Quarterly Financial Highlights

As the first quarter of 2026 came to a close, I am pleased to present the results of Dimeco, Inc. This year is off to a solid start with both loans and deposits showing continued growth and thereby positively affecting our financial ratios.

Return on average assets (ROAA) was 1.68% as of March 31, 2026, while return on average equity (ROAE) was 14.96%, an increase of 42.4% and 25.9%, respectively, over the first quarter of 2025. The efficiency ratio of 52.14% was an almost 11% decrease from the same quarter last year. This performance resulted in an earnings per share of $1.89 which was an increase of 47.7% over last year. 

Total assets of $1.1 billion increased $40.2 million or 3.6% from the first quarter of 2025. Loan balances of $845.6 million at the end of the quarter were $61.6 million or 7.9% greater than March 31, 2025. Loan growth was across all categories; commercial and residential loans increased $53.5 million, business loans increased $3.9 million, consumer increased by $2.2 million and other loans grew by $2.1 million.

 Cash and cash equivalents decreased by $8.6 million while investment securities declined by $11.1 million as liquidity was needed to fund loan originations. Sales of bonds in the fourth quarter of 2025 contributed to the remaining decrease.

Deposit balances of $981.3 million were an increase of $47.3 million or 5.1% over the previous year. Both noninterest-bearing and interest-bearing deposits showed growth with balances rising $10 million and $37.3 million, respectively.

Other borrowed funds of $21.2 million decreased by $26.2 million or 55.3% from March 31, 2025. No new borrowings were needed due to the increase in deposits and management’s use of brokered deposits when necessary. The remainder of the decrease was due to maturities and normal payment amortization.

Stockholders’ equity grew by $16.9 million from March 31, 2025, to $127.8 million. Retained earnings accounted for most of this growth at $13.7 million, while accumulated other comprehensive losses declined by $2.8 million. This adjustment is due to the requirement to mark our investment portfolio to current market values which reflected an improvement.

Interest income increased $1.7 million or 10.5% over the first quarter of 2025. Loan income and fees added $1.8 million to this category while investment income added $40 thousand. Other income declined by $157 thousand due to lower balances at the Federal Reserve as well as a lower rate paid on this balance.

Interest expense of $4.9 million was $772 thousand less than the same period last year. Deposit expense decreased by $772 thousand while short-term borrowings and other borrowed funds expenses offset each other. Non-interest income increased $329 thousand or 18.2% due to higher brokerage commissions of $251 thousand year over year with other categories contributing smaller increases. Non-interest expenses grew by $679 thousand or 9.6%, mostly due to salaries and employee benefits.

The provision for credit losses increased by $71 thousand or 7.4% as we adjusted our allowance required by our Current Estimated Credit Losses (CECL) calculation. This adjustment was attributed to the growth in the loan portfolio as well as the impact of current market conditions. Income before taxes was $2 million or 51.5% greater than the same time last year while income taxes increased by $433 thousand or 65.2%. This resulted in a net income of $4.8 million which was $1.6 million or 48.7% greater than the first quarter of 2025.

The bank named our new Chief Operating Officer, Melissa Bowling, as of January 2026. Missy started at the bank in 2008 and worked her way up from head teller to now being named a senior vice president! She held several positions throughout her tenure including assistant branch manager, branch manager, and retail operations officer. Her extensive experience allows Missy to understand almost every aspect of the bank which is invaluable to this position. We wish Missy success in her new role and are here to support her every step of the way.

As the remainder of the year plays out, I am excited for the possibilities as management will continue to explore prudent opportunities to grow the balance sheet and expand the sound performance of your Company. As always, we thank you for your continued support and commitment. Please take any opportunity to refer family and friends to Dimeco, Inc.

 

(unaudited)

(dollars in thousands, except per share)

Consolidated Balance Sheet