Pennsylvania
(State
or other jurisdiction of
incorporation
or organization)
|
23-2222567
(I.R.S.
Employer Identification No.)
|
Yes
x
|
|
No
o
|
Large
accelerated filer o
|
|
Accelerated
filer o
|
|
Non-accelerated
filer x
|
Yes
o
|
|
No
x
|
Common
Stock ($1.00 Par Value)
|
2,478,669
|
(Class)
|
(Shares
Outstanding as of
|
August
10, 2007)
|
PART I
- FINANCIAL INFORMATION
|
PAGE
NO.
|
||
ITEM
1.
|
FINANCIAL
STATEMENTS (Unaudited):
|
||
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION
|
|||
June
30, 2007 and December 31, 2006
|
|||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||
Three
and Six Months Ended June 30, 2007 and 2006
|
|||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||
Six
Months Ended June 30, 2007 and 2006
|
|||
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|||
ITEM
2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
||
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
||
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
||
PART
II - OTHER INFORMATION
|
|||
ITEM
1.
|
LEGAL
PROCEEDINGS
|
||
ITEM
1A.
|
RISK
FACTORS
|
||
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
||
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
||
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
||
ITEM
5.
|
OTHER
INFORMATION
|
||
ITEM
6.
|
EXHIBITS
|
||
SIGNATURES
|
|||
June
30
|
December
31
|
|||||||
(Dollars
in thousands except share data)
|
2007
|
2006
|
||||||
Assets
|
||||||||
Cash
and due from banks
|
$ |
12,798
|
$ |
11,611
|
||||
Federal
funds sold
|
16,420
|
12,616
|
||||||
Cash
and cash equivalents
|
29,218
|
24,227
|
||||||
AFS
investment securities, at fair value (amortized cost of
$117,496
and
$132,805)
|
115,037
|
131,636
|
||||||
HTM
investment securities (fair value of $16,444 and $18,393)
|
17,087
|
18,931
|
||||||
Other
investment securities
|
2,957
|
3,608
|
||||||
Total
investment securities
|
135,081
|
154,175
|
||||||
Loans
and leases
|
322,222
|
329,466
|
||||||
Allowance
for credit losses
|
(3,940 | ) | (4,226 | ) | ||||
Net
loans and leases
|
318,282
|
325,240
|
||||||
Office
property and equipment
|
8,821
|
7,699
|
||||||
Accrued
interest receivable
|
2,422
|
2,420
|
||||||
Bank
owned life insurance
|
7,150
|
7,036
|
||||||
Core
deposit intangible
|
333
|
358
|
||||||
Net
deferred taxes
|
3,197
|
2,499
|
||||||
Other
assets
|
1,606
|
1,588
|
||||||
Total
assets
|
$ |
506,110
|
$ |
525,242
|
||||
Liabilities
and Stockholders’ Equity
|
||||||||
Liabilities
|
||||||||
Non-interest-bearing
deposits
|
$ |
54,897
|
$ |
50,852
|
||||
Interest-bearing
deposits:
|
||||||||
NOW
|
86,169
|
82,579
|
||||||
Money
market
|
81,357
|
66,352
|
||||||
Savings
|
46,314
|
54,956
|
||||||
Time
|
120,336
|
126,288
|
||||||
Total
deposits
|
389,073
|
381,027
|
||||||
FHLB
advances
|
35,450
|
55,450
|
||||||
Repurchase
agreements
|
38,479
|
45,120
|
||||||
Junior
subordinated debentures
|
9,279
|
9,279
|
||||||
Other
borrowings
|
682
|
689
|
||||||
Total
borrowings
|
83,890
|
110,538
|
||||||
Accrued
interest payable
|
1,013
|
1,061
|
||||||
Other
liabilities
|
2,258
|
1,205
|
||||||
Total
liabilities
|
476,233
|
493,831
|
||||||
Stockholders’
Equity
|
||||||||
Preferred
stock, $10.00 par value;
|
||||||||
1,000,000
shares authorized;
none issued
|
—
|
—
|
||||||
Common
stock, $1.00 par value;
|
||||||||
10,000,000
shares authorized; 2,717,658 and 2,711,438 issued
respectively
|
2,718
|
2,712
|
||||||
Treasury
stock, at cost; 229,873 and 206,631 shares, respectively
|
(4,628 | ) | (4,158 | ) | ||||
Surplus
|
34,972
|
34,875
|
||||||
Accumulated
deficit
|
(1,005 | ) | (688 | ) | ||||
Accumulated
other comprehensive loss, net
|
(2,181 | ) | (1,330 | ) | ||||
Total
stockholders’ equity
|
29,876
|
31,411
|
||||||
Total
liabilities and stockholders’ equity
|
$ |
506,110
|
$ |
525,242
|
||||
See
accompanying notes to consolidated financial
statements.
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
(Dollars
in thousands except share data)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Interest
Income:
|
||||||||||||||||
Interest
and fees on loans and leases
|
$ |
5,692
|
$ |
5,421
|
$ |
11,485
|
$ |
10,246
|
||||||||
Interest
and dividends on investment securities:
|
||||||||||||||||
Taxable
|
1,404
|
1,190
|
2,632
|
2,383
|
||||||||||||
Exempt
from federal taxes
|
143
|
311
|
435
|
621
|
||||||||||||
Interest
on cash and cash equivalents
|
248
|
96
|
406
|
239
|
||||||||||||
Total
interest income
|
7,487
|
7,018
|
14,958
|
13,489
|
||||||||||||
Interest
Expense:
|
||||||||||||||||
Interest
on NOW, money market and savings
|
1,129
|
1,149
|
2,155
|
2,048
|
||||||||||||
Interest
on time deposits
|
1,446
|
777
|
2,921
|
1,508
|
||||||||||||
Interest
on FHLB advances
|
574
|
690
|
1,160
|
1,416
|
||||||||||||
Interest
on repurchase agreements
|
359
|
399
|
753
|
741
|
||||||||||||
Interest
on junior subordinated debentures
|
183
|
170
|
365
|
346
|
||||||||||||
Interest
on other borrowings
|
23
|
37
|
60
|
62
|
||||||||||||
Total
interest expense
|
3,714
|
3,222
|
7,414
|
6,121
|
||||||||||||
Net
interest income
|
3,773
|
3,796
|
7,544
|
7,368
|
||||||||||||
Provision
for credit losses
|
—
|
—
|
—
|
—
|
||||||||||||
Net
interest income after provision for credit losses
|
3,773
|
3,796
|
7,544
|
7,368
|
||||||||||||
Non-interest
Income:
|
||||||||||||||||
Service
charges on deposits
|
412
|
432
|
811
|
835
|
||||||||||||
Wealth
management fees
|
234
|
209
|
447
|
380
|
||||||||||||
Increase
in cash surrender value of BOLI
|
57
|
51
|
114
|
100
|
||||||||||||
Gain
on sale of securities
|
—
|
13
|
103
|
13
|
||||||||||||
Other
fees
|
201
|
194
|
397
|
386
|
||||||||||||
Total
non-interest income
|
904
|
899
|
1,872
|
1,714
|
||||||||||||
Non-interest
Expense:
|
||||||||||||||||
Salaries
and employee benefits
|
2,363
|
2,250
|
4,725
|
4,498
|
||||||||||||
Furniture
and equipment
|
392
|
329
|
762
|
669
|
||||||||||||
Occupancy
|
360
|
290
|
728
|
592
|
||||||||||||
Professional
and consulting
|
324
|
367
|
610
|
636
|
||||||||||||
Advertising
and marketing
|
139
|
170
|
218
|
283
|
||||||||||||
Printing
and supplies
|
103
|
154
|
199
|
231
|
||||||||||||
Other
expenses
|
554
|
584
|
1,113
|
1,102
|
||||||||||||
Total
non-interest expense
|
4,225
|
4,144
|
8,355
|
8,011
|
||||||||||||
Income
before income taxes
|
452
|
551
|
1,061
|
1,071
|
||||||||||||
Income
tax expense
|
74
|
65
|
148
|
121
|
||||||||||||
Net
Income
|
$ |
378
|
$ |
486
|
$ |
913
|
$ |
950
|
||||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$ |
0.15
|
$ |
0.19
|
$ |
0.37
|
$ |
0.38
|
||||||||
Diluted
|
$ |
0.15
|
$ |
0.19
|
$ |
0.36
|
$ |
0.38
|
||||||||
Cash
dividends per share
|
$ |
0.13
|
$ |
0.12
|
$ |
0.26
|
$ |
0.25
|
||||||||
Weighted
average common shares outstanding:
|
||||||||||||||||
Basic
|
2,497,669
|
2,494,809
|
2,500,121
|
2,493,207
|
||||||||||||
Diluted
|
2,513,011
|
2,514,062
|
2,515,384
|
2,511,447
|
||||||||||||
(Share
data adjusted for 2006 5% stock dividend)
|
||||||||||||||||
See
accompanying notes to consolidated financial
statements.
|
Six
Months Ended June 30,
|
||||||||
(Dollars
in thousands)
|
2007
|
2006
|
||||||
Cash
Flows From Operating Activities:
|
||||||||
Net
income
|
$ |
913
|
$ |
950
|
||||
Adjustments
to reconcile net income to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Depreciation,
amortization and
accretion
|
603
|
598
|
||||||
Unvested stock amortization
|
56
|
68
|
||||||
Net
gain on sale of
securities
|
(103 | ) | (13 | ) | ||||
Increase
in interest
receivable
|
(2 | ) | (16 | ) | ||||
Decrease
in other
assets
|
7
|
297
|
||||||
Increase
in investment in
BOLI
|
(114 | ) | (100 | ) | ||||
Decrease
in interest
payable
|
(48 | ) | (10 | ) | ||||
Increase
in deferred tax
benefit
|
(79 | ) | (33 | ) | ||||
Increase
(decrease) in other
liabilities
|
290
|
(45 | ) | |||||
Net
Cash Provided By Operating Activities
|
1,523
|
1,696
|
||||||
Cash
Flows From Investing Activities:
|
||||||||
Activity
in available-for-sale securities:
|
||||||||
Sales
|
24,478
|
¾
|
||||||
Maturities,
repayments and calls
|
24,765
|
6,765
|
||||||
Purchases
|
(33,877 | ) | (5,856 | ) | ||||
Activity
in held-to-maturity securities:
|
||||||||
Maturities,
repayments and calls
|
1,812
|
7,034
|
||||||
Net
decrease (increase) in other investments
|
651
|
(293 | ) | |||||
Net
decrease (increase) in loans and leases
|
6,958
|
(42,154 | ) | |||||
Purchase
of bank property and equipment, net
|
(1,647 | ) | (1,107 | ) | ||||
Net
Cash Provided (Used) By Investing Activities
|
23,140
|
(35,611 | ) | |||||
Cash
Flows From Financing Activities:
|
||||||||
Net
Increase in deposits
|
8,046
|
22,896
|
||||||
Increase
(decrease) in FHLB advances
|
(20,000 | ) |
3,200
|
|||||
Increase
(decrease) in short term repurchase agreements
|
(6,641 | ) |
4,048
|
|||||
Decrease
in lease obligations
|
(7 | ) | (6 | ) | ||||
Dividends
paid
|
(647 | ) | (616 | ) | ||||
Proceeds
from issuance of stock under stock option plan
|
47
|
44
|
||||||
(Increase)
decrease in treasury stock
|
(470 | ) |
73
|
|||||
Net
Cash (Used) Provided By Financing Activities
|
(19,672 | ) |
29,639
|
|||||
Net
Change in Cash and Cash Equivalents
|
4,991
|
(4,276 | ) | |||||
Cash
and Cash Equivalents at Beginning of Period
|
24,227
|
22,183
|
||||||
Cash
and Cash Equivalents at End of Period
|
$ |
29,218
|
$ |
17,907
|
||||
Supplemental
Disclosure of Cash Flow Information:
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ |
7,462
|
$ |
6,131
|
||||
Income
taxes
|
311
|
1
|
||||||
Supplemental
Disclosure of Non-cash Flow Information:
|
||||||||
Change
in unrealized losses on AFS securities
|
$ | (1,290 | ) | $ | (1,734 | ) | ||
Change
in deferred taxes due to change in unrealized
|
||||||||
losses
on AFS securities
|
439
|
589
|
||||||
See
accompanying notes to consolidated financial
statements.
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||||||||
June
30, 2007
|
June
30, 2007
|
|||||||||||||||||||||||
(In
thousands, except per-share data)
|
Income
|
Shares
|
Amount
|
Income
|
Shares
|
Amount
|
||||||||||||||||||
Basic
EPS
|
||||||||||||||||||||||||
Income
available to common stockholders
|
$ |
378
|
2,498
|
$ |
0.15
|
$ |
913
|
2,500
|
$ |
0.37
|
||||||||||||||
Effect
of potential dilutive common stock – stock options and unvested
shares
|
—
|
15
|
—
|
—
|
15
|
(.01 | ) | |||||||||||||||||
Diluted
EPS
|
||||||||||||||||||||||||
Income
available to common stockholders
|
$ |
378
|
2,513
|
$ |
0.15
|
$ |
913
|
2,515
|
$ |
0.36
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||||||||
June
30, 2006
|
June
30, 2006
|
|||||||||||||||||||||||
(In
thousands, except per-share data)
|
Income
|
Shares
|
Amount
|
Income
|
Shares
|
Amount
|
||||||||||||||||||
Basic
EPS
|
||||||||||||||||||||||||
Income
available to common stockholders
|
$ |
486
|
2,495
|
$ |
0.19
|
$ |
950
|
2,493
|
$ |
0.38
|
||||||||||||||
Effect
of potential dilutive common stock– stock options and unvested
shares
|
—
|
19
|
—
|
—
|
18
|
—
|
||||||||||||||||||
Diluted
EPS
|
||||||||||||||||||||||||
Income
available to common stockholders
|
$ |
486
|
2,514
|
$ |
0.19
|
$ |
950
|
2,511
|
$ |
0.38
|
Three
Months Ended
|
Three
Months Ended
|
|||||||
June
30, 2007
|
June
30, 2006
|
|||||||
(Dollars
in thousands)
|
Net-of-Tax
Amount
|
Net-of-Tax
Amount
|
||||||
Net
Income
|
$ |
378
|
$ |
486
|
||||
Other
Comprehensive Income:
|
||||||||
Unrealized
holding losses arising during the period
|
(1,055 | ) | (983 | ) | ||||
Reclassification
for gains included in net income
|
—
|
(9 | ) | |||||
Total
Comprehensive Loss
|
$ | (677 | ) | $ | (506 | ) | ||
Six
Months Ended
|
Six
Months Ended
|
|||||||
June
30, 2007
|
June
30, 2006
|
|||||||
(Dollars
in thousands)
|
Net-of-Tax
Amount
|
Net-of-Tax
Amount
|
||||||
Net
Income
|
$ |
913
|
$ |
950
|
||||
Other
Comprehensive Income:
|
||||||||
Unrealized
holding losses arising during the period
|
(783 | ) | (1,136 | ) | ||||
Reclassification
for gains included in net income
|
(68 | ) | (9 | ) | ||||
Total
Comprehensive Income (Loss)
|
$ |
62
|
$ | (195 | ) |
June
30,
|
December
31,
|
|||||||
(Dollars
in thousands)
|
2007
|
2006
|
||||||
Commercial
mortgage
|
$ |
105,945
|
$ |
99,333
|
||||
Commercial
term and lines of credit
|
95,428
|
99,732
|
||||||
Consumer
|
53,809
|
54,771
|
||||||
Residential
mortgage
|
49,514
|
52,636
|
||||||
Commercial
leases
|
17,526
|
22,994
|
||||||
Gross
loans and leases
|
322,222
|
329,466
|
||||||
Allowance
for credit losses
|
(3,940 | ) | (4,226 | ) | ||||
Net
loans and leases
|
$ |
318,282
|
$ |
325,240
|
Number
Outstanding
|
Weighted
Average
Exercise
Price
|
|||||||
Outstanding
January 1, 2007
|
270,258
|
$ |
20.09
|
|||||
Granted
|
–
|
–
|
||||||
Exercised
|
3,752
|
12.43
|
||||||
Expired
|
–
|
–
|
||||||
Forfeited
|
(19,748 | ) | (21.67 | ) | ||||
Outstanding
June 30, 2007
|
246,758
|
$ |
20.08
|
June
30, 2007
|
|||||||||||
Range
of
|
Number
|
Weighted
Average
|
|||||||||
Exercise
Prices
|
Outstanding
|
Exercise
Price
|
Remaining
Contractual Life
|
||||||||
$ |
9.69-10.99
|
10,764
|
$ |
9.69
|
3.00
years
|
||||||
11.00-13.99
|
12,635
|
11.82
|
3.41
years
|
||||||||
14.00-19.99
|
119,871
|
18.30
|
6.35
years
|
||||||||
20.00-23.99
|
57,735
|
23.24
|
4.42
years
|
||||||||
24.00-25.49
|
45,753
|
25.49
|
7.80
years
|
||||||||
Total
|
246,758
|
$ |
20.08
|
5.87
years
|
Shares
|
|
Outstanding
- January 1, 2007
|
13,528
|
Granted
|
–
|
Forfeited
|
–
|
Outstanding
– June 30, 2007
|
13,528
|
Capital
Category
|
Supervisory
Group
|
|||
A
|
B
|
C
|
||
Well
Capitalized
|
I
5-7
bps
|
II
10
bps
|
III
28
bps
|
|
Adequately
Capitalized
|
|
|||
Undercapitalized
|
III
28
bps
|
IV
43
bps
|
|
•
|
Fair
value is significantly below cost and the decline is attributable
to
adverse conditions specifically related to the security or to specific
conditions in an industry or in a geographic area, the decline has
existed
for an extended period of time or Management does not possess both
the
intent and the ability to hold the security for a period of time
sufficient to allow for any anticipated recovery in fair
value.
|
|
•
|
The
security has been downgraded by a rating
agency.
|
|
•
|
The
financial condition of the issuer has
deteriorated.
|
|
•
|
Dividends
have been reduced or eliminated, or scheduled interest payments have
not
been made.
|
|
•
|
The
entity recorded losses from the security subsequent to the end of
the
reporting period.
|
(Dollars
in thousands)
|
Six
Months Ended
June
30,
2007
|
Year
Ended
December
31,
2006
|
Six
Months Ended
June
30,
2006
|
|||||||||
Beginning
balance
|
4,226
|
$ |
4,420
|
$ |
4,420
|
|||||||
Provisions
|
¾
|
—
|
—
|
|||||||||
Charge-offs
|
(362 | ) | (365 | ) | (144 | ) | ||||||
Recoveries
|
76
|
171
|
45
|
|||||||||
Ending
balance
|
$ |
3,940
|
$ |
4,226
|
$ |
4,321
|
Non-Performing
Assets
|
||||||||||||
(Dollars
in thousands)
|
June
30,
2007
|
December
31,
2006
|
June
30,
2006
|
|||||||||
Loans
and leases:
|
||||||||||||
Non-accrual
|
$ |
404
|
$ |
715
|
$ |
910
|
||||||
90
days past due and still accruing
|
60
|
106
|
96
|
|||||||||
Troubled
debt restructurings
|
—
|
—
|
—
|
|||||||||
Total
non-performing loans and leases
|
464
|
821
|
1,006
|
|||||||||
Other
real estate owned
|
—
|
—
|
—
|
|||||||||
Total
non-performing assets
|
$ |
464
|
$ |
821
|
$ |
1,006
|
June
30,
2007
|
December
31,
2006
|
June
30,
2006
|
||||||||||
Asset
quality ratios:
|
||||||||||||
Non-performing
loans to total
loans
|
0.14 | % | 0.25 | % | 0.30 | % | ||||||
Non-performing
assets to total
assets
|
0.09
|
0.16
|
0.20
|
|||||||||
Allowance
for credit losses to:
|
||||||||||||
Total
loans and
leases
|
1.22
|
1.28
|
1.31
|
|||||||||
Non-performing
loans and
leases
|
849.32
|
514.70
|
429.77
|
Six
Months Ended
|
Year
Ended
|
Six
Months Ended
|
||||||||||
(Dollars
in thousands)
|
June
30,
2007
|
December
31,
2006
|
June
30,
2006
|
|||||||||
Interest
income which would have been
|
||||||||||||
recorded
under original
terms
|
$ |
20
|
$ |
56
|
$ |
39
|
||||||
Interest
income recorded during the period
|
(5 | ) | (28 | ) | (1 | ) | ||||||
Net
impact on interest income
|
$ |
14
|
$ |
28
|
$ |
38
|
Six
Months Ended
|
Year
Ended
|
Six
Months Ended
|
||||||||||
(Dollars
in thousands)
|
June
30,
2007
|
December
31,
2006
|
June
30,
2006
|
|||||||||
Total
recorded investment
|
$ |
733
|
$ |
641
|
$ |
869
|
||||||
Average
recorded investment
|
687
|
962
|
928
|
|||||||||
Specific
allowance allocation
|
25
|
76
|
411
|
|||||||||
Total
cash collected
|
30
|
$ |
1,145
|
$ |
166
|
|||||||
Interest
income recorded
|
—
|
4
|
—
|
For
Capital
|
To
Be Well Capitalized Under Prompt Corrective
|
|||||||||||||||||||||||
Actual
|
Adequacy
Purposes
|
Action
Provisions
|
||||||||||||||||||||||
(Dollars
in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
DNB
Financial Corporation
|
||||||||||||||||||||||||
June
30, 2007:
|
||||||||||||||||||||||||
Total
risk-based
capital
|
$ |
44,716
|
13.03 | % | $ |
27,202
|
8.00 | % | $ |
34,003
|
10.00 | % | ||||||||||||
Tier
1 capital
|
40,721
|
11.87
|
13,601
|
4.00
|
20,402
|
6.00
|
||||||||||||||||||
Tier
1 (leverage)
capital
|
40,721
|
8.19
|
19,877
|
4.00
|
24,846
|
5.00
|
||||||||||||||||||
December
31, 2006:
|
||||||||||||||||||||||||
Total
risk-based
capital
|
$ |
45,682
|
13.29 | % | $ |
27,504
|
8.00 | % | $ |
34,380
|
10.00 | % | ||||||||||||
Tier
1 capital
|
41,384
|
12.04
|
13,752
|
4.00
|
20,628
|
6.00
|
||||||||||||||||||
Tier
1 (leverage)
capital
|
41,384
|
8.28
|
19,987
|
4.00
|
24,984
|
5.00
|
||||||||||||||||||
DNB
First, N.A.
|
||||||||||||||||||||||||
June
30, 2007:
|
||||||||||||||||||||||||
Total
risk-based
capital
|
$ |
44,998
|
13.27 | % | $ |
27,127
|
8.00 | % | $ |
33,909
|
10.00 | % | ||||||||||||
Tier
1 capital
|
40,992
|
12.09
|
13,563
|
4.00
|
20,345
|
6.00
|
||||||||||||||||||
Tier
1 (leverage)
capital
|
40,992
|
8.26
|
19,854
|
4.00
|
24,817
|
5.00
|
||||||||||||||||||
December
31, 2006:
|
||||||||||||||||||||||||
Total
risk-based
capital
|
$ |
45,708
|
13.32 | % | $ |
27,451
|
8.00 | % | $ |
34,314
|
10.00 | % | ||||||||||||
Tier
1 capital
|
41,419
|
12.07
|
13,725
|
4.00
|
20,588
|
6.00
|
||||||||||||||||||
Tier
1 (leverage)
capital
|
41,419
|
8.30
|
19,966
|
4.00
|
24,958
|
5.00
|
June
30, 2007
|
December
31, 2006
|
|||||||||||||||||||||||
Change
in rates
|
Flat
|
-200bp
|
+200bp
|
Flat
|
-200bp
|
+200bp
|
||||||||||||||||||
EVE
|
$ |
55,322
|
$ |
50,682
|
$ |
51,796
|
$ |
48,771
|
$ |
45,426
|
$ |
43,466
|
||||||||||||
Change
|
$ | (4,640 | ) | $ | (3,526 | ) | (3,345 | ) | (5,305 | ) | ||||||||||||||
Change
as a % of assets
|
(.9 | %) | (.7 | %) | (0.6 | %) | (1.0 | %) | ||||||||||||||||
Change
as a % of PV equity
|
(8.4 | %) | (6.4 | %) | (6.9 | %) | (10.9 | %) |
Period
|
Total Number
Of
Shares Purchased
|
|
Average
Price
Paid
Per
Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
|
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans or
Programs (a)
|
|
April
1, 2007 – April 30, 2007
|
3,525
|
|
$20.24
|
|
3,525
|
|
128,149
|
|
May
1, 2007 – May 31, 2007
|
13,138
|
|
20.25
|
|
13,138
|
|
115,011
|
|
June
1, 2007 – June 30, 2007
|
5,934
|
|
19.85
|
|
5,934
|
|
109,077
|
|
Total
|
22,597
|
|
$20.14
|
|
22,597
|
|
103,036
|
(a)
|
On
July 25, 2001, DNB authorized the buyback of up to 192,938 shares
of its
common stock over an indefinite period. On August 27, 2004, DNB increased
the buyback from 192,938 to 376,228 shares of its common stock over
an
indefinite period. This number has been adjusted to reflect the 5%
stock
dividend issued in December 2006. The foregoing figures have been
adjusted
for stock dividends that have occurred since the date of each
authorization.
|
A.
|
Election
of Class "C" Directors:
|
For
|
Withheld
|
|
Mildred
C. Joyner
|
1,512,300
|
239,601
|
William
S. Latoff
|
1,542,464
|
209,437
|
|
B. The
motion to ratify the appointment of KPMG LLP as the independent auditors
for the fiscal year ending December 31,
2007:
|
For
|
Against
|
Abstain
|
1,713,215
|
36,173
|
2,513
|
DNB
FINANCIAL CORPORATION
|
||
August
14, 2007
|
BY:
|
/s/
William S. Latoff
|
William
S. Latoff, Chairman of the
Board
and Chief Executive Officer
|
||
August
14, 2007
|
BY:
|
/s/
Gerald F. Sopp
|
Gerald
F. Sopp, Chief Financial Officer and Executive Vice
President
|
||
Exhibit
No. Under Item
601
of Regulation S-K
|
Description
of Exhibit and Filing Information
|
|
3
|
(i)
|
Amended
and Restated Articles of Incorporation, as amended effective June
15,
2001, filed on August 14, 2001, as Item 6(a) to Form 10-Q (No. 0-16667)
and incorporated herein by reference.
|
(ii)
|
By-laws
of the Registrant as amended December 19, 2001, filed on March 24,
2002 at
Item 3(b) to Form 10-K for the fiscal year ended December 31, 2001
(No.
0-16667) and incorporated herein by reference.
|
|
4
|
Registrant
has certain debt obligations outstanding, for none of which do the
instruments defining holders rights authorize an amount of securities
in
excess of 10% of the total assets of the Registrant and its subsidiaries
on a consolidated basis. Registrant agrees to furnish copies of such
agreements to the Commission on request.
|
|
10
|
(a)*
|
Amended
and Restated Change of Control Agreements dated December 20, 2006
between
DNB Financial Corporation and DNB First, N.A. and the following executive
officers, each in the form filed March 26, 2007 as item 10(a) to
Form 10-K
for the fiscal year-ended December 31, 2006 (No. 0-16667) and incorporated
herein by reference: Ronald K. Dankanich, Bruce E. Moroney, C. Tomlinson
Kline III, and Richard J. Hartmann.
|
(b)**
|
1995
Stock Option Plan of DNB Financial Corporation (as amended and restated,
effective as of April 27, 2004), filed on March 29, 2004 as Appendix
A to
Registrant’s Proxy Statement for its Annual Meeting of Stockholders held
April 27, 2004, and incorporated herein by reference.
|
|
(c)*
|
Form
of Change of Control Agreements, as amended November 10, 2003, filed
on
November 14, 2003 as Item 10(e) to Form 8-K (No. 0-16667) and incorporated
herein by reference between DNB Financial Corporation and DNB First,
N.A.
and each of the following Directors: (i) dated November 10, 2005
with
James H. Thornton, James J. Koegel and Eli Silberman, and (ii) dated
February 23, 2005 with Mildred C. Joyner, and dated February 22,
2006 with
Thomas Fillippo.
|
|
(d)***
|
DNB
Financial Corp. Incentive Equity and Deferred Compensation Plan filed
March 10, 2005 as item 10(i) to Form 10-K for the fiscal year-ended
December 31, 2004 (No. 0-16667) and incorporated herein by
reference.
|
|
(e)*
|
Amended
and Restated Change of Control Agreement among DNB Financial Corporation,
DNB First, N.A. and William S. Latoff, dated December 20, 2006, filed
March 26, 2007 as item 10(e) to Form 10-K for the fiscal year-ended
December 31, 2006 (No. 0-16667) and incorporated herein by
reference
|
|
(f)*
|
Agreement
of Lease dated February 10, 2005 between Headwaters Associates, a
Pennsylvania general partnership, as Lessor, and DNB First, National
Association as Lessee for a portion of premises at 2 North Church
Street,
West Chester, Pennsylvania, filed March 10, 2005 as Item 10(l) to
Form
10-K for the fiscal year ended December 31, 2004 (No. 0-16667) and
incorporated herein by reference, as amended by Addendum to Agreement
of
Lease dated as of November 15, 2005, filed March 23, 2006 as Item
10(l) to
Form 10-K for the fiscal year ended December 31, 2005 (No. 0-16667)
and
incorporated herein by reference, and as further amended by Second
Addendum to Agreement of Lease dated as of May 25, 2006, filed August
14,
2006 as Item 10(l) to Form 10-Q for the fiscal quarter ended June
30, 2006
(No. 0-16667) and incorporated herein by reference.
|
(g)
|
Marketing
Services Agreement between TSG, INC., a Pennsylvania
business corporation (the "Service Provider") for which Eli
Silberman, a Director of Registrant, is the President and owner
dated March 14, 2006, filed May 10, 2006 as Item 10(m) to Form 10-Q
for
the fiscal quarter ended March 31, 2006 (No. 0-16667) and incorporated
herein by reference.
|
|
(h)**
|
Form
of Stock Option Agreement for grants prior to 2005 under the Registrant’s
Stock Option Plan, filed May 11, 2005 as Item 10(n) to Form 10-Q
for the
fiscal quarter ended March 31, 2005 (No. 0-16667) and incorporated
herein
by reference.
|
|
(i)**
|
Form
of Nonqualified Stock Option Agreement for April 18, 2005 and subsequent
grants under the Stock Option Plan, filed May 11, 2005 as Item 10(o)
to
Form 10-Q for the fiscal quarter ended March 31, 2005 (No. 0-16667)
and
incorporated herein by reference.
|
|
(j)
|
Agreement
of Sale dated June 1, 2005 between DNB First, National Association
(the “Bank”), as seller, and Papermill Brandywine Company, LLC,
a Pennsylvania limited liability company, as buyer (“Buyer”) with respect
to the sale of the Bank’s operations center and an adjunct administrative
office (the “Property”) and accompanying (i) Agreement of Lease between
the Buyer as landlord and the Bank as tenant, pursuant to which the
Property will be leased back to the Bank, and (ii) Parking Easement
Agreement to provide cross easements with respect to the Property,
the
Buyer’s other adjoining property and the Bank’s other adjoining property,
filed August 15, 2005 as Item 10(p) to Form 10-Q for the fiscal quarter
ended June 30, 2005 (No. 0-16667) and incorporated herein by
reference.
|
|
(k)
|
Agreement
of Lease dated November 18, 2005 between Papermill Brandywine Company,
LLC, a Pennsylvania limited liability company (“Papermill”), as Lessor,
and DNB First, National Association as Lessee for the banks operations
center and adjunct administrative office, filed March 23, 2006 as
Item
10(q) to Form 10-K for the fiscal year ended December 31, 2005 (No.
0-16667) and incorporated herein by reference.
|
|
(l)*
|
Amended
and Restated Change of Control Agreement among DNB Financial Corporation,
DNB First, N.A. and William J. Hieb, filed May
15, 2007
as Item 10(l) to Form 10-Q for the fiscal quarter ended March 31,
2007
(No. 0-16667) and incorporated herein by reference.
|
|
(m)**
|
Form
of Nonqualified Stock Option Agreement for grants on and after December
22, 2005 under the Stock Option Plan, filed March 23, 2006 as Item
10(s)
to Form 10-K for the fiscal year ended December 31, 2005 (No. 0-16667)
and
incorporated herein by reference.
|
|
(n)***
|
Deferred
Compensation Plan For Directors of DNB Financial Corporation (adopted
effective October 1, 2006), filed November 14, 2006 as Item 10(s)
to Form
10-Q for the fiscal quarter ended September 30, 2006 (No. 0-16667)
and
incorporated herein by reference.
|
|
(o)***
|
DNB
Financial Corporation Deferred Compensation Plan (adopted effective
October 1, 2006), filed November 14, 2006 as Item 10(t) to Form 10-Q
for
the fiscal quarter ended September 30, 2006 (No. 0-16667) and incorporated
herein by reference.
|
|
(p)***
|
Trust
Agreement, effective as of October 1, 2006, between DNB Financial
Corporation and DNB First, National Association (Deferred Compensation
Plan), filed November 14, 2006 as Item 10(u) to Form 10-Q for the
fiscal
quarter ended September 30, 2006 (No. 0-16667) and incorporated herein
by
reference.
|
|
(q)*
|
Change
of Control Agreements among DNB Financial Corporation, DNB First,
N.A. and
each of the following executive officers, each in the form filed
March 26,
2007 as item 10(q) to Form 10-K for the fiscal year-ended December
31,
2006 (No. 0-16667) and incorporated herein by reference: Albert
J. Melfi, Jr. and Gerald F. Sopp.
|
(r)*
|
DNB
Financial Corporation
Supplemental Executive Retirement Plan for William S. Latoff as amended
and restated effective April 1, 2007,filed May
15, 2007 as Item 10(r)
to Form 10-Q for the fiscal quarter ended March 31, 2007 (No. 0-16667)
and
incorporated herein by reference.
|
|
(s)*
|
Trust
Agreement effective as of December 20, 2006 between DNB Financial
Corporation and DNB First, N.A. (William S. Latoff SERP), filed March
26,
2007 as item 10(s) to Form 10-K for the fiscal year-ended December
31,
2006 (No. 0-16667) and incorporated herein by reference, as modified
by
Agreement to Terminate Trust dated as of April 1, 2007, filed May
15, 2007
as Item 10(s) to Form 10-Q for the fiscal quarter ended March 31,
2007
(No. 0-16667) and incorporated herein by reference.
|
|
(t)*
|
DNB
Offer Letter to Albert J. Melfi, Jr., dated November 10, 2006, filed
March
26, 2005 as item 10(t) to Form 10-K for the fiscal year-ended December
31,
2006 (No. 0-16667) and incorporated herein by reference.
|
|
(u)*
|
DNB
Offer Letter to Gerald F. Sopp, dated December 20, 2006, filed March
26,
2007 as item 10(u) to Form 10-K for the fiscal year-ended December
31,
2006 (No. 0-16667) and incorporated herein by reference.
|
|
11
|
Registrant’s
Statement of Computation of Earnings Per Share. The information for
this
Exhibit is incorporated by reference to Note 2 of this Form
10-Q
|
|
14
|
Code
of Ethics as amended and restated effective February 23, 2005, filed
March
10, 2005 as Item 10(m) to Form 10-K for the fiscal year ended December
31,
2004 (No. 0-16667) and incorporated herein by reference.
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
*
|
Management
contract or compensatory plan arrangement.
|
|
**
|
Shareholder
approved compensatory plan pursuant to which the Registrant’s Common Stock
may be issued to employees of the Corporation.
|
|
***
|
Non-shareholder
approved compensatory plan pursuant to which the Registrant’s Common Stock
may be issued to employees of the
Corporation.
|