DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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EXHIBIT 99
THE DELAWARE COUNTY BANK AND
TRUST COMPANY
EMPLOYEE 401(k) RETIREMENT PLAN
Lewis Center, Ohio
FINANCIAL STATEMENTS
December 31, 2002 and 2001
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DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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CONTENTS
REPORT OF INDEPENDENT AUDITORS............................................ 8
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS..................... 9
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS...................................................... 10
NOTES TO FINANCIAL STATEMENTS....................................... 11
SUPPLEMENTARY INFORMATION
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)...... 17
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DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Delaware County Bank and Trust Company
Employee 401(k) Retirement Plan
Lewis Center, Ohio
We were engaged to audit the financial statements and supplemental schedule of
The Delaware County Bank and Trust Employee 401(k) Retirement Plan (the "Plan")
as of December 31, 2002 and for the year ended December 31, 2002, as listed in
the accompanying index. These financial statements and schedule are the
responsibility of the Plan's management.
As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, the plan administrator instructed us not to perform, and
we did not perform, any auditing procedures with respect to the information
summarized in Note 6, which was certified by The Delaware County Bank and
Trust's Trust Department, the Trustee of the Plan, except for comparing such
information with the related information included in the financial statements
and supplemental schedule. We have been informed by the plan administrator that
the Trust Department holds the Plan's investment assets and executes investment
transactions. The plan administrator has obtained a certification from the
Trustee as of December 31, 2002, that the information provided to the plan
administrator by the Trustee is complete and accurate.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the accompanying financial
statements and schedule taken as a whole. The form and content of the
information included in the financial statements and schedule, other than that
derived from the information certified by the Trustee, have been audited by us
in accordance with auditing standards generally accepted in the United States of
America and, in our opinion, are presented in compliance with the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
Other auditors audited the statement of net assets available for benefits of The
Delaware County Bank and Trust Employee 401(k) Retirement Plan as of December
31, 2001, and issued their report dated April 16, 2002, which expressed their
opinion that such financial statements present fairly, in all material respects,
the financial status of The Delaware County Bank and Trust Employee 401(k)
Retirement Plan as of December 31, 2001, in conformity with accounting
principles generally accepted in the United States of America.
/s/Grant Thornton LLP
Cincinnati, Ohio
June 27, 2003
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DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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THE DELAWARE COUNTY BANK AND TRUST COMPANY
EMPLOYEE 401(k) RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2002 and 2001
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2002 2001
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ASSETS
Investments at fair value (Note 4) $3,827,969 $3,357,573
Cash 7 185
Receivables:
Accrued income 3,148 1,611
Employer contributions 4,624 45,045
Employee contributions 13,048 14,086
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Total receivables 20,820 60,742
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Net assets available for benefits $3,848,796 $3,418,500
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See accompanying notes to financial statements.
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DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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THE DELAWARE COUNTY BANK AND TRUST COMPANY
EMPLOYEE 401(k) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2002
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ADDITIONS
Additions to net assets attributed to:
Investment income
Net appreciation in fair value of investments (Note 4) $ 255,387
Interest and dividend income 78,232
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Total investment income 333,619
Cash contributions:
Employee 359,310
Employer 127,855
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Total contributions 487,165
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Total additions 820,784
DEDUCTIONS
Benefits paid directly to participants -390,488
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Net increase 430,296
Net assets available for benefits
Beginning of year 3,418,500
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End of year $3,848,796
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See accompanying notes to financial statements.
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DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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THE DELAWARE COUNTY BANK AND TRUST COMPANY
EMPLOYEE 401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
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NOTE 1 - DESCRIPTION OF PLAN
The following description of The Delaware County Bank and Trust Company Employee
401(k) Retirement Plan (the "Plan") provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
GENERAL: The Plan is a defined contribution plan covering all eligible employees
of The Delaware County Bank and Trust Company (the "Company"). All employees who
are at least 20 years of age and complete one year of service are eligible to be
in the Plan. Each employee enters the plan on the first day of the plan quarter
following completion of the eligibility requirements. The Plan is subject to the
provisions of the Employee Retirement Security Act of 1974 (ERISA).
CONTRIBUTIONS: Participants may make salary deferral contributions at their
discretion up to 15% of their annual compensation. Participants direct the
investment of their contributions into various investment options offered by the
Plan. At the discretion of the Board of Directors, the Company matches the
participants' contributions up to a maximum of 6% of their annual compensation.
During 2002, the Company's matching contribution was 50% of employee
contributions up to the maximum of 6% of annual compensation. In addition, the
Board of Directors can provide for an additional Company contribution on a
discretionary basis. In 2002 there was no additional discretionary contribution,
while in 2001, the Company's discretionary contribution was 0.9% of the
Company's annual earnings. To be eligible to receive the discretionary Company
contribution, an employee must work 1,000 hours and be employed on the last day
of the plan year.
PARTICIPANT ACCOUNTS: Each participant's account is credited with the
participant's own contributions, the Company's contributions and plan earnings
and losses. Allocations of the Company contributions are based on participant
compensation and 401(k) contributions. Earnings and losses are allocated based
on account balances. The benefit to which a participant is entitled is the
benefit that can be provided from the participant's account.
RETIREMENT, DEATH AND DISABILITY: A participant is entitled to 100% of his or
her account balance upon retirement, death, or disability.
VESTING: Participants are immediately vested in their salary deferral
contribution and any earnings or losses thereon. Participants vest in Company
contributions and earnings or losses thereon as follows:
YEARS OF SERVICE VESTING PERCENTAGE
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Less than 1 0%
1 but less than 2 33%
2 but less than 3 66%
3 or more 100%
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(Continued)
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DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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THE DELAWARE COUNTY BANK AND TRUST COMPANY
EMPLOYEE 401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
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NOTE 1 - DESCRIPTION OF PLAN (Continued)
Forfeitures of terminated participants' nonvested account balances are used to
reduce employer contributions. As of December 31, 2002, there were $11,593 of
forfeitures available to reduce future contributions.
PAYMENT OF BENEFITS: On termination of service with the Company, a participant
will receive a lump-sum amount equal to the value of his or her account.
LOAN PROVISIONS: Participants may borrow 50% of their vested account balance up
to a maximum of $50,000 minus any loan amounts repaid in the last 12 months. The
minimum loan request is $1,000 and interest is payable at the than prevailing
interest prime interest rate.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING: The financial statements of the Plan are prepared under the
accrual method of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION: The Plan's investments are stated
at fair value as estimated by the Plan's trustee. If available, quoted market
prices are used to value investments. Common stock of DCB Financial Corp. (the
"Corporation") is listed on the over-the-counter bulletin board. The value of
the Company's common stock is based on the last known transaction prior to the
date of each statement of net assets available for benefits. Stock price
reflects inter-dealer prices, without retail mark-up, mark-down or commissions;
and may not represent actual transactions.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
ESTIMATES: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the plan
administrator to make estimates and assumptions that affect certain reported
amounts and disclosures, and actual results may differ from these estimates. A
significant change may occur in the near term for the estimates of investment
valuation.
PAYMENT OF BENEFITS: Benefits are recorded when paid.
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(Continued)
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DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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THE DELAWARE COUNTY BANK AND TRUST COMPANY
EMPLOYEE 401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
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NOTE 3 - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the provisions of the Plan to discontinue its contributions at any time
and to terminate the Plan subject to the provisions of ERISA. In the event of
plan termination, participants would become 100% vested in their employer
contributions.
NOTE 4 - INVESTMENTS
The following table presents investments that represent 5% or more of the Plan's
net assets:
2002 2001
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INVESTMENTS AT FAIR VALUE AS DETERMINED
BY QUOTED MARKET PRICE:
Automated Cash Management Fund $ 944,828 $ 907,479
Federated Max Cap Fund 183,128 175,648
Federated Stock Trust Fund 232,571 301,018
Federated Stock and Bond Fund 255,351 352,410
INVESTMENTS AT ESTIMATED FAIR VALUE:
DCB Financial Corp common stock 1,637,175 1,063,852
The Plan's investments (including investments bought, sold, as well as held
during the year) appreciated by $255,387 as detailed below:
Common stock $ 477,576
Mutual Funds (222,189)
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$ 255,387
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During 2002, the Plan earned $78,232 of dividend and interest income.
NOTE 5 - PARTY-IN-INTEREST TRANSACTIONS
Parties-in-interest are defined under Department of Labor (DOL) Regulations as
any fiduciary of the plan, any party rendering services to the plan, the
employer, and certain others. The Delaware County Bank and Trust Company, the
employer, serves as the Plan trustee and is the custodian of the Plan assets.
Transactions during the year with parties-in-interest included investment in the
employer's common stock and contributions made by the employer.
At December 31, 2002, the Plan owned 87,316 shares of DCB Financial Corp. common
stock, valued at $18.75 per share for a total of $1,637,175. At December 31,
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DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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2001, the Plan owned 82,790 shares of DCB Financial Corp. common stock, value at
$12.85 per share for a total of $1,063,852. Expenses incurred in the
administration of the Plan are paid by the Company on behalf of the Plan.
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(Continued)
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DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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THE DELAWARE COUNTY BANK AND TRUST COMPANY
EMPLOYEE 401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2002 and 2001
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NOTE 6 - TAX STATUS
The Internal Revenue Service has determined and informed the Company by letter
dated January 4, 2000, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The Plan
document is in the process of being restated for recent law changes. Management
believes that it is operating in compliance with the IRC as it relates to the
Plan.
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DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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SUPPLEMENTARY INFORMATION
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DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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THE DELAWARE COUNTY BANK AND TRUST COMPANY
EMPLOYEE 401(k) RETIREMENT PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2002
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Name of plan sponsor: THE DELAWARE COUNTY BANK AND TRUST COMPANY
Employer identification number: 31-4376006
Three-digit plan number: 002
(c)
Description of
Investment including
(b) Maturity Date, Rate of (e)
Identity of Issue Interest Collateral, Par (d) Current
(a) or Borrower or Maturity Value Cost Value
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Federated Funds Federated Money Market Fund @ $ 127
Investment in 127 shares of a
registered investment company
Federated Funds Federated Investors Auto Cash @ 944,828
Management Fund
Investment in 944,828 shares of a
registered investment company
Federated Funds Federated High Yield Trust Fund @ 29,914
Investment in 5,581 shares of a
registered investment company
Federated Funds Federated Bond Fund @ 83,742
Investment in 9,726 shares of a
registered investment company
Federated Funds Federated Stock Trust Fund @ 232,571
Investment in 8,557 shares of a
registered investment company
Federated Funds Federated Equity Income Fund @ 92,877
Investment in 7,058 shares of a
registered investment company
Federated Funds Federated Equity Funds - Growth @ 57,151
Strategy A
Investment in 3,053 shares of a
registered investment company
* Denotes parties-in-interest to the Plan.
@ Participant-directed investment. Cost basis disclosure not required.
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DCB FINANCIAL CORP - 11-K Filing Date: 06/27/03
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THE DELAWARE COUNTY BANK AND TRUST COMPANY
EMPLOYEE 401(k) RETIREMENT PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2002
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Name of plan sponsor: THE DELAWARE COUNTY BANK AND TRUST COMPANY
Employer identification number: 31-4376006
Three-digit plan number: 002
(c)
Description of
Investment including
(b) Maturity Date, Rate of (e)
Identity of Issue Interest Collateral, Par (d) Current
(a) or Borrower or Maturity Value Cost Value
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Federated Funds Federated Kaufmann Fund @ 62,723
Investment in 18,181 shares of a
registered investment company
Federated Funds Federated Equity Fund @ 24,431
Communications Technology Class A
Investment in 7,426 shares of a
registered investment company
Federated Funds Federated Max Cap Fund @ 183,128
Investment in 10,294 shares of a
registered investment company
Federated Funds Federated International Equity Fund @ 68,925
Investment in 5,988 shares of a
registered investment company
Federated Funds Federated Stock & Bond Fund @ 255,351
Investment in 16,296 shares of a
registered investment company
* DCB Financial Corp DCB Financial Corp Common Stock @ 1,637,175
Investment in 87,316 shares of common
stock
* Participant Notes Debt obligations of Plan participants
with interest rates ranging from 6.5%
to 9.5% 155,026
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Total $ 3,827,969
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* Denotes parties-in-interest to the Plan.
@ Participant-directed investment. Cost basis disclosure not required.
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