Attached files
file | filename |
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8-K - FORM 8-K - DCB FINANCIAL CORP | c07425e8vk.htm |
EX-10.1 - EXHIBIT 10.1 - DCB FINANCIAL CORP | c07425exv10w1.htm |
EX-10.2 - EXHIBIT 10.2 - DCB FINANCIAL CORP | c07425exv10w2.htm |
EXHIBIT 99
FOR IMMEDIATE RELEASE
|
CONTACT: John A. Ustaszewski | |
Thursday, October 28, 2010
|
Chief Financial Officer | |
(740) 657-7000 |
DCB FINANCIAL CORP ANNOUNCES
ENTRY INTO MATERIAL DEFINITIVE AGREEMENTS
ENTRY INTO MATERIAL DEFINITIVE AGREEMENTS
LEWIS CENTER, Ohio DCB Financial Corp (DCBF), a registered financial holding company and the
parent holding company for The Delaware County Bank & Trust Company (the Bank) announces that the
Bank has entered into a written agreement (the Agreement)with the Ohio Division of Financial
Institutions (ODFI) and a Consent Order (the Consent Order) with the Federal Deposit Insurance
Corporation (FDIC) effective October 28, 2010 which address matters pertaining to, among other
things: management and operations of the Bank; credit risk management practices and credit
administration policies and procedures; Bank actions with respect to problem assets; reserves for
loan and lease losses; strengthening the capital position of the Bank; the strategic plan and
budget for fiscal 2011; staffing; and submitting a funding contingency plan for the Bank that
identifies available sources of liquidity and includes a plan for dealing with potential adverse
economic and market conditions.
The Consent Order and the Agreement contain substantially similar provisions. Among other things
they require the Bank to attain a minimum 9% tier-1 capital ratio within 90 days of the effective
date, and total risk-based capital ratio of not less than 13% within that same time period;
submission of plans related to the reduction of non-performing assets; and, a review of accounting
matters related to subsidiary companies.
Management and the board have already made significant progress towards addressing and resolving
these issues which are based on the findings of the ODFI and FDIC during their examination of the
Bank as of March 2010. Since the completion of the examination a number of initiatives have been
developed and implemented which address the referenced matters, including: strengthening the Banks
liquidity position and developing improved liquidity analysis and reporting; improving its credit
underwriting and monitoring processes; and utilizing significant resources to address its problem
loan portfolio in order to reduce the total level of under-performing loans. As noted below, DCBF
has also engaged a national recognized consulting firm to provide assistance with respect to
capital planning for DCBF and the Bank.
Board Chair Vicki Lewis and Interim President and Chief Executive Officer Dave Folkwein have stated
that they look forward to continuing working closely with regulatory agencies to address and
resolve the issues facing the Bank, and have already taken significant steps toward addressing and
resolving the matters contained in the Agreement and Consent Order. Mr. Folkwein noted, We are all
dedicated to continuing to work hard and to put in long hours to resolve the issues facing the Bank
and DCBF in tandem with our regulatory partners. The banking industry is particularly challenged by
the current economy, and we will continue to address those challenges head-on.
Mr. Folkwein added, The Bank has aggressively managed its problem loan portfolio and as a whole
have added significantly to our reserve position which now stands at 2.84% at September 30, 2010.
Our customers deposits remain insured to the maximum provided by law through the FDIC. Our
customers will continue to receive outstanding customer support and the fast, friendly service to
which they are accustomed.
The Agreement and Consent Order also provide that The Bank may not declare or pay dividends to DCBF
without the prior approval of the FDIC and ODFI. And, as announced earlier this year by DCBF,
without the prior approval of the Federal Reserve, DCBF may not declare or pay cash dividends,
repurchase any of its shares, make payments on its trust preferred securities or incur or guarantee
any debt.
As previously noted, The Bank is required to achieve a tier-1 capital ratio of not less than 9.0%
and a total risk-based capital ratio of not less than 13% within 90 days of the effective date of
the Agreement and Consent Order, and, to maintain those capital levels during the remaining term of
the Agreement and the Consent Order. It may do so by, among other alternatives, raising additional
capital, generating sufficient earnings, reducing the banks assets, or a combination thereof.
Management has also retained the services of Keefe, Bruyette & Woods (KBW), a nationally
recognized capital markets specialist, to assist in the development of initiatives to increase the
overall capital levels of the Bank and its parent, DCB Financial Corp. With the assistance of KBW
and the completion of the initiatives already indentified, Management and the board are committed
to meet the terms of the Agreement and the Consent Order on a timely basis. However, there can be
no assurances that the Bank will be able to comply.
Additionally, the Bank is required to submit periodic progress reports to the ODFI and the FDIC
regarding various aspects of the foregoing actions and requirements, and the Bank board has
appointed a compliance committee to monitor and coordinate the Banks performance under the
Agreement and Consent Order. The Agreement and Consent Order will remain in effect until modified
or terminated by the ODFI and/or the FDIC. The Bank entered into the Agreement and the Consent
Order without admitting or denying any unsafe or unsound banking practices, violations, rule or
regulation.
The Bank remains an eligible depository for public funds as defined by Ohio Revised Code, and, its
customers retain full availability of deposit insurance through the FDIC to the maximum provided by
law.
Information regarding FDIC insurance can be located at:
http://www.fdic.gov/deposit/deposits/index.html
A copy of the Consent Order is attached as Exhibit 10.1, and a copy of the Agreement is attached as
Exhibit 10.2, to this Current Report on Form 8-K. The above summary of the Consent Order and the
Agreement is qualified in its entirety by reference to documents contained in those Exhibits, which
are incorporated herein by this reference.
About DCB Financial Corp
The DCB Financial Corp. (OTC Bulletin Board: DCBF) is a bank holding company headquartered in Lewis
Center, Ohio. Through its affiliated companies, the DCB Financial Corp. has been providing a full
range of financial services including checking, loans, savings, insurance and investment services
to customers for 60 years. For more information about the DCB Financial Corp, please visit
www.dcbfinancialcorp.com.
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,
managements 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.
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