8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  July 22, 2009

FIDELITY D & D BANCORP, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	333-90273	23-3017653
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
Blakely and Drinker Streets, Dunmore, PA		18512
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:(570) 342-8281

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act  (17 CFR 240.13e-4(c))

FIDELITY D & D BANCORP, INC.

CURRENT REPORT ON FORM 8-K

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 22, 2009, Fidelity D & D Bancorp, Inc. issued a press release describing its results of operations for the quarter and six months ended June 30, 2009.  A copy of the related press release is being furnished as Exhibit 99.1 to this Form 8-K.

The information in this Item 2.02 is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

Exhibit Number	Description
99.1	Copy of the Press Release, dated July 22, 2009.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIDELITY D & D BANCORP, INC.
Date: July 23, 2009	By:	/s/ Salvatore R. DeFrancesco, Jr.
		Salvatore R. DeFrancesco, Jr.
		Treasurer and Chief Financial Officer

3

EX-99.1

Exhibit 99.1

FIDELITY D & D BANCORP, INC.

FOR IMMEDIATE RELEASE

Date: July 22, 2009

Contacts:
	Steven C. Ackmann	Salvatore R. DeFrancesco, Jr.
	President and	Treasurer and
	Chief Executive Officer	Chief Financial Officer
	570-346-4156	570-504-8000

FIDELITY D & D BANCORP, INC.

SECOND QUARTER 2009 FINANCIAL RESULTS

Dunmore, PA — Fidelity D & D Bancorp, Inc. (OTC Bulletin Board: FDBC), parent company of The Fidelity Deposit and Discount Bank, announced net income for the quarter ended June 30, 2009 of $912,000 compared to $1,204,000 for the same quarter of 2008.  This net income decline resulted from increased other operating expenses principally related to an increase in FDIC insurance assessments of $321,000, which includes a special assessment of $255,000.  Earnings per share on a fully diluted basis for the quarter totaled $0.44 down from $0.59 for the prior year period.

Net income for the six months ended June 30, 2009 was $1,737,000 compared to net income of $2,293,000 for the same 2008 period.  Earnings per share were $0.84 and $1.11 for the six months ended June 30, 2009 and 2008, respectively.  Provision for loan loss, other-than-temporary impairment, and FDIC insurance assessments, partially offset by mortgage banking gains, were the primary drivers reducing net income for the first six months of 2009 compared to the same 2008 period.

Net interest income decreased to $4,740,000 for the quarter ended June 30, 2009 from $4,943,000 recorded during the same quarter of 2008.  The cost reduction from lowering rates on interest bearing liabilities lagged behind the effect the current interest rate environment had on earning asset yields.  As a result, net interest income dipped $203,000, or 4%, for the second quarter of 2009.  This earnings decline, in relation to the $15,496,000 reduction in average earning assets, maintained the net interest margin at 3.70% for the second quarter of 2009, compared to 3.71% for same 2008 period.

Net interest income increased to $9,565,000 for the six months ended June 30, 2009 from $9,490,000 recorded during the same quarter of 2008.  Net interest margin was 3.71% during the first half of 2009 compared to 3.54% during the same 2008 period.

“While the worst of the financial crisis seems to be behind us, the current recession and the tumult in the industry has made the first half of 2009 one of the most challenging for bankers, ever,” said Steven C. Ackmann, President and CEO. “Our charges for security impairments and the high FDIC fees and special FDIC assessment have been largely offset by a terrific first six months of mortgage banking. We’re gratified of the stabile trends in our credit quality, but continue to monitor the loan portfolio closely to stay on top of any developing credit issues.”  Mr. Ackmann further stated, “Meanwhile, we continue to lend to qualified borrowers seen in the high volume of mortgage originations plus our 6% commercial loan growth in the first half.  Additionally, our deposit gathering efforts produced growth of 4.8% for the first half of 2009.”

The provision for loan loss was $300,000 for the second quarter and $725,000 for six month period ending June 30, 2009, as compared to $125,000 requirements for the same 2008 quarter and six month periods. A provision for loan loss was required due to internally classified credit downgrades, weakening economic conditions plus commercial loan growth during the second quarter of 2009.  The allowance for loan losses was 1.22% of total loans at June 30, 2009, up from 1.00% at June 30, 2008.

Total other income recorded for the quarter ended June 30, 2009 was $1,458,000, 15% higher when compared with $1,266,000 for the same quarter in 2008.  Mortgage banking produced $268,000 more gains recorded in other income during the second quarter of 2009, which more than offset fewer deposit service charges collected, when compared to other income recorded for the second quarter of 2008.

Total other income for the six months ended June 30, 2009 was $2,772,000, compared to $2,561,000 for the same period in 2008.  Mortgage banking services produced $667,000 of additional gains that more than offset a $326,000 non-cash other-than-temporary impairment and $220,000 lower deposit service charge levels during the six months ended June 30, 2009 compared to the same 2008 period.

Total other operating expenses increased 7% from $4,445,000 to $4,739,000 for the quarters ending June 30, 2008 and 2009, respectively.  The other operating expenses primarily increased from recognizing a $255,000 FDIC special assessment premium and added premises and equipment expenses resulting mostly from the West Scranton branch opening in August 2008.

Total other operating expenses increased 6% from $8,837,000 for the six months ending June 30, 2008 to $9,401,000 for 2009. The operating expense increase resulted from $383,000 of additional FDIC premiums, including the mentioned special assessment, and $239,000 in added occupancy expenses.

The Company’s assets contracted $15,265,000 to total $560,454,000 at June 30, 2009 from $575,719,000 at December 31, 2008, caused from mortgage sale proceeds utilized to pay off debt and improve liquidity and interest rate risk positions.

Fidelity D & D Bancorp, Inc. serves Lackawanna and Luzerne Counties through The Fidelity Deposit and Discount Bank’s 11 community banking office locations.  The Bank’s deposits are insured by the Federal Deposit Insurance Corporation up to the full extent permitted by law.

For more information please visit our investor relations web site located through www.bankatfidelity.com.

This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  Actual results and trends could differ materially from those set forth in such statements due to various factors.  These factors include the possibility that increased demand or prices for the company’s financial services and products may not occur, changing economic, interest rate and competitive conditions, technological developments and other risks and uncertainties, including those detailed in the company’s filings with the Securities and Exchange Commission.

FIDELITY D & D BANCORP, INC.

Unaudited Condensed Consolidated Balance Sheets

At Period End:

	Jun. 30, 2009			Mar. 31, 2009			Dec. 31, 2008			Sep. 30, 2008			Jun. 30, 2008
Assets
Total cash and cash equivalents	$	15,569,573		$	20,800,732		$	12,771,147		$	13,375,299		$	16,040,466
Investment securities	77,319,094			78,949,503			84,187,579			87,179,549			129,244,167
Federal Home Loan Bank Stock	4,781,100			4,781,100			4,781,100			4,770,700			4,358,300
Loans and leases	427,432,128			426,269,981			441,036,694			431,293,559			418,650,319
Allowance for loan losses	(5,215,736		)	(5,097,641		)	(4,745,234		)	(4,205,566		)	(4,188,571		)
Premises and equipment, net	15,544,799			15,871,074			16,056,362			16,018,219			12,912,023
Life insurance cash surrender value	8,962,081			8,886,844			8,807,784			8,728,568			8,645,597
Other assets	16,061,169			16,323,980			12,823,565			12,383,084			12,901,595
Total assets	$	560,454,208		$	566,785,573		$	575,718,997		$	569,543,412		$	598,563,896
Liabilities
Non-interest-bearing deposits	$	69,503,187		$	69,296,833		$	71,442,651		$	69,619,234		$	74,765,086
Interest-bearing deposits	384,370,177			394,857,294			361,869,281			365,812,303			373,468,779
Total deposits	453,873,364			464,154,127			433,311,932			435,431,537			448,233,865
Short-term borrowings	8,880,343			10,741,814			38,129,704			17,086,314			29,674,336
Long-term debt	42,000,000			42,000,000			52,000,000			62,071,661			62,285,582
Other liabilities	6,577,952			4,427,884			3,316,710			4,335,911			5,318,030
Total liabilities	511,331,659			521,323,825			526,758,346			518,925,423			545,511,813
Shareholders’ equity	49,122,549			45,461,748			48,960,651			50,617,989			53,052,083
Total liabilities and shareholders’ equity	$	560,454,208		$	566,785,573		$	575,718,997		$	569,543,412		$	598,563,896

Average Quarterly Balances:

	Jun. 30, 2009		Mar. 31, 2009		Dec. 31, 2008		Sep. 30, 2008		Jun. 30, 2008
Assets
Total cash and cash equivalents	$	22,538,111	$	12,902,871	$	11,389,500	$	11,483,829	$	12,025,621
Investment securities	78,537,567		86,550,978		90,153,057		117,713,728		138,429,282
Loans and leases, net	422,830,387		433,903,852		434,511,745		421,771,678		402,874,033
Premises and equipment, net	15,751,986		16,048,369		15,948,591		13,315,976		12,951,487
Other assets	23,783,296		22,889,530		21,628,663		19,744,364		19,358,141
Total assets	$	563,441,347	$	572,295,600	$	573,631,556	$	584,029,575	$	585,638,564
Liabilities
Non-interest-bearing deposits	$	68,908,889	$	68,083,243	$	69,665,796	$	69,069,124	$	65,591,257
Interest-bearing deposits	389,822,588		380,508,523		366,709,783		360,426,504		378,477,080
Total deposits	458,731,477		448,591,766		436,375,579		429,495,628		444,068,337
Short-term borrowings and long-term debt	52,414,957		72,666,503		83,447,025		97,685,420		81,129,443
Other liabilities	4,372,934		3,366,585		4,093,554		4,466,079		5,005,066
Total liabilities	515,519,368		524,624,854		523,916,158		531,647,127		530,202,846
Shareholders’ equity	47,921,979		47,670,746		49,715,398		52,382,448		55,435,718
Total liabilities and shareholders’ equity	$	563,441,347	$	572,295,600	$	573,631,556	$	584,029,575	$	585,638,564

FIDELITY D & D BANCORP, INC.

Unaudited Condensed Consolidated Statements of Income

	Three Months Ended				Six Months Ended
	Jun. 30, 2009		Jun. 30, 2008		Jun. 30, 2009		Jun. 30, 2008
Interest income
Loans and leases	$	6,470,352	$	6,860,510	$	13,145,874	$	13,747,720
Securities and other	985,161		1,752,556		2,137,052		3,610,178
Total interest income	7,455,513		8,613,066		15,282,926		17,357,898
Interest expense
Deposits	2,138,133		2,831,400		4,329,905		6,065,136
Borrowings and debt	576,811		838,502		1,387,632		1,802,762
Total interest expense	2,714,944		3,669,902		5,717,537		7,867,898
Net interest income	4,740,569		4,943,164		9,565,389		9,490,000
Provision for loan losses	300,000		125,000		725,000		125,000
Other income	1,458,269		1,265,669		2,771,631		2,561,211
Other expenses	4,738,834		4,444,540		9,400,776		8,837,289
Provision for income taxes	247,851		435,347		474,033		796,029
Net income	$	912,153	$	1,203,946	$	1,737,211	$	2,292,893

	Three Months Ended
	Jun. 30, 2009		Mar. 31, 2009		Dec. 31, 2008		Sep. 30, 2008		Jun. 30, 2008
Interest income
Loans and leases	$	6,470,352	$	6,675,522	$	6,911,146	$	6,905,422	$	6,860,510
Securities and other	985,161		1,151,891		1,272,950		1,514,018		1,752,556
Total interest income	7,455,513		7,827,413		8,184,096		8,419,440		8,613,066
Interest expense
Deposits	2,138,133		2,191,772		2,454,253		2,598,805		2,831,400
Borrowings and debt	576,811		810,821		821,689		941,488		838,502
Total interest expense	2,714,944		3,002,593		3,275,942		3,540,293		3,669,902
Net interest income	4,740,569		4,824,820		4,908,154		4,879,147		4,943,164
Provision for loan losses	300,000		425,000		685,000		130,000		125,000
Other income	1,458,269		1,313,362		1,172,647		844,443		1,265,669
Other expenses	4,738,834		4,661,942		4,700,740		4,672,654		4,444,540
Provision for income taxes	247,851		226,182		93,121		179,821		435,347
Net income	$	912,153	$	825,058	$	601,940	$	741,115	$	1,203,946

FIDELITY D & D BANCORP, INC.

Selected Financial Ratios and Other Data

	Three Months Ended
	Jun. 30, 2009			Mar. 31, 2009			Dec. 31, 2008			Sep. 30, 2008			Jun. 30, 2008
Selected returns and financial ratios
Diluted earnings per share	$	0.44		$	0.40		$	0.30		$	0.35		$	0.59
Dividends per share	$	0.25		$	0.25		$	0.25		$	0.25		$	0.25
Yield on interest-earning assets (FTE)	5.74		%	5.97		%	6.13		%	6.17		%	6.39		%
Cost of interest-bearing liabilities	2.46		%	2.69		%	2.90		%	3.07		%	3.21		%
Net interest spread	3.28		%	3.28		%	3.23		%	3.10		%	3.18		%
Net interest margin	3.70		%	3.73		%	3.72		%	3.62		%	3.71		%
Return on average assets	0.65		%	0.58		%	0.42		%	0.50		%	0.83		%
Return on average equity	7.63		%	7.02		%	4.82		%	5.63		%	8.73		%
Efficiency ratio	70.16		%	70.33		%	73.33		%	74.84		%	70.17		%
Expense ratio	2.16		%	2.15		%	2.35		%	2.35		%	2.19		%
	Six Months Ended
	Jun. 30, 2009			Jun. 30, 2008
Diluted earnings per share	$	0.84		$	1.11
Dividends per share	$	0.50		$	0.50
Yield on interest-earning assets (FTE)	5.85		%	6.39		%
Cost of interest-bearing liabilities	2.58		%	3.42		%
Net interest spread	3.27		%	2.97		%
Net interest margin	3.71		%	3.54		%
Return on average assets	0.62		%	0.78		%
Return on average equity	7.33		%	8.26		%
Efficiency ratio	70.24		%	71.85		%
Expense ratio	2.15		%	2.15		%

Other data

	Jun. 30, 2009			Mar. 31, 2009			Dec. 31, 2008			Sep. 30, 2008			Jun. 30, 2008
Book value per share	$	23.59		$	21.94		$	23.73		$	24.55		$	25.63
Equity to assets	8.76		%	8.02		%	8.50		%	8.89		%	8.86		%
Allowance for loan losses to:
Total loans	1.22		%	1.20		%	1.08		%	0.98		%	1.00		%
Non-accrual loans	0.70		x	0.70		x	1.36		x	1.35		x	1.14		x
Non-accrual loans to net loans	1.75		%	1.72		%	0.80		%	0.73		%	0.88		%
Non-performing assets to total assets	1.57		%	1.56		%	0.96		%	0.90		%	0.79		%