Fidelity D & D Bancorp, Inc. (NASDAQ: FDBC) and its banking
subsidiary, The Fidelity Deposit and Discount Bank, announced
its unaudited, consolidated financial results for the three-month
period ended March 31, 2023.
Unaudited Financial Information
Net income for the quarter ended March 31, 2023 was
$7.0 million, or $1.24 diluted earnings per share, compared to
$7.5 million, or $1.32 diluted earnings per share, for the quarter
ended March 31, 2022. The $0.5 million, or 6%, decline in net
income resulted primarily from the $0.3 million decline
in net interest income and $0.2 million higher non-interest
expenses. Diluted earnings per share decreased by $0.08 per share,
or 6%, due to the lower net income.
“The first quarter results continue to be positive and reflect
the strength and stability of Fidelity Bank. During the first
quarter, despite the market disruption in March, the bank increased
its capital position, grew loans, and maintained strong credit
quality, while at the same time effectively managing expenses.”
stated Daniel J. Santaniello, President and Chief Executive
Officer. “Fidelity Bank’s strong balance sheet positions the
company well to continue growing through a well-executed strategic
plan that focuses on building relationships and delivering value to
clients.”
Consolidated First Quarter Operating Results
Overview
Net interest income was $17.0 million for the first quarter of
2023, a 2% decrease over the $17.3 million earned
for the first quarter of 2022. The $0.3 million decline in net
interest income resulted primarily from the increase of $4.4
million in interest expense primarily due to a 99 basis point
increase in the rates paid on interest-bearing deposits which
resulted in $3.8 million in additional interest expense. The
Company also required $48.9 million in average short-term
borrowings during the first quarter of 2023 which contributed $0.6
million in interest expense compared to no short-term
borrowings needed during the first quarter of 2022. Partially
offsetting the higher interest expense, interest income grew $4.2
million primarily due to a $17.6 million increase in the
average balance of interest-earning assets and a 72 basis
point increase in fully-taxable equivalent ("FTE") yields on
these earning assets. The loan portfolio had the biggest impact,
producing a $4.4 million increase in FTE interest income from
$142.3 million in higher average balances and an increase of 74
basis points in FTE yields earned on loans. FTE interest income in
the commercial portfolio increased $2.5 million during
the first quarter of 2023 versus the first quarter of 2022, despite
the recognition of $0.7 million less Small Business
Administration ("SBA") fees attributable to Paycheck
Protection Program ("PPP") loans over the comparative periods.
The overall cost of interest-bearing liabilities was 1.33% for
the first quarter of 2023, an increase of 111 basis points from the
0.22% paid for the first quarter of 2022. The cost of funds
increased 82 basis points to 0.98% for the first quarter of 2023
from 0.16% for the first quarter of 2022. The Company’s
FTE (non-GAAP measurement) net interest spread was 2.73%
for the first quarter of 2023, down 39 basis points from the 3.12%
recorded for the first quarter of 2022. FTE net interest margin
decreased by five basis points to 3.13% for the three months
ended March 31, 2023 from 3.18% for the same
2022 period due to the increase in rates paid on
interest-bearing liabilities growing at a faster pace than the
yields on interest-earning assets.
The provision for credit losses on loans was $0.2 million
and the provision for credit losses on unfunded loan commitments
was $0.2 million for the first quarter of 2023. During the first
quarter of 2023, the Company adopted Accounting Standard Update
2016-13, Financial Instruments - Credit Losses (Topic 326)
Measurement of Credit Losses on Financial Instruments (CECL). Upon
adoption on January 1, 2023, the Company recorded an increase of
$0.7 million in the allowance for credit losses on loans and an
increase of $1.1 million in the allowance for credit losses on
unfunded loan commitments. Results for reporting periods
beginning after January 1, 2023 are presented under ASC 326 while
prior period amounts continue to be reported in accordance with
previously applicable GAAP. For the three months ended March
31, 2023, the increase in the allowance for credit losses on
unfunded commitments was due to four large unfunded commercial
loan commitments originated during the quarter. For the three
months ended March 31, 2023, the increase in the allowance for
credit losses on loans was due to growth in the loan portfolio.
Total non-interest income decreased $0.1 million, or 1%,
to $4.5 million for the first quarter of
2023 compared to $4.6 million for the first quarter
of 2022. The decrease in non-interest income was primarily
attributable to $0.5 million lower gains on the sale of mortgage
loans and $0.1 million less service charges on loans. Partially
offsetting these decreases was $0.1 million higher service
charges on deposits and $0.1 million death claim on bank-owned life
insurance. The Company also had $0.2 million in losses on the
write-down of premises and equipment during the first quarter of
2022 compared to no significant gains/losses on the sale,
write-down or disposal of premises and equipment during the first
quarter of 2023 which partially offset decreases in non-interest
income.
Non-interest expenses increased $0.2 million, or 2%,
for the first quarter of 2023 to $12.9 million from $12.7 million
for the same quarter of 2022. Professional services and premises
and equipment expenses each increased by $0.2
million quarter-over-quarter. Donation expense increased $0.1
million due to additional donations related to PA tax credit
programs during the first quarter of 2023. These increases were
partially offset by decreases of $0.2 million in PA shares tax
expense and $0.2 million in salaries and employee benefit
expenses.
The provision for income taxes increased $0.1 million during the
first quarter of 2023 due to higher estimated taxable income
compared to the first quarter of 2022.
Consolidated Balance Sheet & Asset Quality
Overview
The Company’s total assets grew to $2.4 billion as of March
31, 2023, an increase of $65 million from December 31, 2022.
Growth in the loan portfolio of $61 million and $34 million of cash
and cash equivalents was offset by a reduction of the
investment portfolio by $29 million. The decline in the
investment portfolio was primarily due to sales of $31 million in
securities partially offset by a $10 million improvement in
market value of available-for-sale securities. During the
first quarter of 2023, the market value of held-to-maturity
securities also improved by $7 million, with $29 million in
unrealized losses at March 31, 2023. During the same time period,
total liabilities increased $52 million, or 2%. Growth of $76
million in short-term borrowings replaced deposit declines of $24
million with the remaining balance used to fund loan growth
with the excess increasing cash balances. Transactional deposit
balances are down primarily from customers' investing part of their
funds in higher yields. The reduction was partially mitigated
through the promotional CD offerings during the first quarter of
2023.
Shareholders’ equity increased $12.9 million, or 8%, to $175.9
million at March 31, 2023 from $163.0 million at December 31, 2022.
The increase was caused by an $8.2 million, after tax, improvement
in accumulated other comprehensive income from lower net
unrealized losses recorded on available-for-sale investment
securities. At March 31, 2023, there were no securities identified
with credit-related, other-than-temporary impairment losses.
Accumulated other comprehensive income (loss) is excluded from
regulatory capital ratios. Retained earnings also improved from net
income of $7.0 million, partially offset by $2.1 million in cash
dividends paid to shareholders. An additional $1.1 million was
recorded from the issuance of common stock under the Company’s
stock plans and stock-based compensation expense. Partially
offsetting these increases, a cumulative-effect adjustment was made
for adoption of ASU 2016-13 during the first quarter of 2023 which
reduced retained earnings by $1.3 million. The Company remains well
capitalized with Tier 1 capital at 8.92% of total average assets as
of March 31, 2023. Total risk-based capital was 14.59% of
risk-weighted assets and Tier 1 risk-based capital was 13.42% of
risk-weighted assets as of March 31, 2023. Tangible book value per
share was $27.33 at March 31, 2023 compared to $25.18 at December
31, 2022. Tangible common equity was 6.39% of total assets at March
31, 2023 compared to 6.01% at December 31, 2022.
Asset Quality
Total non-performing assets were $3.4 million, or 0.14% of
total assets, at March 31, 2023, compared to $2.7 million, or
0.12% of total assets, at December 31, 2022. Based on the Company’s
adoption of ASU 2022-02, Financial Instruments-Credit Losses
(Topic 326) Troubled Debt Restructurings and Vintage Disclosures,
the recognition and measurement guidance related to troubled debt
restructurings (TDR) has been eliminated. As such, TDRs were
removed from non-performing assets at March 31, 2023 and December
31, 2022 above to adhere to this standard and provide better
comparability. Past due and non-accrual loans to total loans
were 0.26% at March 31, 2023 compared to 0.28% at December 31,
2022. Net charge-offs to average total loans were 0.04% at March
31, 2023 unchanged compared to 0.04% at December 31,
2022.
About Fidelity D & D Bancorp, Inc. and The Fidelity
Deposit and Discount Bank
Fidelity D & D Bancorp, Inc. has built a strong history as
trusted financial advisor to the clients served by The Fidelity
Deposit and Discount Bank (“Fidelity Bank”). Fidelity Bank operates
20 full-service offices throughout Lackawanna, Luzerne, Lehigh and
Northampton Counties, along with a limited production commercial
office in Luzerne County and a Fidelity Bank Wealth Management
Minersville Office in Schuylkill County. Fidelity Bank provides a
digital and virtual experience via digital services, and digital
account opening offered through online banking at
bankatfidelity.com and the mobile app. Additionally, Fidelity Bank
offers full-service Wealth Management & Brokerage Services, a
Mortgage Center, and an array of personal and business banking
products and services. Part of the Company’s vision is to serve as
the best bank for the community, which was accomplished by
having provided over 4,100 hours of volunteer time and over
$1.6 million in donations to non-profit organizations directly
within the markets served throughout 2022. The
Company continues its mission of exceeding client
expectations through a unique banking experience, providing 24
hour, 7 days a week service to clients through branch offices,
online at www.bankatfidelity.com, and through the Customer Care
Center at 800-388-4380. Fidelity 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 use 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. Reconciliations of non-GAAP financial measures to GAAP
are presented in the tables below.
Interest income was adjusted to recognize the income from tax
exempt interest-earning assets as if the interest was taxable,
fully-taxable equivalent (FTE), 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
2023 and 2022.
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:
|
■ |
local, regional and national economic conditions and changes
thereto; |
|
■ |
the short-term and long-term
effects of inflation, and rising costs to the Company, its
customers and on the economy; |
|
■ |
securities markets and
monetary fluctuations and volatility; |
|
■ |
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 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 laws and regulations
concerning taxes, banking, securities and insurance and their
application with which the Company and its subsidiaries must
comply; |
|
■ |
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 and
volatility of 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; |
|
■ |
the effects of economic
conditions particularly with regard to the negative impact of
lingering disruptions caused by the spread of Coronavirus Disease
2019 (COVID-19) and any other pandemic, epidemic or other
health-related crisis 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; |
|
■ |
technological changes; |
|
■ |
the interruption or breach in
security of our information systems, continually evolving
cybersecurity 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; |
|
■ |
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.
Contacts: |
|
|
|
Daniel J. Santaniello |
Salvatore R. DeFrancesco,
Jr. |
President and Chief Executive
Officer |
Treasurer and Chief
Financial Officer |
570-504-8035 |
570-504-8000 |
FIDELITY D & D BANCORP, INC. |
Unaudited Condensed Consolidated Balance Sheets |
(dollars in thousands) |
|
At Period End: |
|
March 31, 2023 |
|
|
December 31, 2022 |
|
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
63,038 |
|
|
$ |
29,091 |
|
Investment securities |
|
|
614,526 |
|
|
|
643,606 |
|
Restricted investments in bank stock |
|
|
5,968 |
|
|
|
5,268 |
|
Loans and leases |
|
|
1,627,155 |
|
|
|
1,565,811 |
|
Allowance for credit losses on loans |
|
|
(17,910 |
) |
|
|
(17,149 |
) |
Premises and equipment, net |
|
|
31,408 |
|
|
|
31,307 |
|
Life insurance cash surrender value |
|
|
53,567 |
|
|
|
54,035 |
|
Goodwill and core deposit intangible |
|
|
21,071 |
|
|
|
21,168 |
|
Other assets |
|
|
44,198 |
|
|
|
45,235 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,443,021 |
|
|
$ |
2,378,372 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Non-interest-bearing deposits |
|
$ |
591,055 |
|
|
$ |
602,608 |
|
Interest-bearing deposits |
|
|
1,552,036 |
|
|
|
1,564,305 |
|
Total deposits |
|
|
2,143,091 |
|
|
|
2,166,913 |
|
Short-term borrowings |
|
|
88,989 |
|
|
|
12,940 |
|
Secured borrowings |
|
|
7,560 |
|
|
|
7,619 |
|
Other liabilities |
|
|
27,494 |
|
|
|
27,950 |
|
Total liabilities |
|
|
2,267,134 |
|
|
|
2,215,422 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
175,887 |
|
|
|
162,950 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
2,443,021 |
|
|
$ |
2,378,372 |
|
Average Year-To-Date Balances: |
|
March 31, 2023 |
|
|
December 31, 2022 |
|
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
29,192 |
|
|
$ |
81,532 |
|
Investment securities |
|
|
623,097 |
|
|
|
684,588 |
|
Restricted investments in bank stock |
|
|
5,418 |
|
|
|
3,565 |
|
Loans and leases |
|
|
1,609,655 |
|
|
|
1,500,796 |
|
Allowance for credit losses on loans |
|
|
(18,380 |
) |
|
|
(16,612 |
) |
Premises and equipment, net |
|
|
31,477 |
|
|
|
30,640 |
|
Life insurance cash surrender value |
|
|
53,995 |
|
|
|
53,443 |
|
Goodwill and core deposit intangible |
|
|
21,120 |
|
|
|
21,359 |
|
Other assets |
|
|
43,690 |
|
|
|
40,265 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,399,264 |
|
|
$ |
2,399,576 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Non-interest-bearing deposits |
|
$ |
585,987 |
|
|
$ |
594,541 |
|
Interest-bearing deposits |
|
|
1,559,212 |
|
|
|
1,593,805 |
|
Total deposits |
|
|
2,145,199 |
|
|
|
2,188,346 |
|
Short-term borrowings |
|
|
48,937 |
|
|
|
1,031 |
|
Secured borrowings |
|
|
7,548 |
|
|
|
8,886 |
|
Other liabilities |
|
|
29,651 |
|
|
|
28,434 |
|
Total liabilities |
|
|
2,231,335 |
|
|
|
2,226,697 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
167,929 |
|
|
|
172,879 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
2,399,264 |
|
|
$ |
2,399,576 |
|
FIDELITY D & D BANCORP, INC. |
Unaudited Condensed Consolidated Statements of Income |
(dollars in thousands) |
|
|
|
Three Months Ended |
|
|
|
Mar. 31, 2023 |
|
|
Mar. 31, 2022 |
|
Interest income |
|
|
|
|
|
|
|
|
Loans and leases |
|
$ |
19,018 |
|
|
$ |
14,775 |
|
Securities and other |
|
|
3,320 |
|
|
|
3,403 |
|
|
|
|
|
|
|
|
|
|
Total interest income |
|
|
22,338 |
|
|
|
18,178 |
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
|
|
|
Deposits |
|
|
(4,618 |
) |
|
|
(822 |
) |
Borrowings and debt |
|
|
(695 |
) |
|
|
(65 |
) |
|
|
|
|
|
|
|
|
|
Total interest expense |
|
|
(5,313 |
) |
|
|
(887 |
) |
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
17,025 |
|
|
|
17,291 |
|
|
|
|
|
|
|
|
|
|
Provision for credit losses on loans |
|
|
(180 |
) |
|
|
(525 |
) |
(Provision) credit for credit losses on unfunded loan
commitments |
|
|
(225 |
) |
|
|
11 |
|
Non-interest income |
|
|
4,489 |
|
|
|
4,554 |
|
Non-interest expense |
|
|
(12,857 |
) |
|
|
(12,665 |
) |
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
8,252 |
|
|
|
8,666 |
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
(1,212 |
) |
|
|
(1,144 |
) |
Net income |
|
$ |
7,040 |
|
|
$ |
7,522 |
|
|
|
Three Months Ended |
|
|
|
Mar. 31, 2023 |
|
|
Dec. 31, 2022 |
|
|
Sep. 30, 2022 |
|
|
Jun. 30, 2022 |
|
|
Mar. 31, 2022 |
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases |
|
$ |
19,018 |
|
|
$ |
17,425 |
|
|
$ |
16,320 |
|
|
$ |
15,500 |
|
|
$ |
14,775 |
|
Securities and other |
|
|
3,320 |
|
|
|
3,869 |
|
|
|
3,815 |
|
|
|
3,565 |
|
|
|
3,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income |
|
|
22,338 |
|
|
|
21,294 |
|
|
|
20,135 |
|
|
|
19,065 |
|
|
|
18,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
(4,618 |
) |
|
|
(2,822 |
) |
|
|
(1,550 |
) |
|
|
(950 |
) |
|
|
(822 |
) |
Borrowings and debt |
|
|
(695 |
) |
|
|
(145 |
) |
|
|
(75 |
) |
|
|
30 |
|
|
|
(65 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest expense |
|
|
(5,313 |
) |
|
|
(2,967 |
) |
|
|
(1,625 |
) |
|
|
(920 |
) |
|
|
(887 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
17,025 |
|
|
|
18,327 |
|
|
|
18,510 |
|
|
|
18,145 |
|
|
|
17,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit losses on loans |
|
|
(180 |
) |
|
|
(525 |
) |
|
|
(525 |
) |
|
|
(525 |
) |
|
|
(525 |
) |
(Provision) credit for credit losses on unfunded loan
commitments |
|
|
(225 |
) |
|
|
(11 |
) |
|
|
6 |
|
|
|
8 |
|
|
|
11 |
|
Non-interest income |
|
|
4,489 |
|
|
|
3,920 |
|
|
|
3,911 |
|
|
|
4,256 |
|
|
|
4,554 |
|
Non-interest expense |
|
|
(12,857 |
) |
|
|
(12,854 |
) |
|
|
(13,034 |
) |
|
|
(12,808 |
) |
|
|
(12,665 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
8,252 |
|
|
|
8,857 |
|
|
|
8,868 |
|
|
|
9,076 |
|
|
|
8,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
(1,212 |
) |
|
|
(1,711 |
) |
|
|
(1,179 |
) |
|
|
(1,412 |
) |
|
|
(1,144 |
) |
Net income |
|
$ |
7,040 |
|
|
$ |
7,146 |
|
|
$ |
7,689 |
|
|
$ |
7,664 |
|
|
$ |
7,522 |
|
FIDELITY D & D BANCORP, INC. |
Unaudited Condensed Consolidated Balance Sheets |
(dollars in thousands) |
|
At Period End: |
|
Mar. 31, 2023 |
|
|
Dec. 31, 2022 |
|
|
Sep. 30, 2022 |
|
|
Jun. 30, 2022 |
|
|
Mar. 31, 2022 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
63,038 |
|
|
$ |
29,091 |
|
|
$ |
134,042 |
|
|
$ |
109,125 |
|
|
$ |
97,403 |
|
Investment securities |
|
|
614,526 |
|
|
|
643,606 |
|
|
|
635,787 |
|
|
|
674,833 |
|
|
|
711,583 |
|
Restricted investments in bank stock |
|
|
5,968 |
|
|
|
5,268 |
|
|
|
3,639 |
|
|
|
3,622 |
|
|
|
3,231 |
|
Loans and leases |
|
|
1,627,155 |
|
|
|
1,565,811 |
|
|
|
1,524,328 |
|
|
|
1,494,316 |
|
|
|
1,479,114 |
|
Allowance for credit losses on loans |
|
|
(17,910 |
) |
|
|
(17,149 |
) |
|
|
(16,779 |
) |
|
|
(16,590 |
) |
|
|
(16,081 |
) |
Premises and equipment, net |
|
|
31,408 |
|
|
|
31,307 |
|
|
|
30,971 |
|
|
|
30,855 |
|
|
|
31,336 |
|
Life insurance cash surrender value |
|
|
53,567 |
|
|
|
54,035 |
|
|
|
53,711 |
|
|
|
53,383 |
|
|
|
53,065 |
|
Goodwill and core deposit intangible |
|
|
21,071 |
|
|
|
21,168 |
|
|
|
21,264 |
|
|
|
21,360 |
|
|
|
21,462 |
|
Other assets |
|
|
44,198 |
|
|
|
45,235 |
|
|
|
48,805 |
|
|
|
44,036 |
|
|
|
39,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,443,021 |
|
|
$ |
2,378,372 |
|
|
$ |
2,435,768 |
|
|
$ |
2,414,940 |
|
|
$ |
2,420,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing deposits |
|
$ |
591,055 |
|
|
$ |
602,608 |
|
|
$ |
616,844 |
|
|
$ |
610,987 |
|
|
$ |
599,497 |
|
Interest-bearing deposits |
|
|
1,552,036 |
|
|
|
1,564,305 |
|
|
|
1,636,389 |
|
|
|
1,606,637 |
|
|
|
1,610,508 |
|
Total deposits |
|
|
2,143,091 |
|
|
|
2,166,913 |
|
|
|
2,253,233 |
|
|
|
2,217,624 |
|
|
|
2,210,005 |
|
Short-term borrowings |
|
|
88,989 |
|
|
|
12,940 |
|
|
|
10 |
|
|
|
10 |
|
|
|
- |
|
Secured borrowings |
|
|
7,560 |
|
|
|
7,619 |
|
|
|
7,688 |
|
|
|
7,736 |
|
|
|
10,572 |
|
Other liabilities |
|
|
27,494 |
|
|
|
27,950 |
|
|
|
28,350 |
|
|
|
26,951 |
|
|
|
24,954 |
|
Total liabilities |
|
|
2,267,134 |
|
|
|
2,215,422 |
|
|
|
2,289,281 |
|
|
|
2,252,321 |
|
|
|
2,245,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
175,887 |
|
|
|
162,950 |
|
|
|
146,487 |
|
|
|
162,619 |
|
|
|
175,243 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
2,443,021 |
|
|
$ |
2,378,372 |
|
|
$ |
2,435,768 |
|
|
$ |
2,414,940 |
|
|
$ |
2,420,774 |
|
Average Quarterly Balances: |
|
Mar. 31, 2023 |
|
|
Dec. 31, 2022 |
|
|
Sep. 30, 2022 |
|
|
Jun. 30, 2022 |
|
|
Mar. 31, 2022 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
29,192 |
|
|
$ |
73,023 |
|
|
$ |
88,863 |
|
|
$ |
69,086 |
|
|
$ |
95,319 |
|
Investment securities |
|
|
623,097 |
|
|
|
637,825 |
|
|
|
672,595 |
|
|
|
693,121 |
|
|
|
736,021 |
|
Restricted investments in bank stock |
|
|
5,418 |
|
|
|
3,840 |
|
|
|
3,645 |
|
|
|
3,538 |
|
|
|
3,228 |
|
Loans and leases |
|
|
1,609,655 |
|
|
|
1,540,999 |
|
|
|
1,511,268 |
|
|
|
1,482,629 |
|
|
|
1,467,362 |
|
Allowance for credit losses on loans |
|
|
(18,380 |
) |
|
|
(17,113 |
) |
|
|
(16,911 |
) |
|
|
(16,441 |
) |
|
|
(15,966 |
) |
Premises and equipment, net |
|
|
31,477 |
|
|
|
31,190 |
|
|
|
30,956 |
|
|
|
31,091 |
|
|
|
29,301 |
|
Life insurance cash surrender value |
|
|
53,995 |
|
|
|
53,925 |
|
|
|
53,599 |
|
|
|
53,277 |
|
|
|
52,960 |
|
Goodwill and core deposit intangible |
|
|
21,120 |
|
|
|
21,210 |
|
|
|
21,308 |
|
|
|
21,405 |
|
|
|
21,517 |
|
Other assets |
|
|
43,690 |
|
|
|
47,715 |
|
|
|
42,564 |
|
|
|
40,878 |
|
|
|
29,679 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,399,264 |
|
|
$ |
2,392,614 |
|
|
$ |
2,407,887 |
|
|
$ |
2,378,584 |
|
|
$ |
2,419,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing deposits |
|
$ |
585,987 |
|
|
$ |
609,262 |
|
|
$ |
589,227 |
|
|
$ |
593,121 |
|
|
$ |
586,363 |
|
Interest-bearing deposits |
|
|
1,559,212 |
|
|
|
1,589,129 |
|
|
|
1,614,573 |
|
|
|
1,579,150 |
|
|
|
1,592,173 |
|
Total deposits |
|
|
2,145,199 |
|
|
|
2,198,391 |
|
|
|
2,203,800 |
|
|
|
2,172,271 |
|
|
|
2,178,536 |
|
Short-term borrowings |
|
|
48,937 |
|
|
|
3,875 |
|
|
|
10 |
|
|
|
206 |
|
|
|
- |
|
Secured borrowings |
|
|
7,548 |
|
|
|
7,654 |
|
|
|
7,707 |
|
|
|
9,644 |
|
|
|
10,584 |
|
Other liabilities |
|
|
29,651 |
|
|
|
30,489 |
|
|
|
29,031 |
|
|
|
27,164 |
|
|
|
27,008 |
|
Total liabilities |
|
|
2,231,335 |
|
|
|
2,240,409 |
|
|
|
2,240,548 |
|
|
|
2,209,285 |
|
|
|
2,216,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
167,929 |
|
|
|
152,205 |
|
|
|
167,339 |
|
|
|
169,299 |
|
|
|
203,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
2,399,264 |
|
|
$ |
2,392,614 |
|
|
$ |
2,407,887 |
|
|
$ |
2,378,584 |
|
|
$ |
2,419,421 |
|
FIDELITY D & D BANCORP, INC. |
Selected Financial Ratios and Other Financial Data |
|
|
|
Three Months Ended |
|
|
|
Mar. 31, 2023 |
|
|
Dec. 31, 2022 |
|
|
Sep. 30, 2022 |
|
|
Jun. 30, 2022 |
|
|
Mar. 31, 2022 |
|
Selected returns and financial ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
1.25 |
|
|
$ |
1.27 |
|
|
$ |
1.36 |
|
|
$ |
1.35 |
|
|
$ |
1.33 |
|
Diluted earnings per share |
|
$ |
1.24 |
|
|
$ |
1.26 |
|
|
$ |
1.36 |
|
|
$ |
1.35 |
|
|
$ |
1.32 |
|
Dividends per share |
|
$ |
0.36 |
|
|
$ |
0.36 |
|
|
$ |
0.33 |
|
|
$ |
0.33 |
|
|
$ |
0.33 |
|
Yield on interest-earning assets (FTE)* |
|
|
4.06 |
% |
|
|
3.78 |
% |
|
|
3.60 |
% |
|
|
3.50 |
% |
|
|
3.34 |
% |
Cost of interest-bearing liabilities |
|
|
1.33 |
% |
|
|
0.74 |
% |
|
|
0.40 |
% |
|
|
0.23 |
% |
|
|
0.22 |
% |
Cost of funds |
|
|
0.98 |
% |
|
|
0.53 |
% |
|
|
0.29 |
% |
|
|
0.17 |
% |
|
|
0.16 |
% |
Net interest spread (FTE)* |
|
|
2.73 |
% |
|
|
3.04 |
% |
|
|
3.20 |
% |
|
|
3.27 |
% |
|
|
3.12 |
% |
Net interest margin (FTE)* |
|
|
3.13 |
% |
|
|
3.27 |
% |
|
|
3.32 |
% |
|
|
3.34 |
% |
|
|
3.18 |
% |
Return on average assets |
|
|
1.19 |
% |
|
|
1.18 |
% |
|
|
1.27 |
% |
|
|
1.29 |
% |
|
|
1.26 |
% |
Pre-provision net revenue to average assets* |
|
|
1.46 |
% |
|
|
1.56 |
% |
|
|
1.55 |
% |
|
|
1.62 |
% |
|
|
1.54 |
% |
Return on average equity |
|
|
17.00 |
% |
|
|
18.63 |
% |
|
|
18.23 |
% |
|
|
18.16 |
% |
|
|
15.01 |
% |
Return on average tangible equity* |
|
|
19.45 |
% |
|
|
21.64 |
% |
|
|
20.89 |
% |
|
|
20.79 |
% |
|
|
16.78 |
% |
Efficiency ratio (FTE)* |
|
|
57.72 |
% |
|
|
56.02 |
% |
|
|
56.40 |
% |
|
|
55.49 |
% |
|
|
56.26 |
% |
Expense ratio |
|
|
1.41 |
% |
|
|
1.48 |
% |
|
|
1.51 |
% |
|
|
1.44 |
% |
|
|
1.36 |
% |
Other financial data |
|
At period end: |
|
(dollars in thousands except per share data) |
|
Mar. 31, 2023 |
|
|
Dec. 31, 2022 |
|
|
Sep. 30, 2022 |
|
|
Jun. 30, 2022 |
|
|
Mar. 31, 2022 |
|
Pre-provision net revenue* |
|
$ |
8,657 |
|
|
$ |
9,393 |
|
|
$ |
9,387 |
|
|
$ |
9,593 |
|
|
$ |
9,180 |
|
Interest income adjustment to FTE* |
|
$ |
760 |
|
|
$ |
700 |
|
|
$ |
687 |
|
|
$ |
682 |
|
|
$ |
668 |
|
Assets under management |
|
$ |
809,897 |
|
|
$ |
736,401 |
|
|
$ |
678,431 |
|
|
$ |
619,420 |
|
|
$ |
672,166 |
|
Book value per share |
|
$ |
31.05 |
|
|
$ |
28.94 |
|
|
$ |
26.02 |
|
|
$ |
28.77 |
|
|
$ |
30.97 |
|
Tangible book value per share* |
|
$ |
27.33 |
|
|
$ |
25.18 |
|
|
$ |
22.24 |
|
|
$ |
24.99 |
|
|
$ |
27.17 |
|
Equity to assets |
|
|
7.20 |
% |
|
|
6.85 |
% |
|
|
6.01 |
% |
|
|
6.73 |
% |
|
|
7.24 |
% |
Tangible common equity ratio* |
|
|
6.39 |
% |
|
|
6.01 |
% |
|
|
5.19 |
% |
|
|
5.90 |
% |
|
|
6.41 |
% |
Allowance for credit losses on loans to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans |
|
|
1.10 |
% |
|
|
1.10 |
% |
|
|
1.10 |
% |
|
|
1.11 |
% |
|
|
1.09 |
% |
Non-accrual loans |
|
5.36x |
|
|
6.77x |
|
|
5.23x |
|
|
5.17x |
|
|
6.97x |
|
Non-accrual loans to total loans |
|
|
0.21 |
% |
|
|
0.16 |
% |
|
|
0.20 |
% |
|
|
0.21 |
% |
|
|
0.16 |
% |
Non-performing assets to total assets** |
|
|
0.14 |
% |
|
|
0.17 |
% |
|
|
0.19 |
% |
|
|
0.20 |
% |
|
|
0.17 |
% |
Net charge-offs to average total loans |
|
|
0.04 |
% |
|
|
0.04 |
% |
|
|
0.04 |
% |
|
|
0.01 |
% |
|
|
0.02 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Adequacy Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital
ratio |
|
|
14.59 |
% |
|
|
14.35 |
% |
|
|
14.34 |
% |
|
|
14.30 |
% |
|
|
14.18 |
% |
Common equity tier 1
risk-based capital ratio |
|
|
13.42 |
% |
|
|
13.27 |
% |
|
|
13.27 |
% |
|
|
13.21 |
% |
|
|
13.11 |
% |
Tier 1 risk-based capital
ratio |
|
|
13.42 |
% |
|
|
13.27 |
% |
|
|
13.27 |
% |
|
|
13.21 |
% |
|
|
13.11 |
% |
Leverage ratio |
|
|
8.92 |
% |
|
|
8.69 |
% |
|
|
8.51 |
% |
|
|
8.43 |
% |
|
|
8.14 |
% |
* Non-GAAP Financial Measures - see reconciliations below**Note
that based on the Company’s adoption of ASU 2022-02, Financial
Instruments-Credit Losses (Topic 326) Troubled Debt Restructurings
and Vintage Disclosures, the recognition and measurement guidance
related to troubled debt restructurings (TDR) has been eliminated.
As such, TDRs were removed from non-performing assets for the
current reporting period to adhere to this standard. Prior periods
included accruing TDRs in non-performing assets.
FIDELITY D & D BANCORP, INC. |
Reconciliations of Non-GAAP Financial Measures to GAAP |
|
Reconciliations of
Non-GAAP Measures to GAAP |
|
Three Months Ended |
|
(dollars in thousands) |
|
Mar. 31, 2023 |
|
|
Dec. 31, 2022 |
|
|
Sep. 30, 2022 |
|
|
Jun. 30, 2022 |
|
|
Mar. 31, 2022 |
|
FTE net interest income (non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (GAAP) |
|
$ |
22,338 |
|
|
$ |
21,294 |
|
|
$ |
20,135 |
|
|
$ |
19,065 |
|
|
$ |
18,178 |
|
Adjustment to FTE |
|
|
760 |
|
|
|
700 |
|
|
|
687 |
|
|
|
682 |
|
|
|
668 |
|
Interest income adjusted to
FTE (non-GAAP) |
|
|
23,098 |
|
|
|
21,994 |
|
|
|
20,822 |
|
|
|
19,747 |
|
|
|
18,846 |
|
Interest expense (GAAP) |
|
|
5,313 |
|
|
|
2,967 |
|
|
|
1,625 |
|
|
|
920 |
|
|
|
887 |
|
Net
interest income adjusted to FTE (non-GAAP) |
|
$ |
17,785 |
|
|
|
19,027 |
|
|
|
19,197 |
|
|
|
18,827 |
|
|
|
17,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency Ratio
(non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expenses
(GAAP) |
|
$ |
12,857 |
|
|
$ |
12,854 |
|
|
$ |
13,034 |
|
|
$ |
12,808 |
|
|
$ |
12,665 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(GAAP) |
|
|
17,025 |
|
|
|
18,327 |
|
|
|
18,510 |
|
|
|
18,145 |
|
|
|
17,291 |
|
Plus: taxable equivalent
adjustment |
|
|
760 |
|
|
|
700 |
|
|
|
687 |
|
|
|
682 |
|
|
|
668 |
|
Non-interest income (GAAP) |
|
|
4,489 |
|
|
|
3,920 |
|
|
|
3,911 |
|
|
|
4,256 |
|
|
|
4,554 |
|
Net
interest income (FTE) plus non-interest income (non-GAAP) |
|
$ |
22,274 |
|
|
$ |
22,947 |
|
|
$ |
23,108 |
|
|
$ |
23,083 |
|
|
$ |
22,513 |
|
Efficiency ratio (non-GAAP) |
|
|
57.72 |
% |
|
|
56.02 |
% |
|
|
56.40 |
% |
|
|
55.49 |
% |
|
|
56.26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Book Value
per Share/Tangible Common Equity Ratio (non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets (GAAP) |
|
$ |
2,443,021 |
|
|
$ |
2,378,372 |
|
|
$ |
2,435,768 |
|
|
$ |
2,414,940 |
|
|
$ |
2,420,774 |
|
Less:
Intangible assets, primarily goodwill |
|
|
(21,071 |
) |
|
|
(21,167 |
) |
|
|
(21,264 |
) |
|
|
(21,360 |
) |
|
|
(21,462 |
) |
Tangible assets |
|
|
2,421,950 |
|
|
|
2,357,205 |
|
|
|
2,414,504 |
|
|
|
2,393,580 |
|
|
|
2,399,312 |
|
Total shareholders' equity
(GAAP) |
|
|
175,887 |
|
|
|
162,950 |
|
|
|
146,487 |
|
|
|
162,619 |
|
|
|
175,243 |
|
Less:
Intangible assets, primarily goodwill |
|
|
(21,071 |
) |
|
|
(21,167 |
) |
|
|
(21,264 |
) |
|
|
(21,360 |
) |
|
|
(21,462 |
) |
Tangible common equity |
|
|
154,816 |
|
|
|
141,783 |
|
|
|
125,223 |
|
|
|
141,259 |
|
|
|
153,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
shares outstanding, end of period |
|
|
5,665,255 |
|
|
|
5,630,794 |
|
|
|
5,630,332 |
|
|
|
5,651,777 |
|
|
|
5,659,068 |
|
Tangible Common Book Value per Share |
|
$ |
27.33 |
|
|
$ |
25.18 |
|
|
$ |
22.24 |
|
|
$ |
24.99 |
|
|
$ |
27.17 |
|
Tangible Common Equity Ratio |
|
|
6.39 |
% |
|
|
6.01 |
% |
|
|
5.19 |
% |
|
|
5.90 |
% |
|
|
6.41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Provision Net
Revenue to Average Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
(GAAP) |
|
$ |
8,252 |
|
|
$ |
8,857 |
|
|
$ |
8,868 |
|
|
$ |
9,076 |
|
|
$ |
8,666 |
|
Plus:
Provision for credit losses |
|
|
405 |
|
|
|
536 |
|
|
|
519 |
|
|
|
517 |
|
|
|
514 |
|
Total pre-provision net
revenue (non-GAAP) |
|
|
8,657 |
|
|
|
9,393 |
|
|
|
9,387 |
|
|
|
9,593 |
|
|
|
9,180 |
|
Total (annualized)
(non-GAAP) |
|
$ |
35,110 |
|
|
$ |
37,267 |
|
|
$ |
37,240 |
|
|
$ |
38,476 |
|
|
$ |
37,232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
assets |
|
$ |
2,399,264 |
|
|
$ |
2,392,614 |
|
|
$ |
2,407,887 |
|
|
$ |
2,378,584 |
|
|
$ |
2,419,421 |
|
Pre-Provision Net Revenue to Average Assets (non-GAAP) |
|
|
1.46 |
% |
|
|
1.56 |
% |
|
|
1.55 |
% |
|
|
1.62 |
% |
|
|
1.54 |
% |
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