DCB FINANCIAL CORP - FORM 10-Q

Attached files

file	filename
EX-31.1 - EXHIBIT 31.1 - DCB FINANCIAL CORP	c17344exv31w1.htm
EX-32.2 - EXHIBIT 32.2 - DCB FINANCIAL CORP	c17344exv32w2.htm
EX-32.1 - EXHIBIT 32.1 - DCB FINANCIAL CORP	c17344exv32w1.htm
EX-31.2 - EXHIBIT 31.2 - DCB FINANCIAL CORP	c17344exv31w2.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: MARCH 31, 2011


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-22387

DCB Financial Corp

(Exact name of registrant as specified in its charter)


Ohio		31-1469837
(State or other jurisdiction of		(I.R.S. Employer Identification Number)
incorporation or organization)

110 Riverbend Avenue, Lewis Center, Ohio 43035
(Address of principal executive offices)

(740) 657-7000

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filers o		Accelerated filer o		Non-accelerated filer o		Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes o No þ

As of May 7, 2011, the latest practicable date, 3,717,385 shares of the registrant’s no par value common stock were issued and outstanding.

DCB FINANCIAL CORP

FORM 10-Q
For the Three Month Periods Ended March 31, 2011 and 2010

Table of Contents


	Page
PART I — FINANCIAL INFORMATION

ITEM 1 — Financial Statements

Condensed Consolidated Balance Sheets		3

Condensed Consolidated Statements of Operations		4

Condensed Consolidated Statements of Comprehensive Income (Loss)		5

Condensed Consolidated Statements of Cash Flows		6

Notes to the Condensed Consolidated Financial Statements		7

ITEM 1A — Risk Factors		28

ITEM 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations		29

ITEM 3 — Quantitative and Qualitative Disclosures About Market Risk		34

ITEM 4 — Controls and Procedures		35

PART II — OTHER INFORMATION		36

SIGNATURES		38

Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

DCB FINANCIAL CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)


Item 1.		Financial Statements


	March 31,			December 31,
	2011			2010
	(unaudited)
ASSETS
Cash and due from financial institutions	$	10,461		$	10,024
Interest-bearing deposits		64,714			23,497

Total cash and cash equivalents		75,175			33,521
Securities available-for-sale		67,045			69,597
Securities held-to-maturity		1,238			1,313

Total securities		68,283			70,910
Loans held for sale, at lower of cost or fair value		353			753
Loans		408,244			424,864
Less allowance for loan losses		(10,300	)		(12,247	)
Net loans		397,944			412,617
Real estate owned		4,611			5,284
Investment in FHLB stock		3,799			3,799
Premises and equipment, net		12,898			13,175
Bank-owned life insurance		17,240			17,073
Accrued interest receivable and other assets		7,539			7,973

Total assets	$	587,842		$	565,105


LIABILITIES
Deposits
Noninterest-bearing	$	63,384		$	63,695
Interest-bearing		425,761			401,381

Total deposits		489,145			465,076
Federal funds purchased and other short-term borrowings		1,161			1,265
Federal Home Loan Bank advances		57,655			58,502
Accrued interest payable and other liabilities		2,384			2,848

Total liabilities		550,345			527,691

SHAREHOLDERS’ EQUITY
Common stock, no par value, 7,500,000 shares authorized, 4,273,908 issued		3,785			3,785
Retained earnings		47,919			47,883
Treasury stock, at cost, 556,523 shares		(13,494	)		(13,494	)
Accumulated other comprehensive loss		(713	)		(760	)

Total shareholders’ equity		37,497			37,414

Total liabilities and shareholders’ equity	$	587,842		$	565,105

See Notes to condensed consolidated financial statements.

DCB FINANCIAL CORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except per share data)


	Three Months Ended
	March 31,
	2011			2010
Interest and dividend income
Loans	$	5,328		$	6,456
Taxable securities		510			722
Tax-exempt securities		93			199
Federal funds sold and other		21			18

Total interest income		5,952			7,395

Interest expense
Deposits		702			1,210
Borrowings		637			691

Total interest expense		1,339			1,901


Net interest income		4,613			5,494

Provision for loan losses		675			1,961


Net interest income after provision for loan losses		3,938			3,533

Noninterest income
Service charges on deposit accounts		651			605
Trust department income		259			225
Net gain on sales of assets		111			98
Gains on sale of loans		18			29
Treasury management fees		107			130
Data processing servicing fees		141			132
Earnings on bank owned life insurance		167			167
Total other-than-temporary impairment losses		(75	)		(80	)
Portion of loss recognized in (reclassified from) other comprehensive loss (before taxes)		(17	)		(950	)

Net impairment losses recognized in income		(92	)		(1,030	)
Other		140			80

Total noninterest income		1,502			436

Noninterest expense
Salaries and other employee benefits		2,405			2,624
Occupancy and equipment		1,027			1,030
Professional services		406			307
Advertising		86			74
Postage, freight and courier		95			87
Supplies		38			30
State franchise taxes		125			152
Federal deposit insurance premiums		407			396
Other		842			788

Total noninterest expense		5,431			5,488


Net income (loss) before income tax credits		9			(1,519	)
Income tax credits		(24	)		(631	)

Net income (loss)	$	33		$	(888	)


Basic and diluted income (loss) per common share	$	(0.00	)	$	(0.24	)

Dividends per share	$	—		$	—

See Notes to the condensed consolidated financial statements.

DCB FINANCIAL CORP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(Dollars in thousands)


	Three Months Ended
	March 31,
	2011		2010

Net income (loss)	$	33	$	(888	)

Reclassification adjustment for other-than-temporary impairment loss recognized in income, net of taxes of $0 and $323		—		627

Unrealized gains on securities available-for-sale, net of taxes of $18 and $74 for the respective periods		35		144

Net unrealized gain (loss) on securities held-to-maturity for which a portion of an other-than-temporary impairment has been recognized in income, net of realized losses and net of taxes of $6 and $0		11		—


Comprehensive income (loss)	$	79	$	(117	)

See Notes to the condensed consolidated financial statements.

DCB FINANCIAL CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)


	Three Months Ended
	March 31,
	2011			2010

Cash flows provided by (used in) operating activities	$	(1,046	)	$	2,716

Cash flows provided by investing activities
Securities
Purchases		(3,003	)		(9,861	)
Maturities, principal payments and calls		5,759			9,481
Net change in loans		16,620			7,740
Proceeds from sale of real estate owned		271			688
Investment in unconsolidated affiliate		—			5
Premises and equipment expenditures		(65	)		(49	)

Net cash flows provided by investing activities		19,582			8,004

Cash flows provided by financing activities
Net change in deposits		24,069			16,718
Net change in federal funds purchased and other short-term borrowings		(104	)		(1,750	)
Repayment of Federal Home Loan Bank advances		(847	)		(1,641	)

Net cash provided by financing activities		23,118			13,327


Net change in cash and cash equivalents		41,654			24,047

Cash and cash equivalents at beginning of period		33,521			41,453


Cash and cash equivalents at end of period	$	75,175		$	65,500


Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest on deposits and borrowings	$	1,315		$	1,996

Supplemental disclosure of non-cash investing and financing activities:
Transfers from loans to real estate owned	$	33		$	16

Cash dividends declared but unpaid	$	—		$	—

See Notes to the condensed consolidated financial statements.

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These consolidated interim financial statements are prepared without audit and reflect all adjustments which, in the opinion of management, are necessary to present fairly the financial position of DCB Financial Corp (the “Corporation”) at March 31, 2011, and its results of operations and cash flows for the three month periods ended March 31, 2011 and 2010. All such adjustments are normal and recurring in nature. The accompanying consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not purport to contain all necessary financial disclosures required by accounting principles generally accepted in the United States of America that might otherwise be necessary in the circumstances, and should be read in conjunction with the consolidated financial statements, and notes thereto, included in its Annual Report as of December 31, 2010. Refer to the accounting policies of the Corporation described in the Notes to Consolidated Financial Statements contained in the Corporation’s Annual Report as of December 31, 2010. The Corporation has consistently followed these policies in preparing this Form 10-Q. The results of operations for the three months ended March 31, 2011, are not necessarily indicative of the results that may be expected for the entire year.

The accompanying consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiaries, The Delaware County Bank and Trust Company (the “Bank”), DCB Title Services LLC, Datatasx LLC and ORECO (collectively referred to herein after as the “Corporation”). All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements. Management considers the Corporation to operate within one business segment, banking. Subsequent to the end of the first quarter 2011, Management entered into an agreement to sell the outstanding contracts serviced through Datatasx LLC. It is estimated that those contracts will be converted to the new provider by the end of the third quarter 2011. On a pre-tax net basis, Datatasx’s contributed approximately $48 thousand in the first quarter 2011 to the consolidated companies. Management considers both the net contribution and Datatasx’s balance sheet to be immaterial to financial results on a consolidated basis.

To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect amounts reported in the financial statements and disclosures provided, and future results could differ. The allowance for loan losses, fair values of financial instruments and status of contingencies are particularly subject to change.

Income tax expense is based on the effective tax rate expected to be applicable for the entire year. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A full valuation allowance was taken in 2010, reducing the deferred tax assets.

Earnings per share

Earnings per common share is net income divided by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed including the dilutive effect of additional potential common shares under stock options. Weighted-average shares for basic and diluted earnings per share are presented below.


	Three Months Ended
	March 31,
	2011		2010
Weighted-average common shares outstanding (basic)		3,717,385		3,717,385

Dilutive effect of assumed exercise of stock options		—		—


Weighted-average common shares outstanding (diluted)		3,717,385		3,717,385

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands, except per share data)

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Options to purchase 277,389 shares of common stock with a weighted-average exercise price of $11.95, were outstanding at March 31, 2011, but were excluded from the computation of common share equivalents for the three month period then ended because the exercise price was greater than the average fair value of the shares.

Options to purchase 200,742 shares of common stock with a weighted-average exercise price of $19.59, were outstanding at March 31, 2010, but were excluded from the computation of common share equivalents for the period then ended because the exercise price was greater than the average fair value of the shares during the period.

Stock option plan

The Corporation’s shareholders approved an employee share option plan (the “Plan”) in May 2004. This plan grants certain employees the right to purchase shares at a predetermined price. The plan is limited to 300,000 shares. The shares granted to employees vest 20% per year over a five year period. The options expire after ten years. No shares were granted for the period ending March 31, 2011. At March 31, 2011, 88,968 shares were exercisable and 14,194 shares were available for grant under this plan.

The Corporation recognizes compensation cost for unvested equity-based awards based on their grant-date fair value. The Corporation recorded $30 and $24 in compensation cost for equity-based awards that vested during the three months ended March 31, 2011 and 2010, respectively. The Corporation has $137 of total unrecognized compensation cost related to non-vested equity-based awards granted under its stock option plan as of March 31, 2011, which is expected to be recognized over a weighted-average period of 3.28 years.

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands, except share data)

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

A summary of the status of the Corporation’s stock option plan as of March 31, 2011 and December 31, 2010, and changes during the periods then ended are presented below:


				Three Months Ended
				March 31,
				2011
						Weighted
						Average
				Weighted		Remaining
				Average Exercise		Contractual
	Shares			Price		Life

Outstanding at beginning of period		285,806		$	11.87	8.6 years
Forfeited		(352	)		3.50


Outstanding at end of period		285,454		$	12.11	7.86 years


Options exercisable at period end		93,330		$	21.81


				Year Ended
				December 31,
				2010
						Weighted
				Weighted		Average Remaining
				Average Exercise		Contractual
	Shares			Price		Life

Outstanding at beginning of year		204,883		$	24.77	8.6 years
Granted		131,816			3.50	9.9 years
Forfeited		(50,893	)		21.30


Outstanding at end of year		285,806		$	11.87	8.6 years


Options exercisable at year end		81,800		$	18.27


Weighted-average fair value of options granted during the year				$	0.76

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands, except share data)

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The following information applies to options outstanding at March 31, 2011:


		Range of
Number Outstanding		Exercise Prices
73,942		$23.00 – $30.70
44,299		$14.15 – $16.90
167,233		$3.50 – $9.00

Application of Critical Accounting Policies

DCB Financial Corp’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America 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 procedures for assessing the adequacy of the allowance for loan losses reflect our evaluation of credit risk after careful consideration of all information available to us. In developing this assessment, we must rely on estimates and exercise judgment regarding matters where the ultimate outcome is unknown, such as economic factors, developments affecting companies in specific industries and issues with respect to single borrowers. Depending on changes in circumstances, future assessments of credit risk may yield materially different results, which may require an increase or a decrease in the allowance for loan losses.

The allowance is regularly reviewed by management and the Board to determine whether the amount is considered adequate to absorb probable losses. This evaluation includes specific loss estimates on certain individually reviewed loans, statistical loss estimates for loan pools that are based on historical loss experience, and general loss estimates that are based upon the size, quality, and concentration characteristics of the various loan portfolios, adverse situations that may affect a borrower’s ability to repay, and current economic and industry conditions. Also considered as part of that judgment is a review of the Bank’s trends in delinquencies and loan losses, as well as trends in delinquencies and losses for the region and nationally, and economic factors.

The allowance for loan losses is maintained at a level believed adequate by management to absorb probable losses inherent in the loan portfolio. Management’s evaluation of the adequacy of the allowance is an estimate based on management’s current judgment about the credit quality of the loan portfolio. While the Corporation strives to reflect all known risk factors in its evaluations, judgment errors may occur.

The valuation of other assets requires that management utilize a variety of estimates and analysis to determine whether an asset is impaired or other-than-temporarily impaired (“OTTI”). After determining the appropriate methodology for fair value measurement, management then evaluates whether or not declines in fair value below book value are temporary or other-than-temporary impairments. If it is determined that measured impairment is other-than-temporary the appropriate loss recognition is recorded within the period that OTTI is recognized. Generally, management utilizes third parties to provide appraisals, analysis or market pricing in support of OTTI analysis.

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands, except share data)

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, unamortized deferred loan fees and costs and the allowance for loan losses.

Interest income is accrued based on the unpaid principal balance and includes amortization of net deferred loan fees and costs over the loan term. Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the credit is well secured and in process of collection. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on nonaccrual status are reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Allowance for Loan Losses: The allowance for loan losses is a valuation allowance for probable but unconfirmed credit losses, increased by the provision for loan losses and decreased by charge-offs net of recoveries. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the required allowance balance based on past loan loss experience, augmented by additional estimates related to the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, economic conditions and other factors.

The allowance consists of both specific and general components. The specific component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established with the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers nonclassified loans and is based on historical charge-off experience and expected loss given default derived from the Bank’s internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risking rating data.

A loan is impaired when full payment of interest and principal under the original contractual loan terms is not expected. Commercial and industrial loans, commercial and multi-family real estate, and land development loans are individually evaluated for impairment. If a loan is impaired, the loan amount exceeding fair value, based on the most current information available is reserved. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans are collectively evaluated for impairment, and accordingly, such loans are not separately identified for impairment disclosures.

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands, except share data)

NOTE 2 — SECURITIES

The amortized cost and estimated fair values of securities available-for-sale were as follows:

March 31, 2011


			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Costs		Gains		Losses			Value

U.S. Government and agency obligations	$	30,484	$	617	$	(82	)	$	31,019
State and municipal obligations		11,998		203		(61	)		12,140
Mortgage-backed securities		22,866		1,020		—			23,886


Total	$	65,348	$	1,840	$	(143	)	$	67,045

The amortized cost and estimated fair values of securities held-to-maturity were as follows:

Adjusted

Gross

Estimated

Amortized

Unrealized

Fair

Cost

Gains

Value

Collateralized Debt Obligations

1,238

542

1,780

December 31, 2010


			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Costs		Gains		Losses			Value

U.S. Government and agency obligations	$	29,510	$	599	$	(123	)	$	29,986
State and municipal obligations		12,153		193		(84	)		12,262
Mortgage-backed securities		29,290		1,059		—			27,349


Total	$	67,953	$	1,851	$	(207	)	$	69,597

The amortized cost and estimated fair values of securities held-to-maturity were as follows:

Adjusted

Gross

Estimated

Amortized

Unrealized

Fair

Cost

Gains

Value

Collateralized Debt Obligations

1,313

367

1,680

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 2 — SECURITIES (continued)

Credit Losses Recognized on Investments

The following table provides information about debt securities for which only a credit loss was recognized in income and other losses are recorded in other comprehensive income for the three month periods ended March 31, 2011 and 2010.

Accumulated Credit Losses:


	Three Months Ended
	March 31,
	2011		2010

Credit losses on debt securities held
Beginning of period	$	3,924	$	2,621
Additions related to other-than-temporary losses not previously recognized		92		1,030
Reductions due to sales		—		—
Reductions due to change in intent or likelihood of sale		—		—
Additions related to increases in previously recognized other-than-temporary losses		—		—
Reductions due to increases in expected cash flows		—		—


End of period	$	4,016	$	3,651

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 2 — SECURITIES (continued)

The table below indicates the length of time individual securities have been in a continuous unrealized loss position at March 31, 2011 and December 31, 2010:

March 31, 2011


	(Less than 12 months)							(12 months or longer)										Total
Description of	Number of		Fair		Unrealized			Number of		Fair		Unrealized		Number of		Fair		Unrealized
Securities	investments		value		losses			investments		value		losses		investments		value		losses

U.S. Government and agency obligations		8	$	7,925	$	(82	)		—	$	—	$	—		8	$	7,925	$	(82	)
State and municipal obligations		5		2,034		(61	)		—		—		—		5		2,034		(61	)


Total securities		13	$	9,959	$	(143	)		—	$	—	$	—		13	$	9,959	$	(143	)

December 31, 2010

	(Less than 12 months)							(12 months or longer)										Total
Description of	Number of		Fair		Unrealized			Number of		Fair		Unrealized		Number of		Fair		Unrealized
Securities	investments		value		losses			investments		value		losses		investments		value		losses

U.S. Government and agency obligations		10	$	9,904	$	(123	)		—	$	—	$	—		10	$	9,904	$	(123	)
State and municipal obligations		9		3,575		(84	)		—		—		—		9		3,575		(84	)


Total securities		19	$	13,479	$	(207	)		—	$	—	$	—		19	$	13,429	$	(207	)

The unrealized losses on the Corporation’s investments in U.S. Government and agency obligations, state and political subdivision obligations and mortgage-backed securities were caused primarily by changes in interest rates. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Corporation does not intend to sell the investments and it is not more likely than not the Corporation will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Corporation does not consider those investments to be other-than-temporarily impaired at March 31, 2011.

The Corporation’s unrealized loss on investments in collateralized debt obligations relates to an original investment of $8,000 in pooled trust securities. The company evaluates those investments on a quarterly basis for other-than-temporary impairment and other unrealized losses due to temporary market factors. The unrealized losses were primarily attributed to: declines in the performance of the underlying collateral due to weakness in the economy, and a lower than investment grade rating by industry analysts.

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 2 — SECURITIES (continued)

Credit losses on these securities are calculated by comparing expected discounted cash flows based on performance indicators of the underlying assets in the security to the carrying value of the investment. Because the Corporation does not intend to sell the investment and it is not more likely than not the Corporation will be required to sell the investment before recovery of its new, lower amortized cost basis, which may be maturity, it does not consider the remainder of the investment in the securities to be other-than-temporarily impaired at March 31, 2011.

Substantially all mortgage-backed securities are backed by pools of mortgages that are insured or guaranteed by the Federal National Mortgage Association (“FNMA”), the Government National Mortgage Association (“GNMA”) or the Federal Home Loan Mortgage Corporation (“FHLMC”).

At March 31, 2011, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity other than the pooled trust securities as noted above.

The amortized cost and estimated fair value of all debt securities at March 31, 2011, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown separately since they are not due at a single maturity date.


	Available-for-sale				Held-to-maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Due in one year or less	$	300	$	300	$	—	$	—
Due from one to five years		19,757		19,945		—		—

Due from five to ten years		14,693		15,127		—		—

Due after ten years		7,732		7,787		1,238		1,780
Mortgage-backed and related securities		22,866		23,886		—		—

Total	$	65,348	$	67,045	$	1,238	$	1,780

Securities with a fair value of $64,043 at March 31, 2011 were pledged to secure public deposits and other obligations.

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 3 — LOANS

Loans at March 31, 2011 and December 31, 2010, were as follows:


	March 31,		December 31,
	2011		2010

Commercial and industrial	$	143,584	$	155,410
Commercial real estate		133,628		135,035
Residential real estate and home equity		91,553		93,646
Real estate construction and land development		17,517		17,339
Consumer and credit card		21,940		23,411

		408,222		424,841
Add: Net deferred loan origination costs		22		23


Total loans receivable	$	408,244	$	424,864

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 4 — CREDIT QUALITY

Allowance for Credit Losses

The table below presents allowance for credit losses by loan portfolio. As presented within this note, commercial real estate includes real estate construction and land development loans.

Three Months Ended March 31, 2011


										Residential
										Real Estate
	Consumer and			Commercial and			Commercial			and Home
	Credit Card			Industrial			Real Estate			Equity			Total

Beginning Balance	$	796		$	4,174		$	6,786		$	491		$	12,247

Charge Offs		(117	)		(1,419	)		(1,159	)		(35	)		(2,730	)
Recoveries		70			35			—			3			108
Provision		6			(877	)		1,515			31			675


Ending Balance	$	755		$	1,913		$	7,142		$	490		$	10,300


Individually evaluated for impairment	$	—		$	651		$	5,612		$	—		$	6,263
Collectively evaluated for impairment		755			1,262			1,530			490			4,037


Ending Balance	$	755		$	1,913		$	7,142		$	490		$	10,300


Financing Receivables

Individually evaluated for impairment	$	—		$	15,425		$	36,003		$	—		$	51,428
Collectively evaluated for impairment		21,940			128,159			115,142			91,553			356,794


Total	$	21,940		$	143,584		$	151,145		$	91,553		$	408,222

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 4 — CREDIT QUALITY (continued)

Year Ended December 31, 2010


										Residential
										Real Estate
	Consumer and			Commercial and			Commercial			and Home
	Credit Card			Industrial			Real Estate			Equity			Total

Beginning Balance	$	874		$	2,476		$	6,817		$	312		$	10,479

Charge Offs		(824	)		(2,261	)		(6,175	)		(498	)		(9,758	)
Recoveries		200			270			4			12			486
Provision		546			3,689			6,140			665			11,040


Ending Balance	$	796		$	4,174		$	6,786		$	491		$	12,247


Individually evaluated for impairment	$	—		$	2,812		$	5,158		$	—		$	7,970
Collectively evaluated for impairment		796			1,362			1,628			491			4,277


Ending Balance	$	796		$	4,174		$	6,786		$	491		$	12,247


Financing Receivables

Individually evaluated for impairment	$	—		$	18,967		$	42,104		$	—		$	61,071
Collectively evaluated for impairment		23,411			136,144			110,270			93,646			363,770


Total	$	23,411		$	155,410		$	152,374		$	93,646		$	424,841

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 4 — CREDIT QUALITY (continued)

Impaired Loans

A loan is considered impaired when based on current information and events; it is probable the Bank will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. Generally, commercial and commercial real estate loans with risk grades Substandard, Vulnerable, Doubtful, or Loss, with aggregate relationships greater than $250 are evaluated for impairment.

The following table indicates impaired loans with and without an allocated allowance:

At March 31, 2011


			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
With No Related Allowance Recorded
Consumer and Credit Card	$	—	$	—	$	—	$	—	$	—
Commercial and Industrial		4,542		5,245		—		5,170		63
Commercial Real Estate		12,713		13,415		—		16,009		178
Residential RE and Home Equity		—		—		—		—		—
With Allowance Recorded
Consumer and Credit Card		—		—		—		—		—
Commercial and Industrial		10,883		12,435		651		12,280		195

Commercial Real Estate		23,290		28,200		5,612		23,958		186
Residential RE and Home Equity		—		—		—		—		—
Total
Consumer and Credit Card		—		—		—		—		—
Commercial and Industrial		15,425		17,680		651		17,450		258
Commercial Real Estate		36,003		41,615		5,612		39,967		364
Residential RE and Home Equity		—		—		—		—		—


Total	$	51,428	$	59,295	$	6,263	$	57,417	$	622

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 4 — CREDIT QUALITY (continued)

At December 31, 2010


			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized
With No Related Allowance Recorded
Consumer and Credit Card	$	—	$	—	$	—	$	—	$	—
Commercial and Industrial		5,615		5,757		—		4,196		295
Commercial Real Estate		17,529		20,855		—		14,597		993
Residential RE and Home Equity		—		—		—		—		—
With Allowance Recorded
Consumer and Credit Card		—		—		—		—		—
Commercial and Industrial		13,352		15,238		2,812		13,651		741
Commercial Real Estate		24,575		28,823		5,158		25,209		821
Residential RE and Home Equity		—		—		—		—		—
Total
Consumer and Credit Card		—		—		—		—		—
Commercial and Industrial		18,967		20,995		2,812		17,847		1,036
Commercial Real Estate		42,104		49,678		5,158		39,806		1,814
Residential RE and Home Equity		—		—		—		—		—


Total	$	61,071	$	70,673	$	7,970	$	57,653	$	2,850

The allowance for impaired loans is included in the Corporation’s overall allowance for loan losses. The provision necessary to increase this allowance is included in the Corporation’s overall provision for losses on loans.

Financing receivables on nonaccrual status at March 31, 2011 and December 31, 2010 are as follows:


	March 31,		December 31,
	2011		2010

Consumer and credit card	$	102	$	33
Commercial and industrial		3,952		6,043
Commercial real estate		12,235		10,102
Residential real estate and home equity		869		389


Total	$	17,158	$	16,567

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 4 — CREDIT QUALITY (continued)

Credit Quality Indicators

Corporate risk exposure by risk profile was as follows at March 31, 2011:


	Commercial and		Commercial Real
Category	Industrial		Estate

Prime-1	$	8,312	$	561
Good-2		19,746		18,675
Fair-3		55,852		29,177
Compromised-4		30,414		32,653
Vulnerable-5		20,032		6,144
Substandard-6		9,228		63,935
Doubtful-7		—		—
Loss-8		—		—


Total	$	143,584	$	151,145

Corporate risk exposure by risk profile was as follows at December 31, 2010:


	Commercial and		Commercial Real
Category	Industrial		Estate

Prime-1	$	8,459	$	561
Good-2		22,355		20,404
Fair-3		45,853		39,067
Compromised-4		31,628		27,692
Vulnerable-5		22,154		11,785
Substandard-6		24,959		52,865
Doubtful-7		2		—
Loss-8		—		—


Total	$	155,410	$	152,374

Risk Category Descriptions

Prime — 1

Prime loans based on liquid collateral, with adequate margin or supported by a strong financial statement audited with an unqualified opinion from a CPA firm. The character and repayment ability of the borrowers are excellent and without question. High liquidity, minimum risk, strong ratios, and low handling costs are common to these loans. This classification will also include all loans secured by CDs or cash equivalents.

Good — 2

Good loans of above average quality. Borrowers have a modest degree of risk. The margin of protection is good. Elements of strength are present in areas such as liquidity, stability of margins and cash flows, diversity of assets, and lack of dependence on one type of business or customer. Reasonable access to alternative bank financing is present and borrowers can obtain favorable rates and terms. These are well established regional firms and excellent local companies operating in a reasonably stable industry that may be moderately affected by the business cycle. Management and owners have unquestioned character, as demonstrated by repeated performance.

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 4 — CREDIT QUALITY (continued)

Fair — 3

Satisfactory loans of average or slightly above average risk — having some deficiency or vulnerability to changing economic conditions, but still fully collectible. Projects should clearly demonstrate at least break-even debt service coverage. May be some weakness but with offsetting features of other support readily available. These loans are meeting the terms of repayment, but which may be susceptible to deterioration if adverse factors are encountered.

Compromised — 4

This risk grade may be established for a loan considered satisfactory but which is of below average credit risk due to financial weaknesses or uncertainty. The loans warrant a higher than average level of monitoring to ensure that weaknesses do not advance. The level of risk in Compromised classification is considered acceptable and within normal underwriting guidelines, so long as the loan is given the proper level of management supervision. Loans are considered Compromised when the following conditions apply:

•

At inception, the loan was properly underwritten and did not possess an unwarranted level of credit risk; also the loan met the above criteria for a risk grade of 1 (Prime), 2 (Good), 3 (Fair) or 4 (Compromised).

•

At inception, the loan was secured with collateral possessing a loan-to-value adequate to protect the Bank from loss.

•

The loan exhibited two or more years of satisfactory repayment with a reasonable reduction of the principal balance.

•

During the period that the loan has been outstanding, there has been no evidence of any credit weakness. Some examples of weakness include slow payment, lack of cooperation by the borrower, breach of loan covenants, or the business is in an industry which is known to be experiencing problems. If any of these credit weaknesses is observed, a lower risk grade may be warranted.

Vulnerable (Special Mention) — 5

Loans which possess some credit deficiency or potential weakness which deserves close attention, but which do not yet warrant substandard classification. Such loans pose unwarranted financial risk that, if not corrected, could weaken the loan and increase risk in the future. The key distinctions of a 5 (Special Mention) classification are that (1) it is indicative of an unwarranted level of risk, and (2) weaknesses are considered “potential”, versus “well-defined”, impairments to the primary source of loan repayment.

Substandard — 6

Loans that are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected. One or more of the following characteristics may be exhibited in loans classified Substandard:

•

Loans, which possess a defined credit weakness and the likelihood that a loan will be paid from the primary source, is uncertain. Financial deterioration is underway and very close attention is warranted to ensure that the loan is collected without loss.

•

Loans are inadequately protected by the current net worth and paying capacity of the obligor.

•

The primary source of repayment is gone, and the Bank is forced to rely on a secondary source of repayment such as collateral liquidation or guarantees.

•

Loans are characterized by the distinct possibility that the Bank will sustain some loss if deficiencies are not corrected.

•

Unusual courses of action are needed to maintain a high probability of repayment.

•

The borrower is not generating enough cash flow to repay loan principal; however, continues to make interest payments.

•

The lender is forced into a subordinated or unsecured position due to flaws in documentation.

•

Loans have been restructured so that payment schedules, terms and collateral represent concessions to the borrower when compared to the normal loan terms.

•

The lender is seriously contemplating foreclosure or legal action due to the apparent deterioration in the loan.

•

There is a significant deterioration in the market conditions and the borrower is highly vulnerable to these conditions.

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 4 — CREDIT QUALITY (continued)

Doubtful — 7

One or more of the following characteristics may be exhibited in loans classified Doubtful:

•

Loans have all of the weaknesses of those classified as Substandard. Additionally, however, these weaknesses make collection or liquidation in full based on existing conditions improbable.

•

The primary source of repayment is gone, and there is considerable doubt as to the quality of the secondary source of repayment.

•

The possibility of loss is high, but, because of certain important pending factors, which may strengthen the loan, loss classification is deferred until its exact status is known. A Doubtful classification is established during this period of deferring the realization of the loss.

Loss — 8

Loans are considered uncollectible and of such little value that continuing to carry them as assets on the institution’s financial statements is not feasible. Loans will be classified Loss when it is neither practical nor desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future.

Consumer Risk

Consumer risk based on payment activity at March 31, 2011 is as follows.


			Residential Real
	Consumer and		Estate and Home
Payment Category	Credit Card		Equity

Performing	$	21,425	$	90,587
Non-Performing		515		966


Total	$	21,940	$	91,553

Consumer risk based on payment activity at December 31, 2010 is as follows.


			Residential Real
	Consumer and		Estate and Home
Payment Category	Credit Card		Equity

Performing	$	22,970	$	92,832
Non-Performing		441		814


Total	$	23,411	$	93,646

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 4 — CREDIT QUALITY (continued)

Age Analysis of Past Due Loans

The following table presents past due loans aged as of March 31, 2011.


													Recorded
			60-89		Greater								Investment
			Days		than 90						Total		> 90 days
	30-59 Days		Past		Days Past		Total				Financing		and
Category	Past Due		Due		Due		Past Due		Current		Receivables		Accruing

Consumer and Credit Card	$	189	$	130	$	575	$	894	$	21,046	$	21,940	$	413
Commercial and Industrial		179		348		1,359		1,886		141,698		143,584		990
Commercial Real Estate		171		574		9,889		10,634		140,511		151,145		35
Residential Real Estate and Home Equity		1,415		14		746		2,175		89,378		91,553		98


Total	$	1,954	$	1,066	$	12,569	$	15,589	$	392,633	$	408,222	$	1,536

The following table presents past due loans aged as of December 31, 2010.


													Recorded
			60-89		Greater								Investment
			Days		than 90						Total		> 90 days
	30-59 Days		Past		Days Past		Total				Financing		and
Category	Past Due		Due		Due		Past Due		Current		Receivables		Accruing

Consumer and Credit Card	$	300	$	104	$	441	$	845	$	22,566	$	23,411	$	407
Commercial and Industrial		359		3		1,373		1,735		153,675		155,410		991
Commercial Real Estate		885		2,050		10,118		13,053		139,321		152,374		35
Residential Real Estate and Home Equity		472		123		814		1,409		92,237		93,646		425


Total	$	2,016	$	2,280	$	12,746	$	17,042	$	407,799	$	424,841	$	1,858

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 5 — FAIR VALUE MEASUREMENTS

The Corporation accounts for fair value measurements in accordance with FASB ASC 820, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure fair value:

	Level 1		Quoted prices in active markets for identical assets or liabilities

	Level 2		Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

	Level 3		Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include certain equity securities and U.S. Government and agency obligations. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include U.S. Government and agency obligations, state and municipal obligations, corporate bonds and mortgage-backed securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

The following table presents the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2011 and December 31, 2010:


			Fair Value Measurements Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
March 31, 2011	Fair Value		(Level 1)		(Level 2)		(Level 3)
U.S. Government and agency obligations	$	31,019	$	3,003	$	28,016	$	—
State and municipal obligations		12,140		—		12,140		—
Mortgage-backed		23,886		—		23,886		—


Total	$	67,045	$	3,003	$	64,042	$	—

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 5 — FAIR VALUE MEASUREMENTS (continued)


			Fair Value Measurements Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
December 31, 2010	Fair Value		(Level 1)		(Level 2)		(Level 3)
U.S. Government and agency obligations	$	29,986	$	—	$	29,986	$	—
State and municipal obligations		12,262		—		12,262		—
Mortgage-backed and other securities		27,349		—		27,349		—


Total	$	69,597	$	—	$	69,597	$	—

Following is a description of the valuation methodologies used for instruments measured at fair value on a non-recurring basis and recognized in the accompanying balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Securities

Certain collateralized debt obligations are classified as held to maturity. The Corporation recognized other-than-temporary impairment on the securities as of March 31, 2011, based upon a Level 3 estimate of fair value, including a discounted cash flows calculation and a fair value estimate from an independent evaluation of the securities.

Impaired loans

At March 31, 2011 and December 31, 2010, impaired loans consisted primarily of loans secured by nonresidential and commercial real estate. Management has determined fair value measurements on impaired loans primarily through evaluations of appraisals performed.

Real Estate Owned

Real estate acquired through, or in lieu of, loan foreclosure is held for sale and initially recorded at fair value (based on current appraised value) at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell. Management has determined fair value measurements on real estate owned primarily through evaluations of appraisals performed.

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 5 — FAIR VALUE MEASUREMENTS (continued)

The following table presents the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2011 and December 31, 2010.


			Fair Value Measurements Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
March 31, 2011	Fair Value		(Level 1)		(Level 2)		(Level 3)

Collateralized debt obligations	$	1,780	$	—	$	—	$	1,780
Impaired loans		29,270		—		—		29,270
Real estate owned		1,468		—		—		1,468


			Fair Value Measurements Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
December 31, 2010	Fair Value		(Level 1)		(Level 2)		(Level 3)

Collateralized debt obligations	$	1,313	$	—	$	—	$	1,313
Impaired loans		24,187		—		—		24,187
Real estate owned		449		—		—		449

DCB FINANCIAL CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands)

NOTE 5 — FAIR VALUE MEASUREMENTS (continued)

Carrying amount and estimated fair values of financial instruments were as follows:


	March 31,				December 31,
	2011				2010
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial assets
Cash and cash equivalents	$	75,175	$	75,175	$	33,521	$	33,521
Securities available-for-sale		67,045		67,045		69,597		69,597
Securities held-to-maturity		1,238		1,780		1,313		1,680
Loans held for sale		353		353		753		753
Loans		397,944		387,748		412,617		401,967
FHLB stock		3,799		3,799		3,799		3,799
Accrued interest receivable		1,556		1,556		1,673		1,673


	March 31,				December 31,
	2011				2010
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial liabilities
Noninterest-bearing deposits	$	63,384	$	63,384	$	63,695	$	63,695
Interest-bearing deposits		425,761		425,992		401,381		402,131
Federal funds purchased and other short-term borrowings		1,161		1,161		1,265		1,265
FHLB advances		57,655		58,875		58,502		60,581
Accrued interest payable		360		360		336		336

The estimated fair value of cash and cash equivalents, FHLB stock, accrued interest receivable, noninterest bearing deposits, federal funds purchased and other short-term borrowings and accrued interest payable approximates the related carrying amounts.

For fixed rate loans or deposits and for variable rate loans or deposits with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. Fair value of loans held for sale is based on market quotes. Fair values of long-term FHLB advances are based on current rates for similar financing. Fair values of off-balance-sheet items are based on the current fee or cost that would be charged to enter into or terminate such agreements, which are not material.


Item 1A.		Risk Factors

There has been no material change in the nature of the risk factors set forth in the Company’s Form 10-K for the year ended December 31, 2010.

DCB FINANCIAL CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in thousands, except per share data)


Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations

INTRODUCTION

In the following pages, management presents an analysis of the consolidated financial condition of DCB Financial Corp (the “Corporation”) at March 31, 2011, compared to December 31, 2010, and the consolidated results of operations for the three months ended March 31, 2011, compared to the same period in 2010. This discussion is designed to provide shareholders with a more comprehensive review of the operating results and financial position than could be obtained from reading the consolidated financial statements alone. This analysis should be read in conjunction with the consolidated financial statements and related footnotes and the selected financial data included elsewhere in this report.

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, related 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 Securities and Exchange 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.

Overview of the first quarter of 2011

The Corporation, through the Bank provides customary retail banking services to its customers, including checking and savings accounts, time deposits, IRAs, safe deposit facilities, personal loans, real estate mortgage loans and installment loans. The Bank also provides trust and wealth management products and services through its own trust department and its Raymond James affiliation. It also offers a variety of commercial and commercial real estate loans along with treasury management services to various commercial businesses.

DCB FINANCIAL CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in thousands, except per share data)

The Corporation, through the Bank, grants residential real estate, commercial real estate, consumer and commercial loans to customers located primarily in Delaware, Franklin, Licking, Morrow, Marion and Union Counties, Ohio. General economic conditions in the Corporation’s market area have been under some pressures mainly attributable to an overall slow down in economic activity and related increases in unemployment levels, loan foreclosure volume and a decline in real estate values. The Corporation’s business has been under pressure due primarily to market interest rate conditions, competition and a slow down in the economy. Real estate values, especially in the Bank’s core geographic area, have declined during the past several years and the lower values have continued into the first three months of 2011.

•

The Corporation’s consolidated assets totaled $587,842 at March 31, 2011, compared to $565,105 at December 31, 2010, an increase of $22,737, or 4.0%. The increase in assets was mainly attributed to an increase in cash and cash equivalents due to an increase in overall deposits.

•

Net income for the first three months of 2011 totaled $33, an improvement over the net loss of $888 for the same period in 2010. This is mainly attributed to the decline in the provision for loan losses period to period.

•

The provision for loan losses totaled $675 for the three months ended March 31, 2011 compared to $1,961 in the first three months of 2010. DCB maintains an allowance for loan losses at a level to absorb management’s estimate of probable inherent credit losses in its portfolio.

•

The Corporation recognized a $92 other-than-temporary impairment charge on its investment in collateralized debt obligations during the first quarter 2011.

•

The Corporation’s net interest income declined from the same period in 2010. Net interest income decreased to $4,613 for the three months ended March 31, 2011 compared to $5,494 for the same period in 2010. The lower net interest income is mainly attributed to the overall decline in interest earning assets within the loan and investment portfolios.

•

The ability to generate earnings is impacted in part by competitive pricing on loans and deposits, and by changes in the rates on various U.S. Treasury, U. S. Government Agency and State and political subdivision issues which comprise a significant portion of the Bank’s investment portfolio. The Bank is competitive with interest rates and loan fees that it charges, in pricing and variety of accounts it offers to the depositor. The Corporation confirms this by completing regular rate shops and comparisons versus competing financial services companies. The dominant pricing mechanism on loans is the prime interest rate as published in the Wall Street Journal, on a fixed rate plus spread over the index. The interest spread depends on the overall account relationship and the creditworthiness of the borrower.

•

Deposit rates are reviewed weekly by management and are generally discussed by the Asset/Liability Committee on a monthly basis. The Bank’s primary objective in setting deposit rates is to remain competitive in the market area, and develop funding opportunities while earning an adequate interest rate margin.

•

Total borrowings decreased to $57,655 at March 31, 2011 from $58,502 at December 31, 2010. This is mainly due to a reduced reliance on borrowed funds because of the improved ability to raise deposits from its core customer base.

ANALYSIS OF FINANCIAL CONDITION

The Corporation’s consolidated assets totaled $587,842 at March 31, 2011, compared to $565,105 at December 31, 2010, an increase of $22,737, or 4.0%. Cash and cash equivalents increased by $41,654 to $75,175 at March 31, 2011 as a result of increased deposits and run-off in the loan portfolios. Total securities decreased slightly from $70,910 at December 31, 2010 to $68,283 at March 31, 2011. Management utilizes investment securities to provide the Bank with the flexibility to move funds into loans as demand warrants, and as collateral for various borrowing opportunities.

DCB FINANCIAL CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in thousands, except per share data)

Total loans, including loans held for sale, decreased $16,620, from $424,864 at December 31, 2010 to $408,244 at March 31, 2011. The decline in outstanding loan balances is mainly due to the lower volume of new originations due to the current economy and the charge-off of non-performing loans. The Corporation’s loan originations have remained lower, as the availability of quality lending opportunities within The Bank’s marketplace remain low.

Total deposits increased $24,069, from $465,076 at December 31, 2010 to $489,145 at March 31, 2011. Deposit growth stems primarily from increased deposits from local public customers. The Bank had $89,268 in CDARS deposits outstanding at March 31, 2011, a significant decline from one-year earlier. Noninterest-bearing deposits were stable from year-end.

On an as needed basis, The Corporation utilizes a variety of alternative funding sources due to competitive challenges within its primary market. Total borrowings decreased $847 during the three months ended March 31, 2011. The decline in long-term borrowings was mainly attributed to normal pay downs based on pre-determined amortization schedules. Typically, the Company utilizes a matched funding methodology for its borrowing and deposit activities. This is done by matching the rates, terms and expected cash flows of its loans to the various liability products. This matching principle is used to not only provide funding, but also as a means of mitigating interest rate risk associated with originating longer-term fixed-rate loans. Additional reliance on borrowings outside of normal deposit growth may increase the Corporation’s overall cost of funds.

COMPARISON OF RESULTS OF OPERATIONS

Net Income (Loss). The Corporation reported net income of $33 for the three months ended March 31, 2011, compared to a loss of $888 in 2010. The improvement in profitability was mainly attributed to reduced provision expense and reduced recognition of other-than-temporary impairment. Additionally, a decline in salary and benefit expense contributed to the positive change. These increases were partially offset by reduced net interest income and increased expenses associated with workout loans and OREO property.

Net Interest Income. Net interest income represents the amount by which interest income on interest-earning assets exceeds interest expense on interest-bearing liabilities. Net interest income is the largest component of the Corporation’s income, and is affected by the interest rate environment and the volume and the composition of interest-earning assets and interest-bearing liabilities.

Net interest income was $4,613 for the three months ended March 31, 2011 and $5,494 for the same period in 2010. This decline is mainly attributed to lower interest earning assets, including the fact that loan originations are not keeping pace with loan amortization. Due to the current economic environment, quality loan originations remained sluggish during the first quarter and The Bank continued to experience run off in its loan portfolios. Additionally, The Bank has increased on-balance sheet cash from year-end 2010, which provides nominal interest yield.

As noted, The Corporation has been able to reduce its overall borrowings, mainly through the FHLB, by replacing them with customer deposits that have grown significantly. Deposits normally are less expensive and less volatile than borrowing which contributes to the stable net interest margin The Bank has experienced. Net interest margin for the first quarter remained stable in the first quarter 2011 at 3.52%, which is comparable to both the first quarter 2010 and the fourth quarter 2010. Additionally, the cost of deposits has remained controlled, which has also contributed to the stable margin.

The Asset/Liability Management Committee, which is responsible for determining deposit rates, continues to closely monitor the Bank’s cost of funds to take advantage of pricing and cash flow opportunities. Additionally, because of the increased competition in the Bank’s primary marketplace, management has continued to recognize the importance of offering special rates on certain deposit products. These special deposit rates tend to negatively affect the Corporation’s net interest margin. It is likely that these rates will continue to be offered to secure liquidity while maintaining market share.

DCB FINANCIAL CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in thousands, except per share data)

Provision and Allowance for Loan Losses. The provision for loan losses represents the charge to income necessary to adjust the allowance for loan losses to an amount that represents management’s assessment of the losses known and inherent in the Bank’s loan portfolio. All lending activity contains associated risks of loan losses and the Bank recognizes these credit risks as a necessary element of its business activity.

The provision for loan losses totaled $675 for the three months ended March 31, 2011, compared to $1,961 for the same period in 2010. This decline from the previous year’s quarter is mainly attributed to the overall improvement in credit quality within The Bank’s loan portfolios. Other contributing factors include improvement in delinquencies, improved workout results and some improvements in economic conditions within The Bank’s market area. Management maintains an allowance for loan losses at a level to absorb management’s estimate of probable inherent credit losses in its portfolio.

Non-accrual loans at March 31, 2011 were $17,158, an increase of only $591 over the December 31, 2010 balance of $16,657, as problems loans have stabilized in response to workout activities. The majority of non-accrual balances are attributed to loans in the investment real estate sector that were not generating sufficient cash flow to service the debt. Delinquent loans over thirty days decreased to 3.80% of total loans at March 31, 2011 from 4.01% at December 31, 2010. Delinquent loans are mainly attributed to the real estate investment and commercial portfolios.

The allowance for loan losses was $10,300, or 2.52% of total loans at March 31, 2011, compared to $12,247, or 2.88% of total loans at December 31, 2010. Net charge-offs for the first quarter were $2,623, which were mainly attributed to commercial real estate loans. The net charge-offs were the main reason for the decline in both the dollar and percentage of reserves to total loans at March 31, 2011. Management will continue to monitor the credit quality of the loan portfolio and may recognize additional provisions in the future if needed to maintain the allowance for loan losses at an appropriate level.

Noninterest Income. Total noninterest income increased $1,066 for the three months ended March 31, 2011, compared to the same period in 2010. The increase was primarily attributable to the decline in losses attributed to the Corporation’s CDO portfolio. In the first quarter 2010 the other-than-temporary impairment recognized was $1,030 versus $92 in the first quarter 2011. Other revenue categories such as service charges and trust fees increased slightly, but were offset by gains on loan sales and data processing fees.

Noninterest Expense. Total noninterest expense decreased $57, or 1.0%, for the three months ended March 31, 2011 compared to the same period in 2010. The decrease was the result of a decline in salary and benefits of $219 from the first quarter 2010, offset by increases in professional services of $99. The Company has reduced staffing levels through attrition in order to better match FTE employee count to the overall size of operations. The Corporation also continues to experience larger than normal costs associated with legal and consulting as a result of the credit issues within its loan portfolios. As workout results improve the expectations are that professional and legal fees will decline accordingly in future periods.

Income Taxes. The Corporation recorded a tax credit totaling $24 for the three months ended March 31, 2011, compared to tax credit of $631 in the first quarter 2010. In 2010, The Corporation was booking federal income tax credits in order to recognize the deferred tax benefit associated with its quarterly losses. In 2011, Management elected to recognize a full allowance on its deferred tax position.

DCB FINANCIAL CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in thousands, except per share data)

LIQUIDITY

Liquidity is the ability of the Corporation to fund customers’ needs for borrowing and deposit withdrawals. The purpose of liquidity management is to assure sufficient cash flow to meet all of the financial commitments and to capitalize on opportunities for business expansion. This ability depends on the financial strength, asset quality and types of deposit and investment instruments offered by the Bank to its customers. The Bank’s principal sources of funds are deposits, loan and security repayments, maturities of securities, sales of securities available for sale and other funds provided by operations. The Bank also has the ability to borrow from the Federal Home Loan Bank (“FHLB”). While scheduled loan repayments and maturing investments are relatively predictable, deposit flows and early loan and mortgage-backed security prepayments are more influenced by interest rates, general economic conditions, and competition. The Corporation maintains investments in liquid assets based upon management’s assessment of (1) need for funds, (2) expected deposit flows, (3) yields available on short-term liquid assets and (4) objectives of the asset/liability management program.

Cash and cash equivalents increased $41,654 to $75,175 at March 31, 2011 as compared to December 31, 2010. The increase in cash equivalents is mainly due to increased deposit activity related to public fund deposit activity. The Bank is offering a number of retail deposit programs to increase core deposits while reducing reliance on large depositors and CDARS deposits. Cash and equivalents represented 12.8% of total assets at March 31, 2011 and 5.9% of total assets at December 31, 2010. The Corporation has the ability to borrow funds from the FHLB and the Federal Reserve should the Corporation need to supplement its future liquidity needs. Management believes the Corporation’s liquidity position is adequate based on its current level of cash, cash equivalents, core deposits, the stability of its other funding sources, and the support provided by its capital base.

CAPITAL RESOURCES

Total shareholders’ equity increased $83 between December 31, 2010 and March 31, 2011. The increase was primarily due to period net income of $33, and a decrease in accumulated other comprehensive loss.

Tier 1 capital is shareholders’ equity excluding the unrealized gain or loss on securities and intangible assets. Total capital includes Tier 1 capital plus the allowance for loan losses, not to exceed 1.25% of risk-weighted assets. Risk-weighted assets are the Corporation’s total assets after such assets are assessed for risk and assigned a weighting factor defined by regulation based on their inherent risk.

The Corporation and its subsidiaries meet all published regulatory capital requirements. The ratio of total capital to risk-weighted assets was 10.59% at March 31, 2011, while the Tier 1 risk-based capital ratio was 6.55%. Regulatory minimums call for a total risk-based capital ratio of 8.0%, at least half of which must be Tier 1 capital. The Corporation’s leverage ratio, defined as Tier 1 capital divided by average assets, was 6.6% at March 31, 2010. The Corporation’s wholly-owned bank reported total capital to risk-weighted assets of 10.6% at March 31, 2010.

As previously reported in the notes to the 10-K filing for December 31, 2010, the Corporation’s wholly owned subsidiary bank is required to reach a Tier-1 capital level of 9% per formal agreements entered into with the FDIC and ODFI. Management has been partnering with the appropriate regulatory bodies in addressing the issues presented in the agreements. However, at March 31, 2011, the Bank had not increased its Tier-1 capital ratio to that level. For additional details regarding the content of the agreement, see Notes to the Consolidated Statements of the 10-K.

DCB FINANCIAL CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in thousands, except per share data)

The following table sets forth the Corporation’s obligations and commitments to make future payments under contract as of March 31, 2011.


	Payment Due by Year
			Less than 1						More than 5
Contractual Obligations	Total		year		1-3 years		3-5 years		years

FHLB advances	$	57,655	$	15,000	$	31,877	$	7,617	$	3,161
Federal funds purchased and other short-term borrowings		1,161		1,161		—		—		—
Operating lease obligations		3,712		705		1,059		944		1,004
Loan and line of credit commitments		69,616		34,364		—		—		35,252


Total Contractual Obligations	$	132,144	$	51,230	$	32,936	$	8,561	$	39,417


Item 3.		Quantitative and Qualitative Disclosure About Market Risk

ASSET AND LIABILITY MANAGEMENT AND MARKET RISK

The Corporation’s primary market risk exposure is interest rate risk and, to a lesser extent, liquidity risk. Interest rate risk is the possibility that the Corporation’s financial condition will be adversely affected due to movements in interest rates. The income of financial institutions is primarily derived from the excess of interest earned on interest-earning assets over the interest paid on interest-bearing liabilities. Accordingly, the Corporation places great importance on monitoring and controlling interest rate risk. The measurement and analysis of the exposure of the Corporation’s primary operating subsidiary, The Delaware County Bank and Trust Company, to changes in the interest rate environment are referred to as asset/liability management. One method used to analyze the Corporation’s sensitivity to changes in interest rates is the “net portfolio value” (“NPV”) methodology.

NPV is generally considered to be the present value of the difference between expected incoming cash flows on interest-earning and other assets and expected outgoing cash flows on interest-bearing and other liabilities. For example, the asset/liability model that the Corporation currently employs attempts to measure the change in NPV for a variety of interest rate scenarios, typically for up and down parallel shifts of 100 to 400 basis points in market rates.

The Corporation’s Annual Report includes a table depicting the changes in the Corporation’s interest rate risk as of December 31, 2010, as measured by changes in NPV for instantaneous and sustained parallel shifts of -100 to +400 basis points in market interest rates. Management believes that no events have occurred since December 31, 2010 that would significantly change their ratio of rate sensitive assets to rate sensitive liabilities.

The Corporation’s NPV is more sensitive to rising rates than declining rates. From an overall perspective, such difference in sensitivity occurs principally because, as rates rise, borrowers do not prepay fixed-rate loans as quickly as they do when interest rates are declining. Thus, in a rising interest rate environment, because the Corporation has fixed-rate loans in its loan portfolio, the amount of interest the Corporation would receive on its loans would increase relatively slowly as loans are slowly prepaid and new loans at higher rates are made. Moreover, the interest the Corporation would pay on its deposits would increase rapidly because the Corporation’s deposits generally have shorter periods for repricing.

DCB FINANCIAL CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in thousands, except per share data)

The Corporation can utilize various tools to reduce exposure to changes in interest rates including offering floating versus fixed rate products, or utilizing interest rate swaps. Additional consideration should also be given to today’s current interest rate levels. Several deposit products are within 200 basis points of zero percent and other products within 300 basis points. Should rates decline, fewer liabilities could be repriced down to offset potentially lower yields on loans. Thus decreases could also impact future earnings and the Corporation’s NPV.

As with any method of measuring interest rate risk, certain shortcomings are inherent in the NPV approach. For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Further, in the event of a change in interest rates, expected rates of prepayment on loans and mortgage-backed securities and early withdrawal levels from certificates of deposit would likely deviate significantly from those assumed in making risk calculations.


Item 4.		Controls and Procedures

The Corporation carried out an evaluation, under the supervision and with the participation of the Corporation’s management, including the Corporation’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Corporation’s disclosure controls and procedures as of March 31, 2011, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures were effective as of March 31, 2011, in timely alerting them to material information relating to the Corporation (including its consolidated subsidiaries) required to be included in the Corporation’s periodic SEC filings.

There was no change in the Corporation’s internal control over financial reporting that occurred during the Corporation’s fiscal quarter ended March 31, 2011, that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting, except with respect to controls related to determination of fair value and evaluation of other-than-temporary impairment of collateralized debt obligations.

DCB FINANCIAL CORP

FORM 10-Q

Quarter ended March 31, 2011

PART II — OTHER INFORMATION


Item 1 —		Legal Proceedings:

There are no matters required to be reported under this item.


Item 2 —		Unregistered Sales of Equity Securities and Use of Proceeds:

ISSUER PURCHASES OF EQUITY SECURITIES


							(d)
					(c)		Maximum Number
					Total Number of		(or Approximate
	(a)				Shares (or Units)		Dollar Value) of
	Total Number		(b)		Purchased as Part		Shares (or Units) that
	of Shares		Average Price		of Publicly		May Yet Be
	(or Units)		Paid per Share		Announced Plans		Purchased Under the
Period	Purchased		(or Unit)		or Programs⁽¹⁾		Plans or Programs

Beginning Balance		—		—		—		184,907
Month #l 1/1/2011 to 1/31/2011		—		—		—		—
Month #2 2/1/2011 to 2/28/2011		—		—		—		—
Month #3 3/1/2011 to 3/31/2011		—		—		—		—

Ending Balance		—		—		—		184,907


(1)		On August 16, 2007, the Company announced a repurchase program which authorizes the repurchase of up to 200,000 of its common shares over a two year period commencing August 15, 2007.

DCB FINANCIAL CORP

FORM 10-Q

Quarter ended March 31, 2011

PART II — OTHER INFORMATION


Item 3 —		Defaults Upon Senior Securities:

There are no matters required to be reported under this item.


Item 4 —		Submission of Matters to a Vote of Security Holders:

There are no matters required to be reported under this item.


Item 5 —		Other Information:

There are no matters required to be reported under this item.


Item 6 —		Exhibits:

Exhibits — The following exhibits are filed as a part of this report:


Exhibit No.		Exhibit

	3.1	Amended and Restated Articles of Incorporation of DCB Financial Corp, incorporated by reference to the Company’s Report on Form 10-Q filed with the Commission on November 14, 2003.

	3.2	Amended and Restated Articles of Incorporation of DCB Financial Corp, incorporated by reference to the Company’s Report on Form 10-Q filed with the Commission on November 14, 2003.

	31.1	Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002

	31.2	Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002

	32.1	Certification pursuant to 18 U.S.C. 1350, as enacted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

	32.2	Certification pursuant to 18 U.S.C. 1350, as enacted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

DCB FINANCIAL CORP

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	DCB FINANCIAL CORP (Registrant)
Date: May 16, 2011	/s/ David J. Folkwein
	David J. Folkwein
	President and Chief Executive Officer

Date: May 16, 2011	/s/ John A. Ustaszewski
	John A. Ustaszewski
	Senior Vice President and Chief Financial Officer

DCB FINANCIAL CORP

INDEX TO EXHIBITS


EXHIBIT
NUMBER		DESCRIPTION

	3.1	Amended and Restated Articles of Incorporation of DCB Financial Corp, incorporated by reference to the Company’s Report on Form 10-Q filed with the Commission on November 14, 2003.

	3.2	Amended and Restated Articles of Incorporation of DCB Financial Corp, incorporated by reference to the Company’s Report on Form 10-Q filed with the Commission on November 14, 2003.

	31.1	Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

	31.2	Certification of Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

	32.1	Certification pursuant to 18 U.S.C. 1350, as enacted Pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

	32.2	Certification pursuant to 18 U.S.C. 1350, as enacted Pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

DCB FINANCIAL CORP - FORM 10-Q - May 16, 2011

Attached files

Stock widget

Investing forum

DCB FINANCIAL CORP Reports