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| 8-K - FORM 8-K - DIMECO INC | v326234_8k.htm |
NEWS RELEASE
TO BUSINESS EDITOR
DIMECO, INC. REPORTS EARNINGS AT SEPTEMBER 30, 2012
Honesdale, PA, October 19, 2012/ Dimeco, Inc. (Nasdaq “DIMC”), parent company of The Dime Bank, reported earnings for the nine months ended September 30, 2012 of $4,997,000, an increase of 21.3% over the same period in 2011. The main component of improved earnings came from net interest income of $16,228,000, which was 11.3% greater than the first nine months of 2011. Earnings per share were $3.12 for the nine month period ended September 30, 2012, an increase of 21.9% over 2011. Dividends declared year-to-date were $1.08 per share. Return on average stockholders’ equity was 11.65% and 10.45% for the first nine months of 2012 and 2011, respectively. Return on average assets was 1.12% for the first nine months of 2012, an increase of 12.0% over the previous year to date ratio.
The Company reported total assets of $613,704,000 at September 30, 2012, an increase of $43,748,000 or 7.7% over balances a year earlier. During that time, the loan portfolio grew $33,250,000 or 7.5% to $477,131,000 and deposits increased $38,636,000 or 8.2% to $507,310,000 at September 30, 2012. The Company reported ratios of net charge offs to average loans of .50% and nonperforming assets to total assets of 2.48% at September 30, 2012, compared to .30% and 3.43%, respectively, at September 30, 2011. With continued stagnation in economic conditions, the Company has experienced an increase in charged off loans assisting to lower nonperforming assets.
President and Chief Executive Officer Gary C. Beilman stated, “Our entire institution is busy servicing existing customers and establishing new relationships as can be evidenced in our continued growth. When compared to balances one year ago, deposits, loans, and total assets have all increased. Net income for three quarters is just under $5 million, which is 21% greater than the same period last year. The value of Dimeco is strong; book value per share is up almost 7%, market value per share has increased almost 15%, and stockholders’ equity has expanded by 8.5%.”
Beilman continued, “We continue our efforts to improve asset quality during this prolonged economic downturn. Non-performing assets to total assets decreased almost 28% due to our efforts to address these quality issues and take the necessary steps to properly record asset valuation. Also of note, is $2.6 million in non-accrual loans that went back to accrual status in the third quarter of 2012. Our focus will remain on the improvement of this segment of our business as we move forward. 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 Northeast 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 19, 2012
Contact: Deborah Unflat, Vice President Marketing
DIMECO, INC.
CONSOLIDATED STATEMENT OF INCOME (unaudited)
| For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
| (in thousands, except per share) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
| Interest Income | ||||||||||||||||
| Interest and fees on loans | $ | 6,103 | $ | 5,721 | $ | 17,665 | $ | 16,681 | ||||||||
| Investment securities: | ||||||||||||||||
| Taxable | 279 | 327 | 923 | 937 | ||||||||||||
| Exempt from federal income tax | 315 | 305 | 944 | 898 | ||||||||||||
| Other | 2 | 1 | 7 | 8 | ||||||||||||
| Total interest income | 6,699 | 6,354 | 19,539 | 18,524 | ||||||||||||
| Interest Expense | ||||||||||||||||
| Deposits | 861 | 1,016 | 2,698 | 3,221 | ||||||||||||
| Short-term borrowings | 21 | 29 | 71 | 90 | ||||||||||||
| Other borrowed funds | 176 | 206 | 542 | 639 | ||||||||||||
| Total interest expense | 1,058 | 1,251 | 3,311 | 3,950 | ||||||||||||
| Net Interest Income | 5,641 | 5,103 | 16,228 | 14,574 | ||||||||||||
| Provision for loan losses | 650 | 1,300 | 2,000 | 2,000 | ||||||||||||
| Net Interest Income After Provision for Loan Losses | 4,991 | 3,803 | 14,228 | 12,574 | ||||||||||||
| Noninterest Income | ||||||||||||||||
| Service charges on deposit accounts | 218 | 260 | 674 | 788 | ||||||||||||
| Mortgage loans held for sale gains, net | 104 | 75 | 428 | 223 | ||||||||||||
| Investment securities gains (losses) | - | 14 | 109 | (14 | ) | |||||||||||
| Brokerage commissions | 220 | 156 | 550 | 494 | ||||||||||||
| Earnings on bank-owned life insurance | 110 | 110 | 326 | 323 | ||||||||||||
| Debit card fees | 169 | 160 | 479 | 451 | ||||||||||||
| Other income | 244 | 157 | 629 | 610 | ||||||||||||
| Total noninterest income | 1,065 | 932 | 3,195 | 2,875 | ||||||||||||
| Noninterest Expense | ||||||||||||||||
| Salaries and employee benefits | 1,942 | 1,752 | 5,768 | 5,372 | ||||||||||||
| Occupancy expense, net | 277 | 282 | 854 | 853 | ||||||||||||
| Furniture and equipment expense | 101 | 107 | 301 | 325 | ||||||||||||
| Professional fees | 181 | 144 | 577 | 637 | ||||||||||||
| Data processing expense | 163 | 173 | 489 | 530 | ||||||||||||
| Other expense | 1,052 | 839 | 2,879 | 2,539 | ||||||||||||
| Total noninterest expense | 3,716 | 3,297 | 10,868 | 10,256 | ||||||||||||
| Income before income taxes | 2,340 | 1,438 | 6,555 | 5,193 | ||||||||||||
| Income taxes | 593 | 256 | 1,558 | 1,075 | ||||||||||||
| NET INCOME | $ | 1,747 | $ | 1,182 | $ | 4,997 | $ | 4,118 | ||||||||
| Earnings per Share - basic | $ | 1.09 | $ | 0.73 | $ | 3.12 | $ | 2.56 | ||||||||
| Earnings per Share - diluted | $ | 1.09 | $ | 0.73 | $ | 3.12 | $ | 2.56 | ||||||||
| Average shares outstanding - basic | 1,600,248 | 1,623,718 | 1,599,848 | 1,606,811 | ||||||||||||
| Average shares outstanding - diluted | 1,609,699 | 1,625,183 | 1,602,137 | 1,608,112 | ||||||||||||
DIMECO, INC.
CONSOLIDATED BALANCE SHEET (unaudited)
| (in thousands) | ||||||||
| September 30, | 2012 | 2011 | ||||||
| Assets | ||||||||
| Cash and due from banks | $ | 6,809 | $ | 7,762 | ||||
| Interest-bearing deposits in other banks | 1,096 | 2,583 | ||||||
| Total cash and cash equivalents | 7,905 | 10,345 | ||||||
| Mortgage loans held for sale | 569 | - | ||||||
| Investment securities available for sale | 97,684 | 85,863 | ||||||
| Loans (net of unearned income of $0 and $6) | 477,131 | 443,881 | ||||||
| Less allowance for loan losses | 8,019 | 8,444 | ||||||
| Net loans | 469,112 | 435,437 | ||||||
| Premises and equipment | 9,698 | 10,108 | ||||||
| Accrued interest receivable | 2,115 | 1,978 | ||||||
| Bank-owned life insurance | 10,334 | 9,965 | ||||||
| Other real estate owned | 3,103 | 4,192 | ||||||
| Other assets | 13,184 | 12,068 | ||||||
| TOTAL ASSETS | $ | 613,704 | $ | 569,956 | ||||
| Liabilities | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing | $ | 58,433 | $ | 52,988 | ||||
| Interest-bearing | 448,877 | 415,686 | ||||||
| Total deposits | 507,310 | 468,674 | ||||||
| Short-term borrowings | 21,518 | 24,733 | ||||||
| Other borrowed funds | 21,111 | 18,110 | ||||||
| Accrued interest payable | 498 | 510 | ||||||
| Other liabilities | 4,323 | 3,604 | ||||||
| TOTAL LIABILITIES | 554,760 | 515,631 | ||||||
| Stockholders' Equity | ||||||||
| Common stock, $.50 par value; 5,000,000 shares authorized; | ||||||||
| 1,653,746 shares issued | 827 | 827 | ||||||
| Capital surplus | 5,834 | 6,347 | ||||||
| Retained earnings | 51,422 | 47,568 | ||||||
| Accumulated other comprehensive income | 2,073 | 1,650 | ||||||
| Treasury stock, at cost (29,940 and 54,100 shares) | (1,212 | ) | (2,067 | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY | 58,944 | 54,325 | ||||||
| TOTAL LIABILITES AND STOCKHOLDERS' EQUITY | $ | 613,704 | $ | 569,956 | ||||
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 nine months ended September 30, | ||||||||||||||
| Interest income | $ | 19,539 | $ | 18,524 | 5.5 | % | ||||||||
| Interest expense | $ | 3,311 | $ | 3,950 | -16.2 | % | ||||||||
| Net interest income | $ | 16,228 | $ | 14,574 | 11.3 | % | ||||||||
| Net income | $ | 4,997 | $ | 4,118 | 21.3 | % | ||||||||
| Shareholders' Value (per share) | ||||||||||||||
| Net income - basic | $ | 3.12 | $ | 2.56 | 21.9 | % | ||||||||
| Net income - diluted | $ | 3.12 | $ | 2.56 | 21.9 | % | ||||||||
| Dividends | $ | 1.08 | $ | 1.08 | - | |||||||||
| Book value | $ | 36.30 | $ | 33.96 | 6.9 | % | ||||||||
| Market value | $ | 39.00 | $ | 34.00 | 14.7 | % | ||||||||
| Market value/book value ratio | 107.4 | % | 100.1 | % | 7.3 | % | ||||||||
| *Price/earnings multiple | 9.4 | X | 10.0 | X | -6.0 | % | ||||||||
| *Dividend yield | 3.69 | % | 4.24 | % | -13.0 | % | ||||||||
| Financial Ratios | ||||||||||||||
| *Return on average assets | 1.12 | % | 1.00 | % | 12.0 | % | ||||||||
| *Return on average equity | 11.65 | % | 10.45 | % | 11.5 | % | ||||||||
| Shareholders' equity/asset ratio | 9.60 | % | 9.53 | % | 0.7 | % | ||||||||
| Dividend payout ratio | 34.62 | % | 42.19 | % | -17.9 | % | ||||||||
| Nonperforming assets/total assets | 2.48 | % | 3.43 | % | -27.7 | % | ||||||||
| Allowance for loan loss as a % of loans | 1.68 | % | 1.90 | % | -11.6 | % | ||||||||
| Net charge-offs/average loans | 0.50 | % | 0.30 | % | 66.7 | % | ||||||||
| Allowance for loan loss/nonaccrual loans | 73.8 | % | 65.6 | % | 12.5 | % | ||||||||
| Allowance for loan loss/non-performing loans | 66.4 | % | 55.1 | % | 20.5 | % | ||||||||
| Financial Position at September 30, | ||||||||||||||
| Assets | $ | 613,704 | $ | 569,956 | 7.7 | % | ||||||||
| Loans, net of unearned | $ | 477,131 | $ | 443,881 | 7.5 | % | ||||||||
| Deposits | $ | 507,310 | $ | 468,674 | 8.2 | % | ||||||||
| Stockholders' equity | $ | 58,944 | $ | 54,325 | 8.5 | % | ||||||||
| * | annualized |
October 2012
Dear Shareholders:
I am pleased to present the report of your company, Dimeco, Inc., for the third quarter of 2012. To begin, I direct your attention to our continued growth. When compared to the same quarter of last year, deposits have grown over 8%, loans have increased by 7.5%, and total assets stand at almost $614 million, up 7.7%. Our entire institution is busy servicing existing customers and establishing new relationships.
Net income for three quarters is just under $5 million, which is up 21% over the same period last year. This performance equates to a return on average assets of 1.12% and a return on average equity of 11.65%, both of which are double digit increases over 2011 third quarter results. Important to you, our shareholders, is that book value per share is up almost 7%, market value per share has increased almost 15%, and stockholders’ equity has expanded by 8.5%. We believe these numbers speak well towards the enhancement of your investment.
As discussed during the previous two quarterly reports, we continue our efforts to improve asset quality during this prolonged economic downturn. Non-performing assets to total assets decreased almost 28% due to our efforts to address these quality issues and take the necessary steps to properly record asset valuation. Also of note, is $2.6 million in non-accrual loans that went back on accrual status after showing positive payment history. Our focus will remain on the improvement of this segment of our business as we move forward. As always, we will keep you informed of the results of our efforts.
I thank you for your loyalty and continued support. Please remember to recommend our company for banking and wealth management services, as well as for the investment in our company stock.
Sincerely,
/s/ Gary C. Beilman
Gary C. Beilman
President and Chief Executive Officer