Sb Financial Group, Inc. · NASDAQ:SBFG
Sb Financial — Rurban Financial — Investor Presentation (November 2010)
35 slides from Sb Financial's investor presentation, Nov 30, 2010
Slide 1: A Work in Progress
A Work W k iin P Progress November 30, 2010
Slide 2: Forward-Looking Statements
Forward‐‐Looking Forward g 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 r
Slide 3: We Are Here to Talk About…
W A We Are Here H to t Talk T lk About… Ab t • Where we are today • Where Wh we wantt tto be b • How we pplan to get g there
Slide 4: Who We Are: Rurban Financial Corp.
Who We Are: Rurban Financial Corp Corp. • Headquartered in Defiance, Ohio • $681 million in assets • Two T primary i businesses b i • The State Bank and Trust Company ‐‐ Community banking • Reliance Financial Services, Wealth Management Division • RDSI Bankingg Systems y ‐‐ Data and item p processin
Slide 5: Our Organization & Our Team
Our Organization & Our Team Rurban Financial Corp. • Mark Klein – President and CEO Rurban Financial Corp. RBNF • Tony Cosentino – EVP and CFO The State Bank and Trust Company • Jon Gathman – EVP and Senior Lender The State Bank RDSI • John Kendzel – Toledo Regional President & Trust Company • David
Slide 6: Our Footprint in NW Ohio… and Beyond
Our Footprint in NW Ohio… and d Beyond B d Added 6 new counties: • Allen County, OH • Lucas and Wood Counties • Allen ll County, IN • Williams County • Franklin County Now have total of 9 counties in our footprint p
Slide 7: Where We Are Today
ENANCIAL CORP. Where We Are Today
Slide 8: Four Years of Market Expansion
Four Years of Market Expansion Assets Acquired • June 2005: 2 branches in Lima ‐ $12 million • Dec. 2005: Exchange Bancshares $85 million • Sept. 2006: Diverse Computer Marketers (DCM) • Jan. 2007: Opened Fort Wayne branch • Dec. 2007: Opened Columbus office • Dec. 2008: National Bank of Montpelier
Slide 9: What We've Done So Far
What We We’ve ve Done So Far Annualized Expense Efficiency Measures: Reduction • O t 2006: Oct. 2006 Cl Closed dHHolland ll d bbranch h off E Exchange h B Bank k $200 th thousand d • March 2007: Consolidation of Exchange Bank, Reliance Financial Services, N.A., and Rurban Operations Corp. into State
Slide 10: Diversified Revenue Stream
Diversified Revenue Stream Stream* (Millions) $50 $44.6 $43.6 $44 7 $44.7 $41.1 $40 $38.3 $38.2 Other Trust/Brokerage $30 Service Charges $20 Mortgage g g Banking g (Net) ( ) RDSI $10 Net Interest Income $0 2007 2008 2009 1Q'10 2Q'10 3Q'10 Quarterly Annualized * Excluding gains/losses on the sale of
Slide 11: Asset Quality: A Strength of State Bank
A Asset Q Quality: li A SStrength h off S State B Bank k A off Sept. As S t 3030, 2010 St t B State Bankk & TTrustt P Peer G Group TTop Q Quartile* til * NPAs + 90 PD/ Loans + OREO 2.66% 4.17% NPLs + 90 PD/ Total Loans 2.23% 2.76% Loan Loss Reserve /Total Loans 1.46% 2.55% Loan Loss Reserve/NPL 65.5
Slide 12: Rurban Non Performing Assets
Rurban Non Performing Assets Non‐Performing Assets / Total Assets 3.50% 3.22% 3.00% 2.60% 2.50% 2.17% % of Total Assetts 2.00% 1.77% 1.50% 1 13% 1.13% 1.02% 1.00% 0.50% 0.00% 2007 2008 2009 1Q'10 2Q'10 3Q'10 RBNF Top Quartile • Top quartile performance of peer group consisting of 11 bank holding com
Slide 13: Balance Sheet: Strength & Diversity
Balance Sheet: Strength g & Diversityy Total Assets = $681Million Cash & Due, 9% Securities 17% Other, 5% Intangibles 3% Loan Portfolio = $ $438 Million HELOC 9% 1-4 Family RE, 25% C&D 4% Loans ((Net)) Consumer and and HFS 66% Other, Oth 3% Multi-Family RE, 7% C&,I 16% Agriculture, 8% CRE – Owner CR
Slide 14: Loan Growth
Loan Growth Organic Loan Growth Lima Acq. Exchange Acq. Montpelier Acq. ($000s) $ $453 9 $453.9 $469 4 $469.4 $43.7 $438.5 $43.7 $390.9 $43.7 $370.5 $56.1 $56.1 $56.1 $5.9 $56.1 $327.3 $56.1 $5.9 $5 9 $5.9 $5.9 $5.9 $56.1 $264.9 $5.9 $348 2 $348.2 $363.7 $363 $ $328.9 $332 8 $332.8 $308.5 $264.9 $26
Slide 15: Deposit Mix: Strong Local Presence
Deposit Mix: Strong Local Presence Borrowings, Capital, Capital 11% Deposit Portfolio = 11% $523 million Deposits, 78% Non-Interest DDA, 12% NOW, 19% IRAs 7% Non‐maturity N Non‐ i deposits d i = Savings, 9% 57% of total deposits Weighted average cost of Time, deposits = 1 1.03% 03% 36% MMDA, 17% 15
Slide 16: Growth of Local, Low-Cost Deposits
Growth of Local, Low Low‐‐Cost Deposits ($ Millions) $523.3 Non‐interest Bearing $484.7 $491.5 $65 Demand $52 $57 $406.6 Interest Bearing NOW $73 $181 $42 $88 $54 $35 57% of $46 Savings 45% of $43 $25 Deposits Deposits $82 $61 $87 $87 Money Market $201 $215 $190 $181 Total Time $28 $28 $43 Brokered
Slide 17: Mortgage Banking Activity
Mortgage Banking Activity Gain on Sales Loan Service Fees Originations $1 200 $1,200 $80 000 $80,000 $1,000 Origin 000’s) $60,000 Banking ($0 nations ($0 $800 $600 $40,000 000’s) Mortgage B $400 $20,000 $200 M $0 $0 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010
Slide 18: Reliance Financial Services
Reliance Financial Services
Slide 19: Reliance Financial Services
Reliance Financial Services Quality Wealth Management in Our Own Backyard • Investment plans – to achieve client objectives • Continuous monitoring and fine‐tuning – adjusts to changes in life events – adjusts to the economy • Trust services • Retirement plans – Individual – Small Business – Corpora
Slide 20: Reliance Financial History
Reliance Financial Historyy YTD Oct. 2005 2006 2007 2008 2009 ($000) 2010 Assets Under $342 779 $342,779 $348 333 $348,333 $386 537 $386,537 $278 093 $278,093 $302 471 $302,471 $302 647 $302,647 Management Revenue $3,287 $3,420 $3,441 $3,146 $2,606 $2,166 Expenses $2,321 $2,337 $2,252 $2,090 $2,171
Slide 21: RDSI Banking Systems
Banking Systems RDSI Banking Systems RECESS Cc
Slide 22: RDSI Banking Systems – Business Lines
RDSI Banking B ki S Systems t – Business B i Lines Li • Payment Solutions (DCM Item Processing, Processing Image Exchange, and LPSI) • Network Solutions • Consulting C li
Slide 23: RDSI Banking Systems
RDSI Banking Systems YTD Sept. (in th (i thousands) d) 2005 2006 2007 2008 2009 2010 * Revenue $ 13,197 $ 16,576 $20,889 $ 21,677 $ 20,518 $9,452 Operating Expense $ 10,298 $ 13,142 $16,873 $ 17,295 $ 18,929 $ 17,563 Net Income before tax $ 2,663 $ 3,156 $ 3,747 $ 4,271 $ 1,325 ($11,397) Net Income
Slide 24: RDSI Year in Review
RDSI Year in Review • O Original g a SBT S Conversion o e s o Date a e – Oc October, obe , 2009 009 • Actual SBT Conversion Date – March, 2010 • Decision Made to Convert Back to Fiserv Premier in May, y, 2010 • Conversion Date Set for Close of Business June 25, 2010 • Due to Declining Processing Rev
Slide 25: The Rurban Vision for 2014
The Rurban Vision for 2014 To become a high-performing high performing (top (top-quartile) quartile) community-focused, financial services provider September 30, 2010 Goals 2014 Rurban Peer Group* ROA 1.00% 0.02% 0.68% Leverage 8.50% 7.90% 8.63% ROAE 13.0% 0.19% 7.90% * Top quartile performance of p
Slide 26: How We Plan to Get There
ENANCIAL CORP. How We Plan to Get There RECESS Cc
Slide 27: Strategic Priorities – State Bank
Strategic Priorities –State Bank ~ One Company ~ One Culture ~ • Organic growth • Organizational O i i l synergies i • Growth of fee‐based businesses • Sound asset quality • Acquisitions
Slide 28: Strategic Vision – State Bank
Strategic Vision – State Bank A community‐based community based, integrated financial 1 services company Led by strong regional presidents who 2 “own” the delivery channels S Supported db by product/business d /b i liline experts 3 and high quality operations.
Slide 29: State Bank Value Proposition
State Bank Value Proposition “Your Financial Services Partner Delivering Proactive and Innovative o a e SoSolutions u o s Locally oca y by Employees p oyees with a Passion for Service” • Proactively uncover client needs • Decentralized decision‐makingg authorityy • We inspect what we expect • We mon
Slide 30: Recent Initiatives
Recent Initiatives • Restructured RFC/SBT/RDSI • Linked Incentive plan directly to Major Initiatives (All Business Lines) • Referrals • Regional Presidents‐In‐Market Team leaders • Functional Support pp • RDSI to remain within RFC • Columbus LPO Expansion
Slide 31: Incentive Compensation Drives Organic Growth
Incentive Compensation Drives Organic O i Growth G h • Every E employee l iincluded l d d iin plan l • All have goals in four categories: – Profitability – Asset Quality – Growth – Client Service • All receive monthly scorecards on performance • Variable pay averaged 5.34% of total 2009 compensation
Slide 32: Referrals by Year
Referrals by Year Year Over Year Referrals 2500 2242 2000 1925 1500 Number 1331 1050 1000 Gross 860 780 Closed 397 500 289 0 2007 2008 2009 Oct 2010 (Annualized) Per Year
Slide 33: Rurban's Strategic Initiatives
Rurban’s Strategic Initiatives • Deliver prudent growth with appropriate net interest margin • Maintain vigilant oversight of credit underwriting and administration • Attract core deposits • Identify potential acquisitions in high potential markets • Restructure corporation for improved efficiency •
Slide 34: Open Issues
Open Issues • Dodd Dodd‐Frank Frank Act • Basel III Capital Accord • Small S ll Business i Lending di Bill ill • Economic Activity
Slide 35: Thank you for joining us.
Thank you for joining us. us Any questions?
Rurban Financial — Investor Presentation (November 2010) on 6ix