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 ended March 31,
2015.
For the quarter ended March 31, 2015, net income available to
common stockholders was $1.23 million or $0.43 per diluted common
share, up 27% compared with $967,000 or $0.35 per diluted common
share for the quarter ended March 31, 2014.
William S. Latoff, Chairman and CEO, commented: "We feel it was
a strong quarter in which we met many of our financial performance
targets and delivered significant year-over-year net income growth
driven by increased earning assets. Initiatives in place to expand
banking relationships with clients played a key role in driving
strong growth in core deposits.
"We accomplished our goals despite the second consecutive winter
of unusually severe weather. Even with the negative impact the
inclement weather had, the entire banking operation continued to
build momentum. We were very encouraged by the quarter's results
and the steady, sustainable growth DNB has demonstrated each of the
past several quarters."
Highlights:
- Return on average assets (ROAA) was 0.69% for the three months
ended March 31, 2015, compared to 0.62% a year earlier, and return
on average equity (ROAE) rose to 8.13% for the three months ended
March 31, 2015, compared with 6.78% for the three months ended
March 31, 2014.
- Tangible book value per share increased significantly to $18.83
at March 31, 2015, compared to $17.01 at March 31, 2014, and was up
from $18.26 at December 31, 2014.
- Net interest income in the first quarter of 2015 increased to
$5.39 million, compared to $5.18 million in the first quarter of
2014, reflecting increased interest income from loan growth and
reduced interest expense resulting from disciplined rate
management.
- Total assets rose to a Company record $748.44 million, up 9.9%
compared with total assets of $681.26 million at March 31, 2014,
and up 3.47% from $723.33 million at December 31, 2014.
- Wealth management assets under care grew to $178.34 million at
March 31, 2015 – 16.9% growth from March 31, 2014 totals –
reflecting consistent consecutive quarter growth as the Bank
continued expanding its wealth management business.
- Total loans and leases before the allowance for credit losses,
reflecting a balanced mix of commercial loans and growing retail
lending, increased 7.9% to $464.10 million at March 31, 2015 from
$430.17 million at March 31, 2014. Total loans and leases after
allowance for credit losses increased 7.9% on a year-over-year
comparison.
- The Bank's core deposits (demand deposits, NOW, money market
and savings accounts) grew substantially to $544.23 million at
March 31, 2015, a 13.7% increase from $478.48 million a year
earlier, and up from $518.04 million at December 31, 2014, as the
Bank continued its focus on building commercial and retail client
relationships that incorporate attractive lower-cost deposits as
part of a total relationship banking experience.
- The Company's balance sheet continued to demonstrate stable
asset quality, and capital levels that exceeded accepted standards
for a well-capitalized institution.
Income Statement Highlights
For the three months ended March 31, 2015, net interest income
after provision for credit losses increased to $5.09 million
compared with $4.80 million in the first quarter of 2014, with the
increase reflecting organic loan growth, a decline in the Company's
provision for credit losses, 3.34% interest income growth and a
3.04% decline in interest expense.
The Company's net interest margin was 3.14% for the first
quarter of 2015 compared with 3.36% for the first quarter of 2014.
On a consecutive quarter basis, the Company's net interest margin
remained relatively stable throughout 2014, but net interest margin
in the first quarter of 2015 reflected continuing pressure on
margins in a low-interest rate environment, and intense pricing
competition for quality lending business. As in past quarters, the
Company mitigated some of this pressure through interest expense
management, growing lower-cost core deposits while trimming time
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 and loans,
income from merchant services and debit and credit card use, rose
9.5% to $1.34 million in the first quarter of 2015 compared with
$1.22 million in the first quarter of 2014. The year-over-year
results included 19.94% growth in fees from DNB Investment
Management and Trust, new fee income from mortgage banking
reflecting the Company's expanding retail banking business, and a
gain of $231,000 from the sale of Small Business Administration
(SBA) loans, as part of the Company's SBA lending activities.
Total non-interest expense was $4.82 million for the quarter
ended March 31, 2015, up from $4.69 million for the quarter ended
March 31, 2014, with the year-over-year increase primarily due to
increased salaries and benefits, reflecting the hiring of
experienced individuals in retail banking and commercial
lending.
Balance Sheet, Asset Quality, and Capital Position
Highlights
Total assets increased to a record $748.44 million at March 31,
2015 compared to $681.26 million at March 31, 2014, and rose 3.47%
from $723.33 million at December 31, 2014.
Total deposits were $627.26 million at March 31, 2015, an 11.66%
increase compared with $561.77 million at March 31, 2014, and up
3.67% from $605.08 million at December 31, 2014. The Company added
$65.75 million in lower-cost core deposits (demand deposits, NOW
accounts, money market and savings accounts) between March 31, 2014
and March 31, 2015, and grew core deposits 5.06% from December 31,
2014.
Total net loans and leases before allowance for credit losses
were $464.10 at March 31, 2015 compared to $430.17 million and
$455.6 million at March 31, 2014 and December 31, 2014,
respectively. After allowance for credit losses, net loans and
leases were $458.91 million at March 31, 2015, compared to $425.42
million at March 31, 2014 and up from $450.70 million at year-end
2014. Asset quality measurements at March 31, 2015 continued to
reflect a sound balance sheet and disciplined risk and credit
management. At March 31, 2015, the ratio of total non-performing
loans to total loans was 1.47%, the ratio of non-performing assets
to total assets was 1.03%, and net charge-offs to average loans was
0.01%.
Key measurements of stockholder value, including total earning
assets, book value per common share, ROAA and ROAE grew
year-over-year. Retained earnings were $18.16 million, up from
$14.01 million at March 31, 2014. Tangible common equity,
reflecting increased earnings, increased to $52.85 million at March
31, 2015 compared to $47.03 million at March 31, 2014.
Stockholders' equity declined to $56.17 million compared to $60.12
million at March 31, 2014 and $63.91 million at December 31, 2014.
In the first quarter of 2015 the company issued a subordinated debt
note for $9.75 million, using the proceeds to retire 9,750
preferred shares issued under the Small Business Lending Fund
(SBLF) and amounting to $9.75 million.
The Company's key capital ratios exceeded accepted minimum
regulatory standards for well-capitalized institutions, with a Tier
1 leverage ratio of 8.98%, Tier 1 risk-based capital ratio of
12.63% and total risk-based capital ratio of 15.51% at March 31,
2015.
Latoff concluded: "We believe DNB First, supported by a talented
and experienced team of bankers, has demonstrated the ability to
build business in a very attractive, economically healthy, but
competitive market. We are excited about the prospects to continue
growing and with accelerating productivity and efficiency, deliver
value to 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 |
|
March
31, |
|
2015 |
2014 |
EARNINGS: |
|
|
Interest income |
$ 5,996 |
$ 5,802 |
Interest expense |
606 |
625 |
Net interest income |
5,390 |
5,177 |
Provision for credit losses |
300 |
375 |
Non-interest income |
1,051 |
984 |
Gain on sale of investment
securities |
53 |
235 |
Gain on sale of SBA loans |
231 |
0 |
Loss on sale / write-down of OREO and
ORA |
0 |
6 |
Non-interest expense |
4,824 |
4,688 |
Income before income taxes |
1,601 |
1,327 |
Income tax expense |
349 |
323 |
Net income |
1,252 |
1,004 |
Preferred stock dividends and accretion
of discount |
26 |
37 |
Net income available to common
stockholders |
$ 1,226 |
$ 967 |
Net income per common share,
diluted |
$ 0.43 |
$ 0.35 |
|
|
|
|
|
|
|
|
|
Condensed Consolidated
Statements of Financial Condition (Unaudited) |
(Dollars in thousands) |
|
|
March 31, |
Dec 31, |
|
2015 |
2014 |
FINANCIAL
POSITION: |
|
|
Cash and cash equivalents |
$ 28,335 |
$ 12,504 |
Investment securities |
232,958 |
231,656 |
Loans held for sale |
0 |
617 |
Loans |
464,100 |
455,603 |
Allowance for credit losses |
(5,190) |
(4,906) |
Net loans |
458,910 |
450,697 |
Premises and equipment, net |
7,490 |
7,668 |
Other assets |
20,747 |
20,188 |
Total assets |
$ 748,440 |
$ 723,330 |
|
|
|
Deposits |
$ 627,261 |
$ 605,083 |
FHLB advances |
20,000 |
20,000 |
Repurchase agreements |
20,316 |
19,221 |
Other borrowings |
19,524 |
9,784 |
Other liabilities |
5,166 |
5,334 |
Stockholders' equity |
56,173 |
63,908 |
Total liabilities and stockholders'
equity |
$ 748,440 |
$ 723,330 |
|
DNB Financial
Corporation |
Selected Financial Data
(Unaudited) |
(In thousands, except per share
data) |
|
|
Quarterly |
|
2015 |
2014 |
2014 |
2014 |
2014 |
|
1st Qtr |
4th Qtr |
3rd Qtr |
2nd Qtr |
1st Qtr |
Earnings and Per Share Data |
|
|
|
|
|
Net income available to common
stockholders |
$ 1,226 |
$ 1,419 |
$ 1,196 |
$ 1,087 |
$ 967 |
Basic earnings per common
share |
$ 0.44 |
$ 0.51 |
$ 0.43 |
$ 0.39 |
$ 0.35 |
Diluted earnings per common
share |
$ 0.43 |
$ 0.50 |
$ 0.43 |
$ 0.38 |
$ 0.35 |
Dividends per common share |
$ 0.07 |
$ 0.07 |
$ 0.07 |
$ 0.07 |
$ 0.07 |
Book value per common
share |
$ 18.91 |
$ 18.32 |
$ 17.81 |
$ 17.62 |
$ 17.09 |
Tangible book value per common
share |
$ 18.83 |
$ 18.26 |
$ 17.74 |
$ 17.55 |
$ 17.01 |
Average common shares
outstanding |
2,786 |
2,776 |
2,769 |
2,763 |
2,758 |
Average diluted common shares
outstanding |
2,833 |
2,822 |
2,817 |
2,810 |
2,802 |
|
|
|
|
|
|
Performance Ratios |
|
|
|
|
|
Return on average assets |
0.69% |
0.82% |
0.72% |
0.67% |
0.62% |
Return on average equity |
8.13% |
9.04% |
7.82% |
7.35% |
6.78% |
Return on average tangible
equity |
8.15% |
9.06% |
7.84% |
7.38% |
6.81% |
Net interest margin |
3.14% |
3.25% |
3.33% |
3.36% |
3.36% |
Efficiency ratio |
69.87% |
70.45% |
68.76% |
71.97% |
73.63% |
|
|
|
|
|
|
Asset Quality Ratios |
|
|
|
|
|
Net charge-offs to average
loans |
0.01% |
0.16% |
0.27% |
0.11% |
0.24% |
Non-performing loans/Total
loans |
1.47% |
1.50% |
1.34% |
1.18% |
1.26% |
Non-performing assets/Total
assets |
1.03% |
1.07% |
1.00% |
0.89% |
0.94% |
Allowance for credit loss/Total
loans |
1.12% |
1.08% |
1.09% |
1.11% |
1.10% |
Allowance for credit
loss/Non-performing loans |
76.24% |
71.59% |
81.01% |
94.62% |
87.59% |
|
|
|
|
|
|
Capital Ratios |
|
|
|
|
|
Total equity/Total assets |
7.51% |
8.84% |
8.97% |
9.00% |
8.83% |
Tangible equity/Tangible
assets |
7.53% |
8.82% |
8.95% |
8.95% |
8.78% |
Tangible common equity/Tangible
assets |
7.09% |
7.02% |
7.08% |
7.06% |
6.88% |
Tier 1 leverage ratio |
8.98% |
10.55% |
10.75% |
10.76% |
10.72% |
Common tier 1 risk-based
capital ratio |
10.28% |
n/a |
n/a |
n/a |
n/a |
Tier 1 risk-based capital
ratio |
12.63% |
14.90% |
14.84% |
14.88% |
15.00% |
Total risk-based capital
ratio |
15.51% |
15.92% |
15.86% |
15.92% |
16.04% |
|
|
|
|
|
|
Wealth Management |
|
|
|
|
|
Assets under care* |
$ 178,339 |
$ 163,807 |
$ 161,068 |
$ 158,688 |
$ 152,570 |
|
|
|
|
|
|
*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 |
|
Mar 31, |
Dec 31, |
Sept 30, |
June 30, |
Mar 31, |
|
2015 |
2014 |
2014 |
2014 |
2014 |
EARNINGS: |
|
|
|
|
|
Interest income |
$ 5,996 |
$ 6,012 |
$ 5,905 |
$ 5,877 |
$ 5,802 |
Interest expense |
606 |
561 |
544 |
581 |
625 |
Net interest income |
5,390 |
5,451 |
5,361 |
5,296 |
5,177 |
Provision for credit losses |
300 |
200 |
300 |
255 |
375 |
Non-interest income |
1,051 |
1,063 |
1,041 |
1,012 |
984 |
Gain on sale of investment
securities |
53 |
435 |
86 |
102 |
235 |
Loss on sale / write-down of OREO and
ORA |
0 |
0 |
0 |
1 |
6 |
Non-interest expense |
4,824 |
4,732 |
4,532 |
4,673 |
4,688 |
Income before income taxes |
1,601 |
2,017 |
1,656 |
1,481 |
1,327 |
Income tax expense |
349 |
566 |
427 |
361 |
323 |
Net income |
1,252 |
1,451 |
1,229 |
1,120 |
1,004 |
Preferred stock dividends and accretion
of discount |
26 |
32 |
33 |
33 |
37 |
Net income available to common
stockholders |
$ 1,226 |
$ 1,419 |
$ 1,196 |
$ 1,087 |
$ 967 |
Net income per common share,
diluted |
$ 0.43 |
$ 0.50 |
$ 0.43 |
$ 0.38 |
$ 0.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Financial Condition
(Unaudited) |
|
|
|
|
|
(Dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Mar 31, |
Dec 31, |
Sept 30, |
June 30, |
Mar 31, |
|
2015 |
2014 |
2014 |
2014 |
2014 |
FINANCIAL
POSITION: |
|
|
|
|
|
Cash and cash equivalents |
$ 28,335 |
$ 12,504 |
$ 23,891 |
$ 28,428 |
$ 35,692 |
Investment securities |
232,958 |
231,656 |
198,086 |
194,771 |
191,829 |
Loans held for sale |
0 |
617 |
0 |
0 |
0 |
Loans and leases |
464,100 |
455,603 |
449,407 |
439,022 |
430,171 |
Allowance for credit losses |
(5,190) |
(4,906) |
(4,887) |
(4,887) |
(4,750) |
Net loans and leases |
458,910 |
450,697 |
444,520 |
434,135 |
425,421 |
Premises and equipment, net |
7,490 |
7,668 |
7,825 |
7,973 |
8,120 |
Other assets |
20,747 |
20,188 |
21,098 |
19,855 |
20,197 |
Total assets |
$ 748,440 |
$ 723,330 |
$ 695,420 |
$ 685,162 |
$ 681,259 |
|
|
|
|
|
|
Demand Deposits |
$ 113,419 |
$ 102,107 |
$ 116,758 |
$ 116,989 |
$ 110,866 |
NOW |
215,799 |
205,816 |
173,168 |
174,044 |
177,300 |
Money markets |
144,648 |
143,483 |
143,771 |
133,479 |
127,961 |
Savings |
70,363 |
66,634 |
64,550 |
63,844 |
62,349 |
Core Deposits |
544,229 |
518,040 |
498,247 |
488,356 |
478,476 |
Time deposits |
72,784 |
76,805 |
80,898 |
79,494 |
83,297 |
Brokered deposits |
10,248 |
10,238 |
10,221 |
7,719 |
-- |
Total Deposits |
627,261 |
605,083 |
589,366 |
575,569 |
561,773 |
FHLB advances |
20,000 |
20,000 |
10,000 |
10,000 |
10,000 |
Repurchase agreements |
20,316 |
19,221 |
19,330 |
23,939 |
35,555 |
Other borrowings |
19,524 |
9,784 |
9,793 |
9,802 |
9,811 |
Other liabilities |
5,166 |
5,334 |
4,568 |
4,155 |
3,999 |
Stockholders' equity |
56,173 |
63,908 |
62,363 |
61,697 |
60,121 |
Total liabilities and stockholders'
equity |
$ 748,440 |
$ 723,330 |
$ 695,420 |
$ 685,162 |
$ 681,259 |
CONTACT: For further information, please contact:
Gerald F. Sopp CFO/Executive Vice-President
484.359.3138
gsopp@dnbfirst.com
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