Fidelity D & D Bancorp, Inc. Announces Third Quarter Dividend and Reports Second Quarter 2020 Financial Results

Nachrichtenquelle: globenewswire
30.07.2020, 15:31  |  110   |   |   

DUNMORE, PA , July 30, 2020 (GLOBE NEWSWIRE) -- Fidelity D & D Bancorp, Inc. (NASDAQ: FDBC) and its banking subsidiary The Fidelity Deposit and Discount Bank, announced its most recent dividend declaration and unaudited, consolidated financial results for the three and six month periods ended June 30, 2020.

Dividend Declared

The Board of Directors of Fidelity D & D Bancorp, Inc. (the “Company”) announced their declaration of the Company’s third quarter dividend of $0.28 per share. The dividend is payable September 10, 2020 to shareholders of record at the close of business on August 20, 2020.

Unaudited Financial Information

Net income for the quarter ended June 30, 2020 was $0.3 million, or $0.05 diluted earnings per share, compared to $3.0 million, or $0.79 diluted earnings per share, for the quarter ended June 30, 2019.  The $2.7 million, or 92%, reduction in net income resulted from $1.9 million in merger-related expenses, $1.6 million in salaries and employee benefits, a $1.6 million increase in the provision for loan losses, $0.5 million in professional services,  and a $0.5 million FHLB prepayment penalty which more than offset the $3.0 million increase in net interest income.  Second quarter diluted earnings per share was reduced by $0.34 per share due to $1.6 million in non-recurring merger-related expenses, net of tax. 

As previously announced, the Company acquired MNB Corporation (MNB) and its wholly-owned subsidiary, Merchants Bank of Bangor effective May 1, 2020.  The fair value of total assets added $451 million in assets, $395 million in deposits and $245 million in loans to the Company’s balance sheet.  The reported results include provisional estimates of the accounting for the acquisition of MNB which are subject to revision in future periods when the application of the accounting guidance for business combinations is finalized.  Based on the closing price on April 30, 2020, the merger valuation was $45.4 million.  Merger-related costs totaled $2.2 million on a gross basis through June 30, 2020.

Daniel J. Santaniello, President and Chief Executive Officer commented, “During the current pandemic, the Fidelity Bankers have continued to be focused on the execution of the strategic initiative of building long-term relationships through organic and inorganic growth. While the first half of 2020 financial results have been adversely impacted with the anticipated and nonrecurring expenses associated with the acquisition of MNB Corporation, the Board of Directors and Management are pleased with the Bank’s core operating results.  We believe the addition of the Lehigh Valley Bankers and the acquired strong balance sheet will continue to build long-term shareholder value.”

Mr. Santaniello also commented, “In addition, the company’s financial results for the 2nd quarter of 2020 have been materially impacted by COVID-19. During these unprecedented times, the Company has taken the necessary steps to ensure the health and welfare of the Fidelity Bankers, Clients, and Community.  Through the collective efforts of the Fidelity Bankers, several initiatives were undertaken to partner with clients and assist them through the current economic crisis.  The Company originated 1,439 Paycheck Protection Program Loans totaling $157 million, provided 1,429 loan deferments to clients, and strengthened the allowance for loan losses. With both a strong balance sheet and capital, we believe the Company is well positioned to navigate through the current economic uncertainties.”

The Company began proactive initiatives in March 2020 to assist clients, Fidelity Bankers and communities impacted by the effects of the novel coronavirus pandemic.  Management activated its established pandemic contingency plan response in March 2020 to ensure business continuity while assuring the health, safety and well-being of bankers, clients and the community.  Special measures included:

  • Opening branch lobbies by appointment only while drive-thru locations remained open for transactions until June 1st when all branch lobbies fully reopened.
  • Installing proper social distancing signs and markers, to include safety barriers for both bankers and clients that encourage proper separation as recommended by the CDC.
  • Expanding use of online, mobile, telephone banking, night drop and ATMs to meet clients’ banking needs.
  • Adding resources to the Customer Care Center to manage increased call and chat volume.
  • Activating telecommunications capabilities to enable Fidelity Bankers to work-from-home, as appropriate.
  • Providing Fidelity Bankers personal protective equipment and disinfectant supplies when working on-site.
  • Scheduling in-person meetings by appointment only, observing the guidelines of social distancing and personal safety as recommended by health and safety officials.
  • Enhancing EPA approved cleaning and disinfecting protocols implemented at all locations, including utilizing ionization machines when required.
  • Increasing the fresh air intake and using anti-viral filters in all HVAC units, above OSHA regulations.
  • Conducting meetings virtually, including the Special and Annual Shareholder Meetings.

To address the pandemic’s economic impact on its clients, the Company provided hardship relief requested by 1,429 clients with balances totaling $202 million through June 30, 2020.  This short-term relief was offered in the form of loan forbearance or interest-only modifications.  

The Company processed 1,439 applications providing over $157 million in loans through the Small Business Administration (SBA) Paycheck Protection Program (PPP) proving the Company’s commitment to support all small businesses.  These PPP loans generated approximately $5.2 million of SBA processing fees, net of origination expenses, of which $0.8 million was earned in the second quarter.  The $4.4 million remaining balance is expected to continue to be earned over the remaining life of the loan.  However, the majority of these fees may be recognized during the second half of 2020 only if forgiven by the SBA.  The Fidelity Deposit and Discount Bank is a Paycheck Protection Program Liquidity Facility (PPPLF) eligible depository institution that obtained an extension of credit under the PPPLF to fund originated PPP loans.

Consolidated Second Quarter Operating Results Overview

Net interest income was $10.8 million for the second quarter of 2020, a 39% increase over the $7.8 million earned for the second quarter of 2019.  The $3.0 million improvement in net interest income resulted from a $426.1 million larger average balance of interest-earning assets which offset the declining yields on these assets.  The loan portfolio had the biggest impact, producing a $2.6 million increase in interest income from $309.9 million in higher average balances primarily from the addition of MNB loans to the balance sheet.  The Company also experienced an $0.8 million increase in interest income from accretion of SBA fees recognized during the second quarter of 2020 on PPP loans.  Interest income from the investment portfolio increased $0.1 million as larger average balances offset lower yields.  Interest expense was $0.4 million lower due to decreases in deposit rates and lower rates paid on borrowings.  The average balance of interest-bearing deposits increased $294.1 million and the rates paid on these deposits decreased 44 basis points resulting in $0.3 million less in interest expense.  The interest-bearing deposits acquired from MNB had favorable rates and had the effect of reducing the Company’s rate paid on interest-bearing deposits.  The Company utilized $63.4 million more in average short-term borrowings, but overnight borrowings were replaced with PPPLF funding which had lower rates reducing interest expense from borrowings by $0.1 million.  The overall cost of interest-bearing liabilities was 0.57% for the second quarter of 2020, a decrease of 56 basis points over the 1.13% paid for the second quarter of 2019.  The cost of funds decreased 46 basis points to 0.42% for the second quarter of 2020 from 0.88% for the second quarter of 2019.  The Company’s fully-taxable equivalent (FTE) (non-GAAP) net interest spread was 3.20% for the second quarter of 2020, or three basis points lower than the 3.23% recorded for the same 2019 quarter.  The Company’s FTE (non-GAAP) net interest margin decreased by 20 basis points to 3.34% for the three months ended June 30, 2020 from 3.54% for the same 2019 period.

The provision for loan losses was $1.9 million for the second quarter of 2020, a $1.6 million increase compared to $0.3 million for the second quarter of 2019.  The substantial increase in the provision compared to the year earlier period was attributed to the qualitative factor increases stemming from the public health and economic crisis caused by the COVID-19 pandemic.  This amount of provisioning reflected what management deemed necessary to maintain the allowance for loan and lease losses at an adequate level.  

Total non-interest income increased $0.2 million to $2.7 million for the second quarter of 2020 compared to $2.5 million for the second quarter of 2019.  The increase in other income was primarily due to $0.3 million higher gains on loan sales and $0.1 million increase in service charges on loans during the second quarter of 2020 compared to the same 2019 period due to increased mortgage loan activity.  The Company also recognized $0.1 million more in debit card interchange fees, generally resulting from adding MNB accounts.  These increases were partially offset by $0.2 million less service charges on deposit accounts, primarily from a reduced number of overdraft transactions, and $0.1 million higher mortgage servicing right amortization.

Non-interest expenses increased $4.9 million, or 76%, for the second quarter of 2020 to $11.3 million from $6.4 million for the same 2019 quarter.  Most of the increase was due to $1.9 million in nonrecurring merger-related expenses, primarily consisting of professional services, salaries and employee benefits and data processing expenses in connection with the MNB acquisition. The Company also recognized $1.6 million in added salaries and employee benefits primarily due to an increase in the number of bankers post-merger.  During the second quarter of 2020, the Company paid off FHLB advances early due to generally unfavorable rates on FHLB advances compared to available rates on other funding sources and incurred a $0.5 million prepayment penalty.  The Company also experienced increases of $0.5 million in professional services, $0.4 million in premises and equipment and $0.4 million in data processing and communication expenses primarily due to expenses related to the pandemic and acquisition of MNB Corporation. These increases were partially offset by $0.4 million more in loan origination cost deferrals associated with PPP lending.

The provision for income taxes decreased $0.5 million during second of 2020 compared to the same 2019 quarter due to the lower income before taxes.  However, the effective tax rate for the second quarter of 2020 was 21% compared to 16% for the second quarter of 2019 as a result of non-deductible merger facilitating expenses.

Consolidated Year-To-Date Operating Results Overview

Net interest income was $18.8 million for the six months ended June 30, 2020 compared to $15.7 million for the six months ended June 30, 2019.  The $3.1 million, or 20%, improvement was the result of earnings from a larger average balance of interest-earning assets combined with lower interest expense from a decrease in rates paid on interest-bearing liabilities.  The loan portfolio drove the increased interest income which grew $2.7 million from higher average balances due to acquired loans, PPP lending and increased mortgage origination activity.  On the liability side, interest expense decreased by $0.5 million due to lower rates paid on interest-bearing deposits and borrowings.  FTE net interest spread was 3.21% for the first half of 2020, or seven basis points lower than the 3.28% recorded for the first half of 2019.  Over the same time period, the Company’s FTE net interest margin decreased by 19 basis points to 3.39% from 3.58%.

For the six months ended June 30, 2020, the provision for loan losses was $2.2 million compared to $0.5 million for the same 2019 period.  The $1.7 million increase in the provision was attributed to the qualitative factor increases stemming from the public health and economic crisis caused by the COVID-19 pandemic.  This amount of provisioning reflected what management deemed necessary to maintain the allowance for loan and lease losses at an adequate level.  

Total non-interest income for the six months ended June 30, 2020 was $5.5 million, an increase of $0.5 million, or 10%, from $5.0 million for the six months ended June 30, 2019.  The increase in other income was comprised of the following: $0.3 million in loan service charges, $0.3 million in gains on loan sales, $0.2 million in interchange fees and $0.2 million in trust fees. These increases were partially offset by $0.2 million lower financial service fees, $0.1 million higher mortgage servicing right amortization and $0.1 million less deposit service charges. 

Non-interest expenses increased to $18.6 million for the six months ended June 30, 2020, an increase of $5.4 million, or 41%, from $13.2 million for the six months ended June 30, 2019.  The largest driver of this increase was a $2.2 million increase in merger-related expenses in connection with the acquisition of MNB.  In addition, there was $1.8 million more salaries and employee benefit expense, $0.6 million higher professional services, a $0.5 million FHLB prepayment fee, $0.4 million in additional premises and equipment expenses and a $0.4 million increase in data processing expense. These increases were partially offset by a $0.5 million reduction in other expenses due to higher loan origination cost deferrals from PPP lending.

The provision for income taxes decreased $0.5 million during first half of 2020 compared to the same 2019 period due to the lower income before taxes.  However, the effective tax rate for the second half of 2020 was 17% compared to 16% for the second half of 2019 as a result of non-deductible merger facilitating expenses.

Consolidated Balance Sheet & Asset Quality Overview

During the first half of 2020, the Company’s total assets increased $791.6 million, or 78%, to $1.8 billion at June 30, 2020 from $1.0 billion at December 31, 2019.  This asset growth resulted primarily from the MNB merger and PPP lending with a $386.6 million increase in the loan portfolio, $249.1 million increase in cash and cash equivalents and a $108.0 million increase in investment securities.  The Company funded the PPP loans originated by utilizing $152.8 million from the Federal Reserve Bank (FRB) PPPLF program.  Deposit growth of $598.0 million was used to pay down borrowings and to fund the organic loan portfolio growth.  The deposit growth includes MNB acquired deposits, proceeds from PPP loans and other relief from the Coronavirus Aid, Relief, and Economic Security (CARES) Act that has not yet been utilized along with increases in personal account balances.  In addition, other assets and other liabilities included $22.5 million in investment security purchases pending settlement at June 30, 2020.

Total non-performing assets were $5.6 million, or 0.31% of total assets, at June 30, 2020, compared to $5.0 million, or 0.50% of total assets, at December 31, 2019.  Past due loans to total loans were 0.46% compared to 0.67% at December 31, 2019.  Net charge-offs to average total loans declined to 0.06% at June 30, 2020 compared to 0.15% at December 31, 2019.

Shareholders’ equity increased $50.3 million, or 47%, to $157.1 million at June 30, 2020 from $106.8 million at December 31, 2019.  The increase was primarily caused by $45.4 million in common stock issued as a result of the merger.  Net income of $2.9 million was supplemented by a $3.6 million, after tax, improvement in net unrealized gains from the investment portfolio.  An additional $0.9 million recorded from the issuance of common stock under the Company’s stock plans and stock-based compensation, was offset by $2.5 million in cash dividends paid to shareholders.  The Company remains well capitalized and is positioned for continued growth with total shareholders’ equity at 8.72% of total assets at June 30, 2020.  Tangible book value per share was $29.77 at June 30, 2020 compared to $28.20 at December 31, 2019.

Fidelity D & D Bancorp, Inc. has built a strong history as trusted financial advisors to the clients served by The Fidelity Deposit and Discount Bank and is proud to be an active member of the community of Northeastern Pennsylvania and the Lehigh Valley.  Part of the Bank’s mission is to be a good corporate partner within its market areas by providing nearly 3,000 hours of volunteer time to non-profit organizations yearly.  The Company serves multiple office locations in Eastern Pennsylvania providing personal and business banking products and services, including wealth management planning through fiduciary activities with the Bank’s full trust powers; as well as offering a full array of asset management services.  The Bank provides 24 hour, 7 day a week service to customers through branch offices, online at www.bankatfidelity.com, and through the Customer Care Center at 800-388-4380.  The Bank's deposits are insured by the Federal Deposit Insurance Corporation up to the full extent permitted by law.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures to provide information useful to the reader in understanding its operating performance and trends, and to facilitate comparisons with the performance of other financial institutions. Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities.  The Company’s non-GAAP financial measures and key performance indicators may differ from the non-GAAP financial measures and key performance indicators other financial institutions used to measure their performance and trends.

Non-GAAP financial measures should be supplemental to GAAP used to prepare the Company’s operating results and should not be read in isolation or relied upon as a substitute for GAAP measures.  In the event of such a disclosure or release, the Securities and Exchange Commission’s (SEC) Regulation G requires: (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP.  Reconciliations of GAAP to non-GAAP operating measures to the most directly comparable GAAP financial measures are included in the tables at the end of this release.

Management believes merger-related expenses are not standard costs necessary for operations.  These charges principally represent professional fees and system conversion and integration costs related to the transaction.  These costs are specific to each individual transaction and may vary significantly based on the size and complexity of the transaction.  Management also believes the FHLB prepayment fee incurred to payoff FHLB advances is non-recurring and should be excluded from normal operating expenses for proper comparison.

Interest income was fully-taxable equivalent (FTE) adjusted to recognize the income from tax exempt interest-earning assets as if the interest was taxable in order to calculate certain ratios within this document.  This treatment allows a uniform comparison among yields on interest-earning assets.  Interest income was FTE adjusted, using the corporate federal tax rate of 21% for 2020 and 2019.

Forward-looking statements

Certain of the matters discussed in this press release constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.  The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” and similar expressions are intended to identify such forward-looking statements.

The Company’s actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation:

  • the effects of economic conditions particularly with regard to the negative impact of severe, wide-ranging and continuing disruptions caused by the spread of Coronavirus Disease 2019 (COVID-19) and responses thereto on current customers and the operations of the Company, specifically the effect of the economy on loan customers’ ability to repay loans;
  • the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;
  • the impact of new or changes in existing laws and regulations, including the Tax Cuts and Jobs Act and Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations promulgated there under;
  • impacts of the capital and liquidity requirements of the Basel III standards and other regulatory pronouncements, regulations and rules;
  • governmental monetary and fiscal policies, as well as legislative and regulatory changes;
  • effects of short- and long-term federal budget and tax negotiations and their effect on economic and business conditions;
  • the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters;
  • the risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities and interest rate protection agreements, as well as interest rate risks;
  • the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating locally, regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the internet;
  • technological changes;
  • the interruption or breach in security of our information systems and other technological risks and attacks resulting in failures or disruptions in customer account management, general ledger processing and loan or deposit updates and potential impacts resulting therefrom including additional costs, reputational damage, regulatory penalties, and financial losses;
  • acquisitions and integration of acquired businesses;
  • the failure of assumptions underlying the establishment of reserves for loan losses and estimations of values of collateral and various financial assets and liabilities;
  • volatilities in the securities markets;
  • acts of war or terrorism;
  • disruption of credit and equity markets; and
  • the risk that our analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful.

The Company cautions readers not to place undue reliance on forward-looking statements, which reflect analyses only as of the date of this release.  The Company has no obligation to update any forward-looking statements to reflect events or circumstances after the date of this release.

For more information please visit our investor relations web site located through www.bankatfidelity.com.

 
 
FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands)
         
At Period End: June 30, 2020
    December 31, 2019  
Assets            
Cash and cash equivalents $  264,798   $ 15,663  
Investment securities    293,118     185,117  
Federal Home Loan Bank stock    3,020     4,383  
Loans and leases    1,141,692     755,053  
Allowance for loan losses    (11,671 )   (9,747 )
Premises and equipment, net    28,479     21,557  
Life insurance cash surrender value    32,852     23,261  
Goodwill and core deposit intangible    8,966     209  
Other assets    40,276     14,431  
         
Total assets $  1,801,530   $ 1,009,927  
         
Liabilities        
Non-interest-bearing deposits $  414,918   $ 192,023  
Interest-bearing deposits    1,018,771     643,714  
Total deposits    1,433,689     835,737  
Short-term borrowings    152,791     37,839  
FHLB advances    5,000     15,000  
Other liabilities    52,890     14,516  
Total liabilities    1,644,370     903,092  
         
Shareholders' equity    157,160     106,835  
         
Total liabilities and shareholders' equity $  1,801,530   $ 1,009,927  
         
Average Year-To-Date Balances: June 30, 2020
    December 31, 2019  
Assets        
Cash and cash equivalents $  103,568   $ 15,364  
Investment securities    217,995     185,512  
Federal Home Loan Bank stock    3,282     4,208  
Loans and leases, net    880,130     722,466  
Premises and equipment, net    23,254     18,465  
Life insurance cash surrender value    26,543     22,493  
Goodwill and core deposit intangible    1,667     209  
Other assets    15,612     15,835  
         
Total assets $  1,272,051   $ 984,552  
         
Liabilities        
Non-interest-bearing deposits $  271,561   $ 195,393  
Interest-bearing deposits    783,085     621,618  
Total deposits    1,054,646     817,011  
Short-term borrowings    59,413     35,243  
FHLB advances    16,278     18,074  
Other liabilities    16,257     13,517  
Total liabilities    1,146,594     883,845  
         
Shareholders' equity    125,457     100,707  
         
Total liabilities and shareholders' equity $  1,272,051   $ 984,552  
             


FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Statements of Income
(dollars in thousands)
 
    Three Months Ended   Six Months Ended    
    Jun. 30, 2020   Jun. 30, 2019   Jun. 30, 2020   Jun. 30, 2019    
Interest income                    
Loans and leases $  10,772   $ 8,193   $  19,131   $ 16,351      
Securities and other    1,478     1,464      2,829     2,961      
                     
Total interest income    12,250     9,657      21,961     19,312      
                     
Interest expense                    
Deposits    1,195     1,474      2,711     2,806      
Borrowings and debt    234     389      423     802      
                     
Total interest expense    1,429     1,863      3,134     3,608      
                     
Net interest income    10,821     7,794      18,827     15,704      
                     
Provision for loan losses    (1,900 )   (255 )    (2,200 )   (510 )    
Non-interest income    2,708     2,489      5,463     4,946      
Non-interest expense    (11,311 )   (6,435 )    (18,615 )   (13,205 )    
                     
Income before income taxes    318     3,593      3,475     6,935      
                     
Provision for income taxes    (66 )   (591 )    (589 )   (1,131 )    
Net income $  252   $ 3,002   $  2,886   $ 5,804      
                     
                     
                     
  Three Months Ended
    Jun. 30, 2020   Mar. 31, 2020   Dec. 31, 2019   Sep. 30, 2019   Jun. 30, 2019
Interest income                    
Loans and leases $  10,772   $ 8,360   $ 8,591   $ 8,499   $ 8,193  
Securities and other    1,478     1,351     1,358     1,509     1,464  
                     
Total interest income    12,250     9,711     9,949     10,008     9,657  
                     
Interest expense                    
Deposits    1,195     1,516     1,687     1,683     1,474  
Borrowings and debt    234     189     251     325     389  
                     
Total interest expense    1,429     1,705     1,938     2,008     1,863  
                     
Net interest income    10,821     8,006     8,011     8,000     7,794  
                     
Provision for loan losses    (1,900 )   (300 )   (255 )   (320 )   (255 )
Non-interest income    2,708     2,755     2,615     2,632     2,489  
Non-interest expense    (11,311 )   (7,304 )   (7,073 )   (6,643 )   (6,435 )
                     
Income before income taxes    318     3,157     3,298     3,669     3,593  
                     
Provision for income taxes    (66 )   (523 )   (584 )   (611 )   (591 )
Net income $  252   $ 2,634   $ 2,714   $ 3,058   $ 3,002  
                     


FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands)
                     
At Period End:   Jun. 30, 2020   Mar. 31, 2020   Dec. 31, 2019   Sep. 30, 2019   Jun. 30, 2019
Assets                    
Cash and cash equivalents $  264,798   $  58,960   $  15,663   $  18,687   $  19,190  
Investment securities    293,118      203,984      185,117      189,246      189,899  
Federal Home Loan Bank stock    3,020      2,732      4,383      3,818      4,396  
Loans and leases    1,141,692      746,715      755,053      750,470      735,685  
Allowance for loan losses    (11,671 )    (10,017 )    (9,747 )    (9,441 )    (9,495 )
Premises and equipment, net    28,479      21,412      21,557      18,149      18,353  
Life insurance cash surrender value    32,852      23,426      23,261      23,094      22,926  
Goodwill and core deposit intangible    8,966      209      209      209      209  
Other assets    40,276      15,074      14,431      17,192      15,876  
                     
Total assets $  1,801,530   $  1,062,495   $  1,009,927   $  1,011,424   $  997,039  
                     
Liabilities                    
Non-interest-bearing deposits $  414,918   $  243,942   $  192,023   $  203,816   $  215,973  
Interest-bearing deposits    1,018,771      675,719      643,714      648,506      623,650  
Total deposits    1,433,689      919,661      835,737      852,322      839,623  
Short-term borrowings    152,791      -      37,839      24,355      29,105  
FHLB advances    5,000      15,000      15,000      15,000      15,000  
Other liabilities    52,890      15,694      14,516      14,958      11,885  
Total liabilities    1,644,370      950,355      903,092      906,635      895,613  
                     
Shareholders' equity    157,160      112,140      106,835      104,789      101,426  
                     
Total liabilities and shareholders' equity $  1,801,530   $  1,062,495   $  1,009,927   $  1,011,424   $  997,039  
                     
Average Quarterly Balances:   Jun. 30, 2020   Mar. 31, 2020   Dec. 31, 2019   Sep. 30, 2019   Jun. 30, 2019
Assets                    
Cash and cash equivalents $  184,692   $  22,444   $  15,048   $  15,357   $  14,518  
Investment securities    246,909      189,081      187,171      190,087      185,290  
Federal Home Loan Bank stock    3,129      3,434      3,738      4,038      4,414  
Loans and leases, net    1,014,012      746,248      746,867      727,441      704,748  
Premises and equipment, net    25,507      21,002      18,924      18,288      18,362  
Life insurance cash surrender value    29,716      23,370      23,206      23,038      22,872  
Goodwill and core deposit intangible    3,124      209      209      209      209  
Other assets    17,462      13,764      15,947      16,761      15,054  
                     
Total assets $  1,524,551   $  1,019,552   $  1,011,110   $  995,219   $  965,467  
                     
Liabilities                    
Non-interest-bearing deposits $  348,275   $  194,847   $  194,313   $  198,188   $  193,702  
Interest-bearing deposits    896,304      669,867      654,205      630,810      602,161  
Total deposits    1,244,579      864,714      848,518      828,998      795,863  
Short-term borrowings    102,652      16,174      27,160      34,096      39,291  
FHLB advances    17,555      15,000      15,000      15,000      18,831  
Other liabilities    17,624      14,891      14,773      14,008      12,477  
Total liabilities    1,382,410      910,779      905,451      892,102      866,462  
                     
Shareholders' equity    142,141      108,773      105,659      103,117      99,005  
                     
Total liabilities and shareholders' equity $  1,524,551   $  1,019,552   $  1,011,110   $  995,219   $  965,467  


 
FIDELITY D & D BANCORP, INC.
Selected Financial Ratios and Other Data
                     
    Three Months Ended
    Jun. 30, 2020   Mar. 31, 2020   Dec. 31, 2019   Sep. 30, 2019   Jun. 30, 2019
Selected returns and financial ratios                    
Basic earnings per share $  0.05   $ 0.69   $ 0.71   $ 0.82   $ 0.79  
Diluted earnings per share $  0.05   $ 0.69   $ 0.71   $ 0.80   $ 0.79  
Dividends per share $  0.28   $ 0.28   $ 0.28   $ 0.26   $ 0.26  
Yield on interest-earning assets (FTE)*   3.77 %   4.19 %   4.26 %   4.35 %   4.36 %
Cost of interest-bearing liabilities   0.57 %   0.98 %   1.10 %   1.17 %   1.13 %
Cost of funds   0.42 %   0.77 %   0.86 %   0.91 %   0.88 %
Net interest spread (FTE)*   3.20 %   3.21 %   3.16 %   3.18 %   3.23 %
Net interest margin (FTE)*   3.34 %   3.47 %   3.45 %   3.49 %   3.54 %
Return on average assets   0.07 %   1.04 %   1.06 %   1.22 %   1.25 %
Return on average equity   0.71 %   9.74 %   10.19 %   11.77 %   12.16 %
Return on average tangible equity*   0.73 %   9.73 %   10.21 %   11.79 %   12.19 %
Efficiency ratio (FTE)*   82.28 %   66.69 %   65.38 %   61.41 %   61.47 %
Expense ratio   2.27 %   1.79 %   1.75 %   1.60 %   1.64 %


         
    Six Months Ended
    Jun. 30, 2020   Jun. 30, 2019
Basic earnings per share $  0.69   $ 1.53  
Diluted earnings per share $  0.68   $ 1.52  
Dividends per share $  0.56   $ 0.52  
Yield on interest-earning assets (FTE)*   3.94 %   4.38 %
Cost of interest-bearing liabilities   0.73 %   1.10 %
Cost of funds   0.56 %   0.85 %
Net interest spread (FTE)*   3.21 %   3.28 %
Net interest margin (FTE)*   3.39 %   3.58 %
Return on average assets   0.46 %   1.21 %
Return on average equity   4.63 %   12.07 %
Return on average tangible equity*   4.69 %   12.10 %
Efficiency ratio (FTE)*   75.37 %   62.82 %
Expense ratio   2.08 %   1.72 %


                 
Non-GAAP Measures   Three Months Ended   Six Months Ended
(dollars in thousands except per share data)   Jun. 30, 2020     Jun. 30, 2019     Jun. 30, 2020     Jun. 30, 2019  
Net income $  252   $ 3,002   $  2,886   $ 5,804  
Merger-related expenses, net of income taxes    1,577     -      1,839     15  
FHLB prepayment penalty, net of income taxes    381     -      381     -  
Adjusted net income* $  2,210   $ 3,002   $  5,105   $ 5,819  
Adjusted basic earnings per share* $  0.48   $ 0.79   $  1.22   $ 1.53  
Adjusted diluted earnings per share* $  0.48   $ 0.79   $  1.21   $ 1.52  
Interest income adjustment to FTE* $  217   $ 185   $  408   $ 372  
Adjusted return on average assets*   0.58 %   1.25 %   0.81 %   1.21 %
Adjusted return on average tangible equity*   6.40 %   12.19 %   8.30 %   12.13 %


                     
Other financial data   At period end:
(dollars in thousands except per share data)   Jun. 30, 2020   Mar. 31, 2020   Dec. 31, 2019   Sep. 30, 2019   Jun. 30, 2019
Book value per share $  31.57   $ 29.53   $ 28.25   $ 27.71   $ 26.82  
Tangible book value per share*    29.77     29.47     28.20     27.66     26.77  
Equity to assets   8.72 %   10.55 %   10.58 %   10.36 %   10.17 %
Allowance for loan losses to:                    
Total loans   1.04 %   1.34 %   1.29 %   1.26 %   1.29 %
Non-accrual loans   2.74 x   2.74 x   2.65 x   2.45 x   2.31 x
Non-accrual loans to total loans   0.37 %   0.49 %   0.49 %   0.51 %   0.56 %
Non-performing assets to total assets   0.31 %   0.45 %   0.50 %   0.55 %   0.62 %
Net charge-offs to average total loans   0.06 %   0.02 %   0.15 %   0.21 %   0.21 %
                     
Capital Adequacy Ratios                    
Total risk-based capital ratio   15.83 %   15.80 %   15.76 %   15.56 %   15.01 %
Common equity tier 1 risk-based capital ratio   14.61 %   14.55 %   14.51 %   14.31 %   13.76 %
Tier 1 risk-based capital ratio   14.61 %   14.55 %   14.51 %   14.31 %   13.76 %
Leverage ratio   10.02 %   10.37 %   10.39 %   10.20 %   10.26 %
* See non-GAAP Financial Measures above.   


Contacts:  
   
Daniel J. Santaniello
President and Chief Executive Officer
570-504-8035
Salvatore R. DeFrancesco, Jr.
Treasurer and Chief Financial Officer
570-504-8000
   


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