Exhibit 99

NEWS RELEASE

TO BUSINESS EDITOR

DIMECO, INC. ANNOUNCES EARNINGS AT SEPTEMBER 30, 2004

Dimeco, Inc. (Nasdaq DIMC), parent company of The Dime Bank, reported earnings for the nine months ended September 30, 2004 of $2,672,000, representing earnings per share of $1.74. Net interest income increased 6.7% during the first three quarters of 2004 versus the same period in 2003. In addition, dividends declared year to date increased 6.2% over the same period last year to $.69 per share. Dimeco, Inc. stock traded at $35.50 per share at September 30, 2004, an increase of 12.6% over the stock price one year earlier.

The Company continued to experience growth with total assets increasing $23,471,000 or 7.9% to $321,554,000 from September 30, 2003 to September 30, 2004. Return on average stockholders’ equity and return on average assets were 12.64% and 1.16%, respectively, at September 30, 2004.

Gary C. Beilman, EVP and CEO, stated, “I am happy to present Dimeco’s results of operations for the nine months ended September 30, 2004. Our growth is evident in that both loans and deposits are up. Loan quality continues to improve with delinquency under 1% and non-performing assets to total assets improving a significant 59.3% to end the quarter at .44%. During the next quarter we anticipate increased activity from our Title Insurance entity and our Investments Department. Additionally, we will continue to bring the best value to our customers and the community when we open our fifth community office in Dingmans Ferry later this fall. All are welcome to share in our Grand Opening Celebrations.”

The Dime Bank serves Wayne and Pike counties in Pennsylvania and Sullivan County, New York. The Bank offers a full array of financial services ranging from traditional products to electronic banking along with a Trust Department and an Investments and Financial Services Department. For more information on The Dime Bank, visit www.thedimebank.com

Source Dimeco, Inc. / September 20, 2004

Contact: Deborah Unflat-Petroski, Marketing Officer

DIMECO, INC.

CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands, except per share)	2004		2003			2004		2003
Interest Income
Interest and fees on loans	$	3,564	$	3,281		$	10,110	$	9,639
Investment securities		483		555			1,473		1,851
Other		4		2			19		21
Total interest income		4,051		3,838			11,602		11,511
Interest Expense
Deposits		976		1,074			2,927		3,354
Short-term borrowings		35		28			89		88
Other borrowed funds		99		55			175		187
Total interest expense		1,110		1,157			3,191		3,629
Net Interest Income		2,941		2,681			8,411		7,882
Provision for loan losses		261		230			1,126		680
Net Interest Income After Provision for Loan Losses		2,680		2,451			7,285		7,202
Noninterest Income		694		700			2,096		1,881
Noninterest Expense
Salaries and employee benefits		973		913			2,880		2,581
Other expense		898		819			2,645		2,379
Total noninterest expense		1,871		1,732			5,525		4,960
Income before income taxes		1,503		1,419			3,856		4,123
Income taxes		465		399			1,184		1,257
NET INCOME	$	1,038	$	1,020		$	2,672	$	2,866
Earnings per Share - basic	$	0.67	$	0.68	*	$	1.74	$	1.90	*
Earnings per Share - diluted	$	0.65	$	0.63	*	$	1.67	$	1.83	*
Average shares outstanding - basic		1,538,727		1,513,312	*		1,534,681		1,512,860	*
Average shares outstanding - diluted		1,599,004		1,625,430	*		1,599,977		1,571,812	*

* Adjusted to reflect 100% stock split effected in the form of a dividend on 12/1/03.

This statement has not been reviewed or confirmed for accuracy or relevance by the FDIC.

DIMECO, INC.

CONSOLIDATED BALANCE SHEET (UNAUDITED)

September 30,	2004		2003
(in thousands)
Assets
Cash and due from banks	$	7,563	$	10,020
Interest-bearing deposits in other banks		33		16
Federal funds sold		5,712		4,250
Total cash and cash equivalents		13,308		14,286
Mortgage loans held for sale		548		892
Investment securities available for sale		43,846		54,086
Investment securities held to maturity (market value of $220 and $232)		198		197
Loans (net of unearned income of $675 and $763)		252,512		219,260
Less allowance for loan losses		3,314		3,103
Net loans		249,198		216,157
Premises and equipment		5,159		4,249
Bank-owned life insurance		5,018		4,807
Accrued interest receivable		1,210		1,285
Other assets		3,069		2,124
TOTAL ASSETS	$	321,554	$	298,083
Liabilities
Deposits :
Noninterest-bearing	$	32,247	$	29,252
Interest-bearing		237,820		230,400
Total deposits		270,067		259,652
Short-term borrowings		10,915		9,105
Other borrowed funds		9,845		1,000
Accrued interest payable		513		631
Other liabilities		1,429		1,165
TOTAL LIABILITIES		292,769		271,553
Stockholders’ Equity
Common stock, $.50 par value; 5,000,000 shares authorized; 1,541,494 and 758,855 shares issued		771		379
Capital surplus		4,174		3,796
Retained earnings		23,649		21,793
Accumulated other comprehensive income		191		595
Treasury stock, at cost (520 shares)		—		(33	)
TOTAL STOCKHOLDERS’ EQUITY		28,785		26,530
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	321,554	$	298,083

This statement has not been reviewed or confirmed for accuracy or relevance by the FDIC.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(amounts in thousands, except per share)	2004			2003			% Increase (decrease)
Performance for the nine months ended September 30,
Interest income	$	11,602		$	11,511		0.8	%
Interest expense	$	3,191		$	3,629		-12.1	%
Net interest income	$	8,411		$	7,882		6.7	%
Net income	$	2,672		$	2,866		-6.8	%
Shareholders’ Value (per share)
Net income - basic	$	1.74		$	1.90	(1)	-8.4	%
Net income - diluted	$	1.67		$	1.83	(1)	-8.7	%
Dividends	$	0.69		$	0.65	(1)	6.2	%
Book value	$	18.67		$	17.48	(1)	6.8	%
Market value	$	35.50		$	31.53	(1)	12.6	%
Market value/book value ratio		190.1	%		180.4	%	5.4	%
* Price/earnings multiple		15.3	X		13.0	X	17.7	%
* Dividend yield		2.59	%		2.73	%	-5.1	%
Financial Ratios
* Return on average assets		1.16	%		1.35	%	-14.1	%
* Return on average equity		12.64	%		14.85	%	-14.9	%
Shareholders’ equity/asset ratio		8.95	%		8.90	%	0.6	%
Dividend payout ratio		39.66	%		34.21	%	15.9	%
Nonperforming assets/total assets		0.44	%		1.08	%	-59.3	%
Allowance for loan loss as a % of loans		1.31	%		1.42	%	-7.8	%
* Net charge-offs/average loans		0.47	%		0.26	%	80.8	%
Allowance for loan loss/nonaccrual loans		283.25	%		112.35	%	152.1	%
Allowance for loan loss/non-performing loans		234.04	%		96.61	%	142.3	%
Financial Position at September 30,
Assets	$	321,554		$	298,083		7.9	%
Loans	$	252,512		$	219,260		15.2	%
Deposits	$	270,067		$	259,652		4.0	%
Stockholders’ equity	$	28,785		$	26,530		8.5	%

* annualized

⁽¹⁾ Adjusted to reflect 100% stock split effected in the form of a dividend on 12/1/03.

Jeff - Please put brackets around negative numbers instead of - sign.

       - Don’t print leading 0 when there are no whole dollars or percentages.

October 2004

Dear Shareholders:

With the end of the third quarter of 2004, I am happy to present the results of operations of Dimeco, Inc. Compared to 2003, the Company continues to grow with deposits up 4%, loans increasing 15.2%, and total assets expanding 7.9% to close this period at over $321 million. Loan quality continues to improve with delinquency under 1% and with non-performing assets to total assets improving a significant 59.3% to end the quarter at .44%. Net income, although somewhat slower than last year’s robust pace, came in at a healthy $2.67 million.

From these profits we returned to you, our stockholders, a dividend of $.69 per share, representing a payout ratio of 39.66%. This quarter’s $.23 per share dividend is up 6.2% from that of last year. Further, you will see that shareholders’ equity has increased by 8.5% and is now up to $28.7 million. Simultaneously, it is noted that the book value of your investment has increased 6.8% per share. During this past quarter, the market price of Dimeco has vacillated in response to overall market acceptance of financial services companies. Given this market activity, your per share value has increased 12.6% over a year ago.

During the next quarter, we anticipate increased activity and revenues from our Title Insurance entity and our Investments department. Additionally, we will open our fifth community office in Dingmans Ferry, which we expect will be met with great enthusiasm.

As always, your comments and questions are welcome. We appreciate your commitment as well as your investment.

Sincerely,

Gary C. Beilman

Executive Vice President and

Chief Executive Officer