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 |
