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DNB Financial Corporation Reports First Quarter 2014 Financial Results

Stocks in this article: DNBF

DOWNINGTOWN, Pa., April 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 months ended March 31, 2014.

For the quarter ended March 31, 2014, net income was $1.0 million compared to $1.18 million for the three months ended March 31, 2013. Earnings reflected year-over-year interest income growth driven by accelerating lending activity, interest expense reduction, offset by higher non-interest expense related to the Company's investment in expanded lines of business and revenue-producing personnel. Harsh winter weather conditions throughout the first quarter of 2014 had a negative impact on revenue, particularly from consumer spending and mortgage lending activity.

William S. Latoff, Chairman and CEO, commented: "Our first quarter financial performance continued to reflect the consistent progress we are making to build the value of the DNB franchise for shareholders. Despite unusually severe weather, which offered its share of challenges and expenses, DNB demonstrated clear traction from numerous growth and performance improvement initiatives.

"Commercial lending was strong in the first quarter, reflecting healthy growth in loan balances from year-end 2013 and compared to the first quarter of 2013. We have supported lending activities through core deposit growth, leading to a decline in interest expense. We are enthusiastic about the prospects of generating new revenues from a growing wealth management business and establishing DNB First as a full-service community bank with expanded mortgage lending and retail banking capabilities."

Highlights:

  • Net income available to common shareholders was $967,000 or $0.35 per diluted common share compared with $1.14 million or $0.41 per diluted common share for the three months ended March 31, 2013.
  • Total loans and leases before the allowance for credit losses were $430.17 million at March 31, 2014, up 7% compared to $402.03 million at March 31, 2013, reflecting growth in both commercial and consumer loans.
  • The Bank continued to demonstrate accelerating commercial loan growth as its commercial loan portfolio increased 3.39% at March 31, 2014 compared with December 31, 2013. Despite severe winter weather that impacted retail lending activity, residential mortgages increased 1.7% and consumer lending grew 5.8% compared to year-end 2013 totals.
  • Total assets increased to a Company record $681.26 million at March 31, 2014 compared with $641.78 million at March 31, 2013.
  • Reflecting steady consecutive quarterly growth, net interest income before provision for credit losses was $5.18 million for the quarter ended March 31, 2014 compared with $4.97 million for the quarter ended March 31, 2013.
  • Core deposits, driven by growth in demand deposits, NOW and money market accounts increased 9% to $478.48 million in the first quarter of 2014 compared with $438.30 million in the first quarter of 2013.
  • Core deposit growth supported the Bank's ability to trim interest expense to $625,000 in the first quarter of 2014 from $800,000 in the first quarter of 2013.
  • Improved asset quality was reflected in several key performance ratios, including a non-performing loan to total loan ratio declining to 1.26% from 4.05% in the prior year's first quarter, and a ratio of non-performing assets to total assets of 0.94% at March 31, 2014 compared with 2.72% at March 31, 2013.
  • Wealth management continued to demonstrate strong growth in total assets under care, which increased 13% year-over-year to a record $152.57 million at March 31, 2014 compared with $135.00 million at March 31, 2013.
  • Total stockholders' equity increased to $60.12 million at March 31, 2014 compared with $57.66 million at March 31, 2013. Book value per common share rose to $17.09 at March 31, 2014 compared with $16.39 at March 31, 2013.
  • Tier 1 leverage ratio of 10.72%, Tier 1 risk-based capital ratio of 15.00% and total risk-based capital ratio of 16.04% as of March 31, 2014 exceeded regulatory definitions for a well-capitalized institution.

Income Statement Highlights

Net interest income after the provision for credit losses was $4.80 million for the three months ended March 31, 2014 compared with $4.79 million for the three months ended March 31, 2013. Year-over-year results reflected a 22% reduction of total interest expense, and the addition of new loans that offset rate-related customer pay-downs. The Company's provision for credit losses was $375,000 in the first quarter of 2014, equal to fourth quarter 2013 totals and up from $180,000 in the first quarter of 2013, reflecting strong loan growth.

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