x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Ohio | | 31-1469837 |
(State or other jurisdiction of | | (I.R.S. Employer Identification Number) |
incorporation or organization) | | |
| Page |
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PART I FINANCIAL INFORMATION | |
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ITEM 1 Financial Statements | |
| |
Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012 | 2 |
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012 | 3 |
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2013 and 2012 | 4 |
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012 | 5 |
Notes to the Condensed Consolidated Financial Statements | 6 |
| |
ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 |
ITEM 3 - Quantitative and Qualitative Disclosures About Market Risk | 38 |
ITEM 4 Controls and Procedures | 39 |
PART II OTHER INFORMATION | |
ITEM 1 - Legal Proceedings | 40 |
ITEM 1A - Risk Factors | 40 |
ITEM 2 - Unregistered Sales of Equity Securities and Use of Proceeds | 40 |
ITEM 3 - Default upon Senior Securities | 40 |
ITEM 4 Mine Safety Disclosures | 40 |
ITEM 5 - Other Information | 40 |
ITEM 6 - Exhibits | 40 |
SIGNATURES | 41 |
| | September 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
| | (Unaudited) | | | | | |
ASSETS | | | | | | | |
Cash and due from financial institutions | | $ | 7,294 | | $ | 9,663 | |
Interest-bearing deposits | | | 27,488 | | | 53,644 | |
Total cash and cash equivalents | | | 34,782 | | | 63,307 | |
Securities available-for-sale | | | 81,071 | | | 87,197 | |
Securities held-to-maturity | | | - | | | 1,149 | |
Total securities | | | 81,071 | | | 88,346 | |
Loans | | | 358,290 | | | 317,504 | |
Less allowance for loan losses | | | (6,471) | | | (6,881) | |
Net Loans | | | 351,819 | | | 310,623 | |
Real estate owned | | | 1,291 | | | 3,671 | |
Investment in FHLB Stock | | | 3,799 | | | 3,799 | |
Premises and equipment, net | | | 12,151 | | | 12,036 | |
Bank owned life insurance | | | 19,135 | | | 18,564 | |
Accrued interest receivable and other assets | | | 2,774 | | | 6,146 | |
Total assets | | $ | 506,822 | | $ | 506,492 | |
| | | | | | | |
LIABILITIES | | | | | | | |
Noninterest bearing deposits | | $ | 103,762 | | $ | 95,847 | |
Interest bearing deposits | | | 347,303 | | | 352,443 | |
Total deposits | | | 451,065 | | | 448,290 | |
Federal Home Loan Bank advances | | | 5,140 | | | 7,498 | |
Accrued interest payable and other liabilities | | | 2,138 | | | 2,315 | |
Total liabilities | | | 458,343 | | | 458,103 | |
| | | | | | | |
STOCKHOLDERS' EQUITY | | | | | | | |
Common stock, no par value, 7,500,000 shares authorized, 7,500,000 shares issued, and 7,500,000 shares outstanding at September 30, 2013 and December 31, 2012 | | | 15,771 | | | 15,771 | |
Retained earnings | | | 40,785 | | | 40,614 | |
Treasury stock, at cost, 307,650 shares at September 30, 2013 and December 31, 2012 | | | (7,416) | | | (7,416) | |
Accumulated other comprehensive loss | | | (661) | | | (580) | |
Total stockholders' equity | | | 48,479 | | | 48,389 | |
Total liabilities and stockholders' equity | | $ | 506,822 | | $ | 506,492 | |
2 | ||
| | Three months ended September 30, | | Nine months ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Interest and dividend income | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Loans | | $ | 3,814 | | $ | 3,967 | | $ | 11,100 | | $ | 12,414 | |
Taxable securities | | | 434 | | | 537 | | | 1,396 | | | 1,688 | |
Tax-exempt securities | | | 47 | | | 54 | | | 140 | | | 171 | |
Federal funds sold and other | | | 21 | | | 21 | | | 71 | | | 70 | |
Total interest income | | | 4,316 | | | 4,579 | | | 12,707 | | | 14,343 | |
| | | | | | | | | | | | | |
Interest expense | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Deposits | | | 362 | | | 566 | | | 1,235 | | | 1,862 | |
Borrowings | | | 63 | | | 177 | | | 214 | | | 771 | |
Total interest expense | | | 425 | | | 743 | | | 1,449 | | | 2,633 | |
| | | | | | | | | | | | | |
Net interest income | | | 3,891 | | | 3,836 | | | 11,258 | | | 11,710 | |
| | | | | | | | | | | | | |
Provision for loan losses | | | - | | | 65 | | | (890) | | | 795 | |
| | | | | | | | | | | | | |
Net interest income after provision for loan losses | | | 3,891 | | | 3,771 | | | 12,148 | | | 10,915 | |
| | | | | | | | | | | | | |
Non-interest income | | | | | | | | | | | | | |
Service charges | | | 543 | | | 718 | | | 1,665 | | | 1,912 | |
Trust department income | | | 181 | | | 224 | | | 553 | | | 674 | |
Gain on sales of securities | | | - | | | - | | | 135 | | | 508 | |
Net gain (loss) on sale of REO | | | (51) | | | (52) | | | 35 | | | (309) | |
Treasury management fees | | | 57 | | | 61 | | | 183 | | | 193 | |
Earnings on bank owned life insurance | | | 166 | | | 165 | | | 571 | | | 575 | |
Other | | | 296 | | | 42 | | | 709 | | | 527 | |
Total noninterest income | | | 1,192 | | | 1,158 | | | 3,851 | | | 4,080 | |
| | | | | | | | | | | | | |
Noninterest expense | | | | | | | | | | | | | |
Salaries and other employee benefits | | | 2,924 | | | 2,542 | | | 8,760 | | | 7,155 | |
Occupancy and equipment | | | 685 | | | 745 | | | 2,278 | | | 2,283 | |
Professional services | | | 359 | | | 172 | | | 1,326 | | | 870 | |
Advertising | | | 66 | | | 134 | | | 239 | | | 322 | |
Postage, freight and courier | | | 52 | | | 11 | | | 149 | | | 94 | |
Supplies | | | 79 | | | 35 | | | 214 | | | 124 | |
State franchise taxes | | | 120 | | | 70 | | | 374 | | | 278 | |
Federal deposit insurance premiums | | | 187 | | | 287 | | | 531 | | | 862 | |
Other | | | 758 | | | 754 | | | 2,255 | | | 2,415 | |
Total noninterest expense | | | 5,230 | | | 4,750 | | | 16,126 | | | 14,403 | |
| | | | | | | | | | | | | |
Net income (loss) before income taxes | | | (147) | | | 179 | | | (127) | | | 592 | |
| | | | | | | | | | | | | |
Income tax benefit | | | (20) | | | (127) | | | (298) | | | (156) | |
| | | | | | | | | | | | | |
Net income (loss) | | $ | (127) | | $ | 306 | | $ | 171 | | $ | 748 | |
| | | | | | | | | | | | | |
Basic and diluted earnings (loss) per common share | | $ | (0.02) | | $ | 0.08 | | $ | 0.02 | | $ | 0.20 | |
Dividends per share | | $ | - | | $ | - | | $ | - | | $ | - | |
3 | ||
| | For the three months ended | | For the nine months ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | | | | | | | | | | | | |
Net income (loss) | | $ | (127) | | $ | 306 | | $ | 171 | | $ | 748 | |
| | | | | | | | | | | | | |
Other comprehensive income (loss): | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Reclassification adjustment of previously recognized noncredit other-than-temporary impairment on sale of security, net of tax of $512 | | | - | | | - | | | 995 | | | - | |
| | | | | | | | | | | | | |
Reclassification adjustment for realized gains included in net income, net of taxes of $46 and $173. | | | - | | | - | | | (89) | | | (335) | |
| | | | | | | | | | | | | |
Unrealized gains (losses) on securities available-for-sale, net of related taxes of $(326), $116, $(667), and $294 in 2013 and 2012, respectively | | | (633) | | | 225 | | | (1,294) | | | 570 | |
| | | | | | | | | | | | | |
Unrealized gains on securities transferred into available-for-sale, net of related taxes of $131 | | | - | | | - | | | 254 | | | - | |
| | | | | | | | | | | | | |
Amortization of unrealized losses on held-to-maturity securities, net of taxes of $5, $12, $27, and $35 in 2013 and 2012 respectively | | | 10 | | | 23 | | | 53 | | | 69 | |
| | | | | | | | | | | | | |
Total other comprehensive income (loss) | | | (623) | | | 248 | | | (81) | | | 304 | |
| | | | | | | | | | | | | |
Comprehensive income (loss) | | $ | (750) | | $ | 554 | | $ | 90 | | $ | 1,052 | |
4 | ||
| | 2013 | | 2012 | | ||
| | | | | | | |
Cash flows provided by (used in) operating activites | | $ | 3,509 | | $ | (1,500) | |
| | | | | | | |
Cash flows provided by (used in) investing activities | | | | | | | |
Securities | | | | | | | |
Purchases | | | (17,268) | | | (42,868) | |
Proceeds from maturities, principal payments and calls | | | 20,757 | | | 19,627 | |
Sales | | | 2,561 | | | 12,934 | |
Net change in loans | | | (40,033) | | | 36,096 | |
Proceeds from sale of real estate owned | | | 2,442 | | | 2,358 | |
Premises and equipment expenditures | | | (910) | | | (348) | |
Net cash flows provided by (used in) investing activities | | | (32,451) | | | 27,799 | |
| | | | | | | |
Cash flows provided by (used in) financing activities | | | | | | | |
Net change in deposits | | | 2,775 | | | 5,891 | |
Repayment of Federal Home Loan Bank advances | | | (2,358) | | | (23,347) | |
Net cash provided by (used in) financing activities | | | 417 | | | (17,456) | |
| | | | | | | |
Net change in cash and cash equivalents | | | (28,525) | | | 8,843 | |
| | | | | | | |
Cash and cash equivalents at beginning of period | | | 63,307 | | | 39,314 | |
| | | | | | | |
Cash and cash equivalents at end of period | | $ | 34,782 | | $ | 48,157 | |
| | | | | | | |
Supplemental disclosures of cash flow information: | | | | | | | |
Cash paid during the period for: | | | | | | | |
Interest on deposits and borrowings | | $ | 1,519 | | $ | 2,687 | |
| | | | | | | |
Supplemental disclosures of non-cash investing and financing activites | | | | | | | |
Transfers from loans to real estate owned | | $ | 27 | | $ | 2,187 | |
5 | ||
6 | ||
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
Weighted-average common shares outstanding (basic) | | | 7,192,350 | | | 3,717,385 | | | 7,192,350 | | | 3,717,385 | |
Dilutive effect of assumed exercise of stock options | | | - | | | 22,309 | | | 34,020 | | | 17,795 | |
Weighted-average common shares outstanding (diluted) | | | 7,192,350 | | | 3,739,694 | | | 7,226,370 | | | 3,735,180 | |
7 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | Adjusted Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value | | ||||
| | | | | | | | | | | | | |
U.S. Government and agency obligations | | $ | 16,793 | | $ | 9 | | $ | 396 | | $ | 16,406 | |
Corporate bonds | | | 6,202 | | | 51 | | | 70 | | | 6,183 | |
States and municipal obligations | | | 20,723 | | | 331 | | | 497 | | | 20,557 | |
Collateralized debt obligations | | | 1,932 | | | - | | | 928 | | | 1,004 | |
Mortgage-backed securities | | | 36,439 | | | 746 | | | 264 | | | 36,921 | |
Total | | $ | 82,089 | | $ | 1,137 | | $ | 2,155 | | $ | 81,071 | |
| | Amortized Costs | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value | | ||||
| | | | | | | | | | | | | |
U.S. Government and agency obligations | | $ | 16,821 | | $ | 134 | | $ | 18 | | $ | 16,937 | |
Corporate bonds | | | 5,081 | | | 86 | | | 2 | | | 5,165 | |
States and municipal obligations | | | 19,874 | | | 918 | | | 31 | | | 20,761 | |
Mortgage-backed securities | | | 43,432 | | | 931 | | | 29 | | | 44,334 | |
Total | | $ | 85,208 | | $ | 2,069 | | $ | 80 | | $ | 87,197 | |
| | Adjusted Amortized Cost | | Gross Unrealized Gains | | Estimated Fair Value | | |||
| | | | | | | | | | |
Collateralized debt obligations | | $ | 1,149 | | $ | 941 | | $ | 2,090 | |
8 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | (Less than 12 months) | | (12 months or longer) | | Total | | ||||||||||||||||||
Description of securities | | Number of investment | | Fair Value | | Unrealized losses | | Number of investments | | Fair value | | Unrealized losses | | Number of investments | | Fair value | | Unrealized losses | | ||||||
U.S. Government and agency obligations | | 13 | | $ | 13,285 | | $ | 396 | | - | | $ | - | | $ | - | | 13 | | $ | 13,285 | | $ | 396 | |
Corporate bonds | | 7 | | | 3,023 | | | 70 | | - | | | - | | | - | | 7 | | | 3,023 | | | 70 | |
State and municipal obligations | | 33 | | | 11,139 | | | 464 | | 1 | | | 475 | | | 33 | | 34 | | | 11,614 | | | 497 | |
Collateralized | | | | | | | | | | | | | | | | | | | | | | | | | |
debt obligations | | - | | | - | | | - | | 1 | | | 1,004 | | | 928 | | 1 | | | 1,004 | | | 928 | |
Mortgage-backed securities and other | | 9 | | | 7,047 | | | 264 | | - | | | | | | - | | 9 | | | 7,047 | | | 264 | |
Total temporarily impaired securities | | 62 | | $ | 34,494 | | $ | 1,194 | | 2 | | $ | 1,479 | | $ | 961 | | 64 | | $ | 35,973 | | $ | 2,155 | |
| | (Less than 12 months) | | (12 months or longer) | | Total | | ||||||||||||||||||
Description of securities | | Number of investment | | Fair value | | Unrealized losses | | Number of investments | | Fair value | | Unrealized losses | | Number of investments | | Fair value | | Unrealized losses | | ||||||
U.S. Government and agency obligations | | 3 | | $ | 3,649 | | $ | 18 | | - | | $ | - | | $ | - | | 3 | | $ | 3,649 | | $ | 18 | |
Corporate bonds | | 1 | | | 501 | | | 2 | | - | | | - | | | - | | 1 | | | 501 | | | 2 | |
State and municipal obligations | | 5 | | | 1,630 | | | 31 | | - | | | - | | | - | | 5 | | | 1,630 | | | 31 | |
Mortgage-backed securities and other | | 6 | | | 4,065 | | | 29 | | - | | | - | | | - | | 6 | | | 4,065 | | | 29 | |
Total temporarily impaired securities | | 15 | | $ | 9,845 | | $ | 80 | | - | | $ | - | | $ | - | | 15 | | $ | 9,845 | | $ | 80 | |
9 | ||
| | Available-for-sale | | Held-to-maturity | | ||||||||
| | Amortized | | Fair | | Amortized | | Fair | | ||||
| | Cost | | Value | | Cost | | Value | | ||||
Due in one year or less | | $ | 1,041 | | $ | 1,048 | | $ | - | | $ | - | |
Due after one to five years | | | 8,256 | | | 8,320 | | | - | | | - | |
Due after five to ten years | | | 24,156 | | | 23,836 | | | - | | | - | |
Due after ten years | | | 12,197 | | | 10,946 | | | - | | | - | |
Mortgage-backed and related securities | | | 36,439 | | | 36,921 | | | - | | | - | |
Total | | $ | 82,089 | | $ | 81,071 | | $ | - | | $ | - | |
| | September 30, 2013 | | December 31, 2012 | | ||
Commercial and industrial | | $ | 122,687 | | $ | 112,300 | |
Commercial real estate | | | 109,933 | | | 111,417 | |
Residential real estate and home equity | | | 93,349 | | | 72,137 | |
Consumer and credit card | | | 32,169 | | | 21,620 | |
Subtotal | | | 358,138 | | | 317,474 | |
Add: Net deferred loan origination fees | | | 152 | | | 30 | |
| | | | | | | |
Total loans receivable | | $ | 358,290 | | $ | 317,504 | |
10 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | Consumer and Credit Card | | Commercial and Industrial | | Commercial Real Estate | | Residential Real Estate and Home Equity | | Total | | |||||
Beginning balance: | | $ | 368 | | $ | 1,572 | | $ | 4,363 | | $ | 200 | | $ | 6,503 | |
Chargeoffs | | | (83) | | | (6) | | | (5) | | | (52) | | | (146) | |
Recoveries | | | 82 | | | 5 | | | 20 | | | 7 | | | 114 | |
Provision | | | 8 | | | (101) | | | 9 | | | 84 | | | - | |
Ending balance: | | $ | 375 | | $ | 1,470 | | $ | 4,387 | | $ | 239 | | $ | 6,471 | |
| | Consumer and Credit Card | | Commercial and Industrial | | Commercial Real Estate | | Residential Real Estate and Home Equity | | Total | | |||||
Beginning balance: | | $ | 365 | | $ | 1,620 | | $ | 4,692 | | $ | 204 | | $ | 6,881 | |
Chargeoffs | | | (219) | | | (85) | | | (135) | | | (141) | | | (580) | |
Recoveries | | | 192 | | | 780 | | | 43 | | | 45 | | | 1,060 | |
Provision | | | 37 | | | (845) | | | (213) | | | 131 | | | (890) | |
Ending balance: | | $ | 375 | | $ | 1,470 | | $ | 4,387 | | $ | 239 | | $ | 6,471 | |
11 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | Consumer and Credit Card | | Commercial and Industrial | | Commercial Real Estate | | Residential Real Estate and Home Equity | | Total | | |||||
Beginning balance: | | $ | 373 | | $ | 2,132 | | $ | 6,436 | | $ | 207 | | $ | 9,148 | |
Chargeoffs | | | (82) | | | (833) | | | (250) | | | (43) | | | (1,209) | |
Recoveries | | | 51 | | | 62 | | | 29 | | | 4 | | | 146 | |
Provision | | | 30 | | | 777 | | | (783) | | | 41 | | | 66 | |
Ending balance: | | $ | 372 | | $ | 2,138 | | $ | 5,432 | | $ | 209 | | $ | 8,151 | |
| | Consumer and Credit Card | | Commercial and Industrial | | Commercial Real Estate | | Residential Real Estate and Home Equity | | Total | | |||||
Beginning balance: | | $ | 425 | | $ | 1,952 | | $ | 6,916 | | $ | 291 | | $ | 9,584 | |
Chargeoffs | | | (294) | | | (981) | | | (1,323) | | | (62) | | | (2,660) | |
Recoveries | | | 162 | | | 213 | | | 42 | | | 15 | | | 432 | |
Provision | | | 79 | | | 954 | | | (203) | | | (35) | | | 795 | |
Ending balance: | | $ | 372 | | $ | 2,138 | | $ | 5,432 | | $ | 209 | | $ | 8,151 | |
12 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | 9 Months Average Recorded Investment | | 9 Months Interest Income Recognized | | 3 Months Average Recorded Investment | | 3 Months Interest Income Recognized | | |||||||
With No Related Allowance | | | | | | | | | | | | | | | | | | | | | | |
Recorded | | | | | | | | | | | | | | | | | | | | | | |
Consumer and Credit Card | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
Commercial and Industrial | | | 2,658 | | | 2,735 | | | - | | | 3,420 | | | 81 | | | 3,198 | | | 26 | |
Commercial Real Estate | | | 10,790 | | | 12,833 | | | - | | | 9,839 | | | 498 | | | 11,075 | | | 166 | |
Residential RE and Home Equity | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | |
With Allowance Recorded | | | | | | | | | | | | | | | | | | | | | | |
Consumer and Credit Card | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
Commercial and Industrial | | | 2,928 | | | 2,572 | | | 609 | | | 2,349 | | | 71 | | | 3,132 | | | 24 | |
Commercial Real Estate | | | 10,190 | | | 10,609 | | | 2,537 | | | 10,947 | | | 265 | | | 9,256 | | | 103 | |
Residential RE and Home Equity | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | |
Total | | | | | | | | | | | | | | | | | | | | | | |
Consumer and Credit Card | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
Commercial and Industrial | | | 5,586 | | | 5,307 | | | 609 | | | 5,769 | | | 152 | | | 6,330 | | | 50 | |
Commercial Real Estate | | | 20,980 | | | 23,442 | | | 2,537 | | | 20,786 | | | 763 | | | 20,331 | | | 269 | |
Residential RE and Home Equity | | | - | | | - | | | - | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 26,566 | | $ | 28,749 | | $ | 3,146 | | $ | 26,555 | | $ | 915 | | $ | 26,661 | | $ | 319 | |
13 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | Average Recorded Investment | | Interest Income Recognized | | |||||
With No Related Allowance | | | | | | | | | | | | | | | | |
Recorded | | | | | | | | | | | | | | | | |
Consumer and Credit Card | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
Commercial and Industrial | | | 4,288 | | | 4,437 | | | - | | | 3,557 | | | 268 | |
Commercial Real Estate | | | 5,507 | | | 5,998 | | | - | | | 10,067 | | | 241 | |
Residential RE and Home Equity | | | - | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | | | |
With Allowance Recorded | | | | | | | | | | | | | | | | |
Consumer and Credit Card | | | - | | | - | | | - | | | - | | | - | |
Commercial and Industrial | | | 1,183 | | | 1,248 | | | 340 | | | 6,208 | | | 65 | |
Commercial Real Estate | | | 16,376 | | | 20,008 | | | 3,400 | | | 15,965 | | | 820 | |
Residential RE and Home Equity | | | - | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | | | |
Total | | | | | | | | | | | | | | | | |
Consumer and Credit Card | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | |
Commercial and Industrial | | | 5,471 | | | 5,685 | | | 340 | | | 9,765 | | | 333 | |
Commercial Real Estate | | | 21,883 | | | 26,006 | | | 3,400 | | | 26,032 | | | 1,061 | |
Residential RE and Home Equity | | | - | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | | | | |
Total | | $ | 27,354 | | $ | 31,691 | | $ | 3,740 | | $ | 35,797 | | $ | 1,394 | |
| | Consumer and Credit Card | | Commercial and Industrial | | Commercial Real Estate | | Residential Real Estate and Home Equity | | Total | | |||||
Individually evaluated for impairment | | $ | - | | $ | 609 | | $ | 2,537 | | $ | - | | $ | 3,146 | |
Collectively evaluated for impairment | | | 375 | | | 861 | | | 1,850 | | | 239 | | | 3,325 | |
Ending balance: | | $ | 375 | | $ | 1,470 | | $ | 4,387 | | $ | 239 | | $ | 6,471 | |
| | Consumer and Credit Card | | Commercial and Industrial | | Commercial Real Estate | | Residential Real Estate and Home Equity | | Total | | |||||
Individually evaluated for impairment | | $ | - | | $ | 340 | | $ | 3,400 | | $ | - | | $ | 3,740 | |
Collectively evaluated for impairment | | | 365 | | | 1,280 | | | 1,292 | | | 204 | | | 3,141 | |
Ending balance: | | $ | 365 | | $ | 1,620 | | $ | 4,692 | | $ | 204 | | $ | 6,881 | |
14 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | Consumer and Credit Card | | Commercial and Industrial | | Commercial Real Estate | | Residential Real Estate and Home Equity | | Total | | |||||
Loans: | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | - | | $ | 5,586 | | $ | 20,980 | | $ | - | | $ | 26,566 | |
Collectively evaluated for impairment | | | 32,169 | | | 117,101 | | | 88,953 | | | 93,349 | | | 331,572 | |
Ending balance: | | $ | 32,169 | | $ | 122,687 | | $ | 109,933 | | $ | 93,349 | | $ | 358,138 | |
| | Consumer and Credit Card | | Commercial and Industrial | | Commercial Real Estate | | Residential Real Estate and Home Equity | | Total | | |||||
Loans: | | | | | | | | | | | | | | | | |
Individually evaluated for impairment | | $ | - | | $ | 5,471 | | $ | 21,883 | | $ | - | | $ | 27,354 | |
Collectively evaluated for impairment | | | 21,620 | | | 106,829 | | | 89,534 | | | 72,137 | | | 290,120 | |
Ending balance: | | $ | 21,620 | | $ | 112,300 | | $ | 111,417 | | $ | 72,137 | | $ | 317,474 | |
| | September 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
Consumer and credit card | | $ | - | | $ | - | |
Commercial and industrial | | | 1,765 | | | 2,815 | |
Commercial real estate | | | 3,529 | | | 2,195 | |
Residential real estate and home equity | | | 257 | | | 321 | |
| | | | | | | |
Total | | $ | 5,551 | | $ | 5,331 | |
15 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
· | Loans that possess a defined credit weakness and the likelihood that a loan will be paid from the primary source is uncertain. Financial deterioration is underway and very close attention is warranted to ensure that the loan is collected without loss. |
· | Loans are inadequately protected by the current net worth and paying capacity of the obligor. |
· | The primary source of repayment is gone, and the Bank is forced to rely on a secondary source of repayment such as collateral liquidation or guarantees. | |
· | Loans are characterized by the distinct possibility that the Bank will sustain some loss if deficiencies are not corrected. | |
· | Unusual courses of action are needed to maintain a high probability of repayment. | |
· | The borrower is not generating enough cash flow to repay loan principal; however, continues to make interest payments. | |
· | The Bank is forced into a subordinated or unsecured position due to flaws in documentation. | |
· | Loans have been restructured so that payment schedules, terms and collateral represent concessions to the borrower when compared to the normal loan terms. | |
· | The Bank is contemplating foreclosure or legal action due to the apparent deterioration in the loan. | |
· | There is a significant deterioration in the market conditions and the borrower is highly vulnerable to these conditions. |
16 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
· | Loans have all of the weaknesses of those classified as Substandard. Additionally, however, these weaknesses make collection or liquidation in full based on existing conditions improbable. | |
· | The primary source of repayment is gone, and there is considerable doubt as to the quality of the secondary source of repayment. | |
· | The possibility of loss is high, but, because of certain important pending factors, which may strengthen the loan, loss classification is deferred until its exact status is known. A Doubtful classification is established during this period of deferring the realization of the loss. |
17 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
Category | | Commercial and Industrial | | Commercial Real Estate | | ||
| | | | | | | |
Pass - 1 through 4 | | $ | 105,435 | | $ | 82,212 | |
Vulnerable 5 | | | 9,021 | | | 8,826 | |
Substandard 6 | | | 8,231 | | | 18,895 | |
Doubtful 7 | | | - | | | - | |
Loss 8 | | | - | | | - | |
| | | | | | | |
Total | | $ | 122,687 | | $ | 109,933 | |
Category | | Commercial and Industrial | | Commercial Real Estate | | ||
| | | | | | | |
Pass-1-4 | | $ | 90,516 | | $ | 76,708 | |
Vulnerable-5 | | | 12,240 | | | 12,289 | |
Substandard-6 | | | 9,544 | | | 22,420 | |
Doubtful-7 | | | - | | | - | |
Loss-8 | | | - | | | - | |
| | | | | | | |
Total | | $ | 112,300 | | $ | 111,417 | |
18 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
Payment Category | | Consumer and Credit Card | | Residential Real Estate and Home Equity | | ||
| | | | | | | |
Performing | | $ | 32,169 | | $ | 93,051 | |
Nonperforming | | | - | | | 298 | |
| | | | | | | |
Total | | $ | 32,169 | | $ | 93,349 | |
Payment Category | | Consumer and Credit Card | | Residential Real Estate and Home Equity | | ||
| | | | | | | |
Performing | | $ | 21,592 | | $ | 71,816 | |
Non-Performing | | | 28 | | | 321 | |
| | | | | | | |
Total | | $ | 21,620 | | $ | 72,137 | |
Category | | 30-59 Days Past Due | | 60-89 Days Past Due | | Greater than 90 Days Past Due | | Total Past Due | | Current | | Loans | | Recorded Investment > 90 days and Accruing | | |||||||
| | | | | | | | | | | | | | | | | | | | | | |
Consumer and credit card | | $ | 53 | | $ | 103 | | $ | - | | $ | 156 | | $ | 32,013 | | $ | 32,169 | | $ | - | |
Commercial and industrial | | | 17 | | | - | | | 1,049 | | | 1,066 | | | 121,621 | | | 122,687 | | | 47 | |
Commercial real estate | | | - | | | - | | | 2,711 | | | 2,711 | | | 107,222 | | | 109,933 | | | - | |
Residential real estate and home equity | | | 78 | | | 198 | | | 298 | | | 574 | | | 92,775 | | | 93,349 | | | 40 | |
| | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 168 | | $ | 412 | | $ | 4,058 | | $ | 4,507 | | $ | 353,631 | | $ | 358,138 | | $ | 87 | |
19 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
Category | | 30-59 Days Past Due | | 60-89 Days Past Due | | Greater than 90 Days Past Due | | Total Past Due | | Current | | Total Loans | | Recorded Investment > 90 days and Accruing | | |||||||
| | | | | | | | | | | | | | | | | | | | | | |
Consumer and Credit Card | | $ | 37 | | $ | 101 | | $ | 28 | | $ | 166 | | $ | 21,454 | | $ | 21,620 | | $ | 28 | |
Commercial and Industrial | | | 20 | | | - | | | 26 | | | 46 | | | 112,254 | | | 112,300 | | | - | |
Commercial Real Estate | | | 538 | | | 114 | | | 2,195 | | | 2,847 | | | 108,570 | | | 111,417 | | | - | |
Residential Real Estate and Home Equity | | | 444 | | | 289 | | | 321 | | | 1,054 | | | 71,083 | | | 72,137 | | | - | |
| | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,039 | | $ | 504 | | $ | 2,570 | | $ | 4,113 | | $ | 313,361 | | $ | 317,474 | | $ | 28 | |
20 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | Three Months Ended | | ||||||||
| | September 30, 2013 | | September 30, 2012 | | ||||||
| | Number of Contracts | | Recorded Investment (as of period end) | | Number of Contracts | | Recorded Investment (as of period end) | | ||
Consumer and credit card | | - | | $ | - | | 2 | | $ | 11 | |
Commercial and industrial | | - | | | - | | - | | | - | |
Commercial real estate | | - | | | - | | - | | | - | |
Residential real estate and home equity | | - | | | - | | - | | | - | |
| | | | | | | | | | | |
Total | | - | | $ | - | | 2 | | $ | 11 | |
| | Nine Months Ended | | ||||||||
| | September 30, 2013 | | September 30, 2012 | | ||||||
| | Number of Contracts | | Recorded Investment (as of period end) | | Number of Contracts | | Recorded Investment (as of period end) | | ||
Consumer and credit card | | - | | $ | - | | 6 | | $ | 56 | |
Commercial and industrial | | 1 | | | 61 | | - | | | - | |
Commercial real estate | | 5 | | | 3,552 | | 2 | | | 2,803 | |
Residential real estate and home equity | | - | | | - | | - | | | - | |
| | | | | | | | | | | |
Total | | 6 | | $ | 3,613 | | 8 | | $ | 2,859 | |
| | Three Months Ended | | ||||||||
| | September 30, 2013 | | September 30, 2012 | | ||||||
| | Number of Contracts | | Recorded Investment as of period end (1) | | Number of Contracts | | Recorded Investment as of period end (1) | | ||
Consumer and credit card | | - | | $ | - | | - | | $ | - | |
Commercial and industrial | | - | | | - | | - | | | - | |
Commercial real estate | | 3 | | | 163 | | 1 | | | 1,110 | |
Residential real estate and home equity | | - | | | - | | - | | | - | |
| | | | | | | | | | | |
Total | | 3 | | $ | 163 | | 1 | | $ | 1,110 | |
21 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | Nine Months Ended | | ||||||||
| | September 30, 2013 | | September 30, 2012 | | ||||||
| | Number of Contracts | | Recorded Investment as of period end (1) | | Number of Contracts | | Recorded Investment as of period end (1) | | ||
Consumer and credit card | | - | | $ | - | | - | | $ | - | |
Commercial and industrial | | - | | | - | | - | | | - | |
Commercial real estate | | 3 | | | 163 | | 1 | | | 1,110 | |
Residential real estate and home equity | | - | | | - | | - | | | - | |
| | | | | | | | | | | |
Total | | 3 | | $ | 163 | | 1 | | $ | 1,110 | |
| Level 1 | Quoted prices in active markets for identical assets or liabilities |
| Level 2 | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities |
| Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities |
22 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
23 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | Carrying Amount | | Fair Value | | Level 1 | | Level 2 | | Level 3 | | |||||
Financial assets | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 34,782 | | $ | 34,782 | | $ | 34,782 | | $ | - | | $ | - | |
Securities available-for-sale | | | 81,071 | | | 81,071 | | | - | | | 80,067 | | | 1,004 | |
Securities held-to-maturity | | | - | | | - | | | - | | | - | | | - | |
Loans (net of allowance) | | | 351,819 | | | 343,306 | | | - | | | - | | | 343,306 | |
FHLB stock | | | 3,799 | | | 3,799 | | | - | | | 3,799 | | | - | |
Accrued interest receivable | | | 1,537 | | | 1,537 | | | - | | | - | | | 1,537 | |
| | | | | | | | | | | | | | | | |
Financial liabilities | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits | | $ | 103,762 | | $ | 103,762 | | $ | - | | $ | 103,762 | | $ | - | |
Interest-bearing deposits | | | 347,303 | | | 347,591 | | | - | | | 347,591 | | | - | |
FHLB advances | | | 5,140 | | | 5,140 | | | - | | | 5,140 | | | - | |
Accrued interest payable | | | 138 | | | 138 | | | - | | | - | | | 138 | |
| | Carrying Amount | | Fair Value | | Level 1 | | Level 2 | | Level 3 | | |||||
Financial assets | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 63,307 | | $ | 63,307 | | $ | 63,307 | | $ | - | | $ | - | |
Securities available-for-sale | | | 87,197 | | | 87,197 | | | - | | | 87,197 | | | - | |
Securities held-to-maturity | | | 1,149 | | | 2,090 | | | - | | | - | | | 2,090 | |
Loans (net of allowance) | | | 310,623 | | | 307,729 | | | - | | | - | | | 307,729 | |
FHLB stock | | | 3,799 | | | 3,799 | | | - | | | 3,799 | | | - | |
Accrued interest receivable | | | 1,287 | | | 1,287 | | | - | | | - | | | 1,287 | |
| | | | | | | | | | | | | | | | |
Financial liabilities | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits | | $ | 95,847 | | $ | 95,847 | | $ | - | | $ | 95,847 | | $ | - | |
Interest-bearing deposits | | | 352,443 | | | 352,759 | | | - | | | 352,759 | | | - | |
FHLB advances | | | 7,498 | | | 7,498 | | | - | | | 7,498 | | | - | |
Accrued interest payable | | | 208 | | | 208 | | | - | | | - | | | 208 | |
24 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | | | | Fair Value Measurements Using | | |||||||
| | | | | Quoted Prices | | | | | | | | |
| | | | | in Active | | Significant | | | | | ||
| | | | | Markets for | | Other | | Significant | | |||
| | | | | Identical | | Observable | | Unobservable | | |||
| | | | | Assets | | Inputs | | Inputs | | |||
| | Fair Value | | (Level 1) | | (Level 2) | | (Level 3) | | ||||
| | | | | | | | | | | | | |
U.S. Government and agency obligations | | $ | 16,406 | | $ | - | | $ | 16,406 | | $ | - | |
State and municipal obligations | | | 20,557 | | | - | | | 20,557 | | | - | |
Collateralized debt obligations | | | 1,004 | | | - | | | - | | | 1,004 | |
Corporate bonds | | | 6,183 | | | - | | | 6,183 | | | - | |
Mortgage-backed securities and other | | | 36,921 | | | - | | | 36,921 | | | - | |
Total | | $ | 81,071 | | $ | - | | $ | 80,067 | | $ | 1,004 | |
| | | | | Fair Value Measurements Using | | |||||||
| | | | | Quoted Prices | | | | | | | | |
| | | | | in Active | | Significant | | | | | ||
| | | | | Markets for | | Other | | Significant | | |||
| | | | | Identical | | Observable | | Unobservable | | |||
| | | | | Assets | | Inputs | | Inputs | | |||
| | Fair Value | | (Level 1) | | (Level 2) | | (Level 3) | | ||||
| | | | | | | | | | | | | |
U.S. Government and agency obligations | | $ | 16,937 | | $ | - | | $ | 16,937 | | $ | - | |
State and municipal obligations | | | 20,761 | | | - | | | 20,761 | | | - | |
Corporate bonds | | | 5,165 | | | - | | | 5,165 | | | - | |
Mortgage-backed securities and other | | | 44,334 | | | - | | | 44,334 | | | - | |
Total | | $ | 87,197 | | $ | - | | $ | 87,197 | | $ | - | |
25 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | | | | Fair Value Measurements Using | | |||||||
| | | | | Quoted Prices | | | | | | | | |
| | | | | in Active | | Significant | | | | | ||
| | | | | Markets for | | Other | | Significant | | |||
| | | | | Identical | | Observable | | Unobservable | | |||
| | Fair | | Assets | | Inputs | | Inputs | | ||||
| | Value | | (Level 1) | | (Level 2) | | (Level 3) | | ||||
| | | | | | | | | | | | | |
Impaired loans | | $ | 10,035 | | $ | - | | $ | - | | $ | 10,035 | |
Real estate owned | | | 1,291 | | | - | | | - | | | 1,291 | |
| | | | | Fair Value Measurements Using | | |||||||
| | | | | Quoted Prices | | | | | | | | |
| | | | | in Active | | Significant | | | | | ||
| | | | | Markets for | | Other | | Significant | | |||
| | | | | Identical | | Observable | | Unobservable | | |||
| | Fair | | Assets | | Inputs | | Inputs | | ||||
| | Value | | (Level 1) | | (Level 2) | | (Level 3) | | ||||
| | | | | | | | | | | | | |
Collateralized debt obligations | | $ | 2,090 | | $ | - | | $ | - | | $ | 2,090 | |
Impaired loans | | | 23,370 | | | - | | | - | | | 23,370 | |
Real estate owned | | | 3,671 | | | - | | | - | | | 3,671 | |
26 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | | | Weighted | | Weighted | | Aggregate | | ||
| | | | Average Exercise | | Average Remaining | | Intrinsic | | ||
| | Shares | | Price | | Contractual Life | | Value | | ||
| | | | | | | | | | | |
Outstanding at beginning of year | | 261,098 | | $ | 10.38 | | 6.9 years | | | | |
Granted | | 13,889 | | | 5.40 | | 9.6 years | | | | |
Exercised | | (2,936) | | | 3.50 | | | | | | |
Forfeited | | (20,651) | | | 13.98 | | | | | | |
| | | | | | | | | | | |
Outstanding at end of period | | 251,400 | | $ | 9.89 | | 6.7 years | | $ | 187 | |
| | | | | | | | | | | |
Options exercisable at period end | | 117,891 | | $ | 16.09 | | 4.9 years | | $ | 52 | |
| | | | | | | | | | | |
Weighted-average fair value of options granted during the nine months ended September 30, 2013 | | | | $ | 1.77 | | | | | | |
Weighted-average fair value of options granted during the year ended December 31, 2012 | | | | $ | 2.13 | | | | | | |
Number Outstanding | | Range Of Exercise Prices | |
| | | |
157,547 | | $3.50 - $5.40 | |
22,202 | | $7.50 - $9.00 | |
25,612 | | $14.15 - $16.90 | |
46,039 | | $23.00 - $31.00 | |
27 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
28 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
29 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | Three months ending September 30, | | | |||||||||||||||||
| | 2013 | | | 2012 | | | ||||||||||||||
| | Average | | | Interest | | | | | | Average | | | Interest | | | | | | ||
| | outstanding | | earned/ | | Yield/ | | | outstanding | | earned/ | | Yield/ | | | ||||||
| | balance | | paid | | rate | | | balance | | paid | | rate | | | ||||||
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | |
Federal funds sold and other short term | | $ | 23,879 | | $ | 21 | | | 0.35 | % | | $ | 38,617 | | $ | 21 | | | 0.22 | % | |
Taxable securities | | | 80,131 | | | 433 | | | 2.14 | | | | 88,689 | | | 537 | | | 2.41 | | |
Tax-exempt securities | | | 4,912 | | | 47 | | | 3.80 | | | | 5,380 | | | 54 | | | 3.99 | | |
Loans (includes nonaccrual loans) | | | 353,697 | | | 3,815 | | | 4.28 | | | | 321,559 | | | 3,967 | | | 4.91 | | |
Total interest-earning assets | | | 462,619 | | | 4,316 | | | 3.70 | | | | 454,245 | | | 4,579 | | | 4.01 | | |
Noninterest-earning assets | | | 44,632 | | | | | | | | | | 46,692 | | | | | | | | |
Total assets | | $ | 507,251 | | | | | | | | | $ | 500,937 | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand and money market deposits | | $ | 297,045 | | $ | 131 | | | 0.17 | % | | $ | 255,532 | | $ | 101 | | | 0.16 | % | |
Savings deposits | | | 42,186 | | | 16 | | | 0.15 | | | | 35,328 | | | 13 | | | 0.15 | | |
Time deposits | | | 109,777 | | | 215 | | | 0.78 | | | | 155,216 | | | 452 | | | 1.16 | | |
Total deposits | | | 449,008 | | | 362 | | | 0.32 | | | | 446,076 | | | 566 | | | 0.50 | | |
Borrowed funds | | | 5,482 | | | 63 | | | 4.56 | | | | 17,214 | | | 177 | | | 4.09 | | |
Total interest-bearing liabilities | | | 454,490 | | | 425 | | | 0.37 | | | | 463,290 | | | 743 | | | 0.64 | | |
Noninterest-bearing liabilities | | | 5,033 | | | | | | | | | | 3,017 | | | | | | | | |
Total liabilities | | | 459,523 | | | | | | | | | | 465,805 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Shareholders’ equity | | | 47,728 | | | | | | | | | | 34,630 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 507,251 | | | | | | | | | $ | 500,937 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Net interest income; interest rate spread | | | | | $ | 3,891 | | | 3.33 | % | | | | | $ | 3,836 | | | 3.37 | % | |
| | | | | | | | | | | | | | | | | | | | | |
Net interest margin (net interest income as a percent of average interest-earning assets) | | | | | | | | | 3.34 | % | | | | | | | | | 3.36 | % | |
| | | | | | | | | | | | | | | | | | | | | |
Average interest-earning assets to average interest-bearing liabilities | | | | | | | | | 101.79 | % | | | | | | | | | 98.05 | % | |
30 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | Nine months ending September 30, | | | |||||||||||||||||
| | 2013 | | | 2012 | | | ||||||||||||||
| | Average | | | Interest | | | | | | Average | | | Interest | | | | | | ||
| | outstanding | | earned/ | | Yield/ | | | outstanding | | earned/ | | Yield/ | | | ||||||
| | balance | | paid | | rate | | | balance | | paid | | rate | | | ||||||
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | |
Federal funds sold and other short term | | $ | 36,001 | | $ | 71 | | | 0.26 | % | | $ | 40,044 | | $ | 70 | | | 0.23 | % | |
Taxable securities | | | 82,409 | | | 1,396 | | | 2.26 | | | | 87,984 | | | 1,688 | | | 2.56 | | |
Tax-exempt securities | | | 4,704 | | | 140 | | | 3.98 | | | | 5,704 | | | 171 | | | 4.00 | | |
Loans (includes nonaccrual loans) | | | 335,749 | | | 11,100 | | | 4.42 | | | | 334,020 | | | 12,414 | | | 4.96 | | |
Total interest-earning assets | | | 458,863 | | | 12,707 | | | 3.70 | | | | 467,752 | | | 14,343 | | | 4.10 | | |
Noninterest-earning assets | | | 46,759 | | | | | | | | | | 45,977 | | | | | | | | |
Total assets | | $ | 505,622 | | | | | | | | | $ | 513,729 | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand and money market deposits | | $ | 285,685 | | $ | 367 | | | 0.17 | % | | $ | 252,265 | | $ | 293 | | | 0.16 | % | |
Savings deposits | | | 40,201 | | | 45 | | | 0.15 | | | | 34,716 | | | 39 | | | 0.15 | | |
Time deposits | | | 122,842 | | | 823 | | | 0.90 | | | | 164,258 | | | 1,530 | | | 1.24 | | |
Total deposits | | | 448,728 | | | 1,235 | | | 0.37 | | | | 451,239 | | | 1,862 | | | 0.55 | | |
Borrowed funds | | | 6,213 | | | 214 | | | 4.61 | | | | 24,611 | | | 771 | | | 4.18 | | |
Total interest-bearing liabilities | | | 454,941 | | | 1,449 | | | 0.43 | | | | 475,850 | | | 2,633 | | | 0.74 | | |
Noninterest-bearing liabilities | | | 3,073 | | | | | | | | | | 3,249 | | | | | | | | |
Total liabilities | | | 458,014 | | | | | | | | | | 479,099 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Shareholders’ equity | | | 47,608 | | | | | | | | | | 34,630 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 505,622 | | | | | | | | | $ | 513,729 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Net interest income; interest rate spread | | | | | $ | 11,258 | | | 3.28 | % | | | | | $ | 17,619 | | | 3.25 | % | |
| | | | | | | | | | | | | | | | | | | | | |
Net interest margin (net interest income as a percent of average interest-earning assets) | | | | | | | | | 3.28 | % | | | | | | | | | 3.39 | % | |
| | | | | | | | | | | | | | | | | | | | | |
Average interest-earning assets to average interest-bearing liabilities | | | | | | | | | 100.86 | % | | | | | | | | | 114.37 | % | |
31 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | September 30, 2013 | | June 30, 2013 | | December 31, 2012 | | |||
Nonaccrual loans | | $ | 5,551 | | $ | 5,698 | | $ | 5,331 | |
Accruing troubled debt restructurings | | | 13,992 | | | 14,987 | | | 20,080 | |
Other real estate owned | | | 1,291 | | | 2,100 | | | 3,671 | |
Impaired investment securities | | | 1,004 | | | 1,004 | | | 1,149 | |
Total nonperforming assets | | $ | 21,838 | | $ | 23,789 | | $ | 30,231 | |
32 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | | Three months ended September 30, | | | | Nine months ended September 30, | | ||||||||||
| | 2013 | | 2012 | | % Change | | | 2013 | | 2012 | | % Change | | ||||
Service charges | | $ | 543 | | $ | 718 | | (24.37) | % | | $ | 1,665 | | $ | 1,912 | | (12.92) | % |
Trust department income | | | 181 | | | 224 | | (19.20) | % | | | 553 | | | 674 | | (17.95) | % |
Gain on sale of securities | | | - | | | - | | 0.00 | % | | | 135 | | | 508 | | (73.43) | % |
Net gain (loss) on sales of REO | | | (51) | | | (52) | | 1.92 | % | | | 35 | | | (309) | | 111.33 | % |
Treasury management fees | | | 57 | | | 61 | | (6.56) | % | | | 183 | | | 193 | | (5.18) | % |
Earnings on bank owned life insurance | | | 166 | | | 165 | | 0.61 | % | | | 571 | | | 575 | | (0.70) | % |
Other | | | 296 | | | 42 | | 604.80 | % | | | 709 | | | 464 | | 52.80 | % |
Total noninterest income | | $ | 1,192 | | $ | 1,158 | | 2.90 | % | | $ | 3,851 | | $ | 4,080 | | (5.60) | % |
33 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | | Three months ended September 30, | | | Nine months ended September 30, | | |||||||||||
| | 2013 | | 2012 | | % Change | | | 2013 | | 2012 | | % Change | | ||||
Salaries and other employee benefits | | $ | 2,924 | | $ | 2,542 | | 15.0 | % | | $ | 8,760 | | $ | 7,155 | | 22.4 | % |
Occupancy and equipment | | | 685 | | | 745 | | (8.1) | % | | | 2,278 | | | 2,283 | | (0.2) | % |
Professional services | | | 359 | | | 172 | | 108.7 | % | | | 1,326 | | | 870 | | 52.4 | % |
Advertising | | | 66 | | | 134 | | (50.7) | % | | | 239 | | | 322 | | (25.8) | % |
Postage, freight and courier | | | 52 | | | 11 | | 372.7 | % | | | 149 | | | 94 | | 58.5 | % |
Supplies | | | 79 | | | 35 | | 125.7 | % | | | 214 | | | 124 | | 72.6 | % |
State franchise taxes | | | 120 | | | 70 | | 71.4 | % | | | 374 | | | 278 | | 34.5 | % |
Federal deposit insurance premiums | | | 187 | | | 287 | | (34.8) | % | | | 531 | | | 862 | | (38.4) | % |
Other | | | 758 | | | 754 | | 0.5 | % | | | 2,255 | | | 2,415 | | (6.6) | % |
Total noninterest expense | | $ | 5,230 | | $ | 4,750 | | 10.1 | % | | $ | 16,126 | | $ | 14,403 | | 12.0 | % |
34 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | September 30, 2013 | | | December 31, 2012 | | ||||||
Commercial and industrial | | $ | 122,687 | | 34.3 | % | | $ | 112,300 | | 35.4 | % |
Commercial real estate | | | 109,933 | | 30.7 | | | | 111,417 | | 35.1 | |
Residential real estate and home equity | | | 93,349 | | 26.0 | | | | 72,137 | | 22.7 | |
Consumer and credit card | | | 32,169 | | 9.0 | | | | 21,620 | | 6.8 | |
| | | 358,139 | | 100.0 | % | | | 317,474 | | 100.0 | % |
Net deferred loan fees costs | | | 151 | | | | | | 30 | | | |
Total loans and leases | | | 358,290 | | | | | | 317,504 | | | |
Allowance for credit losses | | | (6,471) | | | | | | (6,881) | | | |
Net loans and leases | | $ | 351,819 | | | | | $ | 310,623 | | | |
35 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
36 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
| | Actual | | | | For Capital Adequacy Purposes | | To Be Well-Capitalized Under Prompt Corrective Action Provisions | | |||||||||||
| | Amount | | Ratio | | | Amount | | Ratio | | Amount | | Ratio | | ||||||
As of September 30, 2013 | | | | | | | | | | | | | | | | | | | | |
Total risk-based capital | | | | | | | | | | | | | | | | | | | | |
DCB Financial Corp | | $ | 53,728 | | | 14.70 | % | | $ | 29,222 | | | ≥ 8.00 % | | $ | N/A | | | N/A | |
Bank | | | 52,560 | | | 14.38 | % | | | 29,222 | | | ≥ 8.00 % | | | 36,528 | | | ≥10.00 % | |
Tier 1 capital | | | | | | | | | | | | | | | | | | | | |
DCB Financial Corp | | | 49,139 | | | 13.44 | % | | | 14,611 | | | ≥ 4.00 % | | | N/A | | | N/A | |
Bank | | | 47,971 | | | 13.12 | % | | | 14,611 | | | ≥ 4.00 % | | | 21,917 | | | ≥ 6.00 % | |
Leverage | | | | | | | | | | | | | | | | | | | | |
DCB Financial Corp | | | 49,139 | | | 9.67 | % | | | 20,320 | | | ≥ 4.00 % | | | N/A | | | N/A | |
Bank | | | 47,971 | | | 9.44 | % | | | 20,320 | | | ≥ 4.00 % | | | 25,400 | | | ≥ 5.00 % | |
| | | | | | | | | | | | | | | | | | | | |
As of December 31, 2012 | | | | | | | | | | | | | | | | | | | | |
Total risk-based capital | | | | | | | | | | | | | | | | | | | | |
DCB Financial Corp | | $ | 53,808 | | | 13.46 | % | | $ | 31,975 | | | ≥ 8.00 % | | $ | N/A | | | N/A | |
Bank | | | 44,505 | | | 11.02 | % | | | 32,320 | | | ≥ 8.00 % | | | 40,400 | | | ≥10.00 % | |
Tier 1 capital | | | | | | | | | | | | | | | | | | | | |
DCB Financial Corp | | | 48,968 | | | 12.25 | % | | | 15,987 | | | ≥ 4.00 % | | | N/A | | | N/A | |
Bank | | | 39,665 | | | 9.82 | % | | | 16,160 | | | ≥ 4.00 % | | | 24,240 | | | ≥ 6.00 % | |
Leverage | | | | | | | | | | | | | | | | | | | | |
DCB Financial Corp | | | 48,968 | | | 9.79 | % | | | 20,017 | | | ≥ 4.00 % | | | N/A | | | N/A | |
Bank | | | 39,665 | | | 7.93 | % | | | 20,017 | | | ≥ 4.00 % | | | 25,021 | | | ≥ 5.00 % | |
| | Payment Due by Year | | |||||||||||||
Contractual Obligations | | Total | | Less than 1 year | | 1-3 years | | 3-5 years | | More than 5 years | | |||||
FHLB advances | | $ | 5,140 | | $ | 1,694 | | $ | 2,751 | | $ | 330 | | $ | 365 | |
Operating lease obligations | | | 2,612 | | | 548 | | | 1,076 | | | 753 | | | 235 | |
Loan and line of credit commitments | | | 115,559 | | | 83,926 | | | - | | | - | | | 31,633 | |
| | | | | | | | | | | | | | | | |
Total Contractual Obligations | | $ | 123,311 | | $ | 86,168 | | $ | 3,827 | | $ | 1,083 | | $ | 32,233 | |
37 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
Change in | | September 30, 2013 | | December 31, 2012 | | ||||||||||||||
Interest Rate | | $ Change | | % Change | | NPV | | $ Change | | % Change | | NPV | | ||||||
(Basis Points) | | in NPV | | in NPV | | Ratio | | in NPV | | in NPV | | Ratio | | ||||||
| | | | | | | | | | | | | | | | | | | |
+400 | | $ | 1,382 | | | 2.00 | % | | 15.08 | % | $ | 11,300 | | | 21.91 | % | | 13.32 | % |
+300 | | | 7,866 | | | 11.40 | | | 16.10 | | | 14,430 | | | 27.98 | | | 13.74 | |
+200 | | | 9,828 | | | 14.24 | | | 16.16 | | | 13,938 | | | 27.03 | | | 13.39 | |
+100 | | | 5,362 | | | 7.77 | | | 14.93 | | | 7,744 | | | 15.02 | | | 11.92 | |
Base | | | - | | | - | | | - | | | - | | | - | | | - | |
-100 | | | (8,510) | | | (12.33) | | | 11.70 | | | (10,892) | | | (21.12) | | | 7.95 | |
38 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
39 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
FORM 10-Q |
Quarter ended September 30, 2013 |
PART II - OTHER INFORMATION |
|
Item 1. | Legal Proceedings |
| There are no matters required to be reported under this item. |
| |
Item 1A. | Risk Factors |
| There has been no material change in the nature of the risk factors set forth in the Company’s Form 10-K for the year ended December 31, 2012. |
| |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
| There are no matters required to be reported under this item. |
| |
Item 3. | Defaults Upon Senior Securities: |
| |
| There are no matters required to be reported under this item. |
| |
Item 4. | Mine Safety Disclosures |
| |
| There are no matters required to be reported under this item. |
| |
Item 5. | Other Information: |
| |
| There are no matters required to be reported under this item. |
| |
Item 6. | Exhibits: |
| |
| Exhibits The following exhibits are filed as a part of this report: |
Exhibit No. | Exhibit | ||
| 3.1 | | Amended and Restated Articles of Incorporation of DCB Financial Corp. incorporated by reference to Exhibit 3.1 to the Corporation’s Quarterly Report on Form 10-Q filed November 14, 2003 (File No 000-22387). |
| | | |
| 3.2 | | Amended and Restated Code of Regulations of DCB Financial Corp. incorporated by reference to Exhibit 3.2 to the Corporation’s Quarterly Report on Form 10-Q filed November 14, 2003 (File No 000-22387). |
| | | |
| 31.1 | | Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 |
| | | |
| 31.2 | | Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 |
| | | |
| 32.1 | | Certification pursuant to 18 U.S.C. 1350, as enacted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 |
| | | |
| 32.2 | | Certification pursuant to 18 U.S.C. 1350, as enacted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 |
| | | |
| 101 | | The following information from DCB Financial Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 formatted in XBRL (eXtensible Business Reporting Language ) pursuant to Rule 405 of Regulation S-T: (i) the Condensed Consolidated Balance Sheets as of September 30, 2013 (unaudited) and December 31, 2012; (ii) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012 (unaudited); (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2013 and 2012 (unaudited); (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012 (unaudited); (v) the Notes to Condensed Consolidated Financial Statements (furnished herewith). |
| | | |
| | | Pursuant to Rule 406T of Regulation S-T, the interactive data files included as Exhibit 101 are furnished and not deemed filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those Sections. |
40 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
SIGNATURES |
|
| DCB FINANCIAL CORP |
| (Registrant) |
Date: November 14, 2013 | /s/ Ronald J. Seiffert |
| |
| Ronald J. Seiffert |
| President and Chief Executive Officer |
| |
Date: November 14, 2013 | /s/ J. Daniel Mohr |
| |
| J. Daniel Mohr |
| Executive Vice President and Chief Financial Officer |
41 | ||
DCB FINANCIAL CORP |
(Dollars in thousands, except per share data) |
|
1. | I have reviewed this quarterly report on Form 10-Q of DCB Financial Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 14, 2013 | /s/ Ronald J. Seiffert |
| Ronald J. Seiffert |
| Title: President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of DCB Financial Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 14, 2013 | /s/ J. Daniel Mohr |
| J. Daniel Mohr |
| Title: Executive Vice President |
| and Chief Financial Officer |
/s/ Ronald J. Seiffert | |
| |
Ronald J. Seiffert | |
President and Chief Executive Officer | |
November 14, 2013 | |
/s/ J. Daniel Mohr | |
| |
J. Daniel Mohr | |
Executive Vice President and Chief Financial Officer | |
November 14, 2013 | |
LOANS (Tables)
|
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2013
|
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | The following table presents major classifications of loans at the dates indicated (in thousands):
|