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| 8-K - DIMECO INC | v219579_8-k.htm |
Exhibit 99
NEWS RELEASE
TO BUSINESS EDITOR
DIMECO, INC. ANNOUNCES 2011 FIRST QUARTER EARNINGS
Honesdale, PA, April 22, 2011/ Dimeco, Inc. (Nasdaq DIMC), parent company of The Dime Bank, reported first quarter 2011 earnings of $1,270,000, an increase of 15.2% over $1,102,000 reported for the first quarter 2010. A key component of this increase was net interest income, which increased 17.4% in the first quarter of 2011 as compared to that quarter in 2010. As a result, earnings per share were $.79 for the first quarter 2011, representing an increase of 12.9% over the same quarter 2010. This level of net income provided a return on average stockholders’ equity of 9.93%, and a return on average assets of .94%, for the first quarter of 2011, an increase of 7.8% and 14.6%, respectively, over the first quarter 2010. Payment of a $.36 per share cash dividend produced a yield of 3.74%.
The Company ended the first quarter 2011 with total assets of $543,331,000, a decrease of 1.8% from the first quarter 2010. This slight decline was part of the strategic effort to increase net interest income. Loans increased $14,798,000 to $422,468,000, a growth of 3.6% over prior year. Deposits ended the quarter at $450,567,000, a slight decrease of 1.5% from March 31, 2010 while stockholders’ equity increased 6.4% to $51,492,000 at March 31, 2011.
Gary C. Beilman, President and Chief Executive Officer, commented “I am happy to say that Dimeco has started the year on several positive notes. Through numerous interest rate repricings on both sides of the balance sheet and our ongoing cost containment efforts, net income is up significantly from last year, along with many of our financial ratios. This is not to say, however, that the continuing economic situation is without its consequences. Non-accrual loans continue to be at a higher level than a year earlier. Restricted cash flows have made it increasingly difficult for certain borrowers to maintain timely payment schedules, adding to nonperforming assets. Our commitment is to continue our efforts to work with all customers, with our primary goal to maintain a strong financial position, while being as fair as possible in dealing with troubled customers.”
The Dime Bank, a wholly owned subsidiary of Dimeco, Inc., serves Wayne and Pike counties in Pennsylvania and Sullivan County, New York. The Bank offers a full array of financial services ranging from traditional products to electronic banking and wealth management services. For more information on The Dime Bank, visit www.thedimebank.com.
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DIMECO, INC.
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CONSOLIDATED STATEMENT OF INCOME (unaudited)
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(in thousands, except per share)
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For the three months ended March 31,
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2011
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2010
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Interest Income
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Interest and fees on loans
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$ | 5,445 | $ | 5,481 | ||||
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Investment securities:
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Taxable
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290 | 296 | ||||||
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Exempt from federal income tax
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290 | 256 | ||||||
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Other
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15 | 12 | ||||||
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Total interest income
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6,040 | 6,045 | ||||||
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Interest Expense
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Deposits
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1,139 | 1,796 | ||||||
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Short-term borrowings
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23 | 25 | ||||||
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Other borrowed funds
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219 | 257 | ||||||
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Total interest expense
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1,381 | 2,078 | ||||||
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Net Interest Income
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4,659 | 3,967 | ||||||
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Provision for loan losses
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425 | 250 | ||||||
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Net Interest Income After Provision for Loan Losses
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4,234 | 3,717 | ||||||
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Noninterest Income
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Service charges on deposit accounts
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271 | 343 | ||||||
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Mortgage loans held for sale gains, net
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82 | 50 | ||||||
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Investment securities losses
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(2 | ) | - | |||||
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Brokerage commissions
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181 | 138 | ||||||
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Earnings on bank-owned life insurance
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108 | 106 | ||||||
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Other income
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303 | 324 | ||||||
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Total noninterest income
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943 | 961 | ||||||
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Noninterest Expense
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Salaries and employee benefits
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1,777 | 1,674 | ||||||
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Occupancy expense, net
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306 | 305 | ||||||
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Furniture and equipment expense
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105 | 118 | ||||||
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Professional fees
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310 | 152 | ||||||
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Data processing expense
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179 | 187 | ||||||
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FDIC insurance
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189 | 177 | ||||||
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Other expense
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731 | 587 | ||||||
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Total noninterest expense
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3,597 | 3,200 | ||||||
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Income before income taxes
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1,580 | 1,478 | ||||||
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Income taxes
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310 | 376 | ||||||
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NET INCOME
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$ | 1,270 | $ | 1,102 | ||||
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Earnings per Share - basic
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$ | 0.79 | $ | 0.70 | ||||
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Earnings per Share - diluted
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$ | 0.79 | $ | 0.70 | ||||
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Average shares outstanding - basic
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1,598,218 | 1,575,103 | ||||||
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Average shares outstanding - diluted
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1,600,252 | 1,575,150 | ||||||
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DIMECO, INC.
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CONSOLIDATED BALANCE SHEET (unaudited)
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(in thousands)
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March 31,
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2011
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2010
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Assets
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Cash and due from banks
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$ | 4,680 | $ | 4,839 | ||||
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Interest-bearing deposits in other banks
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2,660 | 14,635 | ||||||
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Federal funds sold
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- | 3,000 | ||||||
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Total cash and cash equivalents
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7,340 | 22,474 | ||||||
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Mortgage loans held for sale
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92 | - | ||||||
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Investment securities available for sale
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82,977 | 95,369 | ||||||
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Loans (net of unearned income of $16 and $74)
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422,468 | 407,670 | ||||||
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Less allowance for loan losses
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7,115 | 6,467 | ||||||
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Net loans
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415,353 | 401,203 | ||||||
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Premises and equipment
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10,403 | 10,781 | ||||||
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Accrued interest receivable
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1,940 | 1,806 | ||||||
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Bank-owned life insurance
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9,778 | 9,267 | ||||||
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Other real estate owned
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3,995 | 1,073 | ||||||
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Prepaid FDIC insurance
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1,438 | 2,144 | ||||||
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Other assets
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10,015 | 9,129 | ||||||
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TOTAL ASSETS
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$ | 543,331 | $ | 553,246 | ||||
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Liabilities
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Deposits :
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Noninterest-bearing
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50,126 | 43,458 | ||||||
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Interest-bearing
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400,441 | 413,904 | ||||||
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Total deposits
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450,567 | 457,362 | ||||||
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Short-term borrowings
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17,908 | 17,584 | ||||||
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Other borrowed funds
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19,077 | 21,947 | ||||||
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Accrued interest payable
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698 | 1,031 | ||||||
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Other liabilities
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3,589 | 6,910 | ||||||
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TOTAL LIABILITIES
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491,839 | 504,834 | ||||||
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Stockholders' Equity
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Common stock, $.50 par value; 5,000,000 shares authorized;
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1,652,318 and 1,650,868 shares issued
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826 | 825 | ||||||
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Capital surplus
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6,273 | 6,134 | ||||||
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Retained earnings
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45,872 | 42,845 | ||||||
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Accumulated other comprehensive income
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588 | 675 | ||||||
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Treasury stock, at cost (54,100 shares)
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(2,067 | ) | (2,067 | ) | ||||
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TOTAL STOCKHOLDERS' EQUITY
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51,492 | 48,412 | ||||||
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TOTAL LIABILITES AND STOCKHOLDERS' EQUITY
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$ | 543,331 | $ | 553,246 | ||||
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This statement has not been reviewed or confirmed for accuracy or relevance by the FDIC.
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| CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) | ||||||||||||||||
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(amounts in thousands, except per share)
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% Increase
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2011
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2010
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(decrease)
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Performance for the three months ended March 31,
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Interest income
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$ | 6,040 | $ | 6,045 | -0.1 | % | ||||||||||
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Interest expense
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$ | 1,381 | $ | 2,078 | -33.5 | % | ||||||||||
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Net interest income
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$ | 4,659 | $ | 3,967 | 17.4 | % | ||||||||||
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Net income
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$ | 1,270 | $ | 1,102 | 15.2 | % | ||||||||||
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Shareholders' Value (per share)
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Net income - basic
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$ | 0.79 | $ | 0.70 | 12.9 | % | ||||||||||
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Net income - diluted
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$ | 0.79 | $ | 0.70 | 12.9 | % | ||||||||||
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Dividends
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$ | 0.36 | $ | 0.36 | 0.0 | % | ||||||||||
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Book value
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$ | 32.22 | $ | 30.32 | 6.3 | % | ||||||||||
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Market value
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$ | 38.50 | $ | 34.40 | 11.9 | % | ||||||||||
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Market value/book value ratio
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119.5 | % | 113.5 | % | 5.3 | % | ||||||||||
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Price/earnings multiple
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12.2 | X | 12.3 | X | -0.8 | % | |||||||||
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Dividend yield
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3.74 | % | 4.19 | % | -10.7 | % | |||||||||
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Financial Ratios
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Return on average assets
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0.94 | % | 0.82 | % | 14.6 | % | |||||||||
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Return on average equity
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9.93 | % | 9.21 | % | 7.8 | % | |||||||||
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Shareholders' equity/asset ratio
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9.48 | % | 8.75 | % | 8.3 | % | ||||||||||
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Dividend payout ratio
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45.57 | % | 51.43 | % | -11.4 | % | ||||||||||
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Nonperforming assets/total assets
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3.20 | % | 1.82 | % | 75.8 | % | ||||||||||
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Allowance for loan loss as a % of loans
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1.68 | % | 1.59 | % | 5.7 | % | ||||||||||
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Net charge-offs/average loans
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0.25 | % | 0.01 | % | 2,400.0 | % | ||||||||||
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Allowance for loan loss/nonaccrual loans
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56.75 | % | 83.98 | % | -32.4 | % | ||||||||||
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Allowance for loan loss/non-performing loans
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53.31 | % | 72.30 | % | -26.3 | % | ||||||||||
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Financial Position at March 31,
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Assets
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$ | 543,331 | $ | 553,246 | -1.8 | % | ||||||||||
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Loans
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$ | 422,468 | $ | 407,670 | 3.6 | % | ||||||||||
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Deposits
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$ | 450,567 | $ | 457,362 | -1.5 | % | ||||||||||
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Stockholders' equity
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$ | 51,492 | $ | 48,412 | 6.4 | % | ||||||||||
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*
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annualized
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April 2011
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Dear Shareholders:
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It is with pleasure that I present this report of Dimeco, Inc. for the first quarter of 2011. I am happy to say that your Company has started the year on several positive notes. Through numerous interest rate repricings on both sides of the balance sheet and our ongoing cost containment efforts, net income for this quarter is up a significant 15% over that from last year. Profitability of this magnitude has, in turn, greatly increased our return on average assets and return on average equity ratios. Of special note to you, our shareholders, is that stockholders’ equity has grown by more than 6%, and our shareholders’ equity to asset ratio has expanded by over 8%. All of this news, coupled with a dividend yield of 3.74%, is exciting information to share.
That is not to say, however, that the continuing economic situation is without its consequences. We completed foreclosure on a commercial real estate property, adding $3 million to other real estate owned and charging off $746 thousand which was included in a specific reserve for that loan. Two commercial real estate properties comprise the majority of the balance of other real estate owned, one is under agreement of sale with the closing expected to take place during the second quarter and we are aggressively marketing the commercial property which was added in the first quarter. Non-accrual loans continue to be at a higher level than a year earlier, adding to the deterioration of credit quality ratios. Restricted cash flows have made it increasingly difficult for certain borrowers to maintain timely payment schedules, adding to nonperforming assets. As noted in recent quarterly reports, we have greatly enhanced our loan monitoring and collection activities. We remain prudent and cautious during these uncertain economic times.
Our commitment is to continue our efforts to work with all customers, with our primary goal to produce the best possible results for you, our shareholders, while being as fair as possible in dealing with troubled customers. We ask that you continue to recommend us for banking and wealth management services, as well as for investment in Dimeco, Inc. stock. As always, your comments and questions are welcome.
Sincerely,
/s/ Gary C. Beilman
Gary C. Beilman
President and Chief Executive Officer