FIDELITY D & D BANCORP, INC.

FOR IMMEDIATE RELEASE

Date: April 29, 2010

Contacts:
Patrick J. Dempsey	Salvatore R. DeFrancesco, Jr.
Chairman of the	Treasurer and
Board	Chief Financial Officer
570-342-8281	570-504-8000

FIDELITY D & D BANCORP, INC.

REPORTS FIRST QUARTER 2010 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 March 31, 2010 of $556,000 compared to $825,000 for the first quarter of 2009.  Earnings were impacted by $398,000 in pre-tax costs on early retirement and severance payments from Management’s reorganization of the Company.  Earnings per share on a fully diluted basis for the quarter totaled $0.26 compared to $0.40 for the prior year period.

“Even though the challenging times for our industry continue, the first quarter is a reflection of the improving position of the Company.  The measures instituted last quarter to reposition our organizational structure and to reduce costs have positioned us for better profitability going forward. The first quarter profits were additionally constrained by reduced mortgage demand, increased FDIC premiums, increased loan loss reserves and the lingering impact of the credit costs from a deteriorated economy,” stated Patrick J. Dempsey, Chairman of the Board.  “We remain well capitalized by regulatory requirements; have increased total assets, had a significant increase in total cash and cash equivalents over the last quarter, improved net interest income, and our commitment to sound banking practices has led to the continuing increase in core deposits. This is strong a representation of the confidence our customers hold in Fidelity Bank.”

Net interest income increased $334,000, or 7%, to $5,159,000 for the quarter ended March 31, 2010 from $4,825,000 recorded during the first quarter of 2009.  The lower interest rate environment during 2010 produced a cost savings on interest-bearing liabilities that offset the decline in yield on interest-earning assets, increasing net interest income earned for the first quarter of 2010.  This also improved net interest margin to 3.91% for the first quarter of 2010, compared to 3.73% for same 2009 period.

A provision for loan loss of $575,000 was recorded during the first quarter of 2010 compared to $425,000 required for the same 2009 period. The provision recorded in 2010 was necessary due to credit quality deterioration and provide for potential losses, which could be incurred on non-accrual loans. The provision also served to reinforce the allowance for loan losses and provide for potential credit risks that may result from today’s uncertain economic climate.  The allowance for loan losses was 1.79% of total loans at March 31, 2010, up from 1.20% at March 31, 2009.

Total other income recorded for the quarter ended March 31, 2010 was $1,146,000, compared to $1,313,000 for the same quarter in 2009.  The difference was from less robust mortgage banking activities during 2010 which tapered back gains towards average levels when compared to mortgage loans sold during the first quarter of 2009.

Total other operating expenses increased $443,000 from $4,662,000 to $5,105,000 for the quarters ended March 31, 2009 and 2010, respectively.  The operating expense increase resulted primarily from realizing $398,000 salary and payroll tax costs incurred from early retirement and severance programs that was partially offset by the $198,000 salary and benefit savings initially realized, $121,000 FDIC premium increase and $148,000 in other operating costs, primarily from less costs deferred on lower mortgage originations, during the first quarter of 2010 as compared to 2009.

The Company’s assets increased 7% to total $595,289,000 at March 31, 2010 compared to the $556,017,000 total assets at December 31, 2009.

Fidelity D & D Bancorp, Inc. serves Lackawanna and Luzerne Counties through The Fidelity Deposit and Discount Bank’s eleven community banking offices.  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.

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 deterioration 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;

·   governmental monetary and fiscal policies, as well as legislative and regulatory changes;

·   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 Mid Penn’s 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;

·   acquisitions and integration of acquired businesses;

·   the failure of assumptions underlying the establishment of reserves for loan and lease losses and estimations of values of collateral and various financial assets and liabilities;

·   volatilities in the securities markets;

·   deteriorating economic conditions

·   acts of war or terrorism; and

·   disruption of credit and equity markets.

 FIDELITY D & D BANCORP, INC.

Unaudited Condensed Consolidated Balance Sheets

At Period End:	March 31, 2010			December 31, 2009
Assets
Total cash and cash equivalents	$	40,182,654		$	8,327,954
Investment securities		81,433,603			76,529,998
Federal Home Loan Bank Stock		4,781,100			4,781,100
Loans and leases		434,257,867			431,919,022
Allowance for loan losses		(7,751,589	)		(7,573,603	)
Premises and equipment, net		15,245,122			15,361,810
Life insurance cash surrender value		9,192,627			9,117,156
Other assets		17,947,191			17,553,834
Total assets	$	595,288,575		$	556,017,271
Liabilities
Non-interest-bearing deposits	$	73,065,849		$	70,890,578
Interest-bearing deposits		413,491,335			388,103,880
Total deposits		486,557,184			458,994,458
Short-term borrowings		26,370,222			16,533,107
Long-term debt		32,000,000			32,000,000
Other liabilities		3,995,312			2,815,159
Total liabilities		548,922,718			510,342,724
Shareholders' equity		46,365,857			45,674,547
Total liabilities and shareholders' equity	$	595,288,575		$	556,017,271

Average Year-to-date Balances:	March 31, 2010		December 31, 2009
Assets
Total cash and cash equivalents	$	37,358,017	$	15,812,533
Investment securities		79,737,266		83,633,697
Loans and leases, net		429,450,503		426,927,977
Premises and equipment, net		15,288,661		15,674,301
Other assets		26,527,219		23,227,334
Total assets	$	588,361,666	$	565,275,842
Liabilities
Non-interest-bearing deposits	$	74,808,276	$	70,285,476
Interest-bearing deposits		403,594,213		388,304,096
Total deposits		478,402,489		458,589,572
Short-term borrowings and long-term debt		60,053,061		54,721,932
Other liabilities		3,379,727		3,827,831
Total liabilities		541,835,277		517,139,335
Shareholders' equity		46,526,389		48,136,507
Total liabilities and shareholders' equity	$	588,361,666	$	565,275,842

FIDELITY D & D BANCORP, INC.

Unaudited Condensed Consolidated Statements of Income

	Three Months Ended
	Mar. 31, 2010		Mar. 31, 2009
Interest income
Loans and leases	$	6,226,313	$	6,675,522
Securities and other		814,978		1,151,891
Total interest income		7,041,291		7,827,413
Interest expense
Deposits		1,414,061		2,191,772
Borrowings and debt		468,296		810,821
Total interest expense		1,882,357		3,002,593
Net interest income		5,158,934		4,824,820
Provision for loan losses		575,000		425,000
Other income		1,145,602		1,313,362
Other expenses		5,104,449		4,661,942
Provision for income taxes		69,207		226,182
Net income	$	555,880	$	825,058

	Three Months Ended
	Mar. 31, 2010		Dec. 31, 2009			Sep. 30, 2009			Jun. 30, 2009		Mar. 31, 2009
Interest income
Loans and leases	$	6,226,313	$	6,277,617		$	6,546,053		$	6,470,352	$	6,675,522
Securities and other		814,978		895,244			907,433			985,161		1,151,891
Total interest income		7,041,291		7,172,861			7,453,486			7,455,513		7,827,413
Interest expense
Deposits		1,414,061		1,616,269			1,949,402			2,138,133		2,191,772
Borrowings and debt		468,296		430,394			1,083,252			576,811		810,821
Total interest expense		1,882,357		2,046,663			3,032,654			2,714,944		3,002,593
Net interest income		5,158,934		5,126,198			4,420,832			4,740,569		4,824,820
Provision for loan losses		575,000		1,200,000			3,125,000			300,000		425,000
Other income (loss)		1,145,602		682,112			(1,292,556	)		1,458,269		1,313,362
Other expenses		5,104,449		4,731,054			5,109,295			4,738,834		4,661,942
Provision (credit) for income taxes		69,207		(196,008	)		(1,895,339	)		247,851		226,182
Net income (loss)	$	555,880	$	73,264		$	(3,210,680	)	$	912,153	$	825,058

 FIDELITY D & D BANCORP, INC.

Unaudited Condensed Consolidated Balance Sheets

At Period End:	Mar. 31, 2010			Dec. 31, 2009			Sep. 30, 2009			Jun. 30, 2009			Mar. 31, 2009
Assets
Total cash and cash equivalents	$	40,182,654		$	8,327,954		$	17,632,181		$	15,569,573		$	20,800,732
Investment securities		81,433,603			76,529,998			83,142,117			77,319,094			78,949,503
Federal Home Loan Bank Stock		4,781,100			4,781,100			4,781,100			4,781,100			4,781,100
Loans and leases		434,257,867			431,919,022			428,439,731			427,432,128			426,269,981
Allowance for loan losses		(7,751,589	)		(7,573,603	)		(6,724,857	)		(5,215,736	)		(5,097,641	)
Premises and equipment, net		15,245,122			15,361,810			15,514,474			15,544,799			15,871,074
Life insurance cash surrender value		9,192,627			9,117,156			9,038,561			8,962,081			8,886,844
Other assets		17,947,191			17,553,834			14,176,127			16,061,169			16,323,980
Total assets	$	595,288,575		$	556,017,271		$	565,999,434		$	560,454,208		$	566,785,573
Liabilities
Non-interest-bearing deposits	$	73,065,849		$	70,890,578		$	73,990,068		$	69,503,187		$	69,296,833
Interest-bearing deposits		413,491,335			388,103,880			403,268,503			384,370,177			394,857,294
Total deposits		486,557,184			458,994,458			477,258,571			453,873,364			464,154,127
Short-term borrowings		26,370,222			16,533,107			5,238,457			8,880,343			10,741,814
Long-term debt		32,000,000			32,000,000			32,000,000			42,000,000			42,000,000
Other liabilities		3,995,312			2,815,159			3,338,059			6,577,952			4,427,884
Total liabilities		548,922,718			510,342,724			517,835,087			511,331,659			521,323,825
Shareholders' equity		46,365,857			45,674,547			48,164,347			49,122,549			45,461,748
Total liabilities and shareholders' equity	$	595,288,575		$	556,017,271		$	565,999,434		$	560,454,208		$	566,785,573
Average Quarterly Balances:	Mar. 31, 2010			Dec. 31, 2009			Sep. 30, 2009			Jun. 30, 2009			Mar. 31, 2009
Assets
Total cash and cash equivalents	$	37,358,017		$	11,236,021		$	16,582,979		$	22,538,111		$	12,902,871
Investment securities		79,737,266			83,854,397			85,599,872			78,537,567			86,550,978
Loans and leases, net		429,450,503			425,502,519			425,582,260			422,830,387			433,903,852
Premises and equipment, net		15,288,661			15,402,408			15,503,416			15,751,986			16,048,369
Other assets		26,527,219			23,514,032			22,723,241			23,783,296			22,889,530
Total assets	$	588,361,666		$	559,509,377		$	565,991,768		$	563,441,347		$	572,295,600
Liabilities
Non-interest-bearing deposits	$	74,808,276		$	73,674,479		$	70,412,455		$	68,908,889		$	68,083,243
Interest-bearing deposits		403,594,213			390,741,705			391,990,603			389,822,588			380,508,523
Total deposits		478,402,489			464,416,184			462,403,058			458,731,477			448,591,766
Short-term borrowings and long-term debt		60,053,061			44,159,415			50,011,878			52,414,957			72,666,503
Other liabilities		3,379,727			3,465,228			4,102,285			4,372,934			3,366,585
Total liabilities		541,835,277			512,040,827			516,517,221			515,519,368			524,624,854
Shareholders' equity		46,526,389			47,468,550			49,474,547			47,921,979			47,670,746
Total liabilities and shareholders' equity	$	588,361,666		$	559,509,377		$	565,991,768		$	563,441,347		$	572,295,600

FIDELITY D & D BANCORP, INC.

Selected Financial Ratios and Other Data

	Three Months Ended
	Mar. 31, 2010			Dec. 31, 2009			Sep. 30, 2009			Jun. 30, 2009			Mar. 31, 2009
Selected returns and financial ratios
Diluted earnings (loss) per share	$	0.26		$	0.04		$	(1.55	)	$	0.44		$	0.40
Dividends per share	$	0.25		$	0.25		$	0.25		$	0.25		$	0.25
Yield on interest-earning assets (FTE)		5.28	%		5.52	%		5.67	%		5.74	%		5.97	%
Cost of interest-bearing liabilities		1.65	%		1.87	%		2.72	%		2.46	%		2.69	%
Net interest spread		3.63	%		3.65	%		2.95	%		3.28	%		3.28	%
Net interest margin		3.91	%		3.99	%		3.43	%		3.70	%		3.73	%
Return on average assets		0.38	%		0.05	%		-2.25	%		0.65	%		0.58	%
Return on average equity		4.85	%		0.61	%		-25.75	%		7.63	%		7.02	%
Efficiency ratio		71.57	%		72.76	%		77.39	%		70.16	%		70.33	%
Expense ratio		2.40	%		2.50	%		2.67	%		2.16	%		2.15	%
Other data
	Mar. 31, 2010			Dec. 31, 2009			Sep. 30, 2009			Jun. 30, 2009			Mar. 31, 2009
Book value per share	$	21.74		$	21.69		$	23.01		$	23.59		$	21.94
Equity to assets		7.79	%		8.21	%		8.51	%		8.76	%		8.02	%
Allowance for loan losses to:
Total loans		1.79	%		1.75	%		1.57	%		1.22	%		1.20	%
Non-accrual loans		0.70	x		0.61	x		0.85	x		0.70	x		0.70	x
Non-accrual loans to total loans		2.56	%		2.85	%		1.84	%		1.73	%		1.70	%
Non-performing assets to total assets		2.28	%		2.58	%		1.81	%		1.57	%		1.56	%