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Norwich - A local economy marked by high unemployment translated into reduced profits at Dime Bank, according to a just-released annual report.
The report showed the Norwich-based bank made a profit of just over $4 million last year, compared with $5.8 million reported a year previously. This translates to reduced profits of 31.2 percent.
The profits made in 2011, however, were abnormally high because the bank recovered $2.8 million in investment security losses incurred during the nation's financial crisis of 2007-2008. Removing that money, the bank actually increased its profits last year.
"The sluggish economy, especially in southeastern Connecticut and Rhode Island, has caused many of our customers to face financial challenges stemming from unemployment or underemployment," The Dime's president and chief executive Nicholas Caplanson said in his annual report to the mutual bank members. "We have been working with many of these people and their families to restructure their financial obligations, help them stay in their homes and work through this difficult economic cycle."
Despite the challenges, Caplanson noted that Dime Bank finished the year with a record $235 million in commercial and residential loans.
The bank also noted deposit growth of almost $19 million, while assets rose by more than $22 million.
Working capital also increased, by more than $5 million, according to the report, and Dime Bank now has money on hand that is roughly double what regulators require.
"These are all very positive numbers," Caplanson said.
Loan-loss reserves increased $270,000 last year compared with the year before. But commercial mortgages topped $200 million, increasing nearly 15 percent from the year before. Commercial loans also surged, by about 21 percent.
"Although 2013 looks to be another challenging year for the economy and the housing market, we are well-positioned to continue our profitable growth and to offer support for customers in need of assistance," Caplanson concluded.
2012 vs. 2011
Net income $4 million $5.8 million
Total assets $729.8 million $707.2 million
Total loans $530.7 million $509.8 million
Loan loss reserve $5.6 million $5.4 million