Re: | DCB Financial Corp Form 10-K for the Fiscal Year Ended December 31, 2010 Filed March 31, 2011 |
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Your File No. 000-22387 |
1. | Please revise this section or Note 11 to the financial statements to disclose the extent to which each of the material steps required by the FDIC order to be taken by the company has been accomplished. Provide updated disclosure in future filings as appropriate. |
| Timely completion of third-party review of intercompany finance operations | ||
| Development and timely submission to regulatory authorities of plans to address criticized / classified loan portfolios | ||
| Development and timely submission to regulatory authorities of liquidity and funding contingency plans | ||
| Development of plans to address capital requirements imposed by agreements |
2. | Please confirm that by incorporating by reference the information in the Companys proxy statement under the section captioned Committees and Compensation of the Board of Directors you are referring to the section captioned Board of Directors and Selected Committees on page 8 of the proxy, and please correct this in future filings. |
3. | Please confirm that by incorporating by reference the information in the Companys proxy statement under the section captioned Information Concerning Independent Registered Public Accountants you are referring to the section captioned Principal Accounting Firm Fees on page 25 of the proxy, and please correct this in future filings. |
4. | We note your policy for determining your allowance for loan loss on page 44. Please revise future filings to provide enhanced disclosures to fully comply with the disclosure requirements of ASU 2010-20, including for instance, how management considers historical losses and the existing economic conditions. Please also refer to ASC 310-10-50-11B (a) which requires various disclosures on this item by portfolio segment. Please provide us with your proposed disclosures in your response letter. |
5. | We note your accounting policy stating that loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. We further note that your loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Please revise future filings to provide additional information regarding your charge-off policies and how you determine that the uncollectibility of a loan balance is confirmed. For example: |
| Disclose whether you charge-off loans after a certain number of days of delinquency; | ||
| Disclose if you charge-off a portion of nonperforming and impaired loans and whether you have revised these policies during 2009 or 2010; and | ||
| Discuss the triggering events or other facts and circumstances that impact your decision to charge-off a portion of a loan as compared to recording a specific or general reserve. |
6. | We note you had $17.3 million and $27.1 million in real estate construction and land development loans as of December 31, 2010 and December 31, 2009, respectively. Based on your disclosure on page 15 of the Form 10-K, we note you had no allowance for loan loss allocated to this segment for these periods. Please tell us the following: |
| The nature of your real estate construction loans and land development loans; | ||
| Why you do not report any allocation of your allowance for loan loss to the construction and land development segment on page 15 of the Form 10-K, while you state that your roll forward of allowance for credit loss table by loan portfolio includes real estate construction and land development loans in the commercial real estate portfolio, on page 54; | ||
| Please clarify if you had any charge-offs, recoveries, or specific reserve allocations on your construction and land development loans during the periods presented and if so, please quantify these amounts and clarify this in future filings. |
7. | Based on your disclosures on page 56, we note your troubled debt restructurings were $29.3 million as of December 31, 2010. We further note that $14.1 million of these loans were not performing as of such date. Given the significance of your restructured loans, please tell us and revise future filings to disclose the following: |
| The amounts of your troubled debt restructuring in prior periods presented; | ||
| A description of the key features of the modifications including the significant terms modified and whether the modification is short-term or long-term; and | ||
| Your policy on how many payments the borrower needs to make before returning the loan to accrual status. |
8. | Please tell us and disclose in future filings the amount of modified loans by loan type that you believe do not meet the definition of a troubled debt restructuring. |
9. | Please confirm that by other persons of similar creditworthiness in the representations included in this section, you mean other persons not related to you. Please refer to Instruction 4(c) (ii) of Regulation S-K. Confirm that you will provide the correct representation in future filings. |
| DCB is responsible for the adequacy and accuracy of the disclosure in the filing; | ||
| Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and | ||
| DCB may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
/s/ John A. Ustaszewski
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John A. Ustaszewski |
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Senior Vice-President and Chief Financial Officer |
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