DEFIANCE, Ohio, July 16, 2008 (PRIME NEWSWIRE) -- Rurban Financial Corp. (Nasdaq:RBNF), reported second quarter 2008 earnings of $1.36 million, or $0.28 per diluted share, an increase of 72.7 percent above the $785,000, or $0.16 per diluted share, reported in second quarter 2007, and 22.3 percent above linked first quarter earnings of $1.11 million, or $0.22 per diluted share. Rurban's strong second quarter performance reflects growth initiatives and efficiency enhancements implemented in Rurban's operating subsidiaries, The State Bank and Trust Company and RDSI. Rurban is a leading provider of community banking, investment management, trust services and bank data and item processing services.
Consolidated earnings for the 2008 second quarter include a one-time after-tax gain of $132,000 ($200,000 pre-tax) arising from the recovery of legal fees associated with Rurban's workout subsidiary, RFCBC, Inc. Excluding the net after-tax impact of this $132,000 gain, operating earnings were $1.22 million, or $0.25 per share for the 2008 quarter, compared with $785,000 for the prior-year quarter, up 55.9 percent.
For the first half of 2008, consolidated earnings were $2.5 million, or $0.50 per diluted share, an increase of 65.7 percent over the $1.5 million, or $0.30 per diluted share, recorded for the first half of 2007. Consolidated earnings for the first half of 2008 include one-time pre-tax gains of $200,000, $197,000, and $132,000, respectively, from the recovery of legal fees associated with RFCBC, the partial recovery of previously written-off WorldCom securities, and proceeds from the sale of equity securities derived from the VISA Inc. Initial Public Offering (IPO). These gains were partially offset by $176,000 of one-time expenses associated with the wind-down of RFCBC. The net of these one-time items resulted in an after-tax gain of $233,000 for year-to-date 2008. The first half of 2007 included a pre-tax merger-related expense of $95,000 ($63,000 after-tax). Excluding the after-tax impact of the $233,000 net gain during the first six months of 2008, and the $63,000 expense from the year-ago period, operating earnings were $2.2 million in 2008, compared with $1.6 million for the first half of 2007, an improvement of 44.0 percent.
"Our success this quarter and this year is the result of the planning and execution of strategies that began two years ago," said Kenneth Joyce, President and Chief Executive Officer of Rurban Financial Corp. "I had previously characterized the first three months of 2008 as a breakthrough quarter for Rurban," Mr. Joyce continued. "I am even more pleased now to confirm that we have built a strong, dynamic franchise, which continues adding value through extremely challenging economic conditions. We are improving our performance quarterly, and I am confident that the initiatives and people we have in place will continue to support this momentum."
"We believe we have a unique combination of businesses that gives us a good balance between fee revenue and loan income, and this balance makes us less vulnerable to dislocations in the credit markets. Also, because of our experience with problem loans in the past, we entered this turbulent period in the financial industry with a disciplined credit framework, strong controls and seasoned, well-trained lenders. As a result, we have been able to grow our business this year, while many others in the industry are contracting and retreating; we are not experiencing any credit quality decline at this time."
The Banking Group (including RFCBC, the workout company) increased earnings 46.6 percent from $830,000 in the second quarter of 2007 to $1.2 million in the second quarter of 2008. Excluding from earnings a one-time net after-tax gain of $132,000 ($200,000 pre-tax) in second quarter 2008, which represents RFCBC's recovery of legal fees, the Banking Group's second quarter 2008 operating earnings were $1.1 million compared with $830,000 in second quarter 2007, up $255,000, or 30.7 percent.
RDSI earned $640,000 during the second quarter 2008, an increase of $164,000, or 34.4 percent, above the $476,000 earned in the year-ago quarter.
Highlights of Rurban's consolidated second quarter performance are as follows:
* Consolidated Return on Average Assets (ROAA) was 0.94 percent for
the second quarter of 2008 compared with 0.57 percent for the year-
ago quarter, up 37 basis points. On an operating basis, excluding
one-time items, second quarter 2008 ROAA was 0.85 percent, while
second quarter 2007 ROAA was 0.57 percent, an increase of 28 basis
points for the year-over-year quarters.
* Loans grew $22.8 million, or 6.0 percent, over the past twelve
months, resulting from aggressive calling initiatives and Rurban's
entry into higher growth markets, such as Lima, Toledo suburbs,
Columbus, and Fort Wayne, Indiana. Rurban's strategy of efficient,
in-market acquisitions and opening loan production offices followed
by full-service branches has been a cost-effective approach to
building franchise value and improving earnings.
* The recent rate reductions were beneficial to The State Bank and
Trust Company, which is liability sensitive. The Banking Group net
interest margin for the second quarter 2008 was 3.83 percent, up 38
basis points from the linked quarter and 27 basis points from the
prior-year period.
* On May 23, 2008, the Company announced plans to acquire NBM
Bancorp, Incorporated and its subsidiary, National Bank of
Montpelier. The acquisition is expected to close later this year
pending the approval of NBM Bancorp, Incorporated shareholders,
banking regulators, and the satisfaction of customary closing
conditions. Upon completion, the deal will add approximately $109
million in assets and $90 million in deposits and extend Rurban's
banking operations into Williams County, Ohio. The acquisition is
projected to be immediately accretive to earnings with full
contribution in approximately six months from closing. A nominal
charge for merger related expenses before year-end is expected.
CONSOLIDATED - QUARTERLY RESULTS
(Dollars in thousands except per share data)
OPERATING EARNINGS: 2Q 2008 1Q 2008 2Q 2007
------------------- --------- --------- ---------
Net interest income $ 4,432 $ 3,817 $ 3,751
Non-interest income* 6,801 7,186 6,508
Operating revenue* 11,233 11,003 10,259
Provision for loan losses 213 192 146
Operating expense* 9,111 9,601 9,065
Net income (GAAP) 1,356 1,109 785
Operating income 1,224 1,008 785
Diluted EPS $ 0.28 $ 0.22 $ 0.16
* Nonrecurring item in 2Q 2008 is a (pretax) gain of $200,000 from
the recovery of legal fees associated with RFCBC. Nonrecurring items
in 1Q 2008 are (pretax) gains of $197,500 from WorldCom bond
recovery, $132,000 of proceeds from VISA IPO and expenses of $176,000
associated with RFCBC (workout company).
Operating revenue, consisting of net interest income and non-interest income, was $11.2 million for the second quarter of 2008, up 9.5 percent from the year-ago quarter. For second quarter 2008, net-interest income increased $681,000, or 18.2 percent, compared to the year-ago quarter. Growth in net interest income was driven from the combined impact of a 6.0 percent increase in average loans and a 36 basis point, or 11.3 percent, improvement in the year-over-year consolidated net interest margin.
Operating expenses were $9.1 million for the second quarter of 2008, which were unchanged from the second quarter of 2007. Expenses were well-controlled, mainly as a result of a 12 FTE decline in staffing, ending the current quarter with 273 FTE employees. This staff reduction kept salaries and employee benefits virtually unchanged over the course of the year. The increased postage and delivery expense - up $152,000 from second quarter 2007 - is a result of RDSI bringing mailing operations in-house during first quarter 2008 instead of outsourcing preparation and mailing. This is a pass-through expense, which also increases revenue, resulting in a net contribution to net income. The large decrease in professional fees from the year-ago quarter reflects the recovery of litigation expenses previously mentioned.
BANKING GROUP OPERATING RESULTS
Net income for the Banking Group was $1.2 million for the second quarter of 2008 compared with $830,000 reported for the prior-year quarter, an increase of 46.6 percent. Included in second quarter 2008 results is a recovery of $200,000 pre-tax ($132,000 after-tax) in legal fees associated with RFCBC.
"Our performance this quarter is being driven by initiatives begun two years ago with continuing innovations as markets change and opportunities are presented," said Mr. Joyce. "Our company has been, and continues to be, successful in growing our loan portfolio and originating mortgage loans meeting our stringent standards. We originated $13.0 million in new mortgage loans in the quarter, compared with $9.5 million in the year-ago second quarter. Our execution of deposit generation strategies continues to successfully increase low-cost deposits, while reducing our dependence on higher cost funding. These programs have virtually eliminated our current dependence on broker deposits."
BANKING GROUP - QUARTERLY RESULTS
(Dollars in thousands except per share data)
OPERATING EARNINGS: 2Q 2008 1Q 2008 2Q 2007
------------------- --------- --------- ---------
Net interest income $ 4,881 $ 4,295 $ 4,272
Non-interest income* 1,848 1,938 1,858
Operating revenue* 6,729 6,233 6,130
Provision for loan losses 213 192 146
Operating expense* 4,812 5,018 4,848
Net income (GAAP) 1,217 917 830
Operating income $ 1,085 $ 881 $ 830
* Nonrecurring item in 2Q 2008 is a (pretax) gain of $200,000 from
the recovery of legal fees associated with RFCBC. Nonrecurring items
in 1Q 2008 are (pretax) gains of $197,500 from WorldCom bond
recovery, $132,000 of proceeds from VISA IPO and expenses of $176,000
associated with RFCBC (workout company).
Rurban's Banking Group consists of The State Bank and Trust Company, a $560 million asset organization with a trust business managing approximately $375 million of assets, and RFCBC, Inc., which is a loan workout company and a small portion of the Banking Group. RFCBC is projected to be closed out at the end of this year and has only one remaining credit relationship that is less than $500 thousand, classified non-performing, that is making significant, regular debt reduction payments.
Operating revenue for the Banking Group, consisting of net interest income and non-interest income, totaled $6.7 million for the second quarter of 2008, compared with $6.2 million for the second quarter of 2007, an increase of 8.0 percent. Net interest income increased 13.6 percent to $4.9 million over the past three months, reflecting average earning asset growth of 2.3 percent and a Banking Group net interest margin of 3.83 percent for second quarter 2008, an increase of 27 basis points, or 7.6 percent, over the same period. In a market where interest rates have been declining, Rurban's net interest margin has been aided by the Bank's liability sensitive position.
The Bank recorded a provision for loan losses this quarter of $213,000 compared with $192,000 in the linked-quarter and $146,000 in the year-ago quarter. The allowance for loan loss to total loans was 1.04 percent at the end of the quarter. The higher provision in the second quarter is principally due to loan growth.
Operating expenses were $4.8 million for the second quarter of 2008, down $206,000 from the linked quarter and $37,000 from the prior-year second quarter. This decline is attributable to the efficiencies gained from merging all the bank activities into The State Bank and Trust Company during the first quarter of 2007, and the one-time recovery of legal fees at RFCBC totaling $200,000. Overall, litigation fees within the workout company of RFCBC continue to decline. Reflecting this improvement, the efficiency ratio for the Banking Group declined to 69.85 percent for the current quarter, compared with 75.90 percent for the linked quarter, and 77.23 percent for the prior-year second quarter.
Total loans, net of unearned income, were $404.4 million at June 30, 2008, up $22.8 million, or 6.0 percent, during the past twelve months, and $12.5 million (annualized 12.7 percent) from the linked quarter. Growth over the past twelve months was derived primarily from commercial real estate loans, up $24.5 million, and commercial business loans, up $7.3 million. Commercial loans now account for 67.7 percent of the loan portfolio, compared with 63.6 percent twelve months ago. Linked quarter growth was derived from commercial real estate, up $14.0 million, and commercial business loans, up $3.0 million. Growth from both prior periods was partially offset by declines in consumer and residential mortgage loans.
Total deposits at June 30, 2008 were $402.6 million, down $14.2 million, or 3.4 percent, from the linked quarter and down $5.0 million, or 1.2 percent, from 2007 June quarter-end. Time Certificates of Deposits led the declines in both periods - down $11.5 million, or 5.2 percent, in the linked quarter and $18.6, or 8.2 percent in the year-ago period. Year-over-year declines were offset by increases in interest bearing NOW accounts, up $8.6 million, and Money Market accounts up $6.1 million to $57.5 million and $71.7 million, respectively. Broker Deposits totaled only $1.3 million at quarter-end.
"Liability management has been one of our major focal points over the last two years," Mr. Joyce remarked. "We have aggressively marketed low-cost transaction deposit accounts in our markets, and our success in transaction accounts reflects that effort. At the end of the second quarter, the percentage of transaction account balances to total deposits increased from the linked quarter, as well as the year-ago quarter. As a result, our average cost of funds declined by 46 basis points from second quarter 2007. We remain focused on low cost transaction accounts versus high cost Certificate of Deposit accounts. We are pleased with the results of this strategy and will continue to aggressively market deposit products in our banking footprint."
ASSET QUALITY - QUARTERLY RESULTS
(Dollars in thousands except percent data)
ASSET QUALITY 2Q 2008 1Q 2008 2Q 2007
------------- --------- --------- ---------
Net charge-offs (Recoveries) $ (18) $ 166 $ 90
Net charge-offs to avg. loans
(Annualized) (0.02%) 0.17% 0.09%
Non-performing assets (NPA's) $ 6,707 $ 6,967 $ 5,997
NPA / Total assets 1.16% 1.22% 1.09%
Allowance for loan losses $ 4,247 $ 4,016 $ 3,824
Allowance for loan
losses / Loans 1.04% 1.02% 1.00%
Non-performing assets (loans + OREO + OAO) were $6.7 million, or 1.16 percent, of total assets on June 30, 2008, compared with $7.0 million, or 1.22 percent, of total assets for the linked quarter and $6.0 million, or 1.09 percent, of total assets 12 months ago. All benchmarks of asset quality remain stable.
RDSI OPERATING RESULTS
Second quarter 2008 net income for RDSI was $640,000, an increase of 34.5 percent from the $476,000 reported for the prior-year second quarter. Mr. Joyce commented, "RDSI continues to provide strong performance through its revenue growth and disciplined control of expenses." Total revenue for second quarter of 2008 was $5.3 million, an increase 6.8 percent above the $5.0 million reported for the second quarter of 2007. The increase in revenue was aided by strong growth in new client bank sales throughout 2007, which were converted in late 2007 and early 2008.
As of June 2008, RDSI clients totaled 117 banking organizations. RDSI provided Data Processing services to 75 clients and Item Processing services to a total of 92 clients.
Operating expenses were $4.3 million for second quarter 2008, up $88,000, or 2.1 percent, from the second quarter of 2007. The increase was due largely to postage expenses associated with the aforementioned in-house process RDSI started in the first quarter of 2008. Excluding this change in how the company handles postage expense, operating expenses decreased $86,000, or 2.0 percent, reflecting numerous efficiencies gained on consolidations within the item processing segment of RDSI's business.
Mr. Joyce concluded, "We continue to be pleased with RDSI's contribution to Rurban's performance. RDSI has been a key component to our successful first half of 2008, and we are looking forward to new avenues of growth for the business within a framework of careful, disciplined expense management. Again, this solid base of steady and consistent fee growth is a strategic competitive advantage for Rurban and contributes to shareholder value."
Rurban continues to maintain a strong capital position. Stockholders' equity totaled $59.4 million for June 30, 2008, an increase of $2.0 million, or 3.5 percent, from 12 months ago. Period-end tangible equity to tangible assets remains strong at 7.4%. 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 17 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 4,913,933 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
June 30, 2008, December 31, 2007 and June 30, 2007
June December June
2008 2007 2007
---- ---- ----
(Unaudited) (Unaudited)
ASSETS
Cash and due from banks $ 11,876,639 $ 15,183,627 $ 12,120,732
Federal funds sold -- 2,000,000 --
------------ ------------ -------------
Cash and cash
equivalents 11,876,639 17,183,627 12,120,732
Available-for-sale
securities 96,706,231 92,661,386 93,376,749
Loans held for sale 2,644,049 1,649,758 389,900
Loans, net of unearned
income 404,434,895 389,268,744 381,661,661
Allowance for loan losses (4,246,794) (3,990,455) (3,824,445)
Premises and equipment,
net 15,128,647 15,128,754 15,710,869
Purchased software 4,656,742 4,282,563 4,639,198
Federal Reserve and
Federal Home Loan Bank
Stock 4,105,000 4,021,200 4,040,700
Foreclosed assets held
for sale, net 1,479,561 124,131 83,891
Accrued interest
receivable 2,757,523 3,008,968 2,971,082
Goodwill 13,940,618 13,940,618 13,690,092
Core deposits and other
intangibles 4,788,465 5,135,228 5,503,122
Cash value of life
insurance 12,393,478 12,160,581 10,953,313
Other assets 5,847,772 6,638,895 6,883,346
------------ ------------ -------------
Total assets $576,512,826 $561,213,998 $ 548,200,210
============ ============ =============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits
Non interest bearing
demand $ 41,419,072 $ 41,541,297 $ 41,163,381
Interest bearing NOW 57,503,181 54,308,665 48,910,162
Savings 24,980,849 25,320,126 26,356,783
Money Market 71,656,108 61,380,252 65,599,894
Time Deposits 206,998,707 223,480,842 225,554,636
------------ ------------ -------------
Total deposits 402,557,917 406,031,182 407,584,856
Notes payable -- 922,457 1,126,860
Advances from Federal
Home Loan Bank 37,808,264 24,000,000 21,000,000
Fed Funds Purchased 3,600,000 -- 1,000,000
Repurchase Agreements 44,509,511 43,006,438 33,116,993
Trust preferred
securities 20,620,000 20,620,000 20,620,000
Accrued interest payable 2,158,948 2,532,914 2,121,446
Other liabilities 5,896,457 4,775,773 4,280,560
------------ ------------ -------------
Total liabilities 517,151,097 501,888,764 490,850,715
Shareholders' Equity
Common stock 12,568,583 12,568,583 12,568,583
Additional paid-in
capital 14,964,795 14,923,571 14,882,083
Retained earnings 33,916,713 32,361,106 31,291,504
Accumulated other
comprehensive income
(loss) (761,502) 82,235 (1,243,475)
Treasury stock (1,326,860) (610,260) (149,200)
------------ ------------ -------------
Total shareholders'
equity 59,361,729 59,325,235 57,349,495
------------ ------------ -------------
Total liabilities
and shareholders'
equity $576,512,826 $561,213,998 $ 548,200,210
============ ============ =============
RURBAN FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2008 2007 2008 2007
---- ---- ---- ----
Interest income
Loans
Taxable $ 7,023,308 $ 6,976,506 $13,831,504 $13,653,319
Tax-exempt 20,469 17,250 41,819 34,543
Securities
Taxable 1,090,570 1,044,300 2,130,464 2,135,497
Tax-exempt 165,798 160,845 324,165 313,902
Other 15,380 35,138 112,789 113,606
----------- ----------- ----------- -----------
Total interest
income 8,315,525 8,234,039 16,440,741 16,250,867
Interest expense
Deposits 2,623,590 3,381,667 5,715,492 6,715,397
Other borrowings 9,483 57,546 26,989 108,618
Retail
Repurchase
Agreements 450,763 351,833 911,315 695,682
Federal Home
Loan Bank
advances 377,146 242,658 679,482 492,245
Trust preferred
securities 422,385 450,197 858,089 895,511
----------- ----------- ----------- -----------
Total interest
expense 3,883,367 4,483,901 8,191,367 8,907,453
----------- ----------- ----------- -----------
Net interest
income 4,432,158 3,750,138 8,249,374 7,343,414
Provision for
loan losses 212,997 145,594 405,215 238,234
----------- ----------- ----------- -----------
Net interest
income after
provision for
loan losses 4,219,161 3,604,544 7,844,159 7,105,180
Non-interest
income
Data service
fees 4,948,783 4,629,258 10,213,348 9,463,394
Trust fees 815,734 865,880 1,670,841 1,692,262
Customer service
fees 612,825 533,209 1,199,032 1,061,633
Net gain on
sales of loans 183,145 207,366 457,748 307,442
Net realized
gain on sales
of securities -- 367 -- 367
Net proceeds
from VISA IPO -- -- 132,106 --
Investment
securities
recoveries -- -- 197,487 --
Loan servicing
fees 55,220 56,234 118,160 119,143
Gain (loss) on
sale of assets (390) 14,010 (71,422) 49,977
Other income 185,841 201,376 399,371 552,224
----------- ----------- ----------- -----------
Total non-
interest
income 6,801,158 6,507,700 14,316,671 13,246,442
Non-interest
expense
Salaries and
employee
benefits 4,435,657 4,185,324 8,874,421 8,582,111
Net occupancy
expense 511,179 505,925 1,077,195 1,033,058
Equipment
expense 1,625,708 1,676,676 3,193,345 3,282,549
Data processing
fees 104,792 114,243 201,359 270,424
Professional
fees 284,536 501,015 855,223 1,178,406
Marketing
expense 156,090 187,098 337,837 342,783
Printing and
office supplies 119,686 181,362 305,738 379,454
Telephone and
communication 421,858 437,690 843,787 882,894
Postage and
delivery
expense 535,813 384,091 1,138,447 776,352
State, local and
other taxes 186,418 165,175 367,186 364,916
Employee expense 303,372 280,078 533,983 535,147
Other expenses 425,237 446,693 983,185 737,529
----------- ----------- ----------- -----------
Total non-
interest
expense 9,110,346 9,065,370 18,711,706 18,365,623
----------- ----------- ----------- -----------
Income before
income tax
expense 1,909,973 1,046,874 3,449,124 1,985,999
Income tax
expense 554,149 261,829 983,944 498,501
----------- ---------- ----------- -----------
Net income $ 1,355,824 $ 785,045 $ 2,465,180 $ 1,487,498
=========== =========== =========== ===========
Earnings per
common share:
Basic $ 0.28 $ 0.16 $ 0.50 $ 0.30
=========== =========== =========== ===========
Diluted $ 0.28 $ 0.16 $ 0.50 $ 0.30
=========== =========== =========== ===========
RURBAN FINANCIAL CORP.
CONSOLIDATED FINANCIAL
HIGHLIGHTS
(Unaudited)
------------------------
Three Months Ended Six Months Ended
June 30, June 30,
(dollars in thousands -------- --------
except per share data) 2008 2007 2008 2007
------------------------ --------- --------- --------- ---------
EARNINGS
Net interest income $ 4,432 $ 3,750 $ 8,249 $ 7,344
Provision for loan loss $ 213 $ 146 $ 405 $ 239
Non-interest income $ 6,801 $ 6,508 $ 14,317 $ 13,247
Revenue (net interest
income plus non-
interest income) $ 11,233 $ 10,258 $ 22,566 $ 20,591
Non-interest expense $ 9,111 $ 9,065 $ 18,712 $ 18,366
Net income $ 1,356 $ 785 $ 2,465 $ 1,487
PER SHARE DATA
Basic earnings per
share $ 0.28 $ 0.16 $ 0.50 $ 0.30
Diluted earnings per
share $ 0.28 $ 0.16 $ 0.50 $ 0.30
Book value per share $ 12.08 $ 11.43 $ 12.08 $ 11.43
Tangible book value per
share $ 8.41 $ 7.83 $ 8.41 $ 7.83
Cash dividend per share $ 0.08 $ 0.06 $ 0.16 $ 0.12
PERFORMANCE RATIOS
Return on average
assets 0.94% 0.57% 0.86% 0.54%
Return on average
equity 9.09% 5.45% 8.27% 5.18%
Net interest margin
(tax equivalent) 3.55% 3.19% 3.34% 3.11%
Net interest margin
(Banking Group) 3.83% 3.56% 3.64% 3.51%
Non-interest expense /
Average assets 6.29% 6.60% 6.53% 6.65%
Efficiency Ratio -
(Banking Group)
(non-GAAP) 69.85% 77.23% 72.83% 80.69%
MARKET DATA PER SHARE
Market value per share
- Period end $ 9.52 $ 12.82 $ 9.52 $ 12.82
Market as a % of book 79% 112% 79% 112%
Cash dividend yield 3.36% 1.87% 3.36% 1.87%
Period-end common
shares outstanding
(000) 4,914 5,015 4,914 5,015
Common stock market
capitalization ($000) $ 46,781 $ 64,298 $ 46,781 $ 64,298
CAPITAL & LIQUIDITY
Equity to assets 10.3% 10.5% 10.3% 10.5%
Period-end tangible
equity to tangible
assets 7.4% 7.4% 7.4% 7.4%
Tier 1 risk-based
capital ratio 14.6% 14.9% 14.6% 14.9%
Total risk-based
capital ratio 15.7% 16.1% 15.7% 16.1%
ASSET QUALITY
Net charge-offs /
(Recoveries) $ (18) $ 90 $ 149 $ 131
Net loan charge-offs
(Ann.) / Average loans (0.02%) 0.09% 0.07% 0.14%
Non-performing loans $ 5,141 $ 5,913 $ 5,141 $ 5,913
OREO / OAOs $ 1,566 $ 84 $ 1,566 $ 84
Non-performing assets $ 6,707 $ 5,997 $ 6,707 $ 5,997
Non-performing assets /
Total assets 1.16% 1.09% 1.16% 1.09%
Allowance for loan
losses / Total loans 1.04% 1.00% 1.04% 1.00%
Allowance for loan
losses / Non-performing
Assets 63.3% 63.8% 59.0% 63.8%
END OF PERIOD BALANCES
Total loans, net of
unearned income $ 404,435 $ 381,662 $ 404,435 $ 381,662
Allowance for loan loss $ 4,247 $ 3,824 $ 4,247 $ 3,824
Total assets $ 576,513 $ 548,200 $ 576,513 $ 548,200
Deposits $ 402,558 $ 407,585 $ 402,558 $ 407,585
Stockholders' equity $ 59,362 $ 57,349 $ 59,362 $ 57,349
Full-time equivalent
employees 273 285 273 285
AVERAGE BALANCES
Loans $ 404,756 $ 379,191 $ 397,338 $ 375,499
Total earning assets $ 510,521 $ 482,036 $ 504,628 $ 483,449
Total assets $ 579,004 $ 549,426 $ 572,914 $ 552,398
Deposits $ 412,080 $ 410,392 $ 412,045 $ 412,979
Stockholders' equity $ 59,671 $ 57,617 $ 59,628 $ 57,443
RURBAN FINANCIAL CORP.
CONSOLIDATED FINANCIAL
HIGHLIGHTS
(Unaudited)
-------------------- -------- -------- -------- -------- --------
(dollars in thousands
except per share 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
data) 2008 2008 2007 2007 2007
-------------------- -------- -------- -------- -------- --------
EARNINGS
Net interest income $ 4,432 $ 3,817 $ 3,783 $ 3,661 $ 3,750
Provision for loan
loss $ 213 $ 192 $ 143 $ 140 $ 146
Non-interest income $ 6,801 $ 7,516 $ 6,832 $ 6,783 $ 6,508
Revenue (net
interest income
plus non-
interest income) $ 11,233 $ 11,333 $ 10,615 $ 10,444 $ 10,258
Non-interest
expense $ 9,111 $ 9,601 $ 9,164 $ 9,106 $ 9,065
Net income $ 1,356 $ 1,109 $ 906 $ 864 $ 785
PER SHARE DATA
Basic earnings per
share $ 0.28 $ 0.22 $ 0.18 $ 0.17 $ 0.16
Diluted earnings
per share $ 0.28 $ 0.22 $ 0.18 $ 0.17 $ 0.16
Book value per
share $ 12.08 $ 12.11 $ 11.92 $ 11.70 $ 11.43
Tangible book value
per share $ 8.41 $ 8.10 $ 8.00 $ 7.87 $ 7.83
Cash dividend per
share $ 0.08 $ 0.08 $ 0.07 $ 0.07 $ 0.06
PERFORMANCE RATIOS
Return on average
assets 0.94% 0.78% 0.64% 0.62% 0.57%
Return on average
equity 9.09% 7.50% 6.15% 5.97% 5.45%
Net interest margin
(tax equivalent) 3.55% 3.26% 3.12% 2.96% 3.19%
Net interest margin
(Banking Group) 3.83% 3.45% 3.43% 3.41% 3.56%
Non-interest
expense /
Average assets 6.29% 6.77% 6.48% 6.56% 6.60%
Efficiency Ratio -
(Banking Group)
(non-GAAP) 69.85% 75.90% 76.68% 80.17% 77.23%
MARKET DATA PER
SHARE
Market value per
share - Period
end $ 9.52 $ 10.24 $ 12.49 $ 12.65 $ 12.82
Market as a % of
book 79% 85% 105% 108% 112%
Cash dividend yield 3.36% 3.13% 2.24% 2.21% 1.87%
Period-end common
shares outstanding
(000) 4,914 4,942 4,979 4,999 5,015
Common stock market
capitalization
($000) $ 46,781 $ 50,605 $ 62,188 $ 63,237 $ 64,298
CAPITAL & LIQUIDITY
Equity to assets 10.3% 10.5% 10.6% 10.3% 10.5%
Period-end tangible
equity to tangible
assets 7.4% 7.2% 7.3% 7.2% 7.4%
Tier 1 risk-based
capital ratio 14.6% 14.9% 14.8% 14.6% 14.9%
Total risk-based
capital ratio 15.7% 15.8% 16.0% 15.7% 16.1%
ASSET QUALITY
Net charge-offs /
(Recoveries) $ (18) $ 166 $ 89 $ 28 $ 90
Net loan charge-
offs (Ann.) /
Average loans (0.02%) 0.17% 0.09% 0.03% 0.09%
Non-performing
loans $ 5,141 $ 5,305 $ 5,990 $ 6,361 $ 5,913
OREO / OAOs $ 1,566 $ 1,662 $ 172 $ 71 $ 84
Non-performing
assets $ 6,707 $ 6,967 $ 6,162 $ 6,432 $ 5,997
Non-performing
assets / Total
assets 1.16% 1.22% 1.10% 1.14% 1.09%
Allowance for loan
losses / Total
loans 1.04% 1.02% 1.03% 1.01% 1.00%
Allowance for loan
losses / Non-
performing Assets 63.3% 57.6% 64.8% 61.2% 63.8%
END OF PERIOD
BALANCES
Total loans, net of
unearned income $404,435 $391,963 $389,269 $388,264 $381,662
Allowance for loan
loss $ 4,247 $ 4,016 $ 3,990 $ 3,937 $ 3,824
Total assets $576,513 $571,733 $561,214 $565,674 $548,200
Deposits $402,558 $416,712 $406,031 $413,152 $407,585
Stockholders'
equity $ 59,362 $ 59,870 $ 59,325 $ 58,504 $ 57,349
Full-time
equivalent
employees 273 272 275 280 285
AVERAGE BALANCES
Loans $404,756 $389,917 $389,526 $385,126 $379,191
Total earning
assets $510,521 $498,731 $496,782 $488,798 $482,036
Total assets $579,004 $567,129 $565,779 $555,451 $549,426
Deposits $412,080 $412,424 $413,473 $411,948 $410,392
Stockholders'
equity $ 59,671 $ 59,149 $ 58,928 $ 57,830 $ 57,617
Rurban Financial Corp.
Segment Reporting
Three Months Ended June 30, 2008
($ in Thousands)
---------------------------------------------------
Parent
Company Rurban
Income Statement Banking Data and Elimination Financial
Measures Group Processing Other Entries Corp.
---------------- ---------------------------------------------------
Interest Income $ 8,339 $ -- $ -- $ (24) $ 8,315
Interest Expense 3,458 32 417 (24) $ 3,883
Net Interest
Income 4,881 (32) (417) -- $ 4,432
Provision For
Loan Loss 213 -- -- -- $ 213
Non-interest
Income 1,848 5,317 402 (766) $ 6,801
Non-interest
Expense 4,812 4,316 748 (766) $ 9,110
Net Income QTD $ 1,217 $ 640 $ (501) $ -- $ 1,356
Performance
Measures
-----------
Average Assets
-QTD $560,223 $ 20,214 $ 81,579 $(83,011) $579,004
ROAA 0.87% 12.66% -- -- 0.94%
Average Equity
- QTD $ 59,395 $ 15,861 $ 59,671 $(75,256) $ 59,671
ROAE 8.20% 16.14% -- -- 9.09%
Efficiency Ratio
- % 69.85% -- -- -- 79.56%
Average Loans
- QTD $406,051 $ -- $ -- $ (1,295) $404,756
Average Deposits
- QTD $418,541 $ -- $ -- $ (6,460) $412,080
Rurban Financial Corp.
Segment Reporting
Six Months Ended June 30, 2008
($ in Thousands)
---------------------------------------------------
Parent
Company Rurban
Income Statement Banking Data and Elimination Financial
Measures Group Processing Other Entries Corp.
---------------- ---------------------------------------------------
Interest Income $ 16,490 $ -- $ 1 $ (51) $ 16,440
Interest Expense 7,314 76 852 (51) $ 8,191
Net Interest
Income 9,176 (76) (851) -- $ 8,249
Provision For
Loan Loss 405 -- -- -- $ 405
Non-interest
Income 4,016 10,967 809 (1,476) $ 14,316
Non-interest
Expense 9,831 8,710 1,647 (1,476) $ 18,712
Net Income YTD $ 2,134 $ 1,440 $ (1,109) $ -- $ 2,465
Performance
Measures
-----------
Average Assets
-YTD $553,862 $ 20,130 $ 81,659 $(82,737) $572,914
ROAA 0.77% 14.31% -- -- 0.86%
Average Equity
- YTD $ 59,219 $ 15,711 $ 59,628 $(74,930) $ 59,628
ROAE 7.21% 18.33% -- -- 8.27%
Efficiency
Ratio - % 72.83% -- -- -- 81.39%
Average Loans
- YTD $398,715 $ -- $ -- $ (1,377) $397,338
Average Deposits
- YTD $418,475 $ -- $ -- $ (6,430) $412,045
Rurban Financial Corp.
Proforma Performance Measurement
Quarterly Comparison - Second Quarter 2008
($ in Thousands)
-----------------------------------------------------
Parent Rurban
Banking Data Company Elimination Financial
Group Processing and Other Entries Corp.
-----------------------------------------------------
Revenue
-------
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
3Q07 $ 5,939 $ 5,332 $ (100) $ (727) $ 10,444
2Q07 $ 6,130 $ 4,949 $ (82) $ (739) $ 10,258
2nd Quarter
Comparison $ 599 $ 336 $ 67 $ -- $ 975
Non-interest
Expenses
------------
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
3Q07 $ 4,874 $ 4,334 $ 626 $ (727) $ 9,106
2Q07 $ 4,849 $ 4,228 $ 728 $ (739) $ 9,065
2nd Quarter
Comparison $ (37) $ 88 $ 20 $ -- $ 45
Net Income
----------
2Q08 $ 1,217 $ 640 $ (501) $ -- $ 1,356
1Q08 $ 917 $ 800 $ (608) $ -- $ 1,109
4Q07 $ 836 $ 648 $ (578) $ -- $ 906
3Q07 $ 674 $ 659 $ (470) $ -- $ 864
2Q07 $ 830 $ 476 $ (521) $ -- $ 785
2nd Quarter
Comparison $ 387 $ 164 $ 20 $ -- $ 571
Average
Assets
-------
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
3Q07 $ 536,470 $ 19,739 $ 79,380 $ (80,137) $ 555,451
2Q07 $ 530,618 $ 20,320 $ 78,908 $ (80,420) $ 549,426
2nd Quarter
Comparison $ 29,605 $ (107) $ 2,671 $ -- $ 29,579
ROAA
----
2Q08 0.87% 12.66% -- -- 0.94%
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%
2nd Quarter
Comparison 0.24% 3.29% -- -- 0.37%
Average
Equity
-------
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
3Q07 $ 56,805 $ 14,732 $ 57,830 $ (71,536) $ 57,830
2Q07 $ 56,249 $ 14,182 $ 57,617 $ (70,431) $ 57,617
2nd Quarter
Comparison $ 3,146 $ 1,678 $ 2,054 $ -- $ 2,054
ROAE
----
2Q08 8.20% 16.14% -- -- 9.09%
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%
2nd Quarter
Comparison 2.30% 2.71% -- -- 3.64%
Efficiency
Ratio
----------
2Q08 69.85% 80.50% -- -- 79.56%
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%
2nd Quarter
Comparison (7.38%) (3.59%) -- -- (7.05%)