Exhibit 99.1
NEWS RELEASE	FOR IMMEDIATE RELEASE

 

 

DCB Financial Corp Announces Fourth Quarter and Full Year 2014 Results

 

Lewis Center, OH, January 29, 2015 - DCB Financial Corp (the “Company”), (OTC Bulletin Board DCBF), parent holding company of The Delaware County Bank & Trust Company, Lewis Center, Ohio (the “Bank”) announced net income of $164,000 or $0.02 per diluted share for the three months ended December 31, 2014, compared to a net loss of $3.1 million or $0.43 per diluted share for the fourth quarter of 2013.

 

The loss recorded in the fourth quarter of 2013 was due primarily to a provision for loan losses of $3.3 million in that quarter as a result of specific strategies developed at the end of 2013, including collateral liquidations and loan sales, to accelerate the disposition of certain classified and nonperforming commercial loans at the end of 2013.

 

Net income was $372,000 or $0.05 per diluted share for the year ended December 31, 2014, compared to a net loss of $2.9 million or $0.41 per diluted share in 2013.

 

Ronald J. Seiffert, President and CEO for the Company said, “We made important, strategic decisions relative to asset quality in the fourth quarter of 2013 that paved the way for the sharp reduction in problem assets that we achieved in 2014. The successful implementation of these strategies, along with favorable economic conditions, were key factors in the substantial improvement in our asset quality metrics in 2014. The amount of loans on nonaccrual status at the end of 2014 was down $5.5 million or 80% from the end of 2013, and total nonperforming assets were reduced by $10.3 million or 46% in 2014, including a $2.5 million decrease in the fourth quarter.”

 

Seiffert continued, “From a business development standpoint, the fourth quarter was our best quarter in 2014, with total loans up $15.8 million, for an annualized growth rate of 17%. Nearly two-thirds of the growth was in our commercial loan portfolios, which were up $9.8 million, as we built a robust pipeline of commercial prospects over the second half of 2014.”

 

 

Balance Sheet Highlights

Total assets were $515.3 million at December 31, 2014, compared with $500.3 million at September 30, 2014 and $502.4 million at December 31, 2013.

 

Total loans, including loans held for sale, increased $15.8 million in the fourth quarter of 2014, and were $385.4 million at December 31, 2014, compared with $369.6 million at September 30, 2014 and $363.9 million at December 31, 2013. Commercial loan demand was strong in the fourth quarter of 2014, with growth in the Company’s commercial loan portfolios totaling $9.8 million, while residential mortgages increased at a relatively seasonal pace of $4.2 million during the fourth quarter of 2014.

 

Deposits totaled $453.2 million at December 31, 2014, compared with $445.5 million at September 30, 2014 and $449.4 million at December 31, 2013. Demand accounts increased $10.9 million in the fourth quarter of 2014, which was partially offset by a decrease in time accounts of $2.5 million. Consistent with the financial sector generally, the very low interest rate environment continues to influence the Company’s deposit composition, as customer preference for non-maturity accounts outweighs that of time accounts.

 

Stockholders’ equity was $47.2 million at December 31, 2014, compared with $46.7 million at September 30, 2014, and $45.3 million at December 31, 2013. The increase since the end of 2013 was primarily the result of the difference between the unrealized loss of $940,000 on one collateralized debt obligation (“CDO”) at December 31, 2013, and the actual loss recognized upon the sale of that security in the first quarter of $140,000. Sharply higher demand for these types of securities in the first quarter of 2014 contributed to the increase in the value of the CDO during that quarter. The remaining increase in stockholders’ equity in 2014 was due primarily to an increase in unrealized gains on securities available-for-sale and net income for the year.

 

The Bank’s Tier 1 leverage ratio was 9.00% and its total risk-based capital ratio was 13.56% at December 31, 2014, both of which were well above the regulatory thresholds required to be classified as a “well-capitalized” institution, which are 5.0% and 10.0%, respectively.

 

Asset Quality and the Provision for Loan Losses

Delinquent loans (including non-accrual) totaled $2.2 million or 0.58% of total loans at December 31, 2014, compared to $3.6 million or 0.98% of total loans at September 30, 2014 and $8.7 million or 2.39% at the end of 2013. Nonaccrual loans totaled $1.4 million or 0.36% of total loans at December 31, 2014, compared to $3.0 million or 0.81% of total loans at September 30, 2014 and $6.9 million or 1.90% of total loans at December 31, 2013.

 

 

Non-performing assets were $12.1 million or 2.35% of total assets at December 31, 2014, compared with $14.6 million or 2.92% of total assets at September 30, 2014 and $22.4 million or 4.47% of total assets at December 31, 2013. 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 $9.1 million at December 31, 2014, compared to $9.8 million at September 30, 2014 and $12.8 million at December 31, 2013.

 

The $2.4 million decrease in non-performing assets in the fourth quarter of 2014 was attributable primarily to the successful workout of two non-accrual commercial real estate loans totaling $961,000, and to cash paydowns of $585,000 on a third non-accrual commercial mortgage. The Company made significant progress in reducing its non-performing assets in 2014, which were down $10.3 million or 46.0% during the year largely as the result of the execution of previously disclosed strategies developed in the fourth quarter of 2013 to accelerate the disposition of certain troubled assets. The Company’s exposure to its three highest risk troubled commercial relationships with aggregate balances at the end of 2013 of $7.0 million was reduced by $6.8 million in 2014 through a combination of collection actions, negotiated settlements, and asset sales, which resulted in charge-offs of $1.9 million and cash collections of $4.7 million.

 

Net charge-offs were $90,000 or 0.10% (annualized) of average loans in the fourth quarter of 2014, compared to net charge-offs of $1.1 million or 1.21% in the year-ago quarter. Net charge-offs were $2.5 million or 0.70% of average loans in 2014, compared to $609,000 or 0.18% in 2013. The three commercial relationships discussed above comprised approximately 67.1% of the gross charge-offs in 2014, which were charged against specific allowance allocations established in the fourth quarter of 2013 in connection with the non-performing asset reduction strategy developed in last year’s fourth quarter.

 

The provision for loan losses was $150,000 for the quarter and year ended December 31, 2014, compared to $3.3 million and $2.4 million, respectively, for the quarter and year ended December 31, 2013. The provision expense in the fourth quarter of 2013 was attributable to the strategies the Company developed at that time to accelerate the reduction of the Company’s exposure to three commercial relationships, as discussed above, and a group of homogenous single-family residential investment properties. Taken together, loan loss provisions allocated to these four exposures totaled $3.3 million or 100% of the provision expense for the fourth quarter of 2013. The provision for loan losses as a percentage of net charge-offs was 166.7% and 5.9%, respectively, in the quarter and year ended December 31, 2014, compared to 303.7% and 396.9%, respectively, in the year ago periods. The provision for loan losses as a percentage of net charge-offs was 95.2% for the five quarters ending December 31, 2014.

 

 

The allowance for loan losses was $4.2 million at December 31, 2014 and at September 30, 2014 compared with $6.7 million at December 31, 2013. The decrease in the allowance for loan losses in 2014 is a direct result of writedowns taken on loans in 2014 against the loan loss allowances established for these loans at or prior to the end of 2013. The ratio of the allowance for loan losses to total loans was 1.10% at December 31, 2014, compared with 1.13% at September 30, 2014 and 1.85% at December 31, 2013. The ratio of the allowance for loan losses to non-performing loans (including TDR’s) was 38.5% at December 31, 2014, compared with 31.3% at September 30, 2014 and 33.2% at December 31, 2013. The ratio of the allowance for loan losses to non-accrual loans was 306.1% at December 31, 2014, compared with 138.9% at September 30, 2014 and 97.4% at December 31, 2013.

 

Net Interest Income

Net interest income totaled $4.2 million in the three months ended December 31, 2014, compared with $4.0 million in both the year-ago quarter and the third quarter of 2014. The Company recognized $171,000 of interest income in the fourth quarter of 2014 upon the refinance of a non-accrual commercial mortgage which, upon the refinance, was returned to accrual status.

 

The net interest margin was 3.62% in the fourth quarter of 2014, compared with 3.37% in the year-ago quarter and 3.40% in the third quarter of 2014. The net interest margin was 3.48% in the fourth quarter of 2014 without the $171,000 interest recovery.

 

The earning assets yield increased 18 basis points and 20 basis points in the fourth quarter of 2014 compared with the year-ago quarter and third quarter of 2014, respectively, due primarily to the $171,000 interest recovery, and to the effect of purchase premiums written off in the third quarter of 2014 on the prepayment of certain investment securities and purchased mortgages. The cost of interest-bearing liabilities decreased 9 basis points and 2 basis points in the fourth quarter of 2014 compared to the year-ago quarter and third quarter of 2014, respectively, as a result of maturing time accounts which either were renewed at lower rates or were transferred into our interest-bearing demand and money market accounts, which earn interest at lower rates than time accounts. Also, the Company restructured advances from the Federal Home Loan Bank in November 2013 which contributed to a 153 basis point decrease in the cost of borrowings in the third quarter compared to the year-ago quarter.

 

Average interest-earning assets were $465.7 million in the fourth quarter of 2014, compared with $470.7 million in the year-ago quarter and $463.5 million in the third quarter of 2014. In the fourth quarter of 2014 the average balance of loans increased by $13.0 million, while the average balance of interest earning cash and cash equivalents decreased $10.6 million and average investments decreased $6.3 million when compared with the year-ago quarter, as the Company used its excess liquidity position to fund organic loan growth. Total average loans were 80.3% of total average interest-earning assets in the fourth quarter of 2014, compared with 76.7% in the year-ago quarter and 78.2% in the third quarter of 2014. The average balance of time deposits declined $21.9 million in the fourth quarter of 2014 compared with the year-ago quarter, while average balances in lower-costing interest-bearing demand, savings and money market accounts increased $22.8 million, and the average balance of non-interest-bearing demand accounts decreased $3.8 million over that same period.

 

 

Net interest income totaled $16.2 million in 2014, which was an increase of $907,000 or 5.9% compared with $15.3 million in 2013. The net interest margin was 3.49% in 2014, compared with 3.17% in 2013. The earning asset yield increased 32 basis point in 2014 compared with 2013, due largely to loan growth, and the cost of interest-bearing liabilities decreased 16 basis points over the same period.

 

Average interest-earning assets were $462.9 million in 2014, which was a decrease of $1.8 million from 2013. Total average loans were 78.5% of total interest-earning assets in 2014, compared with 73.6% in 2013. The average balance in time deposits decreased $36.0 million in 2014 compared with 2013, while the average balances in lower-costing interest-bearing demand, savings and money market accounts increased $25.0 million, and the average balance of non-interest-bearing demand accounts increased $10.1 million.

 

Non-Interest Income and Non-Interest Expenses

Non-interest income was $1.1 million in the fourth quarter of 2014, which was virtually unchanged from the year-ago quarter and from the third quarter of 2014.

 

Non-interest income was $4.5 million in 2014, compared to $5.0 million in 2013. Non-recurring writedowns and losses, net were $56,000 in 2014, compared to net non-recurring gains of $166,000 in 2013. In addition, service charges decreased $232,000 in 2014 compared to 2013 due primarily to lower volumes of customer overdraft and debit card transactions.

 

Non-interest income (net of nonrecurring income, gains and losses and gains/losses on the sales of securities) accounted for 20.6% of total revenue in the fourth quarter of 2014, compared with 21.9% in the year-ago quarter and 22.6% in the third quarter of 2014. Non-interest income accounted for 21.8% of total revenue in 2014, compared with 23.9% in 2013.

 

Non-interest expenses were $5.1 million for the fourth quarter of 2014, compared with $4.9 million in the year-ago quarter and $5.1 million for the third quarter of 2014. Salaries and benefits increased $302,000 in the fourth quarter of 2014 compared to the year-ago quarter due primarily to a reversal of incentive compensation accruals in the fourth quarter of 2013 which had been accrued over the first three quarters of 2013. FDIC insurance expense decreased $58,000 in the fourth quarter compared to the year-ago quarter due to the improvement in the Bank’s regulatory risk rating, which was effective in the fourth quarter of 2014, and which resulted largely from the substantial improvement in the Bank’s asset quality in 2014. Non-interest expenses for the fourth quarter of 2014 included approximately $107,000 of non-routine expenses, consisting primarily of legal expenses covering matters of corporate governance, capital management, corporate equity plans and the special meeting of shareholders held in October, among other things.

 

 

The Company’s efficiency ratio was 94.6% in the fourth quarter of 2014, compared with 95.8% in the year-ago quarter, and 98.7% in the third quarter of 2014.

 

Non-interest expenses were $20.1 million in 2014, which was a decrease of $934,000 or 4.4% compared to 2013. Professional services decreased $412,000 due to the substantial reduction in non-performing assets in 2014 which has resulted in a reduced need for outside professional services related to the workout of such assets. Office supplies, postage and courier expenses declined $153,000 in 2014 due primarily to expense reduction initiatives. State franchise taxes decreased $212,000 in 2014 due to a change in the tax law which changed how the tax was calculated in 2014. Non-interest expenses in 2014 included approximately $314,000 of non-routine expenses, consisting primarily of legal expenses covering matters of corporate governance, capital management, corporate equity plans and the special meeting of shareholders held in October, among other things.

 

The Company’s efficiency ratio was 97.2% in 2014, compared to 104.7% in 2013.

 

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 14 branch offices located in Delaware County, Ohio and surrounding communities. 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, 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. 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: 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, among other things, in 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, 2013, 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.

 

Contact:	DCB Financial Corp
	Ronald J. Seiffert, President and CEO
	(740) 657-7000
	J. Daniel Mohr, Executive Vice President and CFO
	(740) 657-7510

 

 

DCB Financial Corp

Consolidated Balance Sheets (Unaudited)

 

		December 31, 2014				December 31, 2013
		(Dollars in thousands, except share and per share data)
Assets
Cash and due from financial institutions		$	6,247			$	6,110
Interest-bearing deposits			15,027				19,247
Total cash and cash equivalents			21,274				25,357
Securities available-for-sale			75,909				79,948
Loans			385,444				356,048
Less allowance for loan losses			(4,236	)			(6,724	)
Net loans			381,208				349,324
Loans held for sale			—				7,806
Real estate owned			1,111				1,219
Investment in FHLB stock			3,250				3,799
Premises and equipment, net			10,016				10,641
Premises and equipment held for sale			—				1,405
Bank-owned life insurance			20,027				19,297
Accrued interest receivable and other assets			2,587				3,623
Total assets		$	515,382			$	502,419
Liabilities and stockholders’ equity
Liabilities:
Deposits:
Non-interest bearing		$	111,022			$	109,622
Interest bearing			342,170				317,237
Total deposits			453,192				426,859
Deposits held for sale			—				22,571
Overnight borrowings			7,000				—
Federal Home Loan Bank advances			4,808				4,838
Accrued interest payable and other liabilities			3,171				2,887
Total liabilities			468,171				457,155
Stockholders’ equity:
Common stock			16,064				15,771
Retained earnings			38,045				37,683
Treasury stock			(7,416	)			(7,416	)
Accumulated other comprehensive income (loss)			654				(774	)
Deferred stock-based compensation			(136	)			—
Total stockholders’ equity			47,211				45,264
Total liabilities and stockholders’ equity		$	515,382			$	502,419
Common shares outstanding			7,233,795				7,192,350
Book value per common share		$	6.53			$	6.29

 

 

DCB Financial Corp

Consolidated Statements of Operations (Unaudited)

 

		Three months ended December 31,								Year ended December 31,
		2014				2013				2014				2013
		(Dollars in thousands, except share and per share data)
Interest income:
Loans		$	4,044			$	3,828			$	15,276			$	14,928
Securities			484				528				2,065				2,064
Federal funds sold and interest bearing deposits			8				16				39				87
Total interest income			4,536				4,372				17,380				17,079
Interest expense:
Deposits:
Savings and money market  accounts			145				131				559				474
Time accounts			94				166				434				989
NOW accounts			17				22				76				91
Total			256				319				1,069				1,554
Borrowings:
FHLB advances			36				50				143				264
Total interest expense			292				369				1,212				1,818
Net interest income			4,244				4,003				16,168				15,261
Provision for loan losses			150				3,307				150				2,417
Net interest income after provision for loan losses			4,094				696				16,018				12,844
Non-interest income:
Service charges			475				530				1,963				2,195
Wealth management fees			383				329				1,474				1,418
Treasury management fees			47				61				220				244
Income from bank-owned life insurance			164				162				732				733
Gain (loss) on loans held for sale			37				—				(511	)			—
(Loss) gain on sale of REO			(11	)			(4	)			(84	)			31
Gain on sale of securities, available-for-sale			—				—				101				135
Gain on sale of branch			—				—				438				—
Other non-interest income			34				38				127				211
Total non-interest income			1,129				1,116				4,460				4,967
Non-interest expense:
Salaries and employee benefits			2,829				2,527				11,141				11,287
Occupancy and equipment			798				791				3,192				3,069
Professional services			395				465				1,379				1,791
Advertising			89				54				347				293
Office supplies, postage and courier			72				118				328				481
FDIC insurance premium			110				168				630				699
State franchise taxes			67				104				266				478
Other non-interest expense			699				687				2,823				2,942
Total non-interest expense			5,059				4,914				20,106				21,040
Income (loss) before income tax benefit			164				(3,102	)			372				(3,229	)
Income tax benefit			—				—				—				(298	)
Net income (loss)		$	164			$	(3,102	)		$	372			$	(2,931	)
Share and Per Share Data
Basic average common shares outstanding			7,196,404				7,192,350				7,193,372				7,192,350
Diluted average common shares outstanding			7,232,961				7,192,350				7,232,388				7,192,350
Basic earnings per common share		$	0.02			$	(0.43	)		$	0.05			$	(0.41	)
Diluted earnings per common share		$	0.02			$	(0.43	)		$	0.05			$	(0.41	)

 

 

DCB Financial Corp

Consolidated Average Balances (Unaudited)

 

		Three months ended December 31,								Year ended December 31,
		2014				2013				2014				2013
		(Dollars in thousands)
Earning assets
Interest bearing cash		$	12,745			$	23,295			$	16,576			$	32,799
Securities			75,339				81,622				78,704				85,052
Tax-exempt securities			3,625				4,838				4,314				4,738
Loans (1)			373,981				360,994				363,340				342,112
Total earning assets			465,690				470,749				462,934				464,701
Non-earning assets			40,314				39,595				40,414				42,111
Total assets		$	506,004			$	510,344			$	503,348			$	506,812
Interest bearing liabilities
Interest bearing DDA		$	76,918			$	74,461			$	78,447			$	74,853
Money market			146,818				126,032				136,393				116,872
Savings accounts			42,711				43,184				42,845				40,953
Time deposits			74,360				96,294				80,114				116,151
Overnight borrowings			1,022				—				863				—
FHLB advances			4,813				5,037				4,824				5,916
Total interest bearing liabilities			346,642				345,008				343,486				354,745
Non-interest bearing deposits		$	110,913			$	114,680			$	110,457			$	100,385
Other non-interest bearing liabilities			2,458				1,853				3,791				2,883
Total liabilities			460,013				461,541				457,734				458,013
Stockholders’ equity			45,991				48,803				45,614				48,799
Total liabilities and stockholders’ equity		$	506,004			$	510,344			$	503,348			$	506,812

 

(1)

Includes loans held for sale

 

 

DCB Financial Corp

Loans and Deposits (Unaudited)

 

The following table sets forth the composition of the Company’s loan portfolio at the dates indicated (includes loans held for sale):

 

		December 31, 2014								September 30, 2014								December 31, 2013
		Amount				Percent				Amount				Percent				Amount				Percent
		(Dollars in thousands)
Loan portfolio composition
Commercial and industrial		$	106,222				27.6	%		$	102,629				27.8	%		$	122,901				33.8	%
Commercial real estate			111,851				29.0	%			105,621				28.6	%			106,901				29.4	%
Real estate and home equity			129,650				33.7	%			125,484				34.0	%			98,622				27.1	%
Consumer and credit card			37,507				9.7	%			35,725				9.6	%			35,265				9.7	%
Total loans		$	385,230				100.0	%		$	369,459				100.0	%			363,689				100.0	%
Net deferred loan costs			214								182								165
Allowance for loan losses			(4,236	)							(4,176	)							(6,724	)
Net loans		$	381,208							$	365,465							$	357,130

 

The following table sets forth the composition of the Company’s deposits at the dates indicated (includes deposits held for sale):

 

		December 31, 2014								September 30, 2014								December 31, 2013
		Amount				Percent				Amount				Percent				Amount				Percent
		(Dollars in thousands)
Deposit composition
Non-interest bearing demand		$	111,022				24.5	%		$	104,991				23.6	%		$	112,711				25.1	%
Interest bearing demand			77,534				17.1	%			72,622				16.3	%			78,229				17.4	%
Total demand			188,556				41.6	%			177,613				39.9	%			190,940				42.5	%
Savings			42,634				9.4	%			42,482				9.5	%			43,448				9.7	%
Money market			147,667				32.6	%			148,628				33.4	%			125,635				27.9	%
Time deposits			74,335				16.4	%			76,811				17.2	%			89,407				19.9	%
Total deposits		$	453,192				100.0	%		$	445,534				100.0	%		$	449,430				100.0	%

 

 

DCB Financial Corp

Asset Quality (Unaudited)

 

The following table represents a summary of delinquent loans grouped by the number of days delinquent at the dates indicated (includes loans held-for-sale):

 

Delinquent loans and leases		December 31, 2014								September 30, 2014								December 31, 2013
		$				%(1)				$				%(1)				$				%(1)
		(Dollars in thousands)
30 days past due		$	336				0.09	%		$	68				0.02	%		$	945				0.26	%
60 days past due			37				0.01	%			50				0.01	%			290				0.08	%
90 days past due and still accruing			480				0.12	%			520				0.14	%			560				0.15	%
Non-accrual			1,384				0.36	%			3,007				0.81	%			6,904				1.90	%
Total		$	2,237				0.58	%		$	3,645				0.98	%		$	8,699				2.39	%

 

(1) As a percentage of total loans, excluding deferred costs

 

The following table represents information concerning the aggregate amount of non-performing assets (includes loans held for sale):

 

Non-performing assets		December 31, 2014				September 30, 2014				December 31, 2013
		(Dollars in thousands)
Non-accruing loans:
Residential real estate loans and home equity		$	334			$	343			$	352
Commercial real estate			298				1,889				1,850
Commercial and industrial			632				651				4,702
Consumer loans and credit cards			120				124				—
Total non-accruing loans			1,384				3,007				6,904
Accruing loans delinquent 90 days or more			480				520				560
Total non-performing loans (excluding TDR’s)			1,864				3,527				7,464
Collateralized debt obligations			—				—				976
Other real estate and repossessed assets			1,111				1,215				1,219
Total non-performing assets (excluding TDR’s)		$	2,975			$	4,742			$	9,659
Troubled debt restructurings(1)		$	9,147			$	9,834			$	12,788
Total non-performing loans (including TDR’s)		$	11,011			$	13,361			$	20,252
Total non-performing assets (including TDR’s)		$	12,122			$	14,576			$	22,447

 

(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 and leases previously charged off and additions to the allowance which have been charged to expense:

 

Allowance for loan losses		Three months ended December 31,								Year ended December 31,
		2014				2013				2014				2013
		(Dollars in thousands)
Allowance for loan losses, beginning of period		$	4,176			$	6,471			$	6,724			$	6,881
Loans charged-off			(162	)			(1,161	)			(2,865	)			(1,741	)
Recoveries of loans previously charged-off			72				72				324				1,132
Net loans charged-off			(90	)			(1,089	)			(2,541	)			(609	)
Allowance related to loans transferred to held-for-sale			—				(1,965	)			(97	)			(1,965	)
Provision for loan losses			150				3,307				150				2,417
Allowance for loan losses, end of period		$	4,236			$	6,724			$	4,236			$	6,724

 

 

DCB Financial Corp

Consolidated Financial Information (Unaudited)

 

Key Ratios		At or for the three months ended December 31,								At or for year ended December 31,
		2014				2013				2014				2013
Return on average assets			0.13	%			(2.43	)%			0.07	%			(0.58	)%
Return on average equity			1.44	%			(25.42	)%			0.82	%			(6.01	)%
Yield on earning assets			3.86	%			3.68	%			4.00	%			3.68	%
Cost of interest-bearing liabilities			0.33	%			0.42	%			0.35	%			0.51	%
Net interest margin (1)			3.62	%			3.37	%			3.49	%			3.17	%
Non-interest income to total income (2)			20.6	%			21.9	%			21.8	%			23.9	%
Efficiency ratio (3)			94.6	%			95.8	%			97.2	%			104.7	%
Net loans charged-off to average loans, annualized			0.10	%			1.21	%			0.70	%			0.18	%
Provision for loan losses to average loans, annualized			0.16	%			3.66	%			0.04	%			0.71	%
Allowance for loan losses to total loans			1.10	%			1.85	%			1.10	%			1.85	%
Allowance for loan losses to non-accrual loans			306	%			97	%			306	%			97	%
Non-accrual loans to total loans			0.36	%			1.90	%			0.36	%			1.90	%
Non-performing assets to total assets (including performing TDR’s)			2.35	%			4.47	%			2.35	%			4.47	%
Non-performing assets to total assets (excluding performing TDR’s)			0.58	%			1.92	%			0.58	%			1.92	%

 

(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)

 

		2014																2013
		Fourth				Third				Second				First				Fourth
		(Dollars in thousands, except per share data)
Interest income		$	4,536			$	4,278			$	4,262			$	4,304			$	4,372
Interest expense			292				306				299				316				369
Net interest income			4,244				3,972				3,963				3,988				4,003
Provision for loan losses			150				—				—				—				3,307
Net interest income after provision for loan losses			4,094				3,972				3,963				3,988				696
Non-interest income			1,129				1,140				996				1,192				1,116
Non-interest expenses			5,059				5,062				4,922				5,063				4,914
Income (loss) before income taxes			164				50				37				117				(3,102	)
Income taxes			—				—				—				—				—
Net income (loss)		$	164			$	50			$	37			$	117			$	(3,102	)
Stock and related per share data:
Basic and diluted earnings (loss) per common share		$	0.02			$	0.01			$	0.01			$	0.02			$	(0.43	)
Basic weighted average common shares outstanding			7.196,404				7,192,350				7,192,350				7,192,350				7,192,350
Diluted weighted average common shares outstanding			7,232,961				7,249,194				7,250,702				7,244,716				7,192,350
Common book value per share		$	6.53			$	6.49			$	6.51			$	6.45			$	6.29
Capital Ratios:
Bank
Tier 1 leverage ratio			9.00	%			8.96	%			8.97	%			8.83	%			8.77	%
Tier 1 risk based capital			12.40	%			12.42	%			12.77	%			12.78	%			12.24	%
Total risk based capital			13.56	%			13.57	%			14.02	%			14.03	%			13.50	%
Total equity to assets ratio (consolidated)			9.16	%			9.33	%			9.35	%			9.39	%			9.01	%
Selected ratios:
Return on average assets			0.13	%			0.04	%			0.05	%			0.09	%			(2.43	)%
Return on average equity			1.44	%			0.43	%			0.53	%			1.02	%			(25.42	)%
Yield on earning assets			3.86	%			3.66	%			3.75	%			3.74	%			3.68	%
Cost of interest-bearing liabilities			0.33	%			0.35	%			0.36	%			0.32	%			0.42	%
Net interest margin			3.62	%			3.40	%			3.51	%			3.50	%			3.37	%
Non-interest income to total income (1)			20.6	%			22.6	%			21.8	%			22.2	%			21.9	%
Efficiency ratio (2)			94.6	%			98.7	%			96.2	%			98.5	%			95.8	%
Asset quality ratios:
Net loans charged off to average loans, annualized			0.10	%			0.43	%			0.87	%			1.43	%			1.21	%
Provision for loan losses to average loans, annualized			0.16	%			0.00	%			0.00	%			0.00	%			3.66	%
Allowance for loan losses to total loans			1.10	%			1.13	%			1.28	%			1.51	%			1.85	%
Allowance for loan losses to non-accrual loans			306	%			139	%			109	%			148	%			97	%
Non-accrual loans to total loans			0.36	%			0.81	%			1.17	%			1.02	%			1.90	%
Non-performing assets to total assets (including performing TDR’s)			2.35	%			2.91	%			3.06	%			3.59	%			4.47	%
Non-performing assets to total assets (excluding performing TDR’s)			0.58	%			0.95	%			1.12	%			1.05	%			1.92	%

 

(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)