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| 8-K - FORM 8-K - DIMECO INC | v319187_8k.htm |
NEWS RELEASE
TO BUSINESS EDITOR
DIMECO, INC. ANNOUNCES JUNE 30, 2012 EARNINGS
Honesdale, PA, July 20, 2012/ Dimeco, Inc. (Nasdaq DIMC), parent company of The Dime Bank, reported year-to-date net income for 2012 of $3,250,000, or 10.7% greater than income earned for the first half of 2011. This level of net income provided a return on average assets of 1.11% and a return on average shareholders’ equity of 11.50% for the first six months of 2012. Earnings per share were $2.03 for the six months ended June 30, 2012, representing an increase of 10.3% over the same period in 2011. Dimeco’s board of directors declared dividends totaling $.72 per share for the first half of 2012 which produced a dividend yield of 3.83% at the market price of $37.60 per share at June 30, 2012.
Asset quality improved with the ratio of net charge-offs to average loans showing a decline of 57.7% to reach .11% at June 30, 2012 while the level of nonperforming assets to total assets of 3.16% represented a decline of 17.5% from a year earlier.
Total assets were $608,543,000 at June 30, 2012, an increase of 8.6% or $48,047,000 from one year earlier. During that period loans expanded by $32,550,000 or 7.5% while total deposits increased $46,568,000 or 10.3%. Included in the deposit growth, balances of noninterest-bearing deposits rose $3,663,000 or 6.8% while balances of interest-bearing deposits increased $42,905,000 or 10.8%. Shareholders’ equity of $57,476,000 at June 30, 2012 represented growth of 8.1% over balances a year earlier. At the current level, the ratio of stockholders’ equity to assets is 9.44%.
Gary C. Beilman, president and chief executive officer of The Dime Bank, reported, “Our second quarter 2012 numbers show positive performance when compared to the same period last year. Through numerous ongoing efforts, we have increased interest income and decreased interest expense, all while maintaining our competitiveness. One primary driver of this enhanced performance is our growth. Progress like this just doesn’t happen, especially in this sluggish economy. Every day each member of our staff strives to prove that our financial institution is a special place for all customers. This is demonstrated by expanded existing relationships and the continuing origination of new ones. Our focus has not only been on growth, however. We continue to vigorously address asset quality issues, most of which have been caused by the lingering economic downturn. In assessing quality in the loan portfolio, we have taken further prudent action by increasing the allowance for loan loss as a percent of loans by over 15% since June 2011. Our quest as we go forward is continued success, profitability, and growth, while improving asset quality.”
The Dime Bank, a wholly owned subsidiary of Dimeco, Inc., has been helping customers meet their financial needs since 1905. Serving its primary market of Northeastern 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 and Dimeco, Inc., visit www.thedimebank.com.
Source: Dimeco, Inc. / Contact: Deborah L. Unflat
DIMECO, INC.
CONSOLIDATED STATEMENT OF INCOME (unaudited)
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| (in thousands, except per share) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
| Interest Income | ||||||||||||||||
| Interest and fees on loans | $ | 5,865 | $ | 5,515 | $ | 11,562 | $ | 10,960 | ||||||||
| Investment securities: | ||||||||||||||||
| Taxable | 320 | 320 | 644 | 610 | ||||||||||||
| Exempt from federal income tax | 314 | 303 | 629 | 593 | ||||||||||||
| Other | 3 | 3 | 5 | 7 | ||||||||||||
| Total interest income | 6,502 | 6,141 | 12,840 | 12,170 | ||||||||||||
| Interest Expense | ||||||||||||||||
| Deposits | 904 | 1,066 | 1,837 | 2,205 | ||||||||||||
| Short-term borrowings | 31 | 38 | 50 | 61 | ||||||||||||
| Other borrowed funds | 180 | 214 | 366 | 433 | ||||||||||||
| Total interest expense | 1,115 | 1,318 | 2,253 | 2,699 | ||||||||||||
| Net Interest Income | 5,387 | 4,823 | 10,587 | 9,471 | ||||||||||||
| Provision for loan losses | 700 | 275 | 1,350 | 700 | ||||||||||||
| Net Interest Income After Provision for Loan Losses | 4,687 | 4,548 | 9,237 | 8,771 | ||||||||||||
| Noninterest Income | ||||||||||||||||
| Service charges on deposit accounts | 221 | 257 | 456 | 528 | ||||||||||||
| Mortgage loans held for sale gains, net | 185 | 66 | 324 | 148 | ||||||||||||
| Investment securities gains (losses) | 40 | (26 | ) | 109 | (28 | ) | ||||||||||
| Brokerage commissions | 183 | 157 | 330 | 338 | ||||||||||||
| Earnings on bank-owned life insurance | 109 | 107 | 216 | 213 | ||||||||||||
| Debit card fees | 161 | 154 | 310 | 291 | ||||||||||||
| Other income | 214 | 274 | 385 | 453 | ||||||||||||
| Total noninterest income | 1,113 | 989 | 2,130 | 1,943 | ||||||||||||
| Noninterest Expense | ||||||||||||||||
| Salaries and employee benefits | 1,899 | 1,843 | 3,826 | 3,620 | ||||||||||||
| Occupancy expense, net | 279 | 265 | 577 | 571 | ||||||||||||
| Furniture and equipment expense | 109 | 113 | 200 | 218 | ||||||||||||
| Professional fees | 231 | 183 | 396 | 493 | ||||||||||||
| Data processing expense | 163 | 178 | 326 | 357 | ||||||||||||
| Other expense | 919 | 780 | 1,827 | 1,700 | ||||||||||||
| Total noninterest expense | 3,600 | 3,362 | 7,152 | 6,959 | ||||||||||||
| Income before income taxes | 2,200 | 2,175 | 4,215 | 3,755 | ||||||||||||
| Income taxes | 519 | 509 | 965 | 819 | ||||||||||||
| NET INCOME | $ | 1,681 | $ | 1,666 | $ | 3,250 | $ | 2,936 | ||||||||
| Earnings per Share - basic | $ | 1.05 | $ | 1.04 | $ | 2.03 | $ | 1.84 | ||||||||
| Earnings per Share - diluted | $ | 1.05 | $ | 1.04 | $ | 2.03 | $ | 1.84 | ||||||||
| Average shares outstanding - basic | 1,599,646 | 1,598,218 | 1,599,646 | 1,598,218 | ||||||||||||
| Average shares outstanding - diluted | 1,601,680 | 1,599,205 | 1,600,362 | 1,599,739 | ||||||||||||
DIMECO, INC.
CONSOLIDATED BALANCE SHEET (unaudited)
| (in thousands) | ||||||||
| June 30, | 2012 | 2011 | ||||||
| Assets | ||||||||
| Cash and due from banks | $ | 6,097 | $ | 7,240 | ||||
| Interest-bearing deposits in other banks | 1,451 | 2,157 | ||||||
| Total cash and cash equivalents | 7,548 | 9,397 | ||||||
| Mortgage loans held for sale | - | 80 | ||||||
| Investment securities available for sale | 106,541 | 87,272 | ||||||
| Loans (net of unearned income of $1 and $10) | 465,511 | 432,961 | ||||||
| Less allowance for loan losses | 9,144 | 7,343 | ||||||
| Net loans | 456,367 | 425,618 | ||||||
| Premises and equipment | 9,864 | 10,239 | ||||||
| Accrued interest receivable | 1,868 | 1,927 | ||||||
| Bank-owned life insurance | 10,241 | 9,871 | ||||||
| Other real estate owned | 3,264 | 4,192 | ||||||
| Other assets | 12,850 | 11,900 | ||||||
| TOTAL ASSETS | $ | 608,543 | $ | 560,496 | ||||
| Liabilities | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing | $ | 57,610 | $ | 53,947 | ||||
| Interest-bearing | 440,653 | 397,748 | ||||||
| Total deposits | 498,263 | 451,695 | ||||||
| Short-term borrowings | 31,587 | 33,157 | ||||||
| Other borrowed funds | 16,619 | 18,596 | ||||||
| Accrued interest payable | 529 | 614 | ||||||
| Other liabilities | 4,069 | 3,270 | ||||||
| TOTAL LIABILITIES | 551,067 | 507,332 | ||||||
| Stockholders' Equity | ||||||||
| Common stock, $.50 par value; 5,000,000 shares authorized; | ||||||||
| 1,653,746 and 1,652,318 shares issued | 827 | 826 | ||||||
| Capital surplus | 6,604 | 6,273 | ||||||
| Retained earnings | 50,274 | 46,962 | ||||||
| Accumulated other comprehensive income | 1,838 | 1,170 | ||||||
| Treasury stock, at cost (54,100 shares) | (2,067 | ) | (2,067 | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY | 57,476 | 53,164 | ||||||
| TOTAL LIABILITES AND STOCKHOLDERS' EQUITY | $ | 608,543 | $ | 560,496 | ||||
This statement has not been reviewed or confirmed for accuracy or relevance by the FDIC.
DIMECO, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
| (amounts in thousands, except per share) | % Increase | |||||||||||||||
| 2012 | 2011 | (decrease) | ||||||||||||||
| Performance for the six months ended June 30, | ||||||||||||||||
| Interest income | $ | 12,840 | $ | 12,170 | 5.5 | % | ||||||||||
| Interest expense | $ | 2,253 | $ | 2,699 | -16.5 | % | ||||||||||
| Net interest income | $ | 10,587 | $ | 9,471 | 11.8 | % | ||||||||||
| Net income | $ | 3,250 | $ | 2,936 | 10.7 | % | ||||||||||
| Shareholders' Value (per share) | ||||||||||||||||
| Net income - basic | $ | 2.03 | $ | 1.84 | 10.3 | % | ||||||||||
| Net income - diluted | $ | 2.03 | $ | 1.84 | 10.3 | % | ||||||||||
| Dividends | $ | 0.72 | $ | 0.72 | - | |||||||||||
| Book value | $ | 35.93 | $ | 33.26 | 8.0 | % | ||||||||||
| Market value | $ | 37.60 | $ | 35.00 | 7.4 | % | ||||||||||
| Market value/book value ratio | 104.6 | % | 105.2 | % | -0.6 | % | ||||||||||
| * | Price/earnings multiple | 9.3 | X | 9.5 | X | -2.1 | % | |||||||||
| * | Dividend yield | 3.83 | % | 4.11 | % | -6.8 | % | |||||||||
| Financial Ratios | ||||||||||||||||
| * | Return on average assets | 1.11 | % | 1.08 | % | 2.8 | % | |||||||||
| * | Return on average equity | 11.50 | % | 11.35 | % | 1.3 | % | |||||||||
| Shareholders' equity/asset ratio | 9.44 | % | 9.49 | % | -0.5 | % | ||||||||||
| Dividend payout ratio | 35.47 | % | 39.13 | % | -9.4 | % | ||||||||||
| Nonperforming assets/total assets | 3.16 | % | 3.83 | % | -17.5 | % | ||||||||||
| Allowance for loan loss as a % of loans | 1.96 | % | 1.70 | % | 15.3 | % | ||||||||||
| Net charge-offs/average loans | 0.11 | % | 0.26 | % | -57.7 | % | ||||||||||
| Allowance for loan loss/nonaccrual loans | 59.6 | % | 58.0 | % | 2.8 | % | ||||||||||
| Allowance for loan loss/non-performing loans | 57.2 | % | 42.6 | % | 34.3 | % | ||||||||||
| Financial Position at June 30, | ||||||||||||||||
| Assets | $ | 608,543 | $ | 560,496 | 8.6 | % | ||||||||||
| Loans, net of unearned | $ | 465,511 | $ | 432,961 | 7.5 | % | ||||||||||
| Deposits | $ | 498,263 | $ | 451,695 | 10.3 | % | ||||||||||
| Stockholders' equity | $ | 57,476 | $ | 53,164 | 8.1 | % | ||||||||||
| * | annualized | |||||||||||||||
July 2012
Dear Shareholders:
It is with pleasure that I present this report of Dimeco, Inc. for the second quarter of 2012. Our numbers show positive performance when compared to the same period last year. Through numerous ongoing efforts, we have increased interest income and decreased interest expense, all while maintaining our competitiveness. The results of our actions showed an increase in net income of 10.7%. Our year to date return on average assets is 1.11% and on average equity is 11.5% , with both ratios showing improvement over both the first half of 2011 and the first quarter of 2012.
One primary driver of this enhanced performance is our growth. For the six months ended June 30th, deposits are up over 10%, loans have grown by more than 7%, and total assets have increased by almost 9%, as compared to 2011. Progress like this just doesn’t happen, especially in this sluggish economy. Every day each member of our staff strives to prove that our financial institution is a special place for all customers. This is demonstrated by expanded existing relationships and the continuing origination of new ones.
Our focus has not only been on growth, however. We continue to vigorously address asset quality issues, most of which have been caused by the lingering economic downturn. Net charge offs are down, as are non-performing assets compared to total assets. Additionally, loan delinquencies are down from the same period last year. In assessing quality in the loan portfolio, we have taken further prudent action by increasing the allowance for loan loss as a percent of loans by over 15% since June 2011. Although there is more work to be accomplished in this area, these are certainly significant strides in the right direction.
Overall, we are happy with the results to date. Our quest as we go forward is continued success, profitability, and growth, while improving asset quality.
We thank you for your investment and loyalty. We ask that you continue to recommend us for banking and wealth management services, as well as for investment in Dimeco, Inc. stock. Your comments and questions are always welcome.
Sincerely,
/s/ Gary C. Beilman
Gary C. Beilman
President and Chief Executive Officer