Exhibit 99.1
FIDELITY D & D BANCORP, INC.
PRESS RELEASE
Date: January 19, 2007
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.
REPORTS 2006 FINANCIAL RESULTS
Dunmore, PA, Fidelity D & D Bancorp, Inc. (OTC Bulletin Board: FDBC), parent company of The Fidelity Deposit and Discount Bank, reported net income of $4,125,000, or $2.01 per diluted share, for the year ended December 31, 2006, compared to net income of $4,592,000 or $2.25 per diluted share for the year ended December 31, 2005. The return on average assets for the 2006 year was 0.73%, with the return on average equity of 8.31%. Earnings for the fourth quarter of 2006 totaled $1,125,000, compared to $1,142,000 earned in the same period of 2005. Earnings per share on a fully diluted basis for the current quarter totaled $0.54, off a penny from $0.55 for the prior year period.
The reported difference in annual earnings resulted primarily from the investment in added personnel, new branch locations and enhanced information technology systems and equipment. These steps were taken to better serve customers and continue to grow deposits, loans, and assets under management. The creation of a Business Lending Department, the addition of a Customer Contact Center, and the recent conversion to a new state-of-the-art core processing server are some examples of completed initiatives in 2006.
“We think 2006 was an important year for our Company. During the year we have made significant progress in reducing our non-performing assets. In addition, we have invested in staff, technology and branches that should put our Company on the path toward long-term growth in both assets and earnings,” stated Steven C. Ackmann, President and CEO. “This year we were also able to begin to address our high funding costs when we restructured $16,000,000 in high cost debt in the third quarter. Even with the difficult rate environment that exists for banks today, we continue to look for opportunities to reduce funding costs going forward.”
Total assets as of December 31, 2006 were $562,318,000, an $18,257,000, or 3%, increase in assets from $544,061,000 at December 31, 2005.
Loans increased by $14,055,000, or 3%, to $417,199,000, primarily from a nearly 20% growth in home equity installment loans during 2006, followed by 6% growth in residential mortgages. Investments increased $2,732,000 to $100,411,000 at December 31, 2006. Total deposits increased 8%, or $30,836,000, to $410,335,000 at December 31, 2006, from the $379,499,000 balance at December 31, 2005. Short-term borrowings increased $4,883,000 to $33,656,000 with long-term debt declining $21,168,000, or 25%, totaling $62,536,000 as of December 31, 2006.
Net interest income was $17,169,000 for the year ended December 31, 2006, slightly off-pace from $17,299,000 for 2005. Net interest margin for the fourth quarter continued to trend upward to 3.34%, from the second quarter low of 3.26%. For the quarter ended December 31, 2006, net interest income totaled $4,359,000, improving from $4,343,000 for the same period of 2005. The increase for the quarter was primarily due to loan growth and improved yields on earning assets.
The 2006 provision for loan losses was $325,000 compared to $830,000 for 2005. This significant reduction was due to the improved quality of the loan portfolio with a $6,211,000 decline in non-performing loans. The effort to improve the credit profile of the loan portfolio has reduced the non-performing assets by more than half. Accordingly, the ratio of non-accrual loans to net loans at December 31, 2006 was 0.80%, down from 2.34% as of December 31, 2005. Net charge-offs were $865,000 in 2006 compared to $833,000 in 2005. The ratio of allowance for loan losses to total loans was 1.29% at December 31, 2006, down from 1.46% at December 31, 2005.
Total other income improved $372,000, or 9%, in 2006 totaling $4,522,000 as compared to $4,151,000 for 2005. Increases in gains on loans sold and asset management fees coupled with a reduction in losses associated with the discontinued automobile leasing portfolio were slightly offset by lower levels of fees and service charges collected during 2006.
Total other operating expenses increased 9%, from $14,562,000 in 2005 to $15,878,000 for the year ending December 31, 2006. The increased operating expense resulted principally from added salary and employee benefit expenses plus an increase in occupancy and equipment expenses.
Shareholders’ equity as of December 31, 2006 increased to $51,612,000 from $48,846,000 on December 31, 2005. Cash dividends declared by the Company during 2006 were $1,801,000, or $0.88 per share, of which $569,000 was invested in Company stock through the dividend reinvestment plan.
Fidelity D & D Bancorp, Inc. serves Lackawanna and Luzerne Counties through The Fidelity Deposit and Discount Bank’s 12 community banking offices and 19 automated teller machine locations.
For more information 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.
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