Sb Financial Group, Inc. · NASDAQ:SBFG
Sb Financial — Rurban Financial — Investor Presentation (November 2011)
45 slides from Sb Financial's investor presentation, Nov 2, 2011
Slide 1: Rurban Financial Corp. - Building Momentum
RURBAN FINANCIAL CORP. Building Momentum... Mark A. Klein President and CEO November 2, 2001
Slide 2: 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 n Reform Act of 1995 and, therefore, involve risks and uncertainti
Slide 3: We Are Here to Talk About...
We Are Here to Talk About... © Where we are today ... and how we got here © Where we want to be... and how we plan to get there [RFC arta
Slide 4: Who We Are: Rurban Financial Corp.
Who We Are: Rurban Financial Corp. * Headquartered in Defiance, Ohio $624 million in assets * Deleverage strategy * Two primary businesses * The State Bank and Trust Company -- Community banking * Reliance Financial Services, Wealth Management Division * RDSI Banking Systems -- Data and item process
Slide 5: Our Organization & Our Team
Our Organization & Our Team Rurban Finan Rurban Financial Corp. | Corp. * Mark Klein — President and CEO RBNF * Tony Cosentino — EVP and CFO. + Keeta Diller — SVP, Audit The State Bank and Trust Company The State Bank and Trust Company (including SBT Insurance, LLC) David Anderson — Lima Regional Pr
Slide 6: Our Organization & Our Team
Our Organization & Our Team Reliance Financial Services * Craig Kuhiman — President. | Rurban Financial Corp. RBNF * David Bell — EVP, Retirement & Investment Services Manager * Jay Hanson — SVP, Sales & Client Services Manager The State Bank and Trust Company (including SBT Insurance, LLC) and Reli
Slide 7: Our Organization & Our Team
Our Organization & Our Team RDS! Banking Systems * Gary Saxman — President * Bill Brandt — EVP, Payment Solutions * Joe Buerkle ~ SVP, Network Services (IT) * Jim Bremer — EVP, Chief Information Officer * Wonne Swayze ~ VP, DCM Item Processing
Slide 8: Our Footprint in NW Ohio...
Our Footprint in NW Ohio... © The State Bank and Trust Company Banking Centers © Loan Production offices and Beyond Added 3 new counties in past five years: * Williams County ¢ Franklin County * Steuben County Now have total of 10 counties in our footprint with: - 2LPOs - 19 Retail Offices URBAN FIN
Slide 9: Where We Are Today... and How We Got Here
ANANGAN cone Where We Are Today... and How We Got Here
Slide 10: Net Income
Net Income Net Income 39,000 c $5,217 $4,513 $4,000 § $382 a —_——_ z -$1,000 = i= -$6,000 g & 3$11,000 a -$16,000 2008 2009 2010 Sept 2011 YTD mRFC- mState Bank Re) RURBAN FINANCIAL CORP.
Slide 11: Five Years of Market Expansion
Five Years of Market Expansion Assets Acquired June — 2 branches in Lima $12 million December — Exchange Bancshares $85 million September - DCM (Diverse Computer Marketers) January — Opened Fort Wayne office December — Opened Columbus LPO {2008 | December — National Bank of Montpelier $113 million [
Slide 12: Efficiency Measures
Efficiency Measures Annualized Expense Reduction | 2008 | October — Closed Holland branch of Exchange Bank............... $200 thousand March — Consolidation of Exchange Bank, Reliance Financial Services, N.A., and Rurban Operations Corp. into State Bank (reduction of 20 FTE) .. os $1.250 million De
Slide 13: Diversified Revenue Stream
Diversified Revenue Stream* (Millions) $60 $50] ga1.6 $45.9 Other $40 a Trust/Brokerage $30 Service Charges on a Mortgage Banking =RDSI $10 mNet Interest Income $0 2007 2008 2009 2010 YTD 2011 Annualized RFCS Saanent
Slide 14: Loan Portfolio: Signs of Stability
Loan Portfolio: Signs of Stability Peer Group 75" State Bank & Trust 12/30/2010 | 6/30/2011 Percentile* NPAs + 90 PD/ Loans + OREO. 3.09% 2.30% 3.19% NPLs + 90 PD/ Total Loans 2.81% 1.85% 1.64% Loan Loss Reserve /Total Loans 1.57% 1.47% 2.64% Loan Loss Reserve/NPL 54.70% 79.82% 79.61% LTM NCOs / Avg
Slide 15: Balance Sheet: Strength & Diversity
Balance Sheet: Strength & Diversity 624 Mi Cash & Due, 2% her, 6% Intangibles, 3% Loan Portfol Total Asset: n Securities, 17% 450 Million HELOC, 9% 1-4 Family RE, 14% C&D, 4% noo Consumer & Other, 3% and HFS, 71% Multi-Family cal, 16% RE, 8% Agriculture, 9% CRE - Owner CRE-Investor Occupied, 16% Own
Slide 16: Loan Growth
Loan Growth MSBT Base Loans MLimaAcq. Exchange Acq. i Montpelier Acq. (8000s) $453.9 $469.4 $390.9 $436.6 $449.5 | $370.5 300 200 100 0 2006 2007 2008 2009 2010 3Q 2011 RURBAN FINANCIAL CORP.
Slide 17: Consumer Loans Closed
Consumer Loans Closed Consumer Loan Approvals 1200 $35.00 1000 $30.00 3 25.00 $800 4 5 a = $20.00 § § 5 $15.00 ¥ 2 400 g § s10.00 8 2 200 $5.00 ° $0.00 2008 2009 2010 2011 MilHome Equity MilAuto M™lOther Secured lMllUnsecured -#Total Dollars URBAN FINANCIAL CORP. As of 6/30 each year
Slide 18: Deposit Mix: Strong Local Presence
Deposit Mix: Strong Local Presence Borrowings, 9% Deposit Portfolio = $514 million Non-Interest DDA, 12% NOW, 20% Non-maturity deposi 57% of total deposi Weighted average cost of deposits Savings, 9% Time, 43% MMDA, 15%. [RFC iSaNcitveerg Data as of 9/30/11
Slide 19: Growth of Local, Low-Cost Deposits
Growth of Local, Low-Cost Deposits (S Millions) $485 $491 @ Non-interest Bearing Demand @ Interest Bearing NOW @ Savings @ Money Market @ Total Time @ Brokered Deposits FINANCIAL CORP. 3Q2011 [RFC RURBAN
Slide 20: Mortgage Banking Activity
Mortgage Banking Activity $2,000 $1,800 $1,600 ) & es =I Ss $1,200 $1,000 $600 Gain on Sale ($000s) $400 + $200 + mm Gain on Sale —-Originations $100,000 $80,000 $60,000 $800 + $40,000 $20,000 $0 FINANCIAL CORP. (so00$) suojeuibuo
Slide 21: Mortgage Servicing Portfolio
Mortgage Servicing Portfolio $400,000 $370,033 $350,000 $328,435 $300,000 ae so $150,000 $100,000 $71,158 $50,000 ina 528 | 0) (000s) 2007 2008 2009 2010 3Q2011 [RFC arta ta Servicing Portfolio
Slide 22: Reliance Financial Services
(Qi } RELIANCE FINANCIAL SERVICES Reliance Financial Services BREA bee
Slide 23: 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 — Corporate retir
Slide 24: Reliance Financial History
Reliance Financial History Sept. 2011 ($000) 2006 | 2007 | 2008 | 2009 | 2010 | Annualized Assets Under Menace $348,333 $386,537 $278,093 $302,471 $325,851 $288,875 Revenue $3,420 $3,441 «$3,146 «$2,608 $2,648 $2,759 Expenses $2,337 $2,252 «$2,090 $2,171 $1,819 $1,821 After Tax Net - Hassle $715 $78
Slide 25: RDSI Banking Systems
Banking Systems RDSI Banking Systems FRR Gove
Slide 26: RDSI Banking Systems - Business Lines
RDSI Banking Systems - Business Lines * Payment Solutions (DCM Item Processing, Image Exchange, and LPSI) * Network Services [RFC arta
Slide 27: RDSI Banking Systems
RDSI Banking Systems Sept. 2011 2008 2009 2010* Annualized Revenue $ 21,566_|$ 20,254 $10,569] $5,363} |Operating Expense $ 17,295 |$ 18,929 $ 26,341 $5,495} Net Income $ 2,819 |$ 875 ($13,981)} ($291) April 2009: Decision to merge RDSI and New Core Holdings announced. April 2009 to November 2010: C
Slide 28: RDSI Year in Review
RDSI Year in Review * Reduced FTE by 45 (last 12 months) * Item Processing Clients Retained — 26/31 * Expenses reduced by $15.856 million (Sept. 2010 - Sept. 2011) * DP to State Bank [RFC arta
Slide 29: Where We Want to Be... and How We Plan to Get There
NANGAN Core Where We Want to Be... and How We Plan to Get There BREA bee
Slide 30: The Rurban Vision for 2014
The Rurban Vision for 2014 To become a high-performing (top-quartile) community-focused, financial services provider Peer Group 75" Goals 2014 Rurban Percentile* 1.00% 0.24% 0.76% ROAE 11.0% 3.39% 7.53% RURBAN * 75¢ Percentile Peer consists of the 76 publicly traded banks in the CS) FINANCIAL CORP.
Slide 31: Strategic Priorities - State Bank
Strategic Priorities —State Bank ~ One Company ~ One Culture ~ * Organic growth in urban markets * Organizational synergies * Growth of fee-based businesses (trust, loan sale gains, insurance) * Sound asset quality * Strengthen currency to broaden options [RFC arta
Slide 32: Strategic Vision - State Bank
Strategic Vision - State Bank * A community-based, integrated financial services company * Led by strong regional presidents who “own” the delivery channels * Supported by product/business line experts and high quality operations [RFC arta
Slide 33: State Bank Value Proposition
State Bank Value Proposition “Your Financial Services Partner Delivering Proactive and Innovative Solutions Locally through Employees with a Passion for Service” * Proactively uncover client needs * Innovative client advice * Locally through decentralization ¢ We must decide on “who” before we can d
Slide 34: Recent Major Initiatives
Recent Major Initiatives ¢ Flattened the organization ° Pay for performance ¢ Referrals / share of wallet * Regional Executives / In-Market Team Leaders * Functional Support * Optimize RDS! [RFC arta
Slide 35: Referrals by Year
Referrals by Year 2500 2328 2000 lm Gross 1500 lm Closed 1000 839 500 i) 2007 2008 2009 2010 3Q 2011 $33.4 MM $38.4 MM $86.9 MM $60.4mm Annualized $53.2 MM. RURBAN BNANCIAL CORP
Slide 36: Rurban's Strategic Initiatives
Rurban’s Strategic Initiatives * Deliver prudent growth with appropriate net interest margin * Maintain vigilant oversight of credit underwriting and administration * Amass sufficient capital for soundness and growth * Deploy resources to markets with highest potential * Generate higher and more div
Slide 37: Community Banking... Community Involvement
Community Banking... Community Involvement * Community Involvement — 113 Participants spending 7,025 hours in various forms of community service — Overall participation level of 56% — Over 150 organizations throughout our footprint [RFC tNetteans
Slide 38: Tony Cosentino, Chief Financial Officer
ANANGAN cone Tony Cosentino Chief Financial Officer
Slide 39: Benchmarking - 2nd Quarter 2011
Benchmarking © e 2"4 Quarter 2011 ‘Adjusted Holdi eer Group al Profitability Measures | epen | cio |Meat | Return on Assets 0.39 0.48 0.76 Non-Interest Income / Avg. Assets — 134 0.66 0.98 ‘Adjusted Hold Peer Group 75 Efficiency Measures ‘Company Percentile Efficiency Ratio 79.88 72.30 63.95 Non-Int
Slide 40: Benchmarking - 2nd Quarter 2011
Benchmarking © e 2"4 Quarter 2011 Peer Group 75 Capital Measures | ison | wane | roca | Total Risk Based Capital Ratio 11.89 14.77 17.18 4.60 8.77 10.70 Adjusted Hold Peer Group 75 Growth Measures Ss Loan Growth Rate (ann.) (1.20) 6.10 Loans/Deposits % bd 89.90 85.14 94.48 Tangible Equity / Tangible
Slide 41: Benchmarking - Margin and Asset Quality
SEGRE oe [Margin measures | suns | cise | cts | Yield on Earning Assets 491 4.82 5.13 Core Deposits/Total Deposits = 87.84 84.53 88.09 Loan Yield () 5.65 5.66 6.02 Cost of Interest Bearing Deposits (0) 1.01 1.14 0.97 Lasset quaity Mecsures | “sina | win | cate Loan Loss Reserve/Total Loans 1.47 1.85
Slide 42: Economic Headwinds
Economic Headwinds * GDP 2% 2011; 2% 2012 * Unemployment ~9% * Global Economic Slump * Financial Deleveraging * Regulatory Burdens * Political Uncertainties * Domestic Debt 98% of GDP URBAN INANCIAL CORP.
Slide 43: Discussion Items
Discussion Items Dodd-Frank Act Basel III Capital Accord Small Business Lending Bill Economic Activity RURBAN FINANCIAL CORP.
Slide 44: Greatness is not a function of circumstance
“Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline.” -- Jim Collins [RFCS eben
Slide 45: Thank you for joining us. Any questions?
RURBAN FINANCIAL CORP. Thank you for joining us. Any questions? (RO RUREAN
Rurban Financial — Investor Presentation (November 2011) on 6ix