DCB Financial (DCBF) 10-Q 2008 Q1 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: MARCH 31, 2008

OR

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

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 Identification Number)
incorporation or organization)

110 Riverbend Avenue, Lewis Center, Ohio 43035

(Address of principal executive offices)

(740) 657-7000

(Registrant’s telephone number)

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.

Yesþ Noo

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filero	Accelerated filerþ	Non-accelerated filero	Smaller reporting companyo
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).

Yeso Noþ

As of May 9, 2008, the latest practicable date, 3,717,385 shares of the registrant’s no par value common stock were issued and outstanding.

DCB FINANCIAL CORP
FORM 10-Q
For the Three Month Periods Ended March 31, 2008 and 2007

Table of Contents

	Page
PART I — FINANCIAL INFORMATION
ITEM 1 — Financial Statements
Consolidated Balance Sheets	3
Consolidated Statements of Income	4
Consolidated Statements of Comprehensive Income	5
Condensed Consolidated Statements of Cash Flows	6
Notes to the Consolidated Financial Statements	7
ITEM 1A — Risk Factors	16
ITEM 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
ITEM 3 — Quantitative and Qualitative Disclosures About Market Risk	20
ITEM 4 — Controls and Procedures	21
PART II — OTHER INFORMATION	22
SIGNATURES	24
EX-31.1
EX-31.2
EX-32.1
EX-32.2

DCB FINANCIAL CORP

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)

Item 1.Financial Statements

	March 31,			December 31,
	2008			2007
	(unaudited)
ASSETS
Cash and due from financial institutions	$	14,282		$	15,588
Federal funds sold and equivalents		46,500			16,480
Total cash and cash equivalents		60,782			32,068
Securities available for sale		99,825			89,009
Loans held for sale		789			1,078
Loans		517,692			520,493
Less allowance for loan losses		(7,775	)		(8,298	)
Net loans		509,917			512,195
Real estate owned		1,893			1,406
Investment in FHLB stock		3,670			3,670
Premises and equipment, net		14,863			14,178
Investment in unconsolidated affiliates		1,270			1,270
Bank-owned life insurance		15,128			14,963
Accrued interest receivable and other assets		10,928			10,949
Total assets	$	719,065		$	680,786
LIABILITIES
Deposits
Noninterest-bearing	$	51,150		$	53,112
Interest-bearing		511,601			457,762
Total deposits		562,751			510,874
Federal funds purchased and other short-term borrowings		4,180			16,596
Federal Home Loan Bank advances		90,983			93,486
Accrued interest payable and other liabilities		3,026			2,762
Total liabilities		660,940			623,718
SHAREHOLDERS’ EQUITY
Common stock, no par value, 7,500,000 shares authorized, 4,273,750 issued		3,780			3,780
Retained earnings		67,389			66,690
Treasury stock, at cost, 556,365 shares		(13,489	)		(13,489	)
Accumulated other comprehensive income		445			87
Total shareholders’ equity		58,125			57,068
Total liabilities and shareholders’ equity	$	719,065		$	680,786

See notes to the consolidated financial statements.

3

DCB FINANCIAL CORP

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended
	March 31,
	2008			2007
Interest and dividend income
Loans	$	8,801		$	10,051
Taxable securities		885			874
Tax-exempt securities		231			229
Federal funds sold and other		223			65
Total interest income		10,140			11,219
Interest expense
Deposits		3,571			4,724
Borrowings		1,099			1,016
Total interest expense		4,670			5,740
Net interest income		5,470			5,479
Provision for loan losses		600			615
Net interest income after provision for loan losses		4,870			4,864
Noninterest income
Service charges on deposit accounts		611			625
Trust department income		287			249
Net gain on sale of securities		278			—
Net loss on sale of assets		(30	)		—
Gains on sale of loans		62			88
Treasury management fees		107			116
Data processing servicing fees		178			90
Earnings on bank owned life insurance		165			129
Other		120			182
Total noninterest income		1,778			1,479
Noninterest expense
Salaries and other employee benefits		2,549			2,352
Occupancy and equipment		991			834
Professional services		159			99
Advertising		109			99
Postage, freight and courier		91			76
Supplies		70			64
State franchise taxes		69			158
Other		813			509
Total noninterest expense		4,851			4,191
Income before income taxes		1,797			2,152
Federal income tax expense		499			641
Net income	$	1,298		$	1,511
��
Basic and diluted earnings per common share	$	0.35		$	0.40
Dividends per share	$	0.16		$	0.14

See notes to the consolidated financial statements.

4

DCB FINANCIAL CORP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands)

	Three Months Ended
	March 31,
	2008			2007
Net income	$	1,298		$	1,511
Reclassification adjustment for realized gains, net of tax		(183	)		—
Unrealized gains on securities available for sale, net of tax		541			101
Comprehensive income	$	1,656		$	1,612
Accumulated other comprehensive income (loss)	$	445		$	(246	)

See notes to the consolidated financial statements.

5

DCB FINANCIAL CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

	Three Months Ended
	March 31,
	2008			2007
Cash flows provided by operating activities	$	3,053		$	495
Cash flows provided by (used in) investing activities
Securities available for sale
Purchases		(23,861	)		(5,819	)
Maturities, principal payments and calls		12,487			6,400
Net change in loans		1,740			4,804
Premises and equipment expenditures		(1,063	)		(573	)
Net cash flows provided by (used in) investing activities		(10,697	)		4,812
Cash flows provided by financing activities
Net change in deposits		51,877			12,345
Net change in federal funds purchased and other short-term borrowings		(12,416	)		1,622
Repayment of Federal Home Loan Bank advances		(2,503	)		(7,533	)
Purchase of treasury shares, net		—			(2,250	)
Cash dividends paid		(600	)		(540	)
Net cash provided by financing activities		36,358			3,644
Net change in cash and cash equivalents		28,714			8,951
Cash and cash equivalents at beginning of period		32,068			15,894
Cash and cash equivalents at end of period	$	60,782		$	24,845
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest on deposits and borrowings	$	4,219		$	4,291
Cash dividends declared but unpaid	$	599		$	534

See notes to the consolidated financial statements.

6

DCB FINANCIAL CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands, except per share data)

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These consolidated interim financial statements are prepared without audit and reflect all adjustments which, in the opinion of management, are necessary to present fairly the financial position of DCB Financial Corp (the “Corporation”) at March 31, 2008, and its results of operations and cash flows for the three month periods ended March 31, 2008 and 2007. All such adjustments are normal and recurring in nature. The accompanying consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not purport to contain all necessary financial disclosures required by accounting principles generally accepted in the United States of America that might otherwise be necessary in the circumstances, and should be read in conjunction with the consolidated financial statements, and notes thereto, included in its 2007 Annual Report. Refer to the accounting policies of the Corporation described in the Notes to Consolidated Financial Statements contained in the Corporation’s 2007 Annual Report. The Corporation has consistently followed these policies in preparing this Form 10-Q. The results of operations for the three months ended March 31, 2008, are not necessarily indicative of the results that may be expected for the entire year.

The accompanying consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiaries, The Delaware County Bank and Trust Company (the “Bank”), DCB Title Services, LLC and DataTasx LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. Management considers the Corporation to operate within one business segment banking.

To prepare 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 values of financial instruments and status of contingencies are particularly subject to change.

Income tax expense is based on the effective tax rate expected to be applicable for the entire year. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

Earnings per share

Earnings per common share is net income divided by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed including the dilutive effect of additional potential common shares under stock options.

	Three Months Ended
	March 31,
	2008		2007
Weighted-average common shares outstanding (basic)		3,717,385		3,787,533
Dilutive effect of assumed exercise of stock options		—		8,437
Weighted-average common shares outstanding (diluted)		3,717,385		3,795,970

Options to purchase 164,002 and 35,736 shares of common stock with a weighted-average exercise price of $22.92 and $29.32, respectively, were outstanding at March 31, 2008 and 2007, but were excluded from the computation of common share equivalents for the period then ended because the exercise price was greater than the average stock price during the reported period.

7

DCB FINANCIAL CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)

Stock option plan

The Corporation’s shareholders approved an employee share option plan (the “Plan”) in May 2004. This plan grants certain employees the right to purchase shares at a predetermined price. The plan is limited to 300,000 shares. The shares granted to employees vest 20% per year over a five year period. The options expire after ten years. During the three months ended March 31, 2008, options for 57,643 shares were granted to employees under the plan, at an exercise price of $16.90. At March 31, 2008, approximately 20,925 shares were exercisable and 135,412 shares were available for grant under this plan.

The Corporation accounts for its stock option plan in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment.” The compensation cost recorded for unvested equity-based awards is based on their grant-date fair value. The fair value of each option was estimated on the date of grant using the modified Black-Scholes options pricing model with the following weighted-average assumptions used for grants: dividend yield of 2.75% and 2.25% for 2008 and 2007, respectively; expected volatility of 12.0% and 14.0% for 2008 and 2007, respectively; risk-free interest rates with 2.25% and 4.78% for 2008 and 2007, respectively; and expected lives of 10 years for each grant. At March 31, 2008 and December 31, 2007, outstanding options had no intrinsic value.

The expected term of the options is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the US Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based on historical volatility of the Corporation’s stock.

The Company recorded $20 and $14 in compensation cost for equity-based awards that vested during the three months ended March 31, 2008 and 2007, respectively. The Corporation has $448 of total unrecognized compensation cost related to non-vested equity-based awards granted under its stock option plan as of March 31, 2008, which is expected to be recognized over a weighted-average period of 4.5 years.

8

DCB FINANCIAL CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)

A summary of the status of the Corporation’s stock option plan as of March 31, 2008 and December 31, 2007, and changes during the periods then ended are presented below:

	Three Months Ended
	March 31,
	2008
						WEIGHTED
				WEIGHTED		AVERAGE
				AVERAGE		REMAINING
				EXERCISE		CONTRACTUAL
	SHARES			PRICE		LIFE
Outstanding at beginning of period		108,051		$	25.80	8.9 years
Granted		57,643			16.90	9.8 years
Forfeited		(1,692	)		22.67
Outstanding at end of period		164,002		$	22.92	9.2 years
Options exercisable at period end		20,925		$	26.29
Weighted-average fair value of options granted during the period				$	1.01

						Year Ended
						December 31,
						2007
						WEIGHTED
				WEIGHTED		AVERAGE
				AVERAGE		REMAINING
				EXERCISE		CONTRACTUAL
	SHARES			PRICE		LIFE
Outstanding at beginning of year		70,040		$	27.19	8.0 years
Granted		44,214			23.43	9.8 years
Exercised		(158	)		28.69
Forfeited		(6,045	)		26.20
Outstanding at end of year		108,051		$	25.80	8.9 years
Options exercisable at year end		21,553		$	26.13
Weighted-average fair value of options granted during the year				$	2.57

9

DCB FINANCIAL CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)

The following information applies to options outstanding at March 31, 2008:

NUMBER OUTSTANDING	RANGE OF EXERCISE PRICES
108,051	$23.00 — $30.70
55,951	$16.90

Recent Accounting Standards: The Corporation adopted the provisions of FASB Interpretation 48, “Accounting for Uncertainty in Income Taxes,” on January 1, 2007. Previously, the Corporation had accounted for tax contingencies in accordance with Statement of Financial Accounting Standards No. 5, “Accounting for Contingencies.” As required by Interpretation 48, which clarifies Statement No. 109, “Accounting for Income Taxes,” the Corporation recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. At the adoption date, the Corporation applied Interpretation 48 to all tax positions for which the stature of limitations remained open. As a result of the implementation of Interpretation 48, the Corporation was not required to record any liability for unrecognized tax benefits as of January 1, 2007. There have been no material changes in unrecognized tax benefits since January 1, 2007.

The Corporation is subject to income taxes in the U.S. federal jurisdiction, as well as various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Corporation is no longer subject to U.S. federal, state and local, or non U.S. income tax examinations by tax authorities for the years before 2004.

The Corporation will recognize, if applicable, interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” This Statement defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This Statement emphasizes that fair value is a market-based measurement and should be determined based on assumptions that a market participant would use when pricing an asset or liability. This Statement clarifies that market participant assumptions should include assumptions about risk as well as the effect of a restriction on the sale or use of an asset. Additionally, this Statement establishes a fair value hierarchy that provides the highest priority to quoted prices in active markets and the lowest priority to unobservable data. This Statement is effective for fiscal years beginning after November 15, 2007, or January 1, 2008 as to the Corporation, and interim periods within those years. The Corporation adopted this Statement effective January 1, 2008, as required, without material effect on the Corporation’s consolidated statements of financial position or results of operations.

In September 2006, the FASB ratified the Emerging Issues Task Force’s (EITF) Issue 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements,” which requires companies to recognize a liability and related compensation costs for endorsement split-dollar life insurance policies that provide a benefit to an employee extending to postretirement periods. The liability should be recognized based on the substantive agreement with the employee. This Issue is effective beginning January 1, 2008. The Issue can be applied as either a change in accounting principle through a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption, or a change in accounting principle through retrospective application to all periods. The Corporation adopted Issue 06-4 effective January 1, 2008, as required, without material effect on the Corporation’s consolidated statements of financial position or results of operations.

10

DCB FINANCIAL CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities-Including an Amendment of FASB Statement No. 115.” This Statement allows companies the choice to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with FASB’s long term measurement objectives for accounting for financial instruments. This Statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007, or January 1, 2008 as to the Corporation, and interim periods within those fiscal years. The Corporation adopted SFAS No. 159 effective January 1, 2008, as required, without material effect on the consolidated statements of financial condition or results of operations.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations",which replaces SFAS 141. The Statement applies to all transactions or other events in which one entity obtains control of one or more businesses. It requires all assets acquired, liabilities assumed and any noncontrolling interest to be measured at fair value at the acquisition date. The Statement requires certain costs such as acquisition-related costs that were previously recognized as a component of the purchase price, and expected restructuring costs that were previously recognized as an assumed liability, to be recognized separately from the acquisition as an expense when incurred.

FAS 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 and may not be applied before that date.

Concurrent with SFAS No. 141 (revised 2007), the FASB recently issued SFAS No. 160,"Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB 51”. SFAS No. 160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest (formerly known as minority interest) in a subsidiary and for the deconsolidation of a subsidiary. A subsidiary, as defined by SFAS No. 160, includes a variable interest entity that is consolidated by a primary beneficiary.

A noncontrolling interest in a subsidiary, previously reported in the statement of financial position as a liability or in the mezzanine section outside of permanent equity, will be included within consolidated equity as a separate line item upon the adoption of SFAS No. 160. Further, consolidated net income will be reported at amounts that include both the parent
(or primary beneficiary) and the noncontrolling interest with separate disclosure on the face of the consolidated statement of income of the amounts attributable to the parent and to the noncontrolling interest.

SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008.

Application of Critical Accounting Policies

DCB’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and follow general practices within the financial services industry. The application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; as this information changes, the financial statements could reflect different estimates, assumptions, and judgments.

The most significant accounting policies followed by the Corporation are presented in Note 1 of Notes to Consolidated Financial Statements contained in the Corporation’s 2007 Annual Report. These policies, along with the disclosures presented in the other financial statement notes and in this financial review, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined.

11

DCB FINANCIAL CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)

NOTE 2 — SECURITIES

The amortized cost and estimated fair values of securities available for sale were as follows:

			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	March 31, 2008
U.S. Government and agency obligations	$	26,515	$	267	$	—		$	26,782
State and municipal obligations		25,251		345		(45	)		25,551
Corporate bonds		8,002		—		(347	)		7,655
Mortgage-backed securities		39,326		462		(42	)		39,746
Total debt securities		99,094		1,074		(434	)		99,734
Other securities		57		44		(10	)		91
Total	$	99,151	$	1,118	$	(444	)	$	99,825

The table below indicates the length of time individual securities have been in a continuous unrealized loss position at March 31, 2008:

	(Less than 12 months)							(12 months or longer)
			Estimated		Gross					Estimated		Gross					Estimated		Total
Description of	Number of		Fair		Unrealized			Number of		Fair		Unrealized			Number of		Fair		Unrealized
Securities	investments		value		losses			investments		value		losses			investments		value		losses
U.S. Government and agency obligations		—	$	—	$	—				$	—	$	—			—	$	—	$	—
State and municipal obligations		13		4,930		(45	)		—		—		—			13		4,930		(45	)
Corporate bonds		2		7,655		(347	)		—		—		—			2		7,655		(347	)
Mortgage-backed and other securities		36		2,755		(10	)		16		1,214		(42	)		52		3,969		(52	)
Total temporarily impaired securities		51	$	15,340	$	(402	)		16	$	1,214	$	(42	)		67	$	16,554	$	(444	)

Management has the intent and ability to hold these securities for the foreseeable future. The decline in the fair value was primarily due to the effects of changes in market interest rates. The fair values are expected to recover as the securities approach maturity dates.

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”).

12

DCB FINANCIAL CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)

At March 31, 2008, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity.

The amortized cost and estimated fair value of debt securities at March 31, 2008, by contractual maturity, are shown below. 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		Fair
	Cost		Value
Due in one year or less	$	6,094	$	6,127
Due from one to five years		11,163		11,339
Due from five to ten years		21,108		21,406
Due after ten years		21,403		21,116
Mortgage-backed and related securities		39,326		39,746
Total debt securities		99,094		99,734
Other securities		57		91
Total	$	99,151	$	99,825

Securities with a carrying amount of $92,080 at March 31, 2008 were pledged to secure public deposits and other obligations.

NOTE 3 — LOANS
Loans were as follows:

	March 31,
	2008
Commercial and industrial	$	41,773
Commercial real estate		200,373
Residential real estate and home equity		196,762
Real estate construction and land development		46,775
Consumer and credit card		31,770
		517,453
Add: Net deferred loan origination costs		239
Total loans receivable	$	517,692

13

DCB FINANCIAL CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)

NOTE 4 — ALLOWANCE FOR LOAN LOSSES

Activity in the allowance for loan losses was as follows:

	Three months ended
	March 31,
	2008			2007
Balance at beginning of period	$	8,298		$	5,442
Provision for loan losses		600			615
Loans charged off		(1,173	)		(830	)
Recoveries		50			117
Balance at end of period	$	7,775		$	5,344
Nonperforming loans were as follows:

	March 31,		December 31,
	2008		2007
Loans past due 90 days or more and still accruing	$	1,822	$	2,740
Nonaccrual loans		11,990		10,360
Total	$	13,812	$	13,100
Impaired loans (all of which are included in nonperforming loans above) are as follows:
Loans with no allocated allowance for unconfirmed loan losses	$	—	$	538
Loans with allocated allowance for unconfirmed loan losses		11,990		9,800
Total	$	11,990	$	10,338
	��
Amount of the allowance for loan losses allocated to unconfirmed losses on impaired loans	$	3,047	$	2,114
Average of impaired loans during the period	$	11,138	$	7,907

NOTE 5 — FAIR VALUE MEASUREMENTS

Effective January 1, 2008, the Corporation adopted Statement of Financial Accounting Standards No. 157,Fair Value Measurements(FAS 157). FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FAS 157 has been applied prospectively as of the beginning of the period.

FAS 157 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. FAS 157 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.

14

DCB FINANCIAL CORP
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)

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 active 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

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

Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government agency bonds and mortgage-backed securities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include certain collateralized mortgage and debt obligations and certain municipal securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy and include other less liquid securities.

The following table presents the fair value measurements of assets and liabilities recognized in the accompanying balance sheet measured at fair value on a recurring basis and the level within the FAS 157 fair value hierarchy in which the fair value measurements fall at March 31, 2008:

			Fair Value Measurements Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Available for sale securities	$	99,825	$	10,737	$	89,088	$	—

15

DCB FINANCIAL CORP
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)

The following table presents the fair value measurements of assets and liabilities measured at fair value on a nonrecurring basis and the level within the FAS 157 fair value hierarchy in which the fair value measurements fall at March 31, 2008.

			Fair Value Measurements Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	1,868	$	—	$	—	$	1,868

Item 1A.Risk Factors

There has been no material change in the nature of the risk factors set forth in the Company’s Form 10-K for the year ended December 31, 2007.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

INTRODUCTION

In the following pages, management presents an analysis of the consolidated financial condition of DCB Financial Corp (the “Corporation”) at March 31, 2008, compared to December 31, 2007, and the consolidated results of operations for the three months ended March 31, 2008, compared to the same period in 2007. This discussion is designed to provide shareholders with a more comprehensive review of the operating results and financial position than could be obtained from reading the consolidated financial statements alone. This analysis should be read in conjunction with the consolidated financial statements and related footnotes and the selected financial data included elsewhere in this report.

FORWARD-LOOKING STATEMENTS

Certain statements in this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to the financial condition and prospects, lending risks, plans for future business development and marketing activities, capital spending and financing sources, capital structure, the effects of regulation and competition, and the prospective business of both the Corporation and its wholly-owned subsidiary The Delaware County Bank & Trust Company (the “Bank”). Where used in this report, the word “anticipate,” “believe,” “estimate,” “expect,” “intend,” and similar words and expressions, related to the Corporation or the Bank or their respective management, identify forward-looking statements. Such forward-looking statements reflect the current views of the Corporation and are based on information currently available to the management of the Corporation and the Bank and upon current expectations, estimates, and projections about the Corporation and its industry, management’s belief with respect thereto, and certain assumptions made by management. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

16

DCB FINANCIAL CORP
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)

Potential risks and uncertainties include, but are not limited to: (i) significant increases in competitive pressure in the banking and financial services industries; (ii) changes in the interest rate environment which could reduce anticipated or actual margins; (iii) changes in political conditions or the legislative or regulatory environment; (iv) general economic conditions, either nationally or regionally (especially in central Ohio), becoming less favorable than expected resulting in, among other things, a deterioration in credit quality of assets; (v) changes occurring in business conditions and inflation; (vi) changes in technology; (vii) changes in monetary and tax policies; (viii) changes in the securities markets; and (ix) other risks and uncertainties detailed from time to time in the filings of the Corporation with the Commission.

The Corporation does not undertake, and specifically disclaims any obligation, to publicly 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.

ANALYSIS OF FINANCIAL CONDITION

The Corporation’s assets totaled $719,065 at March 31, 2008, compared to $680,786 at December 31, 2007, an increase of $38,279, or 5.6%. Federal funds and equivalents sold increased from $16,480 at December 31, 2007 to $46,500 at March 31, 2008. Total securities increased from $89,009 at December 31, 2007 to $99,825 at March 31, 2008. The entire securities investment portfolio is classified as available for sale. Management utilizes this classification to provide the Corporation with the flexibility to move funds into loans as demand warrants.

The increase in federal funds sold and securities balances is attributed to the shift of excess funds from loans into investments due to slower loan demand and strong deposit growth. The Corporation invests primarily in U.S. Treasury notes, U.S. government agencies, municipal bonds, corporate obligations and mortgage-backed securities. The mortgage-backed securities portfolio, totaling $39,746 at March 31, 2008, provides the Corporation with a constant cash flow stream from principal repayments and interest payments. The Corporation held no structured notes during any period presented.

Total loans, including loans held for sale, decreased $3,090, or 0.6%, from $521,571 at December 31, 2007 to $518,481 at March 31, 2008. The decline in loan balances is due to continued loan payoffs and intense competitive pricing, coupled with a reduction in the Company’s investment property and indirect auto lending activities. The Bank’s decision to exit the indirect lending market was due to inadequate returns for the risk assumed. Other loan categories in which the Corporation participates, commercial, industrial and consumer financing remained relatively stable or experienced small increases in loans outstanding.

Total deposits increased $51,877, or 10.2%, from $510,874 at December 31, 2007 to $562,751 at March 31, 2008. Deposit growth stems primarily from increased CDARS balances, which provide customer’s jumbo deposits increased levels of FDIC insurance coverage. The Bank had approximately $117,000 in CDARS customer deposits outstanding at March 31, 2008, primarily from public fund customers. Growth of core deposits remains difficult due to the competition’s increased new branch locations. Management intends to continue to develop new products, and to monitor the rate structure of its deposit products to encourage growth of its deposits. Noninterest-bearing deposits decreased $1,962, or 3.7%, while interest bearing deposits increased $53,839, or 11.8% during the quarter ended March 31, 2008. The Corporation utilizes a variety of alternative funding sources due to competitive challenges within its primary market. Total borrowings decreased to $95,163 during the three months ended March 31, 2008, compared to $110,082 at December 31, 2007. Typically, the Company utilizes a matched funding methodology for its borrowing and deposit activities. This is done by matching the rates, terms and expected cash flows of its loans to the various liability products. This matching principle is used to not only provide funding, but also as a means of mitigating interest rate risk associated with originating longer-term fixed-rate loans. Continued reliance on borrowings outside of normal deposit growth may increase the Corporation’s overall cost of funds.

17

DCB FINANCIAL CORP
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)

COMPARISON OF RESULTS OF OPERATIONS

Net Income.Net income for the three months ended March 31, 2008 totaled $1,298, compared to net income of $1,511 for the same period in 2007. Earnings per share was $0.35 for the three months ended March 31, 2008 compared to $0.40 for the three months ended March 31, 2007. The decrease was mainly attributed to increased salary and benefits expense and general operating expenses on four new branch locations, partially offset by an increase in non-interest income.

Net Interest Income.Net interest income represents the amount by which interest income on interest-earning assets exceeds interest paid or accrued on interest-bearing liabilities. Net interest income is the largest component of the Corporation’s income, and is affected by the interest rate environment, the volume, and the composition of interest-earning assets and interest-bearing liabilities.

Net interest income was $5,470 for the three months ended March 31, 2008 and $5,479 for the same period in 2007. The Corporation’s net interest margin for the first quarter declined slightly compared to the first quarter 2007, from 3.49% to 3.47%, due to increased cash equivalent balances which earn a lower yield than longer term interest earning assets. The Bank experienced an overall decline in cost of deposits and interest expense for the first quarter of 2008. The margin was also negatively affected by the reversal of accrued interest on loans that were placed on non-accrual. The Bank has seen deposit growth primarily in products such as time deposits and money market accounts, which generally carry higher costs compared to checking and savings products. The Corporation has been able to reduce its overall borrowings by replacing them with customer deposits.

The Asset/Liability Management Committee, which is responsible for determining deposit rates, continues to closely monitor the Bank’s cost of funds to take advantage of pricing and cash flow opportunities. Additionally, because of the increased competition in the Bank’s primary marketplace, management has continued to recognize the importance of offering special rates on certain deposit products. These special deposit rates tend to negatively affect the Corporation’s net interest margin. It is likely that these offerings will continue to be offered to secure liquidity while maintaining market share.

Provision and Allowance for Loan Losses.The provision for loan losses represents the charge to income necessary to adjust the allowance for loan losses to an amount that represents management’s assessment of the losses known and inherent in the Bank’s loan portfolio. All lending activity contains associated risks of loan losses and the Bank recognizes these credit risks as a necessary element of its business activity.

The provision for loan losses totaled $600 for the three months ended March 31, 2008, compared to $615 for the same period in 2007. DCB maintains an allowance for loan losses at a level to absorb management’s estimate of probable inherent credit losses in its portfolio. Non-accrual loans at March 31, 2008 increased to $11,990 compared to $10,360 at December 31, 2007. The majority of non-accrual balances are attributed to loans in the investment real estate sector that were not generating sufficient cash flow to service the debt. There is also one large real estate development loan included in the non-accrual balances. Delinquent loans over thirty days from period to period increased to 3.27% at March 31, 2008 from 2.94% at March 31, 2007, and again are mainly attributed to the real estate investment portfolio. Management will continue to focus on activities related to monitoring, collection, and workout of delinquent loans. Management also continues to monitor exposure to industry segments, and believes that the loan portfolio remains adequately diversified.

Net charge-offs for the three months ended March 31, 2008 increased to $1,123, compared to $713 for the three months ended March 31, 2007. Annualized net charge-offs for the three months ended March 31, 2008 were 0.86% compared to 0.52% at March 31, 2007. The largest percentage of charge-offs during 2008 was attributed to the economic conditions that affected the Columbus investment property and indirect auto portfolios.

18

DCB FINANCIAL CORP
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)

A significant portion of the charge-offs recorded in the quarter were provided for in December 2007 when DCB recorded a $7.4 million addition to the provision for loan losses. Loans past due 90 days or more and still accruing, declined to $1,822, or 67.5%, at March 31, 2008 from $5,609 at March 31, 2007, while non-accrual balances increased to $11,990 from $5,044 during the same period. Management will continue to monitor the credit quality of the lending portfolio and may recognize additional provisions in the future if needed to maintain the allowance for loan losses at an appropriate level. The balance of allowance for loan losses was $7,775, or 1.50% of total loans at March 31, 2008, compared to $5,344, or 0.98% of total loans at March 31, 2007.

Noninterest Income.Total noninterest income increased $299, or 20.2%, for the three months ended March 31, 2008, compared to the same period in 2007. The increase was primarily attributable to the Bank’s partial redemption of its equity interest in Visa Inc.’s initial public offering, which provided a pretax gain of $278 during the first quarter of 2008. The Corporation experienced increases in trust and data processing revenues due to growth within these areas. Revenues from other services offered by the Bank generally remained at levels consistent with the prior year.

Noninterest Expense.Total noninterest expense increased $660, or 15.7%, for the three months ended March 31, 2008, compared to the same period in 2007. The increase was primarily the result of planned staff additions and occupancy expense along with real estate taxes related to the Corporation’s branch expansion. Additionally, the Corporation experienced increased operating costs and professional services costs related to the management and workout of its non-performing loan portfolio.

Income Taxes.The provision for income taxes totaled $499, for an effective tax rate of 27.8%, for the three months ended March 31, 2008 and $641, for an effective tax rate of 29.8%, for the three months ended March 31, 2007.
The decrease in income tax expense is primarily attributable to the decrease in pretax income of $355, or 16.5%, and an increase in tax exempt earnings on bank owned life insurance.

LIQUIDITY

Liquidity is the ability of the Corporation to fund customers’ needs for borrowing and deposit withdrawals. The purpose of liquidity management is to assure sufficient cash flow to meet all of the financial commitments and to capitalize on opportunities for business expansion. This ability depends on the financial strength, asset quality and types of deposit and investment instruments offered by the Corporation to its customers. The Corporation’s principal sources of funds are deposits, loan and security repayments, maturities of securities, sales of securities available for sale and other funds provided by operations. The Bank also has the ability to borrow from the FHLB. 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. The Corporation maintains investments in liquid assets based upon 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 increased $28,714, or 89.5%, to $60,782 at March 31, 2008 compared to $32,068 at December 31, 2007. Cash and equivalents represented 8.5% of total assets at March 31, 2008 and 4.7% of total assets at December 31, 2007. Management has elected to hold large cash and cash equivalent balances to have more flexibility in terms of funding because of the unusually tight liquidity and credit markets in the current economic environment. The Corporation has the ability to borrow funds from the Federal Home Loan Bank and has various correspondent banking partners to purchase overnight federal funds should the Corporation need to supplement its future liquidity needs. Management believes the Corporation’s liquidity position is adequate based on its current level of cash, cash equivalents, core deposits, the stability of its other funding sources, and the support provided by its capital base.

19

DCB FINANCIAL CORP
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)

CAPITAL RESOURCES

Total shareholders’ equity increased $1,057, or 1.9%, between December 31, 2007 and March 31, 2008. The increase was primarily due to period earnings of $1,298 and unrealized gains on securities designated as available for sale totaling $358, net of tax, offset by the declaration of $600 in dividends.

Tier 1 capital is shareholders’ equity excluding the unrealized gain or loss on securities classified as available for sale and intangible assets. 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 the Corporation’s total assets after such assets are assessed for risk and assigned a weighting factor defined by regulation based on their inherent risk.

The Corporation and its subsidiaries meet all regulatory capital requirements. The ratio of total capital to risk-weighted assets was 12.6% at March 31, 2008, while the Tier 1 risk-based capital ratio was 11.1%. Regulatory minimums call for a total risk-based capital ratio of 8.0%, at least half of which must be Tier 1 capital. The Corporation’s leverage ratio, defined as Tier 1 capital divided by average assets, was 8.1% at March 31, 2008.

The following table sets forth the Corporation’s obligations and commitments to make future payments under contract as of March 31, 2008.

	PAYMENT DUE BY YEAR
CONCTRACTUAL			Less than 1						More than
OBLIGATIONS	Total		year		1-3 years		3-5 years		5 years
FHLB advances	$	90,983	$	1,409	$	4,517	$	29,500	$	55,557
Federal funds purchased and other short-term borrowings		4,180		4,180		—		—		—
Operating lease obligations		6,422		633		1,402		1,680		2,707
Loan and line of credit commitments		84,696		84,696		—		—		—
Total Contractual Obligations	$	186,281	$	90,918	$	5,919	$	31,180	$	58,264

Item 3.Quantitative and Qualitative Disclosure About Market Risk

ASSET AND LIABILITY MANAGEMENT AND MARKET RISK

The Corporation’s primary market risk exposure is interest rate risk and, to a lesser extent, liquidity risk. Interest rate risk is the possibility that the Corporation’s financial condition will be adversely affected due to movements in interest rates. The income of financial institutions is primarily derived from the excess of interest earned on interest-earning assets over the interest paid on interest-bearing liabilities. Accordingly, the Corporation places great importance on monitoring and controlling interest rate risk. The measurement and analysis of the exposure of the Corporation’s primary operating subsidiary, The Delaware County Bank and Trust Company, to changes in the interest rate environment are referred to as asset/liability management. One method used to analyze the Corporation’s sensitivity to changes in interest rates is the “net portfolio value” (“NPV”) methodology.

20

DCB FINANCIAL CORP
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollars in thousands, except per share data)

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 the Corporation currently employs attempts to measure the change in NPV for a variety of interest rate scenarios, typically for parallel shifts of 100 to 300 basis points in market rates.

The Corporation’s 2007 Annual Report includes a table depicting the changes in the Corporation’s interest rate risk as of December 31, 2007, as measured by changes in NPV for instantaneous and sustained parallel shifts of -100 to +300 basis points in market interest rates. Management believes that no events have occurred since December 31, 2007 that would significantly change their ratio of rate sensitive assets to rate sensitive liabilities.

The Corporation’s NPV is more sensitive to rising rates than declining rates. From an overall perspective, such difference in sensitivity occurs principally because, as rates rise, borrowers do not prepay fixed-rate loans as quickly as they do when interest rates are declining. Thus, in a rising interest rate environment, because the Corporation has fixed-rate loans in its loan portfolio, the amount of interest the Corporation would receive on its loans would increase relatively slowly as loans are slowly prepaid and new loans at higher rates are made. Moreover, the interest the Corporation would pay on its deposits would increase rapidly because the Corporation’s deposits generally have shorter periods for repricing. The

Corporation can utilize various tools to reduce exposure to changes in interest rates including offering floating versus fixed rate products, or utilizing interest rate swaps. Additional consideration should also be given to today’s current interest rate levels. Several deposit products are within 200 basis points of zero percent and other products within 300 basis points. Should rates decline, fewer liabilities could be repriced down to offset potentially lower yields on loans. Thus decreases could also impact future earnings and the Corporation’s NPV.

As with any method of measuring interest rate risk, certain shortcomings are inherent in the NPV approach. For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Further, in the event of a change in interest rates, expected rates of prepayment on loans and mortgage-backed securities and early withdrawal levels from certificates of deposit would likely deviate significantly from those assumed in making risk calculations.

Item 4.Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of March 31, 2008, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2008, in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings.

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended March 31, 2008, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

21

DCB FINANCIAL CORP
FORM 10-Q
Quarter ended March 31, 2008
PART II — OTHER INFORMATION

Item 1 -	Legal Proceedings:
	There are no matters required to be reported under this item.
Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds:

ISSUER PURCHASES OF EQUITY SECURITIES

							(d)
					(c)		Maximum Number
					Total Number of		(or Approximate
	(a)				Shares (or Units)		Dollar Value) of
	Total Number		(b)		Purchased as Part		Shares (or Units) that
	of Shares (or		Average Price		of Publicly		May Yet Be
	Units)		Paid per Share		Announced Plans		Purchased Under the
Period	Purchased		(or Unit)		or Programs(1)		Plans or Programs
Month #l		—		—		—		—
1/1/2008 to 1/31/2008
Month #2		—		—		—		—
2/1/2008 to 2/28/2008
Month #3		—		—		—		—
3/1/2008 to 3/31/2008
Total		—		—		—		184,907

(1) On August 16, 2007, the Company announced a repurchase program which authorizes the repurchase of up to 200,000 of its common shares over a two year period commencing August 15, 2007.

See notes to the consolidated financial statements.

22

DCB FINANCIAL CORP

FORM 10-Q
Quarter ended March 31, 2008

PART II — OTHER INFORMATION

Item 3 -	Defaults Upon Senior Securities:
	There are no matters required to be reported under this item.
Item 4 -	Submission of Matters to a Vote of Security Holders:
	There are no matters required to be reported under this item.
Item 5 -	Other Information:
	There are no matters required to be reported under this item.
Item 6 -	Exhibits:
	Exhibits – The following exhibits are filed as a part of this report:

Exhibit No.	Exhibit
3.1	Amended and Restated Articles of Incorporation of DCB Financial Corp, incorporated by reference to the Company’s Report on Form 10-Q filed with the Commission on November 14, 2003.
3.2	Amended and Restated Articles of Incorporation of DCB Financial Corp, incorporated by reference to the Company’s Report on Form 10-Q filed with the Commission on November 14, 2003.
31.1	Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification pursuant to 18 U.S.C. 1350, as enacted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification pursuant to 18 U.S.C. 1350, as enacted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

23

DCB 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, thereunto duly authorized.

DCB FINANCIAL CORP(Registrant)

Date: May 12, 2008	/s/ Jeffrey Benton
	Jeffrey Benton
	President and Chief Executive Officer
Date: May 12, 2008	/s/ John A. Ustaszewski
	John A. Ustaszewski
	Senior Vice President and Chief Financial Officer

24

DCB FINANCIAL CORP

INDEX TO EXHIBITS

EXHIBIT
NUMBER	DESCRIPTION
3.1	Amended and Restated Articles of Incorporation of DCB Financial Corp, incorporated by reference to the Company’s Report on Form 10-Q filed with the Commission on November 14, 2003.
3.2	Amended and Restated Articles of Incorporation of DCB Financial Corp, incorporated by reference to the Company’s Report on Form 10-Q filed with the Commission on November 14, 2003.
31.1	Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification pursuant to 18 U.S.C. 1350, as enacted Pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification pursuant to 18 U.S.C. 1350, as enacted Pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

25