<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
-------------- --------------
Commission file Number 33-58936
Dimeco, Inc.
-----------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2250152
- ------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
820 Church Street
---------------------
Honesdale, PA 18431
---------------------
(Address of principal executive offices)
(717) 253-1970
---------------------
(Issuer's Telephone Number)
Not Applicable
---------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Sections 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
As of August 5, 1997, there were 722,736 shares outstanding of the issuer's
common stock with an aggregate market value of approximately $20,236,597.
<PAGE>
Dimeco, Inc.
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet (unaudited) as of June 30,
1997 and December 31, 1996 3
Consolidated Statement of Income (unaudited) for the
three months and the six months ended
June 30, 1997 and 1996 4
Consolidated Statement of Cash Flows (unaudited) for
the six months ended June 30, 1997 and 1996 5
Consolidated Statement of Changes in Stockholders' Equity 6
Notes to Consolidated Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Default Upon Senior Securities 14
Item 4. Submissions of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
-2-
<PAGE>
Dimeco, Inc.
CONSOLIDATED BALANCE SHEET (Unaudited)
June 30, December 31,
1997 1996
------------- -------------
Assets
Cash and due from banks $ 1,282,567 $ 1,600,524
Interest-bearing deposits in other banks 3,488,280 3,718,168
Federal Funds Sold 8,100,000 1,195,000
------------- -------------
Total cash and cash equivalents 12,870,847 6,513,692
------------- -------------
Mortgage loans held for sale - 206,813
Investment securities held to maturity
(market value $7,858,148 and $14,511,446) 7,799,691 14,792,495
Investment securities available for sale 11,754,953 13,714,782
Loans (net of unearned income of $1,645,175
and $2,215,510) 107,069,033 100,013,324
Less allowance for possible loan losses 1,341,166 1,366,006
------------- -------------
Net loans 105,727,867 98,647,318
------------- -------------
Premises and equipment, net 2,998,551 3,066,150
Other real estate 535,619 460,619
Accrued interest receivable 975,537 1,003,565
Other assets 1,912,406 1,878,770
------------- -------------
TOTAL ASSETS $ 144,575,471 $ 140,284,204
============= =============
Liabilities
Deposits:
Noninterest-bearing $ 14,590,913 $ 12,760,278
Interest-bearing 115,349,287 113,242,229
------------- -------------
Total Deposits 129,940,200 126,002,507
------------- -------------
Accrued interest payable 523,208 521,229
Other liabilities 475,887 613,193
------------- -------------
TOTAL LIABILITIES 130,939,295 127,136,929
------------- -------------
Stockholders' Equity
Common stock, $.50 par value; 3,000,000 shares
authorized, 726,219 and 718,338 shares issued
and outstanding 363,109 360,952
Capital surplus 2,659,526 2,558,151
Retained earnings 10,794,135 10,257,053
Less treasury stock; (5,600 shares at cost) (148,400) -
Net unrealized loss on securities available
for sale (32,194) (28,881)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 13,636,176 13,147,275
------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 144,575,471 $ 140,284,204
============= =============
See accompanying notes to the consolidated financial statements.
-3-
<PAGE>
Dimeco, Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
---------------------------- ----------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INTEREST AND DIVIDEND INCOME
Interest and fees on loans $ 2,367,310 $ 2,139,306 $ 4,589,517 $ 4,262,825
Interest-bearing deposits in other banks 6,271 8,319 12,008 12,334
Federal funds sold and securities
purchased under agreement to resell 30,479 130,983 47,128 251,778
Investment securities:
Taxable 290,823 217,792 600,126 379,009
Exempt from federal income tax 62,644 81,056 128,496 161,651
----------- ----------- ----------- -----------
Total interest income 2,757,527 2,577,456 5,377,275 5,067,597
----------- ----------- ----------- -----------
INTEREST EXPENSE
Deposits 1,159,588 1,079,583 2,283,364 2,147,235
Borrowed funds 670 - 5,582 -
Securities sold under agreements to repurchase - 28,993 - 58,636
----------- ----------- ----------- -----------
Total interest expense 1,160,258 1,108,576 2,288,946 2,205,871
----------- ----------- ----------- -----------
NET INTEREST INCOME 1,597,269 1,468,880 3,088,329 2,861,726
Provision for loan losses 136,500 136,500 271,500 273,000
----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,460,769 1,332,380 2,816,829 2,588,726
----------- ----------- ----------- -----------
OTHER INCOME
Service charges on deposit accounts 56,062 57,374 106,748 106,704
Gain (loss) on loans available for sale 6,037 (35,746) 20,031 (36,084)
Other operating income 97,228 91,996 199,384 197,717
Gain on sale of securities - 59,257 - 59,257
----------- ----------- ----------- -----------
Total other income 159,327 172,881 326,163 327,594
----------- ----------- ----------- -----------
OTHER EXPENSES
Salaries and employee benefits 494,286 477,167 1,027,730 957,182
Occupancy expense, net 84,011 63,975 169,713 140,485
Furniture and equipment expense 82,468 68,690 152,651 128,183
Deposit insurance premiums 6,513 500 7,831 1,000
Other operating expense 333,644 296,456 636,847 585,930
----------- ----------- ----------- -----------
Total other expenses 1,000,922 906,788 1,994,772 1,812,780
----------- ----------- ----------- -----------
Income before income taxes 619,174 598,473 1,148,220 1,103,540
Income tax expense 189,400 179,000 351,100 329,000
----------- ----------- ----------- -----------
NET INCOME $ 429,774 $ 419,473 $ 797,120 $ 774,540
=========== =========== =========== ===========
NET EARNINGS PER SHARE $ 0.59 $ 0.58 $ 1.10 $ 1.08
=========== =========== =========== ===========
</TABLE>
[FN]
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
Dimeco, Inc.
STATEMENT OF CASH FLOWS (Unaudited)
Six Months
Ended June 30,
1997 1996
----------- -----------
OPERATING ACTIVITIES
Net income $ 797,120 $ 774,540
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 271,500 273,000
Depreciation 166,279 130,406
Market value adjustment, loans held for sale - 31,365
Amortization of investments, net (2,902) 64,393
Deferred tax provision - -
Investment securities gains - (59,257)
Decrease (increase) in accrued interest receivable 28,028 (63,091)
Increase (decrease) in accrued interest payable - (7,001)
Net decrease in loans available for sale 1,979 (364,820)
Amortization of net deferred loan origination fees (38,446) (41,995)
Other, net (206,673) (150,668)
----------- -----------
Net cash provided by operating activities 1,016,885 586,872
----------- -----------
INVESTING ACTIVITIES
Investment securities available for sale:
Proceeds from sales of investment securities - 354,248
Proceeds from maturities or paydowns
of investment securities 20,708,218 11,698,103
Purchase of investment securities (11,750,265) (14,889,043)
Net increase in loans (7,181,790) (5,586,211)
Purchase of premises and equipment (98,680) (50,142)
Proceeds from sale of other real estate - 89,655
----------- -----------
Net cash provided by (used for)
investing activities 1,677,483 (8,383,390)
----------- -----------
FINANCING ACTIVITIES
Increase (decrease) in deposits, net 3,937,693 8,695,224
Decrease in short term borrowings - (2,050,000)
Proceeds from dividend reinvestment and
stock purchase plan 103,532 182,252
Dividends paid (260,038) (206,836)
Purchase Treasury Stock (148,400) -
----------- -----------
Net cash provided by financing activities 3,632,787 6,620,640
----------- -----------
Increase (decrease) in cash and cash equivalents 6,327,155 (1,175,878)
Cash and cash equivalents at beginning of period 6,513,692 9,121,689
----------- -----------
Cash and cash equivalents at end of period $12,840,847 $ 7,945,811
=========== ===========
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
Dimeco, Inc.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Net
Unrealized Total
Common Retained Treasury Loss on Stockholders'
Stock Surplus Earnings Stock Securities Equity
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1997 $ 360,952 $ 2,558,151 $ 10,257,053 $ - $ (28,881) $ 13,147,275
Net Income 797,120 797,120
Net Unrealized loss on
securities (3,313) (3,313)
Purchase treasury stock (178,400) (148,400)
Dividend reinvestment and
stock purchase plan 2,157 101,375 103,532
Cash dividends (.36 per
share) (260,038) (260,038)
------------ ------------ ------------ ------------ ------------ ------------
Balance, June 30, 1997 $ 363,109 $ 2,659,526 $ 10,794,135 $ (148,400) $ (32,194) $ 13,636,176
============ ============ ============ ============ ============ ============
</TABLE>
[FN]
See accompanying notes to the consolidated financial statements.
-6-
<PAGE>
Dimeco, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Basis of Presentation
- ---------------------
The consolidated financial statements include the accounts of Dimeco, Inc.
(the "Company") and its wholly-owned subsidiary The Dime Bank (the "Bank").
All significant intercompany balances and transactions have been eliminated in
the consolidation.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do
not necessarily include all information that would be included in audited
financial statements. The information furnished reflects all adjustments
which are, in the opinion of management, necessary for a fair statement of the
results of operations. All such adjustments are of a normal recurring nature.
The results of operations for the interim periods are not necessarily
indicative of the results to be expected for the full year.
Certain comparative amounts for 1996 have been reclassified to conform to 1997
classifications.
Pending Accounting Pronouncements
- ---------------------------------
In June 1996, the Financial Accounting Standards Board ("FASB") issued
Statement No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities." The Statement provides consistent
standards for distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings based on control-oriented "financial-
components" approach. Under this approach, after a transfer of financial
assets, an entity recognizes the financial and servicing assets it controls
and liabilities it has incurred, derecognizes financial assets when control
has been surrendered and derecognizes liabilities when extinguished. The
provisions of Statement No. 125 are effective for transactions occurring after
December 31, 1996, except those provisions relating to repurchase agreements,
securities lending, and other similar transactions and pledged collateral,
which have been delayed until after December 31, 1997 by Statement No. 127,
"Deferral of the Effective Date of Certain Provisions of FASB Statement No.
125, an amendment of FASB Statement No. 125." The adoption of these statements
is not expected to have a material impact on financial position or results of
operations.
On March 3, 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 128, "Earning Per Share." Statement No. 128
will become effective for the Company beginning in December 1997. This
statement re-defines the standards for computing earnings per share ("EPS")
previously found in Accounting Principles Board Opinion No. 15, Earnings Per
Share. Statement No. 128 establishes new standards for computing and
presenting EPS and requires dual presentation of "basic" and "diluted" EPS on
the face of the income statement for all entities with complex capital
structures. Under Statement No. 128, basic EPS is to be computed based upon
income availability to common shareholders and the weighted average number of
common shares outstanding for the period. Diluted EPS is to reflect the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the Company.
Statement No. 128 also requires the restatement of all prior-period EPS data
presented. The Company will adopt Statement No. 128 as of December 31, 1997
and based on current estimates, does not believe the effect of adoption will
have a significant impact on the Company's financial position or results of
operations.
-7-
<PAGE>
In July 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income."
Statement No. 130 is effective for fiscal years beginning after December 15,
1997. This statement establishes standards for reporting and presentation of
comprehensive income and its components (revenue, expenses, gains, and losses)
in a full set of general purpose financial statements. It requires that all
items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that
is presented with the same prominence as other financial statements.
Statement No. 130 requires that companies (i) classify items of other
comprehensive income by their nature in a financial statement and (ii) display
the accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of the statement
of financial condition. Reclassification of financial statements for earlier
periods provided for comprehensive purposes is required.
-8-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Financial Condition
Total assets at June 30, 1997 increased $4,291,000 or 3.1% to $144,575,000
from the $140,284,000 reported at December 31, 1996. Cash and cash
equivalents increased $6,357,000 or 97.6% due mainly to increases in federal
funds sold. In light of lower interest rates offered in the bond market, the
proceeds of investment securities that have matured in 1997 were left in
federal funds sold in order to keep liquidity levels high while maintaining
interest income levels comparable to those on short term investments. The
investment security portfolio reflects this with a decrease of $6,993,000 or
47.3% in held to maturity investments and $1,960,000 or 14.3% in the available
for sale category.
The loan portfolio increased $7,056,000 or 7.1% from December 31, 1996,
bringing the total to $107,069,000 as of June 31, 1997. Residential mortgages
increased $1,239,000 from December 31, 1996 to $37,078,000 at June 30, 1997.
This growth is noteworthy in light of the fact that during the first half of
1997 the Company conducted three sales of residential mortgages in the
secondary market amounting to $2,014,000. Commercial real estate loans grew
by $3,849,000 with loan activity in this category widely diversified among
various types of businesses including children's camps, grocery stores,
nursing homes, restaurants, retail shopping stores and others. Management
believes that the loan growth is a reflection of an improving local economy.
Although certain segments of the Company's marketplace continue to struggle,
generally the areas served by the Company are beginning to experience some of
the uptick that the nation has seen during the past two to three years.
Noninterest-bearing deposits increased $1,831,000 or 14.3% due in part to
increased branching in the past two years along with normal cyclical
commercial customer increased balances. Interest-bearing deposits increased
$2,107,000 or 1.9%, the greatest single account type increase being statement
savings accounts. Management believes this increase is due to competitive
rates offered, with business customers in particular using this type of
account.
Equity capital increased $489,000 or 3.7% since December 31, 1996, primarily
the result of net earnings for the period of $797,000. The dividend
reinvestment plan contributed $104,000. The Company took advantage of an
opportunity to purchase a block of 5,600 shares of stock for $148,000. The
Company will use this stock for purchases in the dividend reinvestment plan in
the upcoming quarters. Stockholders' Equity was decreased by dividends of
$260,000, which accounted for a 28.6% increase in dividends per share as
compared to the first half of 1996.
Management monitors risk-based capital and leverage capital ratios in order to
assess compliance with regulatory guidelines. At June 30, 1997, the bank had
total risk-based capital of 14.3%, exceeding the 8.0% minimum risk-based
capital requirement. Core equity capital, which must be at least fifty
percent of the total risk-based capital, was 13.1% of this requirement at June
30, 1997. Additionally, the Company must maintain a minimum leverage capital
ratio of 3%. As of June 30, 1997 the Company's leverage capital ratio was
9.4%.
-9-
<PAGE>
Results of Operation
Comparison of the Six Months Ended June 30, 1997 and 1996.
- ---------------------------------------------------------
The Company earned $797,000 for the six months ended June 30, 1997, an
increase of $23,000 or 2.9% from the $775,000 reported the first half of 1996.
The net interest margin increased $227,000 or 7.9% from 1996 to 1997 as a
result of a volume increase of $12,767,000 in average interest earning assets
and $8,092,000 in average interest-bearing liabilities while the Company
experienced rate decreases in earning assets of .44% and .32% in interest-
bearing liabilities.
The provision for loan losses remained constant in spite of increases in the
size of the loan portfolio in light of management's continuing evaluation of
credit risk in the portfolio. Our internal evaluation of the allowance for
loan loss indicates that the current allowance is adequate and that the
provision expense is sufficient. Management has taken an aggressive stand in
charging off any loans that qualify under their more stringent charge-off
guidelines and feels that this policy will in fact strengthen the quality of
the remaining loan portfolio. The level of the allowance for loan loss as a
percentage of total loans at June 30, 1997 was 1.25% compared with 1.41% at
June 30, 1996.
Gains (losses) on loans held for sale increased $56,000 in 1997 from 1996.
During 1996 the Company experienced losses in the held for sale loan category
due to unrealized market value decreases while during 1997 the Company sold
loans of $2,014,000 recognizing gains of $20,000.
In the second quarter of 1996, a municipal bond which had been in nonaccrual
status and had been adjusted to a lower market value was refunded and sold
realizing a gain of $52,000. In addition, a group of mortgage-backed
securities which had been paid down to a value below our policy limits was
sold realizing a gain of $7,000. There were no securities sold in 1997.
Salaries and employee benefits increased $71,000 or 7.4% in 1997 as compared
to 1996. Payroll expense increased $49,000 or 7.1% which is due to a
combination of normal salary increases of approximately 5.3%, increased
deferral of payroll costs associated with the origination of loans of $43,000
(deducted from payroll expense) and to increased staffing due to the 1996
opening of the Greentown office amounting to $57,000.
Occupancy expense increased $29,000 or 20.8% mainly due to the leasing of the
Greentown office in the fourth quarter of 1996.
Furniture and equipment expense increased $24,000 or 19.1% with increased
depreciation expenses on fixed assets associated with the opening of the
Greentown office and purchases of computer hardware made in 1996 accounting
for $33,000 in increased expenses.
-10-
<PAGE>
Other operating expense increased $51,000 or 8.7% from 1996 to 1997. Computer
software amortization increased $16,000 with the purchase of $256,000 in new
software during 1996. In addition, computer software maintenance coupled with
increased expenses due to additional purchases made in 1996 increased this
category by $23,000. Outside professional fees increased $17,000 due to
consulting services in connection to marketing and management team building.
Expenses connected with operating or selling other real estate properties
decreased $31,000 from 1996 to 1997 mainly due to the fact that no properties
were sold in 1997 as compared to losses on sales in 1996 of $24,000. Changes
in various other categories account for the remaining increase, with no one
category being a significant dollar amount.
Comparison of Three Months Ended June 30, 1997 and 1996
- -------------------------------------------------------
Net income increased $11,000 for the three months ended June 30, 1997 as
compared to the same quarter in 1996. The net interest margin increased
$128,000 over the same quarter in 1996 based upon increased volume with a
decrease in interest rate, as noted in the six month discussion above.
Market rates dropped on the loans held for sale portfolio during the second
quarter of 1996 compared to gains in 1997 as discussed in the six month
section. Also discussed in the six month section above, management took an
opportunity to sell certain securities in the second quarter of 1996 which were
not matched in 1997.
The increase in salaries was due to normal salary increases of 5.75% offset by
higher than normal overtime costs incurred in 1996 associated with the
computer conversion in the second and third quarter of 1996.
Occupancy expense increased $20,000 or 31.3% mainly due to the increased
expenses in the Greentown office which was not open in the second quarter of
1996.
Furniture and equipment expense increased $14,000 or 20.0% mainly due to
depreciation on the new assets in the Greentown office.
-11-
<PAGE>
Liquidity and Cash Flows
To ensure that the Company can satisfy customer credit needs for current and
future commitments and deposit withdrawal requirements, the Bank manages the
liquidity position by ensuring that there are adequate short-term funding
sources available for those needs. Liquid assets consists of cash and due
from banks, federal funds sold, interest-bearing deposits with other banks and
investment securities maturing in one year or less. The following table shows
these liquidity sources, minus short-term borrowings, as of June 30, 1997
compared to December 31, 1996:
June 30, December 31,
-------- --------
(dollars in thousands)
Cash and due from banks $ 1,283 $ 1,601
Interest-bearing deposits with other banks 3,488 3,719
Federal funds sold 8,100 1,195
Mortgage loans held for sale - 207
Investment securities maturing in one year or less 8,600 20,384
-------- --------
21,471 27,106
Less short-term borrowings - -
-------- --------
Net liquidity position $ 21,471 $ 27,106
======== ========
As a percent of total assets 14.9% 19.3%
======== ========
Management monitors liquidity on a consistent basis and feels that liquidity
levels are adequate. In addition to these liquidity sources, the Bank has
available also a credit line with the Federal Home Loan Bank in the amount of
$3.5 million.
Management is not aware of any known trends, events or uncertainties that will
have or is reasonably likely to have a material effect on the Company's
liquidity, capital resources or operations nor is management aware of any
current recommendations by regulatory authorities, which if implemented, would
have such an effect.
-12-
<PAGE>
Risk Elements
The table below presents information concerning nonperforming assets including
nonaccrual loans, renegotiated loans, loans 90 days or more past due,
nonaccrual securities, other real estate loans and repossessed assets at June
30, 1997 and December 31, 1996. A loan is classified as nonaccrual when, in
the opinion of management, there are doubts about collectibility of interest
and principal. At the time the accrual of interest is discontinued, future
income is recognized only when cash is received. Renegotiated loans are those
loans which terms have been renegotiated to provide a reduction or deferral of
principal or interest as a result of the deterioration of the borrower.
June 30, December 31,
-------- --------
(dollars in thousands)
Loans on nonaccrual basis $ 940 $ 1,822
Loans past due 90 days or more 1,167 834
Renegotiated loans 691 -
-------- --------
Total nonperforming loans 2,798 2,656
Other real estate 536 461
Repossessed assets 2 -
Nonaccrual securities - -
-------- --------
Total nonperforming assets $ 3,336 $ 3,117
======== ========
Nonperforming loans as a percent of total loans 2.6% 2.7%
======== ========
Nonperforming assets as a percent of total assets 2.3% 2.2%
======== ========
Management believes the level of the allowance for loan losses at June 30,
1997 is sufficient. The relationship between the allowance for loan losses
and outstanding loans is a function of the credit quality and known risk
attributed to the loan portfolio. The on-going loan review program and credit
approval process is used to determine the adequacy of the allowance for loan
losses. Included in total loans are loans of $1,111,000 which management has
classified as impaired under the terms of Financial Accounting Standards Board
Statement No. 114, "Accounting by Creditors for Impairment of a Loan Income
Recognition and Disclosure." The related allowance for loan losses on these
loans amounted to $173,000. There were no impaired loans without a related
allowance for loan losses.
Management does not believe that loans classified as loss, doubtful
substandard or special mention for internal or regulatory purposes (i)
represent or result from trends or uncertainties which management reasonably
expects will materially impact future operating results, liquidity, or capital
resources, or (ii) represent material loans about which management is aware of
any information which causes management to have serious doubts as to the
ability of such borrowers to comply with the loan repayment terms.
-13-
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
NONE
Item 2 - Changes in the rights of the Company's security holders
NONE
Item 3 - Defaults by the Company on its senior securities
NONE
Item 4 - Submissions of matters to a vote of security holders
The following represents the results of matters submitted to a
vote of the shareholders at the annual meeting held on April 24,
1997:
Election of Directors:
The following directors were elected with terms to expire
April, 2000:
For Against Abstain
David M. Boyd 500,481.9668 5,851.5479 0.
Thomas A Peifer 500,542.6204 5,790.8943 0.
S.R. Snodgrass, A.C. was selected as the Company's independent
auditors for the year ending December 31, 1997 by the following
vote:
For: 506,333.5147
Against: 0.0000
Abstain: 0.0000
Item 5 - Other information
NONE
Item 6 - Exhibits and Reports on Form 8-K
NONE
-14-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused the report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DIMECO, INC.
Date: August 6, 1996 By:
-----------------------------------
Joseph J. Murray
President and Chief Executive Officer
Date: August 6, 1996 By:
------------------------------------
Maureen H. Beilman
Controller/Treasurer
-15-
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1997
<CASH> 1,283
<INT-BEARING-DEPOSITS> 3,488
<FED-FUNDS-SOLD> 8,100
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 11,755
<INVESTMENTS-CARRYING> 7,800
<INVESTMENTS-MARKET> 7,858
<LOANS> 107,069
<ALLOWANCE> 1,341
<TOTAL-ASSETS> 144,575
<DEPOSITS> 129,940
<SHORT-TERM> 0
<LIABILITIES-OTHER> 476
<LONG-TERM> 0
0
0
<COMMON> 363
<OTHER-SE> 13,273
<TOTAL-LIABILITIES-AND-EQUITY> 144,575
<INTEREST-LOAN> 4,590
<INTEREST-INVEST> 729
<INTEREST-OTHER> 59
<INTEREST-TOTAL> 5,377
<INTEREST-DEPOSIT> 2,283
<INTEREST-EXPENSE> 2,289
<INTEREST-INCOME-NET> 3,088
<LOAN-LOSSES> 272
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,995
<INCOME-PRETAX> 1,148
<INCOME-PRE-EXTRAORDINARY> 797
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 797
<EPS-PRIMARY> 1.10
<EPS-DILUTED> 1.10
<YIELD-ACTUAL> 8.34
<LOANS-NON> 940
<LOANS-PAST> 1,167
<LOANS-TROUBLED> 691
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,366
<CHARGE-OFFS> 320
<RECOVERIES> 23
<ALLOWANCE-CLOSE> 1,341
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
