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DNB Financial Corporation Reports Fourth Quarter, Full Year 2013 Results

Stocks in this article: DNBF

DOWNINGTOWN, Pa., Jan. 23, 2014 (GLOBE NEWSWIRE) -- DNB Financial Corporation (Nasdaq:DNBF), parent of DNB First, National Association, the oldest nationally-chartered community bank serving the greater Philadelphia region, today reported financial results for the three and 12 months ended December 31, 2013.

For the three months ended December 31, 2013, net income available to common shareholders was $1.12 million or $0.41 per diluted common share compared with $1.28 million or $0.47 per diluted common share for the three months ended December 31, 2012.

For the 12 months ended December 31, 2013, net income available to common shareholders was $3.77 million or $1.36 per diluted common share compared with $4.91 million or $1.79 per diluted common share for the 12 months ended December 31, 2012. Earnings in 2013 were impacted by a $3.6 million write-down of three non-performing commercial credits, requiring an additional provision for loan losses of $1.3 million in the third quarter.

William S. Latoff, Chairman and CEO, commented: "DNB's 2013 operating performance reflects the commitment to growing revenue from a diversified mix of commercial, retail, and wealth management services. The Company's focus on increasing shareholder value is reflected in the value of our stock, which increased $5.25 or 34% during the year, from $15.50 to $20.75."

"While accomplishing important objectives to strengthen DNB's balance sheet and improve asset quality, we also made strategic investments that have expanded DNB's capabilities and firmly positioned us for the future. During the past year, the Company made numerous investments, including infrastructure upgrades to enhance efficiency and expanded product lines and services to enhance customer relationships. With the major asset quality initiatives in our rear-view mirror, we are excited about the ability to leverage our expanded capabilities to drive revenue growth and profitability," Latoff explained.

Highlights:

  • Total stockholders' equity increased to $58.58 million at December 31, 2013 compared with $56.71 million at December 31, 2012. Book value per common share rose to $16.55 at December 31, 2013 compared with $16.08 at December 31, 2012.
  • Total loans and leases before the allowance for credit losses were $415.35 million at December 31, 2013, up 5% compared with $396.50 million at December 31, 2012.
  • In the fourth quarter of 2013, the Bank demonstrated accelerating commercial loan growth with the addition of approximately $16 million in net new loans, and entered 2014 with a strong loan pipeline.
  • Total interest income was $23.21 million for the year ended December 31, 2013 compared with $25.73 million for the year ended December 31, 2012, with the decline primarily reflecting the continued low interest rate environment.
  • Improved asset quality was reflected in several key performance ratios, including a non-performing loan to total loan ratio of 1.38% and a ratio of non-performing assets to total assets of 1.03% at December 31, 2013.
  • The Company trimmed total interest expense 23% in 2013 compared with 2012 reflecting ongoing interest rate management practices and the growth of core deposits. Low-cost core deposit growth contributed to the Company's ability to reduce its reliance on FHLB borrowings by half, to $10 million.
  • Wealth management continued to record strong growth in total assets under care, which increased 23.5% to $148.2 million at December 31, 2013 compared with $120.0 million at December 31, 2012. This growth contributed to a 43% increase in fee income from DNB Investment Management and Trust.
  • Tier 1 leverage ratio of 10.61%, tier 1 risk-based capital ratio of 15.35% and total risk-based capital ratio of 16.40% as of December 31, 2013 exceeded regulatory definitions for a well-capitalized institution.

Income Statement Highlights

Net interest income after the provision for credit losses was $4.78 million for the three months ended December 31, 2013 compared with $5.14 million for the three months ended December 31, 2012. Year-over-year results reflect the continuing low interest rate environment, a 23% reduction of total interest expense, and a provision for credit losses of $375,000 in the quarter.

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