8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):  November 14, 2006

DNB Financial Corporation

__________________________________________

(Exact name of registrant as specified in its charter)

Pennsylvania	0-16667	23-2222567
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
4 Brandywine Avenue, Downingtown, Pennsylvania		19335
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code:  (610) 269-1040

Not Applicable

______________________________________________

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(a) Thomas M. Miller, the Chief Lending Officer of DNB Financial Corporation (“DNB”) and its wholly owned subsidiary, DNB First, National Association (the “Bank”), submitted his resignation to DNB’s board of directors on November 17, 2006, proposing that he be relieved of responsibilities as an executive officer effective November 17, 2006 but with an effective date for termination of employment on December 31, 2006. On November 17, 2006, DNB’s board of directors accepted his resignation and approved the effective dates.

(b) On November 17, 2006, DNB’s board of directors approved the appointment of Albert J. Melfi, Jr., age 54, as Executive Vice President and Chief Lending Officer of DNB and the Bank. Mr. Melfi’s appointment and his employment with DNB will be effective November 17, 2006 and he will serve at the pleasure of DNB’s board of directors. There were no special arrangements or understandings pursuant to which he was selected as an officer, other than DNB’s offer letter, filed herewith as Exhibit 99.1. There are no family relationships between Mr. Melfi and any director or other executive officer of DNB. Prior to joining DNB, Mr. Melfi has been employed as a Regional Vice President with Commerce Bank, PA, N.A. In that position, he had dual responsibilities including (1) managing the lending function for the bank in Delaware County, Pennsylvania, and (2) overseeing a retail branch region currently consisting of 12 branches, with total deposits in excess of $1.2 Billion and approximately 280 full and part time employees. His commercial lending responsibilities included direct supervision of six commercial lenders and his own commercial loan portfolio. In May 1997 he received the SBA (U.S. Small Business Administration) Financial Services Advocate of the Year Award. His retail responsibilities included expanding not only the bank’s deposit base in the region, but also increasing consumer lending. His other affiliations include: board chairman of the Chester County Chamber of Business and Industry, board vice chairman and treasurer of the Brandywine Valley Convention & Visitors Bureau, and board memberships for March of Dimes, Community Action Agency of Delaware County, Delaware County Industrial Development Corp. (for which he also serves as member of the Finance Committee and chairman of the Loan Review Committee), Delaware County Industrial Development Authority, Delaware County Commerce Department (for which he also serves as chairman of the Loan Review Committee), Delaware County Hero Bowl & Foundation, Neumann College Business Advisory Board, and the Delaware County Historical Society. Since the beginning of 2005, neither Mr. Melfi, nor any of his immediate family members, nor any organization or entity in which he has a direct or indirect ownership interest of 10% or more or an interest other than only as board member, has engaged in, or is a party to any proposed transaction, or had or will have a direct or indirect material interest in any transaction, in which DNB was or is to be a participant, where the amount involved exceeded or would exceed $120,000.

(c) On November 14, 2006, Albert J. Melfi, Jr. accepted, and on November 17, 2006, DNB’s board of directors approved, the terms of Mr. Melfi’s employment as Executive Vice President and Chief Lending Officer of DNB and the Bank, as reflected in the offer letter of DNB to Mr. Melfi dated November 10, 2006, filed herewith as Exhibit 99.1 The terms of his employment as presently agreed include: (1) twice-monthly salary of $8,125.00; (2) a $20,000.00 signing bonus which will be paid on November 29, 2006; (3) upon completion of a 90-day initial employment period, 20 vacation days, 5 sick days and 2 personal days based upon Bank policy; (4) a car allowance of $900 per month to be reconciled quarterly to actual expenses; (5) eligibility for participation in all compensation and employee benefit plans, including life insurance at the allowable maximum, medical insurance for Mr. Melfi and his eligible dependents, and all other benefits and perquisites maintained by DNB for officers, including stock options and incentive compensation (Mr. Melfi will be eligible for participation in the medical and life insurance plans 3 months from his date of hire); (6) an agreement by DNB that Mr. Melfi will receive a minimum $15,000 guaranteed bonus for year 2007 payable at such time as 2007 bonuses are awarded, in accordance with any applicable rules; (7) until he becomes eligible to participate in DNB’s health insurance program, during his employment with DNB it will pay or reimburse the difference between the cost of Mr. Melfi’s COBRA payments to his previous employer’s insurance provider and the amount that Mr. Melfi would be obligated to contribute for the same medical coverage plan at DNB; (8) use of DNB’s country club membership for reasonable business entertainment purposes; and (9) ongoing professional training and development. The offer letter also provides that DNB and Mr. Melfi will enter into a change in control agreement providing for 18 months of severance pay (calculated based on base salary, bonus and benefits) should the Bank experience a change of control.

(d) It is anticipated that Mr. Melfi will enter into a change in control agreement with DNB and the Bank on terms that are consistent with DNB’s offer letter of November 10, 2006 (see Exhibit 99.1) and comparable to the terms of the change in control agreements of other executive officers of DNB and the Bank in effect at the time the agreements are signed. However, the specific terms of his change in control agreement have not been finalized or approved by Mr. Melfi or DNB’s board of directors. DNB intends to file an amendment to this Form 8-K under this Item 5.02 describing the terms of the change in control agreement with Mr. Melfi within four business days after the agreements are finalized and signed.

Item 7.01 Regulation FD Disclosure.

On November 17, 2006, DNB and the Bank announced the resignation of Thomas M. Miller as Chief Lending Officer of DNB and the Bank effective December 31, 2006, but with termination of his responsibilities as an executive officer effective November 17, 2006, and the appointment of Albert J. Melfi, Jr., as Executive Vice President and Chief Lending Officer effective November 17, 2006. The press release also summarizes Mr. Melfi’s background and experience, the material elements of which are incorporated herein by reference to the disclosures in this Form 8-K under Item 5.02(b). A copy of the press release is furnished herewith as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1	DNB Offer Letter to Albert J. Melfi, Jr., dated November 10, 2006.
99.2	Press Release dated November 17, 2006

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 hereunto duly authorized.

	DNB FINANCIAL CORPORATION
November 17, 2006		By: /s/ William J. Hieb
		Name: William J. Hieb
		Title: President and Chief Operating Officer

	Exhibit Index
Exhibit No.	Description
99.1	DNB Offer Letter to Albert J. Melfi, Jr., dated November 10, 2006.
99.2	Press Release dated November 17, 2006

EX-99.1

[DNB FIRST LETTERHEAD]

November 10, 2006

Mr. Albert J. Melfi, Jr.

[Address]

Via Email

Dear Al:

This letter confirms our offer to employ you as Executive Vice President, reporting directly to William J. Hieb, President and COO. We anticipate a start date no later than December 4, 2006, or sooner if you are available.

A summary of the key terms and conditions of our offer appear below:

1. A twice-monthly salary of $8,125.00 paid through direct deposit to your employee checking/savings account on the 15th and 30th of each month.

2. At your discretion, you will receive either i)$20,000.00 signing bonus which will be paid in the first pay period after your start date or ii)1000 shares of restricted stock with a 1-year vesting period to be awarded on or about December 31,2006.

3. Upon completion of a 90-day initial employment period, you will be eligible to receive 20 vacation days, 5 sick days and 2 personal days based upon Bank policy.

4. You will receive a car allowance of $900 per month, to be reconciled quarterly to actual expenses.

5. You will be eligible for participation in all compensation and employee benefit plans, including life insurance at the allowable maximum, medical insurance for you and your eligible dependents, and all other benefits and perquisites maintained by the Bank for officers, including stock options and incentive compensation. You will be eligible for participation in the medical and life insurance plans 3 months from your date of hire. You will receive a minimum $15,000 guaranteed bonus for year 2007 payable in accordance with normal plan distribution rules.

6. So long as you are employed by the Bank, the Bank agrees to cover the cost of your COBRA payments, less the amount that you would contribute for the same plan here at DNB, to your previous employer's insurance provider until you become eligible to participate in the Bank's health insurance program. Please submit the bills to Tracy Panati, Human Resource Manager for payment.

7. You will also be covered under a Change in Control Agreement, which provides for 18 months of severance pay which includes base, bonus and benefits should the Bank experience a change of control.

8. The Bank has a country club membership which you will be eligible to use for reasonable business entertainment purposes.

9. Ongoing professional training and development is available.

As required by bank policy, employment is contingent upon a credit and OFAC report acceptable to DNB First, N.A., in its sole discretion. Pursuant to the Fair and Accurate Credit Transactions (FACT) Act, we will forward you the information regarding your credit score disclosure.

In compliance with the Immigration and Control Act of 1986, all new employees must provide documentation proving employment authorization and identity within three (3) working days of your start date. The enclosed notice reviews the required documentation that will be required for you to provide to the Bank. Failure to provide employment authorization may mean termination or cancellation of the offer of employment.

Please acknowledge your acceptance by signing one copy of this letter and returning it to my attention by November 17, 2006.

On behalf of the Bank, our Board of Directors, and our Executive Management team, I am absolutely delighted that you are joining our team to help us meet our vision for the future. If you have any questions, or require additional information, please contact either myself at 484-359-3166 or Bill Hieb at 484-359-3012.

Sincerely,

/s/ William S. Latoff

William S. Latoff

Chairman and CEO

Enclosure

cc: Tracy Panati

Accepted by:	/s/ Albert J. Melfi, Jr.	Date:   11/14/2006
	Albert J. Melfi, Jr.

Notice to Newly Hired Employees

The Immigration Reform and Control Act of 1986

The Immigration Reform and Control Act of 1986 makes it unlawful for employers to knowingly hire aliens not authorized to work in the United States. Employers must verify that every individual hired is not an unauthorized alien.

To comply with this law, you must take the following steps: Within three (3) working days of your start date, you will be required to complete INS Form 1-9. You must provide the documents proving your employment authorization and identity. Failure to provide employment authorization or identity may mean termination or cancellation of the offer of employment. The documents that INS will accept to establish identity and employment eligibility are listed below.

1. Only one document from the following list is needed for establishing both identity and employment eligibility:

· U.S. Passport

· Certificate of U.S. Citizenship

· Certificate of Naturalization

· Unexpired foreign passport with attached employment authorization

· Alien Registration Card with photograph

· Unexpired Temporary Resident Card

· Unexpired Employment Authorization Card

· Unexpired Reentry Permit

· Unexpired Refugee Travel document

· Unexpired Employment Authorization document issued by the INS which contains a photograph

If you do not have any of the above documents you will need to provide one document from each of the following categories:

2. Documents acceptable for establishing eligibility for employment:

· Non-laminated Social Security Number Card (Providing it is not stamped "not valid for employment purposes")

· Original or certified copy of a birth certificate issued by a state, county, or municipal authority bearing an official seal

· Unexpired INS employment authorization

· Certification of Birth Abroad issued by the U.S. Department of State

· U.S. Citizen ID Card

· Native American tribal document

· ID Card for use of Resident Citizen in the U.S.

PLUS

3. Documents acceptable for establishing identity:

· State-issued driver's license or ID Card containing a photograph

· School ID Card with photograph

· Voter registration card

· U.S. military card or draft record

· ID Card issued by Federal, State, or local government agencies or entities containing a photograph

· Military dependent ID Card

· Native American tribal documents

· Driver's license issued by a Canadian Government authority

· U.S. Coast Guard Merchant Mariner Card

Persons under age 16 who are unable to produce any of the documents found in group 3, may present any of the following to establish identity:

· School record or report card

· Clinic, doctor or hospital record

· Day-care or nursery school record

EX-99.2

DNB Financial Corporation

For further information, please contact:
Elizabeth Cook
Assistant Vice President/Marketing
484-359-3201
ecook@dnbfirst.com	FOR IMMEDIATE RELEASE
	(OTC Bulletin Board Symbol: DNBF)

DNB FIRST ANNOUNCES CHANGES IN EXECUTIVE MANAGEMENT

DOWNINGTOWN, Pennsylvania - November 17, 2006 - DNB Financial Corporation, parent company of DNB First, National Association, announced a change in their executive management team.

Thomas M. Miller, DNB’s Chief Lending Officer, will be leaving DNB First and joining the consulting firm of Ardmore Banking Advisors, Ardmore, PA. “Tom has decided to take his career in a different direction. He has been a key member of our management team and we will certainly miss his talent and leadership. We all wish him success in his new career”, said William S. Latoff, Chairman and CEO of DNB First.

“I am extremely pleased to announce that Albert J. Melfi, Jr. has accepted a position with DNB effective today and will be joining us as Executive Vice President and Chief Lending Officer. Al has over 32 years of commercial and consumer lending experience and most recently served as Regional Vice President, of Commerce Bank, PA/N.A. We are extremely pleased to have Al join our executive management team. Our customers, employees and shareholders will benefit greatly from Al’s leadership and experience”, said Mr. Latoff.

While at Commerce Bank, Mr. Melfi managed a 12-branch region including the retail and commercial lending functions. Mr. Melfi is a very successful banking professional and an outstanding community leader. He has served in a leadership capacity on countless professional, community and civic organizations, and, to name a few, presently serves as board chairman of the Chester County Chamber of Business and Industry, board vice chairman and treasurer of the Brandywine Valley Convention & Visitors Bureau, and board memberships for March of Dimes, Community Action Agency of Delaware County, Delaware County Industrial Development Corp. (for which he also serves as member of the Finance Committee and chairman of the Loan Review Committee), Delaware County Industrial Development Authority, Delaware County Commerce Department (for which he also serves as chairman of the Loan Review Committee), Delaware County Hero Bowl & Foundation, Neumann College Business Advisory Board, and the Delaware County Historical Society. He was also the 1997 recipient of the SBA Financial Services Advocate of the Year Award.

“As a former competitor of DNB First, I have the greatest respect and admiration for the way they have been transitioning this historic institution. I look forward to being a part of their continued success”, said Mr. Melfi.

DNB First, National Association, a wholly owned subsidiary of DNB Financial Corporation, a $503 million community bank headquartered in Chester County, Pennsylvania, is the oldest independent bank in the county with ten full service offices and two limited service offices. In addition to a broad array of consumer banking products, DNB offers commercial and construction lending, commercial leasing, cash management, brokerage and insurance through DNB Financial Services, and trust services through DNB Advisors. For more information, go to www.dnbfirst.com.