-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EaBBes6Bg8r/yYmIf3WxG+c5UYF+wLtag+UFYrgiG5F0en5ICeEqn90m9eugxFuY +l53mYbYiOVbEjW4PkPD6w== 0000950159-05-000494.txt : 20050427 0000950159-05-000494.hdr.sgml : 20050427 20050427164638 ACCESSION NUMBER: 0000950159-05-000494 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050427 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050427 DATE AS OF CHANGE: 20050427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DNB FINANCIAL CORP /PA/ CENTRAL INDEX KEY: 0000713671 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 232222567 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16667 FILM NUMBER: 05776910 BUSINESS ADDRESS: STREET 1: 4 BRANDYWINE AVE CITY: DOWNINGTOWN STATE: PA ZIP: 19335 BUSINESS PHONE: 6102691040 MAIL ADDRESS: STREET 1: 4 BRANDYWINE AVENUE CITY: DOWNINGTOWN STATE: PA ZIP: 19335 8-K 1 dnb8k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): April 27, 2005 DNB Financial Corporation ------------------------------------------ (Exact name of registrant as specified in its charter) Pennsylvania 0-16667 23-2222567 --------------------- ------------- -------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 4 Brandywine Avenue, Downingtown, Pennsylvania 19335 --------------------------------- ----------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (610) 269-1040 Not Applicable ---------------------------------------------- Former name or former address, if changed since last report Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. On April 27, 2005, DNB Financial Corp issued a press release discussing the Company's first quarter 2005 results. The press release, attached as Exhibit 99.1 hereto and incorporated herein by reference, is being furnished to the SEC and shall not be deemed to be "filed" for any purpose. Item 9.01. Financial Statements and Exhibits. (c) Exhibits. The following exhibit is furnished herewith: 99.1 Press Release, dated April 27, 2005, of DNB Financial Corp. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. DNB Financial Corporation April 27, 2005 By: /s/ Bruce E. Moroney Name: Bruce E. Moroney Title: Executive Vice President and Chief Financial Officer Exhibit Index Exhibit No. Description 99.1 Earnings Press Release EX-99 2 ex99.txt EXHIBIT 99 DNB Financial Corporation [DNB LOGO OMITTED] For further information, please contact: Bruce Moroney CFO/ Executive Vice President 484-359-3153 FOR IMMEDIATE RELEASE DNB Financial Corporation Reports Earnings for the First Quarter (April 27, 2005 - Downingtown, PA) DNB Financial Corporation ("DNB") (OTC BB: DNBF.OB), parent of DNB First, National Association (the "Bank"), today reported results for the first quarter ended March 31, 2005. Current highlights include: o Investment portfolio restructure o Steady growth in loans o Completion of Trust Preferred Securities offering Earnings For the first quarter 2005, DNB reported net income of $79,000, or $0.04 per share on a diluted basis, compared to net income of $669,000 or $0.33 per share on a diluted basis for the first quarter of 2004. The significant reduction in earnings for the first quarter of 2005 was primarily due to investment portfolio restructuring costs totaling $699,000, as more fully described below. Net interest income increased $129,000 or 4.0% for the first quarter 2005 over the same period in 2004. Interest income for the quarter was $5.2 million, compared to $4.9 million for the same period in 2004. The increase of $328,000 was primarily attributable to interest and fees on loans, which was a result of the loan and lease portfolio increasing to $242.5 million at March 31, 2005, compared to $208.7 million at March 31, 2004. Interest on investment securities remained relatively flat, at $1.5 million. The yield on interest-earning assets for the quarter was 5.21%, compared to 5.33% for the same period in 2004. Interest expense for the quarter was $1.9 million compared to $1.7 million for the same period in 2004. The increase of $199,000 was primarily attributable to higher interest rates resulting from a 175 basis point increase in the federal funds rate over the last year. The costs of deposits increased to 1.09% for the quarter, compared to .86% for the same period in 2004. The composite cost of funds for the quarter was 1.89%, compared to 1.80% for the same period in 2004, while the net interest margin for the quarter was 3.36%, compared to 3.55% for the same period in 2004. Non-interest income for the quarter ended March 31, 2005 was $56,000, compared to $788,000 for the same period in 2004. The $732,000 decline was primarily due to the $699,000 loss recognized on the sale of investment securities. Non-interest expense for the quarter was $3.4 million, compared to $3.2 million for the same period in 2004. The $280,000 increase was related to higher salary expenses and related taxes associated with additions to the Bank's lending staff, as well as increased professional & consulting fees. Investment Portfolio Restructure As part of its previously announced balance sheet repositioning, DNB took advantage of the current rate environment to restructure a significant portion of its investment securities portfolio. Management sold $73.3 million of structured securities, government agency stock, longer-term municipal securities, as well as corporate securities, resulting in an aggregate net $699,000 pre-tax loss, or $461,000 after-tax. DNB is investing the majority of the proceeds into higher yielding agency mortgage-backed securities, agency bonds and municipal securities. Management believes that the restructured portfolio will result in more stable earnings and cash flow, as well as improved value metrics. For the remaining nine months of 2005, the higher yielding investment securities that were purchased with the proceeds are projected, at their current rates of income, to add $415,000 pre-tax, or $285,000 after-tax, which will offset a majority of the loss recognized during the first quarter. Management expects the net impact resulting from these investment transactions on DNB's 2005 earnings will approximate an after-tax loss of $176,000, or $0.09 per share on a diluted basis; however, this outcome is subject to a number of contingencies including, for example, DNB's marginal tax rate for the year and the actual rates of income ultimately earned by the new investments. Steady Growth in Loans and Leases DNB continued to grow its loan portfolio during the quarter and increased total loans by $10.0 million or 4.3% to $242.5 million at March 31, 2005 from $232.6 million at December 31, 2004. Residential real estate loans, primarily variable rate, grew $5.9 million, while commercial loans and commercial leases grew $2.4 million and $1.1 million, respectively. In order to continue building its loan portfolio and diversify credit risk, DNB has plans to open a Loan Production and Wealth Management Center in Newtown Square, Delaware County, Pennsylvania during May 2005. Completion of Trust Preferred Securities Offering At the end of March 2005, DNB completed a private offering of $4 million Trust Preferred Securities. DNB invested the majority of the proceeds into the Bank to increase the Bank's capital levels and legal lending limit. DNB Financial Corporation is a bank holding company whose bank subsidiary, DNB First, National Association, is a $430 million community bank headquartered in Chester County, Pennsylvania. The Bank is the oldest independent bank in the county, founded in 1860, with nine full service offices. In addition to a broad array of consumer banking products, DNB offers commercial and construction lending, commercial leasing, cash management, brokerage and insurance through DNB Financial Services, and trust services through DNB Advisors. Customers may also visit DNB at its internet website at http://www.dnbfirst.com. This press release contains statements that are not of historical facts and may pertain to future operating results or events or management's expectations regarding those results or events. These are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts. When used in this press release, the words "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", or words of similar meaning, or future or conditional verbs, such as "will", "would", "should", "could", or "may" are generally intended to identify forward-looking statements. These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are either beyond our control or not reasonably capable of predicting at this time. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements. Readers of this press release are accordingly cautioned not to place undue reliance on forward-looking statements. DNB disclaims any intent or obligation to update publicly any of the forward-looking statements herein, whether in response to new information, future events or otherwise. With regard to DNB's balance sheet repositioning, the degree to which these steps can be accomplished will depend on a number of factors, including changes in the interest rate environment for loans, investments and deposits, loan prepayments, market opportunities for new loan and participation originations, and the availability of loan and lease receivables for purchase at attractive prices and yields, as well as management's assessment of the timing of each of these opportunities and steps in light of future, unknown developments affecting DNB's business generally. DNB Financial Corporation Summary of Financial Statistics (Dollars in thousands, except per share data)
Three Months Ended March 31 ---------------------------------------------------- 2005 2004 ----------------------- ----------------------- EARNINGS: Total interest income $ 5,207 $ 4,879 Total interest expense 1,882 1,683 Net interest income 3,325 3,196 Provision for credit losses 15 -- Net (loss) gain on sale of securities (699) 46 Other non-interest income 755 742 Non-interest income 56 788 Non-interest expense 3,441 3,161 Income before income taxes (75) 823 Income tax (benefit) expense (154) 154 Net income 79 669 Net income per share, diluted* $ 0.04 $ 0.33 PERFORMANCE RATIOS: Interest rate spread 3.31% 3.53% Net interest margin 3.36 3.55 Return on average equity 1.27 10.36 Return on average assets 0.07 0.67 March 31 ---------------------------------------------------- 2005 2004 ----------------------- ----------------------- FINANCIAL POSITION: Total assets $ 430,481 $ 420,335 Loans and leases 242,528 208,735 Deposits 302,136 302,514 Borrowings 101,849 88,873 Stockholders' equity 24,520 26,342 EQUITY RATIOS: Tier 1 leverage ratio 7.76% 7.16% Risk-based capital ratio 13.24 12.56 Book value per share* $ 12.42 $ 13.25
* All per share amounts have been restated to reflect the 5% stock dividend paid in December 2004. -----END PRIVACY-ENHANCED MESSAGE-----