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 March 31, 2000
[ ] 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)
(570) 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
----- -----
The aggregate market value of the voting stock held by non-affiliates of the
registrant based on a closing sale price: $18,401,850 on May 5, 2000.
As of May 5, 2000, the registrant had outstanding 739,624 shares of its common
stock, par value $.50 per share.
<PAGE>
<PAGE>
Dimeco, Inc.
INDEX
PART I - FINANCIAL INFORMATION Page
----
Item 1. Financial Statements
Consolidated Balance Sheet (unaudited) as of
March 31, 2000 and December 31, 1999 3
Consolidated Statement of Income (unaudited) for
the three months ended March 31, 2000 and 1999 4
Consolidated Statement of Changes in Stockholders'
Equity (unaudited) for the three months ended
March 31, 2000 5
Consolidated Statement of Cash Flows (unaudited)
for the three months ended March 31, 2000 and 1999 6
Notes to Consolidated Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submissions of Matters to a Vote of Security Holders 12-13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 13
2
<PAGE>
DIMECO, INC.
CONSOLIDATED BALANCE SHEET (Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------- -------------
<S> <C> <C>
Assets
Cash and due from banks $ 1,632,544 $ 2,491,460
Interest-bearing deposits in other banks 3,991,515 1,199,210
Federal funds sold and securities purchased
under agreement to resell 4,200,000 940,000
------------- -------------
Total cash and cash equivalents 9,824,059 4,630,670
Mortgage loans held for sale - 237,000
Investment securities available for sale 24,674,027 31,246,921
Investment securities held to maturity
(market value $15,498,465 and $15,516,823) 15,533,661 15,570,500
Loans (net of unearned income of $679,007
and $702,421) 143,567,671 137,526,437
Less allowance for loan losses 1,974,182 1,833,615
------------- -------------
Net loans 141,593,489 135,692,822
Premises and equipment, net 3,884,891 3,598,780
Other real estate 281,436 355,436
Accrued interest receivable 1,520,010 1,386,655
Other assets 2,054,915 1,947,855
------------- -------------
Total Assets $ 199,366,488 $ 194,666,639
============= =============
Liabilities
Deposits
Noninterest-bearing $ 17,681,878 $ 14,627,337
Interest-bearing 155,115,710 152,666,444
------------- -------------
Total deposits 172,797,588 167,293,781
Short-term borrowings 5,788,744 8,184,933
Other borrowings 1,000,000 -
Accrued interest payable 1,012,319 962,542
Other liabilities 963,447 802,167
------------- -------------
Total Liabilities 181,562,098 177,243,423
------------- -------------
Stockholder's Equity
Common stock, $.50 par value; 3,000,000 shares
authorized, 738,372 and 735,565 shares issued 369,186 367,782
Capital surplus 3,097,104 3,004,439
Retained earnings 14,690,214 14,378,134
Accumulated other comprehensive income (257,804) (245,830)
Treasury stock, at cost(2,644 and 2,144 shares) (94,310) (81,309)
------------- -------------
Total Stockholders' Equity 17,804,390 17,423,216
------------- -------------
Total Liabilities and Stockholders Equity $ 199,366,488 $ 194,666,639
============= =============
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
3
<PAGE>
DIMECO, INC.
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
------------- -------------
<S> <C> <C>
Interest Income
Interest and fees on loans $ 3,079,601 $ 2,732,601
Interest-bearing deposits in other banks 10,383 68,434
Federal funds sold and securities purchased
under agreements to resell 20,870 108,026
Investment securities:
Taxable 557,838 381,609
Exempt from federal income tax 46,488 15,973
------------- -------------
Total interest income 3,715,180 3,306,643
------------- -------------
Interest Expense
Deposits 1,558,586 1,451,654
Short-term borrowings 63,833 25,997
Other borrowings 7,059 -
------------- -------------
Total interest expense 1,629,478 1,477,651
------------- -------------
Net Interest Income 2,085,702 1,828,992
Provision for loan losses 197,500 112,500
------------- -------------
Net Interest Income After Provision
For Loan Losses 1,888,202 1,716,492
------------- -------------
Noninterest Income
Service charges on deposit accounts 86,368 53,525
Mortgage loans held for sale, gains(losses)net 2,095 (21,919)
Other income 124,162 142,225
------------- -------------
Total noninterest income 212,625 173,831
------------- -------------
Noninterest Expense
Salaries and employee benefits 644,942 569,177
Occupancy expense, net 134,022 119,285
Furniture and equipment expense 98,084 105,031
Other expenses 444,649 364,339
------------- -------------
Total noninterest expense 1,321,697 1,157,832
------------- -------------
Income Before Income Taxes 779,130 732,491
Income taxes 246,182 241,693
------------- -------------
NET INCOME $ 532,948 $ 490,798
============= =============
Earnings Per Share $ .72 $ .67
============= =============
Average shares outstanding 735,739 731,821
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
DIMECO, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
Accumulated
Other Total
Common Capital Retained Comprehensive Treasury Stockholders' Comprehensive
Stock Surplus Earnings Loss Stock Equity Income
--------- ---------- ----------- ---------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1999 $ 367,782 $3,004,439 $14,378,134 $ (245,830) $ (81,309) $17,423,216
Net income 532,948 532,948 $ 532,948
Other comprehensive income:
Net unrealized loss on
available for sale
securities, net of tax
benefit of $6,168 (11,974) (11,974) (11,974)
---------
Comprehensive income $ 520,974
=========
Dividend reinvestment plan 1,404 92,665 94,069
Purchase treasury stock (13,001) (13,001)
Cash dividends ($.30 per share) (220,868) (220,868)
--------- ---------- ----------- ---------- --------- -----------
Balance, March 31, 2000 $ 369,186 $3,097,104 $14,690,214 $ (257,804) $ (94,310) $17,804,390
========= ========== =========== ========== ========= ===========
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
5
<PAGE>
DIMECO, INC.
STATEMENT OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>
For the three months ended March 31, 2000 1999
- ------------------------------------ -------- ---------
<S> <C> <C>
Operating Activities
Net income $ 532,948 $ 490,798
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 197,500 112,500
Depreciation 90,424 102,708
Amortization of premium and discount on
investment securities, net (39,987) (209,440)
Mortgage loans held for sale, (gains) losses (2,095) 21,919
Net decrease (increase) in loans held for sale 237,000 (979,806)
Increase in interest receivable (133,355) (91,341)
Increase in interest payable 49,777 56,173
Amortization of net deferred loan origination fees (7,295) (9,318)
Other, net 61,911 (258,405)
--------- ---------
Net cash provided by(used)for operating
activities 986,828 (764,212)
--------- ---------
Investing Activities:
Investment securities available for sale:
Proceeds maturities or paydown 12,612,476 37,217,869
Purchases (5,980,899) (28,907,075)
Investment securities held to maturity:
Proceeds from the maturities or paydown - 775,000
Purchases - (1,341,846)
(Increase) decrease in loans, net (6,017,141) 92,872
Purchase of premises and equipment (376,535) (51,575)
Proceeds from sale of other real estate owned - 7,620
--------- ---------
Net cash provided by investing activities 237,901 7,792,865
--------- ---------
Financing Activities:
Increase in deposits, net 5,503,807 6,808,202
Increase (decrease) in short-term borrowings (1,396,189) 1,350,646
Proceeds from dividend reinvestment plan 94,069 69,311
Purchase of treasury stock (13,001) (76,000)
Cash dividends paid (220,026) (182,630)
--------- ---------
Net cash provided by financing activities 3,968,660 7,969,529
--------- ---------
Increase in cash and cash equivalents 5,193,389 14,998,182
Cash and cash equivalents January 1, 4,630,670 6,109,976
--------- ---------
Cash and cash equivalents March 31, $9,824,059 $21,108,158
========= =========
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
6
<PAGE>
Dimeco, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - 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-QSB 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 prior periods have been reclassified to
conform with current year presentation. The reclassifications did not effect
net income or equity capital.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
FORWARD LOOKING STATEMENT
The Private Securities Litigation Act of 1995 contains safe harbor provisions
regarding forward-looking statements. When used in this discussion, the words
"believes," "anticipates," "contemplated," "expects," and similar expressions
are intended to identify forward-looking statements. Such statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those projected. Those risks and uncertainties include
changes in interest rates, the ability to control costs and expenses, and
general economic conditions. The Company undertakes no obligation to publicly
release the results of any revisions to those forward-looking statements which
may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
FINANCIAL CONDITION
Total assets at March 31, 2000 increased $4,700,000 or 2.4% to total assets of
$199,366,000 during the first quarter of 2000.
Cash and cash equivalents increased $5,193,000 or 112.2% during the first
quarter of 2000. Cash on hand and due from banks decreased $859,000 or 34.5%
in January after having increased these balances in order to comply with our
Y2K contingency plan. This decrease was combined with an increase of
$2,792,000 or 232.9% of interest-bearing deposits in other banks and
$3,260,000 or 346.8% in federal funds sold. A temporary increase in
customers' deposit accounts combined with investment maturities not yet
reinvested were responsible for the increases in these interest-bearing asset
accounts.
Investment securities available for sale decreased $6,573,000 or 21.0% due to
maturities of short-term commercial paper. Funds received of $12,600,000 from
commercial paper maturities were reinvested in higher yielding investments and
loans, used to repay the year-end FHLB borrowings and the remainder was held
in more liquid assets to fund loan commitments. Management purchased
$5,905,000 in longer term municipal and corporate securities with an average
tax-equivalent interest yield of 7.5% in order to take advantage of the
opportunity to significantly increase the average interest yield of the
portfolio.
The loan portfolio increased $6,041,000 or 4.4% from December 31, 1999 to
March 31, 2000. Growth was concentrated in commercial real estate and other
commercial loans. Financing was provided for a number of business lines, the
most significant being to summer camps and an insurance agency. Management
has taken advantage of quality local loan demand to enhance the loan portfolio
and return a higher interest yield than is available in the investment
portfolio.
Noninterest-bearing deposits increased $3,055,000 or 20.9% during the first
quarter. The cash management program for commercial customers has increased
the number of relationships of this type. In addition, we continue to see a
greater number of deposit accounts developed through the branch network.
8
<PAGE>
Short-term borrowings decreased $2,396,000 or 29.3% due to the repayment of
the $4,200,000 Federal Home Loan borrowing which was offset by an increase in
securities sold under agreements to repurchase. These funds were borrowed at
the end of 1999 to purchase higher yielding investments with the goal of
repaying in the first quarter of 2000 with scheduled investment security
maturities.
Stockholders' Equity increased $381,000 or 2.2%, mainly due to earnings of
$533,000, offset by the dividend declaration of $0.30 per share, which
decreased equity by $221,000. Shareholder participation in the dividend
reinvestment plan contributed $94,000 during the quarter. Management monitors
risk-based capital and leverage capital ratios in order to assess compliance
with regulatory guidelines. At March 31, 2000, the Company had total
risk-based capital of 12.7% which exceeded the requirement of 8.0%. Tier I
risk-based capital was 11.4%, well within the guideline of at least fifty
percent of total risk-based capital. The Company's leverage ratio, which by
requirement must be at least 3%, was 9.3%.
RESULTS OF OPERATIONS
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
Net income for the three months ended March 31, 2000 was $533,000 which
represents an increase of 8.6% over the first quarter of 1999.
Interest and fees earned on loans increased $347,000 or 12.7% from 1999 to
2000 with an increase in the average loan portfolio of $14,333,000 or 11.2%.
The average rate earned on the portfolio increased .10% to 8.46% from 8.36%
the previous year due to new loans originated at current market rates and to
the repricing of variable rate loans in the portfolio. Interest earned on
interest-bearing deposits decreased $58,000 or 84.8% and interest earned on
federal funds sold decreased $87,000 or 80.7% due to lower average balances in
these assets during the first quarter of 2000 as compared to 1999. At the
same time, interest earned on the investment portfolio increased $207,000 or
52.0% due to a combination of larger average balances of $12,457,000 and an
increase of .33% in average interest rate earned.
Interest expense increased $152,000 or 10.3% based upon an increase in average
liabilities of $11,745,000 or 7.2% combined with an increase in the average
interest rate paid from 3.6 % to 3.8%.
The provision for loan losses increased $85,000 or 75.6% from 1999 to 2000.
Management's analysis of the allowance for loan loss identifies the
appropriate charge to the provision for loan loss. The expense recorded in
each quarter is a result of changes in the size and composition of the loan
portfolio. With an increase in the portfolio and increases in nonperforming
loans in 2000, management determined it appropriate to increase the provision.
Service charges on deposit accounts increased $33,000 or 61.4% in the first
quarter of 2000 as compared to 1999. A change in the method of assessing
overdraft charges, slight dollar increases of individual charges along with an
increase in the number of deposit accounts was responsible for this increase.
Net gains (losses) in relation to mortgage loans held for sale increased
$24,000 or 109.5% from 1999 to 2000. Improved management of this product line
has decreased the opportunity for loss. In a rising interest rate
environment, it is necessary to quickly process these loans to alleviate the
possibility of loss on sales.
9
<PAGE>
Salaries and employee benefits increased $76,000 or 13.3% due to a combination
of annual salary increases and the addition of several new employees to manage
additional activities including an outside mortgage originator and trust
department employees.
Other expense increased $80,000 or 22.0% from the first quarter of 1999 to
2000. This category is comprised of numerous expenses. The largest increases
were as follows: $13,000 or 223.4% in legal fees associated with loan
delinquencies, the implementation of the stock option plan and prospective new
lines of business; $12,000 or 67.3% in correspondent bank expense because of
management's decision to maintain lower balances in this account and to pay
hard dollars for services rendered by the correspondent; $16,000 or 113.4% in
outside professional fees in conjunction with the profit improvement plan
which was implemented in the third quarter of 1999; ATM expenses of $8,000 or
52.9% due to timing differences; and expenses associated with other real
estate increased $7,000 or 306.5% due to the payment of back real estate taxes
on a property which was added in the first quarter of 2000. Bank supplies
decreased $9,000 or 21.3% due to larger purchases of supplies during 1999 in
order to replenish supply inventories along with printing expenses related to
the change in area code. The remainder of additional expense is not material
in any one account but small increases and decreases were noted in various
accounts.
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 March 31, 2000
compared to December 31, 1999:
March 31, December 31,
2000 1999
------- -------
(dollars in thousands)
Cash and due from banks $ 1,633 $ 2,491
Interest-bearing deposits with other banks 3,992 1,199
Mortgage loans held for sale - 237
Federal funds sold 4,200 940
Investment securities maturing in one year or less 12,331 21,804
------- -------
22,156 26,671
Less short-term borrowings 5,789 8,185
------- -------
Net liquidity position $16,367 $18,486
======= =======
As a percent of total assets 8.2% 9.5%
======= =======
Management monitors liquidity on a consistent basis and feels that current
levels are adequate. In addition to these liquidity sources, the Bank also
has a maximum borrowing capacity with the Federal Home Loan Bank of
10
<PAGE>
approximately $33.0 million. Management feels that with this line of credit
available, it is more prudent to invest available funds in longer maturity
investments in order to increase profits while not hampering liquidity.
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.
RISK ELEMENTS
The table below presents information concerning nonperforming assets
including nonaccrual loans, renegotiated loans, loans 90 days or more past
due, other real estate loans and repossessed assets at March 31, 2000 and
December 31, 1999. A loan is classified as nonaccrual when, in the opinion
of management, there are doubts about collectability 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 credit quality
deterioration of the borrower.
<TABLE>
<CAPTION>
March 31, December 31, March 31,
2000 1999 1999
------- ------- -------
<S> <C> <C> <C>
Loans on nonaccrual basis $ 1,394 $ 1,057 $ 590
Loans past due 90 days or more 890 832 913
Renegotiated loans 560 614 984
------- ------- -------
Total nonperforming loans 2,844 2,503 2,487
Other real estate 281 355 317
Repossessed assets 5 10 3
------- ------- -------
Total nonperforming assets $ 3,130 $ 2,868 $ 2,807
======= ======= =======
Nonperforming loans as a percent of total loans 2.2% 1.8% 2.3%
======= ======= =======
Nonperforming assets as a percent of total assets 1.6% 1.5% 1.5%
======= ======= =======
Allowance for loan loss as a percent of loans 1.38% 1.33% 1.42%
======= ======= =======
</TABLE>
Management believes the level of the allowance for loan losses at March 31,
2000 is sufficient. The Company has historically experienced a higher level
of nonperforming loans in the first quarter of each year, with improvement
showing in the second and third quarters. 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 $671,545 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 $143,862. There were no impaired loans without a related
allowance for loan losses. The average balance of impaired loans for the
period was $671,466.
11
<PAGE>
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.
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 - Results of votes of security holders
The following represents the results of matters submitted
to a vote of the shareholders at the annual meeting held
on April 27, 2000:
1. Election of Directors:
The following directors were elected with terms to expire
April, 2003:
For Withhold Authority
--- ------------------
John S. Kiesendahl 561,013.3775 14,918.7155
Barbara J. Genzlinger 557,298.1055 18,633.9875
John F. Spall 560,207.2249 15,724.8681
2. Approval and adoption of the Dimeco, Inc. 2000 Stock
Incentive Plan:
For 546,704.7468
Against 19,592.8187
Abstain 9,634.5275
12
<PAGE>
3. Approval and adoption of the Dimeco, Inc. 2000 Independent
Directors Stock Option Plan:
For 528,730.4420
Against 24,748.5094
Abstain 22,453.1416
4. S.R. Snodgrass was elected as the Company's Independent
Auditors for the year ending December 31, 2000 by the
following vote:
For 571,841.4613
Against 445.3017
Abstain 3,645.3300
Item 5 - Other Information
NONE
Item 6 - Exhibits and Reports on Form 8-K
NONE
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: May 10, 2000 By:/s/ Joseph J. Murray
-----------------------------
Joseph J. Murray
Executive Vice President and
Chief Executive Officer
Date: May 10, 2000 By:/s/Maureen H. Beilman
-----------------------------
Maureen H. Beilman
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-2000
<CASH> 1,632,544
<INT-BEARING-DEPOSITS> 3,991,515
<FED-FUNDS-SOLD> 4,200,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 24,674,027
<INVESTMENTS-CARRYING> 15,533,661
<INVESTMENTS-MARKET> 15,498,465
<LOANS> 143,567,671
<ALLOWANCE> 1,974,182
<TOTAL-ASSETS> 199,366,488
<DEPOSITS> 172,797,588
<SHORT-TERM> 5,788,744
<LIABILITIES-OTHER> 1,975,766
<LONG-TERM> 1,000,000
0
0
<COMMON> 369,186
<OTHER-SE> 17,435,204
<TOTAL-LIABILITIES-AND-EQUITY> 199,366,488
<INTEREST-LOAN> 3,079,601
<INTEREST-INVEST> 604,326
<INTEREST-OTHER> 31,253
<INTEREST-TOTAL> 3,715,180
<INTEREST-DEPOSIT> 1,558,586
<INTEREST-EXPENSE> 1,629,478
<INTEREST-INCOME-NET> 2,085,702
<LOAN-LOSSES> 197,500
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,321,697
<INCOME-PRETAX> 779,130
<INCOME-PRE-EXTRAORDINARY> 779,130
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 532,948
<EPS-BASIC> 0.72
<EPS-DILUTED> 0.72
<YIELD-ACTUAL> 4.47
<LOANS-NON> 1,394,000
<LOANS-PAST> 890,000
<LOANS-TROUBLED> 560,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,833,615
<CHARGE-OFFS> 75,085
<RECOVERIES> 18,152
<ALLOWANCE-CLOSE> 1,974,182
<ALLOWANCE-DOMESTIC> 1,921,682
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 52,500
</TABLE>
INDEPENDENT ACCOUNTANTS' REPORT
-------------------------------
Board of Directors and Stockholders
Dimeco, Inc.
We have reviewed the accompanying consolidated balance sheet of Dimeco, Inc.
and subsidiary as of March 31, 2000, and the related consolidated statements
of income and cash flows for the three-month periods ended March 31, 2000 and
1999, and the consolidated statement of changes in stockholders' equity for
the three-month period ended March 31, 2000. These financial statements are
the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1999, and the
related consolidated statements of income, changes in stockholders' equity,
and cash flows for the year then ended (not presented herein); and in our
report dated February 11, 2000, we expressed an unqualified opinion on those
consolidated financial statements.
/s/ S.R. Snodgrass, A.C.
Wexford, PA
May 10, 2000
S.R. Snodgrass, A.C.
1000 Stonewood Drive
Suite 200
Wexford, PA 15090-8399
Phone: 724-934-0344
Facsimile: 724-934-0345
