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| 8-K - FORM 8-K - DIMECO INC | v332727_8k.htm |
NEWS RELEASE
TO BUSINESS EDITOR
DIMECO, INC. ANNOUNCES 2012 FINAL QUARTER EARNINGS
Honesdale, Pennsylvania/ January 22, 2013/ Dimeco, Inc. (OTCBB: DIMC), the holding company for The Dime Bank, released unaudited financial results for the year 2012.
Dimeco, Inc., the “Company”, continued sound, planned growth to end the year with $603,605,000 in total assets, an increase of $21,711,000 or 3.7% over balances one year earlier, with the loan portfolio ending the year at $474,762,000 or 6.2% over balances at December 31, 2011. During 2012 deposits increased $16,301,000 or 3.4% to end the year at $500,585,000. Stockholders’ equity of $59,937,000 at December 31, 2012 represented an increase of 8.8% over a year earlier.
Net income for 2012 was $6,614,000, an increase of $1,278,000 or 24.0% over income reported for the year 2011. The major contributor to this growth was net interest income of $21,725,000, which was $1,955,000 or 9.9% greater than the previous year. At this level of income, the Company reported a return on average assets of 1.10% and a return on average equity of 11.42% for 2012, representing an increase of 14.6% and 13.7%, respectively, over 2011. As a measure of asset quality, the ratio of nonperforming assets to total assets decreased by 14.1% to 3.29% at December 31, 2012, and the allowance to loan loss as a percentage of total loans increased by 3.8% to end 2012 at 1.93%.
Earnings per share for the year ended 2012 were $4.12, an increase of 23.4% over earnings for 2011. Dividends remained solid, amounting to $1.46 per share in 2012, an increase of 1.4% over 2011, producing a dividend yield of 4.03%.
Gary C. Beilman, president and chief executive officer, stated “I am pleased to present our fourth quarter report; 2012 was a year of many positive results beginning with continued growth in assets, loans, and deposits as noted above. Secondly, our significant net income increase of 24% over last year resulted in double digit increases in both our return on average assets and return on average equity ratios. Furthermore, the shareholders equity to assets ratio increased by nearly 5% and book value per share is up 7%. The market value per share has expanded by more than 8% to $36.25. In addition to these highlights, our Board approved an increase in dividends, from $.36 to $.38 per share for the fourth quarter, representing annualized growth of 6% in dividends over that of the previous quarter.
Management is currently taking several steps to improve asset quality; we expect that these efforts will continue for some time before our desired quality goals are achieved.
With our application to the Securities and Exchange Commission to allow the Company to de-register our shares, our intention is to expand upon the information provided in quarterly reports. We are appreciative of continued loyalty and investment in Dimeco and we welcome comments or questions from the community and our shareholders.”
Dimeco, Inc. is the holding company of The Dime Bank, a full service financial institution serving northeastern Pennsylvania and Sullivan County New York. For more information on Dimeco, Inc. and The Dime Bank, visit www.thedimebank.com.
Source: Dimeco, Inc. / January 22, 2013 / Deborah Unflat
| DIMECO, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENT OF INCOME (unaudited) | ||||||||||||||||
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| (in thousands, except per share) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
| Interest Income | ||||||||||||||||
| Interest and fees on loans | $ | 5,951 | $ | 5,754 | $ | 23,616 | $ | 22,435 | ||||||||
| Investment securities: | ||||||||||||||||
| Taxable | 254 | 329 | 1,177 | 1,266 | ||||||||||||
| Exempt from federal income tax | 308 | 311 | 1,252 | 1,209 | ||||||||||||
| Other | 5 | 4 | 12 | 12 | ||||||||||||
| Total interest income | 6,518 | 6,398 | 26,057 | 24,922 | ||||||||||||
| Interest Expense | ||||||||||||||||
| Deposits | 838 | 992 | 3,536 | 4,213 | ||||||||||||
| Short-term borrowings | 16 | 18 | 87 | 108 | ||||||||||||
| Other borrowed funds | 167 | 192 | 709 | 831 | ||||||||||||
| Total interest expense | 1,021 | 1,202 | 4,332 | 5,152 | ||||||||||||
| Net Interest Income | 5,497 | 5,196 | 21,725 | 19,770 | ||||||||||||
| Provision for loan losses | 1,250 | 875 | 3,250 | 2,875 | ||||||||||||
| Net Interest Income After Provision for Loan Losses | 4,247 | 4,321 | 18,475 | 16,895 | ||||||||||||
| Noninterest Income | ||||||||||||||||
| Service charges on deposit accounts | 213 | 234 | 887 | 1,022 | ||||||||||||
| Mortgage loans held for sale gains, net | 264 | 83 | 692 | 306 | ||||||||||||
| Investment securities gains (losses), net | 60 | (2 | ) | 169 | (16 | ) | ||||||||||
| Brokerage commissions | 261 | 226 | 811 | 720 | ||||||||||||
| Earnings on bank-owned life insurance | 110 | 109 | 436 | 432 | ||||||||||||
| Debit card fees | 169 | 157 | 648 | 608 | ||||||||||||
| Other income | 202 | 223 | 831 | 833 | ||||||||||||
| Total noninterest income | 1,279 | 1,030 | 4,474 | 3,905 | ||||||||||||
| Noninterest Expense | ||||||||||||||||
| Salaries and employee benefits | 1,876 | 1,609 | 7,644 | 6,981 | ||||||||||||
| Occupancy expense, net | 296 | 290 | 1,150 | 1,143 | ||||||||||||
| Furniture and equipment expense | 103 | 102 | 404 | 427 | ||||||||||||
| Professional fees | 212 | 181 | 789 | 818 | ||||||||||||
| Data processing expense | 63 | 173 | 552 | 703 | ||||||||||||
| Other expense | 939 | 1,474 | 3,818 | 4,013 | ||||||||||||
| Total noninterest expense | 3,489 | 3,829 | 14,357 | 14,085 | ||||||||||||
| Income before income taxes | 2,037 | 1,522 | 8,592 | 6,715 | ||||||||||||
| Income taxes | 420 | 304 | 1,978 | 1,379 | ||||||||||||
| NET INCOME | $ | 1,617 | $ | 1,218 | $ | 6,614 | $ | 5,336 | ||||||||
| Earnings per Share - basic | $ | 1.00 | $ | 0.76 | $ | 4.12 | $ | 3.34 | ||||||||
| Earnings per Share - diluted | $ | 1.00 | $ | 0.76 | $ | 4.12 | $ | 3.31 | ||||||||
| Average shares outstanding - basic | 1,608,698 | 1,599,646 | 1,602,073 | 1,598,840 | ||||||||||||
| Average shares outstanding - diluted | 1,613,988 | 1,599,903 | 1,604,877 | 1,610,449 | ||||||||||||
DIMECO, INC.
CONSOLIDATED BALANCE SHEET (unaudited)
| (in thousands) | December 31, 2012 | December 31, 2011 | ||||||
| Assets | ||||||||
| Cash and due from banks | $ | 5,722 | $ | 5,348 | ||||
| Interest-bearing deposits in other banks | 2,998 | 4,575 | ||||||
| Total cash and cash equivalents | 8,720 | 9,923 | ||||||
| Mortgage loans held for sale | 1,132 | - | ||||||
| Investment securities available for sale | 90,747 | 95,619 | ||||||
| Loans (net of unearned income of $0 and $3) | 474,762 | 447,254 | ||||||
| Less allowance for loan losses | 9,152 | 8,316 | ||||||
| Net loans | 465,610 | 438,938 | ||||||
| Premises and equipment | 9,675 | 9,997 | ||||||
| Accrued interest receivable | 1,841 | 1,805 | ||||||
| Bank-owned life insurance | 10,427 | 10,060 | ||||||
| Other real estate owned | 2,554 | 3,467 | ||||||
| Other assets | 12,899 | 12,085 | ||||||
| TOTAL ASSETS | $ | 603,605 | $ | 581,894 | ||||
| Liabilities | ||||||||
| Deposits : | ||||||||
| Noninterest-bearing | $ | 51,503 | $ | 52,217 | ||||
| Interest-bearing | 449,082 | 432,067 | ||||||
| Total deposits | 500,585 | 484,284 | ||||||
| Short-term borrowings | 17,813 | 20,686 | ||||||
| Other borrowed funds | 20,597 | 17,618 | ||||||
| Accrued interest payable | 500 | 542 | ||||||
| Other liabilities | 4,173 | 3,664 | ||||||
| TOTAL LIABILITIES | 543,668 | 526,794 | ||||||
| Stockholders' Equity | ||||||||
| Common stock, $.50 par value; 5,000,000 shares authorized; | ||||||||
| 1,656,446 and 1,653,746 shares issued | 828 | 827 | ||||||
| Capital surplus | 6,008 | 6,451 | ||||||
| Retained earnings | 52,426 | 48,193 | ||||||
| Accumulated other comprehensive income | 1,888 | 1,696 | ||||||
| Treasury stock, at cost (29,940 and 54,100 shares) | (1,213 | ) | (2,067 | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY | 59,937 | 55,100 | ||||||
| TOTAL LIABILITES AND STOCKHOLDERS' EQUITY | $ | 603,605 | $ | 581,894 |
DIMECO, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
| (amounts in thousands, except per share) | % Increase | |||||||||||
| 2012 | 2011 | (decrease) | ||||||||||
| Performance for the year ended December 31, | ||||||||||||
| Interest income | $ | 26,057 | $ | 24,922 | 4.6 | % | ||||||
| Interest expense | $ | 4,332 | $ | 5,152 | -15.9 | % | ||||||
| Net interest income | $ | 21,725 | $ | 19,770 | 9.9 | % | ||||||
| Net income | $ | 6,614 | $ | 5,336 | 24.0 | % | ||||||
| Shareholders' Value (per share) | ||||||||||||
| Net income - basic | $ | 4.12 | $ | 3.34 | 23.4 | % | ||||||
| Net income - diluted | $ | 4.12 | $ | 3.31 | 24.5 | % | ||||||
| Dividends | $ | 1.46 | $ | 1.44 | 1.4 | % | ||||||
| Book value | $ | 36.85 | $ | 34.45 | 7.0 | % | ||||||
| Market value | $ | 36.25 | $ | 33.50 | 8.2 | % | ||||||
| Market value/book value ratio | 98.4 | % | 97.2 | % | 1.2 | % | ||||||
| Price/earnings multiple | 8.8 | X | 10.0 | X | -12.0 | % | ||||||
| Dividend yield | 4.03 | % | 4.30 | % | -6.3 | % | ||||||
| Financial Ratios | ||||||||||||
| Return on average assets | 1.10 | % | 0.96 | % | 14.6 | % | ||||||
| Return on average equity | 11.42 | % | 10.04 | % | 13.7 | % | ||||||
| Shareholders' equity/asset ratio | 9.93 | % | 9.47 | % | 4.9 | % | ||||||
| Dividend payout ratio | 35.44 | % | 43.11 | % | -17.8 | % | ||||||
| Nonperforming assets/total assets | 3.29 | % | 3.83 | % | -14.1 | % | ||||||
| Allowance for loan loss as a % of loans | 1.93 | % | 1.86 | % | 3.8 | % | ||||||
| Net charge-offs/average loans | 0.52 | % | 0.53 | % | -1.9 | % | ||||||
| Allowance for loan loss/nonaccrual loans | 58.1 | % | 61.5 | % | -5.5 | % | ||||||
| Allowance for loan loss/non-performing loans | 52.9 | % | 44.3 | % | 19.4 | % | ||||||
| Financial Position at December 31, | ||||||||||||
| Assets | $ | 603,605 | $ | 581,894 | 3.7 | % | ||||||
| Loans | $ | 474,762 | $ | 447,254 | 6.2 | % | ||||||
| Deposits | $ | 500,585 | $ | 484,284 | 3.4 | % | ||||||
| Stockholders' equity | $ | 59,937 | $ | 55,100 | 8.8 | % | ||||||
January 2013
Dear Shareholders:
I am pleased to present this report of Dimeco, Inc. for the fourth quarter and year ended December 31, 2012. In summary, 2012 was a year of many positive results. First, we continued to grow. When compared to 2011, deposits were up over 3% and loans increased by more than 6%. Secondly, and most notably, from a performance perspective, net income was $6.6 million, a significant 24% increase over that of 2011. This increase in net income resulted in our return on average assets ratio of 1.1%, and return on average equity of 11.42%, both of which were double-digit increases from a year earlier. Stockholders’ equity grew to $59.9 million, an increase of almost 9% during 2012. Furthermore, shareholders’ equity to assets increased by nearly 5% and book value per share is up 7%, while the market value per share has expanded by more than 8%. In addition to these highlights, our Board approved an increase in dividends, from $.36 to $.38 per share for the fourth quarter, representing growth of almost 6% in dividends over that of the previous quarter.
All of that information is certainly uplifting. What keeps us grounded is the lingering effects of the national economic slowdown and what that means for a number of our borrowers. Thankfully, when compared to 2011, our nonperforming assets to total assets have decreased by 14%, and prudently we have increased our allowance for loan loss to non-performing loans by 19%. These are positive steps in the effort to improve asset quality; however, we expect that these efforts will continue for some time before our desired levels are achieved.
As we go forward, our intention is to expand upon these quarterly reports, and give you even more detailed information about the performance of your company. We are most appreciative of your investment and your continued loyalty. As always, I welcome any comments or questions you may have.
Sincerely,
/s/ Gary C. Beilman
Gary C. Beilman
President and Chief Executive Officer