DCB FINANCIAL CORP - 8-K Filing Date: 7/22/04
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EXHIBIT 99
FOR IMMEDIATE RELEASE CONTACT:
Thursday July 22, 2004 John A. Ustaszewski
Chief Financial Officer
(740) 657-7000
DCB FINANCIAL CORP ANNOUNCES SECOND QUARTER EARNINGS
LEWIS CENTER, Ohio, July 22, -- DCB Financial Corp, (OTC Bulletin Board DCBF)
announced earnings of $0.65 per share for the three months ended June 30, 2004.
The increase in earnings from the first quarter 2004's $0.33 per share is mainly
attributed to the previously announced sale of DCBF's investment in ProCentury
during April 2004.
"DCB was able to take advantage of the large gain from the sale of ProCentury by
restructuring long-term Federal Home Loan Bank debt, amortization on some large
pre-paid items, and reducing some other non-earning balance sheet items," said
Jeff Benton, President and CEO. "We also were able to increase our allowance for
loan and lease losses to keep pace with the outstanding loan growth we've
experienced during 2004." Benton added, "We've really concentrated on growing
future earnings in order to reach our goal of becoming a high performance bank.
Reducing high-cost debt and removing non-earning assets from the balance sheet
will help us achieve that goal."
The Bank reached a new high in total loans of $438.4 million at the end of the
second quarter compared to $388.0 million at the end of the second quarter 2003,
representing 13% annual growth. Total loans are up $33 million or an annualized
16.5% from year-end 2003, while the allowance for loan and lease losses ended
the quarter at 104 basis points. Despite the strong loan growth, credit quality
showed improvement. Non-accrual loans declined to $1.9 million at June 30, 2004
from $2.9 million at the end of the second quarter 2003. Additionally,
annualized net charge-offs for the quarter were 26 basis points compared to 30
basis points for the same period 2003. Delinquent loans over 30 days remained
stable period to period, increasing slightly to 2.0% from 1.9%.
Net interest income was $4.6 million for the three months ended June 30, 2004,
compared to $4.8 million for the same period in 2003. The approximate $200
thousand decrease was mainly attributed to reduced margins due to the sluggish
interest rate environment, and to the accelerated amortization of dealer reserve
expense. The Company's net interest margin declined to 3.70% on average earning
assets of $570.6 million. This compares to 4.06% for the three months ended June
30, 2003.
Total non-interest expense declined to $4.3 million from $4.5 million or 4.4%,
for the current period ended June 30, 2004, compared to the same period in 2003.
The reduction was primarily the result of a decrease in salaries and benefits
expenses, and a drop in professional and legal fees.
The Board of Directors has declared a dividend of $0.11 per share payable August
16, 2004 to shareholders of record as of July 30, 2004.
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Disclosure Page 3
DCB FINANCIAL CORP - 8-K Filing Date: 7/22/04
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DCB Financial Corp (the "Corporation") is a financial holding company formed
under the laws of the State of Ohio. The Corporation is the parent of The
Delaware County Bank & Trust Company, (the "Bank") a state-chartered commercial
bank. The Bank conducts business from its main offices at 110 Riverbend Avenue
in Lewis Center, Ohio, and through its 15 full-service branch offices located in
Delaware and the surrounding communities. The Bank provides customary retail and
commercial banking services to its customers, including checking and savings
accounts, time deposits, IRAs, safe deposit facilities, personal loans,
commercial loans, real estate mortgage loans, night depository facilities and
trust services. The Bank also provides cash management, bond registrar and
payment services. The Bank offers data processing services to other financial
institutions, however such services are not a significant part of its current
operations or revenues.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
DCB's consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States 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 the audited consolidated financial statements contained
in the Corporation's 2003 Annual Report to Shareholders. 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.
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, as they relate 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. 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
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Disclosure Page 4
DCB FINANCIAL CORP - 8-K Filing Date: 7/22/04
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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.
SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
July 22, 2004 Press Release
DCB FINANCIAL CORP
Key Ratios and Other Financial Data
(Unaudited)
(Dollars in thousands)
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Three Months Ended $(000)
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6/30/04 6/30/03 12/31/03
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Key Financial Information:
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Net interest income $ 4,586 $ 4,762 $ 4,759
Provision for loan and lease losses 443 355 355
Non-interest income 3,874 1,887 1,705
Non-interest expense 4,328 4,517 4,216
Net income 2,558 1,208 1,311
Loan balances (average) 424,366 375,530 399,712
Deposit balances (average) 436,315 433,404 445,810
Basic and diluted earnings per common share $ 0.65 $ 0.31 $ 0.33
Total shares outstanding (000) 3,935 3,935 3,935
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Disclosure Page 5
DCB FINANCIAL CORP - 8-K Filing Date: 7/22/04
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SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
July 22, 2004 Press Release
Three Months Ended
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6/30/04 6/30/03 12/31/03
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Key ratios:
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Return on average assets 1.79% .93% 0.94%
Return on average shareholders' equity 19.85% 10.02% 10.64%
Non-interest expense to average assets 0.76% 0.90% 0.76%
Efficiency ratio 56.89% 67.96% 64.43%
Net interest margin 3.70% 4.06% 3.72%
Equity to assets at period end 8.97% 9.24% 8.98%
Allowance for loan losses as a percentage of period-end loans 1.04% 1.11% 1.07%
Total allowance for losses on loans to non-performing loans 246.10% 150.95% 268.34%
Non-performing loans to total loans (net) 0.43% 0.74% 0.40%
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Disclosure Page 6