DUNMORE, Pa., Feb. 3 /PRNewswire-FirstCall/ -- Fidelity D & D
Bancorp, Inc. (OTC:FDBC) (BULLETIN BOARD: FDBC) , parent company of
The Fidelity Deposit and Discount Bank, reported net income for the
fourth quarter 2009 of $73,000 compared to $602,000 earned in the
fourth quarter of 2008. Earnings per share on a fully diluted basis
for the fourth quarter 2009 totaled $0.04 compared to $0.30
reported for the prior year period. "Although 2009 and the latest
quarter continue to be challenging times for our industry, we are
very pleased that we continue to exceed the current regulatory
requirements as a 'well capitalized' institution," stated Patrick
J. Dempsey, Chairman of the Board. "We are committed to sound
banking practices and it shows, such as the $26 million growth in
deposits. During the fourth quarter, our experienced management
team has focused its efforts on increased efficiencies in service
to our customers and profitability for our shareholders. We pride
ourselves on superior customer service with the most cost-effective
delivery systems." The year-over-year fourth quarter decline was
primarily the result, before tax benefit, from an increase of
$521,000 in FDIC insurance premiums, $515,000 in the provision for
loan losses as well as $510,000 additional other-than-temporary
impairment charges related to the investment in pooled trust
preferred securities. Compared to the third quarter 2009, credit
related losses narrowed with less required provision for loan
losses and fewer security impairment charges, net interest income
benefited $200,000 primarily from less interest expense due to the
payoff of long-term debt and furthermore, other operating expenses
were reduced. Net loss for the year ended December 31, 2009 was
$1,400,000, or $0.67 per share, compared to net income of
$3,636,000, or $1.76 per share, for the year ended December 31,
2008. The decline in annual earnings resulted primarily from a
$4,110,000 increase in provision for loan losses, additional
other-than-temporary impairment charges of $2,864,000, plus
increased FDIC insurance premiums of $1,046,000 and long-term debt
prepayment interest costs that reduced net interest income by
$505,000. The increases in the provision for loan losses and
impairment charges did not have a significant impact on the Bank's
available liquidity or regulatory capital ratios, which exceed the
current "well capitalized" regulatory requirements with a Total
Risk Based Capital Ratio of 11.4%, Tier I Capital Ratio of 10.1%
and Leverage Ratio of 9.7% as of December 31, 2009. Net interest
income was $5,126,000 for the quarter ended December 31, 2009, a 4%
increase compared to the $4,908,000 recorded during the same
quarter of 2008. The year-over-year earning-asset yield reduction
on interest-earning assets lagged the effect the current interest
rate environment had from lowering rates on interest-bearing
liabilities, which as a result, net interest income increased
$218,000. This net increase with a $12,405,000 reduction in average
earning assets improved net interest margin to 3.99% for the fourth
quarter of 2009, compared to 3.72% for same 2008 period. Net
interest income contracted for the year ended December 31, 2009,
totaling $19,112,000 or a $165,000 decrease from $19,277,000 for
2008. The cost reductions over the year from lowering rates on
interest-bearing liabilities kept pace with the effect the current
interest rate environment had on lowering earning-asset yields.
However, net interest income was negatively impacted by the
prepayment interest costs of $505,000 from the third quarter early
pay-off of long-term debt. Net interest margin was 3.71% and 3.60%
for 2009 and 2008, respectively. The net interest margin increase
was attributed to maintaining a stable level of net interest income
while average earning assets decreased $14,530,000. The provision
for loan losses was $1,200,000 in the fourth quarter 2009 compared
to $685,000 in the same 2008 period. The Company recorded provision
for loan losses of $5,050,000 for the 2009 year compared to
$940,000 in 2008. An increased provision was recorded from credit
quality deterioration, primarily due to internally classified
credit downgrades and commercial loan charge-offs. The ratio of
non-performing assets to total assets at December 31, 2009
increased 162 basis-points to 2.58% from 0.96% at December 31,
2008. The ratio of non-accrual loans to net loans at December 31,
2009 increased 211 basis-points to 2.91%. Net charge-offs were
$2,222,000 in 2009 and $1,019,000 in 2008. However, the allowance
for loan losses ratio to total loans was 1.75% at December 31,
2009, up 67 basis points compared to 1.08% at December 31, 2008.
The increased provision was also required to reinforce and fund the
allowance for loan losses for heightened credit risks from a
weakened economy and declining real estate values. Total other
income recorded for the quarter ended December 31, 2009 was
$682,000 compared to $1,173,000 for the same quarter in 2008. The
decrease in noninterest income was primarily due to the $542,000
other-than-temporary impairment on two pooled trust preferred
securities in the quarter ended December 31, 2009 compared to
$32,000 in the previous year's fourth quarter. The impairment
charges recognized represent the expected credit loss on these
pooled trust preferred securities. In the event further interest
deferrals and defaults take place within the pooled trust preferred
portfolio, additional other-than-temporary impairment credit losses
could be recognized through future earnings. Excluding the
impairment charges, other noninterest income was $1,224,000 for the
quarter ended December 31, 2009 compared to $1,205,000 for the
quarter ended December 31, 2008. Total other income in 2009 totaled
$2,161,000 as compared to $4,578,000 for 2008. Total other income
decreased $2,417,000 in 2009, primarily from recognizing $2,864,000
additional other-than-temporary impairment charges, $271,000 less
deposit service charge income and $178,000 in write-downs of
foreclosed assets, all partially offset by $799,000 in added gains
produced from mortgage banking services, compared to 2008.
Excluding the impairment charges, other income would have been
$5,461,000 for the year ended December 31, 2009 compared to
$5,014,000 for the year ended December 31, 2008. Total other
operating expenses increased from $4,701,000 to $4,731,000 for the
quarters ending December 31, 2008 and 2009, respectively. The other
operating expenses for the quarter increased primarily from
recognizing $521,000 in FDIC insurance premiums partially offset by
$152,000 less professional service fees and a $237,000 decline in
salary and benefit expense. Total other operating expenses
increased $1,030,000, or 6%, from $18,211,000 in 2008 to
$19,241,000 for the year ending December 31, 2009. The increased
operating expenses resulted principally from $1,046,000 higher FDIC
insurance premiums and increased depreciation expense from the
branch expansion in 2008, partially offset by less salary and
benefit and advertising expenses. Total assets as of December 31,
2009 were $556,017,000, a $19,702,000, or 3%, decrease from
$575,719,000 at December 31, 2008. This decline resulted from
continuing a deleveraging process, by utilizing proceeds from sales
of residential mortgage loans to pay down long-term debt. This
allowed the Company access to higher available liquidity and to
strengthen regulatory capital ratios. At December 31, 2009, net
total loans decreased overall by $13,083,000, or 3%, to
$423,124,000; the investment portfolio decreased $7,657,000 to
$76,530,000; total deposits increased 6%, or $25,682,000, to
$458,994,000; short-term borrowings decreased $21,597,000 to
$16,533,000 and long-term debt decreased $20,000,000 to $32,000,000
as of December 31, 2009. Total shareholders' equity declined
$3,286,000, to $45,675,000 at December 31, 2009, from retained
earnings absorbing the net loss and $2,078,000, or $1.00 per share,
of cash dividends paid. 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 through
http://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: December 31, 2009 December 31, 2008 --------------
----------------- ----------------- Assets Total cash and cash
equivalents $8,327,954 $12,771,147 Investment securities 76,529,998
84,187,579 Federal Home Loan Bank Stock 4,781,100 4,781,100 Loans
and leases 431,919,022 441,036,694 Allowance for loan losses
(7,573,603) (4,745,234) Premises and equipment, net 15,361,810
16,056,362 Life insurance cash surrender value 9,117,156 8,807,784
Other assets 17,553,834 12,823,565 ---------- ---------- Total
assets $556,017,271 $575,718,997 ============ ============
Liabilities Non-interest-bearing deposits $70,890,578 $71,442,651
Interest-bearing deposits 388,103,880 361,869,281 -----------
----------- Total deposits 458,994,458 433,311,932 Short-term
borrowings 16,533,107 38,129,704 Long-term debt 32,000,000
52,000,000 Other liabilities 2,815,159 3,316,710 ---------
--------- Total liabilities 510,342,724 526,758,346 Shareholders'
equity 45,674,547 48,960,651 ---------- ---------- Total
liabilities and shareholders' equity $556,017,271 $575,718,997
============ ============ Average Year-to-date Balances: December
31, 2009 December 31, 2008 ------------------------------
----------------- ----------------- Assets Total cash and cash
equivalents $15,812,533 $14,604,486 Investment securities
83,633,697 119,789,209 Loans and leases, net 426,927,977
416,437,846 Premises and equipment, net 15,674,301 13,803,903 Other
assets 23,227,334 19,182,727 ---------- ---------- Total assets
$565,275,842 $583,818,171 ============ ============ Liabilities
Non-interest-bearing deposits $70,285,476 $67,716,670
Interest-bearing deposits 388,304,096 371,583,475 -----------
----------- Total deposits 458,589,572 439,300,145 Short-term
borrowings and long- term debt 54,721,932 86,604,300 Other
liabilities 3,827,831 4,504,215 --------- --------- Total
liabilities 517,139,335 530,408,660 Shareholders' equity 48,136,507
53,409,511 ---------- ---------- Total liabilities and
shareholders' equity $565,275,842 $583,818,171 ============
============ FIDELITY D & D BANCORP, INC. Unaudited Condensed
Consolidated Statements of Income Three Months Ended Twelve Months
Ended ------------------ ------------------- Dec. 31, Dec. 31, Dec.
31, Dec. 31, 2009 2008 2009 2008 --------- --------- ---------
--------- Interest income Loans and leases $6,277,617 $6,911,146
$25,969,544 $27,564,288 Securities and other 895,244 1,272,950
3,939,729 6,397,146 ------- --------- --------- --------- Total
interest income 7,172,861 8,184,096 29,909,273 33,961,434 Interest
expense Deposits 1,616,269 2,454,253 7,895,576 11,118,194
Borrowings and debt 430,394 821,689 2,901,278 3,565,939 -------
------- --------- --------- Total interest expense 2,046,663
3,275,942 10,796,854 14,684,133 --------- --------- ----------
---------- Net interest income 5,126,198 4,908,154 19,112,419
19,277,301 Provision for loan losses 1,200,000 685,000 5,050,000
940,000 Other income 682,112 1,172,647 2,161,187 4,578,301 Other
expenses 4,731,054 4,700,740 19,241,125 18,210,683 (Credit)
provision for income taxes (196,008) 93,121 (1,617,314) 1,068,971
-------- ------ ---------- --------- Net income (loss) $73,264
$601,940 $(1,400,205) $3,635,948 ======= ======== ===========
========== Three Months Ended Dec. 31, Sep. 30, Jun. 30, Mar. 31,
Dec. 31, 2009 2009 2009 2009 2008 --------- --------- ---------
--------- --------- Interest income Loans and leases $6,277,617
$6,546,053 $6,470,352 $6,675,522 $6,911,146 Securities and other
895,244 907,433 985,161 1,151,891 1,272,950 ------- ------- -------
--------- --------- Total interest income 7,172,861 7,453,486
7,455,513 7,827,413 8,184,096 Interest expense Deposits 1,616,269
1,949,402 2,138,133 2,191,772 2,454,253 Borrowings and debt 430,394
1,083,252 576,811 810,821 821,689 ------- --------- ------- -------
------- Total interest expense 2,046,663 3,032,654 2,714,944
3,002,593 3,275,942 --------- --------- --------- ---------
--------- Net interest income 5,126,198 4,420,832 4,740,569
4,824,820 4,908,154 Provision for loan losses 1,200,000 3,125,000
300,000 425,000 685,000 Other income (loss) 682,112 (1,292,556)
1,458,269 1,313,362 1,172,647 Other expenses 4,731,054 5,109,295
4,738,834 4,661,942 4,700,740 (Credit) provision for income taxes
(196,008) (1,895,339) 247,851 226,182 93,121 -------- ----------
------- ------- ------ Net income (loss) $73,264 $(3,210,680)
$912,153 $825,058 $601,940 ======= =========== ======== ========
======== FIDELITY D & D BANCORP, INC. Unaudited Condensed
Consolidated Balance Sheets Dec. 31, Sep. 30, Jun. 30, At Period
End: 2009 2009 2009 -------------- --------- --------- ---------
Assets Total cash and cash equivalents $8,327,954 $17,632,181
$15,569,573 Investment securities 76,529,998 83,142,117 77,319,094
Federal Home Loan Bank Stock 4,781,100 4,781,100 4,781,100 Loans
and leases 431,919,022 428,439,731 427,432,128 Allowance for loan
losses (7,573,603) (6,724,857) (5,215,736) Premises and equipment,
net 15,361,810 15,514,474 15,544,799 Life insurance cash surrender
value 9,117,156 9,038,561 8,962,081 Other assets 17,553,834
14,176,127 16,061,169 ---------- ---------- ---------- Total assets
$556,017,271 $565,999,434 $560,454,208 ============ ============
============ Liabilities Non-interest-bearing deposits $70,890,578
$73,990,068 $69,503,187 Interest-bearing deposits 388,103,880
403,268,503 384,370,177 ----------- ----------- ----------- Total
deposits 458,994,458 477,258,571 453,873,364 Short-term borrowings
16,533,107 5,238,457 8,880,343 Long-term debt 32,000,000 32,000,000
42,000,000 Other liabilities 2,815,159 3,338,059 6,577,952
--------- --------- --------- Total liabilities 510,342,724
517,835,087 511,331,659 Shareholders' equity 45,674,547 48,164,347
49,122,549 ---------- ---------- ---------- Total liabilities and
shareholders' equity $556,017,271 $565,999,434 $560,454,208
============ ============ ============ Mar. 31, Dec. 31, At Period
End: 2009 2008 -------------- --------- --------- Assets Total cash
and cash equivalents $20,800,732 $12,771,147 Investment securities
78,949,503 84,187,579 Federal Home Loan Bank Stock 4,781,100
4,781,100 Loans and leases 426,269,981 441,036,694 Allowance for
loan losses (5,097,641) (4,745,234) Premises and equipment, net
15,871,074 16,056,362 Life insurance cash surrender value 8,886,844
8,807,784 Other assets 16,323,980 12,823,565 ---------- ----------
Total assets $566,785,573 $575,718,997 ============ ============
Liabilities Non-interest-bearing deposits $69,296,833 $71,442,651
Interest-bearing deposits 394,857,294 361,869,281 -----------
----------- Total deposits 464,154,127 433,311,932 Short-term
borrowings 10,741,814 38,129,704 Long-term debt 42,000,000
52,000,000 Other liabilities 4,427,884 3,316,710 ---------
--------- Total liabilities 521,323,825 526,758,346 Shareholders'
equity 45,461,748 48,960,651 ---------- ---------- Total
liabilities and shareholders' equity $566,785,573 $575,718,997
============ ============ Dec. 31, Sep. 30, Jun. 30, Average
Quarterly Balances: 2009 2009 2009 ---------------------------
--------- --------- --------- Assets Total cash and cash
equivalents $11,236,021 $16,582,979 $22,538,111 Investment
securities 83,854,397 85,599,872 78,537,567 Loans and leases, net
425,502,519 425,582,260 422,830,387 Premises and equipment, net
15,402,408 15,503,416 15,751,986 Other assets 23,514,032 22,723,241
23,783,296 ---------- ---------- ---------- Total assets
$559,509,377 $565,991,768 $563,441,347 ============ ============
============ Liabilities Non-interest-bearing deposits $73,674,479
$70,412,455 $68,908,889 Interest-bearing deposits 390,741,705
391,990,603 389,822,588 ----------- ----------- ----------- Total
deposits 464,416,184 462,403,058 458,731,477 Short-term borrowings
and long-term debt 44,159,415 50,011,878 52,414,957 Other
liabilities 3,465,228 4,102,285 4,372,934 --------- ---------
--------- Total liabilities 512,040,827 516,517,221 515,519,368
Shareholders' equity 47,468,550 49,474,547 47,921,979 ----------
---------- ---------- Total liabilities and shareholders' equity
$559,509,377 $565,991,768 $563,441,347 ============ ============
============ Mar. 31, Dec 31, Average Quarterly Balances: 2009 2008
--------------------------- --------- -------- Assets Total cash
and cash equivalents $12,902,871 $11,389,500 Investment securities
86,550,978 90,153,057 Loans and leases, net 433,903,852 434,511,745
Premises and equipment, net 16,048,369 15,948,591 Other assets
22,889,530 21,628,663 ---------- ---------- Total assets
$572,295,600 $573,631,556 ============ ============ Liabilities
Non-interest-bearing deposits $68,083,243 $69,665,796
Interest-bearing deposits 380,508,523 366,709,783 -----------
----------- Total deposits 448,591,766 436,375,579 Short-term
borrowings and long-term debt 72,666,503 83,447,025 Other
liabilities 3,366,585 4,093,554 --------- --------- Total
liabilities 524,624,854 523,916,158 Shareholders' equity 47,670,746
49,715,398 ---------- ---------- Total liabilities and
shareholders' equity $572,295,600 $573,631,556 ============
============ FIDELITY D & D BANCORP, INC. Selected Financial
Ratios and Other Data Three Months Ended Dec. 31, Sep. 30, Jun. 30,
Mar. 31, Dec. 31, 2009 2009 2009 2009 2008 --------- ---------
--------- --------- --------- Selected returns and financial ratios
---------------- Diluted earnings (loss) per share $0.04 $(1.55)
$0.44 $0.40 $0.30 Dividends per share $0.25 $0.25 $0.25 $0.25 $0.25
Yield on interest- earning assets (FTE) 5.52% 5.67% 5.74% 5.97%
6.13% Cost of interest- bearing liabilities 1.87% 2.72% 2.46% 2.69%
2.90% Net interest spread 3.65% 2.95% 3.28% 3.28% 3.23% Net
interest margin 3.99% 3.43% 3.70% 3.73% 3.72% Return on average
assets 0.05% -2.25% 0.65% 0.58% 0.42% Return on average equity
0.61% -25.75% 7.63% 7.02% 4.82% Efficiency ratio 72.76% 77.39%
70.16% 70.33% 73.33% Expense ratio 2.50% 2.67% 2.16% 2.15% 2.35%
Twelve Months Ended Dec. 31, Dec. 31, 2009 2008 --------- ---------
Diluted (loss) earnings per share $(0.67) $1.76 Dividends per share
$1.00 $1.00 Yield on interest- earning assets (FTE) 5.72% 6.27%
Cost of interest- bearing liabilities 2.44% 3.20% Net interest
spread 3.28% 3.07% Net interest margin 3.71% 3.60% Return on
average assets -0.25% 0.62% Return on average equity -2.91% 6.81%
Efficiency ratio 72.51% 72.98% Expense ratio 2.37% 2.25% Other data
---------- Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, 2009 2009
2009 2009 2008 --------- --------- --------- --------- ---------
Book value per share $21.69 $23.01 $23.59 $21.94 $23.73 Equity to
assets 8.21% 8.51% 8.76% 8.02% 8.50% Allowance for loan losses to:
Total loans 1.75% 1.57% 1.22% 1.20% 1.08% Non-accrual loans 0.61x
0.85x 0.70x 0.70x 1.36x Non-accrual loans to net loans 2.91% 1.87%
1.75% 1.72% 0.80% Non-performing assets to total assets 2.58% 1.81%
1.57% 1.56% 0.96% DATASOURCE: Fidelity D & D Bancorp, Inc.
CONTACT: Patrick J. Dempsey, Chairman of the Board,
+1-570-342-8281; Salvatore R. DeFrancesco, Jr., Treasurer and Chief
Financial Officer, +1-570-504-8000 Web Site:
http://www.bankatfidelity.com/
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