DUNMORE, Pa., July 31, 2013 /PRNewswire/ -- 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, 2013 of
$1.5 million, an $0.2 million, or 15%, increase compared to the
same 2012 quarter. Earnings improvement occurred by
maintaining the level of net interest income from loan growth,
while producing more other income and incurring less operating
expenses over the previous year's second quarter. The added
revenue improved the return on average assets (ROA) to 1.00% for
the second quarter of 2013 compared to 0.87% for the same 2012
quarter. Earnings per share on a diluted basis were
$0.64 and $0.57 for the three months ended June 30, 2013 and 2012, respectively.
"We are all very pleased with the results of the second quarter
of 2013 which are a direct reflection of management's continued
focus on and execution of its strategic plan. Asset quality
showed a marked improvement while also achieving solid loan
growth," stated Daniel J.
Santaniello, President and Chief Executive Officer.
"Through a disciplined approach, both margin and expenses remained
constant during these economic conditions while, revenue increased
primarily from diversifying non-interest income sources."
Net income for the six months ended June
30, 2013 was $2.9 million, an
increase of $0.3 million, or 13%,
compared to net income of $2.6
million for the six months ended June
30, 2012. The current year-to-date period earnings
improvement occurred from producing more revenue, through increased
net interest income and other income, which more than off-set
higher provision for loan losses, while holding other expenses flat
compared to the prior year-to-date period. ROA was 0.96% for
the six months ended June 30, 2013
compared to 0.85% for the same 2012 period. Earnings per
share were $1.24 and $1.13 for the six months ended June 30, 2013 and 2012, respectively.
The Company's assets increased $13.7
million, or 2%, to total $615.2
million at June 30, 2013 from
$601.5 million at December 31, 2012. The growth resulted
primarily from adding $27.1 million
in net loan balances by deploying excess cash balances, sold loans
and investment portfolio run-off of $9.2
million, $5.2 million and
$4.2 million, respectively, plus
$4.9 million in deposit growth during
the first half of 2013.
Net interest income was preserved at $5.2
million for the quarters ended June
30, 2013 and 2012. The redeployment of lower yielding
cash and securities run-off into $34.7
million average balance loan growth while maintaining
average balance of earning assets mitigated the effect lower
interest rates had on interest income earnings. This coupled
with the $13.0 million increase in
non-interest bearing deposits and the interest expense savings from
the $20.7 million reduction in
interest-bearing deposits produced favorable results to stop net
interest income erosion. As a result, net interest income
expanded $27 thousand, or 1% in the
second quarter of 2013 compared to the year ago period. This
resulted from an improved net interest margin of 3.84% for the
second quarter of 2013 compared to 3.81% for same 2012 period.
Net interest income increased $146
thousand, or 1%, to $10.4
million for the six months ended June
30, 2013 from $10.3 million
recorded during the same period of 2012. Net interest margin
was 3.84% during the first half of 2013 compared to 3.77% during
the first half of 2012, an improvement of 7 basis points from
lowering rates on interest-bearing liabilities by 10 basis points
but, more so, the redeployment within average earning assets base,
stemming from the average balance growth of $34.7 million in loans.
The provision for loan losses was $600
thousand for both the second quarter ending June 30, 2013 and 2012. Provision for loan
losses was $1.2 million for the six
months ending June 30, 2013, as
compared to $1.3 million for the same
2012 period. The allowance for loan losses was 1.78% of total
loans at June 30, 2013, down from
1.91% at June 30, 2012 due to both
charge-offs realized and pay-offs received that reduced the overall
level of non-performing loans.
Total other income recorded for the quarter ended June 30, 2013 was $2.1
million compared with $1.9
million for the same quarter in 2012. The increase in
other income was primarily due to service charges and fee
collection improvement from reoccurring traditional banking
services, partially offset by a $44
thousand reduction in total gains recognized from the sale
of loans.
Total other income for the six months ended June 30, 2013 was $4.1
million compared to $4.0
million for the same period in 2012. The revenue
increase in the comparative periods resulted primarily from
reoccurring banking service charges and fees, including
$65 thousand more gains from the sale
of loans, partially reduced by the $133
thousand lower amount of total gains recognized from
investment securities for the six months ended June 30, 2013 compared to the same 2012 six month
period.
Total other operating expenses were $4.6
million compared to $4.7
million for the quarters ending June
30, 2013 and 2012, respectively. The other operating
expenses declined primarily from a $57
thousand lower loss on loan reacquisition, $55 thousand fewer collection and ORE costs,
$37 thousand less in professional
services, and a $36 thousand refund
from a successful sales-tax appeal, partially off-set by
$128 thousand more salary and benefit
expenses recognized during the second quarter 2013.
Total other operating expenses were $9.5
million each for the six months ending June 30, 2013 and 2012. The current period
included $245 thousand more salary
and benefit expenses, $72 thousand
additional advertising and marketing costs and $87 thousand greater collection and ORE costs,
almost off-set by $94 thousand less
in professional services, $44
thousand lower premises and equipment expenses and the
one-time $236 thousand long-term debt
prepayment fee that only incurred in 2012.
Fidelity D & D Bancorp, Inc. serves Lackawanna and Luzerne Counties through The Fidelity Deposit
and Discount Bank's 11 community banking office locations,
including wealth management assistance through providing fiduciary
activities with the Bank's full trust powers; as well as offering a
full array of asset management services. 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:
|
June 30,
2013
|
December 31,
2012
|
Assets
|
|
|
Total
cash and cash equivalents
|
$
15,266
|
$
21,846
|
Investment securities
|
96,466
|
100,730
|
Federal
Home Loan Bank Stock
|
3,214
|
2,624
|
Loans
and leases
|
465,351
|
444,101
|
Allowance for loan losses
|
(8,296)
|
(8,972)
|
Premises
and equipment, net
|
13,802
|
14,127
|
Life
insurance cash surrender value
|
10,231
|
10,065
|
Other
assets
|
19,141
|
17,004
|
|
|
|
Total
assets
|
$
615,175
|
$
601,525
|
|
|
|
Liabilities
|
|
|
Non-interest-bearing deposits
|
$
127,268
|
$
126,035
|
Interest-bearing deposits
|
392,255
|
388,625
|
Total
deposits
|
519,523
|
514,660
|
Short-term borrowings
|
16,199
|
8,056
|
Long-term debt
|
16,000
|
16,000
|
Other
liabilities
|
3,550
|
3,863
|
Total
liabilities
|
555,272
|
542,579
|
|
|
|
Shareholders' equity
|
59,903
|
58,946
|
|
|
|
Total liabilities
and shareholders' equity
|
$
615,175
|
$
601,525
|
|
|
|
|
|
|
Average
Year-To-Date Balances:
|
June 30,
2013
|
December 31,
2012
|
Assets
|
|
|
Total
cash and cash equivalents
|
$
21,702
|
$
37,022
|
Investment securities
|
103,452
|
112,712
|
Loans
and leases, net
|
446,183
|
418,287
|
Premises
and equipment, net
|
13,939
|
13,943
|
Other
assets
|
28,103
|
26,522
|
|
|
|
Total
assets
|
$
613,379
|
$
608,486
|
|
|
|
Liabilities
|
|
|
Non-interest-bearing deposits
|
$
126,812
|
$
111,458
|
Interest-bearing deposits
|
390,253
|
406,948
|
Total
deposits
|
517,065
|
518,406
|
Short-term borrowings and long-term debt
|
32,401
|
29,794
|
Other
liabilities
|
3,734
|
3,390
|
Total
liabilities
|
553,200
|
551,590
|
|
|
|
Shareholders' equity
|
60,179
|
56,896
|
|
|
|
Total liabilities
and shareholders' equity
|
$
613,379
|
$
608,486
|
|
|
|
FIDELITY D & D
BANCORP, INC.
|
Unaudited Condensed
Consolidated Statements of Income
|
(dollars in
thousands)
|
|
Three Months
Ended
|
Six Months
Ended
|
|
|
Jun. 30,
2013
|
Jun. 30,
2012
|
Jun. 30,
2013
|
Jun. 30,
2012
|
|
Interest
income
|
|
|
|
|
|
Loans and leases
|
$
5,456
|
$
5,408
|
$
10,925
|
$
10,824
|
|
Securities and other
|
456
|
583
|
955
|
1,219
|
|
|
|
|
|
|
|
Total
interest income
|
5,912
|
5,991
|
11,880
|
12,043
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
|
|
Deposits
|
511
|
617
|
1,026
|
1,301
|
|
Borrowings and debt
|
221
|
221
|
441
|
475
|
|
|
|
|
|
|
|
Total
interest expense
|
732
|
838
|
1,467
|
1,776
|
|
|
|
|
|
|
|
Net interest
income
|
5,180
|
5,153
|
10,413
|
10,267
|
|
|
|
|
|
|
|
Provision for loan losses
|
600
|
600
|
1,150
|
1,300
|
|
OTTI - credit losses
|
-
|
31
|
-
|
136
|
|
Other income
|
2,051
|
1,934
|
4,119
|
4,028
|
|
Other expenses
|
4,606
|
4,709
|
9,487
|
9,460
|
|
Provision for income taxes
|
512
|
430
|
988
|
825
|
|
Net
income
|
$
1,513
|
$
1,317
|
$
2,907
|
$
2,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Jun. 30,
2013
|
Mar. 31,
2013
|
Dec. 31,
2012
|
Sep. 30,
2012
|
Jun. 30,
2012
|
Interest
income
|
|
|
|
|
|
Loans and leases
|
$
5,456
|
$
5,469
|
$
5,455
|
$
5,420
|
$
5,408
|
Securities and other
|
456
|
499
|
522
|
554
|
583
|
|
|
|
|
|
|
Total
interest income
|
5,912
|
5,968
|
5,977
|
5,974
|
5,991
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
|
|
Deposits
|
511
|
515
|
553
|
585
|
617
|
Borrowings and debt
|
221
|
220
|
221
|
219
|
221
|
|
|
|
|
|
|
Total
interest expense
|
732
|
735
|
774
|
804
|
838
|
|
|
|
|
|
|
Net interest
income
|
5,180
|
5,233
|
5,203
|
5,170
|
5,153
|
|
|
|
|
|
|
Provision for loan losses
|
600
|
550
|
1,250
|
700
|
600
|
OTTI - credit losses
|
-
|
-
|
-
|
-
|
31
|
Other income
|
2,051
|
2,068
|
1,866
|
1,893
|
1,934
|
Other expenses
|
4,606
|
4,880
|
4,642
|
4,478
|
4,709
|
Provision for income taxes
|
512
|
477
|
248
|
486
|
430
|
Net
income
|
$
1,513
|
$
1,394
|
$
929
|
$
1,399
|
$
1,317
|
|
|
|
|
|
|
FIDELITY D
& D BANCORP, INC.
|
Unaudited Condensed
Consolidated Balance Sheets
|
(dollars in
thousands)
|
|
|
|
|
|
|
At Period
End:
|
Jun. 30,
2013
|
Mar. 31,
2013
|
Dec. 31,
2012
|
Sep. 30,
2012
|
Jun. 30,
2012
|
Assets
|
|
|
|
|
|
Total
cash and cash equivalents
|
$
15,266
|
$
20,730
|
$
21,846
|
$
45,622
|
$
22,791
|
Investment securities
|
96,466
|
99,496
|
100,730
|
103,135
|
110,809
|
Federal
Home Loan Bank Stock
|
3,214
|
2,238
|
2,624
|
3,019
|
3,339
|
Loans
and leases
|
465,351
|
450,677
|
444,101
|
430,914
|
426,118
|
Allowance for loan losses
|
(8,296)
|
(8,236)
|
(8,972)
|
(8,142)
|
(8,151)
|
Premises
and equipment, net
|
13,802
|
13,876
|
14,127
|
14,270
|
13,686
|
Life
insurance cash surrender value
|
10,231
|
10,146
|
10,065
|
9,984
|
9,901
|
Other
assets
|
19,141
|
19,244
|
17,004
|
16,645
|
17,243
|
|
|
|
|
|
|
Total
assets
|
$
615,175
|
$
608,171
|
$
601,525
|
$
615,447
|
$
595,736
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Non-interest-bearing deposits
|
$
127,268
|
$
122,855
|
$
126,035
|
$
114,653
|
$
110,283
|
Interest-bearing deposits
|
392,255
|
391,611
|
388,625
|
409,467
|
401,787
|
Total
deposits
|
519,523
|
514,466
|
514,660
|
524,120
|
512,070
|
Short-term borrowings
|
16,199
|
13,593
|
8,056
|
14,069
|
8,106
|
Long-term debt
|
16,000
|
16,000
|
16,000
|
16,000
|
16,000
|
Other
liabilities
|
3,550
|
4,333
|
3,863
|
2,705
|
2,997
|
Total
liabilities
|
555,272
|
548,392
|
542,579
|
556,894
|
539,173
|
|
|
|
|
|
|
Shareholders' equity
|
59,903
|
59,779
|
58,946
|
58,553
|
56,563
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
615,175
|
$
608,171
|
$
601,525
|
$
615,447
|
$
595,736
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Quarterly
Balances:
|
Jun. 30,
2013
|
Mar. 31,
2013
|
Dec. 31,
2012
|
Sep. 30,
2012
|
Jun. 30,
2012
|
Assets
|
|
|
|
|
|
Total
cash and cash equivalents
|
$
13,554
|
$
29,939
|
$
27,674
|
$
32,254
|
$
32,037
|
Investment securities
|
102,335
|
104,582
|
107,021
|
111,112
|
118,721
|
Loans
and leases, net
|
450,684
|
441,632
|
426,040
|
423,250
|
416,755
|
Premises
and equipment, net
|
13,838
|
14,042
|
14,266
|
14,132
|
13,855
|
Other
assets
|
28,441
|
27,761
|
26,662
|
26,938
|
26,680
|
|
|
|
|
|
|
Total
assets
|
$
608,852
|
$
617,956
|
$
601,663
|
$
607,686
|
$
608,048
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Non-interest-bearing deposits
|
$
122,805
|
$
130,864
|
$
117,025
|
$
111,781
|
$
109,785
|
Interest-bearing deposits
|
390,392
|
390,113
|
393,319
|
407,335
|
411,088
|
Total
deposits
|
513,197
|
520,977
|
510,344
|
519,116
|
520,873
|
Short-term borrowings and long-term debt
|
31,199
|
33,616
|
28,527
|
27,616
|
27,954
|
Other
liabilities
|
3,657
|
3,811
|
3,549
|
3,390
|
3,266
|
Total
liabilities
|
548,053
|
558,404
|
542,420
|
550,122
|
552,093
|
|
|
|
|
|
|
Shareholders' equity
|
60,799
|
59,552
|
59,243
|
57,564
|
55,955
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
608,852
|
$
617,956
|
$
601,663
|
$
607,686
|
$
608,048
|
|
|
|
|
|
|
FIDELITY D & D
BANCORP, INC.
|
Selected Financial
Ratios and Other Data
|
|
|
|
|
|
Three Months
Ended
|
|
Jun. 30,
2013
|
Mar. 31,
2013
|
Dec. 31,
2012
|
Sep. 30,
2012
|
Jun. 30,
2012
|
Selected returns
and financial ratios
|
|
|
|
|
|
Diluted
earnings per share
|
$
0.64
|
$
0.60
|
$
0.40
|
$
0.61
|
$
0.57
|
Dividends per share
|
$
0.25
|
$
0.25
|
$
0.25
|
$
0.25
|
$
0.25
|
Yield on
interest-earning assets (FTE)
|
4.37%
|
4.36%
|
4.41%
|
4.36%
|
4.41%
|
Cost of
interest-bearing liabilities
|
0.70%
|
0.70%
|
0.73%
|
0.74%
|
0.77%
|
Net
interest spread
|
3.67%
|
3.66%
|
3.68%
|
3.62%
|
3.64%
|
Net
interest margin
|
3.84%
|
3.84%
|
3.86%
|
3.79%
|
3.81%
|
Return
on average assets
|
1.00%
|
0.91%
|
0.61%
|
0.92%
|
0.87%
|
Return
on average equity
|
9.98%
|
9.49%
|
6.24%
|
9.67%
|
9.47%
|
Efficiency ratio
|
61.90%
|
66.17%
|
64.44%
|
61.74%
|
64.54%
|
Expense
ratio
|
1.69%
|
1.92%
|
1.88%
|
1.69%
|
1.84%
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
Jun. 30,
2013
|
Jun. 30,
2012
|
|
|
|
Diluted
earnings per share
|
$
1.24
|
$
1.13
|
|
|
|
Dividends per share
|
$
0.50
|
$
0.50
|
|
|
|
Yield on
interest-earning assets (FTE)
|
4.37%
|
4.40%
|
|
|
|
Cost of
interest-bearing liabilities
|
0.70%
|
0.80%
|
|
|
|
Net
interest spread
|
3.67%
|
3.60%
|
|
|
|
Net
interest margin
|
3.84%
|
3.77%
|
|
|
|
Return
on average assets
|
0.96%
|
0.85%
|
|
|
|
Return
on average equity
|
9.74%
|
9.35%
|
|
|
|
Efficiency ratio
|
64.02%
|
63.72%
|
|
|
|
Expense
ratio
|
1.81%
|
1.80%
|
|
|
|
|
|
|
|
|
|
Other financial
data
|
Three Months
Ended
|
|
Jun. 30,
2013
|
Mar. 31,
2013
|
Dec. 31,
2012
|
Sep. 30,
2012
|
Jun. 30,
2012
|
Book
value per share
|
$
25.42
|
$
25.52
|
$
25.37
|
$
25.37
|
$
24.69
|
Equity
to assets
|
9.74%
|
9.83%
|
9.80%
|
9.51%
|
9.49%
|
Allowance for loan losses to:
|
|
|
|
|
|
Total loans
|
1.78%
|
1.83%
|
2.02%
|
1.89%
|
1.91%
|
Non-accrual
loans
|
1.24x
|
0.85x
|
0.74x
|
0.65x
|
0.60x
|
Non-accrual loans to total loans
|
1.44%
|
2.16%
|
2.73%
|
2.89%
|
3.16%
|
Non-performing assets to total assets
|
2.03%
|
2.47%
|
2.94%
|
2.72%
|
3.70%
|
|
|
|
|
|
|
SOURCE Fidelity D & D Bancorp, Inc.