Fidelity D & D Bancorp, Inc. Reports First Quarter 2010 Financial Results
DUNMORE, Pa., April 29 /PRNewswire-FirstCall/ -- 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 |
0.70x |
0.61x |
0.85x |
0.70x |
0.70x |
|
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% |
|
SOURCE Fidelity D & D Bancorp, Inc.
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