DNB Financial Corporation (Nasdaq:DNBF), parent of DNB First,
National Association, one of the first nationally-chartered
community banks to serve the greater Philadelphia region, today
reported financial results for the three months and 12 months ended
December 31, 2014.
For the three months ended December 31, 2014, net income
available to common shareholders was $1.42 million or $0.50 per
diluted common share compared with $1.12 million or $0.41 per
diluted common share for the three months ended December 31,
2013.
For the 12 months ended December 31, 2014, net income available
to common shareholders was $4.67 million or $1.66 per diluted
common share compared with $3.77 million or $1.36 per diluted
common share for the 12 months ended December 31, 2013. Net income
in 2013 included a $1.6 million provision for credit losses in the
third quarter following a $3.6 million write-down of three
non-performing commercial credits.
William S. Latoff, Chairman and CEO, commented: "Our financial
performance in 2014 reflected key initiatives to transform DNB
First into a better integrated organization with a strong sales
culture. We were very pleased with the results generated by our
full-service retail banking operation, which we have built to be
flexible, responsive, and able to provide a wide range of financial
solutions. Fee income from wealth management services also
contributed to our increasingly diversified revenue stream.
"We entered 2014 with a strengthened balance sheet and a solid
capital position. As a result, DNB was able to flow a greater
amount of revenue to the bottom line and build shareholder value.
We have significant momentum as we enter 2015."
Highlights:
- Total stockholders' equity was $63.91 million at December 31,
2014, reflecting consistent quarterly growth throughout the year,
and was up from $58.58 million at December 31, 2013. Tangible book
value per common share rose to $18.27 at December 31, 2014 compared
with $16.47 at December 31, 2013.
- Return on average assets (ROAA) was 0.82% for the three months
ended December 31, 2014, reflecting a consecutive quarterly
increase throughout 2014 from 0.70% a year earlier, and return on
average equity (ROAE) rose to 9.04% for the three months ended
December 31, 2014 compared with 7.86% for the three months ended
December 31, 2013.
- Total assets were a Company record $723.33 million, up 9.4%
compared with total assets of $661.47 million at December 31,
2013.
- Total loans and leases before the allowance for credit losses,
reflecting a balanced mix of commercial loans and growing retail
lending, increased 9.69% to $455.60 million at December 31, 2014
from $415.35 million at December 31, 2013. Total loans and leases
after allowance for credit losses rose 9.73% on a year-over-year
comparison.
- Net interest income for the 12 months of 2014 was $21.29
million compared with $20.32 million for the 12 months ended
December 31, 2013, reflecting increased interest income from loan
growth and reduced interest expense resulting from disciplined rate
management.
- The Bank's core deposits (demand deposits, NOW, money market
and savings accounts) rose 11.8% to $518.04 million at December 31,
2014 compared with $463.21 million at December 31, 2013, as the
Bank continued to build commercial and retail client relationships
that incorporate attractive lower-cost deposits as part of a total
relationship banking experience.
- Wealth management assets under care grew to $163.81 million at
December 31, 2014, up from $148.19 million at December 31, 2013, as
the Bank continued expanding its wealth management business.
Fourth Quarter, Three and 12 Months of 2014 Income
Statement Highlights
For the three months ended December 31, 2014, net interest
income after provision for credit losses increased to $5.25 million
compared with $4.78 million in the fourth quarter of 2013,
reflecting organic loan growth, a lower provision for credit losses
and a 16.76% reduction of interest expense.
Net interest income rose 4.7% to $21.29 million for the 12
months ended December 31, 2014, compared with $20.32 million for
the 12 months ended December 31, 2013. The year-over-year
improvement reflected increased loan volume and a reduction in
interest expense.
The Company's net interest margin was 3.25% for the fourth
quarter of 2014 compared with 3.31% for the fourth quarter of 2013.
On a consecutive quarter basis, the Company's net interest margin
remained relatively stable throughout 2014, despite the continuing
pressures of a low-interest rate environment. The Company mitigated
some of this pressure through interest expense management,
including increased levels of core deposits and opportunistic use
of wholesale borrowings at attractive rates.
Total non-interest income, including fees from wealth
management, gains on the sale of investment securities, income from
merchant services and debit and credit card use, were up 34.47% to
$1.50 million in the fourth quarter of 2014 compared with $1.11
million in the fourth quarter of December 2013. The year-over-year
growth included an 11.19% rise in fees from DNB Investment
Management and Trust, new fee income from mortgage banking
reflecting the Company's expanding retail banking business, and
higher income generated by the Company's ongoing management of its
investment securities portfolio. Total non-interest income for the
12 months of 2014 was $4.96 million compared with $4.80 million in
2013.
Total non-interest expense was $4.73 million in the fourth
quarter of 2014 compared with $4.34 million in the fourth quarter
of 2013, and was $18.63 million for the 12 months ended December
31, 2014 compared with $17.45 million for the 12 months ended
December 31, 2013. Latoff noted, "The increase in expenses reflect
the Company's ongoing investment in technology, personnel and
facilities to support retail banking initiatives, build wealth
management capabilities, and drive efficiency and productivity
throughout the franchise."
Balance Sheet, Asset Quality, and Capital Position
Highlights
Total assets increased to a company record $723.33 million at
December 31, 2014 compared with $661.47 million at December 31,
2013. The Company grew earning assets, primarily loans and
investment securities, while trimming premises and equipment assets
by 6.70% and reducing other real estate owned (OREO) holdings by
17.72% at December 31, 2014 compared with December 31, 2013.
Total deposits increased to $605.08 million at December 31,
2014, an 8.29% increase from $558.75 million at December 31, 2013.
The Company added $54.83 million to core deposits in 2014, which
increased 11.84% to $518.04 million compared with $463.21 million.
The increase in core deposits and attractively priced FHLB
borrowings contributed to a cost of funds of 38 basis points for
the year ended December 31, 2014.
Total net loans and leases before allowance for credit losses
increased 9.69% to $455.60 million at December 31, 2014 compared
with $415.35 million at December 31, 2013. After allowance for
credit losses, total loans and leases stood at $450.70 million at
year-end 2014 compared with $410.73 at year-end 2013. Loan totals
at December 31, 2014 included year-over-year growth of 85.9% in
commercial construction loans, 9.7% growth in commercial real
estate lending, a 5.3% increase in residential mortgage loans and
17.3% growth in consumer lending.
Asset quality measurements at December 31, 2014 reflected
ongoing balance sheet stability and diligent risk management as
assets have grown. At December 31, 2014, the ratio of total
non-performing loans to total loans was 1.50%, the ratio of
non-performing assets to total assets was 1.07%, and net
charge-offs to average loans was 0.16%.
Key measurements of shareholder value, including total
stockholders' equity, total earning assets, book value per common
share, ROAA and ROAE grew throughout the year. The Company further
enhanced shareholder value through quarterly $0.07 cash dividends
generating a current yield of approximately 1.3% to common
stockholders.
The Company's key capital ratios exceeded accepted minimum
regulatory standards for well-capitalized institutions. Tier 1
leverage ratio of 10.55%, tier 1 risk-based capital ratio of 14.86%
and total risk-based capital ratio of 15.87% as of December 31,
2014 exceeded regulatory definitions for a well-capitalized
institution and were consistent with the prior four quarters'
ratios.
Latoff concluded: "Looking ahead to 2015, we feel the Company is
well positioned to grow, despite the prospects of a continuing
uncertain interest rate and overall economic environment. We
anticipate that competition for quality business in commercial
banking, in particular, will remain intense. We believe our
expanded range of services and capabilities will be a key factor in
winning business and building lasting, long-term client
relationships. We welcome the opportunity to continue on our path
of building value for the Company and our shareholders."
DNB Financial Corporation is a bank holding company whose bank
subsidiary, DNB First, National Association, is a community bank
headquartered in Downingtown, Pennsylvania with 13 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/.
DNB Financial Corporation (the "Corporation"), may from time to
time make written or oral "forward-looking statements," including
statements contained in the Corporation's filings with the
Securities and Exchange Commission including this press release and
in its reports to stockholders and in other communications by the
Corporation, which are made in good faith by the Corporation
pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended.
These forward-looking statements include statements with respect
to the Corporation'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 the
Corporation'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. The following factors, among others,
could cause the Corporation's financial performance to differ
materially from the plans, objectives, expectations, estimates and
intentions expressed in such forward-looking statements: the
strength of the United States economy in general and the strength
of the local economies in which the Corporation conducts
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 recent
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 of the Corporation 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 the Corporation's
products and services; the success of the Corporation 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; acquisitions;
changes in consumer spending and saving habits; the nature, extent,
and timing of governmental actions and reforms, including the rules
of participation for the Small Business Lending Fund (SBLF), a U.S.
Treasury Department program; and the success of the Corporation at
managing the risks involved in the foregoing.
The Corporation 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 the Corporation on its
website or otherwise. The Corporation 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 the Corporation 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 Securities and Exchange Commission, 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
DNB Financial
Corporation |
Condensed Consolidated
Statements of Income (Unaudited) |
(Dollars in thousands, except
per share data) |
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2014 |
2013 |
2014 |
2013 |
EARNINGS: |
|
|
|
|
Interest income |
$ 6,012 |
$ 5,828 |
$ 23,596 |
$ 23,212 |
Interest expense |
561 |
674 |
2,311 |
2,888 |
Net interest income |
5,451 |
5,154 |
21,285 |
20,324 |
Provision for credit losses |
200 |
375 |
1,130 |
2,530 |
Non-interest income |
1,063 |
999 |
4,100 |
4,023 |
Gain on sale of investment securities |
435 |
115 |
858 |
610 |
Gain on sale of SBA loans |
0 |
0 |
0 |
162 |
(Gain) loss on sale / write-down of OREO and
ORA |
0 |
(134) |
7 |
(106) |
Non-interest expense |
4,732 |
4,470 |
18,625 |
17,556 |
Income before income taxes |
2,017 |
1,557 |
6,481 |
5,139 |
Income tax expense |
566 |
396 |
1,677 |
1,220 |
Net income |
1,451 |
1,161 |
4,804 |
3,919 |
Preferred stock dividends and accretion of
discount |
32 |
37 |
135 |
148 |
Net income available to common
stockholders |
$ 1,419 |
$ 1,124 |
$ 4,669 |
$ 3,771 |
Net income per common share, diluted |
$ 0.50 |
$ 0.41 |
$ 1.66 |
$ 1.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated
Statements of Financial Condition (Unaudited) |
(Dollars in thousands) |
|
|
|
|
|
|
December 31, |
December 31, |
|
|
|
2014 |
2013 |
|
|
FINANCIAL POSITION: |
|
|
|
|
Cash and cash equivalents |
$ 12,504 |
$ 34,060 |
|
|
Investment securities |
231,656 |
186,958 |
|
|
Loans held for sale |
617 |
0 |
|
|
Loans |
455,603 |
415,354 |
|
|
Allowance for credit losses |
(4,906) |
(4,623) |
|
|
Net loans |
450,697 |
410,731 |
|
|
Premises and equipment, net |
7,668 |
8,218 |
|
|
Other assets |
20,188 |
21,506 |
|
|
Total assets |
$ 723,330 |
$ 661,473 |
|
|
|
|
|
|
|
Deposits |
$ 605,083 |
$ 558,747 |
|
|
FHLB advances |
20,000 |
10,000 |
|
|
Repurchase agreements |
19,221 |
19,854 |
|
|
Other borrowings |
9,784 |
9,820 |
|
|
Other liabilities |
5,334 |
4,469 |
|
|
Stockholders' equity |
63,908 |
58,583 |
|
|
Total liabilities and stockholders'
equity |
$ 723,330 |
$ 661,473 |
|
|
|
DNB Financial
Corporation |
Selected Financial Data
(Unaudited) |
(In thousands, except per share
data) |
|
|
|
|
|
|
|
Quarterly |
|
2014 |
2014 |
2014 |
2014 |
2013 |
|
4th Qtr |
3rd Qtr |
2nd Qtr |
1st Qtr |
4th Qtr |
Earnings and Per Share Data |
|
|
|
|
|
Net income available to common
stockholders |
$ 1,419 |
$ 1,196 |
$ 1,087 |
$ 967 |
$ 1,124 |
Basic earnings per common
share |
$ 0.51 |
$ 0.43 |
$ 0.39 |
$ 0.35 |
$ 0.41 |
Diluted earnings per common
share |
$ 0.50 |
$ 0.43 |
$ 0.38 |
$ 0.35 |
$ 0.41 |
Dividends per common share |
$ 0.07 |
$ 0.07 |
$ 0.07 |
$ 0.07 |
$ 0.07 |
Book value per common
share |
$ 18.33 |
$ 17.81 |
$ 17.62 |
$ 17.09 |
$ 16.55 |
Tangible book value per common
share |
$ 18.27 |
$ 17.74 |
$ 17.55 |
$ 17.01 |
$ 16.47 |
Average common shares
outstanding |
2,776 |
2,769 |
2,763 |
2,758 |
2,754 |
Average diluted common shares
outstanding |
2,822 |
2,817 |
2,810 |
2,802 |
2,799 |
|
|
|
|
|
|
Performance Ratios |
|
|
|
|
|
Return on average assets |
0.82% |
0.72% |
0.67% |
0.62% |
0.70% |
Return on average equity |
9.04% |
7.82% |
7.35% |
6.78% |
7.86% |
Return on average tangible
equity |
9.06% |
7.84% |
7.38% |
6.81% |
7.89% |
Net interest margin |
3.25% |
3.33% |
3.36% |
3.36% |
3.31% |
Efficiency ratio |
70.45% |
68.76% |
71.97% |
73.63% |
70.15% |
|
|
|
|
|
|
Asset Quality Ratios |
|
|
|
|
|
Net charge-offs to average
loans |
0.16% |
0.27% |
0.11% |
0.24% |
0.06% |
Non-performing loans/Total
loans |
1.50% |
1.34% |
1.18% |
1.26% |
1.38% |
Non-performing assets/Total
assets |
1.07% |
1.00% |
0.89% |
0.94% |
1.03% |
Allowance for credit loss/Total
loans |
1.08% |
1.09% |
1.11% |
1.10% |
1.11% |
Allowance for credit
loss/Non-performing loans |
71.59% |
81.01% |
94.62% |
87.59% |
80.73% |
|
|
|
|
|
|
Capital Ratios |
|
|
|
|
|
Total equity/Total assets |
8.84% |
8.97% |
9.00% |
8.83% |
8.86% |
Tangible equity/Tangible
assets |
8.82% |
8.95% |
8.95% |
8.78% |
8.84% |
Tangible common equity/Tangible
assets |
7.02% |
7.08% |
7.06% |
6.88% |
6.87% |
Tier 1 leverage ratio |
10.55% |
10.75% |
10.76% |
10.72% |
10.61% |
Tier 1 risk-based capital
ratio |
14.86% |
14.84% |
14.88% |
15.00% |
15.35% |
Total risk-based capital
ratio |
15.87% |
15.86% |
15.92% |
16.04% |
16.40% |
|
|
|
|
|
|
Wealth Management |
|
|
|
|
|
Assets under care* |
$ 163,807 |
$ 161,068 |
$ 158,688 |
$ 152,570 |
$ 148,193 |
|
|
|
|
|
|
*Wealth Management assets under
care includes assets under management, administration, supervision
and brokerage. |
|
DNB Financial
Corporation |
Condensed Consolidated
Statements of Income (Unaudited) |
(Dollars in thousands, except
per share data) |
|
|
|
|
|
|
|
Three Months
Ended |
|
Dec 31, |
Sept 30, |
June 30, |
Mar 31, |
Dec 31, |
|
2014 |
2014 |
2014 |
2014 |
2013 |
EARNINGS: |
|
|
|
|
|
Interest income |
$ 6,012 |
$ 5,905 |
$ 5,877 |
$ 5,802 |
$ 5,828 |
Interest expense |
561 |
544 |
581 |
625 |
674 |
Net interest income |
5,451 |
5,361 |
5,296 |
5,177 |
5,154 |
Provision for credit losses |
200 |
300 |
255 |
375 |
375 |
Non-interest income |
1,063 |
1,041 |
1,012 |
984 |
999 |
Gain on sale of investment securities |
435 |
86 |
102 |
235 |
115 |
(Gain) loss on sale / write-down of OREO and
ORA |
0 |
0 |
1 |
6 |
(134) |
Non-interest expense |
4,732 |
4,532 |
4,673 |
4,688 |
4,470 |
Income before income taxes |
2,017 |
1,656 |
1,481 |
1,327 |
1,557 |
Income tax expense |
566 |
427 |
361 |
323 |
396 |
Net income |
1,451 |
1,229 |
1,120 |
1,004 |
1,161 |
Preferred stock dividends and accretion of
discount |
32 |
33 |
33 |
37 |
37 |
Net income available to common
stockholders |
$ 1,419 |
$ 1,196 |
$ 1,087 |
$ 967 |
$ 1,124 |
Net income per common share, diluted |
$ 0.50 |
$ 0.43 |
$ 0.38 |
$ 0.35 |
$ 0.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated
Statements of Financial Condition (Unaudited) |
(Dollars in thousands) |
|
|
|
|
|
|
|
Dec 31, |
Sept 30, |
June 30, |
Mar 31, |
Dec 31, |
|
2014 |
2014 |
2014 |
2014 |
2013 |
FINANCIAL POSITION: |
|
|
|
|
|
Cash and cash equivalents |
$ 12,504 |
$ 23,891 |
$ 28,428 |
$ 35,692 |
$ 34,060 |
Investment securities |
231,656 |
198,086 |
194,771 |
191,829 |
186,958 |
Loans held for sale |
617 |
0 |
0 |
0 |
0 |
Loans and leases |
455,603 |
449,407 |
439,022 |
430,171 |
415,354 |
Allowance for credit losses |
(4,906) |
(4,887) |
(4,887) |
(4,750) |
(4,623) |
Net loans and leases |
450,697 |
444,520 |
434,135 |
425,421 |
410,731 |
Premises and equipment, net |
7,668 |
7,825 |
7,973 |
8,120 |
8,218 |
Other assets |
20,188 |
21,098 |
19,855 |
20,197 |
21,506 |
Total assets |
$ 723,330 |
$ 695,420 |
$ 685,162 |
$ 681,259 |
$ 661,473 |
|
|
|
|
|
|
Demand Deposits |
$ 102,107 |
$ 116,758 |
$ 116,989 |
$ 110,866 |
$ 101,853 |
NOW |
205,816 |
173,168 |
174,044 |
177,300 |
170,427 |
Money markets |
143,483 |
143,771 |
133,479 |
127,961 |
130,835 |
Savings |
66,634 |
64,550 |
63,844 |
62,349 |
60,090 |
Core Deposits |
518,040 |
498,247 |
488,356 |
478,476 |
463,205 |
Time deposits |
76,805 |
80,898 |
79,494 |
83,297 |
95,542 |
Brokered deposits |
10,238 |
10,221 |
7,719 |
-- |
-- |
Total Deposits |
605,083 |
589,366 |
575,569 |
561,773 |
558,747 |
FHLB advances |
20,000 |
10,000 |
10,000 |
10,000 |
10,000 |
Repurchase agreements |
19,221 |
19,330 |
23,939 |
35,555 |
19,854 |
Other borrowings |
9,784 |
9,793 |
9,802 |
9,811 |
9,820 |
Other liabilities |
5,334 |
4,568 |
4,155 |
3,999 |
4,469 |
Stockholders' equity |
63,908 |
62,363 |
61,697 |
60,121 |
58,583 |
Total liabilities and stockholders'
equity |
$ 723,330 |
$ 695,420 |
$ 685,162 |
$ 681,259 |
$ 661,473 |
CONTACT: For further information, please contact:
Gerald F. Sopp CFO/Executive Vice-President
484.359.3138
gsopp@dnbfirst.com
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