Fidelity D & D Bancorp (FDBC) 8-K Reports First Quarter 2011 Financial Results

Exhibit 99.1

FIDELITY D & D BANCORP, INC.

FOR IMMEDIATE RELEASE

Date: April 27, 2011

Contacts:

Daniel J. Santaniello	Salvatore R. DeFrancesco, Jr.
President and	Treasurer and
Chief Executive Officer	Chief Financial Officer
570-504-8035	570-504-8000

FIDELITY D & D BANCORP, INC.

REPORTS FIRST QUARTER 2011 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, 2011 of $1,227,000, an increase of $671,000, or 121%, compared to $556,000 for the first quarter of 2010.  Improvement in financial performance was seen from the combined management efforts across all divisions of the Bank: net interest income and other income increased $75,000 and $188,000, respectively; while, $100,000 less provision for loan loss was required and other operating expenses declined $615,000.  Earnings per share on a fully diluted basis for the quarter totaled $0.56 compared to $0.26 for the prior year period.

“Fidelity delivered excellent financial performance across all divisions in the opening quarter of 2011,” stated Daniel J. Santaniello, President and Chief Executive Officer.  “With continued focus on building customer relationships and a strong customer acquisition strategy, Fidelity continued to produce strong core deposit growth along with an improved net interest margin.  The company continues to be well positioned from a capital perspective, exceeding all regulatory requirements.  Management’s continued focus on enhancing asset quality produced improvements in all asset quality metrics.”

Net interest income increased $75,000 to $5,234,000 for the quarter ended March 31, 2011 from $5,159,000 recorded during the first quarter of 2011.  The increase in demand deposits and less outstanding debt along with the interest rate environment led to the cost savings on interest-bearing liabilities which more than offset the decline in yield on interest-earning assets, increasing net interest income earned for the first quarter of 2011.  This also improved net interest margin to 4.05% for the first quarter of 2011, compared to 3.91% for same 2010 period.

A provision for loan loss of $475,000 was recorded during the first quarter of 2011 compared to $575,000 required for the same 2010 period. The provision for loan loss reinforced the allowance for loan losses for potential credit risks that may result from today’s uncertain economic climate, while improvement in overall asset quality dictated the lower required level of provision for the current quarter.  The allowance for loan losses was 1.96% of total loans at March 31, 2011, up from 1.79% at March 31, 2010.

Total other income recorded for the quarter ended March 31, 2011 was $1,413,000, compared to $1,225,000 for the same quarter in 2010.  The increase was primarily from added gains from mortgage banking and the sale of an SBA guaranteed commercial loan during 2011.  Mortgage servicing plus higher revenue from financial service and trust activities during 2011 contributed to the increased other income when compared to the first quarter of 2010.

The OTTI credit losses on pooled trust preferred securities were $75,000 and $79,000 in the quarters ended March 31, 2011 and 2010, respectively.  The risk of future OTTI charges will be influenced by the performance of the collateral pools that support each pooled trust preferred security.  Additional rating downgrades, deferring collateral and reduced default recovery rates, could cause further OTTI charges to be recognized through future earnings.

Total other operating expense was reduced by $615,000, or 12% from $5,105,000 to $4,490,000 for the quarters ended March 31, 2010 and 2011, respectively.  The other expense decrease resulted primarily from $544,000 less salary and benefit costs incurred, including the $398,000 early retirement and severance costs realized in 2010, and the $113,000 reduction in collection and ORE expenses during the first quarter of 2011 as compared to 2010.

The Company’s assets increased 6% to total $596,296,000 at March 31, 2011 compared to the $561,673,000 total assets at December 31, 2010.  The Bank’s regulatory capital ratios improved for the period ending March 31, 2011 with a Total Risk Based Capital Ratio of 12.0%, Tier I Capital Ratio of 10.8% and Leverage Ratio of 8.4%, all of which exceed the current "well capitalized" regulatory requirements.

Fidelity D & D Bancorp, Inc. serves Lackawanna and Luzerne Counties through The Fidelity Deposit and Discount Bank’s 11 community banking offices.  The Bank's deposits are insured by the Federal Deposit Insurance Corporation up to the full extent permitted by law.

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;

· the effects of new laws and regulations, specifically the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act;

· 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 the Company’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.

For more information please visit our investor relations web site located through www.bankatfidelity.com.

FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
At Period End:	March 31, 2011			December 31, 2010
Assets
Total cash and cash equivalents	$	47,443,267		$	22,967,345
Investment securities		90,881,865			83,431,371
Federal Home Loan Bank Stock		4,314,900			4,542,000
Loans and leases		419,806,900			416,014,151
Allowance for loan losses		(8,223,978	)		(7,897,822	)
Premises and equipment, net		14,421,943			14,763,873
Life insurance cash surrender value		9,501,732			9,424,926
Other assets		18,149,883			18,427,308
Total assets	$	596,296,512		$	561,673,152
Liabilities
Non-interest-bearing deposits	$	113,283,383		$	85,780,392
Interest-bearing deposits		399,916,954			396,667,300
Total deposits		513,200,337			482,447,692
Short-term borrowings		11,131,104			8,548,400
Long-term debt		21,000,000			21,000,000
Other liabilities		2,662,440			2,903,045
Total liabilities		547,993,881			514,899,137
Shareholders' equity		48,302,631			46,774,015
Total liabilities and shareholders' equity	$	596,296,512		$	561,673,152
Average Year-To-Date Balances:	March 31, 2011			December 31, 2010
Assets
Total cash and cash equivalents	$	38,769,905		$	42,181,685
Investment securities		89,632,732			84,050,381
Loans and leases, net		411,113,414			419,748,250
Premises and equipment, net		14,638,667			14,975,020
Other assets		27,516,317			26,598,374
Total assets	$	581,671,035		$	587,553,710
Liabilities
Non-interest-bearing deposits	$	101,941,654		$	76,707,139
Interest-bearing deposits		392,160,656			405,518,509
Total deposits		494,102,310			482,225,648
Short-term borrowings and long-term debt		36,534,997			53,823,711
Other liabilities		3,258,128			3,626,830
Total liabilities		533,895,435			539,676,189
Shareholders' equity		47,775,600			47,877,521
Total liabilities and shareholders' equity	$	581,671,035		$	587,553,710

FIDELITY D & D BANCORP, INC.

Unaudited Condensed Consolidated Statements of Income

	Three Months Ended
	Mar. 31, 2011		Mar. 31, 2010
Interest income
Loans and leases	$	5,934,513	$	6,226,313
Securities and other		615,860		814,978
Total interest income		6,550,373		7,041,291
Interest expense
Deposits		1,041,877		1,414,061
Borrowings and debt		274,877		468,296
Total interest expense		1,316,754		1,882,357
Net interest income		5,233,619		5,158,934
Provision for loan losses		475,000		575,000
OTTI - credit losses		74,692		79,050
Other income		1,412,630		1,224,652
Other expenses		4,489,828		5,104,449
Provision for income taxes		379,844		69,207
Net income	$	1,226,886	$	555,880

	Three Months Ended
	Mar. 31, 2011		Dec. 31, 2010			Sep. 30, 2010			Jun. 30, 2010		Mar. 31, 2010
Interest income
Loans and leases	$	5,934,513	$	6,010,455		$	6,213,939		$	6,158,022	$	6,226,313
Securities and other		615,860		604,335			739,761			812,171		814,978
Total interest income		6,550,373		6,614,790			6,953,700			6,970,193		7,041,291
Interest expense
Deposits		1,041,877		1,119,838			1,244,438			1,299,716		1,414,061
Borrowings and debt		274,877		390,980			436,490			453,196		468,296
Total interest expense		1,316,754		1,510,818			1,680,928			1,752,912		1,882,357
Net interest income		5,233,619		5,103,972			5,272,772			5,217,281		5,158,934
Provision for loan losses		475,000		835,000			375,000			300,000		575,000
OTTI - credit losses		74,692		9,332,322			1,748,674			675,872		79,050
Other income		1,412,630		695,159			1,478,263			1,316,231		1,224,652
Other expenses		4,489,828		796,137			4,317,611			4,694,155		5,104,449
Provision (credit) for income taxes		379,844		(2,724,896	)		(45,193	)		144,513		69,207
Net income (loss)	$	1,226,885	$	(2,439,432	)	$	354,943		$	718,972	$	555,880

FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
At Period End:	Mar. 31, 2011			Dec. 31, 2010			Sep. 30, 2010			Jun. 30, 2010			Mar. 31, 2010
Assets
Total cash and cash equivalents	$	47,443,267		$	22,967,345		$	47,571,175		$	36,728,875		$	40,182,654
Investment securities		90,881,865			83,431,371			87,255,681			75,948,064			81,433,603
Federal Home Loan Bank Stock		4,314,900			4,542,000			4,781,100			4,781,100			4,781,100
Loans and leases		419,806,900			416,014,151			422,688,600			428,122,754			434,257,867
Allowance for loan losses		(8,223,978	)		(7,897,822	)		(7,484,253	)		(7,523,250	)		(7,751,589	)
Premises and equipment, net		14,421,943			14,763,873			14,649,763			14,936,387			15,245,122
Life insurance cash surrender value		9,501,732			9,424,926			9,347,707			9,269,973			9,192,627
Other assets		18,149,883			18,427,308			17,788,825			17,006,380			17,947,191
Total assets	$	596,296,512		$	561,673,152		$	596,598,598		$	579,270,283		$	595,288,575
Liabilities
Non-interest-bearing deposits	$	113,283,383		$	85,780,392		$	81,819,441		$	77,836,050		$	73,065,849
Interest-bearing deposits		399,916,954			396,667,300			409,063,486			403,090,854			413,491,335
Total deposits		513,200,337			482,447,692			490,882,927			480,926,904			486,557,184
Short-term borrowings		11,131,104			8,548,400			21,804,259			15,577,694			26,370,222
Long-term debt		21,000,000			21,000,000			32,000,000			32,000,000			32,000,000
Other liabilities		2,662,440			2,903,045			3,235,939			2,922,545			3,995,312
Total liabilities		547,993,881			514,899,137			547,923,125			531,427,143			548,922,718
Shareholders' equity		48,302,631			46,774,015			48,675,473			47,843,140			46,365,857
Total liabilities and shareholders' equity	$	596,296,512		$	561,673,152		$	596,598,598		$	579,270,283		$	595,288,575
Average Quarterly Balances:	Mar. 31, 2011			Dec. 31, 2010			Sep. 30, 2010			Jun. 30, 2010			Mar. 31, 2010
Assets
Total cash and cash equivalents	$	38,769,905		$	53,297,299		$	44,858,721		$	33,008,130		$	37,358,017
Investment securities		89,632,732			86,120,978			83,361,340			86,919,361			79,737,266
Loans and leases, net		411,113,414			409,008,829			416,462,967			424,331,436			429,450,503
Premises and equipment, net		14,638,667			14,648,400			14,854,405			15,116,975			15,288,661
Other assets		27,516,317			27,381,576			26,404,370			26,073,072			26,527,219
Total assets	$	581,671,035		$	590,457,082		$	585,941,803		$	585,448,974		$	588,361,666
Liabilities
Non-interest-bearing deposits	$	101,941,654		$	82,019,125		$	75,830,989		$	74,100,555		$	74,808,276
Interest-bearing deposits		392,160,656			404,692,893			406,630,065			407,132,578			403,594,213
Total deposits		494,102,310			486,712,018			482,461,054			481,233,133			478,402,489
Short-term borrowings and long-term debt		36,534,997			51,089,956			50,958,606			53,323,203			60,053,061
Other liabilities		3,258,128			3,995,850			3,509,030			3,618,319			3,379,727
Total liabilities		533,895,435			541,797,824			536,928,690			538,174,655			541,835,277
Shareholders' equity		47,775,600			48,659,258			49,013,113			47,274,319			46,526,389
Total liabilities and shareholders' equity	$	581,671,035		$	590,457,082		$	585,941,803		$	585,448,974		$	588,361,666

FIDELITY D & D BANCORP, INC.
Selected Financial Ratios and Other Data
	Three Months Ended
	Mar. 31, 2011			Dec. 31, 2010			Sep. 30, 2010			Jun. 30, 2010			Mar. 31, 2010
Selected returns and financial ratios
Diluted earnings (loss) per share	$	0.56		$	(2.26	)	$	0.16		$	0.34		$	0.26
Dividends per share	$	0.25		$	0.25		$	0.25		$	0.25		$	0.25
Yield on interest-earning assets (FTE)		5.03	%		4.87	%		5.14	%		5.19	%		5.28	%
Cost of interest-bearing liabilities		1.25	%		1.32	%		1.46	%		1.53	%		1.65	%
Net interest spread		3.78	%		3.55	%		3.68	%		3.66	%		3.63	%
Net interest margin		4.05	%		3.79	%		3.93	%		3.92	%		3.91	%
Return on average assets		0.86	%		-3.25	%		0.24	%		0.49	%		0.38	%
Return on average equity		10.41	%		-39.42	%		2.87	%		6.10	%		4.85	%
Efficiency ratio		65.51	%		58.61	%		62.10	%		69.66	%		71.57	%
Expense ratio		2.15	%		1.68	%		1.92	%		2.32	%		2.40	%
Other data
	Mar. 31, 2011			Dec. 31, 2010			Sep. 30, 2010			Jun. 30, 2010			Mar. 31, 2010
Book value per share	$	21.96		$	21.48		$	22.50		$	22.27		$	21.74
�� Equity to assets		8.10	%		8.33	%		8.16	%		8.26	%		7.79	%
Allowance for loan losses to:
Total loans		1.96	%		1.90	%		1.77	%		1.76	%		1.79	%
Non-accrual loans		0.87	x		0.79	x		0.78	x		0.84	x		0.70	x
Non-accrual loans to total loans		2.25	%		2.40	%		2.27	%		2.08	%		2.56	%
Non-performing assets to total assets		2.37	%		2.38	%		2.22	%		2.21	%		2.28	%