Dimeco (DIMC) 8-K Dimeco, Inc. Announces 2005 First Quarter Earnings

Exhibit 99

NEWS RELEASE

TO BUSINESS EDITOR

DIMECO, INC. ANNOUNCES 2005 FIRST QUARTER EARNINGS

Dimeco, Inc. (Nasdaq DIMC), parent company of The Dime Bank, reported first quarter 2005 earnings of $931,000, an increase of 9.5% over $850,000 reported for the first quarter 2004. Net interest income increased 6.6% during the first quarter of 2005 as compared to the first quarter of 2004. Earnings per share of $.60 were reported for the first quarter 2005, representing an increase of 7.1% from the same period of the prior year. The Board of Directors declared a cash dividend of $.25 per share, an 8.7% increase over dividends declared for the first quarter of 2004. Return on average stockholders’ equity and return on average assets were 12.38% and 1.14%, respectively, for the first quarter of 2005.

The Company continued to experience growth during the twelve months ended March 31, 2005 with total assets of $331,972,000, representing an increase of $35,425,000 or 12.0% during the period. Deposits increased $22,270,000 or 8.8% and loans increased $30,714,000 or 13.5% over the previous year balances. Asset quality improved dramatically with the ratio of nonperforming assets to total assets down 81.8% to .16% and the allowance for loan loss enhanced to 654% of nonperforming assets.

Gary Beilman, President and Chief Executive Officer, comments, “I am pleased to say that the year is off to a nice start for Dimeco. Both deposits and loans show positive growth trends while the results of operations also show increases over previous years. All offices in our branch network are busy. We are committed to assisting current customers with all of their financial needs while initializing new relationships. The Dime Bank has received outstanding support in the area of Pike County surrounding our newest office in Dingmans Ferry. Our thanks go out to our customers, the community and our shareholders for continued trust and support.”

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 20, 2005/ Contact: Deborah Unflat-Petroski, Marketing Officer

DIMECO, INC.

CONSOLIDATED STATEMENT OF INCOME (unaudited)

(in thousands, except per share)

For the three months ended March 31,		2005		2004
Interest Income
Interest and fees on loans		$	3,711	$	3,232
Investment securities:
Taxable			404		423
Exempt from federal income tax			38		73
Other			22		4
Total interest income			4,175		3,732
Interest Expense
Deposits			1,142		985
Short-term borrowings			36		22
Other borrowed funds			115		21
Total interest expense			1,293		1,028
Net Interest Income			2,882		2,704
Provision for loan losses			220		377
Net Interest Income After Provision for Loan Losses			2,662		2,327
Noninterest Income
Services charges on deposit accounts			294		299
Other income			444		417
Total noninterest income			738		716
Noninterest Expense
Salaries and employee benefits			1,091		952
Net occupancy and equipment expense			339		281
Other expense			611		589
Total noninterest expense			2,041		1,822
Income before income taxes			1,359		1,221
Income taxes			428		371
NET INCOME		$	931	$	850
	��
Earnings per Share - basic		$	0.60	$	0.56
Earnings per Share - diluted		$	0.58	$	0.53
Average shares outstanding - basic			1,549,187		1,529,925
Average shares outstanding - diluted			1,603,562		1,599,794

DIMECO, INC.

CONSOLIDATED BALANCE SHEET(UNAUDITED)

(in thousands)

March 31,	2005			2004
Assets
Cash and due from banks	$	5,808		$	4,559
Interest-bearing deposits in other banks		36			18
Federal funds sold		7,076			5,000
Total cash and cash equivalents		12,920			9,577
Mortgage loans held for sale		427			—
Investment securities available for sale		47,759			49,239
Investment securities held to maturity (market value of $213 and $228)		198			197
Loans (net of unearned income of $748 and $727)		259,062			228,348
Less allowance for loan losses		3,393			3,349
Net loans		255,669			224,999
Premises and equipment		6,092			4,109
Accrued interest receivable		1,151			1,286
Bank-owned life insurance		5,112			4,916
Other assets		2,644			2,224
TOTAL ASSETS	$	331,972		$	296,547
Liabilities
Deposits :
Noninterest-bearing	$	32,456		$	27,071
Interest-bearing		242,541			225,656
Total deposits		274,997			252,727
Short-term borrowings		13,573			9,821
Other borrowed funds		11,245			4,000
Accrued interest payable		636			603
Other liabilities		1,514			1,479
TOTAL LIABILITIES		301,965			268,630
Stockholders’ Equity
Common stock, $.50 par value; 5,000,000 shares authorized; 1,549,269 and 1,533,634 shares issued		775			767
Capital surplus		4,380			4,067
Retained earnings		25,040			22,536
Accumulated other comprehensive income		(188	)		547
TOTAL STOCKHOLDERS’ EQUITY		30,007			27,917
TOTAL LIABILITES AND STOCKHOLDERS’ EQUITY	$	331,972		$	296,547

This statement has not been reviewed or confirmed for accuracy or relevance by the FDIC.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(amounts in thousands, except per share)

	2005			2004			% Increase (decrease)
Performance for the three months ended March 31,
Interest income	$	4,175		$	3,732		11.9	%
Interest expense	$	1,293		$	1,028		25.8	%
Net interest income	$	2,882		$	2,704		6.6	%
Net income	$	931		$	850		9.5	%
Shareholders’ Value (per share)
Net income - basic	$	0.60		$	0.56		7.1	%
Net income - diluted	$	0.58		$	0.53		9.4	%
Dividends	$	0.25		$	0.23		8.7	%
Book value	$	19.37		$	18.20		6.4	%
Market value	$	36.50		$	42.80		-14.7	%
Market value/book value ratio		188.5	%		235.2	%	-19.9	%
* Price/earnings multiple		15.2	X		19.1	X	-20.4	%
* Dividend yield		2.74	%		2.15	%	27.4	%
Financial Ratios
* Return on average assets		1.14	%		1.15	%	-0.9	%
* Return on average equity		12.38	%		12.24	%	1.1	%
Shareholders’ equity/asset ratio		9.04	%		9.41	%	-3.9	%
Dividend payout ratio		41.67	%		41.07	%	1.5	%
Nonperforming assets/total assets		0.16	%		0.88	%	-81.8	%
Allowance for loan loss as a % of loans		1.31	%		1.47	%	-10.9	%
* Net charge-offs/average loans		0.00	%		0.08	%	-100.0	%
Allowance for loan loss/nonaccrual loans		1098.1	%		133.9	%	720.1	%
Allowance for loan loss/non-performing loans		653.8	%		128.8	%	407.6	%
Financial Position at March 31,
Assets	$	331,972		$	296,547		12.0	%
Loans	$	259,062		$	228,348		13.5	%
Deposits	$	274,997		$	252,727		8.8	%
Stockholders’ equity	$	30,007		$	27,917		7.5	%

* annualized