DEFIANCE, Ohio, April 16, 2008 (PRIME NEWSWIRE) -- Rurban Financial Corp. (Nasdaq:RBNF), a leading provider of full-service community banking, investment management, trust services and bank data and item processing, reported first quarter 2008 earnings of $1.11 million, or $0.22 per diluted share, an increase of 58.0% and 60.0%, respectively, above the $702 thousand, or $0.14 per diluted share, reported in first quarter 2007. Improved performance reflects across-the-board improvement at both of Rurban's subsidiary companies, The State Bank and Trust Company and RDSI. The growth initiatives and improved efficiencies implemented over the past two years are providing clear and positive results.
Consolidated earnings for the 2008 first quarter include one-time pre-tax gains of $197,000 and $132,000, respectively, from the partial recovery of previously written-off WorldCom securities and proceeds from the sale of equity securities derived from VISA Inc.'s Initial Public Offering (IPO). These gains were partially offset by $176,000 of one-time expenses associated with the wind-down of RFCBC, Rurban's workout subsidiary. These one-time items resulted in a net after-tax gain of $101,000. The 2007 first quarter included a pre-tax merger-related expense of $95,000 ($63,000 after-tax). Excluding the after-tax impact of the $101,000 net gain for the 2008 quarter and the $63,000 expense for the year-ago quarter, operating earnings were $1.0 million in 2008, compared with $765,000 for the prior-year quarter, up 31.8%.
"This has been a break-through quarter for Rurban," commented Kenneth Joyce, President and CEO of Rurban Financial Corp. "While much of the banking industry has suffered from the financial and economic crises that began over a year ago, Rurban has proven to be more resilient. Our combination of net interest and non-interest income provides balance to our revenue stream, and enables us to be more resistant to interest rate swings. From our earlier experience with problem loans, we have built a credit infrastructure with strong controls and a disciplined lending team. These are the primary factors -- revenue growth and asset quality -- that influence our present and future performance, and that of the banking industry as a whole. We believe that Rurban is well-positioned for the current environment, and we know there are still many additional opportunities as we continue down this path."
The Banking Group (including RFCBC, the workout company) increased earnings from $571,000 for the first quarter of 2007, to $917,000 for the first quarter of 2008, an increase of 60.6%. Excluding earnings from the one-time net after-tax gain in the first quarter of 2008, and merger-related expenses from 2007, 2008 first quarter operating earnings were $881,000 versus $634,000 in 2007, up $247,000, or 39.0%.
RDSI had a record first quarter. The first quarter of 2008 net income was $800,000, compared with $690,000 in the 2007 first quarter, up $110,000, or 15.9%.
Highlights of Rurban's consolidated first quarter performance include:
* Rurban's revenue stream has benefited from the complementary contributions of both subsidiaries. RDSI revenue consists entirely of non-interest income, while State Bank has a mix of 66.3% net interest income and 33.6% non-interest income. The consolidated mix is approximately 66.3% non-interest and the remainder net interest income, a significant advantage in the current banking interest rate environment. * Rurban's Banking Group entered this declining rate environment liability-sensitive and has benefited from this positioning in the current interest rate environment. First quarter 2008 banking net interest margin was 3.45%, up 2 basis points from the linked quarter. * Consolidated return on average assets (ROAA) was 0.78% for the first quarter of 2008, compared with 0.51% for the year-ago quarter, up 27 basis points. On a core operating basis, first quarter ROAA was 0.71% in 2008, and 0.56% in 2007, an increase of 15 basis points. * Profitability has benefited largely from revenue growth; as a percent of average assets, annualized revenue has increased from 7.45% in the first quarter of 2007, to 7.99% for the current quarter -- an improvement of 54 basis points. Meanwhile, annualized operating expenses were a stable percent of average assets, at 6.77%. As Rurban continues with the successful implementation of its expansion strategy, operating leverage should provide growing profitability. * Loans grew $18.7 million, or 5.0%, over the past twelve months, reflecting Rurban's entry into higher-growth markets, such as Lima, Toledo, Fort Wayne and Columbus. Rurban's strategy to complete acquisitions and open loan production offices, followed by full- service branches, has been a cost-effective approach to building its franchise. CONSOLIDATED - FIRST QUARTER RESULTS (Dollars in thousands except per share data) OPERATING EARNINGS:* 1Q 2008 4Q 2007 1Q 2007 -------------------- ------- ------- ------- Net interest income $ 3,817 $ 3,783 $ 3,593 Recurring non-interest income 7,186 6,832 6,739 Operating revenue 11,003 10,615 10,332 Provision for loan losses 192 143 93 Operating expense 9,601 9,164 9,300 Net income (GAAP) 1,109 906 702 Operating income 1,008 906 765 Diluted EPS $ 0.22 $ 0.18 $ 0.14 * Nonrecurring items in 1Q 2008 are (pre-tax) gains of $197,500 from WorldCom recovery, $132,000 of proceeds from VISA IPO and expenses of $176,000 associated with RFCBC. Nonrecurring item in 1Q 2007 was $95,000 of merger-related expense
Operating revenue, consisting of net interest income and recurring non-interest income, was $11.0 million for the first quarter of 2008, up 6.5% from the year-ago quarter. For both quarters, non-interest income contributed approximately 65% of total operating revenue. Both Banking and RDSI contributed to this growth -- net interest income and fee income grew 10.4% and 5.8%, respectively, over first quarter 2007 results. Net interest income, contributed by the Banking Group, grew 10.4% from the combined impact of a 4.9% increase in average loans and a 7.2% improvement in net interest margin.
Operating expenses, excluding non-recurring items, were $9.4 million for the first quarter of 2008, compared with $9.2 million for the first quarter of 2007, an increase of $200,000, or 2.4%. RDSI took billing for postage in-house during the quarter resulting in additional postage expense of $230,000 being recorded. This is offset by increases in revenues. Excluding all non-recurring items, operating expenses were flat for the first quarter 2008 compared to the first quarter of 2007. Expenses are well-controlled, mainly as a result of the efficiencies completed throughout 2007. The reduction in staff kept salaries and employee benefits in check, and virtually unchanged, over the course of the past twelve months.
BANK OPERATING RESULTS
Net income for the Banking Group was $917,000 for the first quarter of 2008 compared with $571,000 reported for the prior-year quarter, an increase of 60.6%. Included in first quarter 2008 results are 50% of the $197,500 recovery on previously charged-off WorldCom bond, (the other 50% was recorded at the holding company level), $132,000 in proceeds from the VISA Inc. IPO, and the $176,000 of one-time expenses.
Mr. Joyce commented, "Our staff has worked hard and smart to obtain these first quarter results. Not only has the Banking Group produced improved earnings, but also, we've repositioned the bank according to the plan that we developed over the course of two years, and it's exciting to see this plan deliver. While current quarter results benefited from a number of nonrecurring items, our performance is still at improved levels, whether measured by GAAP, or by operating earnings. All of our banking offices have been instrumental in expanding our loan portfolio and generating mortgage originations. We originated $18.0 million in mortgage loans during the first quarter 2008 -- this compares to $8.4 million for the first quarter of 2007. These positive results reflect several changes in structure and function we had implemented in 2007, and will continue to execute in 2008."
BANKING - QUARTERLY RESULTS (Dollars in thousands except per share data) OPERATING EARNINGS: 1Q 2008 4Q 2007 1Q 2007 ------------------- ------- ------- ------- Net interest income $ 4,295 $ 4,287 $ 4,131 Recurring non-interest income 1,938 1,945 1,894 Operating revenue 6,233 6,232 6,025 Provision for loan losses 192 143 93 Operating expense 5,018 4,908 5,188 Net income (GAAP) 917 836 571 Operating income $ 881 $ 836 $ 634
Operating revenue, consisting of net interest income and recurring non-interest income, totaled $6.2 million for the first quarter of 2008, compared with $6.0 million for the first quarter of 2007, an increase of 3.5%. Net interest income increased 4.0% to $4.3 million, reflecting earning asset growth of 3.0% and a two basis point expansion in the net interest margin to 3.45%. Mr. Joyce added, "State Bank's net interest margin is being well-managed in this declining interest rate environment and we are being aided by our balance sheet positioning. Non-interest income, excluding non-recurring items, increased to $1.94 million, or 2.3%, compared to the first quarter of 2007. Growth in deposit and mortgage banking fees were offset by slight declines in other income and loan servicing fees."
The Banking Group took a slightly larger provision for loan losses than in previous quarters. The $192,000 loan loss provision more than replaced the level of loans charged-off, which totaled $166,000. Total Allowance for loan losses to total loans was 1.02%, and consistent with the previous year levels.
Operating expenses, excluding non-recurring items, were $4.8 million for the first quarter of 2008, down $251,000, or 4.9%, reported for the prior-year quarter. This decline is attributable to the reduction of 25 full-time equivalent positions during the first quarter of 2007. Reflecting this improvement, the efficiency ratio declined to 75.90% for the current quarter, compared with 76.68% for the linked quarter, and 85.47% for the prior-year quarter.
Total loans were $392.0 million on March 31, 2008, up $18.7 million, or 5.0%, from 12 months ago and up $2.7 million, or an annualized 2.8%, from the linked quarter. Growth over the past twelve months was derived primarily from commercial real estate loans, up $17.4 million, and commercial business loans, up $9.3 million. Commercial loans now account for 65.9% of the loan portfolio, compared with 62.3%, twelve months ago. Linked quarter growth came from agricultural loans, up $4.1 million, and commercial real estate loans, up $2.9 million. Growth for the linked quarter was primarily offset by slight declines in consumer and residential loans.
Total deposits on March 31, 2008 were $416.7 million, up $4.1 million, or 1.0%, from the March 2007 quarter-end. The more robust linked quarter results reflect Money Market Deposit growth of $11.3 million and Interest Checking Deposits growth of $5.2 million. These increases were partially offset by a $2.9 million decline in Retail Time Deposits, a $2.1 million decline in Brokered Time Deposits, and a $1.0 million decline in Savings Deposits. The High Performance Checking promotion begun in April of 2007 has generated $6.2 million in new retail checking account balances at a funding cost of 1.00%. Retail Time Deposits have declined by $10.3 million from the year-ago quarter, reflecting the execution of run-off of municipal deposits as part of the planned balance sheet restructuring.
"We have spent a considerable amount of time restructuring our balance sheet over the past two years," commented Mr. Joyce. "We have dedicated as much time on the liability side of our balance sheet as we have on the asset side. The percentage of transaction account balances to total deposits increased to 47.6% for the current quarter compared to 43.8% for the prior-year first quarter. This has contributed significantly to our reduction in cost of funds."
ASSET QUALITY (Dollars in thousands except percent data) ASSET QUALITY 1Q 2008 4Q 2007 1Q 2007 ------------- ------- ------- ------- Net charge-offs $ 166 $ 89 $ 41 (Ann.) Net charge-offs to avg. loans 0.17% 0.09% 0.04% Non-performing assets (NPAs) $ 6,967 $ 6,162 $ 4,112 NPA / Total assets 1.22% 1.10% 0.75% Allowance for loan losses $ 4,016 $ 3,990 $ 3,769 Allowance for loan losses / Loans 1.02% 1.03% 1.01%
Non-performing assets (loans + OREO + OAO) were $7.0 million, or 1.22%, of total assets on March 31, 2008, compared with $6.2 million, or 1.10%, of assets for the linked quarter and $4.1 million, or 0.75%, of assets 12 months ago. The increase in non-performing assets was primarily due to four credits. Management does not anticipate losses on these credits. Also during the quarter, the company was successful in taking title to one of the three remaining legacy credits, which increased OREO balances. This represents a step in clearing this asset off the balance sheet, aiding us in our goal of reducing NPA's during 2008.
RDSI RESULTS
First quarter 2008 net income for RDSI was $800,000, an increase of 15.9% from the $690,000 reported for the prior-year first quarter. Mr. Joyce commented, "RDSI continues to improve its performance through strong revenue growth and disciplined control of expenses. We converted thirteen new clients over the past year, and have a pipeline in place that should support continued growth through 2008."
Total revenue for first quarter of 2008 was $5.6 million, an increase 8.7% above the $5.2 million reported for the first quarter of 2007. The increase in revenue was aided by $237,000 of revenue associated with postage fees. During the first quarter, RDSI brought the billing for postage associated with client banks in-house. Excluding this change, revenue increased $214,000, or 16.6%, on an annualized basis.
As of March, 2008 the RDSI (including DCM) roster of clients totaled 116 banking organizations, representing a net increase of ten clients since March 31, 2007. RDSI provided Data Processing Services to 76 clients and Item Processing Services to a total of 92 clients.
Operating expenses were $4.4 million for first quarter 2008, up $285,000, or 6.9%, from the first quarter of 2007. The increase was due largely to postage expenses associated with the aforementioned in-house process. Excluding the postage change, operating expenses increased $55,000, or 1.3%, reflecting several efficiencies gained on consolidations within the item processing segment of RDSI's business.
Mr. Joyce concluded, "We are very pleased with RDSI's performance this past quarter, and continue to improve upon both revenue and expenses -- identifying new key growth areas and conservatively managing operating expenses -- to continue our net income growth. As always, we will be working to maximize growth and profitability for Rurban Financial Corp. and its shareholders."
Rurban continues to maintain a strong capital position. Stockholders' equity totaled $59.9 million, on March 31, 2008, an increase of $2.2 million, or 3.7%, from 12 months ago. Capital ratios exceed the regulatory minimums for a well-capitalized institution.
About Rurban Financial Corp.
Rurban Financial Corp. is a publicly-held financial services holding company based in Defiance, Ohio. Rurban's wholly-owned subsidiaries are The State Bank and Trust Company, including Reliance Financial Services and Rurbanc Data Services, Inc. (RDSI), including DCM. The State Bank and Trust Company offers financial services through its 16 branches in Allen, Defiance, Fulton, Lucas, Paulding and Wood Counties, Ohio and Allen County, Indiana and a Loan Production Office in Franklin County, Ohio. Reliance Financial Services, a division of the Bank, 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, Nebraska, Nevada, 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 4,941,933 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. CONSOLIDATED BALANCE SHEETS March 31, 2008, December 31, 2007 and March 31, 2007 March December March 2008 2007 2007 ---- ---- ---- (Unaudited) (Unaudited) ASSETS Cash and due from banks $ 15,758,593 $ 15,183,627 $ 10,627,291 Federal funds sold 6,400,000 2,000,000 6,500,000 ------------ ------------ ------------ Cash and cash equivalents 22,158,593 17,183,627 17,127,291 Interest-earning deposits in other financial institutions -- -- 150,000 Available-for-sale securities 94,378,377 92,661,386 97,148,409 Loans held for sale 2,464,643 1,649,758 110,697 Loans, net of unearned income 391,962,691 389,268,744 373,293,814 Allowance for loan losses (4,016,230) (3,990,455) (3,768,814) Premises and equipment, net 15,180,760 15,128,754 15,912,493 Purchased software 4,149,202 4,282,563 4,482,113 Federal Reserve and Federal Home Loan Bank Stock 4,062,100 4,021,200 4,040,700 Foreclosed assets held for sale, net 1,572,644 124,131 9,400 Accrued interest receivable 2,752,252 3,008,968 2,820,915 Goodwill 13,940,618 13,940,618 13,690,092 Core deposits and other intangibles 4,961,846 5,135,228 5,683,598 Cash value of life insurance 12,276,003 12,160,581 10,861,017 Other assets 5,889,849 6,638,895 7,323,829 ------------ ------------ ------------ Total assets $571,733,348 $561,213,998 $548,885,554 ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Deposits Non interest bearing demand $ 41,748,793 $ 41,541,297 $ 43,759,627 Interest bearing NOW 59,547,916 54,308,665 47,026,613 Savings 24,289,198 25,320,126 27,738,612 Money Market 72,676,846 61,380,252 61,989,662 Time Deposits 218,449,515 223,480,842 232,078,426 ------------ ------------ ------------ Total deposits 416,712,268 406,031,182 412,592,940 Notes payable 817,584 922,457 2,515,911 Advances from Federal Home Loan Bank 23,000,000 24,000,000 17,500,000 Repurchase Agreements 43,536,570 43,006,438 30,827,195 Trust preferred securities 20,620,000 20,620,000 20,620,000 Accrued interest payable 2,481,629 2,532,914 2,233,625 Other liabilities 4,694,986 4,775,773 4,884,579 ------------ ------------ ------------ Total liabilities 511,863,037 501,888,764 491,174,250 Shareholders' Equity Common stock 12,568,583 12,568,583 12,568,583 Additional paid-in capital 14,944,315 14,923,571 14,872,424 Retained earnings 32,956,244 32,361,106 30,808,105 Accumulated other comprehensive income (loss) 432,429 82,235 (537,808) Treasury stock (1,031,260) (610,260) -- ------------ ------------ ------------ Total shareholders' equity 59,870,311 59,325,235 57,711,304 ------------ ------------ ------------ Total liabilities and shareholders' equity $571,733,348 $561,213,998 $548,885,554 ============ ============ ============ RURBAN FINANCIAL CORP. CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED For The Three Months Ended March 31, 2008 and 2007 and December 2007 First Fourth First Quarter Quarter Quarter 2008 2007 2007 ---- ---- ---- Interest income Loans Taxable $ 6,808,196 $ 7,056,261 $ 6,676,813 Tax-exempt 21,350 22,240 17,293 Securities Taxable 1,039,894 1,106,834 1,091,197 Tax-exempt 158,367 161,830 153,057 Other 97,409 61,257 78,468 ----------- ----------- ----------- Total interest income 8,125,216 8,408,422 8,016,828 Interest expense Deposits 3,091,902 3,383,225 3,333,730 Other borrowings 17,506 25,215 51,072 Retail Repurchase Agreements 460,552 484,118 343,849 Federal Home Loan Bank advances 302,336 276,492 249,587 Trust preferred securities 435,704 456,427 445,314 ----------- ----------- ----------- Total interest expense 4,308,000 4,625,477 4,423,552 ----------- ----------- ----------- Net interest income 3,817,216 3,782,945 3,593,276 Provision for loan losses 192,218 142,663 92,640 ----------- ----------- ----------- Net interest income after provision for loan losses 3,624,998 3,640,282 3,500,636 Non-interest income Data service fees 5,264,565 4,914,328 4,834,136 Trust fees 855,107 873,069 826,382 Customer service fees 586,207 593,665 528,424 Net gain on sales of loans 274,603 137,611 54,279 Net realized gain on sales of securities -- 1,631 -- Net proceeds from liquidation of equity securities 132,106 -- -- Investment securities recoveries 197,487 -- -- Loan servicing fees 62,940 80,590 108,706 Gain (loss) on sale of assets (71,032) (32,362) 35,967 Other income 213,530 263,583 350,848 ----------- ----------- ----------- Total non-interest income 7,515,513 6,832,115 6,738,742 Non-interest expense Salaries and employee benefits 4,438,764 4,134,242 4,396,787 Net occupancy expense 566,016 587,150 527,133 Equipment expense 1,567,637 1,678,311 1,605,873 Data processing fees 96,567 97,092 156,181 Professional fees 570,687 586,327 677,391 Marketing expense 181,747 218,549 155,685 Printing and office supplies 186,052 151,943 198,092 Telephone and communication 421,929 451,918 445,204 Postage and delivery expense 602,634 376,777 392,261 State, local and other taxes 180,768 115,441 199,741 Employee expense 230,611 281,682 255,069 Other expenses 557,948 485,154 290,836 ----------- ----------- ----------- Total non-interest expense 9,601,360 9,164,586 9,300,253 ----------- ----------- ----------- Income before income tax expense 1,539,151 1,307,811 939,125 Income tax expense 429,795 402,275 236,672 ----------- ----------- ----------- Net income $ 1,109,356 $ 905,536 $ 702,453 =========== =========== =========== Earnings per common share: Basic $ 0.22 $ 0.18 $ 0.14 =========== =========== =========== Diluted $ 0.22 $ 0.18 $ 0.14 =========== =========== =========== RURBAN FINANCIAL CORP. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) ---------------------------------- (dollars in -------- -------- -------- -------- -------- thousands except 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr per share data) 2008 2007 2007 2007 2007 ------------------- -------- -------- -------- -------- -------- EARNINGS Net interest income $ 3,817 $ 3,783 $ 3,661 $ 3,750 $ 3,593 Provision for loan loss $ 192 $ 143 $ 140 $ 146 $ 93 Non-interest income $ 7,516 $ 6,832 $ 6,783 $ 6,508 $ 6,739 Revenue (net interest income plus non-interest income) $ 11,333 $ 10,615 $ 10,444 $ 10,258 $ 10,332 Non-interest expense $ 9,601 $ 9,164 $ 9,106 $ 9,065 $ 9,301 Net income $ 1,109 $ 906 $ 864 $ 785 $ 702 PER SHARE DATA Basic earnings per share $ 0.22 $ 0.18 $ 0.17 $ 0.16 $ 0.14 Diluted earnings per share $ 0.22 $ 0.18 $ 0.17 $ 0.16 $ 0.14 Book value per share $ 12.11 $ 11.92 $ 11.70 $ 11.43 $ 11.48 Tangible book value per share $ 8.10 $ 8.00 $ 7.87 $ 7.83 $ 7.69 Cash dividend per share $ 0.08 $ 0.07 $ 0.07 $ 0.06 $ 0.06 PERFORMANCE RATIOS Return on average assets 0.78% 0.64% 0.62% 0.57% 0.51% Return on average equity 7.50% 6.15% 5.97% 5.45% 4.91% Net interest margin (tax equivalent) 3.26% 3.12% 2.96% 3.19% 3.04% Net interest margin (Bank Only) 3.45% 3.43% 3.41% 3.56% 3.45% Non-interest expense / Average assets 6.77% 6.48% 6.56% 6.60% 6.71% Efficiency Ratio - bank (non-GAAP) 73.20% 76.68% 80.17% 77.23% 87.20% MARKET DATA PER SHARE Market value per share -- Period end $ 10.24 $ 12.49 $ 12.65 $ 12.82 $ 11.84 Market as a % of book 0.85 1.05 1.08 1.12 1.03 Cash dividend yield 3.13% 2.24% 2.21% 1.87% 2.03% Period-end common shares outstanding (000) 4,942 4,979 4,999 5,015 5,027 Common stock market capitalization ($000) $ 50,605 $ 62,188 $ 63,237 $ 64,298 $ 59,525 CAPITAL & LIQUIDITY Equity to assets 10.5% 10.6% 10.3% 10.5% 10.5% Period-end tangible equity to tangible assets 7.2% 7.3% 7.2% 7.4% 7.3% Tier 1 risk-based capital ratio 14.9% 14.8% 14.6% 14.9% 14.8% Total risk-based capital ratio 15.8% 16.0% 15.7% 16.1% 15.9% ASSET QUALITY Net charge-offs / (Recoveries) $ 166 $ 89 $ 28 $ 90 $ 41 Net loan charge-offs (Ann.) / Average loans 0.17% 0.09% 0.03% 0.09% 0.04% Non-performing loans $ 5,305 $ 5,990 $ 6,361 $ 5,913 $ 4,103 OREO / OAOs $ 1,662 $ 172 $ 71 $ 84 $ 9 Non-performing assets $ 6,967 $ 6,162 $ 6,432 $ 5,997 $ 4,112 Non-performing assets / Total assets 1.22% 1.10% 1.14% 1.09% 0.75% Allowance for loan losses / Total loans 1.02% 1.03% 1.01% 1.00% 1.01% Allowance for loan losses / Non-performing Assets 57.6% 64.8% 61.2% 63.8% 91.6% END OF PERIOD BALANCES Total loans, net of unearned income $391,963 $389,084 $388,264 $381,662 $373,294 Allowance for loan loss $ 4,016 $ 3,990 $ 3,937 $ 3,824 $ 3,769 Total assets $571,733 $561,214 $565,674 $548,200 $548,886 Deposits $416,712 $406,031 $413,152 $407,585 $412,593 Stockholders' equity $ 59,870 $ 59,325 $ 58,504 $ 57,349 $ 57,711 Full-time equivalent employees 272 275 280 285 294 AVERAGE BALANCES Loans $389,917 $389,526 $385,126 $379,191 $371,724 Total earning assets $498,731 $496,782 $488,798 $482,036 $484,110 Total assets $567,129 $565,779 $555,451 $549,426 $554,631 Deposits $412,424 $413,473 $411,948 $410,392 $415,887 Stockholders' equity $ 59,149 $ 58,928 $ 57,830 $ 57,617 $ 57,192 Rurban Financial Corp. Segment Reporting First Quarter Ended March 31, 2008 ------------------------------------------------------ Parent Rurban Total Data Company Elimination Financial Banking Processing and Other Entries Corp. ------------------------------------------------------ Income Statement Measures ---------------- Interest Income $ 8,151 $ -- $ 1 $ (27) $ 8,125 Interest Expense 3,856 44 435 (27) $ 4,308 Net Interest Income 4,295 (44) (434) -- $ 3,817 Provision For Loan Loss 192 -- -- -- $ 192 Non-interest Income 2,169 5,650 407 (710) $ 7,516 Non-interest Expense 5,018 4,394 899 (710) $ 9,601 Net Income QTD $ 917 $ 800 $ (608) $ -- $ 1,109 Performance Measures ----------- Average Assets -QTD $547,502 $ 20,103 $ 81,297 $ (81,773) $567,129 ROAA 0.67% 15.92% -- -- 0.78% Average Equity - QTD $ 59,044 $ 15,282 $ 59,149 $ (74,326) $ 59,149 ROAE 6.21% 20.94% -- -- 7.50% Efficiency Ratio - % 75.90% 77.28% -- -- 83.19% Average Loans - QTD $391,379 $ -- $ -- $ (1,462) $389,917 Average Deposits - QTD $418,409 $ -- $ -- $ (5,985) $412,424 Rurban Financial Corp. Proforma Performance Measurement Quarterly Comparison - First Quarter 2008 --------------------------------------------------- Banking Parent Intersegment Rurban Related RDSI Company Elimination Financial Entities and Other Entries Corp. --------------------------------------------------- Revenue ------- 1Q08 $ 6,464 $ 5,606 $ (27) $ (710) $ 11,333 4Q07 $ 6,232 $ 5,184 $ (114) $ (687) $ 10,615 3Q07 $ 5,939 $ 5,332 $ (100) $ (727) $ 10,444 2Q07 $ 6,130 $ 4,949 $ (82) $ (739) $ 10,258 1Q07 $ 6,025 $ 5,155 $ (116) $ (732) $ 10,332 1st Quarter Comparison $ 439 $ 451 $ 89 -- $ 1,001 Non-interest Expenses ------------ 1Q08 $ 5,018 $ 4,394 $ 899 $ (710) $ 9,601 4Q07 $ 4,908 $ 4,202 $ 742 $ (687) $ 9,164 3Q07 $ 4,874 $ 4,334 $ 626 $ (727) $ 9,106 2Q07 $ 4,849 $ 4,228 $ 728 $ (739) $ 9,065 1Q07 $ 5,188 $ 4,109 $ 736 $ (732) $ 9,301 1st Quarter Comparison $ (170) $ 285 $ 163 $ -- $ 300 Net Income ---------- 1Q08 $ 917 $ 800 $ (608) $ -- $ 1,109 4Q07 $ 836 $ 648 $ (578) $ -- $ 906 3Q07 $ 674 $ 659 $ (470) $ -- $ 864 2Q07 $ 830 $ 476 $ (521) $ -- $ 785 1Q07 $ 571 $ 690 $ (559) $ -- $ 702 1st Quarter Comparison $ 346 $ 110 $ (49) $ -- $ 407 Average Assets -------------- 1Q08 $547,502 $20,103 $81,297 $ (81,773) $567,129 4Q07 $546,609 $20,014 $80,827 $ (81,671) $565,779 3Q07 $536,470 $19,739 $79,380 $ (80,137) $555,451 2Q07 $530,618 $20,320 $78,908 $ (80,420) $549,426 1Q07 $536,543 $20,217 $79,251 $ (81,380) $554,631 1st Quarter Comparison $ 10,959 $ (114) $ 2,046 $ -- $ 12,498 ROAA ---- 1Q08 0.67% 15.92% -- -- 0.78% 4Q07 0.61% 12.95% -- -- 0.64% 3Q07 0.50% 13.35% -- -- 0.62% 2Q07 0.63% 9.37% -- -- 0.57% 1Q07 0.43% 13.65% -- -- 0.51% 1st Quarter Comparison 0.24% 2.44% -- -- 0.27% Average Equity -------------- 1Q08 $ 59,044 $15,282 $59,149 $ (74,326) $ 59,149 4Q07 $ 58,115 $15,222 $58,928 $ (73,337) $ 58,928 3Q07 $ 56,805 $14,732 $57,830 $ (71,536) $ 57,830 2Q07 $ 56,249 $14,182 $57,617 $ (70,431) $ 57,617 1Q07 $ 56,330 $13,378 $57,192 $ (69,708) $ 57,192 1st Quarter Comparison $ 2,714 $ 1,904 $ 1,957 -- $ 1,957 ROAE ---- 1Q08 6.21% 20.94% -- -- 7.50% 4Q07 5.75% 17.03% -- -- 6.15% 3Q07 4.75% 17.89% -- -- 5.97% 2Q07 5.90% 13.43% -- -- 5.45% 1Q07 4.05% 20.63% -- -- 4.91% 1st Quarter Comparison 2.16% 0.31% -- -- 2.59% Efficiency Ratio ---------------- 1Q08 75.90% 77.28% -- -- 83.19% 4Q07 76.68% 79.77% -- -- 84.49% 3Q07 80.17% 80.04% -- -- 85.47% 2Q07 77.23% 84.09% -- -- 86.61% 1Q07 85.47% 78.52% -- -- 88.33% 1st Quarter Comparison (9.57%) (1.24%) -- -- (5.14%)