Exhibit 99.1
FIDELITY D & D BANCORP, INC.
PRESS RELEASE
Date: April 19, 2006
Contacts:
Steven C. Ackmann | | Salvatore R. DeFrancesco, Jr. |
President and | | Treasurer and |
Chief Executive Officer | | Chief Financial Officer |
570-346-4156 | | 570-504-8000 |
FIDELITY D & D BANCORP, INC.
FIRST QUARTER 2006 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, 2006 of $1,032,000 compared to $1,019,000 for the same quarter of 2005. Diluted earnings per share was $0.50 for each of the quarters ended March 31, 2006 and 2005.
Net interest income was $4,230,000 for the quarter ended March 31, 2006, showing a slight decrease of $46,000, or 1%, from the $4,276,000 recorded during the same quarter of 2005.
Although total interest income increased by $919,000, or 13%, from $6,974,000 to $7,893,000, interest expense increased by $965,000, or 36%, from $2,698,000 to $3,663,000 for the quarters ended March 31, 2005 and 2006, respectively. Yields on earning assets continued to improve during the first quarter of 2006, producing more interest income compared to the same period last year. However, the increased market rates on deposits and short-term borrowings have pushed interest costs higher. As an overall result, the net interest margin decreased 14 basis points to 3.34% in the first quarter of 2006, compared to 3.48% for the first quarter of 2005.
During the first quarter of 2006, the provision for loan losses was $75,000 compared to $80,000 in the same quarter of 2005. The allowance for loan losses was 1.37% of total loans at March 31, 2006, down from 1.56% at March 31, 2005. These results prove the sustained effort to control the Bank’s credit quality.
Total other income recorded for the quarter ended March 31, 2006 was $1,127,000 compared with $748,000 for the same quarter in 2005. Improved service charges and fees along with gains recorded in the first quarter of 2006, in contrast to $266,000 of losses recorded in the same period of 2005, produced a $380,000 net increase in other income compared to the first quarter of 2005.
Total other operating expenses increased 10%, from $3,566,000 to $3,921,000 for the quarters ending March 31, 2005 and 2006, respectively. The operating expense increase resulted primarily from added salary and benefit expenses, due to a higher number of full-time equivalent employees during 2006. Equipment maintenance, supply costs and other expenses increased in the first quarter of 2006 over 2005. Many of these increases resulted from incurring the operating expense earlier in 2006 in comparison to 2005.
“The Federal Reserve’s efforts to increase short-term rates coupled with the market’s demand for longer term issues has created a difficult environment for banks, causing pressure on margins.” said Steve Ackmann, President and CEO. “We continue to closely manage our pricing strategies to optimize our ability to profit in this rate environment.”
The Company’s total assets were $569,287,000 at March 31, 2006 compared to $544,061,000 at December 31, 2005.
Fidelity D & D Bancorp, Inc. serves Lackawanna and Luzerne Counties through The Fidelity Deposit and Discount Bank’s 12 community banking offices and 20 ATM locations.
For more information please visit our web site at www.the-fidelity.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: | | March 31, 2006 | | December 31, 2005 | |
Assets | | | | | |
Total cash and cash equivalents | | $ | 10,486,895 | | $ | 12,594,540 | |
Investment securities | | 116,205,852 | | 97,678,573 | |
Federal Home Loan Bank Stock | | 4,699,000 | | 4,628,200 | |
Loans and leases | | 417,049,567 | | 409,557,328 | |
Allowance for loan losses | | (5,716,473 | ) | (5,984,649 | ) |
Premises and equipment, net | | 11,543,777 | | 11,683,148 | |
Life insurance cash surrender value | | 7,962,307 | | 7,891,898 | |
Other assets | | 7,055,858 | | 6,011,660 | |
| | | | | |
Total assets | | $ | 569,286,783 | | $ | 544,060,698 | |
| | | | | |
Liabilities | | | | | |
Non-interest-bearing deposits | | $ | 67,692,897 | | $ | 70,361,086 | |
Interest-bearing deposits | | 340,811,377 | | 309,137,554 | |
Total deposits | | 408,504,274 | | 379,498,640 | |
Short-term borrowings | | 27,422,536 | | 28,772,997 | |
Long-term debt | | 81,029,348 | | 83,704,188 | |
Other liabilities | | 3,396,492 | | 3,238,844 | |
Total liabilities | | 520,352,650 | | 495,214,669 | |
| | | | | |
Shareholders’ equity | | 48,934,133 | | 48,846,029 | |
| | | | | |
Total liabilities and shareholders’ equity | | $ | 569,286,783 | | $ | 544,060,698 | |
Average Quarterly Balances: | | March 31, 2006 | | December 31, 2005 | |
Assets | | | | | |
Total cash and cash equivalents | | $ | 10,654,773 | | $ | 9,958,499 | |
Investment securities | | 117,482,664 | | 106,836,106 | |
Loans and leases, net | | 408,418,489 | | 398,021,831 | |
Premises and equipment, net | | 11,647,257 | | 11,297,689 | |
Other assets | | 12,508,922 | | 13,299,448 | |
| | | | | |
Total assets | | $ | 560,712,105 | | $ | 539,413,573 | |
| | | | | |
Liabilities | | | | | |
Non-interest-bearing deposits | | $ | 66,195,050 | | $ | 66,163,112 | |
Interest-bearing deposits | | 330,301,631 | | 300,187,888 | |
Total deposits | | 396,496,681 | | 366,351,000 | |
Short-term borrowings and long-term debt | | 111,943,866 | | 121,063,406 | |
Other liabilities | | 3,096,023 | | 3,653,059 | |
Total liabilities | | 511,536,570 | | 491,067,465 | |
| | | | | |
Shareholders’ equity | | 49,175,535 | | 48,346,108 | |
| | | | | |
Total liabilities and shareholders’ equity | | $ | 560,712,105 | | $ | 539,413,573 | |
FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Statements of Income
| | Three Months Ended | |
| | March 31, 2006 | | March 31, 2005 | |
Interest income | | | | | |
Loans and leases | | $ | 6,630,776 | | $ | 5,781,378 | |
Securities and other | | 1,262,661 | | 1,192,907 | |
| | | | | |
Total interest income | | 7,893,437 | | 6,974,285 | |
| | | | | |
Interest expense | | | | | |
Deposits | | 2,396,906 | | 1,556,239 | |
Borrowings and debt | | 1,266,222 | | 1,142,242 | |
| | | | | |
Total interest expense | | 3,663,128 | | 2,698,481 | |
| | | | | |
Net interest income | | 4,230,309 | | 4,275,804 | |
| | | | | |
Provision for loan losses | | 75,000 | | 80,000 | |
Other income | | 1,127,265 | | 747,613 | |
Other expenses | | 3,921,190 | | 3,565,912 | |
Provision for income taxes | | 329,753 | | 358,116 | |
Net income | | $ | 1,031,631 | | $ | 1,019,389 | |
Selected financial ratios and other data (1):
| | Three months ended
March 31, | |
Selected returns and financial ratios | | 2006 | | 2005 | |
Diluted earnings per share | | $ | 0.50 | | $ | 0.50 | |
Dividends per share | | $ | 0.22 | | $ | 0.20 | |
Yield on interest-earning assets (FTE) | | 6.13 | % | 5.62 | % |
Cost of interest-bearing liabilities | | 3.36 | % | 2.58 | % |
Net interest spread | | 2.77 | % | 3.04 | % |
Net interest margin | | 3.34 | % | 3.48 | % |
Return on average assets | | 0.75 | % | 0.77 | % |
Return on average equity | | 8.51 | % | 8.85 | % |
Efficiency ratio | | 71.39 | % | 69.28 | % |
Expense ratio | | 2.04 | % | 2.11 | % |
Other data
| | As of March 31, | |
| | 2006 | | 2005 | |
Book value per share | | $ | 23.93 | | $ | 22.79 | |
Equity to assets | | 8.60 | % | 8.56 | % |
Allowance for loan losses to: | | | | | |
Total loans | | 1.37 | % | 1.56 | % |
Non-accrual loans | | 64.67 | % | 65.76 | % |
Non-accrual loans to net loans | | 2.15 | % | 2.41 | % |
Non-performing assets to total assets | | 1.60 | % | 1.84 | % |
| | | | | | | |
(1) Per share data, for 2005, has been adjusted to reflect the retroactive effect of a 10% stock dividend paid on February 15, 2006.
