SB Financial (SBFG) 8-K Rurban Financial Corp. Reports 2012 First Quarter Results

Exhibit 99.1

Rurban Financial Corp. Reports 2012 First Quarter Results

DEFIANCE, Ohio, April 24, 2012 (GlobeNewswire) -- 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, 2012.

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, 2012, Rurban reported net income of $0.97 million, or $0.20 per diluted share, compared to net income of $11,000, or $0.00 per diluted share for the quarter ended March 31, 2011, and net income of $0.27 million, or $0.06 per diluted share, for the quarter ended December 31, 2011.

Key items for the 2012 first quarter include:

· Rurban continues to build profitability, reporting a fifth consecutive quarter of positive earnings and a quarterly ROA of 61 basis points.

· Noninterest income benefited from strong first quarter 2012 mortgage banking activity. Net mortgage banking revenue of $1.5 million was the second strongest quarter ever, based on strong loan sales ($64.2 million), a fairly robust spread (1.84 percent) and a favorable mortgage servicing valuation adjustment due to lower refinancings.

· Quarterly noninterest expense appears to have stabilized at approximately $6.7 million, reflecting a halt to the downsizing of RDSI. Full-time equivalent employees declined by 24, or 11 percent, since March 31, 2011 and by seven since year-end 2011.

· Portfolio loans increased $17.6 million, or 4.2 percent, over the past twelve months; this loan growth consisted primarily of commercial real estate and commercial non-real estate loans.

· Year over year, nonperforming assets declined by $4.4 million, or 31 percent, to $9.9 million, or 1.54 percent of total assets. Reserve coverage of nonperforming loans at quarter-end was 82 percent compared to 49 percent at March 31, 2011.

· On a consolidated level, Rurban’s tangible leverage improved by 75 basis points from the prior year. At 4.88 percent, it still remains a focus of management attention.

Mark Klein, President and Chief Executive Officer of Rurban Financial Corp., stated,“This has been another encouraging quarter for us. We have seen greater stability in our earnings stream, as well as stronger profitability. Our entire organization appears to be moving in a positive direction, perhaps at different rates, but still making discrete progress step by step.

“Loans are growing at a comfortable rate, along with low-cost deposits. Our fee-based businesses continue to make a strong contribution; this quarter, they provided 42 percent of total revenue. Our mortgage bankers have started off the year with an exceptionally strong first quarter for originations, assisted by a less frenetic level of refinancing activity. This has provided the basis for near-record mortgage banking revenue in the first quarter of the year. We are in the process of expanding our highly successful Columbus mortgage lending operation, and we will shortly have a second office in place.

“Although we have stepped up virtually every source of revenue, our data services operation, RDSI, still lags behind, constrained by regulatory and other factors from marketing its expanded product line. The Bank has taken data processing in-house, and will continue to provide what RDSI has done for us in the past. We believe this will be a more efficient solution for all parties concerned. With a more modest infrastructure firmly in place, and management realigned to focus on item processing, RDSI is solidly positioned to move ahead once the constraints have been lifted.

“We look to the rest of the year with tempered optimism. We have made tremendous progress by leveraging upon the strengths of our people: to build revenue, to create greater efficiencies, and to connect in meaningful ways with our customers. We plan to continue down this successful path.”

RESULTS OF OPERATIONS

Consolidated Revenue

Total operating revenue, consisting of net interest income fully tax equivalent (FTE) and noninterest income from operations, was $8.5 million for the first quarter of 2012, up $0.53 million, or 6.7 percent, from the first quarter of 2011, but lower by $0.3 million, or 3.8 percent, from the linked quarter.

Net interest income (FTE) for 2012 first quarter was $5.0 million, down one percent year over year, from the combined impact of minor declines in earning assets and net interest margin. The net interest margin (FTE) was 3.60 percent for the first quarter 2012 compared to 3.61 percent for the first quarter of 2011. Continued downward pressure on earning asset yields is driving margin compression, since the cost of interest-bearing liabilities has stabilized relative to the continued decline in earning asset yields.

Noninterest Income

Noninterest income was $3.6 million for the first quarter of 2012, an increase of $0.7 million, or 25.1 percent, from the $2.9 million reported for the first quarter 2011. Noninterest income benefited primarily from strong mortgage loan sales for the first quarter of 2012 compared to the year-earlier first quarter.

Data Services

($’s in thousands)	Mar. 2012			Dec. 2011			Sep. 2011			Jun. 2011			Mar. 2011
Data Processing & Network Services		177			320			292			302			367
Payment Solutions		708			720			784			823			927
Contract Buyout		551			-			-			519			-
RDSI Gross Revenue		1,436			1,040			1,076			1,644			1,294
Less: Intercompany		(793	)		(369	)		(333	)		(340	)		(382	)
Net Data Services Fees	$	643		$	671		$	743		$	1,304		$	912

Gross revenue generated by RDSI, including services provided to Rurban/State Bank, was $1.44 million for the first quarter of 2012. Of this total, $0.55 million consisted of one-time contract buyout fees from former clients, including $0.46 million paid by State Bank to RDSI following State Bank’s purchase of data processing software and equipment from RDSI. Net data services fees, excluding Rurban/State Bank intercompany transactions, were $0.64 million in the first quarter of 2012, down $0.27 million from the year-ago quarter.

Mortgage Banking

	Three Months Ended
($’s in thousands)	Mar. 2012			Dec. 2011			Sep. 2011			Jun. 2011			Mar. 2011
Mortgage originations		68,331			85,114			68,989			38,099			28,005
Mortgage sales		64,212			81,046			56,438			30,017			29,999
Mortgage servicing portfolio		422,802			402,062			370,033			351,888			341,600
Mortgage servicing rights		3,359			2,820			2,709			3,294			3,316
Mortgage servicing revenue:
Loan servicing fees		259			242			226			217			209
OMSR amortization		(349	)		(329	)		(251	)		(94	)		(70	)
Net administrative fees		(90	)		(87	)		(25	)		123			139
OMSR valuation adjustment		419			(221	)		(771	)		(127	)		-
Net loan servicing fees		329			(308	)		(796	)		(4	)		139
Gain on sale of mortgages		1,181			1,529			1,101			565			425
Mortgage banking revenue, net	$	1,510		$	1,221		$	305		$	561		$	564

Mortgage loan originations were exceptionally strong for the first quarter of 2012: $68.3 million, up $40.3 million, or 144 percent, from the $28.0 million generated in the first quarter of 2011.Sales into the secondary market were also exceptionally strong: $64.2 million, up $34.2 million, or 114 percent, above the $30.0 million sold in the year ago-quarter. In addition to the higher volume of sales, first quarter 2012 spreads were also stronger, totaling 1.84 percent of loans sold compared to 1.42 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 $1.51 million for the first quarter of 2012 compared to $1.22 million for the linked quarter and $0.56 million for the year-ago first quarter, higher by $0.29 million and $0.95 million, respectively. The mortgage servicing valuation adjustment in the first quarter of 2012 was a favorable $0.42 million, compared to a charge of $0.22 million for the linked quarter. Valuation of the mortgage servicing portfolio benefited from a lower rate of prepayments this past quarter.The mortgage servicing portfolio at the end of the first quarter 2012 was $422.8 million, up $81.2 million, or 23.8 percent, from first quarter-end 2011.

The remainder of noninterest income, derived from wealth management and customer service fees, plus other income, primarily income from bank-owned life insurance, was $1.48 million for the first quarter of 2012, virtually unchanged from the linked and year-ago quarters. These areas have provided ongoing stability to Rurban’s noninterest income stream. Rurban remains highly diversified for a bank of its asset size. Core noninterest income contributed 41.7 percent of first quarter 2012 core revenue; this compares to a 37.2 percent contribution for first quarter 2011.

Loan Loss Provision

The loan loss provision was $0.45 million for the first quarter of 2012, a decline of $0.05 million from the first quarter of 2011. The decreased provision expense reflects a 39 percent decline in nonperforming loans over the past twelve months, and lower net charge-offs. The loan loss reserve at first quarter-end 2012 was 1.50 percent of total loans, providing 82 percent coverage of nonperforming loans at quarter-end; this compares to reserve coverage of 49 percent at first quarter-end 2011. Nonperforming loans declined by $5.2 million year over year, while net charge-offs declined by $0.25 million.

Noninterest Expense

For the first quarter of 2012, noninterest expense was $6.7 million, a decline of $0.4 million, or 5.4 percent, from the $7.1 million reported for the 2011 first quarter. Although compensation expense was only minimally lower despite a decline of 24 FTE staff, cost savings were also achieved in virtually every expense category. For the quarter ended December 31, 2011, Rurban reported RDSI-related impairments totaling $1.0 million. Excluding these and other nonrecurring charges, noninterest expense from operations for the linked quarter was $6.8 million. Reflecting this improvement in first quarter 2012 operating revenue and expense, the efficiency ratio declined to 76.6 percent, from 86.1 percent for the year-ago quarter.

Balance Sheet

Total assets as of March 31, 2012 were $645.0 million, a decline of $10.0 million, or 1.5 percent, from first quarter-end 2011. The deleveraging transactions completed during June of 2011 contributed to a significant decline in the securities portfolio. Since the prior year, securities are lower by $20.5 million.

Total deposits as of first quarter-end 2012 were $535.5 million, higher by $22.5 million than at first quarter-end 2011. As a result of the balance sheet deleveraging, combined with lower cash reserves, State Bank was able to reduce higher cost repos and FHLB advances by $35.8 million since the prior-year; they now stand at $30.4 million.

Loan Portfolio

($ in Thousands)	Mar. 2012			Dec. 2011			Sep. 2011			Jun. 2011			Mar. 2011			Variance YOY
Commercial	$	78,450		$	78,112		$	77,269		$	74,613		$	70,788		$	7,662
% of Total		17.8	%		17.7	%		17.6	%		17.0	%		16.8	%		10.8	%
Commercial RE		188,984			187,829			186,411			190,625			181,750			7,234
% of Total		43.0	%		42.4	%		42.4	%		43.6	%		43.1	%		4.0	%
Agriculture		37,741			38,361			38,601			38,453			37,206			535
% of Total		8.6	%		8.7	%		8.8	%		8.8	%		8.8	%		1.4	%
Residential RE		84,771			87,656			85,399			82,782			82,436			2,335
% of Total		19.3	%		19.8	%		19.5	%		18.9	%		19.5	%		2.8	%
Consumer & Other		49,775			50,596			51,246			51,078			49,986			(211	)
% of Total		11.3	%		11.4	%		11.7	%		11.7	%		11.8	%		-
Total Loans	$	439,721		$	442,554		$	438,926		$	437,551		$	422,166		$	17,555
																	4.2	%

Total loans held for investment (HFI) were $439.7 million at March 31, 2012 compared to $422.2 million for the prior-year quarter-end, up $17.6 million, or 4.2 percent. Commercial loans accounted for the majority of growth, namely, commercial real estate (“CRE”), up $7.2 million, or 4.0 percent, and commercial and industrial (“C&I”) loans, up $7.7 million, or 10.8 percent. Year-to-date, loans declined by $2.8 million, primarily from a $2.9 million decline in residential mortgages held in portfolio.

Asset Quality

Rurban continues to improve on its asset quality, reporting nonperforming assets of $9.9 million for the current quarter, lower by $4.4 million, or 30.6 percent, than the prior year first quarter-end. Delinquency levels are down significantly, with the 30-89 day category totaling $0.57 million at the end of the 2012 first quarter compared to $0.90 million for the prior-year first quarter, and $1.98 million for the linked quarter.

Summary of Nonperforming Assets
($ in Thousands)
Nonperforming Loan Category	Mar. 2012			Dec. 2011			Sep. 2011			Jun. 2011			Mar. 2011
Commercial	$	2,021		$	2,393		$	2,466		$	2,507		$	2,950
% of Total Commercial loans		2.58	%		3.06	%		3.19	%		3.36	%		4.17	%
Commercial RE loans		1,481			1,456			2,210			2,620			5,336
% of Total CRE loans		0.78	%		0.78	%		1.19	%		1.37	%		2.94	%
Agriculture		113			-			87			87			87
% of Total Ag loans		0.30	%		-			0.23	%		0.23	%		0.23	%
Residential RE		1,840			2,471			2,107			2,436			3,466
% of Total Res. RE loans		2.17	%		2.82	%		2.47	%		2,94	%		4.20	%
Consumer & Other		1,056			580			461			423			282
% of Consumer & Other loans		2.12	%		1.15	%		0.90	%		0.83	%		0.56	%
Total Nonaccruing Loans		6,511			6,900			7,331			8,073			12,121
% of Total Loans		1.48	%		1.56	%		1.67	%		1.85	%		2.87	%
Accruing Restructured Loans)		1,593			1,334			1,311			1,312			1,229
Total Nonperforming Loans	$	8,104		$	8,234		$	8,642		$	9,385		$	13,350
% of Total Loans		1.84	%		1.86	%		1.97	%		2.14	%		3.16	%
OREO & Repossessed Vehicles		1,807			1,830			1,970			2,056			924
Total Nonperforming Assets	$	9,911		$	10,064		$	10,612		$	11,441		$	14,274
% of Total Assets		1.54	%		1.60	%		1.70	%		1.85	%		2.18	%

Nonaccruing loans were $6.5 million as of March 31, 2011, a decline of $5.6 million, or 46 percent from the year-earlier level. The greatest improvement was reflected in the CRE portfolio, where nonaccrual loans declined by $3.9 million, or 72 percent, to $1.5 million over the past twelve months. As of March 31, 2012, only 0.8 percent of CRE loans were on nonaccrual status compared to 2.9 percent at the prior year quarter-end. Currently, Rurban has only three nonperforming relationships that exceed $1.0 million; together, they account for $4.0 million, or 40 percent, of nonperforming assets.

NONPERFORMING ASSET RECONCILIATION
($ in Thousands)	Mar. 2012			Dec. 2011			Sep. 2011			Jun. 2011			Mar. 2011
Beginning Balance	$	10,064		$	10,612		$	11,441		$	14,274		$	14,929
Additions		906			1,193			432			289			1,076
Returns to performing status		(419	)		(169	)		(206	)		(352	)		(83	)
Principal payments		(402	)		(375	)		(281	)		(844	)		(118	)
Sale of OREO/OAO		(23	)		(358	)		(246	)		(416	)		(1,014	)
Loan charge-offs		(474	)		(648	)		(527	)		(1,593	)		(639	)
Valuation write-downs		-			(214	)		-			-			-
Restructured Loan Activity		259			23			(1	)		83			123
Net Change		(153	)		(548	)		(829	)		(2,833	)		(655	)
Total	$	9,911		$	10,064		$	10,612		$	11,441		$	14,274

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 18 banking centers in seven Northwestern Ohio counties, one center in Fort Wayne, Indiana; and loan production offices in Columbus, Ohio and 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. 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.

Contact Information:

At Rurban Financial Corp.:

Anthony V. Cosentino, CFO

419-785-3663

Tony.Cosentino@thebank-sbt.com

RURBAN FINANCIAL CORP.  & SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - (Unaudited)

	March			December			September			June			March
($ in Thousands)	2012			2011			2011			2011			2011
ASSETS
Cash and due from banks	$	29,602		$	14,846		$	13,764		$	10,486		$	38,090
Investment Securities:
Securities available for sale, at fair value		110,603			111,978			104,615			104,770			131,053
Other securities - FRB and FHLB Stock		3,685			3,685			3,748			3,748			3,748
Total investment securities		114,288			115,663			108,363			108,518			134,801
Loans held for sale		11,384			5,238			10,590			7,211			5,424
Loans, net of unearned income		439,721			442,554			438,926			437,551			422,166
Allowance for loan losses		(6,609	)		(6,529	)		(6,235	)		(6,444	)		(6,593	)
Net loans		433,112			436,025			432,691			431,107			415,573
Premises and equipment, net		13,282			13,773			14,120			14,359			14,361
Purchased software		386			159			805			875			947
Cash surrender value of life insurance		12,312			12,224			12,134			12,042			11,951
Goodwill		16,353			16,353			16,734			16,734			16,734
Core deposits and other intangibles		1,691			1,849			2,006			2,191			2,388
Foreclosed assets held for sale, net		1,807			1,830			1,970			2,056			924
Mortgage servicing rights		3,359			2,820			2,709			3,294			3,316
Accrued interest receivable		1,802			1,635			2,061			1,959			2,364
Other assets		5,598			6,249			5,846			7,229			8,095
Total assets	$	644,976		$	628,664		$	623,793		$	618,061		$	654,968
LIABILITIES AND EQUITY
Deposits
Non interest bearing demand	$	71,077		$	65,963		$	62,080		$	59,651		$	64,028
Interest bearing demand		118,898			107,446			103,229			101,972			107,940
Savings		52,599			49,665			48,146			48,771			48,983
Money market		82,799			74,244			79,163			72,823			77,482
Time deposits		210,119			221,447			221,731			212,653			214,528
Total deposits		535,492			518,765			514,349			495,870			512,961
Notes payable		2,519			2,788			2,865			3,142			3,218
Advances from Federal Home Loan Bank		12,611			12,776			12,940			24,602			16,680
Fed funds purchased		-			-			-			2,000			-
Repurchase agreements		17,771			18,779			18,778			19,867			49,499
Trust preferred securities		20,620			20,620			20,620			20,620			20,620
Accrued interest payable		3,556			2,954			2,704			2,392			2,196
Other liabilities		3,381			4,050			3,985			3,554			3,529
Total liabilities		595,950			580,732			576,241			572,047			608,703
Equity
Preferred stock		-			-			-			-			N/A
Common stock		12,569			12,569			12,569			12,569			12,569
Additional paid-in capital		15,338			15,323			15,302			15,280			15,258
Retained earnings		21,438			20,466			20,192			19,590			18,813
Accumulated other comprehensive income		1,450			1,343			1,258			344			1,394
Treasury stock		(1,769	)		(1,769	)		(1,769	)		(1,769	)		(1,769	)
Total equity		49,026			47,932			47,552			46,014			46,265
Total liabilities and equity	$	644,976		$	628,664		$	623,793		$	618,061		$	654,968

RURBAN FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATION - (Unaudited)

Three Months Ended

($ in Thousands)	March			December			September			June			March
Interest income	2012			2011			2011			2011			2011
Loans
Taxable	$	5,928		$	6,171		$	6,251		$	6,170		$	5,852
Nontaxable		23			24			24			15			11
Securities
Taxable		399			387			446			566			611
Nontaxable		147			170			172			302			336
Other		-			-			-			-			-
Total interest income		6,497			6,752			6,893			7,053			6,810
Interest expense
Deposits		854			946			976			1,010			1,049
Other borrowings		34			22			25			24			25
Repurchase Agreements		68			70			72			344			426
Federal Home Loan Bank advances		74			77			79			113			133
Trust preferred securities		592			358			356			349			344
Total interest expense		1,622			1,473			1,508			1,840			1,977
Net interest income		4,875			5,279			5,385			5,213			4,833
Provision for loan losses		450			299			297			898			499
Net interest income after provision
for loan losses		4,425			4,980			5,088			4,315			4,334
Noninterest income
Data service fees		643			671			743			1,304			912
Trust fees		642			623			629			669			695
Customer service fees		631			647			664			640			581
Gain on sale of mortgage  and OMSR's		1,181			1,529			1,101			565			425
Mortgage loan servicing fees, net		329			(308	)		(796	)		(4	)		139
Gain on sale of non-mortgage loans		-			127			-			38			43
Net gain (loss) on sales of securities		-			-			-			1,871			-
Loss on sale or disposal of assets		(56	)		(46	)		(27	)		(160	)		(100	)
Other income		211			180			161			174			168
Total non-interest income		3,581			3,423			2,475			5,097			2,863
Noninterest expense
Salaries and employee benefits		3,499			3,488			3,583			3,573			3,530
Net occupancy expense		548			531			568			517			584
Equipment expense		711			709			690			718			711
FDIC insurance expense		214			191			145			254			318
Fixed asset and software impairment		-			609			-			-			-
Data processing fees		113			131			158			192			144
Professional fees		385			493			377			577			474
Marketing expense		90			93			89			90			56
Printing and office supplies		78			52			86			119			76
Telephone and communication		144			139			141			143			157
Postage and delivery expense		229			235			260			259			344
State, local and other taxes		120			77			103			134			144
Employee expense		106			113			143			172			96
Goodwill Impairment		-			381			-			-			-
Other intangible amortization expense		157			157			185			197			197
OREO Impairment		-			214			-			-			-
Other expenses		282			359			295			1,453			229
Total non-interest expense		6,676			7,972			6,823			8,398			7,060
Income before income tax expense		1,330			431			740			1,014			137
Income tax expense		358			157			137			237			126
Net income	$	972		$	274		$	603		$	777		$	11
Common share data:
Basic earnings per common share	$	0.20		$	0.06		$	0.12		$	0.16		$	0.00
Diluted earnings per common share	$	0.20		$	0.06		$	0.12		$	0.16		$	0.00

RURBAN FINANCIAL CORP.

CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

($ in thousands except per share data)	Three Months Ended
		March		December		September		June		March
SUMMARY OF OPERATIONS		2012		2011		2011		2011		2011
Net interest income	$	4,875		5,279		5,385		5,213		4,833
Tax-equivalent adjustment	$	88		100		101		163		179
Tax-equivalent net interest income (core)	$	4,963		5,379		5,486		5,376		5,012
Provision for loan loss	$	450		299		297		898		499
Noninterest income	$	3,581		3,423		2,475		5,097		2,863
Less: Non core items	$	(34	)	46		27		(2,230	)	100
Core noninterest income	$	3,547		3,469		2,502		2,867		2,963
Total revenue, tax-equivalent	$	8,544		8,802		7,961		10,473		7,875
Core revenue, tax-equivalent	$	8,510		8,848		7,988		8,243		7,975
Noninterest expense	$	6,676		7,972		6,823		8,398		7,060
Less: Non core items	$	-		1,204		-		1,083		-
Core noninterest expense	$	6,676		6,768		6,823		7,315		7,060
Pre provision pretax income (loss)	$	1,780		730		1,037		1,912		636
Core pre provision pretax income	$	1,746		1,980		1,064		765		737
Pretax income (loss)	$	1,330		431		740		1,014		138
Net income (loss)	$	972		274		603		777		11
Core earnings (loss) after tax	$	950		1,099		621		20		77
PER SHARE INFORMATION:
Basic & diluted earnings	$	0.20		0.06		0.12		0.16		0.00
Core earnings	$	0.20		0.23		0.13		0.00		0.02
Book value per common share	$	10.08		9.86		9.78		9.46		9.52
PERFORMANCE RATIOS:
Return on average assets		0.61	%	0.17	%	0.38	%	0.48	%	0.01	%
Core return on average assets		0.60	%	0.69	%	0.40	%	0.01	%	0.05	%
Return on average common equity		8.04	%	2.33	%	5.12	%	6.66	%	0.09	%
Core return on avg. tangible common equity		12.67	%	15.65	%	9.06	%	0.30	%	1.18	%
Earning asset yield		4.77	%	4.93	%	5.07	%	5.14	%	5.04	%
Cost of interest bearing liabilities		1.28	%	1.15	%	1.19	%	1.39	%	1.46	%
Core efficiency ratio		76.61	%	74.72	%	83.10	%	86.35	%	86.05	%
Core noninterest expense/average assets		4.20	%	4.25	%	4.35	%	4.51	%	4.27	%
Core noninterest income/operating revenue		41.52	%	39.41	%	31.43	%	27.37	%	37.63	%
Net interest margin		3.53	%	3.80	%	3.90	%	3.71	%	3.48	%
Tax equivalent effect		0.07	%	0.07	%	0.08	%	0.12	%	0.13	%
Net interest margin - fully tax equivalent basis		3.60	%	3.87	%	3.98	%	3.83	%	3.61	%
ASSET QUALITY RATIOS:
Gross charge-offs	$	474		648		527		1,593		639
Recoveries	$	104		642		21		545		18
Net charge-offs	$	371		6		506		1,048		621
Nonaccruing loans/total loans		1.48	%	1.56	%	1.67	%	1.85	%	2.87	%
Nonperforming loans/total loans		1.84	%	1.86	%	1.97	%	2.14	%	3.16	%
Nonaccruing assets/ loans & OREO		1.88	%	1.96	%	2.11	%	2.30	%	3.08	%
Nonperforming assets/total assets		1.54	%	1.60	%	1.70	%	1.85	%	2.18	%
Allowance for loan loss/nonperforming loans		81.6	%	79.3	%	72.1	%	68.7	%	49.4	%
Allowance for loan loss/total loans		1.50	%	1.48	%	1.42	%	1.47	%	1.56	%
Net loan charge-offs/average loans (ann.)		0.34	%	0.01	%	0.46	%	0.97	%	0.59	%
Loan loss provision/net charge-offs		121.46	%	5243.77	%	58.69	%	85.74	%	80.33	%
CAPITAL & LIQUDITY RATIOS:
Loans/Deposits		82.12	%	85.31	%	85.34	%	88.24	%	82.30	%
Equity/Assets		7.60	%	7.62	%	7.62	%	7.44	%	7.06	%
Tangible equity/Tangible assets		4.88	%	4.85	%	4.64	%	4.38	%	4.13	%
END OF PERIOD BALANCES
Total loans	$	439,721		442,554		438,926		437,551		422,166
Total assets	$	644,976		628,664		623,793		618,061		654,968
Deposits	$	535,492		518,765		514,349		495,870		512,961
Stockholders equity	$	49,026		47,932		47,552		46,014		46,265
Intangibles	$	18,430		18,361		19,545		19,800		20,069
Tangible equity	$	30,596		29,571		28,007		26,214		26,196
Full-time equivalent employees		203		210		215		228		227
AVERAGE BALANCES
Total loans	$	436,384		437,020		437,744		430,363		422,519
Total earning assets	$	552,016		556,004		551,744		561,353		554,975
Total assets	$	635,849		636,932		627,291		648,681		661,621
Deposits	$	523,193		522,472		512,190		510,591		520,045
Stockholders equity	$	48,377		47,035		47,087		46,629		46,229
Tangible equity	$	29,981		28,082		27,414		26,694		26,024

Rurban Financial Corp.

Segment Reporting - (Unaudited)

3 Month Ended March 31, 2012 

		Banking	Parent Company and Other	Total Banking, Parent and Other	Data Services	Elimination Entries	Rurban Financial Corp.
($ in Thousands)
Income Statement Measures
Interest income	$	6,498	-	6,498	-	-	6,498
Interest expense		997	612	1,609	13	-	1,622
Net interest income		5,501	(612)	4,889	(13)	-	4,876
Provision for loan loss		450	-	450	-	-	450
Non-interest income		3,044	69	3,113	1,436	(969)	3,580
Non-interest expense		6,447	294	6,741	884	(949)	6,676
Net income - QTD	$	1,184	(548)	636	356	(20)	972
Performance Measures
Average  assets - QTD	$	628,650	-	632,570	3,279	-	635,849
Return on average assets		0.75%	-	0.40%	43.42%	-	0.61%
Average equity - QTD	$	69,717	-	48,377	(1,860)	-	48,377
Return on average equity		6.79%	-	5.26%	-	-	8.04%
Average loans - QTD	$	437,419	2,000	439,419	-	(3,035)	436,384
Average deposits - QTD	$	524,528	-	524,528	-	(1,335)	523,193

RURBAN FINANCIAL CORP.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

	Three Months Ended
($ in Thousands)		March		December		September		June		March
		2012		2011		2011		2011		2011
GAAP Earnings	$	972		274		603		777		11
Realized securities gains (1)		-		-		-		(1,871	)	-
Prepayment penalties (1)		-		-		-		1,083		-
(Gains)/losses on sales of assets (1)		56		46		27		160		100
OREO writedown (1)		-		214		-		-		-
Hardware write-offs (2)		-		609		-		-		-
Contract buyouts (2)		(90	)	-		-		(519	)	-
Writedown of goodwill and other intangibles (2)		-		381		-		-		-
Total non-core Items		(34	)	1,250		27		(1,147	)	100
Applicable income tax effect on non-core Items		12		(425	)	(9	)	390		(34	)
After-tax non core Items		(22	)	825		18		(757	)	66
Core recurring net income		950		1,099		621		20		77

(1) State Bank & Trust

(2) RDSI