SB FINANCIAL GROUP, INC. - FORM 8-K - EX-99.1

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8-K - SB FINANCIAL GROUP, INC.	v238021_8k.htm

Exhibit 99.1

Rurban Financial Corp. Reports Third Quarter 2011 Results

DEFIANCE, Ohio, October 26, 2011 (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 third quarter and first nine months of 2011.

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"). Net income for the third quarter of 2011 was $602,000, or $0.12 per diluted share, compared to $777,000, or $0.16 per diluted share for the second quarter of 2011, and $26,000, or $0.01 per diluted share for the 2010 third quarter. For the first nine months of 2011, Rurban reported net income of $1.39 million, or $0.29 per diluted share, compared to a net loss of $9.03 million, or ($1.86) per diluted share for the first nine months of 2010.

Excluding after-tax losses of $18,000 and $85,000 on the sale of foreclosed real estate in the third quarters of 2011 and 2010, respectively, core earnings from operations were $620,000, or $0.13 per diluted share for the 2011 third quarter compared to $111,000, or $0.02 per diluted share for the year-ago third quarter. Core earnings for the second quarter of 2011 were $20,000, or $0.00 per diluted share. (The reconciliation of GAAP to core earnings can be found in the financial tables.)

Key items for the 2011 third quarter include:

Core earnings showed significant improvement in response to recent and ongoing initiatives.

Net interest income continued its upward growth trend, primarily from improvements in funding mix.

Core noninterest income is stabilizing following the loss of data processing fee income, and remains highly diversified.

Third quarter mortgage loan originations were exceptionally robust; however, interest rate volatility continues to impact the valuation of mortgage servicing rights, reducing net revenue from mortgage banking.

Corporate-wide expense reductions have more than offset the decline in RDSI revenue.

Asset quality continues to trend in a strongly positive direction.

Both the Bank and the holding company remain well-capitalized.

Mark Klein, President and Chief Executive Officer of Rurban Financial Corp., stated, “We continue to build momentum after working our way through the challenges of 2010. Core earnings rebounded as several ongoing initiatives began to bear fruit: expense control, improvement in asset quality, and balance sheet deleveraging. As a result of these initiatives, we are increasingly positioned for growth and greater profitability, which we anticipate to continue in the upcoming quarters.

“Elevated costs associated with the administration of problem assets are fairly well behind us, and we are focusing more intensively on improving efficiencies within the Bank. Operating expenses have been subjected to greater scrutiny, and I am pleased to report that we’ve saved approximately $500,000 in assorted categories compared to last quarter.

“Whereas many banks are struggling to grow revenue, we have been fairly successful in this area. As a result of improvements on the liability side, net interest income has continued its upward growth trend despite marginal loan growth. The lending environment is still quite competitive, and commercial loan demand remains weak. The balance sheet deleveraging we completed in the second quarter has improved our funding mix to a significant extent, although we don’t anticipate additional savings on the funding side going forward. We regard our non-bank products as a major source of revenue growth, and we have been cross-training our staff to become more knowledgeable so that they can identify and respond more effectively to customer needs.”

RESULTS OF OPERATIONS

Consolidated Revenue

Total revenue from operations, consisting of net interest income on a fully tax-equivalent basis and noninterest income, was $8.0 million for the third quarter of 2011, down $1.6 million, or 17.1 percent, from the $9.6 million reported for the 2010 third quarter. Compared to the linked quarter, total revenue declined by $2.5 million, or 24.0 percent. Year to date, total revenue was $26.3 million, down $4.8 million, or 15.4 percent, from the prior-year nine month period. The lower level of revenue year over year and year to date relates primarily to the loss of RDSI’s data processing business.

Net interest income for the third quarter of 2011 on a tax-equivalent basis was $5.5 million, up $0.4 million, or 8.2 percent, from the third quarter of 2010; growth was derived from a 32 basis point, or 8.7 percent, improvement in the net interest margin on a fully-taxable basis, to 3.98 percent, partially offset by a $2.9 million, or 0.53 percent, decline in average earning assets. Compared to the linked quarter, net interest income increased by $0.11 million, or 2.1 percent, resulting from a 15 basis point, or 3.9 percent, improvement in the net interest margin partially offset by a $9.6 million, or 1.7 percent, decline in average earning assets.

Although Rurban’s funding mix has been improving on a quarterly basis, the deleveraging transaction completed in the 2011 second quarter enabled Rurban to further reduce its higher-cost borrowings. Year to date, net interest income (fully-taxable) was $15.9 million, up $0.5 million, or 3.0 percent, compared to year to date 2010. The net interest margin (fully-taxable) was 3.79 percent compared to 3.65 percent for the 2010 nine-month period. The 14 basis point improvement in the net interest margin resulted from a 46 basis point decrease in the cost of interest-bearing liabilities, partially offset by a 34 basis point decline in the yield on earning assets.

Noninterest Income

Noninterest income was $2.5 million for the third quarter of 2011, a decline of $2.1 million, or 45.4 percent, from the year-ago quarter; the decline from the linked quarter was $2.6 million. Excluding one-time or non-core items, third quarter 2011 noninterest income from operations was $2.5 million compared to $2.9 million and $4.7 million for the linked and year-ago quarters, a decline of 12.7 percent and 46.4 percent, respectively. Second quarter 2011 was distorted primarily by the one-time gain of $1.9 million resulting from the sale of securities as part of the balance sheet deleveraging. The following table provides a reconciliation of core and non-core items to noninterest income on a GAAP basis.

	Three Months Ended															Nine Months Ended
Noninterest Income*: (000’s)	Sept. 30, 2011			June 30, 2011			March 31, 2011			Dec. 31, 2010			Sept. 30, 2010			Sept. 30, 2011			Sept. 30, 2010

Data service fees		743			785			912			1,054			2,044			2,440			8,683
Trust fees		629			669			695			664			651			1,993			1,884
Customer service fees		664			640			581			615			644			1,885			1,846
Gain on sale of mortgage & OMSR’s		1,101			565			425			1,840			1,436			2,091			2,654
Gain on sale of non-mortgage loans		-			38			43			74			125			81			233
Mortgage loan servicing fees, net		(25	)		123			139			(59	)		(24	)		237			183
OMSR valuation adjustment		(771	)		(127	)		-			660			(400	)		(898	)		(575	)
Other income		161			174			168			200			188			503			538

Core noninterest income		2,502			2,867			2,963			5,048			4,664			8,332			15,446

Non-core items:
Contract buyout (2)		-			519			-			-			-			519			-
Net gain/(loss) on sales of securities (1)		-			1,871			-			(1	)		-			1,871			451
Investment securities recoveries (1)		-			-			-			-			-			-			74
Loss on sale or disposal of assets (1)		(27	)		(160	)		(100	)		(40	)		(129	)		(287	)		(159	)

Non-core noninterest income		(27	)		2,230			(100	)		(41	)		(129	)		2,103			366

Total Noninterest Income (GAAP)		2,475			5,097			2,863			5,007			4,535			10,435			15,812

*Line items identified as (1) are reported in the financial statements of State Bank, while items identified as a (2) are part of RDSI

For the third quarter of 2011, noninterest income from operations contributed 31.4 percent of total revenues, a substantial shift from the 48.6 percent contribution in the prior-year third quarter. However, the current level of noninterest income still represents approximately double the 16 percent median value for banks ranging between $500 million-to-$1 billion in asset size. Non-bank fee income from data service fees, trust fees, and mortgage banking activities accounted for $1.7 million of third quarter 2011 noninterest income from operations, or 67.0 percent. This compares with $2.0 million, or 70.3 percent, and $3.7 million, or 79.5 percent, for the linked and year-ago quarters, respectively. Trust fees from Rurban’s wealth management division, Reliance Financial Services, were $2.0 million for the first nine months of 2011, up 5.8 percent from the first nine months of 2010.

Data Services

($000)	3Q 2011		2Q 2011		1Q 2011		4Q 2010		3Q 2010
Data Processing & Network Services	292		302		367		451		1,124
Payment Solutions	784		823		927		1,008		1,215
Contract Buyout			519
RDSI Revenue	1,076		1,644		1,294		1,459		2,339
Less: Intercompany	(333	)	(340	)	(382	)	(405	)	(295	)
Net Data Services Fees	743		1,304		912		1,054		2,044
Net Operating Expense	925		1,016		1,125		8,373		2,023

Net data services fees derived from Rurban’s data services subsidiary, RDSI, were $0.74 million in the third quarter of 2011, down $0.56 million from the $1.3 million reported for the previous quarter, and a decline of $1.3 million from the year-ago quarter. Including fees paid by Rurban/State Bank to RDSI for data and item processing and excluding the one-time contract buyout fee received in the previous quarter, RDSI reported core revenue of $1.08 million for the current quarter compared to $1.13 million for the linked quarter; the decline resulted primarily from the loss of the acquired client. Net operating expenses for RDSI have been reduced by $1.1 million, or 54.3 percent, from the prior year third quarter.

Mortgage Banking

	Three Months Ended														Nine Months Ended
	Sept. 30, 2011			June 30, 2011			March 31, 2011		Dec. 31, 2010			Sept. 30, 2010			Sept. 30, 2011			Sept. 30, 2010
Mortgage originations		68,989			38,099			28,005		90,268			69,084			135,093			148,894
Mortgage sales		56,438			30,017			29,999		79,059			66,036			116,454			147,184
Mortgage servicing portfolio		370,033			351,888			341,600		328,435			276,298			370,033			276,298
Mortgage servicing rights		2,709			3,294			3,316		3,190			2,042			2,709			2,042

Mortgage serving revenue:

Loan servicing fees		226			217			209		191			168			652			417
Less: OMSR amortization		251			94			70		250			192			415			234
Net administrative fees		(25	)		123			139		(59	)		(24	)		237			183
Less: OMSR valuation adj.		771			127			-		(660	)		400			898			575
Net loan servicing fees		(796	)		(4	)		139		601			(424	)		(661	)		(392	)
Plus: Gain on sale of mortgages		1,101			565			425		1,840			1,436			2,091			2,654
Mortgage banking revenue, net		305			561			564		2,441			1,012			1,430			2,262

For the third quarter of 2011, net mortgage banking revenue, consisting of gains on the sale of mortgages and net loan servicing fees, was $0.31 million, down $0.25 million from the linked quarter, and lower by $0.71 million than the year-ago quarter. For the nine months year to date, net mortgage banking revenue was $1.43 million, a decline of $0.83 million, or 36.8 percent. While originations and gains on the sale of mortgages were sharply higher than for the preceding quarter, a valuation adjustment on Originated Mortgage Servicing Rights (“OMSR”) of $0.77 million lowered net revenue for the current quarter.

Rurban continues to aggressively seek mortgage originations through its Northwest Ohio and Northeast Indiana regions, and its loan production office in Columbus. Originations for the September 2011 quarter increased above the June 2011 quarter by $30.9 million, or 81.1 percent, and were at the same level as the year-ago third quarter when government incentives were still in place. State Bank sold $56.4 million of loans in the third quarter of 2011, up $26.4 million from the linked quarter, but lower by $9.6 million, or 14.5 percent, than the 2010 third quarter. Gains on sale of mortgage loans were $1.1 million for the current quarter, or 1.95 percent of mortgage loans sold; this compares to spreads of 1.88 percent in the 2011 second quarter and 2.17 percent for the year-ago quarter. The spread reflects the mix of mortgage loans sold; State Bank retains servicing on conventional mortgages but sells its servicing on all other types of mortgages.

Loan Loss Provision

The loan loss provision was $0.3 million for the third quarter of 2011, a decrease of $0.6 million from both the second quarter of 2011 and the year-ago third quarter. The decreased provision expense reflects the decline in nonperforming loans over the past twelve months, in addition to a lower level of delinquencies. Nonperforming loans declined by $2.8 million year over year, while total delinquencies were $4.7 million lower than the year-ago quarter. The loan loss reserve now stands at 1.42 percent of total loans, providing 85 percent coverage of nonperforming loans; this compares to reserve coverage of 80 percent and 64 percent for the linked and year-ago quarters, respectively. Net charge-offs for the third quarter of 2011 were $0.5 million compared to $1.0 million and $1.4 million for the linked and year-ago quarters, respectively.

Noninterest Expense

Noninterest expense was $6.8 million for the third quarter of 2011, down $1.6 million, or 18.8 percent, from the previous quarter, and lower by $1.9 million, or 21.9 percent, from the year-ago quarter. Year to date, noninterest expense was $22.3 million, a decline of $14.1 million, or 38.8 percent, from the $36.4 million reported for the 2010 period. The following table provides a reconciliation of core and non-core items to noninterest expense on a GAAP basis.

	Three Months Ended										Nine Months Ended
	Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		Sept. 30,		Sept. 30,
Noninterest Expense*: (000’s)	2011		2011		2011		2010		2010		2010		2010

Salaries and employee benefits		3,583		3,573		3,530		3,868		4,058		10,686		14,065
Occupancy & equipment expense		1,258		1,235		1,295		1,544		1,359		3,788		7,063
FDIC Insurance expense		145		254		318		461		260		717		676
Data processing fees		158		192		144		108		211		494		635
Professional fees		377		577		474		722		619		1,428		1,823
Employee expense		143		172		96		163		148		411		655
Other intangible amortization expense		185		197		197		200		200		579		601
Other expenses		974		1,115		1,006		1,809		1,883		3,095		3,814

Core Noninterest Expense		6,823		7,315		7,060		8,875		8,738		21,198		29,332

Non-Core Items

OREO Impairment (1)		-		-		-		757		-		-		215
Goodwill Impairment (2)		-		-		-		4,681		-		-		-
Hardware impairment/ write-off (2)		-		-		-		-		-		-		2,792
Software impairment/ write-off (2)		-		-		-		-		-		-		3,247
FHLB/REPO Prepayment Penalties (1)		-		1,083		-		-		-		1,083		-
Intangible impairment (2)		-		-		-		1,592		-		-		-
Contract write-off (2)**		-		-		-		-		-		-		193
New Core Loan (2)**		-		-		-		-		-		-		624
Non-Core Noninterest Expense		-		1,083		-		7,030		-		1,083		7,071

Noninterest Expense (GAAP)		6,823		8,398		7,060		15,905		8,738		22,281		36,403

* Line items identified as (1) are reported in the financial statements of State Bank, while items identified as a (2) are part of RDSI

** Items marked with double asterisks were included in Other Expense

Non-core expenses reported during the first nine months of 2011 were substantially reduced from 2010 levels: $1.1 million in 2011 compared to $7.1 million for the 2010 nine-month period. At the banking level, State Bank incurred a $1.1 million prepayment penalty during the second quarter of 2011 and $0.2 million of OREO write-downs in the second quarter of 2010. Year to date, RDSI did not have any one-time or non-core charges; by comparison, RDSI wrote off or wrote down $6.8 million of hardware and software assets in the first nine-months of 2010. Excluding these non-core charges, noninterest expense from operations was $21.2 million year to date compared to $29.3 million for the prior-year nine-month period, lower by $8.1 million, or 27.7 percent.

The majority of operational savings during 2011 still relate to the downsizing of RDSI in response to the loss of its data processing business. More recent cost savings have been the result of efficiencies at the bank level; noninterest expense from operations for the third quarter of 2011 was $6.8 million, a decrease of $0.5 million from the linked quarter. Savings were derived in several areas, including data processing, employee expense and professional expenses, as well as from lower FDIC insurance expense as a result of Dodd-Frank premium reductions for small banks. As a result of these initiatives, the efficiency ratio improved to 83.1 percent for the third quarter, down 325 basis points and 465 basis points from the linked and year-ago quarters, respectively. Year to date, the efficiency ratio was 85.2 percent compared to 93.5 percent for the prior-year nine month period.

Balance Sheet

Total assets as of September 30, 2011 were $623.8 million, up $5.7 million, or 0.9 percent, from the linked quarter, and down $57.4 million, or 8.4 percent, from the year-earlier quarter. In a series of transactions completed during June of 2011, State Bank sold $43 million of investment securities with a weighted average yield of 3.97 percent, recognizing a gain on sale of $1.9 million. Proceeds were applied to pay down $32.0 million in borrowings with a weighted average rate of 4.64 percent. The prepayment penalty for the pay down of the $30 million in repos and $2 million in FHLB advances was $1.1 million.

Total loans increased by $1.4 million from the linked quarter, to $438.9 million at September 30, 2011, primarily from a $1.9 increase in Commercial and Industrial (“C&I”) loans; since year-end 2010, total loans increased by $11.4 million, or 2.7 percent. Commercial loans, including Commercial Real Estate (“CRE”) and C&I loans accounted for the majority of growth.

Loan Portfolio

(000’s)		3Q 2011		2Q 2011		1Q 2011		4Q 2010		3Q 2010
Construction & Development		15,992		19,538		17,658		16,177		15,310
Farmland		22,814		22,596		23,207		24,439		21,071
HELOC		38,569		38,950		38,077		38,681		39,120
Residential Real Estate		98,772		93,468		93,122		96,257		95,371
Commercial RE – Owner		70,432		72,172		67,602		65,552		67,288
Commercial RE – Investor		89,772		90,460		87,833		86,956		87,271
Total Real-estate related	$	336,351	$	337,184	$	327,499	$	328,062	$	325,251
Commercial & Industrial		72,622		70,741		67,551		69,510		69,917
Agriculture		15,787		15,858		13,999		16,390		16,152
Consumer		9,475		9,891		9,961		10,653		9,457
Other		4,691		3,877		3,156		2,929		4,219
Total Loans	$	438,926	$	437,551	$	422,166	$	427,544	$	424,996

CRE, the largest loan category, accounts for 36.5 percent of total loans, or $160.2 million, up $7.7 million, or 5.0 percent, since year-end. Along with $16.0 million of construction and development loans, these commercial real estate categories together accounted for 40.1 percent of total loans at September 30, 2011, up from 39.5 percent at December 31, 2010. State Bank’s portfolio of 1-4 family residential real estate loans currently stands at $98.8 million, or 22.5 percent of total loans. This segment grew by approximately $2.5 million since December 31, 2010; in addition to strong sales into the secondary market, State Bank has underwritten jumbo real estate loans to highly-qualified private banking clients, which it retains for its own portfolio. C&I loans now stand at $72.6 million, up $3.1 million, or 4.5 percent, since year-end.

Total deposits as of September 30, 2011 were $514.3 million, down $8.0 million, or 1.5 percent, from the prior-year third quarter, but higher by $18.5 million than at the end of the linked quarter. Increases were distributed among all deposit categories except savings, with noninterest-bearing demand deposits and time deposits each up by four percent, and Money Market accounts higher by nine percent compared to the linked quarter. As a result of the balance sheet deleveraging, combined with lower cash reserves, State Bank was able to reduce repos and FHLB advances by $43.8 million since the prior-year third quarter; they now stand at $31.7 million.

Asset Quality

The quality of Rurban’s loan portfolio has remained stronger than most Midwest banks throughout the current credit cycle. Rurban continues to improve on its performance, reporting nonperforming assets (“NPAs”) of $9.3 million for the current quarter, or 1.49 percent of total assets. NPAs declined $0.8 million, or 8.2 percent, since the linked quarter, and were lower by $2.8 million, or 22.8 percent, than the year-ago third quarter.

Nonperforming Assets by Category

($000)		3Q 2011		2Q 2011		1Q 2011		4Q 2010		3Q 2010
Construction & Development		-		-		-		-		634
Farmland		87		87		87		-		56
HELOC		440		373		200		474		469
Residential Real Estate		2,107		2,436		3,466		3,285		3,419
Commercial RE - Owner		1,308		1,723		4,709		2,183		448
Commercial RE – Investor		902		897		627		3,246		2,510
Total Real Estate-Related	$	4,844	$	5,516	$	9,089	$	9,188	$	7,536
Commercial &Industrial		2,466		2,507		2,950		3,031		2,477
Consumer		21		50		82		64		94
Total Non-performing Loans	$	7,331	$	8,073	$	12,121	$	12,283	$	10,107
OREO/OAO		1,970		2,056		924		1,538		1,947
Nonperforming Assets	$	9,301	$	10,129	$	13,044	$	13,822	$	12,054

Nonperforming loans stand at $7.3 million at September 30, 2011, down $0.74 million, or 9.2 percent, and $2.8 million, or 27.5 percent, from the linked and year-ago quarters, respectively. Real estate-related loans account for 66 percent of problem loans: $4.84 million at September 30, 2011, down $0.67 million and $2.7 million from the linked and year-ago quarters. Currently, State Bank has only three nonperforming relationships that exceed $1.0 million; together, they account for $5.0 million, or 54 percent, of nonperforming assets; each accounts for approximately one-third of the total.

Nonperforming Asset Reconciliation

($000)		3Q 2011			2Q 2011			1Q 2011			4Q 2010			3Q 2010
Beginning Balance	$	10,129		$	13,044		$	13,822		$	12,053		$	14,052
Additions		432			289			1,076			4,590			837
Returns to performing status		(206	)		(352	)		(83	)		(321	)		(128	)
Principal payments		(281	)		(843	)		(118	)		25			313
Sale of OREO/OAO		(246	)		(416	)		(1,014	)		(235	)		(1,438	)
Loan charge-offs		(527	)		(1,593	)		(639	)		(1,591	)		(1,583	)
Valuation write-downs		-			-			-			(699	)		-
Total	$	9,301		$	10,129		$	13,044		$	13,822		$	12,053

New additions to nonperforming status for the current quarter were $0.43 million compared to $0.29 million and $1.1 million in the two preceding quarters. Additions to nonperforming status were more than offset by the $1.3 million decline from the combination of asset sales, principal payments and improved performance during the third quarter.

Capitalization

As of September 30, 2011, the capital ratios of Rurban’s banking subsidiary, State Bank, were all in excess of the regulatory thresholds for a “well-capitalized” institution. The Bank’s Tier I Leverage ratio was 7.95 percent of total assets, a substantial improvement from the 6.90 percent reported at year-end 2010. The Total Risk-Based Capital ratio was 11.85 percent of risk-weighted assets, with the Tier 1 Risk-Based Capital ratio at 10.60 percent.

About Rurban Financial Corp.

Based in Defiance, Ohio, Rurban Financial Corp. is a financial services holding company with two wholly-owned 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 trust services, 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)

	September			June			March			December			September
	2011			2011			2011			2010			2010

ASSETS
Cash and due from banks	$	13,764,025		$	10,485,573		$	38,090,470		$	30,417,813		$	60,600,672

Investment Securities:
Securities available for sale, at fair value		104,614,877			104,769,578			131,052,629			132,762,058			115,993,828
Non-marketable securities - FRB and FHLB Stock		3,748,250			3,748,250			3,748,250			3,748,250			3,748,250
Total investment securities		108,363,127			108,517,828			134,800,879			136,510,308			119,742,078

Loans held for sale		10,589,706			7,211,433			5,423,901			9,055,268			13,453,782

Loans, net of unearned income		438,926,037			437,550,602			422,166,393			427,544,414			424,995,825
Allowance for loan losses		(6,235,230	)		(6,443,873	)		(6,593,279	)		(6,715,397	)		(6,451,422	)
Net Loans		432,690,807			431,106,729			415,573,114			420,829,017			418,544,403

Premises and equipment, net		14,120,118			14,359,437			14,361,382			14,622,541			14,999,354
Purchased software		805,286			874,954			947,061			1,021,036			545,606
Cash surrender value of life insurance		12,133,693			12,041,915			11,951,006			13,211,247			13,107,086
Goodwill		16,733,830			16,733,830			16,733,830			16,733,830			21,414,790
Core deposits and other intangibles		2,005,945			2,190,707			2,387,920			2,585,132			4,377,111
Foreclosed assets held for sale, net		1,970,028			2,056,046			921,660			1,538,307			1,946,653
Mortgage servicing rights		2,709,222			3,294,494			3,316,228			3,190,389			2,041,698
Accrued interest receivable		2,061,201			1,958,748			2,363,645			2,068,965			2,560,938
Other assets		5,846,400			7,229,610			8,096,914			8,503,832			7,855,586
Total assets	$	623,793,388		$	618,061,304		$	654,968,010		$	660,287,685		$	681,189,757

LIABILITIES AND EQUITY
Deposits
Non interest bearing demand	$	62,079,685		$	59,650,822		$	64,027,818		$	62,745,906		$	64,671,378
Interest bearing NOW		103,229,318			101,972,099			107,940,091			105,708,472			99,647,367
Savings		48,145,958			48,771,404			48,983,184			47,662,315			46,092,866
Money Market		79,163,033			72,822,730			77,481,943			84,635,537			87,407,976
Time Deposits		221,730,681			212,652,611			214,528,353			214,925,512			224,501,334
Total deposits		514,348,675			495,869,666			512,961,389			515,677,742			522,320,921

Notes payable		2,865,123			3,142,048			3,218,211			3,290,471			3,368,266
Advances from Federal Home Loan Bank		12,939,598			24,602,002			16,679,942			22,807,351			25,429,671
Fed Funds Purchased		-			2,000,000			-			-			-
Repurchase Agreements		18,777,909			19,866,731			49,499,424			45,785,254			50,117,031
Trust preferred securities		20,620,000			20,620,000			20,620,000			20,620,000			20,620,000
Accrued interest payable		2,704,466			2,391,743			2,195,926			1,971,587			1,683,116
Other liabilities		3,985,333			3,555,204			3,528,328			4,111,182			3,582,414
Total liabilities		576,241,104			572,047,394			608,703,220			614,263,587			627,121,419

Equity
Common stock		12,568,583			12,568,583			12,568,583			12,568,583			12,568,583
Additional paid-in capital		15,302,194			15,280,945			15,258,113			15,235,206			15,208,434
Retained earnings		20,192,317			19,589,825			18,813,030			18,802,106			25,386,403
Accumulated other comprehensive income (loss)		1,258,501			343,868			1,394,375			1,187,514			2,674,229
Treasury stock		(1,769,311	)		(1,769,311	)		(1,769,311	)		(1,769,311	)		(1,769,311	)
Total Equity		47,552,284			46,013,910			46,264,790			46,024,098			54,068,338

Total liabilities and equity	$	623,793,388		$	618,061,304		$	654,968,010		$	660,287,685		$	681,189,757

RURBAN FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATION - (Unaudited)

	Three Months Ended															Nine Months Ended

	September			June			March			December			September			September			September
Interest income	2011			2011			2011			2010			2010			2011			2010
Loans
Taxable	$	6,250,747		$	6,170,234		$	5,852,367		$	6,396,391		$	6,281,157		$	18,273,348		$	19,442,383
Nontaxable		24,140			14,930			11,494			12,761			13,664			50,564			49,960
Securities
Taxable		446,342			566,609			610,524			587,516			596,362			1,623,475			1,679,203
Nontaxable		171,739			301,556			335,969			339,436			353,755			809,264			1,055,707
Other		56			3			83			48			24			142			211
Total interest income		6,893,024			7,053,332			6,810,437			7,336,152			7,244,962			20,756,793			22,227,464

Interest expense
Deposits		976,336			1,010,170			1,049,393			1,187,283			1,275,607			3,035,899			3,935,731
Other borrowings		24,691			24,457			24,629			19,043			32,367			73,777			101,145
Repurchase Agreements		71,900			344,215			425,519			435,234			436,369			841,634			1,295,994
Federal Home Loan Bank advances		79,033			113,379			133,016			220,712			231,122			325,428			872,947
Trust preferred securities		355,632			347,713			344,578			355,304			388,854			1,047,923			1,178,502
Total interest expense		1,507,592			1,839,934			1,977,135			2,217,576			2,364,319			5,324,661			7,384,319

Net interest income		5,385,432			5,213,398			4,833,302			5,118,576			4,880,643			15,432,132			14,843,145

Provision for loan losses		297,368			898,440			498,840			1,798,890			898,570			1,694,648			8,788,713

Net interest income after provision for loan losses		5,088,064			4,314,958			4,334,462			3,319,686			3,982,073			13,737,484			6,054,432

Noninterest income
Data service fees		743,114			1,303,658			912,254			1,053,841			2,044,400			2,959,026			8,682,575
Trust fees		628,994			669,161			695,321			663,705			650,511			1,993,476			1,883,994
Customer service fees		663,691			640,151			580,942			614,572			643,816			1,884,784			1,846,161
Gain on sale of mortgage loans and OMSR's		1,100,557			565,049			425,130			1,839,977			1,435,581			2,090,736			2,653,693
Mortgage loan servicing fees, net		(795,995	)		(4,042	)		138,927			600,456			(423,939	)		(661,110	)		(397,577	)
Gain on sale of non-mortgage loans		-			37,644			42,779			74,070			125,122			80,423			233,071
Net realized gain (loss) on sales of securities		-			1,871,387			-			(589	)		-			1,871,387			451,474
Investment securities recoveries		-			-			-			-			-			-			73,774
Loss on sale or disposal of assets		(26,816	)		(160,453	)		(100,209	)		(40,837	)		(128,985	)		(287,478	)		(159,066	)
Other income		161,377			174,410			167,682			201,435			188,055			503,469			544,094
Total non-interest income		2,474,922			5,096,965			2,862,826			5,006,630			4,534,561			10,434,713			15,812,193

Noninterest expense
Salaries and employee benefits		3,582,982			3,573,103			3,530,106			3,867,605			4,058,316			10,686,191			14,064,591
Net occupancy expense		568,173			517,414			584,057			533,362			486,695			1,669,644			1,639,386
Equipment expense		689,662			717,826			711,051			1,010,194			872,681			2,118,539			5,423,343
FDIC Insurance expense		145,261			253,939			317,639			461,153			259,646			716,839			676,462
Software impairment expense		-			-			-			-			-			-			4,892,231
Data processing fees		157,686			191,801			143,744			108,145			211,129			493,231			635,393
Professional fees		377,322			576,752			473,536			722,103			619,430			1,427,610			1,823,449
Marketing expense		89,192			89,892			55,976			125,754			139,987			235,060			330,213
Printing and office supplies		86,071			118,516			76,148			83,860			111,414			280,735			369,842
Telephone and communication		140,995			143,366			156,640			198,606			267,344			441,001			992,891
Postage and delivery expense		260,477			258,621			344,309			333,016			388,666			863,407			1,415,529
State, local and other taxes		102,577			133,988			143,568			424,838			154,391			380,133			118,835
Employee expense		143,355			171,801			95,884			163,407			147,739			411,040			654,968
Goodwill Impairment		-			-			-			4,680,960			-			-			-
Other intangible amortization expense		184,763			197,212			197,212			1,791,979			200,344			579,187			600,613
OREO Impairment		-			-			-			756,517			-			-			215,000
Other expenses		294,621			1,454,047			229,821			643,454			820,633			1,978,489			2,550,747
Total non-interest expense		6,823,137			8,398,278			7,059,691			15,904,953			8,738,415			22,281,106			36,403,493

Income (loss) before income tax expense		739,849			1,013,645			137,597			(7,578,637	)		(221,781	)		1,891,091			(14,536,868	)

Income tax expense (benefit)		137,356			236,852			126,672			(994,341	)		(247,696	)		500,880			(5,507,954	)

Net income (loss)	$	602,493		$	776,793		$	10,925		$	(6,584,296	)	$	25,915		$	1,390,211		$	(9,028,914	)

Common share data:
Basic earnings (loss) per common share	$	0.12		$	0.16		$	0.00		$	(1.35	)	$	0.01		$	0.29		$	(1.86	)

Diluted earnings (loss) per common share	$	0.12		$	0.16		$	0.00		$	(1.35	)	$	0.01		$	0.29		$	(1.86	)

RURBAN FINANCIAL CORP.

CONSOLIDATED FINANCIAL HIGHLIGHTS - (Unaudited)

($ in thousands except per share data)	Three Months Ended															Nine Months Ended

	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
SUMMARY OF OPERATIONS	2011			2011			2011			2010			2010			2011			2010

Net interest income	$	5,385			5,213			4,833			5,119			4,881			15,432			14,843
Less: Non core item	$	-			-			-			-			-			-			(130	)
Tax-equivalent adjustment	$	101			163			179			181			189			443			570
Tax-equivalent net interest income (core)	$	5,486			5,376			5,012			5,300			5,070			15,875			15,282
Provision for loan loss	$	297			898			499			1,799			899			1,695			8,789
Less: Non core RDSI item	$	-			-			-			-			-			-			3,000
Core provision for loan loss	$	297			898			499			1,799			899			1,695			5,789
Noninterest income	$	2,475			5,097			2,863			5,007			4,535			10,435			15,812
Less: Non core items	$	27			(2,230	)		100			41			129			(2,103	)		(366	)
Core noninterest income	$	2,502			2,867			2,963			5,048			4,664			8,332			15,446
Total revenue, tax-equivalent	$	7,961			10,473			7,875			10,307			9,604			26,310			31,095
Core revenue, tax-equivalent	$	7,988			8,243			7,975			10,348			9,733			24,207			30,729
Noninterest expense	$	6,823			8,398			7,060			15,905			8,738			22,281			36,403
Less: Non core items	$	-			1,083			-			7,030			-			1,083			7,071
Core Noninterest Expense	$	6,823			7,315			7,060			8,875			8,738			21,198			29,332
Pre Provision Pretax income (loss)	$	1,037			1,912			636			(5,780	)		677			3,586			(5,748	)
Core Pre Provision Pretax income (loss)	$	1,064			765			737			1,292			806			2,566			826
Pretax income (loss)	$	740			1,014			138			(7,579	)		(222	)		1,891			(14,537	)
Net income (loss)	$	602			777			11			(6,584	)		26			1,390			(9,029	)
Core Earnings After Tax	$	620			20			77			(1,917	)		111			717			(2,538	)

PER SHARE INFORMATION:
Basic & Diluted earnings	$	0.12			0.16			0.00			(1.35	)		0.01			0.29			(1.86	)
Core earnings	$	0.13			0.00			0.02			(0.39	)		0.02			0.15			(0.52	)
Book value per common share	$	9.78			9.46			9.52			9.47			11.12			9.78			11.12
Tangible book value per common share	$	5.91			5.55			5.56			4.18			5.79			5.91			5.79

PERFORMANCE RATIOS:
Return on average assets		0.38	%		0.48	%		0.01	%		(3.83	%)		0.02	%		0.29	%		(1.80	%)
Core return on average assets		0.40	%		0.01	%		0.05	%		(1.12	%)		0.07	%		0.15	%		(0.50	%)
Return on average common equity		5.12	%		6.66	%		0.09	%		(49.25	%)		0.19	%		3.96	%		(20.53	%)
Core return on avg. tangible common equity		8.78	%		0.29	%		1.14	%		(27.60	%)		1.57	%		3.44	%		(10.42	%)
Cost of interest bearing liabilities		1.19	%		1.39	%		1.46	%		1.59	%		1.73	%		1.35	%		1.81	%
Core efficiency ratio		83.10	%		86.35	%		86.05	%		83.86	%		87.75	%		85.18	%		93.53	%
Core noninterest expense/Average assets		4.35	%		4.51	%		4.27	%		5.17	%		5.26	%		4.37	%		5.83	%
Core noninterest income/Operating revenue		31.42	%		27.37	%		37.63	%		48.98	%		48.56	%		31.67	%		49.67	%
Net interest margin		3.90	%		3.71	%		3.48	%		3.63	%		3.52	%		3.68	%		3.52	%
Tax equivalent effect		0.08	%		0.12	%		0.13	%		0.13	%		0.14	%		0.11	%		0.13	%
Net interest margin - fully tax equivalent basis		3.98	%		3.83	%		3.61	%		3.76	%		3.66	%		3.79	%		3.65	%

ASSET QUALITY RATIOS:
Gross charge-offs	$	527			1,593			639			1,591			1,583			2,759			9,743
Net charge-offs	$	506			1,048			621			1,535			1,448			2,175			9,367
Non-performing loans/total loans		1.67	%		1.85	%		2.87	%		2.87	%		2.38	%		1.67	%		2.38	%
Non-performing assets/ Loans & OREO		2.11	%		2.30	%		3.08	%		3.22	%		2.82	%		2.11	%		2.82	%
Non-performing assets/total assets		1.49	%		1.64	%		1.99	%		2.09	%		1.77	%		1.49	%		1.77	%
Allowance for loan loss/non-performing loans		85.05	%		79.82	%		54.40	%		54.67	%		63.83	%		85.05	%		63.83	%
Allowance for loan loss/total loans		1.42	%		1.47	%		1.56	%		1.57	%		1.52	%		1.42	%		1.52	%
Net loan charge-offs/average loans (ann.)		0.46	%		0.97	%		0.59	%		1.44	%		1.35	%		0.67	%		1.88	%
Loan loss provision/ Net charge-offs		58.77	%		85.74	%		80.33	%		117.20	%		62.07	%		77.92	%		93.83	%

CAPITAL & LIQUDITY RATIOS:
Loans/ Deposits		85.34	%		88.24	%		82.30	%		82.91	%		81.37	%		85.34	%		81.37	%
Equity/Assets		7.62	%		7.44	%		7.06	%		6.97	%		7.94	%		7.62	%		7.94	%
Tangible equity/ Tangible assets		4.76	%		4.52	%		4.27	%		4.17	%		4.31	%		4.76	%		4.31	%
State Bank & Trust:
Total Risk-based Capital Ratio		11.85	%		11.89	%		11.97	%		11.69	%		11.59	%		11.85	%		11.59	%
Tier 1 leverage risk-based capital ratio		10.60	%		10.64	%		10.71	%		10.44	%		10.34	%		10.60	%		10.34	%
Tier 1 leverage capital ratio		7.95	%		7.54	%		7.24	%		6.90	%		7.06	%		7.95	%		7.06	%

END OF PERIOD BALANCES
Total Loans	$	438,926			437,551			422,166			427,544			424,996			438,926			424,996
Total Assets	$	623,793			618,061			654,968			660,288			681,190			623,793			681,190
Deposits	$	514,349			495,870			512,961			515,678			522,321			514,349			522,321
Stockholders Equity	$	47,552			46,014			46,265			46,024			54,068			47,552			54,068
Tangible Equity	$	28,813			27,089			27,143			26,705			28,276			28,813			28,276
Full-time equivalent employees		215			228			227			242			257			215			257
Period-end common shares outstanding		4,862			4,862			4,862			4,862			4,862			4,862			4,862

AVERAGE BALANCES
Total Loans	$	437,744			430,363			422,519			426,629			430,414			430,268			449,281
Total Earning Assets	$	551,744			561,353			554,975			563,609			554,685			558,721			562,894
Total Assets	$	627,291			648,681			661,621			687,058			664,981			645,803			668,605
Deposits	$	512,190			510,591			520,045			534,168			513,448			514,197			501,591
Stockholders Equity	$	47,087			46,629			46,229			53,478			54,154			46,742			58,500
Tangible Equity	$	28,251			27,596			27,003			27,782			28,242			27,711			32,394

RURBAN FINANCIAL CORP.

Rate Volume Analysis

For the Three and Nine Months Ended September 30, 2011 and 2010 ($ in thousands)

($ in Thousands)	Three Months Ended September 30, 2011								Three Months Ended September 30, 2010
	Average					Average			Average					Average
Assets	Balance			Interest		Rate			Balance			Interest		Rate

Taxable Securities	$	91,436			446		1.95	%	$	82,320			596		2.90	%
Non-taxable Securities		15,762			260		6.60	%		33,946			536		6.32	%
Federal funds sold		-			-		N/A			-			-		N/A
Loans, net		444,546			6,287		5.66	%		438,419			6,302		5.75	%
Total earning assets	$	551,744			6,994		5.07	%	$	554,685			7,434		5.36	%

Cash and due from banks		16,391								47,352
Allowance for loan losses		(6,502	)							(7,096	)
Premises and equipment		17,009								16,976
Other assets		48,649								53,064
Total assets	$	627,291							$	664,981

Liabilities
Savings and interest-bearing demand	$	230,591			88		0.15	%	$	230,728			163		0.28	%
Time deposits		218,647			889		1.63	%		219,974			1,112		2.02	%
Repurchase Agreements		18,643			72		1.54	%		47,938			436		3.64	%
Advances from FHLB		14,967			79		2.11	%		25,640			231		3.61	%
Junior subordinated debentures		20,620			356		6.90	%		20,620			389		7.54	%
Notes Payable & other borrowed funds		3,048			25		3.24	%		2,431			32		5.33	%
Total interest-bearing liabilities	$	506,516			1,508		1.19	%	$	547,331			2,364		1.73	%

Non interest-bearing demand		62,952								62,746
Other liabilities		10,736								750
Total liabilities		580,204								610,826

Equity	$	47,087							$	54,154

Total liabilities and equity	$	627,291							$	664,981

Net interest income (tax equivalent basis)				$	5,486							$	5,070

Net interest income as a percent of average interest-earning assets							3.98	%							3.66	%

	Nine Months Ended September 30, 2011								Nine Months Ended September 30, 2010
	Average					Average			Average					Average
Assets	Balance			Interest		Rate			Balance			Interest		Rate

Taxable Securities	$	98,863			1,623		2.19	%	$	79,960			1,679		2.80	%
Non-taxable Securities		24,003			1,226		6.81	%		33,652			1,600		6.34	%
Federal funds sold		-			-		N/A			-			-		N/A
Loans, net		435,855			18,350		5.61	%		449,281			19,518		5.79	%
Total earning assets	$	558,721			21,200		5.06	%	$	562,894			22,797		5.40	%

Cash and due from banks		27,660								38,472
Allowance for loan losses		(6,659	)							(7,005	)
Premises and equipment		16,837								20,832
Other assets		49,244								53,411
Total assets	$	645,803							$	668,605

Liabilities
Savings and interest-bearing demand	$	234,951			297		0.17	%	$	227,390			468		0.27	%
Time deposits		215,647			2,739		1.69	%		213,554			3,468		2.17	%
Repurchase Agreements		35,552			842		3.16	%		47,766			1,296		3.62	%
Advances from FHLB		16,632			325		2.61	%		29,607			873		3.93	%
Junior subordinated debentures		20,620			1,048		6.78	%		20,620			1,179		7.62	%
Notes Payable & other borrowed funds		3,171			74		3.10	%		3,964			101		3.40	%
Total interest-bearing liabilities	$	526,574			5,325		1.35	%	$	542,900			7,384		1.81	%

Non interest-bearing demand		63,599								60,647
Other liabilities		8,889								6,558
Total liabilities		599,061								610,105

Equity	$	46,742							$	58,500

Total liabilities and equity	$	645,803							$	668,605

Net interest income (tax equivalent basis)				$	15,875							$	15,413

Net interest income as a percent of average interest-earning assets							3.79	%							3.65	%

RURBAN FINANCIAL CORP.

Summary of Non-performing Assets

($ in Thousands)	September 30,		June 30,		March 31,		December 31,		September 30,
	2011		2011		2011		2010		2010

Non-performing loans:
Non-accrual loans (1)	$	7,331		8,073		12,121		12,283		10,107
Loans 90 + days past due, still accruing interest	$	-		-		-		-		-

Total non-performing loans	$	7,331		8,073		12,121		12,283		10,107

Other Real Estate Owned (OREO),
Repossessed Vehicles	$	1,970		2,056		924		1,538		1,947

Total non-performing assets	$	9,301		10,129		13,044		13,822		12,053

Total allowance for loan losses	$	6,235		6,444		6,593		6,715		6,451

Accruing restructured loans (2)	$	1,311		1,312		1,229		1,107		1,230

(1)	Includes $2.22 million of restructured loans on non-accrual status at September 30, 2011

(2)	Accruing restructured loans at September 30, 2011 consists primarily of residential and commercial real estate loans that have been modified and are performing in accordance with those modified terms.

	September 30,		June 30,		March 31,		December 31,		September 30,
	2011		2010		2011		2010		2010

30-59 Days Past Due	$	573		1,121		861		1,073		1,568
60-89 Days Past Due	$	146		248		44		568		1,326
90 + Days Past Due	$	6,052		6,808		10,572		10,493		8,556

Total Delinquent Loans	$	6,771		8,177		11,476		12,133		11,450

RURBAN FINANCIAL CORP.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures


				Three Months Ended												Nine Months Ended

($ in Thousands)	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2011			2011			2011			2010			2010			2011			2010

GAAP Earnings	$	602			777			11			(6,584	)		26			1,390			(9,029	)

Realized securities gains (1)		-			(1,871	)		-			1			-			(1,871	)		(451	)
Investment securities recoveries (1)		-			-			-			-			-			-			(74	)
Prepayment penalties (1)		-			1,083			-			-			-			1,083			-
(Gains)/losses on sales of assets (1)		27			160			100			41			129			287			159
OREO writedown (1)		-			-			-			757			-			-			215
Software impairment/ Write-offs (2)		-			-			-			-			-			-			3,247
Hardware write-offs (2)		-			-			-			-			-			-			2,792
Contract impairment/ Write-offs (2)		-			-			-			-			-			-			193
New Core Loan write-off (2)		-			-			-			-			-			-			624
New Core Loan (2)		-			-			-			-			-			-			3,000
Accrued interest on New Core Loan (2)		-			-			-			-			-			-			130
Contract Buyouts (2)		-			(519	)		-			-			-			(519	)		-
Writedown of goodwill and other intangibles (2)		-			-			-			6,273			-			-			-


Total Non-Core Items		27			(1,147	)		100			7,071			129			(1,020	)		9,835


Applicable income tax effect on Non-Core Items		(9	)		390			(34	)		(2,404	)		(44	)		347			(3,344	)

After-tax Non Core Items		18			(757	)		66			4,667			85			(673	)		6,491


Core Recurring Net Income		620			20			77			(1,917	)		111			717			(2,538	)

(1)	State Bank & Trust

(2)

RDSI

Rurban Financial Corp.

Segment Reporting - Three Months Ended September 30, 2011


	Banking			Parent Company and Other			Total Banking, Parent and Other			Data Services			Elimination Entries			Rurban Financial Corp.
($ in Thousands)

Income Statement Measures

Interest Income	$	6,915			31			6,946			-			(53	)		6,893
Interest Expense		1,128			357			1,485			76			(53	)		1,508

Net Interest Income		5,787			(326	)		5,461			(76	)		-			5,385

Provision For Loan Loss		297			-			297			-			-			297

Non-interest Income		1,846			42			1,888			1,080			(493	)		2,475
Non-interest Expense		5,744			314			6,058			1,258			(493	)		6,823

Net Income - QTD	$	1,162			(391	)		771			(169	)		-			602

Performance Measures

Average Assets - QTD	$	618,878			-			621,994			5,297			-			627,291
Return on Average Assets		0.75	%		-			0.50	%		-12.76	%		-			0.38	%

Average Equity - QTD	$	67,391			-			47,087			(909	)		-			47,087
Return on Average Equity		6.90	%		-			6.55	%		-			-			5.12	%

Average Loans - QTD	$	446,042			2,000			448,042			-			(3,496	)		444,546
Average Deposits - QTD	$	513,442			-			513,442			-			(1,252	)		512,190

Rurban Financial Corp.

Segment Reporting - Nine Months Ended September 30, 2011

	Banking			Parent Company and Other			Total Banking, Parent and Other			Data Services			Elimination Entries			Rurban Financial Corp.



Income Statement Measures

Interest Income	$	20,826			90			20,916			-			(159	)		20,757
Interest Expense		4,203			1,048			5,251			233			(159	)		5,325

Net Interest Income		16,623			(958	)		15,665			(233	)		-			15,432

Provision For Loan Loss		1,695			-			1,695			-			-			1,695

Non-interest Income		7,666			136			7,802			4,022			(1,389	)		10,435
Non-interest Expense		18,377			1,172			19,549			4,121			(1,389	)		22,281

Net Income - YTD	$	3,151			(1,542	)		1,609			(219	)		-			1,390

Performance Measures

Average Assets - YTD	$	637,872			-			639,177			6,626						645,803
Return on Average Assets		0.66	%		-			0.34	%		-4.41	%		-			0.29	%

Average Equity - YTD	$	67,033			-			46,742			(887	)		-			46,742
Return on Average Equity		6.27	%		-			4.59	%		-			-			3.96	%

Average Loans - YTD	$	437,452			2,000			439,452			-			(3,597	)		435,855
Average Deposits - YTD	$	515,166			-			515,166			-			(970	)		514,197

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