Sb Financial Group, Inc. · NASDAQ:SBFG
Sb Financial — Rurban Financial — Midwest SuperCommunity Bank Conference (February 2008)
35 slides from Sb Financial's conference presentation, Feb 25, 2008
Slide 1: Midwest SuperCommunity Bank Conference
RFC iene Midwest SuperCommunity Bank Conference February 26, 2008
Slide 2: 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 Priva risks and uncertainties inherent in the national and regional banking, insurance and mortgage industries
Slide 3: Rurban Financial Corp. (RBNF) Profile
Rurban Financial Corp. (RBNF) Profi > Headquartered in Defiance, Ohio > Listed on NASDAQ Global market: RBNF > $561 million in assets > Two business lines: (2007 Revenue Contribution % ™ Community Banking (53%) ™ Data and Item Processing for banks (47%)
Slide 4: RBNF: Organization Chart
| RBNF: Organization Chart The State Bank and Trust Company & Reliance Financial DCM (DBA) Services (DBA)
Slide 5: Rurban: A Successful Turnaround
Rurban: A Successful Turnaround | >» Community Bank Turnaround—~ ™ 2001 to 2002: The Recognition-Phasé Y Took $36.3 million provision (= 5% of assets) ™ 2003 to 2006: The Restructuring Phase Y Sold $305 million bank ¥ Formed workout subsidiary (RFCBC) to address problem loan Y Restructured trust com
Slide 6: Asset and Net Income Growth Strategies
Community Banking: Asset and Net Income Growth Strategies > Asset growth from: ™ Organic Growth through Key Initiativess. Go ™ Acquisitions bringing Geographic Expansion oo SSSssssS= ™ Acquisitions adding to Profit through Consolidation > Improving profitability from: ™ The Best of Both Worlds — Reg
Slide 7: Asset Growth
Community Banking: Asset Growth > Geographic expansion ™ Purchased two Lima, Ohio full service offices in June 2005 —_————— ™ Purchased The Exchange Bank in Toledo suburbs in December 2005 ™ Opened LPO in Fort Wayne, Indiana in 2005: converted to a full service office in 2007 ™ Opened LPO in Columbu
Slide 8: Asset Growth: Expanded Banking Footprint
Community Banking: Asset Growth > Expanded Banking Footprint
Slide 9: Deposit Growth
Community Banking: Deposit Growth > Market Share Growth Potential Deposits Market Share Market (thousands) % Share Rank $185,052 23.8% 2 $46,663 22.5% $56,793 7.3% $55,537 3.6% $55,761 3.3% | LUC $13,306 Allen (IN) $1,892 Using “Inside of Market” data from SOD reports
Slide 10: Deposit Growth Initiatives
Community Banking: Deposit Growth Initiatives > Deposit Growth Initiatives ™ Chief Deposit Officer SS Go = Private Client Group Success —— > ™ Remote Merchant Deposit Capture Growing Rapidly ™ Cross-Selling Improving ™ Electronic Transactions ™ High Performance Checking BXANGA coe
Slide 11: Retail Growth Strategies
Community Banking: Retail Growth Strategies > Retail Growth: Net Retail Checking Accounts 900 700 500 300 (100) 378 100 ij 127 JALIL (3000) A ey Avg 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3007 4Q07 2005 Q
Slide 12: Growth Strategies
Community Banking: Growth Strategies > Building Revenue through Sales = " Best of Both Worlds —<— Go ™ Sales and Service Culture = ¥ Planned and focused sales calls o 2006 Sales Calls: 3,620 © 2007 Sales Calls: 4,900 V Referrals Made Closed o 2006 431 134 o 2007 860 289 BRAG Cove
Slide 13: Growth Strategies: Loan Growth
Community Banking: Growth Strategies > Loan Growth — Volume and Make-up ($ millions) $450 7 Two Year CAGR = 9.1% $400 ; $382 $370 $373 $338 $360 $364 $350 { $300 5 $250 7) YE 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q@ 2005 06 O06 O06 O06 OF OF O07 $200
Slide 14: Net Interest Margin
Community Banking: Net Interest Margin > Net Interest Margin Management ™ Growing the Balance Sheet = 4 VY Loan Structure > SBA, USDA , FSA eo v New Markets > Entry With Key Managemen ==> = v Larger Deals > Match Funding v Participations > Control Relationships v Continuing Process of Conversion > I
Slide 15: Net Interest Margin
Community Banking: Net Interest Margin 4.0 3.8 3.5 3.3 3.0 > Banking Group Net Interest Margin - % 3.85 3.93 ye YE 1006 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2005 = KBW = RFC “KBW Performance ee FIN z
Slide 16: Margin Management
Community Banking: Margin Management > Banking Revenue — Net Interest Income ($ in Millions) $5.5 $4.5 $3.5 $2.5 4 Avg 1Q 06 2Q 063Q 064Q 06 1Q 07 2Q 07 3Q 074Q 07 Q 2005 O Net Interest Income RU Ra ae
Slide 17: Fee Income Strategies
Community Banking: Fee Income Strategies > Banking Revenue — Non-Interest Income ($ in Millions) $3.0 $2.0 $1.0 $0.0 Avg 1Q 06 2Q 063Q 064Q 06 1Q 07 2Q 07 3Q 074Q 07 Q 2005 i Non-Interest Income RANGA Coe ——
Slide 18: Expense Control
Community Banking: Expense Control > Banking Group Quarterly Operating Expenses $6,500 + $6,025 $6,000 $5,500 $5,188 $4,248 $4873 4,908 $5,000 ($ in thousands) $4,500 $4,000 10.06 20 06 3006 4Q.06 1007 2007 3007 4Q.07 A Oe
Slide 19: Net Income
Community Banking: Net Income ($ in thousands) $900 $800 $700 $600 $500 $400 $300 $200 > Banking Group Quarterly Net Income 2005 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 Average Per Quarter URBAN Ce
Slide 20: Asset Quality
Community Banking: Asset Quality > Ongoing Focus on Quality Loan Production ™ Control mechanisms in place -— a and effective Se assets since 2 ™ Positive trend for non-performing. sets since 2002 ¥ Recent minor move up Y Positive trend reflected in delinquencies VY No “subprime” lending or securitie
Slide 21: Asset Quality
Community Banking: Asset Quality > Non-Performing Assets as a % of Total Assets 2.00% - Zo zs = BA. 0.00% YE 1Q06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 2005 ec
Slide 22: Asset Quality
Community Banking: Asset Quality > Net Charge-Offs (Annualized) as % of Average Loans
Slide 23: Net Income Improvement Strategies
Community Banking: Net Income Improvement Strategies > Improving Banking Net Income j ™ Reduction of loan workout experises Oo ™ Fee income generation is improving == : Y Guarantee loan sale expertise (SBA, USDA, FSA) ¥ Mortgage banking revenue © Doubled production from $21 million in 2005 to $44 mi
Slide 24: RDSI: Data and Item Processing
RDSI: Data and Item Processing > Rurbanc Data Servicesnc: (RDSI) ™ Regional processor: ™ Data processing: ™ Item Processing: ™ DCM: Subsidiary of RDSI VY Item Processing Clients: 47 banks ¥ 2006 Acquisition
Slide 25: RDSI: Data and Item Processing
RDSI: Data and Item Processing > RDSI and DCM Client. Bank States MS HB ODcM ~ Wisconsin Il RDS! ~ Arkansas, Floripa, NEVADA, Missouri, NEBRASKA i Botn ~ Onto, MicHicaN, INDIANA, ILLINOIS
Slide 26: RDSI: Revenue
RDSI: Revenue >Historic RDSI Revenue Growth $14 5 Y oe poe —— 2003 2004 2005 2006 2007
Slide 27: RDSI: Growth Strategies
RDSI: Growth Strategies # 7 th Strategies 2 eZ ——_— ™ Sales initiatives — new and existing client sales > Revenue and Net Income.G ™ Geographic expansion ™ Acquisitions ™ Product expansion Yin 2000: 23 products VY In 2007: 130 products = “Check 21” efficiencies REC i Sccteean
Slide 28: RDSI: Net Income
RDSI: Net Income > Historic Net Income Growth ($ in millions) x ZL, 2.60 arn Ne 40 02 i 2.20 + 1.80 + ’ $176 1.40 + 1.00 1 1 1 1 1 2003 2004 2005 2006 2007 GB Net Income UO Tax credits
Slide 29: RDSI: Outlook
RDSI: Outlook > Improving Valuation MetricS= = EBITDA Growth ¥ 2005: $5.2 million ¥ 2006: $6.0 million ¥ 2007: $7.1 million ™ Considering strategic alternatives to recognize RDSI’s value Fone
Slide 30: Business Unit Profitability
Average Quarter 2005 Banking Group Net > Business Unit Profitability 1stQ | 2nd Q | 3rdQ 4tha 1stQ 2ndQ 3rd Q 2006 2006 2006 2006 2007 2007 2007 Rurban: Improving Profitability Income $344 $460 $779 $790 $480 $671 $830 RDSI Net Income $429 $548 $451 $478 $606 $690 $476 BHC Expense $605 $485 $516 $45
Slide 31: Rurban: Improving Profitability
Rurban: Improving Profitability | > Business Unit and Total Net Income ($ in thousands) $1,000 $800 $600 $400 $200 $0 ($200) ($400) ($600) ($800) AvgQ 1Q 06 2Q06 3Q 06 4006 1Q07 2Q07 3Q07 2005 ME BHC Expense GIRS! lB Banking Group ‘=Total Net Income
Slide 32: RBNF: Normalizing Valuation
RBNF: Normalizing Valuation 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 EPS LTM EPS Price / LTM EPS Stock Price @ Quarter End Dividend Yield @ Quarter- End * Price to Book = 90% at $10.70 (2/19/08) + Price to Tangible Book = 134% * Book Value = $11.92
Slide 33: RBNF: Stock Price History
RBNF: Stock Price History >RBNE Stock Versus NASDAQ Index of Banks 115 = a ° = ) a Percentage 90 + T T r T Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 ——RBNF -~ NASDAQ Index Banks
Slide 34: Rurban: Investment Considerations
i} Rurban: Investment Considerations — > Stock price beginning to reflect i improving E earnings and earnings consistency ban > Stock price does not appear to properly value RDSI > EPS valuation becoming a relevant metric > Positive absolute performance and positive performance to Nasdaq Bank Index
Slide 35: Questions & Answers
RAR ee Cove Questions & Answers |
Rurban Financial — Midwest SuperCommunity Bank Conference (February 2008) on 6ix