EX-99.1 2 v343441_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

FIDELITY D & D BANCORP, INC.

FOR IMMEDIATE RELEASE

 

Date: May 1, 2013

 

Contacts:

Daniel J. Santaniello Salvatore R. DeFrancesco, Jr.
President and Treasurer and
Chief Executive Officer Chief Financial Officer
570-504-8035 570-504-8000

 

FIDELITY D & D BANCORP, INC.

REPORTS FIRST QUARTER 2013 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, 2013 of $1.4 million, an improvement of $137 thousand, or 11%, compared to $1.3 million for the first quarter of 2012. Net interest income growth plus improvement in gains from loan sales, service charges and interchange fees within other income categories, along with a lower provision for loan losses, more than offset the higher amounts of loan collection, foreclosed property, salary and benefits, and advertising expenditures incurred, when compared to the prior year quarter. Earnings per share on a diluted basis for the quarter were $0.60 and $0.56 for the three months ended March 31, 2013 and 2012, respectively.

 

“Fidelity is very pleased with the financial results of the 1st quarter of 2013,” stated Daniel J. Santaniello, President and Chief Executive Officer. “The strong financial results are reflective of the Bank’s continued strategic focus on building customer relationships and acquiring new customers. In addition, Management’s commitment to enhancing asset quality continued to produce improvement in asset quality metrics. Our strong capital position will enable us to invest in meeting our customer’s needs as we remain committed to the execution of our strategic plan.”

 

Net interest income increased $119 thousand, or 2%, to $5.2 million for the quarter ended March 31, 2013, from $5.1 million recorded during the first quarter of 2012. Net interest income earned was higher in first quarter 2013 over the same period in 2012, despite the decline in yield on interest earning assets. The Company experienced lower interest costs from carrying less interest-bearing liabilities, which was replaced with the growth of non-interest bearing deposits. This along with a $36 million larger loan portfolio enhanced the net interest margin by 11 basis points to 3.84% for the first quarter of 2013, compared to 3.73% a year earlier for the same 2012 quarter.

 

A provision for loan loss of $550 thousand was recorded during the first quarter of 2013 compared to $700 thousand required for the same 2012 period. The provision for loan loss funded the allowance for loan losses for not only loan growth, but also reinforces it for the potential credit risks that still exist from an uncertain local economic environment. This was done even in light of the overall asset quality improvement stemming from a $6 million reduction in non-performing assets over the past year.  The allowance for loan losses was at 1.83% of total loans at March 31, 2013, down from the charge-offs taken and the loan growth booked, when compared to the 1.97% of total loans at March 31, 2012.

 

Total other income recorded for the quarter ended March 31, 2013 was $2.0 million compared to $2.1 million for the same quarter in 2012. The decrease was primarily from $135 thousand less gains from securities sold, $61 thousand less loan service charges and $22 thousand lower trust and financial services fees realized during 2013. These were offset by growth attributed to a $109 thousand increase in gains from loans sold and a combined increase of $74 thousand from additional deposit service charge fees, rental income and interchange fees recognized within other income during 2013.

 

 
 

 

 

Total other operating expense increased by $132 thousand, or 3%, to $4.8 million from $4.7 million for the quarters ended March 31, 2013 and 2012, respectively. The other operating expenses primarily increased from $117 thousand more salaries and benefits cost, $100 thousand additional advertising and marketing expense, $74 thousand higher loan collection expenses and $71 thousand added costs from carrying other real estate owned.

 

The Company’s assets increased $6.6 million to total $608.2 million at March 31, 2013 compared to the $601.5 million of total assets at December 31, 2012. This asset growth resulted from $15.8 million, or 4%, growth in net loans, offset by the $8.5 million reduction in loans held-for-sale and $1.5 million fewer securities, funded from the $5.5 million increase in short-term borrowings with repurchase customers plus a $0.8 million increase in shareholders’ equity.

 

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

 

Forward-looking statements

 

Certain of the matters discussed in this Quarterly Report on Form 10-Q 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 and the prolonged economic malaise on current customers, specifically the effect of the economy on loan customers’ ability to repay loans;
§the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;
§the impact of new laws and regulations, including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations promulgated there under;
§possible impacts of the capital and liquidity requirements proposed by the Basel III standards and other regulatory pronouncements, regulations and rules;
§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 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;
§acquisitions and integration of acquired businesses;
§the failure of assumptions underlying the establishment of reserves for loan losses and estimations of values of collateral and various financial assets and liabilities;
§volatilities in the securities markets;
§slow economic conditions;
§acts of war or terrorism; and
§disruption of credit and equity markets.

 

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

 

 
 

 

FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands)
         
At Period End:  March 31, 2013   December 31, 2012 
Assets          
   Total cash and cash equivalents  $20,730   $21,846 
   Investment securities   99,496    100,730 
   Federal Home Loan Bank Stock   2,238    2,624 
   Loans and leases   450,677    444,101 
   Allowance for loan losses   (8,236)   (8,972)
   Premises and equipment, net   13,876    14,127 
   Life insurance cash surrender value   10,146    10,065 
   Other assets   19,244    17,004 
           
      Total assets  $608,171   $601,525 
           
Liabilities          
   Non-interest-bearing deposits  $122,855   $126,035 
   Interest-bearing deposits   391,611    388,625 
       Total deposits   514,466    514,660 
   Short-term borrowings   13,593    8,056 
   Long-term debt   16,000    16,000 
   Other liabilities   4,333    3,863 
      Total liabilities   548,392    542,579 
           
   Shareholders' equity   59,779    58,946 
           
      Total liabilities and shareholders' equity  $608,171   $601,525 
           
           
Average Year-To-Date Balances:   March 31, 2013    December 31, 2012 
Assets          
   Total cash and cash equivalents  $29,939   $37,022 
   Investment securities   104,582    112,712 
   Loans and leases, net   441,632    418,287 
   Premises and equipment, net   14,042    13,943 
   Other assets   27,761    26,522 
           
      Total assets  $617,956   $608,486 
           
Liabilities          
   Non-interest-bearing deposits  $130,864   $111,458 
   Interest-bearing deposits   390,113    406,948 
       Total deposits   520,977    518,406 
   Short-term borrowings and long-term debt   33,616    29,794 
   Other liabilities   3,811    3,390 
      Total liabilities   558,404    551,590 
           
   Shareholders' equity   59,552    56,896 
           
      Total liabilities and shareholders' equity  $617,956   $608,486 

 

 
 

 

FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Statements of Income
(dollars in thousands)
   Three Months Ended         
   Mar. 31, 2013   Mar. 31, 2012             
Interest income                         
    Loans and leases  $5,469   $5,416                
    Securities and other   499    636                
                          
       Total interest income   5,968    6,052                
                          
 Interest expense                         
    Deposits   515    684                
    Borrowings and debt   220    254                
                          
       Total interest expense   735    938                
                          
       Net interest income   5,233    5,114                
                          
    Provision for loan losses   550    700                
    OTTI - credit losses   -    105                
    Other income   2,033    2,056                
    Other expenses   4,845    4,713                
    Provision for income taxes   477    395                
       Net income  $1,394   $1,257                
                          
                          
    

 Three Months Ended

 
    Mar. 31, 2013    Dec. 31, 2012    Sep. 30, 2012    Jun. 30, 2012    Mar. 31, 2012 
Interest income                         
    Loans and leases  $5,469   $5,455   $5,420   $5,408   $5,416 
    Securities and other   499    522    554    583    636 
                          
       Total interest income   5,968    5,977    5,974    5,991    6,052 
                          
 Interest expense                         
    Deposits   515    553    585    617    684 
    Borrowings and debt   220    221    219    221    254 
                          
       Total interest expense   735    774    804    838    938 
                          
       Net interest income   5,233    5,203    5,170    5,153    5,114 
                          
    Provision for loan losses   550    1,250    700    600    700 
    OTTI - credit losses   -    -    -    31    105 
    Other income   2,033    1,818    1,868    1,903    2,056 
    Other expenses   4,845    4,594    4,453    4,678    4,713 
    Provision for income taxes   477    248    486    430    395 
       Net income  $1,394   $929   $1,399   $1,317   $1,257 

 

 

 
 

 

 

FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands)
                     
At Period End:  Mar. 31, 2013   Dec. 31, 2012   Sep. 30, 2012   Jun. 30, 2012   Mar. 31, 2012 
Assets                         
   Total cash and cash equivalents  $20,730   $21,846   $45,622   $22,791   $65,681 
   Investment securities   99,496    100,730    103,135    110,809    115,367 
   Federal Home Loan Bank Stock   2,238    2,624    3,019    3,339    3,514 
   Loans and leases   450,677    444,101    430,914    426,118    422,272 
   Allowance for loan losses   (8,236)   (8,972)   (8,142)   (8,151)   (8,320)
   Premises and equipment, net   13,876    14,127    14,270    13,686    13,942 
   Life insurance cash surrender value   10,146    10,065    9,984    9,901    9,819 
   Other assets   19,244    17,004    16,645    17,243    17,005 
                          
      Total assets  $608,171   $601,525   $615,447   $595,736   $639,280 
                          
Liabilities                         
   Non-interest-bearing deposits  $122,855   $126,035   $114,653   $110,283   $129,041 
   Interest-bearing deposits   391,611    388,625    409,467    401,787    419,124 
       Total deposits   514,466    514,660    524,120    512,070    548,165 
   Short-term borrowings   13,593    8,056    14,069    8,106    17,238 
   Long-term debt   16,000    16,000    16,000    16,000    16,000 
   Other liabilities   4,333    3,863    2,705    2,997    2,900 
      Total liabilities   548,392    542,579    556,894    539,173    584,303 
                          
   Shareholders' equity   59,779    58,946    58,553    56,563    54,977 
                          
      Total liabilities and shareholders' equity  $608,171   $601,525   $615,447   $595,736   $639,280 
                          
                          
Average Quarterly Balances:   Mar. 31, 2013    Dec. 31, 2012    Sep. 30, 2012    Jun. 30, 2012    Mar. 31, 2012 
Assets                         
   Total cash and cash equivalents  $29,939   $27,674   $32,254   $32,037   $56,277 
   Investment securities   104,582    107,021    111,112    118,721    114,076 
   Loans and leases, net   441,632    426,040    423,250    416,755    406,962 
   Premises and equipment, net   14,042    14,266    14,132    13,855    13,516 
   Other assets   27,761    26,662    26,938    26,680    25,801 
                          
      Total assets  $617,956   $601,663   $607,686   $608,048   $616,632 
                          
Liabilities                         
   Non-interest-bearing deposits  $130,864   $117,025   $111,781   $109,785   $107,175 
   Interest-bearing deposits   390,113    393,319    407,335    411,088    416,195 
       Total deposits   520,977    510,344    519,116    520,873    523,370 
   Short-term borrowings and long-term debt   33,616    28,527    27,616    27,954    35,117 
   Other liabilities   3,811    3,549    3,390    3,266    3,355 
      Total liabilities   558,404    542,420    550,122    552,093    561,842 
                          
   Shareholders' equity   59,552    59,243    57,564    55,955    54,790 
                          
      Total liabilities and shareholders' equity  $617,956   $601,663   $607,686   $608,048   $616,632 

 

 
 

 

FIDELITY D & D BANCORP, INC.
Selected Financial Ratios and Other Data
             
   Three Months Ended 
   Mar. 31, 2013   Dec. 31, 2012   Sep. 30, 2012   Jun. 30, 2012   Mar. 31, 2012 
Selected returns and financial ratios                         
   Diluted earnings per share  $0.60   $0.40   $0.61   $0.57   $0.56 
   Dividends per share  $0.25   $0.25   $0.25   $0.25   $0.25 
   Yield on interest-earning assets (FTE)   4.36%   4.41%   4.36%   4.41%   4.39%
   Cost of interest-bearing liabilities   0.70%   0.73%   0.74%   0.77%   0.84%
   Net interest spread   3.66%   3.68%   3.62%   3.64%   3.55%
   Net interest margin   3.84%   3.86%   3.79%   3.81%   3.73%
   Return on average assets   0.91%   0.61%   0.92%   0.87%   0.82%
   Return on average equity   9.49%   6.24%   9.67%   9.47%   9.23%
   Efficiency ratio   66.17%   64.44%   61.74%   64.54%   62.89%
   Expense ratio   1.92%   1.88%   1.69%   1.84%   1.74%
                          
                          
Other financial data   Three Months Ended 
    Mar. 31, 2013    Dec. 31, 2012    Sep. 30, 2012    Jun. 30, 2012    Mar. 31, 2012 
   Book value per share  $25.52   $25.37   $25.37   $24.69   $24.18 
   Equity to assets   9.83%   9.80%   9.51%   9.49%   8.60%
   Allowance for loan losses to:                         
      Total loans   1.83%   2.02%   1.89%   1.91%   1.97%
      Non-accrual loans   0.85x   0.74x   0.65x   0.60x   0.65x
   Non-accrual loans to total loans   2.16%   2.73%   2.89%   3.16%   3.04%
   Non-performing assets to total assets   2.47%   2.94%   2.72%   3.70%   3.32%