DCB Financial Announces Record Quarterly Earnings of $1.49 Million Board Increases Dividend



Improved Credit Quality and Reduced Expenses Highlight DCB's Quarterly

Progress



    DELAWARE, Ohio, April 28 /PRNewswire-FirstCall/ -- DCB Financial Corp.
 (OTC: DCBF) today announced record quarterly earnings of $1.49 million, or
 $0.36 per share for the three months ended March 31, 2003, compared to $1.45
 million, or $.35 per share for the first quarter 2002. The record quarterly
 earnings also reflected a sharp improvement over fourth quarter 2002 earnings
 of $0.15 per share.
     The increase in earnings resulted from improved credit quality, strong
 non-interest income revenue and reduced expenses, which more than offset a
 reduction in the net interest margin. Revenues generated by sales of mortgage
 loans were approximately $486 thousand compared to $201 thousand in the first
 quarter 2002. Operating expenses for the first quarter declined by
 $189 thousand or 4.4%, to $4.06 million compared to the first quarter 2002.
 The majority of this expense reduction was related to a decline in salary and
 benefits expense of $125 thousand. Net interest margin declined due to
 investment portfolio run-off, and the decline in interest rates. The
 Corporation is in the process of implementing pricing initiatives during the
 second quarter with the intent of reducing deposit costs and increasing
 margins. Jeffrey T. Benton, President and CEO noted, "We are pleased with the
 improved first quarter results.  We have started to see improvement from
 credit and cost control measures.  We have started numerous other initiatives
 to continue to improve the Bank's performance and improve returns to
 shareholders, while always providing high levels of service to the communities
 we serve."
     While attaining record quarterly earnings, DCB Financial also improved
 credit quality in the first quarter 2003. At March 31, 2003, the allowance for
 loan and lease losses totaled $4.2 million or 1.14% of the loan portfolio.
 This represents an increase from year-end 2002 and the first quarter 2002 when
 the allowance to loans totaled 1.10% and 1.03% respectively. "We are pleased
 with the improved credit performance of our loan portfolio during the first
 quarter," said Mr. Benton, who then added, "We will continue to carefully
 monitor the quality of the Bank's assets."  During the first quarter 2003,
 non-accrual loans declined by $813 thousand, or 22% from December 31, 2002.
 The ratio of non-accrual loans to total loans was 0.78% at March 31, 2003
 compared to 0.96% at year-end.  Additionally, loan delinquencies greater than
 60 days declined to 1.28% from 1.55% at December 31, 2002.
     The DCB Board of Directors has declared a dividend of $0.10 per share
 payable on May 15, 2003 to shareholders of record on April 25, 2003.  This
 compares to a dividend of $0.09 per share for the period ended March 31, 2002.
     DCB Financial Corp (the "Corporation") is a financial holding company
 formed under the laws of the State of Ohio. The Corporation is the parent of
 The Delaware County Bank & Trust Company, (the "Bank") a state-chartered
 commercial bank.  The Bank conducts business from its main offices at 110
 Riverbend Avenue in Lewis Center, Ohio, and through its 16 full-service branch
 offices located in Delaware and the surrounding communities. The bank provides
 customary retail and commercial banking services to its customers, including
 checking and savings accounts, time deposits, IRAs, safe deposit facilities,
 personal loans, commercial loans, real estate mortgage loans, night depository
 facilities and trust services.  The Bank also provides cash management, bond
 registrar and payment services.  The Bank offers data processing services to
 other financial institutions, however such services are not a significant part
 of its current operations or revenues.
 
     Application of Critical Accounting Policies
     DCB's consolidated financial statements are prepared in accordance with
 accounting principles generally accepted in the United States and follow
 general practices within the financial services industry. The application of
 these principles requires management to make estimates, assumptions, and
 judgments that affect the amounts reported in the financial statements and
 accompanying notes.  These estimates, assumptions, and judgments are based on
 information available as of the date of the financial statements; as this
 information changes, the financial statements could reflect different
 estimates, assumptions, and judgments.
     The most significant accounting policies followed by the Corporation are
 presented in Note 1 contained in the Corporation's 2002 annual report to the
 consolidated financial statements. These policies, along with the disclosures
 presented in the other financial statement notes and in this financial review,
 provide information on how significant assets and liabilities are valued in
 the financial statements and how those values are determined.
 
     Forward-Looking Statements
     Certain statements in this report constitute "forward-looking statements"
 within the meaning of the Private Securities Litigation Reform Act of 1995,
 such as statements relating to the financial condition and prospects, lending
 risks, plans for future business development and marketing activities, capital
 spending and financing sources, capital structure, the effects of regulation
 and competition, and the prospective business of both the Corporation and its
 wholly-owned subsidiary The Delaware County Bank & Trust Company (the "Bank").
 Where used in this report, the word "anticipate," "believe," "estimate,"
 "expect," "intend," and similar words and expressions, as they relate to the
 Corporation or the Bank or their respective management, identify forward-
 looking statements.  Such forward-looking statements reflect the current views
 of the Corporation and are based on information currently available to the
 management of the Corporation and the Bank and upon current expectations,
 estimates, and projections about the Corporation and its industry,
 management's belief with respect thereto, and certain assumptions made by
 management.  These forward-looking statements are not guarantees of future
 performance and are subject to risks, uncertainties, and other factors that
 could cause actual results to differ materially from those expressed or
 implied by such forward-looking statements.  Potential risks and uncertainties
 include, but are not limited to: (i) significant increases in competitive
 pressure in the banking and financial services industries; (ii) changes in the
 interest rate environment which could reduce anticipated or actual margins;
 (iii) changes in political conditions or the legislative or regulatory
 environment; (iv) general economic conditions, either nationally or regionally
 (especially in central Ohio), becoming less favorable than expected resulting
 in, among other things, a deterioration in credit quality of assets; (v)
 changes occurring in business conditions and inflation; (vi) changes in
 technology; (vii) changes in monetary and tax policies; (viii) changes in the
 securities markets; and (ix) other risks and uncertainties detailed from time
 to time in the filings of the Corporation with the Commission.
     The Corporation does not undertake, and specifically disclaims any
 obligation, to publicly revise any forward-looking statements to reflect
 events or circumstances after the date of such statements or to reflect the
 occurrence of anticipated or unanticipated events.
 
     SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
     April 28, 2003 Press Release
 
                               DCB FINANCIAL CORP
                      Key Ratios and Other Financial Data
                                  (Unaudited)
                             (Dollars in thousands)
 
                                           Three Months Ended $(000)
 
                                     3/31/03         3/31/02       12/31/02
 
     Key Financial Information:
 
     Net interest income             $ 4,910          $5,387         $5,187
 
     Provision for loan and lease losses 333             300          1,250
 
     Non-interest income               1,651           1,335          1,657
 
     Non-interest expense              4,062           4,251          4,651
 
     Net income                        1,499           1,455            623
 
     Loan balances (average)         375,740         365,914        371,507
 
     Deposit balances (average)      436,293         431,362        432,086
 
     Basic and diluted earnings
      per common share                 $0.36           $0.35          $0.15
 
     Total shares outstanding (000)    4,172           4,178          4,168
 
 
     SELECTED CONSOLIDATED FINANCIAL INFORMATION (unaudited)
     April 28, 2003 Press Release
 
                                              Three Months Ended
                                     3/31/03         3/31/02       12/31/02
 
     Key ratios:
 
     Return on assets                  1.17%           1.11%          0.48%
 
     Return on equity                 11.17%          11.67%          4.74%
 
     Non-interest expense to assets    0.79%           0.81%          0.89%
 
     Efficiency ratio                 60.13%          60.67%         63.93%
 
     Net interest margin               4.11%           4.44%          4.22%
 
     Equity to assets at period end   10.43%           9.55%         10.04%
 
     Allowance for loan and lease
      losses/total loans               1.14%           1.03%          1.10%
 
     Total allowance for losses on
      loans to non-performing loans  146.89%          75.93%        120.93%
 
     Non-performing loans to total
      loans (net)                      0.78%           1.37%          0.92%
 
 

SOURCE DCB Financial Corp

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