EXHIBIT 99
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Tina Farrington, 419-784-2549, rfcmkt@rurban.net
INVESTOR CONTACT: Sandra Stockhorst, 419-784-4023, rfcinv@rurban.net
RURBAN FINANCIAL CORP. REPORTS
FIRST QUARTER 2003 EARNINGS
DEFIANCE, Ohio, April 28, 2003/PRNewswire-FirstCall/ -- Rurban Financial Corp.
(Nasdaq: RBNF - News; "Rurban"), a leading provider of full-service banking,
investment management, trust services and bank data processing, reported
earnings for first quarter 2003 of $5.3 million, or $1.17 per diluted share,
compared with $206,000 or $0.05 per diluted share, for the first quarter of
2002.
Kenneth A. Joyce, President and Chief Executive Officer of Rurban stated, "We
are on target with our rebuilding efforts for the Corporation, as reflected in
our first quarter 2003 earnings. During the first quarter we completed our sale
of the Wood and Sandusky County branches located in Pemberville, Gibsonburg and
the Otterbein-Portage Valley Retirement Village, and recognized a pre tax gain
of approximately $8 million on these transactions." Joyce added, "We also
anticipate completing the sale of the remaining RFC Banking Company branches
during the second quarter of this year. These events were critical components of
our action plan to return Rurban to reasonable profitability levels, strengthen
capital and position the Corporation to be able to reinstate our dividends as
soon as practicable."
Joyce cautioned, "The economic and geopolitical environments continue to provide
a level of uncertainty in our markets. We will be challenged to realize
improvements in loan growth and overall credit quality until the economy begins
to turn."
Net interest income
Net interest income was $4.9 million for the first quarter of 2003, compared
with $5.2 million for the fourth quarter of 2002 and $6.2 million for the first
quarter of 2002. The decline in net interest income, for each period, was a
result of a lower level of average earning assets, declining market rates, a
higher level of non-accrual loans and increased balance sheet liquidity as the
Corporation focused on strengthening its risk based capital ratios.
Non-interest income
Excluding the gain on the sale of RFC Banking Company branches, loan sales and
securities transactions, non-interest income rose 13% and totaled almost $3.8
million for the first quarter of 2003 compared with the same period a year ago
and rose 4% compared with the fourth quarter of 2002. On a linked first quarter
basis, RDSI data processing fees were up 28%, loan servicing fees rose 11% and
customer service fees increased 5%. These increases more than offset the
reduction in trust fees of 6%, which resulted primarily from a decrease in the
stock market value of assets managed, and the other income category which fell
almost 27%. The drop in other income was mainly attributable to the loss of
accident and health insurance premium income associated with a reduction in new
loan production during the first quarter of 2003 compared with the same period
last year.
Compared with the fourth quarter of 2002, total non-interest income improved by
almost 4%, excluding the gains on branch sales, loan sales and securities
transactions. Trust fees increased 32% from the fourth quarter reflecting the
strongest eight day gain in the stock market, from March 12th to March 21st, in
over one hundred years. Other income also rose by almost 55 percent principally
as a result of gain recognized on the disposition of a repossessed asset.
Non-interest expense
Non-interest expense levels totaled $7.7 million for the first quarter of 2003
compared with $7.2 million in the same period a year ago, an increase of almost
seven percent. Although salary and benefit expenses were down slightly on a
comparable basis, offsetting this decline were the additional expenses
associated with the acquisitions made in 2002 which primarily impacted the net
occupancy, equipment, professional fees and postage and delivery expense
categories. Compared with the fourth quarter of 2002, non-interest expense
levels were down over two percent in the first quarter of 2003. Expense
reductions were accomplished in most expense categories as the Corporation
continues to focus on managing and controlling non-interest expense levels
relative to declining asset volumes.
Joyce continued, "We have become a more focused organization as we continue to
work through the problems that were identified during last year. We believe that
our continued efforts will increase shareholder value as we rebuild and
strengthen the Corporation during this year and position ourselves to capitalize
on opportunities as they present themselves in 2004. Our resolve is firm and our
commitment to increasing shareholder value is strong."
ABOUT RURBAN FINANCIAL CORP.
Rurban Financial Corp. is a publicly held bank holding company based in
Defiance, Ohio and is located on the Internet at http://www.rurbanfinancial.net.
Rurban's common stock is quoted on the Nasdaq National Market System under the
symbol RBNF.
The Company currently has 10,000,000 shares of stock authorized and 4,565,721
shares outstanding. The investment banking firms of McDonald & Co. Securities
Inc. (Trident Securities Division), Sweney Cartwright and Co., and Friedman,
Billings, Ramsey Group, Inc. are the primary market makers for these shares.
Rurban's wholly owned subsidiaries are The State Bank and Trust Company,
Reliance Financial Services, N.A., Rurbanc Data Services, Inc. (RDSI) and RFC
Banking Company which consists of The Peoples Banking Company and The First Bank
of Ottawa. The banks offer a full range of financial services through their
offices in the Northern Ohio counties of Defiance, Paulding, Fulton, Hancock,
and Putnam. Reliance Financial Services offers a diversified array of trust and
financial services to customers nationwide. RDSI provides data processing
services to community banks in Ohio, Michigan and Indiana.
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING INFORMATION
Certain statements within this document which are not statements of
historical fact constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward looking statements
involve risks and uncertainties and actual results may differ materially from
those predicted by the forward-looking statements. These risks and uncertainties
include, but are not limited to, risks and uncertainties inherent in the
national and regional banking, insurance and mortgage industries, competitive
factors specific to markets in which Rurban and its subsidiaries operate, future
interest rate levels, legislative and regulatory actions, capital market
conditions, general economic conditions, geopolitical events, the loss of key
personnel and other factors.
Forward-looking statements speak only as of the date on which they are
made, and Rurban undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which the
statement is made. All subsequent written and oral forward-looking statements
attributable to Rurban or any person acting on our behalf are qualified by these
cautionary statements.
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
March 31, 2003 and December 31, 2002
March December
2003 2002
------------- -------------
ASSETS
Cash and due from banks $ 21,589,334 $ 37,018,337
Interest-earning deposits in other financial institutions 310,000 260,000
Federal funds sold 59,350,000 14,000,000
Securities available for sale 99,097,514 115,108,762
Loans held for sale 79,787,224 63,536,309
Loans
Commercial 250,616,220 321,726,300
Residential first mortgage 53,879,447 84,431,599
Consumer 61,707,980 81,647,857
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Total loans 366,203,647 487,805,756
Deferred loan fees, net (273,756) (331,130)
Allowance for loan losses (13,491,372) (17,693,841)
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Net loans 352,438,519 469,780,785
Premises and equipment, net 13,732,992 14,695,613
Federal Reserve and Federal Home Loan Bank Stock 3,697,100 3,665,900
Foreclosed assets held for sale, net 2,009,790 1,960,276
Accrued interest receivable 2,649,869 3,966,721
Deferred income taxes 5,397,313 5,495,812
Goodwill 2,249,246 2,323,643
Core deposits and other intangibles 737,620 770,777
Other assets 3,317,729 9,733,744
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Total assets $ 646,364,250 $ 742,316,679
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Demand $ 35,141,128 $ 46,114,153
Savings, NOW and money market 110,134,983 117,738,013
Time 225,658,046 404,007,515
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Total deposits 370,934,157 567,859,681
Deposits held for sale 166,064,199 68,175,660
Federal funds purchased 0 0
Notes payable 5,499,999 6,000,000
Advances from Federal Home Loan Bank 46,000,000 47,850,000
Trust preferred securities 10,000,000 10,000,000
Accrued interest payable 2,903,799 2,971,448
Other liabilities 3,310,588 3,077,558
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Total liabilities 604,712,742 705,934,347
Shareholders' Equity
Common stock: stated value $2.50 per share;
shares authorized: 10,000,000; shares issued: 4,575,702;
shares outstanding: 2003 - 4,565,721; 2002 - 4,565,721 11,439,255 11,439,255
Additional paid-in capital 11,009,733 11,009,733
Retained earnings 19,203,843 13,904,212
Accumulated other comprehensive income (loss),
net of tax of $306,587 in 2003 and $342,530 in 2002 595,138 664,911
Unearned ESOP shares (281,447) (320,765)
Treasury stock (315,014) (315,014)
------------- -------------
Total shareholders' equity 41,651,508 36,382,332
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Total liabilities and shareholders' equity $ 646,364,250 $ 742,316,679
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RURBAN FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
For The First Quarter Ended March 31, 2003 and 2002
First Quarter First Quarter
2003 2002
------------ ------------
Interest income
Loans $ 8,790,024 $ 11,284,125
Taxable 811,477 1,351,698
Tax-exempt 39,925 103,476
Other 101,023 13,404
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Total interest income 9,742,449 12,752,703
Interest expense
Deposits 3,839,800 5,454,468
Short-term borrowings 93,764 119,403
Federal Home Loan Bank advances 653,502 718,761
Trust preferred securities 265,000 265,000
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Total interest expense 4,852,066 6,557,632
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NET INTEREST INCOME 4,890,383 6,195,071
Provision for loan losses 1,194,000 2,132,000
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NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 3,696,383 4,063,071
Noninterest income
Data service fees 2,223,184 1,738,864
Trust fees 671,502 712,882
Customer service fees 636,256 608,263
Net gain on sales of loans 151,412 129,688
Net realized gains (losses) on sales of
available-for-sale securities 26,533 (80,706)
Loan servicing fees 117,453 105,614
Gain (loss) on sale of assets 8,035,912 1,627
Other income 133,153 182,154
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Total noninterest income 11,995,405 3,398,386
Noninterest expense
Salaries and employee benefits 3,814,914 3,867,691
Net occupancy expense 396,354 306,931
Equipment expense 1,059,154 882,531
Data processing fees 89,687 131,607
Professional fees 774,662 642,403
Marketing expense 100,854 108,817
Printing and office supplies 165,137 187,453
Telephone and communication 197,511 197,511
Postage and delivery expense 191,074 154,073
State, local and other taxes 158,399 160,335
Other expenses 721,739 550,990
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Total noninterest expense 7,669,485 7,190,342
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INCOME BEFORE INCOME TAX EXPENSE 8,022,303 271,115
Income tax expense 2,722,672 64,566
------------ ------------
NET INCOME $ 5,299,631 $ 206,549
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Earnings per common share:
Basic $ 1.17 $ 0.05
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Diluted $ 1.17 $ 0.05
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RURBAN FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
For The First Quarter Ended March 31, 2003 and Fourth Quarter 2002
First Quarter Fourth Quarter
2003 2002
------------ ------------
Interest income
Loans $ 8,790,024 $ 9,708,839
Taxable 811,477 1,026,850
Tax-exempt 39,925 52,065
Other 101,023 142,170
------------ ------------
Total interest income 9,742,449 10,929,924
Interest expense
Deposits 3,839,800 4,602,339
Short-term borrowings 93,764 122,058
Federal Home Loan Bank advances 653,502 711,588
Trust preferred securities 265,000 270,744
------------ ------------
Total interest expense 4,852,066 5,706,729
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NET INTEREST INCOME 4,890,383 5,223,195
Provision for loan losses 1,194,000 11,539,583
------------ ------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 3,696,383 (6,316,388)
Noninterest income
Data service fees 2,223,184 2,195,029
Trust fees 671,502 507,104
Customer service fees 636,256 693,164
Net gain on sales of loans 151,412 399,306
Net realized gains (losses) on sales of
available-for-sale securities 26,533 848,575
Loan servicing fees 117,453 143,227
Gain (loss) on sale of assets 8,035,912 (64,270)
Other income 133,153 85,820
------------ ------------
Total noninterest income 11,995,405 4,807,955
Noninterest expense
Salaries and employee benefits 3,814,914 3,996,740
Net occupancy expense 396,354 330,906
Equipment expense 1,059,154 1,106,533
Data processing fees 89,687 105,530
Professional fees 774,662 862,564
Marketing expense 100,854 122,696
Printing and office supplies 165,137 195,093
Telephone and communication 197,511 206,385
Postage and delivery expense 191,074 156,110
State, local and other taxes 158,399 229,215
Other expenses 721,739 535,933
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Total noninterest expense 7,669,485 7,847,705
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INCOME BEFORE INCOME TAX EXPENSE 8,022,303 (9,356,139)
Income tax expense 2,722,672 (3,206,530)
------------ ------------
NET INCOME $ 5,299,631 $ (6,149,609)
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Earnings per common share:
Basic $ 1.17 $ (1.35)
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Diluted $ 1.17 $ (1.35)
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