Sb Financial Group, Inc. · NASDAQ:SBFG
Sb Financial — Rurban Financial — Midwest SuperCommunity Bank Conference 2009
38 slides from Sb Financial's conference presentation, Feb 24, 2009
Slide 1: Midwest SuperCommunity Bank Conference
RFC BSaraeet Midwest SuperCommunity Bank Conference February 24 - 25, 2009 (RFC IRSA
Slide 2: Ken Joyce, President and CEO
RFC ENvertnesre Ken Joyce President and CEO Rurban Financial Corp. February 24, 2009 | RFC
Slide 3: Forward-Looking Statements
Forward-Looking Statements Rurban would like to remind everyone that comments made during this presentation regarding Rurban's anticipated future performance are forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and therefore involve risks and unc
Slide 4: Rurban Financial Corp. Profile
Rurban Financial Corp. Profile * Headquartered in Defiance, Ohio $658 million in assets at December 31, 2008 Two wholly-owned subsidiaries: = The State Bank and Trust Company (community banking) ™ RDSI (data and item processing for banks) Acquired National Bank of Montpelier on December 1, 2008 22 b
Slide 5: Investment Considerations
Investment Considerations Strong community presence in established markets Growth through acquisition and in-market de novo expansion Profitability enhanced through margin expansion and non- interest income growth Conservative lending philosophy and strong controls have kept problem assets at modera
Slide 6: Rurban Financial Corp. Structure
Rurban Financial Corp. Structure Rurban Financial Corp. RBNF Community Banking The State Bank and Trust Company RDS! and and - ses ay DCM (DBA) Reliance Financial Services (DBA) Data and Item Processing RFC Gatie
Slide 7: Revenue Contribution by Subsidiary
Revenue Contribution by Subsidiary State Bank & Trust: $27.1 MM or = 55% of Revenue —— Net Interest Income, $19.3MM Trust Fees, Gains on Sales, ‘$1.6mm_ Other, Deposit $3-1MM $0.7MM Fees, $2.4MM RDSI: $21.6 MM or = 45% of Revenue Application Services, $5.8MM ee $0.6MM — Services, $1.0MM JPNANCIAL CO
Slide 8: Quarterly Earnings Growth: +47% year-over-year
Quarterly Earnings Growth: +47% year-over-year [ _ Quarterly Earnings Thousands $1,600 = Eamings -*-EPS 4.2007 102008 202008 302008 40.2008
Slide 9: Enhanced Profitability: ROAA Improvement
Enhanced Profitability: ROAA Improvement ERBNF Peer Group 3Q2007 4Q2007 1Q2008 202008 302008 4Q2008 * Peer group = Median of all publically traded banks in Ohio per KBW report. Ize) RURBAN | RFCS toesa
Slide 10: Stable Asset Quality: NPA/Total Assets at 1.00%
Stable Asset Quality: NPA/Total Assets at 1.00% ORBNF Peer Group 1.22% 1.16% eal a T 3Q2007 4Q2007 1Q2008 2Q2008 3Q2008 42008 * Peer group = Median of all publically traded banks in Ohio per KBW report. REC eae
Slide 11: Strong Regulatory Capital: 30% over Well Capitalized
Strong Regulatory Capital: 30% over “Well Capitalized” Risk-based Capital GRBNF Peer Group 20.00% 15.70% 16.00% 15.80% 15.70% 16.20% 16.00% 13.20% 12.59% es |e 1.96% | ba 3305 12.00% 8.00% 4.00% i i 0.00% a 7 —r a ee 3Q2007 402007 1Q2008 2Q2008 3Q2008 4Q2008 * Peer group = All banks nationwide with
Slide 12: The State Bank
E THE STATE BANK Mark Klein President and CEO The State Bank and Trust Company RFC)
Slide 13: State Bank and Trust Profile
State Bank and Trust Profile Founded in 1902 (Survived the “First Depression”) $637 million in assets at 12/31/2008 Recent Acquisitions and De Novo Operations: Columbus, Ohio Loan Production Office (12/07) National Bank of Montpelier (12/01/08) Trust and financial services provided through Reliance
Slide 14: State Bank Footprint locations in counties
State Bank Footprint 23 locations in 9 counties: Indiana Allen (1) Ohio Allen (2) Defiance (5) Franklin (1) Fulton (3) Lucas (1) Paulding (2) Williams (5) ‘Wood (3)
Slide 15: Banking Strategy
Banking Strategy Loan Growth through market expansion and sales activity Create, Monitor and Maintain asset quality Deposit Growth by targeting unique markets and growing electronic client access Improve net interest margin through: Asset Liability Management Core Deposit Growth Grow fee income from
Slide 16: Loan Growth Strategies
Loan Growth Strategies Market expansion OCommercialRE C8 Through acquisitions (Exchange ($MM) ©Res. Mtg. anne Bank, Lima branches, $500 $450 Montpelier) $370 $389 pm LPOs in higher growth areas (Columbus and Ft. Wayne) Building a sales culture 4,900 sales calls in 2007; over 289 closed referrals 3,5
Slide 17: Create, Monitor & Maintain Sound Asset Quality
Create, Monitor & Maintain Sound Asset Quality MNPAs/ Assets MNCO/Avg.Loans Loan Loss Reserve/ Loans 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 371% 2006 2007 2008 RFC ESerneg
Slide 18: High Performance Checking
High Performance Checking: eomulative Change In Net Retail Checking Accounts | |mprovement: $226,630 2007 2008 *2008 Austin Associates Profitability Study GORE...
Slide 19: Deposit Growth Strategies
Deposit Growth Strategies High Performance Checking Growth of Private Client Group Improved cross-selling Remote merchant deposit capture Growth of Electronic Transactions: 30% Y-O-Y Results: Transaction Accounts increased from 45% of total deposits in 2007 to 50% in 2008 $73.1MM 12/31/08 Deposits $
Slide 20: Net Interest Margin Expansion Strategies
Net Interest Margin Expansion Strategies | | 4th Qtr 2007 1st Qtr 2008 2nd Qtr 2008 3rd Qtr 2008 4th Qtr 2008 1 Bank Only H Peer Group RFC IRAE
Slide 21: Banking Systems
Banking Systems Ken Joyce CEO RDSI Banking Systems (RDSI)
Slide 22: RDSI Profile
RDSI Profile * Regional processor: 11 states * Data processing: 73 banks * Item Processing: 92 banks RFCS Sereeg
Slide 23: RDSI Data and Item Processing Footprint
RDS! Data and Item Processing Footprint RDSI: Arkansas, Florida, Indiana, Illinois, Kansas, Michigan, Missouri, Nebraska, Nevada, Ohio, Wisconsin (rige) RURBAN USS rience,
Slide 24: RDSI Strategy
RDSI Strategy *® Strategic Process: Strategy Map and Balanced Scorecard ™ Robert S. Kaplan ™ David P. Norton * RDSI Strategic Themes = Expand revenues = Improve efficiencies ™ Manage the risk
Slide 25: RDSI Initiatives to Expand Revenues
RDSI Initiatives to Expand Revenues * Geographic expansion: = Added new state in 2008 = Added Southeast Sales Representative in 2008 * Sales initiatives = Added six new client banks in 2008 = Eight conversions completed or scheduled for 2009 = Product sales to existing banks: $1 million in 2008 * Ac
Slide 26: RDSI Revenue Growth Year CAGR: 16.1%
RDSI Revenue Growth 5 Year CAGR: 16.1% Revenue $25.0 $20.0 bs a 5 e s = = a es 2004 2005 2007 __2008 REC Gatreed
Slide 27: RDSI Initiatives to Increase Efficiencies
RDSI Initiatives to Increase Efficiencies “Check 21” Accelerates Electronic Transition 99.9% of checks are processed using electronic image instead of paper Staffing Down by 5.5 FTE Year-Over-Year “Image Exchange Program” kicks off in 2"? Quarter Technology Improvements More Efficient Processing Dec
Slide 28: RDSI Earnings Growth Year CAGR = 13.5%
RDSI Earnings Growth 5 Year CAGR = 13.5% Net Income $3.00 $2.50 $2.00 1) cI Sg eI = $1.50 $1.00 2004 2005 2006 2007 Net Income B Tax credits
Slide 29: RDSI Initiatives to Manage Risk
RDSI Initiatives to Manage Risk * Enterprise Risk Management Internal Audit Performed by Plante & Moran = General Controls = Internal Penetration Reviews = External Penetration Reviews External Audit Performed by BKD SAS 70's Performed by Clifton Gunderson Examination Process FDIC occ FRB State of O
Slide 30: Consolidated Financial Performance
RURBAN FINANCIAL CORP, Duane Sinn Chief Financial Officer Consolidated Financial Performance Rurban Financial Corp. RECHSEOSE
Slide 31: Rurban Financial Corp. Investment Considerations
Rurban Financial Corp. Investment Considerations Credit quality is stable Consistent pattern of earnings growth Strong fee income stream contributes additional earnings stability Strong Operational and Financial Controls in place Excess capital supports variety of growth strategies Experienced manag
Slide 32: YTD Financial Highlights
YTD Financial Highlights ($000) 12/31/2008 12/31/2007 %A Assets (millions) $657.6 $561.2 +17% Net Interest Income 17,528 14,787 +19% Provision for Loan Losses 690 521 + 32% Non-Interest Income 28,061 26,861 +5% Non-Interest Expense 37,557 36,637 +3% Net Income 5,217 3,257 +60% Diluted EPS $1.06 $0.6
Slide 33: Attractive Dividend Yield
Attractive Dividend Yield Annualized Dividend Yield 0.0% 3Q'06 4Q'06 1Q'07 207 3Q'07 4Q'07 10°08 2Q'08 3q‘0s 4Q'08 * Based Upon Stock Prices as of quarter end [RFCISean ee
Slide 34: RBNF Stock Price: One Year
| RBNF Stock Price: One Year Price history - RBNF (2/21/2008 - 2/19/2009) 2psfeos afr pe 10/6/2008 15/23 2/16/2003 1596 1036 5% 0% 5% 1036 1556 Nae fr 20% 35% “40% 6% 50% et y AVN: 25% XK = NANA 1m Rusban Financial Corp NASDAQ Bank Index
Slide 35: RBNF Stock Price: Year-To-Date
RBNF Stock Price: Year-To-Date ipizpeoos 1972009 4psjp00s——2/afaams 2/5/2008 2/46 /20082/18/2008 5% 309%, 75% Ruban Financial Comp
Slide 36: RBNF Improving Valuation Metrics
RBNF Improving Valuation Metrics Per Share $1.20 © Quaterly EPS ELLTM EPS 4q06 107 2107 3q07 4Q07 1qos 208 3q08 4Q'08 URBAN
Slide 37: RBNF Improving Valuation Metrics
RBNF Improving Valuation Metrics Price/LTM EPS 4Q06 1Q07 2G07 3Q'07 4Q07 1Q'08 2Q08 308 4Q08 RFC
Slide 38: Questions?
ANANGIAL Core Questions?
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