Exhibit 99.1
FIDELITY D & D BANCORP, INC.
FOR IMMEDIATE RELEASE
Date: July 22, 2009
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.
SECOND QUARTER 2009 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 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 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 | | Sep. 30, 2008 | | Jun. 30, 2008 | |
Assets | | | | | | | | | | | |
Total cash and cash equivalents | | $ | 15,569,573 | | $ | 20,800,732 | | $ | 12,771,147 | | $ | 13,375,299 | | $ | 16,040,466 | |
Investment securities | | 77,319,094 | | 78,949,503 | | 84,187,579 | | 87,179,549 | | 129,244,167 | |
Federal Home Loan Bank Stock | | 4,781,100 | | 4,781,100 | | 4,781,100 | | 4,770,700 | | 4,358,300 | |
Loans and leases | | 427,432,128 | | 426,269,981 | | 441,036,694 | | 431,293,559 | | 418,650,319 | |
Allowance for loan losses | | (5,215,736 | ) | (5,097,641 | ) | (4,745,234 | ) | (4,205,566 | ) | (4,188,571 | ) |
Premises and equipment, net | | 15,544,799 | | 15,871,074 | | 16,056,362 | | 16,018,219 | | 12,912,023 | |
Life insurance cash surrender value | | 8,962,081 | | 8,886,844 | | 8,807,784 | | 8,728,568 | | 8,645,597 | |
Other assets | | 16,061,169 | | 16,323,980 | | 12,823,565 | | 12,383,084 | | 12,901,595 | |
| | | | | | | | | | | |
Total assets | | $ | 560,454,208 | | $ | 566,785,573 | | $ | 575,718,997 | | $ | 569,543,412 | | $ | 598,563,896 | |
| | | | | | | | | | | |
Liabilities | | | | | | | | | | | |
Non-interest-bearing deposits | | $ | 69,503,187 | | $ | 69,296,833 | | $ | 71,442,651 | | $ | 69,619,234 | | $ | 74,765,086 | |
Interest-bearing deposits | | 384,370,177 | | 394,857,294 | | 361,869,281 | | 365,812,303 | | 373,468,779 | |
Total deposits | | 453,873,364 | | 464,154,127 | | 433,311,932 | | 435,431,537 | | 448,233,865 | |
Short-term borrowings | | 8,880,343 | | 10,741,814 | | 38,129,704 | | 17,086,314 | | 29,674,336 | |
Long-term debt | | 42,000,000 | | 42,000,000 | | 52,000,000 | | 62,071,661 | | 62,285,582 | |
Other liabilities | | 6,577,952 | | 4,427,884 | | 3,316,710 | | 4,335,911 | | 5,318,030 | |
Total liabilities | | 511,331,659 | | 521,323,825 | | 526,758,346 | | 518,925,423 | | 545,511,813 | |
| | | | | | | | | | | |
Shareholders’ equity | | 49,122,549 | | 45,461,748 | | 48,960,651 | | 50,617,989 | | 53,052,083 | |
| | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 560,454,208 | | $ | 566,785,573 | | $ | 575,718,997 | | $ | 569,543,412 | | $ | 598,563,896 | |
Average Quarterly Balances:
| | Jun. 30, 2009 | | Mar. 31, 2009 | | Dec. 31, 2008 | | Sep. 30, 2008 | | Jun. 30, 2008 | |
Assets | | | | | | | | | | | |
Total cash and cash equivalents | | $ | 22,538,111 | | $ | 12,902,871 | | $ | 11,389,500 | | $ | 11,483,829 | | $ | 12,025,621 | |
Investment securities | | 78,537,567 | | 86,550,978 | | 90,153,057 | | 117,713,728 | | 138,429,282 | |
Loans and leases, net | | 422,830,387 | | 433,903,852 | | 434,511,745 | | 421,771,678 | | 402,874,033 | |
Premises and equipment, net | | 15,751,986 | | 16,048,369 | | 15,948,591 | | 13,315,976 | | 12,951,487 | |
Other assets | | 23,783,296 | | 22,889,530 | | 21,628,663 | | 19,744,364 | | 19,358,141 | |
| | | | | | | | | | | |
Total assets | | $ | 563,441,347 | | $ | 572,295,600 | | $ | 573,631,556 | | $ | 584,029,575 | | $ | 585,638,564 | |
| | | | | | | | | | | |
Liabilities | | | | | | | | | | | |
Non-interest-bearing deposits | | $ | 68,908,889 | | $ | 68,083,243 | | $ | 69,665,796 | | $ | 69,069,124 | | $ | 65,591,257 | |
Interest-bearing deposits | | 389,822,588 | | 380,508,523 | | 366,709,783 | | 360,426,504 | | 378,477,080 | |
Total deposits | | 458,731,477 | | 448,591,766 | | 436,375,579 | | 429,495,628 | | 444,068,337 | |
Short-term borrowings and long-term debt | | 52,414,957 | | 72,666,503 | | 83,447,025 | | 97,685,420 | | 81,129,443 | |
Other liabilities | | 4,372,934 | | 3,366,585 | | 4,093,554 | | 4,466,079 | | 5,005,066 | |
Total liabilities | | 515,519,368 | | 524,624,854 | | 523,916,158 | | 531,647,127 | | 530,202,846 | |
| | | | | | | | | | | |
Shareholders’ equity | | 47,921,979 | | 47,670,746 | | 49,715,398 | | 52,382,448 | | 55,435,718 | |
| | | | | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 563,441,347 | | $ | 572,295,600 | | $ | 573,631,556 | | $ | 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, 2009 | | Mar. 31, 2009 | | Dec. 31, 2008 | | Sep. 30, 2008 | | Jun. 30, 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, 2009 | | Mar. 31, 2009 | | Dec. 31, 2008 | | Sep. 30, 2008 | | Jun. 30, 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, 2009 | | Jun. 30, 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, 2009 | | Mar. 31, 2009 | | Dec. 31, 2008 | | Sep. 30, 2008 | | Jun. 30, 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 | | 0.70 | x | 0.70 | x | 1.36 | x | 1.35 | x | 1.14 | x |
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 | % |
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