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Section 1: 8-K (8-K)

Form 8-K 1Q 2018

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 8-K



CURRENT REPORT



Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934





ly

 

 

Date of Report (Date of Earliest Event Reported):

 

 

April 24, 2018

 


 

DNB Financial Corporation

__________________________________________

(Exact name of registrant as specified in its charter)





 

 

 

Pennsylvania

1-34242

23-2222567

 

_____________________

(State or other jurisdiction

_____________

(Commission

______________

(I.R.S. Employer

 

of incorporation)

File Number)

Identification No.)

 

   

 

 

 

4 Brandywine Avenue, Downingtown, Pennsylvania

 

19335

 

_________________________________

(Address of principal executive offices)

 

___________

(Zip Code)

 



 

Registrant’s telephone number, including area code:

 

(610) 269-1040

 





Not Applicable

______________________________________________

Former name or former address, if changed since last report



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.










 

Item 2.02. Results of Operations and Financial Condition.



On April 24, 2018, DNB Financial Corporation issued a press release discussing the Company's First Quarter 2018 Results. The press release, attached as Exhibit 99.1 hereto and incorporated herein by reference, is being furnished to the SEC and shall not be deemed to be "filed" for any purpose.



Item 8.01. Other Events



The information in Item 2.02 is incorporated into this Item 8.01 by reference.



Item 9.01. Financial Statements and Exhibits.



(c) Exhibits. The following exhibit is furnished herewith:



99.1 Press Release, dated April 24, 2018 of DNB Financial Corporation








 





SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.





 

 

 

DNB Financial Corporation

   

 

April 24, 2018

By:

/s/ Gerald F. Sopp

 

 

Name: Gerald F. Sopp

 

 

Title: Chief Financial Officer and Executive Vice President



 










































Exhibit Index



nuary

 

 

 

Exhibit No.

 

Description

 

99.1

 

 Press Release dated April 24, 2018 of DNB Financial Corporation  

 

 

 







(Back To Top)

Section 2: EX-99.1 (EX-99.1)

Press Release 1Q 2018

DNB Financial Corporation



DNB_Financial-4c_rev



For further information, please contact:

Gerald F. Sopp CFO/Executive Vice-President

484.359.3138FOR IMMEDIATE RELEASE 

gsopp@dnbfirst.com (NasdaqCM: DNBF)

DNB Financial Corporation Reports First Quarter 2018 Results

Downingtown PA., April 24, 2018 (GLOBE NEWSWIRE)– DNB Financial Corporation (Nasdaq: DNBF), today reported net income of $2.6 million, or $0.61 per diluted share, for the quarter ended March 31, 2018, compared with $2.4 million, or $0.57 per diluted share, for the same quarter last year. 

DNB Financial Corporation (the “Company” or “DNB”) is the parent of DNB First, National Association, one of the first nationally-chartered community banks to serve the greater Philadelphia region. 

William J. Hieb, President and CEO, commented, “Our first quarter results represented a good start to the new year.  Our performance included solid loan, deposit, and wealth management growth along with disciplined expense management.”  Mr. Hieb continued, “Despite our solid commercial loan and core deposit growth, margin pressure continued as we contend with the flatter yield curve and better position our balance sheet for rising short-term interest rates.” 

Highlights 

·

Total loans increased 2.2% on a sequential quarter basis and 5.9% since March 31, 2017. 

·

Core deposits grew $36.1 million, or 5.3% since December 31, 2017, and were 80% of total deposits at March 31, 2018.  As of the same date, the loan-to-deposit ratio was 97%.

·

Asset quality remained strong as net charge-offs were only 0.04% (annualized) of total average loans for the first quarter of 2018.  Non-performing loans were 0.97% of total loans at March 31, 2018.

·

On a year-over-year basis, net income increased $172,000, or 7.0%, despite the 16 basis point decrease in the net interest margin to 3.51%.  The decline was largely attributable to a  $379,000 net reduction in purchase accounting marks and an overall increase in market interest rates on interest-bearing liabilities.

·

Wealth management assets under care increased 3.0% to $260.3 million as of March 31, 2018, from $252.8 million as of December, 31, 2017.  Wealth management fees represented approximately 34% of total fee income for the first quarter of 2018.

·

The Company paid a quarterly cash dividend of $0.07 per share on March 27, 2018.

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Income Statement Summary

Net income of $2.6 million for the first quarter of 2018, generated a return on average assets (“ROAA”) and return on average tangible common equity (“ROTCE”) of 0.97% and 12.1%, respectively. 

Net interest income for the three months ending March 31, 2018 was $9.0 million, which represents a $621,000 decrease from the quarter ended December 31, 2017, and a $205,000 decrease from the quarter ended March 31, 2017.  The year-over-year decline was primarily due to a 16 basis point decrease in the net interest margin to 3.51% for the quarter ended March 31, 2018.  The drop in the net interest margin resulted chiefly from a $379,000 net reduction in purchase accounting marks and the higher cost of interest-bearing liabilities, partially offset by a $21.14 million rise in total average interest-earning assets. For the first quarters of 2018 and 2017, the weighted average yields on total interest-earning assets were 4.24% and 4.16%, respectively, which included purchase accounting adjustments. 

Total interest expense was $1.9 million for the three months ending March 31, 2018, compared with $1.6 million for the three months ending December 31, 2017, and $1.3 million for the first quarter of 2017.  The weighted average rate paid for interest-bearing liabilities was 0.78%, 0.66% and 0.53% for the quarters ending March 31, 2018, December 31, 2017 and March 31, 2017, respectively.  The rise in the weighted average rate year-over-year was primarily due to a $196,000 reduction in purchase accounting marks and an overall increase in market interest rates.

The provision for credit losses was $375,000 for the first quarter of 2018, compared with $325,000 for the same quarter last year.  As of March 31, 2018, the allowance for credit losses was $6.1 million and represented 0.71% of total loans.  Loans acquired in connection with the purchase of East River in 2016 were recorded at fair value based on an initial estimate of expected cash flows, including a reduction for estimated credit losses, and without carryover of the respective portfolio's historical allowance for credit losses. 

Total non-interest income for the first quarter of 2018 was $1.3 million, compared with $1.2 million for the same quarter last year.  Wealth management fees were $435,000 for the first quarter of 2018, compared with $374,000 for the first quarter of 2017. Wealth management fees represented approximately 34% of total fee income. 

Non-interest expense was $6.7 million for the first quarter of 2018, which was stable compared with the first quarter of 2017. 

The enactment of the Tax Cuts and Jobs Act in December 2017 provided significant changes including a reduction of the federal corporate tax rate to 21% from 34%, effective January 1, 2018.  The Company’s tax rate for the quarter ended March 31, 2018 was 18.2%, compared with 29.6% for the same quarter, last year.

Balance Sheet Summary

As of March 31, 2018, total assets were $1.1 billion.  Since December 31, 2017, total assets increased 1.7%, primarily due to total loan growth of $18.4 million, or 2.2%.  Total deposits increased $30.6 million, or 3.6%, on a sequential quarter basis mainly due to growth in core deposits.  As of March 31, 2018, total shareholders’ equity was $103.7 million, compared with $101.9 million as of December 31, 2017.  Tangible book value per share was $20.44 as of March 31, 2018, compared with $20.06 as of December 31, 2017.

2


 

As of March 31, 2018, total loans were $864.3 million, or 78.6% of total assets.  Over the past 3 months, total commercial loans increased $19.1 million, or 2.8%.  Commercial mortgage loans increased $13.6 million, or 2.8%, commercial business loans grew $1.6 million, or 1.2%, and commercial construction loans increased $3.8 million, or 5.1%.  As of March 31, 2018, commercial loans totaled $708.5 million and represented 82% of total loans.  Consumer loans, however, declined over the quarter as overall loan demand appeared fairly restrained. The Company’s loan originations have been prudent and conservative underwriting standards have been maintained. 

On a sequential quarter basis, total core deposits increased $36.1 million, or 5.3%, and were 80.2% of total deposits as of March 31, 2018.  As of the same date, noninterest-bearing deposits were 19.3% of total deposits.  Core deposit growth in the first quarter of 2018, was primarily attributable to an increase in money market accounts.  The planned decrease in time deposits was partially offset by an increase in brokered deposits due to the more favorable rates and maturities available during the first quarter of 2018.

Capital ratios continue to exceed all regulatory guidelines.  As of March 31, 2018, the Tier 1 leverage ratio was 9.33%, the Tier 1 risk-based capital was 11.67%, the common equity Tier 1 risk-based capital ratio was 10.63% and the total risk based capital ratio was 13.56%.  As of the same date, the tangible common equity-to-tangible assets ratio was 8.09%.  Intangible assets and goodwill totaled $15.9 million as of March 31, 2018. 

Asset Quality Summary

Asset quality remained strong as net charge-offs were 0.04% (annualized) of total average loans for the quarter ended March 31, 2018.  Total non-performing assets, including loans and other real estate property, were $13.4 million as of March 31, 2018, compared with $12.6 million as of December 31, 2017, and $12.7 million as of March 31, 2017.  The ratio of non-performing loans to total loans was 0.97% as of March 31, 2018, versus 0.89% as of December 31, 2017.    

Interest Rate Risk Management

DNB's strategy has been to seek shorter duration over yield in its lending and investing activities and lengthen duration over rate in its financing activities to minimize interest rate risk.  The Company also strives to offer products and services that develop strong relationships to retain core deposits. The Bank has an Asset Liability Management Committee that actively monitors and manages the Bank's interest rate exposure using simulation models and gap analysis. The Committee's primary objective is to minimize the adverse impact of changes in interest rates on net interest income, while maximizing earnings. Simulation model results continue to show moderate liability sensitivity to rising rates in 100, 200, 300 and 400 basis point shock scenarios, but risk is increasing. Rate changes ramped in over 24 months also show moderate liability sensitivity.

Non-GAAP Based Financial Measures

The income statement summary and selected financial data contains non-GAAP financial measures calculated using non-GAAP amounts. These measures are tangible book value per common share, return on average tangible equity and tangible equity to tangible assets. Tangible book value per share adjusts the numerator by the amount of Goodwill and Other Intangible Assets (reduction of Shareholders' Equity). Return on average tangible equity adjusts the denominator by the amount of Goodwill and Other Intangible Assets (reduction of Shareholders’ Equity). Tangible equity to tangible assets adjusts the numerator by the amount of Goodwill and Other Intangible Assets (reduction of Shareholders’ Equity)

3


 

and adjust the denominator by the amount of Goodwill and Other Intangible Assets (reduction of Total Assets). Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of non-GAAP measures provides additional clarity when assessing our financial results and use of equity. Disclosures of this type should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.

General Information



DNB Financial Corporation is a bank holding company whose bank subsidiary, DNB First, National Association, is a community bank headquartered in Downingtown, Pennsylvania with 15 locations. DNB First, which was founded in 1860, provides a broad array of consumer and business banking products, and offers brokerage and insurance services through DNB Investments & Insurance, and investment management services through DNB Investment Management & Trust. DNB Financial Corporation's shares are traded on NASDAQ’s Capital Market under the symbol: DNBF. We invite our customers and shareholders to visit our website at https://www.dnbfirst.com. DNB's Investor Relations site can be found at http://investors.dnbfirst.com/.



Forward-Looking Statements



This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, expectations or predictions of future financial or business performance. These forward-looking statements include statements with respect to DNB’s beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various factors (some of which are beyond DNB’s control). The words "may," "could," "should," "would," "will," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify forward-looking statements.



In addition to factors previously disclosed in the reports filed by DNB with the Securities and Exchange Commission (the “SEC”) and those identified elsewhere in this document, the following factors, among others, could cause actual results to differ materially from forward looking statements or historical performance: the strength of the United States economy in general and the strength of the local economies in which DNB conducts its operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; the downgrade, and any future downgrades, in the credit rating of the U.S. Government and federal agencies; inflation, interest rate, market and monetary fluctuations; the timely development of and acceptance of new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors' products and services; the willingness of users to substitute competitors’ products and services for DNB’s products and services; the success of DNB in gaining regulatory approval of its products and services, when required; the impact of changes in laws and regulations applicable to financial institutions (including laws concerning taxes, banking, securities and insurance); technological changes; additional acquisitions; changes in consumer spending and saving habits; the nature, extent, and timing of governmental actions and reforms; and the success of DNB at managing the risks involved in the foregoing. Further, DNB’s expectations with respect to the effects of the new tax law could be affected by future clarifications, amendments, and interpretations of such law. Annualized, pro forma, projected and estimated numbers presented herein are presented for illustrative purpose only, are not forecasts and may not reflect actual results.



4


 

DNB cautions that the foregoing list of important factors is not exclusive. Readers are also cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date of this press release, even if subsequently made available by DNB on its website or otherwise. DNB does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of DNB to reflect events or circumstances occurring after the date of this press release.



For a complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review our filings with the SEC, including our most recent annual report on Form 10-K, as supplemented by our quarterly or other reports subsequently filed with the SEC.



FINANCIAL TABLES FOLLOW































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DNB Financial Corporation

Condensed Consolidated Statements of Income (Unaudited)

(Dollars in thousands, except per share data)



 

 

 

 

 

 



Three Months Ended

 



March 31,

 



 

2018

 

 

2017

 

 EARNINGS:

 

 

 

 

 

 

 Interest income

$

10,913 

 

$

10,494 

 

 Interest expense

 

1,886 

 

 

1,262 

 

 Net interest income

 

9,027 

 

 

9,232 

 

 Provision for credit losses

 

375 

 

 

325 

 

 Non-interest income

 

1,273 

 

 

1,226 

 

 Gain from insurance proceeds

 

 -

 

 

80 

 

 Loss on sale / write-down of OREO and ORA

 

 -

 

 

(1)

 

 Due diligence & merger expense

 

 -

 

 

51 

 

 Non-interest expense

 

6,730 

 

 

6,695 

 

 Income before income taxes(1)

 

3,195 

 

 

3,468 

 

 Income tax expense

 

582 

 

 

1,027 

 

 Net income

$

2,613 

 

$

2,441 

 

 Net income per common share, diluted

$

0.61 

 

$

0.57 

 

(1) Net income before income taxes includes net accretion of purchase accounting fair value adjustments of $262,000 for the three month period ended March 31, 2018, compared with $638,000 for the same quarter last year.



Condensed Consolidated Statements of Financial Condition (Unaudited)

(Dollars in thousands)



 

 

 

 

 

 



 

March 31,

 

 

December 31,

 



 

2018

 

 

2017

 

 FINANCIAL POSITION:

 

 

 

 

 

 

 Cash and cash equivalents

$

14,078 

 

$

10,917 

 

 Investment securities

 

171,108 

 

 

174,173 

 

 Loans held for sale

 

646 

 

 

651 

 

 Loans

 

864,345 

 

 

845,897 

 

 Allowance for credit losses

 

(6,145)

 

 

(5,843)

 

 Net loans

 

858,200 

 

 

840,054 

 

 Premises and equipment, net

 

8,366 

 

 

8,649 

 

 Other assets

 

47,632 

 

 

47,471 

 

 Total assets

$

1,100,030 

 

$

1,081,915 

 



 

 

 

 

 

 

 Deposits

$

891,786 

 

$

861,203 

 

 FHLB advances

 

67,993 

 

 

79,013 

 

 Repurchase agreements

 

10,717 

 

 

12,023 

 

 Other borrowings

 

9,630 

 

 

12,017 

 

 Subordinated debt

 

9,750 

 

 

9,750 

 

 Other liabilities

 

6,484 

 

 

5,967 

 

 Stockholders' equity

 

103,670 

 

 

101,942 

 

 Total liabilities and stockholders' equity

$

1,100,030 

 

$

1,081,915 

 



 

 

 

 

 

 



 









 

 

 

 

 

 

 

 

 

 

 

 

 

 

6


 

DNB Financial Corporation

Selected Financial Data (Unaudited)

(In thousands, except per share data)



 

 

 

 

 

 

 

 

 

 

 

 

 

 



Quarterly



2018

 

2017

 

2017

 

2017

 

2017



1st Qtr

 

4th Qtr

 

3rd Qtr

 

2nd Qtr

 

1st Qtr

Earnings and Per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net income

$

2,613 

 

$

808 

 

$

2,411 

 

$

2,286 

 

$

2,441 

 Basic earnings per common share

$

0.61 

 

$

0.19 

 

$

0.57 

 

$

0.54 

 

$

0.57 

 Diluted earnings per common share

$

0.61 

 

$

0.19 

 

$

0.56 

 

$

0.53 

 

$

0.57 

 Dividends per common share

$

0.07 

 

$

0.07 

 

$

0.07 

 

$

0.07 

 

$

0.07 

 Book value per common share

$

24.15 

 

$

23.78 

 

$

23.90 

 

$

23.35 

 

$

22.88 

 Tangible book value per common share (Non-GAAP)

$

20.44 

 

$

20.06 

 

$

20.15 

 

$

19.59 

 

$

19.11 

 Average common shares outstanding

 

4,291 

 

 

4,274 

 

 

4,262 

 

 

4,258 

 

 

4,247 

 Average diluted common shares outstanding

 

4,309 

 

 

4,297 

 

 

4,296 

 

 

4,292 

 

 

4,274 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Return on average assets

 

0.97% 

 

 

0.30% 

 

 

0.90% 

 

 

0.84% 

 

 

0.92% 

 Return on average equity

 

10.25% 

 

 

3.10% 

 

 

9.42% 

 

 

9.23% 

 

 

10.28% 

 Return on average tangible equity (Non-GAAP)

 

12.12% 

 

 

3.66% 

 

 

11.18% 

 

 

11.00% 

 

 

12.34% 

 Net interest margin

 

3.51% 

 

 

3.74% 

 

 

3.72% 

 

 

3.59% 

 

 

3.67% 

 Efficiency ratio

 

64.61% 

 

 

64.73% 

 

 

63.45% 

 

 

63.80% 

 

 

63.14% 

 Wtd average yield on earning assets

 

4.24% 

 

 

4.35% 

 

 

4.30% 

 

 

4.12% 

 

 

4.16% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net charge-offs to average loans

 

0.04% 

 

 

0.06% 

 

 

0.02% 

 

 

0.36% 

 

 

0.14% 

 Non-performing loans/Total loans

 

0.97% 

 

 

0.89% 

 

 

0.87% 

 

 

0.84% 

 

 

0.94% 

 Non-performing assets/Total assets

 

1.22% 

 

 

1.16% 

 

 

1.13% 

 

 

1.13% 

 

 

1.16% 

 Allowance for credit loss/Total loans

 

0.71% 

 

 

0.69% 

 

 

0.68% 

 

 

0.65% 

 

 

0.66% 

 Allowance for credit loss/Non-performing loans

 

73.08% 

 

 

77.36% 

 

 

78.68% 

 

 

76.76% 

 

 

70.56% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Total equity/Total assets

 

9.42% 

 

 

9.42% 

 

 

9.56% 

 

 

9.19% 

 

 

8.93% 

 Tangible equity/Tangible assets (Non-GAAP)

 

8.09% 

 

 

8.07% 

 

 

8.18% 

 

 

7.83% 

 

 

7.57% 

 Tier 1 leverage ratio

 

9.33% 

 

 

9.19% 

 

 

9.22% 

 

 

8.80% 

 

 

8.75% 

 Common equity tier 1 risk-based capital ratio

 

10.63% 

 

 

10.71% 

 

 

10.78% 

 

 

10.24% 

 

 

9.71% 

 Tier 1 risk based capital ratio

 

11.67% 

 

 

11.80% 

 

 

11.88% 

 

 

11.32% 

 

 

10.75% 

 Total risk based capital ratio

 

13.56% 

 

 

13.73% 

 

 

13.79% 

 

 

13.15% 

 

 

12.56% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wealth Management Assets Under Care(1)

$

260,324 

 

$

252,823 

 

$

246,294 

 

$

232,707 

 

$

224,490 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Wealth Management Assets Under Care includes assets under management, administration, supervision and brokerage.

















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7


 

DNB Financial Corporation

 

Condensed Consolidated Statements of Income (Unaudited)

 

(Dollars in thousands, except per share data)

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended

 



Mar 31,

 

Dec 31,

 

Sept 30,

 

June 30,

 

Mar 31,

 



2018

 

2017

 

2017

 

2017

 

2017

 

 EARNINGS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Interest income

$

10,913 

 

$

11,241 

 

$

10,989 

 

$

10,661 

 

$

10,494 

 

 Interest expense

 

1,886 

 

 

1,593 

 

 

1,483 

 

 

1,382 

 

 

1,262 

 

 Net interest income

 

9,027 

 

 

9,648 

 

 

9,506 

 

 

9,279 

 

 

9,232 

 

 Provision for credit losses

 

375 

 

 

375 

 

 

375 

 

 

585 

 

 

325 

 

 Non-interest income

 

1,273 

 

 

1,250 

 

 

1,236 

 

 

1,300 

 

 

1,226 

 

 Gain from insurance proceeds

 

 -

 

 

123 

 

 

 -

 

 

 -

 

 

80 

 

 Gain on sale of investment securities

 

 -

 

 

25 

 

 

 -

 

 

25 

 

 

 -

 

 Gain on sale of SBA loans

 

 -

 

 

21 

 

 

35 

 

 

97 

 

 

 -

 

 Loss (gain) on sale / write-down of OREO and ORA

 

 -

 

 

 -

 

 

 

 

115 

 

 

(1)

 

 Due diligence & merger expense

 

 -

 

 

 -

 

 

 -

 

 

26 

 

 

51 

 

 Non-interest expense

 

6,730 

 

 

7,202 

 

 

6,983 

 

 

6,943 

 

 

6,695 

 

 Income before income taxes

 

3,195 

 

 

3,490 

 

 

3,412 

 

 

3,032 

 

 

3,468 

 

 Income tax expense

 

582 

 

 

2,682 

 

 

1,001 

 

 

746 

 

 

1,027 

 

 Net income(1)

$

2,613 

 

$

808 

 

$

2,411 

 

$

2,286 

 

$

2,441 

 

 Net income per common share, diluted

$

0.61 

 

$

0.19 

 

$

0.56 

 

$

0.53 

 

$

0.57 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Fourth quarter 2017 results were impacted by a $1.8 million charge, or $0.43 per diluted share, to adjust deferred taxes due to the enactment of the Tax Cuts and Jobs Act.

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Financial Condition (Unaudited)

 

(Dollars in thousands)

 



Mar 31,

 

Dec 31,

 

Sept 30,

 

June 30,

 

Mar 31,

 



2018

 

2017

 

2017

 

2017

 

2017

 

 FINANCIAL POSITION:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Cash and cash equivalents

$

14,078 

 

$

10,917 

 

$

19,490 

 

$

36,189 

 

$

44,068 

 

 Investment securities

 

171,108 

 

 

174,173 

 

 

175,148 

 

 

177,149 

 

 

178,422 

 

 Loans held for sale

 

646 

 

 

651 

 

 

350 

 

 

 -

 

 

200 

 

 Loans and leases

 

864,345 

 

 

845,897 

 

 

819,753 

 

 

816,525 

 

 

816,363 

 

 Allowance for credit losses

 

(6,145)

 

 

(5,843)

 

 

(5,594)

 

 

(5,267)

 

 

(5,418)

 

 Net loans and leases

 

858,200 

 

 

840,054 

 

 

814,159 

 

 

811,258 

 

 

810,945 

 

 Premises and equipment, net

 

8,366 

 

 

8,649 

 

 

8,898 

 

 

9,099 

 

 

9,203 

 

 Goodwill

 

15,525 

 

 

15,525 

 

 

15,525 

 

 

15,525 

 

 

15,525 

 

 Other assets

 

32,107 

 

 

31,946 

 

 

32,113 

 

 

32,240 

 

 

31,576 

 

 Total assets

$

1,100,030 

 

$

1,081,915 

 

$

1,065,683 

 

$

1,081,460 

 

$

1,089,939 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Demand

$

172,044 

 

$

176,815 

 

$

198,399 

 

$

181,529 

 

$

176,199 

 

 NOW

 

207,538 

 

 

199,310 

 

 

195,455 

 

 

209,355 

 

 

218,133 

 

 Money market

 

253,757 

 

 

221,726 

 

 

217,870 

 

 

240,434 

 

 

221,356 

 

 Savings

 

81,635 

 

 

81,050 

 

 

81,030 

 

 

84,820 

 

 

84,700 

 

 Core deposits

 

714,974 

 

 

678,901 

 

 

692,754 

 

 

716,138 

 

 

700,388 

 

 Time deposits

 

115,214 

 

 

140,490 

 

 

136,759 

 

 

147,110 

 

 

177,335 

 

 Brokered deposits

 

61,598 

 

 

41,812 

 

 

41,815 

 

 

29,811 

 

 

28,045 

 

 Total deposits

 

891,786 

 

 

861,203 

 

 

871,328 

 

 

893,059 

 

 

905,768 

 

 FHLB advances

 

67,993 

 

 

79,013 

 

 

51,047 

 

 

49,869 

 

 

50,972 

 

 Repurchase agreements

 

10,717 

 

 

12,023 

 

 

15,383 

 

 

15,700 

 

 

11,474 

 

 Subordinated debt

 

9,750 

 

 

9,750 

 

 

9,750 

 

 

9,750 

 

 

9,750 

 

 Other borrowings

 

9,630 

 

 

12,017 

 

 

9,658 

 

 

9,672 

 

 

9,685 

 

 Other liabilities

 

6,484 

 

 

5,967 

 

 

6,633 

 

 

4,005 

 

 

5,002 

 

 Stockholders' equity

 

103,670 

 

 

101,942 

 

 

101,884 

 

 

99,405 

 

 

97,288 

 

 Total liabilities and stockholders' equity

$

1,100,030 

 

$

1,081,915 

 

$

1,065,683 

 

$

1,081,460 

 

$

1,089,939 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8


 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DNB Financial Corporation

Condensed Consolidated Statements of Financial Condition - Quarterly Average Balances (Unaudited)

(Dollars in thousands)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Mar 31,

 

 

Dec 31,

 

 

Sept 30,

 

 

June 30,

 

 

Mar 31,

 



 

2018

 

 

2017

 

 

2017

 

 

2017

 

 

2017

 

 FINANCIAL POSITION:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Cash and cash equivalents

$

16,509 

 

$

23,513 

 

$

20,673 

 

$

46,629 

 

$

27,406 

 

 Investment securities

 

180,162 

 

 

180,754 

 

 

182,930 

 

 

182,124 

 

 

185,676 

 

 Loans held for sale

 

113 

 

 

34 

 

 

49 

 

 

10 

 

 

41 

 

 Loans and leases

 

851,623 

 

 

827,273 

 

 

818,800 

 

 

817,148 

 

 

815,028 

 

 Allowance for credit losses

 

(5,958)

 

 

(5,639)

 

 

(5,388)

 

 

(5,557)

 

 

(5,432)

 

 Net loans and leases

 

845,665 

 

 

821,634 

 

 

813,412 

 

 

811,591 

 

 

809,596 

 

 Premises and equipment, net

 

8,552 

 

 

8,841 

 

 

9,032 

 

 

9,188 

 

 

9,267 

 

 Goodwill

 

15,525 

 

 

15,525 

 

 

15,525 

 

 

15,525 

 

 

15,589 

 

 Other assets

 

23,436 

 

 

24,723 

 

 

24,839 

 

 

24,785 

 

 

24,046 

 

 Total assets

$

1,089,962 

 

$

1,075,024 

 

$

1,066,460 

 

$

1,089,852 

 

$

1,071,621 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Demand

$

174,022 

 

$

192,700 

 

$

188,804 

 

$

183,329 

 

$

172,984 

 

 NOW

 

204,719 

 

 

196,055 

 

 

199,311 

 

 

209,433 

 

 

218,357 

 

 Money market

 

236,165 

 

 

216,853 

 

 

223,448 

 

 

232,662 

 

 

197,615 

 

 Savings

 

80,992 

 

 

81,118 

 

 

82,971 

 

 

84,946 

 

 

85,348 

 

 Core deposits

 

695,898 

 

 

686,726 

 

 

694,534 

 

 

710,370 

 

 

674,304 

 

 Time deposits

 

133,222 

 

 

142,283 

 

 

142,846 

 

 

166,459 

 

 

180,819 

 

 Brokered deposits

 

43,739 

 

 

41,814 

 

 

35,474 

 

 

26,709 

 

 

28,326 

 

 Total deposits

 

872,859 

 

 

870,823 

 

 

872,854 

 

 

903,538 

 

 

883,449 

 

 FHLB advances

 

75,458 

 

 

59,373 

 

 

50,827 

 

 

50,634 

 

 

55,420 

 

 Repurchase agreements

 

12,364 

 

 

15,388 

 

 

16,070 

 

 

12,551 

 

 

12,858 

 

 Subordinated debt

 

9,750 

 

 

9,750 

 

 

9,750 

 

 

9,750 

 

 

9,750 

 

 Other borrowings

 

10,470 

 

 

9,835 

 

 

9,996 

 

 

9,684 

 

 

9,748 

 

 Other liabilities

 

5,657 

 

 

6,298 

 

 

5,433 

 

 

4,353 

 

 

4,070 

 

 Stockholders' equity

 

103,404 

 

 

103,557 

 

 

101,530 

 

 

99,342 

 

 

96,326 

 

 Total liabilities and stockholders' equity

$

1,089,962 

 

$

1,075,024 

 

$

1,066,460 

 

$

1,089,852 

 

$

1,071,621 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



9


 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DNB Financial Corporation

Reconciliation of Non-GAAP Financial Measures (Unaudited)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Tangible Book Value Per Common Share to Book Value Per Common Share

(In thousands, except share and per share data)



Mar 31,

 

Dec 31,

 

Sept 30,

 

June 30,

 

Mar 31,

 



2018

 

2017

 

2017

 

2017

 

2017

 

Stockholders' Equity

$

103,670 

 

$

101,942 

 

$

101,884 

 

$

99,405 

 

$

97,288 

 

Goodwill

 

15,525 

 

 

15,525 

 

 

15,525 

 

 

15,525 

 

 

15,525 

 

Other intangible assets

 

423 

 

 

435 

 

 

459 

 

 

485 

 

 

511 

 

Tangible common equity (Non-GAAP)

$

87,722 

 

$

85,982 

 

$

85,900 

 

$

83,395 

 

$

81,252 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding shares

4,292,689 

 

4,286,117 

 

4,262,721 

 

4,258,073 

 

4,251,664 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per common share (GAAP)

$

24.15 

 

$

23.78 

 

$

23.90 

 

$

23.35 

 

$

22.88 

 

Tangible book value per common share (Non-GAAP)

 

20.44 

 

 

20.06 

 

 

20.15 

 

 

19.59 

 

 

19.11 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Tangible Equity

(Dollars in thousands)

For the Quarter Ended



Mar 31,

 

Dec 31,

 

Sept 30,

 

June 30,

 

Mar 31,

 



2018

 

2017

 

2017

 

2017

 

2017

 

Average Stockholders' Equity

$

103,404 

 

$

103,557 

 

$

101,530 

 

$

99,342 

 

$

96,326 

 

Average goodwill

 

15,525 

 

 

15,525 

 

 

15,525 

 

 

15,525