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Investor Information

Stock Listing – DIMC

Transfer Agent
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
800-937-5449
e-mail:  [email protected]
Internet address:  www.astfinancial.com  

Dividend Reinvestment Plan
The Company offers a plan for stockholders to automatically reinvest their dividends in shares of common stock along with the opportunity to purchase additional stock. There are no brokerage commissions or fees imposed. For more information, contact the Transfer Agent listed above.

Dimeco, Inc. Stock Market Makers

Boenning & Scattergood, Inc.
800-842-8928

FIG Partners, LLC
404-601-7225

Raymond James & Associates
800-800-4693

Stifel, Nicolaus & Company, Inc.
800-233-8602

Directors

John S. Kiesendahl, Chairman
Todd J. Stephens, Vice Chairman
Gary C. Beilman, President
John F. Spall, Secretary

Gregory J. Frigolettop
Barbara J. Genzlinger
Brian T. Kelly
Thomas A. Peifer
David D. Reynolds, M.D.
Henry M. Skier

e-mail:  [email protected]
www.thedimebank.com
888-4MY-DIME

Dear Shareholders:

It is my pleasure to present this report of Dimeco Inc., as of the second quarter of 2019. Enthusiastically, I have great news.

When compared to the same period one year ago, Dimeco’s financial position as of June 30, 2019 shows several positive results. Deposits stand at $565 million, an increase of almost 15% over 2018. Deposit growth this year was spread across checking and savings accounts as well as certificates of deposits. This growth includes the repositioning of commercial funds from repurchase agreement sweep accounts into deposit accounts. This transition provides our commercial clients with FDIC insurance for their deposits, while eliminating the need for us to pledge investment securities. Loans as of June 30, 2019 are $523 million or 3.7% higher than in 2018. The pace of both consumer and commercial loan originations are handsomely ahead of those last year. In 2019, we continue to experience unexpected loan payoffs. Despite these payoffs, our lenders are busy originating new loans, and our loan pipeline remains healthy.

As we end the second quarter of 2019, our assets are $710 million, an increase of 7.7% over the previous year. We are proud to note that this is the first quarter that total assets are over $700 million.

The second quarter indicates continued positive results from an income performance perspective. Interest income for the first half of 2019 is $16 million, a 15% expansion over 2018. Interest expense year to date is $2.7 million, or 58% over one year earlier. Interest expense related to certificates of deposit represents the greatest increase, mostly due to special rate offerings to reward customer relationships and to remain competitive in our market. Of particular note, net interest income is $13.3 million, up 9% over that of a year ago. Net income of $4.4 million is a solid 23% increase over 2018! These positive results are mainly attributable to the increase in all types of interest income along with reduced expenses related to other real estate owned with continued improvement in asset quality.

This strong performance equates to very positive results for shareholders. On a per share basis, the book value and market value of your Dimeco investment grew by 10.7% and 9%, respectively when comparing 2019 to 2018. Moreover, dividends approved by your Board of Directors increased by 7.1% over the same period. Finally, the year to date return on average assets ratio is 1.27% and the return on average equity is 10.79%, increases of 15.5% and 13.2% respectively, over the first half of 2018.

As we move into the next half of 2019, we do so vigilantly, watching several factors including: the overall sentiment of our economy, concern over possible turmoil with foreign trade, and the uncertainty of potential interest rate moves by the Federal Reserve. Rest assured that all our actions in the coming months will continue to be directed toward providing you with the best results possible.

We extend sincere thanks to you for your investment and loyalty. I encourage you to recommend us to others for investment in our stock and to use our full array of banking and wealth management services. As always, your comments and questions are welcome.

Sincerely,


Gary C. Beilman
President and Chief Executive Officer

CONSOLIDATED FINANCIAL HIGHLIGHTS  (unaudited)
(dollars in thousands, exept per share)

  2019    2018   % Increase  
(decrease)
Performance for the six months ended June 30,        
Interest income $ 16,000   13,893  15.2%
Interest expense $ 2,690   1,698  58.4%
Net interest income $ 13,310   12,195  9.1%
Net income $ 4,407   3,585  22.9%
Shareholders' Value (per share)        
Net income - basic $ 1.77   1.45  22.1%
Net income - diluted $ 1.75   1.43  22.4%
Dividends $   .60   .56  7.1%
Book value $ 33.84   30.56  10.7%
Market value $ 40.88   37.50  9.0%
Market value/book value ratio   120.8%      122.7% (1.5%)
Price/earnings multiple*     11.5X      12.9X (10.9%)
Dividend yield*   2.94%      2.99% (1.7%)
Financial Ratios        
Return on average assets*   1.27%      1.10% 15.5%
Return on average equity*   10.79%      9.53%  
Efficiency ratio   64.93%      70.48% (7.9%)
Net interest margin   4.24%      4.13% 2.7%
Shareholders' equity/asset ratio   11.89%      11.49% 3.5%
Dividend payout ratio   33.90%       38.62% (12.2%)
Nonperforming assets/total assets   1.66%      1.75% (5.1%)
Allowance for loan losses as a % of loans   1.61%      1.55% 3.9%
Net charge-offs/average loans     .01%  - -
Allowance for loan losses/nonaccrual loans   127.07%      173.46%  (26.7%)
Allowance for loan losses/non-performing loans   115.47%     155.60%  (25.8%)
Financial Position at June 30,        
Assets $ 709,738   658,812  7.7%
Loans $  523,152   504,550  3.7%
Deposits $ 565,227   492,377  14.8%
Stockholders' equity $ 84,398   75,678  11.5%

*annualized

             
CONSOLIDATED BALANCE SHEET  (unaudited)
(in thousands)   6/30/2019   3/31/2019    6/30/2018
Assets
Cash and cash equivalents $ 21,789 $ 15,172 $ 12,685
Mortgage loans held for sale   -   458   -
Investment securities available for sale   122,965   114,883   99,319
Loans, net of allowance for loan losses   514,741   505,125   496,706
Premises and equipment   9,374   9,417   9,861
Accrued interest receivable   2,282   2,158   1,998
Other real estate owned   4,487   4,749   6,483
Other assets   34,100   34,455   31,760
TOTAL ASSETS $ 709,738 $  686,417 $ 658,812
             
Liabilities     
Deposits:            
    Noninterest-bearing $ 100,370 $ 91,801 $ 97,691
    Interest-bearing   464,857   449,805   394,686
        Total deposits   565,227   541,606   492,377
Short-term borrowings   652   2,318   37,998
Other borrowed funds   49,629   50,820   45,568
Accrued interest payable   284   553   186
Other liabilities   9,548   9,670   7,005
TOTAL LIABILITIES   625,340   604,967   583,134
TOTAL STOCKHOLDERS' EQUITY   84,398   81,450   75,678
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 709,738 $ 686,417 $ 658,812
CONSOLIDATED STATEMENT OF INCOME     (unaudited)
(in thousands, except per share data) Three months ended Six months ended
    6/30/2019   3/31/2019   6/30/2018     6/30/2019   6/30/2018
Interest Income     
Loans, including fees $ 7,049 $ 6,887 $ 6,405   $ 13,936 $ 12,655
Investment securities   943   881   612     1,824   1,126
Other   159   81   71     240   112
    Total interest income   8,151   7,849   7,088     16,000   13,893
Interest Expense     
Deposits   1,007   999   553     2,006   1,108
Short-term borrowings   -   10   31     10   57
Other borrowed funds   331   343   281     674   533
    Total interest expense   1,338   1,352   865     2,690   1,698
Net Interest Income   6,813   6,497   6,223     13,310   12,195
Provision for loan losses   102   248   -     350   248
Net Interest Income, After Provision for Loan Losses   6,711   6,249   6,223     12,960   11,947
Noninterest income   1,158   1,038   1,077     2,196   2,301
Noninterest expense   5,320   4,887   5,453     10,207   10,347
Income before income taxes   2,549   2,400   1,847     4,949   3,901
Income taxes   299   243   142     542   316
NET INCOME $ 2,250 $ 2,157 $ 1,705   $ 4,407 $ 3,585
Earnings per share-basic $ .90 $ .87 $ .69   $ 1.77 $ 1.45
Earnings per share-diluted $ .89 $ .86 $ .68   $ 1.75 $ 1.43
Average shares outstanding-basic   2,490,179   2,488,467   2,475,503     2,489,969   2,475,285
Average shares outstanding-diluted   2,518,289   2,517,538   2,502,530     2,518,518   2,501,735