NEWS RELEASE
TO BUSINESS EDITOR
DIMECO, INC. ANNOUNCES EARNINGS
Dimeco, Inc. (Nasdaq DIMC), parent company of The Dime Bank, reported earnings for the nine months ended September 30, 2003 of $2,866,000, representing an increase of 21.8% over the $2,353,000 reported for the same period 2002. Earnings per share increased $.59 or 19.3%, to $3.65 per share. In addition, dividends declared year to date increased 7.5% over the same period last year to $1.29 per share.
The Company continued to experience growth with total assets increasing $30,463,000 or 11.4% to $298,119,000 from September 30, 2002 to September 30, 2003. During this time the loan portfolio increased $35,993,000 or 19.6% with deposits also increasing $29,601,000 or 12.9%. Return on average stockholders’ equity and return on average assets are very strong at 14.85% and 1.35% for the third quarter 2003.
Gary C. Beilman, EVP and CEO, stated, “I am excited to present the financial highlights of Dimeco’s performance for the nine months ended September 30, 2003. Our growth is evident in that both loans and deposits are up. With this growth has come an exerted effort towards continued profitability. While these successes are pleasing, we will not become complacent. We will be diligent in attempting to properly plan for our future and continue to bring the best value to our customers, our shareholders and the community.”
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 along with a Trust Department and an Investments and Financial Services Department. For more information on The Dime Bank, visit www.thedimebank.com
Source Dimeco, Inc./ October 20, 2003
Contact: Deborah Unflat-Petroski, Marketing Officer
Telephone (570) 253-6511 ext 715 email: operations@thedimebank.com
DIMECO, INC.
CONSOLIDATED BALANCE SHEET (unaudited)
SEPTEMBER 30,
| | | 2003
| | | 2002
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(in thousands) | | | | | | | | |
Assets | | | | | | | | |
Cash and due from banks | | $ | 10,020 | | | $ | 9,205 | |
Interest-bearing deposits in other banks | | | 16 | | | | 15 | |
Federal funds sold | | | 4,250 | | | | 11,960 | |
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Total cash and cash equivalents | | | 14,286 | | | | 21,180 | |
Mortgage loans held for sale | | | 892 | | | | 118 | |
Investment securities available for sale | | | 54,086 | | | | 57,038 | |
Investment securities held to maturity (market value of $232 and $465) | | | 197 | | | | 423 | |
Loans (net of unearned income of $762 and $748) | | | 219,260 | | | | 183,267 | |
Less allowance for loan losses | | | 3,103 | | | | 2,751 | |
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Net loans | | | 216,157 | | | | 180,516 | |
Premises and equipment | | | 4,249 | | | | 4,252 | |
Accrued interest receivable | | | 1,285 | | | | 1,147 | |
Other assets | | | 6,967 | | | | 2,982 | |
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TOTAL ASSETS | | $ | 298,119 | | | $ | 267,656 | |
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Liabilities | | | | | | | | |
Deposits: | | | | | | | | |
Noninterest-bearing | | $ | 29,252 | | | $ | 23,786 | |
Interest-bearing | | | 230,400 | | | | 206,265 | |
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Total deposits | | | 259,652 | | | | 230,051 | |
Short-term borrowings | | | 9,105 | | | | 8,015 | |
Other borrowed funds | | | 1,000 | | | | 4,000 | |
Accrued interest payable | | | 631 | | | | 746 | |
Other liabilities | | | 1,201 | | | | 1,162 | |
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TOTAL LIABILITIES | | | 271,589 | | | | 243,974 | |
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Stockholders’ Equity | | | | | | | | |
Common stock, $.50 par value; 3,000,000 shares authorized; | | | | | | | | |
758,855 and 754,482 shares issued | | | 379 | | | | 377 | |
Capital surplus | | | 3,796 | | | | 3,648 | |
Retained earnings | | | 21,793 | | | | 19,215 | |
Accumulated other comprehensive income | | | 595 | | | | 603 | |
Treasury stock, at cost (520 and 3,753 shares) | | | (33 | ) | | | (161 | ) |
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TOTAL STOCKHOLDERS’ EQUITY | | | 26,530 | | | | 23,682 | |
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TOTAL LIABILITES AND STOCKHOLDERS’ EQUITY | | $ | 298,119 | | | $ | 267,656 | |
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DIMECO, INC.
CONSOLIDATED STATEMENT OF INCOME (unaudited)
(in thousands, except per share)
| For the nine months ended September 30, | | 2003
| | 2002
|
Interest Income | | | | | | |
Interest and fees on loans | | $ | 9,639 | | $ | 9,239 |
Interest-bearing deposits in other banks | | | 1 | | | 20 |
Federal funds sold | | | 20 | | | 57 |
Investment securities: | | | | | | |
Taxable | | | 1,633 | | | 2,002 |
Exempt from federal income tax | | | 218 | | | 223 |
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Total interest income | | | 11,511 | | | 11,541 |
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Interest Expense | | | | | | |
Deposits | | | 3,354 | | | 3,939 |
Short-term borrowings | | | 88 | | | 112 |
Other borrowed funds | | | 187 | | | 201 |
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Total interest expense | | | 3,629 | | | 4,252 |
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Net Interest Income | | | 7,882 | | | 7,289 |
Provision for loan losses | | | 680 | | | 575 |
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Net Interest Income, After Provision for Loan Losses | | | 7,202 | | | 6,714 |
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Noninterest Income | | | | | | |
Services charges on deposit accounts | | | 759 | | | 431 |
Mortgage loans held for sale gains, net | | | 662 | | | 270 |
Other income | | | 447 | | | 457 |
Investment securites gains | | | 13 | | | — |
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Total noninterest income | | | 1,881 | | | 1,158 |
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Noninterest Expense | | | | | | |
Salaries and employee benefits | | | 2,581 | | | 2,243 |
Occupancy expense, net | | | 452 | | | 394 |
Furniture and equipment expense | | | 336 | | | 355 |
Other expense | | | 1,591 | | | 1,447 |
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Total noninterest expense | | | 4,960 | | | 4,439 |
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Income before income taxes | | | 4,123 | | | 3,433 |
Income taxes | | | 1,257 | | | 1,080 |
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NET INCOME | | $ | 2,866 | | $ | 2,353 |
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Earnings per Share – basic | | $ | 3.79 | | $ | 3.14 |
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Earnings per Share – diluted | | $ | 3.65 | | $ | 3.06 |
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Average shares outstanding – basic | | | 756,430 | | | 750,214 |
Average shares outstanding – diluted | | | 785,906 | | | 769,780 |
CONSOLIDATED FINANCIAL HIGHLIGHTS
(amounts in thousands, except per share)
| Performance for the nine months ended September 30, | | 2003
| | | | | 2002
| | | | | %
Increase
(decrease)
| |
Interest income | | $ | 11,511 | | | | | $ | 11,541 | | | | | -0.26 | % |
Interest expense | | $ | 3,629 | | | | | $ | 4,252 | | | | | -14.65 | % |
Net interest income | | $ | 7,882 | | | | | $ | 7,289 | | | | | 8.14 | % |
Net income | | $ | 2,866 | | | | | $ | 2,353 | | | | | 21.80 | % |
Shareholders’ Value (per share) | | | | | | | | | | | | | | | |
Net income – basic | | $ | 3.79 | | | | | $ | 3.14 | | | | | 20.70 | % |
Net income – diluted | | $ | 3.65 | | | | | $ | 3.06 | | | | | 19.28 | % |
Dividends | | $ | 1.29 | | | | | $ | 1.20 | | | | | 7.50 | % |
Book value | | $ | 34.96 | | | | | $ | 31.54 | | | | | 10.84 | % |
Market value | | $ | 63.05 | | | | | $ | 42.85 | | | | | 47.14 | % |
Market value/book value ratio | | | 180.35 | % | | | | | 135.84 | % | | | | 32.77 | % |
* Price/earnings multiple | | | 13.0 | | | X | | | 10.2 | | | X | | 27.45 | % |
* Dividend yield | | | 2.73 | % | | | | | 3.73 | % | | | | -26.81 | % |
Financial Ratios | | | | | | | | | | | | | | | |
* Return on average assets | | | 1.35 | % | | | | | 1.24 | % | | | | 8.87 | % |
* Return on average equity | | | 14.85 | % | | | | | 13.67 | % | | | | 8.63 | % |
Shareholders’ equity/asset ratio | | | 8.90 | % | | | | | 8.85 | % | | | | 0.56 | % |
Dividend payout ratio | | | 35.34 | % | | | | | 38.22 | % | | | | -7.54 | % |
Nonperforming assets/total assets | | | 1.08 | % | | | | | 0.45 | % | | | | 140.00 | % |
Allowance for loan loss as a % of loans | | | 1.42 | % | | | | | 1.50 | % | | | | -5.33 | % |
* Net charge-offs/average loans | | | 0.26 | % | | | | | 0.16 | % | | | | 62.50 | % |
Allowance for loan loss/nonaccrual loans | | | 112.35 | % | | | | | 552.41 | % | | | | -79.66 | % |
Allowance for loan loss/non-performing loans | | | 96.61 | % | | | | | 232.02 | % | | | | -58.36 | % |
Financial Position at September 30, | | | | | | | | | | | | | | | |
Assets | | $ | 298,119 | | | | | $ | 267,656 | | | | | 11.38 | % |
Loans | | $ | 219,260 | | | | | $ | 183,267 | | | | | 19.64 | % |
Deposits | | $ | 259,652 | | | | | $ | 230,051 | | | | | 12.87 | % |
Stockholders’ equity | | $ | 26,530 | | | | | $ | 23,682 | | | | | 12.03 | % |
Dear Shareholders:
I am excited to present the financial highlights of Dimeco’s performance for the nine months ended September 30, 2003. For the first nine months of 2003, compared to the same period last year, our loans have increased over 19%; deposits have increased over 12%; and assets are up over 11%. With this growth has come an exerted effort towards continued profitability. This effort has been successful in that our net income for this first nine months is up over 21% from last year.
This growth and profitability have also increased our significant ratios. Return on average equity is at 14.85% and return on average assets is 1.35%. For you, our shareholders, I am also pleased to report that dividends are up over 7% and stockholders’ equity is up over 12%.
Of note, however, are the increase in nonperforming assets to total assets and the resulting changes in our allowance for loan losses to both nonaccrual and nonperforming loans. Management is working with a commercial credit for which original repayments terms were adjusted. Although we continue to work closely with this borrower and are hopeful of the outcome, conservative accounting dictates that we provide for unexpected occurrences.
A significant outcome of our financial performance has been evidenced in the area of the market value of your investment. The per share market price one year ago was $42.85 and as of this quarter’s end, it is now $63.05, making a total increase of 47.14%. All of this is information about which we can all be pleased.
While these successes are pleasing, we will not become complacent. We will be prudent and monitor many factors that could affect us going forward. The national economy, the recovery from the recession, and the continuation of the current low interest rate environment are questions. We will be diligent in attempting to properly plan for our future.
We thank you for your investment and faith in us. As always, your comments and questions are welcome.
Sincerely,
/s/ Gary C. Beilman
Gary C. Beilman
Executive Vice President and
Chief Executive Officer
