Dime has a solid '09

The Dime Bank ended 2009 in a strong financial position, experiencing growth in its earnings and strong activity in its lending portfolio and deposit base.

James Cronin, the Norwich-based bank's president, said Monday he was "very pleased" with the institution's financial performance this past year, especially given the still-troubled economy.

Cronin said the mutual savings bank, which has 10 branches in southeastern Connecticut and a branch in Westerly, saw its earnings exceed $3.1 million in 2009. The bank's assets this past year stood at $634 million. Last year, the bank (www.dimesavingsbank.com) reported a one-time loss of $2.5 million due to the soured economy, investment-related writedowns and additional loan-loss reserves.

Cronin said the bank's robust 2009 performance was an indication of its overall financial soundness. He said the bank's capital cushion rose to 10 percent in 2009, double the regulatory requirement, and an indication of a well-capitalized institution.

He said the nation's recession over the past 18 months has created a "very challenging period for banks." Cronin and Dime Bank officials detailed the bank's annual financial performance to the institution's corporators this past week.

Nick Caplanson, the Dime's chief financial officer, said the Dime's core earnings rebounded strongly in 2009 due to the bank's diversified balance sheet. He said the bank continued to experience strong loan demand, originating $173 million in loans during the past year. The bank's retail deposits, he said, grew by $11.9 million. Cronin said consumer dissatisfaction with many of the nation's largest banks during this financial crisis has resulted in increased deposits into community-based banks such as the Dime.

Cronin said the bank made a $1.25 million provision to its loan-loss reserves as a precaution in 2009, but he said overall loan-loss reserves are a little less than 1 percent of the bank's total loan portfolio.

He said the bank's premiums to the Federal Deposit Insurance Corp. skyrocketed during 2009, as they did for the nation's other banks and savings institutions whose deposits are insured by the federal banking agency. In 2008, the Dime's annual premium stood at $249,000, but jumped to nearly $1.2 million in 2009. Those mandated increases were necessitated by losses incurred by the FDIC from the failure of 140 banks across the country during 2009.

Cronin said the premium hike, while difficult, was absorbed by the bank and the institution was still able to grow its profits during the past year.

a.cronin@theday.com