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| 8-K - FORM 8-K - DIMECO INC | v229251_8k.htm |
Exhibit 99
NEWS RELEASE
TO BUSINESS EDITOR
DIMECO, INC. ANNOUNCES SECOND QUARTER 2011 EARNINGS
Honesdale, PA, July 20, 2011/ Dimeco, Inc. (Nasdaq DIMC), parent company of The Dime Bank, reported 2011 second quarter earnings of $1,666,000, an increase of $481,000 or 40.6% over the same quarter of the previous year. The primary component of additional earnings was a reduction in interest expense of $683,000 or 34.1% in the second quarter of 2011 as compared to the same period of 2010. Earnings per share were $1.04 for the three months ended June 30, 2011, representing an increase of 40.5% over the same period in 2010.
Year to date net income for 2011 was $2,936,000, 28.4% greater than the income earned for the first half of 2010. This level of net income provided a return on average assets of 1.08% and a return on average shareholders’ equity of 11.35% for the first six months of 2011, an increase of 30.1% and 20.2%, respectively, over earnings for the first half of 2010. Dimeco’s Board of Directors declared dividends totaling $.72 per share for the first half of 2011, producing a dividend yield of 4.11% at the market price of $35.00 per share at June 30, 2011.
Total assets were $560,496,000 at June 30, 2011, a slight increase from one year earlier. During the period loans expanded by $25,171,000 or 6.2%, over balances of a year earlier. Total deposits at June 30, 2011 were $451,695,000, a decline of $11,112,000 or 2.4% from balances at June 30, 2010. Balances of noninterest-bearing deposits increased $6,468,000 or 13.6% while balances of interest-bearing deposits decreased due to the maturity of higher costing certificates of deposit during the year. Shareholders’ equity also grew by 7.9% to $53,164,000 at June 30, 2011, resulting in a 9.49% ratio of stockholders’ equity to assets.
Gary C. Beilman, president and chief executive officer of The Dime Bank, reported, “Once again our financial performance has received national recognition. In the June 2011 edition of “US Banker” magazine, Dimeco, Inc. has been listed in the top 200 community banks in our country based on a three-year return on average equity. This distinction marks the fifth straight year of our inclusion in this list. Despite this encouraging news, we will not become complacent. Attention to our loan portfolio is an on-going process and our efforts are directed toward success and building an even stronger institution.”
The Dime Bank, a wholly owned subsidiary of Dimeco, Inc., serves Wayne County and Pike County in Pennsylvania and Sullivan County in New York. The Bank offers a full array of financial services ranging from traditional products to electronic banking and wealth management services. For more information on The Dime Bank, visit www.thedimebank.com.
Source: Dimeco, Inc. / Contact: Deborah L. Unflat
DIMECO, INC.
CONSOLIDATED STATEMENT OF INCOME (unaudited)
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For the three months ended June 30,
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For the three months ended June 30,
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(in thousands, except per share)
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2011
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2010
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2011
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2010
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||||||||||||
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Interest Income
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||||||||||||||||
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Interest and fees on loans
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$ | 5,515 | $ | 5,450 | $ | 10,960 | $ | 10,931 | ||||||||
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Investment securities:
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||||||||||||||||
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Taxable
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320 | 376 | 610 | 672 | ||||||||||||
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Exempt from federal income tax
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303 | 258 | 593 | 514 | ||||||||||||
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Other
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14 | 24 | 29 | 36 | ||||||||||||
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Total interest income
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6,152 | 6,108 | 12,192 | 12,153 | ||||||||||||
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Interest Expense
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||||||||||||||||
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Deposits
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1,066 | 1,707 | 2,205 | 3,503 | ||||||||||||
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Short-term borrowings
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38 | 51 | 61 | 76 | ||||||||||||
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Other borrowed funds
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214 | 243 | 433 | 500 | ||||||||||||
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Total interest expense
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1,318 | 2,001 | 2,699 | 4,079 | ||||||||||||
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Net Interest Income
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4,834 | 4,107 | 9,493 | 8,074 | ||||||||||||
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Provision for loan losses
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275 | 330 | 700 | 580 | ||||||||||||
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Net Interest Income After Provision for Loan Losses
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4,559 | 3,777 | 8,793 | 7,494 | ||||||||||||
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Noninterest Income
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||||||||||||||||
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Service charges on deposit accounts
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257 | 349 | 528 | 692 | ||||||||||||
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Mortgage loans held for sale gains, net
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66 | 45 | 148 | 95 | ||||||||||||
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Investment securities losses
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(26 | ) | (6 | ) | (28 | ) | (6 | ) | ||||||||
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Brokerage commissions
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157 | 253 | 338 | 391 | ||||||||||||
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Earnings on bank-owned life insurance
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109 | 104 | 217 | 210 | ||||||||||||
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Other income
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415 | 348 | 718 | 672 | ||||||||||||
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Total noninterest income
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978 | 1,093 | 1,921 | 2,054 | ||||||||||||
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Noninterest Expense
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||||||||||||||||
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Salaries and employee benefits
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1,843 | 1,720 | 3,620 | 3,394 | ||||||||||||
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Occupancy expense, net
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265 | 272 | 571 | 577 | ||||||||||||
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Furniture and equipment expense
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113 | 121 | 218 | 239 | ||||||||||||
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Professional fees
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183 | 201 | 493 | 353 | ||||||||||||
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Data processing expense
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178 | 168 | 357 | 355 | ||||||||||||
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FDIC insurance
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122 | 184 | 311 | 361 | ||||||||||||
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Other expense
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658 | 593 | 1,389 | 1,180 | ||||||||||||
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Total noninterest expense
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3,362 | 3,259 | 6,959 | 6,459 | ||||||||||||
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Income before income taxes
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2,175 | 1,611 | 3,755 | 3,089 | ||||||||||||
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Income taxes
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509 | 426 | 819 | 802 | ||||||||||||
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NET INCOME
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$ | 1,666 | $ | 1,185 | $ | 2,936 | $ | 2,287 | ||||||||
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Earnings per Share - basic
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$ | 1.04 | $ | .74 | $ | 1.84 | $ | 1.44 | ||||||||
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Earnings per Share - diluted
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$ | 1.04 | $ | .74 | $ | 1.84 | $ | 1.44 | ||||||||
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Average shares outstanding - basic
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1,598,218 | 1,596,768 | 1,598,218 | 1,585,996 | ||||||||||||
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Average shares outstanding - diluted
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1,599,205 | 1,598,818 | 1,599,739 | 1,586,468 | ||||||||||||
DIMECO, INC.
CONSOLIDATED BALANCE SHEET (unaudited)
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(in thousands)
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June 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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$ | 7,240 | $ | 6,519 | ||||
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Interest-bearing deposits in other banks
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2,157 | 14,785 | ||||||
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Total cash and cash equivalents
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9,397 | 21,304 | ||||||
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Mortgage loans held for sale
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80 | - | ||||||
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Investment securities available for sale
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87,272 | 103,851 | ||||||
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Loans (net of unearned income of $10 and $53)
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432,961 | 407,790 | ||||||
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Less allowance for loan losses
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7,343 | 6,635 | ||||||
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Net loans
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425,618 | 401,155 | ||||||
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Premises and equipment
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10,239 | 10,637 | ||||||
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Accrued interest receivable
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1,927 | 1,909 | ||||||
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Bank-owned life insurance
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9,871 | 9,359 | ||||||
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Other real estate owned
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4,192 | 1,111 | ||||||
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Prepaid FDIC insurance
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1,313 | 1,972 | ||||||
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Other assets
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10,587 | 8,963 | ||||||
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TOTAL ASSETS
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$ | 560,496 | $ | 560,261 | ||||
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Liabilities
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Deposits:
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Noninterest-bearing
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$ | 53,947 | $ | 47,479 | ||||
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Interest-bearing
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397,748 | 415,328 | ||||||
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Total deposits
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451,695 | 462,807 | ||||||
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Short-term borrowings
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33,157 | 22,850 | ||||||
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Other borrowed funds
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18,596 | 21,487 | ||||||
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Accrued interest payable
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614 | 960 | ||||||
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Other liabilities
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3,270 | 2,906 | ||||||
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TOTAL LIABILITIES
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507,332 | 511,010 | ||||||
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Stockholders' Equity
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Common stock, $.50 par value; 5,000,000 shares authorized;
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||||||||
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1,652,318 and 1,650,868 shares issued
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826 | 825 | ||||||
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Capital surplus
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6,273 | 6,134 | ||||||
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Retained earnings
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46,962 | 43,455 | ||||||
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Accumulated other comprehensive income
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1,170 | 904 | ||||||
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Treasury stock, at cost (54,100 shares)
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(2,067 | ) | (2,067 | ) | ||||
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TOTAL STOCKHOLDERS' EQUITY
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53,164 | 49,251 | ||||||
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TOTAL LIABILITES AND STOCKHOLDERS' EQUITY
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$ | 560,496 | $ | 560,261 | ||||
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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 six months ended June 30,
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Interest income
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$ | 12,192 | $ | 12,153 | .3 | % | ||||||||||||||
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Interest expense
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$ | 2,699 | $ | 4,079 | (33.8 | %) | ||||||||||||||
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Net interest income
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$ | 9,493 | $ | 8,074 | 17.6 | % | ||||||||||||||
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Net income
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$ | 2,936 | $ | 2,287 | 28.4 | % | ||||||||||||||
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Shareholders' Value (per share)
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||||||||||||||||||||
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Net income - basic
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$ | 1.84 | $ | 1.44 | 27.8 | % | ||||||||||||||
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Net income - diluted
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$ | 1.84 | $ | 1.44 | 27.8 | % | ||||||||||||||
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Dividends
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$ | .72 | $ | .72 | - | |||||||||||||||
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Book value
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$ | 33.26 | $ | 30.84 | 7.8 | % | ||||||||||||||
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Market value
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$ | 35.00 | $ | 38.00 | (7.9 | %) | ||||||||||||||
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Market value/book value ratio
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105.2 | % | 123.2 | % | (14.6 | %) | ||||||||||||||
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*Price/earnings multiple
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9.5 | X | 13.2 | X | (28.0 | %) | ||||||||||||||
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*Dividend yield
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4.11 | % | 3.79 | % | 8.4 | % | ||||||||||||||
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Financial Ratios
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*Return on average assets
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1.08 | % | .83 | % | 30.1 | % | ||||||||||||||
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*Return on average equity
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11.35 | % | 9.44 | % | 20.2 | % | ||||||||||||||
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Shareholders' equity/asset ratio
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9.49 | % | 8.79 | % | 8.0 | % | ||||||||||||||
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Dividend payout ratio
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39.13 | % | 50.00 | % | (21.7 | %) | ||||||||||||||
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Nonperforming assets/total assets
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3.83 | % | 2.94 | % | 30.3 | % | ||||||||||||||
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Allowance for loan loss as a % of loans
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1.70 | % | 1.63 | % | 4.3 | % | ||||||||||||||
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Net charge-offs/average loans
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.26 | % | .05 | % | 420.0 | % | ||||||||||||||
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Allowance for loan loss/nonaccrual loans
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58.0 | % | 57.5 | % | .9 | % | ||||||||||||||
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Allowance for loan loss/non-performing loans
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42.6 | % | 43.3 | % | (1.6 | %) | ||||||||||||||
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Financial Position at June 30,
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Assets
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$ | 560,496 | $ | 560,261 | - | |||||||||||||||
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Loans, net of unearned
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$ | 432,961 | $ | 407,790 | 6.2 | % | ||||||||||||||
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Deposits
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$ | 451,695 | $ | 462,807 | (2.4 | %) | ||||||||||||||
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Stockholders' equity
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$ | 53,164 | $ | 49,251 | 7.9 | % | ||||||||||||||
* annualized
July 2011
Dear Shareholders:
It is with pleasure that I make this report of Dimeco, Inc. as of June 30, 2011. As you read through this report you will note numerous positive trends. Compared to the same quarter last year, net income is up over 28%, our return on average assets has increased by 30%, and our return on average equity has grown by 20%. From your direct perspective as a shareholder, I am very pleased to inform you that both book value and stockholders’ equity are each up almost 8%. Additionally, our dividend yield of 4.11% compares favorably to our peer group.
Attention to our loan portfolio is an on-going process. Lending personnel continue to work diligently with those borrowers who have been challenged during these trying economic times. Our efforts are primarily directed toward the collection of delinquent payments and the reduction of nonaccrual credits. We are making progress, but there is more to do. Regarding other real estate owned, we have an executed agreement of sale on one piece and legal counsel on both sides are working on the final draft of another sales agreement. We anticipate that the sale of these two properties, which comprise 90% of other real estate owned assets, will take place very shortly.
In an effort to enhance the value of your investment relationship, I am thrilled to inform you that we are re-introducing the stock purchase option within our dividend reinvestment plan. On a quarterly basis you will now have the opportunity to purchase additional shares of Dimeco, and to do so conveniently and without incurring brokers’ commissions. More information about this program is being sent to you under separate cover.
Once again our financial performance has received national recognition. In the June 2011 edition of “US Banker” magazine, Dimeco, Inc. has been listed in the top 200 community banks in our country based on a three-year return on average equity. This distinction marks the fifth straight year of our inclusion in this list.
Despite this encouraging news, we will not become complacent. We fully recognize that our country’s sluggish economy will present further challenges. Throughout these times we want you to know that all of our efforts will remain directed towards success and building a stronger institution.
We thank you for your investment and continued loyalty, and as always, we welcome your comments and questions.
Sincerely,
/s/ Gary C. Beilman
Gary C. Beilman
President and Chief Executive Officer