Pennsylvania
(State
or other jurisdiction of incorporation or organization)
|
23-2222567
(I.R.S.
Employer Identification No.)
|
Common
Stock ($1.00 Par Value)
(Class)
|
1,975,526
(Shares
Outstanding as of May 11, 2005)
|
PART
I - FINANCIAL INFORMATION
|
PAGE
NO.
|
||
ITEM
1.
|
FINANCIAL
STATEMENTS (Unaudited):
|
||
CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION
|
|||
March
31, 2005 and December 31, 2004
|
3
|
||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||
Three
Months Ended March 31, 2005 and 2004
|
4
|
||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||
Three
Months Ended March 31, 2005 and 2004
|
5
|
||
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|||
March
31, 2005 and December 31, 2004
|
6
|
||
ITEM
2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
9
|
|
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
21
|
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
21
|
|
PART
II - OTHER INFORMATION
|
|||
ITEM
1.
|
LEGAL
PROCEEDINGS
|
22
|
|
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
22
|
|
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
22
|
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
22
|
|
ITEM
5.
|
OTHER
INFORMATION
|
22
|
|
ITEM
6.
|
EXHIBITS
INDEX
|
22
|
|
SIGNATURES
|
25
|
||
EXHIBITS
|
26
|
||
March
31
|
December
31
|
|||
(Dollars
in thousands except share data)
|
2005
|
2004
|
||
Assets
|
||||
Cash
and due from banks
|
$
9,389
|
$
9,535
|
||
Federal
funds sold
|
1,386
|
14,586
|
||
Cash
and cash equivalents
|
10,775
|
24,121
|
||
AFS
investment securities, at fair value
|
54,935
|
132,288
|
||
HTM
investment securities (fair value of $35,108 and $37,095)
|
35,956
|
37,475
|
||
Loans
and leases
|
242,528
|
232,577
|
||
Allowance
for credit losses
|
(4,448
|
)
|
(4,436
|
)
|
Net
loans and leases
|
238,080
|
228,141
|
||
Investment
securities sold, not settled
|
71,118
|
—
|
||
Office
property and equipment
|
7,078
|
7,186
|
||
Bank
owned life insurance
|
6,345
|
6,295
|
||
Other
assets
|
3,353
|
2,831
|
||
Accrued
interest receivable
|
1,815
|
1,772
|
||
Net
deferred taxes
|
1,026
|
950
|
||
Total
assets
|
$430,481
|
$441,059
|
||
Liabilities
and Stockholders’ Equity
|
||||
Liabilities
|
||||
Non-interest-bearing
deposits
|
$
51,520
|
$
53,402
|
||
Interest-bearing
deposits:
|
||||
NOW
|
64,464
|
79,527
|
||
Money
market
|
40,824
|
42,199
|
||
Savings
|
79,702
|
77,897
|
||
Time
|
65,626
|
70,119
|
||
Total
deposits
|
302,136
|
323,144
|
||
FHLB
advances
|
60,900
|
61,650
|
||
Repurchase
agreements
|
30,961
|
23,127
|
||
Junior
subordinated debentures
|
9,279
|
5,155
|
||
Other
borrowings
|
709
|
711
|
||
Total
borrowings
|
101,849
|
90,643
|
||
Accrued
interest payable
|
854
|
923
|
||
Other
liabilities
|
1,122
|
1,611
|
||
Total
liabilities
|
405,961
|
416,321
|
||
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; 2,176,750 and 2,170,237 issued
|
2,177
|
2,170
|
||
Treasury
stock, at cost; 202,852 shares
|
(4,488
|
)
|
(4,488
|
)
|
Surplus
|
29,510
|
29,388
|
||
Accumulated
deficit
|
(2,450
|
)
|
(2,273
|
)
|
Accumulated
other comprehensive loss, net
|
(229
|
)
|
(59
|
)
|
Total
stockholders’ equity
|
24,520
|
24,738
|
||
Total
liabilities and stockholders’ equity
|
$430,481
|
$441,059
|
||
See
accompanying notes to consolidated financial statements.
|
Three
Months Ended March 31,
|
|||||
(Dollars
in thousands except share data)
|
2005
|
2004
|
|||
Interest
Income:
|
|||||
Interest
and fees on loans
|
$
3,640
|
$
3,334
|
|||
Interest
and dividends on investment securities:
|
|||||
Taxable
|
1,250
|
1,197
|
|||
Exempt
from Federal taxes
|
242
|
242
|
|||
Tax-preferred
DRD
|
31
|
85
|
|||
Interest
on cash and cash equivalents
|
44
|
21
|
|||
Total
interest income
|
5,207
|
4,879
|
|||
Interest
Expense:
|
|||||
Interest
on NOW, money market and savings
|
419
|
241
|
|||
Interest
on time deposits
|
413
|
376
|
|||
Interest
on FHLB advances
|
832
|
976
|
|||
Interest
on repurchase agreements
|
106
|
—
|
|||
Interest
on junior subordinated debentures
|
82
|
64
|
|||
Interest
on other borrowings
|
30
|
26
|
|||
Total
interest expense
|
1,882
|
1,683
|
|||
Net
interest income
|
3,325
|
3,196
|
|||
Provision
for credit losses
|
15
|
—
|
|||
Net
interest income after provision for credit losses
|
3,310
|
3,196
|
|||
Non-interest
Income:
|
|||||
Service
charges on deposits
|
290
|
312
|
|||
Wealth
management fees
|
246
|
211
|
|||
Increase
in cash surrender value of BOLI
|
50
|
52
|
|||
Net
(losses) gains on sales of available for sale securities
|
(699
|
)
|
46
|
||
Other
|
169
|
167
|
|||
Total
non-interest income
|
56
|
788
|
|||
Non-interest
Expense:
|
|||||
Salaries
and employee benefits
|
2,006
|
1,722
|
|||
Furniture
and equipment
|
299
|
323
|
|||
Occupancy
|
230
|
219
|
|||
Professional
and consulting
|
256
|
157
|
|||
Advertising
and marketing
|
144
|
89
|
|||
Printing
and supplies
|
79
|
101
|
|||
Other
|
427
|
550
|
|||
Total
non-interest expense
|
3,441
|
3,161
|
|||
(Loss)
income before income taxes
|
(75
|
)
|
823
|
||
Income
tax (benefit) expense
|
(154
|
)
|
154
|
||
Net
Income
|
$
79
|
$
669
|
|||
Earnings
per share:
|
|||||
Basic
|
$0.04
|
$0.34
|
|||
Diluted
|
0.04
|
0.33
|
|||
Cash
dividends per share
|
$0.13
|
$0.12
|
|||
Weighted
average common shares outstanding:
|
|||||
Basic
|
1,971,510
|
1,995,134
|
|||
Diluted
|
2,005,243
|
2,041,922
|
|||
See
accompanying notes to consolidated financial
statements.
|
Three
Months Ended March 31,
|
|||||
(Dollars
in thousands)
|
2005
|
2004
|
|||
Cash
Flows From Operating Activities:
|
|||||
Net
income
|
$
79
|
$
669
|
|||
Adjustments
to reconcile net income to net cash
|
|||||
provided
(used) by operating activities:
|
|||||
Depreciation,
amortization and accretion
|
344
|
368
|
|||
Provision
for credit losses
|
15
|
—
|
|||
Net
loss (gain) on sale of securities
|
699
|
(46
|
)
|
||
(Increase)
decrease in interest receivable
|
(43)
|
71
|
|||
Increase
in other assets
|
(522
|
)
|
(254
|
)
|
|
Increase
in investment in BOLI
|
(50
|
)
|
(52
|
)
|
|
Decrease
in interest payable
|
(69
|
)
|
(61
|
)
|
|
Decrease
(increase) in deferred tax benefit
|
4
|
(26
|
)
|
||
(Decrease)
increase in other liabilities
|
(489
|
)
|
181
|
||
Net
Cash (Used) Provided By Operating Activities
|
(32
|
)
|
850
|
||
Cash
Flows From Investing Activities:
|
|||||
Proceeds
from maturities and paydowns - AFS securities
|
8,220
|
11,323
|
|||
Proceeds
from maturities and paydowns - HTM securities
|
1,680
|
3,191
|
|||
Purchase
of AFS securities
|
(4,687
|
)
|
(12,035
|
)
|
|
Proceeds
from sale of AFS - securities
|
1,460
|
5,270
|
|||
Net
increase in loans and leases
|
(9,954
|
)
|
(5,251
|
)
|
|
Purchase
of bank property and equipment, net
|
(104
|
)
|
39
|
||
Net
Cash (Used) Provided By Investing Activities
|
(3,385
|
)
|
2,537
|
||
Cash
Flows From Financing Activities:
|
|||||
Net
(decrease) increase in deposits
|
(21,008
|
)
|
10,078
|
||
Decrease
in FHLB advances
|
(750
|
)
|
—
|
||
Increase
in junior subordinated debentures
|
4,124
|
—
|
|||
Proceeds
from short term repurchase agreements
|
7,834
|
—
|
|||
Decrease
in lease obligations
|
(2
|
)
|
(2
|
)
|
|
Dividends
paid
|
(256
|
)
|
(248
|
)
|
|
Proceeds
from issuance of stock under stock option plan
|
129
|
125
|
|||
Purchase
of treasury stock
|
—
|
(374
|
)
|
||
Net
Cash (Used) Provided By Financing Activities
|
(9,929
|
)
|
9,579
|
||
Net
Change in Cash and Cash Equivalents
|
(13,346
|
)
|
12,966
|
||
Cash
and Cash Equivalents at Beginning of Period
|
24,121
|
15,582
|
|||
Cash
and Cash Equivalents at End of Period
|
$10,775
|
$28,548
|
|||
Supplemental
Disclosure of Cash Flow Information:
|
|||||
Cash
paid during the period for:
|
|||||
Interest
|
$
1,951
|
$
1,745
|
|||
Income
taxes
|
—
|
3
|
|||
Supplemental
Disclosure of Non-cash Flow Information:
|
|||||
Change
in unrealized losses on AFS securities
|
$
250
|
$
1,209
|
|||
Change
in deferred taxes due to change in unrealized
|
|||||
losses
on AFS securities
|
(80
|
)
|
(410
|
)
|
|
Investment
securities sold, not settled
|
71,118
|
—
|
|||
See
accompanying notes to consolidated financial
statements.
|
Three
Months Ended March 31,
|
||||
(Dollars
in thousands, except per share data)
|
2005
|
2004
|
||
Net
income as reported
|
$
79
|
$
669
|
||
Deduct:
Total stock-based employee compensation expense determined under fair
value based method for all awards, net of related tax effects
|
—
|
—
|
||
Pro
forma net income
|
$
79
|
$
669
|
||
Earnings
per share:
|
||||
Basic
- as reported
|
$
0.04
|
$
0.34
|
||
Basic
- pro forma
|
$
0.04
|
$
0.34
|
||
Diluted
- as reported
|
$
0.04
|
$
0.33
|
||
Diluted
- pro forma
|
$
0.04
|
$
0.33
|
||
Three
Months Ended
|
Three
Months Ended
|
|||||||||||
March
31, 2005
|
March
31, 2004
|
|||||||||||
(Dollars
in thousands ,except share data)
|
Income
|
Shares
|
Amount
|
Income
|
Shares
|
Amount
|
||||||
Basic
EPS
|
||||||||||||
Income
available to common stockholders
|
$
79
|
1,971
|
$0.04
|
$
669
|
1,995
|
$0.34
|
||||||
Effect
of dilutive common stock equivalents - stock options
|
—
|
34
|
—
|
—
|
47
|
(0.01
|
)
|
|||||
Diluted
EPS
|
||||||||||||
Income
available to common stockholders after assumed conversions
|
$
79
|
2,005
|
$0.04
|
$
669
|
2,042
|
$0.33
|
Net-of-Tax
|
|||
(Dollars
in thousands)
|
Amount
|
||
Three
Months Ended March 31, 2005:
|
|||
Net
Income
|
$
79
|
||
Other
Comprehensive Income:
|
|||
Unrealized
holding losses arising during the period
|
(631
|
)
|
|
Reclassification
for losses included in net income
|
461
|
||
Total
Comprehensive Loss
|
$
(91
|
)
|
|
Three
Months Ended March 31, 2004:
|
|||
Net
Income
|
$
669
|
||
Other
Comprehensive Income:
|
|||
Unrealized
holding gains arising during the period
|
829
|
||
Reclassification
for gains included in net income
|
(30)
|
||
Total
Comprehensive Income
|
$
1,468
|
||
March
31
|
December
31
|
|||
(Dollars
in thousands)
|
2005
|
2004
|
||
Commercial
mortgage
|
$
90,980
|
$
87,795
|
||
Commercial
term
|
62,829
|
63,595
|
||
Consumer
|
43,779
|
43,210
|
||
Residential
mortgage
|
24,530
|
18,677
|
||
Commercial
Leases
|
20,410
|
19,300
|
||
Gross
loans and leases
|
242,528
|
232,577
|
||
Less
allowance for credit losses
|
(4,448
|
)
|
(4,436
|
)
|
Net
loans and leases
|
$
238,080
|
$
228,141
|
•
|
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.
|
Tax-Equivalent
Basis
|
GAAP
Basis
|
Reconciling
|
|||||||||||||
Rate
/ Volume Analysis
|
Three
Months Ended March 31,
|
Three
Months Ended March 31,
|
Difference
|
||||||||||||
2005
Compared to 2004
|
2005
Compared to 2004
|
Due
to Tax
|
|||||||||||||
Change
Due To
|
Change
Due To
|
Equivalent
|
|||||||||||||
(Dollars
in thousands)
|
Rate
|
Volume
|
Total
|
Rate
|
Volume
|
Total
|
Interest
|
||||||||
Interest-earning
assets:
|
|||||||||||||||
Loans
and leases
|
$
(179
|
)
|
$
495
|
$
316
|
$
(189
|
)
|
$
495
|
$
306
|
$
10
|
||||||
Investment
securities:
|
|||||||||||||||
Taxable
|
61
|
(8
|
)
|
53
|
61
|
(8
|
)
|
53
|
—
|
||||||
Tax-exempt
|
(24
|
)
|
24
|
—
|
(24
|
)
|
24
|
—
|
—
|
||||||
Tax-preferred
DRD
|
(35
|
)
|
(33
|
)
|
(68
|
)
|
(21
|
)
|
(33
|
)
|
(54
|
)
|
(14)
|
||
Cash
and cash equivalents
|
35
|
(12
|
)
|
23
|
35
|
(12
|
)
|
23
|
—
|
||||||
Total
|
(143
|
)
|
466
|
323
|
(138
|
)
|
466
|
328
|
(4)
|
||||||
Interest-bearing
liabilities:
|
|||||||||||||||
Savings
deposits
|
24
|
154
|
178
|
24
|
154
|
178
|
—
|
||||||||
Time
deposits
|
46
|
(9
|
)
|
37
|
46
|
(9
|
)
|
37
|
—
|
||||||
FHLB
advances
|
137
|
(281
|
)
|
(144
|
)
|
137
|
(281
|
)
|
(144
|
)
|
—
|
||||
Repurchase
agreements
|
—
|
106
|
106
|
—
|
106
|
106
|
—
|
||||||||
Junior
subordinated debentures
|
16
|
2
|
18
|
16
|
2
|
18
|
—
|
||||||||
Other
borrowings
|
2
|
2
|
4
|
2
|
2
|
4
|
—
|
||||||||
Total
|
225
|
(26
|
)
|
199
|
225
|
(26
|
)
|
199
|
—
|
||||||
Net
interest income
|
$
(368
|
)
|
$
492
|
$
125
|
$
(363
|
)
|
$
492
|
$
129
|
$
(4)
|
(Dollars
in thousands)
|
Three
Months Ended March 31, 2005
|
Year
Ended
December
31, 2004
|
Three
Months Ended March 31, 2004
|
|||
Beginning
balance
|
$4,436
|
$4,559
|
$4,559
|
|||
Provisions
|
15
|
—
|
—
|
|||
Charged-off
|
(8
|
)
|
(188
|
)
|
(105
|
)
|
Recoveries
|
5
|
65
|
36
|
|||
Ending
balance
|
$4,448
|
$4,436
|
$4,490
|
Non-Performing
Assets
|
|||||||
(Dollars
in thousands)
|
March
31,
2005
|
December
31, 2004
|
March
31,
2004
|
||||
Loans
and leases:
|
|||||||
Non-accrual
|
$
1,542
|
$
389
|
$2,521
|
||||
90
days past due and still accruing
|
4
|
36
|
145
|
||||
Troubled
debt restructurings
|
—
|
—
|
—
|
||||
Total
non-performing loans and leases
|
1,546
|
425
|
2,666
|
||||
Other
real estate owned
|
—
|
—
|
—
|
||||
Total
non-performing assets
|
$
1,546
|
$
425
|
$2,666
|
||||
March
31,
2005
|
December
31, 2004
|
March
31,
2004
|
|||||
Asset
quality ratios:
|
|||||||
Non-performing
loans to total loans
|
0.6
|
%
|
0.2
|
%
|
1.3
|
%
|
|
Non-performing
assets to total assets
|
0.4
|
0.1
|
0.6
|
||||
Allowance
for credit losses to:
|
|||||||
Total
loans and leases
|
1.8
|
1.9
|
2.2
|
||||
Non-performing
loans and leases
|
287.7
|
1,043.8
|
168.4
|
(Dollars
in thousands)
|
March
31,
2005
|
December
31, 2004
|
March
31,
2004
|
|||
Interest
income which would have been
|
||||||
Recorded
under original terms
|
$
28
|
$
31
|
$
47
|
|||
Interest
income recorded during the year
|
(8
|
)
|
(5
|
)
|
(37
|
)
|
Net
impact on interest income
|
$
20
|
$
26
|
$
10
|
(Dollars
in thousands)
|
March
31,
2005
|
December
31, 2004
|
March
31,
2004
|
|||
Total
recorded investment
|
$
1,287
|
$
o 216
|
$
2,159
|
|||
Average
recorded investment
|
1,287
|
1,083
|
2,153
|
|||
Specific
allowance allocation
|
455
|
—
|
—
|
|||
Total
cash collected
|
95
|
2,249
|
43
|
|||
Interest
income recorded
|
—
|
133
|
37
|
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
|
||||||||||||
March
31, 2005:
|
||||||||||||
Total
risk-based capital
|
$36,941
|
13.19
|
%
|
$22,414
|
8.00
|
%
|
$28,018
|
10.00
|
%
|
|||
Tier
1 capital
|
33,305
|
11.89
|
11,207
|
4.00
|
16,811
|
6.00
|
||||||
Tier
1 (leverage) capital
|
33,305
|
7.76
|
17,178
|
4.00
|
21,4727
|
5.00
|
||||||
December
31, 2004:
|
||||||||||||
Total
risk-based capital
|
$32,778
|
11.96
|
%
|
$21,917
|
8.00
|
%
|
$27,396
|
10.00
|
%
|
|||
Tier
1 capital
|
29,341
|
10.71
|
10,959
|
4.00
|
16,438
|
6.00
|
||||||
Tier
1 (leverage) capital
|
29,341
|
6.75
|
17,389
|
4.00
|
21,737
|
5.00
|
||||||
DNB
First, N.A.
|
||||||||||||
March
31, 2005:
|
||||||||||||
Total
risk-based capital
|
$36,868
|
13.17
|
%
|
$22,395
|
8.00
|
%
|
$27,994
|
10.00
|
%
|
|||
Tier
1 capital
|
33,232
|
11.87
|
11,198
|
4.00
|
16,796
|
6.00
|
||||||
Tier
1 (leverage) capital
|
33,232
|
7.74
|
17,166
|
4.00
|
21,458
|
5.00
|
||||||
December
31, 2004:
|
||||||||||||
Total
risk-based capital
|
$32,750
|
11.97
|
%
|
$21,894
|
8.00
|
%
|
$27,368
|
10.00
|
%
|
|||
Tier
1 capital
|
29,316
|
10.71
|
10,947
|
4.00
|
16,421
|
6.00
|
||||||
Tier
1 (leverage) capital
|
29,316
|
6.75
|
17,366
|
4.00
|
21,707
|
5.00
|
March
31, 2005
|
December
31, 2004
|
|||||||||||
Change
in rates
|
Flat
|
-200bp
|
+200bp
|
Flat
|
-200bp
|
+200bp
|
||||||
EVPE
|
$53,654
|
$45,759
|
$53,004
|
$40,712
|
$33,327
|
$36,297
|
||||||
Change
|
(7,895
|
)
|
(650
|
)
|
(7,385
|
)
|
(4,415
|
)
|
||||
Change
as a % of assets
|
(1.8%
|
)
|
(0.2%
|
)
|
(1.7%
|
)
|
(1.0%
|
)
|
||||
Change
as a % of PV equity
|
(19.4%
|
)
|
(1.6%
|
)
|
(18.1%
|
)
|
(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)
|
|
January
1 , 2005 - January 31, 2005
|
|
—
|
|
$
|
—
|
|
—
|
|
138,398
|
February
1, 2005 - February 28, 2005
|
|
—
|
|
—
|
|
—
|
|
138,398
|
|
March
1, 2005 - March 31, 2005
|
|
—
|
|
—
|
|
—
|
|
138,398
|
|
Total
|
|
—
|
|
$
|
—
|
|
—
|
|
138,398
|
(a)
|
|
On
July 25, 2001, DNB authorized the buyback of up to 175,000 shares of its
common stock over an indefinite period. On August 27, 2004, DNB increased
the buyback from 175,000 to 341,250 shares of its common stock over an
indefinite period. This number has been adjusted to reflect the 5% stock
dividend issued in December 2004.
|
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 10Q (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 3b 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)*
|
Employment
Agreement between DNB First, N.A. and Henry F. Thorne dated December 31,
1996 filed on March 26, 1999 at Item 10.1 to Form 10-K for the fiscal year
ended December 31, 1998 (No. 0-16667) and incorporated herein by
reference.
|
(b)*
|
Change
of Control Agreements between DNB Financial Corporation and DNB First,
N.A. and the following executive officers each in the form filed on March
26, 1999 at Item 10.2 to Form 10-K for the fiscal year ended December 31,
1998 (No. 0-16667), and incorporated herein by reference: (i) dated May 5,
1998 with Ronald K. Dankanich; Eileen M. Knott and Bruce B. Moroney, (ii)
dated July 18, 2000, April 28, 2003 and September 22, 2003 with William J.
Hieb and Richard M. Wright, respectively, and (iii) dated December 3, 2004
with Thomas M. Miller.
|
|
(c)**
|
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.
|
|
(d)*
|
Death
Benefit Agreement between DNB First, N.A. and Henry F. Thorne dated
November 24, 1999, filed March 20, 2002 as Item 10(d) to Form 10-K for the
fiscal year ended December 31, 2001 (No. 0-16667) and incorporated herein
by reference.
|
|
(e)*
|
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.
|
|
(f)*
|
Retirement
and Change of Control Agreement dated as of February 27, 2002, between DNB
Financial Corporation and DNB First, N.A. and Thomas R. Greenleaf, a
Director, filed on November 14, 2003 as item 10(f) to Form 8-K (No.
0-16667) and incorporated herein by reference.
|
|
(g)*
|
First
Amendment to Employment Agreement of Henry F. Thorne dated December 23,
2003 filed March 29, 2004 as Item 10(g) to Form 10-K for the fiscal year
ended December 31, 2003 (No. 0-16667) and incorporated herein by
reference.
|
|
(h)*
|
Retirement
and Death Benefit Agreement between DNB First, N.A. and Henry F. Thorne
dated December 23, 2003 filed March 29, 2004 as Item 10(h) to Form 10-K
for the fiscal year ended December 31, 2003 (No. 0-16667) and incorporated
herein by reference.
|
|
(i)***
|
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.
|
|
(j)*
|
Retirement
Agreement among DNB Financial Corporation, DNB First, N.A. and Henry F.
Thorne, dated December 17, 2004, 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.
|
|
(k)*
|
Change
of Control Agreement among DNB Financial Corporation, DNB First, N.A. and
William S. Latoff, dated December 17, 2004, 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.
|
DNB
FINANCIAL CORPORATION
|
||
May
11, 2005
|
BY:
|
/s/
William S. Latoff
|
William
S. Latoff, Chairman of the
Board
and Chief Executive Officer
|
||
May
11, 2005
|
BY:
|
/s/
Bruce E. Moroney
|
Bruce
E. Moroney, Chief Financial Officer and Executive Vice
President
|
||
DNB
FIRST, NATIONAL ASSOCIATION
By:___________________________
William
S. Latoff
Chief
Executive Officer
|
TSG,
INC.
By:___________________________
President
|
To: DNB Financial Corporation | Attention: Corporate Secretary | |
From:
|
_____________________________________
|
Date:
___________________________
|
(Grantee
Name)
|
||
_____________________________________
|
Tel.
No. _____ - ______ - __________
|
|
(Address)
|
||
_____________________________________
|
||
_____________________________________
|
||
_____________________________________
|
DNB
FINANCIAL CORPORATION
By:
________________________________
Print
Name: __________________________
Title:
_______________________________
|
Grantee:
________________________________
(Signature)
Print
Name: _______________________
|
Federal
Income Tax Withholding
|
$
__________. ____
|
(Contact
Payroll to Determine)
|
|
F.I.C.A.
Tax Withholding
|
$
__________. ____
|
(Contact
Payroll to Determine)
|
|
Pennsylvania
Personal Income Tax Withholding
|
$
__________. ____
|
(Contact
Payroll to Determine))
|
|
Local
Earned Income Tax Withholding
|
$
__________. ____
|
(Contact
Payroll to Determine)
|
|
Subtotal
of withholding taxes
|
$
__________. ____
|
(Contact
Payroll to Determine)
|
|
Total
Remittance
|
$
__________. ____
|
1. |
A
DNB director, officer or employee places DNB’s interests ahead of his or
her own private interest.
|
2. |
A
DNB director, officer or employee must make full disclosure of any
situation in which his or her private interests create a conflict or
potential conflict with those of the Company or the Bank or any of their
subsidiaries.
|
1. |
All
unpublished financial results;
|
2. |
All
unpublished financial projections; and
|
3. |
All
non-public information, the substance of which may be deemed material by
an investor or which would give a competitor a competitive advantage, such
as new products, services or pending
lawsuits.
|
1. |
Unsolicited
gifts of nominal value (not over $100) given at Christmas, other holidays,
or special occasions that represent expressions of friendship and are not
in connection with any transaction or business
DNB.
|
2. |
Luncheons,
dinners or business meetings and accompanying reasonable entertainment
with present and prospective customers and suppliers when the return of
the expenditure on a comparable basis is likely to occur and is properly
chargeable as a business expense.
|
3. |
Unsolicited
advertising or promotional material (e.g., pens and calendars) of a value
not exceeding $100.
|
· |
Providing
information to or otherwise assisting in an investigation by a federal
regulatory or law enforcement agency, any member of Congress or committee
of Congress, or any person with supervisory authority over the employee or
who has the authority to investigate, discover, or terminate misconduct,
where such information or investigation relates to any conduct of the
employer that the employee reasonably believes constitutes a violation of
specified federal fraud laws, any SEC rule or regulation, or any other
federal law relating to fraud against
shareholders.
|
· |
Filing,
testifying, participating in, or otherwise assisting in a proceeding
relating to alleged violations of any of the federal fraud or securities
laws described above.
|
· |
Any
employee wishing to file a complaint, may do so by e-mailing the Chairman
of the Audit Committee at
.
|
· |
If
you prefer to remain anonymous, you may mail your complaint to James H.
Thornton, 43 Cedar Hill Lane, Media, PA
19063.
|
· |
The
chairman of the audit committee will present the complaint to the full
Audit Committee at the next schedule meeting. Any serious concerns that
are revealed will be reviewed with the audit committee before
implementation of any final corrective action. The chairman has the
authority communicate with other committee members prior to the next
scheduled meeting where warranted.
|
· |
A
complete investigation of the complaint will occur. The Audit Committee
may use the Internal Audit Department staff for any investigations. The
Chairman of the Audit Committee has the right to retain any advisers need
to carry out the committee’s duties.
|
· |
All
documentation relating to complaints will be maintained by the Audit
Department for a period of five years.
|
1. |
I
have read and understand the Code of Ethics/Whistleblower
Policy.
|
2. |
I
have complied with and will continue to comply with all of the
requirements of the Code of EthicsWhistleblower Policy, and I have nothing
to disclose as required by the Policy except as
follows:
|
3. |
I
am not engaged in any outside employment except as
follows:
|
4. |
Neither
I nor any member of my immediate family is engaged in any activity which
may reasonably be deemed a conflict of interest as defined in the Bank’s
Code of Ethics/Whistleblower Policy except as
follows:
|