Sb Financial Group, Inc. · NASDAQ:SBFG
Sb Financial — Rurban Financial — Shareholder Meeting (May 2011)
49 slides from Sb Financial's shareholder meeting presentation, May 5, 2011
Slide 1: May 5, 2011
May 5, 2011
Slide 2: Welcome and Call to Order
NANG core Welcome and Call to Order Mark Klein President & CEO Rurban Financial Corp. The State Bank and Trust Company
Slide 3: Mark Klein, President & CEO
NANG core Mark Klein President & CEO Rurban Financial Corp. The State Bank and Trust Company
Slide 4: Annual Meeting Agenda
Rurban Financial Corp. Annual Meeting Agenda Introductions Chairman Remarks - Richard L. Hardgrove Rurban Overview - Mark A. Klein CEO - Tony Cosentino CFO Election Results Questions RFC
Slide 5: Special Guests
Rurban Financial Corp. Special Guests * Craig Liechty-BKD, LLP — Independent Auditor * Chuck DeRousie and Tony Weis-Vorys, Sater, Seymour & Pease, LLP — Columbus, SEC Counsel Curt Loveland-Porter Wright — Columbus, Board Counsel Stan Yoder and Steve Hubbard-Weaner, Zimmerman, Bacon, Yoder & Hubbard,
Slide 6: Advisory Board Members
The State Bank and Trust Company Advisory Board Members Fulton County Paulding County Board Liaison: Gaylyn Finn Board Liaison: Bob Fawcett James M. McDonnall George W. Carter Virginia £. Nevenschwander Floyd F. Furrow Ed ward L. Nofziger John H. Kauser Joseph P. O'Neil Dr. John M. Saxton Joseph D.
Slide 7: Annual Meeting Agenda
Rurban Financial Corp. Annual Meeting Agenda itroductions + Chairman Remarks — Richard L. Hardgrove kurban ¢ — Mark A. Klein CEO RECESS
Slide 8: Director Overview and Insight
Rurban Financial Corp. Director Overview and Insight Richard L. Hardgrove Chairman of the Board Rurban Financial Corp. The State Bank and Trust Company RDSI Banking Systems RECESS
Slide 9: Retired Directors: As of July 31, 2010
Retired Directors: As of July 31, 2010 Thomas Callan: 14 years of service John Compo: 23 years of service Steve VanDemark: 19 years of service J. Michael Walz: 18 years of service RECESS
Slide 10: New Directors in 2010
Rurban Financial Corp. New Directors in 2010 ¢ Mark Klein — Joined The State Bank and Trust Company in January of 2006 — Was appointed President and CEO and Director of Rurban January 2010 * Tim Stolly — Brings to the Board over 30 years of insurance industry experience — Lima Advisory Board member
Slide 11: Board of Directors Standing for Election - 2011
Rurban Financial Corp. Board of Directors Standing for Election - 2011 * Robert A. Fawcett, Jr. * Gaylyn J. Finn + Rita A. Kissner* Term Expiring 2012 Term Expiring 2013 * Thomas A. Buis « Richard L. Hardgrove* * Thomas L. Sauer + Mark A. Klein* * Timothy J. Stolly * Indicates an RDSI Board Member,
Slide 12: Rurban Financial: Director Committees
Rurban Financial: Director Committees Audit Committee — Chairman: Rita A. Kissner — Financial Expert: Gaylyn J. Finn Compensation Committee — Chairman: Robert A. Fawcett, Jr. Governance and Nominating Committee — Chairman: Thomas A. Buis Loan Review Committee — Chairman: Gaylyn J. Finn fiz@) RURBAN
Slide 13: Rurban Overview
CECI spse Rurban Overview Mark A. Klein Anthony V. Cosentino President & CEO Chief Financial Officer Rurban Financial Corp. and The State Bank and Trust Company
Slide 14: 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 unce
Slide 15: Profile
Rurban Financial Corp. Profile Headquartered in Defiance, Ohio Listed on NASDAQ Global Market: RBNF Two wholly-owned subsidiaries Diversified financial services organization 262 employees at YE 2010 $660 million in assets at December 31, 2010 RFC BSc
Slide 16: 2010: A Transitional Year
Rurban Financial Corp. 2010: A Transitional Year Consolidated HC and State Bank to improve efficiencies ; reduced staff by seven FTE Achieved a record year at State Bank for mortgage loan originations : $235 million Improving economy and $7.9 million of net charge-offs at the Bank significantly impr
Slide 17: Earnings
Rurban Financial Corp. Earnings Rurban Net Income —_™ Pre-Tax, Pre-Provision Core Earnings of $7.6 2007 2008 2009 2010 RFC BSc
Slide 18: The State Bank and Trust
The State Bank and Trust Company
Slide 19: Credit Costs Impacted Earnings
Credit Costs Impacted Earnings of State Bank for Past Two Years = Bank Net Income & Pre-Tax, Pre-Provision Core Earnings Provision Expense: $0.7mm $5.7mm $7.6mm 2007 2008 RFCINISaaay
Slide 20: Asset Quality Initiatives
The State Bank and Trust Company Asset Quality Initiatives * Expanded credit underwriting and loan review Departments * Focused on reduction of non-performing assets * Involvement of corporate directors in loan review process and with Advisory Boards * Independent third-party portfolio review confir
Slide 21: Asset Quality: An Improving Picture
The State Bank and Trust Company Asset Quality: An Improving Picture NPA/Assets IENCO/ Avg. Loans 4.00% Al 2007 2008 2009 2010 1Q 2011 1Q'11 Median* * Peer group consists of 77 bank subsidiaries of publicly traded BHCs nationwide with assets between $500mm and $4billion aces FINANCIAL CORP,
Slide 22: Asset Quality: An Improving Picture
The State Bank and Trust Company Asset Quality: An Improving Picture Loan Loss Reserve/ Loans Mi Reserves/NPLs 4.00% 120% 102% 3.00% g 80% 2.00% 60% 40% 1.00% Y 20% 0.00% LL P 0% 2007 2008 2009 2010 1Q2011 1Q'11 Median* * Peer group consists of 77 bank subsidiaries of publicly traded BHCs nationwide
Slide 23: Expense Control Initiatives
The State Bank and Trust Company Expense Control Initiatives Savings of approximately $5 million over the last four years from operational, fixed asset and personnel costs: — Reduced Bank/ BHC staff by 16 FTE since 2009 — Consolidated Exchange Bank, Reliance Financial Services & Rurban Operations Co
Slide 24: Non-Interest Expense Comparison
The State Bank and Trust Company Non-Interest Expense Comparison Ast Qtr 2009 Ast Qtr 2011 Non-Interest Expense = Non-Interest Expense = $6,317,175 $5,734,869 Salary & Salary & Benefits Benefits Occupancy & Occupancy & Equipment _ ; 2 ee mFDIC Other Other [RFC UREA
Slide 25: Expanding from Our NW Ohio Base
The State Bank and Trust Company Expanding from Our NW Ohio Base 19 Retail Banking Offices within Our 10-County Footprint 2 Loan Production Offices (LPOs) Counties -4 io and Indiana) = | each + Paulding - 2 + Steuben - LPO + Wood - 3 * Williams - 4 RECESS
Slide 26: Organic Growth from Synergies within State Bank
Organic Growth from Synergies within State Bank « Leadership by in-market regional executives * Interdepartmental referrals * Relationship-based selling * Cross-selling Top-down driven sales culture RECESS
Slide 27: Well-Diversified Balance Sheet
The State Bank and Trust Company Well-Diversified Balance Sheet Total Assets = $655Million Cash & Due, 9% Other, 5% Intangibles, 3% Cas Loan Portfolio = $428 Million HELOC, 9% C&D, 4%, Consumer & Other, 3%, _ >» * 1-4 Family RE, 25% Loans (Net) and HFS, 66% ~ Multi-Family Cal, 16% we RE, 7% Agricult
Slide 28: Local, Low-Cost Deposit Mix
The State Bank and Trust Company Local, Low-Cost Deposit Mix Borrowings, 14% other, 1% \ Deposit Portfolio = Ss Capital, 7h $513 million Non-Interest bate) NOW, 19% Non-maturity deposits = Savings, 8% 58% of total deposits - e yd deposits = -* a Time, 37% MMDA, 14% As of March 31, 2011 | RFC INS
Slide 29: Expansion of Non-Interest Income
The State Bank and Trust Company Expansion of Non-Interest Income * Community Banking Mortgage Banking Deposit Fees Wealth Management SBA / FSA Loan Sales Insurance RECESS
Slide 30: Referrals by Year
The State Bank and Trust Company Referrals by Year Gross ™Closed 2007 2008 2009 2010 $33.4MM. $38.4MM $86.9 $60.4 MM RECESS
Slide 31: State Bank: Diversified Revenue Stream
State Bank: Diversified Revenue Stream* $40 (Millions) cH Trust/Brokerage Service Charges Mortgage Banking (Net) = Net Interest Income 2007 2008 2009 + Excluding gains/losses on the sale of securities, proceeds from investments and recoveries a RFCINASAp
Slide 32: Mortgage Servicing Portfolio
Mortgage Servicing Portfolio $350,000 $328,435 $300,000 $250,000 $200,000 $150,000 $100,000 $71,158 $50,000 $39,528 $0 $204,810 2008 2009 Servicing Portfolio [RFC UREA
Slide 33: Mortgage Banking Activity
Mortgage Banking Activity Gain on Sales mlliLoan Service Fees Originations $2,500 $100 $2,000 - REawiwz $1,000 $500 wg) suoneUlBUC 3 3 2 é 5 8 2 @ 2 € 5 a 3 % 2 BY 2 5 2 $0 3Q'09 4Q'09 -1Q10 = 2Q40 «93010 = 4Q'10 [RFC UREA
Slide 34: Reliance Financial Services
Reliance Financial Services
Slide 35: Reliance Financial Services: 2010 Initiatives
Reliance Financial Services 2010 Initiatives ¢ Integration with State Bank client base * Competitive Market Returns * Leverage Regional Executive presence * Incentive plan emphasis on performance improvement RECESS
Slide 36: Reliance Financial Services: Assets Under Management
Reliance Financial Services 3 © g % 3 = & 3 fey fay 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 Assets Under Management 50,000 -—i i —] '—_ ee (0) 2006 2007 2008 2009 2010 YID March 2011 Annualized Assets Under Management RECESS
Slide 37: RDSI Banking Systems
RDSI Banking Systems
Slide 38: Overview of RDSI Banking Systems
Overview of RDSI Banking Systems Unsuccessful planned spin-off of RDSI in June 2010 Announced exit from data processing and deconverted all DP clients Currently focused on Item Processing: — 30 stable community banking clients — DCMis a low-cost provider — Investigating additional applications of im
Slide 39: RDSI Banking Systems: Revenue
RDSI Banking Systems Revenue $25,000 21, $20,620 922566 go 54 $20,000 $15,000 $10,569 2 3 = S & 3 3 ct is $10,000 agae $5,175 $0 2008 2009 2010 1Q 2011 Annualized RFC ESAs
Slide 40: RDSI Banking Systems: Revenue by Service
RDSI Banking Systems: Data Processing Network Services Payment Solutions RDSI Revenue Less: Intercompany . (0.40) Net Data Services . 4.03 Revenue (0.24) 2.61 (0.30) 2.04 (0.40) 1.05 (REC IRON FINANCIAL Corr.
Slide 41: RDSI Banking Systems: Right-sizing the Organization
RDSI Banking Systems: Right-sizing the Organization * Took charges totaling $14.1 million for impairments, write-downs and charge-offs in 2010 Reduced staff by 79 since YE 2009 for savings of $7 million Excluding salaries, reduced operating expenses by over $8 million since YE 2009 We have a positiv
Slide 42: Focusing on the Future
Focusing on the Future Rurban Financial Corp
Slide 43: Where Do We Go from Here?
Rurban Financial Corp. Where Do We Go from Here? Back to the Basics of Banking Maintain asset quality Control expenses Emphasis on new sources of non-interest income Improve capital Drive sales culture RECESS
Slide 44: Preferred Shares
Rurban Financial Corp. Preferred Shares * Capital ratios key in the banking environment Proposed participation in Small Business Lending Fund (SBLF) * More we lend, the lower the cost of capital * Preferred shares are non-voting * Can be redeemed any time RECESS
Slide 45: Strategic Vision
Rurban Financial Corp. Strategic Vision: To become a high-performing, diversified financial services organization with $1 billion in assets and ROAA of 1.0% Benchmark performance progress against universe of micro-cap banks Local presence in communities enhances efficiency, responsiveness, and marke
Slide 46: RDSI / New Core Review
Rurban Financial Corp. RDSI / New Core Review Richard L. Hardgrove Chairman of the Board Rurban Financial Corp. The State Bank and Trust Company RDSI Banking Systems RECESS
Slide 47: Annual Meeting Agenda
Rurban Financial Corp. Annual Meeting Agenda * Introductions Chairman Remarks — Richard L. Hardgrove ¢ Rurban * Election Results * Questions RECESS
Slide 48: Annual Meeting Agenda
Rurban Financial Corp. Annual Meeting Agenda * Introductions Chairman Remarks — Richard L. Hardgrove ¢ Rurban * Election Results * Questions RECESS
Slide 49: Thank You for Attending
if Thank You for Attending