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Fidelity D & D Bancorp, Inc. Reports Second Quarter 2022 Financial Results
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Fidelity D & D Bancorp, Inc. Reports Second Quarter 2022 Financial Results

DUNMORE, Pa., July 27, 2022 (GLOBE NEWSWIRE) — 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 and six month periods ended June 30, 2022.

Unaudited Financial Information

Net income for the quarter ended June 30, 2022 was $7.7 million, or $1.35 diluted earnings per share, compared to $5.7 million, or $1.13 diluted earnings per share, for the quarter ended June 30, 2021.  The $2.0 million, or 35%, improvement in net income resulted from the $4.8 million increase in net interest income which more than offset a $1.9 million increase in non-interest expenses, $0.3 million less in non-interest income and $0.2 million higher provision for loan losses.  Diluted earnings per share increased by $0.22 per share, or 19%, due to the higher net income. 

“Fidelity Bank had a very strong first half of 2022,” stated Daniel J. Santaniello, President and Chief Executive Officer. “The Company meaningfully improved net interest income and net interest margin, produced robust organic loan growth, maintained excellent asset quality, and expenses remained well controlled. The continued growth is reflective of the Fidelity Bankers’ commitment to building relationships and partnering with clients to achieve mutual financial success.”

For the six months ended June 30, 2022, net income was $15.2 million, or $2.67 diluted earnings per share, compared to $11.4 million, or $2.26 diluted earnings per share, for the six months ended June 30, 2021.  The $3.8 million, or 34% improvement in net income stemmed from the $8.6 million improvement in net interest income partially offset by $1.3 million less non-interest income and $3.1 million higher non-interest expenses.

The acquisition of Landmark Bancorp, Inc. (“Landmark”) during the third quarter of 2021 resulted in growth in the Company’s earning assets which contributed to net interest income growth.  The Company continued to operate three community banking offices acquired from Landmark which increased operating expenses.

Consolidated Second Quarter Operating Results Overview

Net interest income was $18.1 million for the second quarter of 2022, a 36% increase over the $13.3 million earned for the second quarter of 2021.  The $4.8 million improvement in net interest income resulted primarily from a $472.8 million increase in the average balance of interest-earning assets supplemented by a 21 basis point increase in fully-taxable equivalent yields on these earning assets.  The loan portfolio had the biggest impact, producing a $3.6 million increase in interest income from $332.3 million in higher average balances.  Interest income in the commercial portfolio increased $2.0 million during the second quarter of 2022 versus the second quarter of 2021, despite recognition of $0.6 million less Small Business Administration ("SBA") fees attributable to Paycheck Protection Program ("PPP") loans over the same time periods.  Accretion of purchase accounting fair value adjustments on acquired loans increased by $0.5 million over the same time periods.  Interest income from the investment portfolio grew $1.3 million from $249.0 million in increased average balances.  Interest expense grew $0.1 million due to an increase of $339.5 million in average interest-bearing liabilities partially mitigated by a four basis point decrease in rates paid on interest-bearing liabilities.    

The overall cost of interest-bearing liabilities was 0.23% for the second quarter of 2022, a decrease of four basis points from the 0.27% paid for the second quarter of 2021.  The cost of funds decreased three basis points to 0.17% for the second quarter of 2022 from 0.20% for the second quarter of 2021.  The Company’s fully-taxable equivalent (“FTE”) (non-GAAP measurement) net interest spread was 3.27% for the second quarter of 2022, up 25 basis points from the 3.02% recorded for the second quarter of 2021.  FTE net interest margin increased by 24 basis points to 3.34% for the three months ended June 30, 2022 from 3.10% for the same 2021 period due to the increase in yields on interest-earning assets as rates on interest-bearing liabilities declined.

As of June 30, 2022, the outstanding SBA PPP loan balances totaled $2.5 million.  Total PPP loans generated approximately $9.4 million of SBA processing fees, net of origination expenses, of which $9.3 million was earned to date with $0.5 million and $1.1 million recognized during the three months ended June 30, 2022 and 2021, respectively.  The $0.1 million remaining balance is expected to continue to be earned over the remaining life of the loans; however, the fees may be recognized earlier upon loan forgiveness by the SBA or if paid off by the borrower.

The provision for loan losses was $0.5 million for the second quarter of 2022, a $0.2 million increase compared to $0.3 million for the second quarter of 2021.  The increase in the provision compared to the quarter ended June 30, 2021 was due to the higher provisioning required for experienced loan growth in the second quarter of 2022 compared to the year earlier period. This amount of provisioning reflected what management deemed necessary to maintain the allowance for loan and lease losses at an adequate level.

Total non-interest income decreased $0.3 million, or 7%, to $4.3 million for the second quarter of 2022 compared to $4.6 million for the second quarter of 2021.   The decrease in non-interest income was attributable to the decline in residential mortgage activity stemming from increased mortgage rates which lowered the level of gains by $0.7 million during the second quarter of 2022 compared to the same 2021 period.  The Company also recorded $0.2 million less service charges on loans primarily from this decline in mortgage activity.  Partially offsetting these decreases was $0.3 million higher service charges on deposits primarily from increased overdraft activity, $0.1 million higher mortgage servicing fees and $0.1 million in additional wealth management fees.

Non-interest expenses increased $1.9 million, or 18%, for the second quarter of 2022 to $12.8 million from $10.9 million for the same quarter of 2021.  Non-interest expenses would have increased another $0.4 million if not for merger-related expenses incurred in the second quarter of 2021.  The increase was due to the $1.6 million higher salaries and employee benefits primarily due to 14 additional full-time equivalent employees and higher employee benefit expenses.  Additionally, the Company experienced increases in premises and equipment expenses of $0.3 million and $0.2 million in advertising and marketing expenses. 

The provision for income taxes increased $0.4 million during the second quarter of 2022 due to higher income before taxes compared to the second quarter of 2021.  

Consolidated Year-To-Date Operating Results Overview

Net interest income was $35.4 million for the six months ended June 30, 2022 compared to $26.8 million for the six months ended June 30, 2021.  The $8.6 million, or 32%, improvement was the result of earnings from a larger average balance of interest-earning assets.  The loan portfolio had the biggest impact, producing $5.8 million more interest income from $318.9 million in higher average balances.  Interest income in the commercial portfolio increased $3.0 million during the six months ended June 30, 2022 compared to the same 2021 period, despite recognition of $1.7 million less SBA fees attributable to PPP loans over the same time periods.  Interest income from investments increased $2.9 million from a $296.3 million larger average balance in the portfolio. On the funding side, interest expense increased by $0.1 million due to a larger average balance of interest-bearing deposits.  FTE net interest spread was 3.19% for the first half of 2022, or four basis points higher than the 3.15% recorded for the first half of 2021.  Over the same time period, the Company’s FTE net interest margin increased by two basis points to 3.26% from 3.24%.

For the six months ended June 30, 2022, the provision for loan losses was $1.1 million relatively unchanged from the same 2021 period as the increased provisioning needed for higher loan growth was offset by a $0.4 million specific reserve incurred during the prior year that was not required in the current year.  This amount of provisioning was respective to the loan growth achieved during 2022 and reflected what management deemed necessary to maintain the allowance for loan and lease losses at an adequate level. 

Total non-interest income for the six months ended June 30, 2022 was $8.8 million, a decrease of $1.3 million, or 13%, from $10.1 million for the six months ended June 30, 2021.  The decrease in other income was primarily due to $2.3 million lower gains on loan sales and $0.3 million less service charges on loans due primarily to a decline in residential mortgage activity.  Partially offsetting these decreases were increases as follows: $0.5 million in service charges on deposits, $0.2 million in trust fiduciary fees and $0.2 million in interchange fees.

Non-interest expenses increased to $25.4 million for the six months ended June 30, 2022, an increase of $3.1 million, or 14%, from $22.3 million for the six months ended June 30, 2021.  Non-interest expenses would have increased another $1.3 million if not for merger-related expenses of $0.9 million and a FHLB prepayment penalty of $0.4 million incurred in the second quarter of 2021.  The largest driver of this increase was a $3.1 million increase in salaries and employee benefit expenses.  In addition, there was $0.6 million more premises and equipment expenses and $0.2 million higher PA shares tax expense. These increases were partially offset by $0.2 million less advertising and marketing expenses. 

The provision for income taxes increased $0.5 million during first half of 2022 compared to the same 2021 period due to the higher income before taxes. 

Consolidated Balance Sheet & Asset Quality Overview

The Company’s total assets remained at $2.4 billion as of June 30, 2022, relatively unchanged from December 31, 2021.  Growth in the loan portfolio of $29 million was offset by a reduction of the investment portfolio by $64 million due to recording net unrealized losses resulting from the significantly higher interest rates in intermediate to long-term U.S. Treasury interest rates through the first half of 2022.  Partially offsetting the decrease in the investment portfolio was the $16 million increase in deferred tax assets due to the unrealized losses in the investment portfolio.  During the same time period, total liabilities increased $45 million, or 2%.  Deposit growth of $48 million was used to fund loan growth with the excess increasing cash balances.  During the second quarter of 2022, the Company accepted $52 million from various wealth managed trust accounts into a bank pledged money market account which increased total deposits.  

Shareholders’ equity decreased $49.1 million, or 23%, to $162.6 million at June 30, 2022 from $211.7 million at December 31, 2021.   The decrease was caused by a $61.1 million, after tax, reduction in accumulated other comprehensive income from net unrealized losses recorded in the investment portfolio stemming from the increase in intermediate to long-term U.S. Treasury interest rates.  At June 30, 2022, there were no securities identified with credit-related, other-than-temporary impairment losses.  During the second quarter of 2022, the Company acquired treasury stock totaling $0.4 million which further reduced shareholders’ equity.  Partially offsetting these decreases, retained earnings improved from net income of $15.2 million, partially offset by $3.8 million in cash dividends paid to shareholders.  An additional $1.0 million recorded from the issuance of common stock under the Company’s stock plans and stock-based compensation also partially offset the decrease in shareholders’ equity.   Accumulated other comprehensive income (loss) is excluded from regulatory capital ratios.  The Company remains well capitalized with Tier 1 capital at 8.43% of total average assets as of June 30, 2022.  Total risk-based capital was 14.30% of risk-weighted assets and Tier 1 risk-based capital was 13.21% of risk-weighted assets as of June 30, 2022.  Tangible book value per share was $24.99 at June 30, 2022 compared to $33.68 at December 31, 2021.

Asset Quality

Total non-performing assets were $4.7 million, or 0.20% of total assets, at June 30, 2022, compared to $6.4 million, or 0.27% of total assets, at December 31, 2021.  Past due and non-accrual loans to total loans were 0.30% at June 30, 2022 compared to 0.34% at December 31, 2021.  Net charge-offs to average total loans decreased to 0.01% at June 30, 2022 compared to 0.04% at December 31, 2021.

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 22 full-service offices throughout Lackawanna, Luzerne 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 3,100 hours of volunteer time and over $1.8 million in donations to non-profit organizations directly within the markets served throughout 2021.  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 GAAP to non-GAAP operating measures to the most directly comparable GAAP financial measures are included in the tables at the end of this release.

Management believes merger-related expenses are not standard costs necessary for operations.  These charges principally represent professional fees and system conversion and integration costs related to the transaction.  These costs are specific to each individual transaction and may vary significantly based on the size and complexity of the transaction.  Management also believes the FHLB prepayment fee incurred to payoff FHLB advances is non-recurring and should be excluded from normal operating expenses for proper comparison.

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 2022 and 2021.

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 short-term and long-term effects of inflation, and rising costs to the Company, its customers and on the economy;
  the effects of economic conditions particularly with regard to the negative impact of severe, wide-ranging and continuing 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;
  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;
  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, 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;
  inflation, securities markets and monetary fluctuations and volatility;
  the short-term and long-term effects of inflation, and rising costs to the Company, its customers and on the economy;
  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: June 30, 2022   December 31, 2021
Assets              
Cash and cash equivalents $ 109,125     $ 96,877  
Investment securities   674,833       738,980  
Restricted investments in bank stock   3,622       3,206  
Loans and leases   1,494,316       1,464,855  
Allowance for loan losses   (16,590 )     (15,624 )
Premises and equipment, net   30,855       29,310  
Life insurance cash surrender value   53,383       52,745  
Goodwill and core deposit intangible   21,360       21,570  
Other assets   44,036       27,185  
               
Total assets $ 2,414,940     $ 2,419,104  
               
Liabilities              
Non-interest-bearing deposits $ 610,987     $ 590,283  
Interest-bearing deposits   1,606,637       1,579,582  
Total deposits   2,217,624       2,169,865  
Short-term borrowings   10        
Secured borrowings   7,736       10,620  
Other liabilities   26,951       26,890  
Total liabilities   2,252,321       2,207,375  
               
Shareholders’ equity   162,619       211,729  
               
Total liabilities and shareholders’ equity $ 2,414,940     $ 2,419,104  

Average Year-To-Date Balances: June 30, 2022   December 31, 2021
Assets              
Cash and cash equivalents $ 82,130     $ 146,986  
Investment securities   714,453       568,785  
Restricted investments in bank stock   3,384       3,181  
Loans and leases   1,475,038       1,299,960  
Allowance for loan losses   (16,205 )     (16,100 )
Premises and equipment, net   30,201       28,956  
Life insurance cash surrender value   53,119       48,570  
Goodwill and core deposit intangible   21,460       12,180  
Other assets   35,310       23,069  
               
Total assets $ 2,398,890     $ 2,115,587  
               
Liabilities              
Non-interest-bearing deposits $ 589,760     $ 517,599  
Interest-bearing deposits   1,585,626       1,376,364  
Total deposits   2,175,386       1,893,963  
Short-term borrowings   104       97  
Secured borrowings   10,111       9,122  
FHLB advances         848  
Other liabilities   27,087       22,322  
Total liabilities   2,212,688       1,926,352  
               
Shareholders’ equity   186,202       189,235  
               
Total liabilities and shareholders’ equity $ 2,398,890     $ 2,115,587  

FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Statements of Income
(dollars in thousands)

  Three Months Ended     Six months ended  
  Jun. 30, 2022   Jun. 30, 2021   Jun. 30, 2022   Jun. 30, 2021
Interest income                              
Loans and leases $ 15,500     $ 11,950     $ 30,275     $ 24,458  
Securities and other   3,565       2,217       6,969       4,049  
                               
Total interest income   19,065       14,167       37,244       28,507  
                               
Interest expense                              
Deposits   (950 )     (841 )     (1,772 )     (1,705 )
Borrowings and debt   30             (35 )     (26 )
                               
Total interest expense   920       841       1,807       1,731  
                               
Net interest income   18,146       13,326       35,438       26,776  
                               
Provision for loan losses   (525 )     (300 )     (1,050 )     (1,100 )
Non-interest income   4,256       4,577       8,810       10,093  
Non-interest expense   (12,800 )     (10,851 )     (25,454 )     (22,307 )
                               
Income before income taxes   9,077       6,752       17,744       13,462  
                               
Provision for income taxes   (1,412 )     (1,056 )     (2,556 )     (2,099 )
Net income $ 7,664     $ 5,696     $ 15,187     $ 11,363  

  Three Months Ended  
  Jun. 30, 2022     Mar. 31, 2022     Dec. 31, 2021     Sep. 30, 2021     Jun. 30, 2021  
Interest income                                      
Loans and leases $ 15,500     $ 14,775     $ 15,614     $ 15,359     $ 11,950  
Securities and other   3,565       3,403       3,174       2,814       2,217  
                                       
Total interest income   19,065       18,178       18,788       18,173       14,167  
                                       
Interest expense                                      
Deposits   (950 )     (822 )     (873 )     (878 )     (841 )
Borrowings and debt   30       (65 )     (37 )     (121 )      
                                       
Total interest expense   920       887       910       999       841  
                                       
Net interest income   18,146       17,291       17,878       17,174       13,326  
                                       
Provision for loan losses   (525 )     (525 )     (450 )     (450 )     (300 )
Non-interest income   4,256       4,554       4,185       4,009       4,577  
Non-interest expense   (12,800 )     (12,654 )     (12,614 )     (15,185 )     (10,851 )
                                       
Income before income taxes   9,077       8,666       8,999       5,548       6,752  
                                       
Provision for income taxes   (1,412 )     (1,144 )     (1,213 )     (689 )     (1,056 )
Net income $ 7,664     $ 7,522     $ 7,786     $ 4,859     $ 5,696  

FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands)

At Period End: Jun. 30, 2022     Mar. 31, 2022     Dec. 31, 2021     Sep. 30, 2021     Jun. 30, 2021  
Assets                                      
Cash and cash equivalents $ 109,125     $ 97,403     $ 96,877     $ 167,386     $ 170,064  
Investment securities   674,833       711,583       738,980       686,926       554,955  
Restricted investments in bank stock   3,622       3,231       3,206       3,321       3,231  
Loans and leases   1,494,316       1,479,114       1,464,855       1,435,997       1,134,158  
Allowance for loan losses   (16,590 )     (16,081 )     (15,624 )     (15,601 )     (15,245 )
Premises and equipment, net   30,855       31,336       29,310       29,406       27,615  
Life insurance cash surrender value   53,383       53,065       52,745       52,417       44,858  
Goodwill and core deposit intangible   21,360       21,462       21,570       21,678       8,613  
Other assets   44,036       39,661       27,185       30,269       20,984  
                                       
Total assets $ 2,414,940     $ 2,420,774     $ 2,419,104     $ 2,411,799     $ 1,949,233  
                                       
Liabilities                                      
Non-interest-bearing deposits $ 610,987     $ 599,497     $ 590,283     $ 586,952     $ 491,051  
Interest-bearing deposits   1,606,637       1,610,508       1,579,582       1,576,498       1,266,609  
Total deposits   2,217,624       2,210,005       2,169,865       2,163,450       1,757,660  
Short-term borrowings   10                          
Secured borrowings   7,736       10,572       10,620       16,885        
Other liabilities   26,951       24,954       26,890       25,895       19,388  
Total liabilities   2,252,321       2,245,531       2,207,375       2,206,230       1,777,048  
                                       
Shareholders’ equity   162,619       175,243       211,729       205,569       172,185  
                                       
Total liabilities and shareholders’ equity $ 2,414,940     $ 2,420,774     $ 2,419,104     $ 2,411,799     $ 1,949,233  

Average Quarterly Balances: Jun. 30, 2022     Mar. 31, 2022     Dec. 31, 2021     Sep. 30, 2021     Jun. 30, 2021  
Assets                                      
Cash and cash equivalents $ 69,086     $ 95,319     $ 117,746     $ 185,835     $ 171,968  
Investment securities   693,121       736,021       725,977       640,900       489,424  
Restricted investments in bank stock   3,538       3,228       3,246       3,430       3,152  
Loans and leases   1,482,629       1,467,362       1,452,676       1,430,142       1,150,286  
Allowance for loan losses   (16,441 )     (15,966 )     (15,857 )     (18,716 )     (15,285 )
Premises and equipment, net   31,091       29,301       29,399       31,381       27,502  
Life insurance cash surrender value   53,277       52,960       52,635       52,285       44,751  
Goodwill and core deposit intangible   21,405       21,517       21,632       9,579       8,648  
Other assets   40,878       29,679       26,679       23,420       20,593  
                                       
Total assets $ 2,378,584     $ 2,419,421     $ 2,414,133     $ 2,358,256     $ 1,901,039  
                                       
Liabilities                                      
Non-interest-bearing deposits $ 593,121     $ 586,363     $ 585,899     $ 579,629     $ 464,818  
Interest-bearing deposits   1,579,150       1,592,173       1,575,844       1,522,149       1,249,347  
Total deposits   2,172,271       2,178,536       2,161,743       2,101,778       1,714,165  
Short-term borrowings   206                   68       177  
Secured borrowings   9,644       10,584       16,053       20,140        
FHLB advances                     49        
Other liabilities   27,164       27,008       27,410       23,798       19,026  
Total liabilities   2,209,285       2,216,128       2,205,206       2,145,833       1,733,368  
                                       
Shareholders’ equity   169,299       203,293       208,927       212,423       167,671  
                                       
Total liabilities and shareholders’ equity $ 2,378,584     $ 2,419,421     $ 2,414,133     $ 2,358,256     $ 1,901,039  

FIDELITY D & D BANCORP, INC.
Selected Financial Ratios and Other Data

  Three Months Ended  
  Jun. 30, 2022     Mar. 31, 2022     Dec. 31, 2021     Sep. 30, 2021     Jun. 30, 2021  
Selected returns and financial ratios                                      
Basic earnings per share $ 1.35     $ 1.33     $ 1.38     $ 0.86     $ 1.14  
Diluted earnings per share $ 1.35     $ 1.32     $ 1.37     $ 0.85     $ 1.13  
Dividends per share $ 0.33     $ 0.33     $ 0.33     $ 0.30     $ 0.30  
Yield on interest-earning assets (FTE)*   3.50 %     3.34 %     3.40 %     3.40 %     3.29 %
Cost of interest-bearing liabilities   0.23 %     0.22 %     0.23 %     0.26 %     0.27 %
Cost of funds   0.17 %     0.16 %     0.17 %     0.19 %     0.20 %
Net interest spread (FTE)*   3.27 %     3.12 %     3.17 %     3.14 %     3.02 %
Net interest margin (FTE)*   3.34 %     3.18 %     3.24 %     3.22 %     3.10 %
Return on average assets   1.29 %     1.26 %     1.28 %     0.82 %     1.20 %
Return on average equity   18.16 %     15.01 %     14.79 %     9.07 %     13.63 %
Return on average tangible equity*   20.79 %     16.78 %     16.49 %     9.50 %     14.37 %
Efficiency ratio (FTE)*   55.45 %     56.21 %     55.52 %     69.79 %     59.01 %
Expense ratio   1.44 %     1.36 %     1.38 %     1.88 %     1.32 %

  Six months ended  
  Jun. 30, 2022   Jun. 30, 2021
Basic earnings per share $ 2.68     $ 2.28  
Diluted earnings per share $ 2.67     $ 2.26  
Dividends per share $ 0.66     $ 0.60  
Yield on interest-earning assets (FTE)*   3.42 %     3.44 %
Cost of interest-bearing liabilities   0.23 %     0.29 %
Cost of funds   0.17 %     0.21 %
Net interest spread (FTE)*   3.19 %     3.15 %
Net interest margin (FTE)*   3.26 %     3.24 %
Return on average assets   1.28 %     1.24 %
Return on average equity   16.45 %     13.68 %
Return on average tangible equity*   18.59 %     14.43 %
Efficiency ratio (FTE)*   55.82 %     59.06 %
Expense ratio   1.40 %     1.34 %

Non-GAAP Measures Three Months Ended     Six months ended  
(dollars in thousands except per share data) Jun. 30, 2022   Jun. 30, 2021   Jun. 30, 2022   Jun. 30, 2021
Net income $ 7,664     $ 5,696     $ 15,187     $ 11,363  
Merger-related expenses, net of income taxes         375             890  
FHLB prepayment penalty, net of income taxes                     291  
Adjusted net income* $ 7,664     $ 6,071     $ 15,187     $ 12,544  
Adjusted basic earnings per share* $ 1.35     $ 1.22     $ 2.68     $ 2.51  
Adjusted diluted earnings per share* $ 1.35     $ 1.21     $ 2.67     $ 2.49  
Interest income adjustment to FTE* $ 682     $ 487     $ 1,350     $ 903  
Adjusted return on average assets*   1.29 %     1.28 %     1.28 %     1.37 %
Adjusted return on average tangible equity*   20.79 %     15.31 %     18.59 %     15.94 %

Other financial data At period end:  
(dollars in thousands except per share data) Jun. 30, 2022   Mar. 31, 2022   Dec. 31, 2021   Sep. 30, 2021   Jun. 30, 2021
Book value per share $ 28.77     $ 30.97     $ 37.50     $ 36.41     $ 34.47  
Tangible book value per share* $ 24.99     $ 27.17     $ 33.68     $ 32.57     $ 32.74  
Equity to assets   6.73 %     7.24 %     8.75 %     8.52 %     8.83 %
Allowance for loan losses to:                                      
Total loans   1.11 %     1.09 %     1.09 %     1.12 %     1.35 %
Non-accrual loans 5.17x     6.97x     5.30x     5.68x     4.81x  
Non-accrual loans to total loans   0.21 %     0.16 %     0.20 %     0.19 %     0.28 %
Non-performing assets to total assets   0.20 %     0.17 %     0.27 %     0.25 %     0.31 %
Net charge-offs to average total loans   0.01 %     0.02 %     0.04 %     0.02 %     0.03 %
                                       
Capital Adequacy Ratios                                      
Total risk-based capital ratio   14.30 %     14.18 %     14.51 %     14.52 %     16.27 %
Common equity tier 1 risk-based capital ratio   13.21 %     13.11 %     13.40 %     13.38 %     15.02 %
Tier 1 risk-based capital ratio   13.21 %     13.11 %     13.40 %     13.38 %     15.02 %
Leverage ratio   8.43 %     8.14 %     7.94 %     7.89 %     8.38 %

* See non-GAAP Financial Measures above. 

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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