Regulatory Matters

12 Months Ended

Dec. 31, 2012

Regulatory Capital Requirements [Abstract]

REGULATORY MATTERS

(16)  REGULATORY MATTERS

Under the Federal Reserve’s Regulation H, DNB First, National Association may not, without regulatory approval, declare or pay a dividend to DNB if the total of all dividends declared in a calendar year exceeds the total of (a) the Bank’s net income for that year and (b) its retained net income for the preceding two calendar years, less any required transfers to additional paid-in capital or to a fund for the retirement of preferred stock.

Federal banking agencies impose three minimum capital requirements—Total risk-based, Tier 1 risk-based and Leverage capital. The risk-based capital ratios measure the adequacy of a bank’s capital against the riskiness of its assets and off-balance sheet activities. Failure to maintain adequate capital is a basis for “prompt corrective action” or other regulatory enforcement action. In assessing a bank’s capital adequacy, regulators also consider other factors such as interest rate risk exposure; liquidity, funding and market risks; quality and level of earnings; concentrations of credit, quality of loans and investments; risks of any nontraditional activities; effectiveness of bank policies; and management’s overall ability to monitor and control risks.

Quantitative measures established by regulation to ensure capital adequacy require DNB to maintain certain minimum amounts and ratios as set forth below. Management believes that DNB and the Bank meet all capital adequacy requirements to which they are subject. The Bank is considered “Well Capitalized” under the regulatory framework for prompt corrective action. To be categorized as Well Capitalized, the Bank must maintain minimum ratios as set forth below. There are no conditions or events since the most recent regulatory notification that management believes would have changed the Bank’s category. Actual capital amounts and ratios are presented in the following table.

								To Be Well
								Capitalized
								Under
								Prompt
					For Capital			Corrective
					Adequacy			Action
		Actual			Purposes			Provisions
(Dollars in thousands)		Amount	Ratio		Amount	Ratio		Amount	Ratio
DNB Financial Corporation
December 31, 2012:
Total risk-based capital	$	71,775	15.88%	$	36,153	8.00%		N/A	N/A
Tier 1 risk-based capital		66,115	14.63		18,076	4.00		N/A	N/A
Tier 1 (leverage) capital		66,115	10.50		25,189	4.00		N/A	N/A
December 31, 2011:
Total risk-based capital	$	66,716	15.57%	$	34,275	8.00%		N/A	N/A
Tier 1 risk-based capital		61,354	14.32		17,138	4.00		N/A	N/A
Tier 1 (leverage) capital		61,354	10.14		24,205	4.00		N/A	N/A
DNB First, N.A.
December 31, 2012:
Total risk-based capital	$	71,737	15.89%	$	36,119	8.00%	$	45,149	10.00%
Tier 1 risk-based capital		66,077	14.64		18,060	4.00		27,090	6.00
Tier 1 (leverage) capital		66,077	10.53		25,110	4.00		31,387	5.00
December 31, 2011:
Total risk-based capital	$	66,692	15.58%	$	34,242	8.00%	$	42,803	10.00%
Tier 1 risk-based capital		61,330	14.33		17,121	4.00		25,682	6.00
Tier 1 (leverage) capital		61,330	10.14		24,188	4.00		30,235	5.00