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DNB Financial Corporation Reports Fourth Quarter and Full Year 2018 Results

DOWNINGTOWN, Pa., Jan. 24, 2019 (GLOBE NEWSWIRE) -- DNB Financial Corporation (DNBF), today reported net income of $3.0 million, or $0.69 per diluted share, for the quarter ending December 31, 2018, compared with $808,000, or $0.19 per diluted share, for the same quarter, last year.  For the year ending December 31, 2018, net income was $10.7 million, or $2.48 per diluted share, compared with $7.9 million, or $1.85 per diluted share, for the same period last year.  Fourth quarter and full year 2017 results were impacted by a $1.8 million charge, or $0.43 per diluted share, to adjust deferred taxes due to the enactment of the Tax Cuts and Jobs Act (the “Tax Act”) in December 2017.

DNB Financial Corporation (the “Company” or “DNB”) is the parent of DNB First, National Association, one of the first nationally-chartered community banks to serve the greater Philadelphia region.

William J. Hieb, President and CEO, stated, “Our fourth quarter results provide further evidence of the strength and flexibility of the Company’s business strategy.  Although the flat yield curve poses a challenge for all banks, we are confident that our prudent commercial loan growth, conservative credit culture, and judicious expense management will benefit our shareholders.”

Highlights

  • Total loans increased 2.9% (not annualized) on a sequential quarter basis and 10.5% since December 31, 2017.  Total commercial loans grew 4.2% (not annualized) on a sequential quarter basis and were 83.3% of total loans as of December 31, 2018.
  • The net interest margin was 3.45% for the quarter ending December 31, 2018, compared with 3.39% for the previous quarter and 3.74% for the three months ending December 31, 2017.
  • Asset quality remained stable as net charge-offs were only 0.10% (annualized) of total average loans for the fourth quarter of 2018.  Non-performing loans were 0.62% of total loans at December 31, 2018.
  • Wealth management assets under care were $253.3 million as of December 31, 2018, compared with $252.8 million as of December 31, 2017.  Wealth management fees represented approximately 37% of total fee income for the fourth quarter of 2018.
  • The Company paid a quarterly cash dividend of $0.07 per share on December 10, 2018.

Income Statement Summary

Net income of $3.0 million for the fourth quarter of 2018, generated a return on average assets (“ROAA”) and return on average tangible equity (“ROTE”) (a non-GAAP measure) of 1.03% and 12.62%, respectively.  A discussion of non-GAAP measures in this release is included below and a reconciliation of this and other non-GAAP to GAAP measures is included in the Financial Tables below.

Net interest income for the three months ending December 31, 2018 was $9.6 million, which represented a $407,000 increase from the quarter ending September 30, 2018, and a $90,000 decrease from the quarter ending December 31, 2017.  The net interest margin for the fourth quarter of 2018 was 3.45%; which represented a six basis point increase on a sequential quarter basis.  The year-over-year net interest margin decline of 29 basis points was primarily due to a $245,208 net reduction in purchase accounting marks and the higher cost of interest-bearing liabilities, which was partially offset by a $92.7 million increase in total average loans.  For the fourth quarters of 2018 and 2017, the weighted average yields on total interest-earning assets were 4.44% and 4.35%, respectively, which included purchase accounting marks.  On a year-over year basis, the weighted average yield on loans remained at approximately 4.85% as higher yields on newly-originated and purchased loans along with existing adjustable-rate loans offset the reduction in purchase accounting marks.

Total interest expense was $2.8 million for the three months ending December 31, 2018, compared with $2.5 million for the three months ending September 30, 2018 and $1.6 million for the fourth quarter of 2017.  The weighted average rate paid for interest-bearing liabilities was 1.07%, 0.98%, and 0.66% for the quarters ending December 31, 2018, September 30, 2018 and December 31, 2017, respectively.  The rise in the weighted average rate was primarily due to an overall increase in market interest rates.

The provision for credit losses was $350,000 for the fourth quarter of 2018, compared with $100,000 for the quarter ending September 30, 2018, and $375,000 for the quarter ending December 31, 2017.  As of December 31, 2018, the allowance for credit losses was $6.7 million and represented 0.71% of total loans.  Loans acquired in connection with the purchase of East River Bank in 2016 were recorded at fair value based on an initial estimate of expected cash flows, including a reduction for estimated credit losses, and without carryover of the respective portfolio's historical allowance for credit losses. 

Total non-interest income for the fourth quarter of 2018 remained fairly steady at $1.3 million, compared with $1.4 million for both the third quarter of 2018 and the quarter ending December 31, 2017.  Wealth management fees were $466,000 for the fourth quarter of 2018, compared with $542,000 for the third quarter of 2018, and $456,000 for the fourth quarter of 2017.  Wealth management fees represented approximately 37% of total fee income. 

Non-interest expense was approximately $6.8 million for both quarters ending December 31, 2018 and September 30, 2018, compared with $7.2 million for the quarter ending December 31, 2017.  The efficiency ratio was approximately 62% for the three months ended December 31, 2018.

Income tax expense was $643,000 for the three months ending December 31, 2018, and $2.3 million for the year ending December 31, 2018.  Fourth quarter and full year 2017 results were impacted by a $1.8 million charge, or $0.43 per diluted share, to adjust deferred taxes due to the enactment of the Tax Act in December 2017.  The Tax Act provided significant changes including a reduction of the federal corporate tax rate to 21% from 34%, effective January 1, 2018. 

Balance Sheet Summary      

As of December 31, 2018, total assets were $1.2 billion.  Since December 31, 2017, total assets increased $76.3 million, or 7.1%.  Total loan growth of $89.1 million, or 10.5% was partially offset by a $15.5 million, or 8.9% decrease in total investment securities.  Total deposits increased $125.6 million, or 14.6% since December 31, 2017, mainly due to growth in NOW, time, and brokered deposits.  As of December 31, 2018, total shareholders’ equity was $111.8 million, compared with $101.9 million as of December 31, 2017.  Tangible book value per share (a non-GAAP measure) was $22.21 as of December 31, 2018, compared with $20.06 as of December 31, 2017. See Reconciliation of Non-GAAP Financial Measures on page 10.

As of December 31, 2018, total loans were $935.0 million, or 80.7% of total assets.  At the same date, commercial loans, a key strategic emphasis, totaled $778.4 million and represented 83.3% of total loans.  The Company views commercial loan growth as the highest and best use of its capital as they generally have higher yields and shorter durations.  Total commercial loans increased $89.0 million, or 12.9% since December 31, 2017.  Loan originations have been prudent and conservative underwriting standards have been maintained.

Total core deposits increased $37.1 million, or 5.5% since December 31, 2017, and were 72.6% of total deposits as of December 31, 2018.  As of the same date, non-interest bearing deposits were 16.7% of total deposits.  Time and brokered deposits increased $88.4 million, or 48.5%, throughout 2018. The Company used these deposits to help fund loan growth due to their more favorable rates and maturities, compared with other funding sources.  As of December 31, 2018, the loan-to-deposit ratio was 94.8%.  Over the past year, borrowed funds decreased $57.5 million, or 51%, to $55.3 million as of December 31, 2018.

Capital ratios continue to exceed all regulatory guidelines.  As of December 31, 2018, the tier 1 leverage ratio was 9.48%, the tier 1 risk-based capital ratio was 11.74%, the common equity tier 1 risk-based capital ratio was 10.76% and the total risk based capital ratio was 13.57%.  As of the same date, the tangible common equity-to-tangible assets ratio (a non-GAAP measure) was 8.40%.  Intangible assets and goodwill totaled $15.9 million as of December 31, 2018. See Reconciliation of Non-GAAP Financial Measures on page 10.

Asset Quality Summary

Asset quality remained stable as net charge-offs were 0.10% (annualized) of total average loans for the quarter ending December 31, 2018, and 0.04% for the year ending December 31, 2018.  Total non-performing assets, including loans and other real estate property, were $10.8 million as of December 31, 2018, compared with $11.5 million as of September 30, 2018, and $12.6 million as of December 31, 2017.  The ratio of non-performing loans to total loans was 0.62% as of December 31, 2018, versus 0.89% as of December 31, 2017.    

Interest Rate Risk Management
DNB's strategy has been to seek shorter duration over yield in its lending and investing activities and lengthen duration in its financing activities to minimize interest rate risk.  The Company also strives to offer products and services that develop strong relationships to retain core deposits. The Bank has an Asset Liability Management Committee that actively monitors and manages the bank's interest rate exposure using simulation models and gap analysis. The Committee's primary objective is to minimize the adverse impact of changes in interest rates on net interest income, while maximizing earnings.  Simulation model results show moderate liability sensitivity to rising rates in 100, 200, 300 and 400 basis point shock scenarios. Rate changes ramped in over 24 months also show moderate liability sensitivity.

Non-GAAP Based Financial Measures

The income statement summary and selected financial data contains non-GAAP financial measures calculated using non-GAAP amounts. These measures are tangible book value per common share, return on average tangible equity and tangible equity to tangible assets. Tangible book value per share adjusts the numerator by the amount of Goodwill and Other Intangible Assets (reduction of Shareholders' Equity). Return on average tangible equity adjusts the denominator by the amount of Goodwill and Other Intangible Assets (reduction of Shareholders’ Equity). Tangible equity to tangible assets adjusts the numerator by the amount of Goodwill and Other Intangible Assets (reduction of Shareholders’ Equity) and adjust the denominator by the amount of Goodwill and Other Intangible Assets (reduction of Total Assets). Management uses non-GAAP measures to present historical periods comparable to the current period presentation. In addition, management believes the use of non-GAAP measures provides additional clarity when assessing our financial results and use of equity. Disclosures of this type should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.

General Information

DNB Financial Corporation is a bank holding company whose bank subsidiary, DNB First, National Association, is a community bank headquartered in Downingtown, Pennsylvania with 15 locations. DNB First, which was founded in 1860, provides a broad array of consumer and business banking products, and offers brokerage and insurance services through DNB Investments & Insurance, and investment management services through DNB Investment Management & Trust. DNB Financial Corporation's shares are traded on NASDAQ’s Capital Market under the symbol: DNBF. We invite our customers and shareholders to visit our website at https://www.dnbfirst.com. DNB's Investor Relations site can be found at http://investors.dnbfirst.com/.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, expectations or predictions of future financial or business performance. These forward-looking statements include statements with respect to DNB’s beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various factors (some of which are beyond DNB’s control). The words "may," "could," "should," "would," "will," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify forward-looking statements.

In addition to factors previously disclosed in the reports filed by DNB with the Securities and Exchange Commission (the “SEC”) and those identified elsewhere in this document, the following factors, among others, could cause actual results to differ materially from forward looking statements or historical performance: the strength of the United States economy in general and the strength of the local economies in which DNB conducts its operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; the downgrade, and any future downgrades, in the credit rating of the U.S. Government and federal agencies; inflation, interest rate, market and monetary fluctuations; the timely development of and acceptance of new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors' products and services; the willingness of users to substitute competitors’ products and services for DNB’s products and services; the success of DNB in gaining regulatory approval of its products and services, when required; the impact of changes in laws and regulations applicable to financial institutions (including laws concerning taxes, banking, securities and insurance); technological changes; additional acquisitions; changes in consumer spending and saving habits; the nature, extent, and timing of governmental actions and reforms; and the success of DNB at managing the risks involved in the foregoing. Further, DNB’s expectations with respect to the effects of the new tax law could be affected by future clarifications, amendments, and interpretations of such law. Annualized, pro forma, projected and estimated numbers presented herein are presented for illustrative purpose only, are not forecasts and may not reflect actual results.

DNB cautions that the foregoing list of important factors is not exclusive. Readers are also cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date of this press release, even if subsequently made available by DNB on its website or otherwise. DNB does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of DNB to reflect events or circumstances occurring after the date of this press release.

For a complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review our filings with the SEC, including our most recent annual report on Form 10-K, as supplemented by our quarterly or other reports subsequently filed with the SEC.

FINANCIAL TABLES FOLLOW

                       
DNB Financial Corporation
Condensed Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)
                       
  Three Months Ended   Twelve Months Ended
  Dec 31,   Dec 31,
    2018       2017       2018     2017
  EARNINGS:                      
  Interest income $  12,338      $  11,241      $  46,175    $  43,385 
  Interest expense    2,780         1,593         9,371       5,720 
  Net interest income    9,558         9,648         36,804       37,665 
  Provision for credit losses    350         375         1,200       1,660 
  Non-interest income    1,268         1,250         5,199       5,012 
  Gain from insurance proceeds    -        123         8       203 
  Gain on sale of investment securities    -        25         -      50 
  Gain on sale of SBA loans    1         21         38       153 
  Loss on sale / write-down of OREO and ORA    20         -        171       121 
  Due diligence & merger expense    -        -        -      77 
  Non-interest expense    6,812         7,202         27,704       27,823 
  Income before income taxes(1)    3,645         3,490         12,974       13,402 
  Income tax expense    643         2,682         2,290       5,456 
  Net income $  3,002      $  808      $  10,684    $  7,946 
  Net income per common share, diluted $  0.69      $  0.19      $  2.48    $  1.85 
                       
(1) Net income before income taxes includes net accretion of purchase accounting fair value adjustments of $190,000 and $935,000 for the three and twelve month periods ended December, 31, 2018, respectively, compared with $433,000 and $2.2 million for the same periods last year.
           
           
Condensed Consolidated Statements of Financial Condition (Unaudited)          
(Dollars in thousands)          
               
    Dec 31,     Dec 31,    
    2018       2017              
 FINANCIAL POSITION:                      
  Cash and cash equivalents $  17,321      $  10,917               
  Investment securities    158,669         174,173               
  Loans held for sale    419         651               
  Loans    934,971         845,897               
  Allowance for credit losses    (6,675 )      (5,843 )            
  Net loans    928,296         840,054               
  Premises and equipment, net    7,636         8,649               
  Restricted Stock    5,616         7,641               
  Other assets    40,278         39,830               
  Total assets $  1,158,235      $  1,081,915               
                       
  Deposits $  986,771      $  861,203               
  FHLB advances    32,935         79,013               
  Repurchase agreements    -        12,023               
  Other borrowings    12,584         12,017               
  Subordinated debt    9,750         9,750               
  Other liabilities    4,349         5,967               
  Stockholders' equity    111,846         101,942               
  Total liabilities and stockholders' equity $  1,158,235      $  1,081,915               
                       
             


                             
DNB Financial Corporation
Selected Financial Data (Unaudited)
(In thousands, except per share data)
                             
  Quarterly
  2018     2018     2018     2018     2017  
  4th Qtr   3rd Qtr   2nd Qtr   1st Qtr   4th Qtr
Earnings and Per Share Data                            
  Net income $ 3,002     $ 3,020     $ 2,049     $ 2,613     $ 808  
  Basic earnings per common share $ 0.70     $ 0.70     $ 0.48     $ 0.61     $ 0.19  
  Diluted earnings per common share (2) $ 0.69     $ 0.70     $ 0.47     $ 0.61     $ 0.19  
  Dividends per common share $ 0.07     $ 0.07     $ 0.07     $ 0.07     $ 0.07  
  Book value per common share $ 25.88     $ 25.06     $ 24.49     $ 24.15     $ 23.78  
  Tangible book value per common share (Non-GAAP) $ 22.21     $ 21.38     $ 20.79     $ 20.44     $ 20.06  
  Average common shares outstanding   4,317       4,307       4,298       4,291       4,274  
  Average diluted common shares outstanding   4,320       4,318       4,314       4,309       4,297  
                             
Performance Ratios                            
  Return on average assets   1.03 %     1.07 %     0.74 %     0.97 %     0.30 %
  Return on average equity   10.80 %     11.17 %     7.79 %     10.25 %     3.10 %
  Return on average tangible equity (Non-GAAP)   12.62 %     13.11 %     9.18 %     12.12 %     3.66 %
  Yield on Loans and Leases   4.85 %     4.74 %     4.70 %     4.71 %     4.85 %
  Cost of Deposits   0.97 %     0.86 %     0.77 %     0.63 %     0.52 %
  Net interest margin   3.45 %     3.39 %     3.44 %     3.51 %     3.74 %
  Efficiency ratio   62.45 %     63.68 %     70.39 %     64.61 %     64.73 %
  Wtd average yield on earning assets   4.44 %     4.30 %     4.28 %     4.24 %     4.35 %
                             
Asset Quality Ratios                            
  Net charge-offs (recoveries) to average loans   0.10 %     (0.12 %)     0.15 %     0.04 %     0.06 %
  Non-performing loans/Total loans   0.62 %     0.71 %     0.76 %     0.97 %     0.89 %
  Non-performing assets/Total assets   0.94 %     1.02 %     1.05 %     1.22 %     1.16 %
  Allowance for credit loss/Total loans   0.71 %     0.72 %     0.70 %     0.71 %     0.69 %
  Allowance for credit loss/Non-performing loans   115.50 %     101.36 %     91.76 %     73.08 %     77.36 %
                             
Capital Ratios                            
  Total equity/Total assets   9.66 %     9.58 %     9.29 %     9.42 %     9.42 %
  Tangible equity/Tangible assets (Non-GAAP)   8.40 %     8.29 %     8.00 %     8.09 %     8.07 %
  Tier 1 leverage ratio   9.48 %     9.48 %     9.35 %     9.33 %     9.19 %
  Common equity tier 1 risk-based capital ratio   10.76 %     10.91 %     10.69 %     10.63 %     10.71 %
  Tier 1 risk based capital ratio   11.74 %     11.93 %     11.72 %     11.67 %     11.80 %
  Total risk based capital ratio   13.57 %     13.83 %     13.59 %     13.56 %     13.73 %
                             
Wealth Management Assets Under Care(1) $ 253,323     $ 269,074     $ 257,797     $ 260,324     $ 252,823  
                             
(1) Wealth Management Assets Under Care includes assets under management, administration, supervision and brokerage.
(2) The sum of the four quarters EPS data does not equal the annual EPS data due to rounding.


                               
DNB Financial Corporation  
Condensed Consolidated Statements of Income (Unaudited)  
(Dollars in thousands, except per share data)  
                               
  Three Months Ended  
  Dec 31,   Sept 30,   June 30,   Mar 31,   Dec 31,  
  2018     2018     2018     2018     2017    
  EARNINGS:                              
  Interest income $  12,338      $  11,635      $  11,289      $  10,913      $  11,241     
  Interest expense    2,780         2,484         2,221         1,886         1,593     
  Net interest income    9,558         9,151         9,068         9,027         9,648     
  Provision for credit losses    350         100         375         375         375     
  Non-interest income    1,268         1,336         1,322         1,273         1,250     
  Gain from insurance proceeds    -        8         -        -        123     
  Gain on sale of investment securities    -        -        -        -        25     
  Gain on sale of SBA loans    1         27         10         -        21     
  Loss on sale / write-down of OREO and ORA    20         11         140         -        -    
  Non-interest expense    6,812         6,762         7,400         6,730         7,202     
  Income before income taxes    3,645         3,649         2,485         3,195         3,490     
  Income tax expense    643         629         436         582         2,682     
  Net income(1) $  3,002      $  3,020      $  2,049      $  2,613      $  808     
  Net income per common share, diluted $  0.69      $  0.70      $  0.47      $  0.61      $  0.19     
                               
(1) Fourth quarter 2017 results were impacted by a $1.8 million charge, or $0.43 per diluted share, to adjust deferred taxes due to the enactment of the Tax Cuts and Jobs Act.  
   
   
Condensed Consolidated Statements of Financial Condition (Unaudited)  
(Dollars in thousands)  
  Dec 31,   Sept 30,   June 30,   Mar 31,   Dec 31,  
  2018     2018     2018     2018     2017    
  FINANCIAL POSITION:                              
  Cash and cash equivalents $  17,321      $  10,702      $  33,452      $  14,078      $  10,917     
  Investment securities    158,669         161,230         165,574         171,108         174,173     
  Loans held for sale    419         -        276         646         651     
  Loans and leases    934,971         908,293         885,320         864,345         845,897     
  Allowance for credit losses    (6,675 )      (6,559 )      (6,188 )      (6,145 )      (5,843 )  
  Net loans and leases    928,296         901,734         879,132         858,200         840,054     
  Premises and equipment, net    7,636         7,881         8,150         8,366         8,649     
  Goodwill    15,525         15,525         15,525         15,525         15,525     
  Restricted Stock    5,616         5,864         6,950         7,363         7,641     
  Other assets    24,753         25,179         24,550         24,744         24,305     
  Total assets $  1,158,235      $  1,128,115      $  1,133,609      $  1,100,030      $  1,081,915     
                               
  Demand $  164,746      $  168,311      $  175,561      $  172,044      $  176,815     
  NOW    238,276         213,707         216,261         207,538         199,310     
  Money market    235,023         227,797         254,061         253,757         221,726     
  Savings    77,979         78,996         80,044         81,635         81,050     
  Core deposits    716,024         688,811         725,927         714,974         678,901     
  Time deposits    162,096         154,021         114,766         115,214         140,490     
  Brokered deposits    108,651         97,049         93,422         61,598         41,812     
  Total deposits    986,771         939,881         934,115         891,786         861,203     
  FHLB advances    32,935         36,952         62,972         67,993         79,013     
  Repurchase agreements    -        4,089         5,609         10,717         12,023     
  Subordinated debt    9,750         9,750         9,750         9,750         9,750     
  Other borrowings    12,584         22,833         9,615         9,630         12,017     
  Other liabilities    4,349         6,551         6,215         6,484         5,967     
  Stockholders' equity    111,846         108,059         105,333         103,670         101,942     
  Total liabilities and stockholders' equity $  1,158,235      $  1,128,115      $  1,133,609      $  1,100,030      $  1,081,915     
                               


                               
DNB Financial Corporation
Condensed Consolidated Statements of Financial Condition - Quarterly Average Balances (Unaudited)
(Dollars in thousands)
                               
    Dec 31,     Sept 30,     June 30,     Mar 31,     Dec 31,  
    2018       2018       2018       2018       2017    
  FINANCIAL POSITION:                              
  Cash and cash equivalents $  25,269      $  21,676      $  20,528      $  16,509      $  23,513     
  Investment securities    159,717         163,800         168,836         172,488         173,959     
  Loans held for sale    320         338         642         113         34     
  Loans and leases    919,985         889,113         869,166         851,623         827,273     
  Allowance for credit losses    (6,550 )      (6,567 )      (6,197 )      (5,958 )      (5,639 )  
  Net loans and leases    913,435         882,546         862,969         845,665         821,634     
  Premises and equipment, net    7,789         8,059         8,306         8,552         8,841     
  Goodwill    15,525         15,525         15,525         15,525         15,525     
  Restricted Stock    5,759         6,262         6,836         7,674         6,795     
  Other assets    23,816         24,012         23,568         23,436         24,723     
  Total assets $  1,151,630      $  1,122,218      $  1,107,210      $  1,089,962      $  1,075,024     
                               
  Demand $  168,495      $  174,798      $  170,885      $  174,022      $  192,700     
  NOW    222,638         215,055         206,341         204,719         196,055     
  Money market    241,777         238,679         252,825         236,165         216,853     
  Savings    78,069         79,695         80,696         80,992         81,118     
  Core deposits    710,979         708,227         710,747         695,898         686,726     
  Time deposits    157,944         141,794         114,091         133,222         142,283     
  Brokered deposits    104,161         85,690         82,957         43,739         41,814     
  Total deposits    973,084         935,711         907,795         872,859         870,823     
  FHLB advances    34,834         45,549         54,971         75,458         59,373     
  Repurchase agreements    1,168         4,644         12,042         12,364         15,388     
  Subordinated debt    9,750         9,750         9,750         9,750         9,750     
  Other borrowings    15,752         13,060         10,923         10,470         9,835     
  Other liabilities    6,780         6,193         6,277         5,657         6,298     
  Stockholders' equity    110,262         107,311         105,452         103,404         103,557     
  Total liabilities and stockholders' equity $  1,151,630      $  1,122,218      $  1,107,210      $  1,089,962      $  1,075,024     
                               




                               
DNB Financial Corporation
Reconciliation of Non-GAAP Financial Measures (Unaudited)
                               
Reconciliation of Tangible Book Value Per Common Share to Book Value Per Common Share
(In thousands, except share and per share data)
  Dec 31,   Sept 30,   June 30,   Mar 31,   Dec 31,  
  2018   2018   2018   2018   2017  
Stockholders' Equity $  111,846    $  108,059    $  105,333    $  103,670    $  101,942   
Goodwill    15,525       15,525       15,525       15,525       15,525   
Other intangible assets    343       364       388       423       435   
Tangible common equity (Non-GAAP) $  95,978    $  92,170    $  89,420    $  87,722    $  85,982   
                               
Outstanding shares  4,321,745     4,311,860     4,301,898     4,292,689     4,286,117   
                               
Book value per common share (GAAP) $  25.88    $  25.06    $  24.49    $  24.15    $  23.78   
Tangible book value per common share (Non-GAAP)    22.21       21.38       20.79       20.44       20.06   
                               
                               
                               
Return on Average Tangible Equity
(Dollars in thousands) For the Quarter Ended
  Dec 31,   Sept 30,   June 30,   Mar 31,   Dec 31,  
  2018   2018   2018   2018   2017  
Average Stockholders' Equity $  110,262    $  107,311    $  105,452    $  103,404    $  103,557   
Average goodwill    15,525       15,525       15,525       15,525       15,525   
Average other intangible assets    354       376       388       423       435   
Average tangible stockholders' equity (Non-GAAP) $  94,383    $  91,410    $  89,539    $  87,456    $  87,597   
                               
Net Income $  3,002    $  3,020    $  2,049    $  2,613    $  808   
                               
Return on average stockholders' equity (GAAP)    10.80  %    11.17  %    7.79  %    10.25  %    3.10  %
Return on average tangible equity (Non-GAAP)    12.62       13.11       9.18       12.12       3.66   
                               
                               
                               
Tangible Equity/Tangible Assets
(Dollars in thousands)
  Dec 31,   Sept 30,   June 30,   Mar 31,   Dec 31,  
  2018   2018   2018   2018   2017  
Stockholders' Equity $  111,846    $  108,059    $  105,333    $  103,670    $  101,942   
Goodwill    15,525       15,525       15,525       15,525       15,525   
Other intangible assets    343       364       388       423       435   
Tangible common equity (Non-GAAP) $  95,978    $  92,170    $  89,420    $  87,722    $  85,982   
                               
Assets  1,158,235     1,128,115     1,133,609     1,100,030     1,081,915   
Goodwill    15,525       15,525       15,525       15,525       15,525   
Other intangible assets    343       364       388       423       435   
Tangible assets (Non-GAAP)  1,142,367     1,112,226     1,117,696     1,084,082     1,065,955   
                               
Total equity/Total assets (GAAP)    9.66  %    9.58  %    9.29  %    9.42  %    9.42  %
Tangible common equity/Tangible assets (Non-GAAP)    8.40       8.29       8.00       8.09       8.07   


For further information, please contact:
Gerald F. Sopp CFO/Executive Vice-President
484.359.3138                                                                        
gsopp@dnbfirst.com