EXHIBIT 99
FOR IMMEDIATE RELEASE CONTACT:
Thursday October 20, 2005 John A. Ustaszewski
Chief Financial Officer
(740) 657-7000
DCB FINANCIAL CORP ANNOUNCES
THIRD QUARTER 2005 EARNINGS
AND INCREASES QUARTERLY DIVIDEND
LEWIS CENTER, Ohio, October 20, -- DCB Financial Corp, (OTC Bulletin Board DCBF)
announced earnings of $1.98 million, or $0.51 per basic and diluted share for
the three months ended September 30, 2005. This represents a $0.13, or 34%
increase from the $0.38 basic and diluted per share reported for the third
quarter 2004. Return on assets for the third quarter improved to 1.17% from
1.02% reported in 2004, while return on equity was 14.2%, a 25% increase from
the same period in 2004. Strong loan growth, stable credit trends and increased
efficiency have all contributed to the continued improvement in core earnings.
President and Chief Executive Officer Jeffrey T. Benton commented, "We are
pleased with the third quarter 2005 results. We continue to see significant
progress from our efforts to improve the Company's performance as to earnings
and growth. The Company is well positioned to take advantage of the continued
favorable banking environment in Delaware County. Reflecting its confidence in
the Company's earnings outlook, the Board approved an increase in the quarterly
dividend to $0.13 per share."
At quarter-end, total loans reached $544 million, an increase of $83.2 million
or 18% from the quarter ending September 30, 2004. The commercial and commercial
real estate loan portfolios continue to grow, reflective of the growth in
Delaware County. The Company has also seen good loan growth in its retail
products, particularly in credit cards and home equity products. The overall
credit quality of the Company remained stable on a year-to-year basis. At
September 30, 2005 loan delinquencies to total loans were 1.59% compared to
1.22% at September 30, 2004, while non-performing loans to total loans improved
to 0.35% at September 30, 2005 from 0.40%, during the same period in 2004. The
allowance for loan and lease losses was 1.04% at quarter-end, up from 1.01% at
the end of the third quarter 2004. For the quarter, net charge-offs as a
percentage of average loans improved to 0.20% from 0.38% in the third quarter
2004.
Net interest income was $5.9 million for the three months ended September 30,
2005, compared to $5.1 million for the same period in 2004. The $734 thousand
increase is mainly attributable to increased loan balances, as average-earning
assets increased by $91 million from the end of the third quarter 2004. The
Company's third quarter net interest margin decreased slightly to 3.72% on a
fully tax equivalent basis from 3.83% during the third quarter 2004. The decline
is attributed to funding some of the continued loan growth through higher cost
borrowings and the increased deposit costs associated with the current interest
rate environment. The Bank has mainly seen deposit growth in products such as
time deposits and money market accounts, which generally carry higher costs
compared to checking and savings products. Higher borrowing and core deposit
costs may further negatively impact the net interest margin in future periods.
Non-interest expense decreased $23 thousand on a quarter-to-quarter basis, which
is mainly attributed to lower occupancy and other expenses incurred offset by
increased salary and employee benefits costs. The Company's quarterly efficiency
ratio improved to 52.8% from 58.6% for the same period in 2004. This reflects
the Company's increased revenue growth while maintaining the level of
non-interest expense.
The Board of Directors declared a dividend of $0.13 per share payable November
15, 2005 to shareholders of record as of October 31, 2005.
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 and personalized wealth management 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 2004 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 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 20, 2005 Press Release
DCB FINANCIAL CORP
Key Ratios and Other Financial Data
(Unaudited)
(Dollars in thousands, except per share data)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Three Months Ended Nine Months Ended
---------------------------------- ----------------------------------
9/30/05 9/30/04 9/30/05 9/30/04
--------------- --------------- --------------- ---------------
Key Financial Information:
Net interest income $ 5,859 $ 5,125 $ 16,991 $ 14,609
Provision for loan and lease losses $ 545 $ 497 $ 1,535 $ 1,318
Non-interest income $ 1,350 $ 1,316 $ 4,220 $ 6,351
Non-interest expense $ 3,805 $ 3,828 $ 11,805 $ 11,978
Net income $ 1,982 $ 1,507 $ 5,501 $ 5,371
Loan balances (average) $ 537,141 $ 446,989 $ 515,948 $ 426,816
Deposit balances (average) $ 501,982 $ 443,789 $ 486,721 $ 438,961
Basic earnings per common share $ 0.51 $ 0.38 $ 1.41 $ 1.37
Diluted earnings per common share $ 0.51 $ 0.38 $ 1.41 $ 1.37
Weighted Average Shares Outstanding (000)
Basic 3,865 3,935 3,910 3,935
Diluted 3,868 3,935 3,912 3,935
</Table>
SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
October 20, 2005 Press Release
<Table>
<Caption>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
9/30/05 9/30/04 9/30/05 9/30/04
------------ ------------ ------------ ------------
Key ratios:
Return on average assets 1.17% 1.02% 1.13% 1.25%
Return on average shareholders' equity 14.2% 11.4% 13.3% 13.9%
Annualized non-interest expense to average assets 2.27% 2.58% 2.42% 2.78%
Efficiency ratio 52.8% 58.6% 55.7% 59.2%
Net interest margin 3.72% 3.83% 3.76% 3.80%
Equity to assets at period end 8.19% 8.92% 8.19% 8.92%
Allowance for loan losses as a percentage of period-end loans 1.04% 1.01% 1.04% 1.01%
Total allowance for losses on loans to non-performing loans 299.6% 253.2% 299.6% 253.2%
Net charge-offs (annualized) as a percent of average loans 0.20% 0.38% 0.18% 0.31%
Non-performing loans to total loans (net) 0.35% 0.40% 0.35% 0.40%
Delinquent loans (30+ days) 1.59% 1.22% 1.59% 1.22%
</Table>