Rurban Financial Corp. Reports First Quarter 2013 Results

  • Consolidated earnings up 36 percent year over year  
  • Nonperforming assets declined to 1.30 percent of total assets  
  • Portfolio loans increased $15.7 million, or 3.6 percent, year over year  
  • Tangible leverage of 5.87 percent, up 20 percent year over year  
  • Expense levels remained flat to the prior year  
  • Net interest margin at 3.86 percent, up 26 basis points year over year

DEFIANCE, Ohio, April 22, 2013 (GLOBE NEWSWIRE) -- Rurban Financial Corp. (Nasdaq:RBNF) ("Rurban" or the "Company"), a diversified financial services company providing full-service community banking, mortgage banking, wealth management and item processing services, today reported earnings for the first quarter ended March 31, 2013.

Consolidated earnings for Rurban Financial Corp. include the results of Rurban's Banking Group, consisting primarily of The State Bank and Trust Company ("State Bank" or the "Bank"), and Rurban's data services subsidiary, Rurbanc Data Services, Inc. (dba "RDSI Banking Systems" or "RDSI"). For the quarter ended March 31, 2013, Rurban reported net income of $1.32 million, or $0.27 per diluted share, compared to net income of $0.97 million, or $0.20 per diluted share for the quarter ended March 31, 2012, and net income of $1.52 million, or $0.31 per diluted share, for the quarter ended December 31, 2012.

Mark Klein, president and chief executive officer of Rurban Financial Corp., stated, "Our first quarter results continued our progress toward higher performance. Earnings are up 36 percent, our loan portfolio experienced nearly $16 million in growth and asset quality showed another quarter of improvement. The hallmark of our success over these last two years has been our relentless focus on asset quality, solid steady loan growth and revenue diversity. These traits have served us well in this quarter and should continue to provide momentum in the future. We were also pleased to have met another benchmark, when earlier this month we initiated shareholder dividends after an extended absence."

RESULTS OF OPERATIONS

Consolidated Revenue

Total revenue, consisting of net interest income fully tax equivalent (FTE) and noninterest income, was $8.96 million for the first quarter of 2013, up $0.42 million, or 4.9 percent, from the first quarter of 2012, but lower by $0.94 million, or 9.5 percent, from the linked quarter.  Revenue was impacted in the quarter by the 23.1 percent decline in mortgage originations from the linked quarter.

Net interest income (FTE) for the 2013 first quarter was $5.39 million, up 8.6 percent year over year, from the combined impact of increases in earning assets and lower funding costs. The net interest margin (FTE) was 3.86 percent for the first quarter of 2013 compared to 3.60 percent for the first quarter of 2012. Mr. Klein continued, "We have focused on shifting our earning assets into higher yielding products. Compared to the year prior, we have seen a reduction of $12 million from lower yielding securities and an increase of $16 million in loans. The margin this quarter also benefited from the lower interest rate on our trust preferred securities that were brought current at the end of 2012."

Noninterest Income

Noninterest income was $3.57 million for the first quarter of 2013, which held steady to the prior year but was lower than the linked quarter by $1.08 million. While mortgage production continued its strong momentum, the drop off from the record setting fourth quarter of 2012 drove down mortgage banking revenue by 27.3 percent.
Mortgage Banking ($000's) Three Months Ended
  Mar. 2013 Dec. 2012 Sep. 2012 Jun. 2012 Mar. 2012
Mortgage originations $ 71,967 $ 93,619 $ 90,685 $ 79,901 $ 68,331
Mortgage sales 68,431 93,993 81,862 75,227 64,212
Mortgage servicing portfolio 548,493 528,086 488,930 459,380 422,802
Mortgage servicing rights 4,068 3,775 3,346 3,359 3,359
           
Mortgage servicing revenue:          
Loan servicing fees 338 319 297 274 259
OMSR amortization (330) (362) (369) (254) (349)
Net administrative fees 8 (43) (72) 20 (90)
OMSR valuation adjustment 171 195 (120) (185) 419
Net loan servicing fees 179 152 (192) (165) 329
Gain on sale of mortgages 1,484 2,136 1,572 1,395 1,181
Mortgage banking revenue, net $1,663 $2,288 $1,380 $1,230 $1,510

Mortgage loan originations for the first quarter of 2013 were $72.0 million, up $3.64 million, or 5.3 percent, from the $68.3 million generated in the first quarter of 2012. Sales into the secondary market were also higher: $68.4 million, up $4.22 million, or 6.6 percent, above the $64.2 million sold in the year ago-quarter. In addition to the higher volume of sales, first quarter 2013 spreads were also stronger, totaling 2.17 percent of loans sold compared to 1.84 percent for the year-earlier quarter.

Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.66 million for the first quarter of 2013 compared to $2.29 million for the linked quarter and $1.51 million for the year-ago first quarter. The mortgage servicing valuation adjustment in the first quarter of 2013 was a favorable $0.17 million, compared to $0.20 million for the linked quarter. The mortgage servicing portfolio at the end of the first quarter 2013 was $548.5 million, up $125.7 million, or 29.7 percent, from the end of the first quarter 2012.

Our fee income diversity also includes wealth management, deposit fees and income from bank owned life insurance. Wealth management increased revenue by 6.1 percent from the linked quarter as assets under management grew by $20.6 million in the first quarter. In addition, this quarter we sold several FSA agriculture credits which generated gains of $0.16 million. Noninterest income contributed 39.8 percent of first quarter 2013 revenue (FTE); this compares to a 41.9 percent contribution of revenue (FTE) for first quarter 2012.
Data Services ($000's) Mar. 2013 Dec. 2012 Sep. 2012 Jun. 2012 Mar. 2012
Data Processing & Network Services $ 270 $ 179 $ 229 $ 194 $ 177
Payment Solutions 484 549 488 633 708
Contract Buyout -- -- 53 -- 551
Vendor Settlement -- 334 -- -- --
RDSI Gross Revenue 754 1,062 780 827 1,436
Less: Intercompany (340) (251) (285) (251) (793)
Net Data Services Fees $ 414 $ 811 $ 485 $ 576 $ 643
Core Data Service Fees $ 414 $ 477 $  432 $ 576 $ 553

Gross revenue generated by RDSI, including services provided to Rurban/State Bank, was $0.75 million for the first quarter of 2013. Net data services fees, excluding Rurban/State Bank intercompany transactions, were $0.41 million in the first quarter of 2013, down $0.23 million from the year-ago quarter.

Loan Loss Provision

The loan loss provision was $0.30 million for the first quarter of 2013, a decline of $0.15 million from the first quarter of 2012. The decreased provision expense reflects a 15.7 percent decline in nonperforming loans and a 68.1 percent reduction in net charge-offs from the prior year. The loan loss reserve at first quarter-end 2013 was 1.54 percent of total loans, providing 114.9 percent coverage of nonperforming loans; this compares to reserve coverage of 81.6 percent at first quarter-end 2012.

Noninterest Expense

For the first quarter of 2013, noninterest expense was $6.67 million, level with the $6.68 million reported for the 2012 first quarter. Compared to the linked quarter, expense levels are down $0.54 million, a 7.5 percent reduction. Linked quarter reductions centered on compensation, due to lower mortgage commission and legal costs from the settlement of the New Core litigation. Mr. Klein added "We are encouraged that our expense levels were flat to the prior year this quarter and down significantly from the linked quarter. We were able to maintain our expense levels while increasing revenue 4.9 percent over the prior year." 

Balance Sheet

Total assets as of March 31, 2013 were $641.3 million, a decline of $3.68 million, or 0.6 percent, from first quarter-end 2012. Total deposits as of first quarter-end 2013 were $532.3 million, lower by $3.23 million than at first quarter-end 2012. As a result of the balance sheet deleveraging, combined with lower cash reserves, State Bank was able to reduce its reliance on higher cost repos and FHLB advances from the prior-year; they now stand at $28.5 million.
Loan Portfolio ($000's)   Mar. 2013 Dec. 2012 Sep. 2012 Jun. 2012 Mar. 2012 Variance YOY
Commercial   $ 80,431 $ 81,491 $ 76,043 $ 75,964 $ 78,450 $ 1,981
  % of Total 17.7% 17.6% 16.7% 16.8% 17.8% 2.5%
Commercial RE   199,615 201,392 198,682 199,918 188,984 10,631
  % of Total 43.8% 43.5% 43.6% 44.2% 43.0% 5.6%
Agriculture   37,950 42,276 42,988 41,093 37,741 209
  % of Total 8.3% 9.1% 9.4% 9.1% 8.6% 0.6%
Residential RE   89,669 87,859 85,727 85,046 84,771 4,898
  % of Total 19.7% 19.0% 18.8% 18.8% 19.3% 5.8%
Consumer & Other   47,778 50,371 51,581 50,089 49,775 (1,997)
  % of Total 10.5% 10.9% 11.3% 11.1% 11.3% (4.0%)
               
  Total Loans $455,443 $463,389 $455,021 $452,110 $439,721 $ 15,722
              3.6%

Total loans held for investment (HFI) were $455.4 million at March 31, 2013 compared to $439.7 million for the prior-year quarter-end, up $15.7 million, or 3.6 percent. Commercial real estate loans ("CRE") accounted for the majority of growth, up $10.6 million, or 5.6 percent, and residential real estate loans, up $4.90 million, or 5.8 percent. Year-to-date, loans declined by $7.95 million, primarily from a $4.33 million decline in agriculture loans.

Asset Quality

Rurban continues to improve on its asset quality, reporting nonperforming assets of $8.35 million for the current quarter, lower by $1.56 million, or 15.7 percent, than the prior year first quarter. Net charge-offs of $0.12 million were just 10 basis points for the quarter and were down from both the prior year and the linked quarter of $0.37 and $0.29 million respectively. Delinquency levels have remained steady, with the 30-89 day category totaling $0.69 million at the end of the 2013 first quarter compared to $0.57 million for the prior-year first quarter, and down significantly from the $2.60 million for the linked quarter. Mr. Klein continued "all of our asset quality measures have shown improvement. Total delinquencies are just 0.64 percent of our portfolio and nonperforming assets are at 1.3 percent of total assets. We have been at or below the 1.5 percent nonperforming asset level for five consecutive quarters. This is a testament to our strong underwriting and credit administration expertise."
  Summary of Nonperforming Assets ($000's)
           
Nonperforming Loan Category Mar. 2013 Dec. 2012 Sep. 2012 Jun. 2012 Mar. 2012
Commercial 1,135 $ 1,246 $ 1,362 $ 1,467 $ 2,021
% of Total Commercial loans  1.41% 1.53% 1.78% 1.93%  2.58%
Commercial RE loans 457 782 448 1,345 1,481
% of Total CRE loans 0.23% 0.39% 0.23% 0.67% 0.78%
Agriculture -- -- 3 -- 113
% of Total Ag loans -- -- 0.01% -- 0.30%
Residential RE 2,614 2,631 2,607 1,958 1,840
% of Total Res. RE loans 2.92% 2.99% 3.04% 2.30% 2.17%
Consumer & Other 605 646 829 545 1,056
% of Consumer & Other loans 1.27% 1.28% 1.61% 1.09% 2.12%
Total Nonaccruing Loans 4,811 5,305 5,249 5,315 6,511
% of Total Loans 1.06% 1.14% 1.15% 1.18% 1.48%
Accruing Restructured Loans 1,273 1,258 1,735 1,837 1,593
Total Nonaccruing & Restructured $ 6,084 $ 6,563 $ 6,984 $ 7,152 $ 8,104
% of Total Loans 1.34% 1.42% 1.53% 1.58% 1.84%
OREO & Repossessed Vehicles 2,270 2,367 2,415 1,708 1,807
Total Nonperforming Assets $ 8,354 $ 8,930 $ 9,399 $ 8,860 $ 9,911
% of Total Assets 1.30% 1.40% 1.49% 1.40% 1.54%

Capitalization

Capital ratios continue to improve, however it still remains a primary focus of management. The tangible leverage ratio improved by 99 basis points over the past twelve months, and now stands at 5.87 percent. All bank regulatory ratios remain in excess of "well-capitalized" levels. At March 31, 2013, State Bank's Total Risk-Based Capital was estimated to be $58.0 million, $20.7 million above the well-capitalized level. The Total Risk-based Capital Ratio is estimated at 12.1 percent.

About Rurban Financial Corp.

Based in Defiance, Ohio, Rurban Financial Corp. is a financial services holding company with two wholly-owned operating subsidiaries: The State Bank and Trust Company (State Bank) and RDSI Banking Systems (RDSI). State Bank operates through 17 banking centers in seven Northwestern Ohio counties, one center in Fort Wayne, Indiana; and three loan production offices: two in Columbus, Ohio and one in Angola, Indiana. The Bank offers a full range of financial services for consumers and small businesses, including wealth management, mortgage banking, commercial and agricultural lending. RDSI provides item processing services to community banks located in the Midwest. Rurban's common stock is listed on the NASDAQ Global Market under the symbol RBNF.

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. Additional factors that could cause results to differ from those described above can be found in Rurban's Annual Report on Form 10-K and documents subsequently filed by Rurban with the Securities and Exchange Commission. 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 except as required by law. All subsequent written and oral forward-looking statements attributable to Rurban or any person acting on its behalf are qualified by these cautionary statements.

Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this release contains certain non-GAAP financial measures. Management believes that providing certain non-GAAP financial measures provides investors with information useful in understanding Rurban's financial performance, its performance trends and financial position. Specifically, Rurban provides measures based on "core operating earnings," which excludes merger, integration and restructuring expenses that are not reflective of on-going operations or not expected to recur. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results.
           
           
RURBAN FINANCIAL CORP. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - (Unaudited)
           
           
($ in Thousands) March 2013 December 2012 September 2012 June 2012 March 2012
           
ASSETS          
Cash and due from banks  $ 28,031  $ 19,144  $ 10,289  $ 14,636  $ 29,602
           
Securities available for sale, at fair value  98,390  98,702  101,247  102,537  110,603
Other securities - FRB and FHLB Stock  3,748  3,748  3,748  3,748  3,685
Total investment securities  102,138  102,450  104,995  106,285  114,288
           
Loans held for sale  8,560  6,147  11,584  10,595  11,384
           
Loans, net of unearned income  455,443  463,389  455,021  452,110  439,721
Allowance for loan losses  (6,992)  (6,811)  (6,696)  (6,618)  (6,609)
Net loans  448,451  456,578  448,325  445,492  433,112
           
Premises and equipment, net  12,738  12,633  12,898  13,190  13,282
Purchased software  300  330  334  355  386
Cash surrender value of life insurance  12,659  12,577  12,491  12,401  12,312
Goodwill  16,353  16,353  16,353  16,353  16,353
Core deposits and other intangibles  1,066  1,219  1,376  1,534  1,691
Foreclosed assets held for sale, net  2,270  2,367  2,415  1,708  1,807
Mortgage servicing rights  4,068  3,775  3,346  3,359  3,359
Accrued interest receivable  1,618  1,235  1,832  1,597  1,802
Other assets  3,048  3,426  3,967  5,026  5,598
Total assets  $ 641,300  $ 638,234  $ 630,205  $ 632,531  $ 644,976
           
           
LIABILITIES AND EQUITY          
Deposits          
Non interest bearing demand  $ 79,579  $ 77,799  $ 69,250  $ 68,918  $ 71,077
Interest bearing demand  123,748  117,289  112,230  109,268  118,898
Savings  62,404  57,461  53,505  53,777  52,599
Money market  81,130  80,381  78,006  81,114  82,799
Time deposits  185,398  194,071  202,259  205,584  210,119
Total deposits  532,259  527,001  515,250  518,661  535,492
           
Notes payable  1,424  1,702  1,975  2,249  2,519
Advances from Federal Home Loan Bank  17,500  21,000  18,500  17,500  12,611
Repurchase agreements  10,983  10,333  13,735  15,824  17,771
Trust preferred securities  20,620  20,620  20,620  20,620  20,620
Accrued interest payable  515  138  4,223  3,836  3,556
Other liabilities  3,704  4,156  3,972  3,567  3,381
Total liabilities  587,005  584,950  578,275  582,257  595,950
           
Equity          
Preferred stock  --   --   --   --   -- 
Common stock   12,569  12,569  12,569  12,569  12,569
Additional paid-in capital  15,381  15,374  15,363  15,350  15,338
Retained earnings  26,476  25,280  23,755  22,452  21,438
Accumulated other comprehensive income  1,623  1,830  2,012  1,672  1,450
Treasury stock  (1,754)  (1,769)  (1,769)  (1,769)  (1,769)
Total equity  54,295  53,284  51,930  50,274  49,026
           
Total liabilities and equity  $ 641,300  $ 638,234  $ 630,205  $ 632,531  $ 644,976
           
           
RURBAN FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - (Unaudited)
 
           
($ in thousands, except share data) Three Months Ended
Interest income March 2013 December 2012 September 2012 June 2012 March 2012
Loans          
 Taxable   $ 5,883  $ 5,840  $ 6,106  $ 6,037  $ 5,928
 Nontaxable  24  22  21  24  23
Securities          
 Taxable   330  330  383  403  399
 Nontaxable  170  157  156  146  147
Total interest income  6,407  6,349  6,666  6,610  6,497
           
Interest expense          
Deposits  606  653  694  768  854
Other borrowings  14  15  17  (2)  34
Repurchase Agreements  2  3  11  60  68
Federal Home Loan Bank advances  90  92  92  75  74
Trust preferred securities  403  431  418  441  592
Total interest expense  1,115  1,194  1,232  1,342  1,622
           
Net interest income  5,292  5,155  5,434  5,268  4,875
           
Provision for loan losses   299  400  300  200  450
           
Net interest income after provision for loan losses  4,993  4,755  5,134  5,068  4,425
           
Noninterest income          
Data service fees  414  811  485  576  643
Trust fees  643  606  646  607  642
Customer service fees  616  648  677  668  631
Gain on sale of mtg. loans & OMSR's  1,484  2,136  1,572  1,395  1,181
Mortgage loan servicing fees, net  179  152  (192)  (165)  329
Gain on sale of non-mortgage loans  156  94  170  --   -- 
Net gain on sales of securities  20  --   --   --   -- 
Loss on sale or disposal of assets  (105)  (54)  (151)  (50)  (56)
Other income  160  255  201  177  211
Total non-interest income  3,567  4,648  3,408  3,208  3,581
           
           
Noninterest expense          
Salaries and employee benefits  3,439  3,825  3,597  3,597  3,499
Net occupancy expense  518  494  515  528  548
Equipment expense  755  692  722  712  711
FDIC insurance expense  132  100  91  223  214
Fixed asset and software impairment  --   65  --   --   -- 
Data processing fees  77  132  103  121  113
Professional fees  429  686  451  390  385
Marketing expense  108  115  85  103  90
Printing and office supplies  46  46  39  67  78
Telephone and communication  158  146  151  139  144
Postage and delivery expense  215  204  223  200  229
State, local and other taxes  134  136  128  118  120
Employee expense  152  113  118  119  106
Other intangible amortization expense  153  158  157  158  157
OREO Impairment  33  --   --   58  -- 
Other expenses  321  300  345  338  282
Total non-interest expense  6,670  7,212  6,725  6,871  6,676
           
Income before income tax expense  1,890  2,191  1,817  1,405  1,330
Income tax expense   572  667  513  391  358
           
Net income   $ 1,318  $ 1,524  $ 1,304  $ 1,014  $ 972
           
Common share data:          
Basic earnings per common share  $ 0.27  $ 0.31  $ 0.27  $ 0.21  $ 0.20
Diluted earnings per common share  $ 0.27  $ 0.31  $ 0.27  $ 0.21  $ 0.20
           
Average shares outstanding ($ in thousands):          
Basic:  4,863  4,862  4,862  4,862  4,862
Diluted:   4,870  4,862  4,862  4,862  4,862
           
 
RURBAN FINANCIAL CORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
           
           
($ in thousands, except per share data) Three Months Ended
SUMMARY OF OPERATIONS March 2013 December 2012 September 2012 June 2012 March 2012
 Net interest income   $ 5,292  5,155  5,434  5,268  4,875
 Tax-equivalent adjustment  $ 100  92  91  88  88
 Tax-equivalent net interest income   $ 5,392  5,247  5,525  5,356  4,963
 Provision for loan loss   $ 299  400  300  200  450
 Noninterest income  $ 3,567  4,648  3,408  3,208  3,581
 Total revenue, tax-equivalent  $ 8,959  9,895  8,933  8,564  8,544
 Noninterest expense  $ 6,670  7,212  6,725  6,871  6,676
 Pre provision pretax income  $ 2,189  2,591  2,117  1,605  1,780
 Pretax income  $ 1,890  2,191  1,817  1,405  1,330
 Net income   $ 1,318  1,524  1,304  1,014  972
           
           
PER SHARE INFORMATION:          
 Basic & diluted earnings per share  $ 0.27 0.31 0.27 0.21 0.20
 Book value per common share  $ 11.16  10.96  10.68  10.34  10.08
           
           
PERFORMANCE RATIOS:          
 Return on average assets  0.83% 0.95% 0.82% 0.63% 0.61%
 Return on average common equity 9.82% 11.64% 10.25% 8.20% 8.04%
 Return on avg. tangible common equity 14.56% 17.57% 15.91% 13.01% 12.97%
 Core efficiency ratio  72.02% 71.47% 72.07% 77.66% 76.98%
 Earning asset yield 4.65% 4.50% 4.78% 4.76% 4.77%
 Cost of interest bearing liabilities 0.90% 0.96% 0.98% 1.05% 1.28%
 Net interest margin 3.76% 3.65% 3.85% 3.75% 3.53%
 Tax equivalent effect 0.10% 0.07% 0.06% 0.06% 0.07%
 Net interest margin - fully tax equivalent basis  3.86% 3.72% 3.91% 3.81% 3.60%
           
           
ASSET QUALITY RATIOS:          
 Gross charge-offs  $ 136  300  302  252  474
 Recoveries  $ 18  15  78  62  104
 Net charge-offs  $ 118  285  223  190  370
 Nonaccruing loans/ Total loans 1.06% 1.14% 1.15% 1.18% 1.48%
 Nonperforming loans/ Total loans 1.34% 1.42% 1.53% 1.58% 1.84%
 Nonperforming assets/ Loans & OREO 1.95% 2.02% 2.05% 1.95% 2.24%
 Nonperforming assets/ Total assets 1.30% 1.40% 1.49% 1.40% 1.54%
 Allowance for loan loss/ Nonperforming loans 114.9% 103.8% 95.9% 92.5% 81.6%
 Allowance for loan loss/ Total loans 1.54% 1.47% 1.47% 1.46% 1.50%
 Net loan charge-offs/ Average loans (ann.) 0.10% 0.25% 0.20% 0.17% 0.34%
 Loan loss provision/ Net charge-offs 253.39% 140.56% 134.46% 105.22% 121.52%
           
           
CAPITAL & LIQUIDITY RATIOS:          
 Loans/ Deposits 85.57% 87.93% 88.31% 87.17% 82.12%
 Equity/ Assets 8.49% 8.35% 8.24% 7.95% 7.60%
 Tangible equity/ Tangible assets 5.87% 5.70% 5.53% 5.21% 4.88%
           
           
END OF PERIOD BALANCES          
 Total loans   $ 455,443  463,389  455,021  452,110  439,721
 Total assets  $ 641,300  638,234  630,205  632,531  644,976
 Deposits  $ 532,259  527,001  515,250  518,661  535,492
 Stockholders equity  $ 54,295  53,284  51,930  50,274  49,026
 Tangible equity  $ 36,576  35,382  33,867  32,032  30,596
 Full-time equivalent employees 204 204  199  204  203
           
           
AVERAGE BALANCES          
 Total loans   $ 459,988  455,705  454,634  446,786  436,384
 Total earning assets   $ 559,383  564,564  565,144  562,169  552,016
 Total assets  $ 638,801  639,048  635,012  643,859  635,849
 Deposits  $ 524,901  522,970  515,795  527,992  523,193
 Stockholders equity  $ 53,711  52,351  50,905  49,464  48,377
 Intangibles  $ 17,512  17,665  18,126  18,299  18,396
 Tangible equity  $ 36,199  34,686  32,779  31,165  29,981
             
             
RURBAN FINANCIAL CORP.
Rate Volume Analysis - (Unaudited)
For the Three Months Ended March 31, 2013 and 2012
($ in Thousands) Three Months Ended March 31, 2013 Three Months Ended March 31, 2012
Assets Average Balance Interest Average Rate Average Balance Interest Average Rate
Taxable securities  $ 83,512  330 1.58%  $ 95,050  399 1.68%
Non-taxable securities  15,883  258 6.49%  14,618  223 6.10%
Federal funds sold  --   --   N/A  --   --  N/A
Loans, net  459,988  5,919 5.15%  442,348  5,963 5.39%
 Total earning assets  $ 559,383  6,507 4.65%  $ 552,016  6,585 4.77%
Cash and due from banks  24,167      27,453    
Allowance for loan losses  (6,862)      (6,442)    
Premises and equipment  15,120      15,504    
Other assets  46,993      47,318    
 Total assets  $ 638,801      $ 635,849    
             
Liabilities            
Savings and interest-bearing demand  $ 259,809  21 0.03%  $ 240,750  68 0.11%
Time deposits  188,195  585 1.24%  214,686  786 1.46%
Repurchase agreements  9,970  2 0.08%  17,129  68 1.59%
Advances from FHLB  17,606  90 2.04%  12,668  74 2.34%
Junior subordinated debentures  20,620  403 7.82%  20,620  592 11.48%
Notes payable & other borrowed funds  1,516  14 3.69%  2,559  34 5.31%
 Total interest-bearing liabilities  $ 497,716  1,115 0.90%  $ 508,412  1,622 1.28%
             
Non interest-bearing demand  76,897      67,757    
Other liabilities  10,477      11,303    
 Total liabilities  585,090      587,472    
             
Equity  $ 53,711      $ 48,377    
             
 Total liabilities and equity  $ 638,801      $ 635,849    
             
Net interest income (tax equivalent basis)    $ 5,392      $ 4,963  
             
Net interest income as a percent of average interest-earning assets      3.86%     3.60%
CONTACT: Anthony Cosentino         Executive Vice President and          Chief Financial Officer         419.785.3663         Tony.Cosentino@thebank-sbt.com