EXHIBIT 99
NEWS RELEASE
TO BUSINESS EDITOR
DIMECO, INC. ANNOUNCES SOLID EARNINGS AT JUNE 30, 2003
Dimeco, Inc. (Nasdaq “DIMC”), parent company of The Dime Bank, reported earnings of $1,845,000 for the six months ended June 30, 2003, representing an increase of 20.3% over the $1,534,000 reported for the same period in 2002. Net interest income increased 7.8% during the first half of 2003 versus the same period in 2002. Earnings per share increased $.32 or 16.0%, to $2.32 per share. In addition, dividends declared year to date increased 7.5% over the same period last year to $.86 per share. The market value of Dimeco, Inc. shares grew 29.7% to $57.05 per share at June 30, 2003 from $44.00 per share at June 30, 2002.
The Company continued to experience growth over the past year, with total assets of $291,577,000 at June 30, 2003, representing an increase of $31,134,000 or 12.0%. During this time, deposits increased $29,742,000 or 13.8% while the loan portfolio increased $37,001,000 or 22.0%. Return on average assets and return on average stockholders’ equity were strong at 1.32% and 14.51% for the first half of 2003. Asset performance was strong with the ratio of nonperforming assets to total assets decreasing 35.7% to .27% at June 30, 2003.
Mr. Gary C. Beilman, EVP and CEO, stated, “The focus for this year has been to expand customer relationships, implement profit improvement plans and continue growth momentum. Our growth is being managed with profits in mind, and our success is quite evident with net income up over 20% and both return on average equity and return on average assets increasing handsomely. In mid-June, we began operations of our new Investments and Financial Services Department. These activities will provide new and additional opportunities for our customers, and will enhance our fee income. Furthermore, we have now received regulatory approval for our new Dingmans Ferry branch, which we hope to have open in late 2003/early 2004.”
The Dime Bank 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 and Trust and Investments Services. For more information on The Dime Bank, visit www.thedimebank.com
Source Dimeco, Inc. / July 22, 2003
Contact: Deborah Unflat-Petroski, Marketing Officer
Telephone (570) 253-6511 ext 715; email: operations@thedimebank.com
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DIMECO, INC.
CONSOLIDATED STATEMENT OF INCOME (unaudited)
(in thousands, except per share)
| For the six months ended June 30, | 2003 | 2002 | ||||
Interest Income | ||||||
Interest and fees on loans | $ | 6,358 | $ | 6,106 | ||
Interest-bearing deposits in other banks | 1 | 15 | ||||
Federal funds sold | 18 | 45 | ||||
Investment securities: | ||||||
Taxable | 1,147 | 1,422 | ||||
Exempt from federal income tax | 150 | 135 | ||||
Total interest income | 7,674 | 7,723 | ||||
Interest Expense | ||||||
Deposits | 2,280 | 2,691 | ||||
Short-term borrowings | 60 | 75 | ||||
Other borrowed funds | 133 | 133 | ||||
Total interest expense | 2,473 | 2,899 | ||||
Net Interest Income | 5,201 | 4,824 | ||||
Provision for loan losses | 450 | 429 | ||||
Net Interest Income, After Provision for Loan Losses | 4,751 | 4,395 | ||||
Noninterest Income | ||||||
Services charges on deposit accounts | 504 | 264 | ||||
Mortgage loans held for sale gains, net | 415 | 214 | ||||
Other income | 255 | 300 | ||||
Investment securities gains | 7 | — | ||||
Total noninterest income | 1,181 | 778 | ||||
Noninterest Expense | ||||||
Salaries and employee benefits | 1,668 | 1,490 | ||||
Occupancy expense, net | 310 | 264 | ||||
Furniture and equipment expense | 228 | 237 | ||||
Other expense | 1,022 | 944 | ||||
Total noninterest expense | 3,228 | 2,935 | ||||
Income before income taxes | 2,704 | 2,238 | ||||
Income taxes | 859 | 704 | ||||
NET INCOME | $ | 1,845 | $ | 1,534 | ||
Earnings per Share – basic | $ | 2.44 | $ | 2.05 | ||
Earnings per Share – diluted | $ | 2.32 | $ | 2.00 | ||
Average shares outstanding – basic | 755,336 | 749,452 | ||||
Average shares outstanding – diluted | 795,697 | 768,240 | ||||
This statement has not been reviewed or confirmed for accuracy or relevance by the FDIC.
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DIMECO, INC.
CONSOLIDATED BALANCE SHEET (unaudited)
| JUNE 30, | 2003 | 2002 | ||||||
(in thousands) | ||||||||
Assets | ||||||||
Cash and due from banks | $ | 11,441 | $ | 7,879 | ||||
Interest-bearing deposits in other banks | 17 | 16 | ||||||
Federal funds sold | 305 | 1,466 | ||||||
Total cash and cash equivalents | 11,763 | 9,361 | ||||||
Mortgage loans held for sale | 1,161 | 165 | ||||||
Investment securities available for sale | 67,323 | 76,890 | ||||||
Investment securities held to maturity (market value of $234 and $459) | 197 | 420 | ||||||
Loans (net of unearned income of $739 and $744) | 205,030 | 168,029 | ||||||
Less allowance for loan losses | 3,093 | 2,679 | ||||||
Net loans | 201,937 | 165,350 | ||||||
Premises and equipment | 4,271 | 4,008 | ||||||
Accrued interest receivable | 1,236 | 1,341 | ||||||
Other assets | 3,689 | 2,908 | ||||||
TOTAL ASSETS | $ | 291,577 | $ | 260,443 | ||||
Liabilities | ||||||||
Deposits: | ||||||||
Noninterest-bearing | $ | 28,688 | $ | 20,064 | ||||
Interest-bearing | 216,854 | 195,736 | ||||||
Total deposits | 245,542 | 215,800 | ||||||
Short-term borrowings | 14,117 | 15,552 | ||||||
Other borrowed funds | 4,000 | 4,000 | ||||||
Accrued interest payable | 700 | 854 | ||||||
Other liabilities | 1,225 | 1,137 | ||||||
TOTAL LIABILITIES | 265,584 | 237,343 | ||||||
Stockholders’ Equity | ||||||||
Common stock, $.50 par value; 3,000,000 shares authorized; 757,331 and 751,648 shares issued | 379 | 376 | ||||||
Capital surplus | 3,772 | 3,537 | ||||||
Retained earnings | 21,103 | 18,696 | ||||||
Accumulated other comprehensive income | 755 | 516 | ||||||
Treasury stock, at cost (350 and 574 shares) | (16 | ) | (25 | ) | ||||
TOTAL STOCKHOLDERS’ EQUITY | 25,993 | 23,100 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 291,577 | $ | 260,443 | ||||
This statement has not been reviewed or confirmed for accuracy or relevance by the FDIC.
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CONSOLIDATED FINANCIAL HIGHLIGHTS
(amounts in thousands, except per share)
| Performance for the six months ended June 30, | 2003 | 2002 | % (decrease) | ||||||||||
Interest income | $ | 7,674 | $ | 7,723 | -0.63 | % | |||||||
Interest expense | $ | 2,473 | $ | 2,899 | -14.69 | % | |||||||
Net interest income | $ | 5,201 | $ | 4,824 | 7.82 | % | |||||||
Net income | $ | 1,845 | $ | 1,534 | 20.27 | % | |||||||
| Shareholders’ Value (per share) | |||||||||||||
Net income–basic | $ | 2.44 | $ | 2.05 | 19.02 | % | |||||||
Net income–diluted | $ | 2.32 | $ | 2.00 | 16.00 | % | |||||||
Dividends | $ | 0.86 | $ | 0.80 | 7.50 | % | |||||||
Book value | $ | 34.34 | $ | 30.76 | 11.64 | % | |||||||
Market value | $ | 57.05 | $ | 44.00 | 29.66 | % | |||||||
Market value/book value ratio | 166.13 | % | 143.04 | % | 16.14 | % | |||||||
* | Price/earnings multiple | 12.3 | X | 11.0 | X | 11.82 | % | ||||||
* | Dividend yield | 3.01 | % | 3.64 | % | -17.31 | % | ||||||
| Financial Ratios | |||||||||||||
* | Return on average assets | 1.32 | % | 1.23 | % | 7.32 | % | ||||||
* | Return on average equity | 14.51 | % | 13.66 | % | 6.22 | % | ||||||
Shareholders’ equity/asset ratio | 8.91 | % | 8.87 | % | 0.45 | % | |||||||
Dividend payout ratio | 37.07 | % | 39.02 | % | -5.00 | % | |||||||
Nonperforming assets/total assets | 0.27 | % | 0.42 | % | -35.71 | % | |||||||
Allowance for loan loss as a % of loans | 1.51 | % | 1.59 | % | -5.03 | % | |||||||
* | Net charge-offs/average loans | 0.18 | % | 0.15 | % | 20.00 | % | ||||||
Allowance for loan loss/nonaccrual loans | 667.69 | % | 707.27 | % | -5.60 | % | |||||||
Allowance for loan loss/non-performing loans | 404.28 | % | 251.63 | % | 60.66 | % | |||||||
| Financial Position at June 30, | |||||||||||||
Assets | $ | 291,577 | $ | 260,443 | 11.95 | % | |||||||
Loans | $ | 205,030 | $ | 168,029 | 22.02 | % | |||||||
Deposits | $ | 245,542 | $ | 215,800 | 13.78 | % | |||||||
Stockholders’ equity | $ | 25,993 | $ | 23,100 | 12.52 | % | |||||||
| * | annualized |
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July 2003
Dear Shareholders:
Growth, profitability, and increased market value are the highlights of Dimeco’s performance for the six months ended June 30, 2003. As you will see in this statement, deposits, loans, and total assets have all grown substantially when compared to the same period last year. This growth has been managed with profits in mind, and our success is quite evident. Net income is up over 20%, and our Return on Average Equity and Return on Average Assets have both increased handsomely.
All of this means healthy increases for you, our shareholders. Stockholders’ equity is now almost $26 Million – up 12.5% from the same time last year. Dividends have been increased and the per share book value has expanded 11.6%. With numbers like these, it is not surprising that the market price of Dimeco stock has grown by nearly 30%, with the per share price being $57.05 at the end of this second quarter.
The focus for this year has been to expand customer relationships, implement profit improvement plans, and continue our growth momentum. The numbers speak for themselves, and although we cannot make guarantees for the future, we believe we are on the right track. In mid-June, we began operations of our new Investments and Financial Services Department. These activities will provide new and additional opportunities for our customers, and will enhance our fee income. Furthermore, we have now received regulatory approval for our new Dingmans Ferry branch, which we hope to open in late 2003/early 2004.
We thank you for your investment and trust in us. As always, we welcome your questions and comments.
Sincerely,
/S/ GARY C. BEILMAN
Gary C. Beilman
Executive Vice President and
Chief Executive Officer
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