----

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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-Q**

**RURBAN      FINANCIAL CORP. **

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| Ohio                                           |   | 34-1395608                                          |
|------------------------------------------------|--------|-----------------------------------------------------|
| (State                or other jurisdiction of |   | (I.R.S.                Employer Identification No.) |
| incorporation                or organization)  |   |                                                |

| **Common                Shares, without par value** | **4,999,433                shares**                 |
|-----------------------------------------------------|-----------------------------------------------------|
| **(class)**                                         | **(Outstanding                at August 13, 2007)** |

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**RURBAN      FINANCIAL CORP.**

**FORM      10-Q**

**TABLE      OF CONTENTS**

| **PART                I - FINANCIAL INFORMATION** |
|---------------------------------------------------|
|                                              |   |
| Item                1.                            | Financial                Statements |
| Item                2.                            | Management’s                Discussion and Analysis of Financial Condition and Results of                Operations |
| Item                3.                            | Quantitative                and Qualitative Disclosures About Market Risk |
| Item                4.                            | Controls                and Procedures |
|                                                   |   |
| **PART                II - OTHER INFORMATION**    |
|                                              |   |
| Item                1.                            | Legal                Proceedings |
| Item                1A.                           | Risk                Factors |
| Item                2.                            | Unregistered                Sales of Equity Securities and Use of Proceeds |
| Item                3.                            | Defaults                Upon Senior Securities |
| Item                4.                            | Submission                of Matters to a Vote of Security Holders |
| Item                5.                            | Other                Information |
| Item                6.                            | Exhibits |
|                                              |   |
| Signatures                                        |

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**PART      I - FINANCIAL INFORMATION**

**Item      1. Financial Statements**

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**Rurban        Financial Corp.**

**Condensed        Consolidated Balance Sheets **

**June        30, 2007 and December 31, 2006**

|                                                            |   | **(Unaudited)**             |        |                            |   |
|-----------------------------------------------------------------|--------|-----------------------------|-------------|---------------------------------|--------|
|                                                            |   | **June                30,** |        | **December                31,** |   |
|                                                            |   | **2007**                    |        | **2006**                        |   |
| **Assets**                                                      |   |                        |        |                            |   |
| Cash                and due from banks                          |   | $                           | 12,120,732  |                            | $      | 13,381,791 |   |
| Federal                funds sold                               |   |                        | —     |                            |   | 9,100,000 |   |
| Cash                and cash equivalents                        |   |                        | 12,120,732  |                            |   | 22,481,791 |   |
| Interest-bearing                deposits                        |   |                        | —     |                            |   | 150,000 |   |
| Available-for-sale                securities                    |   |                        | 93,376,749  |                            |   | 102,462,075 |   |
| Loans                held for sale                              |   |                        | 389,900     |                            |   | 390,100 |   |
| Loans,                net of unearned income                    |   |                        | 381,661,661 |                            |   | 370,101,809 |   |
| Allowance                for loan losses                        |   |                        | (3,824,445  | )                               |   | (3,717,377 | ) |
| Premises                and equipment                           |   |                        | 15,710,869  |                            |   | 15,449,774 |   |
| Purchased                software                               |   |                        | 4,639,198   |                            |   | 4,618,691 |   |
| Federal                Reserve and Federal Home Loan Bank stock |   |                        | 4,040,700   |                            |   | 3,993,450 |   |
| Foreclosed                assets held for sale, net             |   |                        | 83,891      |                            |   | 82,397 |   |
| Interest                receivable                              |   |                        | 2,971,082   |                            |   | 3,129,774 |   |
| Goodwill                                                        |   |                        | 13,690,092  |                            |   | 13,674,058 |   |
| Core                deposits and other intangibles              |   |                        | 5,503,122   |                            |   | 5,858,982 |   |
| Cash                value of life insurance                     |   |                        | 10,953,313  |                            |   | 10,771,843 |   |
| Other                                                           |   |                        | 6,883,346   |                            |   | 6,559,886 |   |
| Total                assets                                     |   | $                           | 548,200,210 |                            | $      | 556,007,253 |   |

*See      notes to condensed consolidated financial statements      (unaudited)*

*Note:      The balance sheet at December 31, 2006 has been derived from the*
*audited      consolidated financial statements at that date.*

----

**Rurban      Financial Corp.**

**Condensed      Consolidated Balance Sheets **

**June      30, 2007 and December 31, 2006**

|                                                                                                                                                                                                             |   | **(Unaudited)**             |    |        |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|--------------|---------------------------------|--------|
|                                                                                                                                                                                                             |   | **June                30,** |         | **December                31,** |   |
|                                                                                                                                                                                                             |   | **2007**                    |         | **2006**                        |   |
| **Liabilities                and Stockholders’ Equity**                                                                                                                                                    |   |                        |         |                            |   |
| **Liabilities**                                                                                                                                                                                                  |   |                        |         |                            |   |
| Deposits                                                                                                                                                                                                         |   |                        |         |                            |   |
| Demand                                                                                                                                                                                                           |   | $                           | 41,255,495   |                            | $      | 46,565,554 |   |
| Savings,                interest checking and money market                                                                                                                                                       |   |                        | 140,774,725  |                            |   | 130,267,333 |   |
| Time                                                                                                                                                                                                             |   |                        | 225,554,636  |                            |   | 237,722,558 |   |
| Total                deposits                                                                                                                                                                                    |   |                        | 407,584,856  |                            |   | 414,555,445 |   |
| Notes                payable                                                                                                                                                                                     |   |                        | 1,126,860    |                            |   | 2,589,207 |   |
| Federal                Home Loan Bank advances                                                                                                                                                                   |   |                        | 21,000,000   |                            |   | 21,000,000 |   |
| Federal                Funds Purchased                                                                                                                                                                           |   |                        | 1,000,000    |                            |   | — |   |
| Retail                repurchase agreements                                                                                                                                                                      |   |                        | 33,116,993   |                            |   | 32,270,900 |   |
| Trust                preferred securities                                                                                                                                                                        |   |                        | 20,620,000   |                            |   | 20,620,000 |   |
| Interest                payable                                                                                                                                                                                  |   |                        | 2,121,446    |                            |   | 2,224,413 |   |
| Other                liabilities                                                                                                                                                                                 |   |                        | 4,280,560    |                            |   | 5,792,135 |   |
| Total                liabilities                                                                                                                                                                                 |   |                        | 490,850,715  |                            |   | 499,052,100 |   |
| **Commitments                and Contingent Liabilities**                                                                                                                                                        |   |                        |         |                            |   |   |   |
|                                                                                                                                                                                                             |   |                        |         |                            |   |   |   |
| **Stockholders’                Equity**                                                                                                                                                                    |   |                        |         |                            |   |   |   |
| Common                stock, $2.50 stated value; authorized 10,000,000 shares; issued 5,027,433                shares; outstanding June 2007 - 5,015,433 shares, December 2006 -                5,027,433 shares |   |                        | 12,568,583   |                            |   | 12,568,583 |   |
| Additional                paid-in capital                                                                                                                                                                        |   |                        | 14,882,083   |                            |   | 14,859,165 |   |
| Retained                earnings                                                                                                                                                                                 |   |                        | 31,291,504   |                            |   | 30,407,298 |   |
| Accumulated                other comprehensive loss                                                                                                                                                              |   |                        | (1,243,475   | )                               |   | (879,893 | ) |
| Treasury                Stock, at cost                                                                                                                                                                           |   |                        |         |                            |   |   |   |
| Common;                June 2007 - 12,000 shares, December 2006 - 0 shares                                                                                                                                       |   |                        | (149,200     | )                               |   | — |   |
| Total                stockholders’ equity                                                                                                                                                                  |   |                        | 57,349,495   |                            |   | 56,955,153 |   |
| Total                liabilities and stockholders’ equity                                                                                                                                                  |   | $                           | 548,200,210  |                            | $      | 556,007,253 |   |
|                                                                                                                                                                                                                  |   |                        |         |                            |   |   |   |
|                                                                                                                                                                                                                  |   |                        |         |                            |   |   |   |

*See      notes to condensed consolidated financial statements      (unaudited)*

*Note:      The balance sheet at December 31, 2006 has been derived from the*
*audited      consolidated financial statements at that date.*

----

**Rurban        Financial Corp.**

**Condensed        Consolidated Statements of Income (Unaudited)**

**Three        Months Ended**

|                                                                      |   | **June                30,****2007** |      | **June                30,****2006** |   |
|---------------------------------------------------------------------------|--------|-------------------------------------|-----------|-------------------------------------|--------|
| **Interest                Income**                                        |   |                                |      |                                |   |
| Loans                                                                     |   |                                |      |                                |   |
| Taxable                                                                   |   | $                                   | 6,976,506 |                                | $      | 6,043,057 |   |
| Tax-exempt                                                                |   |                                | 17,250    |                                |   | 15,157 |   |
| Securities                                                                |   |                                |      |                                |   |   |   |
| Taxable                                                                   |   |                                | 1,044,300 |                                |   | 1,333,858 |   |
| Tax-exempt                                                                |   |                                | 160,845   |                                |   | 136,570 |   |
| Other                                                                     |   |                                | 35,138    |                                |   | 14,046 |   |
| Total                interest income                                      |   |                                | 8,234,039 |                                |   | 7,542,688 |   |
| **Interest                Expense**                                       |   |                                |      |                                |   |   |   |
| Deposits                                                                  |   |                                | 3,381,667 |                                |   | 2,556,180 |   |
| Other                borrowings                                           |   |                                | 57,546    |                                |   | 26,148 |   |
| Retail                repurchase agreements                               |   |                                | 351,833   |                                |   | 159,276 |   |
| Federal                Home Loan Bank advances                            |   |                                | 242,658   |                                |   | 533,845 |   |
| Trust                preferred securities                                 |   |                                | 450,197   |                                |   | 436,776 |   |
| Total                interest expense                                     |   |                                | 4,483,901 |                                |   | 3,712,225 |   |
|                                                                      |   |                                |      |                                |   |   |   |
| **Net                Interest Income**                                    |   |                                | 3,750,138 |                                |   | 3,830,463 |   |
|                                                                      |   |                                |      |                                |   |   |   |
| **Provision                for Loan Losses**                              |   |                                | 145,594   |                                |   | 56,321 |   |
|                                                                      |   |                                |      |                                |   |   |   |
| **Net                Interest Income After Provision for Loan Losses**    |   |                                | 3,604,544 |                                |   | 3,774,142 |   |
|                                                                      |   |                                |      |                                |   |   |   |
| **Non-interest                Income**                                    |   |                                |      |                                |   |   |   |
| Data                service fees                                          |   |                                | 4,629,258 |                                |   | 3,286,586 |   |
| Trust                fees                                                 |   |                                | 865,880   |                                |   | 792,227 |   |
| Customer                service fees                                      |   |                                | 533,209   |                                |   | 542,687 |   |
| Net                gains on loan sales                                    |   |                                | 174,168   |                                |   | 71,664 |   |
| Loan                servicing fees                                        |   |                                | 89,432    |                                |   | 117,785 |   |
| Net                realized gain on sale of available-for-sale securities |   |                                | 367       |                                |   | — |   |
| Gain                (loss) on sale of assets                              |   |                                | 14,010    |                                |   | 78,558 |   |
| Other                                                                     |   |                                | 201,376   |                                |   | 378,745 |   |
| Total                non-interest income                                  |   |                                | 6,507,700 |                                |   | 5,268,252 |   |
|                                                                           |   |                                |      |                                |   |   |   |
|                                                                      |   |                                |      |                                |   |   |   |

*See      notes to condensed consolidated financial statements      (unaudited)*

----

**Rurban        Financial Corp.**

**Condensed        Consolidated Statements of Income (Unaudited)**

**Three        Months Ended**

|                                            |   | **June                30,****2007** |      | **June                30,****2006** |   |
|-------------------------------------------------|--------|-------------------------------------|-----------|-------------------------------------|--------|
| **Non-interest                Expense**         |   |                                |      |                                |   |
| Salaries                and employee benefits   |   | $                                   | 4,185,324 |                                | $      | 3,795,252 |   |
| Net                occupancy expense            |   |                                | 505,925   |                                |   | 425,918 |   |
| Equipment                expense                |   |                                | 1,676,676 |                                |   | 1,347,634 |   |
| Data                processing fees             |   |                                | 114,243   |                                |   | 119,368 |   |
| Professional                fees                |   |                                | 501,015   |                                |   | 524,902 |   |
| Marketing                expense                |   |                                | 187,098   |                                |   | 242,498 |   |
| Printing                and office supplies     |   |                                | 181,362   |                                |   | 173,361 |   |
| Telephone                and communications     |   |                                | 437,690   |                                |   | 407,648 |   |
| Postage                and delivery expense     |   |                                | 384,091   |                                |   | 122,267 |   |
| State,                local and other taxes     |   |                                | 165,175   |                                |   | 190,436 |   |
| Employee                expense                 |   |                                | 280,078   |                                |   | 260,523 |   |
| Other                                           |   |                                | 446,693   |                                |   | 470,068 |   |
| Total                non-interest expense       |   |                                | 9,065,370 |                                |   | 8,079,875 |   |
|                                                 |   |                                |      |                                |   |   |   |
| **Income                Before Income Tax**     |   |                                | 1,046,874 |                                |   | 962,519 |   |
|                                            |   |                                |      |                                |   |   |   |
| **Provision                for Income Taxes**   |   |                                | 261,829   |                                |   | 248,996 |   |
|                                            |   |                                |      |                                |   |   |   |
| **Net                Income**                   |   | $                                   | 785,045   |                                | $      | 713,523 |   |
|                                            |   |                                |      |                                |   |   |   |
| **Basic                Earnings Per Share**     |   | $                                   | 0.16      |                                | $      | 0.14 |   |
|                                            |   |                                |      |                                |   |   |   |
| **Diluted                Earnings Per Share**   |   | $                                   | 0.16      |                                | $      | 0.14 |   |
|                                            |   |                                |      |                                |   |   |   |
| **Dividends                Declared Per Share** |   | $                                   | 0.06      |                                | $      | 0.05 |   |
|                                                 |   |                                |      |                                |   |   |   |
|                                                 |   |                                |      |                                |   |   |   |

*See      notes to condensed consolidated financial statements      (unaudited)*

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**Rurban      Financial Corp.**

**Condensed        Consolidated Statements of Income (Unaudited)**

**Six        Months Ended**

|                                                                   |   | **June                30,****2007** |       | **June                30,****2006** |   |
|------------------------------------------------------------------------|--------|-------------------------------------|------------|-------------------------------------|--------|
| **Interest                Income**                                     |   |                                |       |                                |   |
| Loans                                                                  |   |                                |       |                                |   |
| Taxable                                                                |   | $                                   | 13,653,319 |                                | $      | 11,597,211 |   |
| Tax-exempt                                                             |   |                                | 34,543     |                                |   | 27,392 |   |
| Securities                                                             |   |                                |       |                                |   |   |   |
| Taxable                                                                |   |                                | 2,135,497  |                                |   | 2,646,459 |   |
| Tax-exempt                                                             |   |                                | 313,902    |                                |   | 268,403 |   |
| Other                                                                  |   |                                | 113,606    |                                |   | 50,312 |   |
| Total                interest income                                   |   |                                | 16,250,867 |                                |   | 14,589,777 |   |
| **Interest                Expense**                                    |   |                                |       |                                |   |   |   |
| Deposits                                                               |   |                                | 6,715,397  |                                |   | 4,677,394 |   |
| Other                borrowings                                        |   |                                | 108,618    |                                |   | 52,447 |   |
| Retail                repurchase agreements                            |   |                                | 695,682    |                                |   | 283,553 |   |
| Federal                Home Loan Bank advances                         |   |                                | 492,245    |                                |   | 1,016,666 |   |
| Trust                preferred securities                              |   |                                | 895,511    |                                |   | 865,198 |   |
| Total                interest expense                                  |   |                                | 8,907,453  |                                |   | 6,895,258 |   |
|                                                                   |   |                                |       |                                |   |   |   |
| **Net                Interest Income**                                 |   |                                | 7,343,414  |                                |   | 7,694,519 |   |
|                                                                   |   |                                |       |                                |   |   |   |
| **Provision                for Loan Losses**                           |   |                                | 238,234    |                                |   | 302,321 |   |
|                                                                   |   |                                |       |                                |   |   |   |
| **Net                Interest Income After Provision for Loan Losses** |   |                                | 7,105,180  |                                |   | 7,392,198 |   |
|                                                                   |   |                                |       |                                |   |   |   |
| **Non-interest                Income**                                 |   |                                |       |                                |   |   |   |
| Data                service fees                                       |   |                                | 9,463,394  |                                |   | 6,527,720 |   |
| Trust                fees                                              |   |                                | 1,692,262  |                                |   | 1,607,678 |   |
| Customer                service fees                                   |   |                                | 1,061,633  |                                |   | 1,092,754 |   |
| Net                gains on loan sales                                 |   |                                | 228,447    |                                |   | 132,710 |   |
| Net                realized gains on sales of available-for-sale       |   |                                | 367        |                                |   | — |   |
| Loan                servicing fees                                     |   |                                | 198,138    |                                |   | 204,479 |   |
| Gain                (loss) on sale of assets                           |   |                                | 49,977     |                                |   | 59,432 |   |
| Other                                                                  |   |                                | 552,224    |                                |   | 651,778 |   |
| Total                non-interest income                               |   |                                | 13,246,442 |                                |   | 10,276,551 |   |
|                                                                   |   |                                |       |                                |   |   |   |
|                                                                        |   |                                |       |                                |   |   |   |

*See      notes to condensed consolidated financial statements      (unaudited)*

----

**Rurban      Financial Corp.**

**Condensed        Consolidated Statements of Income (Unaudited)**

**Six        Months Ended**

|                                            |   | **June                30,****2007** |       | **June                30,****2006** |   |
|-------------------------------------------------|--------|-------------------------------------|------------|-------------------------------------|--------|
| **Non-interest                Expense**         |   |                                |       |                                |   |
| Salaries                and employee benefits   |   | $                                   | 8,582,111  |                                | $      | 7,652,985 |   |
| Net                occupancy expense            |   |                                | 1,033,058  |                                |   | 865,867 |   |
| Equipment                expense                |   |                                | 3,282,549  |                                |   | 2,723,461 |   |
| Data                processing fees             |   |                                | 270,424    |                                |   | 255,958 |   |
| Professional                fees                |   |                                | 1,178,406  |                                |   | 1,044,267 |   |
| Marketing                expense                |   |                                | 342,783    |                                |   | 368,946 |   |
| Printing                and office supplies     |   |                                | 379,454    |                                |   | 326,345 |   |
| Telephone                and communications     |   |                                | 882,894    |                                |   | 810,015 |   |
| Postage                and delivery expense     |   |                                | 776,352    |                                |   | 254,260 |   |
| State,                local and other taxes     |   |                                | 364,916    |                                |   | 324,293 |   |
| Employee                expense                 |   |                                | 535,147    |                                |   | 509,912 |   |
| Other                                           |   |                                | 737,529    |                                |   | 893,597 |   |
| Total                non-interest expense       |   |                                | 18,365,623 |                                |   | 16,029,906 |   |
|                                                 |   |                                |       |                                |   |   |   |
| **Income                Before Income Tax**     |   |                                | 1,985,999  |                                |   | 1,638,843 |   |
|                                            |   |                                |       |                                |   |   |   |
| **Provision                for Income Taxes**   |   |                                | 498,501    |                                |   | 402,775 |   |
|                                            |   |                                |       |                                |   |   |   |
| **Net                Income**                   |   | $                                   | 1,487,498  |                                | $      | 1,236,068 |   |
|                                            |   |                                |       |                                |   |   |   |
| **Basic                Earnings Per Share**     |   | $                                   | 0.30       |                                | $      | 0.25 |   |
|                                            |   |                                |       |                                |   |   |   |
| **Diluted                Earnings Per Share**   |   | $                                   | 0.30       |                                | $      | 0.25 |   |
|                                            |   |                                |       |                                |   |   |   |
| **Dividends                Declared Per Share** |   | $                                   | 0.12       |                                | $      | 0.10 |   |
|                                                 |   |                                |       |                                |   |   |   |
|                                                 |   |                                |       |                                |   |   |   |

*See      notes to condensed consolidated financial statements      (unaudited)*

----

| **RURBAN                FINANCIAL CORP.**                                                             |
|-------------------------------------------------------------------------------------------------------|
| **CONDENSED                CONSOLIDATED STATEMENTS OF CHANGES IN                STOCKHOLDERS’** |
| **EQUITY                (UNAUDITED)**                                                                 |

|                                                   |   | Three                Months Ended |       | Six                Months Ended |   |
|--------------------------------------------------------|--------|-----------------------------------|------------|---------------------------------|--------|
|                                                   |   | June                30, 2007      |       | June                30, 2006    |   | June                30, 2007 |   | June                30, 2006 |   |
|                                                   |   |                              |       |                            |   |   |   |   |   |
| Balance                at beginning of period          |   | $                                 | 57,711,304 |                            | $      | 54,051,932 |   | $ | 56,955,153 |   | $ | 54,450,648 |   |
|                                                   |   |                              |       |                            |   |   |   |   |   |   |   |   |   |
| Net                Income                              |   |                              | 785,045    |                            |   | 713,523 |   |   | 1,487,498 |   |  | 1,236,068 |   |
|                                                   |   |                              |       |                            |   |   |   |   |   |   |   |   |   |
| Other                comprehensive income (loss):      |   |                              |       |                            |   |   |   |   |   |   |   |   |   |
| Net                change in unrealized gains (losses) |   |                              |       |                            |   |   |   |   |   |   |   |   |   |
| On                securities available for sale, net   |   |                              | (705,666   | )                               |   | (493,897 | ) |   | (363,584 | ) |   | (1,169,727 | ) |
| Total                comprehensive income (loss)       |   |                              | 79,379     |                            |   | 219,626 |   |   | 1,123,914 |   |   | 66,341 |   |
|                                                        |   |                              |       |                            |   |   |   |   |   |   |   |   |   |
| Cash                dividend                           |   |                              | (301,647   | )                               |   | (251,372 | ) |   | (603,290 | ) |   | (502,741 | ) |
|                                                   |   |                              |       |                            |   |   |   |   |   |   |   |   |   |
| Purchase                of treasury shares             |   |                              | (149,200   | )                               |   | — |   |   | (149,200 | ) |   | — |   |
|                                                   |   |                              |       |                            |   |   |   |   |   |   |   |   |   |
| Stock                option expense                    |   |                              | 9,659      |                            |   | 5,940 |   |   | 22,918 |   |   | 11,878 |   |
|                                                   |   |                              |       |                            |   |   |   |   |   |   |   |   |   |
| Balance                at end of period                |   | $                                 | 57,349,495 |                            | $      | 54,026,126 |   | $ | 57,349,495 |   | $ | 54,026,126 |   |

*See      notes to condensed consolidated financial statements      (unaudited)*

----

**Rurban      Financial Corp.**

**Condensed      Consolidated Statements of Cash Flows (Unaudited)**

**Six      Months Ended**

|                                                                      |   | **June                30, 2007** |        | **June                30, 2006** |   |
|---------------------------------------------------------------------------|--------|----------------------------------|-------------|----------------------------------|--------|
| **Operating                Activities**                                   |   |                             |        |                             |   |
| Net                income                                                 |   | $                                | 1,487,498   |                             | $      | 1,236,068 |   |
| Items                not requiring (providing) cash                       |   |                             |        |                             |   |   |   |
| Depreciation                and amortization                              |   |                             | 1,962,303   |                             |   | 1,717,743 |   |
| Provision                for loan losses                                  |   |                             | 238,234     |                             |   | 302,321 |   |
| Expense                of stock option plan                               |   |                             | 22,918      |                             |   | 11,878 |   |
| Amortization                of premiums and discounts on securities       |   |                             | 18,329      |                             |   | 125,158 |   |
| Amortization                of intangible assets                          |   |                             | 355,860     |                             |   | 233,520 |   |
| Deferred                income taxes                                      |   |                             | 1,105,680   |                             |   | (613,792 | ) |
| FHLB                Stock Dividends                                       |   |                             | (47,250     | )                                |   | (84,900 | ) |
| Proceeds                from sale of loans held for sale                  |   |                             | 8,184,841   |                             |   | 6,864,003 |   |
| Originations                of loans held for sale                        |   |                             | (7,956,195  | )                                |   | (6,507,295 | ) |
| Gain                from sale of loans                                    |   |                             | (228,447    | )                                |   | (132,710 | ) |
| (Gain)                loss on sale of foreclosed assets                   |   |                             | (7,666      | )                                |   | (66,454 | ) |
| (Gain)                loss on sales of fixed assets                       |   |                             | (42,311     | )                                |   | 7,022 |   |
| Changes                in                                                 |   |                             |        |                             |   |   |   |
| Interest                receivable                                        |   |                             | 158,692     |                             |   | (57,928 | ) |
| Other                assets                                               |   |                             | (504,930    | )                                |   | (560,973 | ) |
| Interest                payable and other liabilities                     |   |                             | (2,532,923  | )                                |   | (865,297 | ) |
| Net                cash provided by operating activities                  |   |                             | 2,214,633   |                             |   | 1,608,364 |   |
| **Investing                Activities**                                   |   |                             |        |                             |   |   |   |
| Purchases                of available-for-sale securities                 |   |                             | (15,399,580 | )                                |   | (12,727,731 | ) |
| Proceeds                from maturities of available-for-sale securities  |   |                             | 23,507,087  |                             |   | 5,008,771 |   |
| Proceeds                from sales of available-for-sale securities       |   |                             | 408,608     |                             |   | 15,562,738 |   |
| Net                change in interest bearing deposits                    |   |                             | 150,000     |                             |   | — |   |
| Net                change in loans                                        |   |                             | (11,828,901 | )                                |   | (33,623,712 | ) |
| Purchase                of premises and equipment and software            |   |                             | (2,453,476  | )                                |   | (2,702,597 | ) |
| Proceeds                from sales of premises and equipment              |   |                             | 251,882     |                             |   | 23,741 |   |
| Proceeds                from sale of foreclosed assets                    |   |                             | 144,055     |                             |   | 2,581,996 |   |
| Cash                paid to shareholders of Exchange Bank acquisition     |   |                             | —     |                             |   | (6,453,084 | ) |
| Cash                paid for Diverse Computer Marketers, Inc. acquisition |   |                             | (16,034     | )                                |   | — |   |
| Net                cash provided by (used in) investing activities        |   |                             | (5,236,359  | )                                |   | (32,329,878 | ) |

*See      notes to condensed consolidated financial statements      (unaudited)*

----

**Rurban      Financial Corp.**

**Condensed      Consolidated Statements of Cash Flows (Unaudited) (continued)**

**Six      Months Ended**

|                                                                                                                           |   | **June                30, 2007** |        | **June                30, 2006** |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|-------------|----------------------------------|--------|
| **Financing                Activities**                                                                                        |   |                             |        |                             |   |
| Net                increase (decrease) in demand deposits, money market, interest checking                and savings accounts |   | $                                | 5,197,333   |                             | $      | (5,905,987 | ) |
| Net                increase (decrease) in certificates of deposit                                                              |   |                             | (12,167,922 | )                                |   | 22,024,044 |   |
| Net                increase (decrease) in securities sold under agreements to                repurchase                        |   |                             | 846,093     |                             |   | 11,360,656 |   |
| Net                decrease in federal funds purchased                                                                         |   |                             | 1,000,000   |                             |   | (4,600,000 | ) |
| Proceeds                from Federal Home Loan Bank advances                                                                   |   |                             | 3,500,000   |                             |   | 23,900,000 |   |
| Repayment                of Federal Home Loan Bank advances                                                                    |   |                             | (3,500,000  | )                                |   | (15,900,000 | ) |
| Repayment                of notes payable                                                                                      |   |                             | (1,462,347  | )                                |   | (938,572 | ) |
| Purchase                of treasury stock                                                                                      |   |                             | (149,200    | )                                |   | — |   |
| Dividends                paid                                                                                                  |   |                             | (603,290    | )                                |   | (502,741 | ) |
| Net                cash (used in) provided by financing activities                                                             |   |                             | (7,339,333  | )                                |   | 29,437,400 |   |
|                                                                                                                           |   |                             |        |                             |   |   |   |
| **Increase                (Decrease) in Cash and Cash Equivalents**                                                            |   |                             | (10,361,059 | )                                |   | (1,284,114 | ) |
|                                                                                                                           |   |                             |        |                             |   |   |   |
| **Cash                and Cash Equivalents, Beginning of Year**                                                                |   |                             | 22,481,791  |                             |   | 12,650,839 |   |
|                                                                                                                           |   |                             |        |                             |   |   |   |
| **Cash                and Cash Equivalents, End of Period**                                                                    |   | $                                | 12,120,732  |                             | $      | 11,366,725 |   |
| **Supplemental                Cash Flows Information**                                                                         |   |                             |        |                             |   |   |   |
|                                                                                                                                |   |                             |        |                             |   |   |   |
| Interest                paid                                                                                                   |   | $                                | 9,010,420   |                             | $      | 6,563,571 |   |
|                                                                                                                           |   |                             |        |                             |   |   |   |
| Transfer                of loans to foreclosed assets                                                                          |   | $                                | 137,883     |                             | $      | 336,833 |   |

*See      notes to condensed consolidated financial statements      (unaudited)*

----

**RURBAN      FINANCIAL CORP. **

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

**NOTE      A—BASIS OF PRESENTATION**

**NOTE      B—EARNINGS PER SHARE**

|                                      |   | Three                Months Ended |      | Six                Months Ended |   |
|-------------------------------------------|--------|-----------------------------------|-----------|---------------------------------|--------|
|                                      |   | June                30            |      | June                30          |   |
|                                           |   | 2007                              |      | 2006                            |   | 2007 |   | 2006 |   |
| Basic                earnings per share   |   |                              | 5,025,100 |                            |   | 5,027,433 |   |   | 5,026,260 |   |   | 5,027,433 |   |
| Diluted                earnings per share |   |                              | 5,030,441 |                            |   | 5,028,397 |   |   | 5,026,893 |   |   | 5,029,338 |   |

**NOTE      C - LOANS, RISK ELEMENTS AND ALLOWANCE FOR LOAN LOSSES**

|                                                            |   | June                  30, |        | December                  31, |   |
|-----------------------------------------------------------------|--------|---------------------------|-------------|-------------------------------|--------|
|                                                            |   | 2007                      |        | 2006                          |   |
|                                                            |   |                      |        |                          |   |
| Commercial                                                      |   | $                         | 77,064,200  |                          | $      | 71,640,907 |   |
| Commercial                  real estate                         |   |                      | 119,174,980 |                          |   | 109,503,312 |   |
| Agricultural                                                    |   |                      | 46,173,520  |                          |   | 44,682,699 |   |
| Residential                  real estate                        |   |                      | 87,991,361  |                          |   | 94,389,118 |   |
| Consumer                                                        |   |                      | 51,028,736  |                          |   | 49,314,080 |   |
| Lease                  financing                                |   |                      | 503,126     |                          |   | 856,808 |   |
| Total                  loans                                    |   |                      | 381,935,923 |                          |   | 370,386,924 |   |
| Less                                                            |   |                      |        |                          |   |   |   |
| Net                  deferred loan fees, premiums and discounts |   |                      | (274,262    | )                             |   | (285,115 | ) |
|                                                            |   |                      |        |                          |   |   |   |
| Loans,                  net of unearned income                  |   | $                         | 381,661,661 |                          | $      | 370,101,809 |   |
|                                                            |   |                      |        |                          |   |   |   |
| Allowance                  for loan losses                      |   | $                         | (3,824,445  | )                             | $      | (3,717,377 | ) |

----

|                                        |   | Three                Months Ended |      | Six                Months Ended |   |
|---------------------------------------------|--------|-----------------------------------|-----------|---------------------------------|--------|
|                                        |   | June                30,           |      | June                30,         |   |
|                                             |   | 2007                              |      | 2006                            |   | 2007 |   | 2006 |   |
| Balance,                beginning of period |   | $                                 | 3,768,814 |                            | $      | 4,348,541 |   | $ | 3,717,377 |   | $ | 4,699,827 |   |
| Provision                charged to expense |   |                              | 145,594   |                            |   | 56,321 |   |   | 238,234 |   |   | 302,321 |   |
| Recoveries                                  |   |                              | 46,448    |                            |   | 154,342 |   |   | 100,491 |   |   | 297,643 |   |
| Loans                charged off            |   |                              | (136,411  | )                               |   | (121,065 | ) |   | (231,657 | ) |   | (861,652 | ) |
| Balance,                end of period       |   | $                                 | 3,824,445 |                            | $      | 4,438,139 |   | $ | 3,824,445 |   | $ | 4,438,139 |   |

|                                                                                                                                                    |   | June                  30, |      | December                  31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|-----------|-------------------------------|--------|
|                                                                                                                                                         |   | 2007                      |      | 2006                          |   |
| Non-accrual                  loans                                                                                                                      |   | $                         | 5,913,000 |                          | $      | 3,828,000 |   |
|                                                                                                                                                    |   |                      |      |                          |   |   |   |
| Accruing                  loans which are contractually past due 90 days or more as to interest                  or                  principal payments |   |                      | —   |                          |   | — |   |
| Total                  non-performing loans                                                                                                             |   | $                         | 5,913,000 |                          | $      | 3,828,000 |   |

|                                                               |   | June                  30, |      | December                  31, |   |
|--------------------------------------------------------------------|--------|---------------------------|-----------|-------------------------------|--------|
|                                                               |   | 2007                      |      | 2006                          |   |
|                                                               |   |                      |      |                          |   |
| Loans                  with no allowance for loan losses allocated |   | $                         | 1,058,000 |                          | $      | 608,000 |   |
| Loans                  with allowance for loan losses allocated    |   |                      | 1,470,000 |                          |   | 1,514,000 |   |
| Total                  impaired loans                              |   | $                         | 2,528,000 |                          | $      | 2,122,000 |   |
|                                                               |   |                      |      |                          |   |   |   |
| Amount                  of allowance allocated                     |   | $                         | 151,000   |                          | $      | 225,000 |   |

**NOTE      D - REGULATORY MATTERS**

----

* *

|                                                                      |   | **Actual** |   | **Minimum                  Required For****Capital                  Adequacy Purposes** |   | **To                  Be Well Capitalized Under****Prompt                  Corrective Action Provisions** |   |
|---------------------------------------------------------------------------|--------|------------|--------|-----------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|--------|
|                                                                      |   | **Amount** |   | **Ratio**                                                                               |   | **Amount**                                                                                                |   | **Ratio** |   | **Amount** |   | **Ratio** |   |
| As                  of June 30, 2007                                      |   |       |   |                                                                                    |   |                                                                                                      |   |   |   |   |   |   |   |
| Total                  Capital(to                  Risk-Weighted Assets)  |   |       |   |                                                                                    |   |                                                                                                      |   |   |   |   |   |   |   |
| Consolidated                                                              |   | $          | 63.2   |                                                                                    |   | 15.9                                                                                                      | %      | $ | 31.7 |   |   | 8.0 | % | $ | — |   |   | N/A |   |
| State                  Bank                                               |   |       | 48.1   |                                                                                    |   | 12.5                                                                                                      |   |   | 30.7 |   |   | 8.0 |   |   | 38.4 |   |   | 10.0 |   |
|                                                                      |   |       |   |                                                                                    |   |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                  I Capital(to                  Risk-Weighted Assets) |   |       |   |                                                                                    |   |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                                              |   |       | 58.9   |                                                                                    |   | 14.9                                                                                                      |   |   | 15.9 |   |   | 4.0 |   |   | — |   |   | N/A |   |
| State                  Bank                                               |   |       | 44.3   |                                                                                    |   | 11.5                                                                                                      |   |   | 15.3 |   |   | 4.0 |   |   | 23.0 |   |   | 6.0 |   |
|                                                                      |   |       |   |                                                                                    |   |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                  I Capital(to                  Average Assets)       |   |       |   |                                                                                    |   |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                                              |   |       | 58.9   |                                                                                    |   | 10.7                                                                                                      |   |   | 22.0 |   |   | 4.0 |   |   | — |   |   | N/A |   |
| State                  Bank                                               |   |       | 44.3   |                                                                                    |   | 8.4                                                                                                       |   |   | 21.2 |   |   | 4.0 |   |   | 26.4 |   |   | 5.0 |   |
| As                  of December 31, 2006                                  |   |       |   |                                                                                    |   |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Capital(to                  Risk-Weighted Assets)  |   |       |   |                                                                                    |   |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                                              |   | $          | 62.0   |                                                                                    |   | 16.0                                                                                                      | %      | $ | 30.9 |   |   | 8.0 | % | $ | — |   |   | N/A |   |
| State                  Bank                                               |   |       | 38.9   |                                                                                    |   | 12.2                                                                                                      |   |   | 25.4 |   |   | 8.0 |   |   | 31.8 |   |   | 10.0 |   |
| Exchange                  Bank                                            |   |       | 7.8    |                                                                                    |   | 13.2                                                                                                      |   |   | 4.8 |   |   | 8.0 |   |   | 6.0 |   |   | 10.0 |   |
|                                                                      |   |       |   |                                                                                    |   |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                  I Capital(to                  Risk-Weighted Assets) |   |       |   |                                                                                    |   |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                                              |   |       | 57.6   |                                                                                    |   | 14.9                                                                                                      |   |   | 15.5 |   |   | 4.0 |   |   | — |   |   | N/A |   |
| State                  Bank                                               |   |       | 35.9   |                                                                                    |   | 11.3                                                                                                      |   |   | 12.7 |   |   | 4.0 |   |   | 19.1 |   |   | 6.0 |   |
| Exchange                  Bank                                            |   |       | 7.1    |                                                                                    |   | 11.9                                                                                                      |   |   | 2.4 |   |   | 4.0 |   |   | 3.6 |   |   | 6.0 |   |
|                                                                      |   |       |   |                                                                                    |   |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                  I Capital(to                  Average Assets)       |   |       |   |                                                                                    |   |                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                                              |   |       | 57.6   |                                                                                    |   | 10.5                                                                                                      |   |   | 22.0 |   |   | 4.0 |   |   | — |   |   | N/A |   |
| State                  Bank                                               |   |       | 35.9   |                                                                                    |   | 7.9                                                                                                       |   |   | 18.2 |   |   | 4.0 |   |   | 22.8 |   |   | 5.0 |   |
| Exchange                  Bank                                            |   |       | 7.1    |                                                                                    |   | 8.7                                                                                                       |   |   | 3.3 |   |   | 4.0 |   |   | 4.1 |   |   | 5.0 |   |

----

**NOTE      E - CONTINGENT LIABILITIES**

**NOTE      F - NEW ACCOUNTING PRONOUNCEMENTS**

*Accounting      for Servicing of Financial Assets: an amendment of FASB Statement      No. 140*

----

*Fair      Value Measurements*

*Accounting      for Purchases of Life Insurance-Determining the Amount That Could Be Realized      in      Accordance with FASB Technical Bulletin No. 85-4 (Accounting for Purchases      of      Life Insurance). *

**NOTE      G - COMMITMENTS AND CREDIT RISK**

**NOTE      H - SEGMENT INFORMATION**

----

| NOTE                  H -- SEGMENT INFORMATION (Continued)        |   |
|-------------------------------------------------------------------|--------|
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  of and for the six months ended June 30, 2007 |   |
|                                                              |   |   |   | Data |   |   |   | Total |   | Intersegment |   | Consolidated |   |
| Income                  statement information:                    |   | Banking |   | Processing |   | Other |   | Segments |   | Elimination |   | Totals |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest income (expense)                    |   | $ | 8,404,344 |   | $ | (167,102 | ) | $ | (893,828 | ) | $ | 7,343,414 |   |   |   |   | $ | 7,343,414 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                  income - external                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| customers                                                         |   |   | 3,746,531 |   |   | 9,463,394 |   |   | 36,517 |   |   | 13,246,442 |   |   |   |   |   | 13,246,442 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                  income - other segments             |   |   | 526,948 |   |   | 807,240 |   |   | 658,441 |   |   | 1,992,629 |   |   | (1,992,629 | ) |   | — |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  revenue                                    |   |   | 12,677,823 |   |   | 10,103,532 |   |   | (198,870 | ) |   | 22,582,485 |   |   | (1,992,629 | ) |   | 20,589,856 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                  expense                             |   |   | 10,557,613 |   |   | 8,336,869 |   |   | 1,463,770 |   |   | 20,358,252 |   |   | (1,992,629 | ) |   | 18,365,623 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Significant                  non-cash items:                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                  and                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| amortization                                                      |   |   | 496,575 |   |   | 1,407,664 |   |   | 58,064 |   |   | 1,962,303 |   |   | — |   |   | 1,962,303 |   |
| Provision                  for loan losses                        |   |   | 238,234 |   |   | — |   |   | — |   |   | 238,234 |   |   | — |   |   | 238,234 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax expense (benefit)                     |   |   | 480,126 |   |   | 600,665 |   |   | (582,290 | ) |   | 498,501 |   |   | — |   |   | 498,501 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment                  profit (loss)                            |   | $ | 1,401,850 |   | $ | 1,165,998 |   | $ | (1,080,350 | ) | $ | 1,487,498 |   | $ | — |   | $ | 1,487,498 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  sheet information:                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  assets                                     |   | $ | 529,530,988 |   | $ | 19,591,386 |   | $ | 8,062,404 |   | $ | 557,184,778 |   | $ | (8,984,568 | ) | $ | 548,200,210 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                  and intangibles                         |   |   | 11,926,264 |   |   | 7,266,950 |   |   | — |   |   | 19,193,214 |   |   | — |   |   | 19,193,214 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Premises                  and equipment expenditures              |   |   | 1,000,030 |   |   | 1,392,255 |   |   | 61,191 |   |   | 2,453,476 |   |   | — |   |   | 2,453,476 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| NOTE                H -- SEGMENT INFORMATION (Continued)        |   |
|-----------------------------------------------------------------|--------|
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                of and for the six months ended June 30, 2006 |   |
|                                                            |   |   |   | Data |   |   |   | Total |   | Intersegment |   | Consolidated |   |
| Income                statement information:                    |   | Banking |   | Processing |   | Other |   | Segments |   | Elimination |   | Totals |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income (expense)                    |   | $ | 8,663,691 |   | $ | (97,590 | ) | $ | (871,582 | ) | $ | 7,694,519 |   |   |   |   | $ | 7,694,519 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                income - external                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| customers                                                       |   |   | 3,706,650 |   |   | 6,527,720 |   |   | 42,181 |   |   | 10,276,551 |   |   |   |   |   | 10,276,551 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                income - other segments             |   |   | 52,397 |   |   | 840,001 |   |   | 548,353 |   |   | 1,440,751 |   |   | (1,440,751 | ) |   | — |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                revenue                                    |   |   | 12,422,738 |   |   | 7,270,131 |   |   | (281,048 | ) |   | 19,411,821 |   |   | (1,440,751 | ) |   | 17,971,070 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                expense                             |   |   | 10,467,131 |   |   | 5,755,990 |   |   | 1,247,536 |   |   | 17,470,657 |   |   | (1,440,751 | ) |   | 16,029,906 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Significant                non-cash items:                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                and                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| amortization                                                    |   |   | 481,927 |   |   | 1,186,084 |   |   | 49,732 |   |   | 1,717,743 |   |   | — |   |   | 1,717,743 |   |
| Provision                for loan losses                        |   |   | 302,321 |   |   | — |   |   | — |   |   | 302,321 |   |   | — |   |   | 302,321 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                tax expense (benefit)                     |   |   | 414,460 |   |   | 514,808 |   |   | (526,493 | ) |   | 402,775 |   |   | — |   |   | 402,775 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment                profit (loss)                            |   | $ | 1,238,826 |   | $ | 999,333 |   | $ | (1,002,091 | ) | $ | 1,236,068 |   | $ | — |   | $ | 1,236,068 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                sheet information:                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                assets                                     |   | $ | 546,859,859 |   | $ | 13,882,700 |   | $ | 11,851,454 |   | $ | 572,594,013 |   | $ | (20,748,858 | ) | $ | 551,845,155 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                and intangibles                         |   |   | 12,314,160 |   |   | — |   |   | — |   |   | 12,314,160 |   |   | — |   |   | 12,314,160 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Premises                and equipment expenditures              |   |   | 410,288 |   |   | 2,216,279 |   |   | 76,030 |   |   | 2,702,597 |   |   | — |   |   | 2,702,597 |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| NOTE                  H -- SEGMENT INFORMATION (Continued)          |   |
|---------------------------------------------------------------------|--------|
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  of and for the three months ended June 30, 2007 |   |
|                                                                |   |   |   | Data |   |   |   | Total |   | Intersegment |   | Consolidated |   |
| Income                  statement information:                      |   | Banking |   | Processing |   | Other |   | Segments |   | Elimination |   | Totals |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest income (expense)                      |   | $ | 4,272,915 |   | $ | (73,444 | ) | $ | (449,333 | ) | $ | 3,750,138 |   |   |   |   | $ | 3,750,138 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                  income - external                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| customers                                                           |   |   | 1,856,794 |   |   | 4,629,258 |   |   | 21,648 |   |   | 6,507,700 |   |   |   |   |   | 6,507,700 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                  income - other segments               |   |   | 824 |   |   | 392,015 |   |   | 345,395 |   |   | 738,234 |   |   | (738,234 | ) |   | — |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  revenue                                      |   |   | 6,130,533 |   |   | 4,947,829 |   |   | (82,290 | ) |   | 10,996,072 |   |   | (738,234 | ) |   | 10,257,838 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                  expense                               |   |   | 4,847,410 |   |   | 4,228,103 |   |   | 728,091 |   |   | 9,803,604 |   |   | (738,234 | ) |   | 9,065,370 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Significant                  non-cash items:                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                  and                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| amortization                                                        |   |   | 255,990 |   |   | 708,027 |   |   | 29,555 |   |   | 993,572 |   |   | — |   |   | 993,572 |   |
| Provision                  for loan losses                          |   |   | 145,594 |   |   | — |   |   | — |   |   | 145,594 |   |   | — |   |   | 145,594 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax expense (benefit)                       |   |   | 306,182 |   |   | 244,692 |   |   | (289,045 | ) |   | 261,829 |   |   | — |   |   | 261,829 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment                  profit (loss)                              |   | $ | 831,347 |   | $ | 475,034 |   | $ | (521,336 | ) | $ | 785,045 |   | $ | — |   | $ | 785,045 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  sheet information:                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  assets                                       |   | $ | 529,530,988 |   | $ | 19,591,386 |   | $ | 8,062,404 |   | $ | 557,184,778 |   | $ | (8,984,568 | ) | $ | 548,200,210 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                  and intangibles                           |   |   | 11,926,264 |   |   | 7,266,950 |   |   | — |   |   | 19,193,214 |   |   | — |   |   | 19,193,214 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Premises                  and equipment expenditures                |   |   | 269,595 |   |   | 620,218 |   |   | 61,191 |   |   | 951,004 |   |   | — |   |   | 951,004 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| NOTE                  H -- SEGMENT INFORMATION (Continued)          |   |
|---------------------------------------------------------------------|--------|
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As                  of and for the three months ended June 30, 2006 |   |
|                                                                |   |   |   | Data |   |   |   | Total |   | Intersegment |   | Consolidated |   |
| Income                  statement information:                      |   | Banking |   | Processing |   | Other |   | Segments |   | Elimination |   | Totals |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest income (expense)                      |   | $ | 4,321,897 |   | $ | (51,663 | ) | $ | (439,771 | ) | $ | 3,830,463 |   |   |   |   | $ | 3,830,463 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                  income - external                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| customers                                                           |   |   | 1,959,613 |   |   | 3,286,586 |   |   | 22,053 |   |   | 5,268,252 |   |   |   |   |   | 5,268,252 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                  income - other segments               |   |   | 26,156 |   |   | 397,833 |   |   | 255,613 |   |   | 679,602 |   |   | (679,602 | ) |   | — |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  revenue                                      |   |   | 6,307,666 |   |   | 3,632,756 |   |   | (162,105 | ) |   | 9,778,317 |   |   | (679,602 | ) |   | 9,098,715 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest                  expense                               |   |   | 5,185,319 |   |   | 2,948,796 |   |   | 625,362 |   |   | 8,759,477 |   |   | (679,602 | ) |   | 8,079,875 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Significant                  non-cash items:                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                  and                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| amortization                                                        |   |   | 240,667 |   |   | 591,565 |   |   | 37,768 |   |   | 870,000 |   |   | — |   |   | 870,000 |   |
| Provision                  for loan losses                          |   |   | 56,321 |   |   | — |   |   | — |   |   | 56,321 |   |   | — |   |   | 56,321 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax expense (benefit)                       |   |   | 287,594 |   |   | 232,546 |   |   | (271,144 | ) |   | 248,996 |   |   | — |   |   | 248,996 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment                  profit (loss)                              |   | $ | 778,432 |   | $ | 451,414 |   | $ | (516,323 | ) | $ | 713,523 |   | $ | — |   | $ | 713,523 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  sheet information:                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  assets                                       |   | $ | 546,859,859 |   | $ | 13,882,700 |   | $ | 11,851,454 |   | $ | 572,594,013 |   | $ | (20,748,858 | ) | $ | 551,845,155 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                  and intangibles                           |   |   | 12,314,160 |   |   | — |   |   | — |   |   | 12,314,160 |   |   | — |   |   | 12,314,160 |   |
|                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Premises                  and equipment expenditures                |   |   | 89,432 |   |   | 405,022 |   |   | 71,102 |   |   | 565,556 |   |   | — |   |   | 565,556 |   |

----

**Item      2. Management’s Discussion and Analysis of Financial Condition and Results of      Operations**

**Cautionary      Statement Regarding Forward-Looking Information**

**Overview      of Rurban**

----

**Critical      Accounting Policies**

**Allowance      for Loan Losses - **

----

**Goodwill      and Other Intangibles **
***-***

**Impact      of Accounting Changes**

**Three      Months Ended June 30, 2007 compared to Three Months Ended June 30,      2006**

***Net      Income:***

***Net      Interest Income:***

----

***Provision      for Loan Losses:***

| *($                in Thousands)*                                | June                30, 2007 | March                31, 2007 | June                30, 2006 |
|------------------------------------------------------------------|------------------------------|-------------------------------|------------------------------|
| Net                charge-offs                                   | $90                          | $41                           | $(33)                        |
| Non-performing                loans                              | 5,913                        | 4,103                         | 5,479                        |
| OREO                / OAO                                        | 84                           | 9                             | 430                          |
| Non-performing                assets                             | 5,997                        | 4,112                         | 5,909                        |
| Non-performing                assets / Total assets              | 1.09%                        | .75%                          | 1.07%                        |
| Allowance                for loan losses / Total loans           | 1.00%                        | 1.01%                         | 1.23%                        |
| Allowance                for loan losses / Non-performing assets | 63.8%                        | 91.6%                         | 75.1%                        |

***Non-interest      Income:***

----

***Non-interest      Expense:***

**Six      Months Ended June 30, 2007 compared to Six Months Ended June 30,      2006**

***Net      Income:***

***Net      Interest Income:***

***Provision      for Loan Losses:***

***Non-interest      Income:***

***Non-interest      Expense:***

----

**Changes      in Financial Condition**

**June      30, 2007 vs. December 31, 2006**

----

**Capital      Resources**

|                                                     |   |   |   |                               |   |                                |   |                                     |   | Minimum                  Required |   |
|----------------------------------------------------------|--------|--------|--------|------------------------------------|--------|-------------------------------------|--------|------------------------------------------|--------|-----------------------------------|--------|
|                                                     |   |   |   |                               |   | Minimum                  Required   |   | To                  Be Well Capitalized  |   |
|                                                     |   |   |   |                               |   | For                  Capital        |   | Under                  Prompt Corrective |   |
|                                                     |   | Actual |   | Adequacy                  Purposes |   | Action                  Regulations |   |
|                                                     |   | Amount |   | Ratio                              |   | Amount                              |   | Ratio                                    |   | Amount                            |   | Ratio |   |
|                                                     |   |   |   |                               |   |                                |   |                                     |   |                              |   |   |   |
| Total                  capital (to risk weighted assets) |   |   |   |                               |   |                                |   |                                     |   |                              |   |   |   |
| Consolidated                                             |   | $      | 63.2   |                               |   | 15.9                                | %      | $                                        | 31.7   |                              |   | 8.0 | % | $ | — |   |   | N/A |   |
| State                  Bank                              |   |   | 48.1   |                               |   | 12.5                                |   |                                     | 30.7   |                              |   | 8.0 |   |   | 38.4 |   |   | 10.0 |   |

**LIQUIDITY**

----

**Off-Balance-Sheet      Borrowing Arrangements:**

**ASSET      LIABILITY MANAGEMENT**

----

----

**Item      3. Quantitative and Qualitative Disclosures About Market      Risk**

----

**Principal/Notional      Amount Maturing or Assumed to Withdraw In:**

**(Dollars      in Thousands)**

| Comparison                  of 2007 to 2006:       |   | First  |    | Years                                   |   |       |   |   |    |
|----------------------------------------------------|--------|--------|---------|-----------------------------------------|--------|------------|--------|--------|---------|
| Total                  rate-sensitive assets:      |   | Year   |    | 2                  -                  5 |   | Thereafter |   | Total  |    |
| At                  June 30, 2007                  |   | $      | 175,915 |                                    | $      | 184,505    |   | $      | 119,048 |   | $ | 479,469 |   |
| At                  December 31, 2006              |   |   | 195,015 |                                    |   | 170,804    |   |   | 120,379 |   |   | 486,198 |   |
| Increase                  (decrease)               |   | $      | (19,100 | )                                       | $      | 13,701     |   | $      | (1,331  | ) | $ | (6,729 | ) |
|                                               |   |   |    |                                    |   |       |   |   |    |   |   |   |   |
| Total                  rate-sensitive liabilities: |   |   |    |                                    |   |       |   |   |    |   |   |   |   |
| At                  June 30, 2007                  |   | $      | 226,596 |                                    | $      | 236,128    |   | $      | 21,725  |   | $ | 484,449 |   |
| At                  December 31, 2006              |   |   | 232,446 |                                    |   | 237,240    |   |   | 21,349  |   |   | 491,035 |   |
| Increase                  (decrease)               |   | $      | (5,850  | )                                       | $      | (1,112     | )      | $      | 376     |   | $ | (6,586 | ) |

**Item      4. Controls and Procedures**

| **·** | information                required to be disclosed by the Company in this Quarterly Report                on Form                10-Q and other reports which the Company files or submits under the                Exchange Act would be accumulated                and |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **·** | information                required to be disclosed by the Company in this Quarterly Report                on Form                10-Q and other reports which the Company files or submits under the                Exchange Act would be recorded, processed, summarized and reported                within                the time periods specified in the SEC’s rules and forms;                and |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **·** | the                Company’s disclosure controls and procedures were effective as of the end                of the quarterly period covered by this Quarterly Report on Form                10-Q. |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PART      II - OTHER INFORMATION**

**Item      1. Legal Proceedings**

**Item      1A. Risk Factors**

**Item      2. Unregistered Sales of Equity Securities and Use of      Proceeds**

|   | a. | Not                applicable |
|--------|----|-------------------------------|

|  | b. | Not                applicable |
|--|----|-------------------------------|

|  | c. | The                following table provides information regarding repurchases of the                Company’s common shares during the three months ended June 30,                2007: |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Period                                        | Total                Number ofShares                Purchased (1) | Average                PricePaid                per Share | Total                Number ofShares                Purchased asPart                of PubliclyAnnounced                Plans or Programs | Maximum                Number(or                ApproximateDollar                Value) ofShares                that May YetBe                Purchased Underthe                Plans orPrograms                (2) |
|-----------------------------------------------|-------------------------------------------------------------------|-----------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| April                1 through April 30, 2007 | 2,594                                                             | $12.00                                                    | —                                                                                                                                   | 250,000                                                                                                                                                                                                             |
| May                1 through May 31, 2007     | 6,186                                                             | $12.11                                                    | 2,000                                                                                                                                     | 248,000                                                                                                                                                                                                             |
| June                1 through June 30, 2007   | 12,378                                                            | $12.52                                                    | 10,000                                                                                                                                    | 238,000                                                                                                                                                                                                             |

|   | (1) | All                of the repurchased shares, other than the shares repurchased as part                of                the publicly announced plan, were purchased in the open market by                Reliance                Financial Services, an indirect subsidiary of the Company, in its                capacity                as the administrator of the Company’s Employee Stock Ownership and Savings                Plan. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | On                April 12, 2007 the Company announced that its Board of Directors                had                authorized a stock repurchase program pursuant to which the Company                may                purchase up to 250,000 common shares over the ensuing 15-month                period. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item      3. Defaults Upon Senior Securities**

----

**Item      4. Submission of Matters to a Vote of Security Holders**

**Item      5. Other Information**

**Item      6. Exhibits**

----

**SIGNATURES**

----

----

----