Exhibit 99.1
Rurban Financial Corp. Reports 2012 Second Quarter Results
DEFIANCE, Ohio, July 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 second quarter and six months ended June 30, 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 June 30, 2012, Rurban reported net income of $1.0 million, or $0.21 per diluted share, compared to net income of $0.78 million, or $0.16 per diluted share, for the quarter ended June 30, 2011, and net income of $0.97 million, or $0.20 per diluted share, for the quarter ended March 31, 2012.
For the first six months of 2012, net income was $1.99 million, or $0.41 per common share, compared to $0.79 million, or $0.16 per common share, for the prior-year six month period. Excluding non-recurring items from the second quarter of 2011, including a gain of $1.87 million and a prepayment penalty of $1.08 million, both related to the balance sheet restructuring reported in the June 2011 quarter, as well as a contract buyout penalty paid to RDSI of $0.52 million, core earnings for the second quarter and first six months of 2011 were a loss of $0.09 million, or $(0.02) per share, and a loss of $0.08 million, or $(0.02) per share, respectively.
Key items for the 2012 second quarter include:
| · | Rurban continues to improve profitability, reporting a quarterly ROA of 63 basis points compared to 45 basis points for the last twelve months. |
| · | Noninterest income has benefited from sustained activity in the mortgage market; year-to-date, mortgage banking contributed 40 percent of noninterest income compared to 14 percent for the prior-year six month period. |
| · | Quarterly noninterest expense has stabilized at approximately $6.87 million, or 4.27 percent of average assets. Although the ratio declined by 33 basis points from the year ago quarter primarily as a result of a ten percent staff reduction, operating expenses still represent a major opportunity for profitability improvement. |
| · | Portfolio loans grew $14.6 million, or 3.3 percent, over the past twelve months. Loan growth consisted primarily of $10.9 million of commercial real estate loans booked in the most recent quarter. |
| · | Year over year, nonperforming assets declined by $2.6 million, or 23 percent, to $8.86 million, or 1.40 percent of total assets. Reserve coverage of nonperforming loans at quarter-end was 93 percent compared to 69 percent at June 30, 2011. |
| | | |
| · | On a consolidated level, Rurban’s tangible leverage improved by 83 basis points from the prior year second quarter, to 5.21 percent; it still remains a focus of management attention. |
Mark Klein, President and Chief Executive Officer of Rurban Financial Corp., stated, “It is a pleasure to report another straight-forward quarter of strong operating performance. We hit the million dollar mark for net income this quarter, an event that last transpired exactly three years ago while RDSI was still generating $5 million of revenue per quarter. Although that source of revenue is now greatly diminished, we’ve offset the decline with other sources of revenue and a much more efficiently managed organization.
“We are energized and well-positioned to capitalize on our improved efficiencies and commitment to growth; our pipeline has been replenishing each quarter primarily with commercial and residential real estate loans. Although some of our markets are certainly not high growth, the experience of our lenders has prevailed; we grew nearly $12 million of commercial and commercial real estate loans this past quarter, despite tough underwriting standards that have maintained asset quality near the top of our peer group. In addition, our mortgage bankers originated approximately $80 million of residential real estate loans this past quarter, nearly all of which was sold. These two product lines – commercial real estate loans to hold in portfolio and residential mortgages that we originate for sale but continue to service – account for much of our six percent core revenue growth this past year.
“Our data services subsidiary, RDSI, continues to advance. Our banking clients are beginning to extend out their renewal contracts for years rather than months, and we are in the process of booking some new business. Although we haven’t retained 100% of our item processing customer base over the past year, the vast majority are still with us, and some have even expanded their relationship. This is a strong signal that clients are recognizing our efforts to stabilize RDSI, and that they have faith in its future.
“We have much to be optimistic about. Our bankers are combing the countryside, and the cities, as well, for new business opportunities. We opened a second loan production office in Columbus this past quarter to provide an additional base for our commercial and mortgage bankers. The demand is there, and now we have more lenders to respond effectively to these opportunities.
“We are pleased with our progress, and it is gratifying to see an improvement in our shareholders’ value. We continue to search for opportunities to grow and become more efficient, and we are becoming increasingly successful in these endeavors across-the-board.”
RESULTS OF OPERATIONS
Consolidated Revenue
Total operating revenue, consisting of net interest income on a fully tax equivalent basis (“FTE”) and noninterest income from operations, was $8.56 million for the second quarter of 2012, up $0.48 million, or 6.0 percent, from the second quarter of 2011, and higher by $0.11 million, or 1.3 percent, from the linked quarter.
Net interest income (FTE) for the 2012 second quarter was $5.36 million, which was flat year over year but substantially higher than the previous quarter. Net interest income was positively impacted by the restoration of a more normalized net interest margin (FTE) of 3.81 percent for the second quarter 2012, as compared to 3.60 percent and 3.83 percent for the linked and prior-year second quarters, respectively. Although downward pressure on earning asset yields continues, liability costs are still declining, but to a lesser extent.
Noninterest Income
Noninterest income was $3.21 million for the second quarter of 2012, a decline of $1.9 million from the $5.1 million reported for the year-ago second quarter and $0.3 million less than the first quarter of 2012. Excluding from 2011 second quarter fee income the nonrecurring gain of $1.87 million from the sale of securities and the $0.52 million prepayment penalty received by RDSI, noninterest income from operations for the second quarter of 2012 increased by $0.5 million, or 18.5 percent; higher net revenue from mortgage banking was the primary growth factor. Compared to the linked quarter, a $0.49 million swing in net loan servicing fees accounted for the majority of the negative variance.
Data Services
| ($’s in thousands) | | Jun. 2012 | | | Mar. 2012 | | | Dec. 2011 | | | Sep. 2011 | | | Jun. 2011 | |
| Data Processing & Network Services | | $ | 194 | | | $ | 177 | | | $ | 320 | | | $ | 292 | | | $ | 302 | |
| Payment Solutions | | | 633 | | | | 708 | | | | 720 | | | | 784 | | | | 823 | |
| Contract Buyout | | | - | | | | 551 | | | | - | | | | - | | | | 519 | |
| RDSI Gross Revenue | | | 827 | | | | 1,436 | | | | 1,040 | | | | 1,076 | | | | 1,644 | |
| Less: Intercompany | | | (251 | ) | | | (793 | ) | | | (369 | ) | | | (333 | ) | | | (340 | ) |
| Nonrecurring | | | | | | | | | | | | | | | | | | | (519 | ) |
| Net Data Services Fees | | $ | 576 | | | $ | 643 | | | $ | 671 | | | $ | 743 | | | $ | 785 | |
Gross revenue generated by RDSI, including services provided to Rurban/State Bank, was $0.83 million for the second quarter of 2012. Excluding Rurban/State Bank intercompany transactions from both quarters and the one-time prepayment penalty from the 2011 quarter, net data services fees were $0.58 million for the current quarter compared to $0.79 million for the year-ago second quarter, a decline of $0.21 million. RDSI currently has contracts with 25 item processing clients, and is in the process of adding two new accounts.
Mortgage Banking
| | | Three Months Ended | |
| ($’s in thousands) | | Jun. 2012 | | | Mar. 2012 | | | Dec. 2011 | | | Sep. 2011 | | | Jun. 2011 | |
| | | | | | | | | | | | | | | | |
| Mortgage originations | | $ | 79,901 | | | $ | 68,331 | | | $ | 85,114 | | | $ | 68,989 | | | $ | 38,099 | |
| Mortgage sales | | | 75,227 | | | | 64,212 | | | | 81,046 | | | | 56,438 | | | | 30,017 | |
| Mortgage servicing portfolio | | | 459,380 | | | | 422,802 | | | | 402,062 | | | | 370,033 | | | | 351,888 | |
| Mortgage servicing rights | | | 3,359 | | | | 3,359 | | | | 2,820 | | | | 2,709 | | | | 3,294 | |
| | | | | | | | | | | | | | | | | | | | | |
| Mortgage servicing revenue: | | | | | | | | | | | | | | | | | | | | |
| Loan servicing fees | | | 274 | | | | 259 | | | | 242 | | | | 226 | | | | 217 | |
| OMSR amortization | | | (254 | ) | | | (349 | ) | | | (329 | ) | | | (251 | ) | | | (94 | ) |
| Net administrative fees | | | 20 | | | | (90 | ) | | | (87 | ) | | | (25 | ) | | | 123 | |
| OMSR valuation adjustment | | | (185 | ) | | | 419 | | | | (221 | ) | | | (771 | ) | | | (127 | ) |
| Net loan servicing fees | | | (165 | ) | | | 329 | | | | (308 | ) | | | (796 | ) | | | (4 | ) |
| Gain on sale of mortgages | | | 1,395 | | | | 1,181 | | | | 1,529 | | | | 1,101 | | | | 565 | |
| Mortgage banking revenue, net | | $ | 1,230 | | | $ | 1,510 | | | $ | 1,221 | | | $ | 305 | | | $ | 561 | |
Mortgage loan originations continued to be exceptionally strong for the second quarter of 2012: $79.9 million, up $41.8 million, or 110 percent, from the $38.1 million generated in the second quarter of 2011, and higher by $11.6 million than the previous quarter. Sales into the secondary market were also exceptionally strong: $75.2 million, up $45.2 million, or 151 percent, above the $30.0 million sold in the year ago-quarter.
Net mortgage banking income, consisting of gains on the sale of mortgage loans and net loan servicing fees, was $1.23 million for the second quarter of 2012 compared to $1.51 million for the linked quarter and $0.56 million for the year-ago second quarter. Year-to-date, the net mortgage servicing valuation adjustment was $0.23 million; this quarter’s negative valuation adjustment partially offset the large gain of the previous quarter. The mortgage servicing portfolio at the end of the second quarter 2012 was $459.4 million, up $107.5 million, or 30.5 percent, from 2011 second quarter-end.
The remainder of noninterest income was $1.40 million for the second quarter of 2012, derived from wealth management and customer service fees, plus other income primarily from bank-owned life insurance; these fees were 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 company of its asset size. Core noninterest income contributed 37.5 percent of second quarter 2012 operating revenue; this compares to a 33.5 percent contribution for second quarter 2011.
Loan Loss Provision
The loan loss provision was $0.20 million for the second quarter of 2012, a decline of $0.69 million from the second quarter of 2011, and lower by $0.25 million from the linked quarter. The decreased provision expense reflects a 24 percent decline in nonperforming loans over the past twelve months, and an 82 percent decline in net charge-offs. At second quarter-end 2012, the loan loss reserve was $6.62 million, or 1.46 percent of total loans, providing 93 percent coverage of nonperforming loans at quarter-end; this compares to reserve coverage of 69 percent at second quarter-end 2011. Nonperforming loans declined by $2.23 million year over year, while net charge-offs declined by $0.86 million.
Noninterest Expense
For the second quarter of 2012, noninterest expense was $6.87 million compared to $6.67 million and $8.40 million for the linked and year-ago quarters, respectively. Excluding the $1.1 million prepayment penalty reported for the 2011 second quarter, noninterest expense from operations declined by $0.44 million, or 6.1 percent. Although expenses were reduced in virtually every category with the important exception of compensation expense, the largest improvement was in the professional fee category, which accounted for approximately 50 percent of the expense decline year over year. Excluding $0.55 million and $0.15 million of commissions paid primarily to State Bank’s mortgage bankers in the second quarters of 2012 and 2011, respectively, salary expense declined 8.4 percent, consistent with a decline of 24 FTE staff, or 10.5 percent, over the past twelve-month period. Reflecting this improvement in second quarter 2012 operating revenue and expense, the efficiency ratio declined to 77.7 percent, from 86.3 percent for the year-ago quarter.
Balance Sheet
Total assets as of June 30, 2012 were $632.5 million, an increase of $14.5 million, or 2.3 percent, from June 30, 2011. Total deposits as of second quarter-end 2012 were $518.7 million, higher by $22.8 million than at second quarter-end 2011. Over the past twelve months, the deposit mix shifted further toward lower-cost non-maturity deposits, which now comprise 60 percent of total deposits compared to 57 percent for the year-ago quarter. As a result of the improved mix combined with a continuation of declining interest rates, the cost of deposits declined from 79 basis points to 58 basis points. The balance sheet deleveraging completed in June 2011 further improved the liability mix and improved funding costs; the transaction reduced the average balance of higher-cost repos and FHLB advances from $59.1 million for the June 2011 quarter to $31.1 million for the 2012 June quarter, and reduced the weighted average interest rate from 3.09 percent to 1.72 percent for the current June quarter.
Loan Portfolio
| ($ in Thousands) | | Jun. 2012 | | | Mar. 2012 | | | Dec. 2011 | | | Sep. 2011 | | | Jun. 2011 | | | Variance
YOY | |
| | | | | | | | | | | | | | | | | | | |
| Commercial & Industrial (C&I) | | $ | 75,964 | | | $ | 78,450 | | | $ | 78,112 | | | $ | 77,269 | | | $ | 74,613 | | | $ | 1,351 | |
| % of Total | | | 16.8 | % | | | 17.8 | % | | | 17.7 | % | | | 17.6 | % | | | 17.0 | % | | | 1.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial Real Estate | | | 199,918 | | | | 188,984 | | | | 187,829 | | | | 186,411 | | | | 190,625 | | | | 9,293 | |
| % of Total | | | 44.2 | % | | | 43.0 | % | | | 42.4 | % | | | 42.4 | % | | | 43.6 | % | | | 4.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Agriculture | | | 41,093 | | | | 37,741 | | | | 38,361 | | | | 38,601 | | | | 38,453 | | | | 2,640 | |
| % of Total | | | 9.1 | % | | | 8.6 | % | | | 8.7 | % | | | 8.8 | % | | | 8.8 | % | | | 6.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential Real Estate | | | 85,046 | | | | 84,771 | | | | 87,656 | | | | 85,399 | | | | 82,782 | | | | 2,264 | |
| % of Total | | | 18.8 | % | | | 19.3 | % | | | 19.8 | % | | | 19.5 | % | | | 18.9 | % | | | 2.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Consumer & Other | | | 50,089 | | | | 49,775 | | | | 50,596 | | | | 51,246 | | | | 51,078 | | | | (989 | ) |
| % of Total | | | 11.1 | % | | | 11.3 | % | | | 11.4 | % | | | 11.7 | % | | | 11.7 | % | | | (1.9 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Loans | | $ | 452,110 | | | $ | 439,721 | | | $ | 442,554 | | | $ | 438,926 | | | $ | 437,551 | | | $ | 14,559 | |
| | | | | | | | | | | | | | | | | | | | | | | | 3.3 | % |
Total loans held for investment (“HFI”) were $452.1 million at June 30, 2012 compared to $437.6 million for the prior-year quarter-end, up $14.6 million, or 3.3 percent. Commercial real estate (“CRE”) loans accounted for 64 percent of total loan growth over the past twelve-month period, up $9.3 million, or 4.9 percent. However, the majority of this CRE loan growth occurred during the most recent quarter; CRE outstandings increased by $10.9 million since March 31, 2012 (up 5.8 percent) to $199.9 million at June 30, 2012. CRE loans are the largest loan category, comprising 44 percent of State Bank’s loan portfolio. Residential real estate and C&I loans comprised the next largest loan categories, at 18.8 percent and 16.8 percent, respectively, as of June 30, 2012.
Asset Quality
Summary of Nonperforming Assets
($ in Thousands)
| Nonaccruing Loan Category | | Jun. 2012 | | | Mar. 2012 | | | Dec. 2011 | | | Sep. 2011 | | | Jun. 2011 | |
| | | | | | | | | | | | | | | | |
| Commercial & Industrial (C&I) | | $ | 1,467 | | | $ | 2,021 | | | $ | 2,393 | | | $ | 2,466 | | | $ | 2,507 | |
| % of Total C&I loans | | | 1.93 | % | | | 2.58 | % | | | 3.06 | % | | | 3.19 | % | | | 3.36 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Commercial Real Estate | | | 1,345 | | | | 1,481 | | | | 1,456 | | | | 2,210 | | | | 2,620 | |
| % of Total CRE loans | | | 0.67 | % | | | 0.78 | % | | | 0.78 | % | | | 1.19 | % | | | 1.37 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Agriculture | | | - | | | | 113 | | | | - | | | | 87 | | | | 87 | |
| % of Total Ag loans | | | - | | | | 0.30 | % | | | - | | | | 0.23 | % | | | 0.23 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Residential Real Estate | | | 1,958 | | | | 1,840 | | | | 2,471 | | | | 2,107 | | | | 2,436 | |
| % of Total Res. RE loans | | | 2.30 | % | | | 2.17 | % | | | 2.82 | % | | | 2.47 | % | | | 2.94 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Consumer & Other | | | 545 | | | | 1,056 | | | | 580 | | | | 461 | | | | 423 | |
| % of Consumer & Other loans | | | 1.09 | % | | | 2.12 | % | | | 1.15 | % | | | 0.90 | % | | | 0.83 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total Nonaccruing Loans | | | 5,315 | | | | 6,511 | | | | 6,900 | | | | 7,331 | | | | 8,073 | |
| % of Total Loans | | | 1.18 | % | | | 1.48 | % | | | 1.56 | % | | | 1.67 | % | | | 1.85 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Accruing Restructured Loans | | | 1,837 | | | | 1,593 | | | | 1,334 | | | | 1,311 | | | | 1,312 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Nonperforming Loans | | $ | 7,152 | | | $ | 8,104 | | | $ | 8,234 | | | $ | 8,642 | | | $ | 9,385 | |
| % of Total Loans | | | 1.58 | % | | | 1.84 | % | | | 1.86 | % | | | 1.97 | % | | | 2.14 | % |
| | | | | | | | | | | | | | | | | | | | | |
| OREO & Repossessed Vehicles | | | 1,708 | | | | 1,807 | | | | 1,830 | | | | 1,970 | | | | 2,056 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Nonperforming Assets | | $ | 8,860 | | | $ | 9,911 | | | $ | 10,064 | | | $ | 10,612 | | | $ | 11,441 | |
| % of Total Assets | | | 1.40 | % | | | 1.54 | % | | | 1.60 | % | | | 1.70 | % | | | 1.85 | % |
Nonaccruing loans were $5.3 million as of June 30, 2012, a decline of $2.8 million, or 34 percent from the year-earlier level. The greatest improvement was reflected in the CRE portfolio, where nonaccrual loans declined over the past twelve months by $1.3 million, or 49 percent, to $1.3 million as of June 30, 2012. Currently, Rurban has only two nonperforming relationships that exceed $1.0 million; together, they account for $2.3 million, or 26 percent, of nonperforming assets.
NONPERFORMING ASSET RECONCILIATION
| ($ in Thousands) | | Jun. 2012 | | | Mar. 2012 | | | Dec. 2011 | | | Sep. 2011 | | | Jun. 2011 | |
| | | | | | | | | | | | | | | | |
| Beginning Balance | | $ | 9,911 | | | $ | 10,064 | | | $ | 10,612 | | | $ | 11,441 | | | $ | 14,274 | |
| Additions | | | 1,209 | | | | 906 | | | | 1,193 | | | | 432 | | | | 289 | |
| Returns to performing status | | | (306 | ) | | | (419 | ) | | | (169 | ) | | | (206 | ) | | | (352 | ) |
| Principal payments | | | (1,773 | ) | | | (402 | ) | | | (375 | ) | | | (281 | ) | | | (844 | ) |
| Sale of OREO/OAO | | | (147 | ) | | | (23 | ) | | | (358 | ) | | | (246 | ) | | | (416 | ) |
| Loan charge-offs | | | (220 | ) | | | (474 | ) | | | (648 | ) | | | (527 | ) | | | (1,593 | ) |
| Valuation write-downs | | | (58 | ) | | | - | | | | (214 | ) | | | - | | | | - | |
| Restructured Loan Activity | | | 244 | | | | 259 | | | | 23 | | | | (1 | ) | | | 83 | |
| Net Change | | | (1,051 | ) | | | (153 | ) | | | (548 | ) | | | (829 | ) | | | (2,833 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Total | | $ | 8,860 | | | $ | 9,911 | | | $ | 10,064 | | | $ | 10,612 | | | $ | 11,441 | |
Capitalization
All capital ratios continue to improve; however, capital adequacy remains an important focus of management attention. Tangible leverage increased 83 basis points over the past twelve months, and now stands at 5.21 percent. All bank regulatory ratios remain in excess of “well-capitalized” levels, and continue to improve, as do capital ratios at the holding company level. At June 30, 2012, State Bank’s Total Risk-Based Capital was $56.0 million, $19.3 million above the well-capitalized level; the Total Risk-based Capital Ratio was 12.2 percent. As of June 30, 2012, Rurban had 4,861,779 common shares outstanding.
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, and one center in Fort Wayne, Indiana; and two loan production offices in Columbus, Ohio and one loan production office 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. 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:
Anthony V. Cosentino, CFO
419-785-3663
RURBAN FINANCIAL CORP. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - (Unaudited)
| | | June | | | March | | | December | | | September | | | June | |
| ($ in Thousands) | | 2012 | | | 2012 | | | 2011 | | | 2011 | | | 2011 | |
| | | | | | | | | | | | | | | | |
| ASSETS | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 14,636 | | | $ | 29,602 | | | $ | 14,846 | | | $ | 13,764 | | | $ | 10,486 | |
| | | | | | | | | | | | | | | | | | | | | |
| Investment Securities: | | | | | | | | | | | | | | | | | | | | |
| Securities available for sale, at fair value | | | 102,537 | | | | 110,603 | | | | 111,978 | | | | 104,615 | | | | 104,770 | |
| Other securities - FRB and FHLB Stock | | | 3,748 | | | | 3,685 | | | | 3,685 | | | | 3,748 | | | | 3,748 | |
| Total investment securities | | | 106,285 | | | | 114,288 | | | | 115,663 | | | | 108,363 | | | | 108,518 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loans held for sale | | | 10,595 | | | | 11,384 | | | | 5,238 | | | | 10,590 | | | | 7,211 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loans, net of unearned income | | | 452,110 | | | | 439,721 | | | | 442,554 | | | | 438,926 | | | | 437,551 | |
| Allowance for loan losses | | | (6,618 | ) | | | (6,609 | ) | | | (6,529 | ) | | | (6,235 | ) | | | (6,444 | ) |
| Net loans | | | 445,492 | | | | 433,112 | | | | 436,025 | | | | 432,691 | | | | 431,107 | |
| | | | | | | | | | | | | | | | | | | | | |
| Premises and equipment, net | | | 13,190 | | | | 13,282 | | | | 13,773 | | | | 14,120 | | | | 14,359 | |
| Purchased software | | | 355 | | | | 386 | | | | 159 | | | | 805 | | | | 875 | |
| Cash surrender value of life insurance | | | 12,401 | | | | 12,312 | | | | 12,224 | | | | 12,134 | | | | 12,042 | |
| Goodwill | | | 16,353 | | | | 16,353 | | | | 16,353 | | | | 16,734 | | | | 16,734 | |
| Core deposits and other intangibles | | | 1,534 | | | | 1,691 | | | | 1,849 | | | | 2,006 | | | | 2,191 | |
| Foreclosed assets held for sale, net | | | 1,708 | | | | 1,807 | | | | 1,830 | | | | 1,970 | | | | 2,056 | |
| Mortgage servicing rights | | | 3,359 | | | | 3,359 | | | | 2,820 | | | | 2,709 | | | | 3,294 | |
| Accrued interest receivable | | | 1,597 | | | | 1,802 | | | | 1,635 | | | | 2,061 | | | | 1,959 | |
| Other assets | | | 5,026 | | | | 5,598 | | | | 6,249 | | | | 5,846 | | | | 7,229 | |
| Total assets | | $ | 632,531 | | | $ | 644,976 | | | $ | 628,664 | | | $ | 623,793 | | | $ | 618,061 | |
| | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES AND EQUITY | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | | | | | | | | |
| Non interest bearing demand | | $ | 68,918 | | | $ | 71,077 | | | $ | 65,963 | | | $ | 62,080 | | | $ | 59,651 | |
| Interest bearing demand | �� | | 109,268 | | | | 118,898 | | | | 107,446 | | | | 103,229 | | | | 101,972 | |
| Savings | | | 53,777 | | | | 52,599 | | | | 49,665 | | | | 48,146 | | | | 48,771 | |
| Money market | | | 81,114 | | | | 82,799 | | | | 74,244 | | | | 79,163 | | | | 72,823 | |
| Time deposits | | | 205,584 | | | | 210,119 | | | | 221,447 | | | | 221,731 | | | | 212,653 | |
| Total deposits | | | 518,661 | | | | 535,492 | | | | 518,765 | | | | 514,349 | | | | 495,870 | |
| | | | | | | | | | | | | | | | | | | | | |
| Notes payable | | | 2,249 | | | | 2,519 | | | | 2,788 | | | | 2,865 | | | | 3,142 | |
| Advances from Federal Home Loan Bank | | | 17,500 | | | | 12,611 | | | | 12,776 | | | | 12,940 | | | | 24,602 | |
| Fed funds purchased | | | - | | | | - | | | | - | | | | - | | | | 2,000 | |
| Repurchase agreements | | | 15,824 | | | | 17,771 | | | | 18,779 | | | | 18,778 | | | | 19,867 | |
| Trust preferred securities | | | 20,620 | | | | 20,620 | | | | 20,620 | | | | 20,620 | | | | 20,620 | |
| Accrued interest payable | | | 3,836 | | | | 3,556 | | | | 2,954 | | | | 2,704 | | | | 2,392 | |
| Other liabilities | | | 3,567 | | | | 3,381 | | | | 4,050 | | | | 3,985 | | | | 3,554 | |
| Total liabilities | | | 582,257 | | | | 595,950 | | | | 580,732 | | | | 576,241 | | | | 572,047 | |
| | | | | | | | | | | | | | | | | | | | | |
| Equity | | | | | | | | | | | | | | | | | | | | |
| Preferred stock | | | - | | | | - | | | | - | | | | - | | | | - | |
| Common stock | | | 12,569 | | | | 12,569 | | | | 12,569 | | | | 12,569 | | | | 12,569 | |
| Additional paid-in capital | | | 15,350 | | | | 15,338 | | | | 15,323 | | | | 15,302 | | | | 15,280 | |
| Retained earnings | | | 22,452 | | | | 21,438 | | | | 20,466 | | | | 20,192 | | | | 19,590 | |
| Accumulated other comprehensive income | | | 1,672 | | | | 1,450 | | | | 1,343 | | | | 1,258 | | | | 344 | |
| Treasury stock | | | (1,769 | ) | | | (1,769 | ) | | | (1,769 | ) | | | (1,769 | ) | | | (1,769 | ) |
| Total equity | | | 50,274 | | | | 49,026 | | | | 47,932 | | | | 47,552 | | | | 46,014 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total liabilities and equity | | $ | 632,531 | | | $ | 644,976 | | | $ | 628,664 | | | $ | 623,793 | | | $ | 618,061 | |
RURBAN FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF OPERATION - (Unaudited)
| | | Three Months Ended | | | | | | | | | | | | Six Months Ended | |
| ($ in Thousands) | | June | | | March | | | December | | | September | | | June | | | June | | | June | |
| | | 2012 | | | 2012 | | | 2011 | | | 2011 | | | 2011 | | | 2012 | | | 2011 | |
| Interest income | | | | | | | | | | | | | | �� | | | | | | | | | | | | | | |
| Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | $ | 6,037 | | | $ | 5,928 | | | $ | 6,171 | | | $ | 6,251 | | | $ | 6,170 | | | $ | 11,965 | | | $ | 12,022 | |
| Nontaxable | | | 24 | | | | 23 | | | | 24 | | | | 24 | | | | 15 | | | | 47 | | | | 26 | |
| Securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 403 | | | | 399 | | | | 387 | | | | 446 | | | | 566 | | | | 802 | | | | 1,177 | |
| Nontaxable | | | 146 | | | | 147 | | | | 170 | | | | 172 | | | | 302 | | | | 293 | | | | 638 | |
| Other | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total interest income | | | 6,610 | | | | 6,497 | | | | 6,752 | | | | 6,893 | | | | 7,053 | | | | 13,107 | | | | 13,863 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 768 | | | | 854 | | | | 946 | | | | 976 | | | | 1,010 | | | | 1,622 | | | | 2,059 | |
| Other borrowings | | | (2 | ) | | | 34 | | | | 22 | | | | 25 | | | | 24 | | | | 32 | | | | 49 | |
| Repurchase Agreements | | | 60 | | | | 68 | | | | 70 | | | | 72 | | | | 344 | | | | 128 | | | | 770 | |
| Federal Home Loan Bank advances | | | 75 | | | | 74 | | | | 77 | | | | 79 | | | | 113 | | | | 149 | | | | 246 | |
| Trust preferred securities | | | 441 | | | | 592 | | | | 358 | | | | 356 | | | | 349 | | | | 1,033 | | | | 693 | |
| Total interest expense | | | 1,342 | | | | 1,622 | | | | 1,473 | | | | 1,508 | | | | 1,840 | | | | 2,964 | | | | 3,817 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | 5,268 | | | | 4,875 | | | | 5,279 | | | | 5,385 | | | | 5,213 | | | | 10,143 | | | | 10,046 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Provision for loan losses | | | 200 | | | | 450 | | | | 299 | | | | 297 | | | | 898 | | | | 650 | | | | 1,397 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 5,068 | | | | 4,425 | | | | 4,980 | | | | 5,088 | | | | 4,315 | | | | 9,493 | | | | 8,649 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Data service fees | | | 576 | | | | 643 | | | | 671 | | | | 743 | | | | 1,304 | | | | 1,219 | | | | 2,216 | |
| Trust fees | | | 607 | | | | 642 | | | | 623 | | | | 629 | | | | 669 | | | | 1,249 | | | | 1,364 | |
| Customer service fees | | | 668 | | | | 631 | | | | 647 | | | | 664 | | | | 640 | | | | 1,299 | | | | 1,221 | |
| Gain on sale of mortgage and OMSR's | | | 1,395 | | | | 1,181 | | | | 1,529 | | | | 1,101 | | | | 565 | | | | 2,576 | | | | 990 | |
| Mortgage loan servicing fees, net | | | (165 | ) | | | 329 | | | | (308 | ) | | | (796 | ) | | | (4 | ) | | | 164 | | | | 135 | |
| Gain on sale of non-mortgage loans | | | - | | | | - | | | | 127 | | | | - | | | | 38 | | | | - | | | | 81 | |
| Net gain (loss) on sales of securities | | | - | | | | - | | | | - | | | | - | | | | 1,871 | | | | - | | | | 1,871 | |
| Loss on sale or disposal of assets | | | (50 | ) | | | (56 | ) | | | (46 | ) | | | (27 | ) | | | (160 | ) | | | (106 | ) | | | (260 | ) |
| Other income | | | 177 | | | | 211 | | | | 180 | | | | 161 | | | | 174 | | | | 388 | | | | 342 | |
| Total non-interest income | | | 3,208 | | | | 3,581 | | | | 3,423 | | | | 2,475 | | | | 5,097 | | | | 6,789 | | | | 7,960 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Noninterest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 3,597 | | | | 3,499 | | | | 3,488 | | | | 3,583 | | | | 3,573 | | | | 7,096 | | | | 7,103 | |
| Net occupancy expense | | | 528 | | | | 548 | | | | 531 | | | | 568 | | | | 517 | | | | 1,076 | | | | 1,101 | |
| Equipment expense | | | 712 | | | | 711 | | | | 709 | | | | 690 | | | | 718 | | | | 1,423 | | | | 1,429 | |
| FDIC insurance expense | | | 223 | | | | 214 | | | | 191 | | | | 145 | | | | 254 | | | | 437 | | | | 572 | |
| Fixed asset and software impairment | | | - | | | | - | | | | 609 | | | | - | | | | - | | | | - | | | | - | |
| Data processing fees | | | 121 | | | | 113 | | | | 131 | | | | 158 | | | | 192 | | | | 234 | | | | 336 | |
| Professional fees | | | 390 | | | | 385 | | | | 493 | | | | 377 | | | | 577 | | | | 775 | | | | 1,051 | |
| Marketing expense | | | 103 | | | | 90 | | | | 93 | | | | 89 | | | | 90 | | | | 193 | | | | 146 | |
| Printing and office supplies | | | 67 | | | | 78 | | | | 52 | | | | 86 | | | | 119 | | | | 145 | | | | 195 | |
| Telephone and communication | | | 139 | | | | 144 | | | | 139 | | | | 141 | | | | 143 | | | | 283 | | | | 300 | |
| Postage and delivery expense | | | 200 | | | | 229 | | | | 235 | | | | 260 | | | | 259 | | | | 429 | | | | 603 | |
| State, local and other taxes | | | 118 | | | | 120 | | | | 77 | | | | 103 | | | | 134 | | | | 238 | | | | 278 | |
| Employee expense | | | 119 | | | | 106 | | | | 113 | | | | 143 | | | | 172 | | | | 225 | | | | 268 | |
| Goodwill Impairment | | | - | | | | - | | | | 381 | | | | - | | | | - | | | | - | | | | - | |
| Other intangible amortization expense | | | 158 | | | | 157 | | | | 157 | | | | 185 | | | | 197 | | | | 315 | | | | 394 | |
| OREO Impairment | | | 58 | | | | - | | | | 214 | | | | - | | | | - | | | | 58 | | | | - | |
| Other expenses | | | 338 | | | | 282 | | | | 359 | | | | 295 | | | | 1,453 | | | | 620 | | | | 1,682 | |
| Total non-interest expense | | | 6,871 | | | | 6,676 | | | | 7,972 | | | | 6,823 | | | | 8,398 | | | | 13,547 | | | | 15,458 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income before income tax expense | | | 1,405 | | | | 1,330 | | | | 431 | | | | 740 | | | | 1,014 | | | | 2,735 | | | | 1,151 | |
| Income tax expense | | | 391 | | | | 358 | | | | 157 | | | | 137 | | | | 237 | | | | 749 | | | | 363 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 1,014 | | | | 972 | | | $ | 274 | | | $ | 603 | | | $ | 777 | | | $ | 1,986 | | | $ | 788 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common share data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic earnings per common share | | $ | 0.21 | | | | 0.20 | | | $ | 0.06 | | | $ | 0.12 | | | $ | 0.16 | | | $ | 0.41 | | | $ | 0.16 | |
| Diluted earnings per common share | | $ | 0.21 | | | | 0.20 | | | $ | 0.06 | | | $ | 0.12 | | | $ | 0.16 | | | $ | 0.41 | | | $ | 0.16 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average shares outstanding: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic: | | | 4,862 | | | | 4,862 | | | | 4,862 | | | | 4,862 | | | | 4,862 | | | | 4,862 | | | | 4,862 | |
| Diluted: | | | 4,862 | | | | 4,862 | | | | 4,862 | | | | 4,862 | | | | 4,862 | | | | 4,862 | | | | 4,862 | |
RURBAN FINANCIAL CORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)
| ($ in thousands except per share data) | | Three Months Ended | | | Six Months Ended | |
| | | June | | | March | | | December | | | September | | | June | | | June | | | June | |
| SUMMARY OF OPERATIONS | | 2012 | | | 2012 | | | 2011 | | | 2011 | | | 2011 | | | 2012 | | | 2011 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | $ | 5,268 | | | | 4,875 | | | | 5,279 | | | | 5,385 | | | | 5,213 | | | | 10,143 | | | | 10,046 | |
| Tax-equivalent adjustment | | $ | 88 | | | | 88 | | | | 100 | | | | 101 | | | | 163 | | | | 175 | | | | 342 | |
| Tax-equivalent net interest income (core) | | $ | 5,356 | | | | 4,963 | | | | 5,379 | | | | 5,486 | | | | 5,376 | | | | 10,318 | | | | 10,388 | |
| Provision for loan loss | | $ | 200 | | | | 450 | | | | 299 | | | | 297 | | | | 898 | | | | 650 | | | | 1,397 | |
| Noninterest income | | $ | 3,208 | | | | 3,581 | | | | 3,423 | | | | 2,475 | | | | 5,097 | | | | 6,789 | | | | 7,960 | |
| Less: Non core items | | $ | - | | | | (90 | ) | | | - | | | | - | | | | (2,390 | ) | | | (90 | ) | | | (2,390 | ) |
| Core noninterest income | | $ | 3,208 | | | | 3,491 | | | | 3,423 | | | | 2,475 | | | | 2,707 | | | | 6,699 | | | | 5,569 | |
| Total revenue, tax-equivalent | | $ | 8,564 | | | | 8,544 | | | | 8,802 | | | | 7,961 | | | | 10,473 | | | | 17,107 | | | | 18,348 | |
| Core revenue, tax-equivalent | | $ | 8,564 | | | | 8,454 | | | | 8,802 | | | | 7,961 | | | | 8,083 | | | | 17,017 | | | | 15,957 | |
| Noninterest expense | | $ | 6,871 | | | | 6,676 | | | | 7,972 | | | | 6,823 | | | | 8,398 | | | | 13,547 | | | | 15,458 | |
| Less: Non core items | | $ | - | | | | - | | | | 990 | | | | - | | | | 1,083 | | | | - | | | | 1,083 | |
| Core noninterest expense | | $ | 6,871 | | | | 6,676 | | | | 6,982 | | | | 6,823 | | | | 7,315 | | | | 13,547 | | | | 14,375 | |
| Pre provision pretax income (loss) | | $ | 1,605 | | | | 1,780 | | | | 730 | | | | 1,037 | | | | 1,912 | | | | 3,385 | | | | 2,548 | |
| Core pre provision pretax income | | $ | 1,605 | | | | 1,690 | | | | 1,720 | | | | 1,037 | | | | 604 | | | | 3,295 | | | | 1,240 | |
| Pretax income (loss) | | $ | 1,405 | | | | 1,330 | | | | 431 | | | | 740 | | | | 1,013 | | | | 2,735 | | | | 1,151 | |
| Net income (loss) | | $ | 1,014 | | | | 972 | | | | 274 | | | | 603 | | | | 777 | | | | 1,986 | | | | 788 | |
| Core earnings (loss) after tax | | $ | 1,014 | | | | 913 | | | | 927 | | | | 603 | | | | (86 | ) | | | 1,927 | | | | (75 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| PER SHARE INFORMATION: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic & diluted earnings | | $ | 0.21 | | | | 0.20 | | | | 0.06 | | | | 0.12 | | | | 0.16 | | | | 0.41 | | | | 0.16 | |
| Core earnings | | $ | 0.21 | | | | 0.19 | | | | 0.19 | | | | 0.12 | | | | (0.02 | ) | | | 0.40 | | | | (0.02 | ) |
| Book value per common share | | $ | 10.34 | | | | 10.08 | | | | 9.86 | | | | 9.78 | | | | 9.46 | | | | 10.34 | | | | 9.46 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| PERFORMANCE RATIOS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.63 | % | | | 0.61 | % | | | 0.17 | % | | | 0.38 | % | | | 0.48 | % | | | 0.62 | % | | | 0.24 | % |
| Core return on average assets | | | 0.63 | % | | | 0.57 | % | | | 0.58 | % | | | 0.38 | % | | | (0.05 | )% | | | 0.60 | % | | | (0.02 | )% |
| Return on average common equity | | | 8.20 | % | | | 8.04 | % | | | 2.33 | % | | | 5.12 | % | | | 6.66 | % | | | 8.12 | % | | | 3.39 | % |
| Core return on avg. tangible common equity | | | 13.01 | % | | | 12.18 | % | | | 13.21 | % | | | 8.80 | % | | | (1.29 | )% | | | 12.47 | % | | | (0.55 | )% |
| Earning asset yield | | | 4.76 | % | | | 4.77 | % | | | 4.93 | % | | | 5.07 | % | | | 5.14 | % | | | 4.77 | % | | | 5.05 | % |
| Cost of interest bearing liabilities | | | 1.05 | % | | | 1.28 | % | | | 1.15 | % | | | 1.19 | % | | | 1.39 | % | | | 1.16 | % | | | 1.43 | % |
| Core efficiency ratio | | | 77.66 | % | | | 76.17 | % | | | 74.80 | % | | | 83.05 | % | | | 86.30 | % | | | 77.01 | % | | | 87.61 | % |
| Core noninterest expense/average assets | | | 4.27 | % | | | 4.20 | % | | | 4.39 | % | | | 4.35 | % | | | 4.51 | % | | | 4.23 | % | | | 4.39 | % |
| Core noninterest income/operating revenue | | | 37.46 | % | | | 40.86 | % | | | 38.89 | % | | | 31.09 | % | | | 25.84 | % | | | 39.16 | % | | | 30.35 | % |
| Net interest margin | | | 3.75 | % | | | 3.53 | % | | | 3.80 | % | | | 3.90 | % | | | 3.71 | % | | | 3.64 | % | | | 3.57 | % |
| Tax equivalent effect | | | 0.06 | % | | | 0.07 | % | | | 0.07 | % | | | 0.08 | % | | | 0.12 | % | | | 0.06 | % | | | 0.12 | % |
| Net interest margin - fully tax equivalent basis | | | 3.81 | % | | | 3.60 | % | | | 3.87 | % | | | 3.98 | % | | | 3.83 | % | | | 3.70 | % | | | 3.69 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ASSET QUALITY RATIOS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross charge-offs | | $ | 252 | | | | 474 | | | | 648 | | | | 527 | | | | 1,593 | | | | 726 | | | | 2,232 | |
| Recoveries | | $ | 62 | | | | 104 | | | | 642 | | | | 21 | | | | 545 | | | | 166 | | | | 563 | |
| Net charge-offs | | $ | 190 | | | | 370 | | | | 6 | | | | 506 | | | | 1,048 | | | | 560 | | | | 1,669 | |
| Nonaccruing loans/total loans | | | 1.18 | % | | | 1.48 | % | | | 1.56 | % | | | 1.67 | % | | | 1.85 | % | | | 1.18 | % | | | 1.85 | % |
| Nonperforming loans/total loans | | | 1.58 | % | | | 1.84 | % | | | 1.86 | % | | | 1.97 | % | | | 2.14 | % | | | 1.58 | % | | | 2.14 | % |
| Nonaccruing assets/ loans & OREO | | | 1.55 | % | | | 1.88 | % | | | 1.96 | % | | | 2.11 | % | | | 2.30 | % | | | 1.55 | % | | | 2.30 | % |
| Nonperforming assets/total assets | | | 1.40 | % | | | 1.54 | % | | | 1.60 | % | | | 1.70 | % | | | 1.85 | % | | | 1.40 | % | | | 1.85 | % |
| Allowance for loan loss/nonperforming loans | | | 92.5 | % | | | 81.6 | % | | | 79.3 | % | | | 72.1 | % | | | 68.7 | % | | | 92.5 | % | | | 68.7 | % |
| Allowance for loan loss/total loans | | | 1.46 | % | | | 1.50 | % | | | 1.48 | % | | | 1.42 | % | | | 1.47 | % | | | 1.46 | % | | | 1.47 | % |
| Net loan charge-offs/average loans (ann.) | | | 0.17 | % | | | 0.34 | % | | | 0.01 | % | | | 0.46 | % | | | 0.96 | % | | | 0.25 | % | | | 0.79 | % |
| Loan loss provision/net charge-offs | | | 105.22 | % | | | 121.52 | % | | | 5243.77 | % | | | 58.69 | % | | | 85.74 | % | | | 115.99 | % | | | 83.73 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CAPITAL & LIQUDITY RATIOS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans/Deposits | | | 87.17 | % | | | 82.12 | % | | | 85.31 | % | | | 85.34 | % | | | 88.24 | % | | | 87.17 | % | | | 88.24 | % |
| Equity/Assets | | | 7.95 | % | | | 7.60 | % | | | 7.62 | % | | | 7.62 | % | | | 7.44 | % | | | 7.95 | % | | | 7.44 | % |
| Tangible equity/Tangible assets | | | 5.21 | % | | | 4.88 | % | | | 4.85 | % | | | 4.63 | % | | | 4.38 | % | | | 5.21 | % | | | 4.38 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| END OF PERIOD BALANCES | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total loans | | $ | 452,110 | | | | 439,721 | | | | 442,554 | | | | 438,926 | | | | 437,551 | | | | 452,110 | | | | 437,551 | |
| Total assets | | $ | 632,531 | | | | 644,976 | | | | 628,664 | | | | 623,793 | | | | 618,061 | | | | 632,531 | | | | 618,061 | |
| Deposits | | $ | 518,661 | | | | 535,492 | | | | 518,765 | | | | 514,349 | | | | 495,870 | | | | 518,661 | | | | 495,870 | |
| Stockholders equity | | $ | 50,274 | | | | 49,026 | | | | 47,932 | | | | 47,552 | | | | 46,014 | | | | 50,274 | | | | 46,014 | |
| Intangibles | | $ | 18,242 | | | | 18,430 | | | | 18,361 | | | | 19,545 | | | | 19,800 | | | | 18,242 | | | | 19,800 | |
| Tangible equity | | $ | 32,032 | | | | 30,596 | | | | 29,571 | | | | 28,007 | | | | 26,214 | | | | 32,032 | | | | 26,214 | |
| Full-time equivalent employees | | | 204 | | | | 203 | | | | 210 | | | | 215 | | | | 228 | | | | 204 | | | | 228 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| AVERAGE BALANCES | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total loans | | $ | 454,354 | | | | 436,384 | | | | 437,020 | | | | 437,744 | | | | 434,700 | | | | 448,642 | | | | 422,512 | |
| Total earning assets | | $ | 562,169 | | | | 552,016 | | | | 556,004 | | | | 551,744 | | | | 561,353 | | | | 557,371 | | | | 562,386 | |
| Total assets | | $ | 643,859 | | | | 635,849 | | | | 636,932 | | | | 627,291 | | | | 648,681 | | | | 639,926 | | | | 655,233 | |
| Deposits | | $ | 527,992 | | | | 523,193 | | | | 522,472 | | | | 512,190 | | | | 510,591 | | | | 525,313 | | | | 515,270 | |
| Stockholders equity | | $ | 49,464 | | | | 48,377 | | | | 47,035 | | | | 47,087 | | | | 46,629 | | | | 48,946 | | | | 46,452 | |
| Tangible equity | | $ | 31,165 | | | | 29,981 | | | | 28,082 | | | | 27,414 | | | | 26,694 | | | | 30,889 | | | | 27,323 | |
RURBAN FINANCIAL CORP.
Rate Volume Analysis - (Unaudited)
For the Three and Six Months Ended June 30, 2012 and 2011
| ($ in Thousands) | | Three Months Ended June 30, 2012 | | | Three Months Ended June 30, 2011 | |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
| | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | |
| | | | | | | | | | | | | | | | | | | |
| Assets | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable securities | | $ | 93,458 | | | | 403 | | | | 1.73 | % | | $ | 100,559 | | | | 566 | | | | 2.25 | % |
| Non-taxable securities | | | 14,357 | | | | 221 | | | | 6.16 | % | | | 26,094 | | | | 457 | | | | 7.01 | % |
| Federal funds sold | | | - | | | | - | | | | N/A | | | | - | | | | - | | | | N/A | |
| Loans, net | | | 454,354 | | | | 6,074 | | | | 5.35 | % | | | 434,700 | | | | 6,193 | | | | 5.70 | % |
| Total earning assets | | $ | 562,169 | | | | 6,698 | | | | 4.77 | % | | $ | 561,353 | | | | 7,216 | | | | 5.14 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | 24,109 | | | | | | | | | | | | 28,732 | | | | | | | | | |
| Allowance for loan losses | | | (6,368 | ) | | | | | | | | | | | (6,665 | ) | | | | | | | | |
| Premises and equipment | | | 15,119 | | | | | | | | | | | | 16,501 | | | | | | | | | |
| Other assets | | | 48,830 | | | | | | | | | | | | 48,760 | | | | | | | | | |
| Total assets | | $ | 643,859 | | | | | | | | | | | $ | 648,681 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings and interest-bearing demand | | $ | 250,496 | | | | 52 | | | | 0.08 | % | | $ | 233,437 | | | | 92 | | | | 0.16 | % |
| Time deposits | | | 208,205 | | | | 716 | | | | 1.37 | % | | | 214,108 | | | | 918 | | | | 1.71 | % |
| Repurchase agreements | | | 17,957 | | | | 60 | | | | 1.34 | % | | | 41,409 | | | | 344 | | | | 3.33 | % |
| Advances from FHLB | | | 13,134 | | | | 74 | | | | 2.25 | % | | | 17,738 | | | | 113 | | | | 2.56 | % |
| Junior subordinated debentures | | | 20,620 | | | | 421 | | | | 8.17 | % | | | 20,620 | | | | 349 | | | | 6.77 | % |
| Notes payable & other borrowed funds | | | 2,178 | | | | 19 | | | | 3.52 | % | | | 1,498 | | | | 24 | | | | 6.53 | % |
| Total interest-bearing liabilities | | $ | 512,591 | | | | 1,342 | | | | 1.05 | % | | $ | 528,810 | | | | 1,840 | | | | 1.39 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non interest-bearing demand | | | 69,291 | | | | | | | | | | | | 63,046 | | | | | | | | | |
| Other liabilities | | | 12,514 | | | | | | | | | | | | 10,196 | | | | | | | | | |
| Total liabilities | | | 594,395 | | | | | | | | | | | | 602,052 | | | | | | | | | |
| Equity | | $ | 49,464 | | | | | | | | | | | $ | 46,629 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities and equity | | $ | 643,859 | | | | | | | | | | | $ | 648,681 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income (tax equivalent basis) | | | | | | $ | 5,356 | | | | | | | | | | | $ | 5,376 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income as a percent of average interest-earning assets | | | | | | | | | | | 3.81 | % | | | | | | | | | | | 3.83 | % |
| | | Six Months Ended June 30, 2012 | | | Six Months Ended June 30, 2011 | |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
| | Balance | | | Interest | | | Rate | | | Balance | | | Interest | | | Rate | |
| | | | | | | | | | | | | | | | | | | |
| Assets | | | | | | | | | | | | | | | | | | |
| Taxable securities | | $ | 89,234 | | | | 802 | | | | 1.80 | % | | $ | 103,189 | | | | 1,177 | | | | 2.28 | % |
| Non-taxable securities | | | 19,495 | | | | 444 | | | | 4.56 | % | | | 27,765 | | | | 966 | | | | 6.96 | % |
| Federal funds sold | | | - | | | | - | | | | N/A | | | | - | | | | - | | | | N/A | |
| Loans, net | | | 448,642 | | | | 12,035 | | | | 5.37 | % | | | 431,431 | | | | 12,063 | | | | 5.59 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total earning assets | | $ | 557,371 | | | | 13,282 | | | | 4.77 | % | | $ | 562,386 | | | | 14,205 | | | | 5.05 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | 25,793 | | | | | | | | | | | | 33,389 | | | | | | | | | |
| Allowance for loan losses | | | (6,405 | ) | | | | | | | | | | | (6,739 | ) | | | | | | | | |
| Premises and equipment | | | 15,336 | | | | | | | | | | | | 16,740 | | | | | | | | | |
| Other assets | | | 47,831 | | | | | | | | | | | | 49,456 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 639,926 | | | | | | | | | | | $ | 655,233 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings and interest-bearing demand | | $ | 245,623 | | | | 120 | | | | 0.10 | % | | $ | 237,167 | | | | 209 | | | | 0.18 | % |
| Time deposits | | | 211,445 | | | | 1,502 | | | | 1.42 | % | | | 214,122 | | | | 1,850 | | | | 1.73 | % |
| Repurchase agreements | | | 17,543 | | | | 128 | | | | 1.46 | % | | | 44,146 | | | | 770 | | | | 3.49 | % |
| Advances from FHLB | | | 12,901 | | | | 149 | | | | 2.31 | % | | | 17,479 | | | | 246 | | | | 2.81 | % |
| Junior subordinated debentures | | | 20,620 | | | | 1,033 | | | | 10.02 | % | | | 20,620 | | | | 693 | | | | 6.72 | % |
| Notes payable & other borrowed funds | | | 2,670 | | | | 32 | | | | 2.43 | % | | | 1,531 | | | | 49 | | | | 6.40 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total interest-bearing liabilities | | $ | 510,803 | | | | 2,964 | | | | 1.16 | % | | $ | 535,065 | | | | 3,817 | | | | 1.43 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non interest-bearing demand | | | 68,245 | | | | | | | | | | | | 63,981 | | | | | | | | | |
| Other liabilities | | | 11,932 | | | | | | | | | | | | 9,734 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities | | | 590,979 | | | | | | | | | | | | 608,780 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Equity | | $ | 48,946 | | | | | | | | | | | $ | 46,452 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities and equity | | $ | 639,926 | | | | | | | | | | | $ | 655,233 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income (tax equivalent basis) | | | | | | $ | 10,318 | | | | | | | | | | | $ | 10,389 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income as a percent of average interest-earning assets | | | | | | | | | | | 3.70 | % | | | | | | | | | | | 3.69 | % |
Rurban Financial Corp.
Segment Reporting - (Unaudited)
Three Months Ended June 30, 2012
| ($ in Thousands) | | Banking | | | Parent
Company and
Other | | | Total Banking,
Parent and
Other | | | Data Services | | | Elimination
Entries | | | Rurban
Financial Corp. | |
| | | | | | | | | | | | | | | | | | | |
| Income Statement Measures | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income | | $ | 6,693 | | | | - | | | | 6,693 | | | | - | | | | (83 | ) | | | 6,610 | |
| Interest expense | | | 902 | | | | 421 | | | | 1,323 | | | | 69 | | | | (50 | ) | | | 1,342 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | 5,791 | | | | (421 | ) | | | 5,370 | | | | (69 | ) | | | (33 | ) | | | 5,268 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Provision for loan loss | | | 200 | | | | - | | | | 200 | | | | - | | | | - | | | | 200 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest income | | | 2,741 | | | | 70 | | | | 2,811 | | | | 827 | | | | (430 | ) | | | 3,208 | |
| Non-interest expense | | | 6,083 | | | | 370 | | | | 6,453 | | | | 841 | | | | (423 | ) | | | 6,871 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income - QTD | | $ | 1,579 | | | | (471 | ) | | | 1,108 | | | | (55 | ) | | | (39 | ) | | | 1,014 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Measures | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Average assets - QTD | | $ | 636,198 | | | | - | | | | 641,043 | | | | 2,815 | | | | - | | | | 643,859 | |
| Return on average assets | | | 0.99 | % | | | - | | | | 0.69 | % | | | -7.81 | % | | | - | | | | 0.63 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Average equity - QTD | | $ | 70,342 | | | | - | | | | 49,464 | | | | (1,667 | ) | | | - | | | | 49,464 | |
| Return on average equity | | | 8.98 | % | | | - | | | | 8.96 | % | | | - | | | | - | | | | 8.20 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Average loans - QTD | | $ | 454,956 | | | | 2,000 | | | | 456,956 | | | | - | | | | (2,602 | ) | | | 454,354 | |
| Average deposits - QTD | | $ | 529,346 | | | | - | | | | 529,346 | | | | - | | | | (1,354 | ) | | | 527,992 | |
Rurban Financial Corp.
Segment Reporting - (Unaudited)
Six Months Ended June 30, 2012
| | | Banking | | | Parent
Company and
Other | | | Total Banking,
Parent and
Other | | | Data Services | | | Elimination
Entries | | | Rurban
Financial Corp. | |
| | | | | | | | | | | | | | | | | | | |
| Income Statement Measures | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income | | $ | 13,190 | | | | - | | | | 13,190 | | | | - | | | | (83 | ) | | | 13,107 | |
| Interest expense | | | 1,899 | | | | 1,033 | | | | 2,932 | | | | 82 | | | | (50 | ) | | | 2,964 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | 11,291 | | | | (1,033 | ) | | | 10,258 | | | | (82 | ) | | | (33 | ) | | | 10,143 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Provision for loan loss | | | 650 | | | | - | | | | 650 | | | | - | | | | - | | | | 650 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-interest income | | | 5,785 | | | | 139 | | | | 5,924 | | | | 2,263 | | | | (1,399 | ) | | | 6,789 | |
| Non-interest expense | | | 12,530 | | | | 664 | | | | 13,194 | | | | 1,725 | | | | (1,372 | ) | | | 13,547 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net income - YTD | | $ | 2,763 | | | | (1,019 | ) | | | 1,744 | | | | 301 | | | | (59 | ) | | | 1,986 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Measures | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Average assets - YTD | | $ | 632,434 | | | | - | | | | 636,851 | | | | 3,075 | | | | | | | | 639,926 | |
| Return on average assets | | | 0.87 | % | | | - | | | | 0.37 | % | | | 13.05 | % | | | - | | | | 0.62 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Average equity - YTD | | $ | 66,851 | | | | - | | | | 48,946 | | | | (1,758 | ) | | | - | | | | 48,946 | |
| Return on average equity | | | 8.27 | % | | | - | | | | 4.75 | % | | | - | | | | - | | | | 8.12 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Average loans - YTD | | $ | 449,170 | | | | 2,000 | | | | 451,170 | | | | - | | | | (2,528 | ) | | | 448,642 | |
| Average deposits - YTD | | $ | 526,937 | | | | - | | | | 526,937 | | | | - | | | | (1,624 | ) | | | 525,313 | |
RURBAN FINANCIAL CORP.
SUMMARY OF NONPERFORMING ASSETS
| ($ in Thousands) | | June | | | March | | | December | | | September | | | June | |
| | | 2012 | | | 2012 | | | 2011 | | | 2011 | | | 2011 | |
| | | | | | | | | | | | | | | | |
| Commercial & industrial | | $ | 1,467 | | | | 2,021 | | | | 2,393 | | | | 2,466 | | | | 2,507 | |
| Commercial real estate | | | 1,345 | | | | 1,481 | | | | 1,456 | | | | 2,210 | | | | 2,620 | |
| Agricultural | | | - | | | | 113 | | | | - | | | | 87 | | | | 87 | |
| Residential real estate | | | 1,958 | | | | 1,840 | | | | 2,471 | | | | 2,107 | | | | 2,436 | |
| Home Equity Line of Credit (HELOC) | | | 540 | | | | 1,044 | | | | 562 | | | | 440 | | | | 373 | |
| Consumer | | | 5 | | | | 12 | | | | 18 | | | | 21 | | | | 50 | |
| Leasing | | | - | | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Total nonaccruing loans(1) | | $ | 5,315 | | | | 6,511 | | | | 6,900 | | | | 7,331 | | | | 8,073 | |
| | | | | | | | | | | | | | | | | | | | | |
| Other real estate owned (OREO) & | | | | | | | | | | | | | | | | | | | | |
| Repossessed vehicles | | $ | 1,708 | | | | 1,807 | | | | 1,830 | | | | 1,970 | | | | 2,056 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total nonaccruing assets | | $ | 7,023 | | | | 8,318 | | | | 8,730 | | | | 9,301 | | | | 10,129 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total allowance for loan losses | | $ | 6,618 | | | | 6,609 | | | | 6,529 | | | | 6,235 | | | | 6,444 | |
| | | | | | | | | | | | | | | | | | | | | |
| Accruing restructured loans (TDR's)(2) | | $ | 1,837 | | | | 1,593 | | | | 1,334 | | | | 1,311 | | | | 1,312 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total nonperforming loans (nonaccruing loans & TDR's) | | $ | 7,152 | | | | 8,104 | | | | 8,234 | | | | 8,642 | | | | 9,385 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total nonperforming assets | | $ | 8,860 | | | | 9,911 | | | | 10,064 | | | | 10,612 | | | | 11,441 | |
(1) Includes$1.83million of restructured loans on nonaccruing status at June 30, 2012. There were no loans past due in excess of 90 days still accruing interest.
(2) Accruing restructured loans at June 30, 2012 consists primarily of residential and commercial real estate loans that have been modified and are performing in accordance with those modified terms.
| | | June | | | March | | | December | | | September | | | June | |
| | | 2012 | | | 2012 | | | 2011 | | | 2011 | | | 2011 | |
| | | | | | | | | | | | | | | | |
| 30-59 days past due | | $ | 1,385 | | | | 271 | | | | 1,002 | | | | 573 | | | | 1,121 | |
| 60-89 days past due | | $ | 778 | | | | 294 | | | | 978 | | | | 146 | | | | 248 | |
| 90 + days past due | | $ | 2,787 | | | | 4,926 | | | | 5,064 | | | | 6,052 | | | | 6,809 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total delinquent loans | | $ | 4,950 | | | | 5,491 | | | | 7,044 | | | | 6,771 | | | | 8,178 | |
RURBAN FINANCIAL CORP.
TOTAL LOAN BALANCES
| ($ in Thousands) | | June | | | March | | | December | | | September | | | June | |
| | | 2012 | | | 2012 | | | 2011 | | | 2011 | | | 2011 | |
| | | | | | | | | | | | | | | | |
| Commercial & industrial | | | 75,757 | | | | 78,450 | | | | 78,112 | | | | 77,269 | | | | 74,613 | |
| Commercial real estate | | | 199,918 | | | | 188,984 | | | | 187,829 | | | | 186,411 | | | | 190,625 | |
| Agricultural | | | 41,093 | | | | 37,741 | | | | 38,361 | | | | 38,601 | | | | 38,453 | |
| Residential real estate | | | 85,046 | | | | 84,771 | | | | 87,656 | | | | 85,399 | | | | 82,782 | |
| Home Equity Line of Credit (HELOC) | | | 39,983 | | | | 40,435 | | | | 41,704 | | | | 41,710 | | | | 41,675 | |
| Consumer | | | 10,106 | | | | 9,133 | | | | 8,676 | | | | 9,259 | | | | 9,173 | |
| Leasing | | | 207 | | | | 207 | | | | 216 | | | | 277 | | | | 230 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total loans | | | 452,110 | | | | 439,721 | | | | 442,554 | | | | 438,926 | | | | 437,551 | |
| | | | | | | | | | | | | | | | | | | | | |
| Loans held for sale | | | 10,595 | | | | 11,384 | | | | 5,238 | | | | 10,590 | | | | 7,211 | |
RURBAN FINANCIAL CORP.
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
| | | Three Months Ended | | | Six Months Ended | |
| ($ in Thousands) | | June | | | March | | | December | | | September | | | June | | | June | | | June | |
| | | 2012 | | | 2012 | | | 2011 | | | 2011 | | | 2011 | | | 2012 | | | 2011 | |
| | | | | | | | | | | | | | | | | | | | | | |
| GAAP Earnings | | $ | 1,014 | | | | 972 | | | | 274 | | | | 603 | | | | 777 | | | | 1,986 | | | | 788 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Realized securities gains (1) | | | - | | | | - | | | | - | | | | - | | | | (1,871 | ) | | | - | | | | (1,871 | ) |
| Prepayment penalties (1) | | | - | | | | - | | | | - | | | | - | | | | 1,083 | | | | - | | | | 1,083 | |
| Hardware write-offs (2) | | | - | | | | - | | | | 609 | | | | - | | | | - | | | | - | | | | - | |
| Contract buyouts (2) | | | - | | | | (90 | ) | | | - | | | | - | | | | (519 | ) | | | (90 | ) | | | (519 | ) |
| Writedown of goodwill and other intangibles (2) | | | - | | | | - | | | | 381 | | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total non-core Items | | | - | | | | (90 | ) | | | 990 | | | | - | | | | (1,307 | ) | | | (90 | ) | | | (1,307 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Applicable income tax effect on non-core Items | | | - | | | | 31 | | | | (336 | ) | | | - | | | | 445 | | | | 31 | | | | 445 | |
| After-tax non core Items | | | - | | | | (59 | ) | | | 653 | | | | - | | | | (863 | ) | | | (59 | ) | | | (863 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Core recurring net income | | | 1,014 | | | | 913 | | | | 927 | | | | 603 | | | | (86 | ) | | | 1,927 | | | | (75 | ) |
(1) State Bank & Trust
(2) RDSI
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
| | | June | | | March | | | December | | | September | | | June | | | June | | | June | |
| Dollars in thousands | | 2012 | | | 2012 | | | 2011 | | | 2011 | | | 2011 | | | 2012 | | | 2011 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Recurring total revenue - excluding realized securities gains/losses, gains/losses on sales of assets, interest accrued on RDSI loans ("Core revenue") | | $ | 8,564 | | | | 8,454 | | | | 8,802 | | | | 7,961 | | | | 8,083 | | | | 17,017 | | | | 15,957 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax equivalent adjustment (1) | | | 88 | | | | 88 | | | | 100 | | | | 101 | | | | 163 | | | | 175 | | | | 342 | |
| Contract buyouts (2) | | | - | | | | (90 | ) | | | - | | | | - | | | | (519 | ) | | | (90 | ) | | | (519 | ) |
| Realized securities gains (1) | | | - | | | | - | | | | - | | | | - | | | | (1,871 | ) | | | - | | | | (1,871 | ) |
| (Gains)/losses on sales of assets (1) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Total nonrecurring items | | | 88 | | | | (2 | ) | | | 100 | | | | 101 | | | | (2,227 | ) | | | 85 | | | | (2,048 | ) |
| Total GAAP revenue | | $ | 8,476 | | | | 8,456 | | | | 8,702 | | | | 7,860 | | | | 10,310 | | | | 16,932 | | | | 18,006 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Recurring net Interest Income - excluding interest accrued on New Core loan ("Core noninterest income") | | $ | 5,356 | | | | 4,963 | | | | 5,379 | | | | 5,486 | | | | 5,376 | | | | 10,318 | | | | 10,388 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Tax equivalent adjustment (1) | | | 88 | | | | 88 | | | | 100 | | | | 101 | | | | 163 | | | | 175 | | | | 342 | |
| Total nonrecurring items | | | 88 | | | | 88 | | | | 100 | | | | 101 | | | | 163 | | | | 175 | | | | 342 | |
| GAAP Net interest income | | $ | 5,268 | | | | 4,875 | | | | 5,279 | | | | 5,385 | | | | 5,213 | | | | 10,143 | | | | 10,046 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Recurring noninterest income - excluding realized securities gains/losses, gains/losses on sales of assets, etc. ("Core noninterest income") | | $ | 3,208 | | | | 3,491 | | | | 3,423 | | | | 2,475 | | | | 2,707 | | | | 6,699 | | | | 5,569 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Contract buyouts (2) | | | - | | | | (90 | ) | | | - | | | | - | | | | (519 | ) | | | (90 | ) | | | (519 | ) |
| Realized securities gains (1) | | | - | | | | - | | | | - | | | | - | | | | (1,871 | ) | | | - | | | | (1,871 | ) |
| Total nonrecurring items | | | - | | | | (90 | ) | | | - | | | | - | | | | (2,390 | ) | | | (90 | ) | | | (2,390 | ) |
| GAAP noninterest income | | $ | 3,208 | | | | 3,581 | | | | 3,423 | | | | 2,475 | | | | 5,097 | | | | 6,789 | | | | 7,960 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Recurring loan loss provision | | $ | 200 | | | | 450 | | | | 299 | | | | 297 | | | | 898 | | | | 650 | | | | 1,397 | |
| Total nonrecurring items | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| GAAP loan loss provision | | $ | 200 | | | | 450 | | | | 299 | | | | 297 | | | | 898 | | | | 650 | | | | 1,397 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Recurring noninterest expense — excluding unrealized OREO writedowns, writedowns of goodwill and other intangibles, software and hardware writedowns, contract write-offs, early termination fees and RDSI loan write-off | | $ | 6,871 | | | | 6,676 | | | | 6,982 | | | | 6,823 | | | | 7,315 | | | | 13,547 | | | | 14,375 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| FHLB/REPO prepayment penalties (1) | | | - | | | | - | | | | - | | | | - | | | | 1,083 | | | | - | | | | 1,083 | |
| Hardware write-offs (2) | | | - | | | | - | | | | 609 | | | | - | | | | - | | | | - | | | | - | |
| Writedown of goodwill and other intangibles (2) | | | - | | | | - | | | | 381 | | | | - | | | | - | | | | - | | | | - | |
| Total Nonrecurring items | | | - | | | | - | | | | 990 | | | | - | | | | 1,083 | | | | - | | | | 1,083 | |
| GAAP Noninterest Expense | | $ | 6,871 | | | | 6,676 | | | | 7,972 | | | | 6,823 | | | | 8,398 | | | | 13,547 | | | | 15,458 | |
