DUNMORE, Pa., July 22 /PRNewswire-FirstCall/ -- Fidelity D & D Bancorp, Inc. (BULLETIN BOARD: FDBC) , parent company of The Fidelity Deposit and Discount Bank, announced net income for the quarter ended June 30, 2009 of $912,000 compared to $1,204,000 for the same quarter of 2008. This net income decline resulted from increased other operating expenses principally related to an increase in FDIC insurance assessments of $321,000, which includes a special assessment of $255,000. Earnings per share on a fully diluted basis for the quarter totaled $0.44 down from $0.59 for the prior year period.
Net income for the six months ended June 30, 2009 was $1,737,000 compared to net income of $2,293,000 for the same 2008 period. Earnings per share were $0.84 and $1.11 for the six months ended June 30, 2009 and 2008, respectively. Provision for loan loss, other-than-temporary impairment, and FDIC insurance assessments, partially offset by mortgage banking gains, were the primary drivers reducing net income for the first six months of 2009 compared to the same 2008 period.
Net interest income decreased to $4,740,000 for the quarter ended June 30, 2009 from $4,943,000 recorded during the same quarter of 2008. The cost reduction from lowering rates on interest bearing liabilities lagged behind the effect the current interest rate environment had on earning asset yields. As a result, net interest income dipped $203,000, or 4%, for the second quarter of 2009. This earnings decline, in relation to the $15,496,000 reduction in average earning assets, maintained the net interest margin at 3.70% for the second quarter of 2009, compared to 3.71% for same 2008 period.
Net interest income increased to $9,565,000 for the six months ended June 30, 2009 from $9,490,000 recorded during the same quarter of 2008. Net interest margin was 3.71% during the first half of 2009 compared to 3.54% during the same 2008 period.
"While the worst of the financial crisis seems to be behind us, the current recession and the tumult in the industry has made the first half of 2009 one of the most challenging for bankers, ever," said Steven C. Ackmann, President and CEO. "Our charges for security impairments and the high FDIC fees and special FDIC assessment have been largely offset by a terrific first six months of mortgage banking. We're gratified of the stabile trends in our credit quality, but continue to monitor the loan portfolio closely to stay on top of any developing credit issues." Mr. Ackmann further stated, "Meanwhile, we continue to lend to qualified borrowers seen in the high volume of mortgage originations plus our 6% commercial loan growth in the first half. Additionally, our deposit gathering efforts produced growth of 4.8% for the first half of 2009."
The provision for loan loss was $300,000 for the second quarter and $725,000 for six month period ending June 30, 2009, as compared to $125,000 requirements for the same 2008 quarter and six month periods. A provision for loan loss was required due to internally classified credit downgrades, weakening economic conditions plus commercial loan growth during the second quarter of 2009. The allowance for loan losses was 1.22% of total loans at June 30, 2009, up from 1.00% at June 30, 2008.
Total other income recorded for the quarter ended June 30, 2009 was $1,458,000, 15% higher when compared with $1,266,000 for the same quarter in 2008. Mortgage banking produced $268,000 more gains recorded in other income during the second quarter of 2009, which more than offset fewer deposit service charges collected, when compared to other income recorded for the second quarter of 2008.
Total other income for the six months ended June 30, 2009 was $2,772,000, compared to $2,561,000 for the same period in 2008. Mortgage banking services produced $667,000 of additional gains that more than offset a $326,000 non-cash other-than-temporary impairment and $220,000 lower deposit service charge levels during the six months ended June 30, 2009 compared to the same 2008 period.
Total other operating expenses increased 7% from $4,445,000 to $4,739,000 for the quarters ending June 30, 2008 and 2009, respectively. The other operating expenses primarily increased from recognizing a $255,000 FDIC special assessment premium and added premises and equipment expenses resulting mostly from the West Scranton branch opening in August 2008.
Total other operating expenses increased 6% from $8,837,000 for the six months ending June 30, 2008 to $9,401,000 for 2009. The operating expense increase resulted from $383,000 of additional FDIC premiums, including the mentioned special assessment, and $239,000 in added occupancy expenses.
The Company's assets contracted $15,265,000 to total $560,454,000 at June 30, 2009 from $575,719,000 at December 31, 2008, caused from mortgage sale proceeds utilized to pay off debt and improve liquidity and interest rate risk positions.
Fidelity D & D Bancorp, Inc. serves Lackawanna and Luzerne Counties through The Fidelity Deposit and Discount Bank's 11 community banking office locations. 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 http://www.bankatfidelity.com/.
This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. These factors include the possibility that increased demand or prices for the company's financial services and products may not occur, changing economic, interest rate and competitive conditions, technological developments and other risks and uncertainties, including those detailed in the company's filings with the Securities and Exchange Commission.
FIDELITY D & D BANCORP, INC. Unaudited Condensed Consolidated Balance Sheets At Period End: Jun. 30, 2009 Mar. 31, 2009 Dec. 31, 2008 ---------- ---------- ---------- Assets Total cash and cash equivalents $15,569,573 $20,800,732 $12,771,147 Investment securities 77,319,094 78,949,503 84,187,579 Federal Home Loan Bank Stock 4,781,100 4,781,100 4,781,100 Loans and leases 427,432,128 426,269,981 441,036,694 Allowance for loan losses (5,215,736) (5,097,641) (4,745,234) Premises and equipment, net 15,544,799 15,871,074 16,056,362 Life insurance cash surrender value 8,962,081 8,886,844 8,807,784 Other assets 16,061,169 16,323,980 12,823,565 ---------- ---------- ---------- Total assets $560,454,208 $566,785,573 $575,718,997 ============ ============ ============ Liabilities Non-interest-bearing deposits $69,503,187 $69,296,833 $71,442,651 Interest-bearing deposits 384,370,177 394,857,294 361,869,281 ----------- ----------- ----------- Total deposits 453,873,364 464,154,127 433,311,932 Short-term borrowings 8,880,343 10,741,814 38,129,704 Long-term debt 42,000,000 42,000,000 52,000,000 Other liabilities 6,577,952 4,427,884 3,316,710 --------- --------- --------- Total liabilities 511,331,659 521,323,825 526,758,346 Shareholders' equity 49,122,549 45,461,748 48,960,651 ---------- ---------- ---------- Total liabilities and shareholders' equity $560,454,208 $566,785,573 $575,718,997 ============ ============ ============ Average Quarterly Jun. 30, 2009 Mar. 31, 2009 Dec. 31, 2008 Balances: ----------------- ------------- ------------- ------------- Assets Total cash and cash equivalents $22,538,111 $12,902,871 $11,389,500 Investment securities 78,537,567 86,550,978 90,153,057 Loans and leases, net 422,830,387 433,903,852 434,511,745 Premises and equipment, net 15,751,986 16,048,369 15,948,591 Other assets 23,783,296 22,889,530 21,628,663 ---------- ---------- ---------- Total assets $563,441,347 $572,295,600 $573,631,556 ============ ============ ============ Liabilities Non-interest-bearing deposits $68,908,889 $68,083,243 $69,665,796 Interest-bearing deposits 389,822,588 380,508,523 366,709,783 ----------- ----------- ----------- Total deposits 458,731,477 448,591,766 436,375,579 Short-term borrowings and long-term debt 52,414,957 72,666,503 83,447,025 Other liabilities 4,372,934 3,366,585 4,093,554 --------- --------- --------- Total liabilities 515,519,368 524,624,854 523,916,158 Shareholders' equity 47,921,979 47,670,746 49,715,398 ---------- ---------- ---------- Total liabilities and shareholders' equity $563,441,347 $572,295,600 $573,631,556 ============ ============ ============ Sep. 30, 2008 Jun. 30, 2008 Assets ---------- ---------- Total cash and cash equivalents $13,375,299 $16,040,466 Investment securities 87,179,549 129,244,167 Federal Home Loan Bank Stock 4,770,700 4,358,300 Loans and leases 431,293,559 418,650,319 Allowance for loan losses (4,205,566) (4,188,571) Premises and equipment, net 16,018,219 12,912,023 Life insurance cash surrender 8,728,568 8,645,597 value Other assets 12,383,084 12,901,595 ---------- ---------- Total assets $569,543,412 $598,563,896 ============ ============ Liabilities Non-interest-bearing deposits $69,619,234 $74,765,086 Interest-bearing deposits 365,812,303 373,468,779 ----------- ----------- Total deposits 435,431,537 448,233,865 Short-term borrowings 17,086,314 29,674,336 Long-term debt 62,071,661 62,285,582 Other liabilities 4,335,911 5,318,030 --------- --------- Total liabilities 518,925,423 545,511,813 Shareholders' equity 50,617,989 53,052,083 ---------- ---------- Total liabilities and shareholders' equity $569,543,412 $598,563,896 ============ ============ Average Quarterly Balances: Sep. 30, 2008 Jun. 30, 2008 -------------------------- ------------- ------------- Assets Total cash and cash equivalents $11,483,829 $12,025,621 Investment securities 117,713,728 138,429,282 Loans and leases, net 421,771,678 402,874,033 Premises and equipment, net 13,315,976 12,951,487 Other assets 19,744,364 19,358,141 ---------- ---------- Total assets $584,029,575 $585,638,564 ============ ============ Liabilities Non-interest-bearing deposits $69,069,124 $65,591,257 Interest-bearing deposits 360,426,504 378,477,080 ----------- ----------- Total deposits 429,495,628 444,068,337 Short-term borrowings and long-term debt 97,685,420 81,129,443 Other liabilities 4,466,079 5,005,066 --------- --------- Total liabilities 531,647,127 530,202,846 Shareholders' equity 52,382,448 55,435,718 ---------- ---------- Total liabilities and shareholders' equity $584,029,575 $585,638,564 ============ ============ FIDELITY D & D BANCORP, INC. Unaudited Condensed Consolidated Statements of Income Three Months Ended Six Months Ended ------------------ ---------------- Jun. 30, 2009 Jun. 30, 2008 Jun. 30, 2009 Jun. 30, 2008 ------------- ------------- ------------- ------------- Interest income Loans and leases $6,470,352 $6,860,510 $13,145,874 $13,747,720 Securities and other 985,161 1,752,556 2,137,052 3,610,178 ------- --------- --------- --------- Total interest income 7,455,513 8,613,066 15,282,926 17,357,898 Interest expense Deposits 2,138,133 2,831,400 4,329,905 6,065,136 Borrowings and debt 576,811 838,502 1,387,632 1,802,762 ------- ------- --------- --------- Total interest expense 2,714,944 3,669,902 5,717,537 7,867,898 --------- --------- --------- --------- Net interest income 4,740,569 4,943,164 9,565,389 9,490,000 Provision for loan losses 300,000 125,000 725,000 125,000 Other income 1,458,269 1,265,669 2,771,631 2,561,211 Other expenses 4,738,834 4,444,540 9,400,776 8,837,289 Provision for income taxes 247,851 435,347 474,033 796,029 ------- ------- ------- ------- Net income $912,153 $1,203,946 $1,737,211 $2,292,893 ======== ========== ========== ========== Three Months Ended ------------------ Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, 2009 2009 2008 2008 2008 -------- -------- -------- -------- --------- Interest income Loans and leases $6,470,352 $6,675,522 $6,911,146 $6,905,422 $6,860,510 Securities and other 985,161 1,151,891 1,272,950 1,514,018 1,752,556 ------- --------- --------- --------- --------- Total interest income 7,455,513 7,827,413 8,184,096 8,419,440 8,613,066 Interest expense Deposits 2,138,133 2,191,772 2,454,253 2,598,805 2,831,400 Borrowings and debt 576,811 810,821 821,689 941,488 838,502 ------- ------- ------- ------- ------- Total interest expense 2,714,944 3,002,593 3,275,942 3,540,293 3,669,902 --------- --------- --------- --------- --------- Net interest income 4,740,569 4,824,820 4,908,154 4,879,147 4,943,164 Provision for loan losses 300,000 425,000 685,000 130,000 125,000 Other income 1,458,269 1,313,362 1,172,647 844,443 1,265,669 Other expenses 4,738,834 4,661,942 4,700,740 4,672,654 4,444,540 Provision for income taxes 247,851 226,182 93,121 179,821 435,347 ------- ------- ------ ------- ------- Net income $912,153 $825,058 $601,940 $741,115 $1,203,946 ======== ======== ======== ======== ========== FIDELITY D & D BANCORP, INC. Selected Financial Ratios and Other Data ---------------------------------------- Three Months Ended ------------------ Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, 2009 2009 2008 2008 2008 Selected returns and ----- ----- ----- ----- ----- financial ratios -------------------- Diluted earnings per share $0.44 $0.40 $0.30 $0.35 $0.59 Dividends per share $0.25 $0.25 $0.25 $0.25 $0.25 Yield on interest-earning assets (FTE) 5.74% 5.97% 6.13% 6.17% 6.39% Cost of interest-bearing liabilities 2.46% 2.69% 2.90% 3.07% 3.21% Net interest spread 3.28% 3.28% 3.23% 3.10% 3.18% Net interest margin 3.70% 3.73% 3.72% 3.62% 3.71% Return on average assets 0.65% 0.58% 0.42% 0.50% 0.83% Return on average equity 7.63% 7.02% 4.82% 5.63% 8.73% Efficiency ratio 70.16% 70.33% 73.33% 74.84% 70.17% Expense ratio 2.16% 2.15% 2.35% 2.35% 2.19% Six Months Ended ---------------- Jun. 30, Jun. 30, 2009 2008 -------- -------- Diluted earnings per share $0.84 $1.11 Dividends per share $0.50 $0.50 Yield on interest-earning assets (FTE) 5.85% 6.39% Cost of interest-bearing liabilities 2.58% 3.42% Net interest spread 3.27% 2.97% Net interest margin 3.71% 3.54% Return on average assets 0.62% 0.78% Return on average equity 7.33% 8.26% Efficiency ratio 70.24% 71.85% Expense ratio 2.15% 2.15% Other data ---------- Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, 2009 2009 2008 2008 2008 ----- ----- ----- ----- ----- Book value per share $23.59 $21.94 $23.73 $24.55 $25.63 Equity to assets 8.76% 8.02% 8.50% 8.89% 8.86% Allowance for loan losses to: Total loans 1.22% 1.20% 1.08% 0.98% 1.00% Non-accrual loans 0.70x 0.70x 1.36x 1.35x 1.14x Non-accrual loans to net loans 1.75% 1.72% 0.80% 0.73% 0.88% Non-performing assets to total assets 1.57% 1.56% 0.96% 0.90% 0.79%
Fidelity D & D Bancorp, Inc.
CONTACT: Steven C. Ackmann, President and Chief Executive Officer,
+1-570-346-4156, or Salvatore R. DeFrancesco, Jr., Treasurer and Chief
Financial Officer, +1-570-504-8000
Web Site: http://www.bankatfidelity.com/
