DUNMORE, Pa., April 26, 2017 (GLOBE NEWSWIRE) -- Fidelity D & D Bancorp, Inc. (OTC US:FDBC) and its banking subsidiary Fidelity Deposit and Discount Bank, announced net income for the quarter ended March 31, 2017 of $2.0 million, or $0.80 diluted earnings per share, compared to $1.7 million, or $0.69 diluted earnings per share, for the quarter ended March 31, 2016.  The $0.3 million, or 16%, improvement resulted from producing more net interest income and other income which more than offset increased provision for loan losses and higher other expenses.  Return on average assets (ROA) and return on average equity (ROE) were 0.99% and 9.85%, respectively, for the first quarter of 2017 and 0.92% and 8.83%, respectively, for the first quarter of 2016.

“Fidelity’s strong first quarter financial results set the stage for a successful 2017,” stated Daniel J. Santaniello, President and Chief Executive Officer.  “The continued growth in earnings, capital, loans, core deposits, and non-interest income are the highlights for the first quarter.  These positive financial results enabled us to increase our dividend in the first quarter to $0.31 per share, or 15%, when compared to the first quarter of 2016. Fidelity Bank is well positioned for the future and I remain confident in our Fidelity Banker’s ability to bring value to our clients, shareholders, and community.”

The Company’s total assets increased $59.7 million, or 8%, to $852.6 million at March 31, 2017 from $792.9 million at December 31, 2016.  This asset growth resulted primarily from $22.6 million net growth in the loan portfolio and a $24.2 million increase in securities along with an additional $8.0 million of bank owned life insurance purchased during the first quarter of 2017.  Asset growth was funded by $30.5 million more in deposits, $27.5 million in additional borrowings and $1.6 million higher shareholders' equity.  During the first quarter of 2017, the Company completed the acquisition of Wayne Bank’s West Scranton branch which added $13.9 million in deposits.

Net interest income was $6.6 million for the first quarter of 2017, a $0.5 million, or 9%, increase over the $6.1 million earned for the first quarter of 2016.  An increase of $54.9 million in average loans and leases mitigated the lower yields earned in the loan portfolio and generated $0.4 million more interest income.  Higher investment portfolio yields with an additional $23.7 million in average investments contributed another $0.3 million in interest income.  This interest income growth was partially offset by $0.1 million more interest expense due to higher average borrowings.  During the first quarter of 2017, the Company used FHLB advances and short-term borrowings to purchase approximately $20.0 million of securities producing an expected after-tax return of 1.10%.  As a result of the higher earnings on a larger average portfolio of earning assets, net interest margin was 3.72% for the first quarter of 2017, or 2 basis points higher, than the 3.70% recorded for the first quarter of 2016.

The provision for loan losses was $325 thousand for the first quarter of 2017, a $175 thousand increase compared to $150 thousand for the first quarter of 2016.  The increase in the provision is primarily attributable to the growth in the loan portfolio during the first quarter of 2017.  The allowance for loan losses was 1.54% of total loans at March 31, 2017 compared to 1.69% of total loans at March 31, 2016.

Total other income recorded for the three months ended March 31, 2017 was $2.1 million, an increase of $0.4 million, or 25%, from the $1.7 million recorded for the three months ended March 31, 2016.  Other income increased due to $177 thousand more gains on loan sales, $55 thousand higher deposit service charges, $44 thousand in additional interchange fees, $42 thousand more fees from financial services and a $42 thousand increase in loan service charges.

Other expenses increased to $5.8 million for the quarter ended March 31, 2017, an increase of $0.4 million from $5.4 million for the quarter ended March 31, 2016.  Increases within this category included a $0.2 million increase in salaries and employee benefits expense, a $0.1 million increase in data processing expense and $0.1 million more in premises and equipment expense during the first quarter of 2017 compared to the same 2016 period.

Fidelity D & D Bancorp, Inc. has built a strong history as trusted advisors to the customers served by The Fidelity Deposit and Discount Bank, and is proud to be an active member of the community of Northeastern Pennsylvania.  The Company serves Lackawanna and Luzerne Counties through The Fidelity Deposit and Discount Bank’s 10 community banking office locations providing personal and business banking products and services, including wealth management assistance 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.

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 on current customers, 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 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:March 31, 2017 December 31, 2016
Assets    
Total cash and cash equivalents$ 29,116 $ 25,843 
Investment securities  154,223   130,037 
Federal Home Loan Bank Stock  2,467   2,606 
Loans and leases  623,130   600,348 
Allowance for loan losses  (9,548)  (9,364)
Premises and equipment, net  17,026   17,164 
Life insurance cash surrender value  19,542   11,435 
Other assets  16,730   14,875 
     
Total assets$ 852,686 $ 792,944 
     
Liabilities    
Non-interest-bearing deposits$ 190,482 $ 211,153 
Interest-bearing deposits  543,444   492,306 
Total deposits  733,926   703,459 
Short-term borrowings  14,699   4,223 
Long-term debt  17,000   - 
Other liabilities  4,868   4,631 
Total liabilities  770,493   712,313 
     
Shareholders' equity  82,193   80,631 
     
Total liabilities and shareholders' equity$ 852,686 $ 792,944 
     
     
Average Year-To-Date Balances:March 31, 2017December 31, 2016
Assets    
Total cash and cash equivalents$ 14,529 $ 23,801 
Investment securities  149,627   129,679 
Loans and leases, net  603,078   559,538 
Premises and equipment, net  17,124   16,584 
Other assets  29,725   26,244 
     
Total assets$ 814,083 $ 755,846 
     
Liabilities    
Non-interest-bearing deposits$ 164,340 $ 152,826 
Interest-bearing deposits  509,588   505,079 
Total deposits  673,928   657,905 
Short-term borrowings and long-term debt  53,145   13,044 
Other liabilities  5,501   5,120 
Total liabilities  732,574   676,069 
     
Shareholders' equity  81,509   79,777 
     
Total liabilities and shareholders' equity$ 814,083 $ 755,846 
     



FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Statements of Income
(dollars in thousands)
           
  Three Months Ended    
  Mar. 31, 2017 Mar. 31, 2016      
Interest income          
Loans and leases$ 6,370  $ 6,006       
Securities and other  996   730       
           
Total interest income  7,366   6,736       
           
Interest expense          
Deposits  586   580       
Borrowings and debt  102   18       
           
Total interest expense  688   598       
           
Net interest income  6,678   6,138       
           
Provision for loan losses  (325)  (150)      
Other income  2,105   1,687       
Other expenses  (5,797)  (5,388)      
Provision for income taxes  (681)  (586)      
Net income$ 1,980  $ 1,701       
           
           
           
           
 Three Months Ended
  Mar. 31, 2017 Dec. 31, 2016 Sep. 30, 2016 Jun. 30, 2016 Mar. 31, 2016
Interest income          
Loans and leases$ 6,370  $ 6,212  $ 6,155  $ 5,989  $ 6,006 
Securities and other  996   826   851   726   730 
           
Total interest income  7,366   7,038   7,006   6,715   6,736 
           
Interest expense          
Deposits  586   582   580   567   580 
Borrowings and debt  102   19   5   7   18 
           
Total interest expense  688   601   585   574   598 
           
Net interest income  6,678   6,437   6,421   6,141   6,138 
           
Provision for loan losses  (325)  (375)  (225)  (275)  (150)
Other income  2,105   2,194   2,024   2,100   1,687 
Other expenses  (5,797)  (5,489)  (5,409)  (5,369)  (5,388)
Provision for income taxes  (681)  (738)  (776)  (669)  (586)
Net income$ 1,980  $ 2,029  $ 2,035  $ 1,928  $ 1,701 
           

 

FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands)
           
At Period End: Mar. 31, 2017 Dec. 31, 2016 Sep. 30, 2016 Jun. 30, 2016 Mar. 31, 2016
Assets          
Total cash and cash equivalents$ 29,116 $ 25,843 $ 31,440 $ 27,853 $ 41,091 
Investment securities  154,223   130,037   128,765   129,760   128,673 
Federal Home Loan Bank Stock  2,467   2,606   1,201   1,140   1,420 
Loans and leases  623,130   600,348   573,898   562,758   557,293 
Allowance for loan losses  (9,548)  (9,364)  (9,196)  (9,207)  (9,384)
Premises and equipment, net  17,026   17,164   16,497   16,455   16,519 
Life insurance cash surrender value  19,542   11,435   11,346   11,257   11,169 
Other assets  16,730   14,875   16,472   16,460   16,601 
           
Total assets$ 852,686 $ 792,944 $ 770,423 $ 756,476 $ 763,382 
           
Liabilities          
Non-interest-bearing deposits$ 190,482 $ 211,153 $ 160,129 $ 157,776 $ 157,358 
Interest-bearing deposits  543,444   492,306   511,678   505,524   510,553 
Total deposits  733,926   703,459   671,807   663,300   667,911 
Short-term borrowings  14,699   4,223   10,996   7,258   12,765 
Long-term debt  17,000   -   -   -   - 
Other liabilities  4,868   4,631   6,061   5,522   4,397 
Total liabilities  770,493   712,313   688,864   676,080   685,073 
           
Shareholders' equity  82,193   80,631   81,559   80,396   78,309 
           
Total liabilities and shareholders' equity$ 852,686 $ 792,944 $ 770,423 $ 756,476 $ 763,382 
           
           
Average Quarterly Balances: Mar. 31, 2017 Dec. 31, 2016 Sep. 30, 2016 Jun. 30, 2016 Mar. 31, 2016
Assets          
Total cash and cash equivalents$ 14,529 $ 16,435 $ 21,166 $ 28,753 $ 28,960 
Investment securities  149,627   130,971   130,301   129,604   127,820 
Loans and leases, net  603,078   574,283   562,429   553,212   548,034 
Premises and equipment, net  17,124   16,780   16,468   16,445   16,641 
Other assets  29,725   26,651   26,594   26,347   25,374 
           
Total assets$ 814,083 $ 765,120 $ 756,958 $ 754,361 $ 746,829 
           
Liabilities          
Non-interest-bearing deposits$ 164,340 $ 162,065 $ 155,516 $ 148,703 $ 144,890 
Interest-bearing deposits  509,588   499,087   505,673   512,695   502,917 
Total deposits  673,928   661,152   661,189   661,398   647,807 
Short-term borrowings and long-term debt  53,145   16,606   9,266   9,162   17,145 
Other liabilities  5,501   5,950   5,409   4,713   4,396 
Total liabilities  732,574   683,708   675,864   675,273   669,348 
           
Shareholders' equity  81,509   81,412   81,094   79,088   77,481 
           
Total liabilities and shareholders' equity$ 814,083 $ 765,120 $ 756,958 $ 754,361 $ 746,829 
           

 

FIDELITY D & D BANCORP, INC.
Selected Financial Ratios and Other Data
           
  Three Months Ended
  Mar. 31, 2017 Dec. 31, 2016 Sep. 30, 2016 Jun. 30, 2016 Mar. 31, 2016
Selected returns and financial ratios          
Basic earnings per share$ 0.80 $ 0.83 $ 0.83 $ 0.79 $ 0.69 
Diluted earnings per share$ 0.80 $ 0.83 $ 0.82 $ 0.79 $ 0.69 
Dividends per share$ 0.31 $ 0.39 $ 0.29 $ 0.29 $ 0.27 
Yield on interest-earning assets (FTE) 4.08% 4.07% 4.11% 3.99% 4.04%
Cost of interest-bearing liabilities 0.50% 0.46% 0.45% 0.44% 0.46%
Net interest spread 3.58% 3.61% 3.66% 3.55% 3.58%
Net interest margin 3.72% 3.73% 3.78% 3.66% 3.70%
Return on average assets 0.99% 1.06% 1.07% 1.03% 0.92%
Return on average equity 9.85% 9.92% 9.99% 9.80% 8.83%
Efficiency ratio 64.33% 61.23% 61.85% 63.09% 66.49%
Expense ratio 1.88% 1.69% 1.77% 1.75% 1.99%
           
Other financial data At period end:
  Mar. 31, 2017 Dec. 31, 2016 Sep. 30, 2016 Jun. 30, 2016 Mar. 31, 2016
Book value per share$ 33.27 $ 32.86 $ 33.24 $ 32.76  $ 31.92 
Equity to assets 9.64% 10.17% 10.59% 10.63% 10.26%
Allowance for loan losses to:          
Total loans 1.54% 1.57% 1.61% 1.64% 1.69%
Non-accrual loans 1.22x 1.27x 1.57x 1.56x 1.13x
Non-accrual loans to total loans 1.26% 1.23% 1.02% 1.05% 1.49%
Non-performing assets to total assets 1.28% 1.33% 1.32% 1.37% 1.77%
Net charge-offs to average total loans 0.09% 0.21% 0.23% 0.27% 0.21%
Contacts:

Daniel J. Santaniello
President and Chief Executive Officer
570-504-8035

Salvatore R. DeFrancesco, Jr.
Treasurer and Chief Financial Officer
570-504-8000