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 |
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| 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 |
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| 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 | 1.13 | x | 1.06 | x | 2.09 | x | 2.18 | x | 2.41 | x | |||||||||||
| 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 | % | |||||||||||
CONTACT: Contacts: Daniel J. Santaniello President and Chief Executive Officer 570-504-8035 Salvatore R. DeFrancesco, Jr. Treasurer and Chief Financial Officer 570-504-8000