonable fees and disbursements of counsel) incurred by the Agent or any of them in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), the General Disclosure Package, any Issuer-Represented Limited-Use Free Writing Prospectus, any Issuer Represented General Free Writing Prospectus, preliminary or final Prospectus (or any amendment or supplement thereto), or any instrument or document executed by the Company or based upon written information supplied by the Company filed in any state or jurisdiction to register or qualify any or all of the Shares or to claim an exemption therefrom or provided to any state or jurisdiction to exempt the Company as a broker-dealer or its officers, directors and employees as broker-dealers or agents, under the securities laws thereof (collectively, the “Blue Sky Application”), or any document, advertisement, oral statement or communication (“Sales Information”) prepared, made or executed by or on behalf of the Company with its consent or based upon written information furnished by or on behalf of the Company, whether or not filed in any jurisdiction, in order to qualify or register the Shares or to claim an exemption therefrom under the securities laws thereof; (ii) arise out of or are based upon the omission or alleged omission to state in any of the foregoing documents or information a material fact required to be stated therein or necessary to make the statements therein (other than in the Registration Statement, in light of the circumstances under which they were made) not misleading; or (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the General Disclosure Package, any Issuer-Represented Limited-Use Free Writing Prospectus, any Issuer-Represented General Free Writing Prospectus, any Blue Sky Application or Sales Information or other documentation distributed in connection with the Offering; provided, however, that no indemnification is required under this paragraph (a) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue material statement or alleged untrue material statement in, or material omission or alleged material omission from, the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the General Disclosure Package, any Issuer-Represented Limited-Use Free Writing Prospectus, any Issuer-Represented General Free Writing Prospectus, any Blue Sky

Application or Sales Information made in reliance upon and in conformity with information furnished in writing to the Company by the Agent or its counsel regarding the Agent, and provided, that it is agreed and understood that the only information furnished in writing to the Company, by the Agent regarding the Agent is set forth in the Prospectus in the second, third to last and last paragraphs under the subheading “Marketing and Distribution; Compensation” under the caption “Plan of Distribution”.

(b) The Agent agrees to indemnify and hold harmless the Company, its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses), joint or several, which they, or any of them, may suffer or to which they, or any of them may become subject under all applicable federal and state laws or otherwise, and to promptly reimburse the Company, and any such persons upon written demand for any expenses (including reasonable fees and disbursements of counsel) incurred by them, or any of them, in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), the preliminary or final Prospectus (or any amendment or supplement thereto), any Blue Sky Application or Sales Information, (ii) are based upon the omission or alleged omission to state in any of the foregoing documents a material fact required to be stated therein or necessary to make the statements therein (other than in the Registration Statement, in the light of the circumstances under which they were made) not misleading, or (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), or any Blue Sky Application or Sales Information or other documentation distributed in connection with the Offering; provided, however, that the Agent’s obligations under this Section 9(b) shall exist only if and only to the extent that such untrue statement or alleged untrue statement was made in, or such material fact or alleged material fact was omitted from, the Registration Statement (or any amendment or supplement thereto), the preliminary or final Prospectus (or any amendment or supplement thereto), any Blue Sky Application or Sales Information in reliance upon and in conformity with information furnished in writing to the Company or the Bank, by the Agent or its counsel regarding the Agent, and provided, that it is agreed and understood that the only information furnished in writing to the Company by the Agent regarding the Agent is set forth in the Prospectus in the second, third to last and last paragraphs under the subheading “Marketing and Distribution; Compensation” under the caption “Plan of Distribution”.

(c) Each indemnified party shall give prompt written notice to each indemnifying party of any action, proceeding, claim (whether commenced or threatened), or suit instituted against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have on account of this Section 9 or otherwise. An indemnifying party may participate at its own expense in the defense of such action. In addition, if it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume defense of such action with counsel chosen by it and approved by the indemnified parties that are defendants in such action, unless such indemnified parties reasonably object to

such assumption on the ground that there may be legal defenses available to them that are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying parties shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action, proceeding or claim, other than reasonable costs of investigation. In no event shall the indemnifying parties be liable for the fees and expenses of more than one separate firm of attorneys (designated by the Agent if the Agent is an indemnified party), for all indemnified parties, collectively, in connection with any one action, proceeding or claim or separate but similar or related actions, proceedings or claims in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall be liable for any settlement effected without its written consent.

Section 10. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 9 is due in accordance with its terms but is for any reason held by a court to be unavailable from the Company or the Agent, the Company and the Agent shall contribute to the aggregate losses, claims, damages and liabilities (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding, but after deducting any contribution received by the Company or the Agent from persons other than the other parties thereto, who may also be liable for contribution) in such proportion so that the Agent is responsible for that portion represented by the percentage that the fees paid to the Agent pursuant to Section 2 of this Agreement (not including expenses) bears to the gross proceeds received by the Company from the sale of the Shares in the Offering, and the Company shall be responsible for the balance. If, however, the allocation provided above is not permitted by applicable law, then each party shall contribute to such amount paid or payable by the parties in such proportion as is appropriate to reflect not only such relative fault of the Company on the one hand and the Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereto), but also the relative benefits received by the Company on the one hand and the Agent on the other from the Offering (before deducting expenses). The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Agent on the other and the parties’ relative intent, good faith, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Agent agree that it would not be just and equitable if contribution pursuant to this Section 10 were determined by pro-rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to above in this Section 10. The amount paid or payable by a party as a result of the losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereof) referred to above in this Section 10 shall be deemed to include any legal or other expenses reasonably incurred by such party in connection with investigating or defending any such action, proceeding or claim. It is expressly agreed that the Agent shall not be liable for any loss, liability, claim, damage or expense or be required to contribute any amount pursuant to Section 9(b) or this Section 10 which in the aggregate exceeds the amount paid (excluding reimbursable expenses) to the Agent under this Agreement. It is understood that the above stated limitation on the Agent’s liability is essential to the Agent and that the Agent would not have entered into this Agreement if such limitation had not been agreed to by the parties to this Agreement. No person found guilty of any

fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. The obligations of the Company under this Section 10 and under Section 9 shall be in addition to any liability which the Company and the Agent may otherwise have. For purposes of this Section 10, each of the Agent’s and the Company’s officers and directors and each person, if any, who controls the Agent or any of the Company within the meaning of the 1933 Act and the 1934 Act shall have the same rights to contribution as the Agent on the one hand, or, the Company on the other hand. Any party entitled to contribution, promptly after receipt of notice of commencement of any action, suit, claim or proceeding against such party in respect of which a claim for contribution may be made against another party under this Section 10, will notify such party from whom contribution may be sought, but the omission to so notify such party shall not relieve the party from whom contribution may be sought from any other obligation it may have hereunder or otherwise than under this Section 10.

Section 11. Termination. The Agent may terminate this Agreement by giving the notice indicated below in Section 12 at any time after this Agreement becomes effective as follows:

(a) If the effect of any of the events described in Section 8(k) hereof makes it, in the Agent’s reasonable opinion, impracticable or inadvisable to proceed with the Offering or the delivery of the Shares on the terms and in the manner contemplated in the Registration Statement and the Prospectus; or if there shall have been a material adverse change in the financial condition, results of operations or business of the Company and its Subsidiaries, taken as a whole, or if the Company shall have sustained a material or substantial loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act, whether or not said loss shall have been insured.

(b) In the event the Company fails to sell the required minimum number of the Shares by the date when such sales must be completed, in accordance with the Prospectus, this Agreement shall terminate upon refund by the Company or the Escrow Agent to each person who has subscribed for or ordered any of the Shares the full amount which it may have received from such person, and no party to this Agreement shall have any obligation to the other hereunder, except as set forth in Sections 2, 7, 9 and 10 hereof.

(c) If any of the conditions specified in Section 8 shall not have been fulfilled when and as required by this Agreement, unless waived in writing, or by the Closing Date, this Agreement and all of the Agent’s obligations hereunder may be cancelled by the Agent by notifying the Company of such cancellation in writing or by electronic mail at any time at or prior to the Closing Date, and any such cancellation shall be without liability of any party to any other party except as otherwise provided in Sections 2, 7, 9 and 10 hereof.

(d) If the Agent elects to terminate this Agreement as provided in this Section, it shall promptly notify the Company by telephone or electronic mail, confirmed by letter.

The Company may terminate this Agreement in the event the Agent is in material breach of the representations and warranties or covenants contained in Section 5 and such breach has not been cured within a reasonable time period after the Company has provided the Agent with notice of such breach.

This Agreement may also be terminated by mutual written consent of the parties hereto.

Section 12. Notices. All communications hereunder, except as herein otherwise specifically provided, shall be in writing and if sent to the Agent shall be mailed, delivered or telegraphed and confirmed to Keefe, Bruyette & Woods, Inc., 787 Seventh Avenue, New York, NY 10019, Attention: Chief Counsel — Investment Banking (with a copy to Tucker Ellis LLP, 950 Main Avenue, Suite 1100 Cleveland, Ohio 44113-7213, Attention: M. Patricia Oliver, Esq.) and, if sent to the Company, shall be mailed, delivered or telegraphed and confirmed to SB Financial Group, Inc., 401 Clinton Street, Defiance, Ohio 43512, Attention: Mark A. Klein, President and Chief Executive Officer (with a copy to Vorys, Sater, Seymour and Pease LLP, Attention: Anthony D. Weis, Esq.).

Section 13. Parties. The Company shall be entitled to act and rely on any request, notice, consent, waiver or agreement purportedly given on behalf of the Agent when the same shall have been given by the undersigned. The Agent shall be entitled to act and rely on any request, notice, consent, waiver or agreement purportedly given on behalf of the Company, when the same shall have been given by the undersigned or any other officer of any of the Company. This Agreement shall inure solely to the benefit of, and shall be binding upon, the Agent, the Company and their respective successors and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained.

Section 14. Closing. The closing for the sale and issuance of the Shares (the “Closing”) shall take place on the Closing Date at such location as mutually agreed upon by the Agent and the Company. At the Closing, the Company shall deliver to the Agent (or cause the Escrow Agent to deliver) in immediately available funds the commissions, fees and expenses due and owing to the Agent as set forth in Sections 2 and 7 hereof and shall deliver or cause the appropriate persons to deliver to the Agent the opinions and certificates required hereby and any other documents deemed reasonably necessary by the Agent to effect the sale of the Shares as contemplated hereby and pursuant to the terms of the Prospectus.

Section 15. Partial Invalidity. In the event that any term, provision or covenant herein or the application thereof to any circumstance or situation shall be invalid or unenforceable, in whole or in part, the remainder hereof and the application of said term, provision or covenant to any other circumstances or situation shall not be affected thereby, and each term, provision or covenant herein shall be valid and enforceable to the full extent permitted by law.

Section 16. Governing Law and Construction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of law.

Section 17. Counterparts. This Agreement may be executed in separate counterparts, each of which so executed and delivered shall be an original, but all of which together shall constitute but one and the same instrument.

Section 18. Entire Agreement. This Agreement, including schedules and exhibits hereto, which are integral parts hereof and incorporated as though set forth in full, constitutes the entire agreement between the parties pertaining to the subject matter hereof superseding any and all prior or contemporaneous oral or prior written agreements, proposals, letters of intent and understandings, and cannot be modified, changed, waived or terminated except by a writing which expressly states that it is an amendment, modification or waiver, refers to this Agreement and is signed by the party to be charged. No course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof.

Section 19. Survival. The respective indemnities, agreements, representations, warranties and other statements of the Company and the Agent, as set forth in this Agreement, shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation (or any statement as to the results thereof) made by or on behalf of the Agent or any of the Agent’s officers or directors or any person controlling the Agent, or the Company, or any of its respective officers or directors or any person controlling the Company, and shall survive termination of this Agreement and receipt or delivery of any payment for the Shares.

Section 20. Waiver of Trial by Jury. EACH OF THE AGENT AND THE COMPANY HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) RELATED TO OR ARISING OUT OF THIS AGREEMENT.

Section 21. Successors. Except as provided for in Section 9, this Agreement is made solely for the benefit of and will be binding upon the parties hereto and their respective successors and the directors, officers and controlling persons and no other person will have any right or obligation hereunder. No party may assign this Agreement without the written consent of the other.

If the foregoing correctly sets forth the arrangement between the Company and the Agent, please indicate acceptance thereof in the space provided below for that purpose, whereupon this letter and the Agent’s acceptance shall constitute a binding agreement.

[SIGNATURE PAGE FOLLOWS]


Very truly yours,

SB Financial Group, Inc.

By Its Authorized Representative:


Mark A. Klein
President and Chief Executive Officer

KEEFE, BRUYETTE & WOODS, INC.

By Its Authorized Representative:


Name:		Harold T. Hanley III
Title:		Managing Director

Accepted as of the date first above written

[SIGNATURE PAGE TO AGENCY AGREEMENT]

EXHIBIT A

FORM OF OPINION OF COMPANY’S COUNSEL

TO BE DELIVERED PURSUANT TO SECTION 8(b)

(i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Ohio.

(ii) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under the Agency Agreement.

(iii) The Company is not qualified as a foreign corporation in any jurisdiction.

(iv) The authorized capital stock of the Company consists of (a) 10,000,000 common shares, each without par value, and (b) 200,000 preferred shares, each without par value, of which (1) 15,000 preferred shares have been designated as Series A Shares and (2) 185,000 are undesignated preferred shares; the issued and outstanding common shares of the Company have been duly authorized and validly issued and are fully paid and non-assessable; and to the best of our knowledge, none of the outstanding common shares of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company.

(v) Each of the Series A Shares and the Conversion Shares have been duly authorized for issuance and sale and, when issued and delivered by the Company pursuant to the subscription agreements of the subscribers thereof and, in the case of the Conversion Shares, the Articles of Incorporation, against payment of the consideration set forth in the subscription agreement and Prospectus, will be validly issued and fully paid and non-assessable and no holder of either the Series A Shares or the Conversion Shares is or will be subject to personal liability by reason of being such a holder.

(vi) To the best of our knowledge, the issuance and sale of each of the Series A Shares, the Shares and the Conversion Shares by the Company is not subject to preemptive or other similar rights of any securityholder of the Company.

(vii) The deposit of the Series A Shares in respect of the Shares by the Company in accordance with the Deposit Agreement has been duly authorized and, when the Shares (evidenced by the related Depositary Receipts) are issued and delivered in accordance with the terms of the Registration Statement, the Prospectus, the subscription agreement, this Agreement and the Deposit Agreement, the Shares will represent legal and valid interests in such Series A Shares, and the Shares (evidenced by the related Depositary Receipts) will entitle holders thereof to the benefits provided therein and in the Deposit Agreement. The Shares, the Series A Shares and the Conversion Shares conform in all material respects to the respective statements relating thereto contained in the Registration Statement, the General Disclosure Package and the Prospectus.

(viii) Each Subsidiary is validly existing as a corporation (or limited liability company or trust) in good standing under the laws of the jurisdiction of its incorporation or organization, has the corporate (or limited liability company or trust) power and authority to own, lease and

Exhibit A - Page 1

operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation (or limited liability company or trust) to transact business and is in good standing in the jurisdictions set forth in Annex I hereto.

(ix) The Agency Agreement has been duly authorized, executed and delivered by the Company.

(x) The Deposit Agreement has been duly authorized by the Company and, when duly executed and delivered by the Company and the Depositary, will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally or by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). The Deposit Agreement conforms in all material respects to the description of the Deposit Agreement contained in the Registration Statement, the General Disclosure Package and the Prospectus.

(xi) The Registration Statement, including any Rule 462(b) or (d) Registration Statement, has been declared effective under the 1933 Act; any required filing of the Prospectus pursuant to Rule 424(b) or (d) has been made in the manner and within the time period required by Rule 424(b); and, to the best of our knowledge, no stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) or (d) Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or threatened by the Commission.

(xii) The Registration Statement, including any Rule 462(b) or (d) Registration Statement, the Rule 430B Information, the Prospectus, and each amendment or supplement to the Registration Statement and Prospectus, excluding the documents incorporated by reference therein, as of their respective effective or issue dates (other than the financial statements, supporting schedules and other financial data included or incorporated by reference therein or omitted therefrom, as to which we need express no opinion) complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations.

(xiii) The documents incorporated by reference in the Prospectus (other than the financial statements, supporting schedules and other financial data included or incorporated by reference therein or omitted therefrom, as to which we need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations, as applicable, and the rules and regulations of the Commission thereunder.

(xiv) To our knowledge, based solely upon our inquiry with attorneys of this firm who have represented the Company and the Subsidiaries on substantive legal matters and in reliance upon the representations and warranties of the Company contained in the Agency Agreement (and without performing any docket search or other public records search of litigation filings), there is not pending or threatened any action, suit, proceeding, inquiry or investigation, to which the Company or any Subsidiary is a party, or to which the property of the Company or any

Exhibit A - Page 2

Subsidiary is subject, before or brought by any court or governmental agency or body, domestic or foreign, which might reasonably be expected to result in a Material Adverse Effect, or, except as disclosed in the Registration Statement, the General Disclosure Package, any preliminary prospectus and/or the Prospectus, which might reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated in the Agency Agreement or the performance by the Company of its obligations thereunder.

(xv) To the extent that it constitutes matters of law, summaries of legal matters or summaries of the Company’s articles of incorporation and regulations, the information (i) in the Prospectus under “Business — Supervision and Regulation”, “Description of the Series A Preferred Shares”, “Description of the Depositary Shares”, “Description of Common Shares”, “Description of Preferred Shares” and “Material U.S. Federal Income Tax Consequences”, (ii) in the Registration Statement under Item 15 and (iii) in the section of the Company’s Form 10-K for the year ended December 31, 2013 entitled “Business — Supervision and Regulation”, has been reviewed by us and is correct in all material respects.

(xvi) To the best of our knowledge, there are no contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Registration Statement or to be filed as exhibits thereto other than those described or referred to therein or filed or incorporated by reference as exhibits thereto, and the descriptions thereof or references thereto are correct in all material respects.

(xvii) To the best of our knowledge, neither the Company nor any Subsidiary is in violation of its articles of incorporation, certificate of incorporation, articles of organization, regulations, by-laws, operating agreement, certificate of trust or declaration of trust, as applicable, and no default by the Company or any Subsidiary exists in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument that is described or referred to in the Registration Statement or the Prospectus or filed or incorporated by reference as an exhibit to the Registration Statement.

(xviii) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign (other than under the 1933 Act and the 1933 Act Regulations, which have been obtained, or as may be required under the securities or blue sky laws of the various states, as to which we need express no opinion) is necessary or required in connection with the due authorization, execution and delivery of the Agency Agreement or for the issuance and delivery of the Series A Shares or the offering, issuance, sale or delivery of the Shares.

(xix) The execution, delivery and performance of the Agency Agreement and the consummation of the transactions contemplated by the Agency Agreement and by the Registration Statement (including the issuance of the Series A Shares and the issuance and sale of the Shares and the use of the proceeds from the sale of the Shares as described in the Prospectus under the caption “Use of Proceeds”) and compliance by the Company with its obligations under the Agency Agreement do not and will not, whether with or without the giving of notice or lapse of time or both, constitute a breach of, or default under or result in the creation

Exhibit A - Page 3

or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument to which the Company or any Subsidiary is a party and that is filed as an exhibit to (a) the Registration Statement, (b) the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, or (c) the Company’s Quarterly Reports on Form 10-Q for the quarters ended in March 31, 2014 and June 30, 2014, pursuant to Item 601 under Regulation S-K under the 1933 Act (except for such breaches or defaults or liens, charges or encumbrances that would not reasonably be expected to have a Material Adverse Effect), nor will such action result in any violation of the provisions of the articles of incorporation, certificate of incorporation, articles of organization, regulations, by-laws, operating agreement, certificate of trust or declaration of trust, as applicable, of the Company or any Subsidiary, or any applicable law, statute, rule, regulation, judgment, order, writ or decree, known to us, of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any Subsidiary or any of their respective properties, assets or operations.

(xx) Neither the Company [nor any Subsidiary] is an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended or an “investment adviser” as defined in the Investment Advisers Act of 1940, as amended.

(xxi) The Company has filed the Certificate of Amendment with the Secretary of State of the State of Ohio, and such Certificate of Amendment is in full force and effect.

In addition, we have acted as outside counsel to the Company on a regular basis and have acted as counsel to the Company in connection with the Registration Statement, the General Disclosure Package and the Prospectus, and, based on the foregoing, while we have not ourselves checked the accuracy or completeness of, or otherwise verified, and are not passing upon, and assume no responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement, the General Disclosure Package or the Prospectus (other than as set forth in paragraph (xv) above), in the course of our review and discussion of the contents of the Registration Statement, the General Disclosure Package and the Prospectus with certain officers and employees of the Company and its independent registered public accounting firm, but without independent check or verification, no facts have come to our attention that have caused us to believe that, (i) the Registration Statement, at the time it became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Prospectus or any amendment or supplement thereto, as of its date, as of the Applicable Time, or as of the date hereof, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iii) the General Disclosure Package, as of the Applicable Time and as of the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that we express no comment with respect to the financial statements or other financial or related statistical information or data that is included or incorporated by reference in or omitted from the Registration Statement, the Prospectus or the General Disclosure Package).

Exhibit A - Page 4

The opinions expressed herein are limited to the federal laws, rules and regulations of the United States of America and the laws, rules and regulations of the State of Ohio having effect on the date hereof. Accordingly, we express no opinion as to the laws of any other jurisdiction or as to any time after the date hereof. With your consent, we have assumed that the law of the State of New York (which governs the Agency Agreement) is the same as the law of the State of Ohio. As to matters of fact, we have relied on the representations and warranties of the Company contained in the Agency Agreement and on the Officer’s Certificate. We express no opinion herein concerning any statutes, laws, ordinances, orders, decrees, administrative decisions, rules or regulations of any county, town, municipality or special political subdivision (whether created or enabled through legislative action at the federal, state or regional level).

This opinion letter is furnished to you solely in connection with the transactions described herein. The opinions expressed herein may not be used or relied upon by you for any other purpose and may not be relied upon for any purpose by any other person without our prior written consent; provided, however, that this opinion letter may be delivered to your regulators, accountants, attorneys and other professional advisers and may be used in connection with any legal or regulatory proceeding relating to the subject matter of this opinion letter for the purpose of proving this opinion letter’s existence.

Exhibit A - Page 5

EXHIBIT B

FORM OF LOCK-UP AGREEMENT

Keefe, Bruyette & Woods, Inc.

787 Seventh Avenue

4th Floor

New York, New York 10019

Re: Proposed Public Offering by SB Financial Group, Inc.

Dear Sirs and Madams:

The undersigned, an executive officer and/or director of SB Financial Group, Inc., an Ohio corporation (the “Company”), understands that Keefe, Bruyette & Woods, Inc. (“KBW”) proposes to enter into an Agency Agreement (the “Agency Agreement”) with the Company providing for the public offering (the “Offering”) of up to 1,500,000 Depositary Shares, each Representing a 1/100th Interest in a 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A of the Company (the “Shares”). In recognition of the benefit that such an offering will confer upon the undersigned as an executive officer and/or director of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with KBW that, during a period beginning on the date of the Agency Agreement and ending ninety (90) days after the date of the closing of the Offering (the “Restricted Period”), the undersigned will not, without the prior written consent of KBW, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any of the Company’s common shares, no par value per share (the “Common Shares”), or any securities convertible into or exchangeable or exercisable for Common Shares, including the Shares, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition, or file any registration statement under the Securities Act of 1933, as amended, with respect to any of the foregoing or (ii) enter into any swap, hedge or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Shares, whether any such swap, hedge or transaction is to be settled by delivery of Common Shares or other securities, in cash or otherwise. In the event that either (i) during the period that begins on the date that is fifteen (15) calendar days plus three (3) business days before the last day of the Restricted Period and ends on the last day of the Restricted Period, the Company issues an earnings release or material news or a material event relating to the Company occurs, or (ii) prior to the expiration of the Restricted Period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the Restricted Period, the restrictions set forth herein will continue to apply until the expiration of the date that is fifteen (15) calendar days plus three (3) business days after the date on which the earnings release is issued or the material news or event related to the Company occurs. The Company shall promptly notify KBW of any earnings releases, news or events that may give rise to an extension of the initial restricted period.

Exhibit B - Page 1

Notwithstanding the foregoing, (A) the undersigned may transfer the undersigned’s Common Shares (i) as a bona fide gift or gifts, provided that the donee or donees agree to be bound in writing by the restrictions set forth herein, (ii) to any trust or family limited partnership for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust or general partner of the family limited partnership, as the case may be, agrees to be bound by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, (iii) pledged in a bona fide transaction outstanding as of the date hereof to a lender to the undersigned, as disclosed in writing to KBW, (iv) pursuant to the exercise by the undersigned of stock options that have been granted by the Company prior to, and are outstanding as of, the date of the Agency Agreement, where the Common Shares received upon any such exercise are held by the undersigned, individually or as fiduciary, in accordance with the terms of this Lock-Up Agreement, or (v) with the prior written consent of KBW. For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.

The undersigned represents and warrants that the undersigned beneficially owns Common Shares covered by this Lock-Up Agreement, and that the undersigned has full power and authority to enter into this Lock-Up Agreement. The undersigned agrees that the provisions of this Lock-Up Agreement shall be binding also upon the successors, assigns, heirs and personal representatives of the undersigned. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Common Shares, except in compliance with this Lock-Up Agreement. In furtherance of the foregoing, the Company and its transfer agent are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Lock-Up Agreement.

Notwithstanding the provisions of this Lock-Up Agreement set forth above, if (i) the Agency Agreement does not become effective or (ii) the Agency Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to the closing of the Offering, the undersigned shall be released from all obligations under this Lock-Up Agreement.

This Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of New York.

[REMAINDER OF PAGE LEFT BLANK]

Exhibit B - Page 2

Very truly yours,

Signature

Print Name

Dated: , 2014

Exhibit B - Page 3

EXHIBIT C

LIST OF DIRECTORS AND EXECUTIVE OFFICERS SUBJECT TO LOCK-UP:

George W. Carter

Gary M. Cates

Robert A. Fawcett, Jr.

Gaylyn J. Finn

Richard L. Hardgrove

Rita A. Kissner

Mark A. Klein

William G. Martin

Timothy J. Stolly

Anthony V. Cosentino

Jonathan R. Gathman

Exhibit C - Page 1

Exhibit 3.7

ATTACHMENT TO CERTIFICATE OF AMENDMENT BY DIRECTORS OR

INCORPORATORS TO ARTICLES OF INCORPORATION

SB FINANCIAL GROUP, INC.

RESOLVED , that pursuant to the authority granted to and vested in the board of directors (the “ Board of Directors ”) of SB Financial Group, Inc. (the “ Corporation ”), and in accordance with Section 1701.70(B)(1) of the Ohio Revised Code and Article FOURTH of the Corporation’s Amended Articles of Incorporation (the “ Articles ”), the Board of Directors hereby establishes the terms of the Corporation’s 6.50% Noncumulative Convertible Perpetual Preferred Shares, Series A, each without par value, and fixes and determines the designation and authorized number of shares of the series and the dividend rights, liquidation rights, voting rights and conversion rights with respect to the shares of the series, and certain other relative, participating, optional or other special rights, and the qualifications, limitations and restrictions thereof, with the Articles hereby amended to add such terms as Section I of Article FOURTH of the Articles as follows:

SECTION I

EXPRESS TERMS

6.50% NONCUMULATIVE CONVERTIBLE

PERPETUAL PREFERRED SHARES, SERIES A

Section 1. Designation and Amount . There is hereby created out of the authorized and unissued preferred shares of the Corporation a series of preferred shares designated as the “6.50% Noncumulative Convertible Perpetual Preferred Shares, Series A” (the “ Series A Preferred Shares ”). The Series A Preferred Shares shall be perpetual. The authorized number of Series A Preferred Shares shall be 15,000 shares, each without par value, having a liquidation preference of $1,000 per share. The number of Series A Preferred Shares may be increased from time to time in accordance with Ohio law and the Articles of Incorporation of the Corporation (the “ Articles ”) up to the maximum number of preferred shares authorized to be issued under the Articles, as amended, less all shares at the time authorized of any other series of preferred shares, and any such additional Series A Preferred Shares would form a single series with the Series A Preferred Shares. Outstanding Series A Preferred Shares that are purchased or otherwise acquired by the Corporation, or converted into Common Shares, shall be cancelled and shall revert to authorized but unissued preferred shares undesignated as to series.

Section 2. Definitions . As used herein with respect to the Series A Preferred Shares, in addition to those terms otherwise defined herein, the following terms shall have the following meanings:

(a) “ Affiliate ” shall mean, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any Person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

(b) “ BHC Act ” shall mean the Bank Holding Company Act of 1956, as amended.

(c) “ Business Day ” shall mean any day except Saturday, Sunday and any day on which banking institutions in the State of New York generally are authorized or required by law or other governmental actions to close.

(d) “ CIBC Act ” shall mean the Change in Bank Control Act of 1978, as amended.

(e) “ Closing Sales Price ” shall mean, with respect to a particular day, the closing sale price or, if no closing sale price is reported, the last reported sale price per Common Share (or share or unit of capital stock or other equity interest, as applicable) on such day on the NASDAQ Capital Market or such other national securities exchange or automated quotation system on which the Common Shares are then listed or authorized for quotation or, if the Common Shares are not so listed or authorized for quotation, an amount determined in good faith by the Board of Directors to be the fair value of the Common Shares.

(f) “ Common Shares ” shall mean the common shares, each without par value, of the Corporation, or any other class of capital stock resulting from (i) successive exchanges or reclassifications of such common shares consisting solely of changes in par value, or from no par value to par value, or (ii) a subdivision, combination, Reorganization Event or similar transaction in which the Corporation is a constituent corporation.

(g) “ Conversion Date ” shall have the meaning ascribed to such term in Section 8(c) hereof.

(h) “ Conversion Price ” shall mean, initially, $10.34 per Common Share, subject to adjustment from time to time as set forth in Section 11 hereof.

(i) “ Conversion Ratio ” shall mean the number of Common Shares into which each Series A Preferred Share may be converted at any time pursuant to and in accordance with Sections 8 or 9, and shall equal the Liquidation Preference divided by the Conversion Price applicable upon such conversion.

(j) “ Conversion Right ” shall have the meaning ascribed to such term in Section 8(a) hereof.

(k) “ Corporation Conversion Notice ” shall have the meaning ascribed to such term in Section 9(b) hereof.

(l) “ Corporation Conversion Option ” shall have the meaning ascribed to such term in Section 9(a) hereof.

(m) “ Corporation Conversion Option Date ” shall have the meaning ascribed to such term in Section 9(b) hereof.

(n)

“ Dividend Period ” shall have the meaning ascribed to such term in Section 4(b) hereof.

(o)

“ Dividend Record Date ” shall have the meaning ascribed to such term in Section 4(e) hereof.

(p)

“ Ex-Date ” shall mean, when used with respect to any issuance, dividend or distribution giving rise to an adjustment to the Conversion Price pursuant to Section 11, the first date on which the Common Shares or other securities trade without the right to receive the issuance, dividend or distribution.

(q)

“ Federal Reserve ” shall mean the Board of Governors of the Federal Reserve System.

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(r)

“ Holder ” shall mean a holder of record of outstanding Series A Preferred Shares.

(s)

“ Issue Date ” shall mean the original date of issuance of the Series A Preferred Shares.

(t)

“ Junior Shares ” shall mean the Common Shares and any other class or series of capital stock of the Corporation now or hereafter authorized, issued or outstanding that, by its terms, does not expressly provide that it ranks pari passu with or senior to the Series A Preferred Shares with respect to dividend rights and rights upon liquidation, dissolution and winding up of the Corporation.

(u)

“ Liquidation Parity Shares ” shall mean Parity Shares the terms of which expressly provide that it will rank pari passu with the Series A Preferred Shares as to rights upon liquidation, dissolution and winding up of the Corporation.

(v)

“ Liquidation Preference ” shall mean, with respect to each Series A Preferred Share, $1,000, subject to equitable adjustment from time to time pursuant to Section 14(b).

(w)

“ Market Value ” shall mean the average Closing Sale Price of a Common Share for a thirty (30) consecutive Trading Day period prior to the date of measurement.

(x)

“ Officer ” shall mean the Chief Executive Officer, the President, any Vice President, the Treasurer, the Secretary or any Assistant Secretary of the Corporation.

(y)

“ Officers’ Certificate ” shall mean a certificate signed by two duly authorized Officers.

(z)

“ Opinion of Counsel ” shall mean a written opinion from legal counsel acceptable to the Transfer Agent. Such counsel may be an employee of or counsel to the Corporation or the Transfer Agent.

(aa)

“ Parity Shares ” shall mean any class or series of capital stock of the Corporation hereafter authorized, issued or outstanding that, by its terms, expressly provides that it ranks pari passu with the Series A Preferred Shares with respect to dividend rights and rights upon liquidation, dissolution and winding up of the Corporation (without regard to whether dividends accrue cumulatively or non-cumulatively).

(bb)

“ Partial Dividend ” shall have the meaning ascribed to such term in Section 4(d) hereof.

(cc)

“ Person ” shall mean any individual, corporation, general partnership, limited partnership, limited liability partnership, joint venture, association, joint-stock corporation, trust, limited liability corporation, unincorporated organization, other entity or government or any agency or political subdivision thereof.

(dd)

“ Reorganization Event ” shall have the meaning ascribed to such term in Section 7(b)(iii) hereof.

(ee)

“ Senior Shares ” shall mean any class or series of capital stock of the Corporation hereafter authorized, issued or outstanding that, by its terms, expressly provides that it ranks senior to the Series A Preferred Shares with respect to dividend rights or rights upon liquidation, dissolution and winding up of the Corporation.

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(ff)

“ Series A Dividend Payment Date ” shall have the meaning ascribed to such term in Section 4(b).

(gg)

“ Series A Preferred Shares ” shall have the meaning ascribed to such term in Section 1 hereof.

(hh)

“ Trading Day ” shall mean any day on which the NASDAQ Capital Market (or such other successor national securities exchange or automated quotation system on which the Common Shares are then listed or authorized for quotation) is open for the transaction of business.

(ii)

“ Transfer Agent ” shall mean the Corporation’s duly appointed transfer agent, registrar, conversion and dividend disbursing agent for the Series A Preferred Shares and transfer agent and registrar for any Common Shares issued upon conversion of the Series A Preferred Shares, or any successor duly appointed by the Corporation.

(jj)

“ Voting Securities ” shall have the meaning ascribed to such term in the BHC Act and any rules or regulations promulgated thereunder

Section 3. Ranking . The Series A Preferred Shares shall rank, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Corporation, (a) senior to all Junior Shares, (b) on parity with all Parity Shares and (c) junior to all Senior Shares.

Section 4. Dividends .

(a) Subject to the rights of any holders of Senior Shares, each Holder shall be entitled to receive, on each Series A Preferred Share held, if, as and when declared by the Board of Directors or any duly authorized committee of the Board of Directors, but only out of the Corporation’s net income, retained earnings or surplus related to other capital instruments that qualify as “Tier 1 capital” under applicable banking regulations, noncumulative cash dividends with respect to each Dividend Period at a rate per annum equal to 6.50% of the Liquidation Preference.

(b) If declared by the Board of Directors or a duly authorized committee of the Board of Directors, dividends shall be payable on the Series A Preferred Shares quarterly, in arrears, on March 15, June 15, September 15 and December 15 of each year, beginning on March 15, 2015 (each such date, a “ Series A Dividend Payment Date ”). In the event that any Series A Dividend Payment Date would otherwise fall on a day that is not a Business Day, the dividend payment due on that date will be postponed to the next day that is a Business Day and no additional dividends will accrue as a result of that postponement. The period from and including any Series A Dividend Payment Date to, but excluding, the next Series A Dividend Payment Date is a “ Dividend Period ,” provided that the initial Dividend Period shall be the period from and including the Issue Date to, but excluding, the next Series A Dividend Payment Date.

(c) Dividends that are payable on the Series A Preferred Shares in respect of any Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of dividends payable on the Series A Preferred Shares on any date prior to the end of a Dividend Period, and for the initial Dividend Period, shall be computed on the basis of a 360-day year consisting of twelve 30-day months, and actual days elapsed over a 30-day month.

(d) In the event that the Board of Directors or a duly authorized committee of the Board of Directors declares a dividend on the Series A Preferred Shares with respect to a Dividend Period in an

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amount less than the full amount payable to the Holders with respect to such Dividend Period pursuant to Sections 4(a) and 4(b) (such lesser amount, a “ Partial Dividend ”), such Partial Dividend shall be distributed to the Holders on a pro rata basis with respect to the outstanding Series A Preferred Shares.

(e) Dividends that are payable on the Series A Preferred Shares on any Series A Dividend Payment Date will be payable to Holders of record of Series A Preferred Shares as they appear on the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day immediately preceding such Series A Dividend Payment Date (each, a “ Dividend Record Date ”). Any such day that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a Business Day.

(f) Dividends on the Series A Preferred Shares will not be cumulative. If the Board of Directors or a duly authorized committee of the Board of Directors does not declare a dividend on the Series A Preferred Shares in respect of a Dividend Period, then no dividend shall be deemed to have accrued for such Dividend Period, be payable on the applicable Series A Dividend Payment Date or be cumulative, and the Corporation will have no obligation to pay any dividend for that Dividend Period, whether or not the Board of Directors or a duly authorized committee of the Board of Directors declares a dividend for any future Dividend Period with respect to the Series A Preferred Shares or any other class or series of the Corporation’s preferred shares.

(g) So long as any Series A Preferred Shares remain outstanding, unless the full dividends for the most recently completed Dividend Period have been declared and paid (or declared and a sum sufficient for the payment thereof has been set aside) on all outstanding Series A Preferred Shares, during a Dividend Period:

(i) no dividend shall be declared or paid or set aside for payment and no distribution shall be declared or made or set aside for payment on any Junior Shares (other than a dividend payable solely in Junior Shares);

(ii) no Junior Shares shall be repurchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than (A) as a result of a reclassification of Junior Shares for or into other Junior Shares, (B) the exchange or conversion of one Junior Share for or into another Junior Share, (C) through the use of the proceeds of a substantially contemporaneous sale of other Junior Shares, (D) purchases, redemptions or other acquisitions of Junior Shares in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or consultants, or (E) the purchase of fractional interests in Junior Shares pursuant to the conversion or exchange provisions of such stock or the security being converted or exchanged) nor shall any monies be paid to or made available for a sinking fund for the redemption of any such securities by the Corporation; and

(iii) no Parity Shares shall be repurchased, redeemed or otherwise acquired for consideration by the Corporation, other than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series A Preferred Shares and such Parity Shares, except by conversion into or exchange for Junior Shares.

(h) When dividends are not paid in full upon the Series A Preferred Shares and Parity Shares, if any, all dividends declared upon Series A Preferred Shares and Parity Shares, if any, will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that accrued dividends for the Series A Preferred Shares, and accrued dividends, including any accumulations, on Parity Shares, if any, bear to each other for the then-current Dividend Period.

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(i) Subject to the foregoing provisions of Section 4(g) and 4(h), and not otherwise, dividends (payable in cash, stock or otherwise), as may be determined by the Board of Directors or a duly authorized committee of the Board of Directors, may be declared and paid on the Common Shares and any other Junior Shares or any Parity Shares from time to time out of any assets legally available for such payment, and the Holders of Series A Preferred Shares shall not be entitled to participate in any such dividend.

(j) Dividends on the Series A Preferred Shares will not be declared, paid or set aside for payment to the extent such act would cause the Corporation to fail to comply with applicable laws and regulations, including applicable capital adequacy guidelines.

(k) Payments of cash for dividends will be delivered to the Holders at their addresses listed in the stock record books maintained by the Transfer Agent.

Section 5. Liquidation Preference .

(a) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, each Holder shall be entitled to receive, out of the assets of the Corporation or proceeds thereof (whether capital or surplus) available for distribution to shareholders of the Corporation, subject to the prior rights of holders of any Senior Shares, the Liquidation Preference for each outstanding Series A Preferred Share held by such Holder, plus any declared but unpaid dividends (subject to the prior approval of the Federal Reserve, if required), but without accumulation of any undeclared dividends, without interest to the date fixed for such liquidation, dissolution or winding up, in preference to the holders of, and before any payment or distribution is made on (or any setting apart for any payment or distribution), any Junior Shares, including, without limitation, on any Common Shares. After the payment to the Holders of the full amount of such liquidating distribution for each outstanding Series A Preferred Share, such Holders shall not be entitled to convert any Series A Preferred Shares into Common Shares and shall not be entitled to any further participation in distributions of, and shall have no right or claim to, any of the remaining assets of the Corporation in respect of the Series A Preferred Shares.

(b) Neither (i) the sale, lease, exchange or conveyance for cash, securities or other property of all or substantially all the assets of the Corporation (other than in connection with the voluntary or involuntary liquidation, dissolution or winding up of the Corporation) nor (ii) the merger, consolidation or share exchange of the Corporation into or with any other Person shall be deemed to be a liquidation, dissolution or winding up of the Corporation, voluntary or involuntary, for the purposes of this Section 5.

(c) In the event the assets of the Corporation legally available for distribution to the Holders upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full all amounts to which such Holders are entitled pursuant to Section 5(a), no such distribution shall be made on account of any Liquidation Parity Shares upon such liquidation, dissolution or winding up of the Corporation unless proportionate distributable amounts shall be paid with equal priority on account of the Series A Preferred Shares, ratably, in proportion to the full distributable amounts for which Holders of the Series A Preferred Shares and holders of any Liquidation Parity Shares are entitled upon such liquidation, dissolution or winding up of the Corporation.

(d) All distributions made with respect to the Series A Preferred Shares in connection with any liquidation, dissolution or winding up of the Corporation shall be made pro rata to the Holders.

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Section 6. Redemption . The Series A Preferred Shares are not redeemable at the option of the Corporation at any time.

Section 7. Voting Rights .

(a) The Series A Preferred Shares shall have no voting rights except as set forth in this Section 7 and as otherwise required by Ohio law from time to time. Except as otherwise provided in this Section 7, in exercising any such voting rights, each Holder shall be entitled to one vote for each Series A Preferred Share held by such Holder.

(b) So long as any Series A Preferred Shares remain outstanding, unless a greater percentage shall then be required by law, the affirmative vote or consent of the Holders of at least two-thirds of all of the Series A Preferred Shares at the time outstanding, voting separately as a class, shall be required to:

(i) amend, alter or repeal any provision of the Corporation’s Articles (including the provisions hereof creating the Series A Preferred Shares), if the amendment, alteration or repeal of the Articles would materially and adversely affect the rights, preferences, powers or privileges of the Series A Preferred Shares;

(ii) create, authorize, issue or increase the authorized or issued amount of any class or series of any of the Corporation’s equity securities, or any warrants, options or other rights convertible or exchangeable into any class or series of any of the Corporation’s equity securities, which would constitute Senior Shares or Parity Shares or reclassify any authorized shares of the Corporation into any such shares, or create, authorize or issue any obligation or security convertible into, exchangeable or exercisable for, or evidencing the right to purchase any such shares; or

(iii) enter into or consummate any (A) reclassification of the outstanding Common Shares (other than a change in par value, or from no par value to par value, or from par value to no par value), (B) consolidation, merger or share exchange of the Corporation with or into another Person or any merger, consolidation or share exchange of another Person with or into the Corporation (other than a consolidation, merger or share exchange in which the Corporation is the resulting or surviving Person and which does not result in any reclassification of the outstanding Common Shares), or (C) sale, lease or other disposition to another Person of all or substantially all of the assets of the Corporation (computed on a consolidated basis), other than to one or more of the Corporation’s subsidiaries (any of the foregoing, a “ Reorganization Event ”); provided, however, that the Holders will have no right to vote under this Section 7 regarding the Corporation’s entry into or consummation of a Reorganization Event if, upon the consummation of the Reorganization Event, (I) the Series A Preferred Shares remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and (II) such Series A Preferred Shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers of the Series A Preferred Shares, taken as a whole.

Notwithstanding the foregoing, except as otherwise required by law, the Corporation may, without the consent of any Holder, (x) authorize, increase the authorized amount of, or issue Parity Shares (provided that dividend rights are noncumulative) and Junior Shares or (y) increase the amount of authorized Series A Preferred Shares or issue any additional Series A Preferred Shares; provided,

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however, that with respect to clause (x), such Parity Shares or Junior Shares, as the case may be, do not rank senior to the Series A Preferred Shares as to dividend rights or rights upon liquidation, dissolution or winding up of the Corporation.

Section 8. Conversion Rights .

(a) Each Holder shall have the right (the “ Conversion Right ”), at such Holder’s option, exercisable at any time and from time to time from the Issue Date, to convert, subject to the terms and provisions of Section 6 and this Section 8, any or all of such Holder’s Series A Preferred Shares (including any fraction thereof) into such whole number of Common Shares per Series A Preferred Share as is equal to the Conversion Ratio in effect on the date of conversion, plus cash in lieu of any fractional Common Share as provided in Section 10. Notwithstanding anything to the contrary set forth herein, each Holder shall be entitled to convert Series A Preferred Shares pursuant to this Section 8, or receive Common Shares upon any such conversion, to the extent (but only to the extent) that such conversion or receipt would not cause or result in such Holder and its Affiliates, collectively, being deemed to own, control or have the power to vote, for purposes of the BHC Act or the CIBC Act, and any rules and regulations promulgated thereunder, 10% or more of any class of Voting Securities of the Corporation outstanding at such time (it being understood, for the avoidance of doubt, that no Security shall be included in any such percentage calculation to the extent that it cannot by its terms be converted into or exercised for Voting Securities by such Holder or its Affiliates at the time of such measurement or transfer).

(b) A Holder of Series A Preferred Shares must complete each of the following procedures to exercise the Conversion Right:

(i) complete, manually sign and deliver to the Transfer Agent a written notice in the form provided by the Transfer Agent indicating that the Holder elects to convert the number of such Holder’s Series A Preferred Shares (including any fraction thereof) specified in such notice;

(ii) If the Series A Preferred Shares that the Holder wishes to convert are represented by one or more physical certificates, surrender such physical certificate(s) to the Transfer Agent;

(iii) if required by the Corporation or the Transfer Agent, furnish appropriate endorsements and transfer documents; and

(iv) if required, pay all transfer or similar taxes.

(c) The date on which a Holder complies with the applicable procedures set forth in Section 8(b) is the “ Conversion Date .” Immediately prior to the close of business on the Conversion Date, each converting Holder shall be deemed to be the holder of record of Common Shares issuable upon conversion of such Holder’s Series A Preferred Shares notwithstanding that the share register of the Corporation shall then be closed or that, if applicable, physical certificates representing such Common Shares shall not then be actually delivered to such Holder. On the Conversion Date, all rights of any Holder with respect to the Series A Preferred Shares so converted, including the rights, if any, to receive distributions of the Corporation’s assets (including, but not limited to, the Liquidation Preference) or notices from the Corporation, will terminate, except only for the rights of any such Holder to (i) receive physical certificates (if applicable) for the number of fully paid and non-assessable whole Common Shares into which such Series A Preferred Shares have been converted and cash in lieu of any fractional share as provided in Section 10, and (ii) exercise the rights to which such Holder is entitled as a holder of Common Shares into which such Series A Preferred Shares have been converted.

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(d) The Transfer Agent shall, on a Holder’s behalf, convert the Series A Preferred Shares into Common Shares, in accordance with the terms of the notice delivered by such Holder described in Section 8(b)(i) above. The Common Shares and cash in lieu of any fractional share due to a Holder surrendering physical certificates shall be delivered to the Holder and each surrendered physical certificate shall be canceled and retired. In the event that the Holders shall not by written notice designate the name in which Common Shares and/or cash, securities or other property (including payments of cash in lieu of fractional shares) to be issued or paid upon conversion of Series A Preferred Shares should be registered or paid or the manner in which such shares should be delivered, the Corporation shall be entitled to register and deliver such shares, and make such payment, in the name of the Holders and in the manner shown on the records of the Corporation.

(e) If the Conversion Date occurs on or before the close of business on a Dividend Record Date, the Holder shall not be entitled to receive any portion of the dividend declared on such converted Series A Preferred Shares and paid or payable on the corresponding Dividend Payment Date.

(f) If the Conversion Date occurs after a Dividend Record Date but prior to the corresponding Series A Dividend Payment Date, the Holder on the Dividend Record Date shall receive on that Dividend Payment Date dividends declared and paid on those Series A Preferred Shares, notwithstanding the conversion of those Series A Preferred Shares prior to that Dividend Payment Date, because that Holder shall have been the Holder of record on the corresponding Dividend Record Date. However, at the time that such holder surrenders the Series A Preferred Shares for conversion, the holder shall pay to the Corporation an amount equal to the dividend that has been paid, or will be paid, on the related Series A Dividend Payment Date.

(g) A Holder of Series A Preferred Shares on a Dividend Record Date who exercises such Holder’s Conversion Right and converts such Series A Preferred Shares into Common Shares on or after the corresponding Dividend Payment Date shall be entitled to receive the dividend declared on such Series A Preferred Shares and paid or payable on such Series A Dividend Payment Date, and the converting Holder need not include payment of the amount of such dividend upon surrender for conversion of those Series A Preferred Shares.

(h) The Corporation shall reserve out of its authorized but unissued Common Shares, sufficient Common Shares to provide for the conversion of Series A Preferred Shares from time to time as such Series A Preferred Shares are presented for conversion. The Corporation shall take all action necessary so that all Common Shares that may be issued upon conversion of Series A Preferred Shares will upon issue be validly issued, fully paid and nonassessable, and free from all liens and charges in respect of the issuance or delivery thereof.

(i) If any Series A Preferred Shares are to be converted by the Corporation pursuant to Section 9, such Holder’s right to voluntarily convert such Holder’s Series A Preferred Shares as provided in this Section 8 shall terminate at 5:00 p.m., New York City time, on the Trading Day immediately preceding the Corporation Conversion Option Date, and dividends on the Series A Preferred Shares will thereafter cease to be payable and all other rights of the Holders will terminate, except for the right to receive the Common Shares and cash in lieu of fractional shares.

Section 9. Corporation Conversion Option .

(a) At any time on or after the fifth anniversary of the Issue Date, the Corporation shall have the option to require the Holders to convert all of the outstanding Series A Preferred Shares into that number of Common Shares that are issuable at the Conversion Ratio then in effect (the “ Corporation Conversion Option ”). The Corporation may exercise the Corporation Conversion Option only if: (i) the

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Closing Sale Price equals or exceeds 120% of the Conversion Price then in effect for at least 20 Trading Days in a period of 30 consecutive Trading Days (including the last Trading Day of such period) ending on the fifth Trading Day immediately prior to the Corporation’s issuance of a press release announcing its intent to exercise the Corporation Conversion Option on the Series A Preferred Shares in accordance with Section 9(b); and (ii) the Corporation has declared and paid full dividends for four consecutive quarters prior to the issuance of such press release.

(b) To exercise the Corporation Conversion Option pursuant to this Section 9, the Corporation shall issue a press release for publication on a newswire service in accordance with the federal securities laws or the rules of any stock exchange on which the Series A Preferred Shares or the Common Shares are then listed or traded, and in any case by first class mail to each Holder, providing the relevant information to the public prior to the opening of business on the fifth Trading Day following any date on which the conditions set forth in Section 9(a) shall have been satisfied, announcing the Corporation’s intention to exercise the Corporation Conversion Option. The Corporation shall also give notice by mail or by publication (with subsequent prompt notice by mail) to the Holders (not more than ten Trading Days after the date of the press release) of the exercise of the Corporation Conversion Option announcing the Corporation’s intention to convert the Series A Preferred Shares (“ Corporation Conversion Notice ”). The conversion date (the “ Corporation Conversion Option Date ”) shall be on the date that the Corporation issues such press release, and the date of the issuance of the press release shall be the record date for such conversion. In addition to any information required by applicable law or regulation, the press release and the Corporation Conversion Notice shall state, as appropriate:

(i) the Corporation Conversion Option Date;

(ii) the number of Common Shares to be issued upon conversion of each Series A Preferred Share; and

(iii) that dividends on the Series A Preferred Shares to be converted shall cease to accrue for that Dividend Period on the Corporation Conversion Option Date.

(c) Upon exercise of the Corporation Conversion Option and the surrender of Series A Preferred Shares by a Holder thereof, the Corporation shall issue and shall deliver or cause to be issued and delivered to such Holder, or to such other Person on such Holder’s written order (i) certificates representing the number of validly issued, fully paid and non-assessable whole Common Shares to which a Holder of Series A Preferred Shares being converted, or a Holder’s transferee, shall be entitled and (ii) cash in lieu of any fractional Common Share as provided in Section 10.

(d) Each conversion shall be deemed to have been made at the close of business on the Corporation Conversion Option Date so that the rights of the Holder shall cease except for the right to receive the number of fully paid and non-assessable Common Share at the Conversion Ratio (subject to adjustment in accordance with the provisions of Section 11), and cash in lieu of fractional shares as provided in Section 10, and the Person entitled to receive Common Shares shall be treated for all purposes as having become the record holder of those Common Shares at that time.

(e) If the Corporation exercises the Corporation Conversion Option and the Corporation Conversion Option Date is a date that is prior to the close of business on any Dividend Record Date, the Holder shall not be entitled to receive any portion of the dividend payable for such Dividend Period on such converted shares on the corresponding Dividend Payment Date.

(f) If the Corporation exercises the Corporation Conversion Option and the Corporation Conversion Option Date is a date that is after the close of business on any Dividend Record Date and

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prior to the close of business on the corresponding Dividend Payment Date, all dividends for that Dividend Period with respect to the Series A Preferred Shares called for conversion on such date shall be payable on such Dividend Payment Date to the record holder of such shares on such record date.

Section 10. No Fractional Shares Upon Conversion . No fractional Common Shares or securities representing fractional Common Shares shall be issued upon any conversion of any Series A Preferred Shares. If more than one Series A Preferred Share held by the same Holder shall be subject to conversion at one time, the number of whole Common Shares issuable upon conversion thereof shall be computed on the basis of the aggregate Liquidation Preference of all of such Series A Preferred Shares as of the conversion date. If the conversion of one or more Series A Preferred Shares results in a fraction of a Common Share, an amount equal to such fraction multiplied by the Market Value shall be paid to such Holder in cash by the Corporation.

Section 11. Anti-Dilution Adjustments .

(a) Any adjustment to the Conversion Price shall result in a change in the Conversion Ratio. The Conversion Price shall be subject to the following adjustments; provided, however, that notwithstanding anything to the contrary set forth herein, any adjustment to the Conversion Price to be made pursuant to this Section 11 shall be made to the extent (but only to the extent) that such adjustment would not cause or result in any Holder and its Affiliates, collectively, being deemed to own, control or have the power to vote, for purposes of the BHC Act or the CIBC Act and any rules and regulations promulgated thereunder, Voting Securities which (assuming, for this purpose only, full conversion and/or exercise of all such securities) would represent 10% or more of any class of Voting Securities of the Corporation outstanding at such time; provided, further, however, that any adjustment (or portion thereof) prohibited pursuant to this Section 11(a) shall be postponed and implemented on the first date on which such implementation would not result in the condition described above in this Section 11(a):

(i) Dividends and Distributions of Common Shares . If the Corporation pays dividends or other distributions on the Common Shares in Common Shares, then the Conversion Price will be adjusted by multiplying the Conversion Price in effect at 5:00 p.m., New York City time, on the Trading Day immediately prior to the Ex-Date for such dividend or distribution by the following fraction:


		OS ₀
		OS ₁

Where,


OS ₀	=	the number of Common Shares outstanding immediately prior to Ex-Date for such dividend or distribution.

OS ₁	=	the sum of the number of Common Shares outstanding immediately prior to the Ex-Date for such dividend or distribution plus the total number of Common Shares constituting such dividend or distribution.

The adjustment pursuant to this clause (i) shall become effective at 9:00 a.m., New York City time on the Ex-Date for such dividend or distribution. For the purposes of this clause (i), the number of Common Shares at the time outstanding shall not include shares held in treasury by the Corporation. If any dividend or distribution described in this clause (i) is declared but not so paid or made, the Conversion Price shall be readjusted, effective as of the date the

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Board of Directors publicly announces its decision not to make such dividend or distribution, to such Conversion Price that would be in effect if such dividend or distribution had not been declared.

(ii) Subdivisions, Splits and Combination of Common Shares . If the Corporation subdivides, splits or combines the Common Shares, then the Conversion Price will be adjusted by multiplying the Conversion Price in effect at 5:00 p.m., New York City time, on the Trading Day immediately prior to the effective date of such subdivision, split or combination by the following fraction:


		OS ₀
		OS ₁

Where,


OS ₀	=	the number of Common Shares outstanding immediately prior to the effective date of such subdivision, split or combination.

OS ₁	=	the number of Common Shares outstanding immediately after the opening of business on the effective date of such subdivision, split or combination.

The adjustment pursuant to this clause (ii) shall become effective at 9:00 a.m., New York City time on the effective date of such subdivision, split or combination. For the purposes of this clause (ii), the number of Common Shares at the time outstanding shall not include shares held in treasury by the Corporation. If any subdivision, split or combination described in this clause (ii) is announced but the outstanding Common Shares are not subdivided, split or combined, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to subdivide, split or combine the outstanding Common Shares, to such Conversion Price that would be in effect if such subdivision, split or combination had not been announced.

(iii) Issuance of Stock Purchase Rights . If the Corporation issues to all holders of the Common Shares rights or warrants (other than rights or warrants issued pursuant to a dividend reinvestment plan or share purchase plan or other similar plans) entitling them, for a period of up to 45 days from the date of issuance of such rights or warrants, to subscribe for or purchase the Common Shares at less than the Market Value on the date fixed for the determination of shareholders entitled to receive such rights or warrants, then the Conversion Price will be adjusted by multiplying the Conversion Price in effect at 5:00 p.m., New York City time, on the Trading Day immediately prior to the Ex-Date for such issuance by the following fraction:


		OS ₀ + Y
		OS ₀ + X

Where,


OS ₀	=	the number of Common Shares outstanding immediately prior to the Ex-Date for such distribution.

X	=	the total number of Common Shares issuable pursuant to such rights or warrants.

Y	=	the number of Common Shares equal to the aggregate price payable to exercise such rights or warrants divided by the Market Value as of the date immediately prior to the Ex-Date for such distribution.

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Any adjustment pursuant to this clause (iii) shall become effective immediately prior to 9:00 a.m., New York City time, on the Ex-Date for such issuance. For the purposes of this clause (iii), the number of Common Shares at the time outstanding shall not include shares held in treasury by the Corporation. The Corporation shall not issue any such rights or warrants in respect of Common Shares held in treasury by the Corporation. In the event that such rights or warrants described in this clause (iii) are not so issued, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to issue such rights or warrants, to the Conversion Price that would then be in effect if such issuance had not been declared. To the extent that such rights or warrants are not fully exercised prior to their expiration or Common Shares are otherwise not delivered pursuant to such rights or warrants upon the exercise of such rights or warrants, the Conversion Price shall be readjusted to such Conversion Price that would then be in effect had the adjustment made upon the issuance of such rights or warrants been made on the basis of the delivery of only the number of Common Shares actually delivered. In determining the aggregate exercise price payable for such Common Shares, there shall be taken into account any cash and non-cash consideration received for such rights or warrants and the value of any such non-cash consideration shall be reasonably determined by the Board of Directors.

(iv) Debt or Asset Distributions . If the Corporation distributes to all holders of Common Shares evidences of indebtedness, shares of capital stock, securities, cash or other assets (excluding any dividend or distribution referred to in clause (i) above, any rights or warrants referred to in clause (iii) above, any dividend or distribution paid exclusively in cash, any consideration payable in connection with a tender or exchange offer made by the Corporation or any of its subsidiaries, and any dividend of shares of capital stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit in the case of certain spinoff transactions as described below), then the Conversion Price will be adjusted by multiplying the Conversion Price in effect at 5:00 p.m., New York City time, on the Trading Day immediately prior to the Ex-Date for such distribution by the following fraction:


		SP ₀ - FMV
		SP ₀

Where,


SP ₀	=	the Market Value per Common Share on such date.

FMV	=	the fair market value of the portion of the distribution applicable to one Common Share on such date as reasonably determined by the Board of Directors.

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In a “spin-off”, where the Corporation makes a distribution to all holders of Common Shares consisting of capital stock of any class or series, or similar equity interests of, or relating to, a subsidiary or other business unit, the Conversion Price will be adjusted on the 15 ^th Trading Day after the effective date of the distribution by multiplying such Conversion Price in effect immediately prior to such 15 ^th Trading Day by the following fraction:


		MP ₀
		MP ₀ + MP _S

Where,


MP ₀	=	the average of the Closing Sales Prices of the Common Shares over the first 10 Trading Days commencing on and including the fifth Trading Day following the effective date of such distribution.

MP _S	=	the average of the Closing Sales Prices of the capital stock or equity interests representing the portion of the distribution applicable to one Common Share over the first 10 Trading Days commencing on and including the fifth Trading Day following the effective date of such distribution.

Any adjustment pursuant to this clause (iv) shall become effective immediately prior to 9:00 a.m., New York City time, on the Ex-Date for such distribution. In the event that such distribution described in this clause (iv) is not so paid or made, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to pay or make such dividend or distribution, to the Conversion Price that would then be in effect if such distribution had not been declared.

(v) Cash Distributions . If the Corporation makes a distribution consisting exclusively of cash to all holders of Common Shares, excluding (A) any regular cash dividend on the Common Shares to the extent that the aggregate cash dividends per Common Share does not exceed $0.05 in any fiscal quarter, (B) any cash that is distributed in a Reorganization Event or as part of a “spin-off” referred to in clause (iv) above, (C) any dividend or distribution in connection with the Corporation’s liquidation, dissolution or winding up, and (D) any consideration payable in connection with a tender or exchange offer made by the Corporation or any of its subsidiaries, then in each event, the Conversion Price will be adjusted by multiplying the Conversion Price in effect at 5:00 p.m., New York City time, on the Trading Day immediately prior to the Ex-Date for such distribution by the following fraction:


		SP ₀ - DIS
		SP ₀

Where,


SP ₀	=	the Closing Sales Price per Common Share on the Trading Day immediately preceding the Ex-Date.

DIS	=	the amount per Common Share of the distribution (or, in the case of a regular cash dividend, the amount of the aggregate cash dividend in any quarter which is in excess of $0.05 per Common Share).

Any adjustment pursuant to this clause (v) shall become effective immediately prior to 9:00 a.m., New York City time, on the Ex-Date for such dividend or distribution. In the event that any distribution described in this clause (v) is not so made, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to pay such distribution, to the Conversion Price which would then be in effect if such distribution had not been declared.

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(vi) Self Tender Offers and Exchange Offers . If the Corporation or any of its subsidiaries successfully completes a tender or exchange offer for the Common Shares where the cash and the value of any other consideration included in the payment per Common Share exceeds the Closing Sales Price per Common Share on the Trading Day immediately succeeding the expiration of the tender or exchange offer, then the Conversion Price will be adjusted by multiplying the Conversion Price in effect at 5:00 p.m., New York City time, on the expiration date of the offer by the following fraction:


		OS ₀ * SP ₀
		AC + (SP ₀ * OS ₁ )

Where,


SP ₀	=	the Closing Sales Price per Common Share on the Trading Day immediately succeeding the expiration of the tender or exchange offer.

OS ₀	=	the number of Common Shares outstanding immediately prior to the expiration of the tender or exchange offer, including any shares validly tendered and not withdrawn.

OS ₁	=	the number of Common Shares outstanding immediately after the expiration of the tender or exchange offer.

AC	=	the aggregate cash and fair market value of the other consideration payable in the tender or exchange offer, as reasonably determined by the Board of Directors.

Any adjustment made pursuant to this clause (vi) shall become effective immediately prior to 9:00 a.m., New York City time, on the Trading Day immediately following the expiration of the tender or exchange offer. For the purposes of this clause (vi), the number of Common Shares at the time outstanding shall not include shares held in treasury by the Corporation. In the event that the Corporation or one of its subsidiaries is obligated to purchase Common Shares pursuant to any such tender offer or exchange offer, but the Corporation or such subsidiary is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Price shall be readjusted to be such Conversion Price that would then be in effect if such tender offer or exchange offer had not been made.

(vii) Rights Plans . To the extent that the Corporation has a rights plan in effect with respect to the Common Shares on any Conversion Date, upon conversion of any Series A Preferred Shares, the Holders will receive, in addition to the Common Shares, the rights under the rights plan, unless, prior to such Conversion Date, the rights have separated from the Common Shares, in which case the Conversion Price will be adjusted at the time of separation as if the Corporation had made a distribution to all holders of Common Shares as described in clause (iv) above, subject to readjustment in the event of the expiration, termination or redemption of such rights.

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(b) (i) All adjustments to the Conversion Price shall be calculated to the nearest 1/10th of a cent. No adjustment in the Conversion Price shall be required if such adjustment would be less than $0.01; provided that any adjustments which by reason of this subparagraph are not required to be made shall be carried forward and taken into account in any subsequent adjustment; provided, further, that on any Conversion Date adjustments to the Conversion Price will be made with respect to any such adjustment carried forward and which has not been taken into account before such date.

(ii) No adjustment to the Conversion Price shall be made if the Holders may participate in the transaction that would otherwise give rise to an adjustment, as a result of holding the Series A Preferred Shares (including without limitation pursuant to Section 4(b) hereof), without having to convert the Series A Preferred Shares, as if they held the full number of Common Shares into which a Series A Preferred Share may then be converted.

(c) Whenever the Conversion Price is to be adjusted in accordance with Section 11(a), the Corporation shall: (i) compute the Conversion Price in accordance with Section 11(a), taking into account the $0.01 threshold set forth in Section 11(b) hereof; (ii) as soon as practicable following the occurrence of an event that requires an adjustment to the Conversion Price pursuant to Section 11(a), taking into account the $0.01 threshold set forth in Section 11(b) hereof (or if the Corporation is not aware of such occurrence, as soon as practicable after becoming so aware), provide, or cause to be provided, a written notice to the Holders of the occurrence of such event; and (iii) as soon as practicable following the determination of the revised Conversion Price in accordance with Section 11(a) hereof, provide, or cause to be provided, a written notice to the Holders setting forth in reasonable detail the method by which the adjustment to the Conversion Price was determined and setting forth the revised Conversion Price.

(d) In the event of any Reorganization Event, each Series A Preferred Share thereafter remaining outstanding, if any, shall thereafter, without the consent of any Holder, become convertible at any time, at the option of the Holder thereof, or pursuant to and in accordance with the Corporation Conversion Option, only into the kind and amount of securities (of the Corporation or another issuer), cash and other property receivable upon such Reorganization Event by a holder of the number of Common Shares into which such Series A Preferred Share could have been converted immediately prior to such Reorganization Event, after giving effect to any adjustment event. The provisions of this Section 11(d) and any equivalent thereof in any such securities similarly shall apply to successive Reorganization Events. None of the provisions of this Section 11(d) shall affect the right of a Holder to convert the Holder’s Series A Preferred Shares into Common Shares prior to the effective date of a Reorganization Event.

Section 12. Form . Series A Preferred Shares may be issued in the form of physical certificates or in book entry form through the direct registration system of the Transfer Agent.

Section 13. No Preemptive Rights . The holders of Series A Preferred Shares shall have no preemptive rights with respect to any shares of the Corporation’s capital stock or any of its other securities convertible into or carrying rights or options to purchase any such capital stock.

Section 14. Other Provisions .

(a) With respect to any notice to a Holder required to be provided hereunder, such notice shall be mailed to the registered address of such Holder, and neither failure to mail such notice, nor any defect therein or in the mailing thereof, to any particular Holder shall affect the sufficiency of the notice or the validity of the proceedings referred to in such notice with respect to the other Holders or affect the legality or validity of any conversion, distribution, rights, warrant, reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation, winding up or other action, or the vote upon any action

-16-

with respect to which the Holders are entitled to vote. All notice periods referred to herein shall commence on the date of the mailing of the applicable notice. Any notice which was mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Holder receives the notice.

(b) The Liquidation Preference and the annual dividend rate set forth in Section 4(a) shall be subject to adjustment whenever there shall occur a stock split, combination, reclassification or other similar event involving Series A Preferred Shares. Such adjustments shall be made in such manner and at such time as the Board of Directors of the Corporation in good faith determines to be equitable in the circumstances, any such determination to be evidenced in a resolution. Upon any such equitable adjustment, the Corporation shall promptly deliver to the Transfer Agent and each Holder an Officers’ Certificate attaching and certifying the resolution of the Board of Directors, describing in reasonable detail the event requiring the adjustment and the method of calculation thereof and specifying the increased or decreased Liquidation Preference or annual dividend rate in effect following such adjustment.

(c) All issued Series A Preferred Shares shall be deemed outstanding except (i) from the date of surrender of certificates representing Series A Preferred Shares, all Series A Preferred Shares converted into Common Shares; and (ii) from the date of registration of transfer, all Series A Preferred Shares held of record by the Corporation or any subsidiary of the Corporation.

(d) In case, at any time while any of the Series A Preferred Shares are outstanding:

(i) The Corporation shall declare a dividend (or any other distribution) on its Common Shares or any other Junior Shares other than a regular cash dividend on the Corporation’s Common Shares;

(ii) The Corporation shall authorize the issuance to all holders of its Common Shares or any Junior Shares of rights or warrants to subscribe for or purchase Common Shares or of any other subscription rights or warrants;

(iii) There is any Reorganization Event; or

(iv) There is a voluntary or involuntary dissolution, liquidation or winding up of the Corporation;

then the Corporation shall cause to be mailed to the Transfer Agent, if any, for Series A Preferred Shares and the Transfer Agent shall cause to be mailed to the Holders of the outstanding Series A Preferred Shares at their respective addresses as they appear on the books of the Corporation, at least ten (10) days before the date hereinafter specified (or the earlier of the dates herein specified, in the event that more than one date is specified), a notice stating (i) the date on which a record is to be taken for the purpose of such dividend, distribution, rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Shares of record to be entitled to such dividend, distribution, rights or warrants are to be determined, (ii) the date on which any such Reorganization Event, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Shares of record shall be entitled to exchange their shares for the applicable consideration, deliverable upon such Reorganization Event, dissolution, liquidation or winding up or (iii) the date after which the Series A Preferred Shares may be converted into Common Shares at the option of the Holder pursuant to Section 8(a) hereof.

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(e) The headings of the various sections and subsections contained herein are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

(f) Except as may otherwise be required by law, the Series A Preferred Shares shall not have any powers, designations, preferences and relative, participating, optional or other special rights, other than those specifically set forth in this Section I of the Articles.

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Exhibit 4.1

LOGO

THIS CERTIFIES THAT is the owner of CUSIP DATED COUNTERSIGNED AND REGISTERED: COMPUTERSHARE TRUST COMPANY, N.A. TRANSFER AGENT AND REGISTRAR, FULLY-PAID AND NON-ASSESSABLE 6.50% NONCUMULATIVE CONVERTIBLE PERPETUAL PREFERRED SHARES, SERIES A, LIQUIDATION PREFERENCE $1,000 PER SHARE, EACH WITHOUT PAR VALUE OF SB Financial Group, Inc. transferable on the books and records of the Transfer Agent, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The powers, designations, preferences and relative, participating, optional and other special rights of the Series A Preferred Shares represented hereby are issued and shall in all respects be subject to the provisions of the Certificate of Amendment to Article FOURTH of the Articles of Incorporation establishing the terms of the Series A Preferred Shares of SB Financial Group, Inc. (the “Certificate of Designations”). Capitalized terms used herein but not defined shall have the respective meanings given them in the Certificate of Designations. The Corporation will provide a copy of the Certificate of Designations to a Holder without charge upon written request to the Corporation at its principal place of business. Reference is hereby made to select provisions of the Series A Preferred Shares set forth on the reverse hereof, and to the Certificate of Designations, which select provisions and the Certificate of Designations shall for all purposes have the same effect as if set forth in this certificate. Upon receipt of this certificate, the Holder is bound by the Certificate of Designations and is entitled to the benefits thereunder. Unless the Transfer Agent’s valid countersignature appears hereon, the Series A Preferred Shares evidenced hereby shall not be entitled to any benefit under the Certificate of Designations or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Corporation executed this Series A Preferred Share certificate as of the date set forth below. SERIES A PREFERRED SHARES NO PAR VALUE SERIES A PREFERRED SHARES THIS CERTIFICATE IS TRANSFERABLE IN CANTON, MA, JERSEY CITY, NJ AND COLLEGE STATION, TX SEE REVERSE FOR CERTAIN DEFINITIONS Certificate Number Shares . SB FINANCIAL GROUP, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF OHIO President and Chief Executive Officer Corporate Secretary By AUTHORIZED SIGNATURE THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. ZQ|CERT#|COY|CLS|RGSTRY|ACCT#|TRANSTYPE|RUN#|TRANS# XXXXXX XX X DD-MMM-YYYY * * 000000* * * * * * * * * * * * * * * * * * * * * 000000* * * * * * * * * * * * * * * * * * * * * 000000* * * * * * * * * * * * * * * * * * * * * 000000* * * * * * * * * * * * * * * * * * * * * 000000* * * * * * * * * * * * * * ** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Sample **** Mr. Sample **000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares*** *000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares**** 000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****0 00000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****00 0000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000 000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****0000 00**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****00000 0**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000 **Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000* *Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000** Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**S ***ZERO HUNDRED THOUSAND ZERO HUNDRED AND ZERO*** MR. SAMPLE & MRS. SAMPLE & MR. SAMPLE & MRS. SAMPLE ZQ00000000 Certificate Numbers 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 Total Transaction Num/No. 123456 Denom. 123456 Total 1234567 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 PO BOX 43004, Providence, RI 02940-3004 CUSIP XXXXXX XX X Holder ID XXXXXXXXXX Insurance Value 1,000,000.00 Number of Shares 123456 DTC 12345678 123456789012345 Sb financial group Sb financial group

LOGO

The IRS requires that we report the cost basis of certain shares acquired after January 1, 2011. If your shares were covered by the legislation and you have sold or transferred the shares and requested a specific cost basis calculation method, we have processed as requested. If you did not specify a cost basis calculation method, we have defaulted to the first in, first out (FIFO) method. Please visit our website or consult your tax advisor if you need additional information about cost basis. If you do not keep in contact with us or do not have any activity in your account for the time periods specified by state law, your property could become subject to state unclaimed property laws and transferred to the appropriate state. For value received, hereby sell, assign and transfer unto Shares Attorney Dated: 20 Signature: Signature: Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) of the Series A Preferred Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises. . SB FINANCIAL GROUP, INC. Dividends on each Series A Preferred Share shall be payable when, as and if declared by the Board of Directors of the Corporation from funds legally available therefor at a rate per annum set forth in the face hereof or as provided in the Certificate of Designations. The Series A Preferred Shares shall be redeemable as provided in the Certificate of Designations. The Series A Preferred Shares shall be convertible into the Corporation’s Common Shares in the manner and according to the terms set forth in the Certificate of Designations. UPON REQUEST, THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH HOLDER A SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF SHARES OR SERIES THEREOF OF THE CORPORATION, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES OR RIGHTS. SUCH REQUEST MAY BE MADE TO THE CORPORATION AT 401 CLINTON STREET, DEFIANCE, OHIO 43512. Signature(s) Guaranteed: Medallion Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian (Cust) (Minor) TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act (State) JT TEN - as joint tenants with right of survivorship UNIF TRF MIN ACT - Custodian (until age ) and not as tenants in common (Cust) under Uniform Transfers to Minors Act (Minor) (State) Additional abbreviations may also be used though not in the above list.1234567 SECURITY INSTRUCTIONS THIS IS WATERMARKED PAPER DO NOT ACCEPT WITHOUT NOTHING WATERMARK. HOLD TO LIGHT TO VERIFY WATERMARK

Exhibit 4.2

LOGO

THIS CERTIFIES THAT is the owner of CUSIP DATED COUNTERSIGNED AND REGISTERED: COMPUTERSHARE TRUST COMPANY, N.A. TRANSFER AGENT AND REGISTRAR, Depositary Shares (“Depositary Shares”), each representing 1/100th of a 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A, liquidation preference $1,000 per share, each without par value (the “Preferred Shares”), of SB Financial Group, Inc. an Ohio corporation (the “Corporation”), on deposit with the Depositary, subject to the terms and entitled to the benefits of the Deposit Agreement, dated as of November 6, 2014 (the “Deposit Agreement”), among the Corporation, the Depositary and the holders from time to time of the depositary receipts thereunder. By accepting this Depositary Receipt, the holder hereof becomes a party to agrees to be bound by all the terms and conditions of the Deposit Agreement. This Depositary Receipt shall not be valid or obligatory for any purpose or entitled to any benefits under the Deposit Agreement unless it shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized officer, or if a Registrar in respect of the Depositary Receipts (other than the Depositary) shall have been appointed, by the manual or facsimile signature of a duly authorized officer of such registrar. DEPOSITARY RECEIPT NO PAR VALUE DEPOSITARY RECEIPT THIS CERTIFICATE IS TRANSFERABLE IN CANTON, MA, JERSEY CITY, NJ AND COLLEGE STATION, TX SEE REVERSE FOR CERTAIN DEFINITIONS Certificate Number Shares . SB FINANCIAL GROUP, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF OHIO President & CEO Corporate Secretary By AUTHORIZED SIGNATURE THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. ZQ|CERT#|COY|CLS|RGSTRY|ACCT#|TRANSTYPE|RUN#|TRANS# XXXXXX XX X DD-MMM-YYYY * * 000000* * * * * * * * * * * * * * * * * * * * * 000000* * * * * * * * * * * * * * * * * * * * * 000000* * * * * * * * * * * * * * * * * * * * * 000000* * * * * * * * * * * * * * * * * * * * * 000000* * * * * * * * * * * * * * ** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Sample **** Mr. Sample **000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares*** *000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares**** 000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****0 00000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****00 0000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000 000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****0000 00**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****00000 0**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000 **Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000* *Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000** Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**Shares****000000**S ***ZERO HUNDRED THOUSAND ZERO HUNDRED AND ZERO*** MR. SAMPLE & MRS. SAMPLE & MR. SAMPLE & MRS. SAMPLE ZQ00000000 Certificate Numbers 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 Total Transaction Num/No. 123456 Denom. 123456 Total 1234567 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 PO BOX 43004, Providence, RI 02940-3004 CUSIP XXXXXX XX X Holder ID XXXXXXXXXX Insurance Value 1,000,000.00 Number of Shares 123456 DTC 12345678 123456789012345 Sb financial group Sb financial group

LOGO

The IRS requires that we report the cost basis of certain shares acquired after January 1, 2011. If your shares were covered by the legislation and you have sold or transferred the shares and requested a specific cost basis calculation method, we have processed as requested. If you did not specify a cost basis calculation method, we have defaulted to the first in, first out (FIFO) method. Please visit our website or consult your tax advisor if you need additional information about cost basis. If you do not keep in contact with us or do not have any activity in your account for the time periods specified by state law, your property could become subject to state unclaimed property laws and transferred to the appropriate state. For value received, hereby sell, assign and transfer unto Depositary Shares Attorney Dated: 20 Signature: Signature: Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) represented by the within Depositary Receipt, and do hereby irrevocably constitute and appoint to transfer the Depositary Shares on the books of the within named Depositary with full power of substitution in the premises. . SB FINANCIAL GROUP, INC. UPON REQUEST, THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF A DEPOSITARY RECEIPT A COPY OF THE DEPOSIT AGREEMENT AND A COPY OR SUMMARY OF THE CERTIFICATE OF AMENDMENT TO ARTICLE FOURTH OF THE ARTICLES OF INCORPORATION ESTABLISHING THE TERMS OF THE 6.50% NONCUMULATIVE CONVERTIBLE PERPETUAL PREFERRED SHARES, SERIES A, OF SB FINANCIAL GROUP, INC. ANY SUCH REQUEST IS TO BE ADDRESSED TO THE DEPOSITORY NAMED ON THE FACE OF THIS RECEIPT AT COMPUTERSHARE TRUST COMPANY, N.A ATTENTION: CORPORATE ACTIONS, 250 ROYALL ST., CANTON MA 02021. UPON REQUEST, THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF A DEPOSITARY RECEIPT A SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF SHARES OR SERIES THEREOF OF THE CORPORATION, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES OR RIGHTS. SUCH REQUEST MAY BE MADE TO THE CORPORATION AT 401 CLINTON STREET, DEFIANCE, OHIO 43512. Signature(s) Guaranteed: Medallion Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian (Cust) (Minor) TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act (State) JT TEN - as joint tenants with right of survivorship UNIF TRF MIN ACT - Custodian (until age ) and not as tenants in common (Cust) under Uniform Transfers to Minors Act (Minor) (State) Additional abbreviations may also be used though not in the above list. SECURITY INSTRUCTIONS THIS IS WATERMARKED PAPER DO NOT ACCEPT WITHOUT NOTHING WATERMARK. HOLD TO LIGHT TO VERIFY WATERMARK 1234567

Exhibit 4.3

SB FINANCIAL GROUP, INC.

6.50% NONCUMULATIVE CONVERTIBLE

PERPETUAL PREFERRED SHARES, SERIES A

DEPOSIT AGREEMENT

AMONG

SB FINANCIAL GROUP, INC.,

COMPUTERSHARE INC. AND

COMPUTERSHARE TRUST COMPANY, N.A.,

AS DEPOSITARY,

AND

THE HOLDERS FROM TIME TO TIME OF

THE DEPOSITARY RECEIPTS DESCRIBED HEREIN

DATED NOVEMBER 6, 2014

TABLE OF CONTENTS


		Page

ARTICLE I	DEFINITIONS		1

ARTICLE II	APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS, DEPOSIT OF PREFERRED SHARES, EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND CONVERSION OF RECEIPTS		3

Section 2.01.	Appointment of Depositary		3
Section 2.02.	Rights, Privileges and Preferences		3
Section 2.03.	Form and Transfer of Receipts		3
Section 2.04	Deposit of Preferred Shares; Execution and Delivery of Receipts		5
Section 2.05.	[Reserved]		6
Section 2.06.	Conversion Rights of a Holder		6
Section 2.07.	Company Conversion Option		8
Section 2.08.	Registration of Transfers of Receipts		9
Section 2.09.	Combinations and Split-ups of Receipts		9
Section 2.10.	Surrender of Receipts and Withdrawal of Preferred Shares		9
Section 2.11.	Limitations on Execution and Delivery, Transfer, Split-up, Combination, Surrender or Exchange of Receipts		10
Section 2.12.	Lost Receipts, etc.		11
Section 2.13.	Cancellation and Destruction of Surrendered Receipts		11

ARTICLE III	CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY		11

Section 3.01.	Filing Proofs; Certificates and Other Information		11
Section 3.02.	Payment of Fees and Expenses		11
Section 3.03.	Representation and Warranty as to Preferred Shares		12
Section 3.04.	Representations and Warranties as to Receipts and Depositary Shares		12

ARTICLE IV	THE PREFERRED STOCK; NOTICES		12

Section 4.01.	Dividends and Other Cash Distributions		12
Section 4.02.	Distributions Other Than Cash		13
Section 4.03.	Subscription Rights, Preferences or Privileges		13
Section 4.04.	Notice of Distributions; Fixing of Record Date for Holders of Receipts		14
Section 4.05.	Voting Rights		14
Section 4.06.	Changes Affecting Preferred Shares and Reclassifications, Recapitalizations, etc.		15
Section 4.07.	Delivery of Reports		15
Section 4.08.	Lists of Receipt Holders		16
Section 4.09.	Tax and Regulatory Compliance		16

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ARTICLE V	THE DEPOSITARY, THE DEPOSITARY’S AGENTS, THE REGISTRAR AND THE COMPANY	16

Section 5.01.	Maintenance of Offices, Agencies and Transfer Books by the Depositary and the Registrar	16
Section 5.02.	Prevention or Delay in Performance by the Depositary, the Depositary’s Agents, the Registrar or the Company	17
Section 5.03.	Obligations of the Depositary, the Depositary’s Agents, the Registrar and the Company	17
Section 5.04.	Resignation and Removal of the Depositary; Appointment of Successor Depositary	19
Section 5.05.	Notices, Reports and Documents	20
Section 5.06.	Indemnification by the Company	20
Section 5.07.	Fees, Charges and Expenses	20

ARTICLE VI	AMENDMENT AND TERMINATION	21

Section 6.01.	Amendment	21
Section 6.02.	Termination	21

ARTICLE VII	MISCELLANEOUS	22

Section 7.01.	Counterparts	22
Section 7.02.	Exclusive Benefits of Parties	22
Section 7.03.	Invalidity of Provisions	22
Section 7.04.	Notices	22
Section 7.05.	Depositary’s Agents	23
Section 7.06.	Holders of Receipts Are Parties	23
Section 7.07.	Governing Law	23
Section 7.08.	Inspection of Certificate of Designations	23
Section 7.09.	Conflicts with Certificate of Designations	23
Section 7.10.	Headings	24


Exhibit A		Form of Receipt
Exhibit B		Form of Notice of Conversion

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DEPOSIT AGREEMENT

THIS DEPOSIT AGREEMENT is made and entered into as of November 6, 2014, by and among SB Financial Group, Inc., an Ohio corporation (the “ Company ”), Computershare Inc., a Delaware corporation (“Computershare”) and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally-chartered trust company (the “Trust Company,” and together with Computershare, collectively, the “ Depositary ”), and the holders from time to time of the Receipts described herein.

WITNESSETH :

WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit Agreement, for the deposit of Preferred Shares (as hereinafter defined) of the Company with the Depositary for the purposes set forth in this Deposit Agreement and for the issuance hereunder of Receipts (as hereinafter defined) evidencing Depositary Shares (as hereinafter defined) representing a fractional interest in the Preferred Shares so deposited; and

WHEREAS, the Receipts are to be substantially in the form of Exhibit A annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

The following definitions shall apply to the respective terms (in the singular and plural forms of such terms) used in this Deposit Agreement and the Receipts:

“ Articles of Incorporation ” shall mean the articles of incorporation of the Company, as amended and supplemented from time to time.

“ Business Day ” shall mean any day except Saturday, Sunday and any day on which banking institutions in the State of New York generally are authorized or required by law or other governmental actions to close.

“ Certificate of Designations ” shall mean the Certificate of Amendment by Directors or Incorporators to Articles filed with the Ohio Secretary of State on November 6, 2014, evidencing the adoption of an amendment by the Board of Directors of the Company to Article FOURTH of the Articles of Incorporation to classify 15,000 of the Company’s preferred shares as Series A Preferred Shares and to establish the express terms of the Series A Preferred Shares, as the same may be amended from time to time in accordance with the terms thereof.

“ Common Shares ” shall mean the common shares, each without par value, of the Company.

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“ Company ” shall mean SB Financial Group, Inc., an Ohio corporation, and its successors.

“ Computershare ” shall have the meaning set forth in the preamble, above.

“ Corporate Office ” shall mean the corporate office of the Depositary at which at any particular time its business in respect of matters governed by this Deposit Agreement shall be administered, which as of the date of this Deposit Agreement is located at 10 Commerce Drive, Cranford, New Jersey 07016.

“ Deposit Agreement ” or “ Agreement ” shall mean this agreement, as the same may be amended, modified or supplemented from time to time.

“ Depositary ” shall have the meaning set forth in the preamble, above and shall also refer to any successor as depositary hereunder.

“ Depositary’s Agent ” shall mean one or more agents appointed by the Depositary as provided, and for the purposes specified, in Section 7.05.

“ Depositary Share ” shall mean a 1/100th fractional interest in a Preferred Share deposited with the Depositary hereunder and the same proportionate interest in any and all other property received by the Depositary in respect of such Preferred Share held under this Deposit Agreement, all as evidenced by the Receipts issued hereunder.

“ DTC ” shall mean the Depository Trust Company.

“ DTC Receipt ” has the meaning set forth in Section 2.03.

“ Optional Conversion Date ” has the meaning set forth in Section 2.06.

“ Preferred Shares ” shall mean the 6.50% Noncumulative Convertible Perpetual Preferred Shares, Series A, each without par value, of the Company heretofore validly issued, fully paid and non-assessable.

“ Receipt ” shall, as the context requires, mean (i) a receipt issued hereunder to evidence one or more Depositary Shares, whether in definitive, temporary or book-entry form, or (ii) a DTC Receipt, in each case substantially in the form set forth as Exhibit A hereto as applicable.

“ Record Date ” shall mean the date fixed pursuant to Section 4.04.

“ Record holder ” or “ holder ” as applied to a Receipt shall mean the person in whose name a Receipt is registered on the books maintained by the Depositary for such purpose.

“ Registrar ” shall mean the Trust Company or such other successor bank or trust company that shall be appointed by the Company to register ownership and transfers of Receipts as herein provided, and, if a successor Registrar shall be so appointed, references herein to “the books” of or maintained by the Depositary shall be deemed, as applicable, to refer as well to the register maintained by such successor Registrar for such purpose.

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“ Securities Act ” shall mean the Securities Act of 1933, as amended.

“ Signature Guarantee ” shall have the meaning ascribed to such term in Section 2.08.

“ Trading Date ” shall mean any day on which the NASDAQ Capital Market (or such other successor national securities exchange or automated quotation system on which the Common Shares are then listed or authorized for quotation) is open for the transaction of business.

“ Transfer Agent ” shall mean the Trust Company, or any bank or trust company appointed to transfer the Receipts or the deposited Preferred Shares, as the case may be, as herein provided.

“ Trust Company ” shall have the meaning set forth in the preamble, above.

ARTICLE II

APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS,

DEPOSIT OF PREFERRED SHARES, EXECUTION AND DELIVERY, TRANSFER,

SURRENDER AND CONVERSION OF RECEIPTS

Section 2.01. Appointment of Depositary . The Company hereby appoints Depositary as depositary for the Preferred Shares, and Depositary hereby accepts such appointment as depositary for the Preferred Shares, on the terms and conditions set forth in this Agreement.

Section 2.02. Rights, Privileges and Preferences . Subject to the terms of this Deposit Agreement, each Record holder of a Receipt is entitled, proportionately, to all of the rights, preferences and privileges of the Preferred Shares represented by the Depositary Shares evidenced by such Receipt (including the dividend and distribution, voting, conversion and liquidation rights contained in the Certificate of Designations) and the same proportionate interest in any and all other property received by the Depositary in respect of such Preferred Shares and held under this Deposit Agreement.

Section 2.03. Form and Transfer of Receipts . Initially the Company will issue the Depositary Shares in book-entry only form through the direct registration system of the Transfer Agent and the Depositary shall deliver written confirmation to purchasers of Depositary Shares. Subsequently, Depositary Shares may (1) be issued in the form of definitive Receipts, (2) be issued in the form of one or more DTC Receipts (as hereinafter defined) or (3) continue to be held in book-entry form. The definitive Receipts shall be substantially in the form set forth in Exhibit A annexed to this Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided and shall be engraved or otherwise prepared so as to comply with the applicable rules of The NASDAQ Capital Market. Pending the preparation of definitive Receipts, the Depositary, upon the written order of the Company, delivered in compliance with Section 2.04, shall execute and deliver temporary Receipts which may be printed, lithographed, typewritten, mimeographed or otherwise substantially of the tenor of the definitive Receipts in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the persons executing such Receipts may determine, as evidenced by their execution of such Receipts. If temporary Receipts are issued, the Company and the Depositary will cause definitive Receipts to be prepared without unreasonable delay. After the preparation

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of definitive Receipts, the temporary Receipts shall be exchangeable for definitive Receipts upon surrender of the temporary Receipts at the Corporate Office. Upon surrender for cancellation of any one or more temporary Receipts, the Depositary shall execute and deliver in exchange therefor definitive Receipts representing the same number of Depositary Shares as represented by the surrendered temporary Receipt or Receipts. Such exchange shall be made at the Company’s expense and without any charge to the holder therefor. Until so exchanged, the temporary Receipts shall in all respects be entitled to the same benefits under this Deposit Agreement, and with respect to the Preferred Shares deposited, as definitive Receipts.

Receipts shall be executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Trust Company. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose unless it shall have been executed manually or by facsimile signature by a duly authorized officer of the Depositary or, if a Registrar for the Receipts (other than the Depositary) shall have been appointed, by manual or facsimile signature of a duly authorized officer of the Depositary and countersigned by manual or facsimile signature by a duly authorized officer of such Registrar. The Depositary shall record on its books each Receipt so signed and delivered as hereinafter provided.

Receipts shall be in denominations of any number of whole Depositary Shares. All Receipts shall be dated the date of their issuance. The Company shall deliver to the Depositary from time to time such quantities of Receipts as the Depositary may request to enable the Depositary to perform its obligations under this Agreement.

Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement all as may be required by the Depositary and approved by the Company or required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange upon which the Preferred Shares, the Depositary Shares or the Receipts may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject.

Title to Depositary Shares evidenced by a Receipt which is properly endorsed or accompanied by a properly executed instrument of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument; provided, however, that until transfer of any particular Receipt shall be registered on the books of the Depositary as provided in Section 2.08, the Depositary may, notwithstanding any notice to the contrary, treat the Record holder thereof at such time as the absolute owner thereof for the purpose of determining the person entitled to dividends or other distributions, the exercise of any conversion, liquidation or voting rights or to any notice provided for in this Deposit Agreement and for all other purposes.

Notwithstanding the foregoing, the Depositary and the Company will make application to DTC for acceptance of all of the Receipts for its book-entry settlement system. The Company hereby appoints the Depositary acting through any authorized officer thereof as its attorney-in-fact, with full power to delegate, for purposes of executing any agreements, certifications or other instruments or documents necessary or desirable in order to effect the acceptance of such Receipts for DTC eligibility. So long as the Receipts are eligible for book-entry settlement with DTC, unless otherwise required by law, all Depositary Shares with book-entry settlement

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through DTC shall be represented by a single receipt (the “ DTC Receipt ”), substantially in the form set forth in the attached Exhibit A , which shall be deposited with DTC (or its custodian) evidencing all such Depositary Shares and registered in the name of the nominee of DTC (initially expected to be Cede & Co.). The Depositary or the Transfer Agent or such other entity as is agreed to by DTC may hold the DTC Receipt as custodian for DTC. Ownership of beneficial interests in the DTC Receipt shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) DTC or its nominee for such DTC Receipt, or (ii) institutions that have accounts with DTC.

If issued, the DTC Receipt shall be exchangeable for definitive Receipts only if (i) DTC notifies the Company at any time that it is unwilling or unable to continue to make its book-entry settlement system available for the Receipts and a successor to DTC is not appointed by the Company within 90 days of the date the Company is so informed in writing, (ii) DTC notifies the Company at any time that it has ceased to be a clearing agency registered under applicable law and a successor to DTC is not appointed by the Company within 90 days of the date the Company is so informed in writing or (iii) the Company executes and delivers to DTC a notice to the effect that such DTC Receipt shall be so exchangeable. If the beneficial owners of interests in Depositary Shares are entitled to exchange such interests for definitive Receipts as the result of an event described in clause (i), (ii) or (iii) of the preceding sentence, then without unnecessary delay but in any event not later than the earliest date on which such beneficial interests may be so exchanged, the Depositary is hereby directed to and shall provide written instructions to DTC to deliver to the Depositary for cancellation the DTC Receipt, and the Company shall instruct the Depositary in writing to execute and deliver to the beneficial owners of the Depositary Shares previously evidenced by the DTC Receipt definitive Receipts in physical or book-entry form evidencing such Depositary Shares. The DTC Receipt shall be in such form and shall bear such legend or legends as may be appropriate or required by DTC in order for it to accept the Depositary Shares for its book-entry settlement system. Notwithstanding any other provision herein to the contrary, if the Receipts are at any time eligible for book-entry settlement through DTC, delivery of Preferred Shares and other property in connection with the withdrawal of Depositary Shares will be made through DTC and in accordance with its procedures, unless the holder of the relevant Receipt otherwise requests and such request is reasonably acceptable to the Depositary and the Company.

Section 2.04. Deposit of Preferred Shares; Execution and Delivery of Receipts . Subject to the terms and conditions of this Agreement and prior to the issuance of any Depositary Shares, the Company shall deliver to and deposit with the Depositary a certificate or certificates, registered in the name of the Trust Company and evidencing the Preferred Shares underlying the Depositary Shares to be issued hereunder, properly endorsed or accompanied, if required by the Depositary, by a duly executed instrument of transfer or endorsement, in form satisfactory to the Depositary, together with (a) all such certifications as may be required by the Depositary in accordance with the provisions of this Deposit Agreement; (b) an opinion of counsel to the Company addressed to the Depositary containing opinions, or a letter of counsel to the Company authorizing reliance on such counsel’s opinions delivered to the underwriters named therein, relating to (i) the existence and good standing of the Company, (ii) the due authorization of the Depositary Shares, the Preferred Shares and the Common Shares issuable upon conversion of the Preferred Shares (collectively, the “ Securities ”) and the status of the Securities, upon issuance, as validly issued, fully paid and non-assessable, and (iii) the effectiveness of the Company’s

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registration statement under the Securities Act relating to Securities; and (c) a written order of the Company directing the Depositary to execute and deliver to, or upon the written order of, the person or persons stated in such order a Receipt or Receipts for the Depositary Shares representing such deposited Preferred Shares. The Depositary acknowledges receipt of the deposited Preferred Shares and related documentation and agrees to hold such deposited Preferred Shares in an account to be established by the Depositary at the Corporate Office or at such other office as the Depositary shall determine. The Depositary shall not lend or pledge any Preferred Shares deposited hereunder.

The Company hereby appoints the Trust Company as the Registrar and Transfer Agent for the Preferred Shares deposited hereunder and the Trust Company hereby accepts such appointment and, as such, will reflect changes in the number of deposited Preferred Shares (including any fractional shares) held by it by notation, book-entry or other appropriate method.

Upon receipt by the Depositary of a certificate or certificates for Preferred Shares deposited hereunder, together with the other documents specified above, and upon registering such Preferred Shares in the name of the Trust Company, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall execute and deliver to, or upon the order of, the person or persons named in the written order delivered to the Depositary referred to in the first paragraph of this Section 2.04, a Receipt or Receipts for the number of whole Depositary Shares representing the Preferred Shares so deposited and registered in such name or names as may be requested by such person or persons. The Depositary shall execute and deliver such Receipt or Receipts at the Corporate Office, except that, at the request, risk and expense of any person requesting such delivery, such delivery may be made at such other place as may be designated by such person.

Section 2.05. [Reserved] .

Section 2.06. Conversion Rights of a Holder . Each Record holder shall have the right, at the holder’s option, exercisable at any time and from time to time, to convert, subject to this Section 2.06, any or all of such holder’s Depositary Shares into such whole number of Common Shares as is equal the applicable number of Common Shares that the Preferred Shares represented by the Depositary Shares could be converted upon the exercise of the conversion rights with respect to the Preferred Shares as provided in the Certificate of Designations, plus cash in lieu of any fractional Common Share, all as provided in the Certificate of Designations and subject to the limitations set forth therein.

The conversion right of a Record holder shall be exercised by the holder’s delivery to the Depositary at any time during normal business hours at the Corporate Office of a written notice substantially in the form set forth in Exhibit B attached hereto that the Record holder elects to convert the number of its Depositary Shares specified in such notice. The holder shall surrender the Receipts, if any, representing the Depositary Shares to be converted to the Depositary (properly endorsed or assigned for transfer, if the Depositary shall so require) at the time the holder delivers such notice.

The Depositary shall provide notice to the Company or its duly appointed transfer agent for the Common Shares of the exercise of a conversion right within five (5) Business Days of the

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receipt of a request from a Record holder, along with certificates representing the number of Preferred Shares representing the Depositary Shares being so converted. The Company shall thereafter deliver or cause its duly appointed transfer agent to deliver the Common Shares (titled in the name of the holder) and cash in lieu of any fractional share to the Depositary who shall then deliver them to the Record holder who has elected to convert such holder’s Depositary Shares.

Immediately prior to the close of business on the date of receipt by the Company or its duly appointed transfer agent of the notice from the Depositary (the “ Optional Conversion Date ”), each converting Record holder shall be deemed to be the holder of record of Common Shares issuable upon conversion of such holder’s Depositary Shares notwithstanding that the share register of the Company shall then be closed or that, if applicable, physical certificates representing such Common Shares shall not then be actually delivered to such holder.

On the Optional Conversion Date, all rights of any Record holder with respect to the Depositary Shares so converted and all rights of the Depositary with respect to the Preferred Shares so converted, including the rights, if any, to receive distributions of the Company’s assets (including, but not limited to, the liquidation preference) or notices from the Company will terminate, except only for the rights of such Record holder to (a) receive physical certificates (if applicable) representing the number of validly issued, fully paid and non-assessable whole Common Shares into which Depositary Shares have been converted and cash in lieu of any fractional Common Share, all as provided in the Certificate of Designations, and (b) exercise the rights to which such holder is entitled as a holder of Common Shares into which such Depositary Shares have been converted.

If the Optional Conversion Date occurs on or before the close of business on a Record Date, the Record holder shall not be entitled to receive any portion of the dividend declared and payable with respect to such converted Depositary Shares and paid or payable on the corresponding dividend payment date.

If the Optional Conversion Date occurs after a Record Date but prior to the corresponding dividend payment date, the Record holder shall be entitled to receive any portion of the dividend declared and payable with respect to such converted Depositary Shares and paid or payable on the corresponding dividend payment date. At the time that such Record holder surrenders the Depositary Shares for conversion, however, it must pay to the Company an amount equal to the dividend that has been declared and that has been paid, or will be paid, on the related dividend payment date.

A Record holder on a Record Date who exercises such holder’s conversion right and converts such Depositary Shares into Common Shares on or after the corresponding dividend payment date shall be entitled to receive the dividend declared on such Depositary Shares and paid or payable on such dividend payment date.

In the event of any Reorganization Event (as defined in the Certificate of Designations), each Depositary Share thereafter remaining outstanding, if any, shall thereafter become convertible at any time, at the option of the Record holder thereof or by the Company pursuant to and in accordance with the Certificate of Designations, only into the kind and amount of

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securities (of the Company or another issuer), cash and other property receivable upon such Reorganization Event, after giving effect to any adjustment event in accordance with the Certificate of Designations. The foregoing sentence shall not affect the right of a Record holder to convert the holder’s Depositary Shares into Common Shares prior to the effective date of a Reorganization Event. In the event of any Reorganization Event, the Company shall mail to the Depositary a notice of the date on which such Reorganization Event is expected to become effective and the kind and amount of securities (of the Company or another issuer), cash and/or other property receivable upon such Reorganization Event. Such notice shall be provided to the Record holders by the Depositary within five (5) Business Days of receipt.

Section 2.07. Company Conversion Option . Whenever the Company shall elect to convert all of the deposited Preferred Shares in accordance with the provisions of the Certificate of Designations, it shall notify the Depositary prior to the opening of business on the fifth Trading Date following the date on which the conditions set forth to the exercise of the Company’s election to convert shall have been satisfied. The conversion date shall be on the date that the Company issues a press release announcing its intention to exercise its conversion option in accordance with the Certificate of Designations and the date of the issuance of such press release shall be the Record Date for such conversion. In addition to any information required by applicable law or regulation, the Company’s notice of the Company’s election to convert shall state, as appropriate: (a) the conversion date; (b) the number of Common Shares to be issued upon conversion of each Preferred Share and each Depositary Share; and (c) that dividends on the Preferred Shares and the Depositary Shares to be converted shall cease to accrue for that dividend period on the conversion date.

Within five (5) Business Days of the receipt of such notice, the Depositary shall (i) forward such notice to the Record holders, and (ii) surrender to the Company all of the Preferred Shares held by the Depositary, and the Company shall thereafter issue and shall deliver or cause to be issued and delivered to the Depositary, or to such other person on such Depositary’s written order, (x) physical certificates (if applicable) representing the number of validly issued, fully paid and non-assessable whole Common Shares to which the Depositary, or the Depositary’s transferee, shall be entitled and (y) cash in lieu of any fractional Common Share, all as provided in the Certificate of Designations.

Upon receipt of the notice from the Depositary, each Record holder shall surrender all of the holder’s Receipts, if any, and upon the receipt thereof the Depositary shall deliver to the Record holder physical certificates (if applicable) representing the number of Common Shares the holder is entitled to receive and cash in lieu of any fractional Common Share.

The Depositary shall, to the extent permitted by law, return or repay to the Company any Common Shares or funds deposited by or for the account of the Company for the purpose of converting any Depositary Shares that remain unclaimed at the end of two (2) years from the conversion date, without further action necessary on the part of the Company.

The conversion shall be deemed to have been made at the close of business on the conversion date so that the rights of the Depositary with respect to the Preferred Shares (and the right of the Record holder with respect to the Depositary Shares) shall cease except for the right to receive the number of fully paid and non-assessable Common Shares, and cash in lieu of fractional shares, and the person entitled to receive the Common Shares shall be treated for all purposes as having become the Record holder of those Common Shares at that time.

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If the Company exercises the Company’s conversion option and the conversion date is a date that is prior to the close of business on any Record Date for any dividend, neither the Depositary nor the Record holder shall be entitled to receive any portion of the dividend payable for such dividend period on such converted shares on the corresponding dividend payment date.

If the Company exercises the Company’s conversion option and the conversion date is a date that is on or after the close of business on any Record Date for any dividend and prior to the close of business on the corresponding dividend payment date, all dividends for that dividend period with respect to the Preferred Shares (and, therefore, the Depositary Shares) called for conversion on such date, shall be payable on such dividend payment date to the Record holder of such Preferred Shares (and, therefore, the Record holder) on such Record Date.

Section 2.08. Registration of Transfers of Receipts . The Company hereby appoints Computershare as the Registrar and Transfer Agent for the Receipts and the Depositary hereby accepts such appointment and, as such, shall register on its books from time to time transfers of Receipts upon any surrender thereof by the holder in person or by a duly authorized attorney, agent or representative, properly endorsed or accompanied by a properly executed instrument of transfer or endorsement and including a guarantee of the signature thereon by a participant in a signature guarantee medallion program approved by the Securities Transfer Association (a “ Signature Guarantee ”), together with evidence of the payment of any transfer taxes as may be required by applicable law. Upon such surrender, the Depositary shall execute a new Receipt or Receipts evidencing the same aggregate number of Depositary Shares as those evidenced by the Receipt or Receipts surrendered and deliver such new Receipt or Receipts to or upon the order of the person entitled thereto.

Section 2.09. Combinations and Split-ups of Receipts . Upon surrender of a Receipt or Receipts at the Corporate Office or such other office as the Depositary may designate for the purpose of effecting a split-up or combination of Receipts, and subject to the terms and conditions of applicable law and this Deposit Agreement, the Depositary shall execute a new Receipt or Receipts in the authorized denomination or denominations requested, evidencing the aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered, and shall deliver such new Receipt or Receipts to or upon the order of the holder of the Receipt or Receipts so surrendered; provided , however , that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share.

Section 2.10. Surrender of Receipts and Withdrawal of Preferred Shares . Any holder of a Receipt or Receipts may withdraw any or all of the deposited Preferred Shares represented by the Depositary Shares evidenced by such Receipt or Receipts and all money and other property, if any, represented by such Depositary Shares by surrendering such Receipt or Receipts at the Corporate Office or at such other office as the Depositary may designate for such withdrawals; provided , however , that a holder of a Receipt or Receipts may only receive whole Preferred Shares. After such surrender, without unreasonable delay, the Depositary shall deliver to such holder, or to the person or persons designated by such holder as hereinafter provided, the number of such whole Preferred Shares and all such money and other property, if any,

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represented by the Depositary Shares evidenced by the Receipt or Receipts so surrendered for withdrawal, but holders of such whole Preferred Shares will not thereafter be entitled to deposit such Preferred Shares hereunder or to receive a Receipt evidencing Depositary Shares therefor. If the Receipt or Receipts delivered by the holder to the Depositary in connection with such withdrawal shall evidence a number of Depositary Shares in excess of the number of Depositary Shares representing the whole number of deposited Preferred Shares to be withdrawn, the Depositary shall at the same time, in addition to such number of whole Preferred Shares and such money and other property, if any, to be withdrawn, deliver to such holder, or (subject to Sections 2.04 and 2.06) upon such holder’s order, a new Receipt or Receipts evidencing such excess number of Depositary Shares.

In no event will fractional Preferred Shares (or any cash payment in lieu thereof) be delivered by the Depositary. Delivery of the Preferred Shares and money being withdrawn may be made by the delivery of such certificates, documents of title or other instruments as the Depositary may deem appropriate, which, if required by the Depositary, shall be properly endorsed or accompanied by proper instruments of transfer including, but not limited to, a Signature Guarantee.

If the deposited Preferred Shares and the money and other property being withdrawn are to be delivered to a person or persons other than the Record holder of the Receipt or Receipts being surrendered for withdrawal of Preferred Shares, such holder shall execute and deliver to the Depositary a written order so directing the Depositary, and the Depositary may require that the Receipt or Receipts surrendered by such holder for withdrawal of such Preferred Shares be properly endorsed in blank or accompanied by a properly executed instrument of transfer or endorsement in blank with a Signature Guarantee.

The Depositary shall deliver the deposited Preferred Shares and the money and other property, if any, represented by the Depositary Shares evidenced by Receipts surrendered for withdrawal at the Corporate Office, except that, at the request, risk and expense of the holder surrendering such Receipt or Receipts and for the account of the holder thereof, such delivery may be made at such other place as may be designated by such holder.

Section 2.11. Limitations on Execution and Delivery, Transfer, Split-up, Combination, Surrender or Exchange of Receipts . As a condition precedent to the execution and delivery, transfer, split-up, combination, surrender or exchange of any Receipt, the Depositary, any of the Depositary’s Agents or the Company may require any or all of the following: (a) payment to it of a sum sufficient for the payment (or, in the event that the Depositary or the Company shall have made such payment, the reimbursement to it) of any tax or other governmental charge with respect thereto (including any such tax or charge with respect to the Preferred Shares being deposited or withdrawn) and any other fees and expenses payable pursuant to Sections 3.02 and 5.08; (b) the production of evidence satisfactory to it as to the identity and genuineness of any signature (or the authority of any signature), including a Signature Guarantee; and (c) compliance with such regulations, if any, as the Depositary or the Company may establish consistent with the provisions of this Deposit Agreement or as may be required by any applicable law or securities exchange upon which the deposited Preferred Shares, the Depositary Shares or the Receipts may be listed.

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The deposit of Preferred Shares may be refused, the delivery of Receipts against Preferred Shares may be suspended, the transfer of Receipts may be refused, and the transfer, split-up, combination, surrender or exchange of outstanding Receipts may be suspended (i) during any period when the register of shareholders of the Company is closed or (ii) if any such action is deemed reasonably necessary or advisable by the Depositary, any of the Depositary’s Agents or the Company at any time or from time to time because of any requirement of applicable law or of any government or governmental body or commission, or under any provision of this Deposit Agreement.

Section 2.12. Lost Receipts, etc . In case any Receipt shall be mutilated, destroyed, lost or stolen, the Depositary in its discretion may execute and deliver a Receipt of like form and tenor in exchange and substitution for such mutilated Receipt, or in lieu of and in substitution for such destroyed, lost or stolen Receipt, provided that the holder thereof provides the Depositary with (a) evidence reasonably satisfactory to the Depositary of such destruction, loss or theft of such Receipt, of the authenticity thereof and of such holder’s ownership thereof; (b) reasonable indemnification and the provision of an open penalty surety bond satisfactory to the Depositary and holding the Depositary and the Company harmless; and (c) the payment of any reasonable expense (including reasonable fees, charges and expenses of the Depositary) in connection with such execution and delivery.

Section 2.13. Cancellation and Destruction of Surrendered Receipts . All Receipts surrendered to the Depositary or any Depositary’s Agent shall be cancelled by the Depositary. Except as prohibited by applicable law or regulation, the Depositary is authorized and directed to destroy all Receipts so cancelled.

ARTICLE III

CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY

Section 3.01. Filing Proofs; Certificates and Other Information . Any holder of a Receipt may be required from time to time to file such proof of residence or other matters or other information, to execute such certificates and to make such representations and warranties as the Depositary or the Company may reasonably deem necessary or proper or otherwise reasonably request. Subject to applicable law, the Depositary or the Company may withhold the delivery of any Receipt, or delay the registration of transfer or exchange of any Receipt or the withdrawal or conversion of the deposited Preferred Shares represented by the Depositary Shares evidenced by any Receipt, or the distribution of any dividend or other distribution or the sale of any rights or of the proceeds thereof, until such proof or other information is filed or such certificates are executed or such representations and warranties are made.

Section 3.02. Payment of Fees and Expenses . Holders of Receipts shall be obligated to make payments to the Depositary of certain fees, charges and expenses, as provided in Section 5.07 hereof, or provide evidence reasonably satisfactory to the Depositary that such fees and expenses have been paid. Until such payment is made, registration of transfer of any Receipt or any withdrawal of Preferred Shares and all money or other property, if any, represented by the Depositary Shares evidenced by such Receipt may be refused, any dividend, interest payment or other distribution may be withheld, or any part or all of the Preferred Shares or other property

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represented by the Depositary Shares evidenced by such Receipt may be sold for the account of the holder thereof (after attempting by reasonable means to notify such holder a reasonable number of days prior to such sale), and such dividends, interest payments or other distributions or the proceeds of any such sale may be applied to any payment of such fees, charges or expenses, the holder of such Receipt remaining liable for any deficiency.

Section 3.03. Representation and Warranty as to Preferred Shares. The Company hereby represents and warrants that the Preferred Shares, when issued, will be duly authorized, validly issued, fully paid and non-assessable. Such representation and warranty shall survive the deposit of the Preferred Shares and the issuance of the related Receipts.

Section 3.04. Representations and Warranties as to Receipts and Depositary Shares. The Company hereby represents and warrants that the Receipts, when issued, will evidence legal and valid interests in the Depositary Shares and each Depositary Share will represent a legal and valid fractional interest in a deposited Preferred Share. Such representations and warranties shall survive the deposit of the Preferred Shares and the issuance of the related Receipts evidencing the Depositary Shares.

ARTICLE IV

THE PREFERRED STOCK; NOTICES

Section 4.01. Dividends and Other Cash Distributions . Whenever Computershare shall receive any cash dividend or other cash distributions on the deposited Preferred Shares, Computershare shall, subject to Sections 3.01 and 3.02 hereof, distribute to Record holders of Receipts on the Record Date such amounts of such dividend or distribution proceeds as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders; provided , however , that, in case the Company or Computershare shall be required by law to withhold and shall withhold from any cash dividend or other cash distribution in respect of the Preferred Shares an amount on account of taxes or as otherwise required by law, regulation or court process, the amount made available for distribution or distributed in respect of Depositary Shares shall be reduced accordingly. In the event that the calculation of any such cash dividend or other cash distribution to be paid to any Record holder on the aggregate number of Depositary Shares held by such Record holder results in an amount that is a fraction of a cent and that fraction of a cent is equal to or greater than $0.005, the amount Computershare shall distribute to such Record holder shall be rounded up to the next highest whole cent; otherwise, such fractional amount shall be disregarded by Computershare; provided , however , upon Computershare’s request, the Company shall pay the additional amount to Computershare for distribution.

Each holder of a Receipt shall provide to Computershare with its certified tax identification number on a properly completed Form W-8 or W-9, as may be applicable. Each holder of a Receipt acknowledges that, in the event of non-compliance with the preceding sentence, the Internal Revenue Code of 1986, as amended, may require withholding by Computershare of a portion of any of the distributions to be made hereunder.

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All funds received by Computershare under this Deposit Agreement that are to be distributed or applied by Computershare in the performance of Services (the “Funds”) shall be held by Computershare as agent for the Company and deposited in one or more bank accounts to be maintained by Computershare in its name as agent for the Company. Until paid pursuant to this Deposit Agreement, Computershare may hold or invest the Funds through such accounts in: (i) obligations of, or guaranteed by, the United States of America, (ii) commercial paper obligations rated A-1 or P-1 or better by Standard & Poor’s Corporation (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”), respectively, (iii) money market funds that comply with Rule 2a-7 of the Investment Company Act of 1940, or (iv) demand deposit accounts, short term certificates of deposit, bank repurchase agreements or bankers’ acceptances, of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade by S&P (LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.). Computershare shall have no responsibility or liability for any diminution of the Funds that may result from any deposit or investment made by Computershare in accordance with this paragraph, including any losses resulting from a default by any bank, financial institution or other third party. Computershare may from time to time receive interest, dividends or other earnings in connection with such deposits or investments. Computershare shall not be obligated to pay such interest, dividends or earnings to the Company, any holder or any other party.

Section 4.02. Distributions Other Than Cash . Whenever the Depositary shall receive any distribution other than cash on the deposited Preferred Shares, other than pursuant to Section 2.06 or 2.07 hereof, the Depositary shall, subject to Sections 3.01 and 3.02 hereof, distribute to Record holders of Receipts on the Record Date such amounts of the securities or property received by it as are, as nearly as may be practicable, in proportion to the respective number of Depositary Shares evidenced by the Receipts held by such holders. If, in the opinion of the Depositary after consultation with the Company, such distribution cannot be made proportionately among such Record holders, or if for any other reason (including any requirement that the Company or the Depositary withhold an amount on account of taxes), the Depositary deems, after consultation with the Company, such distribution not to be feasible, the Depositary may, with the approval of the Company, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale (at public or private sale) of the securities or property thus received, or any part thereof, in a commercially reasonable manner. The net proceeds of any such sale shall, subject to Sections 3.01, 3.02 and 4.09 hereof, be distributed or made available for distribution, as the case may be, by the Depositary to Record holders of Receipts as provided by Section 4.01 hereof in the case of a distribution received in cash.

Section 4.03. Subscription Rights, Preferences or Privileges . If the Company shall at any time offer or cause to be offered to the persons in whose names deposited Preferred Shares are registered on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, the offering of such rights, preferences or privileges shall in each such instance be communicated to the Depositary and thereafter made available by the Depositary to the Record holders of Receipts in such manner as the Company shall instruct (including by the issue to such Record holders of warrants representing such rights, preferences or privileges); provided , however , that (a) if at the time of issue or offer of any such rights, preferences or privileges, the Company determines upon

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advice of its legal counsel that it is not lawful or not feasible to make such rights, preferences or privileges available to the holders of Receipts (by the issue of warrants or otherwise) or (b) if and to the extent so instructed by holders of Receipts who do not desire to exercise such rights, preferences or privileges, the Depositary shall then, if so instructed by the Company, and if applicable laws or the terms of such rights, preferences or privileges so permit, sell such rights, preferences or privileges of such holders at public or private sale, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Sections 3.01 and 3.02 hereof, be distributed by the Depositary to the Record holders of Receipts entitled thereto as provided by Section 4.01 hereof in the case of a distribution received in cash.

If registration under the Securities Act of the securities to which any rights, preferences or privileges relate is required in order for holders of Receipts to be offered or sold, the Company agrees that it will promptly file a registration statement pursuant to the Securities Act with respect to such rights, preferences or privileges and securities and use its reasonable best efforts and take all steps available to it to cause such registration statement to become effective sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. In no event shall the Depositary make available to the holders of Receipts any right, preference or privilege to subscribe for or to purchase any securities unless and until such a registration statement shall have become effective or unless the offering and sale of such securities to such holders are exempt from registration under the provisions of the Securities Act and the Company shall have provided to the Depositary an opinion of counsel to such effect.

If any other action under the law of any jurisdiction or any governmental or administrative authorization, consent or permit is required in order for such rights, preferences or privileges to be made available to holders of Receipts, the Company agrees to use its reasonable best efforts to take such action or obtain such authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences, or privileges to enable such holders to exercise such rights, preferences or privileges.

Section 4.04. Notice of Distributions; Fixing of Record Date for Holders of Receipts . Whenever any cash dividend or other cash distributions shall become payable, any distribution other than cash shall be made, or any rights, preferences or privileges shall at any time be offered, with respect to the deposited Preferred Shares, or whenever the Depositary shall receive notice of any meeting at which holders of such Preferred Shares are entitled to vote or of which holders of such Preferred Shares are entitled to notice, or whenever the Company and the Depositary decide it appropriate, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date, if any, fixed by the Company with respect to the Preferred Shares (the “ Record Date ”)) for the determination of the holders of Receipts (a) who shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, (b) who shall be entitled to give instructions for the exercise of voting rights at any such meeting, or (c) who shall be entitled to receive notice of such meeting.

Section 4.05. Voting Rights . Upon receipt of notice of any meeting at which the holders of deposited Preferred Shares are entitled to vote, the Depositary shall, as soon as practicable thereafter, mail to the Record holders a notice, which shall be provided by the Company and which shall contain (a) such information as is contained in such notice of meeting,

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(b) a statement that the holders of Receipts at the close of business on a specified Record Date will be entitled, subject to any applicable law, to instruct the Depositary as to the exercise of the voting rights pertaining to the amount of Preferred Shares represented by their respective Depositary Shares (including an express indication that instructions may be given to the Depositary to give a discretionary proxy to a person designated by the Company) and (c) a brief statement as to the manner in which such instructions may be given. Upon the written request of a holder of a Receipt on such Record Date, the Depositary shall vote or cause to be voted the maximum number of whole Preferred Shares represented by the Depositary Shares evidenced by such Receipt in accordance with the instructions set forth in such request. The Company hereby agrees to take all reasonable action that may be deemed necessary by the Depositary in order to enable the Depositary to vote such Preferred Shares or cause such Preferred Shares to be voted. In the absence of specific instructions from the holder of a Receipt, the Depositary will abstain from voting to the extent of the Preferred Shares represented by the Depositary Shares evidenced by such Receipt. The Depositary shall not be required to exercise discretion in voting any Preferred Shares represented by the Depositary Shares evidenced by such Receipt.

Section 4.06. Changes Affecting Preferred Shares and Reclassifications, Recapitalizations, etc . As provided in the Certificate of Designations, the Depositary shall, upon the receipt of instructions from the Company, (a) make such adjustments in the fraction of an interest represented by one Depositary Share in one Preferred Share as may be required by or as is consistent with the provisions of the Certificate of Designations and (b) subject to the Record holder’s right to convert the holder’s Depositary Shares as provided in Section 2.06 hereof or the exercise by the Company of its conversion option in Section 2.07 hereof, treat any shares of stock or other securities or property (including cash), if any, that shall be received by the Depositary in exchange for or upon conversion of or in respect of the Preferred Shares as new deposited property under this Deposit Agreement, and Receipts then outstanding shall thenceforth represent the proportionate interests of holders thereof in the new deposited property so received in exchange for or upon conversion of or in respect of such Preferred Shares. In any such case, the Depositary may, in its discretion, with the approval of the Company, execute and deliver additional Receipts, or may call for the surrender of all outstanding Receipts to be exchanged for new Receipts specifically describing such new deposited property. Anything to the contrary herein notwithstanding, holders of Receipts shall have the right from and after the effective date of the Depositary’s receipt of such property to surrender such Receipts to the Depositary with instructions to convert, exchange or surrender the Preferred Shares represented thereby only into or for, as the case may be, the kind and amount of shares of stock and other securities and property and cash into which the deposited Preferred Shares evidenced by such Receipts might have been converted or for which such Preferred Shares might have been exchanged or surrendered immediately prior to the effective date of such transaction.

Section 4.07. Delivery of Reports . The Depositary shall furnish to the holders of Receipts any reports and communications received from the Company which are received by the Depositary and which the Company is required to furnish to the holders of Preferred Shares. In addition, the Depositary will make available for inspection by holders of Receipts at the Corporate Office, and at such other places as it may from time to time deem advisable, any reports and communications received from the Company which are received by the Depositary.

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Section 4.08. Lists of Receipt Holders . Promptly upon request from time to time by the Company, the Depositary shall furnish to the Company a list, as of a recent date specified by the Company, of the names, addresses and holdings of Depositary Shares of all Record holders of Receipts.

Section 4.09. Tax and Regulatory Compliance . The Depositary, on its own behalf and on behalf of the Company, will comply with all applicable certification, information reporting and withholding (including “backup” withholding) requirements imposed by applicable tax laws, regulations or administrative practice with respect to (a) any payments made with respect to the Depositary Shares or (b) the issuance, delivery, holding, transfer or exercise of rights under the Receipts or the Depositary Shares. Such compliance shall include, without limitation, the preparation and timely filing of required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority or its designated agent.

The Depositary shall comply with any direction received from the Company with respect to the application of such requirements to particular payments or holders or in other particular circumstances, and may for purposes of this Agreement rely on any such direction in accordance with the provisions of Section 5.03 hereof.

The Depositary shall maintain all appropriate records documenting compliance with such requirements, and shall make such records available on request to the Company or to its authorized representatives.

ARTICLE V

THE DEPOSITARY, THE DEPOSITARY’S AGENTS, THE REGISTRAR AND THE COMPANY

Section 5.01. Maintenance of Offices, Agencies and Transfer Books by the Depositary and the Registrar . The Depositary shall maintain at the Corporate Office facilities for the execution and delivery, registration and registration of transfer, surrender and exchange, split-up, combination and conversion of Receipts and deposit and withdrawal of Preferred Shares and at the offices of the Depositary’s Agents, if any, facilities for the delivery, registration and registration of transfer, surrender and exchange, split-up, combination and conversion of Receipts and deposit and withdrawal of Preferred Shares, all in accordance with the provisions of this Deposit Agreement.

The Depositary shall keep books at the Corporate Office for the registration and transfer of Receipts, which books during normal business hours shall be made available for inspection by the Record holders of Receipts as provided by applicable law; provided that any such holder requesting to exercise such right shall certify to the Depositary that such inspection shall be for a proper purpose reasonably related to such person’s interest as an owner of Depositary Shares evidenced by the Receipts. The Depositary may close such books, at any time or from time to time, when deemed expedient by it in connection with the performance of its duties hereunder. The Depositary may maintain such books in customary electronic form.

If the Receipts or the Depositary Shares evidenced thereby or the Preferred Shares represented by such Depositary Shares shall be listed on The NASDAQ Capital Market or any

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other national stock exchange, the Depositary may, with the approval of the Company, appoint a Registrar other than itself (acceptable to the Company) for registration of such Receipts or Depositary Shares in accordance with the requirements of such exchange. Such Registrar (which may be the Depositary if so permitted by the requirements of such exchange) may be removed and a substitute registrar appointed by the Depositary upon the request or with the approval of the Company. If the Receipts, such Depositary Shares or such Preferred Shares are listed on one or more other stock exchanges, the Depositary will, at the request and expense of the Company, arrange such facilities for the delivery, registration, registration of transfer, surrender, conversion and exchange of such Receipts, such Depositary Shares or such Preferred Shares as may be required by applicable law or applicable stock exchange regulations.

Section 5.02. Prevention or Delay in Performance by the Depositary, the Depositary’s Agents, the Registrar or the Company . None of the Depositary, any Depositary’s Agent, any Registrar or the Company shall incur any liability to any holder of any Receipt, if by reason of any provision of any present or future law or regulation thereunder of the United States of America or of any other governmental authority, in the case of the Depositary, the Depositary’s Agent or the Registrar, by reason of any provision, present or future, of the Articles of Incorporation or the Certificate of Designations, or in the case of the Company, the Depositary, the Depositary’s Agent or the Registrar, by reason of any act of God or war or other circumstance beyond the control of the relevant party, the Depositary, any Depositary’s Agent, the Registrar or the Company shall be prevented or forbidden from, or subjected to any penalty on account of, doing or performing any act or thing that the terms of this Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary’s Agent, any Registrar or the Company incur any liability to any holder of a Receipt (a) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing that the terms of this Deposit Agreement provide shall or may be done or performed, or (b) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement, except, in case of any such exercise or failure to exercise discretion not caused as aforesaid, if caused by the gross negligence, willful misconduct or bad faith of the party charged with such exercise or failure to exercise, as finally determined by a court of competent jurisdiction, or as otherwise explicitly set forth in this Deposit Agreement.

Section 5.03. Obligations of the Depositary, the Depositary’s Agents, the Registrar and the Company . Each of the Depositary, any Depositary’s Agent and any Registrar shall at all times act in good faith and shall use its best efforts to insure the accuracy of all services performed pursuant to this Agreement. None of the Depositary, any Depositary’s Agent, any Registrar or the Company assumes any obligation or shall be subject to any liability under this Deposit Agreement or any Receipt to holders of Receipts other than for its bad faith, gross negligence or willful misconduct.

None of the Depositary, any Depositary’s Agent, any Registrar or the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding with respect to the deposited Preferred Shares, the Depositary Shares or the Receipts that in its reasonable opinion may involve it in expense or liability, unless indemnity reasonably satisfactory to it against all expense and liability be furnished as often as may be reasonably required.

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None of the Depositary, any Depositary’s Agent, any Registrar or the Company shall be liable for any action or any failure to act by it in reliance upon the written advice of legal counsel or accountants, or information provided by any person presenting Preferred Shares for deposit, any holder of a Receipt or any other person believed by it in good faith to be competent to give such advice or information. The Depositary, any Depositary’s Agent, any Registrar and the Company may each rely and shall each be protected in acting upon or omitting to act upon any written notice, request, direction or other document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.

The Depositary shall not be responsible for any failure to carry out any instruction to vote any of the deposited Preferred Shares or for the manner or effect of any such vote made, as long as any such action or non-action is in good faith and does not result from negligence or willful misconduct of the Depositary. The Depositary undertakes, and any Registrar shall be required to undertake, to perform such duties and only such duties as are specifically set forth in this Deposit Agreement, and no implied covenants or obligations shall be read into this Deposit Agreement against the Depositary or any Registrar.

The Depositary, any Depositary’s Agent, and any Registrar may own and deal in any class of securities of the Company and its affiliates and in Receipts or Depositary Shares. The Depositary may also act as transfer agent or registrar of any of the securities of the Company and its affiliates or act in any other capacity for the Company or its affiliates.

The Depositary shall indemnify the Company against any liability which may directly arise out of acts performed or omitted by the Depositary or any Depositary’s Agent due to its or their gross negligence, willful misconduct or bad faith. The obligations of the Depositary set forth in this paragraph shall survive any succession of the Company or termination of this Deposit Agreement.

Notwithstanding anything to the contrary herein, no party to this Agreement shall be liable for any incidental, indirect, special or consequential damages of any nature whatsoever, including, but not limited to, loss of anticipated profits, occasioned by breach of any provision of this Agreement even if apprised of the possibility of such damages. Furthermore, the Depositary’s aggregate liability to the Company during any term of this Deposit Agreement with respect to, arising from, or arising in connection with this Deposit Agreement, or from all services provided or omitted to be provided under this Deposit Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid hereunder by the Company to Depositary as fees and charges, but not including reimbursable expenses, during the twelve (12) months immediately preceding the event for which recovery from Depositary is being sought; provided, however, that such limitation shall not apply to any liability which directly arises out of acts performed or omitted by the Depositary or any Depositary’s Agent due to its or their recklessness, willful misconduct or bad faith.

The Depositary shall not be under any liability for interest on any monies at any time received by it pursuant to any of the provisions of this Deposit Agreement or of the Receipts, the Depositary Shares or the Preferred Shares nor shall it be obligated to segregate such monies from other monies held by it, except as required by law. The Depositary shall not be responsible for advancing funds on behalf of the Company and shall have no duty or obligation to make any payments if it has not timely received sufficient funds to make timely payments.

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In the event the Depositary believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or other communication, paper or document received by the Depositary hereunder, or in the administration of any of the provisions of this Deposit Agreement, the Depositary shall deem it necessary or desirable that a matter be proved or established prior to taking, omitting or suffering to take any action hereunder, the Depositary may, in its sole discretion upon written notice to the Company, refrain from taking any action and shall be fully protected and shall not be liable in any way to the Company, any holders of Receipts or any other person or entity for refraining from taking such action, unless the Depositary receives written instructions or a certificate signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction of the Depositary or which proves or establishes the applicable matter to the satisfaction of the Depositary.

From time to time, the Company may provide the Depositary with instructions concerning the services performed by the Depositary under this Agreement and the Depositary shall be indemnified and held harmless in acting, or refraining from acting, as applicable, in reliance upon such instructions. In addition, at any time, the Depositary may apply to any officer of the Company for instruction, and may consult with legal counsel for the Depositary or the Company with respect to any matter arising in connection with the services to be performed by the Depositary under this Agreement.

Section 5.04. Resignation and Removal of the Depositary; Appointment of Successor Depositary . The Depositary may at any time resign as Depositary hereunder by notice of its election to do so delivered to the Company, such resignation to take effect upon the appointment of a successor Depositary and its acceptance of such appointment as hereinafter provided. The Depositary may at any time be removed by the Company by notice of such removal delivered to the Depositary, such removal to take effect upon the appointment of a successor Depositary hereunder and its acceptance of such appointment as hereinafter provided.

In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall, within 60 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor Depositary, which shall be a bank or trust company having its principal office in the United States of America and having a combined capital and surplus of at least $50,000,000. If no successor Depositary shall have been so appointed and accepted appointment within 60 days after delivery of such notice, the resigning or removed Depositary may petition a court of competent jurisdiction to appoint a successor Depositary. Every successor Depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor Depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor and for all purposes shall be the Depositary under this Deposit Agreement, and such predecessor, upon payment of all sums due it and on the written request of the Company, shall promptly execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the deposited Preferred Shares and any moneys or property held hereunder to such successor and shall deliver to such successor a list of the Record holders

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of all outstanding Receipts and such records, books and other information in its possession relating thereto. Any successor depositary shall promptly mail notice of its appointment to the Record holders.

Any entity into or with which the Depositary may be merged, consolidated or converted shall be the successor of such Depositary without the execution or filing of any document or any further act, and notice thereof shall not be required hereunder. Such successor Depositary may execute the Receipts either in the name of the predecessor Depositary or in the name of the successor Depositary.

Section 5.05. Notices, Reports and Documents . The Company agrees that it will deliver to the Depositary, and the Depositary will, promptly after receipt thereof, transmit to the Record holders of Receipts, in each case at the address recorded in the Depositary’s books, copies of all notices and reports (including, without limitation, financial statements) required by law, by the rules of any national securities exchange upon which the Preferred Shares, the Depositary Shares or the Receipts are listed or by the Articles of Incorporation and the Certificate of Designations to be furnished by the Company to holders of the deposited Preferred Shares and, if requested by the holder of any Receipt, a copy of this Deposit Agreement, the form of Receipt, the Certificate of Designations and the form of Preferred Shares. Such transmission will be at the Company’s expense and the Company will provide the Depositary with such number of copies of such documents as the Depositary may reasonably request. In addition, the Depositary will transmit to the Record holders of Receipts at the Company’s expense such other documents as may be requested by the Company.

Section 5.06. Indemnification by the Company . Subject to Section 5.03, the Company shall indemnify the Depositary, any Depositary’s Agent and any Registrar (including each of their officers, directors, agents and employees) against, and hold each of them harmless from, any loss, damage, cost, penalty, liability or expense (including the reasonable costs and expenses of defending itself) which may arise out of acts performed, suffered or omitted to be taken in connection with this Agreement and the Receipts by the Depositary, any Registrar or any of their respective agents (including any Depositary’s Agent) and any transactions or documents contemplated hereby, except for any liability arising out of negligence, willful misconduct or bad faith on the respective parts of any such person or persons. The obligations of the Company set forth in this Section 5.06 shall survive any succession of any Depositary, Registrar or Depositary’s Agent or termination of this Deposit Agreement.

Section 5.07. Fees, Charges and Expenses . No charges and expenses of the Depositary or any Depositary’s Agent hereunder shall be payable by any person, except as provided in this Section 5.07. The Company shall pay all transfer and other taxes and governmental charges arising solely from the existence of this Deposit Agreement. All other transfer and other taxes and governmental changes shall be at the expense of the holders of Depository Shares evidenced by Receipts. The Company shall also pay all reasonable fees and expenses of the Depositary in connection with the initial deposit of the Preferred Shares and the initial issuance of the Depositary Shares evidenced by the Receipts and all withdrawals of the Preferred Shares by holders of Receipts. If a holder of Receipts requests the Depositary to perform duties not required under this Deposit Agreement, the Depositary shall notify such holder of the charges and expenses related to such performance for which the Company is not otherwise liable

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hereunder, and, if the holder authorizes the Depositary to proceed on that basis, the holder will be liable for those charges and expenses. All other fees and expenses of the Depositary and any Depositary’s Agent hereunder and of any Registrar (including, in each case, fees and expenses of counsel) incident to the performance of their respective obligations hereunder will be promptly paid by the Company pursuant to the terms of the Transfer Agency and Service Agreement (or, if such agreement is no longer in effect, pursuant to such terms as the Company and the Depositary shall agree in good faith, which terms shall be at least as favorable to the Depositary as those contained in such agreement as last in effect). The Depositary shall present its statement for fees and expenses to the Company every month or at such other intervals as the Company and the Depositary may agree.

ARTICLE VI

AMENDMENT AND TERMINATION

Section 6.01. Amendment . The form of the Receipts and any provision of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary in any respect that they may deem necessary or desirable; provided , however , that no such amendment (other than any change in the fees of any Depositary, Registrar or Transfer Agent that are payable by the Company) which shall materially and adversely alter the rights of the holders of Receipts shall be effective unless such amendment shall have been approved by the holders of Receipts representing in the aggregate at least two-thirds of the Depositary Shares then outstanding. In no event shall any amendment impair the right, subject to the provisions of Section 2.11 and Section 2.12 and Article III hereof, of any holder of any Depositary Shares to surrender the Receipt evidencing such Depositary Shares with instructions to the Depositary to deliver to the holder the deposited Preferred Shares and all money and other property if any, represented thereby, except in order to comply with mandatory provisions of applicable law. Every holder of an outstanding Receipt at the time any such amendment becomes effective shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by this Deposit Agreement as amended thereby. As a condition precedent to the Depositary’s execution of any amendment, the Company shall deliver to the Depositary a certificate from a duly authorized officer of the Company that states that the proposed amendment is in compliance with the terms of this Section 6.01.

Section 6.02. Termination . This Deposit Agreement may be terminated by the Company or the Depositary if (a) all of the outstanding Depositary Shares shall have been converted pursuant to Section 2.06 or 2.07 hereof, or (b) there shall have been made a final distribution in respect of the deposited Preferred Shares in connection with any liquidation, dissolution or winding up of the Company and such distribution shall have been distributed to the holders of Receipts entitled thereto in accordance with Sections 4.01 and 4.02 hereof.

Upon the termination of this Deposit Agreement, (i) the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary, any Depositary’s Agent and any Registrar under Section 5.06 and Section 5.07 hereof, (ii) the Depositary shall be discharged from all obligations under this Deposit Agreement except as provided in the sixth paragraph of Section 5.03 hereof, and (iii) the Depositary shall retain all rights under this Deposit Agreement as indicated in Sections 5.03, 5.06 and 5.07 hereof, which rights will survive the resignation or removal of the Depositary, or the termination of this Deposit Agreement.

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ARTICLE VII

MISCELLANEOUS

Section 7.01. Counterparts . This Deposit Agreement may be executed in any number of counterparts, and by each of the parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Deposit Agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Deposit Agreement. Copies of this Deposit Agreement shall be filed with the Depositary and the Depositary’s Agents and shall be open to inspection during business hours at the Corporate Office and the respective offices of the Depositary’s Agents, if any, by any holder of a Receipt.

Section 7.02. Exclusive Benefits of Parties . Subject to Section 7.06 hereof, this Deposit Agreement is for the exclusive benefit of the parties hereto, and their respective successors hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever.

Section 7.03. Invalidity of Provisions . In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

Section 7.04. Notices . Any and all notices to be given to the Company hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by facsimile transmission or electronic mail confirmed by letter, addressed to the Company at:


SB Financial Group, Inc.
401 Clinton Street
Defiance, Ohio 43512
Attention:		Mark A. Klein
Telephone:		(419) 783-8950
Facsimile:		(419) 782-6393
Email:		Mark.Klein@yourstatebank.com

or at any other address of which the Company shall have notified the Depositary in writing.

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Any and all notices to be given to the Depositary hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by facsimile transmission or electronic mail confirmed by letter, addressed to the Depositary at:


Computershare Inc. and
Computershare Trust Company, N.A.
Attention:		Michael J. Lang, Senior Vice President
Telephone:		(440) 239-7350
Facsimile:		(440) 239-7355
Email:		Michael.Lang@Computershare.com

or at any other address of which the Depositary shall have notified the Company in writing.

Any and all notices to be given to any Record holder of a Receipt hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or by facsimile transmission or electronic mail confirmed by letter, addressed to such Record holder at the address of such Record holder as it appears on the books of the Registrar, or if such holder shall have filed with the Depositary in a timely manner a written request that notices intended for such holder be mailed to some other address, at the address designated in such request.

Delivery of a notice sent by mail, or by facsimile transmission or electronic mail, shall be deemed to be effected at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a facsimile or electronic mail message) is deposited, postage prepaid, in a post office letter box. The Depositary or the Company may, however, act upon any facsimile or electronic message received by it from the other or from any holder of a Receipt, notwithstanding that such facsimile or electronic mail message shall not subsequently be confirmed by letter as aforesaid.

Section 7.05. Depositary’s Agents . The Depositary may from time to time appoint Depositary’s Agents to act in any respect for the Depositary for the purposes of this Deposit Agreement and may at any time appoint additional Depositary’s Agents and vary or terminate the appointment of such Depositary’s Agents. The Depositary will promptly notify the Company of any such action.

Section 7.06. Holders of Receipts Are Parties . The holders of Receipts from time to time shall be deemed to be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance of delivery thereof.

Section 7.07. Governing Law . This Deposit Agreement and the Receipts and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, and construed in accordance with, the law of the State of New York applicable to agreements made and to be performed in said State.

Section 7.08. Inspection of Certificate of Designations . A copy of the Certificate of Designations shall be filed with the Depositary and the Depositary’s Agents and shall be open to inspection during normal business hours at the Corporate Office and the respective offices of the Depositary’s Agents, if any, by any holder of any Receipt.

Section 7.09. Conflicts with Certificate of Designations . This Deposit Agreement shall be further subject to the terms and conditions of the Certificate of Designations. In the

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event of any conflict between the provisions of this Deposit Agreement and the provisions of the Certificate of Designations, the provisions of the Certificate of Designations will govern and the Company will instruct the Depositary accordingly.

Section 7.10. Headings . The headings of articles and sections in this Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as a part of this Deposit Agreement or the Receipts or to have any bearing upon the meaning or interpretation of any provision contained herein or in the Receipts.

[Signatures begin on next page]

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IN WITNESS WHEREOF, SB Financial Group, Inc., Computershare Inc. and Computershare Trust Company, N.A. have caused this Deposit Agreement to be duly executed on their behalf as of the day and year first above set forth, and all holders of Receipts shall become parties hereto by and upon acceptance by them of delivery of Receipts issued in accordance with the terms hereof.


SB FINANCIAL GROUP, INC.

By:		/s/ Mark A. Klein
Name:		Mark A. Klein
Title:		President and Chief Executive Officer

COMPUTERSHARE INC.

By:		/s/ Dennis Moccia
Name:		Dennis Moccia
Title:		Manager, Contracts Administration

COMPUTERSHARE TRUST COMPANY, N.A.

By:		/s/ Dennis Moccia
Name:		Dennis Moccia
Title:		Manager, Contracts Administration

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Exhibit A

[FORM OF RECEIPT]

See attached.

A-1

Exhibit B

[FORM OF NOTICE OF CONVERSION]

(To be executed by the registered holder in order to

convert Depositary Shares)

The undersigned hereby irrevocably elects to convert (the “ Conversion ”’) Depositary Shares into common shares, each without par value (“ Common Shares ”), of SB Financial Group, Inc., an Ohio corporation (the “ Corporation ”), in accordance with the terms and conditions of the Certificate of Amendment to the Articles of Incorporation of the Corporation establishing the terms of the 6.50% Noncumulative Convertible Perpetual Preferred Shares, Series A (the “ Series A Preferred Shares ”), as of the date written below, and in accordance with the Deposit Agreement, dated as of November 6, 2014, among the Corporation, the Depositary named therein and the holders from time to time of the Depositary Receipts issued thereunder. If Common Shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith payment of all applicable taxes or evidence that such taxes have been paid. No fee will be charged to the holder for any conversion, except for transfer taxes, if any. A copy of each Depositary Receipt representing the Depositary Shares to be converted is attached hereto (or evidence of loss, theft or destruction thereof). ⁽¹⁾


Date of Conversion:



Number of Depositary Shares to be Converted:



Number of Common Shares to be Issued:

Signature:

Name:

Address: ⁽²⁾

Fax No:

⁽¹⁾

The Corporation is not required to issue Common Shares until the original physical certificates, if any, representing the Series A Preferred Shares (or evidence of loss, theft or destruction thereof and indemnity reasonably satisfactory to the Corporation and the Transfer Agent) to be converted are received by the Corporation or the Transfer Agent from the Depositary and the original Depositary Receipts, if any, representing the Depositary Shares (or evidence of loss, theft or destruction thereof and indemnity reasonably satisfactory to the Corporation) to be converted are received by the Depositary.

(2)	Address where Common Shares and any other payments or certificates shall be sent by the Depositary.

B-1

Exhibit 5

[VORYS, SATER, SEYMOUR AND PEASE LLP LETTERHEAD]

November 6, 2014

SB Financial Group, Inc.

401 Clinton Street

Defiance, Ohio 43512

Re:

SB Financial Group, Inc.

Registration Statement on Form S-1 (File No. 333-198879)

Offering of Depositary Shares

Ladies and Gentlemen:

We have acted as counsel to SB Financial Group, Inc., an Ohio corporation (the “Company”), in connection with the preparation and filing with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), of the Registration Statement on Form S-1 (File No. 333-198879), and amendments thereto (the “Registration Statement”), filed by the Company with the Commission, and the offering by the Company pursuant thereto of up to 1,500,000 depositary shares (the “Depositary Shares”), each representing a 1/100th ownership interest in a 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A, without par value, of the Company (the “Preferred Shares”) and the common shares, no par value per share, of the Company issuable upon conversion of the Preferred Shares (the “Common Shares”).

In rendering this opinion, we have examined, among other things: (i) the Registration Statement; (ii) the form of Agency Agreement to be entered into among the Company and the placement agent named therein (the “Agency Agreement”); (iii) the Amended Articles of Incorporation, as amended, of the Company as currently in effect; (iv) the Amended and Restated Regulations of the Company as currently in effect; (v) the resolutions adopted by the Board of Directors of the Company relating to the offering; (vi) the form of order form; (vii) the Escrow Agreement, dated as of November 6, 2014, among the Company the placement agent and the escrow agent named therein; (viii) the Deposit Agreement, dated as of November 6, 2014, among the Company, the depositary named therein and the holders from time to time of the depositary receipts described therein (the “Deposit Agreement”); (ix) the form of depositary receipt; and (x) the form of Certificate for Preferred Shares. We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinions set forth herein.

In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. In making our examination of documents executed by the parties other than the Company, we have assumed that such parties had the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate and other, and execution and delivery by such parties of such documents and the validity and binding effect thereof. As to any facts material to the opinions expressed herein which were not independently established or verified, we have relied upon oral or written statements and representations of officers and other representatives of the Company and others.

Our opinion is subject to (i) the effect of applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws now or hereafter in effect relating to creditors’ rights generally and (ii) the limitations imposed by general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity).

Based upon the foregoing, and subject to the qualifications, assumptions and limitations stated herein, we are of the opinion that (i) the Depositary Shares have been duly authorized, and, upon issuance and delivery of and payment of legal consideration for such Depositary Shares in the manner described in the Registration Statement, the Depositary Shares will be legally issued, fully paid and non-assessable and will entitle their holders to the rights specified in the Deposit Agreement, (ii) the Preferred Shares have been duly authorized, and, upon issuance and delivery of and payment of legal consideration for the Depositary Shares in the manner described in the Registration Statement, the Preferred Shares will be validly issued, fully paid and nonassessable and (iii) the Common Shares initially issuable upon conversion of the Depositary Shares and the Preferred Shares have been authorized by all necessary corporate action of the Company, and, when issued upon such conversion in accordance with the terms of the Depositary Agreement, the Depositary Shares and the Preferred Shares, the Common Shares will be validly issued, fully paid and nonassessable.

Members of our firm are admitted to the Bar in the State of Ohio and we express no opinion as to the laws of any jurisdiction other than the laws of the State of Ohio, including the applicable provisions of the Ohio Constitution and the reported judicial decisions interpreting those laws, and of the United States of America.

The opinions expressed herein are based upon the law and circumstances as they are in effect on the date hereof, and we assume no obligation to revise or supplement this letter in the event of future changes in the law or interpretation thereof with respect to circumstances or events that may occur subsequent to the date hereof.

We hereby consent to your filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm under the caption “Legal Matters” therein and in the related prospectus. In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required to be filed with the Registration Statement under Section 7 of the Securities Act or the rules and regulations promulgated thereunder.

Very truly yours,

/s/ Vorys, Sater, Seymour and Pease LLP

VORYS, SATER, SEYMOUR AND PEASE LLP

Exhibit 21

List of Subsidiaries


Name		State of Incorporation

The State Bank and Trust Company		Ohio
RFCBC, Inc.		Ohio
Rurban Mortgage Company		Ohio
SBT Insurance, LLC		Ohio
Rurbanc Data Services, Inc.		Ohio
Rurban Statutory Trust I		Declaration of Trust – State of Connecticut
Rurban Statutory Trust II		Declaration of Trust – State of Delaware
NC Merger Corp.*		Ohio

*	NC Merger Corp. is a wholly-owned subsidiary of Rurbanc Data Services, Inc., and was formed for the purpose of facilitating the previously planned merger with New Core Holdings, Inc. NC Merger Corp. has no assets or liabilities and is inactive.

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in this Pre-Effective Amendment No. 1 to Registration Statement on Form S-1 of our report dated March 3, 2014, on our audits of the consolidated financial statements of SB Financial Group, Inc., which appears in SB Financial Group Inc.’s Annual Report on Form 10-K for the year ended December 31, 2013. We also consent to the references to our firm under the caption “Experts”.

/s/ BKD, LLP

BKD, LLP

Cincinnati, Ohio

November 6, 2014

Exhibit 99.1

LOGO

ORDER FORM

SEND OVERNIGHT PACKAGES TO:

Keefe, Bruyette & Woods, Inc.

SB Financial Group Processing Center

70 W Madison, Suite 2401

Chicago, IL 60602

(877) 860-2070

Internal Use Only: Date Rec’d / Batch# Order # Category

Order Deadline & Delivery: The order deadline is 3:00 p.m., Eastern Time, on December , 2014. Your original Order Form, properly executed and with the correct payment, must be received by us (not merely postmarked) by the deadline or it will be considered void. Order Forms can be delivered by using the enclosed postage paid Order Reply Envelope, by overnight delivery to the Offering Information Center address on this form, or by hand-delivery to SB Financial’s executive offices located at 401 Clinton Street, Defiance, Ohio. Do not mail Order Forms to State Bank. Faxes or copies of this form may not be accepted. SB Financial Group, Inc. reserves the right to accept or reject incomplete order forms.

PLEASE PRINT CLEARLY AND COMPLETE ALL APPLICABLE AREAS – READ THE ENCLOSED ORDER FORM INSTRUCTIONS AS YOU COMPLETE THIS FORM

(1)

NUMBER OF DEPOSITARY

SHARES

(2) TOTAL AMOUNT DUE

(4) PURCHASER IDENTIFICATION – OFFERING PRIORITIES

Check the one box that applies to the purchaser(s) listed in Section 6:

Price Per Share

x $10.00 =

1. ¨ Existing Shareholders - Check here if you are a beneficial owner of common shares of SB Financial Group, Inc.

THE MINIMUM PURCHASE IS 100 DEPOSITARY SHARES ($1,000). Generally, no person, together with such person’s affiliates, may purchase more than 250,000 shares ($2.5 million). Refer to the Order Form Instructions and the prospectus for further details regarding purchase limitations.

2. ¨ Customers and Local Community – Check here if you are a customer of State Bank or a resident of the Local Community we serve (refer to the Order Form Instructions for a definition of “Local Community”).

3. ¨ General Public – Check here if none of the above categories apply to you.

(3) PAYMENT – CHECK OR MONEY ORDER

(5)

MANAGEMENT

Enclosed is a personal check, bank check or money order made payable to “ U.S. Bank/SBFG – Escrow Account ” in the amount of:

Check below if you are in relation to SB Financial Group, Inc. or any of its subsidiaries:

¨ Director,

¨ Officer,

¨ Employee, or

¨ A member of such person’s household.

Cash and third party checks will not be accepted for this purchase. Checks and money orders will be cashed upon receipt. State Bank line of credit checks may not be remitted as payment. Wire transfers will not be accepted for payment in the shareholder and customer / local community offerings.

( 6) SHARE REGISTRATION: Please PRINT legibly and fill out completely. The depositary share ownership statement and all correspondence related to this order will be mailed to the address provided below. See Order Form Instructions for further guidance.

Individual

Tenants in Common

Corporation

Other

FOR TRUSTEE/BROKER USE ONLY:

Joint Tenants

Uniform Transfers to Minors Act

Partnership

Trust - Under Agreement Dated

¨ Individual Retirement Account

SSNof Beneficial Owner: - -


First Name, Middle Initial, Last Name			SSN or Tax ID No.
First Name, Middle Initial, Last Name			SSN or Tax ID No.
Street			Daytime Telephone #
City	State	Zip Code	Evening Telephone #

(7) ACKNOWLEDGEMENT AND SIGNATURE(S): I understand that to be effective, this Order Form, properly completed, together with full payment must be received (not merely postmarked) by SB Financial Group, Inc. no later than 3:00 p.m., Eastern Time, on December , 2014, otherwise this form will be void. I agree that after receipt by SB Financial Group, Inc. this Order Form may not be modified or cancelled without SB Financial Group Inc.’s consent. Under penalty of perjury, I certify that (1) the Social Security or Tax ID information and all other information provided hereon are true, correct and complete, (2) I am not subject to backup withholding tax [cross out (2) if you have been notified by the IRS that you are subject to backup withholding.] I acknowledge that my order does not conflict with the maximum purchase limitation, as set forth in the Prospectus dated November , 2014.

I further certify that, before executing this order I received the Prospectus dated November , 2014 and that I have read the terms and conditions described in the Prospectus, including disclosure concerning the nature of the security being offered and the risks involved in the investment described in the “Risk Factors” section beginning on page .

*** ORDER NOT VALID UNLESS SIGNED ***

ONE SIGNATURE REQUIRED. IF SIGNING AS A CUSTODIAN, TRUSTEE, CORPORATE OFFICER, ETC. PLEASE INCLUDE YOUR FULL TITLE.

Signature (title, if applicable)

Date

Signature (title, if applicable)

Date

SB Financial Group, Inc.

Order Form Instructions

Offering Information Center: (877) 860-2070

Order Form Instructions – All orders are subject to the terms of the offering as described in the Prospectus.

Sections (1) and (2) – Number of Depositary Shares and Total Amount Due. Fill in the number of depositary shares that you wish to purchase and the total amount due. The amount due is determined by multiplying the number of depositary shares ordered by the price of $10.00 per depositary share. The minimum number of depositary shares you may order is 100 depositary shares ($1,000). The maximum number of depositary shares you may order is the lesser of (i) 250,000 depositary shares ($2.5 million) or (ii) the number of depositary shares, assuming conversion of such depositary shares into our common shares, whereby your total beneficial ownership of our common shares (including any common shares currently owned) would not exceed 5% of our outstanding common shares after the offering. For additional information, see “Description of The Offering – Offering Priorities and Purchase Limitations” in the Prospectus.

Section (3) – Payment – Check or Money Order. Payment for the depositary shares may be made by check, bank check or money order payable to “U.S. Bank/SBFG – Escrow Account”. DO NOT MAIL CASH. Payments received during the offering will be placed in an escrow account at U.S. Bank, who will serve as the escrow agent until completion of the offering. Payments will be deposited upon receipt. The funds remitted by personal check must be available within the account(s) when your Order Form is received. State Bank line of credit checks and third party checks may not be remitted as payment. Wire transfers will not be accepted for payment in the shareholder and customer / local community offerings.

Section (4) – Purchaser Identification – Offering Priorities. Please check the appropriate box to tell us which offering priority applies to the purchaser(s) listed in Section 6 of the Order Form. If purchasing in the Customer and Local Community priority, please be aware that “Local Community” is defined as the Ohio counties of Allen, Defiance, Franklin, Fulton, Lucas, Paulding, Wood and Williams and the Indiana counties of Allen and Steuben.

Section (5) – Management. Please check one of these boxes if you are a director, officer or employee of SB Financial Group, Inc. or any of its subsidiaries or a member of such person’s household.

Section (6) – Share Registration. Clearly PRINT the name(s) in which you want the depositary shares registered and the mailing address for all correspondence related to your order. Please complete this section as fully and accurately as possible, and be certain to supply your social security or Tax I.D. number(s) and your daytime and evening phone numbers. We will need to call you if we cannot execute your order as given. If you have any questions regarding the registration of your shares, please consult your legal advisor or contact the Offering Information Center at (877) 860-2070. If you are an existing shareholder of SB Financial Group, Inc. or a customer of State Bank, to protect your priority over other purchasers as described in the Prospectus you must take ownership in at least one of the shareholder or customer names. NOTE FOR FINRA MEMBERS: If you are a member of the Financial Industry Regulatory Authority (“FINRA”) or are a person affiliated or associated with a FINRA member, you may have additional reporting requirements. Please report this order in writing to the applicable department of the FINRA member firm within one day of payment thereof.

Section (7) – Acknowledgement and Signature(s). Please review the Prospectus dated November , 2014, including the section titled “ Risk Factors ” beginning on page , carefully before making an investment decision. Sign and date the form where indicated. Before you sign, please read carefully and review the information which you have provided and read the acknowledgement. Verify that you have printed clearly and completed all applicable shaded areas on the Order Form. Only one signature is required.

Deliver your completed Order Form, with full payment so that it is received (not merely postmarked) before 3:00 p.m., Eastern Time, on December , 2014. Order Forms can be delivered by using the enclosed postage paid Order Reply Envelope, by overnight delivery to the Offering Information Center address at the top of the Order Form, or by hand-delivery to our executive offices located at 401 Clinton Street, Defiance, Ohio. Please do not mail Order Forms to State Bank. We are not required to accept Order Forms that are found to be deficient or incorrect, or that do not include proper payment or the required signature(s). Faxes or copies of this form are not required to be accepted.

For additional information, refer to the enclosed Prospectus or call our Offering Information Center, toll free, at (877) 860-2070, Monday through Friday, between 10:00 a.m. and 4:00 p.m., Eastern Time. The Offering Information Center will be closed bank on holidays.

SB Financial Group, Inc.

Depositary Share Ownership Guide

Offering Information Center: (877) 860-2070

Depositary Share Ownership Guide

Form of Ownership. For reasons of clarity and standardization, the stock transfer industry has developed uniform stockholder registrations for issuance of stock. Beneficiaries may not be named on share registrations. If you have any questions on wills, estates, beneficiaries, etc., please consult your legal advisor. When registering shares, do not use two initials – use the full first name, middle initial and last name. Omit words that do not affect ownership such as “Dr.” or “Mrs.” Check the one box that applies.

Individual – The depositary shares are to be registered in an individual’s name only.

Joint Tenants – Joint tenants with rights of survivorship identifies two or more owners. When shares are held by joint tenants with rights of survivorship, ownership automatically passes to the surviving joint tenant(s) upon the death of any joint tenant. All owners must agree to the sale of shares.

Tenants in Common – Tenants in common may also identify two or more owners. When shares are to be held by tenants in common, upon the death of one co-tenant, ownership of the shares will be held by the surviving co-tenant(s) and by the heirs of the deceased co-tenant. All parties must agree to the transfer or sale of shares held by tenants in common.

Uniform Transfers to Minors Act (UTMA) – Shares may be held in the name of a custodian for the benefit of a minor under the Uniform Transfers to Minors Act. In this form of ownership, the minor is the actual owner of the shares, with the adult custodian being responsible for the investment until the child reaches legal age. Only one custodian and one minor may be designated. Please consult your legal advisor regarding applicable laws regarding transfers to minors in your state.

Registration for UTMA : On Name Line 1 – print the name of the custodian followed by the abbreviation “CUST”. On Name Line 2 – FBO (for benefit of) followed by the name of the minor, followed by UTMA-OH (Or your state’s abbreviation). List only the minor’s social security number on the form.

Corporation/Partnership – Corporations/Partnerships may purchase the depositary shares. Please provide the Corporation/Partnership’s legal name and entity’s Tax ID Number for reporting purposes.

Fiduciary/Trust – Generally, fiduciary relationships such as trusts, estates, guardianships, etc., are established under a form of trust agreement or pursuant to a court order. Without a legal document establishing a fiduciary relationship, your shares may not be registered in a fiduciary capacity.

Registration for Fiduciary/Trust: On the first name line, print the first name, middle initial and last name of the fiduciary if the fiduciary is an individual. If the fiduciary is a corporation, list the corporate title on the first name line. Following the name, print the fiduciary title, such as trustee, executor, personal representative, etc. On the second name line, print the name of the maker, donor or testator or the name of the beneficiary. Following the name, indicate the type of legal document establishing the fiduciary relationship (agreement, court order, etc.). In the blank after “Under Agreement Dated,” fill in the date of the document governing the relationship. The date of the document need not be provided for a trust created by a will. Indicate the Tax ID Number to be used for reporting purposes.

Individual Retirement Account – Individual Retirement Account (“IRA”) holders may potentially make share purchases from their existing IRA if it is a self-directed IRA. Please contact your broker or self-directed IRA account provider as quickly as possible to explore this option, as it may take a number of weeks to place an order using IRA funds. Registration should reflect the custodian or trustee firm’s registration requirements.

Registration for IRA’s: On Name Line 1 - list the name of the custodian, trustee firm or trust department followed by CUST or TRUSTEE. On Name Line 2 - FBO (for benefit of) YOUR NAME IRA [a/c # ]. You can indicate an account number or other underlying information and the custodian or trustee firm’s address and department to which all correspondence should be mailed related to this order, including your share ownership statement. Indicate the Tax ID Number under which the IRA account should be reported for tax purposes. Please list your phone numbers, not the phone numbers of your broker/trust department.

Exhibit 99.2

LOGO

Questions and answers about our offering of up to

1,500,000 depositary shares, each representing a 1/100th

ownership interest in a 6.50% Noncumulative

Convertible Perpetual Preferred Share, Series A, of SB

Financial Group, Inc.

An investment in the depositary shares is subject to investment risks, including possible loss of the principal invested. This is not an offer to sell or a solicitation of an offer to buy the depositary shares. The offer is made only by the Prospectus. The depositary shares are not savings accounts, deposits or other obligations of any bank, thrift or other depositary institution and are not insured or guaranteed by the FDIC or any other governmental agency or instrumentality.

This pamphlet answers questions about the offering of up to 1,500,000 depositary shares, each representing a 1/100 ^th ownership interest in a 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A (the “Series A Preferred Shares”), of SB Financial Group, Inc. (“SB Financial”). Investing in the depositary shares and, therefore, the Series A Preferred Shares, involves certain risks. For a discussion of these risks and other factors, including a detailed description of the offering, investors are urged to read the accompanying prospectus , especially the discussion under the heading “Risk Factors.”

THE OFFERING AND PURCHASING DEPOSITARY SHARES

W HAT ARE “ DEPOSITARY SHARES ”?

As an alternative to selling the Series A Preferred Shares directly to the public at a price of $1,000 per share, we are instead selling what are termed “depositary shares.” Each depositary share represents a 1/100 ^th ownership interest in one Series A Preferred Share, and each depositary share is being sold at a price of $10.00. The Series A Preferred Shares underlying the depositary shares will be deposited with Computershare Trust Company, N.A., as depositary. As a holder of depositary shares, you will be entitled to all proportional rights, preferences and privileges of the Series A Preferred Shares.

H OW MANY DEPOSITARY SHARES ARE BEING OFFERED AND AT WHAT PRICE ?

SB Financial Group, Inc. is offering up to 1,500,000 depositary shares, as described in the prospectus, at a price of $10.00 per share.

A RE EXISTING SHAREHOLDERS AND CUSTOMERS REQUIRED TO PURCHASE DEPOSITARY SHARES IN THE OFFERING ?

No. Shareholders of SB Financial and customers of The State Bank and Trust Company (the “State Bank”), or any other person, are not required to purchase depositary shares in the offering. The depositary shares are being offered to the public with preference being given first to existing shareholders of SB Financial then to customers of State Bank and residents of the local communities we serve, should they so desire to purchase depositary shares. The decision to purchase depositary shares in the offering will be exclusively that of each person.

W HO IS BEING GIVEN THE OPPORTUNITY TO PURCHASE DEPOSITARY SHARES IN THE OFFERING ?

Depositary shares are being offered for sale to the public in the following order of priority:

•

First, to beneficial owners of common shares of SB Financial;

•

Second, to customers of State Bank and residents of the following counties: Allen, Defiance, Franklin, Fulton, Lucas, Paulding, Wood and Williams Counties, Ohio and Allen and Steuben Counties, Indiana; and

•

Third, any depositary shares not sold to the persons listed above in the offering may be sold to the general public and selected institutional and retail investors through a syndicated offering.

I F I SUBSCRIBE , WILL I RECEIVE DEPOSITARY SHARES ?

Placing an order does not guarantee that you will receive depositary shares in the offering. Orders are filled on a priority basis described above and in the accompanying prospectus. It will depend on several factors such as the total number of depositary shares ordered in the offering by all subscribers and your level of subscription priority. If we receive orders for more depositary shares than we are offering, we may not be able to fully or partially fill your order.

H OW MANY DEPOSITARY SHARES MAY I ORDER ?

The minimum number of depositary shares you may order is 100 shares ($1,000). The maximum number of depositary shares that you may order is the lesser of (1) 250,000 depositary shares ($2.5 million), or (2) the number of depositary shares, assuming conversion of such depositary shares into our common shares, whereby the purchaser’s total beneficial ownership of our common shares (including any common shares currently owned) would not exceed 5% of our outstanding common shares after the offering, as further discussed in the prospectus.

W ILL THE DEPOSITARY SHARES OR THE UNDERLYING SERIES A PREFERRED SHARES BE INSURED ?

NO . Your purchase of depositary shares represents an investment in the underlying Series A Preferred Shares. Like the preferred stock of any public company, the Series A Preferred Shares will NOT be insured or guaranteed by the FDIC or any other government agency or instrumentality.

H OW DO I ORDER THE DEPOSITARY SHARES ?

To purchase depositary shares in the offering you must complete and return an Order Form, along with full payment. Instructions for completing your Order Form are included with the Order Form. Your order must be received by us (not merely postmarked) by 3:00 p.m., Eastern Time, on December , 2014. Delivery of your original Order Form (we reserve the right to reject copies or facsimiles) and full payment may be made by mail using the enclosed postage paid Order Reply Envelope, by overnight delivery to the address indicated at the top of the Order Form, or by hand-delivery to SB Financial’s executive offices located at 401 Clinton Street, Defiance, Ohio. Order Forms may not be delivered by mail or hand-delivery to any other branches or locations of SB Financial or State Bank .

*Due to recently announced reductions in U.S. Postal Service first class mail delivery standards, we encourage you to consider in-person or overnight delivery of your Order Form to ensure your order is received before the deadline.

H OW MAY I PAY FOR MY PURCHASE ?

You may pay by personal check, bank check or money order made payable to “U.S. Bank/SBFG – Escrow Account” . Checks will be cashed upon receipt. State Bank line of credit checks and third party checks may not be remitted. We cannot accept wire transfers for payment during the shareholder and customer / local community offerings. Please do not mail cash!

W ILL I EARN INTEREST ON MY FUNDS WHILE THEY ARE HELD IN ESCROW ?

No. Funds received during the offering will be held in a segregated account at U.S. Bank, our escrow agent for the transaction. Interest will not be paid on these funds while held in escrow.

W ILL DIVIDENDS BE PAID ON THE SERIES A PREFERRED SHARES AND THE DEPOSITARY SHARES ?

We expect to pay noncumulative quarterly dividends on the Series A Preferred Shares (and, therefore, the depositary shares). However, there is no guarantee that dividends will be paid. Please read the accompanying prospectus carefully, especially the section of the prospectus entitled “Risk Factors Related to the Depositary Shares and the Series A Preferred Shares” beginning on page .

H OW WILL THE DEPOSITARY SHARES BE TRADED ?

M UST I PAY A COMMISSION ?

No . You will not be charged a commission on the purchase of depositary shares in the offering. However, if you are purchasing through a brokerage account, your broker may charge fees associated with your account.

M AY I CHANGE MY MIND AFTER I PLACE AN ORDER TO SUBSCRIBE FOR DEPOSITARY SHARES ?

No . After receipt, your executed Order Form may not be modified, amended or rescinded without our consent unless the offering is not completed, in which case your funds will be promptly returned without interest.

I F I PURCHASE DEPOSITARY SHARES IN THE OFFERING , WHEN AND HOW WILL I RECEIVE DELIVERY OF MY SHARES ?

Computershare Trust Company, N.A., as our depositary, transfer agent, and registrar, will issue the depositary shares in book-entry form. This means that we will not issue physical depositary receipts to holders of depositary shares, except in limited circumstances. A statement of ownership will be mailed indicating the number of depositary shares issued to each purchaser in book-entry form.

A RE THE DEPOSITARY SHARES CONVERTIBLE INTO COMMON SHARES OF SB FINANCIAL ?

Yes. Each depositary share, at the option of the holder, is convertible at any time into the number of our common shares equal to $10.00 divided by the conversion price then in effect (initially $10.34). The initial conversion price of $10.34 is equivalent to a 17.5% premium over $8.80 per common share, the last reported sale price of our common shares on November 5, 2014. See “Description of the Series A Preferred Shares — Conversion Rights” in the prospectus for further details.

SB Financial may require the holders of the Series A Preferred Shares (and, therefore, the depositary shares) to convert each Series A Preferred Share into common shares of SB Financial on or after the fifth anniversary of the issue date of the Series A Preferred Shares assuming all necessary mandatory conversion requirements are met. See “Description of the Series A Preferred Shares – Mandatory Conversion at Our Option” in the prospectus for further details.

D O THE DEPOSITARY SHARES HAVE A MATURITY DATE ?

No. The Series A Preferred Shares (and, therefore, the depositary shares) do not have a maturity date, and the Series A Preferred Shares may not be redeemed at the option of SB Financial. Accordingly, the Series A Preferred Shares will remain outstanding indefinitely, unless and until SB Financial is entitled to exercise its right of mandatory conversion and elects to do so. See “Description of the Series A Preferred Shares – Mandatory Conversion at Our Option” in the prospectus for further details.

WHERE TO GET MORE INFORMATION

For additional information, refer to the enclosed prospectus or call our Offering Information Center, toll free, at (877) 860-2070, Monday through Friday, between 10:00 a.m. and 4:00 p.m., Eastern Time. The Offering Information Center will be closed on bank holidays.

Exhibit 99.3

LOGO

Dear Shareholder:

I am pleased to tell you and other shareholders of SB Financial Group, Inc. (“SB Financial”) about an investment opportunity. SB Financial, the parent company of The State Bank and Trust Company (“State Bank”), is conducting an offering of up to 1,500,000 depositary shares, each representing a 1/100 ^th ownership interest in a 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A, of SB Financial, as described in the enclosed prospectus.

In addition to the prospectus, we’ve also enclosed a “Questions and Answers” brochure and other materials which further describe the offering and your opportunity for investment in SB Financial depositary shares. These depositary shares are being offered to the public, with a preference being given first to existing common equity shareholders of SB Financial, and then to customers of State Bank and residents of the local communities we serve.

THE OFFERING

SB Financial is offering up to 1,500,000 depositary shares, each representing a 1/100 ^th ownership interest in a 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A, of SB Financial with a liquidation preference of $1,000 per share (equivalent to $10.00 per depositary share).

The enclosed prospectus contains a detailed discussion of the offering. We urge you to read this document carefully, including the section titled “Risk Factors” beginning on page . If you are interested in purchasing depositary shares in the offering, your Order Form and payment must be received (not merely postmarked) by us before 3:00 p.m., Eastern Time, on December , 2014.

Sincerely,

Mark A. Klein

President and Chief Executive Officer

SB Financial Group, Inc.

An investment in the depositary shares is subject to investment risks, including possible loss of the principal invested. This is not an offer to sell or a solicitation of an offer to buy the depositary shares. The offer is made only by the prospectus. The depositary shares are not savings accounts, deposits or other obligations of any bank, thrift or other depositary institution and are not insured or guaranteed by the FDIC or any other governmental agency or instrumentality.

Exhibit 99.4

LOGO

Dear Friend:

I am pleased to tell you and other customers and friends of The State Bank and Trust Company (“State Bank”) about an investment opportunity. SB Financial Group, Inc. (“SB Financial”), the parent company of State Bank, is conducting an offering of up to 1,500,000 depositary shares, each representing a 1/100 ^th ownership interest in a 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A, of SB Financial, as described in the enclosed prospectus.

In addition to the prospectus, we’ve also enclosed a “Questions and Answers” brochure and other materials which further describe the offering and your opportunity to invest in SB Financial depositary shares. The depositary shares are being offered to the public, with a preference being given first to existing common equity shareholders of SB Financial, and then to customers of State Bank and residents of the local communities we serve.

THE OFFERING

Sincerely,

Mark A. Klein

President and Chief Executive Officer

SB Financial Group, Inc.

An investment in the depositary shares is subject to investment risks, including possible loss of the principal invested. This is not an offer to sell or a solicitation of an offer to buy the depositary shares. The offer is made only by the prospectus. The depositary shares are not savings accounts, deposits or other obligations of any bank, thrift or other depositary institution and are not insured or guaranteed by the FDIC or any other governmental agency or instrumentality.

Exhibit 99.5

LOGO

Dear Prospective Investor:

I am pleased to tell you about an investment opportunity. SB Financial Group, Inc. (“SB Financial”), the parent company of State Bank and Trust Company (“State Bank”), is conducting an offering of up to 1,500,000 depositary shares, each representing a 1/100 ^th ownership interest in a 6.50% Noncumulative Convertible Perpetual Preferred Share, Series A, of SB Financial, as described in the enclosed prospectus.

THE OFFERING

The enclosed prospectus contains a detailed discussion of the offering. We urge you to read this document carefully, including the section titled “Risk Factors” beginning on page . If you are interested in purchasing depositary shares in the offering, your Order Form and payment must be received (not postmarked) by us before 3:00 p.m., Eastern Time, on December , 2014.

Sincerely,

Mark A. Klein

President and Chief Executive Officer

SB Financial Group, Inc.

An investment in the depositary shares is subject to investment risks, including possible loss of the principal invested. This is not an offer to sell or a solicitation of an offer to buy the depositary shares. The offer is made only by the prospectus. The depositary shares are not savings accounts, deposits or other obligations of any bank, thrift or other depositary institution and are not insured or guaranteed by the FDIC or any other governmental agency or instrumentality.

Exhibit 99.6

LOGO

Dear Sir/Madam:

Keefe, Bruyette & Woods, a Stifel Company has been retained by SB Financial Group, Inc. (“SB Financial”) as selling agent in connection with the offering of SB Financial Group, Inc. depositary shares.

At the request of SB Financial, we are enclosing materials explaining the offering of up to 1,500,000 depositary shares, each representing a 1/100 ^th ownership interest in a % Noncumulative Convertible Perpetual Preferred Share, Series A, of SB Financial. Included in this package is a Prospectus describing the depositary shares. We encourage you to read the enclosed information carefully, including the “Risk Factors” section of the Prospectus.

For additional information, you may call the Offering Information Center, toll free, at ( ) - , from 10:00 a.m. to 4:00 p.m., Eastern Time, Monday through Friday. The Offering Information Center is closed on bank holidays.

Sincerely,

LOGO

An investment in the depositary shares is subject to investment risks, including possible loss of the principal invested. This is not an offer to sell or a solicitation of an offer to buy the depositary shares. The offer is made only by the prospectus. The depositary shares are not savings accounts, deposits or other obligations of any bank, thrift or other depositary institution and are not insured or guaranteed by the FDIC or any other governmental agency or instrumentality.

Exhibit 99.7

LOGO

You’re Invited!

You are cordially invited to an informational meeting to learn more about the offering

of SB Financial Group, Inc. depositary shares and the business of SB Financial Group, Inc. and its subsidiaries, including The State Bank and Trust Company.

Senior officers of SB Financial Group, Inc. will present information and

answer your questions.


Date & Time TBD	Date & Time TBD	Date & Time TBD
TBD Location	TBD Location	TBD Location
TBD Street Address	TBD Street Address	TBD Street Addresss
TBD City, ST Zip	TBD City, ST Zip	TBD City, ST Zip

FOR RESERVATIONS, PLEASE CALL:

SB Financial Group, Inc.

Offering Information Center

toll-free at (877) 860-2070,

From 10:00 a.m. to 4:00 p.m., Eastern Time,

Monday through Friday, except bank holidays.

An investment in the depositary shares is subject to investment risks, including possible loss of the principal invested. This is not an offer to sell or a solicitation of an offer to buy the depositary shares. The offer is made only by the prospectus. The depositary shares are not savings accounts, deposits or other obligations of any bank, thrift or other depositary institution and are not insured or guaranteed by the FDIC or any other governmental agency or instrumentality.