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Section 1: 8-K (8-K)

Form 8-K 3Q 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):

 

 

October 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 October 24, 2018, DNB Financial Corporation issued a press release discussing the Company's Third 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 October 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

   

 

October 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 October 24, 2018 of DNB Financial Corporation  

 

 

 







(Back To Top)

Section 2: EX-99.1 (EX-99.1)

Press Release 3Q 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 Third Quarter 2018 Results

Downingtown PA, October 24, 2018 (GLOBE NEWSWIRE)– DNB Financial Corporation (Nasdaq: DNBF), today reported net income of $3.0 million, or $0.70 per diluted share, for the quarter ending September 30, 2018, compared with $2.4 million, or $0.56 per diluted share, for the same quarter, last year.  For the nine months ending September 30, 2018, the Company reported net income of $7.7 million, or $1.78 per diluted share, compared with $7.1 million, or $1.66 per diluted share, for the same period 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, stated, “Our strong third quarter results demonstrate that DNB continues to execute its business plan of disciplined growth and can successfully meet the challenges presented by rising interest rates.  We believe that our continued focus on expense management along with maintaining prudent credit standards will preserve the Company’s position as one of the top-performing banks in the Greater Philadelphia region.”   

Highlights 

·

Total loans increased 2.6% (not annualized) on a sequential quarter basis and 7.4% (not annualized) since December 31, 2017. 

·

Asset quality remained excellent.  Net recoveries were 0.12% (annualized) of total average loans for the third quarter of 2018, and non-performing loans were only 0.71% of total loans at September 30, 2018.

·

On a sequential quarter basis, net interest income increased $83,000 to $9.2 million, primarily due to commercial loan growth.  The net interest margin was fairly stable at 3.39% for the third quarter as the aforementioned loan growth and a two basis point rise in the yield on average interest-earning assets offset an eight basis point increase in the weighted average cost of interest-bearing liabilities.

·

Wealth management fees increased to $542,000 for the third quarter of 2018, compared with $512,000 and $411,000 for the quarters ending June 30, 2018 and September 30, 2017,

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respectively.  Wealth management fees represented approximately 40% of total fee income for the third quarter of 2018.

·

The Company paid a quarterly cash dividend of $0.07 per share on September 19, 2018.

Income Statement Summary

Net income of $3.0 million for the third quarter of 2018, generated a return on average assets (“ROAA”) and return on average tangible equity (“ROTE”) (a non-GAAP measure) of 1.07% and 13.1%, respectively. A discussion of non-GAAP measures in this release is included below and a reconciliation of this and other non-GAAP to GAAP measures is included in the Financial Tables below.

Net interest income for the three months ending September 30, 2018 was $9.2 million, which represented an  $83,000 increase from the quarter ending June 30, 2018, and a $355,000 decrease from the quarter ending September 30, 2017.  The net interest margin for third quarter of 2018 was 3.39%; and was fairly stable on a sequential quarter basis.  The year-over-year net interest margin decline of 33 basis points was primarily due to a $466,000 net reduction in purchase accounting marks and the higher cost of interest-bearing liabilities, which was partially offset by a $70.3 million increase in total average loans. For the third quarters of 2018 and 2017, the weighted average yield on total interest-earning assets was stable at 4.30%, which included purchase accounting marks. 

Total interest expense was $2.5 million for the three months ending September 30, 2018, compared with $2.2 million for the three months ending June 30, 2018, and $1.5 million for the third quarter of 2017.  The weighted average rate paid for interest-bearing liabilities was 0.98%, 0.90% and 0.61% for the quarters ending September 30, 2018, June 30, 2018, and September 30, 2017, respectively.  The rise in the weighted average rate was primarily due to an overall increase in market interest rates.

The provision for credit losses was $100,000 for the third quarter of 2018, compared with $375,000 for both of the quarters ending June 30, 2018 and September 30, 2017.  As of September 30, 2018, the allowance for credit losses was $6.6 million and represented 0.72% of total loans.  Loans acquired in connection with the purchase of East River Bank 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 third quarter of 2018 remained fairly steady at $1.4 million, compared with $1.3 million for both the second quarter of 2018 and the quarter ending September 30, 2017.  Wealth management fees increased to $542,000 for the third quarter of 2018 from $512,000 for the second quarter of 2018, and $411,000 for the third quarter of 2017.  Wealth management fees represented approximately 40% of total fee income. 

Non-interest expense was $6.8 million for the quarter ending September 30, 2018, compared with $7.5 million for the quarter ending June 30, 2018, and $7.0 million for the third quarter of 2017.  As previously disclosed, non-interest expense for the second quarter of 2018 included miscellaneous one-time charges totaling approximately $653,000.  The efficiency ratio was approximately 64% for the three months ended September 30, 2018.

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 effective tax rate for the quarter ending September 30, 2018 was 17.2%, compared with 29.3% for the same quarter, last year.

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Balance Sheet Summary

As of September 30, 2018, total assets were $1.1 billion.  Since December 31, 2017, total assets increased $46.2 million, or 4.3% (not annualized).  Total loan growth of $62.4 million, or 7.4% (not annualized) was partially offset by a $12.9 million, or 7.4% (not annualized) decrease in total investment securities.  Total deposits increased $78.7 million, or 9.1% (not annualized) since December 31, 2017, mainly due to growth in NOW, time, and brokered deposits.  As of September 30, 2018, total shareholders’ equity was $108.1 million, compared with $101.9 million as of December 31, 2017.  Tangible book value per share (a non-GAAP measure) was $21.38 as of September 30, 2018, compared with $20.06 as of December 31, 2017. See Reconciliation of Non-GAAP Financial Measures on page 10.

Total loans were $908.3 million, or 80.5% of total assets, as of September 30, 2018.  As of September 30, 2018, commercial loans, a key strategic emphasis, totaled $746.8 million and represented 82.2% of total loans.  Total commercial loans increased $57.4 million, or 8.3% (not annualized) since December 31, 2017.  Of this total, commercial mortgage loans increased $39.8 million, or 8.2%, commercial business loans increased $11.3 million, or 8.7%, and commercial construction loans increased $6.3 million, or 8.4%.  Residential mortgage loans increased nearly 10% or $9.1 million since January 1, 2018.  Consumer loans, however, declined $4.1 million, or 6.6%, over the same time period. 

On a sequential quarter basis, total core deposits were relatively stable and were 73.3% of total deposits as of September 30, 2018.  As of the same date, non-interest bearing deposits were 17.9% of total deposits.  The amount of time deposits increased $39.3 million, or 34.2%, through the third quarter of 2018. The Company used these deposits to help fund loan growth due to their more favorable rates and maturities compared with other funding sources.  As of September 30, 2018, the loan-to-deposit ratio was 96.6%.

Capital ratios continue to exceed all regulatory guidelines.  As of September 30, 2018, the tier 1 leverage ratio was 9.48%, the tier 1 risk-based capital ratio was 11.93%, the common equity tier 1 risk-based capital ratio was 10.91% and the total risk based capital ratio was 13.83%.  As of the same date, the tangible common equity-to-tangible assets ratio (a non-GAAP measure) was 8.29%.  Intangible assets and goodwill totaled $15.9 million as of September 30, 2018. See Reconciliation of Non-GAAP Financial Measures on page 10.

Asset Quality Summary

Asset quality remained strong as net recoveries were 0.12% (annualized) of total average loans for the quarter ending September 30, 2018 (recoveries of $309,000, offset by charge-offs of $38,000). Total non-performing assets, including loans and other real estate property, were $11.5 million as of September 30, 2018, compared with $11.9 million as of June 30, 2018, and $12.6 million as of December 31, 2017.  The ratio of non-performing loans to total loans was 0.71% compared with 0.76% as of June 30, 2018 and 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 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

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the adverse impact of changes in interest rates on net interest income, while maximizing earnings.  Simulation model results show moderate liability sensitivity to rising rates in 100, 200, 300 and 400 basis point shock scenarios. 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) 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

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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.

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

 

Nine Months Ended



Sept 30,

 

Sept 30,



 

2018

 

 

2017

 

 

2018

 

 

2017

 EARNINGS:

 

 

 

 

 

 

 

 

 

 

 

 Interest income

$

11,635 

 

$

10,989 

 

$

33,837 

 

$

32,144 

 Interest expense

 

2,484 

 

 

1,483 

 

 

6,591 

 

 

4,127 

 Net interest income

 

9,151 

 

 

9,506 

 

 

27,246 

 

 

28,017 

 Provision for credit losses

 

100 

 

 

375 

 

 

850 

 

 

1,285 

 Non-interest income

 

1,336 

 

 

1,236 

 

 

3,931 

 

 

3,762 

 Gain from insurance proceeds

 

 

 

 -

 

 

 

 

80 

 Gain on sale of investment securities

 

 -

 

 

 -

 

 

 -

 

 

25 

 Gain on sale of SBA loans

 

27 

 

 

35 

 

 

37 

 

 

132 

 Loss on sale / write-down of OREO and ORA

 

11 

 

 

 

 

151 

 

 

121 

 Due diligence & merger expense

 

 -

 

 

 -

 

 

 -

 

 

77 

 Non-interest expense

 

6,762 

 

 

6,983 

 

 

20,892 

 

 

20,621 

 Income before income taxes(1)

 

3,649 

 

 

3,412 

 

 

9,329 

 

 

9,912 

 Income tax expense

 

629 

 

 

1,001 

 

 

1,647 

 

 

2,774 

 Net income

$

3,020 

 

$

2,411 

 

$

7,682 

 

$

7,138 

 Net income per common share, diluted

$

0.70 

 

$

0.56 

 

$

1.78 

 

$

1.66 

(1) Net income before income taxes includes net accretion of purchase accounting fair value adjustments of $267,000 and $744,000 for the three and nine month periods ended September, 30, 2018, respectively, compared with $731,000 and $1.8 million for the same periods last year.



 

 

 

 

 

Condensed Consolidated Statements of Financial Condition (Unaudited)

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 



 

 

 

 

 

 

 



 

Sept 30,

 

 

Dec 31,

 

 



 

2018

 

 

2017

 

 

 

 

 

 

 FINANCIAL POSITION:

 

 

 

 

 

 

 

 

 

 

 

 Cash and cash equivalents

$

10,702 

 

$

10,917 

 

 

 

 

 

 

 Investment securities

 

161,230 

 

 

174,173 

 

 

 

 

 

 

 Loans held for sale

 

 -

 

 

651 

 

 

 

 

 

 

 Loans

 

908,293 

 

 

845,897 

 

 

 

 

 

 

 Allowance for credit losses

 

(6,559)

 

 

(5,843)

 

 

 

 

 

 

 Net loans

 

901,734 

 

 

840,054 

 

 

 

 

 

 

 Premises and equipment, net

 

7,881 

 

 

8,649 

 

 

 

 

 

 

 Restricted Stock

 

5,864 

 

 

7,641 

 

 

 

 

 

 

 Other assets

 

40,704 

 

 

39,830 

 

 

 

 

 

 

 Total assets

$

1,128,115 

 

$

1,081,915 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 Deposits

$

939,881 

 

$

861,203 

 

 

 

 

 

 

 FHLB advances

 

36,952 

 

 

79,013 

 

 

 

 

 

 

 Repurchase agreements

 

4,089 

 

 

12,023 

 

 

 

 

 

 

 Other borrowings

 

22,833 

 

 

12,017 

 

 

 

 

 

 

 Subordinated debt

 

9,750 

 

 

9,750 

 

 

 

 

 

 

 Other liabilities

 

6,551 

 

 

5,967 

 

 

 

 

 

 

 Stockholders' equity

 

108,059 

 

 

101,942 

 

 

 

 

 

 

 Total liabilities and stockholders' equity

$

1,128,115 

 

$

1,081,915 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 



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DNB Financial Corporation

Selected Financial Data (Unaudited)

(In thousands, except per share data)



 

 

 

 

 

 

 

 

 

 

 

 

 

 



Quarterly



2018

 

2018

 

2018

 

2017

 

2017



3rd Qtr

 

2nd Qtr

 

1st Qtr

 

4th Qtr

 

3rd Qtr

Earnings and Per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net income

$

3,020 

 

$

2,049 

 

$

2,613 

 

$

808 

 

$

2,411 

 Basic earnings per common share

$

0.70 

 

$

0.48 

 

$

0.61 

 

$

0.19 

 

$

0.57 

 Diluted earnings per common share

$

0.70 

 

$

0.47 

 

$

0.61 

 

$

0.19 

 

$

0.56 

 Dividends per common share

$

0.07 

 

$

0.07 

 

$

0.07 

 

$

0.07 

 

$

0.07 

 Book value per common share

$

25.06 

 

$

24.49 

 

$

24.15 

 

$

23.78 

 

$

23.90 

 Tangible book value per common share (Non-GAAP)

$

21.38 

 

$

20.79 

 

$

20.44 

 

$

20.06 

 

$

20.15 

 Average common shares outstanding

 

4,307 

 

 

4,298 

 

 

4,291 

 

 

4,274 

 

 

4,262 

 Average diluted common shares outstanding

 

4,318 

 

 

4,314 

 

 

4,309 

 

 

4,297 

 

 

4,296 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Return on average assets

 

1.07% 

 

 

0.74% 

 

 

0.97% 

 

 

0.30% 

 

 

0.90% 

 Return on average equity

 

11.17% 

 

 

7.79% 

 

 

10.25% 

 

 

3.10% 

 

 

9.42% 

 Return on average tangible equity (Non-GAAP)

 

13.11% 

 

 

9.18% 

 

 

12.12% 

 

 

3.66% 

 

 

11.18% 

 Yield on Loans and Leases

 

4.74% 

 

 

4.70% 

 

 

4.71% 

 

 

4.85% 

 

 

4.82% 

 Cost of Deposits

 

0.86% 

 

 

0.77% 

 

 

0.63% 

 

 

0.52% 

 

 

0.49% 

 Net interest margin

 

3.39% 

 

 

3.44% 

 

 

3.51% 

 

 

3.74% 

 

 

3.72% 

 Efficiency ratio

 

63.68% 

 

 

70.39% 

 

 

64.61% 

 

 

64.73% 

 

 

63.45% 

 Wtd average yield on earning assets

 

4.30% 

 

 

4.28% 

 

 

4.24% 

 

 

4.35% 

 

 

4.30% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net charge-offs (recoveries) to average loans

 

-0.12%

 

 

0.15% 

 

 

0.04% 

 

 

0.06% 

 

 

0.02% 

 Non-performing loans/Total loans

 

0.71% 

 

 

0.76% 

 

 

0.97% 

 

 

0.89% 

 

 

0.87% 

 Non-performing assets/Total assets

 

1.02% 

 

 

1.05% 

 

 

1.22% 

 

 

1.16% 

 

 

1.13% 

 Allowance for credit loss/Total loans

 

0.72% 

 

 

0.70% 

 

 

0.71% 

 

 

0.69% 

 

 

0.68% 

 Allowance for credit loss/Non-performing loans

 

101.36% 

 

 

91.76% 

 

 

73.08% 

 

 

77.36% 

 

 

78.68% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Total equity/Total assets

 

9.58% 

 

 

9.29% 

 

 

9.42% 

 

 

9.42% 

 

 

9.56% 

 Tangible equity/Tangible assets (Non-GAAP)

 

8.29% 

 

 

8.00% 

 

 

8.09% 

 

 

8.07% 

 

 

8.18% 

 Tier 1 leverage ratio

 

9.48% 

 

 

9.35% 

 

 

9.33% 

 

 

9.19% 

 

 

9.22% 

 Common equity tier 1 risk-based capital ratio

 

10.91% 

 

 

10.69% 

 

 

10.63% 

 

 

10.71% 

 

 

10.78% 

 Tier 1 risk based capital ratio

 

11.93% 

 

 

11.72% 

 

 

11.67% 

 

 

11.80% 

 

 

11.88% 

 Total risk based capital ratio

 

13.83% 

 

 

13.59% 

 

 

13.56% 

 

 

13.73% 

 

 

13.79% 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wealth Management Assets Under Care(1)

$

269,074 

 

$

257,797 

 

$

260,324 

 

$

252,823 

 

$

246,294 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 



Sept 30,

 

June 30,

 

Mar 31,

 

Dec 31,

 

Sept 30,

 



2018

 

2018

 

2018

 

2017

 

2017

 

 EARNINGS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Interest income

$

11,635 

 

$

11,289 

 

$

10,913 

 

$

11,241 

 

$

10,989 

 

 Interest expense

 

2,484 

 

 

2,221 

 

 

1,886 

 

 

1,593 

 

 

1,483 

 

 Net interest income

 

9,151 

 

 

9,068 

 

 

9,027 

 

 

9,648 

 

 

9,506 

 

 Provision for credit losses

 

100 

 

 

375 

 

 

375 

 

 

375 

 

 

375 

 

 Non-interest income

 

1,336 

 

 

1,322 

 

 

1,273 

 

 

1,250 

 

 

1,236 

 

 Gain from insurance proceeds

 

 

 

 -

 

 

 -

 

 

123 

 

 

 -

 

 Gain on sale of investment securities

 

 -

 

 

 -

 

 

 -

 

 

25 

 

 

 -

 

 Gain on sale of SBA loans

 

27 

 

 

10 

 

 

 -

 

 

21 

 

 

35 

 

 Loss on sale / write-down of OREO and ORA

 

11 

 

 

140 

 

 

 -

 

 

 -

 

 

 

 Non-interest expense

 

6,762 

 

 

7,400 

 

 

6,730 

 

 

7,202 

 

 

6,983 

 

 Income before income taxes

 

3,649 

 

 

2,485 

 

 

3,195 

 

 

3,490 

 

 

3,412 

 

 Income tax expense

 

629 

 

 

436 

 

 

582 

 

 

2,682 

 

 

1,001 

 

 Net income(1)

$

3,020 

 

$

2,049 

 

$

2,613 

 

$

808 

 

$

2,411 

 

 Net income per common share, diluted

$

0.70 

 

$

0.47 

 

$

0.61 

 

$

0.19 

 

$

0.56 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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)

 



Sept 30,

 

June 30,

 

Mar 31,

 

Dec 31,

 

Sept 30,

 



2018

 

2018

 

2018

 

2017

 

2017

 

 FINANCIAL POSITION:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Cash and cash equivalents

$

10,702 

 

$

33,452 

 

$

14,078 

 

$

10,917 

 

$

19,490 

 

 Investment securities

 

161,230 

 

 

165,574 

 

 

171,108 

 

 

174,173 

 

 

175,148 

 

 Loans held for sale

 

 -

 

 

276 

 

 

646 

 

 

651 

 

 

350 

 

 Loans and leases

 

908,293 

 

 

885,320 

 

 

864,345 

 

 

845,897 

 

 

819,753 

 

 Allowance for credit losses

 

(6,559)

 

 

(6,188)

 

 

(6,145)

 

 

(5,843)

 

 

(5,594)

 

 Net loans and leases

 

901,734 

 

 

879,132 

 

 

858,200 

 

 

840,054 

 

 

814,159 

 

 Premises and equipment, net

 

7,881 

 

 

8,150 

 

 

8,366 

 

 

8,649 

 

 

8,898 

 

 Goodwill

 

15,525 

 

 

15,525 

 

 

15,525 

 

 

15,525 

 

 

15,525 

 

 Restricted Stock

 

5,864 

 

 

6,950 

 

 

7,363 

 

 

7,641 

 

 

6,371 

 

 Other assets

 

25,179 

 

 

24,550 

 

 

24,744 

 

 

24,305 

 

 

25,742 

 

 Total assets

$

1,128,115 

 

$

1,133,609 

 

$

1,100,030 

 

$

1,081,915 

 

$

1,065,683 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Demand

$

168,311 

 

$

175,561 

 

$

172,044 

 

$

176,815 

 

$

198,399 

 

 NOW

 

213,707 

 

 

216,261 

 

 

207,538 

 

 

199,310 

 

 

195,455 

 

 Money market

 

227,797 

 

 

254,061 

 

 

253,757 

 

 

221,726 

 

 

217,870 

 

 Savings

 

78,996 

 

 

80,044 

 

 

81,635 

 

 

81,050 

 

 

81,030 

 

 Core deposits

 

688,811 

 

 

725,927 

 

 

714,974 

 

 

678,901 

 

 

692,754 

 

 Time deposits

 

154,021 

 

 

114,766 

 

 

115,214 

 

 

140,490 

 

 

136,759 

 

 Brokered deposits

 

97,049 

 

 

93,422 

 

 

61,598 

 

 

41,812 

 

 

41,815 

 

 Total deposits

 

939,881 

 

 

934,115 

 

 

891,786 

 

 

861,203 

 

 

871,328 

 

 FHLB advances

 

36,952 

 

 

62,972 

 

 

67,993 

 

 

79,013 

 

 

51,047 

 

 Repurchase agreements

 

4,089 

 

 

5,609 

 

 

10,717 

 

 

12,023 

 

 

15,383 

 

 Subordinated debt

 

9,750 

 

 

9,750 

 

 

9,750 

 

 

9,750 

 

 

9,750 

 

 Other borrowings

 

22,833 

 

 

9,615 

 

 

9,630 

 

 

12,017 

 

 

9,658 

 

 Other liabilities

 

6,551 

 

 

6,215 

 

 

6,484 

 

 

5,967 

 

 

6,633 

 

 Stockholders' equity

 

108,059 

 

 

105,333 

 

 

103,670 

 

 

101,942 

 

 

101,884 

 

 Total liabilities and stockholders' equity

$

1,128,115 

 

$

1,133,609 

 

$

1,100,030 

 

$

1,081,915 

 

$

1,065,683 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8


 

DNB Financial Corporation

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

(Dollars in thousands)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Sept 30,

 

 

June 30,

 

 

Mar 31,

 

 

Dec 31,

 

 

Sept 30,

 



 

2018

 

 

2018

 

 

2018

 

 

2017

 

 

2017

 

 FINANCIAL POSITION:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Cash and cash equivalents

$

21,676 

 

$

20,528 

 

$

16,509 

 

$

23,513 

 

$

20,673 

 

 Investment securities

 

163,800 

 

 

168,836 

 

 

172,488 

 

 

173,959 

 

 

176,424 

 

 Loans held for sale

 

338 

 

 

642 

 

 

113 

 

 

34 

 

 

49 

 

 Loans and leases

 

889,113 

 

 

869,166 

 

 

851,623 

 

 

827,273 

 

 

818,800 

 

 Allowance for credit losses

 

(6,567)

 

 

(6,197)

 

 

(5,958)

 

 

(5,639)

 

 

(5,388)

 

 Net loans and leases

 

882,546 

 

 

862,969 

 

 

845,665 

 

 

821,634 

 

 

813,412 

 

 Premises and equipment, net

 

8,059 

 

 

8,306 

 

 

8,552 

 

 

8,841 

 

 

9,032 

 

 Goodwill

 

15,525 

 

 

15,525 

 

 

15,525 

 

 

15,525 

 

 

15,525 

 

 Restricted Stock

 

6,262 

 

 

6,836 

 

 

7,674 

 

 

6,795 

 

 

6,506 

 

 Other assets

 

24,012 

 

 

23,568 

 

 

23,436 

 

 

24,723 

 

 

24,839 

 

 Total assets

$

1,122,218 

 

$

1,107,210 

 

$

1,089,962 

 

$

1,075,024 

 

$

1,066,460 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Demand

$

174,798 

 

$

170,885 

 

$

174,022 

 

$

192,700 

 

$

188,804 

 

 NOW

 

215,055 

 

 

206,341 

 

 

204,719 

 

 

196,055 

 

 

199,311 

 

 Money market

 

238,679 

 

 

252,825 

 

 

236,165 

 

 

216,853 

 

 

223,448 

 

 Savings

 

79,695 

 

 

80,696 

 

 

80,992 

 

 

81,118 

 

 

82,971 

 

 Core deposits

 

708,227 

 

 

710,747 

 

 

695,898 

 

 

686,726 

 

 

694,534 

 

 Time deposits

 

141,794 

 

 

114,091 

 

 

133,222 

 

 

142,283 

 

 

142,846 

 

 Brokered deposits

 

85,690 

 

 

82,957 

 

 

43,739 

 

 

41,814 

 

 

35,474 

 

 Total deposits

 

935,711 

 

 

907,795 

 

 

872,859 

 

 

870,823 

 

 

872,854 

 

 FHLB advances

 

45,549 

 

 

54,971 

 

 

75,458 

 

 

59,373 

 

 

50,827 

 

 Repurchase agreements

 

4,644 

 

 

12,042 

 

 

12,364 

 

 

15,388 

 

 

16,070 

 

 Subordinated debt

 

9,750 

 

 

9,750 

 

 

9,750 

 

 

9,750 

 

 

9,750 

 

 Other borrowings

 

13,060 

 

 

10,923 

 

 

10,470 

 

 

9,835 

 

 

9,996 

 

 Other liabilities

 

6,193 

 

 

6,277 

 

 

5,657 

 

 

6,298 

 

 

5,433 

 

 Stockholders' equity

 

107,311 

 

 

105,452 

 

 

103,404 

 

 

103,557 

 

 

101,530 

 

 Total liabilities and stockholders' equity

$

1,122,218 

 

$

1,107,210 

 

$

1,089,962 

 

$

1,075,024 

 

$

1,066,460 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



9


 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DNB Financial Corporation

Reconciliation of Non-GAAP Financial Measures (Unaudited)