LEWIS CENTER, Ohio, Nov. 10, 2016 /PRNewswire/ -- DCB
Financial Corp (the "Company"), (OTCPink:DCBF), parent holding company of The Delaware County Bank & Trust Company,
Lewis Center, Ohio (the "Bank") announced a net loss of $426,000
or $0.06 per diluted share for the three months ended September 30,
2016, compared to net income of $11.1 million or $1.52 per
diluted share for the same period in 2015.
Third quarter results for 2016 included after-tax costs associated with the recently announced acquisition of the Company by
First Commonwealth Financial Corporation ("First Commonwealth") of $651,000 or $0.09 per share. In the third quarter of 2015, the Company reversed a valuation allowance that had previously
been recorded against its net deferred tax assets, resulting in a one-time tax benefit in the third quarter of 2015 of
$10.7 million or $1.46 per diluted share. Pre-tax income was
$400,000 for the third quarter of 2015.
Net income was $21,000 or $0.00 per diluted share for the nine
months ended September 30, 2016, compared to net income of $11.5
million or $1.58 per diluted share for the same period in 2015. Pre-tax income was
$783,000 or $0.11 per diluted share for the nine months ended
September 30, 2015.
On October 3, 2016, First Commonwealth and the Company announced that they had entered into a
definitive merger agreement which provides for the merger of the Company with and into First Commonwealth following the
satisfaction of certain closing conditions, including approval by the Company's shareholders and approval by appropriate bank
regulatory authorities (the "Merger"). Under the terms of the definitive merger agreement, which has been unanimously approved by
the board of directors of both companies, the Company's shareholders will be entitled to receive either 1.427 shares of First
Commonwealth common stock or $14.50 in cash for each common share of the Company, subject to
proration provisions set forth in the definitive merger agreement. Aggregate cash consideration to Company shareholders is fixed
at $21,283,773, which is approximately 20% of the Merger consideration, and the remaining Merger
consideration will be in the form of stock consideration. The Merger is expected to be completed in the second quarter of
2017.
Balance Sheet Highlights
Total assets were $565.4 million at September 30, 2016, compared
with $556.1 million at June 30, 2016 and $541.3 million at December 31, 2015. Much of the increase in assets in the first
nine months of 2016 was in the Company's loan portfolio (including held for sale), which increased $13.0
million or 3.4%, to $391.5 million at September 30, 2016.
Deposits totaled $489.5 million at September 30, 2016, compared
with $467.6 million at June 30, 2016 and $474.5 million at December 31, 2015. Most of the increase during the third
quarter was the result of an increase in municipal deposit balances of $19.5 million during the
quarter.
Shareholders' equity was $59.4 million at September 30, 2016,
compared with $59.9 million at June 30, 2016 and $58.8 million at December 31, 2015. The decrease in shareholders' equity in the
third quarter was attributable primarily to the net loss for the quarter. The Company's tangible common equity to tangible
assets ratio was 10.5% at September 30, 2016.
The Bank's common equity tier 1 capital ratio was 12.26% and its total risk-based capital ratio was 13.44% at September 30, 2016, both of which were well above the regulatory thresholds required to be classified as a
"well-capitalized" institution, which are 6.5% and 10.0%, respectively.
Asset Quality and the Provision for Loan Losses
Delinquent loans (including non-accrual loans) totaled $3.7 million or 0.94% of total loans at
September 30, 2016, compared to $1.6 million or 0.41% of total loans
at June 30, 2016 and $1.5 million or 0.41% of total loans at
December 31, 2015. Non-accrual loans totaled $3.4 million or
0.86% of total loans at September 30, 2016, compared to $1.4 million
or 0.36% of total loans at June 30, 2016 and $1.2 million or 0.32% of
total loans at December 31, 2015. The increase in non-accrual loans resulted from a commercial real
estate mortgage with a balance of $2.1 million that was moved to non-accrual status in the third
quarter.
Non-performing assets were $9.9 million or 1.77% of total assets at September 30, 2016, compared to $8.0 million or 1.43% of total assets at
June 30, 2016 and $7.3 million or 1.35% of total assets at
December 31, 2015. Troubled debt restructurings ("TDR's"), which are performing in accordance
with the restructured terms and accruing interest, but are included in non-performing assets, were $6.4
million at September 30, 2016, compared to $6.5 million at
June 30, 2016 and $6.0 million at December 31,
2015.
Net recoveries of $2,000 were recorded in the third quarter of 2016, compared to net recoveries
of $255,000 in the second quarter of 2016 and net recoveries of $192,000 in the year ago quarter. There was no provision for loan losses recorded in the three months and nine
months ended September 30, 2016. The Company recorded a negative provision for loan losses of
$150,000 in the third quarter of 2015, due primarily to the net recoveries recorded in that quarter
and to the favorable impact on the allowance for loan losses of the reduction in non-performing loans during that quarter. The
negative provision for loan losses recorded in the third quarter of 2015 had the effect of offsetting the provision for loan
losses of $150,000 that was recorded in the first quarter of 2015, resulting in no provision for
loan losses for the nine months ended September 30, 2015. The allowance for loan losses was
$4.6 million at both September 30, 2016 and at June 30, 2016, and was $4.3 million at December 31,
2015. The ratio of the allowance for loan losses to total loans was 1.18% at September 30,
2016, compared to 1.17% at June 30, 2016 and 1.14% at December
31, 2015.
The ratio of the allowance for loan losses to non-performing loans (including TDR's) was 46.9% at September 30, 2016, compared to 58.0% at June 30, 2016 and 59.7% at December 31, 2015. The ratio of the allowance for loan losses to non-accrual loans was 136% at September 30, 2016, compared to 323% at June 30, 2016 and 355% at December 31, 2015.
Net Interest Income
Net interest income totaled $4.3 million in the quarter ended September
30, 2016, compared to $4.2 million in the third quarter of 2015 and $4.2 million in the second quarter of 2016. The net interest margin was 3.31% in the third quarter of 2016,
compared to 3.35% in the year-ago quarter and 3.41% in the second quarter of 2016. The decline in the net interest margin
compared to the second quarter of 2016 was attributable to growth in interest-earning balances in the third quarter being
concentrated in lower yielding securities and cash balances.
Average interest-earning assets were $509.6 million in the third quarter of 2016, compared to
$496.5 million in the year-ago quarter and $499.1 million in the
second quarter of 2016. Average loans outstanding in the third quarter of 2016 were $394.4 million
or 77.4% of average interest-earning assets, compared with $383.3 million or 77.2% of average
interest-earning assets in the year-ago quarter and $395.7 million or 79.3% of total average
interest-earning assets in the second quarter of 2016.
Average interest-bearing deposit balances were $356.8 million in the third quarter of 2016,
compared to $350.4 million in the year-ago quarter and $342.6 million
in the second quarter of 2016. The average balances of interest-bearing demand, savings and money market accounts (transaction
accounts) were $301.4 million in the third quarter of 2016 compared to $277.2 million in the year-ago quarter and $290.2 million in the second quarter
of 2016. Transaction accounts comprised 84.5% of total interest-bearing deposits in the third quarter of 2016, compared to 79.1%
in the year-ago quarter and 84.7% in the second quarter of 2016.
Net interest income totaled $12.6 million in the nine months ended September 30, 2016, compared to $12.5 million in the year-ago period. The
net interest margin was 3.33% for the nine months ended September 30, 2016, compared to 3.41% in
the year-ago period.
Average interest-earning assets were $501.5 million in the nine months ended September 30, 2016, compared to $491.7 million in the year-ago period. Average
loans outstanding in the nine months ended September 30, 2016 increased $9.8
million compared to the year-ago period, and totaled 77.9% of total interest-earning assets in the nine months ended
September 30, 2016, compared with 77.4% in the year-ago period.
The average balance in time deposits decreased $18.5 million in the nine months ended
September 30, 2016 compared with the year-ago period, while the average balances in lower-costing
transaction accounts increased $13.4 million. Transaction accounts comprised 83.8% of total
interest-bearing deposits in the first nine months of 2016, compared to 78.9% in the year-ago. The changes in the composition of
average deposit balances in the three and nine months ended September 30, 2016 was primarily the
result of the movement of large municipal time deposit maturities into money market accounts and overnight sweep accounts.
Non-Interest Income and Non-Interest Expenses
Non-interest income was $1.7 million in the third quarter of 2016, compared to $1.2 million in the year-ago quarter and $1.8 million in the second quarter of
2016. Gains on sales of loans totaled $351,000 in the third quarter of 2016, and $829,000 for the first nine months of 2016, reflecting the launch in the second quarter of secondary market
sales of SBA and residential mortgage loans. Total loan sales in the third quarter were $9.6
million, of which $2.1 million were the 75% guaranteed portion of SBA loans and $7.5 million were residential mortgages. Gains on sales of SBA loans and residential mortgages in the third
quarter totaled $191,000 and $160,000, respectively, compared to
$414,000 and $64,000 in the second quarter of 2016. The Company did
not sell any loans in 2015 or in the first quarter of 2016. Service charges, wealth management fees and treasury management fees
increased an aggregate $115,000 or 11.0% in the third quarter of 2016 compared with the year-ago
quarter, primarily from the impact of changes to certain of the Bank's fees and service charges and from business development
activities.
Non-interest income was $4.8 million in the first nine months of 2016, compared to $3.6 million in the year ago period. Gains on sales of loans accounted for approximately 65% of the increase in
non-interest income, with the balance of the increase being driven by changes to certain of the Bank's fees and service charges
and from business development activities.
Non-interest income accounted for 28.8% of total revenue in the third quarter of 2016, compared to 22.0% in the year-ago
quarter and 29.8% in the second quarter of 2016. Non-interest income accounted for 27.8% of total revenue in the first nine
months of 2016, compared with 22.1% in the year-ago period.
Non-interest expenses were $6.6 million for the third quarter of 2016, compared with
$5.2 million in the year-ago quarter and $5.7 million for the second
quarter of 2016. Merger related expenses accounted for approximately 69% of the increase in non-interest expenses compared to the
year-ago quarter. Salaries and benefits increased $415,000 in the third quarter of 2016 compared to
the year-ago quarter due primarily to the previously-announced hiring of the small business lending team and residential mortgage
originators in the fourth quarter of 2015. The Company's efficiency ratio was 110.3% in the third quarter of 2016, compared with
95.0% in the year-ago quarter and 93.7% in the second quarter of 2016.
Non-interest expenses were $17.6 million in the first nine months of 2016, compared to
$15.3 million in the first nine months of 2015. Merger related expenses accounted for $987,000, or 43% of the increase in non-interest expenses. Salaries and benefits increased $1.1 million due primarily to the hiring of the small business lending team and residential mortgage
originators. The Company's efficiency ratio was 101.2% for the first nine months of 2016, compared to 95.0% in the year-ago
period.
Income Taxes
An income tax benefit of $190,000 and $233,000, respectively, was
recorded in the three months and nine months ended September 30, 2016. The amount of income tax
expense or benefit recognized in 2016 was impacted by the overall amount of pre-tax income and the amount of pre-tax income that
is not subject to federal income taxes, which is comprised primarily of income from bank-owned life insurance that was partially
offset by non-deductible merger related expenses.
About DCB Financial Corp
DCB Financial Corp is a financial holding company formed under the laws of the State of Ohio.
The Company is the parent of The Delaware County Bank & Trust Company, a state-chartered commercial bank. The Bank
conducts business from its main offices at 110 Riverbend Avenue in Lewis Center, Ohio, and
through its nine full-service and four limited-service branch offices located in Central Ohio.
The Bank provides customary retail and commercial banking and cash management services to its customers, including checking and
savings accounts, time deposits, IRAs, safe deposit facilities, personal loans, commercial loans, commercial leases, SBA loans,
real estate mortgage loans, night depository facilities and trust and personalized wealth management services.
Forward-Looking Statements
This press release contains certain forward-looking statements with respect to the financial condition, results of operations
and business of DCB Financial Corp, including certain plans, expectations, goals, projections, and statements. These
forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ
materially from those contemplated by such forward-looking statements include, among others, the following possibilities: ability
to obtain regulatory approvals for the Merger in a timely manner and without significant expense or other burdens; ability to
meet other closing conditions to the Merger, including approval by the Company's shareholders; delay in closing the Merger;
difficulties and delays in integrating the businesses of the Company and First Commonwealth or fully realizing cost savings and
other benefits; business disruption following the Merger; an increase in competitive pressure in the banking industry; changes in
the interest rate environment which may affect the net interest margin; changes in the regulatory environment; general economic
conditions, either nationally or regionally, resulting in, among other things, a deterioration in credit quality; changes in
business conditions and inflation; changes in the securities markets; changes in technology used in the banking business; our
ability to maintain and increase market share and control expenses; increases in FDIC insurance premiums may cause earnings to
decrease; and other risks set forth under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2015, and in subsequent filings with the Securities and Exchange
Commission.
The Company does not undertake, and specifically disclaims any obligation, to publicly revise any forward-looking statements
to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated
events.
|
DCB Financial Corp
Consolidated Balance Sheets
|
|
|
|
September 30, 2016
(unaudited)
|
|
December 31, 2015
|
|
|
(Dollars in thousands, except share and per share data)
|
|
Assets
|
|
|
|
|
|
Cash and due from financial institutions
|
|
$6,092
|
|
$6,929
|
|
Interest-bearing deposits
|
|
25,190
|
|
24,963
|
|
Total cash and cash equivalents
|
|
31,282
|
|
31,892
|
|
|
|
|
|
|
Securities available-for-sale
|
|
95,676
|
|
87,797
|
|
|
|
|
|
|
Loans
|
|
390,750
|
|
378,513
|
|
Less allowance for loan losses
|
|
(4,592)
|
|
(4,333)
|
|
Net loans
|
|
386,158
|
|
374,180
|
|
|
|
|
|
|
Loans held for sale
|
|
755
|
|
-
|
|
Real estate owned
|
|
68
|
|
68
|
|
Investment in FHLB stock
|
|
3,250
|
|
3,250
|
|
Premises and equipment, net
|
|
9,810
|
|
5,091
|
|
Premises and equipment held-for-sale
|
|
-
|
|
4,771
|
|
Bank-owned life insurance
|
|
21,329
|
|
20,760
|
|
Deferred tax asset, net
|
|
10,467
|
|
10,440
|
|
Accrued interest receivable and other assets
|
|
6,622
|
|
3,015
|
|
Total assets
|
|
$565,417
|
|
$541,264
|
|
|
|
|
|
|
Liabilities and shareholders' equity
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
Non-interest bearing
|
|
$123,353
|
|
$124,023
|
|
Interest bearing
|
|
366,195
|
|
350,514
|
|
Total deposits
|
|
489,548
|
|
474,537
|
|
|
|
|
|
|
Borrowings
|
|
4,293
|
|
4,520
|
|
Obligations under capital lease
|
|
8,016
|
|
-
|
|
Accrued interest payable and other liabilities
|
|
4,167
|
|
3,360
|
|
Total liabilities
|
|
506,024
|
|
482,417
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
Common stock
|
|
16,907
|
|
16,410
|
|
Retained earnings
|
|
49,820
|
|
49,799
|
|
Treasury stock
|
|
(7,520)
|
|
(7,416)
|
|
Accumulated other comprehensive income
|
|
994
|
|
436
|
|
Deferred stock-based compensation
|
|
(808)
|
|
(382)
|
|
Total shareholders' equity
|
|
59,393
|
|
58,847
|
|
Total liabilities and shareholders' equity
|
|
$565,417
|
|
$541,264
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding
|
|
7,339,232
|
|
7,281,237
|
|
Book value per common share
|
|
$8.09
|
|
$8.08
|
|
DCB Financial Corp
Consolidated Statements of Operations (Unaudited)
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(Dollars in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
Interest income:
|
|
|
|
|
|
|
|
|
|
Loans
|
|
$4,157
|
|
$3,979
|
|
$12,154
|
|
$11,884
|
|
Securities
|
|
494
|
|
473
|
|
1,508
|
|
1,460
|
|
Federal funds sold and interest bearing deposits
|
|
28
|
|
17
|
|
80
|
|
46
|
|
Total interest income
|
|
4,679
|
|
4,469
|
|
13,742
|
|
13,390
|
|
|
|
|
|
|
|
|
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
Savings and money market accounts
|
|
202
|
|
153
|
|
560
|
|
445
|
|
Time accounts
|
|
81
|
|
88
|
|
229
|
|
272
|
|
NOW accounts
|
|
20
|
|
16
|
|
56
|
|
49
|
|
|
303
|
|
257
|
|
845
|
|
766
|
|
|
|
|
|
|
|
|
|
|
Obligation under capital lease
|
|
81
|
|
-
|
|
215
|
|
-
|
|
Borrowings
|
|
41
|
|
35
|
|
126
|
|
106
|
|
Total interest expense
|
|
425
|
|
292
|
|
1,186
|
|
872
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
4,254
|
|
4,177
|
|
12,556
|
|
12,518
|
|
Provision for loan losses
|
|
-
|
|
(150)
|
|
-
|
|
-
|
|
Net interest income after provision for loan losses
|
|
4,254
|
|
4,327
|
|
12,556
|
|
12,518
|
|
|
|
|
|
|
|
|
|
|
Non-interest income:
|
|
|
|
|
|
|
|
|
|
Service charges
|
|
560
|
|
523
|
|
1,596
|
|
1,475
|
|
Wealth management fees
|
|
463
|
|
438
|
|
1,355
|
|
1,217
|
|
Treasury management fees
|
|
134
|
|
81
|
|
348
|
|
203
|
|
Income from bank-owned life insurance
|
|
163
|
|
163
|
|
569
|
|
571
|
|
Gain on sale of loans
|
|
351
|
|
-
|
|
829
|
|
-
|
|
Loss on sale of REO
|
|
-
|
|
(19)
|
|
-
|
|
(20)
|
|
Other non-interest income
|
|
47
|
|
37
|
|
144
|
|
115
|
|
Total non-interest income
|
|
1,718
|
|
1,223
|
|
4,841
|
|
3,561
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense:
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
3,186
|
|
2,771
|
|
9,356
|
|
8,302
|
|
Occupancy and equipment
|
|
1,016
|
|
1,000
|
|
2,963
|
|
2,965
|
|
Professional services
|
|
218
|
|
405
|
|
905
|
|
1,042
|
|
Merger related expenses
|
|
987
|
|
-
|
|
987
|
|
-
|
|
Advertising
|
|
108
|
|
169
|
|
506
|
|
418
|
|
Office supplies, postage and courier
|
|
87
|
|
81
|
|
250
|
|
232
|
|
FDIC insurance premium
|
|
60
|
|
95
|
|
238
|
|
302
|
|
State franchise taxes
|
|
118
|
|
75
|
|
352
|
|
225
|
|
Other non-interest expense
|
|
808
|
|
554
|
|
2,052
|
|
1,810
|
|
Total non-interest expense
|
|
6,588
|
|
5,150
|
|
17,609
|
|
15,296
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income tax benefit
|
|
(616)
|
|
400
|
|
(212)
|
|
783
|
|
Income tax benefit
|
|
(190)
|
|
(10,688)
|
|
(233)
|
|
(10,688)
|
|
Net income (loss)
|
|
$ (426)
|
|
$11,088
|
|
$21
|
|
$11,471
|
|
|
|
|
|
|
|
|
|
|
Share and Per Share Data
|
|
|
|
|
|
|
|
|
|
Basic average common shares outstanding
|
|
7,339,710
|
|
7,282,365
|
|
7,322,482
|
|
7,269,222
|
|
Diluted average common shares outstanding
|
|
7,339,710
|
|
7,302,174
|
|
7,355,709
|
|
7,288,237
|
|
Basic earnings per common share
|
|
$(0.06)
|
|
$1.52
|
|
$0.00
|
|
$1.58
|
|
Diluted earnings per common share
|
|
$(0.06)
|
|
$1.52
|
|
$0.00
|
|
$1.58
|
|
|
|
|
|
|
|
|
|
|
DCB Financial Corp
Consolidated Average Balances (Unaudited)
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(Dollars in thousands)
|
|
Earning assets
|
|
|
|
|
|
|
|
|
|
|
Interest bearing cash
|
|
$21,473
|
|
$27,563
|
|
$20,658
|
|
$26,167
|
|
|
Securities
|
|
90,796
|
|
82,088
|
|
87,224
|
|
81,172
|
|
|
Tax-exempt securities
|
|
2,915
|
|
3,560
|
|
3,049
|
|
3,584
|
|
|
Loans
|
|
394,392
|
|
383,323
|
|
390,613
|
|
380,824
|
|
|
Total earning assets
|
|
509,576
|
|
496,534
|
|
501,544
|
|
491,747
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-earning assets
|
|
60,065
|
|
39,432
|
|
53,613
|
|
40,060
|
|
|
Total assets
|
|
$569,641
|
|
$535,966
|
|
$555,157
|
|
$531,807
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
Interest bearing DDA
|
|
$88,129
|
|
$80,287
|
|
$84,861
|
|
$80,583
|
|
|
Money market
|
|
162,468
|
|
153,318
|
|
158,822
|
|
155,706
|
|
|
Savings accounts
|
|
50,777
|
|
43,628
|
|
49,396
|
|
43,425
|
|
|
Time deposits
|
|
55,406
|
|
73,151
|
|
56,513
|
|
74,972
|
|
|
Borrowings
|
|
9,690
|
|
7,759
|
|
10,717
|
|
6,304
|
|
|
Obligation under capital lease
|
|
8,069
|
|
-
|
|
8,121
|
|
-
|
|
|
Total interest bearing liabilities
|
|
374,539
|
|
358,143
|
|
368,430
|
|
360,990
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits
|
|
$123,214
|
|
$126,128
|
|
$123,364
|
|
$119,593
|
|
|
Other non-interest bearing liabilities
|
|
12,731
|
|
4,927
|
|
4,775
|
|
4,491
|
|
|
Total liabilities
|
|
510,484
|
|
489,198
|
|
496,569
|
|
485,074
|
|
|
Shareholders' equity
|
|
59,157
|
|
46,768
|
|
58,588
|
|
46,733
|
|
|
Total liabilities and shareholders' equity
|
|
$569,641
|
|
$535,966
|
|
$555,157
|
|
$531,807
|
|
|
DCB Financial Corp
Loans and Deposits (Unaudited)
|
|
|
The following table sets forth the composition of the Company's loan
portfolio, excluding deferred loan costs and including loans held for sale at the dates indicated:
|
|
|
|
September 30, 2016
|
|
June 30, 2016
|
|
December 31, 2015
|
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Loan portfolio composition
|
|
(Dollars in thousands)
|
|
Commercial and industrial
|
|
$104,108
|
|
26.6%
|
|
$105,530
|
|
26.7%
|
|
$ 99,213
|
|
26.2%
|
|
Commercial real estate
|
|
99,505
|
|
25.5%
|
|
103,408
|
|
26.1%
|
|
100,743
|
|
26.7%
|
|
Real estate and home equity
|
|
151,117
|
|
38.7%
|
|
149,383
|
|
37.7%
|
|
137,645
|
|
36.4%
|
|
Consumer and credit card
|
|
36,158
|
|
9.2%
|
|
37,615
|
|
9.5%
|
|
40,587
|
|
10.7%
|
|
Total loans
|
|
$390,888
|
|
100.0%
|
|
$395,936
|
|
100.0%
|
|
$378,188
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred loan costs
|
|
617
|
|
|
|
617
|
|
|
|
325
|
|
|
|
Allowance for loan losses
|
|
(4,592)
|
|
|
|
(4,590)
|
|
|
|
(4,333)
|
|
|
|
Net loans
|
|
$386,913
|
|
|
|
$391,963
|
|
|
|
$374,180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2016, total loans included $755,000 in loans held for
sale, which consisted of residential mortgages for sale on the secondary market. At June 30, 2016 and December 31, 2015
there were $3.6 million and $0 loans held for sale, respectively.
|
|
|
The following table sets forth the composition of the Company's deposits at
the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
June 30, 2016
|
|
December 31, 2015
|
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Deposit composition
|
|
(Dollars in thousands)
|
|
Non-interest bearing demand
|
|
$123,353
|
|
25.2%
|
|
$119,808
|
|
25.6%
|
|
$124,023
|
|
26.1%
|
|
Interest bearing demand
|
|
86,239
|
|
17.6%
|
|
87,873
|
|
18.8%
|
|
77,616
|
|
16.4%
|
|
Total demand
|
|
209,592
|
|
42.8%
|
|
207,681
|
|
44.4%
|
|
201,639
|
|
42.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
|
|
52,026
|
|
10.6%
|
|
49,722
|
|
10.6%
|
|
47,333
|
|
10.0%
|
|
Money market
|
|
171,817
|
|
35.1%
|
|
157,136
|
|
33.6%
|
|
154,119
|
|
32.5%
|
|
Time deposits
|
|
56,113
|
|
11.5%
|
|
53,053
|
|
11.4%
|
|
71,446
|
|
15.0%
|
|
Total deposits
|
|
$489,548
|
|
100.0%
|
|
$467,592
|
|
100.0%
|
|
$474,537
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DCB Financial Corp
Asset Quality (Unaudited, except for December 31, 2015 data)
|
|
|
The following table represents a summary of delinquent loans grouped by the
number of days delinquent at the dates indicated:
|
|
|
Delinquent loans and leases
|
|
September 30, 2016
|
|
June 30, 2016
|
|
December 31, 2015
|
|
|
$
|
%(1)
|
|
$
|
%(1)
|
|
$
|
%(1)
|
|
|
(Dollars in thousands)
|
|
30 days past due
|
|
$202
|
0.05%
|
|
$158
|
0.04%
|
|
$ 191
|
0.05%
|
|
60 days past due
|
|
123
|
0.03%
|
|
56
|
0.01%
|
|
111
|
0.03%
|
|
90 days past due and still accruing
|
|
-
|
-
|
|
-
|
-
|
|
2
|
0.01%
|
|
Non-accrual
|
|
3,367
|
0.86%
|
|
1,423
|
0.36%
|
|
1,222
|
0.32%
|
|
Total
|
|
$3,692
|
0.94%
|
|
$1,637
|
0.41%
|
|
$1,526
|
0.41%
|
|
(1)
|
As a percentage of total loans, including loans held for sale, excluding
deferred costs
|
|
The following table represents information concerning the aggregate amount
of non-performing assets (includes loans held for sale):
|
|
|
Non-performing assets
|
|
September 30, 2016
|
|
June 30, 2016
|
|
December 31, 2015
|
|
|
(Dollars in thousands)
|
|
Non-accruing loans:
|
|
|
|
|
|
|
|
Residential real estate loans and home equity
|
|
$816
|
|
$742
|
|
$668
|
|
Commercial real estate
|
|
2,315
|
|
142
|
|
-
|
|
Commercial and industrial
|
|
236
|
|
539
|
|
554
|
|
Consumer loans and credit cards
|
|
-
|
|
-
|
|
-
|
|
Total non-accruing loans
|
|
3,367
|
|
1,423
|
|
1,222
|
|
Accruing loans delinquent 90 days or more
|
|
-
|
|
-
|
|
2
|
|
Total non-performing loans (excluding TDR's)
|
|
3,367
|
|
1,423
|
|
1,224
|
|
|
|
|
|
|
|
|
Other real estate and repossessed assets
|
|
68
|
|
68
|
|
68
|
|
Total non-performing assets (excluding TDR's)
|
|
$3,435
|
|
$1,491
|
|
$1,292
|
|
|
|
|
|
|
|
|
Troubled debt restructurings(1)
|
|
$6,431
|
|
$6,486
|
|
$6,040
|
|
Total non-performing loans (including TDR's)
|
|
$9,798
|
|
$7,909
|
|
$7,264
|
|
Total non-performing assets (including TDR's)
|
|
$9,866
|
|
$7,977
|
|
$7,332
|
|
|
|
|
|
|
|
|
(1)
|
TDR's that are in compliance with their modified terms and accruing
interest.
|
|
The following table summarizes changes in the allowance for loan losses
arising from loans charged off, recoveries on loans previously charged off and additions to the allowance which have been
charged to expense:
|
|
|
Allowance for loan losses
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(Dollars in thousands)
|
|
Allowance for loan losses, beginning of period
|
|
$4,590
|
|
$4,164
|
|
$4,333
|
|
$4,236
|
|
|
|
|
|
|
|
|
|
|
Loans charged-off
|
|
(68)
|
|
(63)
|
|
(156)
|
|
(570)
|
|
Recoveries of loans previously charged-off
|
|
70
|
|
255
|
|
415
|
|
540
|
|
Net recoveries (charge-offs)
|
|
2
|
|
192
|
|
259
|
|
(30)
|
|
Provision for loan losses
|
|
-
|
|
(150)
|
|
-
|
|
-
|
|
Allowance for loan losses, end of period
|
|
$4,592
|
|
$4,206
|
|
$4,592
|
|
$4,206
|
|
|
|
|
|
|
|
|
|
|
DCB Financial Corp
Consolidated Financial Information (Unaudited)
|
|
|
Key Ratios
|
|
At or for the three months ended
September 30,
|
|
At or for the nine months ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Return on average assets
|
|
(0.30)%
|
|
8.26%
|
|
0.01%
|
|
4.31%
|
|
Return on average equity
|
|
(2.88)%
|
|
94.9%
|
|
0.05%
|
|
49.1%
|
|
Yield on earning assets
|
|
3.63%
|
|
3.57%
|
|
3.63%
|
|
3.76%
|
|
Cost of interest-bearing liabilities
|
|
0.45%
|
|
0.32%
|
|
0.43%
|
|
0.32%
|
|
Net interest margin (1)
|
|
3.31%
|
|
3.35%
|
|
3.33%
|
|
3.41%
|
|
Non-interest income to total income (2)
|
|
28.8%
|
|
22.9%
|
|
27.8%
|
|
22.2%
|
|
Efficiency ratio (3)
|
|
110.3%
|
|
95.0%
|
|
101.2%
|
|
95.0%
|
|
|
|
|
|
|
|
|
|
|
Net loans (recovered) charged-off to average loans, annualized
|
|
0.00%
|
|
(0.20)%
|
|
(0.09)%
|
|
0.02%
|
|
Provision for loan losses to average loans, annualized
|
|
0.00%
|
|
(0.16)%
|
|
0.00%
|
|
0.00%
|
|
Allowance for loan losses to total loans
|
|
1.18%
|
|
1.12%
|
|
1.18%
|
|
1.12%
|
|
Allowance for loan losses to non-accrual loans
|
|
136.4%
|
|
314.4%
|
|
136.4%
|
|
314.4%
|
|
Non-accrual loans to total loans
|
|
0.86%
|
|
0.35%
|
|
0.86%
|
|
0.35%
|
|
Non-performing assets to total assets
(including performing TDR's)
|
|
1.37%
|
|
1.52%
|
|
1.37%
|
|
1.52%
|
|
Non-performing assets to total assets
(excluding performing TDR's)
|
|
0.23%
|
|
0.39%
|
|
0.23%
|
|
0.39%
|
|
(1)
|
Net interest income divided by average earning assets
|
|
(2)
|
Non-interest income (excluding net realized gains and losses on securities
and other non-recurring gains and losses) divided by the sum of net interest income and non-interest income (as
adjusted)
|
|
(3)
|
Non-interest expense (less OREO expense and non-recurring expenses and
losses) divided by the sum of net interest income and non-interest income (as adjusted)
|
|
DCB Financial Corp
Selected Quarterly Financial Data (Unaudited)
|
|
|
2016
|
|
2015
|
|
Third
|
|
Second
|
|
First
|
|
Fourth
|
|
Third
|
|
(Dollars in thousands, except per share data)
|
|
Interest income
|
$4,679
|
|
$4,638
|
|
$4,425
|
|
$4,500
|
|
$4,469
|
|
Interest expense
|
425
|
|
394
|
|
367
|
|
298
|
|
292
|
|
Net interest income
|
4,254
|
|
4,244
|
|
4,058
|
|
4,202
|
|
4,177
|
|
Provision for loan losses
|
-
|
|
-
|
|
-
|
|
-
|
|
(150)
|
|
Net interest income after provision for loan losses
|
4,254
|
|
4,244
|
|
4,058
|
|
4,202
|
|
4,327
|
|
Non-interest income
|
1,718
|
|
1,802
|
|
1,321
|
|
1,261
|
|
1,223
|
|
Non-interest expenses
|
6,588
|
|
5,663
|
|
5,358
|
|
5,157
|
|
5,150
|
|
Income before income tax
|
(616)
|
|
383
|
|
21
|
|
306
|
|
400
|
|
Income tax expense (benefit)
|
(190)
|
|
52
|
|
(95)
|
|
33
|
|
(10,688)
|
|
Net income
|
$(426)
|
|
$331
|
|
$116
|
|
$273
|
|
$11,088
|
|
|
|
|
|
|
|
|
|
|
|
Stock and related per share data
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per common share
|
$(0.06)
|
|
$0.04
|
|
$0.02
|
|
$0.04
|
|
$1.52
|
|
Basic weighted average common shares outstanding
|
7,339,710
|
|
7,346,417
|
|
7,311,238
|
|
7,280,480
|
|
7,282,365
|
|
Diluted weighted average common shares outstanding
|
7,339,710
|
|
7,363,802
|
|
7,330,881
|
|
7,297,496
|
|
7,302,174
|
|
Common book value per share
|
$8.09
|
|
$8.15
|
|
$8.06
|
|
$8.08
|
|
$8.05
|
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios:
|
|
|
|
|
|
|
|
|
|
|
Bank
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio
|
8.84%
|
|
9.02%
|
|
8.97%
|
|
9.11%
|
|
9.18%
|
|
Common equity tier 1 capital ratio
|
12.26%
|
|
12.51%
|
|
12.60%
|
|
13.11%
|
|
13.09%
|
|
Tier 1 risk based capital ratio
|
12.26%
|
|
12.51%
|
|
12.60%
|
|
13.11%
|
|
13.09%
|
|
Total risk based capital ratio
|
13.44%
|
|
13.70%
|
|
13.75%
|
|
14.29%
|
|
14.23%
|
|
|
|
|
|
|
|
|
|
|
|
Total equity to assets ratio (consolidated)
|
10.51%
|
|
10.76%
|
|
10.72%
|
|
10.87%
|
|
10.83%
|
|
|
|
|
|
|
|
|
|
|
|
Selected ratios:
|
|
|
|
|
|
|
|
|
|
|
Return on average assets
|
(0.30)%
|
|
0.24%
|
|
0.09%
|
|
0.20%
|
|
8.26%
|
|
Return on average equity
|
(2.88)%
|
|
2.26%
|
|
0.80%
|
|
1.90%
|
|
94.9%
|
|
Yield on earning assets
|
3.63%
|
|
3.70%
|
|
3.54%
|
|
3.55%
|
|
3.57%
|
|
Cost of interest-bearing liabilities
|
0.45%
|
|
0.44%
|
|
0.34%
|
|
0.33%
|
|
0.32%
|
|
Net interest margin
|
3.31%
|
|
3.41%
|
|
3.33%
|
|
3.33%
|
|
3.35%
|
|
Non-interest income to total income (1)
|
28.8%
|
|
29.8%
|
|
24.6%
|
|
22.6%
|
|
22.9%
|
|
Efficiency ratio (2)
|
110.3%
|
|
93.7%
|
|
99.6%
|
|
95.0%
|
|
95.0%
|
|
|
|
|
|
|
|
|
|
|
|
Asset quality ratios:
|
|
|
|
|
|
|
|
|
|
|
Net loans (recovered) charged-off to average loans, annualized
|
0.00%
|
|
(0.26)%
|
|
0.00%
|
|
(0.13)%
|
|
(0.20)%
|
|
Provision for loan losses to average loans, annualized
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
0.00%
|
|
(0.16)%
|
|
Allowance for loan losses to total loans
|
1.18%
|
|
1.17%
|
|
1.11%
|
|
1.14%
|
|
1.12%
|
|
Allowance for loan losses to non-accrual loans
|
136%
|
|
323%
|
|
365%
|
|
355%
|
|
314%
|
|
Non-accrual loans to total loans
|
0.86%
|
|
0.36%
|
|
0.30%
|
|
0.32%
|
|
0.35%
|
|
Non-performing assets to total assets (including
performing TDR's)
|
1.37%
|
|
1.43%
|
|
1.40%
|
|
1.35%
|
|
1.52%
|
|
Non-performing assets to total assets (excluding
performing TDR's)
|
0.23%
|
|
0.27%
|
|
0.24%
|
|
0.24%
|
|
0.39%
|
|
(1)
|
Non-interest income (net of realized gains and losses on securities and
other non-recurring items) divided by the sum of net interest income and non-interest income (as adjusted).
|
|
|
|
(2)
|
Non-interest expense (less OREO expense) divided by the sum of net interest
income and non-interest income (as adjusted).
|
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dcb-financial-corp-announces-third-quarter-2016-results-300360961.html
SOURCE DCB Financial Corp