10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                                        to                                                      

Commission file number: 0-22387

DCB Financial Corp

(Exact name of registrant as specified in its charter)

Ohio	31-1469837
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

110 Riverbend Ave., Lewis Center, Ohio	43035
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (740) 657-7000

Securities registered pursuant to Section 12(b) of the Act:      None

Securities registered pursuant to Section 12(g) of the Act:      Common Shares, no par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨          No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act.

Yes ¨          No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x          No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes x          No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨	Accelerated filer ¨
Non-accelerated filer (Do not check if a smaller reporting company) ¨	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ¨     No x

At June 30, 2014, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on a common share price of $7.50 per share (such price being the closing share price on such date) was $41,255,000.

At March 20, 2015, the registrant had 7,233,795 common shares outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Annual Report on Form 10-K incorporates by reference certain information from the registrant’s definitive proxy statement for the 2015 Annual Meeting of Shareholders.

PART I

Cautionary Note Regarding Forward-Looking Statements

We may, from time to time, make written or oral “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements contained in our filings with the Securities and Exchange Commission (the “SEC”), our reports to shareholders and in other communications by us. This Annual Report on Form 10-K contains “forward-looking statements” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “intend,” “should,” “planned,” “estimated,” and “potential.” Examples of forward-looking statements include, but are not limited to, statements of our goals, intentions and expectations, statements regarding our business plans and prospects and growth and operating strategies, estimates of our risks, and future costs and benefits that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include, but are not limited to:

· an increase in competitive pressure in the banking industry;

· change in interest rates;

· changes in regulatory environment;

· general economic conditions, both nationally and regionally, resulting, among other things, in a deterioration in credit quality;

· changes in business conditions and inflation;

· changes in monetary policies;

· changes in the securities markets;

· changes in technology used in the banking business;

· changes in laws and regulations to which we are subject;

· our ability to maintain and increase market share and control expenses; and

· other factors detailed from time to time in our SEC filings.

Any or all of our forward-looking statements in this Annual Report on Form 10-K, and in any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Consequently, no forward-looking statements can be guaranteed. We disclaim any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events.

Unless the context indicates otherwise, all references in this Annual Report on Form 10-K to “Delaware,” “DCB,” “we,” “us,” “our company,” “corporation” and “our” refer to DCB Financial Corp and its subsidiaries Delaware County Bank and Trust Company, our wholly owned bank subsidiary (the “Bank”), DCB Title Services, LLC, DCB Insurance Services, LLC, DataTasx LLC, and ORECO, Inc.

Item 1. Business

General

DCB Financial Corp (“DCB” or the “Company” or “we” or “us” or “our”) is a financial holding company headquartered in Lewis Center, Ohio, and was incorporated under the laws of the State of Ohio in 1997, as a bank holding company under the Bank Holding Company Act of 1956, as amended. DCB is the holding company for The Delaware County Bank and Trust Company, a commercial bank organized in 1950 and chartered under the laws of the State of Ohio (the “Bank”).

The Company also has three wholly-owned, non-bank subsidiaries, DCB Title Services, LLC, an Ohio limited liability company (“DCB Title”), DCB Insurance Services, LLC, an Ohio limited liability company (“DCB Insurance”), and DataTasx LLC, an Ohio limited liability company (DataTasx”). DCB Title provides standard real estate title services, while DCB Insurance provides a variety of insurance products. DataTasx is inactive. The activities of each of the three subsidiaries are not material to the Company’s operations. The Bank has one wholly-owned subsidiary, ORECO, Inc., an Ohio corporation (“ORECO”), which is used to hold the Bank’s foreclosed real estate.

At December 31, 2014, we had 133 full-time and 29 part-time employees. Our employees are not represented by any collective bargaining group. We consider our employee relations to be good.

The Bank is a member of the Federal Reserve System and the Federal Home Loan Bank System, and its deposits are insured by the Federal Deposit Insurance Corporation up to applicable limits.

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Services

We offer full-service banking with a broad range of financial products to meet the needs of our commercial, retail, government, and investment management customers located primarily in Delaware, Franklin and Union Counties in Ohio. Depository account services include interest and non-interest-bearing checking accounts, money market accounts, savings accounts, time deposit accounts, and individual retirement accounts. Our lending activities include the making of residential and commercial mortgage loans, business lines of credit, working capital facilities and business term loans, as well as installment loans, home equity loans, and personal lines of credit to individuals. Investment management and trust services include personal trust, employee benefit trust, investment management, custodial, and financial planning. Through Raymond James Financial Services, Inc., member FINRA/SIPC, we provide financial counseling and brokerage services. We also offer safe deposit boxes, wire transfers, collection services, drive-up banking facilities, 24-hour night depositories, automated teller machines, 24-hour telephone banking, and on-line internet banking. The Bank’s core business is not significantly affected by a single industry, however, a number of the Bank’s depositors are public fund units which operate within its geographic footprint. Though this group’s deposit base is significant, overall balances do not fluctuate materially. No material industry or group concentrations exist in the loan portfolio.

Competition

Our business is competitive. We compete not only with other commercial banks, but also with other financial institutions such as thrifts, credit unions, money market and mutual funds, insurance companies, brokerage firms, and a variety of other financial services companies.

Supervision and Regulation

The following discussion summarizes the primary laws and regulations applicable to bank holding companies and state banks and provides certain information relevant to us. This regulatory framework is primarily intended for protecting depositors, consumers, and the deposit insurance fund that insures bank deposits. The information about statutory and regulatory provisions is qualified in its entirety by reference to those provisions. Congress, regulatory agencies, and state legislatures frequently propose changes to the law and regulations affecting the banking industry. A change in the statutes, regulations, or regulatory policies applicable to our Company or our subsidiaries may have a material adverse effect on our business, financial condition, and results of operations.

Bank Holding Company Regulation

We are a bank holding company registered under the Bank Holding Company Act of 1956 and are subject to supervision, regulation and examination by the Federal Reserve Board (“FRB”). The Bank Holding Company Act and other federal laws and regulations subject bank holding companies to restrictions on the activities in which they may engage, and to a supervisory regime that provides for possible regulatory enforcement actions for violations of laws and regulations. We are also a financial holding company; a bank holding company that also qualifies as a financial holding company can expand into a wide variety of services deemed by the FRB to be financial in nature, including securities underwriting, dealing and market making; sponsoring mutual funds and investment companies; insurance underwriting; and merchant banking. For a bank holding company to qualify for, and retain, financial holding company status, the holding company must be deemed to be “well managed” and “well capitalized” and each one of the bank holding company’s subsidiary depository institutions must be deemed “well capitalized” and “well managed” by regulators and must have received at least a “Satisfactory” rating on its last Community Reinvestment Act examination.

The FRB has broad authority to prohibit activities of bank holding companies and their nonbanking subsidiaries that represent unsafe or unsound practices or which constitute violations of laws or regulations, and can bring enforcement actions, including the assessment of civil money penalties, for certain violations or practices.

Under FRB regulations, a bank holding company is expected to act as a source of financial and managerial strength to each of its banking subsidiaries and to commit resources to their support.

The Bank Holding Company Act requires every bank holding company to obtain the prior approval of the FRB before it may acquire all or substantially all of the assets of any bank, or ownership or control of any voting shares of any bank, if after such acquisition it would own or control, directly or indirectly, over 5% of any class of voting shares of such bank. In approving bank acquisitions by bank holding companies, the FRB must consider factors including, among others, the financial and managerial resources and future prospects of the bank holding company and the banks concerned; the convenience and needs of the communities to be served; and competitive factors. The Change in Bank Control Act prohibits a person or group of persons from acquiring “control” of a bank or bank holding company unless the FRB has been notified and has not objected to the transaction. In addition, any entity must obtain the approval of the FRB under the Bank Holding Company Act before acquiring 25% (5% with an acquirer that is a bank holding company) or more of our outstanding common shares, or otherwise obtaining control or a “controlling influence” over a bank.

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Our ability to pay dividends depends on the ability of the Bank to pay dividends to us. The ability of both our Company and the Bank to pay dividends is limited by state and federal statutes, regulations and policies. It is the policy of the FRB that bank holding companies should pay cash dividends on common shares only out of income available over the past year, and only if prospective earnings retention follows the holding company’s expected future needs and financial condition. A holding company should not maintain a level of cash dividends that undermines the holding company’s ability to serve as a source of strength to its banking subsidiaries. Even when the legal ability exists, our Company or the Bank may limit the payment of dividends to retain earnings for corporate use.

Bank Regulation

The Bank is subject to regulation and examination primarily by the Ohio Division of Financial Institutions (the “ODFI”) and by the Federal Deposit Insurance Corporation (the “FDIC”). ODFI and FDIC regulations govern permissible activities, capital requirements, dividend limitations, investments, loans and other matters for the Bank. The ODFI and the FDIC have the authority to impose sanctions on the Bank and, under certain circumstances, may place the Bank into receivership.

The FDIC is the primary federal regulator of the Bank. It is an independent federal agency which insures the deposits, up to prescribed statutory limits, of federally-insured banks and savings associations, and safeguards the safety and soundness of the financial institution industry. Insurance premiums for each insured depository institution are determined based upon the institution’s capital level and supervisory rating and other information the FDIC determines to relate to the risk posed by the institution.

Non-Banking Subsidiaries

Our non-banking subsidiaries are also subject to regulation by the FRB and other applicable federal and state agencies. DCB Insurance, as a licensed insurance agency, is subject to regulation by the Ohio Department of Insurance and the state insurance regulatory agencies of those states where it may conduct business.

Other Government Agencies

Securities and Exchange Commission (“SEC”). We are also under the jurisdiction of the SEC and certain state securities commissions for matters relating to the offering and sale of its securities.

Federal Home Loan Bank (“FHLB”). The Bank is a member of the FHLB which provides credit to its members in advances. As a member of the FHLB, the Bank must maintain an investment in the capital stock of the FHLB in a specified amount.

Legislation and Regulation

The Dodd-Frank Act. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act” or “Dodd-Frank”), passed into law on July 21, 2010, is a broad-ranging financial reform law that affects numerous aspects of the U.S. financial regulatory system. It calls for over 200 rulemakings by numerous federal agencies, some of which have issued rules. However, numerous rules have yet to be proposed or finalized. The Dodd-Frank Act covers subjects including, but not limited to, systemic risk, corporate governance, executive compensation, credit rating agencies, capital and derivatives.

The Dodd-Frank Act created the Consumer Financial Protection Bureau (the “CFPB”), which regulates consumer financial products and services, and certain financial services providers. The CFPB may prevent unfair, deceptive or abusive acts or practices, and ensures consistent enforcement of laws so consumers have access to fair, transparent and competitive markets for consumer financial products and services. The CFPB has rulemaking and interpretive authority regarding the Bank.

Transactions with Affiliates, Directors, Executive Officers and Shareholders. The Bank’s authority to engage in transactions with its affiliates is limited by Sections 23A and 23B of the Federal Reserve Act and the FRB’s Regulation W. In general, these transactions must be on terms at least as favorable to the Bank as comparable transactions with non-affiliates. In addition, certain types of these transactions are restricted to an aggregate percentage of the Bank’s capital. Collateral in specified amounts must usually be provided by affiliates to receive loans from the Bank.

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Loans to Insiders. The Bank’s authority to extend credit to executive officers, directors and greater than 10% shareholders, and entities such persons control, is subject to Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O promulgated under that Act by the FRB, and state law applicable to the Bank. These loans must be made on terms (including interest rates charged and collateral required) substantially the same as those offered to unaffiliated individuals, or be made as part of a benefit or compensation program and on terms widely available to employees, and must not involve a greater than normal risk of repayment. In addition, the loans a bank may make to these persons is based, in part, on the bank’s capital position, and specified approval procedures must be followed in making loans which exceed specified amounts.

Minimum Capital and Prompt Corrective Action. The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), identifies five capital categories for insured depository institutions and requires the respective federal regulatory agencies to implement systems for “prompt corrective action” for insured depository institutions that do not meet minimum capital requirements within such categories. The federal regulatory agencies, including the FRB and the FDIC, have adopted substantially similar regulatory capital guidelines and regulations consistent with the requirements of FDICIA, and established a system of prompt corrective action to resolve certain problems of undercapitalized institutions. This system is based on five capital level categories for insured depository institutions: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” The federal banking agencies may (and sometimes must) take certain supervisory actions depending upon a bank’s capital level. The banking agencies must appoint a receiver or conservator for a bank within 90 days after the bank becomes “critically undercapitalized” unless the bank’s primary regulator determines, with the concurrence of the FDIC, that other action would better achieve regulatory purposes. Throughout 2014, our regulatory capital ratios and those of the Bank were over the levels established for well-capitalized institutions. An institution was deemed to be well-capitalized if it has a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 6% or greater, and a Tier 1 leverage ratio of 5% or greater and is not subject to a regulatory order, agreement, or directive to meet and maintain a capital level for any capital measure.

Basel III Capital Requirements. The FRB sets risk-based capital ratio and leverage ratio guidelines for bank holding companies. Under the guidelines and related policies, bank holding companies must maintain capital sufficient to meet both a risk-based asset ratio test and a leverage ratio test on a consolidated basis. The risk-based ratio is determined by allocating assets and specified off-balance sheet commitments into four weighted categories, with higher weighting assigned to categories perceived as representing greater risk. The risk-based ratio represents total capital divided by total risk-weighted assets. The leverage ratio is core capital divided by total assets adjusted as specified in the guidelines. The Bank is subject to substantially similar capital requirements.

Beginning on January 1, 2015, the capital requirements for our Company and the Bank will increase as a result on the phase-in of certain changes to capital requirements for U.S. banking organizations. On July 2, 2013, the FRB voted to adopt final capital rules implementing Basel III requirements for U.S. banking organizations. The final rules establish an integrated regulatory capital framework to implement in the United States the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Act. Under the final rule, minimum requirements increased for both the quantity and quality of capital held by banking organizations. Consistent with the international Basel framework, the final rule includes a new minimum ratio of common equity tier 1 capital (Tier I Common) to risk-weighted assets and a Tier 1 Common capital conservation buffer of 2.5% of risk-weighted assets that will apply to all supervised financial institutions. The rule also raises the minimum ratio of tier 1 capital to risk-weighted assets and includes a minimum leverage ratio of 4% for all banking organizations. These new minimum capital ratios will become effective for us on January 1, 2015, and will be fully phased-in on January 1, 2019. The following table shows the phase-in of the Basel III regulatory capital levels from January 1, 2015 until January 1, 2019:

	January 1,
	2015			2016			2017			2018			2019
Tier 1 Common		4.5	%		5.125	%		5.75	%		6.375	%		7.0	%
Tier 1 risk-based capital ratio		6.0	%		6.625	%		7.25	%		7.875	%		8.5	%
Total risk-based capital ratio		8.0	%		8.625	%		9.25	%		9.875	%		10.5	%

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Implementing Basel III is not expected to have a material impact on our Company’s or the Bank’s capital ratios and the management of the Company and the Bank expect they will continue to be well-capitalized. In 2015, an institution will be deemed to be well-capitalized if it has a total risk-based capital ratio of 8% or greater, a Tier 1 risk-based capital ratio of 4.5% or greater, and a Tier 1 leverage ratio of 6% or greater and is not subject to a regulatory order, agreement, or directive to meet and maintain a capital level for any capital measure.

Community Reinvestment Act (“CRA”). The CRA requires depository institutions to assist in meeting the credit needs of their market areas consistent with safe and sound banking practice. Under the CRA, each depository institution must help meet the credit needs of its market areas by providing credit or other financial assistance to low and moderate-income individuals and communities. Depository institutions are periodically examined for compliance with the CRA and are assigned ratings. As of December 31, 2014, the FDIC’s most recent performance evaluation of the Bank resulted in an overall rating of “satisfactory.”

Customer Privacy and Other Consumer Protections. The Bank is subject to regulations limiting the ability of financial institutions to disclose non-public information about consumers to nonaffiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a nonaffiliated party. The Bank is also subject to numerous federal and state laws aimed at protecting consumers, including for example the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Equal Credit Opportunity Act, the Truth in Lending Act, the Bank Secrecy Act, the Community Reinvestment Act and the Fair Credit Reporting Act.

Bank Secrecy Act. Our Company and the Bank are also subject to the Bank Secrecy Act, as amended by the USA PATRIOT Act, which gives the federal government powers to address money laundering and terrorist threats through enhanced domestic security measures, expanded surveillance powers, and mandatory transaction reporting obligations. The Bank Secrecy Act imposes an affirmative obligation on the Bank to report currency transactions that exceed certain thresholds and to report other transactions determined to be suspicious. The Bank has in place a comprehensive program to ensure compliance with these requirements. In 2014, the Bank engaged in a limited number of transactions of any kind with foreign financial institutions or foreign persons.

Monetary Policy. The FRB regulates money and credit conditions and interest rates to influence general economic conditions primarily through open market operations in U.S. government securities, changes in the discount rate on bank borrowings, and changes in the reserve requirements against depository institutions’ deposits. These policies and regulations significantly affect the overall growth and distribution of loans, investments and deposits, and interest rates charged on loans and paid on deposits. These monetary policies have had a significant effect on the operating results of financial institutions in the past and are expected to continue to have significant effects. In view of the changing conditions in the economy, the money markets and the activities of monetary and fiscal authorities, we can make no definitive predictions on future changes in interest rates, credit availability or deposit levels or their impact on us or the Bank.

Volcker Rule. In December 2013, five federal agencies adopted a final regulation implementing the Volcker Rule provision of the Dodd-Frank Act (the “Volcker Rule”). The Volcker Rule places limits on the trading activity of insured depository institutions and entities affiliated with a depository institution, subject to certain exceptions. The trading activity includes a purchase or sale as principal of a security, derivative, commodity future or option on any such instrument to benefit from short-term price movements or to realize short-term profits. The Volcker Rule also prohibits a banking entity from having an ownership interest in, or certain relationships with, a hedge fund or private equity fund, with several exceptions. We had one security at the end of 2013, with a carrying value of $976,000, which was subject to the Volcker Rule prohibition. We sold this security in the first quarter of 2014. The Bank does not engage in any of the trading activities with any of the funds regulated by the Volcker Rule.

Executive and Incentive Compensation. In June 2010, the FRB and the FDIC issued joint interagency guidance on incentive compensation policies (the “Joint Guidance”) intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking. This principles-based guidance, which covers all employees that can materially affect the risk profile of an organization, either individually or as part of a group, is based upon the key principles that a banking organization’s incentive compensation arrangements should: (1) provide incentives that do not encourage risk-taking beyond the organization’s ability to identify and manage risks; (2) be compatible with effective internal controls and risk management; and (3) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors. Under the Joint Guidance, the FRB and the FDIC will review as part of a regular, risk-focused examination process, the incentive compensation arrangements of financial institutions such as our Company and the Bank. Enforcement actions may be taken against an institution if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization’s safety and soundness, and prompt and effective measures are not being taken to correct the deficiencies.

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Effect of Environmental Regulation. Compliance with federal, state and local provisions regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, has not had a material effect upon the capital expenditures, earnings or competitive position of our Company and our subsidiaries. We believe the operations of our subsidiaries have little environmental impact and, therefore, anticipates no material capital expenditures for environmental control facilities for its current fiscal year or for the foreseeable future. We believe our primary exposure to environmental risk is through the lending activities of the Bank. In cases where management believes environmental risk potentially exists, the Bank mitigates its environmental risk exposures by requiring environmental site assessments at the time of loan origination to confirm collateral quality on commercial real estate parcels posing higher than normal potential for environmental impact, as determined by reference to present and past uses of the property and adjacent sites. In addition, environmental assessments are typically required prior to any foreclosure activity involving non-residential real estate collateral.

Future Legislation. Significant legislation affecting financial institutions and the financial industry is from time to time introduced by the U.S. Congress and the Ohio Legislature. Such legislation may continue to change banking statutes and the operating environment of the Company and its subsidiaries in substantial and unpredictable ways, and could significantly increase or decrease costs of doing business, limit or expand permissible activities, or affect the competitive balance among financial institutions.

Item 1A. Risk Factors

There are risks inherent to our business. The material risks and uncertainties that we believe affect our Company are described below. Any of the following risks could affect our financial condition and results of operations and could be material and/or adverse in nature.

Deterioration in local economic conditions may negatively impact our financial performance.

Our success depends primarily on the general economic conditions of central Ohio and the specific local markets in which we operate. Unlike larger national or other regional banks that are more geographically diversified, we provide banking and financial services to customers primarily in Central Ohio.  The local economic conditions in these areas have a significant impact on the demand for our products and services as well as the ability of our customers to repay loans, the value of the collateral securing loans and the stability of our deposit funding sources.

As a lender with the majority of our loans secured by real estate or made to businesses in Central Ohio, a downturn in these local economies could cause significant increases in non-performing loans, which could negatively impact our earnings. Declines in real estate values in our market areas could cause any of our loans to become inadequately collateralized, which would expose us to greater risk of loss. Additionally, a decline in real estate values could materially and adversely impact our portfolio of residential and commercial real estate loans and could result in the decline of originations of such loans, as most of our loans, and the collateral securing our loans, are located in those areas.

Variations in interest rates may negatively affect our financial performance.

Our earnings and financial condition are largely dependent upon net interest income, which is the difference between interest earned from loans and investments and interest paid on deposits and borrowings. The narrowing of interest rate spreads could adversely affect our earnings and financial condition. We cannot predict with certainty, or control, changes in interest rates. Regional and local economic conditions and the policies of regulatory authorities, including monetary policies of the FRB, affect interest income and interest expense.  High interest rates could also affect the amount of loans that we can originate because higher rates could cause customers to apply for fewer mortgages or cause depositors to shift funds from accounts that have a comparatively lower cost to accounts with a higher cost.  We may also experience customer attrition due to competitor pricing. With short-term interest rates at historic lows and the current Federal Funds target rate at 25 bps, our interest-bearing deposit accounts, particularly core deposits, have repriced to historic lows as well.  With the possibility that the FRB will soon begin to raise the Fed Funds target rate, our challenge will be managing the impact of an increasing interest rate environment.  If the cost of interest-bearing deposits increases at a rate greater than the yields on interest-earning assets increase, net interest income will be negatively affected. Changes in the asset and liability mix may also affect net interest income. Similarly, lower interest rates cause higher yielding assets to prepay and floating or adjustable rate assets to reset to lower rates. If we are not able to reduce our funding costs sufficiently, due to either competitive factors or the maturity schedule of existing liabilities, then our net interest margin will decline.

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Although management believes it has implemented effective asset and liability management strategies to reduce the potential effects of changes in interest rates on our results of operations, any substantial or unexpected change in, or prolonged change in market interest rates could have a material adverse effect on our business, financial condition and results of operations. See the section captioned “Net Interest Income” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 7A. Quantitative and Qualitative Disclosure About Market Risk for further discussion related to our management of interest rate risk.

Changes in the equity markets could materially affect the level of assets under management and the demand for other fee-based services.

Economic downturns could affect the volume of income from and demand for fee-based services.  Revenues from the trust and wealth management businesses depend in large part on the level of assets under management.  Market volatility that leads customers to liquidate investments, as well as lower asset values, can reduce our level of assets under management and thereby decrease our investment management revenues.

Our lending, and particularly our emphasis on commercial lending, exposes us to the risk of losses upon borrower default.

There are inherent risks associated with our lending activities. These risks include, among other things, the impact of changes in interest rates and changes in the economic conditions in the markets where we operate as well as those across Ohio and the entire United States. Increases in interest rates and/or weakening economic conditions could adversely impact the ability of borrowers to repay outstanding loans or the value of the collateral securing those loans. We are also subject to various laws and regulations that affect our lending activities. Failure to comply with applicable laws and regulations could subject our Company to regulatory enforcement action that could result in the assessment of significant civil money penalties against us.

As of December 31, 2014, approximately 56.6% of our loan portfolio consisted of commercial and industrial, commercial construction and commercial real estate loans. These types of loans generally expose a lender to greater risk of non-payment and loss than residential real estate loans because repayment of the loans often depends on the successful operation of the property, the income stream of the borrowers and, for construction loans, the accuracy of the estimate of the property’s value at completion of construction and the estimated cost of construction. Such loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to residential real estate loans. Because our loan portfolio contains a significant number these loans with relatively large balances, the deterioration of one or a few of these loans could cause a significant increase in non-performing loans. An increase in non-performing loans could result in a net loss of earnings from these loans, an increase in the provision for loan losses and/or an increase in loan charge-offs, all of which could have a material adverse effect on our business, financial condition and results of operations. See the section captioned “Loans” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion related to commercial and industrial, agricultural, construction and commercial real estate loans.

If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings will decrease.

We maintain an allowance for loan losses, which is an allowance established through a provision for loan losses charged to expense, that represents our management’s best estimate of probable losses that could be incurred within the existing portfolio of loans. The allowance, in the judgment of our management, is necessary to reserve for estimated loan losses and risks inherent in the loan portfolio. The level of the allowance reflects our management’s continuing evaluation of industry concentrations; specific credit risks; loan loss experience; current loan portfolio quality; present economic, political, environmental, and regulatory conditions and unidentified losses inherent in the current loan portfolio. The determination of the appropriate level of the allowance for loan losses inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks and future trends, all of which may undergo material changes. Changes in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside of our control, may require an increase in the allowance for loan losses. In addition, bank regulatory agencies periodically review our allowance for loan losses and may require an increase in the provision for loan losses or the recognition of further loan charge-offs, based on judgments different than those of management. In addition, if charge-offs in future periods exceed the allowance for loan losses, we will need additional provisions to increase the allowance for loan losses. These potential increases in the allowance for loan losses would result in a decrease in net income and, possibly, capital, and may have a material adverse effect on our business, financial condition and results of operations. See the section captioned “Asset Quality and the Allowance for Loan Losses” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion related to our process for determining the appropriate level of the allowance for loan losses.

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Strong competition within our industry and market area could hurt our performance and slow our growth.

We face substantial competition in all areas of our operations from a variety of different competitors, many of which are larger and may have more financial resources. Such competitors primarily include national, regional, and community banks within our market area. Additionally, various banks continue to enter or have announced plans to enter the market in which we currently operate. We also face competition from many other types of financial institutions, including, without limitation, savings and loans, credit unions, finance companies, brokerage firms, insurance companies, and other financial intermediaries. The financial services industry could become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation. Banks, securities firms and insurance companies can merge under the umbrella of a financial holding company, which can offer virtually any type of financial service, including banking, securities underwriting, insurance (both agency and underwriting) and merchant banking.  Technology has lowered barriers to entry and made it possible for non-banks to offer products and services traditionally provided by banks, such as automatic transfer and automatic payment systems. Many of our competitors have fewer regulatory constraints and may have lower cost structures. Additionally, due to their size, many competitors may be able to achieve economies of scale and, as a result, may offer a broader range of products and services as well as better pricing for those products and services than we can.

Our ability to compete successfully depends on a number of factors, including, among other things:

· our ability to develop, maintain and build upon long-term customer relationships based on top quality service, high ethical standards and safe, sound assets;

· our ability to expand our market position;

· our scope, relevance and pricing of products and services offered to meet customer  needs and demands;

· the rate at which we introduce new products and services relative to our competitors;

· customer satisfaction with our level of service;

· industry and general economic trends; and

· our ability to attract and retain talented employees.

Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability, which, in turn, could have a material adverse effect on our business, financial condition and results of operations.

We operate in a highly regulated environment and we may be adversely affected by changes in laws and regulations.

Primarily through the Bank and certain non-bank subsidiaries, we are subject to extensive federal regulation and supervision. Banking regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds and the banking system as a whole, not shareholders. These regulations affect our lending practices, capital structure, investment practices, dividend policy and growth, among other things. Congress and federal regulatory agencies continually review banking laws, regulations and policies for possible changes. Changes to statutes, regulations or regulatory policies, including changes in interpretation or implementation of statutes, regulations or policies, could affect us in substantial and unpredictable ways. Such changes could subject us to additional costs, limit the types of financial services and products we may offer and/or increase the ability of non-banks to offer competing financial services and products, among other things. Failure to comply with laws, regulations or policies could result in sanctions by regulatory agencies, civil money penalties and/or reputation damage, which could have a material adverse effect on our business, financial condition and results of operations. While we have policies and procedures designed to prevent any such violations, there can be no assurance that such violations will not occur. See the section captioned “Supervision and Regulation” in Item 1. for further discussion.

Compliance with the Dodd-Frank Act and other regulatory reforms may increase our costs of operations and adversely impact our earnings and capital ratios

The Dodd-Frank Act has significantly changed the bank regulatory landscape and has impacted, and will continue to impact the lending, deposit, investment, trading and operating activities of financial institutions and their holding companies.  Among other things, the Dodd-Frank Act creates a new federal financial consumer protection agency, tightens capital standards, imposes clearing and margining requirements on many derivatives activities, and generally increases oversight and regulation of financial institutions and financial activities. 

9

The scope and impact of many of the Dodd-Frank Act’s provisions will be determined over time as regulations are issued and become effective. As a result, we cannot predict the ultimate impact of the Dodd-Frank Act on us at this time, including the extent to which it could increase costs or limit our ability to pursue business opportunities in an efficient manner, or otherwise adversely affect our business, financial condition and results of operations. However, it is expected that at a minimum such provisions will increase our operating and compliance costs.  The financial reform legislation and any rules that are ultimately issued could have adverse implications on the financial industry, the competitive environment, and our business. We will apply resources to ensure that we are in compliance with all applicable provisions of the Dodd-Frank Act and any implemented rules, which may increase our costs of operations and adversely impact our earnings.

We are subject to liquidity risk which could adversely affect net interest income and earnings

The purpose of our liquidity management is to meet the cash flow obligations of our customers for both deposits and loans.  The primary liquidity measurement that we utilize is called Basic Surplus which captures the adequacy of our access to reliable sources of cash relative to the stability of its funding mix of average liabilities.  This approach recognizes the importance of balancing levels of cash flow liquidity from short and long-term securities with the availability of dependable borrowing sources which can be accessed when necessary.   However, competitive pressure on deposit pricing could result in a decrease in our deposit base or an increase in funding costs.  In addition, liquidity will come under additional pressure if loan growth exceeds deposit growth.  These scenarios could lead to a decrease in our basic surplus measure below the minimum policy level of 5%.  To manage this risk, we have the ability to purchase brokered time deposits, borrow against established borrowing facilities with other banks (Federal funds), and enter into repurchase agreements with investment companies.  Depending on the level of interest rates, our net interest income, and therefore earnings, could be adversely affected.  See the section captioned “Liquidity” in Item 7.

Our ability to pay dividends and otherwise pay our obligations as they come due is substantially dependent on capital distributions from our subsidiaries.

Our Company is a separate and distinct legal entity from our subsidiaries. We receive substantially all of our revenue from dividends from the Bank. These dividends are the principal source of funds to pay dividends on our common shares and interest and principal on our debt. Various federal and/or state laws and regulations limit the amount of dividends that the Bank may pay to us. Also, our right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors. The Bank did not pay any dividends to us in 2014, and we cannot predict when, or if, any such dividends will be paid in the future. The inability of the Bank to pay dividends to us may impair our ability to pay obligations or pay dividends on our common shares. The continued inability to receive dividends from the Bank could have a material adverse effect on our business, financial condition and results of operations.

A breach of information security, including as a result of cyber-attacks, could disrupt our business and impact our earnings.

We depend upon data processing, communication and information exchange on a variety of computing platforms and networks, and over the internet.  In addition, we rely on the services of a variety of vendors to meet our data processing and communication needs.  Despite existing safeguards, we cannot be certain that all of our systems are free from vulnerability to attack or other technological difficulties or failures.  If information security is breached or difficulties or failures occur, despite the controls we and our third party vendors have instituted, information can be lost or misappropriated, resulting in financial loss or costs and reputational damage to us or damages to others. Such costs or losses could exceed the amount of insurance coverage, if any, which would adversely affect our earnings.

We continually encounter technological change and the failure to understand and adapt to these changes could hurt our business.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs. Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations. Many of our competitors have substantially greater resources to invest in technological improvements. We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to its customers. Failure to successfully keep pace with technological changes affecting the financial services industry could have a material adverse impact on our business and, in turn, our financial condition and results of operations.

10

Negative developments in the housing market, financial industry and the domestic and international credit markets may adversely affect our operations and results.

Dramatic declines in the housing market over the past few years, with falling home prices and increasing foreclosures, continued high unemployment and under-employment, have negatively impacted the credit performance of mortgage loans and resulted in significant write-downs of asset values by financial institutions.

The economic pressure experienced by consumers during the recent recession and lack of confidence in the financial markets has adversely affected our business, financial condition and results of operations. In particular, we have seen increases in foreclosures in our markets, increases in expenses such as loan collection and other real estate owned (“OREO”) expenses, and a low reinvestment rate environment.  While we believe the financial and housing markets are slowly recovering, we expect that the challenging conditions in these markets are likely to continue in the near future.  A worsening of these conditions would likely exacerbate the adverse effects of these difficult market conditions. In particular, we may be affected in one or more of the following ways:

· we currently face increased regulation of our industry and compliance with such regulation may increase our costs and limit our ability to pursue business opportunities;

· our ability to borrow from other financial institutions or to access the debt or equity capital markets on favorable terms or at all could be adversely affected by further disruptions in the capital markets; or

· competition in our industry could intensify as a result of the increasing consolidation of financial services companies in connection with current market conditions.

The potential withdrawal of the Bank's deposits from public institutions present possible liquidity and earnings risks.

At December 31, 2014, approximately 12.8% of the Bank's deposits were received from public institutions. The possibility of withdrawal of such deposits, which do not tend to be long-term deposits, poses liquidity and earnings risk to us.

We are subject to other-than-temporary impairment risk which could negatively impact our financial performance.

We recognize an impairment charge when the decline in the fair value of debt securities below their cost basis is judged to be other-than-temporary. Significant judgment is used to identify events or circumstances that would likely have a significant adverse effect on the future use of the investment. We consider various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, forecasted recovery, the financial condition and near-term prospects of the investee, and whether we have the intent to sell and whether it is more likely than not we will be forced to sell the security in question. Information about unrealized gains and losses is subject to changing conditions. The values of securities with unrealized gains and losses will fluctuate, as will the values of securities that we identify as potentially distressed. Our current evaluation of other-than-temporary impairments reflects our intent to hold securities for a reasonable period of time sufficient for a forecasted recovery of fair value. However, our intent to hold certain of these securities may change in future periods as a result of facts and circumstances impacting a specific security. If our intent to hold a security with an unrealized loss changes, and we do not expect the security to fully recover prior to the expected time of disposition, we will write down the security to its fair value in the period that our intent to hold the security changes.

Our controls and procedures may fail or be circumvented, which may result in a material adverse effect on our business, financial condition and results of operations.

Our management regularly reviews and updates our internal controls, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Any failure or circumvention of the controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, financial condition and results of operations.

The preparation of financial statements requires our management to make estimates about matters that are inherently uncertain.

Our management’s accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Our management must exercise judgment in selecting and applying many of these accounting policies and methods in order to ensure that they comply with United States generally accepted accounting principles (“GAAP”) and reflect our management’s judgment as to the most appropriate manner in which to record and report our financial condition and results of operations. Due to the inherent nature of these estimates, we cannot provide absolute assurance that the estimates will not significantly change in subsequent periods.

11

We are exposed to risk of environmental liabilities with respect to properties to which we obtain title.

A significant portion of our loan portfolio at December 31, 2014 was secured by real estate. In the course of our business, we may foreclose and take title to real estate, and could be subject to environmental liabilities with respect to these properties. We may be held liable to a government entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination, or may be required to clean up hazardous or toxic substances, or chemical releases at a property. The costs associated with investigation and remediation activities could be substantial. In addition, if we are the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. These costs and claims could have a material adverse effect on our business, financial condition and results of operations.

We may be adversely affected by the soundness of other financial institutions including the FHLB of Cincinnati.

Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services companies are interrelated as a result of trading, clearing, counterparty or other relationships. We have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, and other institutional clients. As a result, defaults by, or even rumors or questions about, one or more financial services companies, or the financial services industry generally, have led to market-wide liquidity problems and could lead to losses or defaults by us or by other institutions. Many of these transactions expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may be exacerbated if the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of the loan or derivative exposure due us. There is no assurance that any such losses would not materially and adversely affect our business, financial condition or results of operations.

We own common stock of FHLB of Cincinnati in order to qualify for membership in the FHLB system, which enables the Bank to borrow funds under the FHLB of Cincinnati’s advance program.  The carrying value and fair market value of our FHLB of Cincinnati common stock was $3.2 million as of December 31, 2014.

There are 12 branches of the FHLB, including Cincinnati.  The 12 FHLB branches are jointly liable for the consolidated obligations of the FHLB system.  To the extent that one FHLB branch cannot meet its obligations to pay its share of the system’s debt, other FHLB branches can be called upon to make the payment.  Any such adverse effects on the FHLB of Cincinnati could adversely affect the value of our investment in its common stock and negatively impact our results of operations.

Future acquisitions and diversification of business products may materially and adversely affect our business, financial condition and results of operations.

We may acquire other financial institutions or parts of institutions in the future and may open new branches. We also may consider and enter into new lines of business or offer new products or services. Expansions of our business involve a number of expenses and risks, including:

· the time and costs associated with identifying and evaluating potential acquisitions;

· the potential inaccuracy of estimates and judgments used to evaluate credit, operations, management and market risk with respect to the target institutions;

· the time and costs of evaluating new markets, hiring local management and opening new offices, and the delay between commencing these activities and the generation of profits from the expansion;

· our ability to finance an acquisition or other expansion and the possible dilution to our existing shareholders;

· the diversion of management’s attention to the negotiation of a transaction and the integration of the operations and personnel of the combining businesses;

· entry into unfamiliar markets;

12

· the introduction of new products and services into our existing business;

· the incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations; and

· the risk of loss of key employees and customers.

We may incur substantial costs to expand, and we can give no assurance that such expansion will result in the levels of profits we expect. Neither can we assure that integration efforts for any future acquisitions will be successful. We may issue equity securities in connection with acquisitions, which could dilute the economic and voting interests of our existing shareholders.

Trading activity in our common shares could result in material price fluctuations.

The market price of the Company’s common shares may fluctuate significantly in response to a number of factors including, but not limited to:

· trading in our common shares is not active, and the spread between the bid and the ask price is often wide. As a result, shareholders may not be able to sell their shares on short notice, and the sale of a large number of shares at one time could temporarily depress the market price. The price at which a shareholder may be able to sell his or her common shares may be significantly lower than the price at which he or she could buy our common shares at that time;

· changes in securities analysts’ expectations of financial performance;

· volatility of stock market prices and volumes;

· incorrect information or speculation;

· changes in industry valuations;

· variations in operating results from general expectations;

· actions taken against us by various regulatory agencies;

· changes in authoritative accounting guidance by the Financial Accounting Standards Board or other regulatory agencies;

· changes in general domestic economic conditions such as inflation rates, tax rates, unemployment rates, labor and healthcare cost trend rates, recessions, and changing government policies, laws and regulations; and

· severe weather, natural disasters, acts of war or terrorism and other external events.

We undertake no obligation and disclaims any intention to publish revised information or updates to forward-looking statements contained in the above risk factors or in any other statement made at any time by any director, officer, employee or other representative of our Company unless and until any such revisions or updates are required to be disclosed by applicable securities laws or regulations.

Item 1B. Unresolved Staff Comments

We have no unresolved staff comments.

Item 2. Properties

We conduct business in Central Ohio through 14 branch offices and our corporate headquarters. We own our corporate headquarters located in Lewis Center, OH and five of our branches. Nine branch offices are subject to leases and/or long-term land leases.

Item 3. Legal Proceedings

There is no pending litigation of a material nature, other than routine litigation incidental to the business of the Company and Bank, to which the Company or any of its affiliates is a party or of which any of their property is the subject. Further, there are no material legal proceedings in which any director, executive officer, principal shareholder or affiliate of the Company is a party or has a material interest which is adverse to the Company or Bank. There is no routine litigation in which the Company or Bank is involved which is expected to have a material adverse impact on the financial position or results of operations of the Company or Bank.

13

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

Our common shares are quoted on OTCQB Marketplace under the symbol “DCBF.” The table below sets forth the high and low sale transactions for our common shares for the indicated periods. These quotations reflect inter-dealer prices, without retail markup, markdown or commission, and may not represent actual transactions.

	2014						2013
	High		Low		Dividends Declared		High		Low		Dividends Declared
1st Quarter	$	6.65	$	5.98	$	-	$	5.50	$	4.60	$	-
2nd Quarter	$	7.50	$	6.20	$	-	$	5.60	$	5.00	$	-
3rd Quarter	$	7.77	$	7.27	$	-	$	5.60	$	5.17	$	-
4th Quarter	$	7.50	$	6.86	$	-	$	6.24	$	5.35	$	-

As of March 12, 2015, our common shares were held of record by 1,401 shareholders.

Management does not have knowledge of the prices in all transactions and has not verified the accuracy of those prices that have been reported. Because of the lack of an established market for our stock, these prices may not reflect the prices at which the stock would trade in a more active market. The Company sold no securities during 2014 or 2013 that were not registered under the Securities Act of 1933.

Our income primarily consists of dividends, which may be declared by the Board of Directors of the Bank and paid on common shares of the Bank held by the Company. During 2009 we ceased the payment of regular cash dividends and, no assurances can be given that any dividends will be declared or, if declared in the future, what the amount of any such dividends will be. The Bank did not pay dividends to the Company during 2014 or 2013, and we did not pay dividends to our shareholders. See note 13 to the Consolidated Financial Statements for a description of dividend restrictions.

14

Item 6. Selected Financial Data

The following tables set forth certain information concerning the consolidated financial condition, results of operations and other data regarding the Company at the dates and for the periods indicated.

	Year ended December 31,
	2014		2013		2012		2011		2010
Selected Financial Condition Data	(In thousands)
Total assets	$	515,382	$	502,419	$	506,492	$	522,881	$	565,105
Cash and cash equivalents		21,274		25,357		63,307		39,314		33,521
Securities available for sale		75,909		79,948		87,197		88,113		69,597
Securities held to maturity		-		-		1,149		1,010		1,313
Net loans		381,208		349,324		310,623		350,183		412,617
Loans held for sale		-		7,806		-		-		-
Deposits		453,192		426,859		448,290		445,428		465,076
Deposits held for sale		-		22,571		-		-		-
Borrowings		11,808		4,838		7,498		40,036		59,767
Shareholders’ equity	$	47,211	$	45,264	$	48,389	$	34,699	$	37,414

	Year ended December 31,
	2014		2013			2012			2011			2010
Selected Operating Data	(In thousands, except per share data)
Interest income	$	17,380	$	17,079		$	18,848		$	22,732		$	28,118
Interest expense		1,212		1,818			3,238			5,113			6,925
Net interest income		16,168		15,261			15,610			17,619			21,193
Provision for loan losses		150		2,417			495			5,436			11,040
Net interest income after provision for loan losses		16,018		12,844			15,115			12,183			10,153
Noninterest income		4,460		4,967			5,024			6,358			6,115
Noninterest expense		20,106		21,040			19,606			21,292			23,488
Income (loss) before income tax		372		(3,229	)		533			(2,751	)		(7,220	)
Income tax (benefit) expense		-		(298	)		(69	)		(13	)		5,110
Net income (loss)	$	372	$	(2,931	)	$	602		$	(2,738	)	$	(12,330	)
Per Share Data:
Basic earnings (loss) per share	$	0.05	$	(0.41	)	$	0.15		$	(0.74	)	$	(3.32	)
Diluted earnings (loss) per share	$	0.05	$	(0.41	)	$	0.15		$	(0.74	)	$	(3.32	)
Dividends declared per share	$	-	$	-		$	-		$	-		$	-

	At or for the year ended December 31,
Selected Financial Ratios	2014			2013			2012			2011			2010
Interest rate spread		3.65	%		3.16	%		3.20	%		3.26	%		3.44	%
Net interest margin		3.49	%		3.28	%		3.35	%		3.39	%		3.58	%
Return on average assets		0.07	%		(0.58	)%		0.12	%		(0.49	)%		(1.93	)%
Return on average equity		0.82	%		(6.01	)%		1.73	%		(7.41	)%		(26.33	)%
Average equity to average assets		9.06	%		9.39	%		6.83	%		6.56	%		7.32	%
Allowance for loan losses as a percentage of non-accrual loans		306.1	%		87.6	%		129.1	%		100.1	%		73.8	%

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

2014 Highlights and Overview

Our results of operations are dependent primarily on net interest income, which is the difference between the income earned on our loans and leases and securities and our cost of funds, consisting of the interest paid on deposits and borrowings. Results of operations are also affected by the provision for loan losses, securities and loan sale activities, loan servicing activities, service charges and fees collected on our deposit accounts, income collected from trust and investment advisory services and the income earned on our investment in bank-owned life insurance. Our expenses primarily consist of salaries and employee benefits, occupancy and equipment expense, marketing expense, professional services, technology expense, other expense and income tax expense. Results of operations are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, inflation, government policies and the actions of regulatory authorities.

The following is a summary of key financial results for the year ended December 31, 2014:

· Total assets were $515.4 million and $502.4 million and total deposits were $453.2 million and $426.9 million at December 31, 2014 and December 31, 2013, respectively.

· Total loans were $385.4 million at the end of 2014, compared with $356.0 million at the end of 2013.

· Net income in 2014 was $372,000, compared to a net loss of $2.9 million in 2013.

· Net income per diluted common share was $0.05 in 2014, compared with a net loss of $(0.41) in 2013.

· Net interest income was $16.2 million in 2014, compared with $15.3 million in 2013.

· The net interest margin was 3.49% in 2014, compared with 3.28% in 2013.

· Provision for loan losses was $150,000 in 2014, compared with $2.4 million in 2013.

· Total non-performing assets were $12.6 million or 2.4% of total assets at December 31, 2014, compared with $23.2 million, or 4.6% at December 31, 2013. Troubled debt restructurings which are performing in accordance with the restructured terms and are on an accrual basis, but which are classified as non-performing assets were $9.6 million at December 31, 2014, compared with $12.8 million at December 31, 2013.

· Non-interest income, excluding gains and losses on the sales of securities, sale of branch, loans held-for-sale and real estate owned (“REO”), was 21.8% of total revenue (net-interest income plus non-interest income less gains and losses) in 2014, compared with 23.9% in 2013.

· Our efficiency ratio was 97.2% in 2014, compared with 104.9% in 2013.

The following discussion is intended to assist in understanding our financial condition and results of operations. This discussion should be read in conjunction with our consolidated financial statements and accompanying notes contained elsewhere in this report.

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Average Balance Sheet

The following table sets forth information concerning average interest-earning assets and interest-bearing liabilities and the yields and rates thereon. Non-accrual loans have been included in the average balances. Securities are shown at average amortized cost.

	Year ended December 31,
	2014								2013
	Average Balance			Amount of Interest		Yield/ Rate			Average Balance			Amount of Interest		Yield/ Rate
	(Dollars in thousands)
Assets:
Interest-earning assets:
Interest-bearing deposits	$	16,576		$	39		0.24	%	$	32,799		$	87		0.27	%
Investment securities		83,018			2,065		2.49	%		89,790			2,064		2.30	%
Residential real estate loans and home equity		115,404			4,322		3.75	%		85,760			3,282		3.94	%
Consumer loans and credit cards		35,008			1,945		5.56	%		28,610			1,775		6.20	%
Commercial and industrial loans		106,890			4,365		4.06	%		120,895			5,205		4.31	%
Commercial real estate		106,038			4,644		4.38	%		107,150			4,666		4.35	%
Total loans		363,340			15,276		4.20	%		342,415			14,928		4.36	%
Total interest-earning assets		462,934			17,380		3.75	%		465,004			17,079		3.67	%
Noninterest-earning assets:
Other assets		44,769								47,413
Allowance for loan losses		(5,080	)							(6,669	)
Net unrealized gains on securities available-for-sale		724								1,065
Total	$	503,347							$	506,813
Liabilities and Shareholder’s Equity:
Interest-bearing liabilities:
Demand deposits	$	78,447		$	76		0.10	%	$	74,853			91		0.12	%
Savings deposits		42,845			60		0.14	%		40,953			61		0.15	%
Money market deposits		136,393			499		0.37	%		116,872			413		0.35	%
Time deposits		80,113			434		0.54	%		116,151			989		0.85	%
Total interest-bearing deposits		337,798			1,069		0.32	%		348,829			1,554		0.45	%
Borrowings		5,687			143		2.52	%		5,916			264		4.46	%
Total interest-bearing liabilities		343,485			1,212		0.35	%		354,745			1,818		0.51	%
Noninterest-bearing liabilities:
Demand deposits		110,457								101,575
Other liabilities		3,791								2,883
Shareholders’ equity		45,614								47,610
Total	$	503,347							$	506,813
Net interest income; interest rate spread				$	16,168		3.40	%				$	15,261		3.16	%
Net interest margin							3.49	%							3.28	%
Average interest-earning assets to average interest-bearing liabilities		134.8	%							131.1	%

17

Rate/Volume Analysis

The following table sets forth the dollar volume of increase (decrease) in interest income and interest expense resulting from changes in the volume of interest-earning assets and interest-bearing liabilities, and from changes in rates. Volume changes are computed by multiplying the volume difference by the prior year’s rate. Rate changes are computed by multiplying the rate difference by the prior year’s volume. The change in interest due to both rate and volume has been allocated proportionally between the volume and rate variances.

	2014 compared to 2013 Increase (decrease) due to									2013 compared to 2012 Increase (decrease) due to
	Volume			Rate			Net Change			Volume			Rate			Net Change
	(In thousands)
Interest-bearing deposits	$	(39	)	$	(9	)	$	(48	)	$	(22	)	$	11		$	(11	)
Investment securities		(162	)		163			1			(133	)		(210	)		(343	)
Residential real estate loans and home equity		675			365			1,040			623			(788	)		(165	)
Consumer loans and credit cards		367			(197	)		170			642			(458	)		184
Commercial and industrial loans		(560	)		(280	)		(840	)		268			(923	)		(655	)
Commercial real estate		(52	)		30			(22	)		(403	)		(376	)		(779	)
Total interest-earning assets		229			72			301			975			(2,744	)		(1,769	)
Interest-bearing demand		4			(19	)		(15	)		(4	)		10			6
Savings		3			(4	)		(1	)		9			-			9
Money market		72			14			86			82			11			93
Time deposits		(255	)		(300	)		(555	)		(438	)		(467	)		(905	)
Borrowings		(10	)		(111	)		(121	)		(675	)		52			(623	)
Total interest-bearing liabilities		(186	)		(420	)		(606	)		(1,026	)		(394	)		(1,420	)
Net interest income	$	415		$	492		$	907		$	2,001		$	(2,350	)	$	(349	)

Comparison of Operating Results for the Years Ended December 31, 2014 and 2013

General

Net income was $372,000 or $0.05 per diluted common share for the year ended December 31, 2014, compared to a net loss of $2.9 million or $(0.41) per diluted common share in 2013. Net interest income increased $907,000 and the provision for loan losses decreased $2.3 million, respectively, in 2014 compared to 2013. The return on average assets and return on average shareholders’ equity were 0.07% and 0.82%, respectively, in 2014, compared with (0.58)% and (6.01)%, respectively, in 2013.

Net Interest Income

Net interest income totaled $16.2 million in 2014, which was an increase of $907,000 or 5.9% compared with $15.3 million in 2013. The net interest margin was 3.49% in 2014, compared to 3.28% in 2013. The earning assets yield increased 8 basis points in 2014, due largely to loan growth, and the cost of interest-bearing liabilities decreased 16 basis points over the same period due primarily to the movement of maturing time accounts to lower rate non-maturity accounts.

Average interest-earning assets were $462.9 million in 2014, which was a decrease of $2.1 million from 2013, but was more heavily weighted in loans in 2014. Average loans outstanding increased $20.9 million in 2014 compared with 2013, while the average balance of interest earning cash balances decreased $16.2 million and average investments decreased $6.8 million in 2014 when compared with 2013, as we used our excess liquidity position to fund organic loan growth. Total average loans were 78.5% of average interest-earning assets in 2014, compared with 73.6% of average interest-earning assets in 2013.

The cost of our interest-bearing liabilities decreased in 2014 compared to 2013 due to a combination of the low interest rate environment, our deposit pricing strategies and a deposit mix that remains heavily weighted in lower-cost interest-bearing demand, savings and money market accounts, whose rates can be immediately changed at our discretion. The average cost of our money market accounts was 0.37% in 2014, compared with 0.35% in 2013. The average cost of our time deposits dropped 31 basis points, to 0.54% in 2014. Average interest-bearing transaction accounts (non-maturity accounts) comprised 76.3% of total average interest-bearing deposits in 2014, compared to 66.7% in 2013.

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Non-maturity transaction accounts (interest and non-interest-bearing) comprised the majority of our funding sources in 2014 as depositors continue to refrain from investing funds in time accounts at very low, yet competitive rates, and also because of the buildup of cash on corporate customers’ balance sheets. The aggregate average balance of transaction accounts was $368.1 million or 82.1% of total average deposits in 2014, compared with $334.3 million or 74.2% of total average deposits in 2013. Average time account balances in 2014 were $80.1 million or 17.9% of total average deposits, compared with $116.2 million or 25.8% in 2013. Our ability to gather and retain transaction deposits reflects a high positive awareness of our brand in the communities in which we operate. Environmental factors such as equity market volatility and risk aversion among retail investors have also played a role in the growth in our transaction accounts.

Our cost of interest-bearing liabilities was also reduced in 2014 by a restructuring of advances from the Federal Home Loan Bank which we executed in November 2013. The restructuring contributed to a 194 basis point decrease in the cost of borrowings in 2014 compared to 2013.

Non-Interest Income

Our non-interest income is comprised of service charges on deposits, fees from investment management trust and brokerage services, and other recurring operating income fees from normal banking operations, along with non-core components that primarily consist of net gains or losses from sales of investment securities.

The following table sets forth certain information on non-interest income for the years indicated:

	Year ended December 31,
	2014			2013		Change
	(Dollars in thousands)
Service charges	$	1,963		$	2,195	$	(232	)	(10.6	)%
Wealth management fees		1,474			1,418		56		3.9	%
Treasury management fees		220			244		(24	)	(9.8	)%
Income from bank owned life insurance		730			733		(3	)	(0.4	)%
Gain on sales of securities available-for-sale		101			135		(34	)	(25.2	)%
Losses on loans held-for-sale		(509	)		-		(509	)	NM
Net (loss) gain on sale of REO		(84	)		31		(115	)	(371.0	)%
Gain on sale of branch		438			-		438		NM
Other		127			211		(84	)	(39.8	)%
Total non-interest income	$	4,460		$	4,967	$	(507	)	(10.2	)%

Non-interest income was $4.5 million in 2014, compared to $5.0 million in 2013. Non-recurring write-downs and losses on loans and REO, net of securities gains, were $54,000 in 2014, compared to net non-recurring gains of $166,000 in 2013. Service charges decreased $232,000 in 2014 compared to 2013 due primarily to lower volumes of customer overdraft and debit card transactions.

Non-interest income (net of nonrecurring income, gains and losses and gains/losses on the sales of securities) accounted for 21.8% of total revenue in 2014, compared with 23.9% in 2013.

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The following table sets forth certain information on non-interest expenses for the years indicated (dollars in thousands):

	Year ended December 31,
	2014		2013		Change
	(Dollars in thousands)
Salaries and employee benefits	$	11,141	$	11,287	$	(146	)	(1.3	)%
Occupancy and equipment		3,192		3,069		123		4.0	%
Professional services		1,379		1,791		(412	)	(23.0	)%
Advertising		347		293		54		18.4	%
Office supplies, postage and courier		328		481		(153	)	(31.8	)%
FDIC insurance premium		630		699		(69	)	(9.9	)%
State franchise taxes		266		478		(212	)	(44.4	)%
Other		2,823		2,942		(119	)	(4.0	)%
Total non-interest expenses	$	20,106	$	21,040	$	(934	)	(4.4	)%

Non-interest expenses were $20.1 million in 2014, which was a decrease of $934,000 or 4.4% compared to 2013. Professional services decreased $412,000 due to the substantial reduction in non-performing assets in 2014 which has resulted in a reduced need for outside professional services related to the workout of such assets. Office supplies, postage and courier expenses declined $153,000 in 2014 due primarily to expense reduction initiatives. State franchise taxes decreased $212,000 in 2014 due to a change in the tax law which changed how the tax was calculated in 2014.Non-interest expenses in 2014 included approximately $314,000 of non-routine expenses, consisting primarily of legal expenses covering matters of corporate governance, capital management, corporate equity plans and the special meeting of shareholders held in October 2014, among other things.

Our efficiency ratio was 97.2% in 2014, compared to 104.9% in 2013.

Income Taxes

We had net deferred tax assets totaling $10.4 million and $11.6 million, respectively, at December 31, 2014 and December 31, 2013, of which approximately 99% and 94%, respectively, were attributable to net operating loss carry-forwards and timing differences between the provision for loan losses and the charge-off of loans.

Comparison of Financial Condition at December 31, 2014 and December 31, 2013

General

Total assets were $515.4 million at December 31, 2014, compared with $502.4 million at December 31, 2013. Loans (including loans held-for-sale) were $385.4 million at the end of 2014, representing growth of $21.6 million or 5.9% from the end of 2013.

Securities

The securities portfolio is designed to provide a favorable total return utilizing low-risk, high-quality securities while at the same time assisting in meeting the liquidity needs of our loan and deposit operations, and supporting our interest rate risk objectives. Our securities portfolio is predominately comprised of investment grade mortgage-backed securities, securities issued by U.S. government sponsored entities and municipal securities. We classify all of our securities as available-for-sale. We do not engage in securities trading or derivatives activities in carrying out our investment strategies.

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The following table sets forth the amortized cost and market value for our available-for-sale securities portfolio:

	At December 31,
	2014				2013
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
U.S. Government and agency obligations	$	11,602	$	11,545	$	13,714	$	13,302
Corporate bonds		4,975		4,987		6,187		6,168
States and municipal obligations		21,303		21,657		20,651		20,450
Collateralized debt obligations		-		-		1,916		976
Collateralized mortgage obligations		19,601		19,580		15,217		15,045
Mortgage-backed securities		17,438		18,140		23,435		24,007
Total	$	74,919	$	75,909	$	81,120	$	79,948

Investment securities totaled $75.9 million at December 31, 2014, compared with $79.9 million at December 31, 2013. Our portfolio is comprised primarily of investment grade securities, the majority of which are rated “AAA” by one or more of the nationally recognized rating agencies. The breakdown of the securities portfolio at December 31, 2014 was 23.9% government-sponsored entity guaranteed mortgage-backed securities, 25.8% collateralized mortgage obligations, 28.5% municipal securities, 15.2% obligations of U.S. government-sponsored corporations and 6.6% corporate bonds. Mortgage-backed securities, which totaled $18.1 million at December 31, 2014, are comprised primarily of pass-through securities backed by conventional residential mortgages and guaranteed by Fannie-Mae, Freddie-Mac or Ginnie Mae, which in turn are backed by the U.S. government.

We had net unrealized gains of approximately $990,000 in our securities portfolio at December 31, 2014, compared with net unrealized losses of $1.2 million at December 31, 2013.

In March 2014, we sold the remaining collateralized debt obligation in our securities portfolio and recognized a loss of $141,000 on the sale. The actual loss recognized on the sale was substantially lower than the $940,000 unrealized loss on this security at the end of 2013 as increased investor demand for these types of securities pushed prices higher in the first quarter of 2014.

The following table sets forth as of December 31, 2014, the maturities and the weighted-average yields of our debt securities, which have been calculated on the basis of the amortized cost, weighted for scheduled maturity of each security, and adjusted to a fully tax-equivalent basis (dollars in thousands):

	At December 31, 2014
	Within one year or less			After one year but within five years			After five years but within ten years			After ten years			Total
U.S. Government and agency obligations	$	-		$	4,965		$	5,616		$	964		$	11,545
Corporate bonds		1,247			2,308			1,432			-			4,987
States and municipal obligations		183			4,683			11,636			5,155			21,657
Collateralized mortgage obligations		-			701			5,014			13,865			19,580
Mortgage-backed securities		-			1,925			3,378			12,837			18,140
Total	$	1,430		$	14,582		$	27,076		$	32,821		$	75,909
Weighted average yield at year-end		2.11	%		1.77	%		2.73	%		2.55	%		2.49	%

Loans

The loan portfolio is the largest component of our interest-earning assets and it generates the largest portion of our interest income. We provide a full range of credit products through our branch network and through our commercial lending line of business. Consistent with our focus on providing community banking services, we generally do not attempt to diversify geographically by making a significant amount of loans to borrowers outside of our primary service area. Loans are primarily generated internally and the majority of our lending activity takes place in the Central Ohio counties of Delaware, Franklin, Union, and other nearby counties.

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Loans (including loans held-for-sale and deferred loan costs) were $385.4 million at the end of 2014, representing growth of $21.6 million or 5.9% from the end of 2013. The loan growth was concentrated in our residential mortgage and home equity loan portfolio, which increased $31.0 million in 2014. Our commercial loan portfolios decreased $11.7 million in 2014, due in large part to weak loan demand early in 2014 combined with the significant decline in the outstanding balances on non-performing loans and prepayments of certain large commercial relationships. Loan demand strengthened in the second half of 2014, resulting in growth in our commercial portfolios of $9.8 million in the fourth quarter of 2014, which partially offset a $21.6 million decrease in our commercial portfolios in the first nine months of 2014.

The following table sets forth the composition of our loan portfolio, excluding deferred loan costs and including loans held-for-sale at the dates indicated:

	At December 31,
	2014		2013		2012		2011		2010
	(In thousands)
Commercial and industrial	$	106,222	$	122,901	$	112,300	$	126,225	$	155,410
Commercial real estate		111,851		106,901		111,417		129,958		152,374
Residential and home equity		129,650		98,622		72,137		83,814		94,399
Consumer and credit card		37,507		35,265		21,620		19,770		23,411
Total loans	$	385,230	$	363,689	$	317,474	$	359,767	$	425,594

At December 31, 2013, total loans included $7.8 million in loans held for sale. At December 31, 2014, 2012 and 2011, there were no loans held-for-sale. At December 31, 2010 there were $753,000 in loans held-for-sale, which consisted entirely of residential mortgage loans for sale on the secondary market.

The following table shows the amount of loans outstanding (excluding loans held for sale) as of December 31, 2014, which, based on remaining scheduled payments of principal, are due in the periods indicated:

	Maturing within one year or less		Maturing after one but within five years		Maturing after five but within ten years		Total
	(In thousands)
Commercial real estate	$	15,651	$	35,455	$	55,116	$	106,222
Commercial and industrial		8,346		47,444		56,061		111,851
Residential and home equity		20,455		1,460		107,735		129,650
Consumer and credit card		6,115		3,832		27,560		37,507
Total	$	50,567	$	88,191	$	246,472	$	385,230

The following table sets forth the sensitivity to changes in interest rates as of December 31, 2014:

	Fixed Rate		Variable Rate		Total
	(In thousands)
Due after one year, but within five years	$	59,602	$	28,589	$	88,191
Due after five years		152,209		94,263		246,472

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Asset Quality and the Allowance for Loan Losses

The following table summarizes delinquent loans grouped by the number of days delinquent at December 31, 2014:

	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
	(In thousands)
Consumer and credit card	$	66	$	7	$	120	$	193	$	37,314	$	37,507	$	-
Commercial and industrial		68		-		-		68		111,783		111,851		-
Commercial real estate		49		-		306		355		105,867		106,222		-
Residential real estate and Home equity		220		30		642		892		128,758		129,650		480
Total	$	403	$	37	$	1,068	$	1,508	$	383,722	$	385,230	$	480

The following table represents information concerning the aggregate amount of non-performing assets (includes certain loans held-for-sale at December 31, 2013):

	At December 31,
	2014		2013		2012		2011		2010
	(In thousands)
Non-accruing loans:
Residential real estate loans and home equity	$	334	$	352	$	321	$	451	$	389
Commercial real estate		298		2,624		2,195		6,698		10,102
Commercial and industrial		632		4,702		2,815		2,381		6,043
Consumer loans and credit cards		120		-		-		46		33
Total non-accruing loans		1,384		7,678		5,331		9,576		16,567
Accruing loans delinquent 90 days or more		480		560		643		1,812		2,515
Total non-performing loans		1,864		8,238		5,974		11,388		19,082
Collateralized debt obligations		-		976		1,149		1,010		1,313
Other real estate and repossessed assets		1,111		1,219		3,671		4,605		5,284
Total non-performing assets	$	2,975	$	10,433	$	10,794	$	17,003	$	25,679
Restructured loans not included above(1)	$	9,634	$	12,788	$	20,080	$	22,219	$	15,163
Total non-performing loans (including TDR’s)		11,498		21,026		26,054		33,607		34,245
Total non-performing assets (including TDR’s)		12,609		23,221		30,874		39,222		40,842

⁽¹⁾TDR’s that are in compliance with their modified terms and accruing interest.

Delinquent loans (including loans greater than 30 days past due) totaled $1.5 million or 0.39% of total loans at December 31, 2014, compared with $4.4 million or 1.2% at December 31, 2013. Non-performing assets, defined as non-accrual loans plus loans 90 days or more past due, other real estate owned and repossessed assets, impaired investment securities, and troubled debt restructurings not included in non-accrual loans were $12.6 million or 2.45% of total assets at December 31, 2014, compared with $23.2 million or 4.62% of total assets at December 31, 2013. Troubled debt restructurings (“TDR’s”) which are performing in accordance with the restructured terms and accruing interest, but are included in non-performing assets, were $9.6 million at December 31, 2014 compared with $12.8 million at December 31, 2013. Included in non-performing assets at the end of 2014 are non-performing loans totaling $1.9 million or 0.48% of total loans, compared with $8.2 million or 2.27% of total loans (including loans held for sale) at December 31, 2013.

We made significant progress in reducing our non-performing assets in 2014, which were down $10.6 million or 45.7% during the year largely as the result of the execution of previously disclosed strategies developed in the fourth quarter of 2013 to accelerate the disposition of certain troubled assets. Our exposure to the three highest risk troubled commercial relationships with aggregate balances at the end of 2013 of $7.0 million was reduced by $6.8 million in 2014 through a combination of collection actions, negotiated settlements, and asset sales, which resulted in charge-offs of $1.9 million and cash collections of $4.7 million, much of which occurred in the first three quarters of 2014. Non-performing assets decreased $2.4 million during the fourth quarter of 2014, due primarily to the successful workout of two non-accrual commercial real estate loans totaling $961,000, and to cash pay-downs of $585,000 on a third non-accrual commercial mortgage.

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As a recurring part of our portfolio management program, we have classified certain loans as “substandard” in our loan rating system. Substandard loans (excluding loans held-for-sale) total approximately $13.9 million at December 31, 2014, compared with $24.2 million at December 31, 2013. Substandard loans are loans that are currently performing, but where the borrower’s operating performance or other relevant factors could result in potential credit problems. At December 31, 2014, substandard loans consisted of commercial loans and commercial real estate. There can be no assurance that additional loans will not become non-performing, require restructuring, or require increased provision for loan losses.

We have a loan monitoring program that evaluates non-performing loans and the loan portfolio in general. The loan review program continually audits the loan portfolio to confirm management’s loan risk rating system, and systematically tracks such problem loans and to ensure compliance with loan policy underwriting guidelines, and to evaluate the adequacy of the allowance for loan losses.

Our policy is to place a loan on non-accrual status and recognize income on a cash basis when a loan is more than 90 days past due, unless in the opinion of management, the loan is well secured and in the process of collection. Interest payments received on non-accrual loans may be applied to the principal balance of the loan in situations where management believes full collection of the principal amount owed is not probable. The impact of interest not recognized on non-accrual loans was $241,000 in 2014 and $175,000 in 2013.

The allowance for loan losses represents our management’s best estimate of probable incurred losses in our loan portfolio. Our management’s quarterly evaluation of the allowance for loan losses is a comprehensive analysis that builds a total allowance by evaluating the probable incurred losses within each loan portfolio segment. Our portfolio segments are as follows: commercial loan and commercial real estate loans, residential real estate and consumer loans. Our allowance for losses consists of specific valuation allowances based on probable credit losses on specific loans, historical valuation allowances based on loan loss experience for similar loans with similar characteristics and trends and general valuation allowances based on general economic conditions and other qualitative risk factors both internal and external to the organization.

Historical valuation allowances are calculated for commercial loans based on the historical loss experience of specific types of loans and the internal risk grade 24 months prior to the time they were charged off. The internal credit risk grading process evaluates, among other things, the borrower’s ability to repay, the underlying collateral, if any, and the economic environment and industry in which the borrower operates. Historical valuation allowances for residential real estate and consumer loan segments are based on the average loss rates for each class of loans for the time period that includes the current year and two full prior years. We calculate historical loss ratios for pools of similar consumer loans based upon the product of the historical loss ratio and the principal balance of the loans in the pool. Historical loss ratios are updated quarterly based on actual loss experience. Our general valuation allowances are based on general economic conditions and other qualitative risk factors which affect our company. Factors considered include trends in our delinquency rates, macro-economic and credit market conditions, changes in asset quality, changes in loan and lease portfolio volumes, concentrations of credit risk, the changes in internal loan policies, procedures and internal controls, experience and effectiveness of lending personnel. Management evaluates the degree of risk that each one of these components has on the quality of the loan and lease portfolio on a quarterly basis.

For commercial loan and commercial real estate segments, we maintain a specific allocation methodology for those classified in our internal risk grading system as substandard, doubtful or loss with a principal balance in excess of $200,000. A loan is considered impaired, based on current information and events, if it is probable that we will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. The measurement of impaired loans is generally discounted at the historical effective interest rate, except that all collateral-dependent loans are measured for impairment based on the estimated fair value of the collateral. Loans with modified terms in which a concession to the borrower has been made that it would not otherwise consider unless the borrower was experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired.  As of December 31, 2014, there was $12.2 million in impaired loans for which $1.3 million in related allowance for loan losses was allocated. There was $22.9 million in impaired loans for which $4.2 million in related allowance for credit losses was allocated as of December 31, 2013.

Loans are charged against the allowance for loan losses, in accordance with our loan lease policy, when they are determined by management to be uncollectible. Recoveries on loans previously charged off are credited to the allowance for loan losses when they are received. When management determines that the allowance for loan losses is less than adequate to provide for probable incurred losses, a direct charge to operating income is recorded.

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The following table summarizes changes in the allowance for loan losses arising from loans charged off, recoveries on loans previously charged off and additions to the allowance, which have been charged to expense.

	Year ended December 31,
	2014			2013			2012			2011			2010
	(Dollars in thousands)
Balance at beginning of year	$	6,724		$	6,881		$	9,584		$	12,247		$	10,479
Loans charged-off:
Commercial and industrial		(1,410	)		(86	)		(1,926	)		(2,034	)		(2,261	)
Commercial real estate		(1,086	)		(1,038	)		(1,366	)		(5,562	)		(6,175	)
Residential real estate and home equity		(169	)		(331	)		(74	)		(278	)		(498	)
Consumer and credit card		(200	)		(286	)		(372	)		(567	)		(824	)
Total loans charged-off		(2,865	)		(1,741	)		(3,738	)		(8,441	)		(9,758	)
Loan recoveries:
Commercial and industrial		42			823			251			58			270
Commercial real estate		131			38			47			27			4
Residential real estate and home equity		38			52			18			10			12
Consumer and credit card		113			219			224			247			200
Total loan recoveries		324			1,132			540			342			486
Net loans charged-off		(2,541	)		(609	)		(3,198	)		(8,099	)		(9,272	)
Allowance related to loans transferred to held-for-sale		(97	)		(1,965	)		-			-			-
Provision for loan losses		150			2,417			495			5,436			11.040
Balance at end of year	$	4,236		$	6,724		$	6,881		$	9,584		$	12,247
Ratio of net charge-offs to average loans outstanding		0.70	%		0.18	%		0.97	%		2.05	%		2.00	%

Net charge-offs were $2.5 million or 0.70% of average loans in 2014, compared to $609,000 or 0.18% in 2013. Approximately 67.1% of the gross charge-offs in 2014 were charged against specific allowance allocations established in the fourth quarter of 2013 for the three highest risk commercial relationships in connection with the non-performing asset reduction strategy developed in last year’s fourth quarter.

The provision for loan losses was $150,000 for the year ended December 31, 2014, compared to $2.4 million for the year ended December 31, 2013. The provision expense recorded in the fourth quarter of 2013 was $3.3 million and was attributable to the strategies we developed at that time to accelerate the reduction of the exposure to the three highest risk commercial relationships, and to a group of homogenous single-family residential investment properties. Taken together, loan loss provisions allocated to these four exposures totaled $3.3 million or 100% of the provision expense for the fourth quarter of 2013. The provision for loan losses as a percentage of net charge-offs was 166.7% and 5.9%, respectively, in the quarter and year ended December 31, 2014, compared to 303.7% and 396.9%, respectively, in the year ago periods. The provision for loan losses as a percentage of net charge-offs was 95.2% for the five quarters ending December 31, 2014.

The allowance for loan losses was $4.2 million at December 31, 2014, compared with $6.7 million at December 31, 2013. The decrease in the allowance for loan losses in 2014 was a direct result of write-downs taken on loans in 2014 against the loan loss allowances established for these loans at or prior to the end of 2013. The ratio of the allowance for loan losses to total loans was 1.10% at December 31, 2014, compared with 1.85% at December 31, 2013. The ratio of the allowance for loan losses to non-performing loans (including TDR’s) was 38.5% at December 31, 2014, compared with 33.2% at December 31, 2013. The ratio of the allowance for loan losses to non-accrual loans was 306% at December 31, 2014, compared with 88% at December 31, 2013.

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The allowance for loan losses has been allocated within the following categories of loans at the dates indicated with the corresponding percent of loans to total loans (excluding loans held-for-sale) for each category:

	At December 31,
	2014					2013					2012					2011					2010
	Amount of Allowance		Percent of Loans to Total Loans			Amount of Allowance		Percent of Loans to Total Loans			Amount of Allowance		Percent of Loans to Total Loans			Amount of Allowance		Percent of Loans to Total Loans			Amount of Allowance		Percent of Loans to Total Loans
	(Dollars in thousands)
Commercial and industrial	$	1,132		27.6	%	$	2,973		34.3	%	$	1,620		35.4	%	$	1,952		35.1	%	$	4,174		36.6	%
Commercial real estate		2,376		29.0	%		3,231		29.5	%		4,692		35.1	%		6,916		36.1	%		6,786		35.9	%
Residential real estate and home equity		268		33.7	%		219		27.0	%		204		22.7	%		291		23.3	%		491		22.0	%
Consumer and credit card		190		9.7	%		301		9.2	%		365		6.8	%		425		5.5	%		796		5.5	%
Unallocated		270		-			-		-			-		-			-		-			-		-
Total	$	4,236		100.0	%	$	6,724		100.0	%	$	6,881		100.0	%	$	9,584		100.0	%	$	12,247		100.0	%

The allowance for loan losses is allocated according to the amount deemed to be reasonably necessary to provide for the probable incurred losses within each loan category. The higher amounts allocated to the commercial loan and commercial real estate portfolios reflect the higher outstanding balances of these portfolios coupled with the higher inherent risk of these portfolios compared with residential and consumer lending.

Deposits

Our primary source of funds is deposits, consisting of demand, savings, money market and time accounts, of retail, commercial and municipal customers gathered through our branch network. We continuously monitor market pricing, competitors’ rates, and internal interest rate spreads to maintain and promote growth and profitability.

The following table sets forth the composition of our deposits by business line at December 31, 2014 (dollars in thousands):

	Amount		Percent
Non-interest bearing demand	$	111,022		24.5	%
Interest bearing demand		77,534		17.1	%
Total demand		188,556		41.6	%
Savings		42,634		9.4	%
Money market		147,667		32.6	%
Time deposits		74,335		16.4	%
Total deposits	$	453,192		100.0	%

Deposits totaled $453.2 million at December 31, 2014, compared with $449.4 million at December 31, 2013. Our deposit mix at the end of 2014 continued to be weighted heavily in lower cost demand, savings and money market accounts, which totaled $378.9 million or 83.6% of total deposits at the end of 2014, compared to $360.0 million or 80.1% of total deposits at the end of 2013, as we continued to experience a shift into these accounts from maturing time accounts as depositors in general continue to exhibit a reluctance to place funds in time accounts in the low interest rate environment.

Time deposits in excess of $100,000, which tend to be more volatile and sensitive to interest rates, totaled $47.3 million at December 31, 2014, representing 63.6% of total time deposits and 10.4% of total deposits. These deposits totaled $46.2 million, representing 54.8% of total time deposits and 10.3% of total deposits at year-end 2013 (excluding deposits held-for-sale).

26

The following table schedules the amount of our time deposits of $100,000 or more by time remaining until maturity as of December 31, 2014 (in thousands):

Maturing in:
Three months or less	$	10,702
Over three through six months		3,212
Over six through twelve months		15,943
Over twelve months		17,422
Total	$	47,279

Borrowings

During 2014, we utilized advances from the FHLB as an alternative source of funding and as a liability management tool. At December 31, 2014, borrowings from the FHLB were $11.8 million, including $7.0 million of overnight borrowings, compared with $4.8 million at December 31, 2013. In the fourth quarter of 2013, we prepaid $4.4 million of fixed rate FHLB advances with a contractual average interest rate of 4.61% and a weighted average remaining term to maturity of 1.4 years. The transaction was accomplished by extending the maturity date of the advances and rolling the net present value of the advances into the funding cost of the new structure. As a result of the restructure, we were required to pay a prepayment penalty of $268,000 to the FHLB. In accordance with ASC 470-50, Debt - Modification and Exchanges, the new advances were considered a minor modification. The prepayment penalty was deferred and will be recognized in interest expense over the life of the new advances.

Liquidity

Liquidity is our ability to fund customers’ needs for borrowing and deposit withdrawals. The purpose of liquidity management is to assure sufficient cash flow exists to meet all financial commitments and to capitalize on business expansion opportunities. This ability depends on the institution’s financial strength, asset quality and types of deposit and investment instruments we offer to our customers. Our principal sources of funds are deposits, loan and securities repayments, maturities of securities, sales of securities available for sale and other funds provided by operations. We also have the ability to obtain funding from other sources including the FHLB, and through the Federal Reserve. While scheduled loan repayments and maturing investments are relatively predictable, deposit flows and early loan and mortgage-backed security prepayments are more influenced by interest rates, general economic conditions and competition. We maintain investments in liquid assets based upon our management’s assessment of (1) need for funds, (2) expected deposit flows, (3) yields available on short-term liquid assets and (4) objectives of the asset/liability management program.

Cash and cash equivalents decreased $4.1 million, or 16.1% to $21.3 million at year-end 2014 from $25.4 million at year-end 2013. Cash and cash equivalents represented 4.1% of total assets at December 31, 2014 compared to 5.0% on December 31, 2013. The Bank has the ability to borrow funds from the FHLB and has credit lines with the Federal Reserve Bank of Cleveland in the form of discount window availability and through the Borrower-In-Custody program, should it need to supplement its future liquidity needs in order to meet loan demand or to fund investment opportunities.

Off-Balance Sheet Arrangements

In addition to funding maturing deposits and other deposit liabilities, we also have off-balance sheet commitments in the form of lines of credit and letters of credit utilized by customers in the normal course of business. Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and standby letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. These off-balance sheet commitments are not considered to have a significant effect on the liquidity position of our Company. Further, our management believes our liquidity position is adequate based on our stable level of cash equivalents and the stability of its core funding sources.

Capital Resources

Total shareholders’ equity was $47.2 million at December 31, 2014, which was an increase of $1.9 million from the end of 2013 resulting primarily from net income of $372,000 and a $1.4 million increase in unrealized gains on securities available-for-sale, net of taxes.

Tier-1 capital is shareholders’ equity excluding the net unrealized gains or losses included in other comprehensive income and a percentage of mortgage-servicing rights. Total capital includes Tier-1 capital plus the allowance for loan losses, not to exceed 1.25% of risk weighted assets. Risk weighted assets are our total assets after such assets are assessed for risk and assigned a weighting factor based on their inherent risk.

27

Regulatory minimums call for a total risk-based capital ratio of 8.0% and a Tier-1 risk-based consolidated capital ratio of 4.0%. Our consolidated ratio of total capital to risk-weighted assets was 13.88% at year-end 2014, while the Tier-1 risk-based consolidated capital ratio was 12.72%. Our consolidated leverage ratio, defined as Tier-1 capital divided by average assets, was 9.21% at year-end 2014. The Bank’s total capital to risk-weighted assets was 13.56%, Tier-1 risk-based capital ratio was 12.40% and Tier-1 leverage ratio was 9.00% at December 31, 2014.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Asset and Liability Management and Market Risk

Our Asset/Liability Committee (“ALCO”) utilizes a variety of tools to measure and monitor interest rate risk. This is defined as the risk that our financial condition will be adversely affected due to movements in interest rates. To a lesser extent, we are also exposed to liquidity risk, or the risk that changes in cash flows could adversely affect our ability to honor our financial obligations. The ALCO monitors changes in the interest rate environment, and how these changes affect lending and deposit rates, liquidity and profitability.

Since income of the Bank is primarily derived from the excess of interest earned on interest-earning assets over the interest paid on interest-bearing liabilities, the ALCO places great importance on monitoring and controlling interest rate risk. The measurement and analysis of the changes in the interest rate environment are referred to as asset/liability modeling. One method used to analyze our sensitivity to changes in interest rates is the “net portfolio value” (“NPV”) methodology.

NPV is generally considered to be the present value of the difference between expected incoming cash flows on interest-earning and other assets and expected outgoing cash flows on interest-bearing and other liabilities. For example, the asset/liability model that we currently use attempts to measure the change in NPV for a variety of interest rate scenarios, typically for parallel and sustained shifts of +400/-300 basis points in market rates. Presented below is an analysis depicting the changes in our interest rate risk as of December 31, 2014 and December 31, 2013, as measured by changes in NPV for instantaneous and sustained parallel shifts of -100 to +400 basis points in market interest rates. These parallel shifts were used to more accurately represent the current interest rate environment in which we operate. Certain shortcomings are inherent in this method of analysis presented in the computation of estimated NPV.

28

The table that follows is provided pursuant to the market risk disclosure rules set forth in Item 305 of Regulation S-K of the Securities and Exchange Commission. The information provided in the following table is based on significant estimates and assumptions and constitutes, like certain other statements included herein, a forward-looking statement.  The base case (no rate change) information in the table shows an estimate of our net portfolio value at December 31, 2014 arrived at by discounting estimated future cash flows at current market rates, assuming that maturing assets or liabilities are replaced with new balances of the same type, in the same amount, and at current (December 31, 2014) rate levels and repricing balances are adjusted to current (December 31, 2014) rate levels.  The rate change information (rate shocks) in the table shows estimates of net portfolio value at December 31, 2014, assuming instantaneous rate changes of up 100, 200, 300 and 400 basis points.  Cash flows for non-maturity deposits are based on a decay or runoff rate based on average account age.  Rate changes in the rate shock scenario are assumed to be shock or immediate changes and occur uniformly across the yield curve.  Balances that reprice are assumed to reprice at post shock rate levels. The assumptions used in interest rate sensitivity modeling are inherently uncertain and, as a result, we cannot precisely predict the impact of changes in interest rates on NPV. Actual results may differ significantly from those presented due to the timing, magnitude and frequency of changes in interest rates and changes in market conditions and interest rate differentials (spreads) between maturity/repricing categories, as well as any actions which management may take to counter such changes.

	December 31, 2014									December 31, 2013
Change in Interest Rates (Basis Points)	Change in NPV ($)			Change in NPV (%)			NPV Ratio			Change in NPV ($)			Change in NPV (%)			NPV Ratio
	(Dollars in thousands)
+400	$	(1,011	)		(1.69	)%		12.53	%	$	788			1.11	%		16.18	%
+300		6,978			11.67	%		13.84	%		6,552			9.19	%		17.05	%
+200		10,005			16.74	%		14.11	%		8,513			11.95	%		17.08	%
+100		5,936			9.93	%		12.98	%		5,073			7.12	%		16.00	%
Base		-			-			-			-			-			-
-100		(9,286	)		(15.54	)%		9.56	%		(8,999	)		(12.63	)%		12.60	%

29

Item 8. Financial Statements and Supplementary Data

Index to Financial Statements and Schedules

Page(s)
Report of Independent Registered Public Accounting Firm	31
Consolidated Balance Sheets as of December 31, 2014 and 2013	32
Consolidated Statements of Income as of December 31, 2014 and 2013	33
Consolidated Statements of Comprehensive Income (Loss) as of December 31, 2014 and 2013	34
Consolidated Statements of Shareholders’ Equity as of December 31, 2014 and 2013	35
Consolidated Statements of Cash Flow for the years ended December 31, 2014 and 2013	36
Notes to Consolidated Financial Statements	37

30

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

DCB Financial Corp

Lewis Center, Ohio

We have audited the accompanying consolidated balance sheets of DCB Financial Corp as of December 31, 2014 and 2013, the related consolidated statements of income, comprehensive income (loss), changes in shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of DCB Financial Corp as of December 31, 2014 and 2013 and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ Plante & Moran PLLC

Columbus, Ohio

March 25, 2015

31

DCB Financial Corp and Subsidiaries

Consolidated Balance Sheets

	December 31,
	2014			2013
	(Dollars in thousands, except share and per share data)
Assets:
Cash and due from financial institutions	$	6,247		$	6,110
Interest-bearing deposits		15,027			19,247
Total cash and cash equivalents		21,274			25,357
Securities available-for-sale		75,909			79,948
Loans		385,444			356,048
Less allowance for loan losses		(4,236	)		(6,724	)
Net loans		381,208			349,324
Loans held for sale		-			7,806
Real estate owned		1,111			1,219
Investment in FHLB stock		3,250			3,799
Premises and equipment, net		10,016			10,641
Premises and equipment held for sale		-			1,405
Bank-owned life insurance		20,027			19,297
Accrued interest receivable and other assets		2,587			3,623
Total assets	$	515,382		$	502,419
Liabilities and shareholders’ equity
Liabilities:
Deposits:
Non-interest bearing	$	111,022		$	109,622
Interest bearing		342,170			317,237
Total deposits		453,192			426,859
Deposits held for sale		-			22,571
Borrowings		11,808			4,838
Accrued interest payable and other liabilities		3,171			2,887
Total liabilities		468,171			457,155
Shareholders’ equity:
Preferred stock, no par value, 2,000,000 shares authorized, none issued and outstanding		-			-
Common stock, 17,500,000 and 7,500,000 shares authorized, 7,541,445 and 7,500,000 shares issued, and 7,233,795 and 7,192,350 shares outstanding for 2014 and 2013, respectively		16,064			15,771
Retained earnings		38,055			37,683
Treasury stock, at cost, 307,650 shares at December 31, 2014 and 2013		(7,416	)		(7,416	)
Accumulated other comprehensive income (loss)		654			(774	)
Deferred stock-based compensation		(146	)		-
Total shareholders’ equity		47,211			45,264
Total liabilities and shareholders’ equity	$	515,382		$	502,419

See notes to the consolidated financial statements.

32

DCB Financial Corp and Subsidiaries

Consolidated Statements of Income

	Year ended December 31,
	2014			2013
	(Dollars in thousands, except share and per share data)
Interest income:
Loans	$	15,276		$	14,928
Securities		2,065			2,064
Federal funds sold and interest bearing deposits		39			87
Total interest income		17,380			17,079
Interest expense:
Deposits:
Savings and money market accounts		559			474
Time accounts		434			989
NOW accounts		76			91
Total		1,069			1,554
FHLB advances		143			264
Total interest expense		1,212			1,818
Net interest income		16,168			15,261
Provision for loan losses		150			2,417
Net interest income after provision for loan losses		16,018			12,844
Non-interest income:
Service charges		1,963			2,195
Wealth management fees		1,474			1,418
Treasury management fees		220			244
Income from bank-owned life insurance		730			733
Gain on the sale of securities available-for-sale		101			135
Losses on loans held for sale		(509	)		-
Net (loss) gain on sale of REO		(84	)		31
Gain on sale of branch		438			-
Other non-interest income		127			211
Total non-interest income		4,460			4,967
Non-interest expense:
Salaries and employee benefits		11,141			11,287
Occupancy and equipment		3,192			3,069
Professional services		1,379			1,791
Advertising		347			293
Office supplies, postage and courier		328			481
FDIC insurance premium		630			699
State franchise taxes		266			478
Other non-interest expense		2,823			2,942
Total non-interest expense		20,106			21,040
Income (loss) before income tax benefit		372			(3,229	)
Income tax benefit		-			(298	)
Net income (loss)	$	372		$	(2,931	)
Share and Per Share Data
Basic average common shares outstanding		7,193,372			7,192,350
Diluted average common shares outstanding		7,232,388			7,192,350
Basic and diluted earnings (loss) per common share	$	0.05		$	(0.41	)

See notes to the consolidated financial statements.

33

DCB Financial Corp and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

	Year ended December 31,
	2014			2013
	(Dollars in thousands)
Net income (loss)	$	372		$	(2,931	)
Other comprehensive income (loss):
Reclassification of previously recognized noncredit other than temporary impairment on sale of security in 2013, net of taxes of $512		-			995
Net unrealized gains (losses) on securities available-for-sale, net of taxes of $769 and $(755) in 2014 and 2013, respectively		1,494			(1,482	)
Reclassification adjustment for gains included in net income (loss), net of taxes of $(35) and $(2) in 2014 and 2013, respectively		(66	)		(3	)
Unrealized gains on securities transferred to available-for-sale in 2013, net of taxes of $131		-			254
Amortization of unrealized losses on held-to-maturity securities in 2013, net of taxes of $28.		-			42
Total other comprehensive income (loss)		1,428			(194	)
Comprehensive income (loss)	$	1,800		$	(3,125	)

See notes to the consolidated financial statements.

34

DCB Financial Corp and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

Year ended December 31, 2014 and 2013

(Dollars in thousands, except share data)

	Issued and Outstanding Common Shares		Preferred Stock		Common Stock		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Deferred Stock-Based Compensation			Total
Balance at January 1, 2013		7,192,350	$	-	$	15,771	$	40,614		$	(7,416	)	$	(580	)	$	-		$	48,389
Comprehensive loss:
Net loss		-		-		-		(2,931	)		-			-			-			(2,931	)
Other comprehensive loss, net of taxes		-		-		-		-			-			(194	)		-			(194	)
Total comprehensive loss		-		-		-		-			-			-			-			(3,125	)
Balance at December 31, 2013		7,192,350	$	-	$	15,771	$	37,683		$	(7,416	)	$	(774	)	$	-		$	45,264
Comprehensive income:
Net income		-		-		-		372			-			-			-			372
Other comprehensive income, net of taxes		-		-		-		-			-			1,428			-			1,428
Total comprehensive income		-		-		-		-			-			-			-			1,800
Issuance of restricted stock in exchange for cancelled stock options		41,445		-		293		-			-			-			(146	)		147
Balance at December 31, 2014		7,233,795	$	-	$	16,064	$	38,055		$	(7,416	)	$	654		$	(146	)	$	47,211

See notes to consolidated financial statements.

35

DCB Financial Corp and Subsidiaries

Consolidated Statements of Cash Flows

	Year ended December 31
	2014			2013
	(Dollars in thousands)
Cash flows from operating activities
Net income (loss)	$	372		$	(2,931	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		1,070			1,068
Provision for loan losses		150			2,417
Deferred income taxes		-			(298	)
Gain on sale of securities		(101	)		(135	)
Loss on loans held-for-sale		509			-
Loss (gain) on sale of real estate owned		84			(31	)
Gain on sale of branch		(438	)		-
Stock option plan expense		190			129
Premium amortization on securities, net		1,064			1,644
Earnings on bank owned life insurance		(730	)		(733	)
Net changes in other assets and other liabilities		543			3,260
Net cash provided by operating activities		2,713			4,390
Cash flows from investing activities
Purchases of securities available-for-sale		(25,136	)		(23,564	)
Proceeds from maturities, principal payments and calls of securities available-for-sale		23,234			27,699
Proceeds from sales of securities available-for-sale		7,140			2,560
Net change in loans		(31,076	)		(48,983	)
Proceeds from sales of loans held-for-sale		845			-
Proceeds from sale of real estate owned		768			2,546
Net cash paid with sale of branch		(12,464	)		-
Proceeds from redemption of FHLB stock		549			-
Premises and equipment expenditures		(445	)		(1,078	)
Net cash used in investing activities		(36,585	)		(40,820	)
Cash flows from financing activities
Net change in deposits		22,819			1,140
Proceeds from short-term borrowings		7,000			-
Proceeds from long-term borrowings		-			4,411
Repayment of borrowings		(30	)		(7,071	)
Net cash provided by (used in) financing activities		29,789			(1,520	)
Net change in cash and cash equivalents		(4,083	)		(37,950	)
Cash and cash equivalents at beginning of year		25,357			63,307
Cash and cash equivalents at end of year	$	21,274		$	25,357
Supplemental disclosures of cash flow information
Cash paid during the period for interest on deposits and borrowings	$	1,288		$	1,914
Non-cash investing and financing activities:
Transfer of loans to real estate owned		744			59
Transfer of loans to held for sale		913			7,806
Transfer of loans held for sale to held for investment		769			-
Transfer of deposits (from) to held for sale		(3,210	)		22,571

See notes to consolidated financial statements.

36

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

1. Summary of Significant Accounting Policies

Basis of Presentation: The consolidated financial statements include the accounts of DCB Financial Corp (“DCB”) and its wholly-owned subsidiaries, The Delaware County Bank and Trust Company (the “Bank”), DCB Title Services, LLC, DCB Insurance Services, Inc., DataTasx LLC, and ORECO, Inc. (collectively referred to hereinafter as the “Company”). All intercompany transactions and balances have been eliminated in the consolidated financial statements.

Nature of Operations: The Company provides financial services in Delaware, Franklin, and Union Counties, Ohio, as well as nearby counties, through its 14 banking locations. Its primary deposit products are checking, savings, and term certificate accounts and its primary lending products are residential mortgage, commercial and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Real estate loans are secured by both residential and commercial real estate. The Bank also operates a trust department and engages in other personal wealth management activities, including brokerage services and private banking.

Business Segments: While the Bank’s management monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the Bank’s operations are considered by management to be aggregated into one operating segment.

Use of Estimates: To prepare consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect amounts reported in the financial statements and disclosures provided, and future results could differ. The allowance for loan losses, fair value of financial instruments, determination of other-than-temporary impairment, status of contingencies and deferred tax asset valuation are particularly subject to change.

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, federal funds sold and deposits with other financial institutions with original maturities of less than 90 days. Net cash flows are reported for customer loan and deposit transactions, federal funds purchased and other short-term borrowings.

Securities: Securities are classified as held-to-maturity and carried at adjusted amortized cost when management has the positive intent and ability to hold them to maturity. Securities classified as available-for-sale might be sold before maturity. Securities classified as available-for-sale are carried at fair value, with temporary unrealized holding gains and losses excluded from earnings and reported as a component of other comprehensive income. Realized gains and losses on sale of securities are recognized using the specific identification method. The Company does not engage in securities trading activities. Interest income includes premium amortization and accretion of discounts on securities.

For securities with unrealized losses, management considers, in determining whether other-than-temporary impairment exists, (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

For securities with other-than-temporary impairment, further analysis is required to determine the appropriate accounting. If management neither intends to sell the impaired security nor expects it will be required to sell the security prior to recovery, only the credit loss component of the other-than-temporary impairment is recognized in earnings while the non-credit loss is recognized in other comprehensive income. The credit loss component recognized in earnings is identified as the principal cash flows not expected to be received over the remaining term of the security as projected based on cash flow projections.

37

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Loans (including Loans Held for Sale)

Loans are classified as held for investment when management has both the intent and ability to hold the loan for the foreseeable future, or until maturity or payoff. Management’s intent and view of the foreseeable future may change based on changes in business strategies, the economic environment, market conditions and the availability of government programs. Loans that are held for investment are reported at the principal balance outstanding, net of unearned interest, unamortized deferred loan fees and costs and the allowance for loan losses. Loans held for sale are carried at the lower of amortized cost or estimated fair value, determined on an aggregate basis for each type of loan. Net unrealized losses are recognized by charges to income.

Interest income is accrued based on the unpaid principal balance and includes amortization of net deferred loan fees and costs over the loan term. Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the credit is well secured and in process of collection. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on non-accrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

When loans are reclassified from held for investment to held for sale, specific reserves and allocated pooled reserves included in the allowance for loan and losses are reclassified to reduce the basis of the loans to the lower of cost or estimated fair value less cost to sell. Reclassifications of loans from held for sale to held for investment are made at fair value.

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable but unconfirmed credit losses, increased by the provision for loan losses and decreased by charge-offs net of recoveries. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the required allowance balance based on past loan loss experience, augmented by additional estimates related to the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, economic conditions and other factors.

The allowance consists of both specific and general components. The specific component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the collateral value, or value of expected discounted cash flows of the impaired loan is lower than the carrying value of that loan. The general component covers non-classified loans and is based on historical charge-off experience and expected loss given default derived from the Bank’s internal risk rating process. Management utilizes an average of a three year historical loss period. Management has the ability to adjust these loss rates by utilizing risk ratings based on current period trends. If current period trends differ either positively or negatively from the given weighted historical loss rates, adjustments can be made. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risking rating data.

Management also utilizes its assessment of general economic conditions, and other localized economic data to more fully support its loan loss estimates. General economic data may include: inflation rates, savings rates and national unemployment rates. Local data may include: unemployment rates, housing starts, real estate valuations, and other economic data specific to the Company’s market area. Though not specific to individual loans, these economic trends can have an impact on portfolio performance as a whole.

Uncollectibility is usually determined based on a pre-determined number of days delinquent in the case of consumer loans, or, in the case of commercial loans, is based on a combination of factors including delinquency, collateral and other legal considerations. Consumer loans are charged-off prior to 120 days of delinquency, but could be charged off earlier, depending on the individual circumstances. Mortgage loans are charged down prior to 120 days of delinquency, but could be charged off sooner, again, depending upon individual circumstance. Typically, loans collateralized by residential real estate are partially charged down to the estimated liquidation value, which is generally based on appraisal less costs to hold and liquidate. Commercial and commercial real estate loans are evaluated for impairment and typically reserved based on the results of the analysis, then subsequently charged down to a recoverable value when loan repayment is deemed to be collateral dependent. Loans can be partially charged down depending on a number of factors including: the remaining strength of the borrower and guarantor; the type and value of the collateral, and the ease of liquidating collateral; and whether or not collateral is brought onto the bank’s balance sheet via repossession. In the case of commercial and commercial real estate loans, charge-offs, partial or whole, take place when management determines that full collectability of principal balance is unlikely to occur. Subsequent recoveries, if any, are credited to the allowance. Management’s policies for determining impairment, reserves and charge-offs are reviewed and approved by the Board of Directors on an annual basis, and were not materially changed in 2014.

38

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Troubled debt restructuring of loans is undertaken to improve the likelihood that the loan will be repaid in full under the modified terms in accordance with a reasonable repayment schedule.  All modified loans are evaluated to determine whether the loans should be reported as a Troubled Debt Restructuring (TDR).  A loan is a TDR when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower by modifying or renewing a loan that the Company would not otherwise consider. To make this determination, the Company must determine whether (a) the borrower is experiencing financial difficulties and (b) the Company granted the borrower a concession. This determination requires consideration of all of the facts and circumstances surrounding the modification.  An overall general decline in the economy or some deterioration in a borrower’s financial condition does not automatically mean the borrower is experiencing financial difficulties.

Investment in Federal Home Loan Bank Stock: The Company is required as a condition of membership in the Federal Home Loan Bank of Cincinnati (“FHLB”) to maintain an investment in FHLB common stock. The stock is redeemable at par and, therefore, its cost is equivalent to its redemption value. The Company’s ability to redeem FHLB shares is dependent on the redemption practices of the FHLB. The stock is carried at cost and evaluated for impairment.

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed over the assets’ useful lives, estimated to be five to 39 years for buildings, improvements and leasehold improvements. The Company generally uses three to five years for the useful lives of furniture, fixtures, and equipment, using the straight line method, depending on the nature of the asset. Premises and equipment are reviewed for impairment when events indicate the carrying amount may not be recoverable. Maintenance and repairs are expensed and major improvements are capitalized.

Foreclosed Assets: Assets acquired through foreclosure are initially recorded at the lower of cost or fair value less expected selling costs. Subsequent declines in fair value below the recorded amount are recorded as a direct write-down to expense. The Company generally evaluates fair market values of foreclosed assets on a quarterly basis, and adjusts accordingly. Holding costs after acquisition are expensed as incurred; however, construction costs to improve a property’s value may be capitalized as part of the asset value.

Servicing Assets: Servicing assets represent the allocated value of retained servicing on loans sold. Servicing assets are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the assets, using groupings of the underlying loans as to interest rates, and then secondarily as to geographic and prepayment characteristics. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment of a grouping is reported as a valuation allowance. Loans serviced for others totaled $2.1 million and $2.9 million at December 31, 2014 and 2013, respectively. The Company had net servicing assets of $3,000 and $5,000 at December 31, 2014 and 2013, respectively.

39

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Bank Owned Life Insurance: The Company has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at its cash surrender value.

Income Taxes: The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred tax assets are reduced by a valuation allowance, if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment. The Company recognizes interest and penalties on income taxes, if applicable, as a component of income tax expense. The Company files consolidated income tax returns with its subsidiaries.

Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and standby letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Earnings (Loss) Per Common Share: Basic earnings (loss) per common share is net income (loss) divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share are computed including the dilutive effect of additional potential common shares issuable under stock options. Diluted earnings (loss) per share are not computed for periods in which an operating loss is sustained.

The computation of earnings (loss) per share is based upon the following weighted-average shares outstanding for the years ended December 31:

	2014		2013
Weighted-average common shares outstanding (basic)		7,193,372		7,192,350
Dilutive effect of assumed exercise of stock options		39,016		—
Weighted-average common shares outstanding (diluted)		7,232,388		7,192,350

At December 31, 2014, 9,979 of anti-dilutive stock options were excluded from the diluted weighted average common share calculations.

At December 31, 2013, options to purchase 156,665 shares of common stock were excluded from the computation of diluted earnings per share because of the loss incurred.

40

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Stock-Based Compensation: Compensation cost is recognized for restricted stock awards issued to employees and directors based on the fair value of these awards at the date of grant. The market price of the Company’s common stock at the date of grant is used to determine the fair value for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

The Company’s outstanding stock options may be settled for cash at the recipient’s discretion; therefore, liability accounting applies to the Company’s 2004 Long-Term Stock Incentive Plan under which such stock options were granted. Compensation expense is recognized based on the fair value of these awards at the reporting date. A Black Scholes model is utilized to estimate the fair value of stock options at the date of grant and subsequent re-measurement dates. Compensation cost is recognized over the required service period, generally defined as the vesting period. The Company’s stock option awards contain terms that provide for a graded vesting schedule whereby portions of the award vest in increments over the requisite service period.  Changes in fair value of the options between the vesting date and option expiration date are also recognized in the Consolidated Statement of Income.

Comprehensive Income (Loss): Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss), net of applicable income tax effects. Other comprehensive income (loss) includes unrealized appreciation (depreciation) on available-for-sale securities and unrealized appreciation (depreciation) on held-to-maturity securities for which a portion of an other-than-temporary impairment has been recognized in income. Accumulated other comprehensive income consists solely of unrecognized gains and losses on investment securities, net of taxes of $336,000 and ($398,000) at December 31, 2014 and 2013, respectively..

Restrictions on Cash: Other deposits at the Federal Reserve Bank above the clearing balance requirements earn interest at an overnight rate, and are not restricted. In addition, $1.1 million is held in another institution and is under the control of a third party due to a contractual agreement.

Dividend Restrictions: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to DCB or by DCB to shareholders.

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or market conditions could significantly affect the estimates.

Advertising and Marketing: Advertising and other marketing costs are expensed as incurred.

Reclassification: Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the 2014 presentation. These reclassifications had no effect on net income for any period presented.

New Accounting Pronouncements: In August 2014, the Financial Accounting Standards Board (“FASB”) issued amended accounting guidance for the classification of certain government guaranteed mortgage loans upon foreclosure. This guidance requires that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if the following conditions are met: (1) the loan has a government guarantee that is not separable from the loan before foreclosure; (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim; and (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Upon foreclosure, the separate other receivable should be measured based upon the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This guidance should be applied using a prospective transition method or a modified retrospective transition method. The Company expects that the adoption of this guidance in 2015 will not have a significant effect on the Company’s financial position or results of operations.

41

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

In June 2014, the FASB issued amended accounting guidance for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The amended guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The performance target should not be reflected in estimating the grant date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This guidance is effective for annual periods and interim periods within those annual periods beginning after December 31, 2015, with earlier adoption permitted. The Company does not expect the amended guidance published by the FASB to have a material impact on its financial position or results of operations.

In January 2014, the FASB issued amended accounting and disclosure guidance for reclassification of residential real estate collateralized consumer mortgage loans upon foreclosure. The amended guidance clarifies that an in-substance repossession or foreclosure occurs and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amended guidance also requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate that are in the process of foreclosure according to local requirements of the applicable jurisdiction. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This guidance should be applied using a prospective transition method or a modified retrospective transition method. The Company expects that the adoption of this guidance in 2015 will not have a significant effect on the Company’s financial position or results of operations.

2. Sale of Branch and Loans Held for Sale

In March 2014, the Bank closed the previously announced sale of its Marysville branch (the “Branch”) to Merchants National Bank, a national bank headquartered in Hillsboro, Ohio (“Merchants”). Merchants acquired certain assets and assumed certain liabilities of the Branch, including the assumption of $19.4 million in deposit liabilities and the purchase of $4.8 million in loans related to the Branch.

The amounts related to the sale are as follows (in thousands):

Deposits assumed	$	19,403
Loans sold (at book value)		(4,750	)
Property and equipment (agreed upon value)		(1,500	)
Cash on hand		(261	)
Premium on deposits		(438	)
Other, net		10
Cash paid to Merchants	$	12,464

The carrying value of the assets sold and the deposits assigned were classified as held for sale at December 31, 2013.

42

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

In addition to the loans reclassified to held-for-sale in connection with the branch sale, the Company also reclassified 54 homogenous loans secured by single family residential investor properties to held-for-sale as of December 31, 2013. At December 31, 2013 the loans had an aggregate contractual principal balance of $4.2 million, and aggregate allowance for loan loss allocations of $2.0 million. In connection with the transfer to held-for-sale, the Company recorded a provision for loan losses of $946,000 in the fourth quarter of 2013. The loans were transferred to held-for-sale, net of the allowance allocations, at their estimated fair value of $2.2 million.

During the third quarter of 2014, the Company reclassified 30 of the residential investor properties from held for sale to held for investment, because the Company believes the best value for these loans, which generally have been paying as agreed, can be achieved through a hold strategy. The reclassifications of the loans, which had an aggregate contractual principal balance of $1.9 million, were made at the loans net book value of $769,000 on the date of transfer. The $1.1 million difference between the contractual balances and the net book value represents the amount of write-downs taken on these loans at the end of 2013 based on perceived credit weakness of the residential investor properties portfolio in the aggregate. Management believes that the fair value of these loans does not require consideration of a credit loss component, because of the generally satisfactory payment performance of these loans. The weighted average interest rates on these loans was 4.4% on the date of transfer, which management believes reasonably approximates a market interest rate for loans of this type. As a result, management has concluded that the contractual loan amounts approximate their fair value on the transfer date, and the $1.1 million discount on these loans will be accreted to interest income over the life of the loans as payments are made on the loans.

The Company did not have any assets or deposits classified as held-for-sale at December 31, 2014.

3. Securities

The amortized cost and estimated fair values of securities available-for-sale as of December 31, 2014 and 2013 were as follows (in thousands):

As of December 31, 2014:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Government and agency obligations	$	11,602	$	31	$	(88	)	$	11,545
Corporate bonds		4,975		33		(21	)		4,987
States and municipal obligations		21,303		423		(69	)		21,657
Collateralized mortgage obligation		19,601		85		(106	)		19,580
Mortgage-backed securities		17,438		702		—			18,140
Total	$	74,919	$	1,274	$	(284	)	$	75,909

As of December 31, 2013:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Government and agency obligations	$	13,714	$	16	$	(428	)	$	13,302
Corporate bonds		6,187		42		(61	)		6,168
States and municipal obligations		20,651		283		(484	)		20,450
Collateralized debt obligations		1,916		—		(940	)		976
Collateralized mortgage obligations		15,217		135		(308	)		15,045
Mortgage-backed securities		23,435		596		(23	)		24,007
Total	$	81,120	$	1,072	$	(2,244	)	$	79,948

43

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

The tables below indicate the length of time individual securities have been in a continuous unrealized loss position at December 31, 2014 and 2013 (in thousands):

December 31, 2014

	(Less than 12 months)						(12 months or longer)						Total
Description of securities	Number of securities		Fair value		Unrealized losses		Number of securities		Fair value		Unrealized losses		Number of securities		Fair value		Unrealized losses
U.S. Government and agency obligations		3	$	2,488	$	9		4	$	4,446	$	79		7	$	6,934	$	88
Corporate bonds		1		503		1		4		1,664		21		5		2,167		21
State and municipal obligations		8		2,699		18		4		1,915		51		12		4,614		69
Collateralized debt obligations		—		—		—		—		—		—		—		—		—
Collateralized Mortgage obligations		9		5,649		21		4		3,649		85		13		9,298		106
Mortgage-backed securities and other		—		—		—		—		—		—		—		—		—
Total temporarily impaired securities		21	$	11,339	$	49		16	$	11,674	$	236		37	$	23,013	$	284

December 31, 2013

	(Less than 12 months)						(12 months or longer)						Total
Description of securities	Number of securities		Fair value		Unrealized losses		Number of securities		Fair value		Unrealized losses		Number of securities		Fair value		Unrealized losses
U.S. Government and agency obligations		10	$	10,680	$	428		—	$	—	$	—		10	$	10,680	$	428
Corporate bonds		5		2,141		38		2		883		23		7		3,024		61
State and municipal obligations		32		11,012		442		2		822		42		34		11,834		484
Collateralized debt obligations		—		—		—		1		976		940		1		976		940
Collateralized mortgage obligations		7		5,011		208		1		1,189		100		8		6,200		308
Mortgage-backed securities and other		5		3,434		23		—		—		—		5		3,434		23
Total temporarily impaired securities		59	$	32,278	$	1,139		6	$	3,870	$	1,105		65	$	36,148	$	2,244

Collateralized debt obligations at December 31, 2013 consisted of one security, which was reported in the financial statements at an amount less than its historical cost at December 31, 2013. The decline primarily resulted from changes in market interest rates and failure to maintain consistent credit quality ratings. This security was sold in the first quarter of 2014.

44

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

The unrealized losses on the Company’s investments in U.S. Government and agency obligations, corporate bonds, state and political subdivision obligations, and mortgage-backed securities were caused primarily by changes in interest rates. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at December 31, 2014.

Substantially all mortgage-backed securities are backed by pools of mortgages that are insured or guaranteed by the Federal National Mortgage Association (“FNMA”), the Government National Mortgage Association (“GNMA”) or the Federal Home Loan Mortgage Corporation (“FHLMC”).

No other-than-temporary impairment was recognized in 2014 or 2013. There was no accumulated other-than-temporary impairment as of December 31, 2014. The accumulated other-than-temporary impairment was $1.1 million as of December 31, 2013, which was primarily caused by (a) decrease in performance and regulatory capital resulting from exposure to subprime mortgages and (b) sector downgrade by industry analysts which impaired the value of the Company’s investments in collateralized debt obligations. The Company recognized a loss equal to the credit loss, establishing a new, and lower amortized cost basis. The credit loss was calculated by comparing expected discounted cash flows based on performance indicators of the underlying assets in the security to the carrying value of the investment. In March 2014, the Company sold its remaining investment in collateralized debt obligations for a loss of $140,000.

There are no securities from the same issuer, besides agency investments, greater than 10% of total equity at December 31, 2014.

The amortized cost and estimated fair value of debt securities, at December 31, 2014, by contractual maturity, are shown below (in thousands). Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown separately since they are not due at a single maturity date.

	Available-for-sale
	Amortized Cost		Fair Value
Due in one year or less	$	1,417	$	1,430
Due from one to five years		12,646		12,656
Due from five to ten years		23,424		23,699
Due after ten years		19,994		19,984
Mortgage-backed securities		17,438		18,140
Total	$	74,919	$	75,909

Sales of investment securities during the years ended December 31, 2014 and 2013 were as follows (in thousands):

	2014			2013
Proceeds from investments sales	$	7,140		$	2,560
Gross gains on investment sales	$	242		$	135
Gross losses on investment sales	$	(141	)	$	—

Securities with a carrying amount of $65.5 million and $65.6 million at December 31, 2014 and 2013, respectively, were pledged to secure public deposits and other obligations.

45

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

4. Loans

At December 31, 2014, loans were comprised of the following (in thousands):

	2014		2013
Commercial and industrial	$	106,222	$	122,084
Commercial real estate		111,851		104,692
Residential real estate and home equity		129,650		96,245
Consumer and credit card		37,507		32,862
Subtotal		385,230		355,883
Add: Net deferred loan origination fees		214		165
Total loans receivable	$	385,444	$	356,048

Loans to principal officers, directors, and their related affiliates during 2014 and 2013 in the normal course of business were as follows (in thousands).

	2014			2013
Balance at beginning of year	$	1,440		$	469
New loans		7,070			1,058
Repayments		(403	)		(87	)
Balance at end of year	$	8,107		$	1,440

5. Credit Quality

Allowance for Loan Losses

The Company’s methodology for estimating probable future losses on loans utilizes a combination of probability of loss by loan grade and loss given defaults for its portfolios. The probability of default is based on both market data from a third-party independent source and actual historical default rates within the Company’s portfolio. A loan is impaired when full payment of interest and principal under the original contractual loan terms is not expected. Commercial and industrial loans, commercial real estate, including construction and land development, and multi-family real estate loans are individually evaluated for impairment. If a loan is impaired, the loan amount exceeding fair value, based on the most current information available is reserved. Management has developed a process by which commercial and commercial real estate loans receiving an internal grade of Vulnerable, Substandard or Doubtful are individually evaluated for impairment through a loan quality review (LQR). The LQR details the various attributes of the relationship and collateral and determines based on the most recent available information if a specific reserve needs to be applied and at what level. The LQR process for all loans meeting the specific review criteria is completed on a quarterly basis. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, are collectively evaluated for impairment, and accordingly, such loans are not separately identified for impairment disclosures. This methodology recognizes portfolio behavior while allowing for reasonable loss ratios on which to estimate allowance calculations.

Further, the process for estimating probable loan losses is divided into reviewing impaired loans on an individual basis for probable losses and, as noted above, calculating probable future losses based on historical and market data for homogenous loan portfolios. As the Company’s troubled loan portfolios have been reduced through payoffs, paydowns, and charge-offs, the remaining loan portfolios possess better overall credit characteristics, and based on the Company’s methodology require lower rates of reserving than recent historical levels.

46

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

The table below presents allowance for loan losses by loan portfolio (in thousands). Commercial real estate includes real estate construction and land development loans.

For the Year Ended December 31, 2014:

	Consumer and Credit Card			Commercial and Industrial			Commercial Real Estate			Residential Real Estate and Home Equity			Unallocated		Total
Allowance for loan losses:
Beginning balance:	$	301		$	3,231		$	2,973		$	219		$	—	$	6,724
Chargeoffs		(200	)		(1,410	)		(1,086	)		(169	)		—		(2,865	)
Recoveries		113			42			131			38			—		324
Transfer to held for sale		—			—			(97	)		—			—		(97	)
Provision		(24	)		(731	)		455			180			270		150
Ending balance:	$	190		$	1,132		$	2,376		$	268		$	270	$	4,236
Allowance on loans:
Individually evaluated for impairment	$	—		$	256		$	1,042		$	—		$	—	$	1,298
Collectively evaluated for impairment		190			876			1,334			268			270		2,938
Ending balance:	$	190		$	1,132		$	2,376		$	268		$	270	$	4,236
As of December 31, 2014:
Loans:
Individually evaluated for impairment	$	455		$	2,028		$	9,690		$	—		$	—	$	12,173
Collectively evaluated for impairment		37,052			109,823			96,532			129,650			—		373,057
Ending balance:	$	37,507		$	111,851		$	106,222		$	129,650		$	—	$	385,230

47

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

For the year ended December 31, 2013

	Consumer and Credit Card			Commercial and Industrial			Commercial Real Estate			Residential Real Estate and Home Equity			Total
Allowance for loan losses:
Beginning balance:	$	365		$	1,620		$	4,692		$	204		$	6,881
Chargeoffs		(286	)		(86	)		(1,038	)		(331	)		(1,741	)
Recoveries		219			823			38			52			1,132
Transfer to held for sale		—			—			(1,965	)		—			(1,965	)
Provision		3			874			1,246			294			2,417
Ending balance:	$	301		$	3,231		$	2,973		$	219		$	6,724
Allowance on loans:
Individually evaluated for impairment	$	—		$	2,304		$	1,862		$	—		$	4,166
Collectively evaluated for impairment		301			927			1,111			219			2,558
Ending balance:	$	301		$	3,231		$	2,973		$	219		$	6,724
As of December 31, 2013:
Loans:
Individually evaluated for impairment	$	—		$	7,221		$	15,660		$	—		$	22,881
Collectively evaluated for impairment		32,862			114,863			89,032			96,245			333,002
Ending balance:	$	32,862		$	122,084		$	104,692		$	96,245		$	355,883

Impaired Loans

A loan is considered impaired when based on current information and events it is probable the Bank will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include non-performing commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. Commercial and commercial real estate loans with risk grades Substandard, Vulnerable, Doubtful, or Loss are evaluated for impairment.

48

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

The following table indicates impaired loans with and without an allocated allowance at December 31, 2014 (in thousands).

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Consumer and credit card	$	455	$	455	$	—	$	474	$	25
Commercial and industrial		1,288		1,288		—		1,531		45
Commercial real estate		1,088		1,088		—		6,714		70
With allowance recorded
Commercial and industrial		740		817		256		1,772		43
Commercial real estate		8,602		8,602		1,042		6,048		595
Total
Consumer and credit card		455		455		—		474		25
Commercial and industrial		2,028		2,105		256		3,303		88
Commercial real estate		9,690		9,690		1,042		12,762		665
Total	$	12,173	$	12,250	$	1,298	$	16,539	$	778

The following table indicates impaired loans with and without an allocated allowance at December 31, 2013 (in thousands).

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded
Commercial and industrial	$	1,530	$	1,530	$	—	$	3,081	$	67
Commercial real estate		9,892		11,788		—		10,005		615
With allowance recorded
Commercial and industrial		5,691		5,833		2,304		2,686		196
Commercial real estate		5,768		7,296		1,862		10,060		308
Total
Commercial and industrial		7,221		7,363		2,304		5,767		263
Commercial real estate		15,660		19,084		1,862		20,065		923
Total	$	22,881	$	26,447	$	4,166	$	25,832	$	1,186

Included in certain impaired loan categories are troubled debt restructurings that by definition are classified as impaired. At December 31, 2014 and 2013, troubled debt restructurings which were performing in accordance with their modified terms were $780,000 and $262,000 for commercial loans, $8.5 million and $11.8 million for commercial real estate, and $334,000 and $225,000 for consumer loans, respectively.

In addition to these amounts, the Bank had troubled debt restructurings that were impaired and no longer performing in accordance with their modified terms. At December 31, 2014 and 2013, troubled debt restructurings which were no longer performing in accordance with their modified terms were $68,000 and $1.1 million for commercial loans, $236,000 million and $2.1 million for commercial real estate, respectively.

49

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Non-performing loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. Interest income that would have been recognized had non-performing loans performed in accordance with contractual terms totaled $241,000 and $175,000 for years ended December 31, 2014 and 2013, respectively. At December 31, 2014 and 2013, management viewed all loans past due and still accruing interest as well-secured and in the process of collection.

Loans on non-accrual status as of December 31, 2014 and 2013 are as follows (in thousands):

	2014		2013
Consumer and credit card	$	120	$	—
Commercial and industrial		632		4,702
Commercial real estate		298		1,398
Residential real estate and home equity		334		352
Total	$	1,384	$	6,452

Loans held for sale on non-accrual status as of December 31, 2013 were $1.2 million. There were no loans held for sale as of December 31, 2014.

Credit Quality Indicators

Credit risk exposure by risk profile and by class of commercial loans was as follows at year-end 2014 (in thousands).

Category	Commercial and Industrial		Commercial Real Estate
Pass-1-4	$	106,590	$	90,588
Vulnerable-5		823		6,146
Substandard-6		4,438		9,488
Doubtful-7		—		—
Loss-8		—		—
Total	$	111,851	$	106,222

Credit risk exposure by risk profile and by class of commercial loans was as follows at year-end 2013 (in thousands).

Category	Commercial and Industrial		Commercial Real Estate
Pass-1-4	$	111,266	$	83,953
Vulnerable-5		2,574		4,785
Substandard-6		8,244		15,954
Doubtful-7		—		—
Loss-8		—		—
Total	$	122,084	$	104,692

50

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Risk Category Descriptions

Pass (Prime – 1, Good – 2, Fair – 3, Compromised – 4)

Loans with a pass grade have a higher likelihood that the borrower will be able to service its obligations in accordance with the terms of the loan than those loans graded 5, 6, 7, or 8. The borrower’s ability to meet its future debt service obligations is the primary focus for this determination. Generally, a borrower’s expected performance is based on the borrower’s financial strength as reflected by its historical and projected balance sheet and income statement proportions, its performance, and its future prospects in light of conditions that may occur during the term of the loan.

Vulnerable (Special Mention) – 5

Loans which possess some credit deficiency or potential weakness which deserves close attention, but which do not yet warrant substandard classification. Such loans pose unwarranted financial risk that, if not corrected, could weaken the loan and increase risk in the future. The key distinctions of a 5 (Special Mention) classification are that (1) it is indicative of an unwarranted level of risk, and (2) weaknesses are considered “potential”, versus “well-defined”, impairments to the primary source of loan repayment.

Substandard – 6

Loans that are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected. One or more of the following characteristics may be exhibited in loans classified Substandard:

· Loans which 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, the borrower continues to make interest payments.

· The lender 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 lender is seriously 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.

51

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Doubtful – 7

One or more of the following characteristics may be exhibited in loans classified Doubtful:

· 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.

Loss – 8

Loans are considered uncollectible and of such little value that continuing to carry them as assets on the institution’s financial statements is not feasible. Loans will be classified Loss when it is neither practical nor desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future.

For consumer loan classes and residential real estate loans, the Company evaluates credit quality primarily based upon the aging status of the loan, which was previously presented, and by payment activity.

The following table presents the recorded investment in consumer loans and residential real estate loans based on payment activity at the dates indicated (in thousands).

	December 31, 2014
Payment Category	Consumer and Credit Card		Residential Real Estate and Home Equity
Performing	$	37,387	$	128,836
Non-Performing		120		814
Total	$	37,507	$	129,650

	December 31, 2013
Payment Category	Consumer and Credit Card		Residential Real Estate and Home Equity
Performing	$	32,862	$	95,333
Non-Performing		—		912
Total	$	32,862	$	96,245

52

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Age Analysis of Past Due Loans

The following table presents past due loans aged as of December 31, 2014 (in thousands).

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	$	66	$	7	$	120	$	193	$	37,314	$	37,507	$	—
Commercial and Industrial		68		—		—		68		111,783		111,851		—
Commercial Real Estate		49		—		306		355		105,867		106,222		—
Residential Real Estate and Home Equity		220		30		642		892		128,758		129,650		480
Total	$	403	$	37	$	1,068	$	1,508	$	383,722	$	385,230	$	480

The following table presents past due loans aged as of December 31, 2013 (in thousands).

Category	30-59 Days Past Due		60-89 Days Past Due		90 Days or more Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 days and Accruing
Consumer and credit card	$	90	$	92	$	—	$	182	$	32,680	$	32,862	$	—
Commercial and industrial		407		—		1,001		1,408		120,676		122,084		—
Commercial real estate		49		—		682		731		103,961		104,692		—
Residential real estate and home equity		374		197		321		892		95,353		96,245		560
Total	$	920	$	289	$	2,004	$	3,213	$	352,670	$	355,883	$	560

53

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Troubled Debt Restructurings

Information regarding Troubled Debt Restructuring (“TDR”) loans for the year ended December 31, 2014 and 2013 is as follows (dollars in thousands):

	2014				2013
	Number of contracts		Post- modification outstanding recorded investment		Number of contracts		Post- modification outstanding recorded investment
Consumer and credit card		—	$	—		—	$	—
Commercial and industrial		—		—		4		1,081
Commercial real estate		—		—		8		3,905
Residential real estate and home equity		—		—		—		—
Total		—	$	—		12	$	4,986

There were no loans modified as troubled debt restructurings in 2014.

The following presents by class loans modified in a TDR during the years ended December 31, 2014 and 2013 that subsequently defaulted (i.e. 60 days or more past due following a modification) during the next twelve month periods (dollars in thousands).

	December 31, 2014				December 31, 2013
	Number of Contracts		Post-Modification Outstanding Recorded Investment		Number of Contracts		Post-Modification Outstanding Recorded Investment
Consumer and Credit Card		—	$	—		—	$	—
Commercial and Industrial		—		—		3		1,075
Commercial Real Estate		—		—		1		484
Residential Real Estate and Home Equity		—		—		—		—
Total		—	$	—		4	$	1,559

The post-modification outstanding recorded investment amounts at each year end balances are inclusive of all partial pay downs and charge-offs since the modification date. Loans modified in a TDR that were fully paid down, charged off, or foreclosed upon by period end are not reported.

A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company offers various types of concessions when modifying a loan; however, forgiveness of principal is rarely granted. Depending on the financial condition of the borrower, the purpose of the loan and the type of collateral supporting the loan structure; modifications can be either short-term (12 months of less) or long term (greater than one year). Commercial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor may be requested. Commercial mortgage and construction loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period.

54

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Land loans are also included in the class of commercial real estate loans. Land loans are typically structured as interest-only monthly payments with a balloon payment due at maturity. Land loans modified in a TDR typically involve extending the balloon payment by one to three years, changing the monthly payments from interest-only to principal and interest, while leaving the interest rate unchanged.

Loans modified in a TDR are typically already on non-accrual status and partial charge-offs have in some cases already been taken against the outstanding loan balance. As a result, loans modified in a TDR for the Company may have the financial effect of increasing the specific allowance associated with the loan. The allowance for impaired loans that have been modified in a TDR is measured based on the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent or on the present value of expected future cash flows discounted at the loan’s effective interest rate. Management exercises significant judgment in developing these estimates.

As mentioned above, an individual loan is placed on a non-accrual status if, in the judgment of management, it is unlikely that all principal and interest will be received according to the terms of the note. Loans on non-accrual may be eligible to be returned to an accruing status after six months of compliance with the modified terms. However, there are number of factors that could prevent a loan from returning to accruing status, even after remaining in compliance with loan terms for the aforementioned six month period, including deteriorating collateral, negative cash flow changes and inability to reduce debt to income ratios.

6. Premises and Equipment

Premises and equipment were as follows at the dates indicated (in thousands):

	December 31,
	2014			2013
Land	$	1,266		$	1,266
Buildings		13,287			13,277
Furniture and equipment		9,948			9,836
Subtotal		24,501			24,379
Accumulated depreciation		(15,115	)		(14,329	)
Total premises and equipment		9,386			10,050
Software, net of accumulated amortization		630			591
Total premises and equipment	$	10,016		$	10,641

The Company had $1.4 million in premises and equipment held for sale at December 31, 2013 associated with the sale of a branch that was completed March 21, 2014.

Depreciation expense totaled $1.1 million for the years ended December 31, 2014 and 2013.

The Company has entered into operating lease agreements for branch offices and equipment, which expire at various dates through 2023, and provide options for renewals. Rental expense on lease commitments for 2014 and 2013 amounted to $566,000 and $568,000, respectively.

55

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

The total future minimum lease commitments at December 31, 2014 under these leases are summarized as follows (in thousands).

2015	$	596
2016		587
2017		361
2018		231
2019		199
Thereafter		250
Total	$	2,224

7. Interest-Bearing Deposits

Interest-bearing deposits were as follows at the dates indicated (in thousands):

	December 31,
	2014		2013
Interest-bearing demand	$	77,534	$	68,382
Money market		147,667		123,237
Savings deposits		42,634		41,231
Time deposits
In denominations under $250,000		64,758		75,608
In denominations of $250,000 or more		9,577		8,779
Total	$	342,170	$	317,237

Scheduled maturities of time deposits were as follows (in thousands):

2015	$	48,431
2016		23,343
2017		2,154
2018		346
2019 and after		61
Total	$	74,335

At December 31, 2014 and 2013 deposits received from officers, directors and related affiliates were considered to be immaterial to the total amount of total deposits.

8. Borrowings

As a member of the FHLB of Cincinnati, the Bank has the ability to obtain borrowings based on its investment in FHLB stock and other qualified collateral. FHLB advances are collateralized by a blanket pledge of the Bank’s qualifying 1-4 family loan portfolio and all shares of FHLB stock. At December 31, 2014, total pledged loans was $141.8 million and investment in FHLB Stock was $3.2 million. Those amounts at December 31, 2013 were $124.9 million and $3.8 million respectively. The Bank had a $30.1 million line of credit with no outstanding balance at December 31, 2013 with the Federal Reserve Bank of Cleveland through its Discount Window. The Bank has pledged loans totaling $61.7 million at December 31, 2014.

56

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

The following is a summary of borrowings outstanding at year ending December 31, 2014 and 2013 (in thousands):

	2014		2013
Total Borrowings:
FHLB advances	$	11,808	$	4,838

In the fourth quarter of 2013, the Company refinanced $4.4 million of fixed rate FHLB advances with a contractual average interest rate of 4.61% and a weighted average remaining term to maturity of 1.4 years. The transaction was accomplished by extending the maturity date and rolling the net present value of the refinanced advances into the funding cost of the new advances which remain outstanding as of December 31, 2014. As a result of the restructure, the Company was required to pay a prepayment penalty of $268,000 to the FHLB. In accordance with ASC 470-50, Debt - Modification and Exchanges, the new advances were considered a minor modification. The prepayment penalty was deferred and will be recognized in interest expense over the life of the new advances.

The contractual amounts of FHLB borrowings mature as follows at December 31, 2014 (dollars in thousands).

			Weighted
Maturing	Amount		Average Rate
2014	$	—		—	%
2015		7,257		0.27	%
2016		1,530		0.84	%
2017		590		1.12	%
2018		2,034		1.79	%
2019 and after		397		5.44	%
	$	11,808		0.82	%

9. Retirement Plans

The Company provides a 401(k) savings plan (the “Plan”) for all eligible employees. To be eligible, an individual must complete six months of employment and be 20 or more years of age. Under provisions of the Plan, participants can contribute a certain percentage of their compensation to the Plan up to the maximum allowed by the IRS. The Company also matches a certain percentage of those contributions up to a maximum match of up to 3% of the participant’s compensation. The Company may also provide additional discretionary contributions, but did not do so in 2014 or 2013. Employee voluntary contributions are vested immediately and Company contributions are fully vested after three years. The 2014 and 2013 expenses related to the Plan were $176,000 and $173,000, respectively.

The Company maintains a deferred compensation plan for the benefit of certain officers. The plan is designed to provide post-retirement benefits to supplement other sources of retirement income such as social security and 401(k) benefits. The amount of each officer’s benefit will generally depend on their salary, and their length of employment. The Company accrues the cost of this deferred compensation plan during the working careers of the officers. Expense under this plan totaled $38,000 and $0 in 2014 and 2013, respectively. The total accrued liability under this plan was $928,000 and $1.2 million at December 31, 2014 and 2013, respectively. In addition to recognizing expense associated with the plan, the Company funds the vested amounts, $768,000 and $1.0 million, into separate accounts held in custody by the Company’s trust department at December 31, 2014 and 2013, respectively.

The Company has purchased insurance contracts on the lives of the participants in the supplemental post-retirement benefit plan and has named the Company as the beneficiary. While no direct connection exists between the deferred compensation plan and the life insurance contracts, it is management’s current intent that the earnings on the insurance contracts be used as a funding source for benefits payable under the plan.

57

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

10. Stock-Based Compensation

The 2014 Restricted Stock Plan (“2014 Plan”) was approved by shareholders in October 2014 authorizing the use of 350,000 shares of authorized but unissued common stock of DCB. The purpose of the 2014 Plan is to promote the growth and profitability of the Company and its affiliated companies; to attract and retain directors, key officers and employees of outstanding competence; to provide eligible directors, certain key officers and employees of the Company and its affiliated companies with an incentive to achieve corporate objectives; and to provide such directors, officers and employees with an equity interest in the Company and its affiliated companies. Awards granted under this plan generally vest ratably over a five year period.

Restricted stock awards are recorded as deferred compensation, a component of shareholders’ equity, at fair value at the date of the grant and amortized to compensation expense over the specified vesting periods.

The Company also has a long-term stock incentive compensation plan (the “2004 Plan”), under which certain employees were granted the right to purchase shares of the Company’s common stock at a predetermined price. The 2004 Plan, which is limited to 300,000 shares, expired in 2014 and no further awards will be granted from the 2004 Plan. Options granted under the 2004 Plan vest 20% per year over a five year period, and expire after ten years. There were no options granted in 2014. During the year ended December 31, 2013, options for 13,889 shares were granted at an exercise price of $5.40. At December 31, 2014, 58,450 shares were exercisable under the 2004 Plan.

The Company recorded $190,000 and $129,000 in compensation expense for its outstanding stock options for the years ended December 31, 2014 and 2013, respectively.

Stock option activity in the 2004 Plan for the year ended December 31, 2014 was as follows:

	Shares		Weighted Average Exercise Price
Outstanding at beginning of year		250,518	$	9.91
Exercised		17,073		3.81
Forfeited/cancelled		147,816		12.91
Outstanding at end of year		85,629	$	6.81
Options exercisable at year end		58,450	$	8.11

There were no options granted in 2014. The weighted-average fair value of stock options granted in 2013 was $2.45. In determining the fair value of the stock options granted in 2013, the Company utilized a Black-Scholes valuation model with a risk-free interest rate of 2.25%, an expected dividend yield of zero, an expected common stock price volatility of 30%, and an expected life of 10 years.

58

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

The following table summarizes the Company’s stock options at December 31, 2014:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Options Exercisable		Weighted Average Exercise Price
$3.50-$5.40		68,999	$	3.95		6.9		41,820	$	3.78
$5.41-$9.00		5,196	$	9.00		4.5		5,196	$	9.00
$9.01-$16.90		4,783	$	16.90		3.1		4,783	$	16.90
$16.01-$30.70		6,651	$	26.01		1.7		6,651	$	26.01

The total intrinsic value of options exercised during 2014 and 2013 was $57,000 and $7,000, respectively. At December 31, 2014, the aggregate intrinsic value of outstanding options was $211,000 and the aggregate intrinsic value of exercisable options was $138,000.

At December 31, 2014, unrecognized compensation expense to be recognized over the remaining vesting period of outstanding options was $95,000.

On November 25, 2014, the Company commenced a tender offer to exchange (the “Exchange Offer”) 190,104 options outstanding under the Company’s 2004 Plan, for shares of restricted stock to be granted under the Company’s 2014 Plan. The Exchange Offer was subject to the terms and conditions described in Schedule TO (“TO”) which was filed with the SEC on November 25, 2014.

The stock options subject to the TO were any or all options to purchase the Company’s common stock held by employees, executive officers and non-employee directors, whether vested or unvested, out-of-the-money or in-the-money, which had not expired or terminated prior to the expiration of the Exchange Offer on December 23, 2014.

The primary reason for making the Exchange Offer was to reduce the compensation expense we are required to recognize for the Company’s options which are accounted for under the liability accounting method, under which changes in the fair value of the options between the vesting date and expiration date are recognized in the Company’s financial statements. The shares of restricted stock offered in exchange for the eligible options are not subject to liability accounting and, accordingly, would allow the Company to better manage its compensation expense.

Additionally, the exercise prices of some of the outstanding eligible options are significantly higher than the market price of the Company’s common shares. The Company believes that these significantly “out of the money” options may be unlikely to be exercised in the near future and were therefore not providing the incentives intended for our employees, executive officers and non-employee directors. By making the Exchange Offer, the Company believes it was able to re-establish some of the intended incentive value of these options by realigning its compensation programs to more closely reflect the current market and economic conditions.

The Company established eight exchange ratios for eligible options depending on their exercise price, ranging from 0.029 shares of restricted stock per Option to 0.672 shares of restricted stock per option, as specifically set forth in the TO.

Thirty holders of eligible options tendered, and the Company accepted for cancellation, eligible options to purchase an aggregate of 113,873 common shares, representing approximately 64% of the total common shares underlying options eligible for exchange in the Exchange Offer. On December 23, 2014, a total of 41,445 shares of restricted stock were issued to holders of eligible options in exchange for the cancellation of such eligible options pursuant to the Offer to Exchange. The restricted stock granted under the Exchange Offer had a grant date fair value of $7.07 per share, and vest ratably over a five-year period.

59

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

The excess of the aggregate grant date fair value of the restricted stock of $293,000 over the fair value of the stock options canceled of $147,000 was recorded as deferred stock-based compensation, a component of shareholders’ equity, and is being amortized over the vesting period of the restricted stock. The Company did not record any compensation expense associated with restricted stock in 2014 and 2013.

11. Federal Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and franchise tax returns in Ohio. Income tax expense (benefit) for the years ended December 31, 2014 and 2013 included the following components (in thousands).

	2014			2013
Current	$	—		$	—
Deferred		384			(1,918	)
Valuation allowance		(384	)		1,620
Totals	$	-		$	(298	)

The difference between the financial statement tax provision and amounts computed by applying the statutory federal income tax rate to income before income taxes was as follows (in thousands):

	2014			2013
Income tax benefit computed at the statutory federal income tax rate	$	127		$	(1,098	)
Tax exempt income		(330	)		(1,002	)
Change in valuation allowance		(384	)		1,620
Other		587			(324	)
Totals	$	-		$	(298	)

60

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Year-end deferred tax assets and liabilities were comprised of the following (in thousands).

	2014			2013
Deferred tax assets
Allowance for loan losses	$	1,440		$	3,369
Depreciation		103			92
Deferred compensation		316			54
Alternative minimum tax carry forward		145			145
Other-than-temporary impairment losses		-			369
Expenses on foreclosed real estate		10			70
NOL carry forward		8,910			7,460
Other		284			151
Subtotal		11,208			11,710
Deferred tax liabilities
FHLB stock dividends		(389	)		(455	)
Unrealized (gain) loss on available-for-sale securities		(337	)		399
Other		(35	)		(87	)
Subtotal		(761	)		(143	)
Net deferred tax asset		10,447			11,567
Less: valuation allowance		(10,784	)		(11,168	)
Total	$	(337	)	$	399

At December 31, 2014, the Company had a $26 million net operating loss carry forward that begins to expire in 2030.

12. Commitments, Contingencies and Financial Instruments with Off-Balance Sheet Risk

Some financial instruments such as loan commitments, credit lines, letters of credit and overdraft protection are issued to meet customer financing needs. These financing arrangements to provide credit typically have predetermined expiration dates, but can be withdrawn if certain conditions are not met. The commitments may expire without ever having been drawn on by the customer; therefore the total commitment amount does not necessarily represent future cash requirements. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used for loans, including obtaining various forms of collateral, such as real estate or securities at exercise of the commitment or letter of credit.

The Bank grants retail, commercial and commercial real estate loans in central Ohio. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based upon management’s credit evaluation of each customer. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income producing commercial properties.

61

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

The contractual amount of financing instruments with off-balance sheet risk was as follows at year-end (in thousands).

	2014				2013
	Fixed rate		Variable rate		Fixed rate		Variable rate
Commitments to extend credit	$	2,290	$	8,300	$	6,568	$	2,129
Unused lines of credit and letters of credit	$	4,953	$	127,076	$	4,126	$	124,811

Commitments to make loans are generally made for periods of 30 days or less. Maturities for loans subject to these fixed-rate commitments range from up to 1 to 30 years. In the opinion of management, outstanding loan commitments equaled or exceeded prevalent market interest rates at December 31, 2014, such commitments were underwritten in accordance with normal loan underwriting policies, and all disbursements will be funded via normal cash flows from operations and existing excess liquidity.

Legal Proceedings

There is no pending material litigation, other than routine litigation incidental to the business of the Company and Bank. Further, there are no material legal proceedings in which any director, executive officer, principal shareholder or affiliate of the Company is a party or has a material interest, which is adverse to the Company or Bank. Finally, there is no litigation in which the Company or Bank is involved which is expected to have a material adverse impact on the financial position or results of operations of the Company or Bank.

13. Regulatory Capital

The Company is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Capital adequacy guidelines and, additionally for banks, prompt corrective-action regulations, involve quantitative measures of assets, liabilities and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet various capital requirements can initiate regulatory action.

The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and plans for capital restoration are required. The Bank met the well-capitalized requirements, as publicly defined, at December 31, 2014.

62

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Actual and required capital ratios are presented below at year-end (dollars in thousands).

	Actual					For capital adequacy purposes					To be well capitalized under Prompt Corrective Action Provisions (in 2013) and pursuant to the Consent Order and Written Agreement (2012)
	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2014:
Total capital to risk-weighted assets
Consolidated	$	50,656		13.88	%	$	29,197		8.0	%		N/A		N/A
Bank	$	49,602		13.56	%	$	29,264		8.0	%	$	36,580		10.0	%
Tier-1 (core) capital to risk-weighted assets
Consolidated	$	46,420		12.72	%	$	14,597		4.0	%		N/A		N/A
Bank	$	45,366		12.40	%	$	14,634		4.0	%	$	21,951		6.0	%
Tier-1 (core) capital to average assets
Consolidated	$	46,420		9.21	%	$	20,161		4.0	%		N/A		N/A
Bank	$	45,366		9.00	%	$	20,163		4.0	%	$	25,203		5.0	%
December 31, 2013:
Total capital to risk-weighted assets
Consolidated	$	50,644		13.82	%	$	29,321		8.0	%		N/A		N/A
Bank	$	49,473		13.50	%	$	29,321		8.0	%	$	36,651		10.0	%
Tier-1 (core) capital to risk-weighted assets
Consolidated	$	46,036		12.56	%	$	14,661		4.0	%		N/A		N/A
Bank	$	44,865		12.24	%	$	14,661		4.0	%	$	21,992		6.0	%
Tier-1 (core) capital to average assets
Consolidated	$	46,036		9.00	%	$	20,456		4.0	%		N/A		N/A
Bank	$	44,865		8.77	%	$	20,456		4.0	%	$	25,570		5.0	%

Banking regulations limit capital distributions by the Bank. Generally, capital distributions are limited to undistributed net income for the current and prior two years. At December 31, 2014, $372,000 was available for the declaration of dividends by the Bank.

63

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

14. Fair Value Measurements

The Company accounts for fair value measurements in accordance with FASB ASC 820, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure fair value:

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

The carrying value of certain financial assets and liabilities is impacted by the application of fair value measurements, either directly or indirectly.  In certain cases, an asset or liability is measured and reported at fair value on a recurring basis, such as available-for-sale investment securities.  In other cases, management must rely on estimates or judgments to determine if an asset or liability not measured at fair value warrants an impairment write-down or whether a valuation reserve should be established.  Given the inherent volatility, the use of fair value measurements may have a significant impact on the carrying value of assets or liabilities, or result in material changes to the financial statements, from period to period.

Fair value is defined as the price that would be received to sell an asset or transfer a liability between market participants at the balance sheet date. When possible, the Company looks to active and observable markets to price identical assets or liabilities. When identical assets and liabilities are not traded in active markets, the Company looks to observable market data for similar assets and liabilities. However, certain assets and liabilities are not traded in observable markets and the Company must use other valuation methods to develop a fair value. The fair value of impaired loans is based on the fair value of the underlying collateral, which is estimated through third party appraisals or internal estimates of collateral values.

The following methods, assumptions, and valuation techniques were used by the Company to measure different financial assets and liabilities at fair value and in estimating its fair value disclosures for financial instruments.

Cash and Cash Equivalents: The carrying amounts reported in the consolidated statements of financial condition for cash and cash equivalents is deemed to be fair value and are classified as Level 1 of the fair value hierarchy.

Available for Sale Investment Securities: Fair values for investment securities are determined by quoted market prices if available (Level 1). For securities where quoted prices are not available, fair values are estimated based on market prices of similar securities. For securities where quoted prices or market prices of similar securities are not available, fair values are estimated using matrix pricing, which is a mathematical technique widely used in the industry to value investment securities without relying exclusively on quoted prices for the specific investment securities but rather relying on the investment securities’ relationship to other benchmark quoted investment securities (Level 2). Any investment security not valued based upon the methods above is considered Level 3.

64

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

The Company utilizes information provided by a third-party investment securities portfolio manager in analyzing the investment securities portfolio in accordance with the fair value hierarchy of ASC 820. The portfolio manager’s evaluation of investment security portfolio pricing is performed using a combination of prices and data from other sources, along with internally developed matrix pricing models. The third-party’s month-end pricing process includes a series of quality assurance activities where prices are compared to recent market conditions, previous evaluation prices, and between the various pricing services. These processes produce a series of quality assurance reports on which price exceptions are identified, reviewed and where appropriate, securities are re-priced. In the event of a materially different price, the third party will report the variance and review the pricing methodology in detail. The results of the quality assurance process are incorporated into the selection of pricing providers by the third party.

Collateralized Debt Obligations: Estimated fair value for collateralized debt obligations is based on independent third-party evaluations including discounted cash flows and other market assumptions. The methods used to estimate the fair value of the securities do not necessarily represent an exit price and due to the significant judgment involved, these securities are classified Level 3.

Loans: For fixed rate loans and for variable rate loans with infrequent re-pricing or re-pricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life. Fair values for impaired loans are estimated using discounted cash flow analysis or underlying collateral values. For loans held on balance sheet, the discounted fair value is further reduced by the amount of reserves held against the loan portfolios. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price and due to the significant judgment involved in evaluating credit quality, loans are classified Level 3.

Federal Home Loan Bank Stock: The carrying amount presented in the consolidated statements of financial condition is deemed to approximate fair value.

Accrued Interest Receivable and Payable: The fair value for accrued interest approximates its carrying amounts due to the short duration before collection. The valuation is a Level 3 classification which is consistent with its underlying asset or liability.

Deposits: The fair values of deposits with no stated maturity, such as money market demand deposits, savings and NOW accounts have been analyzed by management and assigned estimated maturities and cash flows which are then discounted to derive a value. The fair value of fixed-rate certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. The Company classifies the estimated fair value of deposit liabilities as Level 2 in the fair value hierarchy.

Advances from the Federal Home Loan Bank: The fair value of these advances is estimated using the rates currently offered for similar advances of similar remaining maturities or, when available, quoted market prices.

Commitments to Extend Credit: For fixed-rate and adjustable-rate loan commitments, the fair value estimate considers the difference between current levels of interest rates and committed rates. At December 31, 2014 and December 31, 2013, the fair value of loan commitments was not material.

65

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Based on the foregoing methods and assumptions, the carrying value and fair value of the Company’s financial instruments are as follows (in thousands):

At December 31, 2014:

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	21,274	$	21,274	$	21,274	$	—	$	—
Securities available-for-sale		75,909		75,909		—		75,909		—
Loans (net of allowance)		381,208		381,224		—		—		381,224
FHLB stock		3,250		3,250		—		3,250		—
Accrued interest receivable		1,234		1,234		—		—		1,234
Financial liabilities
Noninterest-bearing deposits	$	111,022	$	111,022	$	—	$	111,022	$	—
Interest-bearing deposits		342,170		342,318		—		342,318		—
FHLB advances		11,808		11,808		—		11,808		—
Accrued interest payable		36		36		—		—		36

At December 31, 2013:

	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	25,357	$	25,357	$	25,357	$	—	$	—
Securities available-for-sale		79,948		79,948		—		78,972		976
Loans (net of allowance) (1)		357,130		348,295		—		—		348,295
FHLB stock		3,799		3,799		—		3,799		—
Accrued interest receivable		1,356		1,356		—		—		1,356
Financial liabilities
Noninterest-bearing deposits (2)	$	112,711	$	112,711	$	—	$	112,711	$	—
Interest-bearing deposits (2)		317,237		318,107		—		318,107		—
FHLB advances		4,838		4,838		—		4,838		—
Accrued interest payable		112		112		—		—		112

(1) Includes loans held for sale

(2) Includes deposits held for sale

66

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

The following table presents the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2014 and December 31, 2013 (in thousands):

			Fair Value Measurements Using
December 31, 2014	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Government and agency obligations	$	11,545	$	—	$	11,545	$	—
State and municipal obligations		21,657		—		21,657		—
Corporate bonds		4,987		—		4,987		—
Collateralized mortgage obligation		19,580		—		19,580		—
Mortgage-backed securities and other		18,140		—		18,140		—
Total	$	75,909	$	—	$	75,909	$	—

			Fair Value Measurements Using
December 31, 2013	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Government and agency obligations	$	13,302	$	—	$	13,302	$	—
State and municipal obligations		20,450		—		20,450		—
Corporate bonds		6,168		—		6,168		—
Collateralized debt obligation		976		—		—		976
Collateralized mortgage obligation		15,045		—		15,045		—
Mortgage-backed securities and other		24,007		—		24,007		—
Total	$	79,948	$	—	$	78,972	$	976

The table below presents a roll-forward of the balance sheet amounts for the year ended December 31, 2014 for the collateralized debt obligation measured on a recurring basis and classified as Level 3. The classification of an item as Level 3 is based on the significance of the unobservable inputs to the overall fair value measurement.

Level 3 Fair Value Measurements Year ended December 31, 2014
Balance, beginning of year	$	976
Sales		(1,775	)
Total gains (losses):
Included in earnings		(141	)
Included in other comprehensive income		940
Balance, end of year	$	—

67

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

The following is a description of the valuation methodologies used for instruments measured at fair value on a non-recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Securities

Collateralized debt obligations were classified as available for sale at December 31, 2013. The Company recognized other-than-temporary impairment on certain of the securities as of December 31, 2013, based upon a Level 3 estimate of fair value, including a discounted cash flows calculation and a fair value estimate from an independent evaluation of the securities.

Impaired loans

At December 31, 2014 and 2013, impaired loans consisted primarily of loans secured by nonresidential and commercial real estate. Management has determined fair value measurements on impaired loans primarily through evaluations of appraisals performed.

Real Estate Owned

Real estate acquired through, or in lieu of, loan foreclosure is held for sale and initially recorded at fair value (based on current appraised value) at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell. Management has determined fair value measurements on real estate owned primarily through evaluations of appraisals performed.

The following table presents the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2014 and 2013 (in thousands).

December 31, 2014			Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	12,173	$	—	$	—	$	12,173
Real estate owned		1,111		—		—		1,111

December 31, 2013			Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	22,881		—		—	$	22,881
Real estate owned		1,219		—		—		1,219

68

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

15. Parent Company Financial Information

Condensed financial information of DCB Financial Corp for the years ended December 31 is as follows:

Condensed Balance Sheets

	2014		2013
Assets
Cash	$	948	$	948
Investment in subsidiaries		46,283		44,336
Total assets	$	47,231	$	45,284
Liabilities
Other liabilities	$	20	$	20
Shareholders’ Equity		47,211		45,264
Total liabilities and shareholders’ equity	$	47,231	$	45,284

Condensed Statements of Operations

	2014		2013
Equity in undistributed income (loss) of subsidiaries	$	372		(2,805	)
Other		—		—
Total income (loss)		372		(2,805	)
Operating expenses		—		(126	)
Federal income tax		—		—
Net income (loss)	$	372	$	(2,931	)

69

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

Condensed Statements of Cash Flows
	2014			2013
Cash flows from operating activities
Net income (loss)	$	372		$	(2,931	)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Equity in undistributed net income (loss) from subsidiaries		(372	)		2,805
Net change in other assets and liabilities		—			(4,171	)
Net cash used in operating activities		—			(4,297	)
Cash flows from investing activities
Investments in affiliates		—			5
Net cash provided by investing activities		—			5
Cash flows from financing activities
Investment in Subsidiary		—			(8,092	)
Net cash used in financing activities		—			(8,092	)
Net change in cash		—			(12,382	)
Cash at beginning of year		948			13,332
Cash at end of year	$	948		$	948

16. Details of Operating Expenses

The following table details the composition of occupancy and equipment expenses for the years ended December 31, 2014 and 2013.

(In thousands)	2014		2013
Bank occupancy expense	$	1,876	$	1,590
Equipment lease		83		342
Equipment depreciation		233		303
Software maintenance		961		824
Other		39		10
Total	$	3,192	$	3,069

The following table details the composition of other operating expenses for the years ended December 31, 2014 and 2013.

(In thousands)	2014		2013
ATM and debit cards	$	690	$	772
Telephone		269		320
Loan		344		482
Real estate taxes		325		281
OREO expenses		26		22
Other operating		1,169		1,065
Total	$	2,823	$	2,942

70

DCB Financial Corp and Subsidiaries

Notes To Consolidated Financial Statements

Years ended December 31, 2014 and 2013

17. Quarterly Financial Data (Unaudited)

The following tables summarize the Company’s quarterly results for the years ended December 31, 2014 and 2013.

(Dollars in thousands, except share and per share data)	2014
	Fourth		Third		Second		First
Interest income	$	4,536	$	4,278	$	4,262	$	4,304
Interest expense		291		306		299		316
Net interest income		4,245		3,972		3,963		3,988
Provision for loan losses		150		—		—		—
Net interest income after provision for loan losses		4,095		3,972		3,963		3,988
Other non-interest income		1,132		1,140		996		1,192
Other non-interest expense		5,059		5,062		4,922		5,063
Income before income tax expense		168		50		37		117
Income taxes		—		—		—		—
Net income	$	168	$	50	$	37	$	117
Stock and related per share data
Basic and diluted earnings per common share	$	0.02	$	0.01	$	0.01	$	0.02
Basic weighted average common shares outstanding		7,196,404		7,192,350		7,192,350		7,192,350
Diluted weighted average common shares outstanding		7,232,961		7,249,194		7,250,702		7,244,716

	2013
	Fourth			Third			Second			First
Interest income	$	4,372		$	4,316		$	4,245		$	4,146
Interest expense		369			425			494			530
Net interest income		4,003			3,891			3,751			3,616
Provision for loan losses		3,307			—			(240	)		(650	)
Net interest income after provision for loan losses		696			3,891			3,991			4,266
Other non-interest income		1,116			1,192			1,351			1,308
Other non-interest expense		4,914			5,230			5,440			5,456
(Loss) income before income tax benefit		(3,102	)		(147	)		(98	)		118
Income tax benefit		—			(20	)		(254	)		(24	)
Net (loss) income	$	(3,102	)	$	(127	)	$	156		$	142
Stock and related per share data
Basic and diluted (loss) earnings per common share	$	(0.43	)	$	(0.02	)	$	0.02		$	0.02
Basic weighted average common shares outstanding		7,192,350			7,192,350			7,192,350			7,192,350
Diluted weighted average common shares outstanding		7,192,350			7,192,350			7,227,901			7,223,144

The sum of the quarterly earnings per share amounts may not equal the total for the year due to the effects of rounding.

71

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of December 31, 2014, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2014.

There was no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s fiscal quarter ended December 31, 2014, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and Rule 15d-15(f) under the Securities Exchange Act of 1934. The Company’s management, including the Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2014.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting at December 31, 2014, as required by Section 404 of the Sarbanes Oxley Act of 2002. Management’s assessment is based on criteria established in the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013) and was designed to provide reasonable assurance that the Company maintained effective internal control over financial reporting as of December 31, 2014. Based on this assessment, management determined that the Company maintained effective internal control over financial reporting as of December 31, 2014.

Item 9B. Other Information

None

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item is set forth in our Proxy Statement to Shareholders in connection with our 2015 Annual Meeting (the “2015 Proxy Statement”), under the headings “Proposal 1 — Election of Directors and Information with Respect to Directors and Officers,” “Board of Directors and Selected Committees,” “Corporate Governance,” and “Section 16(a) Beneficial Ownership Reporting Compliance.” Such information is incorporated herein by reference.

72

Our Board of Directors has adopted a Code of Ethics and Business Conduct that applies to all of its directors, officers, and employees, including its principal executive, principal financial, and principal accounting officers. A copy of the code of ethics will be provided, at no cost, upon written request to the attention of Mr. J. Daniel Mohr, Executive Vice President and Chief Financial Officer, at our main office, 110 Riverbend Avenue Lewis Center, Ohio 43035. In addition, a copy of the Code of Ethics and Business Conduct is posted on our website at http://www.dcbfinancialcorp.com. In the event we make any amendment to, or grant any waiver of, a provision of the Code of Ethics and Business Conduct that applies to the principal executive officer, a principal financial officer, principal accounting officer, or controller, or persons performing similar functions that require disclosure under applicable SEC rules, we intend to disclose such amendment or waiver, the reasons for it, and the nature of any waiver, the name of the person to whom it was granted, and the date, on our internet website.

Item 11. Executive Compensation

The information required by this item is set forth in our 2015 Proxy Statement under the headings “Executive Compensation and Other Information” and “Board of Directors and Selected Committees.” Such information is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information about beneficial ownership of our common shares required by this item is set forth in our 2015 Proxy Statement under the heading “Security Ownership of Certain Beneficial Owners and Management.” Such information is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions and Director Independence

Information required by this item is set forth in our 2015 Proxy Statement under the headings “Certain Relationships and Related Transactions” and “Board of Directors and Selected Committees”, “Selection of Auditors” and “Principal Accounting Firm Fees.” Such information is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

Information required by this item is set forth in our 2015 Proxy Statement under the heading "Information Concerning Independent Registered Public Accountants.” Such information is incorporated herein by reference.

73

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) The following documents are filed as part of this report:

(1) The report of independent registered public accounting firm and consolidated financial statements appearing in Item 8.

(2) None.

(3) The exhibits required by this item and item (b) are listed below under the heading “Exhibit Index.”

(b) The exhibits required by item (a)(3) and this item are listed below under the heading “Exhibit Index.”

(c) None.

Exhibit Index

Exhibit No.	Exhibit Description
2.1	Branch Purchase and Assumption Agreement by and between The Delaware County Bank & Trust Company and Merchants National Bank dated January 10, 2014 (incorporated by reference to Registrant’s Form 8-K filed on January 10, 2014, Exhibit 2.1 (File No.000-22387))
3.1	Amended and Restated Articles of Incorporation of DCB Financial Corp (incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, Exhibit 3.1 (File No.000-22387))
3.2	Amended and Restated Code of Regulations of DCB Financial Corp (incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, Exhibit 3.2 (File No. 000-22387))
4.1	Agreement to furnish instruments and agreements defining rights of holders of long-term debt. (incorporated by reference to Registrant’s Annual Report on Form 10-K/A for the year ended December 31, 2011, Exhibit 4.1 (File No. 000-22387))
10.1*	Employment agreement with Ronald J. Seiffert (incorporated by reference to Registrant’s Current Report on Form 8-K filed on August 15, 2014, Exhibit 4.1 (File No. 000-22387))
10.2*	Employment agreement with Daniel J. Mohr (incorporated by reference to Registrant’s Current Report on Form 8-K filed on August 15, 2014, Exhibit 4.1 (File No. 000-22387))
10.3*	DCB Financial Corp 2004 Long-Term Stock Incentive Plan (incorporated by reference to Registrant’s Annual Report on Form 10-K/A for the year ended December 31, 2011, Exhibit 4.1 (File No. 000-22387))
10.4*	DCB Financial Corp 2014 Restricted Stock Plan (incorporated by reference to the Registrant’s Proxy Statement for a Special Meeting of Shareholders held October 30, 2014, filed on September 18, 2014))
10.5*	DCB Financial Corp 2014 Restricted Stock Plan Form of Restricted Stock Award Notice (incorporated by reference to Registrant’s Current Report on Form 8-K filed on November 4, 2014, Exhibit 10.1 (File No. 000-22387))
10.6*	Special Incentive Agreement with Ronald J. Seiffert (incorporated by reference to Registrant’s Annual Report on Form 10-K/A for the year ended December 31, 2011, Exhibit 4.1 (File No. 000-22387))
10.7*	Plan for Payment of Fees in DCB Financial Corp Common Stock (incorporated by reference to Registrant’s Annual Report on Form 10-K/A for the year ended December 31, 2011, Exhibit 4.1 (File No. 000-22387))

74

10.8*	The Delaware County Bank & Trust Company Executive Deferred Compensation Plan, with amendments (incorporated by reference to Registrant’s Annual Report on Form 10-K/A for the year ended December 31, 2011, Exhibit 4.1 (File No. 000-22387))
10.9*	Form of Change of Control Agreement, dated August 11, 2014 by and between the Bank, the Company and Charles O. Moore, David R. Archibald, Daniel M. Roberts, Roger A. Lossing, and Barbara S. Walters (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on August 15, 2014 (File No. 000-22387))
21**	Subsidiaries of DCB Financial Corp
23**	Consent of Plante & Moran PLLC
31.1**	Rule 13a-14 (a) Certifications
31.2**	Rule 13a-14 (a) Certifications
32.1**	Section 1350 Certifications
32.2**	Section 1350 Certifications
101**	The following materials from DCB Financial Corp’s Annual Report on Form 10-K for the year ended December 31, 2014 formatted in Extensible Business Reporting Language (“XBRL”): (i) Consolidated Statements of Financial Condition; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Income (Loss); (iv) Consolidated Statements of Shareholders’ Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to the Consolidated Financial Statements.

*Compensatory agreement or arrangement.

**Filed herewith.

75

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:  March 25, 2015	DCB FINANCIAL CORP
By: /s/ RONALD J. SEIFFERT	President and Chief Executive Officer
Ronald J. Seiffert	(Principal Executive Officer)
By: /s/ J. DANIEL MOHR	Executive Vice President and Chief Financial
J. Daniel Mohr	Officer (Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant on March 25, 2015 and in the capacities indicated.

Signatures	Title
/s/ RONALD J. SEIFFERT	President and Chief Executive Officer
Ronald J. Seiffert	(Principal Executive Officer), Director
/s/ J. DANIEL MOHR	Executive Vice President and Chief Financial
J. Daniel Mohr	Officer (Principal Financial and Accounting Officer)
/s/ VICKI J. LEWIS	Director, Chairman of the Board
Vicki J. Lewis
/s/ EDWARD A. POWERS	Director
Edward A. Powers
/s/ ADAM STEVENSON	Director
Adam Stevenson
/s/ DONALD J. WOLF	Director
Donald J. Wolf
/s/ GERALD L. KREMER, MD	Director
Gerald L. Kremer
/s/ MARK H. SHIPPS	Director
Mark H. Shipps
/s/ BART E. JOHNSON	Director
Bart E. Johnson
/s/ MICHAEL A. PRIEST	Director
Michael A. Priest
/s/ TOMISLAV MITEVSKI	Director
Tomislav Mitevski
/s/ JEROME HARMEYER	Director
Jerome Harmeyer

76

EX-21

EXHIBIT 21

SUBSIDIARIES OF DCB FINANCIAL CORP

1. The Delaware County Bank and Trust Company
Jurisdiction of incorporation: Ohio
DCB Financial Corp owns 100%

2. DCB Title Services, LLC
Jurisdiction of organization: Ohio
DCB Financial Corp owns 100%

3. DCB Insurance Services, LLC
Jurisdiction of organization: Ohio
DCB Financial Corp owns 100%

4. DataTasx LLC
Jurisdiction of organization: Ohio
DCB Financial Corp owns 100%

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated March 25, 2015, accompanying the consolidated financial statements incorporated by reference in the Annual Report of DCB Financial Corp (the Company) on Form 10-K for the year ended December 31, 2014. We hereby consent to the incorporation by reference of said report in the Registration Statements of DCB Financial Corp on Form S-3, filed with the Securities and Exchange Commission (the Commission) on March 30, 1999, the Company’s Form S-8, filed with the Commission on November 17, 1999, the Company’s Form S-8, filed with the Commission on May 9, 2002, the Company’s Form S-8, filed with the Commission on June 18, 2004, and the Company’s Form S-8, filed with the Commission on November 7, 2014.

/s/ Plante & Moran PLLC

Columbus, Ohio

March 25, 2015

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Ronald J. Seiffert, certify that:

1. I have reviewed this annual report on Form 10-K 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(s) 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(s) 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:	March 25, 2015	/s/ RONALD J. SEIFFERT
		Ronald J. Seiffert
		Title:  President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, J. Daniel Mohr, certify that:

1. I have reviewed this annual report on Form 10-K 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(s) 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(s) 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:	March 25, 2015	/s/ J. DANIEL MOHR
		J. Daniel Mohr
		Title: Executive Vice President and
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ENACTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of DCB Financial Corp (the “Company”) on Form 10-K for the period ending December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ronald J. Seiffert, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ RONALD J. SEIFFERT  

Ronald J. Seiffert

President and Chief Executive Officer

March 25, 2015

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ENACTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of DCB Financial Corp (the “Company”) on Form 10-K for the period ending December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Daniel Mohr, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ J. DANIEL MOHR

J. Daniel Mohr

Executive Vice President and Chief Financial Officer

March 25, 2015

XML

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping [Table Text Block]

Based on the foregoing methods and assumptions, the carrying value and fair value of the Company’s financial instruments are as follows (in thousands):

At December 31, 2014:

	Carrying
	Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	21,274	$	21,274	$	21,274	$	—	$	—
Securities available-for-sale		75,909		75,909		—		75,909		—
Loans (net of allowance)		381,208		381,224		—		—		381,224
FHLB stock		3,250		3,250		—		3,250		—
Accrued interest receivable		1,234		1,234		—		—		1,234
Financial liabilities
Noninterest-bearing deposits	$	111,022	$	111,022	$	—	$	111,022	$	—
Interest-bearing deposits		342,170		342,318		—		342,318		—
FHLB advances		11,808		11,808		—		11,808		—
Accrued interest payable		36		36		—		—		36

At December 31, 2013: 

	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	25,357	$	25,357	$	25,357	$	—	$	—
Securities available-for-sale		79,948		79,948		—		78,972		976
Loans (net of allowance) (1)		357,130		348,295		—		—		348,295
FHLB stock		3,799		3,799		—		3,799		—
Accrued interest receivable		1,356		1,356		—		—		1,356
Financial liabilities
Noninterest-bearing deposits (2)	$	112,711	$	112,711	$	—	$	112,711	$	—
Interest-bearing deposits (2)		317,237		318,107		—		318,107		—
FHLB advances		4,838		4,838		—		4,838		—
Accrued interest payable		112		112		—		—		112

(1) Includes loans held for sale

(2) Includes deposits held for sale

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following table presents the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2014 and December 31, 2013 (in thousands):

			Fair Value Measurements Using
			Quoted Prices in
			Active Markets for		Significant Other		Significant
			Identical Assets		Observable Inputs		Unobservable Inputs
December 31, 2014	Fair Value		(Level 1)		(Level 2)		(Level 3)
U.S. Government and agency obligations	$	11,545	$	—	$	11,545	$	—
State and municipal obligations		21,657		—		21,657		—
Corporate bonds		4,987		—		4,987		—
Collateralized mortgage obligation		19,580		—		19,580		—
Mortgage-backed securities and other		18,140		—		18,140		—
Total	$	75,909	$	—	$	75,909	$	—

			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
December 31, 2013	Fair Value		(Level 1)		(Level 2)		(Level 3)
U.S. Government and agency obligations	$	13,302	$	—	$	13,302	$	—
State and municipal obligations		20,450		—		20,450		—
Corporate bonds		6,168		—		6,168		—
Collateralized debt obligation		976		—		—		976
Collateralized mortgage obligation		15,045		—		15,045		—
Mortgage-backed securities and other		24,007		—		24,007		—
Total	$	79,948	$	—	$	78,972	$	976

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The table below presents a roll-forward of the balance sheet amounts for the year ended December 31, 2014 for the collateralized debt obligation measured on a recurring basis and classified as Level 3. The classification of an item as Level 3 is based on the significance of the unobservable inputs to the overall fair value measurement.

Level 3 Fair Value Measurements
Year ended December 31, 2014
Balance, beginning of year	$	976
Sales		(1,775)
Total gains (losses):
Included in earnings		(141)
Included in other comprehensive income		940
Balance, end of year	$	—

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

The following table presents the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2014 and 2013 (in thousands).

December 31, 2014			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	Fair		Identical Assets		Observable Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	12,173	$	—	$	—	$	12,173
Real estate owned		1,111		—		—		1,111

December 31, 2013			Fair Value Measurements Using
				Quoted Prices in				Significant
				Active Markets for		Significant Other		Unobservable
	Fair			Identical Assets		Observable Inputs		Inputs
	Value			(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	22,881			—		—	$	22,881
Real estate owned		1,219			—		—		1,219

XML

Credit Quality (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Allowance for loan losses:
Beginning balance:	$ 6,724	$ 6,881
Chargeoffs	(2,865)	(1,741)
Recoveries	324	1,132
Transfer to held for sale	(97)	(1,965)
Provision	150	2,417
Ending balance:	4,236	6,724
Allowance on loans:
Individually evaluated for impairment	1,298	4,166
Collectively evaluated for impairment	2,938	2,558
Ending balance:	4,236	6,724
Loans:
Individually evaluated for impairment	12,173	22,881
Collectively evaluated for impairment	373,057	333,002
Ending balance:	385,230	355,883
Consumer and Credit Card [Member]
Allowance for loan losses:
Beginning balance:	301	365
Chargeoffs	(200)	(286)
Recoveries	113	219
Transfer to held for sale	0	0
Provision	(24)	3
Ending balance:	190	301
Allowance on loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	190	301
Ending balance:	190	301
Loans:
Individually evaluated for impairment	455	0
Collectively evaluated for impairment	37,052	32,862
Ending balance:	37,507	32,862
Commercial and Industrial [Member]
Allowance for loan losses:
Beginning balance:	3,231	1,620
Chargeoffs	(1,410)	(86)
Recoveries	42	823
Transfer to held for sale	0	0
Provision	(731)	874
Ending balance:	1,132	3,231
Allowance on loans:
Individually evaluated for impairment	256	2,304
Collectively evaluated for impairment	876	927
Ending balance:	1,132	3,231
Loans:
Individually evaluated for impairment	2,028	7,221
Collectively evaluated for impairment	109,823	114,863
Ending balance:	111,851	122,084
Commercial Real Estate [Member]
Allowance for loan losses:
Beginning balance:	2,973	4,692
Chargeoffs	(1,086)	(1,038)
Recoveries	131	38
Transfer to held for sale	(97)	(1,965)
Provision	455	1,246
Ending balance:	2,376	2,973
Allowance on loans:
Individually evaluated for impairment	1,042	1,862
Collectively evaluated for impairment	1,334	1,111
Ending balance:	2,376	2,973
Loans:
Individually evaluated for impairment	9,690	15,660
Collectively evaluated for impairment	96,532	89,032
Ending balance:	106,222	104,692
Residential Real Estate and Home Equity [Member]
Allowance for loan losses:
Beginning balance:	219	204
Chargeoffs	(169)	(331)
Recoveries	38	52
Transfer to held for sale	0	0
Provision	180	294
Ending balance:	268	219
Allowance on loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	268	219
Ending balance:	268	219
Loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	129,650	96,245
Ending balance:	129,650	96,245
Unallocated Financing Receivables [Member]
Allowance for loan losses:
Beginning balance:	0
Chargeoffs	0
Recoveries	0
Transfer to held for sale	0
Provision	270
Ending balance:	270
Allowance on loans:
Individually evaluated for impairment	0
Collectively evaluated for impairment	270
Ending balance:	270
Loans:
Individually evaluated for impairment	0
Collectively evaluated for impairment	0
Ending balance:	$ 0

XML

Securities (Details 1) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Unrealized loss
Number of securities	37	65
Fair Value	$ 23,013	$ 36,148
Unrealized Losses	284	2,244
Collateralized Mortgage Obligations [Member]
Unrealized loss
Number of securities	13	8
Fair Value	9,298	6,200
Unrealized Losses	106	308
Collateralized debt obligations [Member]
Unrealized loss
Number of securities	0	1
Fair Value	0	976
Unrealized Losses	0	940
Less than 12 months [Member]
Unrealized loss
Number of securities	21	59
Fair Value	11,339	32,278
Unrealized Losses	49	1,139
Less than 12 months [Member] | Collateralized Mortgage Obligations [Member]
Unrealized loss
Number of securities	9	7
Fair Value	5,649	5,011
Unrealized Losses	21	208
Less than 12 months [Member] | Collateralized debt obligations [Member]
Unrealized loss
Number of securities	0	0
Fair Value	0	0
Unrealized Losses	0	0
12 months or longer [Member]
Unrealized loss
Number of securities	16	6
Fair value	11,674	3,870
Unrealized Losses	236	1,105
12 months or longer [Member] | Collateralized Mortgage Obligations [Member]
Unrealized loss
Number of securities	4	1
Fair value	3,649	1,189
Unrealized Losses	85	100
12 months or longer [Member] | Collateralized debt obligations [Member]
Unrealized loss
Number of securities	0	1
Fair value	0	976
Unrealized Losses	0	940
U.S. Government and agency obligations [Member]
Unrealized loss
Number of securities	7	10
Fair Value	6,934	10,680
Unrealized Losses	88	428
U.S. Government and agency obligations [Member] | Less than 12 months [Member]
Unrealized loss
Number of securities	3	10
Fair Value	2,488	10,680
Unrealized Losses	9	428
U.S. Government and agency obligations [Member] | 12 months or longer [Member]
Unrealized loss
Number of securities	4	0
Fair value	4,446	0
Unrealized Losses	79	0
Corporate bonds [Member]
Unrealized loss
Number of securities	5	7
Fair Value	2,167	3,024
Unrealized Losses	21	61
Corporate bonds [Member] | Less than 12 months [Member]
Unrealized loss
Number of securities	1	5
Fair Value	503	2,141
Unrealized Losses	1	38
Corporate bonds [Member] | 12 months or longer [Member]
Unrealized loss
Number of securities	4	2
Fair value	1,664	883
Unrealized Losses	21	23
State and municipal obligations [Member]
Unrealized loss
Number of securities	12	34
Fair Value	4,614	11,834
Unrealized Losses	69	484
State and municipal obligations [Member] | Less than 12 months [Member]
Unrealized loss
Number of securities	8	32
Fair Value	2,699	11,012
Unrealized Losses	18	442
State and municipal obligations [Member] | 12 months or longer [Member]
Unrealized loss
Number of securities	4	2
Fair value	1,915	822
Unrealized Losses	51	42
Mortgage-backed securities and other [Member]
Unrealized loss
Number of securities	0	5
Fair Value	0	3,434
Unrealized Losses	0	23
Mortgage-backed securities and other [Member] | Less than 12 months [Member]
Unrealized loss
Number of securities	0	5
Fair Value	0	3,434
Unrealized Losses	0	23
Mortgage-backed securities and other [Member] | 12 months or longer [Member]
Unrealized loss
Number of securities	0	0
Fair value	0	0
Unrealized Losses	$ 0	$ 0

XML

Retirement Plans (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Period for which individual completed employment	6 months
Eligibility of individual, age basis	20 or more years
Maximum contribution of Corporation	3.00%
Contribution plan vesting period	3 years
Expenses related retirement plan	$ 176,000	$ 173,000
Total expenses	38,000	0
Total accrued liability	928,000	1,200,000
Outstanding liability	$ 768,000	$ 1,000,000

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Credit Quality (Details 1) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Financing Receivable, Impaired [Line Items]
Recorded Investment	$ 12,173	$ 22,881
Unpaid Principal Balance	12,250	26,447
Related Allowance	1,298	4,166
Average Recorded Investment	16,539	25,832
Interest Income Recognized	778	1,186
Consumer and Credit Card [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	455
Unpaid Principal Balance	455
Related Allowance	0
Average Recorded Investment	474
Interest Income Recognized	25
Commercial and industrial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	2,028	7,221
Unpaid Principal Balance	2,105	7,363
Related Allowance	256	2,304
Average Recorded Investment	3,303	5,767
Interest Income Recognized	88	263
Commercial real estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	9,690	15,660
Unpaid Principal Balance	9,690	19,084
Related Allowance	1,042	1,862
Average Recorded Investment	12,762	20,065
Interest Income Recognized	665	923
With no related allowance recorded [Member] | Consumer and Credit Card [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	455
Unpaid Principal Balance	455
Related Allowance	0
Average Recorded Investment	474
Interest Income Recognized	25
With no related allowance recorded [Member] | Commercial and industrial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	1,288	1,530
Unpaid Principal Balance	1,288	1,530
Related Allowance	0	0
Average Recorded Investment	1,531	3,081
Interest Income Recognized	45	67
With no related allowance recorded [Member] | Commercial real estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	1,088	9,892
Unpaid Principal Balance	1,088	11,788
Related Allowance	0	0
Average Recorded Investment	6,714	10,005
Interest Income Recognized	70	615
With allowance recorded [Member] | Commercial and industrial [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	740	5,691
Unpaid Principal Balance	817	5,833
Related Allowance	256	2,304
Average Recorded Investment	1,772	2,686
Interest Income Recognized	43	196
With allowance recorded [Member] | Commercial real estate [Member]
Financing Receivable, Impaired [Line Items]
Recorded Investment	8,602	5,768
Unpaid Principal Balance	8,602	7,296
Related Allowance	1,042	1,862
Average Recorded Investment	6,048	10,060
Interest Income Recognized	$ 595	$ 308

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Commitments, Contingencies and Financial Instruments with Off-Balance Sheet Risk (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Commitments to Extend Credit [Member]
Contractual amount of financing instruments with off-balance sheet risk
Fixed rate	$ 2,290	$ 6,568
Variable Rate	8,300	2,129
Unused lines of credit and letters of credit [Member]
Contractual amount of financing instruments with off-balance sheet risk
Fixed rate	4,953	4,126
Variable Rate	$ 127,076	$ 124,811

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Sale of Branch and Loans Held for Sale (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Mar. 31, 2014	Dec. 31, 2012
Long Lived Assets Held-for-sale [Line Items]
Loans and Leases Receivable, Allowance, Ending Balance	$ 4,236,000	$ 6,724,000		$ 6,881,000
Provision for Loan and Lease Losses	150,000	2,417,000
Deposits Liabilities			19,400,000
Loans Purchase			4,800,000
Number of Loans Reclassified To Held For Sale		54
Loans and Leases Receivable, Net of Deferred Income, Total	385,230,000	355,883,000
Loans Receivable Held-for-sale, Amount		2,200,000
Mortgage Loans on Real Estate, Number of Loans	30
Mortgage Loans on Real Estate, Face Amount of Mortgages	1,900,000
Mortgage Loans on Real Estate, Carrying Amount of Mortgages	769,000
Mortgage Loans on Real Estate, Write-down or Reserve, Amount	$ 1,100,000
Mortgage Loans on Real Estate, Interest Rate	4.40%

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Interest-Bearing Deposits (Tables)

12 Months Ended

Dec. 31, 2014

Banking and Thrift [Abstract]

Schedule Of Interest Bearing Deposits [Table Text Block]

Interest-bearing deposits were as follows at the dates indicated (in thousands):

	December 31,
	2014		2013
Interest-bearing demand	$	77,534	$	68,382
Money market		147,667		123,237
Savings deposits		42,634		41,231
Time deposits
In denominations under $250,000		64,758		75,608
In denominations of $250,000 or more		9,577		8,779
Total	$	342,170	$	317,237

Schedule Of Time Deposits By Maturity [Table Text Block]

Scheduled maturities of time deposits were as follows (in thousands):

2015	$	48,431
2016		23,343
2017		2,154
2018		346
2019 and after		61
Total	$	74,335

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Commitments, Contingencies and Financial Instruments with Off-Balance Sheet Risk (Details Textual)	12 Months Ended
	Dec. 31, 2014
Fair Value, Off balance Sheet Risks, Disclosure Information [LineItems]
Period of loan Maximum	30 days
Maturity Of Loans Subject To Fixed Rate Commitments	1 to 30 years
Material litigation	0
Pending Litigation [Member]
Fair Value, Off balance Sheet Risks, Disclosure Information [LineItems]
Material litigation	0
Material legal proceedings [Member]
Fair Value, Off balance Sheet Risks, Disclosure Information [LineItems]
Material litigation	0

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Stock-Based Compensation (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Nov. 25, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted,Weighted Average Exercise Price		$ 2.45
Risk-Free Interest Rate		2.25%
Unvested equity-based awards based on their grant-date fair value	$ 190,000	$ 129,000
Expected life		10 years
Expected common stock price volatility		30.00%
Unrecognized compensation expense to be recognized over the remaining life of outstanding options	95,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercised, Intrinsic Value	57,000	7,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value	211,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value	138,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period	147,816
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period	41,445
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 7.07
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance	85,629	250,518
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate		0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value	293,000
Deferred Compensation Arrangement with Individual, Compensation Expense	$ 38,000	$ 0
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit	$ 0.029
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit	$ 0.672
Plan 2004 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee share option plan	300,000
Employee share option plan granted	20.00%
Granted,Weighted Average Exercise Price		$ 5.40
Shares Granted	58,450	13,889
Plan 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee share option plan	350,000
Exchange Offer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period	113,873
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	64.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance			190,104

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Details of Operating Expenses (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Details Of Operating Expenses [Line Items]
Bank occupancy expense	$ 1,876	$ 1,590
Equipment lease	83	342
Equipment depreciation	233	303
Software maintenance	961	824
Other	39	10
Total	$ 3,192	$ 3,069

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Credit Quality (Details 3) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Credit Quality Indicators
Loans	$ 385,444	$ 356,048
Commercial and Industrial [Member]
Credit Quality Indicators
Loans	111,851	122,084
Commercial and Industrial [Member] | Pass-1-4 [Member]
Credit Quality Indicators
Loans	106,590	111,266
Commercial and Industrial [Member] | Vulnerable-5 [Member]
Credit Quality Indicators
Loans	823	2,574
Commercial and Industrial [Member] | Substandard-6 [Member]
Credit Quality Indicators
Loans	4,438	8,244
Commercial and Industrial [Member] | Doubtful-7 [Member]
Credit Quality Indicators
Loans	0	0
Commercial and Industrial [Member] | Loss-8 [Member]
Credit Quality Indicators
Loans	0	0
Commercial Real Estate [Member]
Credit Quality Indicators
Loans	106,222	104,692
Commercial Real Estate [Member] | Pass-1-4 [Member]
Credit Quality Indicators
Loans	90,588	83,953
Commercial Real Estate [Member] | Vulnerable-5 [Member]
Credit Quality Indicators
Loans	6,146	4,785
Commercial Real Estate [Member] | Substandard-6 [Member]
Credit Quality Indicators
Loans	9,488	15,954
Commercial Real Estate [Member] | Doubtful-7 [Member]
Credit Quality Indicators
Loans	0	0
Commercial Real Estate [Member] | Loss-8 [Member]
Credit Quality Indicators
Loans	$ 0	$ 0

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Federal Income Taxes (Details 2) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Deferred tax assets
Allowance for loan losses	$ 1,440	$ 3,369
Depreciation	103	92
Deferred compensation	316	54
Alternative minimum tax carry forward	145	145
Other-than-temporary impairment losses	0	369
Expenses on foreclosed real estate	10	70
NOL carry forward	8,910	7,460
Other	284	151
Subtotal	11,208	11,710
Deferred tax liabilities
FHLB stock dividends	(389)	(455)
Unrealized (gain) loss on available-for-sale securities	(337)	399
Other	(35)	(87)
Subtotal	(761)	(143)
Net deferred tax asset	10,447	11,567
Less: valuation allowance	(10,784)	(11,168)
Total	$ (337)	$ 399

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Parent Company Financial Information (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Assets
Cash	$ 21,274	$ 25,357	$ 63,307
Total assets	515,382	502,419
Liabilities
Shareholders' Equity	47,211	45,264	48,389
Total liabilities and shareholders' equity	515,382	502,419
Parent Company [Member]
Assets
Cash	948	948	13,332
Investment in subsidiaries	46,283	44,336
Total assets	47,231	45,284
Liabilities
Other liabilities	20	20
Shareholders' Equity	47,211	45,264
Total liabilities and shareholders' equity	$ 47,231	$ 45,284

XML

Regulatory Capital (Details Textual) (USD $)	Dec. 31, 2014
Statutory Accounting Practices, Statutory Amount Available for Dividend Payments with Regulatory Approval	$ 372,000

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Parent Company Financial Information (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statements of Operations [Abstract]
Federal income tax	$ 0	$ 0	$ 0	$ 0	$ 0	$ (20)	$ (254)	$ (24)	$ 0	$ (298)
Net income (loss)	168	50	37	117	(3,102)	(127)	156	142	372	(2,931)
Parent Company [Member]
Consolidated Statements of Operations [Abstract]
Equity in undistributed income (loss) of subsidiaries									372	(2,805)
Other									0	0
Total income (loss)									372	(2,805)
Operating expenses									0	(126)
Federal income tax									0	0
Net income (loss)									$ 372	$ (2,931)

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Federal Income Taxes (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Investments, Owned, Federal Income Tax Note [Line Items]
Net operating loss carry forward	$ 26
Net operating loss carry forward, expiration starting period	2030

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Stock-Based Compensation (Details) (USD $)	12 Months Ended
	Dec. 31, 2014
Summary of stock option plan
Outstanding at beginning of year, Shares	250,518
Exercised, Shares	17,073
Forfeited/cancelled, Shares	147,816
Outstanding at end of year, Shares	85,629
Options exercisable at period end, Shares	58,450
Outstanding at beginning of year, Weighted Average Exercise Price	$ 9.91
Exercised, Weighted Average Exercise Price	$ 3.81
Forfeited/cancelled, Weighted Average Exercise Price	$ 12.91
Outstanding at end of period, Weighted Average Exercise Price	$ 6.81
Options exercisable at year end, Weighted Average Exercise Price	$ 8.11

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Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information [Text Block]

17. Quarterly Financial Data (Unaudited)

The following tables summarize the Company’s quarterly results for the years ended December 31, 2014 and 2013.

(Dollars in thousands, except share and per share data)	2014
	Fourth		Third		Second		First
Interest income	$	4,536	$	4,278	$	4,262	$	4,304
Interest expense		291		306		299		316
Net interest income		4,245		3,972		3,963		3,988
Provision for loan losses		150		—		—		—
Net interest income after provision for loan losses		4,095		3,972		3,963		3,988
Other non-interest income		1,132		1,140		996		1,192
Other non-interest expense		5,059		5,062		4,922		5,063
Income before income tax expense		168		50		37		117
Income taxes		—		—		—		—
Net income	$	168	$	50	$	37	$	117
Stock and related per share data
Basic and diluted earnings per common share	$	0.02	$	0.01	$	0.01	$	0.02
Basic weighted average common shares outstanding		7,196,404		7,192,350		7,192,350		7,192,350
Diluted weighted average common shares outstanding		7,232,961		7,249,194		7,250,702		7,244,716

	2013
	Fourth		Third		Second		First
Interest income	$	4,372	$	4,316	$	4,245	$	4,146
Interest expense		369		425		494		530
Net interest income		4,003		3,891		3,751		3,616
Provision for loan losses		3,307		—		(240)		(650)
Net interest income after provision for loan losses		696		3,891		3,991		4,266
Other non-interest income		1,116		1,192		1,351		1,308
Other non-interest expense		4,914		5,230		5,440		5,456
(Loss) income before income tax benefit		(3,102)		(147)		(98)		118
Income tax benefit		—		(20)		(254)		(24)
Net (loss) income	$	(3,102)	$	(127)	$	156	$	142
Stock and related per share data
Basic and diluted (loss) earnings per common share	$	(0.43)	$	(0.02)	$	0.02	$	0.02
Basic weighted average common shares outstanding		7,192,350		7,192,350		7,192,350		7,192,350
Diluted weighted average common shares outstanding		7,192,350		7,192,350		7,227,901		7,223,144

The sum of the quarterly earnings per share amounts may not equal the total for the year due to the effects of rounding.

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Securities (Details 3) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Schedule of Held-to-maturity Securities [Line Items]
Proceeds from investments sales	$ 7,140	$ 2,560
Gross gains on investment sales	242	135
Gross losses on investment sales	$ (141)	$ 0

XML

Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information [Table Text Block]

The following tables summarize the Company’s quarterly results for the years ended December 31, 2014 and 2013.

(Dollars in thousands, except share and per share data)	2014
	Fourth		Third		Second		First
Interest income	$	4,536	$	4,278	$	4,262	$	4,304
Interest expense		291		306		299		316
Net interest income		4,245		3,972		3,963		3,988
Provision for loan losses		150		—		—		—
Net interest income after provision for loan losses		4,095		3,972		3,963		3,988
Other non-interest income		1,132		1,140		996		1,192
Other non-interest expense		5,059		5,062		4,922		5,063
Income before income tax expense		168		50		37		117
Income taxes		—		—		—		—
Net income	$	168	$	50	$	37	$	117
Stock and related per share data
Basic and diluted earnings per common share	$	0.02	$	0.01	$	0.01	$	0.02
Basic weighted average common shares outstanding		7,196,404		7,192,350		7,192,350		7,192,350
Diluted weighted average common shares outstanding		7,232,961		7,249,194		7,250,702		7,244,716

	2013
	Fourth		Third		Second		First
Interest income	$	4,372	$	4,316	$	4,245	$	4,146
Interest expense		369		425		494		530
Net interest income		4,003		3,891		3,751		3,616
Provision for loan losses		3,307		—		(240)		(650)
Net interest income after provision for loan losses		696		3,891		3,991		4,266
Other non-interest income		1,116		1,192		1,351		1,308
Other non-interest expense		4,914		5,230		5,440		5,456
(Loss) income before income tax benefit		(3,102)		(147)		(98)		118
Income tax benefit		—		(20)		(254)		(24)
Net (loss) income	$	(3,102)	$	(127)	$	156	$	142
Stock and related per share data
Basic and diluted (loss) earnings per common share	$	(0.43)	$	(0.02)	$	0.02	$	0.02
Basic weighted average common shares outstanding		7,192,350		7,192,350		7,192,350		7,192,350
Diluted weighted average common shares outstanding		7,192,350		7,192,350		7,227,901		7,223,144

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Federal Income Taxes (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Income taxes (credits) computed at the statutory federal
Income tax benefit computed at the statutory federal income tax rate									$ 127	$ (1,098)
Tax exempt income									(330)	(1,002)
Change in valuation allowance									(384)	1,620
Other									587	(324)
Totals	$ 0	$ 0	$ 0	$ 0	$ 0	$ (20)	$ (254)	$ (24)	$ 0	$ (298)

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Commitments, Contingencies and Financial Instruments with Off-Balance Sheet Risk (Tables)

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Contractual Amount Of Financing Instruments With Off Balance Sheet Risk [Table Text Block]

The contractual amount of financing instruments with off-balance sheet risk was as follows at year-end (in thousands).

	2014				2013
	Fixed rate		Variable rate		Fixed rate		Variable rate
Commitments to extend credit	$	2,290	$	8,300	$	6,568	$	2,129
Unused lines of credit and letters of credit	$	4,953	$	127,076	$	4,126	$	124,811

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Loans (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Loans
Commercial and industrial	$ 106,222	$ 122,084
Commercial real estate	111,851	104,692
Residential real estate and home equity	129,650	96,245
Consumer and credit card	37,507	32,862
Subtotal	385,230	355,883
Add: Net deferred loan origination fees	214	165
Total loans receivable	$ 385,444	$ 356,048

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Borrowings (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Total Borrowings:
FHLB advances	$ 11,808	$ 4,838

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Credit Quality (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Financing Receivable, Modifications [Line Items]
Interest income recognized as non performing	$ 241,000	$ 175,000
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	8,500,000	11,800,000
Commercial Real Estate [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	236,000	2,100,000
Commercial Loan [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	780,000	262,000
Commercial Loan [Member] | Nonperforming Financing Receivable [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	68,000	1,100,000
Consumer Loan [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Recorded Investment	$ 334,000	$ 225,000

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Securities (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Fair values of securities available-for-sale
Amortized Costs	$ 74,919	$ 81,120
Gross Unrealized Gains	1,274	1,072
Gross Unrealized Losses	(284)	(2,244)
Fair Value	75,909	79,948
Collateralized mortgage obligation [Member]
Fair values of securities available-for-sale
Amortized Costs	19,601	15,217
Gross Unrealized Gains	85	135
Gross Unrealized Losses	(106)	(308)
Fair Value	19,580	15,045
Collateralized debt obligations [Member]
Fair values of securities available-for-sale
Amortized Costs		1,916
Gross Unrealized Gains		0
Gross Unrealized Losses		(940)
Fair Value		976
U.S. Government and agency obligations [Member]
Fair values of securities available-for-sale
Amortized Costs	11,602	13,714
Gross Unrealized Gains	31	16
Gross Unrealized Losses	(88)	(428)
Fair Value	11,545	13,302
Corporate bonds [Member]
Fair values of securities available-for-sale
Amortized Costs	4,975	6,187
Gross Unrealized Gains	33	42
Gross Unrealized Losses	(21)	(61)
Fair Value	4,987	6,168
States and municipal obligations [Member]
Fair values of securities available-for-sale
Amortized Costs	21,303	20,651
Gross Unrealized Gains	423	283
Gross Unrealized Losses	(69)	(484)
Fair Value	21,657	20,450
Mortgage-backed securities [Member]
Fair values of securities available-for-sale
Amortized Costs	17,438	23,435
Gross Unrealized Gains	702	596
Gross Unrealized Losses	0	(23)
Fair Value	$ 18,140	$ 24,007

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

1. Summary of Significant Accounting Policies

Basis of Presentation: The consolidated financial statements include the accounts of DCB Financial Corp (“DCB”) and its wholly-owned subsidiaries, The Delaware County Bank and Trust Company (the “Bank”), DCB Title Services, LLC, DCB Insurance Services, Inc., DataTasx LLC, and ORECO, Inc. (collectively referred to hereinafter as the “Company”). All intercompany transactions and balances have been eliminated in the consolidated financial statements.

Nature of Operations: The Company provides financial services in Delaware, Franklin, and Union Counties, Ohio, as well as nearby counties, through its 14 banking locations. Its primary deposit products are checking, savings, and term certificate accounts and its primary lending products are residential mortgage, commercial and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Real estate loans are secured by both residential and commercial real estate. The Bank also operates a trust department and engages in other personal wealth management activities, including brokerage services and private banking.

Business Segments: While the Bank’s management monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the Bank’s operations are considered by management to be aggregated into one operating segment.

Use of Estimates: To prepare consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect amounts reported in the financial statements and disclosures provided, and future results could differ. The allowance for loan losses, fair value of financial instruments, determination of other-than-temporary impairment, status of contingencies and deferred tax asset valuation are particularly subject to change.

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, federal funds sold and deposits with other financial institutions with original maturities of less than 90 days. Net cash flows are reported for customer loan and deposit transactions, federal funds purchased and other short-term borrowings.

Securities: Securities are classified as held-to-maturity and carried at adjusted amortized cost when management has the positive intent and ability to hold them to maturity. Securities classified as available-for-sale might be sold before maturity. Securities classified as available-for-sale are carried at fair value, with temporary unrealized holding gains and losses excluded from earnings and reported as a component of other comprehensive income. Realized gains and losses on sale of securities are recognized using the specific identification method. The Company does not engage in securities trading activities. Interest income includes premium amortization and accretion of discounts on securities.

For securities with unrealized losses, management considers, in determining whether other-than-temporary impairment exists, (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

For securities with other-than-temporary impairment, further analysis is required to determine the appropriate accounting. If management neither intends to sell the impaired security nor expects it will be required to sell the security prior to recovery, only the credit loss component of the other-than-temporary impairment is recognized in earnings while the non-credit loss is recognized in other comprehensive income. The credit loss component recognized in earnings is identified as the principal cash flows not expected to be received over the remaining term of the security as projected based on cash flow projections.

Loans (including Loans Held for Sale)

Loans are classified as held for investment when management has both the intent and ability to hold the loan for the foreseeable future, or until maturity or payoff. Management’s intent and view of the foreseeable future may change based on changes in business strategies, the economic environment, market conditions and the availability of government programs. Loans that are held for investment are reported at the principal balance outstanding, net of unearned interest, unamortized deferred loan fees and costs and the allowance for loan losses. Loans held for sale are carried at the lower of amortized cost or estimated fair value, determined on an aggregate basis for each type of loan. Net unrealized losses are recognized by charges to income.

Interest income is accrued based on the unpaid principal balance and includes amortization of net deferred loan fees and costs over the loan term. Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the credit is well secured and in process of collection. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on non-accrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

When loans are reclassified from held for investment to held for sale, specific reserves and allocated pooled reserves included in the allowance for loan and losses are reclassified to reduce the basis of the loans to the lower of cost or estimated fair value less cost to sell. Reclassifications of loans from held for sale to held for investment are made at fair value.

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable but unconfirmed credit losses, increased by the provision for loan losses and decreased by charge-offs net of recoveries. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the required allowance balance based on past loan loss experience, augmented by additional estimates related to the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, economic conditions and other factors.

The allowance consists of both specific and general components. The specific component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the collateral value, or value of expected discounted cash flows of the impaired loan is lower than the carrying value of that loan. The general component covers non-classified loans and is based on historical charge-off experience and expected loss given default derived from the Bank’s internal risk rating process. Management utilizes an average of a three year historical loss period. Management has the ability to adjust these loss rates by utilizing risk ratings based on current period trends. If current period trends differ either positively or negatively from the given weighted historical loss rates, adjustments can be made. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risking rating data.

Management also utilizes its assessment of general economic conditions, and other localized economic data to more fully support its loan loss estimates. General economic data may include: inflation rates, savings rates and national unemployment rates. Local data may include: unemployment rates, housing starts, real estate valuations, and other economic data specific to the Company’s market area. Though not specific to individual loans, these economic trends can have an impact on portfolio performance as a whole.

Uncollectibility is usually determined based on a pre-determined number of days delinquent in the case of consumer loans, or, in the case of commercial loans, is based on a combination of factors including delinquency, collateral and other legal considerations. Consumer loans are charged-off prior to 120 days of delinquency, but could be charged off earlier, depending on the individual circumstances. Mortgage loans are charged down prior to 120 days of delinquency, but could be charged off sooner, again, depending upon individual circumstance. Typically, loans collateralized by residential real estate are partially charged down to the estimated liquidation value, which is generally based on appraisal less costs to hold and liquidate. Commercial and commercial real estate loans are evaluated for impairment and typically reserved based on the results of the analysis, then subsequently charged down to a recoverable value when loan repayment is deemed to be collateral dependent. Loans can be partially charged down depending on a number of factors including: the remaining strength of the borrower and guarantor; the type and value of the collateral, and the ease of liquidating collateral; and whether or not collateral is brought onto the bank’s balance sheet via repossession. In the case of commercial and commercial real estate loans, charge-offs, partial or whole, take place when management determines that full collectability of principal balance is unlikely to occur. Subsequent recoveries, if any, are credited to the allowance. Management’s policies for determining impairment, reserves and charge-offs are reviewed and approved by the Board of Directors on an annual basis, and were not materially changed in 2014.

Troubled debt restructuring of loans is undertaken to improve the likelihood that the loan will be repaid in full under the modified terms in accordance with a reasonable repayment schedule.  All modified loans are evaluated to determine whether the loans should be reported as a Troubled Debt Restructuring (TDR).  A loan is a TDR when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower by modifying or renewing a loan that the Company would not otherwise consider. To make this determination, the Company must determine whether (a) the borrower is experiencing financial difficulties and (b) the Company granted the borrower a concession. This determination requires consideration of all of the facts and circumstances surrounding the modification.  An overall general decline in the economy or some deterioration in a borrower’s financial condition does not automatically mean the borrower is experiencing financial difficulties.

Investment in Federal Home Loan Bank Stock: The Company is required as a condition of membership in the Federal Home Loan Bank of Cincinnati (“FHLB”) to maintain an investment in FHLB common stock. The stock is redeemable at par and, therefore, its cost is equivalent to its redemption value. The Company’s ability to redeem FHLB shares is dependent on the redemption practices of the FHLB. The stock is carried at cost and evaluated for impairment.

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed over the assets’ useful lives, estimated to be five to 39 years for buildings, improvements and leasehold improvements. The Company generally uses three to five years for the useful lives of furniture, fixtures, and equipment, using the straight line method, depending on the nature of the asset. Premises and equipment are reviewed for impairment when events indicate the carrying amount may not be recoverable. Maintenance and repairs are expensed and major improvements are capitalized.

Foreclosed Assets: Assets acquired through foreclosure are initially recorded at the lower of cost or fair value less expected selling costs. Subsequent declines in fair value below the recorded amount are recorded as a direct write-down to expense. The Company generally evaluates fair market values of foreclosed assets on a quarterly basis, and adjusts accordingly. Holding costs after acquisition are expensed as incurred; however, construction costs to improve a property’s value may be capitalized as part of the asset value.

Servicing Assets: Servicing assets represent the allocated value of retained servicing on loans sold. Servicing assets are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the assets, using groupings of the underlying loans as to interest rates, and then secondarily as to geographic and prepayment characteristics. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment of a grouping is reported as a valuation allowance. Loans serviced for others totaled $2.1 million and $2.9 million at December 31, 2014 and 2013, respectively. The Company had net servicing assets of $3,000 and $5,000 at December 31, 2014 and 2013, respectively.

Bank Owned Life Insurance: The Company has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at its cash surrender value.

Income Taxes: The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred tax assets are reduced by a valuation allowance, if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment. The Company recognizes interest and penalties on income taxes, if applicable, as a component of income tax expense. The Company files consolidated income tax returns with its subsidiaries.

Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and standby letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Earnings (Loss) Per Common Share: Basic earnings (loss) per common share is net income (loss) divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share are computed including the dilutive effect of additional potential common shares issuable under stock options. Diluted earnings (loss) per share are not computed for periods in which an operating loss is sustained.

The computation of earnings (loss) per share is based upon the following weighted-average shares outstanding for the years ended December 31:

	2014		2013
Weighted-average common shares outstanding (basic)		7,193,372		7,192,350
Dilutive effect of assumed exercise of stock options		39,016		—
Weighted-average common shares outstanding (diluted)		7,232,388		7,192,350

At December 31, 2014, 9,979 of anti-dilutive stock options were excluded from the diluted weighted average common share calculations.

At December 31, 2013, options to purchase 156,665 shares of common stock were excluded from the computation of diluted earnings per share because of the loss incurred.

Stock-Based Compensation: Compensation cost is recognized for restricted stock awards issued to employees and directors based on the fair value of these awards at the date of grant. The market price of the Company’s common stock at the date of grant is used to determine the fair value for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

The Company’s outstanding stock options may be settled for cash at the recipient’s discretion; therefore, liability accounting applies to the Company’s 2004 Long-Term Stock Incentive Plan under which such stock options were granted. Compensation expense is recognized based on the fair value of these awards at the reporting date. A Black Scholes model is utilized to estimate the fair value of stock options at the date of grant and subsequent re-measurement dates. Compensation cost is recognized over the required service period, generally defined as the vesting period. The Company’s stock option awards contain terms that provide for a graded vesting schedule whereby portions of the award vest in increments over the requisite service period.  Changes in fair value of the options between the vesting date and option expiration date are also recognized in the Consolidated Statement of Income.

Comprehensive Income (Loss): Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss), net of applicable income tax effects. Other comprehensive income (loss) includes unrealized appreciation (depreciation) on available-for-sale securities and unrealized appreciation (depreciation) on held-to-maturity securities for which a portion of an other-than-temporary impairment has been recognized in income. Accumulated other comprehensive income consists solely of unrecognized gains and losses on investment securities, net of taxes of $336,000 and ($398,000) at December 31, 2014 and 2013, respectively..

Restrictions on Cash: Other deposits at the Federal Reserve Bank above the clearing balance requirements earn interest at an overnight rate, and are not restricted. In addition, $1.1 million is held in another institution and is under the control of a third party due to a contractual agreement.

Dividend Restrictions: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to DCB or by DCB to shareholders.

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or market conditions could significantly affect the estimates.

Advertising and Marketing: Advertising and other marketing costs are expensed as incurred.

Reclassification: Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the 2014 presentation. These reclassifications had no effect on net income for any period presented.

New Accounting Pronouncements: In August 2014, the Financial Accounting Standards Board (“FASB”) issued amended accounting guidance for the classification of certain government guaranteed mortgage loans upon foreclosure. This guidance requires that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if the following conditions are met: (1) the loan has a government guarantee that is not separable from the loan before foreclosure; (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim; and (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Upon foreclosure, the separate other receivable should be measured based upon the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This guidance should be applied using a prospective transition method or a modified retrospective transition method. The Company expects that the adoption of this guidance in 2015 will not have a significant effect on the Company’s financial position or results of operations.

In June 2014, the FASB issued amended accounting guidance for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The amended guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The performance target should not be reflected in estimating the grant date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This guidance is effective for annual periods and interim periods within those annual periods beginning after December 31, 2015, with earlier adoption permitted. The Company does not expect the amended guidance published by the FASB to have a material impact on its financial position or results of operations.

In January 2014, the FASB issued amended accounting and disclosure guidance for reclassification of residential real estate collateralized consumer mortgage loans upon foreclosure. The amended guidance clarifies that an in-substance repossession or foreclosure occurs and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amended guidance also requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate that are in the process of foreclosure according to local requirements of the applicable jurisdiction. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This guidance should be applied using a prospective transition method or a modified retrospective transition method. The Company expects that the adoption of this guidance in 2015 will not have a significant effect on the Company’s financial position or results of operations.

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Premises and Equipment (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Property Plant And Equipment Gross	$ 24,501	$ 24,379
Accumulated depreciation	(15,115)	(14,329)
Total premises and equipment	9,386	10,050
Software, net of accumulated amortization	630	591
Total premises and equipment	10,016	10,641
Land [Member]
Property, Plant and Equipment [Line Items]
Property Plant And Equipment Gross	1,266	1,266
Buildings [Member]
Property, Plant and Equipment [Line Items]
Property Plant And Equipment Gross	13,287	13,277
Furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Property Plant And Equipment Gross	$ 9,948	$ 9,836

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Summary of Significant Accounting Policies (Details)	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Weighted-average shares for basic and diluted earnings per share
Weighted-average common shares outstanding (basic)	7,196,404	7,192,350	7,192,350	7,192,350	7,192,350	7,192,350	7,192,350	7,192,350	7,193,372	7,192,350
Dilutive effect of assumed exercise of stock options									39,016	0
Weighted-average common shares outstanding (diluted)	7,232,961	7,249,194	7,250,702	7,244,716	7,192,350	7,192,350	7,227,901	7,223,144	7,232,388	7,192,350

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Securities (Tables)

12 Months Ended

Dec. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

The amortized cost and estimated fair values of securities available-for-sale as of December 31, 2014 and 2013 were as follows (in thousands):

As of December 31, 2014:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government and agency obligations	$	11,602	$	31	$	(88)	$	11,545
Corporate bonds		4,975		33		(21)		4,987
States and municipal obligations		21,303		423		(69)		21,657
Collateralized mortgage obligation		19,601		85		(106)		19,580
Mortgage-backed securities		17,438		702		—		18,140
Total	$	74,919	$	1,274	$	(284)	$	75,909

As of December 31, 2013:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government and agency obligations	$	13,714	$	16	$	(428)	$	13,302
Corporate bonds		6,187		42		(61)		6,168
States and municipal obligations		20,651		283		(484)		20,450
Collateralized debt obligations		1,916		—		(940)		976
Collateralized mortgage obligations		15,217		135		(308)		15,045
Mortgage-backed securities		23,435		596		(23)		24,007
Total	$	81,120	$	1,072	$	(2,244)	$	79,948

Schedule of Temporary Impairment Losses, Investments [Table Text Block]

The tables below indicate the length of time individual securities have been in a continuous unrealized loss position at December 31, 2014 and 2013 (in thousands):

December 31, 2014

	(Less than 12 months)						(12 months or longer)						Total
Description of securities	Number of securities		Fair value		Unrealized losses		Number of securities		Fair value		Unrealized losses		Number of securities		Fair value		Unrealized losses
U.S. Government and agency obligations		3	$	2,488	$	9		4	$	4,446	$	79		7	$	6,934	$	88
Corporate bonds		1		503		1		4		1,664		21		5		2,167		21
State and municipal obligations		8		2,699		18		4		1,915		51		12		4,614		69
Collateralized debt obligations		—		—		—		—		—		—		—		—		—
Collateralized Mortgage obligations		9		5,649		21		4		3,649		85		13		9,298		106
Mortgage-backed securities and other		—		—		—		—		—		—		—		—		—
Total temporarily impaired securities		21	$	11,339	$	49		16	$	11,674	$	236		37	$	23,013	$	284

December 31, 2013

	(Less than 12 months)						(12 months or longer)								Total
Description of securities	Number of securities		Fair value		Unrealized losses		Number of securities		Fair value		Unrealized losses		Number of securities	Fair value		Unrealized losses
U.S. Government and agency obligations		10	$	10,680	$	428		—	$	—	$	—	10	$	10,680	$	428
Corporate bonds		5		2,141		38		2		883		23	7		3,024		61
State and municipal obligations		32		11,012		442		2		822		42	34		11,834		484
Collateralized debt obligations		—		—		—		1		976		940	1		976		940
Collateralized mortgage obligations		7		5,011		208		1		1,189		100	8		6,200		308
Mortgage-backed securities and other		5		3,434		23		—		—		—	5		3,434		23
Total temporarily impaired securities		59	$	32,278	$	1,139		6	$	3,870	$	1,105	65	$	36,148	$	2,244

Investments Classified by Contractual Maturity Date [Table Text Block]

The amortized cost and estimated fair value of debt securities, at December 31, 2014, by contractual maturity, are shown below (in thousands). Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown separately since they are not due at a single maturity date.

	Available-for-sale
	Amortized Cost		Fair Value
Due in one year or less	$	1,417	$	1,430
Due from one to five years		12,646		12,656
Due from five to ten years		23,424		23,699
Due after ten years		19,994		19,984
Mortgage-backed securities		17,438		18,140
Total	$	74,919	$	75,909

Sales Of Investment In Securities Disclosure [Table Text Block]

Sales of investment securities during the years ended December 31, 2014 and 2013 were as follows (in thousands):

	2014		2013
Proceeds from investments sales	$	7,140	$	2,560
Gross gains on investment sales	$	242	$	135
Gross losses on investment sales	$	(141)	$	—

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Sale of Branch and Loans Held for Sale (Tables)

12 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

The amounts related to the sale are as follows (in thousands):

Deposits assumed	$	19,403
Loans sold (at book value)		(4,750)
Property and equipment (agreed upon value)		(1,500)
Cash on hand		(261)
Premium on deposits		(438)
Other, net		10
Cash paid to Merchants	$	12,464

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Credit Quality (Details 2) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans on nonaccrual status	$ 1,384	$ 6,452
Consumer and credit card [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans on nonaccrual status	120	0
Commercial and industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans on nonaccrual status	632	4,702
Commercial real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans on nonaccrual status	298	1,398
Residential real estate and home equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans on nonaccrual status	$ 334	$ 352

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Summary of Significant Accounting Policies (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2014 Locations	Dec. 31, 2013
Summary of Significant Accounting Policies [Abstract]
Consumer Loans Charged Off Delinquency Period	120 days
Mortgage Loans Charge Off Delinquency Period	120 days
Loan Serviced For Others	$ 2,100,000	$ 2,900,000
Aggregate Cash Reserves Required At Federal Reserve Bank	1,100,000
Number Of Locations Of Offices	14
Maturity Period Of Deposits With Other Financial Institution To Be Classified As Cash And Cash Equivalents Maximum	less than 90 days
Period Of Historical Loss Data Considered For Future Loss Expectations	3 years
Unrealized Gain (Loss) on Investments	336,000	398,000
Interest Income On Mortgage And Commercial Loans Discontinuation Period	90 days
Servicing Asset, Total	$ 3,000	$ 5,000
Percentage Of Income Tax Examination Minimum Likelihood Of Tax Benefits Being Realized Upon Examination	50.00%
Percentage Of Income Tax Examination Minimum Likelihood Of Tax Benefits Being Realized Upon Settlement	50.00%
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount		156,665
Employee Stock Option [Member]
Summary of Significant Accounting Policies [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	9,979
Maximum [Member] | Buildings, improvements and leasehold improvements [Member]
Summary of Significant Accounting Policies [Abstract]
Property, Plant and Equipment, Useful Life	39 years
Maximum [Member] | Furniture, fixtures and equipment [Member]
Summary of Significant Accounting Policies [Abstract]
Property, Plant and Equipment, Useful Life	5 years
Minimum [Member] | Buildings, improvements and leasehold improvements [Member]
Summary of Significant Accounting Policies [Abstract]
Property, Plant and Equipment, Useful Life	5 years
Minimum [Member] | Furniture, fixtures and equipment [Member]
Summary of Significant Accounting Policies [Abstract]
Property, Plant and Equipment, Useful Life	3 years

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Loans (Tables)

12 Months Ended

Dec. 31, 2014

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

At December 31, 2014, loans were comprised of the following (in thousands):

	2014		2013
Commercial and industrial	$	106,222	$	122,084
Commercial real estate		111,851		104,692
Residential real estate and home equity		129,650		96,245
Consumer and credit card		37,507		32,862
Subtotal		385,230		355,883
Add: Net deferred loan origination fees		214		165
Total loans receivable	$	385,444	$	356,048

Schedule Of Loans To Related Parties [Table Text Block]

Loans to principal officers, directors, and their related affiliates during 2014 and 2013 in the normal course of business were as follows (in thousands).

	2014		2013
Balance at beginning of year	$	1,440	$	469
New loans		7,070		1,058
Repayments		(403)		(87)
Balance at end of year	$	8,107	$	1,440

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Credit Quality (Tables)

12 Months Ended

Dec. 31, 2014

Credit Quality [Abstract]

Allowance for Credit Losses on Financing Receivables [Table Text Block]

The table below presents allowance for loan losses by loan portfolio (in thousands). Commercial real estate includes real estate construction and land development loans.

For the Year Ended December 31, 2014:

							Residential
							Real Estate
	Consumer and		Commercial and		Commercial		and
	Credit Card		Industrial		Real Estate		Home Equity		Unallocated		Total
Allowance for loan losses:
Beginning balance:	$	301	$	3,231	$	2,973	$	219	$	—	$	6,724
Chargeoffs		(200)		(1,410)		(1,086)		(169)		—		(2,865)
Recoveries		113		42		131		38		—		324
Transfer to held for sale		—		—		(97)		—		—		(97)
Provision		(24)		(731)		455		180		270		150
Ending balance:	$	190	$	1,132	$	2,376	$	268	$	270	$	4,236
Allowance on loans:
Individually evaluated for impairment	$	—	$	256	$	1,042	$	—	$	—	$	1,298
Collectively evaluated for impairment		190		876		1,334		268		270		2,938
Ending balance:	$	190	$	1,132	$	2,376	$	268	$	270	$	4,236
As of December 31, 2014:
Loans:
Individually evaluated for impairment	$	455	$	2,028	$	9,690	$	—	$	—	$	12,173
Collectively evaluated for impairment		37,052		109,823		96,532		129,650		—		373,057
Ending balance:	$	37,507	$	111,851	$	106,222	$	129,650	$	—	$	385,230

For the year ended December 31, 2013

							Residential
							Real Estate
	Consumer and		Commercial and		Commercial		and
	Credit Card		Industrial		Real Estate		Home Equity		Total
Allowance for loan losses:
Beginning balance:	$	365	$	1,620	$	4,692	$	204	$	6,881
Chargeoffs		(286)		(86)		(1,038)		(331)		(1,741)
Recoveries		219		823		38		52		1,132
Transfer to held for sale		—		—		(1,965)		—		(1,965)
Provision		3		874		1,246		294		2,417
Ending balance:	$	301	$	3,231	$	2,973	$	219	$	6,724
Allowance on loans:
Individually evaluated for impairment	$	—	$	2,304	$	1,862	$	—	$	4,166
Collectively evaluated for impairment		301		927		1,111		219		2,558
Ending balance:	$	301	$	3,231	$	2,973	$	219	$	6,724
As of December 31, 2013:
Loans:
Individually evaluated for impairment	$	—	$	7,221	$	15,660	$	—	$	22,881
Collectively evaluated for impairment		32,862		114,863		89,032		96,245		333,002
Ending balance:	$	32,862	$	122,084	$	104,692	$	96,245	$	355,883

Recorded investment, unpaid balance and related allowance [Table Text Block]

The following table indicates impaired loans with and without an allocated allowance at December 31, 2014 (in thousands).

			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
With no related allowance recorded
Consumer and credit card	$	455	$	455	$	—	$	474	$	25
Commercial and industrial		1,288		1,288		—		1,531		45
Commercial real estate		1,088		1,088		—		6,714		70
With allowance recorded
Commercial and industrial		740		817		256		1,772		43
Commercial real estate		8,602		8,602		1,042		6,048		595
Total
Consumer and credit card		455		455		—		474		25
Commercial and industrial		2,028		2,105		256		3,303		88
Commercial real estate		9,690		9,690		1,042		12,762		665
Total	$	12,173	$	12,250	$	1,298	$	16,539	$	778

The following table indicates impaired loans with and without an allocated allowance at December 31, 2013 (in thousands).

			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
With no related allowance recorded
Commercial and industrial	$	1,530	$	1,530	$	—	$	3,081	$	67
Commercial real estate		9,892		11,788		—		10,005		615
With allowance recorded
Commercial and industrial		5,691		5,833		2,304		2,686		196
Commercial real estate		5,768		7,296		1,862		10,060		308
Total
Commercial and industrial		7,221		7,363		2,304		5,767		263
Commercial real estate		15,660		19,084		1,862		20,065		923
Total	$	22,881	$	26,447	$	4,166	$	25,832	$	1,186

Schedule of Financing Receivables, Non Accrual Status [Table Text Block]

Loans on non-accrual status as of December 31, 2014 and 2013 are as follows (in thousands):

	2014		2013
Consumer and credit card	$	120	$	—
Commercial and industrial		632		4,702
Commercial real estate		298		1,398
Residential real estate and home equity		334		352
Total	$	1,384	$	6,452

Financing Receivable Credit Quality Indicators [Table Text Block]

Credit risk exposure by risk profile and by class of commercial loans was as follows at year-end 2014 (in thousands).

	Commercial and		Commercial
Category	Industrial		Real Estate
Pass-1-4	$	106,590	$	90,588
Vulnerable-5		823		6,146
Substandard-6		4,438		9,488
Doubtful-7		—		—
Loss-8		—		—
Total	$	111,851	$	106,222

Credit risk exposure by risk profile and by class of commercial loans was as follows at year-end 2013 (in thousands).

	Commercial and		Commercial
Category	Industrial		Real Estate
Pass-1-4	$	111,266	$	83,953
Vulnerable-5		2,574		4,785
Substandard-6		8,244		15,954
Doubtful-7		—		—
Loss-8		—		—
Total	$	122,084	$	104,692

Consumer Risk [Table Text Block]

The following table presents the recorded investment in consumer loans and residential real estate loans based on payment activity at the dates indicated (in thousands).

	December 31, 2014
Payment Category	Consumer and Credit Card		Residential Real Estate and Home Equity
Performing	$	37,387	$	128,836
Non-Performing		120		814
Total	$	37,507	$	129,650

	December 31, 2013
Payment Category	Consumer and Credit Card		Residential Real Estate and Home Equity
Performing	$	32,862	$	95,333
Non-Performing		—		912
Total	$	32,862	$	96,245

Past Due Financing Receivables [Table Text Block]

The following table presents past due loans aged as of December 31, 2014 (in thousands).

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	$	66	$	7	$	120	$	193	$	37,314	$	37,507	$	—
Commercial and Industrial		68		—		—		68		111,783		111,851		—
Commercial Real Estate		49		—		306		355		105,867		106,222		—
Residential Real Estate and Home Equity		220		30		642		892		128,758		129,650		480
Total	$	403	$	37	$	1,068	$	1,508	$	383,722	$	385,230	$	480

The following table presents past due loans aged as of December 31, 2013 (in thousands).

Category	30-59 Days Past Due		60-89 Days Past Due		90 Days or more Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 days and Accruing
Consumer and credit card	$	90	$	92	$	—	$	182	$	32,680	$	32,862	$	—
Commercial and industrial		407		—		1,001		1,408		120,676		122,084		—
Commercial real estate		49		—		682		731		103,961		104,692		—
Residential real estate and home equity		374		197		321		892		95,353		96,245		560
Total	$	920	$	289	$	2,004	$	3,213	$	352,670	$	355,883	$	560

Schedule of Debtor Troubled Debt Restructuring, Current Period [Table Text Block]

Information regarding Troubled Debt Restructuring (“TDR”) loans for the year ended December 31, 2014 and 2013 is as follows (dollars in thousands):

	2014				2013
	Number of contracts		Post- modification outstanding recorded investment		Number of contracts		Post- modification outstanding recorded investment
Consumer and credit card		—	$	—		—	$	—
Commercial and industrial		—		—		4		1,081
Commercial real estate		—		—		8		3,905
Residential real estate and home equity		—		—		—		—
Total		—	$	—		12	$	4,986

The following presents by class loans modified in a TDR during the years ended December 31, 2014 and 2013 that subsequently defaulted (i.e. 60 days or more past due following a modification) during the next twelve month periods (dollars in thousands).

	December 31, 2014				December 31, 2013
	Number of Contracts		Post-Modification Outstanding Recorded Investment		Number of Contracts		Post-Modification Outstanding Recorded Investment
Consumer and Credit Card		—	$	—		—	$	—
Commercial and Industrial		—		—		3		1,075
Commercial Real Estate		—		—		1		484
Residential Real Estate and Home Equity		—		—		—		—
Total		—	$	—		4	$	1,559

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities
Net income (loss)	$ 372	$ (2,931)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	1,070	1,068
Provision for loan losses	150	2,417
Deferred income taxes	0	(298)
Gain on sale of securities	(101)	(135)
Loss on loans held-for-sale	509	0
Loss (gain) on sale of real estate owned	84	(31)
Gain on sale of branch	(438)	0
Stock option plan expense	190	129
Premium amortization on securities, net	1,064	1,644
Earnings on bank owned life insurance	(730)	(733)
Net changes in other assets and other liabilities	543	3,260
Net cash provided by operating activities	2,713	4,390
Cash flows from investing activities
Purchases of securities available-for-sale	(25,136)	(23,564)
Proceeds from maturities, principal payments and calls of securities available-for-sale	23,234	27,699
Proceeds from sales of securities available-for-sale	7,140	2,560
Net change in loans	(31,076)	(48,983)
Proceeds from sales of loans held-for-sale	845	0
Proceeds from sale of real estate owned	768	2,546
Net cash paid with sale of branch	(12,464)	0
Proceeds from redemption of FHLB stock	549	0
Premises and equipment expenditures	(445)	(1,078)
Net cash used in investing activities	(36,585)	(40,820)
Cash flows from financing activities
Net change in deposits	22,819	1,140
Proceeds from short-term borrowings	7,000	0
Proceeds from long-term borrowings	0	4,411
Repayment of borrowings	(30)	(7,071)
Net cash provided by (used in) financing activities	29,789	(1,520)
Net change in cash and cash equivalents	(4,083)	(37,950)
Cash and cash equivalents at beginning of year	25,357	63,307
Cash and cash equivalents at end of year	21,274	25,357
Cash paid during the period for:
Cash paid during the period for interest on deposits and borrowings	1,288	1,914
Non-cash investing and financing activities:
Transfer of loans to real estate owned	744	59
Transfer of loans to held for sale	913	7,806
Transfer of loans held for sale to held for investment	769	0
Transfer of deposits (from) to held for sale	$ (3,210)	$ 22,571

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Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Premises and equipment were as follows at the dates indicated (in thousands):

	December 31,
	2014		2013
Land	$	1,266	$	1,266
Buildings		13,287		13,277
Furniture and equipment		9,948		9,836
Subtotal		24,501		24,379
Accumulated depreciation		(15,115)		(14,329)
Total premises and equipment		9,386		10,050
Software, net of accumulated amortization		630		591
Total premises and equipment	$	10,016	$	10,641

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

The total future minimum lease commitments at December 31, 2014 under these leases are summarized as follows (in thousands).

2015	$	596
2016		587
2017		361
2018		231
2019		199
Thereafter		250
Total	$	2,224

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Fair Value Measurements (Details 1) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Fair value measurements of assets recurring basis
Securities available-for-sale	$ 75,909	$ 79,948
Collateralized Mortgage Obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	19,580	15,045
U.S. Government and agency obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	11,545	13,302
State and municipal obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	21,657	20,450
Corporate bonds [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	4,987	6,168
Mortgage-backed securities and other [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	18,140	24,007
Collateralized Debt Obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale		976
Quoted Prices in Active Markets for Identical Assets, Level 1 [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	0	0
Quoted Prices in Active Markets for Identical Assets, Level 1 [Member] | Collateralized Mortgage Obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	0	0
Quoted Prices in Active Markets for Identical Assets, Level 1 [Member] | U.S. Government and agency obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	0	0
Quoted Prices in Active Markets for Identical Assets, Level 1 [Member] | State and municipal obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	0	0
Quoted Prices in Active Markets for Identical Assets, Level 1 [Member] | Corporate bonds [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	0	0
Quoted Prices in Active Markets for Identical Assets, Level 1 [Member] | Mortgage-backed securities and other [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	0	0
Quoted Prices in Active Markets for Identical Assets, Level 1 [Member] | Collateralized Debt Obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale		0
Significant Other Observable Inputs, Level 2 [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	75,909	78,972
Significant Other Observable Inputs, Level 2 [Member] | Collateralized Mortgage Obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	19,580	15,045
Significant Other Observable Inputs, Level 2 [Member] | U.S. Government and agency obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	11,545	13,302
Significant Other Observable Inputs, Level 2 [Member] | State and municipal obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	21,657	20,450
Significant Other Observable Inputs, Level 2 [Member] | Corporate bonds [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	4,987	6,168
Significant Other Observable Inputs, Level 2 [Member] | Mortgage-backed securities and other [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	18,140	24,007
Significant Other Observable Inputs, Level 2 [Member] | Collateralized Debt Obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale		0
Significant Unobservable Inputs, Level 3 [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	0	976
Significant Unobservable Inputs, Level 3 [Member] | Collateralized Mortgage Obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	0	0
Significant Unobservable Inputs, Level 3 [Member] | U.S. Government and agency obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	0	0
Significant Unobservable Inputs, Level 3 [Member] | State and municipal obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	0	0
Significant Unobservable Inputs, Level 3 [Member] | Corporate bonds [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	0	0
Significant Unobservable Inputs, Level 3 [Member] | Mortgage-backed securities and other [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale	0	0
Significant Unobservable Inputs, Level 3 [Member] | Collateralized Debt Obligations [Member]
Fair value measurements of assets recurring basis
Securities available-for-sale		$ 976

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Parent Company Financial Information (Tables)

12 Months Ended

Dec. 31, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Balance Sheet [Table Text Block]

Condensed Balance Sheets

	2014		2013
Assets
Cash	$	948	$	948
Investment in subsidiaries		46,283		44,336
Total assets	$	47,231	$	45,284
Liabilities
Other liabilities	$	20	$	20
Shareholders’ Equity		47,211		45,264
Total liabilities and shareholders’ equity	$	47,231	$	45,284

Condensed Income Statement [Table Text Block]

Condensed Statements of Operations

	2014		2013
Equity in undistributed income (loss) of subsidiaries	$	372		(2,805)
Other		—		—
Total income (loss)		372		(2,805)
Operating expenses		—		(126)
Federal income tax		—		—
Net income (loss)	$	372	$	(2,931)

Condensed Cash Flow Statement [Table Text Block]

Condensed Statements of Cash Flows
	2014		2013
Cash flows from operating activities
Net income (loss)	$	372	$	(2,931)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Equity in undistributed net income (loss) from subsidiaries		(372)		2,805
Net change in other assets and liabilities		—		(4,171)
Net cash used in operating activities		—		(4,297)
Cash flows from investing activities
Investments in affiliates		—		5
Net cash provided by investing activities		—		5
Cash flows from financing activities
Investment in Subsidiary		—		(8,092)
Net cash used in financing activities		—		(8,092)
Net change in cash		—		(12,382)
Cash at beginning of year		948		13,332
Cash at end of year	$	948	$	948

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Loans (Details 1) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Schedule Of Loans [Line Items]
Balance at beginning of year	$ 1,440	$ 469
New loans	7,070	1,058
Repayments	(403)	(87)
Balance at end of year	$ 8,107	$ 1,440

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Stock-Based Compensation (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2014
Range of Exercise Prices One [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Prices, Lower Range	$ 3.50
Exercise Prices, Higher Range	$ 5.40
Options Outstanding	68,999
Options Outstanding, Weighted Average Exercise Price	$ 3.95
Options Outstanding, Weighted Average Remaining Life (Years)	6 years 10 months 24 days
Options Exercisable	41,820
Options Exercisable, Weighted Average Exercise Price	$ 3.78
Range of Exercise Prices Two [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Prices, Lower Range	$ 5.41
Exercise Prices, Higher Range	$ 9.00
Options Outstanding	5,196
Options Outstanding, Weighted Average Exercise Price	$ 9.00
Options Outstanding, Weighted Average Remaining Life (Years)	4 years 6 months
Options Exercisable	5,196
Options Exercisable, Weighted Average Exercise Price	$ 9.00
Range of Exercise Prices Three [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Prices, Lower Range	$ 9.01
Exercise Prices, Higher Range	$ 16.90
Options Outstanding	4,783
Options Outstanding, Weighted Average Exercise Price	$ 16.90
Options Outstanding, Weighted Average Remaining Life (Years)	3 years 1 month 6 days
Options Exercisable	4,783
Options Exercisable, Weighted Average Exercise Price	$ 16.90
Range of Exercise Prices Four [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Prices, Lower Range	$ 16.01
Exercise Prices, Higher Range	$ 30.70
Options Outstanding	6,651
Options Outstanding, Weighted Average Exercise Price	$ 26.01
Options Outstanding, Weighted Average Remaining Life (Years)	1 year 8 months 12 days
Options Exercisable	6,651
Options Exercisable, Weighted Average Exercise Price	$ 26.01

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Assets:
Cash and due from financial institutions	$ 6,247	$ 6,110
Interest-bearing deposits	15,027	19,247
Total cash and cash equivalents	21,274	25,357
Securities available-for-sale	75,909	79,948
Loans	385,444	356,048
Less allowance for loan losses	(4,236)	(6,724)
Net loans	381,208	349,324
Loans held for sale	0	7,806
Real estate owned	1,111	1,219
Investment in FHLB stock	3,250	3,799
Premises and equipment, net	10,016	10,641
Premises and equipment held for sale	0	1,405
Bank-owned life insurance	20,027	19,297
Accrued interest receivable and other assets	2,587	3,623
Total assets	515,382	502,419
Liabilities:
Non-interest bearing	111,022	109,622
Interest bearing	342,170	317,237
Total deposits	453,192	426,859
Deposits held for sale	0	22,571
Borrowings	11,808	4,838
Accrued interest payable and other liabilities	3,171	2,887
Total liabilities	468,171	457,155
Shareholders’ equity:
Preferred stock, no par value, 2,000,000 shares authorized, none issued and outstanding	0	0
Common stock, 17,500,000 and 7,500,000 shares authorized, 7,541,445 and 7,500,000 shares issued, and 7,233,795 and 7,192,350 shares outstanding for 2014 and 2013, respectively	16,064	15,771
Retained earnings	38,055	37,683
Treasury stock, at cost, 307,650 shares at December 31, 2014 and 2013	(7,416)	(7,416)
Accumulated other comprehensive income (loss)	654	(774)
Deferred stock-based compensation	(146)	0
Total shareholders’ equity	47,211	45,264
Total liabilities and shareholders’ equity	$ 515,382	$ 502,419

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Sale of Branch and Loans Held for Sale (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Deposits assumed	$ 19,403
Loans sold (at book value)	(4,750)
Property and equipment (agreed upon value)	(1,500)
Cash on hand	(261)
Premium on deposits	(438)
Other, net	10
Cash paid to Merchants	$ 12,464

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Consolidated Statements of Comprehensive Income (Loss) [Parenthetical] (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Other Than Temporary Impairment Losses Investment Reclassification Adjustment Of Previously Recognized Sale Of Security Tax		$ 512
Other than Temporary Impairment Losses, Investments, Portion in Other Comprehensive Loss, Tax, Portion Attributable to Parent, Held-to-maturity Securities	769	(755)
Other than Temporary Impairment Losses, Investments, Portion in Other Comprehensive Loss, Tax, Portion Attributable to Parent, Available-for-sale Securities	(35)	(2)
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax		131
Other Comprehensive Income Amortization Of Unrealized Gain (Losses) On Held To Maturity Securities Tax		$ 28

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Credit Quality (Details 5) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Age analysis of past due loans
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	$ 403	$ 920
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	37	289
Financing Receivable, Recorded Investment, Greater than 90 Days Past Due	1,068	2,004
Financing Receivable, Recorded Investment, Past Due, Total	1,508	3,213
Financing Receivable, Recorded Investment, Current	383,722	352,670
Financing Receivable, Recorded Investment, Subtotal	385,230	355,883
Recorded Investment greater than 90 days and Accruing	480	560
Consumer and Credit Card [Member]
Age analysis of past due loans
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	66	90
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	7	92
Financing Receivable, Recorded Investment, Greater than 90 Days Past Due	120	0
Financing Receivable, Recorded Investment, Past Due, Total	193	182
Financing Receivable, Recorded Investment, Current	37,314	32,680
Financing Receivable, Recorded Investment, Subtotal	37,507	32,862
Recorded Investment greater than 90 days and Accruing	0	0
Commercial and Industrial [Member]
Age analysis of past due loans
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	68	407
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	0	0
Financing Receivable, Recorded Investment, Greater than 90 Days Past Due	0	1,001
Financing Receivable, Recorded Investment, Past Due, Total	68	1,408
Financing Receivable, Recorded Investment, Current	111,783	120,676
Financing Receivable, Recorded Investment, Subtotal	111,851	122,084
Recorded Investment greater than 90 days and Accruing	0	0
Commercial Real Estate [Member]
Age analysis of past due loans
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	49	49
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	0	0
Financing Receivable, Recorded Investment, Greater than 90 Days Past Due	306	682
Financing Receivable, Recorded Investment, Past Due, Total	355	731
Financing Receivable, Recorded Investment, Current	105,867	103,961
Financing Receivable, Recorded Investment, Subtotal	106,222	104,692
Recorded Investment greater than 90 days and Accruing	0	0
Residential Real Estate and Home Equity [Member]
Age analysis of past due loans
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	220	374
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	30	197
Financing Receivable, Recorded Investment, Greater than 90 Days Past Due	642	321
Financing Receivable, Recorded Investment, Past Due, Total	892	892
Financing Receivable, Recorded Investment, Current	128,758	95,353
Financing Receivable, Recorded Investment, Subtotal	129,650	96,245
Recorded Investment greater than 90 days and Accruing	$ 480	$ 560

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

Stock option activity in the 2004 Plan for the year ended December 31, 2014 was as follows:

	Shares		Weighted Average Exercise Price
Outstanding at beginning of year		250,518	$	9.91
Exercised		17,073		3.81
Forfeited/cancelled		147,816		12.91
Outstanding at end of year		85,629	$	6.81
Options exercisable at year end		58,450	$	8.11

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

The following table summarizes the Company’s stock options at December 31, 2014:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Options Exercisable		Weighted Average Exercise Price
$3.50-$5.40		68,999	$	3.95		6.9		41,820	$	3.78
$5.41-$9.00		5,196	$	9.00		4.5		5,196	$	9.00
$9.01-$16.90		4,783	$	16.90		3.1		4,783	$	16.90
$16.01-$30.70		6,651	$	26.01		1.7		6,651	$	26.01

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Interest-Bearing Deposits (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Time deposits
Total	$ 342,170	$ 317,237
Interest-bearing Deposits [Member]
Interest Bearing Deposits [Line Items]
Interest-bearing demand	77,534	68,382
Money market	147,667	123,237
Savings deposits	42,634	41,231
Time deposits
In denominations under $250,000	64,758	75,608
In denominations of $250,000 or more	9,577	8,779
Total	$ 342,170	$ 317,237

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Fair Value Measurements

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

14. Fair Value Measurements

The Company accounts for fair value measurements in accordance with FASB ASC 820, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure fair value:

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

 

The carrying value of certain financial assets and liabilities is impacted by the application of fair value measurements, either directly or indirectly.  In certain cases, an asset or liability is measured and reported at fair value on a recurring basis, such as available-for-sale investment securities.  In other cases, management must rely on estimates or judgments to determine if an asset or liability not measured at fair value warrants an impairment write-down or whether a valuation reserve should be established.  Given the inherent volatility, the use of fair value measurements may have a significant impact on the carrying value of assets or liabilities, or result in material changes to the financial statements, from period to period.

Fair value is defined as the price that would be received to sell an asset or transfer a liability between market participants at the balance sheet date. When possible, the Company looks to active and observable markets to price identical assets or liabilities. When identical assets and liabilities are not traded in active markets, the Company looks to observable market data for similar assets and liabilities. However, certain assets and liabilities are not traded in observable markets and the Company must use other valuation methods to develop a fair value. The fair value of impaired loans is based on the fair value of the underlying collateral, which is estimated through third party appraisals or internal estimates of collateral values.

The following methods, assumptions, and valuation techniques were used by the Company to measure different financial assets and liabilities at fair value and in estimating its fair value disclosures for financial instruments.

Cash and Cash Equivalents: The carrying amounts reported in the consolidated statements of financial condition for cash and cash equivalents is deemed to be fair value and are classified as Level 1 of the fair value hierarchy.

Available for Sale Investment Securities: Fair values for investment securities are determined by quoted market prices if available (Level 1). For securities where quoted prices are not available, fair values are estimated based on market prices of similar securities. For securities where quoted prices or market prices of similar securities are not available, fair values are estimated using matrix pricing, which is a mathematical technique widely used in the industry to value investment securities without relying exclusively on quoted prices for the specific investment securities but rather relying on the investment securities’ relationship to other benchmark quoted investment securities (Level 2). Any investment security not valued based upon the methods above is considered Level 3.

The Company utilizes information provided by a third-party investment securities portfolio manager in analyzing the investment securities portfolio in accordance with the fair value hierarchy of ASC 820. The portfolio manager’s evaluation of investment security portfolio pricing is performed using a combination of prices and data from other sources, along with internally developed matrix pricing models. The third-party’s month-end pricing process includes a series of quality assurance activities where prices are compared to recent market conditions, previous evaluation prices, and between the various pricing services. These processes produce a series of quality assurance reports on which price exceptions are identified, reviewed and where appropriate, securities are re-priced. In the event of a materially different price, the third party will report the variance and review the pricing methodology in detail. The results of the quality assurance process are incorporated into the selection of pricing providers by the third party.

Collateralized Debt Obligations: Estimated fair value for collateralized debt obligations is based on independent third-party evaluations including discounted cash flows and other market assumptions. The methods used to estimate the fair value of the securities do not necessarily represent an exit price and due to the significant judgment involved, these securities are classified Level 3.

Loans: For fixed rate loans and for variable rate loans with infrequent re-pricing or re-pricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life. Fair values for impaired loans are estimated using discounted cash flow analysis or underlying collateral values. For loans held on balance sheet, the discounted fair value is further reduced by the amount of reserves held against the loan portfolios. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price and due to the significant judgment involved in evaluating credit quality, loans are classified Level 3.

Federal Home Loan Bank Stock: The carrying amount presented in the consolidated statements of financial condition is deemed to approximate fair value.

Accrued Interest Receivable and Payable: The fair value for accrued interest approximates its carrying amounts due to the short duration before collection. The valuation is a Level 3 classification which is consistent with its underlying asset or liability.

Deposits: The fair values of deposits with no stated maturity, such as money market demand deposits, savings and NOW accounts have been analyzed by management and assigned estimated maturities and cash flows which are then discounted to derive a value. The fair value of fixed-rate certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. The Company classifies the estimated fair value of deposit liabilities as Level 2 in the fair value hierarchy.

Advances from the Federal Home Loan Bank: The fair value of these advances is estimated using the rates currently offered for similar advances of similar remaining maturities or, when available, quoted market prices.

Commitments to Extend Credit: For fixed-rate and adjustable-rate loan commitments, the fair value estimate considers the difference between current levels of interest rates and committed rates. At December 31, 2014 and December 31, 2013, the fair value of loan commitments was not material.

Based on the foregoing methods and assumptions, the carrying value and fair value of the Company’s financial instruments are as follows (in thousands):

At December 31, 2014:

	Carrying
	Amount		Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	21,274	$	21,274	$	21,274	$	—	$	—
Securities available-for-sale		75,909		75,909		—		75,909		—
Loans (net of allowance)		381,208		381,224		—		—		381,224
FHLB stock		3,250		3,250		—		3,250		—
Accrued interest receivable		1,234		1,234		—		—		1,234
Financial liabilities
Noninterest-bearing deposits	$	111,022	$	111,022	$	—	$	111,022	$	—
Interest-bearing deposits		342,170		342,318		—		342,318		—
FHLB advances		11,808		11,808		—		11,808		—
Accrued interest payable		36		36		—		—		36

At December 31, 2013: 

	Carrying		Fair
	Amount		Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	25,357	$	25,357	$	25,357	$	—	$	—
Securities available-for-sale		79,948		79,948		—		78,972		976
Loans (net of allowance) (1)		357,130		348,295		—		—		348,295
FHLB stock		3,799		3,799		—		3,799		—
Accrued interest receivable		1,356		1,356		—		—		1,356
Financial liabilities
Noninterest-bearing deposits (2)	$	112,711	$	112,711	$	—	$	112,711	$	—
Interest-bearing deposits (2)		317,237		318,107		—		318,107		—
FHLB advances		4,838		4,838		—		4,838		—
Accrued interest payable		112		112		—		—		112

(1) Includes loans held for sale

(2) Includes deposits held for sale

The following table presents the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2014 and December 31, 2013 (in thousands):

			Fair Value Measurements Using
			Quoted Prices in
			Active Markets for		Significant Other		Significant
			Identical Assets		Observable Inputs		Unobservable Inputs
December 31, 2014	Fair Value		(Level 1)		(Level 2)		(Level 3)
U.S. Government and agency obligations	$	11,545	$	—	$	11,545	$	—
State and municipal obligations		21,657		—		21,657		—
Corporate bonds		4,987		—		4,987		—
Collateralized mortgage obligation		19,580		—		19,580		—
Mortgage-backed securities and other		18,140		—		18,140		—
Total	$	75,909	$	—	$	75,909	$	—

			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
December 31, 2013	Fair Value		(Level 1)		(Level 2)		(Level 3)
U.S. Government and agency obligations	$	13,302	$	—	$	13,302	$	—
State and municipal obligations		20,450		—		20,450		—
Corporate bonds		6,168		—		6,168		—
Collateralized debt obligation		976		—		—		976
Collateralized mortgage obligation		15,045		—		15,045		—
Mortgage-backed securities and other		24,007		—		24,007		—
Total	$	79,948	$	—	$	78,972	$	976

The table below presents a roll-forward of the balance sheet amounts for the year ended December 31, 2014 for the collateralized debt obligation measured on a recurring basis and classified as Level 3. The classification of an item as Level 3 is based on the significance of the unobservable inputs to the overall fair value measurement.

Level 3 Fair Value Measurements
Year ended December 31, 2014
Balance, beginning of year	$	976
Sales		(1,775)
Total gains (losses):
Included in earnings		(141)
Included in other comprehensive income		940
Balance, end of year	$	—

The following is a description of the valuation methodologies used for instruments measured at fair value on a non-recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Securities

Collateralized debt obligations were classified as available for sale at December 31, 2013. The Company recognized other-than-temporary impairment on certain of the securities as of December 31, 2013, based upon a Level 3 estimate of fair value, including a discounted cash flows calculation and a fair value estimate from an independent evaluation of the securities.

Impaired loans

At December 31, 2014 and 2013, impaired loans consisted primarily of loans secured by nonresidential and commercial real estate. Management has determined fair value measurements on impaired loans primarily through evaluations of appraisals performed.

Real Estate Owned

Real estate acquired through, or in lieu of, loan foreclosure is held for sale and initially recorded at fair value (based on current appraised value) at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell. Management has determined fair value measurements on real estate owned primarily through evaluations of appraisals performed.

The following table presents the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2014 and 2013 (in thousands).

December 31, 2014			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
	Fair		Identical Assets		Observable Inputs		Inputs
	Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	12,173	$	—	$	—	$	12,173
Real estate owned		1,111		—		—		1,111

December 31, 2013			Fair Value Measurements Using
				Quoted Prices in				Significant
				Active Markets for		Significant Other		Unobservable
	Fair			Identical Assets		Observable Inputs		Inputs
	Value			(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	22,881			—		—	$	22,881
Real estate owned		1,219			—		—		1,219

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Federal Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

Income tax expense (benefit) for the years ended December 31, 2014 and 2013 included the following components (in thousands).

	2014		2013
Current	$	—	$	—
Deferred		384		(1,918)
Valuation allowance		(384)		1,620
Totals	$	-	$	(298)

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The difference between the financial statement tax provision and amounts computed by applying the statutory federal income tax rate to income before income taxes was as follows (in thousands):

	2014		2013
Income tax benefit computed at the statutory federal income tax rate	$	127	$	(1,098)
Tax exempt income		(330)		(1,002)
Change in valuation allowance		(384)		1,620
Other		587		(324)
Totals	$	-	$	(298)

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Year-end deferred tax assets and liabilities were comprised of the following (in thousands).

	2014		2013
Deferred tax assets
Allowance for loan losses	$	1,440	$	3,369
Depreciation		103		92
Deferred compensation		316		54
Alternative minimum tax carry forward		145		145
Other-than-temporary impairment losses		-		369
Expenses on foreclosed real estate		10		70
NOL carry forward		8,910		7,460
Other		284		151
Subtotal		11,208		11,710
Deferred tax liabilities
FHLB stock dividends		(389)		(455)
Unrealized (gain) loss on available-for-sale securities		(337)		399
Other		(35)		(87)
Subtotal		(761)		(143)
Net deferred tax asset		10,447		11,567
Less: valuation allowance		(10,784)		(11,168)
Total	$	(337)	$	399

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Details of Operating Expenses

12 Months Ended

Dec. 31, 2014

Other Income and Expenses [Abstract]

Other Income and Other Expense Disclosure [Text Block]

16. Details of Operating Expenses

The following table details the composition of occupancy and equipment expenses for the years ended December 31, 2014 and 2013.

(In thousands)	2014		2013
Bank occupancy expense	$	1,876	$	1,590
Equipment lease		83		342
Equipment depreciation		233		303
Software maintenance		961		824
Other		39		10
Total	$	3,192	$	3,069

The following table details the composition of other operating expenses for the years ended December 31, 2014 and 2013.

(In thousands)	2014		2013
ATM and debit cards	$	690	$	772
Telephone		269		320
Loan		344		482
Real estate taxes		325		281
OREO expenses		26		22
Other operating		1,169		1,065
Total	$	2,823	$	2,942

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Borrowings (Details 1) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Schedule Of Borrowed Funds [Line Items]
2014, Amount	$ 0
2015, Amount	7,257
2016, Amount	1,530
2017, Amount	590
2018, Amount	2,034
2019 and after, Amount	397
Amount, Total	$ 11,808
2014, Weighted Average Rate	0.00%
2015, Weighted Average Rate	0.27%
2016, Weighted Average Rate	0.84%
2017, Weighted Average Rate	1.12%
2018, Weighted Average Rate	1.79%
2019 and after, Weighted Average Rate	5.44%
Weighted Average Rate Of Borrowings	0.82%

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Consolidated Statements of Changes in Shareholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock [Member]	Preferred Stock [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Deferred Compensation, Share-based Payments [Member]
Balance at Dec. 31, 2012	$ 48,389	$ 15,771	$ 0	$ 40,614	$ (7,416)	$ (580)	$ 0
Balance (in shares) at Dec. 31, 2012		7,192,350
Comprehensive income (loss)
Net income (loss)	(2,931)	0	0	(2,931)	0	0	0
Other comprehensive income (loss), net of taxes	(194)	0	0	0	0	(194)	0
Total comprehensive income (loss)	(3,125)	0	0	0	0	0	0
Balance at Dec. 31, 2013	45,264	15,771	0	37,683	(7,416)	(774)	0
Balance (in shares) at Dec. 31, 2013		7,192,350
Comprehensive income (loss)
Net income (loss)	372	0	0	372	0	0	0
Other comprehensive income (loss), net of taxes	1,428	0	0	0	0	1,428	0
Total comprehensive income (loss)	1,800	0	0	0	0	0	0
Issuance of restricted stock in exchange for cancelled stock options	147	293	0	0	0	0	(146)
Issuance of restricted stock in exchange for cancelled stock options (in shares)		41,445
Balance at Dec. 31, 2014	$ 47,211	$ 16,064	$ 0	$ 38,055	$ (7,416)	$ 654	$ (146)
Balance (in shares) at Dec. 31, 2014		7,233,795

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Consolidated Balance Sheets [Parenthetical] (USD $)	Dec. 31, 2014	Dec. 31, 2013
Preferred Stock, Par or Stated Value Per Share	$ 0	$ 0
Preferred Stock, Shares Authorized	2,000,000	2,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common stock, shares authorized	17,500,000	7,500,000
Common stock, shares issued	7,541,445	7,500,000
Common Stock, Shares, Outstanding	7,233,795	7,192,350
Treasury stock, shares	307,650	307,650

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Retirement Plans

12 Months Ended

Dec. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

9. Retirement Plans

The Company provides a 401(k) savings plan (the “Plan”) for all eligible employees. To be eligible, an individual must complete six months of employment and be 20 or more years of age. Under provisions of the Plan, participants can contribute a certain percentage of their compensation to the Plan up to the maximum allowed by the IRS. The Company also matches a certain percentage of those contributions up to a maximum match of up to 3% of the participant’s compensation. The Company may also provide additional discretionary contributions, but did not do so in 2014 or 2013. Employee voluntary contributions are vested immediately and Company contributions are fully vested after three years. The 2014 and 2013 expenses related to the Plan were $176,000 and $173,000, respectively.

The Company maintains a deferred compensation plan for the benefit of certain officers. The plan is designed to provide post-retirement benefits to supplement other sources of retirement income such as social security and 401(k) benefits. The amount of each officer’s benefit will generally depend on their salary, and their length of employment. The Company accrues the cost of this deferred compensation plan during the working careers of the officers. Expense under this plan totaled $38,000 and $0 in 2014 and 2013, respectively. The total accrued liability under this plan was $928,000 and $1.2 million at December 31, 2014 and 2013, respectively. In addition to recognizing expense associated with the plan, the Company funds the vested amounts, $768,000 and $1.0 million, into separate accounts held in custody by the Company’s trust department at December 31, 2014 and 2013, respectively.

The Company has purchased insurance contracts on the lives of the participants in the supplemental post-retirement benefit plan and has named the Company as the beneficiary. While no direct connection exists between the deferred compensation plan and the life insurance contracts, it is management’s current intent that the earnings on the insurance contracts be used as a funding source for benefits payable under the plan.

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Quarterly Financial Data (Unaudited) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Quarterly Financial Data [Abstract]
Interest income	$ 4,536	$ 4,278	$ 4,262	$ 4,304	$ 4,372	$ 4,316	$ 4,245	$ 4,146	$ 17,380	$ 17,079
Interest expense	291	306	299	316	369	425	494	530	1,212	1,818
Net interest income	4,245	3,972	3,963	3,988	4,003	3,891	3,751	3,616	16,168	15,261
Provision for loan losses	150	0	0	0	3,307	0	(240)	(650)	150	2,417
Net interest income after provision for loan losses	4,095	3,972	3,963	3,988	696	3,891	3,991	4,266	16,018	12,844
Other non-interest income	1,132	1,140	996	1,192	1,116	1,192	1,351	1,308	4,460	4,967
Other non-interest expense	5,059	5,062	4,922	5,063	4,914	5,230	5,440	5,456	20,106	21,040
(Loss) income before income tax expense	168	50	37	117	(3,102)	(147)	(98)	118	372	(3,229)
Income tax benefit	0	0	0	0	0	(20)	(254)	(24)	0	(298)
Net (loss) income	$ 168	$ 50	$ 37	$ 117	$ (3,102)	$ (127)	$ 156	$ 142	$ 372	$ (2,931)
Stock and related per share data
Basic and diluted (loss) earnings per common share (in dollars per share)	$ 0.02	$ 0.01	$ 0.01	$ 0.02	$ (0.43)	$ (0.02)	$ 0.02	$ 0.02	$ 0.05	$ (0.41)
Basic weighted average common shares outstanding (in shares)	7,196,404	7,192,350	7,192,350	7,192,350	7,192,350	7,192,350	7,192,350	7,192,350	7,193,372	7,192,350
Diluted weighted average common shares outstanding (in shares)	7,232,961	7,249,194	7,250,702	7,244,716	7,192,350	7,192,350	7,227,901	7,223,144	7,232,388	7,192,350

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Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2014	Mar. 20, 2015	Jun. 30, 2014
Document Information [Line Items]
Entity Registrant Name	DCB FINANCIAL CORP
Entity Central Index Key	0001025877
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	DCBF
Entity Common Stock, Shares Outstanding		7,233,795
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2014
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 41,255,000

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

10. Stock-Based Compensation

The 2014 Restricted Stock Plan (“2014 Plan”) was approved by shareholders in October 2014 authorizing the use of 350,000 shares of authorized but unissued common stock of DCB. The purpose of the 2014 Plan is to promote the growth and profitability of the Company and its affiliated companies; to attract and retain directors, key officers and employees of outstanding competence; to provide eligible directors, certain key officers and employees of the Company and its affiliated companies with an incentive to achieve corporate objectives; and to provide such directors, officers and employees with an equity interest in the Company and its affiliated companies. Awards granted under this plan generally vest ratably over a five year period.

Restricted stock awards are recorded as deferred compensation, a component of shareholders’ equity, at fair value at the date of the grant and amortized to compensation expense over the specified vesting periods.

The Company also has a long-term stock incentive compensation plan (the “2004 Plan”), under which certain employees were granted the right to purchase shares of the Company’s common stock at a predetermined price. The 2004 Plan, which is limited to 300,000 shares, expired in 2014 and no further awards will be granted from the 2004 Plan. Options granted under the 2004 Plan vest 20% per year over a five year period, and expire after ten years. There were no options granted in 2014. During the year ended December 31, 2013, options for 13,889 shares were granted at an exercise price of $5.40. At December 31, 2014, 58,450 shares were exercisable under the 2004 Plan.

The Company recorded $190,000 and $129,000 in compensation expense for its outstanding stock options for the years ended December 31, 2014 and 2013, respectively.

Stock option activity in the 2004 Plan for the year ended December 31, 2014 was as follows:

	Shares		Weighted Average Exercise Price
Outstanding at beginning of year		250,518	$	9.91
Exercised		17,073		3.81
Forfeited/cancelled		147,816		12.91
Outstanding at end of year		85,629	$	6.81
Options exercisable at year end		58,450	$	8.11

There were no options granted in 2014. The weighted-average fair value of stock options granted in 2013 was $2.45. In determining the fair value of the stock options granted in 2013, the Company utilized a Black-Scholes valuation model with a risk-free interest rate of 2.25%, an expected dividend yield of zero, an expected common stock price volatility of 30%, and an expected life of 10 years.

The following table summarizes the Company’s stock options at December 31, 2014:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Options Exercisable		Weighted Average Exercise Price
$3.50-$5.40		68,999	$	3.95		6.9		41,820	$	3.78
$5.41-$9.00		5,196	$	9.00		4.5		5,196	$	9.00
$9.01-$16.90		4,783	$	16.90		3.1		4,783	$	16.90
$16.01-$30.70		6,651	$	26.01		1.7		6,651	$	26.01

The total intrinsic value of options exercised during 2014 and 2013 was $57,000 and $7,000, respectively. At December 31, 2014, the aggregate intrinsic value of outstanding options was $211,000 and the aggregate intrinsic value of exercisable options was $138,000.

At December 31, 2014, unrecognized compensation expense to be recognized over the remaining vesting period of outstanding options was $95,000.

On November 25, 2014, the Company commenced a tender offer to exchange (the “Exchange Offer”) 190,104 options outstanding under the Company’s 2004 Plan, for shares of restricted stock to be granted under the Company’s 2014 Plan. The Exchange Offer was subject to the terms and conditions described in Schedule TO (“TO”) which was filed with the SEC on November 25, 2014.

The stock options subject to the TO were any or all options to purchase the Company’s common stock held by employees, executive officers and non-employee directors, whether vested or unvested, out-of-the-money or in-the-money, which had not expired or terminated prior to the expiration of the Exchange Offer on December 23, 2014.

The primary reason for making the Exchange Offer was to reduce the compensation expense we are required to recognize for the Company’s options which are accounted for under the liability accounting method, under which changes in the fair value of the options between the vesting date and expiration date are recognized in the Company’s financial statements. The shares of restricted stock offered in exchange for the eligible options are not subject to liability accounting and, accordingly, would allow the Company to better manage its compensation expense.

Additionally, the exercise prices of some of the outstanding eligible options are significantly higher than the market price of the Company’s common shares. The Company believes that these significantly “out of the money” options may be unlikely to be exercised in the near future and were therefore not providing the incentives intended for our employees, executive officers and non-employee directors. By making the Exchange Offer, the Company believes it was able to re-establish some of the intended incentive value of these options by realigning its compensation programs to more closely reflect the current market and economic conditions.

The Company established eight exchange ratios for eligible options depending on their exercise price, ranging from 0.029 shares of restricted stock per Option to 0.672 shares of restricted stock per option, as specifically set forth in the TO.  

Thirty holders of eligible options tendered, and the Company accepted for cancellation, eligible options to purchase an aggregate of 113,873 common shares, representing approximately 64% of the total common shares underlying options eligible for exchange in the Exchange Offer. On December 23, 2014, a total of 41,445 shares of restricted stock were issued to holders of eligible options in exchange for the cancellation of such eligible options pursuant to the Offer to Exchange. The restricted stock granted under the Exchange Offer had a grant date fair value of $7.07 per share, and vest ratably over a five-year period.

The excess of the aggregate grant date fair value of the restricted stock of $293,000 over the fair value of the stock options canceled of $147,000 was recorded as deferred stock-based compensation, a component of shareholders’ equity, and is being amortized over the vesting period of the restricted stock. The Company did not record any compensation expense associated with restricted stock in 2014 and 2013.

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Regulatory Capital (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Summary of actual and required capital ratios
Total capital to risk-weighted assets, Actual Amount	$ 50,656	$ 50,644
Total capital to risk-weighted assets, Actual Ratio	13.88%	13.82%
Total capital to risk-weighted assets, For capital adequacy purposes, Amount	29,197	29,321
Total capital to risk-weighted assets, For capital adequacy purposes, Ratio	8.00%	8.00%
Total capital to risk-weighted assets, To be well capitalized under Consent Order and Written Agreement , Amount	0	0
Total capital to risk-weighted assets, To be well capitalized under Consent Order and Written Agreement, Ratio	0.00%	0.00%
Tier 1 (core) capital to risk-weighted assets, Actual Amount	46,420	46,036
Tier 1 (core) capital to risk-weighted assets, Actual Ratio	12.72%	12.56%
Tier 1 (core) capital to risk-weighted assets, For capital adequacy purposes, Amount	14,597	14,661
Tier 1 (core) capital to risk-weighted assets, For capital adequacy purposes, Ratio	4.00%	4.00%
Tier 1 (core) capital to risk-weighted assets, To be well capitalized under Consent Order and Written Agreement, Amount	0	0
Tier 1 (core) capital to risk-weighted assets, To be well capitalized under Consent Order and Written Agreement, Ratio	0.00%	0.00%
Tier 1 (core) capital to average assets, Actual Amount	46,420	46,036
Tier 1 (core) capital to average assets, Actual Ratio	9.21%	9.00%
Tier 1 (core) capital to average assets, For capital adequacy purposes, Amount	20,161	20,456
Tier 1 (core) capital to average assets, For capital adequacy purposes, Ratio	4.00%	4.00%
Tier 1 (core) capital to average assets, To be well capitalized under Consent Order and Written Agreement, Amount	0	0
Tier 1 (core) capital to average assets, To be well capitalized under Consent Order and Written Agreement, Ratio	0.00%	0.00%
Subsidiaries [Member]
Summary of actual and required capital ratios
Total capital to risk-weighted assets, Actual Amount	49,602	49,473
Total capital to risk-weighted assets, Actual Ratio	13.56%	13.50%
Total capital to risk-weighted assets, For capital adequacy purposes, Amount	29,264	29,321
Total capital to risk-weighted assets, For capital adequacy purposes, Ratio	8.00%	8.00%
Total capital to risk-weighted assets, To be well capitalized under Consent Order and Written Agreement , Amount	36,580	36,651
Total capital to risk-weighted assets, To be well capitalized under Consent Order and Written Agreement, Ratio	10.00%	10.00%
Tier 1 (core) capital to risk-weighted assets, Actual Amount	45,366	44,865
Tier 1 (core) capital to risk-weighted assets, Actual Ratio	12.40%	12.24%
Tier 1 (core) capital to risk-weighted assets, For capital adequacy purposes, Amount	14,634	14,661
Tier 1 (core) capital to risk-weighted assets, For capital adequacy purposes, Ratio	4.00%	4.00%
Tier 1 (core) capital to risk-weighted assets, To be well capitalized under Consent Order and Written Agreement, Amount	21,951	21,992
Tier 1 (core) capital to risk-weighted assets, To be well capitalized under Consent Order and Written Agreement, Ratio	6.00%	6.00%
Tier 1 (core) capital to average assets, Actual Amount	45,366	44,865
Tier 1 (core) capital to average assets, Actual Ratio	9.00%	8.77%
Tier 1 (core) capital to average assets, For capital adequacy purposes, Amount	20,163	20,456
Tier 1 (core) capital to average assets, For capital adequacy purposes, Ratio	4.00%	4.00%
Tier 1 (core) capital to average assets, To be well capitalized under Consent Order and Written Agreement, Amount	$ 25,203	$ 25,570
Tier 1 (core) capital to average assets, To be well capitalized under Consent Order and Written Agreement, Ratio	5.00%	5.00%

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Details of Operating Expenses (Details 1) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Details Of Operating Expenses [Line Items]
Other Noninterest Expense	$ 2,823	$ 2,942
ATM and debit cards [Member]
Details Of Operating Expenses [Line Items]
Other Noninterest Expense	690	772
Telephone [Member]
Details Of Operating Expenses [Line Items]
Other Noninterest Expense	269	320
Loan [Member]
Details Of Operating Expenses [Line Items]
Other Noninterest Expense	344	482
Real estate taxes [Member]
Details Of Operating Expenses [Line Items]
Other Noninterest Expense	325	281
OREO expenses [Member]
Details Of Operating Expenses [Line Items]
Other Noninterest Expense	26	22
Other operating [Member]
Details Of Operating Expenses [Line Items]
Other Noninterest Expense	$ 1,169	$ 1,065

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Consolidated Statements of Income (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Interest income:
Loans	$ 15,276	$ 14,928
Securities	2,065	2,064
Federal funds sold and interest bearing deposits	39	87
Total interest income	17,380	17,079
Interest expense:
Savings and money market accounts	559	474
Time accounts	434	989
NOW accounts	76	91
Total	1,069	1,554
FHLB advances	143	264
Total interest expense	1,212	1,818
Net interest income	16,168	15,261
Provision for loan losses	150	2,417
Net interest income after provision for loan losses	16,018	12,844
Non-interest income:
Service charges	1,963	2,195
Wealth management fees	1,474	1,418
Treasury management fees	220	244
Income from bank-owned life insurance	730	733
Gain on the sale of securities available-for-sale	101	135
Losses on loans held for sale	(509)	0
Net (loss) gain on sale of REO	(84)	31
Gain on sale of branch	438	0
Other non-interest income	127	211
Total non-interest income	4,460	4,967
Non-interest expense:
Salaries and employee benefits	11,141	11,287
Occupancy and equipment	3,192	3,069
Professional services	1,379	1,791
Advertising	347	293
Office supplies, postage and courier	328	481
FDIC insurance premium	630	699
State franchise taxes	266	478
Other non-interest expense	2,823	2,942
Total non-interest expense	20,106	21,040
Income (loss) before income tax benefit	372	(3,229)
Income tax benefit	0	(298)
Net income (loss)	$ 372	$ (2,931)
Share and Per Share Data
Basic average common shares outstanding (in shares)	7,193,372	7,192,350
Diluted average common shares outstanding (in shares)	7,232,388	7,192,350
Basic and diluted earnings (loss) per common share (in dollars per share)	$ 0.05	$ (0.41)

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Loans

12 Months Ended

Dec. 31, 2014

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

4. Loans

At December 31, 2014, loans were comprised of the following (in thousands):

	2014		2013
Commercial and industrial	$	106,222	$	122,084
Commercial real estate		111,851		104,692
Residential real estate and home equity		129,650		96,245
Consumer and credit card		37,507		32,862
Subtotal		385,230		355,883
Add: Net deferred loan origination fees		214		165
Total loans receivable	$	385,444	$	356,048

Loans to principal officers, directors, and their related affiliates during 2014 and 2013 in the normal course of business were as follows (in thousands).

	2014		2013
Balance at beginning of year	$	1,440	$	469
New loans		7,070		1,058
Repayments		(403)		(87)
Balance at end of year	$	8,107	$	1,440

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Securities

12 Months Ended

Dec. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

3. Securities

The amortized cost and estimated fair values of securities available-for-sale as of December 31, 2014 and 2013 were as follows (in thousands):

As of December 31, 2014:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government and agency obligations	$	11,602	$	31	$	(88)	$	11,545
Corporate bonds		4,975		33		(21)		4,987
States and municipal obligations		21,303		423		(69)		21,657
Collateralized mortgage obligation		19,601		85		(106)		19,580
Mortgage-backed securities		17,438		702		—		18,140
Total	$	74,919	$	1,274	$	(284)	$	75,909

As of December 31, 2013:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government and agency obligations	$	13,714	$	16	$	(428)	$	13,302
Corporate bonds		6,187		42		(61)		6,168
States and municipal obligations		20,651		283		(484)		20,450
Collateralized debt obligations		1,916		—		(940)		976
Collateralized mortgage obligations		15,217		135		(308)		15,045
Mortgage-backed securities		23,435		596		(23)		24,007
Total	$	81,120	$	1,072	$	(2,244)	$	79,948

The tables below indicate the length of time individual securities have been in a continuous unrealized loss position at December 31, 2014 and 2013 (in thousands):

December 31, 2014

	(Less than 12 months)						(12 months or longer)						Total
Description of securities	Number of securities		Fair value		Unrealized losses		Number of securities		Fair value		Unrealized losses		Number of securities		Fair value		Unrealized losses
U.S. Government and agency obligations		3	$	2,488	$	9		4	$	4,446	$	79		7	$	6,934	$	88
Corporate bonds		1		503		1		4		1,664		21		5		2,167		21
State and municipal obligations		8		2,699		18		4		1,915		51		12		4,614		69
Collateralized debt obligations		—		—		—		—		—		—		—		—		—
Collateralized Mortgage obligations		9		5,649		21		4		3,649		85		13		9,298		106
Mortgage-backed securities and other		—		—		—		—		—		—		—		—		—
Total temporarily impaired securities		21	$	11,339	$	49		16	$	11,674	$	236		37	$	23,013	$	284

December 31, 2013

	(Less than 12 months)						(12 months or longer)								Total
Description of securities	Number of securities		Fair value		Unrealized losses		Number of securities		Fair value		Unrealized losses		Number of securities	Fair value		Unrealized losses
U.S. Government and agency obligations		10	$	10,680	$	428		—	$	—	$	—	10	$	10,680	$	428
Corporate bonds		5		2,141		38		2		883		23	7		3,024		61
State and municipal obligations		32		11,012		442		2		822		42	34		11,834		484
Collateralized debt obligations		—		—		—		1		976		940	1		976		940
Collateralized mortgage obligations		7		5,011		208		1		1,189		100	8		6,200		308
Mortgage-backed securities and other		5		3,434		23		—		—		—	5		3,434		23
Total temporarily impaired securities		59	$	32,278	$	1,139		6	$	3,870	$	1,105	65	$	36,148	$	2,244

Collateralized debt obligations at December 31, 2013 consisted of one security, which was reported in the financial statements at an amount less than its historical cost at December 31, 2013. The decline primarily resulted from changes in market interest rates and failure to maintain consistent credit quality ratings. This security was sold in the first quarter of 2014.

The unrealized losses on the Company’s investments in U.S. Government and agency obligations, corporate bonds, state and political subdivision obligations, and mortgage-backed securities were caused primarily by changes in interest rates. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at December 31, 2014.

Substantially all mortgage-backed securities are backed by pools of mortgages that are insured or guaranteed by the Federal National Mortgage Association (“FNMA”), the Government National Mortgage Association (“GNMA”) or the Federal Home Loan Mortgage Corporation (“FHLMC”).

No other-than-temporary impairment was recognized in 2014 or 2013. There was no accumulated other-than-temporary impairment as of December 31, 2014. The accumulated other-than-temporary impairment was $1.1 million as of December 31, 2013, which was primarily caused by (a) decrease in performance and regulatory capital resulting from exposure to subprime mortgages and (b) sector downgrade by industry analysts which impaired the value of the Company’s investments in collateralized debt obligations. The Company recognized a loss equal to the credit loss, establishing a new, and lower amortized cost basis. The credit loss was calculated by comparing expected discounted cash flows based on performance indicators of the underlying assets in the security to the carrying value of the investment. In March 2014, the Company sold its remaining investment in collateralized debt obligations for a loss of $140,000.

There are no securities from the same issuer, besides agency investments, greater than 10% of total equity at December 31, 2014.

The amortized cost and estimated fair value of debt securities, at December 31, 2014, by contractual maturity, are shown below (in thousands). Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown separately since they are not due at a single maturity date.

	Available-for-sale
	Amortized Cost		Fair Value
Due in one year or less	$	1,417	$	1,430
Due from one to five years		12,646		12,656
Due from five to ten years		23,424		23,699
Due after ten years		19,994		19,984
Mortgage-backed securities		17,438		18,140
Total	$	74,919	$	75,909

Sales of investment securities during the years ended December 31, 2014 and 2013 were as follows (in thousands):

	2014		2013
Proceeds from investments sales	$	7,140	$	2,560
Gross gains on investment sales	$	242	$	135
Gross losses on investment sales	$	(141)	$	—

Securities with a carrying amount of $65.5 million and $65.6 million at December 31, 2014 and 2013, respectively, were pledged to secure public deposits and other obligations.

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Parent Company Financial Information

12 Months Ended

Dec. 31, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

15. Parent Company Financial Information

Condensed financial information of DCB Financial Corp for the years ended December 31 is as follows:

Condensed Balance Sheets

	2014		2013
Assets
Cash	$	948	$	948
Investment in subsidiaries		46,283		44,336
Total assets	$	47,231	$	45,284
Liabilities
Other liabilities	$	20	$	20
Shareholders’ Equity		47,211		45,264
Total liabilities and shareholders’ equity	$	47,231	$	45,284

Condensed Statements of Operations

	2014		2013
Equity in undistributed income (loss) of subsidiaries	$	372		(2,805)
Other		—		—
Total income (loss)		372		(2,805)
Operating expenses		—		(126)
Federal income tax		—		—
Net income (loss)	$	372	$	(2,931)

Condensed Statements of Cash Flows
	2014		2013
Cash flows from operating activities
Net income (loss)	$	372	$	(2,931)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Equity in undistributed net income (loss) from subsidiaries		(372)		2,805
Net change in other assets and liabilities		—		(4,171)
Net cash used in operating activities		—		(4,297)
Cash flows from investing activities
Investments in affiliates		—		5
Net cash provided by investing activities		—		5
Cash flows from financing activities
Investment in Subsidiary		—		(8,092)
Net cash used in financing activities		—		(8,092)
Net change in cash		—		(12,382)
Cash at beginning of year		948		13,332
Cash at end of year	$	948	$	948

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Federal Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

11. Federal Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and franchise tax returns in Ohio. Income tax expense (benefit) for the years ended December 31, 2014 and 2013 included the following components (in thousands).

	2014		2013
Current	$	—	$	—
Deferred		384		(1,918)
Valuation allowance		(384)		1,620
Totals	$	-	$	(298)

The difference between the financial statement tax provision and amounts computed by applying the statutory federal income tax rate to income before income taxes was as follows (in thousands):

	2014		2013
Income tax benefit computed at the statutory federal income tax rate	$	127	$	(1,098)
Tax exempt income		(330)		(1,002)
Change in valuation allowance		(384)		1,620
Other		587		(324)
Totals	$	-	$	(298)

Year-end deferred tax assets and liabilities were comprised of the following (in thousands).

	2014		2013
Deferred tax assets
Allowance for loan losses	$	1,440	$	3,369
Depreciation		103		92
Deferred compensation		316		54
Alternative minimum tax carry forward		145		145
Other-than-temporary impairment losses		-		369
Expenses on foreclosed real estate		10		70
NOL carry forward		8,910		7,460
Other		284		151
Subtotal		11,208		11,710
Deferred tax liabilities
FHLB stock dividends		(389)		(455)
Unrealized (gain) loss on available-for-sale securities		(337)		399
Other		(35)		(87)
Subtotal		(761)		(143)
Net deferred tax asset		10,447		11,567
Less: valuation allowance		(10,784)		(11,168)
Total	$	(337)	$	399

At December 31, 2014, the Company had a $26 million net operating loss carry forward that begins to expire in 2030.

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Fair Value Measurements (Details 2) (Fair Value, Inputs, Level 3 [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance, beginning of year	$ 976
Sales	(1,775)
Total gains (losses):
Included in earnings	(141)
Included in other comprehensive income	940
Balance, end of year	$ 0

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Interest-Bearing Deposits

12 Months Ended

Dec. 31, 2014

Banking and Thrift [Abstract]

Deposit Liabilities Disclosures [Text Block]

7. Interest-Bearing Deposits

Interest-bearing deposits were as follows at the dates indicated (in thousands):

	December 31,
	2014		2013
Interest-bearing demand	$	77,534	$	68,382
Money market		147,667		123,237
Savings deposits		42,634		41,231
Time deposits
In denominations under $250,000		64,758		75,608
In denominations of $250,000 or more		9,577		8,779
Total	$	342,170	$	317,237

Scheduled maturities of time deposits were as follows (in thousands):

2015	$	48,431
2016		23,343
2017		2,154
2018		346
2019 and after		61
Total	$	74,335

At December 31, 2014 and 2013 deposits received from officers, directors and related affiliates were considered to be immaterial to the total amount of total deposits.

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Credit Quality (Details 6) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Financing Receivable, Modifications [Line Items]
Number of Contracts	0	12
Post-modification outstanding recorded investment	$ 0	$ 4,986
Number of Contracts	0	4
Post-modification outstanding recorded investment	0	1,559
Consumer and credit card [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	0	0
Post-modification outstanding recorded investment	0	0
Number of Contracts	0	0
Post-modification outstanding recorded investment	0	0
Commercial and industrial [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	0	4
Post-modification outstanding recorded investment	0	1,081
Number of Contracts	0	3
Post-modification outstanding recorded investment	0	1,075
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	0	8
Post-modification outstanding recorded investment	0	3,905
Number of Contracts	0	1
Post-modification outstanding recorded investment	0	484
Residential real estate and home equity [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	0	0
Post-modification outstanding recorded investment	0	0
Number of Contracts	0	0
Post-modification outstanding recorded investment	$ 0	$ 0

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Credit Quality

12 Months Ended

Dec. 31, 2014

Credit Quality [Abstract]

Credit Quality Disclosure [Text Block]

5. Credit Quality

Allowance for Loan Losses

The Company’s methodology for estimating probable future losses on loans utilizes a combination of probability of loss by loan grade and loss given defaults for its portfolios. The probability of default is based on both market data from a third-party independent source and actual historical default rates within the Company’s portfolio. A loan is impaired when full payment of interest and principal under the original contractual loan terms is not expected. Commercial and industrial loans, commercial real estate, including construction and land development, and multi-family real estate loans are individually evaluated for impairment. If a loan is impaired, the loan amount exceeding fair value, based on the most current information available is reserved. Management has developed a process by which commercial and commercial real estate loans receiving an internal grade of Vulnerable, Substandard or Doubtful are individually evaluated for impairment through a loan quality review (LQR). The LQR details the various attributes of the relationship and collateral and determines based on the most recent available information if a specific reserve needs to be applied and at what level. The LQR process for all loans meeting the specific review criteria is completed on a quarterly basis. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, are collectively evaluated for impairment, and accordingly, such loans are not separately identified for impairment disclosures. This methodology recognizes portfolio behavior while allowing for reasonable loss ratios on which to estimate allowance calculations.

Further, the process for estimating probable loan losses is divided into reviewing impaired loans on an individual basis for probable losses and, as noted above, calculating probable future losses based on historical and market data for homogenous loan portfolios. As the Company’s troubled loan portfolios have been reduced through payoffs, paydowns, and charge-offs, the remaining loan portfolios possess better overall credit characteristics, and based on the Company’s methodology require lower rates of reserving than recent historical levels.

The table below presents allowance for loan losses by loan portfolio (in thousands). Commercial real estate includes real estate construction and land development loans.

For the Year Ended December 31, 2014:

							Residential
							Real Estate
	Consumer and		Commercial and		Commercial		and
	Credit Card		Industrial		Real Estate		Home Equity		Unallocated		Total
Allowance for loan losses:
Beginning balance:	$	301	$	3,231	$	2,973	$	219	$	—	$	6,724
Chargeoffs		(200)		(1,410)		(1,086)		(169)		—		(2,865)
Recoveries		113		42		131		38		—		324
Transfer to held for sale		—		—		(97)		—		—		(97)
Provision		(24)		(731)		455		180		270		150
Ending balance:	$	190	$	1,132	$	2,376	$	268	$	270	$	4,236
Allowance on loans:
Individually evaluated for impairment	$	—	$	256	$	1,042	$	—	$	—	$	1,298
Collectively evaluated for impairment		190		876		1,334		268		270		2,938
Ending balance:	$	190	$	1,132	$	2,376	$	268	$	270	$	4,236
As of December 31, 2014:
Loans:
Individually evaluated for impairment	$	455	$	2,028	$	9,690	$	—	$	—	$	12,173
Collectively evaluated for impairment		37,052		109,823		96,532		129,650		—		373,057
Ending balance:	$	37,507	$	111,851	$	106,222	$	129,650	$	—	$	385,230

For the year ended December 31, 2013

							Residential
							Real Estate
	Consumer and		Commercial and		Commercial		and
	Credit Card		Industrial		Real Estate		Home Equity		Total
Allowance for loan losses:
Beginning balance:	$	365	$	1,620	$	4,692	$	204	$	6,881
Chargeoffs		(286)		(86)		(1,038)		(331)		(1,741)
Recoveries		219		823		38		52		1,132
Transfer to held for sale		—		—		(1,965)		—		(1,965)
Provision		3		874		1,246		294		2,417
Ending balance:	$	301	$	3,231	$	2,973	$	219	$	6,724
Allowance on loans:
Individually evaluated for impairment	$	—	$	2,304	$	1,862	$	—	$	4,166
Collectively evaluated for impairment		301		927		1,111		219		2,558
Ending balance:	$	301	$	3,231	$	2,973	$	219	$	6,724
As of December 31, 2013:
Loans:
Individually evaluated for impairment	$	—	$	7,221	$	15,660	$	—	$	22,881
Collectively evaluated for impairment		32,862		114,863		89,032		96,245		333,002
Ending balance:	$	32,862	$	122,084	$	104,692	$	96,245	$	355,883

Impaired Loans

A loan is considered impaired when based on current information and events it is probable the Bank will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include non-performing commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. Commercial and commercial real estate loans with risk grades Substandard, Vulnerable, Doubtful, or Loss are evaluated for impairment.

The following table indicates impaired loans with and without an allocated allowance at December 31, 2014 (in thousands).

			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
With no related allowance recorded
Consumer and credit card	$	455	$	455	$	—	$	474	$	25
Commercial and industrial		1,288		1,288		—		1,531		45
Commercial real estate		1,088		1,088		—		6,714		70
With allowance recorded
Commercial and industrial		740		817		256		1,772		43
Commercial real estate		8,602		8,602		1,042		6,048		595
Total
Consumer and credit card		455		455		—		474		25
Commercial and industrial		2,028		2,105		256		3,303		88
Commercial real estate		9,690		9,690		1,042		12,762		665
Total	$	12,173	$	12,250	$	1,298	$	16,539	$	778

The following table indicates impaired loans with and without an allocated allowance at December 31, 2013 (in thousands).

			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
With no related allowance recorded
Commercial and industrial	$	1,530	$	1,530	$	—	$	3,081	$	67
Commercial real estate		9,892		11,788		—		10,005		615
With allowance recorded
Commercial and industrial		5,691		5,833		2,304		2,686		196
Commercial real estate		5,768		7,296		1,862		10,060		308
Total
Commercial and industrial		7,221		7,363		2,304		5,767		263
Commercial real estate		15,660		19,084		1,862		20,065		923
Total	$	22,881	$	26,447	$	4,166	$	25,832	$	1,186

Included in certain impaired loan categories are troubled debt restructurings that by definition are classified as impaired. At December 31, 2014 and 2013, troubled debt restructurings which were performing in accordance with their modified terms were $780,000 and $262,000 for commercial loans, $8.5 million and $11.8 million for commercial real estate, and $334,000 and $225,000 for consumer loans, respectively.

In addition to these amounts, the Bank had troubled debt restructurings that were impaired and no longer performing in accordance with their modified terms. At December 31, 2014 and 2013, troubled debt restructurings which were no longer performing in accordance with their modified terms were $68,000 and $1.1 million for commercial loans, $236,000 million and $2.1 million for commercial real estate, respectively.

Non-performing loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. Interest income that would have been recognized had non-performing loans performed in accordance with contractual terms totaled $241,000 and $175,000 for years ended December 31, 2014 and 2013, respectively. At December 31, 2014 and 2013, management viewed all loans past due and still accruing interest as well-secured and in the process of collection.

Loans on non-accrual status as of December 31, 2014 and 2013 are as follows (in thousands):

	2014		2013
Consumer and credit card	$	120	$	—
Commercial and industrial		632		4,702
Commercial real estate		298		1,398
Residential real estate and home equity		334		352
Total	$	1,384	$	6,452

Loans held for sale on non-accrual status as of December 31, 2013 were $1.2 million. There were no loans held for sale as of December 31, 2014.

Credit Quality Indicators

Credit risk exposure by risk profile and by class of commercial loans was as follows at year-end 2014 (in thousands).

	Commercial and		Commercial
Category	Industrial		Real Estate
Pass-1-4	$	106,590	$	90,588
Vulnerable-5		823		6,146
Substandard-6		4,438		9,488
Doubtful-7		—		—
Loss-8		—		—
Total	$	111,851	$	106,222

Credit risk exposure by risk profile and by class of commercial loans was as follows at year-end 2013 (in thousands).

	Commercial and		Commercial
Category	Industrial		Real Estate
Pass-1-4	$	111,266	$	83,953
Vulnerable-5		2,574		4,785
Substandard-6		8,244		15,954
Doubtful-7		—		—
Loss-8		—		—
Total	$	122,084	$	104,692

Risk Category Descriptions

Pass (Prime – 1, Good – 2, Fair – 3, Compromised – 4)

Loans with a pass grade have a higher likelihood that the borrower will be able to service its obligations in accordance with the terms of the loan than those loans graded 5, 6, 7, or 8. The borrower’s ability to meet its future debt service obligations is the primary focus for this determination. Generally, a borrower’s expected performance is based on the borrower’s financial strength as reflected by its historical and projected balance sheet and income statement proportions, its performance, and its future prospects in light of conditions that may occur during the term of the loan.

Vulnerable (Special Mention) – 5

Loans which possess some credit deficiency or potential weakness which deserves close attention, but which do not yet warrant substandard classification. Such loans pose unwarranted financial risk that, if not corrected, could weaken the loan and increase risk in the future. The key distinctions of a 5 (Special Mention) classification are that (1) it is indicative of an unwarranted level of risk, and (2) weaknesses are considered “potential”, versus “well-defined”, impairments to the primary source of loan repayment.

Substandard – 6

Loans that are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected. One or more of the following characteristics may be exhibited in loans classified Substandard:

⋅ Loans which 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, the borrower continues to make interest payments.

⋅ The lender 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 lender is seriously 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.

Doubtful – 7

One or more of the following characteristics may be exhibited in loans classified Doubtful:

⋅ 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.

Loss – 8

Loans are considered uncollectible and of such little value that continuing to carry them as assets on the institution’s financial statements is not feasible. Loans will be classified Loss when it is neither practical nor desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future.

For consumer loan classes and residential real estate loans, the Company evaluates credit quality primarily based upon the aging status of the loan, which was previously presented, and by payment activity.

The following table presents the recorded investment in consumer loans and residential real estate loans based on payment activity at the dates indicated (in thousands).

	December 31, 2014
Payment Category	Consumer and Credit Card		Residential Real Estate and Home Equity
Performing	$	37,387	$	128,836
Non-Performing		120		814
Total	$	37,507	$	129,650

	December 31, 2013
Payment Category	Consumer and Credit Card		Residential Real Estate and Home Equity
Performing	$	32,862	$	95,333
Non-Performing		—		912
Total	$	32,862	$	96,245

Age Analysis of Past Due Loans

The following table presents past due loans aged as of December 31, 2014 (in thousands).

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	$	66	$	7	$	120	$	193	$	37,314	$	37,507	$	—
Commercial and Industrial		68		—		—		68		111,783		111,851		—
Commercial Real Estate		49		—		306		355		105,867		106,222		—
Residential Real Estate and Home Equity		220		30		642		892		128,758		129,650		480
Total	$	403	$	37	$	1,068	$	1,508	$	383,722	$	385,230	$	480

The following table presents past due loans aged as of December 31, 2013 (in thousands).

Category	30-59 Days Past Due		60-89 Days Past Due		90 Days or more Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 days and Accruing
Consumer and credit card	$	90	$	92	$	—	$	182	$	32,680	$	32,862	$	—
Commercial and industrial		407		—		1,001		1,408		120,676		122,084		—
Commercial real estate		49		—		682		731		103,961		104,692		—
Residential real estate and home equity		374		197		321		892		95,353		96,245		560
Total	$	920	$	289	$	2,004	$	3,213	$	352,670	$	355,883	$	560

Troubled Debt Restructurings

Information regarding Troubled Debt Restructuring (“TDR”) loans for the year ended December 31, 2014 and 2013 is as follows (dollars in thousands):

	2014				2013
	Number of contracts		Post- modification outstanding recorded investment		Number of contracts		Post- modification outstanding recorded investment
Consumer and credit card		—	$	—		—	$	—
Commercial and industrial		—		—		4		1,081
Commercial real estate		—		—		8		3,905
Residential real estate and home equity		—		—		—		—
Total		—	$	—		12	$	4,986

There were no loans modified as troubled debt restructurings in 2014.

The following presents by class loans modified in a TDR during the years ended December 31, 2014 and 2013 that subsequently defaulted (i.e. 60 days or more past due following a modification) during the next twelve month periods (dollars in thousands).

	December 31, 2014				December 31, 2013
	Number of Contracts		Post-Modification Outstanding Recorded Investment		Number of Contracts		Post-Modification Outstanding Recorded Investment
Consumer and Credit Card		—	$	—		—	$	—
Commercial and Industrial		—		—		3		1,075
Commercial Real Estate		—		—		1		484
Residential Real Estate and Home Equity		—		—		—		—
Total		—	$	—		4	$	1,559

The post-modification outstanding recorded investment amounts at each year end balances are inclusive of all partial pay downs and charge-offs since the modification date. Loans modified in a TDR that were fully paid down, charged off, or foreclosed upon by period end are not reported.

A modification of a loan constitutes a TDR when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company offers various types of concessions when modifying a loan; however, forgiveness of principal is rarely granted. Depending on the financial condition of the borrower, the purpose of the loan and the type of collateral supporting the loan structure; modifications can be either short-term (12 months of less) or long term (greater than one year). Commercial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor may be requested. Commercial mortgage and construction loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period.

Land loans are also included in the class of commercial real estate loans. Land loans are typically structured as interest-only monthly payments with a balloon payment due at maturity. Land loans modified in a TDR typically involve extending the balloon payment by one to three years, changing the monthly payments from interest-only to principal and interest, while leaving the interest rate unchanged.

Loans modified in a TDR are typically already on non-accrual status and partial charge-offs have in some cases already been taken against the outstanding loan balance. As a result, loans modified in a TDR for the Company may have the financial effect of increasing the specific allowance associated with the loan. The allowance for impaired loans that have been modified in a TDR is measured based on the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent or on the present value of expected future cash flows discounted at the loan’s effective interest rate. Management exercises significant judgment in developing these estimates.

As mentioned above, an individual loan is placed on a non-accrual status if, in the judgment of management, it is unlikely that all principal and interest will be received according to the terms of the note. Loans on non-accrual may be eligible to be returned to an accruing status after six months of compliance with the modified terms. However, there are number of factors that could prevent a loan from returning to accruing status, even after remaining in compliance with loan terms for the aforementioned six month period, including deteriorating collateral, negative cash flow changes and inability to reduce debt to income ratios.

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Premises and Equipment

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

6. Premises and Equipment

Premises and equipment were as follows at the dates indicated (in thousands):

	December 31,
	2014		2013
Land	$	1,266	$	1,266
Buildings		13,287		13,277
Furniture and equipment		9,948		9,836
Subtotal		24,501		24,379
Accumulated depreciation		(15,115)		(14,329)
Total premises and equipment		9,386		10,050
Software, net of accumulated amortization		630		591
Total premises and equipment	$	10,016	$	10,641

The Company had $1.4 million in premises and equipment held for sale at December 31, 2013 associated with the sale of a branch that was completed March 21, 2014.

Depreciation expense totaled $1.1 million for the years ended December 31, 2014 and 2013.

The Company has entered into operating lease agreements for branch offices and equipment, which expire at various dates through 2023, and provide options for renewals. Rental expense on lease commitments for 2014 and 2013 amounted to $566,000 and $568,000, respectively.

The total future minimum lease commitments at December 31, 2014 under these leases are summarized as follows (in thousands).

2015	$	596
2016		587
2017		361
2018		231
2019		199
Thereafter		250
Total	$	2,224

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Borrowings

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

8. Borrowings

As a member of the FHLB of Cincinnati, the Bank has the ability to obtain borrowings based on its investment in FHLB stock and other qualified collateral. FHLB advances are collateralized by a blanket pledge of the Bank’s qualifying 1-4 family loan portfolio and all shares of FHLB stock. At December 31, 2014, total pledged loans was $141.8 million and investment in FHLB Stock was $3.2 million. Those amounts at December 31, 2013 were $124.9 million and $3.8 million respectively. The Bank had a $30.1 million line of credit with no outstanding balance at December 31, 2013 with the Federal Reserve Bank of Cleveland through its Discount Window. The Bank has pledged loans totaling $61.7 million at December 31, 2014.

The following is a summary of borrowings outstanding at year ending December 31, 2014 and 2013 (in thousands):

	2014		2013
Total Borrowings:
FHLB advances	$	11,808	$	4,838

In the fourth quarter of 2013, the Company refinanced $4.4 million of fixed rate FHLB advances with a contractual average interest rate of 4.61% and a weighted average remaining term to maturity of 1.4 years. The transaction was accomplished by extending the maturity date and rolling the net present value of the refinanced advances into the funding cost of the new advances which remain outstanding as of December 31, 2014. As a result of the restructure, the Company was required to pay a prepayment penalty of $268,000 to the FHLB. In accordance with ASC 470-50, Debt - Modification and Exchanges, the new advances were considered a minor modification. The prepayment penalty was deferred and will be recognized in interest expense over the life of the new advances.

The contractual amounts of FHLB borrowings mature as follows at December 31, 2014 (dollars in thousands).

			Weighted
Maturing	Amount			Average Rate
2014	$	—			—	%
2015		7,257			0.27	%
2016		1,530			0.84	%
2017		590			1.12	%
2018		2,034			1.79	%
2019 and after		397			5.44	%
	$	11,808			0.82	%

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Premises and Equipment (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Depreciation, Total	$ 1,070,000	$ 1,068,000
Operating Leases, Rent Expense, Net, Total	566,000	568,000
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment		$ 1,400,000

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Fair Value Measurements (Details 3) (Fair Value, Measurements, Nonrecurring [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Impaired loans [Member]
Fair value measurements of assets nonrecurring basis
Securities held-to-maturity, Fair Value	$ 12,173	$ 22,881
Impaired loans [Member] | Quoted Prices in Active Markets for Identical Assets, Level 1 [Member]
Fair value measurements of assets nonrecurring basis
Securities held-to-maturity, Fair Value	0	0
Impaired loans [Member] | Significant Other Observable Inputs, Level 2 [Member]
Fair value measurements of assets nonrecurring basis
Securities held-to-maturity, Fair Value	0	0
Impaired loans [Member] | Significant Unobservable Inputs, Level 3 [Member]
Fair value measurements of assets nonrecurring basis
Securities held-to-maturity, Fair Value	12,173	22,881
Real estate owned [Member]
Fair value measurements of assets nonrecurring basis
Securities held-to-maturity, Fair Value	1,111	1,219
Real estate owned [Member] | Quoted Prices in Active Markets for Identical Assets, Level 1 [Member]
Fair value measurements of assets nonrecurring basis
Securities held-to-maturity, Fair Value	0	0
Real estate owned [Member] | Significant Other Observable Inputs, Level 2 [Member]
Fair value measurements of assets nonrecurring basis
Securities held-to-maturity, Fair Value	0	0
Real estate owned [Member] | Significant Unobservable Inputs, Level 3 [Member]
Fair value measurements of assets nonrecurring basis
Securities held-to-maturity, Fair Value	$ 1,111	$ 1,219

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Interest-Bearing Deposits (Details 1) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Interest Bearing Deposits [Line Items]
2015	$ 48,431
2016	23,343
2017	2,154
2018	346
2019 and after	61
Total	$ 74,335

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Premises and Equipment (Details 1) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
2015	$ 596
2016	587
2017	361
2018	231
2019	199
Thereafter	250
Total	$ 2,224

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Borrowings (Tables)

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Schedule Of Outstanding Borrowing [Table Text Block]

The following is a summary of borrowings outstanding at year ending December 31, 2014 and 2013 (in thousands):

	2014		2013
Total Borrowings:
FHLB advances	$	11,808	$	4,838

Schedule of Federal Home Loan Bank, Advances, by Branch of FHLB Bank [Table Text Block]

The contractual amounts of FHLB borrowings mature as follows at December 31, 2014 (dollars in thousands).

			Weighted
Maturing	Amount			Average Rate
2014	$	—			—	%
2015		7,257			0.27	%
2016		1,530			0.84	%
2017		590			1.12	%
2018		2,034			1.79	%
2019 and after		397			5.44	%
	$	11,808			0.82	%

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Securities (Details Textual) (USD $)	12 Months Ended		1 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Mar. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net		$ 1,100,000
Investment From Same Issuer As Percentage Of Equity Maximum	10.00%
Pledged Assets Separately Reported, Securities Pledged as Collateral, at Fair Value, Total	65,500,000	65,600,000
Collateralized debt obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Proceeds from Sale of Available-for-sale Securities, Total			$ 140,000

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Regulatory Capital

12 Months Ended

Dec. 31, 2014

Mortgage Banking [Abstract]

Regulatory Capital Requirements for Mortgage Companies Disclosure [Text Block]

13. Regulatory Capital

The Company is subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Capital adequacy guidelines and, additionally for banks, prompt corrective-action regulations, involve quantitative measures of assets, liabilities and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet various capital requirements can initiate regulatory action.

The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and plans for capital restoration are required. The Bank met the well-capitalized requirements, as publicly defined, at December 31, 2014.

Actual and required capital ratios are presented below at year-end (dollars in thousands).

											To be well capitalized
											under Prompt Corrective
											Action Provisions (in 2013)
											and pursuant to the Consent
						For capital adequacy					Order and Written
	Actual					purposes					Agreement (2012)
	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2014:
Total capital to risk-weighted assets
Consolidated	$	50,656		13.88	%	$	29,197		8.0	%		N/A		N/A
Bank	$	49,602		13.56	%	$	29,264		8.0	%	$	36,580		10.0	%
Tier-1 (core) capital to risk-weighted assets
Consolidated	$	46,420		12.72	%	$	14,597		4.0	%		N/A		N/A
Bank	$	45,366		12.40	%	$	14,634		4.0	%	$	21,951		6.0	%
Tier-1 (core) capital to average assets
Consolidated	$	46,420		9.21	%	$	20,161		4.0	%		N/A		N/A
Bank	$	45,366		9.00	%	$	20,163		4.0	%	$	25,203		5.0	%
December 31, 2013:
Total capital to risk-weighted assets
Consolidated	$	50,644		13.82	%	$	29,321		8.0	%		N/A		N/A
Bank	$	49,473		13.50	%	$	29,321		8.0	%	$	36,651		10.0	%
Tier-1 (core) capital to risk-weighted assets
Consolidated	$	46,036		12.56	%	$	14,661		4.0	%		N/A		N/A
Bank	$	44,865		12.24	%	$	14,661		4.0	%	$	21,992		6.0	%
Tier-1 (core) capital to average assets
Consolidated	$	46,036		9.00	%	$	20,456		4.0	%		N/A		N/A
Bank	$	44,865		8.77	%	$	20,456		4.0	%	$	25,570		5.0	%

Banking regulations limit capital distributions by the Bank. Generally, capital distributions are limited to undistributed net income for the current and prior two years. At December 31, 2014, $372,000 was available for the declaration of dividends by the Bank.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation: The consolidated financial statements include the accounts of DCB Financial Corp (“DCB”) and its wholly-owned subsidiaries, The Delaware County Bank and Trust Company (the “Bank”), DCB Title Services, LLC, DCB Insurance Services, Inc., DataTasx LLC, and ORECO, Inc. (collectively referred to hereinafter as the “Company”). All intercompany transactions and balances have been eliminated in the consolidated financial statements.

Nature Of Operations [Policy Text Block]

Nature of Operations: The Company provides financial services in Delaware, Franklin, and Union Counties, Ohio, as well as nearby counties, through its 14 banking locations. Its primary deposit products are checking, savings, and term certificate accounts and its primary lending products are residential mortgage, commercial and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Real estate loans are secured by both residential and commercial real estate. The Bank also operates a trust department and engages in other personal wealth management activities, including brokerage services and private banking.

Business Segments [Policy Text Block]

Business Segments: While the Bank’s management monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the Bank’s operations are considered by management to be aggregated into one operating segment.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates: To prepare consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect amounts reported in the financial statements and disclosures provided, and future results could differ. The allowance for loan losses, fair value of financial instruments, determination of other-than-temporary impairment, status of contingencies and deferred tax asset valuation are particularly subject to change.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, federal funds sold and deposits with other financial institutions with original maturities of less than 90 days. Net cash flows are reported for customer loan and deposit transactions, federal funds purchased and other short-term borrowings.

Marketable Securities, Policy [Policy Text Block]

Securities: Securities are classified as held-to-maturity and carried at adjusted amortized cost when management has the positive intent and ability to hold them to maturity. Securities classified as available-for-sale might be sold before maturity. Securities classified as available-for-sale are carried at fair value, with temporary unrealized holding gains and losses excluded from earnings and reported as a component of other comprehensive income. Realized gains and losses on sale of securities are recognized using the specific identification method. The Company does not engage in securities trading activities. Interest income includes premium amortization and accretion of discounts on securities.

For securities with unrealized losses, management considers, in determining whether other-than-temporary impairment exists, (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

For securities with other-than-temporary impairment, further analysis is required to determine the appropriate accounting. If management neither intends to sell the impaired security nor expects it will be required to sell the security prior to recovery, only the credit loss component of the other-than-temporary impairment is recognized in earnings while the non-credit loss is recognized in other comprehensive income. The credit loss component recognized in earnings is identified as the principal cash flows not expected to be received over the remaining term of the security as projected based on cash flow projections.

Loans Held For Sale [Policy Text Block]

Loans (including Loans Held for Sale)

Loans are classified as held for investment when management has both the intent and ability to hold the loan for the foreseeable future, or until maturity or payoff. Management’s intent and view of the foreseeable future may change based on changes in business strategies, the economic environment, market conditions and the availability of government programs. Loans that are held for investment are reported at the principal balance outstanding, net of unearned interest, unamortized deferred loan fees and costs and the allowance for loan losses. Loans held for sale are carried at the lower of amortized cost or estimated fair value, determined on an aggregate basis for each type of loan. Net unrealized losses are recognized by charges to income.

Interest income is accrued based on the unpaid principal balance and includes amortization of net deferred loan fees and costs over the loan term. Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the credit is well secured and in process of collection. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on non-accrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

When loans are reclassified from held for investment to held for sale, specific reserves and allocated pooled reserves included in the allowance for loan and losses are reclassified to reduce the basis of the loans to the lower of cost or estimated fair value less cost to sell. Reclassifications of loans from held for sale to held for investment are made at fair value.

Finance, Loans and Leases Receivable, Policy [Policy Text Block]

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable but unconfirmed credit losses, increased by the provision for loan losses and decreased by charge-offs net of recoveries. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the required allowance balance based on past loan loss experience, augmented by additional estimates related to the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, economic conditions and other factors.

The allowance consists of both specific and general components. The specific component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the collateral value, or value of expected discounted cash flows of the impaired loan is lower than the carrying value of that loan. The general component covers non-classified loans and is based on historical charge-off experience and expected loss given default derived from the Bank’s internal risk rating process. Management utilizes an average of a three year historical loss period. Management has the ability to adjust these loss rates by utilizing risk ratings based on current period trends. If current period trends differ either positively or negatively from the given weighted historical loss rates, adjustments can be made. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risking rating data.

Management also utilizes its assessment of general economic conditions, and other localized economic data to more fully support its loan loss estimates. General economic data may include: inflation rates, savings rates and national unemployment rates. Local data may include: unemployment rates, housing starts, real estate valuations, and other economic data specific to the Company’s market area. Though not specific to individual loans, these economic trends can have an impact on portfolio performance as a whole.

Uncollectibility is usually determined based on a pre-determined number of days delinquent in the case of consumer loans, or, in the case of commercial loans, is based on a combination of factors including delinquency, collateral and other legal considerations. Consumer loans are charged-off prior to 120 days of delinquency, but could be charged off earlier, depending on the individual circumstances. Mortgage loans are charged down prior to 120 days of delinquency, but could be charged off sooner, again, depending upon individual circumstance. Typically, loans collateralized by residential real estate are partially charged down to the estimated liquidation value, which is generally based on appraisal less costs to hold and liquidate. Commercial and commercial real estate loans are evaluated for impairment and typically reserved based on the results of the analysis, then subsequently charged down to a recoverable value when loan repayment is deemed to be collateral dependent. Loans can be partially charged down depending on a number of factors including: the remaining strength of the borrower and guarantor; the type and value of the collateral, and the ease of liquidating collateral; and whether or not collateral is brought onto the bank’s balance sheet via repossession. In the case of commercial and commercial real estate loans, charge-offs, partial or whole, take place when management determines that full collectability of principal balance is unlikely to occur. Subsequent recoveries, if any, are credited to the allowance. Management’s policies for determining impairment, reserves and charge-offs are reviewed and approved by the Board of Directors on an annual basis, and were not materially changed in 2014.

Troubled debt restructuring of loans is undertaken to improve the likelihood that the loan will be repaid in full under the modified terms in accordance with a reasonable repayment schedule.  All modified loans are evaluated to determine whether the loans should be reported as a Troubled Debt Restructuring (TDR).  A loan is a TDR when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower by modifying or renewing a loan that the Company would not otherwise consider. To make this determination, the Company must determine whether (a) the borrower is experiencing financial difficulties and (b) the Company granted the borrower a concession. This determination requires consideration of all of the facts and circumstances surrounding the modification.  An overall general decline in the economy or some deterioration in a borrower’s financial condition does not automatically mean the borrower is experiencing financial difficulties.

Investment In Federal Home Loan Bank Stock [Policy Text Block]

Investment in Federal Home Loan Bank Stock: The Company is required as a condition of membership in the Federal Home Loan Bank of Cincinnati (“FHLB”) to maintain an investment in FHLB common stock. The stock is redeemable at par and, therefore, its cost is equivalent to its redemption value. The Company’s ability to redeem FHLB shares is dependent on the redemption practices of the FHLB. The stock is carried at cost and evaluated for impairment.

Property, Plant and Equipment, Policy [Policy Text Block]

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed over the assets’ useful lives, estimated to be five to 39 years for buildings, improvements and leasehold improvements. The Company generally uses three to five years for the useful lives of furniture, fixtures, and equipment, using the straight line method, depending on the nature of the asset. Premises and equipment are reviewed for impairment when events indicate the carrying amount may not be recoverable. Maintenance and repairs are expensed and major improvements are capitalized.

Loans and Leases Receivable, Real Estate Acquired Through Foreclosure, Policy [Policy Text Block]

Foreclosed Assets: Assets acquired through foreclosure are initially recorded at the lower of cost or fair value less expected selling costs. Subsequent declines in fair value below the recorded amount are recorded as a direct write-down to expense. The Company generally evaluates fair market values of foreclosed assets on a quarterly basis, and adjusts accordingly. Holding costs after acquisition are expensed as incurred; however, construction costs to improve a property’s value may be capitalized as part of the asset value.

Transfers and Servicing of Financial Assets, Policy [Policy Text Block]

Servicing Assets: Servicing assets represent the allocated value of retained servicing on loans sold. Servicing assets are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the assets, using groupings of the underlying loans as to interest rates, and then secondarily as to geographic and prepayment characteristics. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Any impairment of a grouping is reported as a valuation allowance. Loans serviced for others totaled $2.1 million and $2.9 million at December 31, 2014 and 2013, respectively. The Company had net servicing assets of $3,000 and $5,000 at December 31, 2014 and 2013, respectively.

Bank Owned Life Insurance [Policy Text Block]

Bank Owned Life Insurance: The Company has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at its cash surrender value.

Income Tax, Policy [Policy Text Block]

Income Taxes: The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred tax assets are reduced by a valuation allowance, if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment. The Company recognizes interest and penalties on income taxes, if applicable, as a component of income tax expense. The Company files consolidated income tax returns with its subsidiaries.

Financial Instruments [Policy Text Block]

Financial Instruments: Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and standby letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Earnings Per Share, Policy [Policy Text Block]

Earnings (Loss) Per Common Share: Basic earnings (loss) per common share is net income (loss) divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share are computed including the dilutive effect of additional potential common shares issuable under stock options. Diluted earnings (loss) per share are not computed for periods in which an operating loss is sustained.

The computation of earnings (loss) per share is based upon the following weighted-average shares outstanding for the years ended December 31:

	2014		2013
Weighted-average common shares outstanding (basic)		7,193,372		7,192,350
Dilutive effect of assumed exercise of stock options		39,016		—
Weighted-average common shares outstanding (diluted)		7,232,388		7,192,350

At December 31, 2014, 9,979 of anti-dilutive stock options were excluded from the diluted weighted average common share calculations.

At December 31, 2013, options to purchase 156,665 shares of common stock were excluded from the computation of diluted earnings per share because of the loss incurred.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation: Compensation cost is recognized for restricted stock awards issued to employees and directors based on the fair value of these awards at the date of grant. The market price of the Company’s common stock at the date of grant is used to determine the fair value for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

The Company’s outstanding stock options may be settled for cash at the recipient’s discretion; therefore, liability accounting applies to the Company’s 2004 Long-Term Stock Incentive Plan under which such stock options were granted. Compensation expense is recognized based on the fair value of these awards at the reporting date. A Black Scholes model is utilized to estimate the fair value of stock options at the date of grant and subsequent re-measurement dates. Compensation cost is recognized over the required service period, generally defined as the vesting period. The Company’s stock option awards contain terms that provide for a graded vesting schedule whereby portions of the award vest in increments over the requisite service period.  Changes in fair value of the options between the vesting date and option expiration date are also recognized in the Consolidated Statement of Income.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income (Loss): Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss), net of applicable income tax effects. Other comprehensive income (loss) includes unrealized appreciation (depreciation) on available-for-sale securities and unrealized appreciation (depreciation) on held-to-maturity securities for which a portion of an other-than-temporary impairment has been recognized in income. Accumulated other comprehensive income consists solely of unrecognized gains and losses on investment securities, net of taxes of $336,000 and ($398,000) at December 31, 2014 and 2013, respectively..

Restrictions On Cash [Policy Text Block]

Restrictions on Cash: Other deposits at the Federal Reserve Bank above the clearing balance requirements earn interest at an overnight rate, and are not restricted. In addition, $1.1 million is held in another institution and is under the control of a third party due to a contractual agreement.

Dividend Restrictions [Policy Text Block]

Dividend Restrictions: Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to DCB or by DCB to shareholders.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or market conditions could significantly affect the estimates.

Advertising Costs, Policy [Policy Text Block]

Advertising and Marketing: Advertising and other marketing costs are expensed as incurred.

Reclassification, Policy [Policy Text Block]

Reclassification: Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the 2014 presentation. These reclassifications had no effect on net income for any period presented.

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Pronouncements: In August 2014, the Financial Accounting Standards Board (“FASB”) issued amended accounting guidance for the classification of certain government guaranteed mortgage loans upon foreclosure. This guidance requires that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if the following conditions are met: (1) the loan has a government guarantee that is not separable from the loan before foreclosure; (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim; and (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Upon foreclosure, the separate other receivable should be measured based upon the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This guidance should be applied using a prospective transition method or a modified retrospective transition method. The Company expects that the adoption of this guidance in 2015 will not have a significant effect on the Company’s financial position or results of operations.

In June 2014, the FASB issued amended accounting guidance for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The amended guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The performance target should not be reflected in estimating the grant date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This guidance is effective for annual periods and interim periods within those annual periods beginning after December 31, 2015, with earlier adoption permitted. The Company does not expect the amended guidance published by the FASB to have a material impact on its financial position or results of operations.

In January 2014, the FASB issued amended accounting and disclosure guidance for reclassification of residential real estate collateralized consumer mortgage loans upon foreclosure. The amended guidance clarifies that an in-substance repossession or foreclosure occurs and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amended guidance also requires interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate that are in the process of foreclosure according to local requirements of the applicable jurisdiction. This guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. This guidance should be applied using a prospective transition method or a modified retrospective transition method. The Company expects that the adoption of this guidance in 2015 will not have a significant effect on the Company’s financial position or results of operations.

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Securities (Details 2) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Amortized cost and estimated fair value of all debt securities
Available-for-sale, Amortized Cost, Due in one year or less	$ 1,417
Available-for-sale, Amortized Cost, Due from one to five years	12,646
Available-for-sale, Amortized Cost, Due from five to ten years	23,424
Available-for-sale, Amortized Cost, Due after ten years	19,994
Available-for-sale, Amortized Cost, Mortgage-backed securities	17,438
Available-for-sale, Amortized Cost, Total	74,919
Available-for-sale, Fair Value, Due in one year or less	1,430
Available-for-sale, Fair Value, Due from one to five years	12,656
Available-for-sale, Fair Value, Due from five to ten years	23,699
Available-for-sale, Fair Value, Fair value, Due after ten years	19,984
Available-for-sale, Fair Value, Mortgage-backed securities	18,140
Available-for-sale, Fair Value, Total	$ 75,909

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Details of Operating Expenses (Tables)

12 Months Ended

Dec. 31, 2014

Other Income and Expenses [Abstract]

Summary Of Composition Of Occupancy And Equipment Expenses [Table Text Block]

The following table details the composition of occupancy and equipment expenses for the years ended December 31, 2014 and 2013.

(In thousands)	2014		2013
Bank occupancy expense	$	1,876	$	1,590
Equipment lease		83		342
Equipment depreciation		233		303
Software maintenance		961		824
Other		39		10
Total	$	3,192	$	3,069

Schedule of Other Operating Cost and Expense, by Component [Table Text Block]

The following table details the composition of other operating expenses for the years ended December 31, 2014 and 2013.

(In thousands)	2014		2013
ATM and debit cards	$	690	$	772
Telephone		269		320
Loan		344		482
Real estate taxes		325		281
OREO expenses		26		22
Other operating		1,169		1,065
Total	$	2,823	$	2,942

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Consolidated Statements of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Net income (loss)	$ 372	$ (2,931)
Other comprehensive income (loss):
Reclassification of previously recognized noncredit other than temporary impairment on sale of security in 2013, net of taxes of $512	0	995
Net unrealized gains (losses) on securities available-for-sale, net of taxes of $769 and $(755) in 2014 and 2013, respectively	1,494	(1,482)
Reclassification adjustment for gains included in net income (loss), net of taxes of $(35) and $(2) in 2014 and 2013, respectively	(66)	(3)
Unrealized gains on securities transferred to available-for-sale in 2013, net of taxes of $131	0	254
Amortization of unrealized losses on held-to-maturity securities in 2013, net of taxes of $28.	0	42
Total other comprehensive income (loss)	1,428	(194)
Comprehensive income (loss)	$ 1,800	$ (3,125)

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Parent Company Financial Information (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities
Net income (loss)	$ 168	$ 50	$ 37	$ 117	$ (3,102)	$ (127)	$ 156	$ 142	$ 372	$ (2,931)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Net change in other assets and liabilities									(543)	(3,260)
Cash flows from investing activities
Net cash provided by investing activities									(36,585)	(40,820)
Cash flows from financing activities
Net cash used in financing activities									29,789	(1,520)
Net change in cash									(4,083)	(37,950)
Cash and cash equivalents at beginning of year				25,357				63,307	25,357	63,307
Cash and cash equivalents at end of year	21,274				25,357				21,274	25,357
Parent Company [Member]
Cash flows from operating activities
Net income (loss)									372	(2,931)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Equity in undistributed net income (loss) from subsidiaries									(372)	2,805
Net change in other assets and liabilities									0	(4,171)
Net cash used in operating activities									0	(4,297)
Cash flows from investing activities
Investments in affiliates									0	5
Net cash provided by investing activities									0	5
Cash flows from financing activities
Investment in Subsidiary									0	(8,092)
Net cash used in financing activities									0	(8,092)
Net change in cash									0	(12,382)
Cash and cash equivalents at beginning of year				948				13,332	948	13,332
Cash and cash equivalents at end of year	$ 948				$ 948				$ 948	$ 948

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Sale of Branch and Loans Held for Sale

12 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

2. Sale of Branch and Loans Held for Sale

In March 2014, the Bank closed the previously announced sale of its Marysville branch (the “Branch”) to Merchants National Bank, a national bank headquartered in Hillsboro, Ohio (“Merchants”). Merchants acquired certain assets and assumed certain liabilities of the Branch, including the assumption of $19.4 million in deposit liabilities and the purchase of $4.8 million in loans related to the Branch.

The amounts related to the sale are as follows (in thousands):

Deposits assumed	$	19,403
Loans sold (at book value)		(4,750)
Property and equipment (agreed upon value)		(1,500)
Cash on hand		(261)
Premium on deposits		(438)
Other, net		10
Cash paid to Merchants	$	12,464

The carrying value of the assets sold and the deposits assigned were classified as held for sale at December 31, 2013.

In addition to the loans reclassified to held-for-sale in connection with the branch sale, the Company also reclassified 54 homogenous loans secured by single family residential investor properties to held-for-sale as of December 31, 2013. At December 31, 2013 the loans had an aggregate contractual principal balance of $4.2 million, and aggregate allowance for loan loss allocations of $2.0 million. In connection with the transfer to held-for-sale, the Company recorded a provision for loan losses of $946,000 in the fourth quarter of 2013. The loans were transferred to held-for-sale, net of the allowance allocations, at their estimated fair value of $2.2 million.

During the third quarter of 2014, the Company reclassified 30 of the residential investor properties from held for sale to held for investment, because the Company believes the best value for these loans, which generally have been paying as agreed, can be achieved through a hold strategy. The reclassifications of the loans, which had an aggregate contractual principal balance of $1.9 million, were made at the loans net book value of $769,000 on the date of transfer. The $1.1 million difference between the contractual balances and the net book value represents the amount of write-downs taken on these loans at the end of 2013 based on perceived credit weakness of the residential investor properties portfolio in the aggregate. Management believes that the fair value of these loans does not require consideration of a credit loss component, because of the generally satisfactory payment performance of these loans. The weighted average interest rates on these loans was 4.4% on the date of transfer, which management believes reasonably approximates a market interest rate for loans of this type. As a result, management has concluded that the contractual loan amounts approximate their fair value on the transfer date, and the $1.1 million discount on these loans will be accreted to interest income over the life of the loans as payments are made on the loans.

The Company did not have any assets or deposits classified as held-for-sale at December 31, 2014.

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Credit Quality (Details 4) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Credit Quality Indicators
Consumer risk based on payment activity	$ 385,444	$ 356,048
Consumer and Credit Card [Member]
Credit Quality Indicators
Consumer risk based on payment activity	37,507	32,862
Consumer and Credit Card [Member] | Performing [Member]
Credit Quality Indicators
Consumer risk based on payment activity	37,387	32,862
Consumer and Credit Card [Member] | Non-Performing [Member]
Credit Quality Indicators
Consumer risk based on payment activity	120	0
Residential real estate and home equity [Member]
Credit Quality Indicators
Consumer risk based on payment activity	129,650	96,245
Residential real estate and home equity [Member] | Performing [Member]
Credit Quality Indicators
Consumer risk based on payment activity	128,836	95,333
Residential real estate and home equity [Member] | Non-Performing [Member]
Credit Quality Indicators
Consumer risk based on payment activity	$ 814	$ 912

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Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013		Dec. 31, 2012
Financial assets
Cash and cash equivalents, Carrying amount	$ 21,274	$ 25,357		$ 63,307
Securities available-for-sale, Carrying amount	75,909	79,948
Loans (net of allowance), Carrying amount	381,208	349,324
FHLB stock, Carrying amount	3,250	3,799
Financial liabilities
Noninterest-bearing deposits, Carrying amount	111,022	109,622
Interest-bearing deposits, Carrying amount	342,170	317,237
FHLB advances, Carrying amount	11,808
Level 1 [Member]
Financial assets
Cash and cash equivalents, Fair value	21,274	25,357
Securities available-for-sale, Carrying amount	0	0
Securities available-for-sale, Fair value	0	0
Loans (net of allowance), Fair value	0	0	[1]
FHLB stock, Fair value	0	0
Accrued interest receivable, Fair value	0	0
Financial liabilities
Noninterest-bearing deposits, Fair value	0	0	[2]
Interest-bearing deposits, Fair value	0	0	[2]
FHLB advances, Fair value	0	0
Accrued interest payable, Fair value	0	0
Level 2 [Member]
Financial assets
Cash and cash equivalents, Fair value	0	0
Securities available-for-sale, Carrying amount	75,909	78,972
Securities available-for-sale, Fair value	75,909	78,972
Loans (net of allowance), Fair value	0	0	[1]
FHLB stock, Fair value	3,250	3,799
Accrued interest receivable, Fair value	0	0
Financial liabilities
Noninterest-bearing deposits, Fair value	111,022	112,711	[2]
Interest-bearing deposits, Fair value	342,318	318,107	[2]
FHLB advances, Fair value	11,808	4,838
Accrued interest payable, Fair value	0	0
Level 3 [Member]
Financial assets
Cash and cash equivalents, Fair value	0	0
Securities available-for-sale, Carrying amount	0	976
Securities available-for-sale, Fair value	0	976
Loans (net of allowance), Fair value	381,224	348,295	[1]
FHLB stock, Fair value	0	0
Accrued interest receivable, Fair value	1,234	1,356
Financial liabilities
Noninterest-bearing deposits, Fair value	0	0	[2]
Interest-bearing deposits, Fair value	0	0	[2]
FHLB advances, Fair value	0	0
Accrued interest payable, Fair value	36	112
Carrying amount [Member]
Financial assets
Cash and cash equivalents, Carrying amount	21,274	25,357
Securities available-for-sale, Carrying amount	75,909	79,948
Loans (net of allowance), Carrying amount	381,208	357,130	[1]
FHLB stock, Carrying amount	3,250	3,799
Accrued interest receivable, Carrying amount	1,234	1,356
Financial liabilities
Noninterest-bearing deposits, Carrying amount	111,022	112,711	[2]
Interest-bearing deposits, Carrying amount	342,170	317,237	[2]
FHLB advances, Carrying amount	11,808	4,838
Accrued interest payable, Carrying Amount	36	112
Fair value [Member]
Financial assets
Cash and cash equivalents, Fair value	21,274	25,357
Securities available-for-sale, Fair value	75,909	79,948
Loans (net of allowance), Fair value	381,224	348,295	[1]
FHLB stock, Fair value	3,250	3,799
Accrued interest receivable, Fair value	1,234	1,356
Financial liabilities
Noninterest-bearing deposits, Fair value	111,022	112,711	[2]
Interest-bearing deposits, Fair value	342,318	318,107	[2]
FHLB advances, Fair value	11,808	4,838
Accrued interest payable, Fair value	$ 36	$ 112

[1] Includes loans held for sale

[2] Includes deposits held for sale

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Borrowings (Details Textual) (USD $)	3 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Schedule Of Borrowed Funds [Line Items]
Line Of Credit Facility Amount	$ 30,100,000
Amount Of Indirect Loan Pledged		61,700,000
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	124,900,000	141,800,000
Federal Home Loan Bank Stock	3,799,000	3,250,000
Federal Home Loan Bank advances, maturity term	1 year 4 months 24 days
Penalty Prepayment to Federal Home Loan Bank	268,000
Payments for Federal Home Loan Bank Advances	$ 4,400,000
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate	4.61%

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Weighted-average shares for basic and diluted earnings per share [Table Text Block]

The computation of earnings (loss) per share is based upon the following weighted-average shares outstanding for the years ended December 31:

	2014		2013
Weighted-average common shares outstanding (basic)		7,193,372		7,192,350
Dilutive effect of assumed exercise of stock options		39,016		—
Weighted-average common shares outstanding (diluted)		7,232,388		7,192,350

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Federal Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Income tax expense (credits)
Current									$ 0	$ 0
Deferred									384	(1,918)
Valuation allowance									(384)	1,620
Totals	$ 0	$ 0	$ 0	$ 0	$ 0	$ (20)	$ (254)	$ (24)	$ 0	$ (298)

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Regulatory Capital (Tables)

12 Months Ended

Dec. 31, 2014

Mortgage Banking [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

Actual and required capital ratios are presented below at year-end (dollars in thousands).

											To be well capitalized
											under Prompt Corrective
											Action Provisions (in 2013)
											and pursuant to the Consent
						For capital adequacy					Order and Written
	Actual					purposes					Agreement (2012)
	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2014:
Total capital to risk-weighted assets
Consolidated	$	50,656		13.88	%	$	29,197		8.0	%		N/A		N/A
Bank	$	49,602		13.56	%	$	29,264		8.0	%	$	36,580		10.0	%
Tier-1 (core) capital to risk-weighted assets
Consolidated	$	46,420		12.72	%	$	14,597		4.0	%		N/A		N/A
Bank	$	45,366		12.40	%	$	14,634		4.0	%	$	21,951		6.0	%
Tier-1 (core) capital to average assets
Consolidated	$	46,420		9.21	%	$	20,161		4.0	%		N/A		N/A
Bank	$	45,366		9.00	%	$	20,163		4.0	%	$	25,203		5.0	%
December 31, 2013:
Total capital to risk-weighted assets
Consolidated	$	50,644		13.82	%	$	29,321		8.0	%		N/A		N/A
Bank	$	49,473		13.50	%	$	29,321		8.0	%	$	36,651		10.0	%
Tier-1 (core) capital to risk-weighted assets
Consolidated	$	46,036		12.56	%	$	14,661		4.0	%		N/A		N/A
Bank	$	44,865		12.24	%	$	14,661		4.0	%	$	21,992		6.0	%
Tier-1 (core) capital to average assets
Consolidated	$	46,036		9.00	%	$	20,456		4.0	%		N/A		N/A
Bank	$	44,865		8.77	%	$	20,456		4.0	%	$	25,570		5.0	%

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Commitments, Contingencies and Financial Instruments with Off-Balance Sheet Risk

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

12. Commitments, Contingencies and Financial Instruments with Off-Balance Sheet Risk

Some financial instruments such as loan commitments, credit lines, letters of credit and overdraft protection are issued to meet customer financing needs. These financing arrangements to provide credit typically have predetermined expiration dates, but can be withdrawn if certain conditions are not met. The commitments may expire without ever having been drawn on by the customer; therefore the total commitment amount does not necessarily represent future cash requirements. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used for loans, including obtaining various forms of collateral, such as real estate or securities at exercise of the commitment or letter of credit.

The Bank grants retail, commercial and commercial real estate loans in central Ohio. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based upon management’s credit evaluation of each customer. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income producing commercial properties.

The contractual amount of financing instruments with off-balance sheet risk was as follows at year-end (in thousands).

	2014				2013
	Fixed rate		Variable rate		Fixed rate		Variable rate
Commitments to extend credit	$	2,290	$	8,300	$	6,568	$	2,129
Unused lines of credit and letters of credit	$	4,953	$	127,076	$	4,126	$	124,811

Commitments to make loans are generally made for periods of 30 days or less. Maturities for loans subject to these fixed-rate commitments range from up to 1 to 30 years. In the opinion of management, outstanding loan commitments equaled or exceeded prevalent market interest rates at December 31, 2014, such commitments were underwritten in accordance with normal loan underwriting policies, and all disbursements will be funded via normal cash flows from operations and existing excess liquidity.

Legal Proceedings

There is no pending material litigation, other than routine litigation incidental to the business of the Company and Bank. Further, there are no material legal proceedings in which any director, executive officer, principal shareholder or affiliate of the Company is a party or has a material interest, which is adverse to the Company or Bank. Finally, there is no litigation in which the Company or Bank is involved which is expected to have a material adverse impact on the financial position or results of operations of the Company or Bank.