Dimeco (DIMC) 8-K Dimeco, Inc. Announces 2007 First Quarter Earnings

Exhibit 99

NEWS RELEASE

TO BUSINESS EDITOR

DIMECO, INC. ANNOUNCES 2007 FIRST QUARTER EARNINGS

Dimeco, Inc. (Nasdaq DIMC), parent company of The Dime Bank, reported first quarter 2007 earnings of $1,497,000, an increase of 25.3% over $1,195,000 reported for the first quarter 2006. A key component of this increase was net interest income, which increased 14.0% in the first quarter of 2007 as compared to that quarter in 2006. These additional earnings drove the earnings per share to $.98 for the first quarter 2007, representing an increase of 25.6% over the same quarter of 2006. This level of net income provided a return on average stockholders’ equity of 16.62% and a return on average assets of 1.50% for the first quarter of 2007. The Board of Directors declared a cash dividend of $.29 per share, representing an increase of 11.5% over the $.26 per share declared in first quarter of 2006.

The Company continued to experience growth during the twelve months ended March 31, 2007 with total assets of $404,992,000, representing an increase of $43,953,000 or 12.2% from one year earlier. Deposits increased $44,649,000, or 15.2%, and loans increased $24,970,000, or 8.8%, over balances a year earlier. Asset quality remained strong at March 31, 2007 with net charge offs to average loans at .20%, nonperforming assets to total assets at .10% while the allowance for loan loss represented 1.47% of total loans.

Gary C. Beilman, President and Chief Executive Officer, commented, “It is with great pleasure that I report our first quarter financials. Dimeco continues its growth pattern in all categories: deposits, loans and assets. Credit quality remains extremely favorable. This growth and asset quality, together with cost containment and interest spread management, have produced handsome net income and financial ratios that should place us in the top percentile of our peer group. We thank our customers, staff, community and shareholders for their continued confidence in us and we invite you to recommend us to your family, friends and associates.”

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, 2007

Deborah L Unflat

Assistant Vice President

Marketing Officer

The Dime Bank

120 Sunrise Avenue

Honesdale PA 18431

570-253-6511 x715

dunflat@thedimebank.com

DIMECO, INC.

CONSOLIDATED STATEMENT OF INCOME (unaudited)

(in thousands, except per share)	For the three months ended March 31,
	2007		2006
Interest Income
Interest and fees on loans	$	6,074	$	4,871
Investment securities:
Taxable		787		521
Exempt from federal income tax		72		49
Other		54		16
Total interest income		6,987		5,457
Interest Expense
Deposits		2,760		1,700
Short-term borrowings		65		63
Other borrowed funds		151		176
Total interest expense		2,976		1,939
Net Interest Income		4,011		3,518
Provision for loan losses		225		215
Net Interest Income After Provision for Loan Losses		3,786		3,303
Noninterest Income
Services charges on deposit accounts		382		365
Other income		428		374
Total noninterest income		810		739
Noninterest Expense
Salaries and employee benefits		1,393		1,267
Net occupancy and equipment expense		342		331
Other expense		685		696
Total noninterest expense		2,420		2,294
Income before income taxes		2,176		1,748
Income taxes		679		553
NET INCOME	$	1,497	$	1,195
Earnings per Share - basic	$	0.98	$	0.78
Earnings per Share - diluted	$	0.95	$	0.76
Average shares outstanding - basic		1,527,418		1,522,967
Average shares outstanding - diluted		1,580,945		1,571,149

DIMECO, INC.

CONSOLIDATED BALANCE SHEET (UNAUDITED)

(in thousands)
March 31,	2007			2006
Assets
Cash and due from banks	$	6,683		$	8,438
Interest-bearing deposits in other banks		35			1,808
Federal funds sold		8,525			7,030
Total cash and cash equivalents		15,243			17,276
Mortgage loans held for sale		120			142
Investment securities available for sale		66,715			47,840
Investment securities held to maturity (market value of $205)		—			199
Loans (net of unearned income of $772 and $713)		308,875			283,905
Less allowance for loan losses		4,542			4,171
Net loans		304,333			279,734
Premises and equipment		5,664			5,913
Accrued interest receivable		1,696			1,363
Bank-owned life insurance		7,964			5,301
Other assets		3,257			3,271
TOTAL ASSETS	$	404,992		$	361,039
Liabilities
Deposits :
Noninterest-bearing	$	32,024		$	29,388
Interest-bearing		306,898			264,885
Total deposits		338,922			294,273
Short-term borrowings		12,127			15,380
Other borrowed funds		13,562			16,356
Accrued interest payable		1,584			924
Other liabilities		2,271			1,991
TOTAL LIABILITIES		368,466			328,924
Stockholders' Equity
Common stock, $.50 par value; 5,000,000 shares authorized;
1,571,570 and 1,553,494 shares issued		786			777
Capital surplus		4,880			4,455
Retained earnings		32,409			28,199
Accumulated other comprehensive loss		(7	)		(254	)
Treasury stock, at cost (43,000 and 30,000 shares)		(1,542	)		(1,062	)
TOTAL STOCKHOLDERS' EQUITY		36,526			32,115
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	404,992		$	361,039

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)	2007			2006			% Increase (decrease)
Performance for the three months ended March 31,
Interest income	$	6,987		$	5,457		28.0	%
Interest expense	$	2,976		$	1,939		53.5	%
Net interest income	$	4,011		$	3,518		14.0	%
Net income	$	1,497		$	1,195		25.3	%
Shareholders' Value (per share)
Net income - basic	$	0.98		$	0.78		25.6	%
Net income - diluted	$	0.95		$	0.76		25.0	%
Dividends	$	0.29		$	0.26		11.5	%
Book value	$	23.89		$	21.08		13.3	%
Market value	$	43.00		$	33.85		27.0	%
Market value/book value ratio		180.0	%		160.6	%	12.1	%
*       Price/earnings multiple		11.0	X		10.9	X	0.9	%
*       Dividend yield		2.70	%		3.07	%	-12.1	%
Financial Ratios
*       Return on average assets		1.50	%		1.35	%	11.1	%
*       Return on average equity		16.62	%		15.02	%	10.7	%
Shareholders' equity/asset ratio		9.02	%		8.90	%	1.4	%
Dividend payout ratio		29.59	%		33.33	%	-11.2	%
Nonperforming assets/total assets		0.10	%		0.17	%	-41.2	%
Allowance for loan loss as a % of loans		1.47	%		1.47	%	—
*       Net charge-offs/average loans		0.20	%		0.02	%	900.0	%
Allowance for loan loss/nonaccrual loans		1164.6	%		2708.4	%	-57.0	%
Allowance for loan loss/non-performing loans		1121.5	%		671.7	%	67.0	%
Financial Position at March 31,
Assets	$	404,992		$	361,039		12.2	%
Loans	$	308,875		$	283,905		8.8	%
Deposits	$	338,922		$	294,273		15.2	%
Stockholders' equity	$	36,526		$	32,115		13.7	%

* annualized