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%)