DEFIANCE, Ohio, July 18, 2007 (PRIME NEWSWIRE) -- Rurban Financial Corp. (Nasdaq:RBNF), a leading provider of full-service community banking, investment management, trust services and bank data processing, reported second quarter 2007 net income of $785,000, an increase of 10.0 percent over the $714,000 reported for the second quarter of 2006. Diluted earnings per share increased 14.3 percent to $0.16 from $0.14 reported for the prior-year period. Compared with the first quarter of 2007, net income and diluted earnings per share increased by 11.8 and 14.3 percent, respectively.
For the six months ended June 30, 2007 Rurban reported net income of $1,487,000 up $251,000, or 20.3 percent, compared to $1,236,000 reported for the six months ended June 2006. Diluted earnings per share were $0.30 for the current year, up 20.0 percent from the $0.25 reported for the prior year.
Highlights include:
* Rurban implemented the final steps of its reorganization plan toward the end of the first quarter 2007. Therefore, this represents Rurban's first reporting quarter as a completely restructured entity, with all bank activities merged into The State Bank and Trust Company; RDSI, the data and item processing company, remains a stand-alone data processing subsidiary of the holding company. * The reorganization had a $0.02 positive impact on earnings per share in second quarter performance through improvements due to consolidation; second quarter ROAA was 57 basis points compared with 51 basis points for the first quarter of 2007. * Rurban's net interest margin increased for a second consecutive quarter. The margin improved to 3.19 percent for the current quarter from 3.04 percent for the first quarter of 2007; the margin for State Bank and Trust was 3.56 percent for the second quarter. * Loan growth accelerated during the second quarter of 2007 increasing $8.4 million, or 9 percent annualized, from March 31, 2007. Year-to-date loan growth was $11.6 million across all loan categories. * Non-interest income continued to be a substantial contributor to Rurban's revenue stream, increasing 23.5 percent from the prior year to $6.5 million, and accounting for 63.4 percent of total revenue. RDSI revenue increased 36.3 percent year-over-year to $4.9 million primarily due to the acquisition of DCM in the third quarter of 2006. * On April 12, 2007, Rurban initiated a stock repurchase program, authorizing the repurchase of up to 250,000 shares or approximately 5 percent of the Company's outstanding shares. As of the end of the second quarter, Rurban repurchased 12,000 shares at an average cost of $12.43
Kenneth A. Joyce, President and Chief Executive Officer, commented, "We are making steady progress toward our goals. With a simplified, more transparent organization, we are able to focus more clearly on the issues that require attention, as can our investors. We know there are still many areas for improvement, but I believe we have addressed most of the major factors that have been a drag on our operations and profitability. We have the right team in place to lead our organization to the next level of profitability and growth, and we are already making progress along that path. We look forward to continuing improvement of our fundamental measurements."
CONSOLIDATED OPERATIONS
Earnings June 2007 Mar. 2007 Dec. 2006 June 2006 (Three months ended) (Dollars in thousands except per share data) Net interest income $3,751 $3,593 $3,584 $3,830 Provision (credit) for loan losses 146 93 (159) 56 Non-interest income 6,508 6,739 7,576 5,268 Non-interest expense 9,065 9,300 10,359 8,080 Net income (loss) 785 702 710 714 Diluted EPS $0.16 $0.14 $0.14 $0.14
Total revenue, consisting of net interest income plus non-interest income, was $10.3 million for the second quarter of 2007, compared with $9.1 million for the prior-year second quarter, an increase of $1.2 million, or 12.8 percent. Compared with the first quarter of this year, total revenue was basically unchanged as the first quarter had significant non-interest income generated by RDSI for year-end processing. Net interest income was $3.8 million in the current quarter, a decrease of $80,000, or 2.1 percent, from the 2006 second quarter, and an increase of $157,000, or 4.4 percent, from the $3.6 million reported for the first quarter of this year. Year-over-year results reflect a 1.1 percent decrease in average earning assets, coupled with a 6 basis point decline in net interest margin, to 3.19 percent this quarter. The linked quarter reflects a 15 basis point improvement in the net interest margin, partially offset by a 0.4 percent decline in average earning assets. Mr. Joyce remarked, "We are reaping the benefits of our balance sheet restructuring that we completed in the fourth quarter of 2006. This quarter marked our second consecutive quarter of margin expansion, resulting in an improvement in net interest margin of 27 basis points since year-end."
Non-interest income, derived primarily from RDSI, is an increasingly significant contributor to Rurban's revenue stream, accounting for 63.4 percent of total revenue for the second quarter of 2007, compared with 57.9 percent for the year-ago quarter. Non-interest income grew $1.2 million, or 23.5 percent, increasing to $6.5 million from $5.3 million a year earlier. The acquisition of DCM in the third quarter of 2006 was the primary driver of this 23.5 percent increase. Gain on sale of loans likewise contributed to the year-over-year increase as mortgage banking continues to show progress in a very difficult market environment. Compared to the first quarter, non-interest income declined by $231,000, or 3.4 percent. This quarterly decrease is largely due to one-time fee income opportunities recorded in the first quarter on previously charged-off loans and end of year processing fees.
The provision for loan losses was $146,000 compared with $56,000 for the second quarter of 2006, and $93,000 for the first quarter of 2007.
Non-interest expense was $9.1 million for the second quarter of 2007, up $985,000, or 12.2 percent, from the year-ago quarter. The increase was due to the acquisition of DCM, which recorded $1.0 million in expenses in the second quarter of 2007. In comparison to first quarter, operating expenses decreased $235,000, or 2.5 percent, despite additional expense within the data processing segment. Salaries and benefit expense declined by nearly 5 percent due to the Company's efforts to reduce staff through the consolidation of its back office and other operational activities following the merger of The Exchange Bank into The State Bank and Trust Company in the first quarter. At quarter-end, Rurban had 285 FTE employees, 32 fewer than year-end 2006. Mr. Joyce stated, "Our goal is to provide the same high quality service with a greater focus on technology efficiencies and resulting profitability."
Rurban continues to be very well capitalized. Stockholders' equity at June 30, 2007 was $57.3 million, equivalent to 10.5 percent of total assets; on a tangible basis, the ratio was 7.1 percent. The total risk-based capital ratio was 16.1 percent, well in excess of the "well-capitalized" regulatory threshold of 10 percent.
THE STATE BANK AND TRUST COMPANY
The State Bank and Trust Company reported net income of $917,000 for the quarter, compared with $888,000 for the prior-year quarter, an increase of 3.3 percent. Compared with the first quarter of 2007, income increased $210,000 or 29.7 percent. Revenue for the Bank (net interest income plus non-interest income) was $6.1 million for the current quarter, a decline of $91,000, or 1.5 percent, from the year earlier level of $6.2 million. Revenue increased $106,000, or 1.8 percent, from the linked quarter's results. Non-interest expense decreased $165,000 to $4.7 million for the current quarter compared to $4.9 million for the second quarter of 2006. This decrease was driven by the operating efficiencies completed at the end of the first quarter. Operating Expenses decreased despite the opening of a new full service branch and increased expenses to create branding and market awareness within our branching network. Non-interest expense decreased $261,000 in the second quarter of 2007 compared to the first quarter of 2007. Mr. Joyce stated, "We are starting to see several of our strategic initiatives mature within our banking group. Our entry into the Lima, Toledo and Fort Wayne markets are starting to provide nice growth opportunities and we feel we have them structured correctly."
Loan growth over the past twelve months was $21.5 million, or 5.6 percent, reaching $383.5 million at June 30, 2007. After a steady but slow first quarter resulting from competitive factors and the priority given to consolidation activities, loan growth rebounded during the second quarter of 2007, growing at an annualized 8.9 percent, and accounting for nearly 40 percent of the year-over-year increase in loans. Commercial and Industrial loans contributed more than half of second quarter loan growth, accounting for $5.0 million of the increase, and raising their share in the portfolio to 20.2 percent, from 19.4 percent at March 31, 2007. Real estate loans accounted for the remainder of the growth, increasing $4.4 million to $269.4 million at quarter-end. Rurban's portfolio continues to lean toward real estate secured lending, which accounted for 70.5 percent of loans at June 30, 2007. Year-over-year, assets declined $17.4 million, or 3.19 percent, due to the $17 million balance sheet restructuring completed in the fourth quarter of 2006.
Deposits at quarter-end were $407.6 million, up $6.6 million, or 1.7 percent, from the second quarter of 2006, and down $5.0 million from $412.6 million at March 31, 2007. The decrease from the previous quarter resulted from Rurban's effort to reduce high-cost deposits; retail and brokered time deposits decreased $6.5 million during the quarter, while low-cost deposits -- checking, savings, and money market accounts -- increased minimally.
ASSET QUALITY
Asset Quality (Three months ended) June 2007 Dec. 2006 June 2006
(dollars in thousands)
Net charge-offs / (Recoveries) $90 $645 $(33)
Net charge-offs (Ann.) / Avg. loans 0.09% 0.70% (0.04%)
Allowance for loan loss $3,824 $3,717 $4,438
Allowance for loan loss / Loans 1.00% 1.00% 1.23%
Non-performing assets $5,997 $3,910 $5,909
NPA / Total assets 1.09% 0.70% 1.07%
Non-performing assets (loans + OREO + OAO) were $6.0 million, or 1.09 percent of total assets at quarter-end 2007, an increase of $88,000 from twelve months ago, and an increase of $1.9 million from the first quarter. Mr. Joyce commented, "We had three commercial facilities which comprised the majority of the increase in our non-performing assets, including one that was called due and declared in default due to persistent delinquency problems. We believe we are adequately reserved for any resultant losses, if any." Net charge-offs for the second quarter were $90,000, compared with a net recovery of $33,000 in the second quarter of 2006 for a net charge-off to average loans of 0.07 percent for the first half of 2007. The loan loss reserve remains at 1.00 percent of period-end loans.
RFCBC (Loan Workout Company)
RFCBC continues to phase out as the one loan relationship that remains is in foreclosure status. RFCBC recorded a loss of $87,000 for the quarter compared to $109,000 for the previous year quarter. The majority of the cost within the workout company remains to be legal cost associated with the remaining loans in litigation status. RFCBC has no employees, as the remaining workout relationships are being managed by a part-time consultant.
RURBANC DATA SERVICES, INC (RDSI)
Revenue for the quarter was $4.9 million, up $1.3 million, or 36.3 percent, above the $3.6 million reported for the second quarter of 2006. Compared with the linked quarter, revenue decreased by $206,000, or 4.0 percent; excluding the $180,000 of year-end processing fees included in the first quarter, second quarter revenue was essentially unchanged. RDSI's strong organic growth from its existing customer base was supplemented by the addition of DCM customers. Rurban completed the acquisition of DCM in the third quarter of 2006. RDSI continues to add new clients; during the second quarter of 2007, it signed three new data processing clients and three new item processing clients. RDSI has seven conversions scheduled between now and the end of the year. Currently, RDSI services over 106 community banks, contributing to over 77.5 percent of Rurban's non-interest income year-to-date.
Earnings for the second quarter were $476,000 compared to $451,000 for the year-ago quarter, up $25,000, or 5.5 percent; on a linked quarter basis, second quarter net income declined by $214,000, or 31.0 percent. RDSI's first quarter results include $180,000 of end of year processing, as well as other one-time revenue items totaling $40,000.
About Rurban Financial Corp.
Rurban Financial Corp. is a publicly-held financial services holding company based in Defiance, Ohio with assets of $548.2 million as of June 30, 2007. Rurban's wholly-owned subsidiaries are The State Bank and Trust Company, including Reliance Financial Services, Rurbanc Data Services, Inc. (RDSI), and DCM. The community bank offers financial services through its 18 branches in Allen, Defiance, Fulton, Lucas, Paulding and Wood Counties, Ohio and Allen County, Indiana. Reliance Financial Services offers a diversified array of trust and financial services to customers throughout the Midwest. RDSI and DCM provide data and item processing services to community banks in Arkansas, Florida, Illinois, Indiana, Michigan, Missouri, Ohio and Wisconsin. Rurban's common stock is quoted on the NASDAQ Global Market under the symbol RBNF. The Company currently has 10,000,000 shares of stock authorized and 5,015,433 shares outstanding. The Company's website is http://www.rurbanfinancial.net.
Forward-Looking Statements
Certain statements within this document, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties and actual results may differ materially from those predicted by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties inherent in the national and regional banking, insurance and mortgage industries, competitive factors specific to markets in which Rurban and its subsidiaries operate, future interest rate levels, legislative and regulatory actions, capital market conditions, general economic conditions, geopolitical events, the loss of key personnel and other factors.
Forward-looking statements speak only as of the date on which they are made, and Rurban undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made. All subsequent written and oral forward-looking statements attributable to Rurban or any person acting on our behalf are qualified by these cautionary statements.
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 2007 and December 31, 2006
June December
2007 2006
------------ ------------
(Unaudited)
ASSETS
Cash and due from banks $ 12,120,732 $ 13,381,791
Federal funds sold -- 9,100,000
------------ ------------
Cash and cash equivalents 12,120,732 22,481,791
Interest-earning deposits in other
financial institutions -- 150,000
Available-for-sale securities 93,376,749 102,462,075
Loans held for sale 389,900 390,100
Loans, net of unearned income 381,661,661 370,101,809
Allowance for loan losses (3,824,445) (3,717,377)
Premises and equipment, net 15,710,869 15,449,774
Purchased software 4,639,198 4,618,691
Federal Reserve and Federal Home Loan
Bank Stock 4,040,700 3,993,450
Foreclosed assets held for sale, net 83,891 82,397
Accrued interest receivable 2,971,082 3,129,774
Goodwill 13,690,092 13,674,058
Core deposits and other intangibles 5,503,122 5,858,982
Cash value of life insurance 10,953,313 10,771,843
Other assets 6,883,346 6,559,886
------------ ------------
Total assets $548,200,210 $556,007,253
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Demand $ 41,255,495 $ 46,565,554
Savings, interest checking and
money market 140,774,725 130,267,333
Time 225,554,636 237,722,558
------------ ------------
Total deposits 407,584,856 414,555,445
Notes payable 1,126,860 2,589,207
Advances from Federal Home Loan Bank 21,000,000 21,000,000
Fed Funds Purchased 1,000,000 --
Repurchase Agreements 33,116,993 32,270,900
Trust preferred securities 20,620,000 20,620,000
Accrued interest payable 2,121,446 2,224,413
Other liabilities 4,280,560 5,792,135
------------ ------------
Total liabilities 490,850,715 499,052,100
Shareholders' Equity
Common stock 12,568,583 12,568,583
Additional paid-in capital 14,882,083 14,859,165
Retained earnings 31,291,504 30,407,298
Accumulated other comprehensive loss (1,243,475) (879,893)
Treasury stock (149,200) --
-----------------------------
Total shareholders' equity 57,349,495 56,955,153
------------ ------------
Total liabilities and shareholders'
equity $548,200,210 $556,007,253
============ ============
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
For The Second Quarter Ended June 30, 2007 and 2006
Second Second Increase/
Quarter Quarter (Decrease)
2007 2006 $
----------- ----------- -----------
Interest income
Loans
Taxable $ 6,976,506 $ 6,043,057 $ 933,449
Tax-exempt 17,250 15,157 2,093
Securities
Taxable 1,044,300 1,333,858 (289,558)
Tax-exempt 160,845 136,570 24,275
Other 35,138 14,046 21,092
----------- ----------- -----------
Total interest income 8,234,039 7,542,688 691,351
Interest expense
Deposits 3,381,667 2,556,180 825,487
Other borrowings 57,546 26,148 31,398
Retail Repurchase
Agreements 351,833 159,276 192,557
Federal Home Loan Bank
advances 242,658 533,845 (291,187)
Trust preferred securities 450,197 436,776 13,421
----------- ----------- -----------
Total interest expense 4,483,901 3,712,225 771,676
----------- ----------- -----------
Net interest income 3,750,138 3,830,463 (80,325)
Provision for loan losses 145,594 56,321 89,273
----------- ----------- -----------
Net interest income after
provision for loan losses 3,604,544 3,774,142 (169,598)
Non-interest income
Data service fees 4,629,258 3,286,586 1,342,672
Trust fees 865,880 792,227 73,653
Customer service fees 533,209 542,687 (9,478)
Net gain on sales of
loans 174,168 71,664 102,504
Net realized gains on
sales of available-for-
sale securities 367 -- 367
Loan servicing fees 89,432 117,785 (28,353)
Gain on sale of assets 14,010 78,558 (64,548)
Other income 201,376 378,745 (177,369)
----------- ----------- -----------
Total non-interest
income 6,507,700 5,268,252 1,239,448
Non-interest expense
Salaries and employee
benefits 4,185,324 3,795,252 390,072
Net occupancy expense 505,925 425,918 80,007
Equipment expense 1,676,676 1,347,634 329,042
Data processing fees 114,243 119,368 (5,125)
Professional fees 501,015 524,902 (23,887)
Marketing expense 187,098 242,498 (55,400)
Printing and office
supplies 181,362 173,361 8,001
Telephone and
communication 437,690 407,648 30,042
Postage and delivery
expense 384,091 122,267 261,824
State, local and other
taxes 165,175 190,436 (25,261)
Employee expense 280,078 260,523 19,555
Other expenses 446,693 470,068 (23,375)
----------- ----------- -----------
Total non-interest
expense 9,065,370 8,079,875 985,495
----------- ----------- -----------
Income before income tax
expense 1,046,874 962,519 84,355
Income tax expense 261,829 248,996 12,833
----------- ----------- -----------
Net income $ 785,045 $ 713,523 $ 71,522
=========== =========== ===========
Earnings per common share:
Basic $ 0.16 $ 0.14 $ 0.02
=========== =========== ===========
Diluted $ 0.16 $ 0.14 $ 0.02
=========== =========== ===========
Average diluted shares
outstanding 5,030,441 4,569,316
=========== ===========
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
For The Three Months Ended June 30, 2007 and March 31, 2007
Second First Increase/
Quarter Quarter (Decrease)
2007 2007 $
----------- ----------- -----------
Interest income
Loans
Taxable $ 6,976,506 $ 6,676,813 $ 299,693
Tax-exempt 17,250 17,293 (43)
Securities
Taxable 1,044,300 1,091,197 (46,897)
Tax-exempt 160,845 153,057 7,788
Other 35,138 78,468 (43,330)
----------- ----------- -----------
Total interest income 8,234,039 8,016,828 217,211
Interest expense
Deposits 3,381,667 3,333,730 47,937
Other borrowings 57,546 51,072 6,474
Retail Repurchase
Agreements 351,833 343,849 7,984
Federal Home Loan Bank
advances 242,658 249,587 (6,929)
Trust preferred securities 450,197 445,314 4,883
----------- ----------- -----------
Total interest expense 4,483,901 4,423,552 60,349
----------- ----------- -----------
Net interest income 3,750,138 3,593,276 156,862
Provision for loan losses 145,594 92,640 52,954
----------- ----------- -----------
Net interest income after
provision for loan losses 3,604,544 3,500,636 103,908
Non-interest income
Data service fees 4,629,258 4,834,136 (204,878)
Trust fees 865,880 826,382 39,498
Customer service fees 533,209 528,424 4,785
Net gain on sales of
loans 174,168 54,279 119,889
Net realized gains on
sales of available-for-
sale securities 367 -- 367
Loan servicing fees 89,432 108,706 (19,274)
Gain on sale of assets 14,010 35,967 (21,957)
Other income 201,376 350,848 (149,472)
----------- ----------- -----------
Total non-interest
income 6,507,700 6,738,742 (231,042)
Non-interest expense
Salaries and employee
benefits 4,185,324 4,396,787 (211,463)
Net occupancy expense 505,925 527,133 (21,208)
Equipment expense 1,676,676 1,605,873 70,803
Data processing fees 114,243 156,181 (41,938)
Professional fees 501,015 677,391 (176,376)
Marketing expense 187,098 155,685 31,413
Printing and office
supplies 181,362 198,092 (16,730)
Telephone and
communication 437,690 445,204 (7,514)
Postage and delivery
expense 384,091 392,261 (8,170)
State, local and other
taxes 165,175 199,741 (34,566)
Employee expense 280,078 255,069 25,009
Other expenses 446,693 290,836 155,857
----------- ----------- -----------
Total non-interest
expense 9,065,370 9,300,253 (234,883)
----------- ----------- -----------
Income before income tax
expense 1,046,874 939,125 107,749
Income tax expense 261,829 236,672 25,157
----------- ----------- -----------
Net income $ 785,045 $ 702,453 $ 82,592
=========== =========== ===========
Earnings per common share:
Basic $ 0.16 $ 0.14 $ 0.02
=========== =========== ===========
Diluted $ 0.16 $ 0.14 $ 0.02
=========== =========== ===========
Average diluted shares
outstanding 5,030,441 5,027,613
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
For The Six Months Ended June 30, 2007 and 2006
Increase/
Six Months Six Months (Decrease)
2007 2006 $
----------- ----------- -----------
Interest income
Loans
Taxable $13,653,319 $11,597,211 $ 2,056,108
Tax-exempt 34,543 27,392 7,151
Securities
Taxable 2,135,497 2,646,459 (510,962)
Tax-exempt 313,902 268,403 45,499
Other 113,606 50,312 63,294
----------- ----------- -----------
Total interest income 16,250,867 14,589,777 1,661,090
Interest expense
Deposits 6,715,397 4,677,394 2,038,003
Other borrowings 108,618 52,447 56,171
Repurchase Agreements 695,682 283,553 412,129
Federal Home Loan Bank
advances 492,245 1,016,666 (524,421)
Trust preferred securities 895,511 865,198 30,313
----------- ----------- -----------
Total interest expense 8,907,453 6,895,258 2,012,195
----------- ----------- -----------
Net interest income 7,343,414 7,694,519 (351,105)
Provision for loan losses 238,234 302,321 (64,087)
----------- ----------- -----------
Net interest income after
provision for loan losses 7,105,180 7,392,198 (287,018)
Non-interest income
Data service fees 9,463,394 6,527,720 2,935,674
Trust fees 1,692,262 1,607,678 84,584
Customer service fees 1,061,633 1,092,754 (31,121)
Net gain on sales of loans 228,447 132,710 95,737
Net realized gains on
sales of available-for-
sale securities 367 -- 367
Loan servicing fees 198,138 204,479 (6,341)
Gain on sale of assets 49,977 59,432 (9,455)
Other income 552,224 651,778 (99,554)
----------- ----------- -----------
Total non-interest
income 13,246,442 10,276,551 2,969,891
Non-interest expense
Salaries and employee
benefits 8,582,111 7,652,985 929,126
Net occupancy expense 1,033,058 865,867 167,191
Equipment expense 3,282,549 2,723,461 559,088
Data processing fees 270,424 255,958 14,466
Professional fees 1,178,406 1,044,267 134,139
Marketing expense 342,783 368,946 (26,163)
Printing and office
supplies 379,454 326,345 53,109
Telephone and
communication 882,894 810,015 72,879
Postage and delivery
expense 776,352 254,260 522,092
State, local and other
taxes 364,916 324,293 40,623
Employee expense 535,147 509,912 25,235
Other expenses 737,529 893,597 (156,068)
----------- ----------- -----------
Total non-interest
expense 18,365,623 16,029,906 2,335,717
----------- ----------- -----------
Income before income tax
expense 1,985,999 1,638,843 347,156
Income tax expense 498,501 402,775 95,726
----------- ----------- -----------
Net income $ 1,487,498 $ 1,236,068 $ 251,430
=========== =========== ===========
Earnings per common share:
Basic $ 0.30 $ 0.25 $ 0.05
=========== =========== ===========
Diluted $ 0.30 $ 0.25 $ 0.05
=========== =========== ===========
Average diluted shares
outstanding 5,026,893 5,029,338
=========== ===========
Rurban Financial Corp.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
---------------------- -------- -------- -------- --------
(dollars in thousands 2nd Qtr YTD 2nd Qtr YTD
except per share data) 2007 2007 2006 2006
---------------------- -------- -------- -------- --------
EARNINGS
Net interest income $ 3,750 $ 7,344 $ 3,830 $ 7,694
Provision for loan
loss $ 146 $ 238 $ 56 $ 302
Non-interest income $ 6,508 $ 13,246 $ 5,268 $ 10,276
Revenue (net
interest income
plus non-interest
income) $ 10,258 $ 20,590 $ 9,098 $ 17,970
Non-interest expense $ 9,065 $ 18,366 $ 8,080 $ 16,030
Net income (loss) $ 785 $ 1,487 $ 714 $ 1,237
PER SHARE DATA
Basic earnings per
share $ 0.16 $ 0.30 $ 0.14 $ 0.25
Diluted earnings per
share $ 0.16 $ 0.30 $ 0.14 $ 0.25
Book value per share $ 11.43 $ 11.43 $ 10.75 $ 10.75
Tangible book value
per share $ 7.83 $ 7.83 $ 8.28 $ 8.28
Cash dividend per
share $ 0.06 $ 0.12 $ 0.05 $ 0.10
PERFORMANCE RATIOS
Return on average
assets 0.57% 0.54% 0.52% 0.46%
Return on average
equity 5.45% 5.18% 5.28% 4.56%
Net interest margin
(tax equivalent) 3.19% 3.11% 3.25% 3.31%
Net interest margin
(Bank Only) 3.56% 3.51% 3.64% 3.66%
Non-interest expense /
Average assets 6.60% 6.65% 5.93% 5.91%
Efficiency Ratio -
bank (non-GAAP) 77.23% 80.69% 80.40% 83.23%
MARKET DATA PER SHARE
Market value per
share -- Period end $ 12.82 $ 12.82 $ 11.00 $ 11.00
Market as a % of book 1.12 1.12 1.02 1.02
Cash dividend yield 1.87% 1.87% 1.82% 1.82%
Period-end common
shares outstanding
(000) 5,015 5,015 5,027 5,027
Common stock market
capitalization
($000) $ 64,298 $ 64,298 $ 55,302 $ 55,302
CAPITAL & LIQUIDITY
Equity to assets 10.5% 10.5% 9.8% 9.8%
Period-end tangible
equity to assets 7.1% 7.1% 7.5% 7.5%
Tier 1 risk-based
capital ratio 14.9% 14.9% 16.7% 16.7%
Total risk-based
capital ratio 16.1% 16.1% 18.1% 18.1%
ASSET QUALITY
Net charge-offs /
(Recoveries) $ 90 $ 131 $ (33) $ 564
Net loan charge-offs
(Ann.) / Average
loans 0.09% 0.07% (0.04%) 0.33%
Non-performing loans $ 5,913 $ 5,913 $ 5,479 $ 5,479
OREO / OAOs $ 84 $ 84 $ 430 $ 430
Non-performing
assets $ 5,997 $ 5,997 $ 5,909 $ 5,909
Non-performing
assets / Total
assets 1.09% 1.09% 1.07% 1.07%
Allowance for loan
losses / Total
loans 1.00% 1.00% 1.23% 1.23%
Allowance for loan
losses /
Non-performing Assets 63.8% 63.8% 75.1% 75.1%
END OF PERIOD BALANCES
Total loans, net of
unearned income $381,662 $381,662 $359,854 $359,854
Allowance for loan
loss $ 3,824 $ 3,824 $ 4,438 $ 4,438
Total assets $548,200 $548,200 $551,845 $551,845
Deposits $407,585 $407,585 $400,956 $400,956
Stockholders' equity $ 57,349 $ 57,349 $ 54,026 $ 54,026
Full-time equivalent
employees 285 285 279 279
AVERAGE BALANCES
Loans $379,191 $375,499 $345,941 $339,026
Total earning assets $482,036 $483,449 $487,637 $480,862
Total assets $549,426 $552,398 $545,074 $542,755
Deposits $410,392 $412,979 $400,581 $396,777
Stockholders' equity $ 57,617 $ 57,443 $ 54,039 $ 54,247
Rurban Financial Corp.
Segment Reporting
Second Quarter Ended June 30, 2007
-----------------------------------------------
RFCBC
State Bank (Loan Workout Total
and Trust Company) Banking
-----------------------------------------------
Income Statement
Measures
----------------
Interest Income $ 8,268 $ -- $ 8,268
Interest Expense 3,996 -- 3,996
Net Interest Income 4,272 -- 4,272
Provision For
Loan Loss 151 (5) 146
Non-interest Income 1,858 -- 1,858
Non-interest Expense 4,711 137 4,848
Net Income Before
Taxes 1,268 (132) 1,136
Income Taxes 351 (45) 306
Net Income QTD $ 917 $ (87) $ 830
Performance Measures
--------------------
Average Assets
- QTD $ 529,071 $ 1,547 $ 530,618
ROAA 0.69% -- 0.63%
Average Equity
- QTD $ 54,905 $ 1,344 $ 56,249
ROAE 6.68% -- 5.90%
Efficiency Ratio
- % 74.99% -- 77.23%
Average Loans
- QTD $ 380,598 $ 582 $ 381,180
Average Deposits
- QTD $ 418,391 $ -- $ 418,391
--------------------------------------------------
Parent
Company Rurban
Data and Elimination Financial
Processing Other Entries Corp.
--------------------------------------------------
Income Statement
Measures
----------------
Interest Income $ 1 $ 1 $ (36) $ 8,234
Interest Expense 74 450 (36) 4,484
Net Interest
Income (73) (449) -- 3,750
Provision For
Loan Loss -- -- -- 146
Non-interest
Income 5,022 367 (739) 6,508
Non-interest
Expense 4,228 728 (739) 9,065
Net Income Before
Taxes 721 (810) -- 1,047
Income Taxes 245 (289) -- 262
Net Income QTD $ 476 $ (521) $ -- $ 785
Performance Measures
--------------------
Average Assets
- QTD $ 20,320 $ 78,908 $(80,420) $549,426
ROAA 9.37% -- -- 0.57%
Average Equity
- QTD $ 14,182 $ 57,617 $(70,431) $ 57,617
ROAE 13.43% -- -- 5.45%
Efficiency Ratio
- % 84.09% -- -- 86.61%
Average Loans
- QTD $ -- $ -- $ (1,989) $379,191
Average Deposits
- QTD $ -- $ -- $ (7,999) $410,392
Rurban Financial Corp.
Segment Reporting
Six Months Ended June 30, 2007
-----------------------------------------------
RFCBC
State Bank (Loan Workout Total
and Trust Company) Banking
-----------------------------------------------
Income Statement
Measures
----------------
Interest Income $ 16,338 $ 1 $ 16,339
Interest Expense 7,935 -- 7,935
Net Interest
Income 8,403 1 8,404
Provision For
Loan Loss 250 (12) 238
Non-interest
Income 3,751 -- 3,751
Non-interest
Expense 9,685 351 10,036
Net Income Before
Taxes 2,219 (338) 1,881
Income Taxes 595 (115) 480
Net Income YTD $ 1,624 $ (223) $ 1,401
Performance Measures
--------------------
Average Assets
- YTD $ 531,835 $ 1,729 $ 533,564
ROAA 0.61% -- 0.53%
Average Equity
- YTD $ 54,866 $ 1,423 $ 56,289
ROAE 5.92% -- 4.98%
Efficiency Ratio
- % 77.81% -- 80.69%
Average Loans
- YTD $ 377,112 $ 598 $ 377,710
Average Deposits
- YTD $ 421,357 $ -- $ 421,357
--------------------------------------------------
Parent
Company Rurban
Data and Elimination Financial
Processing Other Entries Corp.
--------------------------------------------------
Income Statement
Measures
----------------
Interest Income $ 1 $ 2 $ (91) $ 16,251
Interest Expense 168 895 (91) 8,907
Net Interest
Income (167) (893) -- 7,344
Provision For
Loan Loss -- -- -- 238
Non-interest
Income 10,271 695 (1,471) 13,246
Non-interest
Expense 8,337 1,464 (1,471) 18,366
Net Income
Before Taxes 1,767 (1,662) -- 1,986
Income Taxes 601 (582) -- 499
Net Income YTD $ 1,166 $ (1,080) $ -- $ 1,487
Performance Measures
--------------------
Average Assets
- YTD $ 20,430 $ 79,169 $(80,765) $552,398
ROAA 11.41% -- -- 0.54%
Average Equity
- YTD $ 13,887 $ 57,443 $(70,176) $ 57,443
ROAE 16.79% -- -- 5.18%
Efficiency Ratio
- % 81.25% -- -- 87.47%
Average Loans
- YTD $ -- $ -- $ (2,211) $375,499
Average Deposits
- YTD $ -- $ -- $ (8,378) $412,979
Rurban Financial Corp.
Proforma Performance Measurement
Quarterly Comparison - Second Quarter 2007
-------------------------------------------------
State Bank RFCBC (Loan Banking
and Workout Related
Trust Company) Entities
-------------------------------------------------
Average Assets
--------------
2Q07 $529,071 $ 1,547 $530,618
1Q07 $534,629 $ 1,914 $536,543
4Q06 $549,777 $ 2,178 $551,955
3Q06 $549,931 $ 2,451 $552,382
2Q06 $532,027 $ 5,477 $537,504
2nd Quarter
Comparison $ (2,956) $ (3,930) $ (6,886)
Revenue
-------
2Q07 $ 6,130 $ -- $ 6,130
1Q07 $ 6,024 $ 1 $ 6,025
4Q06 $ 6,345 $ 124 $ 6,469
3Q06 $ 6,393 $ 3 $ 6,396
2Q06 $ 6,221 $ 85 $ 6,306
2nd Quarter
Comparison $ (91) $ (85) $ (176)
Non-interest
Expenses
------------
2Q07 $ 4,712 $ 137 $ 4,849
1Q07 $ 4,973 $ 215 $ 5,188
4Q06 $ 5,747 $ 278 $ 6,025
3Q06 $ 4,970 $ 161 $ 5,131
2Q06 $ 4,877 $ 307 $ 5,184
2nd Quarter
Comparison $ (165) $ (170) $ (335)
Net Income
----------
2Q07 $ 917 $ (87) $ 830
1Q07 $ 707 $ (136) $ 571
4Q06 $ 569 $ (89) $ 480
3Q06 $ 872 $ (82) $ 790
2Q06 $ 888 $ (109) $ 779
2nd Quarter
Comparison $ 29 $ 22 $ 51
Efficiency Ratio
----------------
2Q07 74.99% -- 77.23%
1Q07 82.20% -- 85.47%
4Q06 88.78% -- 91.37%
3Q06 75.96% -- 78.44%
2Q06 76.56% -- 80.40%
2nd Quarter
Comparison (1.57%) -- (3.17%)
NPA/Total Assets
----------------
2Q07 1.03% -- --
1Q07 0.66% -- --
4Q06 0.61% -- --
3Q06 0.90% -- --
2Q06 0.86% -- --
2nd Quarter
Comparison 0.17% -- --
ROAA
----
2Q07 0.69% -- 0.63%
1Q07 0.53% -- 0.43%
4Q06 0.41% -- 0.35%
3Q06 0.63% -- 0.57%
2Q06 0.67% -- 0.58%
2nd Quarter
Comparison 0.03% -- 0.03%
ROAE
----
2Q07 6.68% -- 5.90%
1Q07 5.16% -- 4.05%
4Q06 4.20% -- 3.43%
3Q06 6.72% -- 5.83%
2Q06 6.95% -- 5.52%
2nd Quarter
Comparison (0.27%) -- (0.26%)
Average Equity
--------------
2Q07 $ 54,905 $ 1,344 $ 56,249
1Q07 $ 54,828 $ 1,502 $ 56,330
4Q06 $ 54,249 $ 1,714 $ 55,963
3Q06 $ 51,917 $ 2,261 $ 54,178
2Q06 $ 51,093 $ 5,393 $ 56,486
2nd Quarter
Comparison $ 3,812 $ (4,049) $ (237)
--------------------------------------------------
Parent
Company Intersegment Rurban
and Elimination Financial
RDSI Other Entries Corp.
--------------------------------------------------
Average Assets
--------------
2Q07 $ 20,320 $ 78,908 $ (80,420) $549,426
1Q07 $ 20,217 $ 79,251 $ (81,380) $554,631
4Q06 $ 19,695 $ 78,234 $ (80,077) $569,807
3Q06 $ 14,442 $ 75,666 $ (89,023) $553,465
2Q06 $ 13,368 $ 74,679 $ (80,477) $545,074
2nd Quarter
Comparison $ 6,952 $ 4,229 -- $(74,679)
Revenue
-------
2Q07 $ 4,949 $ (82) $ (739) $ 10,258
1Q07 $ 5,155 $ (116) $ (732) $ 10,332
4Q06 $ 4,944 $ 247 $ (500) $ 11,160
3Q06 $ 4,085 $ (219) $ (603) $ 9,659
2Q06 $ 3,632 $ (163) $ (677) $ 9,098
2nd Quarter
Comparison $ 1,317 $ 81 -- $ 1,160
Non-interest
Expenses
------------
2Q07 $ 4,228 $ 728 $ (739) $ 9,065
1Q07 $ 4,109 $ 736 $ (732) $ 9,301
4Q06 $ 4,026 $ 822 $ (514) $ 10,359
3Q06 $ 3,375 $ 612 $ (603) $ 8,515
2Q06 $ 2,949 $ 625 $ (678) $ 8,080
2nd Quarter
Comparison $ 1,279 $ 103 -- $ 985
Net Income
----------
2Q07 $ 476 $ (521) -- $ 785
1Q07 $ 690 $ (559) -- $ 702
4Q06 $ 606 $ (376) -- $ 710
3Q06 $ 478 $ (454) -- $ 814
2Q06 $ 451 $ (516) -- $ 714
2nd Quarter
Comparison $ 25 $ (5) -- $ 71
Efficiency Ratio
----------------
2Q07 84.09% -- -- 86.61%
1Q07 78.52% -- -- 88.33%
4Q06 80.40% -- -- 91.34%
3Q06 82.20% -- -- 86.80%
2Q06 81.19% -- -- 88.81%
2nd Quarter
Comparison 2.89% -- -- (2.20%)
NPA/Total Assets
----------------
2Q07 -- -- -- 1.09%
1Q07 -- -- -- 0.75%
4Q06 -- -- -- 0.70%
3Q06 -- -- -- 1.07%
2Q06 -- -- -- 1.07%
2nd Quarter
Comparison -- -- -- (0.86%)
ROAA
----
2Q07 9.37% -- -- 0.57%
1Q07 13.65% -- -- 0.51%
4Q06 12.31% -- -- 0.50%
3Q06 13.24% -- -- 0.59%
2Q06 13.49% -- -- 0.52%
2nd Quarter
Comparison 0.03% -- -- 0.03%
ROAE
----
2Q07 13.43% -- -- 5.45%
1Q07 20.63% -- -- 4.91%
4Q06 19.06% -- -- 5.08%
3Q06 21.26% -- -- 5.95%
2Q06 21.38% -- -- 5.28%
2nd Quarter
Comparison (0.26%) -- -- (0.26%)
Average Equity
--------------
2Q07 $ 14,182 $ 57,617 $ (70,431) $ 57,617
1Q07 $ 13,378 $ 57,192 $ (69,708) $ 57,192
4Q06 $ 12,721 $ 55,963 $ (68,684) $ 55,963
3Q06 $ 8,995 $ 54,702 $ (63,173) $ 54,702
2Q06 $ 8,437 $ 54,039 $ (64,923) $ 54,039
2nd Quarter
Comparison $ 5,745 $ 3,578 -- $ 3,578