<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE
QUARTERLY PERIOD ENDED MARCH 31, 1999.
---------------
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______________________TO _____________________
COMMISSION FILE NUMBER 0-13507
RURBAN FINANCIAL CORP.
- --------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 34-1395608
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
401 Clinton Street, Defiance, Ohio 43512
----------------------------------------
(Address of principal executive offices)
(Zip Code)
(419) 783-8950
---------------------------------------------------
(Registrant's telephone number, including area code)
None
---------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes / X / No / /
The number of common shares of Rurban Financial Corp. outstanding was
4,140,718 on May 1, 1999.
1
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
------------------------------
Item 1. Financial statements
- ----------------------------
The interim consolidated financial statements of Rurban Financial Corp.
are unaudited; however, the information contained herein reflects all
adjustments which are, in the opinion of management, necessary for a fair
presentation of financial condition and results of operations for the interim
periods presented. All adjustments reflected in these financial statements are
of a normal recurring nature in accordance with Rule 10- 01(b) (8) of Regulation
S-X. Results of operations for the three months ended March 31, 1999 are not
necessarily indicative of the results for the complete year.
2
<PAGE> 3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
March 31 December 31
1999 1998
---------------- -------------
(Unaudited) (Note)
ASSETS
<S> <C> <C>
Cash and due from banks $ 16,686,526 $ 16,790,423
Federal funds sold 463,539 8,718,721
------------ ------------
Total cash and cash equivalents 17,150,065 25,509,144
Interest-bearing deposits in other
financial institutions 180,000 180,000
Securities available for sale 82,440,972 82,142,929
Loans held for sale, net of valuation allowance of
$-0- in 1999 and $-0- in 1998 20,621,376 18,509,275
Loans, net of allowance for losses of $5,465,472
in 1999 and $5,408,854 in 1998 408,486,759 388,560,699
Premises and equipment, net 11,346,013 11,400,045
Accrued interest and other assets 11,567,171 10,852,687
------------ ------------
Total assets $551,792,356 $537,154,779
============ ============
</TABLE>
(Continued)
3
<PAGE> 4
CONDENSED CONSOLIDATED BALANCE SHEETS - CONTINUED (UNAUDITED)
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
March 31 December 31
1999 1998
---------- ------------
(Unaudited) (Note)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest bearing $ 42,826,186 $ 48,135,487
Interest bearing 417,700,065 402,677,736
------------- -------------
Total deposits 460,526,251 450,813,223
Federal funds purchased 8,400,000 9,500,000
Short term note payable 3,100,000 --
Advances from Federal Home Loan Bank (FHLB) 28,728,025 28,890,290
Accrued interest payable 1,601,740 1,685,437
Other liabilities 7,037,505 4,362,879
------------- -------------
Total liabilities 509,393,521 495,251,829
Shareholders' equity
Common stock, stated value $2.50 per share
shares authorized: 10,000,000;
shares issued: 1999 - 4,575,702, 1998 - 4,575,702;
shares outstanding:
1999 - 4,140,718, 1998 - 4,140,518 11,439,255 11,439,255
Additional paid-in capital 11,518,727 11,518,727
Retained earnings 27,151,840 26,508,897
Accumulated other comprehensive income, net of
tax of $7,062 in 1999 and $104,536 in 1998 13,708 202,922
Less: Unearned ESOP shares (unearned shares:
1999 - 73,502 1998 - 73,502) (1,061,587) (1,100,905)
Less: Treasury stock, at cost 1999 - 434,984 shares
at cost, 1998 - 435,184 shares at cost (6,663,108) (6,665,946)
------------- -------------
Total shareholders' equity 42,398,835 41,902,950
------------- -------------
Total liabilities and shareholders' equity $ 551,792,356 $ 537,154,779
============= =============
</TABLE>
See notes to condensed consolidated unaudited financial statements
Note: The balance sheet at December 31, 1998 has been derived from the
audited financial statements at that date.
4
<PAGE> 5
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended
March 31
-----------------------------
1999 1998
<S> <C> <C>
Interest income
Interest and fees on loans $ 9,055,302 $ 8,508,834
Interest and dividends on securities:
Taxable 997,837 944,816
Tax-exempt 119,340 69,525
Other 112,627 142,382
----------- -----------
Total interest income 10,285,106 9,665,557
Interest expense
Deposits 4,428,269 4,233,499
Borrowings 409,659 223,544
----------- -----------
Total interest expense 4,837,928 4,457,043
----------- -----------
Net interest income 5,447,178 5,208,514
Provision for loan losses 276,000 270,000
----------- -----------
Net interest income after provision
for loan losses 5,171,178 4,938,514
Noninterest income
Data processing fees 895,106 708,775
Trust fees 648,642 633,594
Service charges on deposit accounts 336,971 269,894
Net gain on sale of securities 732 33,675
Net gain on sale of loans 368,103 484,868
Other 327,668 231,771
----------- -----------
Total noninterest income 2,577,222 2,362,577
Noninterest expense
Salaries and employee benefits 3,542,866 3,260,019
Net occupancy expense 300,004 271,991
Equipment expense 713,384 559,361
Other 1,773,321 1,685,126
----------- -----------
Total noninterest expense 6,329,575 5,776,497
----------- -----------
Income before income taxes 1,418,825 1,524,594
Income tax expense 366,775 512,994
----------- -----------
Net income $ 1,052,050 $ 1,011,600
=========== ===========
Basic and diluted earnings per Common Share (Note B) $ 0.26 $ 0.25
=========== ===========
</TABLE>
See notes to condensed consolidated unaudited financial statements
5
<PAGE> 6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY (UNAUDITED)
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Accumulated
Additional Other Unearned
Common Paid-In Retained Comprehensve ESOP
Stock Capital Earnings Income, Net of Tax Shares
---------- ---------- -------- -------------------- -------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1999 $ 11,439,255 $ 11,518,727 $ 26,508,897 $ 202,922 ($ 1,100,905)
Net income for the three month period -- -- 1,052,050 1,052,050
Cash dividends declared ($0.10 per share) -- -- (409,107) -- --
Paydown of ESOP loan -- -- -- -- 39,318
Net change in unrealized appreciation
(depreciation) on securities available
for sale, net of tax of $97,474 -- -- -- (189,214) --
Issuance of 200 treasury shares due to
exercise of stock options -- -- -- -- --
-----------------------------------------------------------------------------------
Balance at March 31, 1999 $ 11,439,255 $ 11,518,727 $ 27,151,840 $ 13,708 ($ 1,061,587)
===================================================================================
<CAPTION>
Treasury
Stock Totals
--------- ------
<S> <C> <C>
Balance at January 1, 1999 ($ 6,665,946) $ 41,902,950
Net income for the three month period -- 1,052,050
Cash dividends declared ($0.10 per share) (409,107)
Paydown of ESOP loan -- 39,318
Net change in unrealized appreciation
(depreciation) on securities available
for sale, net of tax of $97,474 -- (189,214)
Issuance of 200 treasury shares due to
exercise of stock options 2,838 2,838
-----------------------------
Balance at March 31, 1999 ($6,663,108) $ 42,398,835
=============================
</TABLE>
See notes to condensed consolidated unaudited financial statements.
6
<PAGE> 7
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------------------------
1999 1998
<S> <C> <C>
Cash Flows From Operating Activities:
Cash received from customers' fees and commissions $ 2,208,387 $ 1,844,034
Cash paid to suppliers and employees (3,196,693) (5,461,489)
Loans originated for sale (33,359,424) (36,204,998)
Proceeds from sales of loans held for sale 31,615,426 28,376,764
Interest received 9,680,609 8,682,801
Interest paid (4,921,625) (4,313,039)
Income taxes paid -- (50,000)
------------ ------------
Net cash from operating activities 2,026,680 (7,125,927)
Cash Flows From Investing Activities:
Net decrease in interest earning desposits
in other financial institutions -- (3,168)
Proceeds from principal repayments, maturities and calls of:
Securities available for sale 11,484,555 6,859,039
Proceeds from sales of available for sale securities 385,880 11,081,773
Purchase of securities available for sale (12,430,600) (19,337,535)
Net change(increase)/decrease in loans (20,443,611) 560,837
Recoveries on loan charge-offs 241,551 87,286
Premises and equipment expenditures (353,976) (468,958)
------------ ------------
Net cash from investing activities (21,116,201) (1,220,726)
Cash Flows From Financing Activities:
Net change in deposits 9,713,028 8,969,363
Net change in federal funds purchased (1,100,000) (4,929,000)
Proceeds from short term note payable 3,100,000 --
Proceeds from FHLB advances 1,000,000 8,100,000
Repayment of FHLB advances (1,162,265) (58,501)
Proceeds from stock option exercises 2,838 --
Dividends paid (823,159) (827,964)
------------ ------------
Net cash from financing activities 10,730,442 11,253,898
------------ ------------
Net change in cash and cash equivalents (8,359,079) 2,907,245
Cash and cash equivalents at beginning of period 25,509,144 22,222,385
------------ ------------
Cash and cash equivalents at end of period $ 17,150,065 $ 25,129,630
============ ============
</TABLE>
See notes to condensed consolidated unaudited financial statements
7
<PAGE> 8
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED (UNAUDITED)
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended
March 31
----------------------------------
1999 1998
<S> <C> <C>
Reconciliation Of Net Income To Net
Cash From Operating Activities
Net income $ 1,052,050 1,011,600
Adjustments to reconcile net income to net cash from operating
activities:
Depreciation and amortization 385,258 233,540
Amortization of intangible assets 71,558 48,230
Provision for loan losses 276,000 270,000
Net gain on sale of securities available for sale (732) (33,675)
Loans originated for sale (33,359,424) (36,204,998)
Proceeds from sales of loans held for sale 31,615,426 28,376,764
Net gain on loan sales (368,103) (484,868)
Net gain on sale of fixed assets (1,084) --
Paydown of ESOP loan 39,318 --
Increase/(decrease) in other liabilities and interest payable 3,004,981 76,898
(Increase)/decrease in other assets and interest receivable (688,568) (419,418)
------------ ------------
Net cash from operating activities $ 2,026,680 $ (7,125,927)
============ ============
</TABLE>
8
<PAGE> 9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
For further information, refer to the consolidated financial statements and
footnotes included in the Corporation's annual report for the year ended
December 31, 1998.
NOTE B--EARNINGS AND DIVIDENDS PER COMMON SHARE
Earnings per common share have been computed based on the weighted average
number of shares outstanding during the periods presented. The number of shares
used in the computation of basic earnings per common share was 4,067,198 for
1999 and 4,053,596 for 1998. The number of shares used in the computation of
diluted earnings per common share was 4,104,362 for 1999 and 4,081,910 for 1998.
NOTE C-- ACCOUNTING STANDARD IMPLEMENTED IN 1999
No new accounting standards have been implemented during the first quarter of
1999.
NOTE D-- RISK ELEMENTS AND LOAN LOSS RESERVE
There have been no changes in the Risk Elements and Loan Loss Reserve activity
that would materially effect the Corporation's financial position or results of
operations for the three months ended March 31, 1999.
NOTE E - BENEFIT PLANS
The Company's Board of Directors has adopted a stock option plan. Under the
terms of this plan, options for up to 400,000 shares of the Company's common
stock may be granted to employees and directors of the Company and its
subsidiaries. Stock option plans are used to reward employees and provide them
with an additional equity interest. Options are issued for 10 year periods with
varying vesting periods. The exercise price of the options is determined at the
time of grant by a committee of the Board of Directors and cannot be less than
the fair market value of the stock on the date of grant.
9
<PAGE> 10
NOTE E - BENEFIT PLANS (Continued)
SFAS No. 123 requires proforma disclosures for companies that do not adopt its
fair value accounting method for stock-based employee compensation. Accordingly,
the following proforma information presents net income and earnings per common
share had the fair value method been used to measure compensation cost for stock
option plans. Compensation cost actually recognized for stock options was $-0-
for the three months ended March 31,1999 and 1998.
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Net income for the quarter ended March 31 $ 1,052,050 $ 1,011,600
Proforma net income for the quarter ended March 31 1,010,805 981,191
Basic and diluted earnings per common share as reported $ .26 $ .25
Proforma basic and diluted earnings per common share $ .25 $ .24
The proforma effects are computed using option pricing models, using the
following weighted-average assumptions as of grant date.
<CAPTION>
1998 Grant 1997 Grant
---------- ----------
<S> <C> <C>
Risk-free interest rate 5.38% 6.50%
Expected option life 10 10
Expected stock price volatility 5.45% 5.45%
Dividend yield 2.16% 2.39%
</TABLE>
In future years, the proforma effect of not applying this standard is expected
to increase as additional options are granted.
Information about option grants follows:
<TABLE>
<CAPTION>
Number of
Outstanding Exercise
Options Price
------- -----
<S> <C> <C>
Outstanding, January 1, 1999 217,800 $ 15.09
Exercised (200) 14.19
-------
Outstanding, March 31, 1999 217,600 15.09
</TABLE>
Options outstanding and exercisable at March 31, 1999 were as follows:
<TABLE>
<CAPTION>
Outstanding Exercisable
----------- -----------
Weighted Average Weighted
Remaining Average
Exercise Contractual Exercise
Prices Number Life (in years) Number Price
- ------ ------ --------------- ------ -----
<C> <C> <C> <C> <C>
$14.19 172,100 8.09 28,900 $ 14.19
$18.50 45,500 9.21 -- --
------- ------
Outstanding at year end 217,600 8.32 28,900 14.19
</TABLE>
10
<PAGE> 11
NOTE F - SEGMENT INFORMATION
The reportable segments are determined by the products and services offered,
primarily distinguished between banking, mortgage banking and data processing
operations. Other segments include the accounts of the holding company, Rurban
Financial Corp., which provides management services to its subsidiaries;
Reliance Financial Services, N.A., which provides trust and financial services
to customers nationwide; and Rurban Life, which provides insurance products to
customers of the Corporation's subsidiary banks. Information reported internally
for performance assessment follows.
11
<PAGE> 12
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
RURBAN FINANCIAL CORP. AND SUBSIDIARIES
NOTE F - SEGMENT INFORMATION (Continued)
<TABLE>
<CAPTION>
1998
- ---- Mortgage Data
Banking Banking Processing Other
------- ------- ---------- -----
<S> <C> <C> <C> <C>
Income statement information:
- -----------------------------
Net interest income (expense) $ 5,311,785 $ 143,787 $ (33,795) $ 25,401
Other revenue - external
customers 502,991 319,656 1,028,861 756,853
Other revenue - other segments 2,154 -- 349,138 570,510
------------ ------------ ----------- -----------
Net interest income
and other revenue 5,816,930 463,443 1,344,204 1,352,764
Noninterest expense 3,768,944 397,583 1,233,132 1,882,858
Significant non-cash items:
Depreciation and
amortization 184,136 14,415 271,436 32,548
Provision for loan losses (276,000) -- -- --
Income tax expense (benefit) 487,905 21,311 37,764 (180,208)
Segment profit (loss) 1,284,081 44,549 73,308 (349,886)
Balance sheet information:
Total assets 552,738,472 22,989,448 4,813,923 22,989,448
Goodwill and intangibles 615,000 52,500 -- --
Premises and equipment 7,213,968 154,854 3,549,618 154,854
expenditures, net
<CAPTION>
1998
- ---- Total Intersegment Consolidated
Segments Elimination Totals
-------- ----------- ------
<S> <C> <C> <C>
Income statement information:
- -----------------------------
Net interest income (expense) $ 5,447,178 $ -- $ 5,447,178
Other revenue - external
customers 2,608,361 -- 2,608,361
Other revenue - other segments 921,802 (921,802) --
------------ ------------ ------------
Net interest income
and other revenue 8,977,341 (921,802) 8,055,539
Noninterest expense 7,282,517 (921,802) 6,360,715
Significant non-cash items:
Depreciation and
amortization 502,535 -- 502,535
Provision for loan losses (276,000) -- (276,000)
Income tax expense (benefit) 366,772 -- 366,772
Segment profit (loss) 1,052,052 -- 1,052,052
Balance sheet information:
Total assets 603,531,289 (28,881,932) 574,649,357
Goodwill and intangibles 667,500 -- 667,500
Premises and equipment 11,073,293 -- 11,073,293
expenditures, net
</TABLE>
12
<PAGE> 13
Item 2. Management's Discussion and Analysis of Financial Condition and Results
- -------------------------------------------------------------------------------
of Operations
- -------------
Rurban Financial Corp. ("Rurban") was incorporated on February 23, 1983, under
the laws of the State of Ohio. Rurban is a bank holding company registered with
the Federal Reserve Board under the Bank Holding Company Act of 1956, as
amended. Rurban's subsidiaries, The State Bank and Trust Company ("State Bank"),
The Peoples Banking Company ("Peoples Bank"), The First National Bank of Ottawa
("First National Bank") and The Citizens Savings Bank Company ("Citizens Bank")
are engaged only in the industry segment of commercial banking. Rurban's
subsidiary, Rurbanc Data Services, Inc. ("RDSI"), provides computerized data
processing services for the Corporation's subsidiary banks as well as other
banks and businesses. Rurban's subsidiary, Rurban Life Insurance Company
("Rurban Life") has a certificate of authority from the State of Arizona to
transact insurance as a domestic life and disability reinsurer. Reliance
Financial Services, N.A. ("Reliance"), a wholly owned subsidiary of State Bank,
provides trust and financial services to customers nationwide. Rurban Mortgage
Company ("Rurban Mortgage"), a wholly owned subsidiary of State Bank, operates a
residential mortgage loan production office in Clearwater, Florida. This office
underwrites, processes, closes and sells residential mortgages acquired through
a network of real estate mortgage lenders in the Tampa Bay, Florida market and
community banks in Ohio, including the four Rurban subsidiary banks.
LIQUIDITY
- ---------
Liquidity relates primarily to the Corporation's ability to fund loan demand,
meet deposit customers' withdrawl requirements and provide for operating
expenses. Assets used to satisfy these needs consist of cash, federal funds
sold, securities and loans held for sale. These assets are commonly referred to
as liquid assets. Liquid assets were $120 million at March 31, 1999, compared to
$126 million at December 31, 1998. The $6 million decrease in liquid assets
represents normal fluctuation and was not due to any change in policy of
management regarding liquidity. Management recognizes that securities may need
to be sold in the future to help fund loan demand and, accordingly, as of March
31, 1999, the entire securities portfolio of $82.4 million was classified as
available for sale.
CAPITAL RESOURCES
- -----------------
Total shareholder's equity net of unearned ESOP shares was $42,399,000 as of
March 31, 1999, an increase of $496,000 over $41,903,000 as of December 31,
1998. The increase was primarily due to 1999 net income of $1,052,050, offset by
dividends declared of $409,107 and a net change in unrealized appreciation on
securities available for sale, net of tax of $189,000.
The Corporation's subsidiaries exceed the applicable minimum regulatory capital
requirements at March 31, 1999.
As of March 31, 1999, management is not aware of any current recommendations by
banking regulatory authorities which, if they were to be implemented, would
have, or are reasonably likely to have, a material adverse effect on the
Corporation's liquidity, capital resources or operations.
IMPACT OF YEAR 2000
- -------------------
There have been no material changes in the Company's plans to or status of
addressing the Year 2000 issue. During the first quarter, the company spent
approximately $216,000 of the budgeted $750,000 of Y2K out of pocket expenses.
Progress in the validation and implementation phases of the Y2K plan remains on
schedule. In regard to the validation phase, the Corporation has tested its
mission critical business applications for Y2K compliance and has found these
systems to be Y2K ready, with minor exceptions. These exceptions are scheduled
to be corrected by May 31, 1999. In regard to the implementation phase, the
Corporation has developed remediation contingency plans for items which are
13
<PAGE> 14
not Year 2000 compliant, business resumption contingency plans and a liquidity
contingency plan. Planned activities during the last half of the calendar year
include:
- Continued testing of systems
- Continued contact with customers and vendors to assess their Y2K
readiness and its potential impact on the Corporation
- Refinement and validation of contingency plans
- Employee training in execution of contingency plans
- Executing a Y2K communication plan to educate and continually update
employees, directors, shareholders, customers and community members
and to calm fears which may develop due to sensationalized media
coverage of the millennium change.
Supplemental Information
- ------------------------
Non performing loans decreased $752,000 from December 31, 1998 to $2,870,000 or
0.67% of net loans at March 31, 1999.
Material Changes in Financial Condition
- ---------------------------------------
Loans and loans held for sale increased $22 million from December 31, 1998 to
$429 million at March 31, 1999; an annualized rate of 21%.
Deposits grew $9.7 million from December 31, 1998 to $461 million at March 31,
1999; an annualized rate of 8.6%.
Material Changes in Results of Operations
- -----------------------------------------
Net interest income for the quarter ended March 31, 1999 was $5,447,178, an
increase of $238,664 (4.6%) over the same period in 1998. This increase was
primarily due to an increase in the amount of earning assets.
Total noninterest income increased $214,645 to $2,577,222 for the quarter due
mainly to increases in data processing fees of $186,331, service charges of
$67,077 and other income of $95,897 partially offset by decreases in gains on
loan sales of $116,765 and gains on securities sales of $32,943.
Total noninterest expenses increased $553,078 for the quarter ended March 31,
1999 when compared to the same period in 1998. Salaries and employee benefits
increased $282,847 (8.7%) due to annual merit increases and the hiring of
additional loan officers and data processing staff; partially offset by a 50%
reduction in staffing at Rurban Mortgage Company. Equipment expense increased
$154,023 (27.5%) primarily due to RDSI's purchase of a second mainframe computer
and associated software licensing costs which more than doubled their processing
capacity.
Income tax expense for the quarter was $366,775, a decrease of $146,219 over the
same period in 1998 due to a $100,000 favorable timing adjustment to deferred
income taxes receivable, which reduced the quarter's income tax expense by that
same amount.
The result of all of these factors was an increase in net income of $40,450 to
$1,052,050 for the three months ended March 31, 1999 when compared to the same
period in 1998.
14
<PAGE> 15
Item 3: Quantitative and Qualitative Disclosures About Market Risk
- -------------------------------------------------------------------
There have been no material changes in the Company's quantitative and
qualitative market risks since December 31, 1998. The following table compares
rate sensitive assets and liabilities as of March 31, 1999 to December 31, 1998.
Principal/Notional Amount Maturing In:
(Dollars In Thousands)
<TABLE>
<CAPTION>
First Years
Year 1 to 5 Thereafter Total
---- ------ ---------- -----
<S> <C> <C> <C> <C>
Comparison of 3/31/99 to 12/31/98
Total rate sensitive assets:
At December 31, 1998 $230,007 $231,979 $ 41,876 $503,862
At March 31, 1999 247,267 236,217 35,961 519,445
-------- -------- -------- --------
Increase (decrease) 17,260 4,238 (5,915) 15,583
Total rate sensitive liabilities:
At December 31, 1998 $283,558 $112,996 $ 92,649 $489,203
At March 31, 1999 291,006 121,148 88,648 500,802
-------- -------- -------- --------
Increase (decrease) 7,448 8,152 (4,001) 11,599
</TABLE>
Total rate sensitive assets increased approximately $16 million during the
quarter, due to a $22 million increase in loans. Of this increase, $15 million
was in Commercial Business loans.
Total rate sensitive liabilities increased approximately $12 million during the
quarter. Deposits increased $10 million-primarily certificates of deposits and
money market accounts. During the quarter, as part of the Y2K liquidity planning
effort, customers were encouraged to lengthen certificate of deposit maturities,
resulting in an increase of $8 million in rate sensitive liabilities with
maturities from over one to five years.
15
<PAGE> 16
PART 11 - OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(A) Exhibits
--------
See index on exhibits on pages 15 and 16
(B) Reports on Form 8-K
-------------------
None
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
RURBAN FINANCIAL CORP.
Date May 17, 1999 By /s/ Thomas C. Williams
--------------------------
Thomas C. Williams
President & CEO
By /s/ Richard C. Warrener
--------------------------
Richard C. Warrener
Executive Vice President &
Chief Financial Officer
16
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 16,686,526
<INT-BEARING-DEPOSITS> 180,000
<FED-FUNDS-SOLD> 463,539
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 82,440,972
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 408,486,759
<ALLOWANCE> 5,465,472
<TOTAL-ASSETS> 551,792,356
<DEPOSITS> 460,526,251
<SHORT-TERM> 15,100,000
<LIABILITIES-OTHER> 8,639,245
<LONG-TERM> 25,128,025
0
0
<COMMON> 11,439,255
<OTHER-SE> 30,959,580
<TOTAL-LIABILITIES-AND-EQUITY> 551,792,356
<INTEREST-LOAN> 9,055,302
<INTEREST-INVEST> 1,117,177
<INTEREST-OTHER> 112,627
<INTEREST-TOTAL> 10,285,106
<INTEREST-DEPOSIT> 4,428,269
<INTEREST-EXPENSE> 4,837,928
<INTEREST-INCOME-NET> 5,447,178
<LOAN-LOSSES> 276,000
<SECURITIES-GAINS> 732
<EXPENSE-OTHER> 6,329,575
<INCOME-PRETAX> 1,418,825
<INCOME-PRE-EXTRAORDINARY> 1,418,825
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,052,050
<EPS-PRIMARY> .26
<EPS-DILUTED> .26
<YIELD-ACTUAL> 3.91
<LOANS-NON> 1,423,769
<LOANS-PAST> 1,411,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 11,449,000
<ALLOWANCE-OPEN> 5,408,854
<CHARGE-OFFS> 460,933
<RECOVERIES> 241,551
<ALLOWANCE-CLOSE> 5,465,472
<ALLOWANCE-DOMESTIC> 3,465,044
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,000,428
</TABLE>
