FIDELITY D & D BANCORP INC - FORM 8-K - EX-99.1

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8-K - 8-K - FIDELITY D & D BANCORP INC	fdbc-20150429x8k.htm

Exhibit 99.1

FIDELITY D & D BANCORP, INC.

FOR IMMEDIATE RELEASE

Date: April 29, 2015

Contacts:


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

FIDELITY D & D BANCORP, INC.

REPORTS FIRST QUARTER 2015 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, 2015 of $1.6 million, an improvement of $0.1 million, or 8%, compared to $1.5 million for the first quarter of 2014. Net interest income growth, along with a lower provision for loan losses, more than offset the non-interest expenses increase, when compared to the prior year first quarter. Earnings per share on a diluted basis for the quarter were $0.63 and $0.61 for the three months ended March 31, 2015 and 2014, respectively.

“Fidelity’s strong first quarter financial results set the stage for a successful 2015,” stated Daniel J. Santaniello, President and Chief Executive Officer. “The growth in earnings and core deposits, strong mortgage loan originations, and improved asset quality are the highlights for the first quarter. I attribute the continued improvement to each and every Fidelity Banker’s commitment to provide value through a customer-centric approach.”

Net interest income increased $312 thousand, or 6%, to $5.6 million for the quarter ended March 31, 2015, from $5.3 million recorded during the first quarter of 2014. Net interest income earned was higher, despite the 19 basis point decline in yield on interest earning assets outpacing the 7 basis point savings on rates of interest-bearing liabilities. Additional revenue from a $36 million and $5 million larger average balance loan and investment portfolio, respectively, pushed interest income up by $302 thousand. The Company also experienced lower interest costs, due primarily from a $6 million lower debt level and the continued lower repricing of certificates-of-deposits. This more than offset the added interest expense from $33 million and $27 million growth in money market and interest-bearing checking account balances, respectively, netting to an $11 thousand interest expense savings. Cost of funds further declined 5 basis points from these interest savings plus the $5 million growth in average non-interest bearing deposits. The earning asset growth at lower yields pressured spread lower, but was moderated by interest cost savings, which reduced net interest margin by 15 basis points to 3.64% for the first quarter of 2015, compared to 3.79% for the same 2014 quarter.

A provision for loan losses of $150 thousand was recorded during the first quarter of 2015 compared to $300 thousand required for the same 2014 period. The provision for loan losses funded the allowance for loan losses for the loan growth experienced during the quarter. Improved asset quality allowed for the overall reduction in provision for loan losses compared to last year’s first quarter. The allowance for loan losses was 1.77% of total loans at March 31, 2015 compared to the 1.84% of total loans at March 31, 2014.

Total other income recorded for the quarters ended March 31, 2015 and 2014 was $1.7 million. Revenue growth occurred with a $101 thousand increase in gains from loans sold, increases of $59 thousand from loan service charges, $53 thousand in fiduciary fees and $12 thousand net loan servicing fees recognized during the first quarter of 2015, more than offset the $205 thousand fewer gains from the sale of securities recognized compared to the first quarter of 2014.

Total other operating expense increased $302 thousand, or 6%, to $5.1 million from $4.8 million for the quarters ended March 31, 2015 and 2014, respectively. The other operating expenses primarily increased from $177 thousand more salary and employee benefits plus increases of $55 thousand from advertising and marketing, $34 thousand in additional foreclosed asset expenses, $24 thousand on added equipment depreciation and $20 thousand in professional expenses incurred during the 2015 period.

The Company’s assets increased $26.0 million to total $702.5 million at March 31, 2015 compared to $676.5 million of total assets at December 31, 2014. This asset growth resulted from $4.2 million added loans and leases and $28.6 million in securities; funded from utilizing $6.9 million in cash plus the $10.3 million increase in interest-bearing deposits, $4.5 million additional non-interest-bearing deposits and $9.8 million more short-term borrowings with repurchase agreement customers, plus a $1.3 million increase in shareholders’ equity.

Fidelity D & D Bancorp, Inc. has built a strong history as trusted advisors to the customers served by The Fidelity Deposit and Discount Bank, and is proud to be an active member of the community of Northeastern Pennsylvania. The Company serves Lackawanna and Luzerne Counties through The Fidelity Deposit and Discount Bank’s 11 community banking office locations providing personal and business banking products and services, including wealth management assistance through fiduciary activities with the Bank’s full trust powers; as well as offering a full array of asset management services. The Bank provides 24 hour, 7 day a week service to customers through branch offices, online at www.bankatfidelity.com, and through the Customer Care Center at 800-388-4380. 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 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;

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;

impacts of the new capital and liquidity requirements of the Basel III standards and other regulatory pronouncements, regulations and rules;

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

effects of short- and long-term federal budget and tax negotiations and their effect on economic and business conditions;

the effect of changes in accounting policies and practices, as may be adopted by banking 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 and lease losses and estimations of values of collateral and various financial assets and liabilities;

volatility in the securities markets;

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, 2015		December 31, 2014
Assets
Total cash and cash equivalents	$	18,983	$	25,851
Investment securities		126,481		97,896
Federal Home Loan Bank Stock		1,291		1,306
Loans and leases		520,855		516,661
Allowance for loan losses		(9,208)		(9,173)
Premises and equipment, net		14,931		14,846
Life insurance cash surrender value		10,825		10,741
Other assets		18,349		18,357

Total assets	$	702,507	$	676,485

Liabilities
Non-interest-bearing deposits	$	133,846	$	129,370
Interest-bearing deposits		467,896		457,574
Total deposits		601,742		586,944
Short-term borrowings		13,773		3,969
Long-term debt		10,000		10,000
Other liabilities		3,470		3,353
Total liabilities		628,985		604,266

Shareholders' equity		73,522		72,219

Total liabilities and shareholders' equity	$	702,507	$	676,485


Average Year-To-Date Balances:	March 31, 2015		December 31, 2014
Assets
Total cash and cash equivalents	$	38,192	$	22,857
Investment securities		109,588		109,166
Loans and leases, net		507,185		486,552
Premises and equipment, net		14,929		14,271
Other assets		28,861		28,013

Total assets	$	698,755	$	660,859

Liabilities
Non-interest-bearing deposits	$	132,327	$	131,691
Interest-bearing deposits		463,849		425,517
Total deposits		596,176		557,208
Short-term borrowings and long-term debt		25,794		29,949
Other liabilities		3,811		4,075
Total liabilities		625,781		591,232

Shareholders' equity		72,974		69,627

Total liabilities and shareholders' equity	$	698,755	$	660,859

FIDELITY D & D BANCORP, INC.

Unaudited Condensed Consolidated Statements of Income

(dollars in thousands)


		Three Months Ended
		Mar. 31, 2015		Mar. 31, 2014
Interest income
Loans and leases	$	5,638	$	5,407
Securities and other		666		595

Total interest income		6,304		6,002

Interest expense
Deposits		557		489
Borrowings and debt		140		218

Total interest expense		697		707

Net interest income		5,607		5,295

Provision for loan losses		(150)		(300)
Other income		1,750		1,738
Other expenses		(5,087)		(4,785)
Provision for income taxes		(547)		(492)
Net income	$	1,573	$	1,456




	Three Months Ended
		Mar. 31, 2015		Dec. 31, 2014		Sep. 30, 2014		Jun. 30, 2014		Mar. 31, 2014
Interest income
Loans and leases	$	5,638	$	5,749	$	5,656	$	5,524	$	5,407
Securities and other		666		653		639		621		595

Total interest income		6,304		6,402		6,295		6,145		6,002

Interest expense
Deposits		557		541		507		498		489
Borrowings and debt		140		218		223		223		218

Total interest expense		697		759		730		721		707

Net interest income		5,607		5,643		5,565		5,424		5,295

Provision for loan losses		(150)		(250)		(210)		(300)		(300)
Other income		1,750		2,047		1,748		1,821		1,738
Other expenses		(5,087)		(5,247)		(4,910)		(4,761)		(4,785)
Provision for income taxes		(547)		(555)		(562)		(557)		(492)
Net income	$	1,573	$	1,638	$	1,631	$	1,627	$	1,456

FIDELITY D & D BANCORP, INC.

Unaudited Condensed Consolidated Balance Sheets

(dollars in thousands)



At Period End:		Mar. 31, 2015		Dec. 31, 2014		Sep. 30, 2014		Jun. 30, 2014		Mar. 31, 2014
Assets
Total cash and cash equivalents	$	18,983	$	25,851	$	19,685	$	14,439	$	32,099
Investment securities		126,481		97,896		114,425		102,699		102,213
Federal Home Loan Bank Stock		1,291		1,306		2,282		2,954		2,176
Loans and leases		520,855		516,661		503,453		497,133		484,015
Allowance for loan losses		(9,208)		(9,173)		(9,277)		(9,029)		(8,899)
Premises and equipment, net		14,931		14,846		14,590		14,341		14,410
Life insurance cash surrender value		10,825		10,741		10,654		10,569		10,485
Other assets		18,349		18,357		18,073		17,200		17,930

Total assets	$	702,507	$	676,485	$	673,885	$	650,306	$	654,429

Liabilities
Non-interest-bearing deposits	$	133,846	$	129,370	$	134,943	$	126,008	$	132,096
Interest-bearing deposits		467,896		457,574		436,925		412,495		422,670
Total deposits		601,742		586,944		571,868		538,503		554,766
Short-term borrowings		13,773		3,969		11,225		21,872		12,327
Long-term debt		10,000		10,000		16,000		16,000		16,000
Other liabilities		3,470		3,353		3,734		4,005		3,487
Total liabilities		628,985		604,266		602,827		580,380		586,580

Shareholders' equity		73,522		72,219		71,058		69,926		67,849

Total liabilities and shareholders' equity	$	702,507	$	676,485	$	673,885	$	650,306	$	654,429


Average Quarterly Balances:		Mar. 31, 2015		Dec. 31, 2014		Sep. 30, 2014		Jun. 30, 2014		Mar. 31, 2014
Assets
Total cash and cash equivalents	$	38,192	$	31,377	$	15,766	$	19,461	$	24,831
Investment securities		109,588		115,934		111,335		106,034		103,197
Loans and leases, net		507,185		500,985		490,712		482,406		471,738
Premises and equipment, net		14,929		14,540		14,432		14,428		13,674
Other assets		28,861		29,142		28,142		27,098		27,651

Total assets	$	698,755	$	691,978	$	660,387	$	649,427	$	641,091

Liabilities
Non-interest-bearing deposits	$	132,327	$	138,644	$	131,201	$	129,069	$	127,736
Interest-bearing deposits		463,849		451,632		424,256		415,555		410,185
Total deposits		596,176		590,276		555,457		544,624		537,921
Short-term borrowings and long-term debt		25,794		25,391		30,071		31,907		32,503
Other liabilities		3,811		4,467		4,285		3,942		3,595
Total liabilities		625,781		620,134		589,813		580,473		574,019

Shareholders' equity		72,974		71,844		70,574		68,954		67,072

Total liabilities and shareholders' equity	$	698,755	$	691,978	$	660,387	$	649,427	$	641,091

FIDELITY D & D BANCORP, INC.

Selected Financial Ratios and Other Data



		Three Months Ended
		Mar. 31, 2015		Dec. 31, 2014		Sep. 30, 2014		Jun. 30, 2014		Mar. 31, 2014
Selected returns and financial ratios
Basic earnings per share	$	0.65	$	0.67	$	0.68	$	0.67	$	0.61
Diluted earnings per share	$	0.63	$	0.67	$	0.67	$	0.67	$	0.61
Dividends per share	$	0.25	$	0.35	$	0.25	$	0.25	$	0.25
Yield on interest-earning assets (FTE)		4.08%		4.12%		4.25%		4.27%		4.27%
Cost of interest-bearing liabilities		0.58%		0.63%		0.64%		0.65%		0.65%
Net interest spread		3.50%		3.49%		3.61%		3.62%		3.62%
Net interest margin		3.64%		3.65%		3.78%		3.79%		3.79%
Return on average assets		0.91%		0.94%		0.98%		1.01%		0.92%
Return on average equity		8.74%		9.04%		9.17%		9.47%		8.80%
Efficiency ratio		66.86%		62.48%		64.92%		64.68%		67.89%
Expense ratio		1.93%		1.74%		1.90%		1.87%		2.06%


Other financial data		Three Months Ended
		Mar. 31, 2015		Dec. 31, 2014		Sep. 30, 2014		Jun. 30, 2014		Mar. 31, 2014
Book value per share	$	30.13	$	29.75	$	29.37	$	28.90	$	28.13
Equity to assets		10.47%		10.68%		10.54%		10.75%		10.37%
Allowance for loan losses to:
Total loans		1.77%		1.78%		1.84%		1.82%		1.84%
Non-accrual loans		2.41x		2.18x		2.07x		2.22x		2.40x
Non-accrual loans to total loans		0.73%		0.82%		0.89%		0.82%		0.77%
Non-performing assets to total assets		1.15%		1.18%		1.09%		1.08%		1.07%

FIDELITY D & D BANCORP INC - FORM 8-K - EX-99.1 - April 29, 2015

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FIDELITY D & D BANCORP INC Reports