×

Fidelity D & D Bancorp, Inc. Reports Better First Quarter 2016 Financial Results

DUNMORE, Pa., April 27, 2016 (GLOBE NEWSWIRE) -- Fidelity D & D Bancorp, Inc., (OTCBB:FDBC), parent company of The Fidelity Deposit and Discount Bank, announced net income for the quarter ended March 31, 2016 of $1.7 million, an improvement of over $0.1 million, or 8%, compared to $1.6 million for the first quarter of 2015. Higher revenue more than offset the increase in non-interest expenses, when compared to the first quarter of 2015. Earnings per share on a diluted basis for the quarter were $0.69 and $0.64 for the three months ended March 31, 2016 and 2015, respectively.

“Fidelity’s strong first quarter earnings sets the stage for a successful 2016,” stated Daniel J. Santaniello, President and Chief Executive Officer. “The growth in earnings, loans, core deposits, and improved net interest margin are the highlights for the first quarter. I attribute the Company’s continued financial success to the Fidelity Banker’s commitment to our client’s financial success and the marketplace acceptance of our customer centric business model.”

Net interest income increased $0.5 million, or 9%, to $6.1 million for the quarter ended March 31, 2016, from $5.6 million recorded during the first quarter of 2015. Net interest income earned was higher with a 12 basis point savings on rates of interest-bearing liabilities outpacing the 4 basis point decline in yield on interest earning assets. Additional revenue from a $41 million and $18 million higher average balance in the loan and investment portfolios, respectively, added $0.4 million to interest income. Lower interest costs of $0.1 million occurred primarily from an $8 million lower debt level and the lower repricing of deposit rates. These more than offset the added interest expense from the $39 million growth in interest-bearing deposit account balances increasing interest expense on deposits by $23 thousand. Cost of funds further declined 9 basis points from these interest savings plus the $13 million growth in average non-interest bearing deposits. The earning asset growth at lower yields pressured spread lower, but was outpaced by interest cost savings, which expanded net interest margin by 6 basis points to 3.70% for the first quarter of 2016, compared to 3.64% for the same 2015 quarter.

A provision for loan losses of $150 thousand was recorded during both first quarters of 2016 and 2015. The allowance for loan losses was $9.4 million, or 1.69% of total loans at March 31, 2016 compared to $9.5 million, or 1.77% of total loans at March 31, 2015.

Total other income recorded for the quarters ended March 31, 2016 and 2015 was $1.7 million. Other income declined due to $122 thousand fewer gains from loans sold, a $47 thousand reduction in fiduciary fees and $23 thousand less financial service fees that offset revenue growth from a $73 thousand increase in deposit service charges and $54 thousand more interchange fees, when compared to the first quarter of 2015.

Total other operating expenses increased $0.3 million, or 6%, to $5.4 million from $5.1 million for the quarters ended March 31, 2016 and 2015, respectively. The other operating expenses primarily increased due to $0.2 million more salary and employee benefits plus increases of $0.1 million from data processing and $51 thousand in additional professional expenses incurred partially offset by reductions of $0.1 million from less other real estate owned expenses and $23 thousand fewer premises and equipment expenses, during the 2016 first quarter compared to the same 2015 period.

The Company’s assets increased $34.0 million to total $763.4 million at March 31, 2016 compared to $729.4 million at December 31, 2015. This asset growth resulted in higher cash and investment securities balances of $28.8 million and $3.4 million, respectively, funded from $32.7 million increase in interest-bearing deposits, $14.6 million additional non-interest-bearing deposits plus a $2.0 million increase in shareholders’ equity, partially offset by $15.4 million less short-term borrowings.

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 may 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 new 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, 2016 December 31, 2015
Assets
Total cash and cash equivalents $ 41,091 $ 12,277
Investment securities 128,673 125,232
Federal Home Loan Bank Stock 1,420 2,120
Loans and leases 557,293 557,630
Allowance for loan losses (9,384) (9,527)
Premises and equipment, net 16,519 16,723
Life insurance cash surrender value 11,169 11,082
Other assets 16,601 13,821
Total assets $ 763,382 $ 729,358
Liabilities
Non-interest-bearing deposits $ 157,358 $ 142,774
Interest-bearing deposits 510,553 477,901
Total deposits 667,911 620,675
Short-term borrowings 12,765 28,204
Long-term debt - -
Other liabilities 4,397 4,128
Total liabilities 685,073 653,007
Shareholders' equity 78,309 76,351
Total liabilities and shareholders' equity $ 763,382 $ 729,358
Average Year-To-Date Balances:March 31, 2016
December 31, 2015
Assets
Total cash and cash equivalents $ 28,960 $ 22,248
Investment securities 127,820 122,549
Loans and leases, net 548,034 525,571
Premises and equipment, net 16,641 15,954
Other assets 25,374 26,520
Total assets $ 746,829 $ 712,842
Liabilities
Non-interest-bearing deposits $ 144,890 $ 138,389
Interest-bearing deposits 502,917 475,853
Total deposits 647,807 614,242
Short-term borrowings and long-term debt 17,145 19,886
Other liabilities 4,396 4,306
Total liabilities 669,348 638,434
Shareholders' equity 77,481 74,408
Total liabilities and shareholders' equity $ 746,829 $ 712,842


FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Statements of Income
(dollars in thousands)
Three Months Ended
Mar. 31, 2016 Mar. 31, 2015
Interest income
Loans and leases $ 6,006 $ 5,638
Securities and other 730 666
Total interest income 6,736 6,304
Interest expense
Deposits 580 557
Borrowings and debt 18 140
Total interest expense 598 697
Net interest income 6,138 5,607
Provision for loan losses (150) (150)
Other income 1,687 1,750
Other expenses (5,388) (5,087)
Provision for income taxes (586) (547)
Net income $ 1,701 $ 1,573
Three Months Ended
Mar. 31, 2016 Dec. 31, 2015 Sep. 30, 2015 Jun. 30, 2015 Mar. 31, 2015
Interest income
Loans and leases $ 6,006 $ 5,979 $ 5,934 $ 5,813 $ 5,638
Securities and other 730 681 678 625 666
Total interest income 6,736 6,660 6,612 6,438 6,304
Interest expense
Deposits 580 597 574 508 557
Borrowings and debt 18 8 6 139 140
Total interest expense 598 605 580 647 697
Net interest income 6,138 6,055 6,032 5,791 5,607
Provision for loan losses (150) (575) (200) (150) (150)
Other income 1,687 1,927 2,023 1,833 1,750
Other expenses (5,388) (4,952) (5,239) (5,744) (5,087)
Provision for income taxes (586) (634) (687) 50 (547)
Net income $ 1,701 $ 1,821 $ 1,929 $ 1,780 $ 1,573


FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands)
At Period End: Mar. 31, 2016 Dec. 31, 2015 Sep. 30, 2015 Jun. 30, 2015 Mar. 31, 2015
Assets
Total cash and cash equivalents $ 41,091 $ 12,277 $ 25,690 $ 21,737 $ 18,983
Investment securities 128,673 125,232 126,782 121,812 126,481
Federal Home Loan Bank Stock 1,420 2,120 1,085 1,988 1,291
Loans and leases 557,293 557,630 543,497 540,787 520,855
Allowance for loan losses (9,384) (9,527) (9,149) (9,259) (9,208)
Premises and equipment, net 16,519 16,723 16,875 17,034 14,931
Life insurance cash surrender value 11,169 11,082 10,995 10,909 10,825
Other assets 16,601 13,821 13,433 13,547 18,349
Total assets $ 763,382 $ 729,358 $ 729,208 $ 718,555 $ 702,507
Liabilities
Non-interest-bearing deposits $ 157,358 $ 142,774 $ 150,714 $ 137,682 $ 133,846
Interest-bearing deposits 510,553 477,901 492,289 469,204 467,896
Total deposits 667,911 620,675 643,003 606,886 601,742
Short-term borrowings 12,765 28,204 6,743 34,263 13,773
Long-term debt - - - - 10,000
Other liabilities 4,397 4,128 3,829 3,707 3,470
Total liabilities 685,073 653,007 653,575 644,856 628,985
Shareholders' equity 78,309 76,351 75,633 73,699 73,522
Total liabilities and shareholders' equity $ 763,382 $ 729,358 $ 729,208 $ 718,555 $ 702,507
Average Quarterly Balances: Mar. 31, 2016 Dec. 31, 2015 Sep. 30, 2015 Jun. 30, 2015 Mar. 31, 2015
Assets
Total cash and cash equivalents $ 28,960 $ 17,612 $ 20,486 $ 12,947 $ 38,192
Investment securities 127,820 127,509 126,238 126,625 109,588
Loans and leases, net 548,034 541,144 532,646 520,857 507,185
Premises and equipment, net 16,641 16,843 17,009 15,002 14,929
Other assets 25,374 24,409 24,769 28,110 28,861
Total assets $ 746,829 $ 727,517 $ 721,148 $ 703,541 $ 698,755
Liabilities
Non-interest-bearing deposits $ 144,890 $ 141,198 $ 143,794 $ 136,079 $ 132,327
Interest-bearing deposits 502,917 493,383 488,608 457,111 463,849
Total deposits 647,807 634,581 632,402 593,190 596,176
Short-term borrowings and long-term debt 17,145 12,003 9,820 32,187 25,794
Other liabilities 4,396 4,766 4,327 4,310 3,811
Total liabilities 669,348 651,350 646,549 629,687 625,781
Shareholders' equity 77,481 76,167 74,599 73,854 72,974
Total liabilities and shareholders' equity
$746,829 $727,517 $721,148 $703,541 $698,755


FIDELITY D & D BANCORP, INC.
Selected Financial Ratios and Other Data
Three Months Ended
Mar. 31, 2016 Dec. 31, 2015 Sep. 30, 2015 Jun. 30, 2015 Mar. 31, 2015
Selected returns and financial ratios
Basic earnings per share $ 0.69 $ 0.74 $ 0.79 $ 0.73 $ 0.65
Diluted earnings per share $ 0.69 $ 0.74 $ 0.79 $ 0.73 $ 0.64
Dividends per share $ 0.27 $ 0.37 $ 0.27 $ 0.27 $ 0.25
Yield on interest-earning assets (FTE) 4.04% 4.05% 4.06% 4.12% 4.08%
Cost of interest-bearing liabilities 0.46% 0.48% 0.46% 0.53% 0.58%
Net interest spread 3.58% 3.57% 3.60% 3.59% 3.50%
Net interest margin 3.70% 3.69% 3.72% 3.72% 3.64%
Return on average assets 0.92% 0.99% 1.06% 1.01% 0.91%
Return on average equity 8.83% 9.48% 10.26% 9.67% 8.74%
Efficiency ratio 66.49% 61.15% 63.98% 65.84% 66.86%
Expense ratio 1.99% 1.68% 1.77% 1.92% 1.93%
Other financial data Three Months Ended
Mar. 31, 2016 Dec. 31, 2015 Sep. 30, 2015 Jun. 30, 2015 Mar. 31, 2015
Book value per share $ 31.92 $ 31.25 $ 31.00 $ 30.21 $ 30.13
Equity to assets 10.26% 10.47% 10.37% 10.26% 10.47%
Allowance for loan losses to:
Total loans 1.69% 1.71% 1.69% 1.71% 1.77%
Non-accrual loans 1.13x 1.06x 2.09x 2.18x 2.41x
Non-accrual loans to total loans 1.49% 1.61% 0.80% 0.79% 0.73%
Non-performing assets to total assets 1.77% 1.76% 1.11% 1.13% 1.15%


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

Source:Fidelity Deposit & Discount Bank