Fidelity D & D Bancorp, Inc. Reports 2022 Financial Results ...| MENAFN.COM

Saturday, 04 February 2023 10:48 GMT

Fidelity D & D Bancorp, Inc. Reports 2022 Financial Results Improved 25%


(MENAFN- GlobeNewsWire - Nasdaq)

DUNMORE, Pa., Jan. 25, 2023 (GLOBE NEWSWIRE) -- Fidelity D & D Bancorp, Inc. (NASDAQ: FDBC) and its banking subsidiary, The Fidelity Deposit and Discount Bank, announced its unaudited, consolidated financial results for the three and twelve month periods ended December 31, 2022.

Unaudited Financial Information

Net income recorded for the year ended December 31, 2022 was $30.0 million, or $5.29 diluted earnings per share, compared to $24.0 million, or $4.48 diluted earnings per share, for the year ended December 31, 2021. The $6.0 million, or 25% improvement in net income stemmed from the $10.5 million improvement in net interest income partially offset by $1.6 million less non-interest income, $1.2 million in additional non-interest expenses and a $1.4 million higher provision for income taxes.

The acquisition of Landmark Bancorp, Inc. (“Landmark”) during the third quarter of 2021 resulted in growth in the Company's earning assets which contributed to net interest income growth. The Company continued to operate four community banking offices acquired from Landmark which contributed to the increased operating expenses.

“We are pleased with our outstanding 2022 financial results. Fidelity Bank achieved record financial results and increased an already strong regulatory capital position. The year was marked by the successful execution of key strategic initiatives and synergies from the Landmark acquisition. Our asset quality metrics remain strong, and our solid capital position allowed us to increase our dividend payments to our shareholders for the eighth consecutive year,” stated Daniel J. Santaniello, President and Chief Executive Officer.“As we enter 2023, we are well positioned to continue to create shareholder value.”

Net income for the quarter ended December 31, 2022 was $7.1 million, or $1.26 diluted earnings per share, compared to $7.8 million, or $1.37 diluted earnings per share, for the quarter ended December 31, 2021. The $0.6 million, or 8%, decline in net income resulted from the $0.5 million increase in the provision for income taxes, $0.3 million higher non-interest expenses and a $0.3 million decrease in non-interest income. The contributors to lower net income were partially offset by the $0.4 million improvement in net interest income quarter-over-quarter.

Consolidated Fourth Quarter Operating Results Overview

Net interest income was $18.3 million for the fourth quarter of 2022, a 3% increase over the $17.9 million earned for the fourth quarter of 2021. The $0.4 million improvement in net interest income resulted primarily from a $37.4 million increase in the average balance of interest-earning assets supplemented by a 38 basis point increase in fully-taxable equivalent (“FTE”) yields on these earning assets partially offset by higher interest expense. The loan portfolio had the biggest impact, producing a $1.8 million increase in interest income from $88.3 million in higher average balances and an increase of 23 basis points in FTE yields earned on loans. Residential real estate contributed the most to the increase in loan interest income, growing $1.1 million from $54.7 million in higher average balances and a 53 basis point increase in FTE yields. Interest income in the commercial portfolio increased $0.4 million during the fourth quarter of 2022 versus the fourth quarter of 2021, despite the recognition of $0.9 million less Small Business Administration (“SBA”) fees attributable to Paycheck Protection Program (“PPP”) loans and $0.8 million less in fair value accretion on acquired loans over the same time periods. Interest income from the investment portfolio grew $0.3 million primarily from mortgage-backed securities which increased $4.0 million in average balances and 33 basis point higher FTE yields earned thereon. Interest income on interest-bearing deposits grew $0.4 million from higher yields. Partially offsetting the increase in interest income, interest expense grew $2.1 million primarily due to a 48 basis point increase in rates paid on interest-bearing deposits which resulted in $2.0 million in additional interest expense.

The overall cost of interest-bearing liabilities was 0.74% for the fourth quarter of 2022, an increase of 51 basis points from the 0.23% paid for the fourth quarter of 2021. The cost of funds increased 36 basis points to 0.53% for the fourth quarter of 2022 from 0.17% for the fourth quarter of 2021. The Company's FTE (non-GAAP measurement) net interest spread was 3.04% for the fourth quarter of 2022, down 13 basis points from the 3.17% recorded for the fourth quarter of 2021. FTE net interest margin increased by three basis points to 3.27% for the three months ended December 31, 2022 from 3.24% for the same 2021 period. Average non-interest bearing deposits, which impact net interest margin, increased $23.4 million quarter-over-quarter resulting in the widening gap between spread and margin.

The provision for loan losses was $0.5 million for the fourth quarter of 2022, a $0.1 million increase compared to $0.4 million for the fourth quarter of 2021. The increase was due to the higher provisioning required for loan growth in the fourth quarter of 2022 compared to the year earlier period. This amount of provisioning reflected what management deemed necessary to maintain the allowance for loan and lease losses at an adequate level.

Total non-interest income decreased $0.3 million, or 6%, to $3.9 million for the fourth quarter of 2022 compared to $4.2 million for the fourth quarter of 2021. The decrease in non-interest income was primarily attributable to $0.3 million lower gains on the sale of loans and $0.2 million less service charges on loans primarily from a decline in mortgage loan service charges and commercial loan late fees. The Company also recognized $0.1 million less fees from financial services and $0.1 million lower rental income. Partially offsetting these decreases was $0.2 million lower losses on disposal of equipment and $0.1 million higher service charges on deposits.

Non-interest expenses increased $0.3 million, or 2%, for the fourth quarter of 2022 to $12.9 million from $12.6 million for the same quarter of 2021. Non-interest expense increases were primarily due to $0.2 million higher professional services, $0.1 million in additional equipment maintenance and rental expenses and $0.1 million more in data processing and communications expenses. These increases were partially offset by decreases of $0.1 million in FDIC assessment and $0.1 million in advertising and marketing expenses.

The provision for income taxes increased $0.5 million during the fourth quarter of 2022 due to an adjustment to the provision calculation recorded during the fourth quarter of 2022.

Consolidated Year-To-Date Operating Results Overview

Net interest income was $72.3 million for the year ended December 31, 2022 compared to $61.8 million for the year ended December 31, 2021. The $10.5 million, or 17%, improvement was the result of earnings from a larger average balance of interest-earning assets supplemented by higher FTE yields earned on these assets which offset an increase in interest expense from a larger average balance and rate paid on interest-bearing deposits. The loan portfolio had the biggest impact, producing $8.6 million more interest income from $200.8 million in higher average balances and a one basis point increase in yields. Interest income in the commercial portfolio increased $3.2 million during 2022 compared to 2021, despite recognition of $3.9 million less SBA fees attributable to PPP loans over the same time periods. Interest income from investments increased $3.8 million from a $167.2 million larger average balance in the portfolio along with a 12 basis point increase in yields. On the funding side, interest expense increased by $2.8 million due to a $217.4 million larger average balance of interest-bearing deposits and a 14 basis point increase in the rates paid on those deposits. FTE net interest spread was 3.16% for 2022, or unchanged from the 3.16% recorded for 2021. Over the same time period, the Company's FTE net interest margin increased by five basis points to 3.28% from 3.23%. The increase in FTE net interest margin is primarily attributable to the growth of $76.9 million in average non-interest-bearing deposits.

For the year ended December 31, 2022, the provision for loan losses was $2.1 million, a $0.1 million increase compared to $2.0 million for the year ended December 31, 2021. The increase in provision expense approximated the growth in loans for the year. This amount of provisioning was respective to the loan growth achieved during 2022 and reflected what management deemed necessary to maintain the allowance for loan and lease losses at an adequate level.

Total non-interest income for the year ended December 31, 2022 was $16.7 million, a decrease of $1.6 million, or 9%, from $18.3 million for the year ended December 31, 2021. The decrease in non-interest income was attributable to the decline in residential mortgage activity stemming from increased mortgage rates and a reduction in secondary market activity which lowered the level of gains by $2.5 million during 2022 compared to 2021. Also, the Company also recorded $0.7 million less service charges on loans primarily from less mortgage loan service charges. Partially offsetting these decreases was $0.9 million in higher service charges on deposits, $0.2 million higher interchange fees and $0.2 million more fees from trust fiduciary activities.

Non-interest expenses increased to $51.3 million for the year ended December 31, 2022, an increase of $1.2 million, or 2%, from $50.1 million for the year ended December 31, 2021. Non-interest expenses would have increased another $3.4 million if not for merger-related expenses of $3.0 million and a FHLB prepayment penalty of $0.4 million incurred during 2021. The largest driver of this increase was a $2.9 million increase in salaries and employee benefit expenses primarily from $1.4 million lower loan origination cost deferrals and $0.9 million higher salaries. Premises and equipment expenses increased $0.6 million primarily from additional lease payments and higher equipment maintenance and rental expenses. PA shares tax expense also increased $0.3 million year-over-year.

The provision for income taxes increased $1.4 million during 2022 compared to 2021 due to the higher income before taxes and a $0.2 million adjustment to the provision calculation recorded during the fourth quarter of 2022.

Consolidated Balance Sheet & Asset Quality Overview

The Company's total assets declined to $2.4 billion as of December 31, 2022, a decrease of $41 million from December 31, 2021. Growth in the loan portfolio of $99 million was offset by a reduction of the investments portfolio by $95 million primarily due to recording net unrealized losses resulting from the significantly higher interest rates throughout 2022 along with paydowns and $68 million lower cash balances. The net growth in loans includes $39 million in paydowns on PPP loans, net of deferred fees. Partially offsetting the decrease in the investment portfolio was an increase within other assets from the $19 million increase in deferred tax assets due to the unrealized losses in the investment portfolio. During the same time period, total liabilities increased $8 million. Deposits declined $3 million and therefore $13 million in short-term borrowings, after use of excess cash balances, were needed to fund loan growth.

Shareholders' equity decreased $48.8 million, or 23%, to $162.9 million at December 31, 2022 from $211.7 million at December 31, 2021. The decrease was caused by an $71.3 million, after tax, reduction in accumulated other comprehensive income from net unrealized losses recorded on the investment portfolio stemming from the increase in intermediate to long-term U.S. Treasury interest rates. At December 31, 2022, there were no securities identified with credit-related, other-than-temporary impairment losses. During 2022, the Company acquired treasury stock totaling $1.3 million which further reduced shareholders' equity. Partially offsetting these decreases, retained earnings improved from net income of $30.0 million, partially offset by $7.7 million in cash dividends paid to shareholders. An additional $1.5 million recorded from the issuance of common stock under the Company's stock plans and stock-based compensation also partially offset the decrease in shareholders' equity. Accumulated other comprehensive income (loss) is excluded from regulatory capital ratios. The Company remains well capitalized with Tier 1 capital at 8.69% of total average assets as of December 31, 2022. Total risk-based capital was 14.35% of risk-weighted assets and Tier 1 risk-based capital was 13.27% of risk-weighted assets as of December 31, 2022. Tangible book value per share was $25.18 at December 31, 2022 compared to $33.68 at December 31, 2021. Tangible common equity was 6.01% of total assets at December 31, 2022 compared to 7.93% at December 31, 2021.

Asset Quality

Total non-performing assets were $4.1 million, or 0.17% of total assets, at December 31, 2022, compared to $6.4 million, or 0.27% of total assets, at December 31, 2021. Past due and non-accrual loans to total loans were 0.28% at December 31, 2022 compared to 0.34% at December 31, 2021. Net charge-offs to average total loans were 0.04% at December 31, 2022 unchanged compared to 0.04% at December 31, 2021.

Fidelity D & D Bancorp, Inc. has built a strong history as trusted financial advisor to the clients served by The Fidelity Deposit and Discount Bank (“Fidelity Bank”). Fidelity Bank operates 21 full-service offices throughout Lackawanna, Luzerne, Lehigh and Northampton Counties, along with a limited production commercial office in Luzerne County and a Fidelity Bank Wealth Management Minersville Office in Schuylkill County. Fidelity Bank provides a digital and virtual experience via digital services, and digital account opening offered through online banking at bankatfidelity.com and the mobile app. Additionally, Fidelity Bank offers full-service Wealth Management & Brokerage Services, a Mortgage Center, and an array of personal and business banking products and services. Part of the Company's vision is to serve as the best bank for the community, which was accomplished by having provided over 4,100 hours of volunteer time and over $1.6 million in donations to non-profit organizations directly within the markets served throughout 2022. The Company continues its mission of exceeding client expectations through a unique banking experience, providing 24 hour, 7 days a week service to clients through branch offices, online at and through the Customer Care Center at 800-388-4380. Fidelity Bank's deposits are insured by the Federal Deposit Insurance Corporation up to the full extent permitted by law.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures to provide information useful to the reader in understanding its operating performance and trends, and to facilitate comparisons with the performance of other financial institutions. Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities. The Company's non-GAAP financial measures and key performance indicators may differ from the non-GAAP financial measures and key performance indicators other financial institutions use to measure their performance and trends. Non-GAAP financial measures should be supplemental to GAAP used to prepare the Company's operating results and should not be read in isolation or relied upon as a substitute for GAAP measures. Reconciliations of GAAP to non-GAAP operating measures to the most directly comparable GAAP financial measures are included in the tables at the end of this release.

Management believes merger-related expenses are not standard costs necessary for operations. These charges principally represent professional fees and system conversion and integration costs related to the transaction. These costs are specific to each individual transaction and may vary significantly based on the size and complexity of the transaction. Management also believes the FHLB prepayment fee incurred to payoff FHLB advances is non-recurring and should be excluded from normal operating expenses for proper comparison.

Interest income was adjusted to recognize the income from tax exempt interest-earning assets as if the interest was taxable, fully-taxable equivalent (FTE), in order to calculate certain ratios within this document. This treatment allows a uniform comparison among yields on interest-earning assets. Interest income was FTE adjusted, using the corporate federal tax rate of 21% for 2022 and 2021.

Forward-looking statements

Certain of the matters discussed in this press release 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:

local, regional and national economic conditions and changes thereto;
the short-term and long-term effects of inflation, and rising costs to the Company, its customers and on the economy;
the effects of economic conditions particularly with regard to the negative impact of severe, wide-ranging and continuing disruptions caused by the spread of Coronavirus Disease 2019 (COVID-19) and any other pandemic, epidemic or other health-related crisis and responses thereto on current customers and the operations of the Company, 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 impact of new or changes in existing laws and regulations, including laws and regulations concerning taxes, banking, securities and insurance and their application with which the Company and its subsidiaries must comply;
impacts of the capital and liquidity requirements of the Basel III standards and other regulatory pronouncements, regulations and rules;
governmental monetary and fiscal policies, as well as legislative and regulatory changes;
effects of short- and long-term federal budget and tax negotiations and their effect on economic and business conditions;
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 and volatility of 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 our 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;
the interruption or breach in security of our information systems, continually evolving cybersecurity and other technological risks and attacks resulting in failures or disruptions in customer account management, general ledger processing and loan or deposit updates and potential impacts resulting therefrom including additional costs, reputational damage, regulatory penalties, and financial losses;
acquisitions and integration of acquired businesses;
the failure of assumptions underlying the establishment of reserves for loan losses and estimations of values of collateral and various financial assets and liabilities;
inflation, securities markets and monetary fluctuations and volatility;
the short-term and long-term effects of inflation, and rising costs to the Company, its customers and on the economy;
acts of war or terrorism;
disruption of credit and equity markets; and
the risk that our analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful.

The Company cautions readers not to place undue reliance on forward-looking statements, which reflect analyses only as of the date of this release. The Company has no obligation to update any forward-looking statements to reflect events or circumstances after the date of this release.

For more information please visit our investor relations web site located through


FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands)

At Period End: December 31, 2022 December 31, 2021
Assets
Cash and cash equivalents $ 29,091 $ 96,877
Investment securities 643,606 738,980
Restricted investments in bank stock 5,268 3,206
Loans and leases 1,565,811 1,464,855
Allowance for loan losses (17,149 ) (15,624 )
Premises and equipment, net 31,307 29,310
Life insurance cash surrender value 54,035 52,745
Goodwill and core deposit intangible 21,168 21,570
Other assets 45,235 27,185
Total assets $ 2,378,372 $ 2,419,104
Liabilities
Non-interest-bearing deposits $ 602,608 $ 590,283
Interest-bearing deposits 1,564,305 1,579,582
Total deposits 2,166,913 2,169,865
Short-term borrowings 12,940 -
Secured borrowings 7,619 10,620
Other liabilities 27,950 26,890
Total liabilities 2,215,422 2,207,375
Shareholders' equity 162,950 211,729
Total liabilities and shareholders' equity $ 2,378,372 $ 2,419,104


Average Year-To-Date Balances: December 31, 2022 December 31, 2021
Assets
Cash and cash equivalents $ 81,532 $ 146,986
Investment securities 684,588 568,785
Restricted investments in bank stock 3,565 3,181
Loans and leases 1,500,796 1,299,960
Allowance for loan losses (16,612 ) (16,100 )
Premises and equipment, net 30,640 28,956
Life insurance cash surrender value 53,443 48,570
Goodwill and core deposit intangible 21,359 12,180
Other assets 40,265 23,069
Total assets $ 2,399,576 $ 2,115,587
Liabilities
Non-interest-bearing deposits $ 594,541 $ 517,599
Interest-bearing deposits 1,593,805 1,376,364
Total deposits 2,188,346 1,893,963
Short-term borrowings 1,031 97
Secured borrowings 8,886 9,122
FHLB advances - 848
Other liabilities 28,434 22,322
Total liabilities 2,226,697 1,926,352
Shareholders' equity 172,879 189,235
Total liabilities and shareholders' equity $ 2,399,576 $ 2,115,587


FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Statements of Income
(dollars in thousands)

Three Months Ended Years ended
Dec. 31, 2022
Dec. 31, 2021 Dec. 31, 2022
Dec. 31, 2021
Interest income
Loans and leases $ 17,425 $ 15,614 $ 64,020 $ 55,431
Securities and other 3,869 3,174 14,652 10,037
Total interest income 21,294 18,788 78,672 65,468
Interest expense
Deposits (2,822 ) (873 ) (6,144 ) (3,456 )
Borrowings and debt (145 ) (37 ) (254 ) (183 )
Total interest expense (2,967 ) (910 ) (6,398 ) (3,639 )
Net interest income 18,327 17,878 72,274 61,829
Provision for loan losses (525 ) (450 ) (2,100 ) (2,000 )
Non-interest income 3,920 4,185 16,642 18,287
Non-interest expense (12,865 ) (12,614 ) (51,348 ) (50,107 )
Income before income taxes 8,857 8,999 35,468 28,009
Provision for income taxes (1,711 ) (1,213 ) (5,447 ) (4,001 )
Net income $ 7,146 $ 7,786 $ 30,021 $ 24,008


Three Months Ended
Dec. 31, 2022
Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021
Interest income
Loans and leases $ 17,425 $ 16,320 $ 15,500 $ 14,775 $ 15,614
Securities and other 3,869 3,815 3,565 3,403 3,174
Total interest income 21,294 20,135 19,065 18,178 18,788
Interest expense
Deposits (2,822 ) (1,550 ) (950 ) (822 ) (873 )
Borrowings and debt (145 ) (75 ) 30 (65 ) (37 )
Total interest expense (2,967 ) (1,625 ) (920 ) (887 ) (910 )
Net interest income 18,327 18,510 18,145 17,291 17,878
Provision for loan losses (525 ) (525 ) (525 ) (525 ) (450 )
Non-interest income 3,920 3,911 4,256 4,554 4,185
Non-interest expense (12,865 ) (13,028 ) (12,800 ) (12,654 ) (12,614 )
Income before income taxes 8,857 8,868 9,076 8,666 8,999
Provision for income taxes (1,711 ) (1,179 ) (1,412 ) (1,144 ) (1,213 )
Net income $ 7,146 $ 7,689 $ 7,664 $ 7,522 $ 7,786


FIDELITY D & D BANCORP, INC.
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands)

At Period End: Dec. 31, 2022
Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021
Assets
Cash and cash equivalents $ 29,091 $ 134,042 $ 109,125 $ 97,403 $ 96,877
Investment securities 643,606 635,787 674,833 711,583 738,980
Restricted investments in bank stock 5,268 3,639 3,622 3,231 3,206
Loans and leases 1,565,811 1,524,328 1,494,316 1,479,114 1,464,855
Allowance for loan losses (17,149 ) (16,779 ) (16,590 ) (16,081 ) (15,624 )
Premises and equipment, net 31,307 30,971 30,855 31,336 29,310
Life insurance cash surrender value 54,035 53,711 53,383 53,065 52,745
Goodwill and core deposit intangible 21,168 21,264 21,360 21,462 21,570
Other assets 45,235 48,805 44,036 39,661 27,185
Total assets $ 2,378,372 $ 2,435,768 $ 2,414,940 $ 2,420,774 $ 2,419,104
Liabilities
Non-interest-bearing deposits $ 602,608 $ 616,844 $ 610,987 $ 599,497 $ 590,283
Interest-bearing deposits 1,564,305 1,636,389 1,606,637 1,610,508 1,579,582
Total deposits 2,166,913 2,253,233 2,217,624 2,210,005 2,169,865
Short-term borrowings 12,940 10 10 - -
Secured borrowings 7,619 7,688 7,736 10,572 10,620
Other liabilities 27,950 28,350 26,951 24,954 26,890
Total liabilities 2,215,422 2,289,281 2,252,321 2,245,531 2,207,375
Shareholders' equity 162,950 146,487 162,619 175,243 211,729
Total liabilities and shareholders' equity $ 2,378,372 $ 2,435,768 $ 2,414,940 $ 2,420,774 $ 2,419,104


Average Quarterly Balances: Dec. 31, 2022
Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021
Assets
Cash and cash equivalents $ 73,023 $ 88,863 $ 69,086 $ 95,319 $ 117,746
Investment securities 637,825 672,595 693,121 736,021 725,977
Restricted investments in bank stock 3,840 3,645 3,538 3,228 3,246
Loans and leases 1,540,999 1,511,268 1,482,629 1,467,362 1,452,676
Allowance for loan losses (17,113 ) (16,911 ) (16,441 ) (15,966 ) (15,857 )
Premises and equipment, net 31,190 30,956 31,091 29,301 29,399
Life insurance cash surrender value 53,925 53,599 53,277 52,960 52,635
Goodwill and core deposit intangible 21,210 21,308 21,405 21,517 21,632
Other assets 47,714 42,564 40,878 29,679 26,679
Total assets $ 2,392,614 $ 2,407,887 $ 2,378,584 $ 2,419,421 $ 2,414,133
Liabilities
Non-interest-bearing deposits $ 609,262 $ 589,227 $ 593,121 $ 586,363 $ 585,899
Interest-bearing deposits 1,589,129 1,614,573 1,579,150 1,592,173 1,575,844
Total deposits 2,198,391 2,203,800 2,172,271 2,178,536 2,161,743
Short-term borrowings 3,875 10 206 - -
Secured borrowings 7,654 7,707 9,644 10,584 16,053
Other liabilities 30,489 29,031 27,164 27,008 27,410
Total liabilities 2,240,409 2,240,548 2,209,285 2,216,128 2,205,206
Shareholders' equity 152,205 167,339 169,299 203,293 208,927
Total liabilities and shareholders' equity $ 2,392,614 $ 2,407,887 $ 2,378,584 $ 2,419,421 $ 2,414,133


FIDELITY D & D BANCORP, INC.
Selected Financial Ratios and Other Financial Data

Three Months Ended
Dec. 31, 2022
Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021
Selected returns and financial ratios
Basic earnings per share $ 1.27 $ 1.36 $ 1.35 $ 1.33 $ 1.38
Diluted earnings per share $ 1.26 $ 1.36 $ 1.35 $ 1.32 $ 1.37
Dividends per share $ 0.36 $ 0.33 $ 0.33 $ 0.33 $ 0.33
Yield on interest-earning assets (FTE)* 3.78 % 3.60 % 3.50 % 3.34 % 3.40 %
Cost of interest-bearing liabilities 0.74 % 0.40 % 0.23 % 0.22 % 0.23 %
Cost of funds 0.53 % 0.29 % 0.17 % 0.16 % 0.17 %
Net interest spread (FTE)* 3.04 % 3.20 % 3.27 % 3.12 % 3.17 %
Net interest margin (FTE)* 3.27 % 3.32 % 3.34 % 3.18 % 3.24 %
Return on average assets 1.18 % 1.27 % 1.29 % 1.26 % 1.28 %
Return on average equity 18.63 % 18.23 % 18.16 % 15.01 % 14.79 %
Return on average tangible equity* 21.64 % 20.89 % 20.79 % 16.78 % 16.49 %
Efficiency ratio (FTE)* 56.06 % 56.38 % 55.45 % 56.21 % 55.52 %
Expense ratio 1.48 % 1.51 % 1.44 % 1.36 % 1.38 %


Years ended
Dec. 31, 2022
Dec. 31, 2021
Basic earnings per share $ 5.32 $ 4.51
Diluted earnings per share $ 5.29 $ 4.48
Dividends per share $ 1.35 $ 1.23
Yield on interest-earning assets (FTE)* 3.56 % 3.42 %
Cost of interest-bearing liabilities 0.40 % 0.26 %
Cost of funds 0.29 % 0.19 %
Net interest spread (FTE)* 3.16 % 3.16 %
Net interest margin (FTE)* 3.28 % 3.23 %
Return on average assets 1.25 % 1.13 %
Return on average equity 17.37 % 12.69 %
Return on average tangible equity* 19.81 % 13.56 %
Efficiency ratio (FTE)* 56.02 % 60.92 %
Expense ratio 1.45 % 1.50 %


Non-GAAP Measures Three Months Ended Years ended
(dollars in thousands except per share data) Dec. 31, 2022
Dec. 31, 2021 Dec. 31, 2022
Dec. 31, 2021
Net income $ 7,146 $ 7,786 $ 30,021 $ 24,008
Merger-related expenses, net of income taxes - (87 ) - 2,542
FHLB prepayment penalty, net of income taxes - - - 291
Adjusted net income* $ 7,146 $ 7,699 $ 30,021 $ 26,841
Adjusted basic earnings per share* $ 1.27 $ 1.36 $ 5.32 $ 5.04
Adjusted diluted earnings per share* $ 1.26 $ 1.35 $ 5.29 $ 5.00
Interest income adjustment to FTE* $ 700 $ 655 $ 2,738 $ 2,135
Adjusted return on average assets* 1.18 % 1.27 % 1.25 % 1.27 %
Adjusted return on average tangible equity* 21.64 % 16.31 % 19.81 % 15.16 %


Other financial data At period end:
(dollars in thousands except per share data) Dec. 31, 2022
Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021
Book value per share $ 28.94 $ 26.02 $ 28.77 $ 30.97 $ 37.50
Tangible book value per share* $ 25.18 $ 22.24 $ 24.99 $ 27.17 $ 33.68
Equity to assets 6.85 % 6.01 % 6.73 % 7.24 % 8.75 %
Allowance for loan losses to:
Total loans 1.10 % 1.10 % 1.11 % 1.09 % 1.09 %
Non-accrual loans 6.77x 5.23x 5.17x 6.97x 5.30x
Non-accrual loans to total loans 0.16 % 0.20 % 0.21 % 0.16 % 0.20 %
Non-performing assets to total assets 0.17 % 0.19 % 0.20 % 0.17 % 0.27 %
Net charge-offs to average total loans 0.04 % 0.04 % 0.01 % 0.02 % 0.04 %
Capital Adequacy Ratios
Total risk-based capital ratio 14.35 % 14.34 % 14.30 % 14.18 % 14.51 %
Common equity tier 1 risk-based capital ratio 13.27 % 13.27 % 13.21 % 13.11 % 13.40 %
Tier 1 risk-based capital ratio 13.27 % 13.27 % 13.21 % 13.11 % 13.40 %
Leverage ratio 8.69 % 8.51 % 8.43 % 8.14 % 7.94 %

* See non-GAAP Financial Measures above.

Contacts:

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




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