EXHIBIT 99
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FOR IMMEDIATE RELEASE CONTACT:
Thursday October 21, 2004 John A. Ustaszewski
Chief Financial Officer
(740) 657-7000
DCB FINANCIAL CORP ANNOUNCES THIRD QUARTER EARNINGS
LEWIS CENTER, Ohio, October 21, -- DCB Financial Corp, (OTC Bulletin Board DCBF)
announced earnings of $0.38 per share for the three months ended September 30,
2004. This represents a $0.12, or 46% increase in earnings from the $0.26
reported for the third quarter 2003. Year to date DCB reported earnings of $1.37
per share compared to $0.93 per share for the nine-months ending September 30,
2003. Return on assets for the third quarter was 102 basis points compared to 74
for the third quarter 2003, while return on equity was 11.4% compared to 8.4%
for the same period in 2003. The improved earnings are mainly attributed to
strong loan growth, improved credit quality, improved net interest margin and
continued emphasis on cost control programs implemented earlier this year and in
2003.
"We are extremely pleased with our third quarter results," said Jeff Benton,
President and CEO. "We continue to generate strong loan growth in our markets,
we've added deposits, and we've done this while maintaining our high credit
standards." Benton added, "We're also seeing the results of our sales training
initiatives and cost control programs, as we've been able to generate more new
business while keeping a line on operating expenses."
Continued strong loan growth during the quarter allowed total loans to exceed
$460 million for the first time in The Bank's history. Overall, loans increased
$55.6 million or an annualized 18.3% since year-end 2003. The majority of growth
has occurred within the commercial and commercial real estate categories, but
there was also strength within retail loans. While loan balances have increased,
credit trends continued to show improvement over prior periods. At September 30,
2004 delinquencies declined to 1.22% from 2.10% at September 30, 2003. Allowance
for loan and lease losses was 101 basis points at quarter-end, down from 108
basis points at year-end, while net non-performing loans declined to .40% from
..63% at year-end.
Net interest income was $5.1 million for the three months ended September 30,
2004, compared to $4.5 million for the same period in 2003. The increase is
mainly attributable to increased loan balances coupled with increased overall
net interest margin. The Company's net interest margin improved to 3.83% on
average earning assets of $545.2 million. This compares to 3.64% for the three
months ended September 30, 2003. The increase in margin is attributable to both
increased yields on loans and investments, but also to controlled deposit costs
and The Bank's ability to grow deposits to fund loan growth. Since year-end
2003, overall deposits have increased $16.3 million or 3.7% while short-term
borrowings have declined by $12.4 million, effectively reducing the overall cost
of funds.
Total non-interest expense declined to $3.8 million from $4.0 million or 5.2%,
for the current period ended September 30, 2004, compared to the same period in
2003. The reduction was primarily the result of a decrease in occupancy and
equipment expense, reduced professional and legal fees, and a slight reduction
in salaries and benefits expense. The Company's efficiency ratio for the quarter
declined to 58.6% from 68.3% in the third quarter 2003.
The Board of Directors has declared a dividend of $0.11 per share payable
November 17, 2004 to shareholders of record as of November 1, 2004.
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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
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
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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)
October 21, 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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9/30/04 9/30/03 12/31/03
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Key Financial Information:
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Net interest income $ 5,125 $ 4,455 $ 4,759
Provision for loan and lease losses 497 375 355
Non-interest income 1,316 1,440 1,705
Non-interest expense 3,828 4,039 4,216
Net income 1,507 1,012 1,311
Loan balances (average) 446,989 391,113 399,712
Deposit balances (average) 443,789 443,713 445,810
Basic and diluted earnings per common share $ 0.38 $ 0.26 $ 0.33
Total shares outstanding (000) 3,935 3,935 3,935
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SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
October 21, 2004 Press Release
Three Months Ended
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9/30/04 9/30/03 12/31/03
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Key ratios:
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Return on average assets 1.02% .74% 0.94%
Return on average shareholders' equity 11.42% 8.37% 10.64%
Non-interest expense to average assets 0.65% 0.77% 0.76%
Efficiency ratio 58.59% 68.33% 64.43%
Net interest margin 3.83% 3.64% 3.72%
Equity to assets at period end 8.92% 8.94% 8.98%
Allowance for loan losses as a percentage of period-end loans 1.01% 1.08% 1.07%
Total allowance for losses on loans to non-performing loans 253.21% 171.57% 268.34%
Net charge-offs (annualized) as a percent of average loans 0.38% 0.43% 0.28%
Non-performing loans to total loans (net) 0.40% 0.63% 0.40%
Delinquent loans (30+ days) 1.22% 2.10% 1.56%
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