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, 2024.
Unaudited Financial Information
Net income for the quarter ended March 31, 2024 was $5.1
million, or $0.88 diluted earnings per share, compared to $7.0
million, or $1.24 diluted earnings per share, for the quarter ended
March 31, 2023. The $1.9 million decline in net
income resulted primarily from the $2.1 million decrease
in net interest income led by higher interest
expense. Non-interest expenses also increased $0.8
million partially offset by $0.5 million lower provision for
income taxes and a $0.3 million reduction in
the provision for credit losses on unfunded commitments.
“Our performance in the first quarter of 2024 demonstrates our
resilience and adaptability in navigating through challenging
economic conditions,” stated Daniel J. Santaniello, President and
Chief Executive Officer. "Despite the decline in net income related
to the interest rate environment, our ongoing commitment to
delivering value to our clients, our shareholders, our bankers, and
the communities we serve has provided tremendous value. Our
proactive measures to manage expenses and optimize resources have
positioned us well for future growth opportunities. We are
confident in our ability to drive sustainable results and create
long-term shareholder value."
Consolidated First Quarter Operating Results
Overview
Net interest income was $14.9 million for the first quarter of
2024, a 12% decrease from the $17.0 million earned for
the first quarter of 2023. The $2.1 million decline in net
interest income resulted primarily from the increase of $5.4
million in interest expense primarily due to a 123 basis point
increase in the rates paid on interest-bearing deposits which
resulted in $5.3 million in additional interest expense. The
Company also utilized $5.0 million more in average short-term
borrowings during the first quarter of 2024 which contributed
additional interest expense compared to the first quarter of
2023. Partially offsetting the higher interest expense,
interest income grew $3.3 million primarily due to an
$87.0 million increase in the average balance of loans
and leases and a 47 basis point increase in fully-taxable
equivalent ("FTE") yields earned thereon, producing $3.2 million
higher FTE interest income. Interest income from interest-bearing
deposits with financial institutions increased $0.3 million
primarily due to higher cash balances. Partially offsetting these
increases to interest income, interest income on investments
declined $0.1 million from carrying lower average balances.
The overall cost of interest-bearing liabilities was 2.51% for
the first quarter of 2024, an increase of 118 basis points from the
1.33% paid for the first quarter of 2023. The cost of
funds increased 95 basis points to 1.93% for the first quarter of
2024 from 0.98% for the first quarter of 2023. The FTE yield on
earning assets was 4.52% for the first quarter of 2024, an increase
of 46 basis points from the 4.06% for the first quarter of
2023. The Company’s FTE (non-GAAP measurement) net
interest spread was 2.01% for the first quarter of 2024, down 72
basis points from the 2.73% recorded for the first quarter of
2023. FTE net interest margin decreased by 44 basis
points to 2.69% for the three months ended March 31, 2024 from
3.13% for the same 2023 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 $0.1 million
partially offset by a net benefit in the provision
for credit losses on unfunded loan commitments of $50
thousand for the first quarter of 2024. For the
three months ended March 31, 2024, the provision for credit
losses on loans declined $0.1 million compared to the three months
ended March 31, 2023. The decrease in the provision for credit
losses on loans was due to lower growth in the loan portfolio and a
reduction in net charge-offs. For the three months ended March
31, 2024, the provision for credit losses on unfunded commitments
decreased $0.3 million compared to the three months ended March 31,
2023. The change in the provision for credit losses on
unfunded commitments was due to a reduction in unfunded
commitments and a general decrease in loss rate and funding rate
assumptions compared to the year earlier period.
Total non-interest income increased $0.1 million, or 2%,
to $4.6 million for the first quarter of 2024 compared
to $4.5 million for the first quarter of 2023. The increase in
non-interest income was primarily attributable to $0.2 million
higher trust income, which was partially offset by the prior
year $0.1 million bank-owned life insurance gain on a death claim
received during the first quarter of 2023.
Non-interest expenses increased $0.8 million, or 6%,
for the first quarter of 2024 to $13.7 million from $12.9 million
for the same quarter of 2023. The increase in non-interest expenses
was primarily due to $0.6 million higher salaries and
insurance expenses. There were also increases in professional
services of $0.1 million and FDIC assessment of $0.1 million.
Partially offsetting these increases, advertising and
marketing expenses decreased by $0.2
million quarter-over-quarter from less advertising, donations
and promotions.
The provision for income taxes decreased $0.5 million during the
first quarter of 2023 primarily due to the lower level of operating
income compared to the first quarter of 2023.
Consolidated Balance Sheet & Asset Quality
Overview
The Company’s total assets totaled to $2.5 billion as of
March 31, 2024, a decrease of $34 million from December
31, 2023. Cash and cash equivalents declined $39 million and
the investment portfolio was reduced by $10 million. The
decline in the investment portfolio was primarily due to $5 million
in paydowns and a $2 million decrease in market value
of available-for-sale securities. During the first three
months of 2024, the market value of held-to-maturity securities
also declined by $3 million, with $31 million in unrealized losses
at March 31, 2024. These decreases were partially offset by $11
million in growth in the loans and leases portfolio during the
first quarter of 2024. During the same time period, total
liabilities decreased $36 million, or 2%. Reductions of $92
million in short-term borrowings were partially offset
by deposit growth of $58 million with the excess cash balances
utilized to pay down borrowings. Transactional deposit balances are
down primarily from reductions in customers' average account
balances, stemming from investing part of their funds in higher
yields and increased spending. This reduction was mitigated
through promotional CD offerings during the first three months of
2024. As of March 31, 2024, the ratio of insured and collateralized
deposits to total deposits was approximately 82%.
Shareholders’ equity increased $2.1 million, or 1%, to $191.6
million at March 31, 2024 from $189.5 million at December 31, 2023.
The increase was caused by retained earnings improvement from net
income of $5.1 million, partially offset by $2.2 million in cash
dividends paid to shareholders. An additional $0.8 million was
recorded from the issuance of common stock under the Company’s
stock plans and stock-based compensation. Partially
offsetting these increases, there was a $1.4 million,
after tax, increase in accumulated other comprehensive loss
from higher net unrealized losses recorded on
available-for-sale investment securities. At March 31, 2024, there
were no credit losses on available-for-sale and held-to-maturity
debt securities. Accumulated other comprehensive income
(loss) is excluded from regulatory capital ratios. The Fidelity
Deposit and Discount Bank remains above well capitalized limits
with Tier 1 capital at 9.15% of total average assets as
of March 31, 2024. Total risk-based capital was 14.68%
of risk-weighted assets and Tier 1 risk-based capital was 13.47% of
risk-weighted assets as of March 31, 2024. Tangible book
value per share was $29.80 at March 31, 2024 compared to $29.57 at
December 31, 2023. Tangible common equity was 6.98% of total
assets at March 31, 2024 compared to 6.79% at December 31,
2023.
Asset Quality
Total non-performing assets were $3.8 million, or 0.15% of
total assets, at March 31, 2024, compared to $3.3 million, or 0.13%
of total assets, at December 31, 2023. Past due and non-accrual
loans to total loans were 0.34% at March 31, 2024 compared to 0.46%
at December 31, 2023. Net charge-offs to average total loans
were 0.01% at March 31, 2024 compared to 0.04% at December 31,
2023.
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
continues its mission of exceeding client expectations through
a unique banking experience. It operates 21 full-service
offices throughout Lackawanna, Luzerne, Lehigh and Northampton
Counties and a Fidelity Bank Wealth Management Office in Schuylkill
County. Fidelity Bank provides a digital banking experience online
at www.bankatfidelity.com, through the Fidelity Mobile Banking app,
and in the Client Care Center at 1-800-388-4380. Additionally, the
Bank offers full-service Wealth Management & Brokerage
Services, a Mortgage Center, and a full suite of personal and
commercial 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 5,980 hours of
volunteer time and over $1.4 million in donations to non-profit
organizations directly within the markets served throughout
2023. 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 2024 and 2023.
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;
- 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;
- securities markets and monetary fluctuations and
volatility;
- disruption of credit and equity markets;
- 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 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 of any other pandemic,
epidemic or other health-related crisis such as 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 effects of bank failures, banking system instability,
deposit fluctuations, loan and securities value changes;
- 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; 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: |
|
March 31, 2024 |
|
|
December 31, 2023 |
|
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
72,733 |
|
|
$ |
111,949 |
|
Investment securities |
|
|
559,016 |
|
|
|
568,273 |
|
Restricted investments in bank stock |
|
|
3,959 |
|
|
|
3,905 |
|
Loans and leases |
|
|
1,697,299 |
|
|
|
1,686,555 |
|
Allowance for credit losses on loans |
|
|
(18,886 |
) |
|
|
(18,806 |
) |
Premises and equipment, net |
|
|
34,899 |
|
|
|
34,232 |
|
Life insurance cash surrender value |
|
|
54,921 |
|
|
|
54,572 |
|
Goodwill and core deposit intangible |
|
|
20,728 |
|
|
|
20,812 |
|
Other assets |
|
|
44,227 |
|
|
|
41,667 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,468,896 |
|
|
$ |
2,503,159 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Non-interest-bearing deposits |
|
$ |
537,824 |
|
|
$ |
536,143 |
|
Interest-bearing deposits |
|
|
1,678,172 |
|
|
|
1,622,282 |
|
Total deposits |
|
|
2,215,996 |
|
|
|
2,158,425 |
|
Short-term borrowings |
|
|
25,000 |
|
|
|
117,000 |
|
Secured borrowings |
|
|
7,299 |
|
|
|
7,372 |
|
Other liabilities |
|
|
28,966 |
|
|
|
30,883 |
|
Total liabilities |
|
|
2,277,261 |
|
|
|
2,313,680 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
191,635 |
|
|
|
189,479 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
2,468,896 |
|
|
$ |
2,503,159 |
|
Average Year-To-Date Balances: |
|
March 31, 2024 |
|
|
December 31, 2023 |
|
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
54,887 |
|
|
$ |
35,462 |
|
Investment securities |
|
|
563,674 |
|
|
|
597,359 |
|
Restricted investments in bank stock |
|
|
3,934 |
|
|
|
4,212 |
|
Loans and leases |
|
|
1,696,669 |
|
|
|
1,635,286 |
|
Allowance for credit losses on loans |
|
|
(19,013 |
) |
|
|
(18,680 |
) |
Premises and equipment, net |
|
|
34,591 |
|
|
|
32,215 |
|
Life insurance cash surrender value |
|
|
54,796 |
|
|
|
54,085 |
|
Goodwill and core deposit intangible |
|
|
20,759 |
|
|
|
20,977 |
|
Other assets |
|
|
40,871 |
|
|
|
44,180 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,451,168 |
|
|
$ |
2,405,096 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Non-interest-bearing deposits |
|
$ |
519,856 |
|
|
$ |
558,962 |
|
Interest-bearing deposits |
|
|
1,647,615 |
|
|
|
1,586,527 |
|
Total deposits |
|
|
2,167,471 |
|
|
|
2,145,489 |
|
Short-term borrowings |
|
|
53,952 |
|
|
|
49,860 |
|
Secured borrowings |
|
|
7,335 |
|
|
|
7,489 |
|
Other liabilities |
|
|
32,434 |
|
|
|
29,881 |
|
Total liabilities |
|
|
2,261,192 |
|
|
|
2,232,719 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
189,976 |
|
|
|
172,377 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
2,451,168 |
|
|
$ |
2,405,096 |
|
|
|
|
|
|
|
|
|
|
FIDELITY D & D BANCORP, INC.Unaudited
Condensed Consolidated Statements of Income(dollars in
thousands) |
|
|
|
Three Months Ended |
|
|
|
Mar. 31, 2024 |
|
|
Mar. 31, 2023 |
|
Interest income |
|
|
|
|
|
|
|
|
Loans and leases |
|
$ |
22,133 |
|
|
$ |
19,018 |
|
Securities, interest-bearing cash and other |
|
|
3,492 |
|
|
|
3,320 |
|
|
|
|
|
|
|
|
|
|
Total interest income |
|
|
25,625 |
|
|
|
22,338 |
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
|
|
|
Deposits |
|
|
(9,941 |
) |
|
|
(4,618 |
) |
Borrowings and debt |
|
|
(741 |
) |
|
|
(695 |
) |
|
|
|
|
|
|
|
|
|
Total interest expense |
|
|
(10,682 |
) |
|
|
(5,313 |
) |
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
14,943 |
|
|
|
17,025 |
|
|
|
|
|
|
|
|
|
|
Provision for credit losses on loans |
|
|
(125 |
) |
|
|
(180 |
) |
Net benefit (provision) for credit losses on unfunded loan
commitments |
|
|
50 |
|
|
|
(225 |
) |
Non-interest income |
|
|
4,572 |
|
|
|
4,489 |
|
Non-interest expense |
|
|
(13,689 |
) |
|
|
(12,857 |
) |
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
5,751 |
|
|
|
8,252 |
|
|
|
|
|
|
|
|
|
|
(Provision) benefit for income taxes |
|
|
(694 |
) |
|
|
(1,212 |
) |
Net income |
|
$ |
5,057 |
|
|
$ |
7,040 |
|
|
|
Three Months Ended |
|
|
|
Mar. 31, 2024 |
|
|
Dec. 31, 2023 |
|
|
Sep. 30, 2023 |
|
|
Jun. 30, 2023 |
|
|
Mar. 31, 2023 |
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases |
|
$ |
22,133 |
|
|
$ |
21,406 |
|
|
$ |
20,502 |
|
|
$ |
19,703 |
|
|
$ |
19,018 |
|
Securities, interest-bearing cash and other |
|
|
3,492 |
|
|
|
3,434 |
|
|
|
3,176 |
|
|
|
3,276 |
|
|
|
3,320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income |
|
|
25,625 |
|
|
|
24,840 |
|
|
|
23,678 |
|
|
|
22,979 |
|
|
|
22,338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
(9,941 |
) |
|
|
(9,232 |
) |
|
|
(8,488 |
) |
|
|
(6,607 |
) |
|
|
(4,618 |
) |
Borrowings and debt |
|
|
(741 |
) |
|
|
(707 |
) |
|
|
(551 |
) |
|
|
(890 |
) |
|
|
(695 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest expense |
|
|
(10,682 |
) |
|
|
(9,939 |
) |
|
|
(9,039 |
) |
|
|
(7,497 |
) |
|
|
(5,313 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
14,943 |
|
|
|
14,901 |
|
|
|
14,639 |
|
|
|
15,482 |
|
|
|
17,025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit losses on loans |
|
|
(125 |
) |
|
|
(111 |
) |
|
|
(525 |
) |
|
|
(675 |
) |
|
|
(180 |
) |
Net benefit (provision) for credit losses on unfunded loan
commitments |
|
|
50 |
|
|
|
65 |
|
|
|
275 |
|
|
|
50 |
|
|
|
(225 |
) |
Non-interest income (loss) |
|
|
4,572 |
|
|
|
(1,944 |
) |
|
|
4,325 |
|
|
|
4,535 |
|
|
|
4,489 |
|
Non-interest expense |
|
|
(13,689 |
) |
|
|
(12,804 |
) |
|
|
(12,784 |
) |
|
|
(13,425 |
) |
|
|
(12,857 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
5,751 |
|
|
|
107 |
|
|
|
5,930 |
|
|
|
5,967 |
|
|
|
8,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Provision) benefit for income taxes |
|
|
(694 |
) |
|
|
361 |
|
|
|
(590 |
) |
|
|
(605 |
) |
|
|
(1,212 |
) |
Net income |
|
$ |
5,057 |
|
|
$ |
468 |
|
|
$ |
5,340 |
|
|
$ |
5,362 |
|
|
$ |
7,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIDELITY D & D BANCORP, INC.Unaudited
Condensed Consolidated Balance Sheets(dollars in thousands) |
|
At Period End: |
|
Mar. 31, 2024 |
|
|
Dec. 31, 2023 |
|
|
Sep. 30, 2023 |
|
|
Jun. 30, 2023 |
|
|
Mar. 31, 2023 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
72,733 |
|
|
$ |
111,949 |
|
|
$ |
110,471 |
|
|
$ |
69,632 |
|
|
$ |
63,038 |
|
Investment securities |
|
|
559,016 |
|
|
|
568,273 |
|
|
|
576,688 |
|
|
|
604,264 |
|
|
|
614,526 |
|
Restricted investments in bank stock |
|
|
3,959 |
|
|
|
3,905 |
|
|
|
3,800 |
|
|
|
3,728 |
|
|
|
5,968 |
|
Loans and leases |
|
|
1,697,299 |
|
|
|
1,686,555 |
|
|
|
1,647,552 |
|
|
|
1,631,472 |
|
|
|
1,627,155 |
|
Allowance for credit losses on loans |
|
|
(18,886 |
) |
|
|
(18,806 |
) |
|
|
(18,757 |
) |
|
|
(18,350 |
) |
|
|
(17,910 |
) |
Premises and equipment, net |
|
|
34,899 |
|
|
|
34,232 |
|
|
|
32,625 |
|
|
|
31,329 |
|
|
|
31,408 |
|
Life insurance cash surrender value |
|
|
54,921 |
|
|
|
54,572 |
|
|
|
54,226 |
|
|
|
53,892 |
|
|
|
53,567 |
|
Goodwill and core deposit intangible |
|
|
20,728 |
|
|
|
20,812 |
|
|
|
20,897 |
|
|
|
20,981 |
|
|
|
21,071 |
|
Other assets |
|
|
44,227 |
|
|
|
41,667 |
|
|
|
49,318 |
|
|
|
44,284 |
|
|
|
44,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,468,896 |
|
|
$ |
2,503,159 |
|
|
$ |
2,476,820 |
|
|
$ |
2,441,232 |
|
|
$ |
2,443,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing deposits |
|
$ |
537,824 |
|
|
$ |
536,143 |
|
|
$ |
549,741 |
|
|
$ |
582,473 |
|
|
$ |
591,055 |
|
Interest-bearing deposits |
|
|
1,678,172 |
|
|
|
1,622,282 |
|
|
|
1,602,018 |
|
|
|
1,569,519 |
|
|
|
1,552,036 |
|
Total deposits |
|
|
2,215,996 |
|
|
|
2,158,425 |
|
|
|
2,151,759 |
|
|
|
2,151,992 |
|
|
|
2,143,091 |
|
Short-term borrowings |
|
|
25,000 |
|
|
|
117,000 |
|
|
|
124,000 |
|
|
|
76,111 |
|
|
|
88,989 |
|
Secured borrowings |
|
|
7,299 |
|
|
|
7,372 |
|
|
|
7,439 |
|
|
|
7,498 |
|
|
|
7,560 |
|
Other liabilities |
|
|
28,966 |
|
|
|
30,883 |
|
|
|
28,190 |
|
|
|
27,887 |
|
|
|
27,494 |
|
Total liabilities |
|
|
2,277,261 |
|
|
|
2,313,680 |
|
|
|
2,311,388 |
|
|
|
2,263,488 |
|
|
|
2,267,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
191,635 |
|
|
|
189,479 |
|
|
|
165,432 |
|
|
|
177,744 |
|
|
|
175,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
2,468,896 |
|
|
$ |
2,503,159 |
|
|
$ |
2,476,820 |
|
|
$ |
2,441,232 |
|
|
$ |
2,443,021 |
|
Average Quarterly Balances: |
|
Mar. 31, 2024 |
|
|
Dec. 31, 2023 |
|
|
Sep. 30, 2023 |
|
|
Jun. 30, 2023 |
|
|
Mar. 31, 2023 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
54,887 |
|
|
$ |
42,176 |
|
|
$ |
33,238 |
|
|
$ |
37,125 |
|
|
$ |
29,192 |
|
Investment securities |
|
|
563,674 |
|
|
|
558,423 |
|
|
|
598,604 |
|
|
|
610,009 |
|
|
|
623,097 |
|
Restricted investments in bank stock |
|
|
3,934 |
|
|
|
3,854 |
|
|
|
3,763 |
|
|
|
3,834 |
|
|
|
5,418 |
|
Loans and leases |
|
|
1,696,669 |
|
|
|
1,664,905 |
|
|
|
1,640,411 |
|
|
|
1,625,509 |
|
|
|
1,609,655 |
|
Allowance for credit losses on loans |
|
|
(19,013 |
) |
|
|
(19,222 |
) |
|
|
(18,812 |
) |
|
|
(18,296 |
) |
|
|
(18,380 |
) |
Premises and equipment, net |
|
|
34,591 |
|
|
|
33,629 |
|
|
|
31,746 |
|
|
|
31,989 |
|
|
|
31,477 |
|
Life insurance cash surrender value |
|
|
54,796 |
|
|
|
54,449 |
|
|
|
54,110 |
|
|
|
53,782 |
|
|
|
53,995 |
|
Goodwill and core deposit intangible |
|
|
20,759 |
|
|
|
20,844 |
|
|
|
20,930 |
|
|
|
21,018 |
|
|
|
21,120 |
|
Other assets |
|
|
40,871 |
|
|
|
46,028 |
|
|
|
44,346 |
|
|
|
42,630 |
|
|
|
43,690 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,451,168 |
|
|
$ |
2,405,086 |
|
|
$ |
2,408,336 |
|
|
$ |
2,407,600 |
|
|
$ |
2,399,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing deposits |
|
$ |
519,856 |
|
|
$ |
533,663 |
|
|
$ |
548,682 |
|
|
$ |
568,202 |
|
|
$ |
585,987 |
|
Interest-bearing deposits |
|
|
1,647,615 |
|
|
|
1,616,826 |
|
|
|
1,607,793 |
|
|
|
1,561,412 |
|
|
|
1,559,212 |
|
Total deposits |
|
|
2,167,471 |
|
|
|
2,150,489 |
|
|
|
2,156,475 |
|
|
|
2,129,614 |
|
|
|
2,145,199 |
|
Short-term borrowings |
|
|
53,952 |
|
|
|
48,490 |
|
|
|
37,595 |
|
|
|
64,558 |
|
|
|
48,937 |
|
Secured borrowings |
|
|
7,335 |
|
|
|
7,412 |
|
|
|
7,470 |
|
|
|
7,529 |
|
|
|
7,548 |
|
Other liabilities |
|
|
32,434 |
|
|
|
30,745 |
|
|
|
29,638 |
|
|
|
29,479 |
|
|
|
29,651 |
|
Total liabilities |
|
|
2,261,192 |
|
|
|
2,237,136 |
|
|
|
2,231,178 |
|
|
|
2,231,180 |
|
|
|
2,231,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
189,976 |
|
|
|
167,950 |
|
|
|
177,158 |
|
|
|
176,420 |
|
|
|
167,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
2,451,168 |
|
|
$ |
2,405,086 |
|
|
$ |
2,408,336 |
|
|
$ |
2,407,600 |
|
|
$ |
2,399,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIDELITY D & D BANCORP, INC.Selected Financial Ratios
and Other Financial Data |
|
|
Three Months Ended |
|
|
|
Mar. 31, 2024 |
|
|
Dec. 31, 2023 |
|
|
Sep. 30, 2023 |
|
|
Jun. 30, 2023 |
|
|
Mar. 31, 2023 |
|
Selected returns and financial ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.88 |
|
|
$ |
0.08 |
|
|
$ |
0.94 |
|
|
$ |
0.95 |
|
|
$ |
1.25 |
|
Diluted earnings per share |
|
$ |
0.88 |
|
|
$ |
0.08 |
|
|
$ |
0.93 |
|
|
$ |
0.94 |
|
|
$ |
1.24 |
|
Dividends per share |
|
$ |
0.38 |
|
|
$ |
0.38 |
|
|
$ |
0.36 |
|
|
$ |
0.36 |
|
|
$ |
0.36 |
|
Yield on interest-earning assets (FTE)* |
|
|
4.52 |
% |
|
|
4.36 |
% |
|
|
4.18 |
% |
|
|
4.12 |
% |
|
|
4.06 |
% |
Cost of interest-bearing liabilities |
|
|
2.51 |
% |
|
|
2.36 |
% |
|
|
2.17 |
% |
|
|
1.84 |
% |
|
|
1.33 |
% |
Cost of funds |
|
|
1.93 |
% |
|
|
1.79 |
% |
|
|
1.63 |
% |
|
|
1.37 |
% |
|
|
0.98 |
% |
Net interest spread (FTE)* |
|
|
2.01 |
% |
|
|
2.00 |
% |
|
|
2.01 |
% |
|
|
2.28 |
% |
|
|
2.73 |
% |
Net interest margin (FTE)* |
|
|
2.69 |
% |
|
|
2.66 |
% |
|
|
2.63 |
% |
|
|
2.82 |
% |
|
|
3.13 |
% |
Return on average assets |
|
|
0.83 |
% |
|
|
0.08 |
% |
|
|
0.88 |
% |
|
|
0.89 |
% |
|
|
1.19 |
% |
Pre-provision net revenue to average assets* |
|
|
0.96 |
% |
|
|
0.03 |
% |
|
|
1.02 |
% |
|
|
1.10 |
% |
|
|
1.46 |
% |
Return on average equity |
|
|
10.71 |
% |
|
|
1.10 |
% |
|
|
11.96 |
% |
|
|
12.19 |
% |
|
|
17.00 |
% |
Return on average tangible equity* |
|
|
12.02 |
% |
|
|
1.26 |
% |
|
|
13.56 |
% |
|
|
13.84 |
% |
|
|
19.45 |
% |
Efficiency ratio (FTE)* |
|
|
67.56 |
% |
|
|
63.74 |
% |
|
|
65.01 |
% |
|
|
64.72 |
% |
|
|
57.72 |
% |
Expense ratio |
|
|
1.50 |
% |
|
|
2.43 |
% |
|
|
1.39 |
% |
|
|
1.48 |
% |
|
|
1.41 |
% |
Other financial data |
|
At period end: |
|
(dollars in thousands except per share data) |
|
Mar. 31, 2024 |
|
|
Dec. 31, 2023 |
|
|
Sep. 30, 2023 |
|
|
Jun. 30, 2023 |
|
|
Mar. 31, 2023 |
|
Assets under management |
|
$ |
900,964 |
|
|
$ |
876,287 |
|
|
$ |
799,968 |
|
|
$ |
840,068 |
|
|
$ |
809,897 |
|
Book value per share |
|
$ |
33.41 |
|
|
$ |
33.22 |
|
|
$ |
29.04 |
|
|
$ |
31.29 |
|
|
$ |
31.05 |
|
Tangible book value per share* |
|
$ |
29.80 |
|
|
$ |
29.57 |
|
|
$ |
25.37 |
|
|
$ |
27.59 |
|
|
$ |
27.33 |
|
Equity to assets |
|
|
7.76 |
% |
|
|
7.57 |
% |
|
|
6.68 |
% |
|
|
7.28 |
% |
|
|
7.20 |
% |
Tangible common equity ratio* |
|
|
6.98 |
% |
|
|
6.79 |
% |
|
|
5.89 |
% |
|
|
6.48 |
% |
|
|
6.39 |
% |
Allowance for credit losses on loans to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans |
|
|
1.11 |
% |
|
|
1.12 |
% |
|
|
1.14 |
% |
|
|
1.13 |
% |
|
|
1.10 |
% |
Non-accrual loans |
|
5.31x |
|
|
5.68x |
|
|
6.24x |
|
|
5.25x |
|
|
5.36x |
|
Non-accrual loans to total loans |
|
|
0.21 |
% |
|
|
0.20 |
% |
|
|
0.18 |
% |
|
|
0.21 |
% |
|
|
0.21 |
% |
Non-performing assets to total assets |
|
|
0.15 |
% |
|
|
0.13 |
% |
|
|
0.14 |
% |
|
|
0.15 |
% |
|
|
0.14 |
% |
Net charge-offs to average total loans |
|
|
0.01 |
% |
|
|
0.04 |
% |
|
|
0.04 |
% |
|
|
0.05 |
% |
|
|
0.04 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fidelity Bank Capital Adequacy Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk-based capital
ratio |
|
|
14.68 |
% |
|
|
14.57 |
% |
|
|
14.69 |
% |
|
|
14.65 |
% |
|
|
14.55 |
% |
Common equity tier 1
risk-based capital ratio |
|
|
13.47 |
% |
|
|
13.32 |
% |
|
|
13.51 |
% |
|
|
13.46 |
% |
|
|
13.37 |
% |
Tier 1 risk-based capital
ratio |
|
|
13.47 |
% |
|
|
13.32 |
% |
|
|
13.51 |
% |
|
|
13.46 |
% |
|
|
13.37 |
% |
Leverage ratio |
|
|
9.15 |
% |
|
|
9.08 |
% |
|
|
9.17 |
% |
|
|
9.04 |
% |
|
|
8.89 |
% |
* Non-GAAP Financial Measures - see reconciliations below
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, 2024 |
|
|
Dec. 31, 2023 |
|
|
Sep. 30, 2023 |
|
|
Jun. 30, 2023 |
|
|
Mar. 31, 2023 |
|
FTE net interest income (non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (GAAP) |
|
$ |
25,625 |
|
|
$ |
24,840 |
|
|
$ |
23,678 |
|
|
$ |
22,979 |
|
|
$ |
22,338 |
|
Adjustment to FTE |
|
|
747 |
|
|
|
664 |
|
|
|
700 |
|
|
|
725 |
|
|
|
760 |
|
Interest income adjusted to
FTE (non-GAAP) |
|
|
26,372 |
|
|
|
25,504 |
|
|
|
24,378 |
|
|
|
23,704 |
|
|
|
23,098 |
|
Interest expense (GAAP) |
|
|
10,682 |
|
|
|
9,939 |
|
|
|
9,039 |
|
|
|
7,497 |
|
|
|
5,313 |
|
Net
interest income adjusted to FTE (non-GAAP) |
|
$ |
15,690 |
|
|
|
15,565 |
|
|
|
15,339 |
|
|
|
16,207 |
|
|
|
17,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency Ratio
(non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expenses
(GAAP) |
|
$ |
13,689 |
|
|
$ |
12,804 |
|
|
$ |
12,784 |
|
|
$ |
13,425 |
|
|
$ |
12,857 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
(GAAP) |
|
|
14,943 |
|
|
|
14,901 |
|
|
|
14,639 |
|
|
|
15,482 |
|
|
|
17,025 |
|
Plus: taxable equivalent
adjustment |
|
|
747 |
|
|
|
664 |
|
|
|
700 |
|
|
|
725 |
|
|
|
760 |
|
Non-interest income
(GAAP) |
|
|
4,572 |
|
|
|
(1,944 |
) |
|
|
4,325 |
|
|
|
4,535 |
|
|
|
4,489 |
|
Less:
(Loss) gain on sales of securities |
|
|
- |
|
|
|
(6,467 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1 |
) |
Net
interest income (FTE) plus adjusted non-interest income
(non-GAAP) |
|
$ |
20,262 |
|
|
$ |
20,088 |
|
|
$ |
19,664 |
|
|
$ |
20,742 |
|
|
$ |
22,275 |
|
Efficiency ratio (non-GAAP) (1) |
|
|
67.56 |
% |
|
|
63.74 |
% |
|
|
65.01 |
% |
|
|
64.72 |
% |
|
|
57.72 |
% |
(1) The reported efficiency
ratio is a non-GAAP measure calculated by dividing non-interest
expense by the sum of net interest income, on an FTE basis, and
adjusted non-interest (loss) income. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Book Value
per Share/Tangible Common Equity Ratio (non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets (GAAP) |
|
$ |
2,468,896 |
|
|
$ |
2,503,159 |
|
|
$ |
2,476,820 |
|
|
$ |
2,441,232 |
|
|
$ |
2,443,021 |
|
Less:
Intangible assets, primarily goodwill |
|
|
(20,728 |
) |
|
|
(20,812 |
) |
|
|
(20,897 |
) |
|
|
(20,981 |
) |
|
|
(21,071 |
) |
Tangible assets |
|
|
2,448,168 |
|
|
|
2,482,347 |
|
|
|
2,455,923 |
|
|
|
2,420,251 |
|
|
|
2,421,950 |
|
Total shareholders' equity
(GAAP) |
|
|
191,635 |
|
|
|
189,479 |
|
|
|
165,432 |
|
|
|
177,744 |
|
|
|
175,887 |
|
Less:
Intangible assets, primarily goodwill |
|
|
(20,728 |
) |
|
|
(20,812 |
) |
|
|
(20,897 |
) |
|
|
(20,981 |
) |
|
|
(21,071 |
) |
Tangible common equity |
|
|
170,907 |
|
|
|
168,667 |
|
|
|
144,535 |
|
|
|
156,763 |
|
|
|
154,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
shares outstanding, end of period |
|
|
5,735,732 |
|
|
|
5,703,636 |
|
|
|
5,696,351 |
|
|
|
5,681,260 |
|
|
|
5,665,255 |
|
Tangible Common Book Value per Share |
|
$ |
29.80 |
|
|
$ |
29.57 |
|
|
$ |
25.37 |
|
|
$ |
27.59 |
|
|
$ |
27.33 |
|
Tangible Common Equity Ratio |
|
|
6.98 |
% |
|
|
6.79 |
% |
|
|
5.89 |
% |
|
|
6.48 |
% |
|
|
6.39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Provision Net
Revenue to Average Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
(GAAP) |
|
$ |
5,751 |
|
|
$ |
107 |
|
|
$ |
5,930 |
|
|
$ |
5,967 |
|
|
$ |
8,252 |
|
Plus:
Provision for credit losses |
|
|
75 |
|
|
|
47 |
|
|
|
250 |
|
|
|
625 |
|
|
|
405 |
|
Total pre-provision net
revenue (non-GAAP) |
|
|
5,826 |
|
|
|
154 |
|
|
|
6,180 |
|
|
|
6,592 |
|
|
|
8,657 |
|
Total (annualized)
(non-GAAP) |
|
$ |
23,432 |
|
|
$ |
609 |
|
|
$ |
24,517 |
|
|
$ |
26,440 |
|
|
$ |
35,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
assets |
|
$ |
2,451,168 |
|
|
$ |
2,405,086 |
|
|
$ |
2,408,336 |
|
|
$ |
2,407,600 |
|
|
$ |
2,399,264 |
|
Pre-Provision Net Revenue to Average Assets (non-GAAP) |
|
|
0.96 |
% |
|
|
0.03 |
% |
|
|
1.02 |
% |
|
|
1.10 |
% |
|
|
1.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contacts:
Daniel J. Santaniello |
Salvatore R. DeFrancesco,
Jr. |
President and Chief Executive
Officer |
Treasurer and Chief
Financial Officer |
570-504-8035 |
570-504-8000 |
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