DEFIANCE, Ohio, Oct. 18 /PRNewswire-FirstCall/ -- Rurban Financial Corp.
(Nasdaq: RBNF), a diversified provider of full-service community banking,
investment management, trust services and bank data processing, today reported
third quarter 2006 earnings. Highlights of the quarter include:
- Net income of $814,000, up $322,000 or 65.3 percent, compared with
net income of $492,000 reported for the third quarter of 2005. Diluted
earnings per share were $0.16 for the current quarter, up 45.5 percent
from $0.11 reported for the 2005 third quarter; average diluted shares
outstanding increased 10.0 percent year-over-year.
- Consolidated non-performing assets at 2006 third quarter-end, including
RFCBC, the loan workout subsidiary, were $6.1 million or 1.07 percent
of total assets, compared with $15.0 million or 3.43 percent of assets
for the prior-year third quarter.
- On October 10th, Rurban announced that it filed an application to open
a full-service banking center in Fort Wayne, Indiana where it presently
has a Loan Production Office.
- Since January 1, 2006, Rurban's Banking Group, consisting of The State
Bank and Trust Company and The Exchange Bank, reported organic loan
growth of $37.3 million, or 11.4 percent (15.2 percent annualized).
Deposit growth since year-end 2005 was $27.3 million or 7.1 percent
(9.5 percent annualized).
- The Company's efficiency ratio was 88.15 percent for the consolidated
entity. The efficiency of the Banking Group continues to reduce from
93.53 percent a year-ago to 84.01 percent for the current quarter.
- RDSI, the data processing subsidiary, reported a strong quarter with
revenue of $4.1 million, up 22.3 percent from third quarter last year.
Net income of $478,000 was $187,000 or 64.3 percent higher. RDSI
completed its acquisition of Lansing, Michigan based Diverse Computer
Marketers (DCM) on September 2, 2006. DCM will operate as a subsidiary
of RDSI.
Kenneth A. Joyce, President and Chief Executive Officer, commented, "We
continue to make progress as a result of the initiatives we began in 2005.
Rurban had solid core earnings for three consecutive quarters and the expense
of the expansion initiatives has been moderating throughout 2006. We believe
we are now positioned to achieve greater growth and profitability as we take
Rurban into new markets and products."
Earnings: (Three months ended) Sept. 2006 Dec. 2005 Sept. 2005
(Dollars in thousands except
per share data)
Diluted EPS $0.16 $(0.08) $0.11
Net interest income 3,756 3,147 2,982
Provision (credit) for loan losses 35 613 (382)
Non-interest income 5,903 4,477 4,595
Non-interest expense 8,515 7,632 7,219
Net income (loss) 814 (344) 492
CONSOLIDATED RESULTS Total revenue, consisting of net interest income plus non-interest income,
was $9.7 million for the third quarter of 2006, up $2.1 million or 27.5
percent, compared with $7.6 million for the prior-year third quarter. Net
interest income was $3.8 million, up $773,000 or 25.9 percent, from the 2005
third quarter. Average earning assets rose $110.0 million or 27.7 percent over
the 12-month period, of which approximately $72.9 million was derived from the
acquisition of Exchange Bank at year-end 2005. Year-over-year, the net
interest margin was unchanged at 3.10 percent; the $8.9 million decline in
non-performing assets over the course of the year, combined with a lower cost
of funds from deposits acquired in the Exchange Bank acquisition, and the
approximately $60.4 million in deposits from the two branches purchased in the
Lima market in June of 2005, were offset by rising funding costs, which
gradually eroded the interest margin from its first quarter 2006 high of 3.37
percent.
Non-interest income was $5.9 million for the third quarter of 2006
compared with $4.6 million for the prior-year third quarter, an increase of
$1.3 million or 28.5 percent. RDSI, Rurban's data processing subsidiary,
accounts for approximately $4.1 million or 69.2 percent of non-interest income
and 56.7 percent of the growth; the remainder was derived from mortgage
banking activities ($254,000 from gains on sale) and a swing of $61,900 from
the sale of OREOs, partially offset by a $34,000 lower level of securities
gains than last year. The quarter was also impacted by a $265,000 increase in
other income, which was driven by the payments on impaired loans and the sale
of previously charged-off loans at Exchange Bank.
Revenue for the quarter continued to grow faster than non-interest
expense; year-over-year expense growth was $1.3 million or 17.9 percent
compared with revenue growth of $2.1 million or 27.5 percent. The $1.3
million expense increase was primarily due to the addition of Exchange Bank's$1.2 million of operating expenses, partially offset by a $438,000 improvement
in State Bank's operating expenses since the acquisition of the Lima branches
in the second quarter of 2005.
Mr. Joyce continued, "Asset quality continues to improve. The decisive
steps we took at year-end 2005 to sell $8.4 million of problem loans and add
to reserves were a turning point on our road to recovery. With fewer troubled
assets, we could devote ourselves to building a profitable financial
institution. We have continued to reduce non-performing assets over the past
year from $15.0 million or 3.43 percent of assets to a current level of $6.1
million or 1.07 percent of assets, and the negative financial impact on Rurban
has declined commensurately. We are working hard to reduce the remaining non-
performing assets to a level consistent with our peers. With every quarter, we
get closer to meeting our Ohio peer banks at around 60 to 65 basis points."
Asset Quality: (Three months ended) Sept. 2006Dec. 2005Sept. 2005
(Dollars in thousands)
Net Charge-Offs / (Recoveries) $(54) $1,638 $14
Net Charge-Offs / Avg. loans (0.06%) 2.40% 0.02%
Allowance for Loan Loss 4,522 4,700 4,814
Allowance for Loan Loss / Loans 1.24% 1.44% 1.77%
Non-Performing Assets 6,126 8,878 15,025
NPA / Total Assets 1.07% 1.67% 3.43%
Non-performing assets (non-performing loans, OREO & OAO) were $6.1 million
or 1.07% percent of total assets at September 30, 2006, a decline of $8.9
million from twelve months ago, despite an additional $1.5 million of non-
performing assets acquired with Exchange Bank, which were not included in the
prior-year third quarter financial results. Of the $6.1 million of remaining
non-performing assets, $1.1 million remain in the loan workout company RFCBC.
"We are getting closer to resolution on several large credits and expect to
hit our target of reducing non-performing assets to total assets below 1% by
year end," commented Mr. Joyce. The loan loss reserve now stands at 1.24
percent of period-end loans.
Balance sheet growth over the past twelve months has been achieved through
a combination of acquisitions and organic growth. Year-over-year, assets
increased $131.4 million or 30.0 percent. Since December 31, 2005, loan growth
has been exclusively organic; loans increased $37.3 million or 15.2 percent
annualized over the past nine months, and by $4.5 million over the last
quarter, equivalent to 5.0 percent growth annualized. Mr. Joyce continued, "We
are being selective in this environment in terms of asset quality and our
ability to fund at a reasonable spread. We received $6.2 million in commercial
loan payoffs in late September, however; our loan pipelines remain strong and
we continue to see an increase in mortgage banking activity."
Rurban continues to be very well capitalized. Stockholders' equity at
September 30, 2006 was $56.1 million, equivalent to 9.8 percent of total
assets; on a tangible basis, the ratio was 6.3 percent. The total risk-based
capital ratio was 16.0 percent, well in excess of the "well-capitalized"
regulatory threshold of 10 percent. At quarter-end, Rurban had 5,027,433 of
its 10,000,000 authorized shares outstanding. Mr. Joyce concluded, "We are
making progress in each of our business units, but at different rates. We are
well into a year that has been transformative in terms of profit generation,
the reduction of business risk, and the clarification of our strategic
direction. Our new management team has been successfully integrated into the
Rurban family and our progress should begin to accelerate going forward."
BANKING GROUP RESULTS
- Mr. Joyce commented, "All of our bank-related businesses are growing
and becoming more profitable. We are particularly pleased with the
progress being made at State Bank and Trust where third quarter
net income increased 82.4 percent over the past twelve months."
State Bank and Trust Company opened a Loan Production Office in
Fort Wayne in January 2006. It announced on October 10th that it has
applied to open a new full-service branch office in Fort Wayne, which
will incorporate the present LPO. The Fort Wayne branch is expected to
open in the fourth quarter of 2006, subject to regulatory approvals and
the normal contingencies of a purchase agreement for the branch site.
- On a consolidated basis, third quarter net income for the banking group
was $631,000 compared with $454,000 for the year-ago quarter, an
increase of 39.0 percent. Revenue increased 25.8 percent to
$5.4 million. Exchange Bank turned profitable in the second quarter,
and has continued to improve its performance in the current quarter.
RELIANCE FINANCIAL SERVICES, N.A. (RFS) Rurban's trust company is building profitability under its new CEO.
Revenue increased 17.7 percent in the third quarter compared to the prior-year
quarter, while expenses increased only 5.2 percent. Net income for the quarter
was $251,000, up $75,000 or 42.6 percent year-over-year. This quarter included
approximately $104,000, net of federal income tax, of a one time fee income
associated with the buy-out of a third party customer.
RURBANC DATA SERVICES, INC. (RDSI)
On September 2nd, Rurbanc Data Services, Inc., Rurban's data and item
processing subsidiary, completed its acquisition of Diverse Computer Marketers
(DCM). Similarly to RDSI, DCM provides check-processing services to 48
financial institutions in several Midwest states, primarily Michigan and
Indiana.
RDSI's revenue for the quarter was $4.1 million, an increase of $733,000
or 21.9 percent from the year-ago quarter; and 12.4 percent ahead of the
linked quarter. Net income for the quarter was $478,000, up an exceptionally
strong 64.3 percent from the prior-year period; net income increased 6.0
percent compared to the second quarter. The twenty-two new bank contracts over
the past year are having a positive impact on revenue growth, as is the
addition of DCM's revenue stream. "DCM is proving to be an excellent
acquisition for us," commented Joyce. "We expected the acquisition to be
accretive to earnings and the first month's results appear to support our
assumptions and projections. We continue to be very excited about the
potential of this acquisition and the potential synergies with RDSI."
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, The Exchange Bank, Reliance Financial Services,
N.A., Rurbanc Data Services, Inc. (RDSI), Diverse Computer Marketers (DCM) and
RFCBC, Inc. The two community banks, State Bank and Exchange Bank, offer a
full range of financial services through 19 offices in Allen, Defiance,
Fulton, Lucas, Paulding and Wood Counties, Ohio and Allen County, Indiana.
Reliance Financial Services offers a diversified array of trust and financial
services to customers throughout the Midwest. RDSI and DCM provide data and
item processing services to community banks in Arkansas, Florida, Illinois,
Indiana, Michigan, Missouri, Ohio and Wisconsin. Rurban's common stock is
quoted on the Nasdaq Global Market under the symbol RBNF. The Company
currently has 10,000,000 shares of stock authorized and 5,027,433 shares
outstanding. The Company's website is http://www.rurbanfinancial.net .
Forward-Looking Statements
Certain statements within this document, which are not statements of
historical fact, constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve risks and uncertainties and actual results may differ
materially from those predicted by the forward-looking statements. These
risks and uncertainties include, but are not limited to, risks and
uncertainties inherent in the national and regional banking, insurance and
mortgage industries, competitive factors specific to markets in which Rurban
and its subsidiaries operate, future interest rate levels, legislative and
regulatory actions, capital market conditions, general economic conditions,
geopolitical events, the loss of key personnel and other factors.
Forward-looking statements speak only as of the date on which they are
made, and Rurban undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which the
statement is made. All subsequent written and oral forward-looking statements
attributable to Rurban or any person acting on our behalf are qualified by
these cautionary statements.
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, 2006 and December 31, 2005
September December
2006 2005
(Unaudited)
ASSETS
Cash and due from banks $18,333,213 $12,650,839
Federal funds sold - -
Cash and cash equivalents 18,333,213 12,650,839
Interest-earning deposits in other
financial institutions 150,000 150,000
Available-for-sale securities 127,863,121 139,353,329
Loans held for sale 282,100 224,000
Loans, net of unearned income 364,343,193 327,048,229
Allowance for loan losses (4,521,911) (4,699,827)
Premises and equipment, net 13,790,324 13,346,632
Purchased software 4,722,746 3,916,913
Federal Reserve and Federal Home Loan
Bank Stock 3,994,000 3,607,500
Foreclosed assets held for sale, net 490,256 2,309,900
Accrued interest receivable 3,399,893 3,010,355
Goodwill 14,169,292 8,917,373
Core deposits and other intangibles 5,375,386 3,742,333
Cash value of life insurance 10,706,737 10,443,487
Other assets 6,888,763 6,521,213
Total assets $569,987,113 $530,542,276
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Demand $44,369,103 $52,073,751
Savings, interest checking and
money market 133,184,971 124,206,115
Time 234,623,570 208,558,046
Total deposits 412,177,644 384,837,912
Notes payable 2,468,646 938,572
Advances from Federal Home Loan
Bank 38,500,000 45,500,000
Fed Funds Purchased 800,000 4,600,000
Repurchase Agreements 31,784,052 6,080,420
Trust preferred securities 20,620,000 20,620,000
Accrued interest payable 2,108,320 1,373,044
Other liabilities 5,417,278 12,141,680
Total liabilities 513,875,940 476,091,628
Shareholders' Equity
Common stock: stated value $2.50
per share; shares authorized:
10,000,000; shares issued: 5,027,433;
shares outstanding: 2006 - 5,027,433,
December 31, 2005 - 5,027,433 12,568,583 12,568,583
Additional paid-in capital 14,852,930 14,835,110
Retained earnings 29,998,511 28,702,817
Accumulated other comprehensive loss (1,308,851) (1,655,862)
Total shareholders' equity 56,111,173 54,450,648
Total liabilities and
shareholders' equity $569,987,113 $530,542,276
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
For The Third Quarter Ended September 30, 2006 and 2005
Third Third Increase/
Quarter Quarter (Decrease)
2006 2005 $
Interest income
Loans
Taxable $6,641,379 $4,187,543 $2,453,836
Tax-exempt 18,326 17,898 428
Securities
Taxable 1,306,979 1,095,151 211,828
Tax-exempt 183,466 71,264 112,202
Other 7,323 57,498 (50,175)
Total interest income 8,157,473 5,429,354 2,728,119
Interest expense
Deposits 3,017,993 1,615,308 1,402,685
Other borrowings 67,773 67,162 611
Repurchase Agreements 182,007 23,874 158,133
Federal Home Loan Bank advances 667,749 440,175 227,574
Trust preferred securities 466,417 300,360 166,057
Total interest expense 4,401,939 2,446,879 1,955,060
Net interest income 3,755,534 2,982,475 773,059
Provision for loan losses 35,000 (382,000) 417,000
Net interest income after provision
for loan losses 3,720,534 3,364,475 356,059
Non-interest income
Data service fees 3,785,037 3,042,996 742,041
Trust fees 753,449 767,969 (14,520)
Customer service fees 542,518 526,197 16,321
Net gain on sales of loans 283,123 28,895 254,228
Net realized gains (losses) on
sales of available-for-sale
securities - 34,050 (34,050)
Loan servicing fees 96,754 79,186 17,568
Gain (loss) on sale of assets 25,914 (36,011) 61,925
Other income 415,961 151,328 264,633
Total non-interest income 5,902,756 4,594,610 1,308,146
Non-interest expense
Salaries and employee benefits 4,253,924 3,607,270 646,654
Net occupancy expense 468,855 312,661 156,194
Equipment expense 1,445,073 1,294,686 150,387
Data processing fees 146,703 99,085 47,618
Professional fees 481,132 467,951 13,181
Marketing expense 168,031 144,954 23,077
Printing and office supplies 126,765 115,320 11,445
Telephone and communication 467,692 388,900 78,792
Postage and delivery expense 142,957 77,979 64,978
State, local and other taxes 188,464 146,683 41,781
Employee expense 235,429 225,032 10,397
Other expenses 389,631 338,556 51,075
Total non-interest expense 8,514,656 7,219,077 1,295,579
Income before income tax expense 1,108,634 740,008 368,626
Income tax expense 294,893 247,824 47,069
Net income $813,741 $492,184 $321,557
Earnings per common share:
Basic $0.16 $0.11 $0.05
Diluted $0.16 $0.11 $0.05
Average diluted shares outstanding 5,027,704 4,569,316
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
For The Third Quarter Ended September 30, 2006 and Second Quarter 2006
Third Second Increase/
Quarter Quarter (Decrease)
2006 2006 $
Interest income
Loans
Taxable $6,641,379 $6,043,057 $598,322
Tax-exempt 18,326 15,157 3,169
Securities
Taxable 1,306,979 1,333,858 (26,879)
Tax-exempt 183,466 136,570 46,896
Other 7,323 14,046 (6,723)
Total interest income 8,157,473 7,542,688 614,785
Interest expense
Deposits 3,017,993 2,556,180 461,813
Other borrowings 67,773 26,148 41,625
Repurchase Agreements 182,007 159,276 22,731
Federal Home Loan Bank advances 667,749 533,845 133,904
Trust preferred securities 466,417 436,776 29,641
Total interest expense 4,401,939 3,712,225 689,714
Net interest income 3,755,534 3,830,463 (74,929)
Provision for loan losses 35,000 56,321 (21,321)
Net interest income after provision
for loan losses 3,720,534 3,774,142 (53,608)
Non-interest income
Data service fees 3,785,037 3,286,586 498,451
Trust fees 753,449 792,227 (38,778)
Customer service fees 542,518 542,687 (169)
Net gain on sales of loans 283,123 71,664 211,459
Loan servicing fees 96,754 117,785 (21,031)
Gain (loss) on sale of assets 25,914 78,558 (52,644)
Other income 415,961 378,745 37,216
Total non-interest income 5,902,756 5,268,252 634,504
Non-interest expense
Salaries and employee benefits 4,253,924 3,795,252 458,672
Net occupancy expense 468,855 425,918 42,937
Equipment expense 1,445,073 1,347,634 97,439
Data processing fees 146,703 119,368 27,335
Professional fees 481,132 524,902 (43,770)
Marketing expense 168,031 242,498 (74,467)
Printing and office supplies 126,765 173,361 (46,596)
Telephone and communication 467,692 407,648 60,044
Postage and delivery expense 142,957 122,267 20,690
State, local and other taxes 188,464 190,436 (1,972)
Employee expense 235,429 260,523 (25,094)
Other expenses 389,631 470,068 (80,437)
Total non-interest expense 8,514,656 8,079,875 434,781
Income before income tax expense 1,108,634 962,519 146,115
Income tax expense 294,893 248,996 45,897
Net income $813,741 $713,523 $100,218
Earnings per common share:
Basic $0.16 $0.14 $0.02
Diluted $0.16 $0.14 $0.02
Average diluted shares outstanding 5,027,704 5,028,397
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
For The Nine Months Ended September 30, 2006 and 2005
Increase/
Nine Months Nine Months (Decrease)
2006 2005 $
Interest income
Loans
Taxable $18,238,590 $12,098,708 $6,139,882
Tax-exempt 45,718 48,227 (2,509)
Securities
Taxable 3,953,438 3,134,559 818,879
Tax-exempt 451,869 165,462 286,407
Other 57,635 159,716 (102,081)
Total interest income 22,747,250 15,606,672 7,140,578
Interest expense
Deposits 7,695,387 4,012,052 3,683,335
Other borrowings 120,220 204,365 (84,145)
Retail Repurchase Agreements 465,560 60,328 405,232
Federal Home Loan Bank advances 1,684,415 1,581,052 103,363
Trust preferred securities 1,331,615 842,170 489,445
Total interest expense 11,297,197 6,699,967 4,597,230
Net interest income 11,450,053 8,906,705 2,543,348
Provision for loan losses 337,321 (30,000) 367,321
Net interest income after provision
for loan losses 11,112,732 8,936,705 2,176,027
Non-interest income
Data service fees 10,312,757 9,312,961 999,796
Trust fees 2,361,127 2,351,509 9,618
Customer service fees 1,635,272 1,409,199 226,073
Net gain on sales of loans 415,833 46,243 369,590
Net realized gains (losses) on sales
of available-for-sale securities - 25,300 (25,300)
Loan servicing fees 301,233 225,326 75,907
Gain (loss) on sale of assets 85,346 (18,935) 104,281
Other income 1,067,739 513,714 554,025
Total non-interest income 16,179,307 13,865,317 2,313,990
Non-interest expense
Salaries and employee benefits 11,906,909 10,339,614 1,567,295
Net occupancy expense 1,334,722 897,058 437,664
Equipment expense 4,168,534 3,831,477 337,057
Data processing fees 402,661 303,781 98,880
Professional fees 1,525,399 1,697,020 (171,621)
Marketing expense 536,977 308,925 228,052
Printing and office supplies 453,110 397,153 55,957
Telephone and communication 1,277,707 1,144,334 133,373
Postage and delivery expense 397,217 236,006 161,211
State, local and other taxes 512,757 380,036 132,721
Employee expense 745,341 726,561 18,780
Other expenses 1,283,228 1,163,450 119,778
Total non-interest expense 24,544,562 21,425,415 3,119,147
Income before income tax expense 2,747,477 1,376,607 1,370,870
Income tax expense 697,668 359,661 338,007
Net income $2,049,809 $1,016,946 $1,032,863
Earnings per common share:
Basic $0.41 $0.22 $0.19
Diluted $0.41 $0.22 $0.19
Average diluted shares outstanding 5,030,084 4,578,981
Rurban Financial Corp.
CONSOLIDATED FINANCIAL
HIGHLIGHTS
(Unaudited)
3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
(dollars in thousands
except per share data) 2006 2006 2006 2005 2005
EARNINGS
Net interest income $3,756 $3,830 $3,864 $3,147 $2,982
Provision for loan
loss $35 $56 $246 $613 $(382)
Non-interest income $5,903 $5,268 $5,008 $4,477 $4,595
Revenue (net interest
income plus non-
interest income) $9,659 $9,098 $8,872 $7,624 $7,577
Non-interest expense $8,515 $8,080 $7,950 $7,632 $7,219
Net income (loss) $814 $714 $523 $(344) $492
PER SHARE DATA
Basic earnings per
share $0.16 $0.14 $0.10 $(0.08) $0.11
Diluted earnings per
share $0.16 $0.14 $0.10 $(0.08) $0.11
Book value per share $11.16 $10.75 $10.75 $10.83 $10.99
Tangible book value
per share $7.19 $8.28 $8.28 $8.31 $9.39
Cash dividend per
share $0.05 $0.05 $0.05 $0.05 $0.05
PERFORMANCE RATIOS
Return on average
assets 0.59% 0.52% 0.39% (0.31%) 0.44%
Return on average
equity 5.95% 5.28% 3.86% (2.63%) 3.90%
Net interest margin
(tax equivalent) 3.10% 3.25% 3.37% 3.18% 3.10%
Non-interest expense
/ Average assets 6.15% 5.93% 5.95% 6.91% 6.49%
Efficiency Ratio -
bank (non-GAAP) 84.01% 84.67% 88.99% 107.58% 93.53%
Non-interest
income/Total
operating revenue
(net interest income
plus non-interest
income) 61.11% 57.90% 56.45% 58.72% 60.64%
MARKET DATA PER SHARE
Market value per
share -- Period end $11.92 $11.00 $12.42 $11.78 $12.75
Market as a % of book 1.07 1.02 1.16 1.09 1.16
Cash dividend yield 1.68% 1.82% 1.61% 1.70% 1.57%
Period-end common shares
outstanding (000) 5,027 5,027 5,027 5,027 4,576
Common stock market
capitalization ($000) $59,927 $55,302 $62,441 $59,223 $58,340
CAPITAL & LIQUIDITY
Equity to assets 9.8% 9.8% 10.0% 10.3% 11.5%
Period-end tangible
equity to assets 6.3% 7.5% 7.7% 7.9% 9.8%
Tier 1 risk-based
capital ratio 14.6% 16.7% 17.3% 17.7% 20.8%
Total risk-based
capital ratio 16.0% 18.1% 18.9% 19.3% 23.0%
Average loans to
average deposits 90.2% 86.4% 84.6% 86.3% 84.1%
ASSET QUALITY
Net charge-offs /
(Recoveries) $(54) $(33) $597 $1,638 $14
Net loan charge-offs
(Ann.) / Average
loans (0.06%) (0.04%) 0.72% 2.40% 0.02%
Non-performing loans $5,636 $5,479 $6,031 $6,270 $12,507
OREO / OAOs $490 $430 $2,802 $2,608 $2,518
Non-performing assets $6,126 $5,909 $8,833 $8,878 $15,025
Non-performing assets
/ Total assets 1.07% 1.07% 1.64% 1.67% 3.43%
Allowance for loan
losses / Total loans 1.24% 1.23% 1.29% 1.44% 1.77%
Allowance for loan
losses / Non-
performing Assets 73.8% 75.1% 49.2% 52.9% 32.0%
END OF PERIOD BALANCES
Total loans, net of
unearned income $364,343 $359,854 $337,729 $327,048 $271,409
Allowance for loan
loss $4,522 $4,438 $4,349 $4,700 $4,814
Total assets $569,987 $551,845 $538,201 $530,542 $438,582
Deposits $412,178 $400,956 $398,526 $384,838 $318,492
Stockholders' equity $56,111 $54,026 $54,052 $54,451 $50,281
Full-time equivalent
employees 271 279 275 281 238
AVERAGE BALANCES
Loans $368,324 $345,941 $331,711 $273,288 $270,985
Total earning assets $506,594$487,637$474,087$409,566$396,616
Total assets $553,465 $545,074 $534,371 $442,024 $444,815
Deposits $408,247 $400,581 $392,323 $316,570 $322,225
Stockholders' equity $54,702 $54,039 $54,251 $52,366 $50,441
Rurban Financial Corp.
Segment Reporting
Three Months Ended September 30, 2006
Banking
RFCBC Intersegment
(Loan Elimin- Banking
State Bank Exchange Workout ation Related
and Trust Bank Company) Entries Entities
Income Statement Measures
Interest Income $6,784 $1,447 $1 ($23) $8,209
Interest Expense 3,491 475 - (23) 3,943
Net Interest Income 3,293 972 1 - 4,266
Provision For Loan Loss 33 35 (33) - 35
Non-interest Income 843 337 2 - 1,182
Non-interest Expense 3,236 1,180 161 - 4,577
Net Income Before Taxes 867 94 (125) - 836
Income Taxes 216 32 (43) - 205
Net Income QTR $651 $62 ($82) $ - $631
Performance Measures
Average Assets -
Quarter $463,601 $88,141 $2,451 ($1,572) $552,621
ROAA 0.56% 0.28% - - 0.46%
Average Equity - Quarter $39,911 $12,119 $2,261 $ - $54,290
ROAE 6.52% 2.05% - - 4.65%
Efficiency Ratio - % 78.24% 90.15% - - 84.01%
Average Loans - Quarter $305,910 $64,153 $1,138 - $371,201
Average Deposits -
Quarter $347,062 $71,990 - ($180) $418,872
RFS Intersegment
(Trust and Parent Elimin- Rurban
Investment Company ation Financial
Co.) RDSI and Other Entries Corp.
Income Statement Measures
Interest Income $15 $0 $1 ($68) $8,157
Interest Expense - 68 459 (68) 4,402
Net Interest Income 15 (68) (458) - 3,755
Provision For Loan Loss - - - - 35
Non-interest Income 935 4,152 1,052 (1,418) 5,903
Non-interest Expense 568 3,360 1,427 (1,418) 8,514
Net Income Before Taxes 382 724 (833) - 1,109
Income Taxes 131 246 (287) - 295
Net Income QTR $251 $478 ($546) $ - $814
Performance Measures
Average Assets -
Quarter $2,390 $14,442 $75,666 ($91,653) $553,465
ROAA 42.01% 13.24% - - 0.59%
Average Equity - Quarter $1,905 $8,995 $53,593 ($64,082) $54,702
ROAE 52.70% 21.26% - - 5.95%
Efficiency Ratio - % 59.79% 82.27% - - 88.15%
Average Loans - Quarter - - - ($2,877) $368,324
Average Deposits -
Quarter - - - ($10,625) $408,247
Rurban Financial Corp.
Segment Reporting
Nine Months Ended September 30, 2006
Banking
RFCBC Intersegment
(Loan Elimin- Banking
State Bank Exchange Workout ation Related
and Trust Bank Company) Entries Entities
Income Statement Measures
Interest Income $19,036 $3,928 $36 ($116) $22,884
Interest Expense 8,881 1,219 - (116) 9,984
Net Interest Income 10,155 2,709 36 - 12,900
Provision For Loan Loss 393 33 (89) - 337
Non-interest Income 2,284 851 145 (3) 3,277
Non-interest Expense 9,601 3,647 642 (3) 13,887
Net Income Before Taxes 2,445 (120) (372) - 1,953
Income Taxes 606 (42) (127) - 437
Net Income YTD $1,839 ($78) ($245) $ - $1,516
Performance Measures
Average Assets - YTD $448,906 $84,497 $4,852 ($1,572) $536,683
ROAA 0.55% (0.12%) - - 0.38%
Average Equity - YTD $39,505 $12,081 $4,867 $ - $56,453
ROAE 6.20% (0.86%) - - 3.57%
Efficiency Ratio - % 77.20% 102.45% - - 85.85%
Average Loans - YTD $288,537 $61,225 $2,162 - $351,924
Average Deposits - YTD $340,687 $70,203 - ($180) $410,710
RFS Intersegment
(Trust and Parent Elimin- Rurban
Investment Company ation Financial
Co.) RDSI and Other Entries Corp.
Income Statement Measures
Interest Income $45 $12 $2 ($196) $22,747
Interest Expense - 177 1,332 (196) 11,297
Net Interest Income 45 (165) (1,330) - 11,450
Provision For Loan Loss - - - - 337
Non-interest Income 2,595 11,520 3,247 (4,460) 16,179
Non-interest Expense 1,721 9,117 4,279 (4,460) 24,544
Net Income Before Taxes 919 2,238 (2,362) - 2,748
Income Taxes 313 761 (813) - 698
Net Income YTD $606 $1,477 ($1,549) $ - $2,050
Performance Measures
Average Assets - YTD $2,406 $13,924 $76,923 ($79,982) $549,954
ROAA 33.63% 14.14% - - 0.50%
Average Equity - YTD $2,017 $7,922 $53,625 ($65,566) $52,434
ROAE 40.12% 24.86% - - 5.21%
Efficiency Ratio - % 65.17% 80.31% - - 88.36%
Average Loans - YTD - - - ($2,877) $349,047
Average Deposits - YTD - - - ($10,625) $400,085
Rurban Financial Corp.
Proforma Performance Measurement
Quarterly Comparison - Third Quarter 2006
Banking
RFCBC Intersegment
(Loan Elimin- Banking
State Bank Exchange Workout ation Related
and Trust Bank Company) Entries Entities
Average Assets
3Q06 $463,601 $88,141 $2,451 $(1,572) $552,621
2Q06 $446,579 $85,449 $5,477 $(4,001) $533,504
1Q06 $436,239 $83,209 $6,675 $(1,071) $525,052
4Q05 $424,432 N/A $13,896 $(847) $437,481
3Q05 $421,009 N/A $15,375 $(2,234) $434,150
Linked Quarter Change $17,022 $2,692 $(3,026) $19,117
Revenue
3Q06 $4,136 $1,309 $3 $ - $5,448
2Q06 $4,173 $1,214 $85 $(2) $5,469
1Q06 $4,131 $1,036 $93 $(2) $5,258
4Q05 $4,389 N/A $(256) $(2) $4,131
3Q05 $4,291 N/A $40 $(2) $4,329
Linked Quarter Change $(37) $95 $(82) $(21)
Non-interest Expenses
3Q06 $3,236 $1,180 $161 $ - $4,577
2Q06 $3,131 $1,195 $307 $(2) $4,631
1Q06 $3,234 $1,273 $174 $(2) $4,679
4Q05 $3,564 N/A $882 $(2) $4,444
3Q05 $3,674 N/A $377 $(2) $4,049
Linked Quarter Change $105 $(15) $(146) $(54)
Net Income
3Q06 $651 $62 $(82) $631
2Q06 $687 $15 $(109) $593
1Q06 $502 $(156) $(54) $292
4Q05 $479 N/A $(1,058) $(579)
3Q05 $357 N/A $97 $454
Linked Quarter Change $(36) $47 $27 $38
Efficiency Ratio
3Q06 78.24% 90.15% 84.01%
2Q06 75.03% 98.41% 84.67%
1Q06 78.28% 122.84% 88.99%
4Q05 81.20% N/A 107.58%
3Q05 85.62% N/A 93.53%
Linked Quarter Change 3.21% (8.26%) (0.66%)
NPA/Total Assets
3Q06 0.92% 0.77% 1.07%
2Q06 0.70% 1.66% 1.07%
1Q06 0.70% 1.77% 1.64%
4Q05 0.64% 2.03% 1.67%
3Q05 0.65% N/A 3.43%
Linked Quarter Change 0.22% (0.90%) (0.00%)
ROAA
3Q06 0.56% 0.28% 0.46%
2Q06 0.62% 0.07% 0.44%
1Q06 0.46% (0.75%) 0.22%
4Q05 0.45% N/A (0.40%)
3Q05 0.34% N/A 0.58%
Linked Quarter Change (0.05%) 0.21% 0.02%
ROAE
3Q06 6.52% 2.05% 4.65%
2Q06 7.03% 0.50% 5.52%
1Q06 5.08% (5.09%) 3.16%
4Q05 4.94% N/A (2.88%)
3Q05 3.68% N/A 4.76%
Linked Quarter Change (0.51%) 1.55% (0.87%)
Average Equity
3Q06 $39,911 $12,119 $2,261 $ - $54,291
2Q06 $39,078 $12,015 $5,393 $ - $56,486
1Q06 $39,522 $12,228 $7,001 $ - $58,751
4Q05 $38,784 $8,109 $13,731 $ - $60,624
3Q05 $38,768 N/A $14,161 $ - $52,929
Linked Quarter Change $833 $104 $(3,132) $(2,195)
RFS Intersegment
(Trust and Parent Elimin- Rurban
Investment Company ation Financial
Co.) RDSI and Other Entries Corp.
Average Assets
3Q06 $2,390 $14,442 $75,666 $(91,653) $553,465
2Q06 $2,583 $13,368 $74,679 $(79,060) $545,074
1Q06 $2,138 $11,579 $78,706 $(83,104) $534,371
4Q05 $2,469 $9,783 $71,938 $(79,647) $442,024
3Q05 $2,504 $10,128 $64,332 $(66,299) $444,815
Linked Quarter Change $(193) $1,074 $987 $8,391
Revenue
3Q06 $950 $4,084 $594 $(1,418) $9,658
2Q06 $834 $3,632 $537 $(1,374) $9,098
1Q06 $856 $3,637 $789 $(1,668) $8,872
4Q05 $823 $3,686 $(163) $(854) $7,624
3Q05 $807 $3,351 $(43) $(868) $7,577
Linked Quarter Change $116 $452 $57 $560
Non-interest Expenses
3Q06 $568 $3,360 $1,427 $(1,418) $8,514
2Q06 $553 $2,949 $1,321 $(1,374) $8,080
1Q06 $601 $2,807 $1,531 $(1,668) $7,950
4Q05 $606 $2,812 $575 $(805) $7,632
3Q05 $540 $2,845 $609 $(824) $7,219
Linked Quarter Change $16 $411 $106 $434
Net Income
3Q06 $251 $478 $(546) $814
2Q06 $186 $451 $(516) $714
1Q06 $168 $548 $(485) $523
4Q05 $143 $577 $(484) $(344)
3Q05 $176 $291 $(428) $492
Linked Quarter Change $65 $27 $(30) $101
Efficiency Ratio
3Q06 59.79% 82.27% 88.15%
2Q06 66.21% 81.18% 88.05%
1Q06 70.23% 77.17% 88.87%
4Q05 73.63% 76.29% 99.32%
3Q05 66.91% 84.92% 94.54%
Linked Quarter Change (6.42%) 1.09% 0.11%
NPA/Total Assets
3Q06 1.07%
2Q06 1.07%
1Q06 1.64%
4Q05 1.67%
3Q05 3.43%
Linked Quarter Change (0.00%)
ROAA
3Q06 42.01% 13.24% 0.59%
2Q06 28.81% 13.50% 0.52%
1Q06 31.45% 18.93% 0.39%
4Q05 25.84% 23.59% (0.31%)
3Q05 26.81% 11.49% 0.44%
Linked Quarter Change 13.20% (0.26%) 0.06%
ROAE
3Q06 52.70% 21.26% 5.95%
2Q06 31.88% 21.39% 5.28%
1Q06 32.42% 31.59% 3.86%
4Q05 33.18% 40.75% (2.63%)
3Q05 37.59% 21.61% 3.90%
Linked Quarter Change 20.83% (0.13%) 0.67%
Average Equity
3Q06 $1,905 $8,995 $53,593 $(64,082) $54,702
2Q06 $2,334 $8,437 $53,593 $(66,811) $54,039
1Q06 $2,074 $6,938 $54,251 $(67,763) $54,251
4Q05 $1,724 $5,664 $52,366 $(68,012) $52,366
3Q05 $1,873 $5,386 $50,441 $(60,188) $50,441
Linked Quarter Change $(429) $558 $ - $663
SOURCE Rurban Financial Corp.
Contact: Investors, Valda Colbart of Rurban Financial Corp., +1-419-784-2759, or rfcinv@rurban.net