Rurban Financial Corp. Reports 2008 Earnings Increased 60 Percent From Previous Year's Results


DEFIANCE, Ohio, Jan. 21, 2009 (GLOBE 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 2008 earnings of $5.22 million, or $1.06 per diluted share, an increase of approximately 60.2 percent from the $3.26 million, or $0.65 per diluted share, reported in 2007. The 2008 results include thirty-one days of operation of the five banking centers acquired in the National Bank of Montpelier ("Montpelier") acquisition and the associated acquisition charges.

Fourth quarter 2008 earnings were $1.33 million, or $0.27 per diluted share, compared with fourth quarter 2007 earnings of $906,000, or $0.18 per diluted share, an increase of approximately 46.7 percent.

Earnings for the 2008 fourth quarter included one-time after-tax charges of $76,000 related to the Corporation's acquisition of Montpelier. The Corporation also recorded an after-tax charge of $66,000, reducing the mortgage servicing rights value on the Corporation's $71.1 million serviced mortgage loan portfolio, as a result of the recent drop in mortgage rates.

Highlights of fourth quarter 2008 include:



 * The State Bank and Trust Company ("State Bank"), Rurban's banking
   subsidiary, completed the acquisition of Montpelier, with five
   branches located in Williams County, on December 1, 2008. The
   acquisition was valued at $25.0 million. This acquisition increases
   State Bank's banking center locations from 17 to 22. The
   acquisition is expected to be immediately accretive to earnings.

 * The turmoil in the banking industry during the majority of the year,
   and especially the fourth quarter, had many institutions electing
   to participate in the Government's TARP/CPP program. After thorough
   consideration of the program's advantages and disadvantages, Rurban
   Financial Corp. and its Board elected not to participate in the
   program due to Rurban's strong capital position and the TARP
   program's uncertainties relative to the Government's intervention
   and expectation relative to the funds' usage.

 * State Bank expanded its reach into Columbus, Ohio's high volume
   mortgage market by adding a Mortgage Origination Group to the
   Columbus Loan Production Office.

 * Asset quality essentially remained stable, with non-performing
   assets declining slightly to 1.00 percent of total assets. Net
   charge-offs remained moderate and significantly below peers at 0.19
   percent of total loans for 2008.

"We have made substantial progress in all business units within Rurban during 2008," commented Ken Joyce, Rurban's CEO. Joyce continued, "The leading drivers of profitability gains at State Bank were significant improvements in net interest margin, consistent and sound underwriting, prudent loan growth, improvement in mortgage banking production, and continued attention to expense controls. A key component of our growth plan is strategic acquisitions with the resultant organization being immediately accretive. In concert with our Strategic Plan, we successfully completed the acquisition of National Bank of Montpelier this year, which we believe will be immediately accretive."

RDSI, Rurban's technology subsidiary, which provides data and item processing services to the banking industry, produced another outstanding earnings period with net income for 2008 up 14.0 percent over 2007. Joyce commented, "The economic environment has certainly been difficult throughout 2008, impacting RDSI. However, our management team has been able to navigate through these problems by adding value, controlling expenses, and consistently improving our service to our client banks."



 2008 FINANCIAL RESULTS
 ----------------------

 Earnings:                                              Year Ended
                                                        December 31
 (Dollars in thousands except per share data)         2008      2007
 Net interest income                                $ 17,528  $ 14,787
 Non-interest income                                  28,061    26,861
 Total revenue                                        45,589    41,648
 Provision for loan losses                               690       521
 Non-interest expense                                 37,557    36,637
 Net income                                            5,217     3,257
 Diluted EPS                                        $   1.06  $   0.65

Net interest income was $17.5 million for 2008 compared to $14.8 million for 2007, an increase of 18.5 percent, which primarily resulted from improved margin. State Bank had been actively managing the balance sheet to a liability sensitive position, which has aided in the rapid decrease in cost of funds during the past twelve months. The consolidated 2008, or full year, margin improved 43 basis points to 3.53 percent for 2008, compared to 3.10 percent for 2007.

Non-interest income was $28.1 million for 2008 compared to $26.9 million for 2007, representing a $1.20 million, or 4.46 percent, increase year-over-year. This increase was driven by a $783,000, or 4.04 percent, increase in Data Service Fees. Increases in Customer Service Fees of $172,000, or 7.68 percent, and gains on sale of loans of $167,000, or 29.1 percent, were offset by decreases in Trust Fees of $303,000, or 8.96 percent. The continued decline in the equity markets has negatively impacted trust fees, which are generally calculated on invested balances. The improved Customer Service Fees and gain on sale of loans are a result of State Bank's continuing focus on its High Performance Checking program, well-developed referral program, and improving cross-selling of additional products.

Non-interest expense increased for 2008 nominally by $920,000, or 2.51 percent. The acquisition of Montpelier contributed approximately $250,000 of this increase, primarily from the December operating expenses and the one-time acquisition cost disclosed above. During 2008, RDSI switched from outsourcing their preparation and mailing activities to managing these mailings in-house. This increased Postage Expense by $760,000 during 2008 and this pass-through was offset by increases in revenue. RDSI also experienced an increase in non-federal taxes as it expanded into newer markets and sales tax expense in these new markets increased. Rurban controlled compensation and benefits with a mere 1.83 percent increase year-over-year. These increases were offset by expense reductions in Equipment Expenses (RDSI) and Professional Fees associated with loan workouts (State Bank).



 FOURTH QUARTER RESULTS
 ----------------------

 Earnings:                                        Fourth Quarter Ended
                                                       December 31
 (Dollars in thousands except per share data)       2008        2007
 Net interest income                              $  4,830    $  3,783
 Non-interest income                                 6,755       6,832
 Revenue                                            11,585      10,615
 Provision (credit) for loan losses                    138         143
 Non-interest expense                                9,566       9,165
 Net income (loss)                                   1,328         906
 Diluted EPS                                      $   0.27    $   0.18

Net interest income increased to $4.83 million for the quarter, compared to $3.78 million for the fourth quarter of 2007. This 27.7 percent increase, is due to a 63 basis point improvement in State Bank's net interest margin for the quarter-over-quarter period. Net interest income also increased due to the Montpelier acquisition and the recovery of $275,000 in interest collected on non-accrual loans that were resolved. State Bank continues to aggressively manage pricing on both loans and deposits, and has successfully navigated through a very difficult banking and rate environment.

Non-interest income was essentially unchanged at $6.76 million for 2008 and $6.83 million for 2007. Slight increases in data service fees and improved gain on sale of loans were offset by a sharp decline in trust fees. The decline in the equity market valuations was the cause of the reduction in trust fees.

Non-interest expense for the year-over-year fourth quarter increased $401,000, or 4.38 percent. As stated earlier, the Montpelier acquisition, which was completed on December 1, 2008, contributed $250,000 of this one-time costs incurred in connection with the increase. Excluding the cost associated with Montpelier, operating expenses increased $151,000, or 1.65 percent. Expenses were well-controlled, as increases in non-federal taxes and RDSI's decision to bring postage operations in-house were offset by reductions in Equipment Expense at RDSI and Professional Fees (State Bank), due to lower loan work-out expenses.

CONSOLIDATED BALANCE SHEET

As a result of the Montpelier acquisition, total assets at December 31, 2008 were $657.6 million compared to $585.0 million at September 30, 2008. Net loans (excluding loans held for sale) were $450.1 million at December 31, 2008 compared to $399.9 million at September 30, 2008. Total deposits were $484.2 million at year-end 2008, compared to $406.5 million at September 30, 2008. Non-interest bearing deposits at December 31, 2008 were $52.2 million, compared to $40.9 million at September 30, 2008. Total shareholder's equity increased to $61.7 million at year-end 2008, compared to $60.1 million at September 30, 2008. Because the Montpelier acquisition was an all cash purchase, no additional shares were issued. At December 31, 2007 total assets were $561.2 million, net loans were $389.3 million, deposits were $406.0 million, non-interest bearing deposits were $41.5 million and equity was $59.3 million.

BANK OPERATING RESULTS

Mr. Joyce commented, "We are pleased to report a $1.6 million increase in our Banking Group's 2008 YTD net income over 2007. Our banking model is firmly established, and Mark Klein, State Bank CEO, and his management team, are executing that model very effectively. We expect to continue to build our loan balances in 2009 in our various markets and maintain tight control on asset quality and expenses. As we stated in previous press releases, the Montpelier acquisition is immediately accretive to net income, earnings per share and return on equity. We would expect to fully realize the benefits of this acquisition by the third quarter of 2009. These incremental earnings will be an offset to the challenges we are facing within the banking industry and more specifically, our trust division, as equity balances decline.

Net income for the Banking Group was $4.5 million for 2008, compared with $2.9 million reported for the prior fiscal year.

Total loans were $450.1 million at December 31, 2008, including the contribution from Montpelier. Excluding Montpelier, organic loan growth in 2008 totaled $16.6 million, or 4.27 percent. Commercial loans were the only category that had significant growth during 2008, up $35.7 million, or 14.1 percent, to $288.9 million.

Total deposits at December 31, 2008 were $484.2 million, including the addition of Montpelier, compared to $406.0 million at December 31, 2007. The cost of deposits dropped to 1.89 percent for the fourth quarter 2008, compared to the year-ago quarter of 3.20 percent. "This reduction in funding cost is attributable to the successful management of the balance sheet to a liability sensitive position that took advantage of falling interest rates throughout 2008. We are now focusing on extending our liabilities and shortening the duration of assets to become more "asset sensitive" to position our balance sheet for increasing interest rates," commented Mr. Joyce. "Our acquisition has positioned us to fund loan growth in 2009 with core transaction deposits versus higher cost alternative funds," continued Joyce. Rurban's deposit mix continues to shift toward core transaction deposits (DDA, NOW, SAV & MMA), which accounted for 49.9 percent of total deposits for 2008, compared with 45.0 percent at prior year-end.

ASSET QUALITY

Provision for Loan Losses was $690,000 in 2008 compared to $521,000 in 2007. The 2008 fourth quarter provision for loan losses was $138,000 compared to $143,000 for the year-ago quarter. For 2008, the net charge-offs totaled $764,000, or 0.19 percent of average loans. Net charge-offs for the fourth quarter decreased slightly compared to the linked quarter to $280,000, or 0.27 percent, of average loans on an annualized basis.



 (Dollars in thousands except percent data)

 ASSET QUALITY                               4Q 2008  3Q 2008  4Q 2007
 -------------                               -------  -------  -------
 Net charge-offs                             $   280  $   336  $    89
 Net charge-offs to avg. loans (Annualized)     0.27%    0.33%    0.09%
 Non-performing loans                        $ 5,178  $ 4,659  $ 5,990
 OREO + OAO                                  $ 1,409  $ 1,611  $   172
 Non-performing assets (NPA's)               $ 6,587  $ 6,270  $ 6,162
 NPA / Total assets                             1.00%    1.07%    1.10%
 Allowance for loan losses                   $ 5,020  $ 4,057  $ 3,990
 Allowance for loan losses / Loans              1.12%    1.01%    1.03%

Non-performing assets (loans + OREO + OAO) were $6.59 million, or 1.00 percent, of total assets at December 31, 2008, an increase of $317,000 from the linked quarter, and an increase of $425,000 from a year-ago. The acquisition of Montpelier contributed $845,000 in non-performing assets at year-end. Asset quality remains stable as we enter 2009. Consistent with external economic conditions, State Bank is seeing a slight increase in delinquencies within all segments of its portfolio, however, the current levels are not significant or alarming. The State Bank has managed through a difficult 2008, but it is not insulated from the economic factors facing the industry in 2009.

RDSI RESULTS

Revenue for the Data and Item Processing Group was $21.6 million, up $946,000, or 4.6 percent, over the $20.6 million reported for year-end 2007. Operating expenses totaled $17.3 million in 2008, compared to $16.9 million in 2007, reflecting a nominal $422,000, or 2.50 percent increase. RDSI offered over 150 products to a total of 113 community banks at year-end 2008, and it launched nine new products to help its client banks achieve their goals during 2008.

Net Income for the 2008 fiscal year was $2.82 million, compared to $2.47 million for 2007, up $346,000, or 14.0 percent. "RDSI experienced solid growth in 2008, and we have positive expectations as eight bank conversions are currently scheduled for 2009 and there is a strong pipeline of prospects," said Mr. Joyce.

Mr. Joyce concluded, "RDSI has always prided itself in providing outstanding customer service and value and delivering on that promise. These factors were certainly instrumental in RDSI attaining record earnings in 2008. We welcomed six new banking clients to our RDSI family roster, and among our existing clients, 206 additional products were purchased that will improve their efficiencies, or allow the offering of new products and services."

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 22 banking centers in Allen, Defiance, Fulton, Lucas, Paulding, Williams 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 4,877,838 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
 December 31, 2008 and December 31, 2007
                                           December         December
                                             2008             2007
                                          ------------    ------------
                                           (Unaudited)
 ASSETS
   Cash and due from banks                $ 18,059,532    $ 15,183,627
   Federal funds sold                       10,000,000       2,000,000
                                          ------------    ------------
     Cash and cash equivalents              28,059,532      17,183,627
   Available-for-sale securities           102,606,475      92,661,386
   Loans held for sale                       3,824,499       1,649,758
   Loans, net of unearned income           450,111,653     389,268,744
   Allowance for loan losses               (5,020,197)     (3,990,455)
   Premises and equipment, net              17,621,262      15,128,754
   Purchased software                        5,867,395       4,282,563
   Federal Reserve and Federal
    Home Loan Bank Stock                     4,244,100       4,021,200
   Foreclosed assets held for sale, net      1,384,335         124,131
   Accrued interest receivable               2,964,663       3,008,968
   Goodwill                                 21,414,790      13,940,618
   Core deposits and other intangibles       5,835,936       5,135,228
   Cash value of life insurance             12,625,015      12,160,581
   Other assets                              6,079,451       6,638,895
                                          ------------    ------------

       Total assets                       $657,618,909    $561,213,998
                                          ============    ============

 LIABILITIES AND SHAREHOLDERS' EQUITY
   Deposits
     Non interest bearing demand          $ 52,242,626    $ 41,541,297
     Interest bearing NOW                   73,123,095      54,308,665
     Savings                                34,313,586      25,320,126
     Money Market                           82,025,074      61,380,252
     Time Deposits                         242,516,203     223,480,842
                                          ------------    ------------
       Total deposits                      484,220,584     406,031,182
   Notes payable                             1,000,000         922,457
   Advances from Federal Home Loan Bank     36,646,854      24,000,000
   Repurchase Agreements                    43,425,978      43,006,438
   Trust preferred securities               20,620,000      20,620,000
   Accrued interest payable                  1,965,842       2,532,914
   Other liabilities                         8,077,647       4,775,773
                                          ------------    ------------

       Total liabilities                   595,956,905     501,888,764

   Shareholders' Equity
     Common stock                           12,568,583      12,568,583
     Additional paid-in capital             15,042,781      14,923,571
     Retained earnings                      35,785,317      32,361,106
     Accumulated other comprehensive
      income (loss)                          (121,657)         82,235
     Treasury stock                        (1,613,020)       (610,260)
                                          ------------    ------------

       Total shareholders' equity           61,662,004      59,325,235
                                          ------------    ------------

       Total liabilities and
        shareholders' equity              $657,618,909    $561,213,998
                                          ============    ============

 RURBAN FINANCIAL CORP.
 CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

                        Three Months Ended       Twelve Months Ended
                           December 31,              December 31,
                      ----------------------   ------------------------
                         2008        2007         2008         2007
                      ----------  ----------   -----------  -----------
 Interest income
   Loans
     Taxable          $6,905,698  $7,056,261   $27,473,302  $27,782,068
     Tax-exempt           20,934      22,240        84,878       73,451
   Securities
     Taxable           1,023,333   1,106,834     4,289,728    4,283,508
     Tax-exempt          252,488     161,830       686,458      645,451
   Other                   3,655      61,257       134,079      225,151
                      ----------  ----------   -----------  -----------
       Total interest
        income         8,206,108   8,408,422    32,668,445   33,009,629

 Interest expense
   Deposits            2,092,363   3,383,225    10,066,325   13,595,896
   Other borrowings        9,216      25,215        53,008      165,859
   Retail Repurchase
    Agreements           444,563     484,118     1,821,330    1,615,016
   Federal Home Loan
    Bank advances        411,937     276,492     1,508,115    1,037,026
   Trust preferred
    securities           418,017     456,427     1,691,792    1,808,520
                      ----------  ----------   -----------  -----------
       Total interest
        expense        3,376,096   4,625,477    15,140,570   18,222,317
                      ----------  ----------   -----------  -----------

 Net interest income   4,830,012   3,782,945    17,527,875   14,787,312

     Provision for
      loan losses        138,179     142,663       689,567      521,306
                      ----------  ----------   -----------  -----------

 Net interest income
  after provision
  for loan losses      4,691,833   3,640,282    16,838,308   14,266,006

 Non-interest income
     Data service fees 5,004,376   4,914,328    20,165,451   19,382,115
     Trust fees          630,331     873,069     3,081,898    3,385,320
     Customer service
      fees               591,053     593,665     2,416,093    2,243,745
     Net gain on sales
      of loans           150,238     137,611       740,985      574,000
     Net realized gain
      on sales of
      securities              --       1,631            --        1,998
     Net proceeds from
      VISA IPO                --          --       132,106           --
     Investment
      securities
      recoveries              --          --       197,487           --
     Loan servicing
      fees                59,579      80,590       235,095      227,017
     Gain (loss) on
      sale of assets      96,124     (32,362)      247,517       29,477
     Other income        223,653     263,583       844,105    1,017,727
                      ----------  ----------   -----------  -----------

       Total
        non-interest
        income         6,755,354   6,832,115    28,060,737   26,861,399

 Non-interest expense
     Salaries and
      employee
      benefits         4,204,104   4,134,242    17,318,103   17,007,314
     Net occupancy
      expense            567,120     587,150     2,170,616    2,134,950
     Equipment expense 1,562,031   1,678,311     6,308,564    6,586,623
     Data processing
      fees               105,741      97,092       427,251      469,808
     Professional fees   514,314     586,327     1,859,447    2,226,577
     Marketing expense   246,770     218,549       831,727      820,528
     Printing and
      office supplies    132,862     151,943       554,267      661,760
     Telephone and
      communication      427,927     451,918     1,686,834    1,781,277
     Postage and
      delivery expense   515,129     376,777     2,165,098    1,545,340
     State, local and
      other taxes        382,670     115,441       985,503      584,031
     Employee expense    277,730     281,682     1,084,028    1,083,056
     Other expenses      629,611     485,154     2,165,175    1,735,346
                      ----------  ----------   -----------  -----------

       Total
        non-interest
        expense        9,566,009   9,164,586    37,556,613   36,636,610
                      ----------  ----------   -----------  -----------

 Income before
  income tax expense   1,881,178   1,307,811     7,342,432    4,490,795
     Income tax 
      expense            553,159     402,275     2,125,193    1,234,160
                      ----------   -----------  ----------- -----------

 Net income           $1,328,019  $  905,536   $ 5,217,239  $ 3,256,635
                      ==========  ==========   ===========  ===========

 Earnings per
  common share:
     Basic            $     0.27  $     0.18   $      1.06  $      0.65
                      ==========  ==========   ===========  ===========
     Diluted          $     0.27  $     0.18   $      1.06  $      0.65
                      ==========  ==========   ===========  ===========


    RURBAN FINANCIAL CORP. 
   CONSOLIDATED FINANCIAL 
         HIGHLIGHTS
         (Unaudited)
 -----------------------------  ------------------  ------------------
                                  Three Months        Twelve Months 
                                     Ended                Ended
                                   December 31,        December 31,
                                ------------------  ------------------
 (dollars in thousands 
  except per share data)          2008      2007      2008      2007
 -----------------------------  --------  --------  --------  --------

 EARNINGS
    Net interest income         $  4,830  $  3,783  $ 17,528  $ 14,787
    Provision for loan loss     $    138  $    143  $    690  $    521
    Non-interest income         $  6,755  $  6,832  $ 28,061  $ 26,861
    Revenue (net interest
     income plus
     non-interest income)       $ 11,585  $ 10,615  $ 45,589  $ 41,648
    Non-interest expense        $  9,566  $  9,165  $ 37,557  $ 36,637
    Net income                  $  1,328  $    906  $  5,217  $  3,257

 PER SHARE DATA
    Basic earnings per share    $   0.27  $   0.18  $   1.06  $   0.65
    Diluted earnings per share  $   0.27  $   0.18  $   1.06  $   0.65
    Book value per share        $  12.63  $  11.92  $  12.63  $  11.92
    Tangible book value
     per share                  $   7.48  $   8.00  $   7.48  $   8.00
    Cash dividend per share     $   0.09  $   0.07  $   0.34  $   0.26

 PERFORMANCE RATIOS
    Return on average assets       0.88%     0.64%     0.91%     0.59%
    Return on average equity       8.75%     6.15%     8.70%     5.62%
    Net interest margin
     (tax equivalent)              3.83%     3.12%     3.53%     3.10%
    Net interest margin -
     banking group                 4.06%     3.43%     3.80%     3.46%
    Non-interest expense /
     Average assets                6.31%     6.48%     6.53%     6.58%
    Efficiency Ratio -
     bank (non-GAAP)              73.15%    76.93%    72.48%    80.07%

 MARKET DATA PER SHARE
    Market value per share -
     Period end                 $   7.60  $  12.49  $   7.60  $  12.49
    Market as a % of book            60%      105%       60%      105%
    Cash dividend yield            4.74%     2.24%     4.47%     2.08%
    Period-end common shares
     outstanding (000)             4,881     4,979     4,881     4,979
    Common stock market
     capitalization ($000)      $ 37,099  $ 62,188  $ 37,099  $ 62,188

 CAPITAL & LIQUIDITY
    Equity to assets                9.4%     10.6%      9.4%     10.6%
    Period-end tangible equity
     to tangible assets             5.8%      7.1%      5.8%      7.1%
    Total risk-based capital
     ratio (Estimate)              13.2%     16.0%     13.2%     16.0%

 ASSET QUALITY
    Net charge-offs /
     (Recoveries)               $    280  $     89  $    764  $    248
    Net loan charge-offs (Ann.)
     / Average loans               0.27%     0.09%     0.19%     0.07%
    Non-performing loans        $  5,178  $  5,990  $  5,178  $  5,990
    OREO / OAOs                 $  1,409  $    172  $  1,409  $    172
    Non-performing assets       $  6,587  $  6,162  $  6,587  $  6,162
    Non-performing assets /
     Total assets                  1.00%     1.10%     1.00%     1.10%
    Allowance for loan losses /
     Total loans                   1.12%     1.03%     1.12%     1.03%
    Allowance for loan losses /
     Non-performing assets         76.2%     64.8%     76.2%     64.8%

 END OF PERIOD BALANCES
    Total loans, net of
     unearned income            $450,112  $389,269  $450,112  $389,269
    Allowance for loan loss     $  5,020  $  3,990  $  5,020  $  3,990
    Total assets                $657,619  $561,214  $657,619  $561,214
    Deposits                    $484,221  $406,031  $484,221  $406,031
    Stockholders' equity        $ 61,662  $ 59,325  $ 61,662  $ 59,325
    Full-time
     equivalent employees            306       275       306       275

 AVERAGE BALANCES
    Loans                       $412,222  $389,529  $401,770  $381,453
    Total earning assets        $518,707  $496,782  $508,250  $488,289
    Total assets                $606,655  $565,779  $575,491  $556,572
    Deposits                    $431,076  $413,473  $408,042  $412,767
    Stockholders' equity        $ 60,686  $ 58,928  $ 59,964  $ 57,945


 RURBAN FINANCIAL CORP. 
 CONSOLIDATED FINANCIAL 
      HIGHLIGHTS
      (Unaudited)
 ------------------  --------  --------  --------  --------  --------
 (dollars 
 in thousands 
 except per          4th Qtr   3rd Qtr   2nd Qtr   1st Qtr   4th Qtr
 share data)           2008      2008      2008      2008      2007
 ------------------  --------  --------  --------  --------  --------

 EARNINGS
  Net interest
   income            $  4,830  $  4,448  $  4,432  $  3,817  $  3,783
  Provision for      
   loan loss         $    138  $    146  $    213  $    192  $    143
  Non-interest       
   income            $  6,755  $  6,989  $  6,801  $  7,516  $  6,832
  Revenue (net       
   interest income   
   plus              
   non-interest      
   income)           $ 11,585  $ 11,437  $ 11,233  $ 11,333  $ 10,615
  Non-interest       
   expense           $  9,566  $  9,279  $  9,111  $  9,601  $  9,165
  Net income         $  1,328  $  1,424  $  1,356  $  1,109  $    906
                     
 PER SHARE DATA      
  Basic              
   earnings          
   per share         $   0.27  $   0.29  $   0.28  $   0.22  $   0.18
  Diluted            
   earnings          
   per share         $   0.27  $   0.29  $   0.28  $   0.22  $   0.18
  Book value         
   per share         $  12.64  $  12.25  $  12.08  $  12.11  $  11.92
  Tangible book      
   value per share   $   7.48  $   8.65  $   8.41  $   8.10  $   8.00
  Cash dividend      
   per share         $   0.09  $   0.09  $   0.08  $   0.08  $   0.07
                     
 PERFORMANCE RATIOS  
  Return on          
   average assets       0.88%     0.99%     0.94%     0.78%     0.64%
  Return on          
   average equity       8.75%     9.54%     9.09%     7.50%     6.15%
  Net interest       
   margin            
   (tax equivalent)     3.83%     3.56%     3.55%     3.26%     3.12%
  Net interest       
   margin            
   (Bank Only)          4.06%     3.84%     3.83%     3.45%     3.43%
  Non-interest       
   expense /         
   Average assets       6.31%     6.44%     6.29%     6.77%     6.48%
  Efficiency Ratio   
  - bank             
  (non-GAAP)           73.15%    71.13%    69.85%    75.90%    76.93%
                     
 MARKET DATA         
  PER SHARE          
  Market value       
   per share --      
   Period end        $   7.60  $   9.00  $   9.52  $  10.24  $  12.49
  Market as a %      
    of book               60%       73%       79%       85%      105%
  Cash dividend      
   yield                4.74%     4.00%     3.36%     3.13%     2.24%
  Period-end         
   common shares     
   outstanding       
   (000)                4,881     4,906     4,914     4,942     4,979
  Common stock       
   market            
   capitalization    
   ($000)            $ 37,099  $ 44,154  $ 46,781  $ 50,605  $ 62,188
                     
 CAPITAL & LIQUIDITY  
    Equity to assets     9.4%     10.3%     10.3%     10.5%     10.6%
    Period-end       
     tangible equity
     to tangible     
     assets              5.8%      7.5%      7.4%      7.2%      7.1%
    Total            
     risk-based      
     capital ratio   
     (Estimate)         13.2%     16.2%     15.7%     15.8%     16.0%
                     
 ASSET QUALITY       
    Net charge-offs  
     / (Recoveries)  $    280  $    336  $    (18) $    166  $     89
    Net loan         
     charge-offs     
     (Ann.) /        
     Average loans      0.27%     0.33%    (0.02%)    0.17%     0.09%
    Non-performing   
     loans           $  5,178  $  4,659  $  5,141  $  5,305  $  5,990
    OREO / OAOs      $  1,409  $  1,611  $  1,566  $  1,662  $    172
    Non-performing   
     assets          $  6,587  $  6,270  $  6,707  $  6,967  $  6,162
    Non-performing   
     assets /        
     Total assets       1.00%     1.07%     1.16%     1.22%     1.10%
    Allowance for    
     loan losses /   
     Total loans        1.12%     1.01%     1.04%     1.02%     1.03%
    Allowance for    
     loan losses /   
     Non-performing  
     assets             76.2%     64.7%     63.3%     57.6%     64.8%
                     
 END OF PERIOD BALANCES
    Total loans,     
     net of          
      unearned       
      income         $450,112  $399,910  $404,435  $391,963  $389,269
    Allowance for    
     loan loss       $  5,020  $  4,057  $  4,247  $  4,016  $  3,990
    Total assets     $657,619  $585,022  $576,513  $571,733  $561,214
    Deposits         $484,221  $406,454  $402,558  $416,712  $406,031
    Stockholders'    
     equity          $ 61,662  $ 60,117  $ 59,362  $ 59,870  $ 59,325
    Full-time        
     equivalent      
     employees            306       271       273       272       275
                     
 AVERAGE BALANCES    
    Loans            $412,222  $401,790  $404,756  $389,917  $389,529
    Total earning    
     assets          $518,707  $506,760  $510,521  $498,731  $496,782
    Total assets     $606,655  $576,774  $579,004  $567,129  $565,779
    Deposits         $431,076  $403,064  $412,080  $412,424  $413,473
    Stockholders'    
     equity          $ 60,686  $ 59,717  $ 59,671  $ 59,149  $ 58,928


                        Rurban Financial Corp.
                           Segment Reporting
                Fourth Quarter Ended December 31, 2008
                           ($ in Thousands)
               
              ---------  ----------  ---------  -----------  ---------
                                      Parent                         
    Income                            Company                 Rurban  
   Statement    Total      Data         and     Elimination  Financial
   Measures    Banking   Processing    Other      Entries      Corp.  
 ------------ ---------  ----------  ---------  -----------  ---------
   Interest   
    Income     $  8,213    $     --  $       1  $       (8)   $  8,206

   Interest 
    Expense       2,953          13        418          (8)      3,376

   Net Interest 
    Income        5,260         (13)      (417)          --      4,830

   Provision For 
    Loan Loss       138          --         --           --        138

   Non-interest 
    Income        1,747       5,394        399        (785)      6,755

   Non-interest 
    Expense       5,254       4,299        798        (785)      9,566

   Net Income 
    QTD        $  1,146    $    715  $   (533)  $        --   $  1,328

 Performance 
  Measures
 ------------
   Average  
    Assets - 
    QTD        $596,469    $ 19,804   $ 82,775  $  (92,393)   $606,655

   ROAA           0.77%      14.44%         --          --       0.88%

   Average 
    Equity - 
    QTD        $ 63,224    $ 15,816   $ 60,686  $  (79,040)   $ 60,686

   ROAE           7.25%      18.08%         --           --      8.75%

   Efficiency 
    Ratio - %    73.15%          --         --           --     80.93%

   Average 
    Loans - 
    QTD        $412,819    $     --   $     --  $     (597)   $412,222

   Average 
    Deposits 
    - QTD      $435,235    $     --   $     --  $   (4,159)   $431,076


                         Rurban Financial Corp.
                           Segment Reporting
                 Twelve Months Ended December 31, 2008
                           ($ in Thousands)

                      ------------------------------------------------
                                           Parent
                                          Company              Rurban
 Income Statement      Total     Data       and   Elimination Financial
  Measures            Banking Processing   Other    Entries    Corp.
 ----------------     ------------------------------------------------
  Interest Income     $ 32,745  $      1  $      2  $    (79) $ 32,669

  Interest Expense      13,417       111     1,692       (79)   15,141

  Net Interest
   Income               19,328      (110)   (1,690)       --    17,528

  Provision For
   Loan Loss               690        --        --        --       690

  Non-interest
   Income                7,748    21,676     1,636    (2,999)   28,061

  Non-interest
   Expense              20,088    17,295     3,172    (2,999)   37,556

  Net Income YTD      $  4,513  $  2,819  $ (2,115) $     --  $  5,217

 Performance Measures
 --------------------
  Average  Assets
  - YTD               $565,395  $ 20,060  $ 82,030  $(91,994) $575,491

  ROAA                   0.80%    14.05%        --        --     0.91%

  Average Equity
   - YTD              $ 60,396  $ 15,797  $ 59,964  $(76,193) $ 59,964

  ROAE                   7.47%    17.85%        --        --     8.70%

  Efficiency
   Ratio - %            72.48%        --        --        --    80.82%

  Average Loans
    - YTD             $403,302  $     --  $     --  $ (1,532) $401,770

  Average Deposits
   - YTD              $422,311  $     --  $     --  $(14,269) $408,042


                        Rurban Financial Corp.
                   Proforma Performance Measurement
              Quarterly Comparison - Fourth Quarter 2008

                             ($ in Thousands)
                  ----------------------------------------------------
                                        Parent
                                        Company               Rurban
                   Total     Data         and   Elimination  Financial
                   Banking Processing    Other    Entries      Corp.
                  ----------------------------------------------------
 Revenue
 -------
 4Q08             $  7,007   $  5,381   $    (18)  $   (785)  $ 11,585
 3Q08             $  6,877   $  5,294   $      5   $   (738)  $ 11,438
 2Q08             $  6,729   $  5,285   $    (15)  $   (766)  $ 11,233
 1Q08             $  6,464   $  5,606   $    (27)  $   (710)  $ 11,333
 4Q07             $  6,232   $  5,184   $   (114)  $   (687)  $ 10,615
  4th Quarter
  Comparison      $    775   $    197   $     96   $     --   $    970

 Non-interest
  Expenses
 ------------
 4Q08             $  5,254   $  4,299   $    798   $   (785)  $  9,566
 3Q08             $  5,003   $  4,286   $    728   $   (738)  $  9,279
 2Q08             $  4,812   $  4,316   $    748   $   (766)  $  9,110
 1Q08             $  5,018   $  4,394   $    899   $   (710)  $  9,601
 4Q07             $  4,908   $  4,202   $    742   $   (687)  $  9,164
  4th Quarter
   Comparison     $    346   $     97   $     56   $     --   $    402

 Net Income
 ----------
 4Q08             $  1,146   $    715   $   (533)  $     --   $  1,328
 3Q08             $  1,233   $    664   $   (473)  $     --   $  1,424
 2Q08             $  1,217   $    640   $   (501)  $     --   $  1,356
 1Q08             $    917   $    800   $   (608)  $     --   $  1,109
 4Q07             $    836   $    648   $   (578)  $     --   $    906
  4th Quarter
   Comparison     $    310   $     67   $     45   $     --   $    422

 Average Assets
 --------------
 4Q08             $596,469   $ 19,804   $ 82,775   $(92,393)  $606,655
 3Q08             $557,306   $ 20,344   $ 81,707   $(82,583)  $576,774
 2Q08             $560,223   $ 20,214   $ 81,579   $(83,011)  $579,004
 1Q08             $547,502   $ 20,103   $ 81,297   $(81,773)  $567,129
 4Q07             $546,609   $ 20,014   $ 80,827   $(81,671)  $565,779
  4th Quarter
   Comparison     $ 49,860   $   (210)  $  1,948   $     --   $ 40,876

 ROAA
 ----
 4Q08                0.77%     14.44%         --         --      0.88%
 3Q08                0.88%     13.06%         --         --      0.99%
 2Q08                0.87%     12.66%         --         --      0.94%
 1Q08                0.67%     15.92%         --         --      0.78%
 4Q07                0.61%     12.95%         --         --      0.64%
  4th Quarter
   Comparison        0.16%      1.49%         --         --      0.24%

 Average Equity
 --------------
 4Q08             $ 63,224   $ 15,816   $ 60,686   $(79,040)  $ 60,686
 3Q08             $ 59,899   $ 16,063   $ 59,717   $(75,962)  $ 59,717
 2Q08             $ 59,395   $ 15,861   $ 59,671   $(75,256)  $ 59,671
 1Q08             $ 59,044   $ 15,282   $ 59,149   $(74,326)  $ 59,149
 4Q07             $ 58,115   $ 15,222   $ 58,928   $(73,337)  $ 58,928
  4th Quarter
   Comparison     $  5,109   $    594   $  1,758   $     --   $  1,758

 ROAE
 ----
 4Q08                7.25%     18.08%         --         --      8.75%
 3Q08                8.23%     16.53%         --         --      9.54%
 2Q08                8.20%     16.14%         --         --      9.09%
 1Q08                6.21%     20.94%         --         --      7.50%
 4Q07                5.75%     17.03%         --         --      6.15%
  4th Quarter
   Comparison        1.50%      1.05%         --         --      2.60%

 Efficiency
  Ratio
 ----------
 4Q08               73.15%     73.15%         --         --     80.92%
 3Q08               71.13%     79.79%         --         --     79.60%
 2Q08               69.85%     80.50%         --         --     79.56%
 1Q08               75.90%     77.28%         --         --     83.19%
 4Q07               76.68%     79.77%         --         --     84.49%
  4th Quarter
   Comparison       (3.53%)    (6.62%)        --         --     (3.57%)


            

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