Quarterly Financial Highlights

Happy New Year! 2024 was a very good year for Dimeco, Inc. with many positive outcomes. Early in the year, our total assets exceeded the $1 billion milestone. The momentum from the first three quarters continued through the last quarter of the year. Loan and deposit demand remained strong all year, and your Company continued its steadfast growth with sound prudent bank management. Dimeco ended the year with a net income of $12.9 million which resulted in earnings per share of $5.12 and a solid return on average assets (ROAA) of 1.25% and a return average equity (ROAE) of 12.61%.

Total assets of $1.080 billion increased $90 million or 9.1% over last year. Loan balances of $775 million at the end of the year were $52.9 million or 7.3% greater than December 31, 2023. Growth was centered in commercial and residential mortgage and consumer loans. Mortgage loans grew by $52.8 million over the previous year. Consumer loans of $31 million were $7.6 million or 32.5% greater than at the end of last year, which consisted of new originations and loan purchases.

These increases were offset by a decline in business loans of $5.4 million. The investment portfolio grew by $29.7 million or 15.1% from the same time last year. Management strategically purchased bonds throughout the year, but mainly in the second quarter before any rate cuts from the Federal Reserve (Fed), thus securing investments that provide higher yields for their duration.

Deposit balances of $911 million were an increase of $84.5 million or 10.2% over last year. As was the case throughout the year, the changing deposit mix showed a continued shift to certificates of deposit (CDs) from demand and savings accounts. Overall, CD growth year over year was $100.4 million or 36.8% greater. Most of this increase was through CD specials and public funds, but there was also a slight increase in brokered CDs.

Short-term borrowings decreased by $15.7 million due to the repositioning of $19.3 million of overnight borrowings to lower interest rate, term borrowings in the fourth quarter. Other borrowed funds increased by $11.8 million or 34.3% as described above. The remaining difference was due to normal payment amortization and maturities.

Stockholders’ equity increased by $8.4 million from December 31, 2023, to $107 million. The increase was mainly from $12.9 million of net income, which was offset by dividends paid. Accumulated other comprehensive losses slightly increased by $687 thousand or 4.3% over last year. While these losses have a negative effect on the tangible book equity, they do not affect the regulatory capital calculations. Dimeco, Inc.’s capital remains above the regulatory requirements to be considered well capitalized.

Interest income increased by $10.6 million or 21.9% over 2023. Most of this growth was attributable to loan interest income of $49.1 million which was $9.7 million or 24.7% greater due to the additional loans originated and a portion of the portfolio still repricing to higher rates. Interest expense expanded by $6.8 million or 47.4%. This was the result of the continued shift to CDs which was offset by the reduction in short-term borrowings. Net interest income grew by $3.8 million as interest income outpaced interest expense paid on the deposits and borrowings.

Non-interest income grew by $810 thousand or 12.1% with several categories contributing to this gain. Non-interest expense increased by $1.3 million or 4.9%. The largest components were salaries for new and existing staff and the related healthcare benefits. The provision for credit losses increased by $495 thousand from December 31, 2023, as we adjusted our allowance based on our Current Estimated Credit Losses (CECL) calculation reflecting our loan portfolio growth and changes.

We remain optimistic for what lies ahead and are confident that the momentum achieved in 2024 will continue through 2025. Management continues to evaluate opportunities to safely grow the bank while maintaining our core vision and values. Our shareholders, customers, and communities are the foundation on which we build our mission, and I thank you for your continued support and commitment. Your questions or comments are welcomed, and I appreciate your referrals to Dimeco, Inc.