Exhibit 99
NEWS RELEASE
TO BUSINESS EDITOR
DIMECO, INC. ANNOUNCES 2004 FIRST QUARTER EARNINGS
Dimeco, Inc. (Nasdaq DIMC), parent company of The Dime Bank, reported first quarter 2004 earnings of $850,000. As a result of lower market interest rates, interest income decreased 1.5% while interest expense decreased 17.6% compared to the same period in 2003 resulting in an overall increase of 6.4% in net interest income during the first quarter of 2004. Earnings per share of $.56 were reported for the first quarter 2004 with dividends declared of $.23 per share, resulting in a dividend payout ratio of 41.1%. The stock closed at $42.80 per share on March 31, 2004, an increase of 67.8% over the $25.50 per share (adjusted to reflect the 12/1/03 100% stock split effected in the form of a dividend) on March 31, 2003. Return on average stockholders’ equity and return on average assets were 12.24% and 1.15%, respectively, for the first quarter of 2004.
The Company continued to experience growth during the twelve months ended March 31, 2004 with total assets of $296,547,000, representing an increase of $20,060,000 or 7.3%. During that period deposits increased $18,231,000 or 7.8% while loans increased $31,489,000 or 16.0% over the previous year balances.
Gary Beilman, Executive Vice President and Chief Executive Officer, comments, “The first quarter of any year is a period of adjustment and anticipation for the year that is about to unfold. As anticipated, mortgage loan refinance activity has slowed, but purchase money transactions continue nicely. Furthermore, we expect that residential construction loan activity will pick up now that warmer weather has arrived.” Mr. Beilman further stated, “We have great plans for 2004. We are currently adding to our technology base by installing new, innovative platform software systems for deposits, new accounts, and consumer loans. Further, our Investments and Financial Services Department is very busy as the interest in the securities’ markets and related transactions has rebounded dramatically. Additionally, construction of our newest branch in Dingmans Ferry, Pennsylvania will begin in just a few weeks.” He concluded by saying, “It’s going to be an exciting year.”
The Dime Bank, a wholly owned subsidiary of Dimeco, Inc., 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 Investment Services. For more information on The Dime Bank, visit www.thedimebank.com
Source Dimeco, Inc. April 17, 2004/ Contact: Deborah Unflat-Petroski, Marketing Officer Telephone (570) 253-6511 ext 715
April 2004
The first quarter of any year is a period of adjustment and anticipation for the year that is about to unfold. The first quarter of 2004 is such a period. Deposits and assets are both up over 7% compared to the same period last year, and loans, as has been the case for more than two years, continue to show strong growth, expanding 16% during the period.
From a shareholder perspective, we are pleased to report several positive changes. Dividends for this period were increased 7% over that of last year. Book value is up almost 9%, and stockholders’ equity is up over10%. Correspondingly, per share market value has continued its upward momentum of the past several quarters, climbing to $42.80 at quarter end, an increase of almost 68% over last year!
We are happy to report an increase of 142% in other income from the first quarter of 2003 to 2004. This is largely attributable to the investment department, which is producing positive results in its first year of operation. Alternatively, income from residential mortgage sales has decreased. As anticipated, mortgage loan activity has slowed with consumers having refinanced their residential mortgages in prior years. We expect that construction loan activity will pick up in the spring, bringing more loans for sale in the fourth quarter of 2004 and beginning of 2005. In addition, the collateral for a loan which had previously been classified as impaired has been appraised at a lower value and therefore provision for loan loss expense has been increased in order to properly fund the allowance for loan loss.
There is much activity already this year. We are currently adding to our technology base by installing new, innovative platform software systems for deposits, new accounts, and consumer loans. Secondly, we expect to see our first fees from the title insurance subsidiary in the second quarter of 2004. Additionally we plan to begin construction within the next few months on our newest branch in Dingmans Ferry, Pennsylvania.
As with all quarterly reports, we thank you for your investment and welcome any comments you may have.
Sincerely,
Gary C. Beilman
Executive Vice President and
Chief Executive Officer
DIMECO, INC.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
| | | | | | | |
| March 31, | | 2004
| | 2003
| |
| (in thousands) | | | | | |
| | |
Assets | | | | | | | |
Cash and due from banks | | $ | 4,559 | | $ | 8,608 | |
Interest-bearing deposits in other banks | | | 18 | | | 15 | |
Federal funds sold | | | 5,000 | | | 2,481 | |
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Total cash and cash equivalents | | | 9,577 | | | 11,104 | |
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Mortgage loans held for sale | | | — | | | 971 | |
Investment securities available for sale | | | 49,239 | | | 60,958 | |
Investment securities held to maturity (market value of $228 and $235) | | | 197 | | | 197 | |
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Loans (net of unearned income of $727 and $752) | | | 228,348 | | | 196,859 | |
Less allowance for loan losses | | | 3,349 | | | 2,952 | |
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Net loans | | | 224,999 | | | 193,907 | |
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Premises and equipment | | | 4,109 | | | 4,173 | |
Accrued interest receivable | | | 1,286 | | | 1,321 | |
Other assets | | | 7,140 | | | 3,856 | |
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TOTAL ASSETS | | $ | 296,547 | | $ | 276,487 | |
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Liabilities | | | | | | | |
Deposits : | | | | | | | |
Noninterest-bearing | | $ | 27,071 | | $ | 21,861 | |
Interest-bearing | | | 225,656 | | | 212,635 | |
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Total deposits | | | 252,727 | | | 234,496 | |
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Short-term borrowings | | | 9,821 | | | 10,253 | |
Other borrowed funds | | | 4,000 | | | 4,000 | |
Accrued interest payable | | | 603 | | | 755 | |
Other liabilities | | | 1,479 | | | 1,708 | |
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TOTAL LIABILITIES | | | 268,630 | | | 251,212 | |
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Stockholders’ Equity | | | | | | | |
Common stock, $.50 par value; 3,000,000 shares authorized; 1,533,634 and 756,035 shares issued | | | 767 | | | 378 | |
Capital surplus | | | 4,067 | | | 3,713 | |
Retained earnings | | | 22,536 | | | 20,513 | |
Accumulated other comprehensive income | | | 547 | | | 687 | |
Treasury stock, at cost (349 shares) | | | — | | | (16 | ) |
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TOTAL STOCKHOLDERS’ EQUITY | | | 27,917 | | | 25,275 | |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 296,547 | | $ | 276,487 | |
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DIMECO, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
| | | | | | | |
| (in thousands, except per share) | | 2004
| | 2003
| |
For the three months ended March 31, | | | | | | | |
Interest Income | | | | | | | |
Interest and fees on loans | | $ | 3,232 | | $ | 3,128 | |
Federal funds sold | | | 4 | | | 7 | |
Investment securities: | | | | | | | |
Taxable | | | 423 | | | 582 | |
Exempt from federal income tax | | | 73 | | | 72 | |
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Total interest income | | | 3,732 | | | 3,789 | |
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Interest Expense | | | | | | | |
Deposits | | | 985 | | | 1,159 | |
Short-term borrowings | | | 22 | | | 22 | |
Other borrowed funds | | | 21 | | | 66 | |
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Total interest expense | | | 1,028 | | | 1,247 | |
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Net Interest Income | | | 2,704 | | | 2,542 | |
Provision for loan losses | | | 377 | | | 192 | |
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Net Interest Income, After Provision for Loan Losses | | | 2,327 | | | 2,350 | |
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Noninterest Income | | | | | | | |
Services charges on deposit accounts | | | 299 | | | 221 | |
Mortgage loans held for sale gains, net | | | 100 | | | 259 | |
Other income | | | 317 | | | 131 | |
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Total noninterest income | | | 716 | | | 611 | |
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Noninterest Expense | | | | | | | |
Salaries and employee benefits | | | 952 | | | 820 | |
Occupancy expense, net | | | 169 | | | 159 | |
Furniture and equipment expense | | | 112 | | | 118 | |
Other expense | | | 589 | | | 499 | |
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Total noninterest expense | | | 1,822 | | | 1,596 | |
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Income before income taxes | | | 1,221 | | | 1,365 | |
Income taxes | | | 371 | | | 436 | |
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NET INCOME | | $ | 850 | | $ | 929 | |
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Earnings per Share - basic | | $ | 0.56 | | $ | 0.62 | * |
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Earnings per Share - diluted | | $ | 0.53 | | $ | 0.60 | * |
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Average shares outstanding - basic | | | 1,529,925 | | | 1,510,170 | * |
Average shares outstanding - diluted | | | 1,599,794 | | | 1,559,808 | * |
| * | Adjusted to reflect 100% stock split effected in the form of a dividend on 12/1/03. |
CONSOLIDATED FINANCIAL HIGHLIGHTS
| | | | | | | | | | | |
| (amounts in thousands, except per share) | | 2004
| | | 2003
| | | % Increase (decrease)
| |
Performance for the three months ended March 31, | | | | | | | | | | | |
Interest income | | $ | 3,732 | | | $ | 3,789 | | | -1.5 | % |
Interest expense | | $ | 1,028 | | | $ | 1,247 | | | -17.6 | % |
Net interest income | | $ | 2,704 | | | $ | 2,542 | | | 6.4 | % |
Net income | | $ | 850 | | | $ | 929 | | | -8.5 | % |
| | | |
Shareholders’ Value (per share) | | | | | | | | | | | |
Net income - basic | | $ | 0.56 | | | $ | 0.62 | (1) | | -9.7 | % |
Net income - diluted | | $ | 0.53 | | | $ | 0.60 | (1) | | -11.7 | % |
Dividends | | $ | 0.23 | | | $ | 0.22 | (1) | | 4.5 | % |
Book value | | $ | 18.20 | | | $ | 16.73 | (1) | | 8.8 | % |
Market value | | $ | 42.80 | | | $ | 25.50 | (1) | | 67.8 | %* |
Market value/book value ratio | | | 235.2 | % | | | 152.4 | % | | 54.3 | % |
* Price/earnings multiple | | | 19.1 | X | | | 10.3 | X | | 85.4 | % |
* Dividend yield | | | 2.15 | % | | | 3.45 | % | | -37.7 | % |
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Financial Ratios | | | | | | | | | | | |
* Return on average assets | | | 1.15 | % | | | 1.36 | % | | -15.4 | % |
* Return on average equity | | | 12.24 | % | | | 14.81 | % | | -17.4 | % |
Shareholders’ equity/asset ratio | | | 9.41 | % | | | 9.14 | % | | 3.0 | % |
Dividend payout ratio | | | 41.07 | % | | | 35.48 | % | | 15.8 | % |
Nonperforming assets/total assets | | | 0.88 | % | | | 0.20 | % | | 340.0 | % |
Allowance for loan loss as a % of loans | | | 1.47 | % | | | 1.50 | % | | -2.0 | % |
* Net charge-offs/average loans | | | 0.08 | % | | | 0.12 | % | | -33.3 | % |
Allowance for loan loss/nonaccrual loans | | | 133.87 | % | | | 636.49 | % | | -79.0 | % |
Allowance for loan loss/non-performing loans | | | 128.79 | % | | | 568.54 | % | | -77.4 | % |
| | | |
Financial Position at March 31, | | | | | | | | | | | |
Assets | | $ | 296,547 | | | $ | 276,487 | | | 7.3 | % |
Loans | | $ | 228,348 | | | $ | 196,859 | | | 16.0 | % |
Deposits | | $ | 252,727 | | | $ | 234,496 | | | 7.8 | % |
Stockholders’ equity | | $ | 27,917 | | | $ | 25,275 | | | 10.5 | % |
| (1) | Adjusted to reflect 100% stock split effected in the form of a dividend on 12/1/03. |
