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| 8-K - FORM 8-K - DIMECO INC | v237718_8k.htm |
Exhibit 99
NEWS RELEASE
TO BUSINESS EDITOR
DIMECO, INC. REPORTS EARNINGS AT SEPTEMBER 30, 2011
Honesdale, PA, October 20, 2011/ Dimeco, Inc. (Nasdaq “DIMC”), parent company of The Dime Bank, reported earnings for the nine months ended September 30, 2011 of $4,118,000, an increase of 15.6% over the same period in 2010. The main component of improved earnings came from net interest income of $14,574,000, which was 16.2% greater than the first nine months of 2010. Earnings per share were $2.56 on September 30, 2011, an increase of 14.3% over 2010 and dividends declared year-to-date were $1.08 per share. Return on average stockholders’ equity was 10.45% and 9.70% for the first nine months of 2011 and 2010, an increase of 7.7% for 2011. Return on average assets was 1.00% and .87% for the first nine months of 2011 and 2010, an increase of 14.9%, over the previous year.
The Company reported total assets of $569,956,000 at September 30, 2011, an increase of $21,902,000 or 4.0% over balances a year earlier. During that time, the loan portfolio grew $21,753,000 or 5.2% to $443,881,000 and deposits increased $9,001,000 or 2.0% to $468,674,000 at September 30, 2011. The Company reported ratios of net charge offs to average loans of .30% and nonperforming assets to total assets of 3.43% at September 30, 2011, compared to .05% and 2.18%, respectively, at September 30, 2010. With continued stagnation in economic conditions, the Company has experienced an increase in charged off loans and in nonperforming loans. These ratios, along with an increase in the ratio of the allowance for loan loss to total loans at 1.90% at the end of the third quarter, compared to 1.69% a year earlier, show evidence of loan issues being recognized in a prudent manner.
President and Chief Executive Officer Gary C. Beilman stated, “Our performance shows numerous positives including a healthy uptick in shareholders’ equity of 8%, and an increase of almost 4% in the shareholders’ equity to asset ratio. The continuation of our quarterly dividend at $.36 per share produces a yield of 4.24% for our shareholders. With this good news, our focus remains centered in realism. The ongoing economic downturn presents challenges every day including decreased cash flows for some customers creating a strain to meet financial obligations in a timely manner. We continue our pledge to plan, monitor and act with the best interests of all as we find our way through this economy. We thank our shareholders for their continued investment in Dimeco, and the community for their continued patronage.”
The Dime Bank, a wholly owned subsidiary of Dimeco, Inc., serves Wayne and Pike counties in Pennsylvania and Sullivan County, New York. The Bank offers a full array of financial services ranging from traditional products to electronic banking along with a wealth management division. For more information on The Dime Bank, visit www.thedimebank.com.
Source Dimeco, Inc. / October 20, 2011
Contact: Deborah Unflat, Vice President Marketing Officer
DIMECO, INC.
CONSOLIDATED STATEMENT OF INCOME (unaudited)
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For the three months ended September 30,
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(in thousands, except per share)
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2011
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2010
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2011
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2010
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Interest Income
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Interest and fees on loans
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$ | 5,721 | $ | 5,593 | $ | 16,681 | $ | 16,524 | ||||||||
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Investment securities:
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Taxable
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327 | 370 | 937 | 1,042 | ||||||||||||
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Exempt from federal income tax
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305 | 254 | 898 | 768 | ||||||||||||
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Other
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1 | 5 | 8 | 29 | ||||||||||||
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Total interest income
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6,354 | 6,222 | 18,524 | 18,363 | ||||||||||||
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Interest Expense
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Deposits
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1,016 | 1,463 | 3,221 | 4,966 | ||||||||||||
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Short-term borrowings
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29 | 37 | 90 | 113 | ||||||||||||
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Other borrowed funds
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206 | 237 | 639 | 737 | ||||||||||||
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Total interest expense
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1,251 | 1,737 | 3,950 | 5,816 | ||||||||||||
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Net Interest Income
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5,103 | 4,485 | 14,574 | 12,547 | ||||||||||||
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Provision for loan losses
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1,300 | 520 | 2,000 | 1,100 | ||||||||||||
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Net Interest Income After Provision for Loan Losses
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3,803 | 3,965 | 12,574 | 11,447 | ||||||||||||
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Noninterest Income
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Service charges on deposit accounts
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260 | 303 | 788 | 995 | ||||||||||||
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Mortgage loans held for sale gains, net
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75 | 76 | 223 | 171 | ||||||||||||
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Investment securities gains (losses)
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14 | 24 | (14 | ) | 18 | |||||||||||
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Brokerage commissions
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156 | 187 | 494 | 578 | ||||||||||||
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Earnings on bank-owned life insurance
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111 | 108 | 328 | 318 | ||||||||||||
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Debit card usage
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160 | 137 | 451 | 384 | ||||||||||||
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Other income
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156 | 194 | 605 | 631 | ||||||||||||
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Total noninterest income
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932 | 1,029 | 2,875 | 3,095 | ||||||||||||
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Noninterest Expense
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Salaries and employee benefits
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1,752 | 1,653 | 5,372 | 5,047 | ||||||||||||
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Occupancy expense, net
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282 | 265 | 853 | 842 | ||||||||||||
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Furniture and equipment expense
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107 | 119 | 325 | 358 | ||||||||||||
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Professional fees
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144 | 215 | 637 | 568 | ||||||||||||
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Data processing expense
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173 | 172 | 530 | 527 | ||||||||||||
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FDIC insurance
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127 | 204 | 438 | 565 | ||||||||||||
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Other expense
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712 | 620 | 2,101 | 1,800 | ||||||||||||
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Total noninterest expense
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3,297 | 3,248 | 10,256 | 9,707 | ||||||||||||
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Income before income taxes
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1,438 | 1,746 | 5,193 | 4,835 | ||||||||||||
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Income taxes
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256 | 471 | 1,075 | 1,273 | ||||||||||||
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NET INCOME
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$ | 1,182 | $ | 1,275 | $ | 4,118 | $ | 3,562 | ||||||||
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Earnings per Share - basic
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$ | 0.73 | $ | 0.80 | $ | 2.56 | $ | 2.24 | ||||||||
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Earnings per Share - diluted
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$ | 0.73 | $ | 0.80 | $ | 2.56 | $ | 2.24 | ||||||||
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Average shares outstanding - basic
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1,623,718 | 1,597,745 | 1,606,811 | 1,589,955 | ||||||||||||
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Average shares outstanding - diluted
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1,625,183 | 1,599,302 | 1,608,112 | 1,590,703 | ||||||||||||
DIMECO, INC.
CONSOLIDATED BALANCE SHEET (unaudited)
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(in thousands)
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September 30,
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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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$ | 7,762 | $ | 5,756 | ||||
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Interest-bearing deposits in other banks
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2,583 | 12,106 | ||||||
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Total cash and cash equivalents
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10,345 | 17,862 | ||||||
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Mortgage loans held for sale
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- | 170 | ||||||
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Investment securities available for sale
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85,863 | 81,007 | ||||||
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Loans (net of unearned income of $6 and $37)
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443,881 | 422,128 | ||||||
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Less allowance for loan losses
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8,444 | 7,152 | ||||||
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Net loans
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435,437 | 414,976 | ||||||
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Premises and equipment
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10,108 | 10,456 | ||||||
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Accrued interest receivable
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1,978 | 1,857 | ||||||
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Bank-owned life insurance
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9,965 | 9,451 | ||||||
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Other real estate owned
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4,192 | 1,111 | ||||||
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Prepaid FDIC insurance
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1,211 | 1,780 | ||||||
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Other assets
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10,857 | 9,384 | ||||||
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TOTAL ASSETS
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$ | 569,956 | $ | 548,054 | ||||
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Liabilities
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Deposits :
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Noninterest-bearing
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$ | 52,988 | $ | 48,964 | ||||
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Interest-bearing
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415,686 | 410,709 | ||||||
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Total deposits
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468,674 | 459,673 | ||||||
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Short-term borrowings
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24,733 | 13,536 | ||||||
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Other borrowed funds
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18,110 | 20,022 | ||||||
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Accrued interest payable
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510 | 757 | ||||||
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Other liabilities
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3,604 | 3,779 | ||||||
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TOTAL LIABILITIES
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515,631 | 497,767 | ||||||
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Stockholders' Equity
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Common stock, $.50 par value; 5,000,000 shares authorized;
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1,653,746 and 1,652,318 shares issued
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827 | 826 | ||||||
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Capital surplus
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6,347 | 6,184 | ||||||
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Retained earnings
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47,568 | 44,155 | ||||||
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Accumulated other comprehensive income
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1,650 | 1,189 | ||||||
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Treasury stock, at cost (54,100 shares)
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(2,067 | ) | (2,067 | ) | ||||
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TOTAL STOCKHOLDERS' EQUITY
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54,325 | 50,287 | ||||||
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TOTAL LIABILITES AND STOCKHOLDERS' EQUITY
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$ | 569,956 | $ | 548,054 | ||||
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This statement has not been reviewed or confirmed for accuracy or relevance by the FDIC.
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DIMECO, INC.
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 nine months ended September 30,
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Interest income
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$ | 18,524 | $ | 18,363 | 0.9 | % | ||||||||||
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Interest expense
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$ | 3,950 | $ | 5,816 | (32.1 | %) | ||||||||||
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Net interest income
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$ | 14,574 | $ | 12,547 | 16.2 | % | ||||||||||
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Net income
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$ | 4,118 | $ | 3,562 | 15.6 | % | ||||||||||
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Shareholders' Value (per share)
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Net income - basic
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$ | 2.56 | $ | 2.24 | 14.3 | % | ||||||||||
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Net income - diluted
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$ | 2.56 | $ | 2.24 | 14.3 | % | ||||||||||
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Dividends
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$ | 1.08 | $ | 1.08 | - | |||||||||||
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Book value
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$ | 33.96 | $ | 31.46 | 7.9 | % | ||||||||||
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Market value
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$ | 34.00 | $ | 34.90 | (2.6 | %) | ||||||||||
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Market value/book value ratio
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100.1 | % | 110.9 | % | (9.7 | %) | ||||||||||
| * |
Price/earnings multiple
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10.0 | X | 11.7 | X | (14.5 | %) | |||||||||
| * |
Dividend yield
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4.24 | % | 4.13 | % | 2.7 | % | |||||||||
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Financial Ratios
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| * |
Return on average assets
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1.00 | % | 0.87 | % | 14.9 | % | |||||||||
| * |
Return on average equity
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10.45 | % | 9.70 | % | 7.7 | % | |||||||||
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Shareholders' equity/asset ratio
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9.53 | % | 9.18 | % | 3.8 | % | ||||||||||
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Dividend payout ratio
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42.19 | % | 48.21 | % | (12.5 | %) | ||||||||||
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Nonperforming assets/total assets
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3.43 | % | 2.18 | % | 57.3 | % | ||||||||||
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Allowance for loan loss as a % of loans
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1.90 | % | 1.69 | % | 12.4 | % | ||||||||||
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Net charge-offs/average loans
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0.30 | % | 0.05 | % | 500.0 | % | ||||||||||
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Allowance for loan loss/nonaccrual loans
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65.6 | % | 72.5 | % | (9.5 | %) | ||||||||||
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Allowance for loan loss/non-performing loans
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55.1 | % | 66.0 | % | (16.5 | %) | ||||||||||
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Financial Position at September 30,
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Assets
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$ | 569,956 | $ | 548,054 | 4.0 | % | ||||||||||
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Loans, net of unearned
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$ | 443,881 | $ | 422,128 | 5.2 | % | ||||||||||
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Deposits
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$ | 468,674 | $ | 459,673 | 2.0 | % | ||||||||||
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Stockholders' equity
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$ | 54,325 | $ | 50,287 | 8.0 | % | ||||||||||
| * |
annualized
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October 2011
Dear Shareholders:
It is my honor to present this report of Dimeco, Inc. for the third quarter of 2011. As you peruse this report you will see numerous positives. To begin, please note that the growth of your Company continues. When compared to the same period last year, both deposits and loans have increased. Total assets are now almost $570 million, a growth of 4%.
Performance has also increased nicely. Net income, probably the most notable indicator of performance, is up a significant 15.6%. With that comes a healthy uptick in shareholders’ equity of 8%, and an increase of almost of 4% in the shareholders’ equity to asset ratio. Furthermore, the return on average assets of 1.00% is almost 15% greater than a year ago, and the return on average equity, at 10.45%, has grown by almost 8%. With the continuation of dividend payments at the same level as last year, your investment return shows a dividend yield of 4.24%. It is our hope that you find all of this information gratifying.
With that good news as a backdrop, our focus remains centered in realism. While we are optimistic about the long term for our country’s recovery, the ongoing economic downturn in our country presents challenges every day. Two of our area’s primary industries, construction and real estate activities, continue to struggle. This situation has resulted in decreased cash flows for some customers creating a strain to meet their obligations in a timely manner. As we experience this trend with some of our borrowers, and without seeing a national economic turnaround in the immediate future, our reaction is to be as prudent as possible. In accordance with our detailed analysis, the financial results reflect a significant increase in the provision for loan losses expense during the quarter.
As we, together with our customers, find our way through this troubled economy, we continue our pledge to plan, monitor, and act in manners that have your best interests in mind. No matter what the economy, that pledge never waivers. As always, your comments and questions are welcome.
Sincerely,
/s/ Gary C. Beilman
Gary C. Beilman
President and Chief Executive Officer