Investment Analysis


This essay will look at the DNB financial corporation investment analysis. Information on this bank will help us review some important information about investment plans and decisions that an individual might make during his or her investment plans. This is a bank with hundred of branches that serve individuals in the baking industry. The company was founded in late 1860s whereby its main aim was to serve customers within the middle age business entrepreneurs. The company has different types of loan services that enable consumers to work and achieve their business expectations. We shall analyze the investment implications of the bank which will enable us to make a buy, sell or hold recommendation to the company’s management.

Executive summary

In respect to the investment of the firm, it’s wise to buy shares of the company. The reason as to why one should buy or purchase the stock from this company is due to the financial performance of the company from the last three years. The company has managed to be among the top 40 firms due to its developments. Services offered by the company has managed the consumers operate comfortable and also invest in businesses which are profitable. Numerous deposits and loans offered by the firm has enabled it increase its operations and develop wise. In more than 3 years, the company has not worked within the lose circle rather it has been in the profit margin gap, (News center, 2011).

Services offered

DNB financial corporation is among the leading commercial banking corporation. The banking services provide loan and other lending services to individuals and also to groups of people. Although the initial services of the company were to provide services to small business operators, currently the firm does provide banking services to sized businesses as well as to individuals who are in the line of development. Just like any other banking system, this corporation does have all services that a consumer may require in enabling that services are run in a smooth way, (Brussee, 2008).

Deposits and loans

Some of the deposits that the company accepts from the consumers include money accounts, accounts that are owned by people who want to retire, common savings, demand deposits and deposits that does not bear any interest among others. In respect to the loan section, the company has various loan accounts or services that are provided to the consumers. We have the real estate loans; loans that are meant to buy businesses or start new businesses, there are secured commercial loans, loans for working capitals and some of unsecured loans. The firm has advanced in such a way that it provides loans to consumers of household products. Home mortgages are part of loans that the firm provides to individuals who are in need of purchasing homes, (News center, 2011).

Other services

The company has developed in such a way that it has services in managing individuals businesses that is how an individual should use and invest his money services. companies or individuals who operate online services or buy things from online benefit from the online banking services that are offered by the firm. The company has some insurance services that enable business operators operate their business with ease knowing that they are secured. If you want investment management education, the company does provide individuals and firms with advisor services and later provide loans for starting same business they have advised on.

Financial analysis


DNB being the first banking firm in Philadelphia, it has enabled hundreds of investors and small firms enjoy and meet their expectations in their field of operations. The company has developed in so many ways which has made its operations useful and effective and hence become one of the most developing banking industries. On April 22, 2011 after so many years, the company had all reasons to smile simply because it was in a position to record and report an increase in its net income. A 50.37% increase of the net income resulted to 73.33% increase for the entire earnings of the company.

  1. 2010

Net income                                           $1.0million                    $675,000

Earning per share                                  $0.32                           $0.20

Securities and penalties                         $1.0million                    $585,000

In respect to the above information, it’s a clear indication that the firm has grown and developed widely. Investing in this firm is the best and reliable option for an investor simply because the firm has its earnings and profits increasing in a positive and not in a direction.


For the last three years, the firm has shown some sort of development activities whereby it has enabled investors see the worth of investing in the firm. During the last quarter when the firm was announcing its financial results, the company had managed to enter among the 40 best companies of the year. The company has more than $500 million financial assets which enables the company to trade in public and be selected among the best 40 companies. For the company to be selected, it must has no loses reported in respect to net income per share within the last 10 years. If the company has three or more consecutive and successive increase in the way the income per share is developed, (Yahoo! Finance 2011).

According to the chairman and CEO of the company, William, "We are pleased to be among the 40 U.S. banks listed on KBW's honor roll. Further, all of the employees of DNB are proud that their hard work to remain profitable and strong has been recognized. We're seeing the results of our efforts to restructure the balance sheet to better position DNB for core earnings growth. Loan growth has been strong, the net interest margin has increased and non-interest expenses remain under control. We've also benefited from increases in fee-based income."

Income of the company

  1. 2010

Net interest income                               $5.2 million                   $4.4 million

Net interest margin                                3.61%                          2.17%

Non interest income                              $961,000                     $1.6 million

Sale of securities                                   $1000                          $696000


The reason as to why the interest income managed to increase is the fact that the company managed to have a greater level of loans that were used by the consumers. During the year, the company experienced a high level of liabilities which enabled the company to reduce its interest expenses as compared to the previous year. The reason as to why non-interest income reduced during the year was due to the reduction of the sale of securities. The absence of the penalties within the year enables the company to manage its non-interest level which helped the company to develop in the positive aspect and not in a negative direction, (Brussee, 2008).

Expense control of the company

This firm has managed to do it in the firm simply because of the control management which has become the tradition of the organization. Hieb W. the credit officer said, "Expense control remains a top priority for management, but as we move forward we won't stop investing in people who can drive revenue growth and on infrastructure improvements that increase productivity and efficiency."

  1. 2010

Loans                                       3.36%                          2.36%

Total assets                              1.27%                          0.87%

Deposits                                   $507.2                         $492.7

Core deposits                           1.55%                          0.93%



The firm has developed in a steady speed whereby it has enabled its market segment to be wide and ever growing. The author of our work has used several factors which have enabled the company’s information to be analyzed in the right manner. Having analyzed the investment implications of the firm, it’s clear that its wise make a buy of stock simply the company has the ability and is currently moving into a positive direction which brings profits to investors.


Brussee, W. (2008). Getting Started in Investment Analysis: John Wiley and Sons

Hoovers (2011). DNB Financial Corporation. Retrieved from,   ,             on April 24, 2011

News center (2011). DNB Financial Corporation Announces 2011 First Quarter Earnings,       Retrieved from,            news/article.aspx?feed=PZ&Date=20110423&ID=13368405, on April 24, 2011

Yahoo! Finance (2011). DNB Financial Corp. (DNBF). Retrieved from,, on April 24, 2011



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