EXHIBIT 99
FOR IMMEDIATE RELEASE CONTACT:
Thursday January 19, 2006 John A. Ustaszewski
Chief Financial Officer
(740) 657-7000
DCB FINANCIAL CORP ANNOUNCES
FOURTH QUARTER 2005 EARNINGS
AND QUARTERLY DIVIDEND
LEWIS CENTER, Ohio, January 19, -- DCB Financial Corp, (OTC Bulletin Board DCBF)
announced earnings of $2.06 million, or $0.54 per basic and diluted share for
the three months ended December 31, 2005. This represents a $0.13, or 32%
increase from the $0.41 basic and diluted earnings per share reported for the
fourth quarter of 2004. Return on assets for the fourth quarter improved to
1.20% from 1.05% reported for the same period in 2004, while return on equity
was 14.6%, a 23% 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. For the year ending December 31, 2005,
earnings per basic and diluted share totaled $1.94, compared to $1.77 for the
same period in 2004, a $0.17, or 10%, increase.
President and Chief Executive Officer Jeffrey T. Benton commented, "We are
pleased with the fourth quarter 2005 results, putting together another strong
quarter to finish a solid earnings performance in 2005. The Company is well
positioned for 2006 and has exciting plans for the upcoming year."
At year-end, total loans reached $553 million, an increase of $69.7 million or
14% from year ending December 31, 2004. The commercial and commercial real
estate loan portfolios continue to grow, reflective of the growth in our primary
market, Delaware County, Ohio. 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 improved on a year-to-year basis. Credit
quality trends improved, as management continues to actively address loan
quality. Non-accrual loans decreased to $1.23 million at December 31, 2005 from
$1.88 million at December 31, 2004, while delinquencies to total loans ended
2005 at 1.31% compared to 1.59% at December 31, 2004. Non-performing loans to
total loans totaled .22% of loans at December 31, 2005, compared to .39% at
December 31, 2004. For the quarter, net charge-offs as a percentage of average
loans increased to 0.42% from 0.18% during the same period in 2004, primarily as
a result of retail loan losses. The allowance for loan and lease losses was
1.00% of total loans at the end of 2005 and 2004.
Net interest income was $5.8 million for the three months ended December 31,
2005, compared to $5.4 million for the same period in 2004. The $422 thousand
increase is mainly attributable to increased loan balances, as average-earning
assets increased by $79 million from the fourth quarter 2004. The Company's
fourth quarter net interest margin decreased to 3.64% on a fully tax equivalent
basis, from 3.87% during the fourth quarter 2004. The decline is primarily
attributed to funding continued loan growth through higher cost borrowings and
deposits associated with the current interest rate environment. 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. Funding costs may further negatively impact the net interest margin in
future periods if the current competitive and rising interest rate environments
remain in effect.
Non-interest expense decreased $146 thousand on a quarter-to-quarter basis,
which is mainly attributed to lower occupancy and other expenses, partially
offset by increased salary and employee benefits costs. The Company's quarterly
efficiency ratio improved to 52.4% in the fourth quarter 2005 from 60.1% for the
same period in 2004. This reflects the Company's increased revenue growth, as
well as stringent control on non-interest expense.
The Board of Directors declared a dividend of $0.13 per share payable February
13, 2006, to shareholders of record as of January 31, 2006.
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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 County, Ohio and 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
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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)
January 19, 2006 Press Release
DCB FINANCIAL CORP
Key Ratios and Other Financial Data
(Unaudited)
(Dollars in thousands, except per share data)
- -------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
----------------------- ------------------------
12/31/05 12/31/04 12/31/05 12/31/04
-------- -------- -------- --------
Key Financial Information:
- -------------------------
Net interest income $ 5,824 $ 5,402 $ 22,816 $ 20,011
Provision for loan and lease losses $ 465 $ 378 $ 2,000 $ 1,696
Non-interest income $ 1,435 $ 1,267 $ 5,654 $ 7,618
Non-interest expense $ 3,861 $ 4,007 $ 15,665 $ 15,985
Net income $ 2,055 $ 1,604 $ 7,556 $ 6,975
Loan balances (average) $547,626 $470,516 $523,867 $437,741
Deposit balances (average) $496,711 $449,733 $489,219 $441,654
Basic earnings per common share $ 0.54 $ 0.41 $ 1.94 $ 1.77
Diluted earnings per common share $ 0.54 $ 0.41 $ 1.94 $ 1.77
Weighted Average Shares Outstanding (000)
Basic 3,835 3,935 3,891 3,935
Diluted 3,838 3,935 3,894 3,935
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SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
January 19, 2006 Press Release
Three Months Ended Twelve Months Ended
------------------------ -----------------------
12/31/05 12/31/04 12/31/05 12/30/04
-------- -------- -------- --------
Key ratios:
- ----------
Return on average assets 1.20% 1.05% 1.15% 1.20%
Return on average shareholders' equity 14.6% 11.9% 13.7% 13.4%
Annualized non-interest expense to average assets 2.27% 2.62% 2.38% 2.74%
Efficiency ratio 52.4% 60.1% 54.2% 57.9%
Net interest margin (FTE) 3.64% 3.87% 3.73% 3.80%
Equity to assets at period end 8.14% 8.87% 8.14% 8.87%
Allowance for loan losses as a percentage of period-end loans 1.00% 1.00% 1.00% 1.00%
Total allowance for losses on loans to non-performing loans 450.0% 256.4% 450.0% 256.4%
Net charge-offs (annualized) as a percent of average loans 0.42% 0.18% 0.24% 0.28%
Non-performing loans to total loans (net) 0.22% 0.39% 0.22% 0.39%
Delinquent loans (30+ days) 1.31% 1.59% 1.31% 1.59%
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