DNB Financial Corporation
2009 Annual Report
The Strength And Stability To Weather Today’s Challenges
FINANCIAL
CORPORATION
A symbol of strength and
stability for 149 years
For thousands of years,
people around the world
have used weathervanes
to prepare for what is to
come. Though different
types were developed, the
weathervane’s purpose
has remained unchanged –
to face and withstand the
wind from any direction.
In 2009, financial institutions
from all over the country
faced stormy economic
conditions. DNB First was
among them. Yet, our
financial strength allowed
us to face our challenges
head on and remain the
beacon of stability our
customers and communities
have relied on for 149 years.
Dear Shareholder:
There is little debate, 2009 was a year of unprecedented
economic challenge, change, and uncertainty. During this
time, individuals struggled to keep their jobs, businesses
were challenged with keeping doors open, and our
communities were left with an ever-increasing demand for
basic human services. And of course, financial institutions
from all over the region had to navigate the most
treacherous financial environment our country has seen
since the Great Depression.
While DNB First was not immune to some of the financial
challenges and changes, we did manage to successfully
weather them. We remained as we have throughout our
long history – a profitable and sound institution dedicated
to serving the best interests of our customers, communities,
and shareholders.
Our continued commitment to fundamental banking,
expense control, and prudent decision-making had us
well positioned to face new challenges and make tough
choices. Rather than denying difficulties, we confronted
them head on, building a defensive balance sheet, keeping
risks reasonable relative to capital, and reducing dividends
to reinvest in the Company. Though our conservative
operating practices over the past several years may
have seemed boring compared to those of other financial
institutions, which made suspect loans and investments,
they were essential for our long-term strength and stability.
Competition truly brought out the worst in some financial
institutions, and our leadership was challenged with not only
understanding the poor decisions these institutions made,
but also ensuring we stay focused on our core values and
core business. This is one of the many reasons why we
remain a strong fixture in our community, while other local
banks have faced financial difficulties and consolidations.
Our focus on core business served us well in our commitment
to helping companies of all sizes, as we experienced an
increase in commercial loan activity. While many businesses
were faced with the difficult task of obtaining capital,
DNB First was there to support them.
This commitment is evident in our recent recognition by
TheStreet.com, a leading financial website, as one of
the few banks in the country that are actually lending. To
accommodate our growth, we hired additional experienced
branch managers and commercial lenders. Of course, we
carefully balanced our willingness to support businesses
with the importance of maintaining our financial strength
and long-term viability.
In 2009, we continued to meet the needs of all of our
customers by offering competitive rates, local decision
making, and the products and services they need to meet
their goals. We also reinforced our commitment to delivering
convenience through our investment in Mobile Banking,
which allows individuals and business customers to manage
their money from any wireless device.
For DNB First, staying true to our values also meant
continuing to give back to the many communities we are so
proud to serve through corporate donations, sponsorships,
and volunteer efforts. Our success in serving our customers
and communities would not be possible without the support
of our employees who gave of themselves and made sacrifices
in order to deliver the very best service.
Looking ahead, there’s little doubt that 2010 will not be without
challenge. There is, however, no doubt that DNB First will
remain committed to standing with our customers, communities,
employees, and shareholders through both prosperous and
uncertain times.
We thank you for your continued support.
William S. Latoff
William J. Hieb
Chairman and CEO
President and COO
Solid enough to be there
for our customers
Fiscal year 2009 was a great period of change and uncertainty
for individuals and businesses around the country, and the
financial institutions on which they have relied. The climate here
at home was no different, as many local banks experienced
financial difficulty. At DNB First, it was a different story. We
continued to be there for our customers and communities,
providing the assurance that we will stand behind them in
these challenging times.
Matt Wagner
President, Bob Wagner’s FlooringAmerica Design Center
“Our family business has been with DNB First since
we opened our doors. The Bank has always taken a
personal interest in our success. They’ve been there for
grand openings and have stood by us and guided us
in challenging times. The personal attention they provide
is really unmatched – from the branch staff to the CEO.”
Values that have stood the test of time
At DNB First, our formula for success is a simple one –
we adhere to the same core values in prosperous and
challenging economic times. It may sound simple, but it
is the reason why we have been around since 1860 and
why we will soon become the last-standing community
bank headquartered in Chester County.
These values include:
n Making prudent financial decisions that are in the best
interest of our customers and shareholders. We never
try to reap short-term rewards without understanding
long-term consequences.
n Delivering a level of service that reminds our customers
how important their business is to us.
n Providing honest values to our customers.
n Giving back to the local communities we are so proud
Jill Renninger
Principal and Vice President, IMS Audio Visual
to serve.
n Supporting the growth of local businesses, which are
vital to the strength and prosperity of our communities.
Continuing to support the growth of
local businesses
As a community bank, DNB First has always remained
focused on meeting the needs of companies of all
sizes. In 2009, our commitment to businesses was more
important than ever as many struggled to secure the
financing they needed to manage cash flow challenges
and build for the future.
Recognizing the vital role that companies play in creating
jobs and stabilizing our local communities, we continued
to stand behind our existing business customers and to
help launch new businesses. Our commitment to lending
is evident in the strong growth in our commercial loan
portfolio in 2009. While other banks ceased lending, we
continued to make sound credit decisions and deliver
the solutions qualified businesses needed to weather
challenges and prepare for the future.
“DNB First really understands our business and the challenges we face.
They don’t just look at our business as a piece of paper, but take the time
to learn about our long-range goals. We’ve never felt that our relationship
was in jeopardy, which is really important today when other banks are just
calling in credit lines for no reason. We couldn’t be happier.”
Building our commercial banking staff and
our commitment to business
One of the ways we strived to support business was through
the hiring of additional commercial loan officers. These
seasoned professionals understand our local communities
and the challenges businesses face. They have decades of
experience in commercial banking and are active members
of the communities they serve. The visibility and experience
of our team provides businesses the assurance that their
bank not only understands their challenges, but is ready,
willing, and able to help deliver solutions.
Continuing a tradition of value
and community support
As a community bank, DNB First is not just a part of your
community, but dedicated to helping build it. Whether
we’re providing products and services that help individuals,
families, and businesses reach their goals or support to
help non-profit organizations carry out their mission, every
day, DNB First strives to be there for the customers and
communities that have relied on us for generations.
In 2009, DNB First provided financial
support to a wide range of organizations
dedicated to youth programs and
education, including the Walden School.
Pictured is Chris Leon (second from
left) with DNB First’s Tom Cozza (left)
and Al Melfi (right).
In the Fall of 2009, we
introduced Mobile Banking
to customers through
a comprehensive
marketing campaign.
Delivering higher values to help our customers
Being there for our customers means understanding their
financial challenges, and the importance of maximizing
cash flow. In 2009, we continued to help our customers
grow savings through accounts like Rewards Checking,
which offers a highly competitive rate with no fees. We
also continued to provide competitive loan rates and
low fee structures.
The commitment to take banking in
new directions
Our focus on strong fundamental banking did not stop
us from continuing to look toward the future to explore
new ways to improve the customer experience. In the Fall,
we introduced Mobile Banking, a convenient service that
allows individuals and businesses to access and manage
their accounts from any wireless device. The addition of
Mobile Banking, and our unwavering commitment to
investing in state-of-the-art products and services, enables
our customers to access the services they would find at
a large financial institution with the personal assistance
and commitment that only a community bank can provide.
These services allow us to meet the needs of new
generations of customers who rely heavily on convenience.
As part of our commitment to technology, we also invested
in a new, cutting edge Virtual Server system that allows us
to operate more efficiently and accommodate future growth.
Helping protect and build wealth
With the financial difficulties on Wall Street over the past
year, individual, business, and institutional investors had to
helplessly watch the value of their investments decline. In
2009, DNB Advisors understood their concerns and worked
with them to help build and protect wealth. Our experienced
investment managers understand the importance of making
sound investment choices. Rather than chasing the latest
fads, they work to create broad, diversified portfolios that
improve upside returns and limit downside risk. Their
goal has always been to deliver best-in-class investment
performance with a personalized, consultative approach.
Supporting our communities
DNB First has always strived to be financially sound, not
just for our customers and shareholders, but also for the
many communities that rely on our support. Even with
the economic challenges of 2009, we continued our long-
standing tradition of supporting our local communities
through financial donations and employee volunteers at
events that enrich our neighborhoods. These initiatives
included sponsorship of:
n Local events that fuel the growth of business
n Arts programs
n Youth support and education
n Affordable housing
n Healthcare and Senior programs
A tradition of Loyalty to Service
In 2009, for the fourth consecutive year, we continued to
honor heroes who support our communities through our
Loyalty to Service awards. This unique program recognizes
outstanding individuals who have demonstrated high levels
of commitment, professionalism, and integrity, in the field of
Social Work.
Loyalty to Service 2009 Awards: Honorees (pictured from left to right with
DNB First’s Bill Hieb and Bill Latoff) Gina Buckman, Regina Horton-Lewis,
Dr. Patricia Joseph (Lifetime Achievement Awardee), and Heidi Carlson
(Main Awardee).
DNB Financial Corporation
Advisory Board Members
Our Advisory Board consists of successful local business
people. They offer additional perspective on the needs
and significant concerns within our community. We are
proud to have their involvement and input for guidance.
Peter R. Barsz, CPA
Partner, Merves, Amon & Barsz, LLC
Joseph E. Brion, Esq.
Partner, Buckley, Brion, McGuire,
Morris & Sommer LLP
Jeffrey P. Brown
President, General InsurCorp, Inc.
Tamara C. Cansler
President and CEO, Cansler
Investment Group
Dominic J. Cappelli, Jr.
CEO, The Cappelli Group, Inc.
Vincent T. Donohue, Esq.
Chairman of Business & Real Estate
Group, Lamb McErlane PC
Isidoro Gonzalez, MD
Senior Vice President, Programs
and Training, Congreso
Charles A. Hackett, CPA
President, Bliss & Co., Ltd.
James A. Mellon, Jr.,
President/Owner,
Mellon Certified Restoration
A. Joseph Rubino
President, KSL Corporation
Kathy Scullin
Vice President Marketing and
Public Relations, Crozer-Keystone
Health System
Charles E. Swope, Jr.,
Broker of Record & Chairman,
Swope Lees Commercial
Real Estate, LLC
Cuyler H. Walker, Esq.
Partner, Pepper Hamilton, LLP
George C. Zumbano, Esq.
Attorney and Shareholder,
Gawthorp Greenwood, PC
DNB Financial Corporation
Board of Directors
Standing, left to right:
Sitting, left to right:
Eli Silberman, Director; President, TSG, Inc. Marketing Consultants
James H. Thornton, Director; President, Thornton Consulting
Gerard F. Griesser, Director; Principal, Prudential Fox & Roach/Trident
William S. Latoff, Director; Chairman and Chief Executive Officer
William J. Hieb, Director; President and Chief Operating Officer
Mildred C. Joyner, Director; Director and Professor of Social Work,
Thomas A. Fillippo, Director; President, Devault Foods
West Chester University
James J. Koegel, Director; President, Jones Motor Group, Inc.
Executive Management Team and Officers
Standing, left to right:
Sitting, left to right:
Bruce E. Moroney, Executive Vice President and Chief Accounting Officer
Gerald F. Sopp, Executive Vice President, Chief Financial Officer
Frank S. Monterosso, Senior Vice President, Operations
and Corporate Secretary
Albert J. Melfi, Jr., Executive Vice President and Chief Lending Officer
William S. Latoff, Chairman and Chief Executive Officer
Richard J. Hartmann, Executive Vice President, Retail Banking
William J. Hieb, President and Chief Operating Officer
An art of helping our communities
Adrian Martinez
DNB First has always been
committed to supporting
our communities and the
individuals who work to
enhance them. As part of
our commitment to the arts,
we’re proud to support local
artists, including Adrian
Martinez. A nationally known
artist based in Downingtown,
Pennsylvania, Adrian’s work
includes portraits, still lifes,
landscapes and historical
paintings, and combines a
classical technique with an
intensely emotional vision.
His art has been shown in
galleries across the United
States and is in many
public collections.
Pictured are two of Adrian’s
works that hang in our Main
Branch, At the Races and
The Artist. At the Races
depicts an afternoon race
at the Downingtown Driving
Park, which was located on
the east side of Brandywine
Avenue between the railroad
At the Races
The Artist
tracks and Boot Road. The
races attracted sportsmen
from all over Pennsylvania
and New Jersey.
The Artist depicts a meeting
taking place, circa 1720, in
the east branch of Brandywine
Creek where two Conestogoe
warriors and a young brave
have arrived to barter their
fur at the Downingtown
Log House. Standing in the
rear of the group on the right
is Peter Bezellion, a French
Canadian fur trader.
For more information
on Adrian’s works, visit
adrianmartinez.com.
DNB First
Branch locations
Caln
1835 East Lincoln Highway
Coatesville, PA 19320
Chadds Ford
300 Oakland Road
West Chester, PA 19382
Downingtown/East End
701 East Lancaster Avenue
Downingtown, PA 19335
Downingtown/Main
4 Brandywine Avenue
Downingtown, PA 19335
Exton
410 Exton Square Parkway
Exton, PA 19341
Kennett Square
215 East Cypress Street
Kennett Square, PA 19348
Lionville
891 North Pottstown Pike
Exton, PA 19341
Little Washington
104 Culbertson Run Road
Downingtown, PA 19335
Ludwig’s Corner
1030 North Pottstown Pike
Chester Springs, PA 19425
Media
200 East State Street
Suite 208
Media, PA 19063
Tel Hai
1200 Tel Hai Circle
Honey Brook, PA 19344
West Chester
2 North Church Street
West Chester, PA 19380
West Goshen
1115 West Chester Pike
West Chester, PA 19380
FINANCIAL
CORPORATION
DNB First n 4 Brandywine Avenue n Downingtown, PA 19335