bba1ff6c6f0443d

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C.  20549

 

______________

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

______________

 

Date of Report (Date of earliest event reported):  April 30, 2014

 

 

FIDELITY D & D BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

 

Pennsylvania

 

333-90273

 

23-3017653

(State or other

jurisdiction of

incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

 

 

 

 

 

Blakely and Drinker Streets, Dunmore, PA       18512

(Address of principal executive offices)              (Zip Code)

Registrant’s telephone number, including area code: (570) 342-8281

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR

240.14d-2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act  (17 CFR

240.13e-4(c))


 

 

FIDELITY D & D BANCORP, INC.

CURRENT REPORT ON FORM 8-K

 

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On April 30, 2014, Fidelity  D & D Bancorp, Inc. issued a press release describing its results of operations for the quarter and year-to-date ended March 31, 2014.  A copy of the related press release is being furnished as Exhibit 99.1 to this Form 8-K.

 

The information in this Item 2.02 is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

 

 

 

ITEM 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit NumberDescription

 

99.1Copy of the Press Release, dated April 30, 2014.

 

 


 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

FIDELITY D & D BANCORP, INC.

 

 

 

 

 

 

Date:  April 30, 2014

By: /s/ Salvatore R. DeFrancesco, Jr.

 

        Salvatore R. DeFrancesco, Jr.

 

        Treasurer and Chief Financial Officer

 

 

 

 


 

 

EXHIBIT INDEX

 

 

 

 

EXHIBIT NO.

 

99.1                       Copy of the Press Release, dated April 30, 2014.


 

 

Exhibit 99.1 

FIDELITY D & D BANCORP, INC.

FOR IMMEDIATE RELEASE

 

Date:  April 30, 2014

Contacts:

 

 

 

 

 

 

 

 

 

 

Daniel J. Santaniello

Salvatore R. DeFrancesco, Jr.

President and Chief Executive Officer

Treasurer and Chief Financial Officer

570-504-8035

570-504-8000

 

FIDELITY D & D BANCORP, INC.

REPORTS FIRST QUARTER 2014 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, 2014 of $1.5 million, an improvement of $62 thousand, or 4%, compared to $1.4 million for the first quarter of 2013.  Net interest income growth along with a lower provision for loan losses and fewer non-interest expenses more than offset the reduction in other income, when compared to the prior year quarter.  Earnings per share on a diluted basis for the quarter were $0.61 and $0.60 for the three months ended March 31, 2014 and 2013, respectively.

“We are very pleased with the financial results for the first quarter of 2014.  The positive results are reflective of the Bank’s commitment to build relationships, maintaining sound business practices, and seeking continuous improvement,” stated Daniel J. Santaniello, President and Chief Executive Officer.  “We continue to attract new customer deposits and loans, while having a modest increase in net overhead expenses.  The Company’s strong capital position has enabled us to invest strategically back into the future growth of the Company.”

Net interest income increased $62 thousand, or 1%, to $5.3 million for the quarter ended March 31, 2014, from $5.2 million recorded during the first quarter of 2013.  Net interest income earned was higher in first quarter 2014 over the same period in 2013, despite the decline in yield on interest earning assets outpacing the savings on rates of interest-bearing liabilities.  The Company experienced lower interest costs from a smaller average certificates-of-deposit total that continues to reprice downward, which was replaced by growth of non-interest bearing deposits.  This interest cost reduction along with additional interest income from a $30 million larger average balance loan portfolio helped to moderate the decline of net interest margin by 5 basis points to 3.79% for the first quarter of 2014, compared to 3.84% for the same 2013 quarter.

A provision for loan losses of $300 thousand was recorded during the first quarter of 2014 compared to $550 thousand required for the same 2013 period. The provision for loan losses funded the allowance for loan losses for the experienced loan growth, but also reinforced it for the potential credit risks that still exist from an uncertain local economic environment.  The allowance for loan losses was maintained at 1.84% of total loans at March 31, 2014 compared to the 1.83% of total loans at March 31, 2013.

Total other income recorded for the quarter ended March 31, 2014 was $1.7 million compared to $2.1 million for the same quarter in 2013.  The decrease was primarily from $376 thousand less in gains from fewer mortgage loans sold, $116 thousand less loan service charges and $29 thousand lower deposit services charges realized during 2014.  These were offset by growth attributed to the $87 thousand increase in gains from securities sold and increases of $35 thousand from net loan servicing fees, $32 thousand interchange fees and $26 thousand rental income recorded during the first quarter of 2014.


 

 

Total other operating expense decreased by $95 thousand, or 2%, to $4.8 million from $4.9 million for the quarters ended March 31, 2014 and 2013, respectively.  The other operating expenses primarily decreased from $206 thousand less collection and foreclosed asset expenses, partly offset by increases of $69 thousand in professional services and $62 thousand from additional occupancy and equipment costs incurred during 2014.

The Company’s assets increased $30.6 million to total $654.4 million at March 31, 2014 compared to $623.8 million of total assets at December 31, 2013.  This asset growth resulted from $18.9 million more held in cash, $5.5 million additional loans and leases and $4.8 million in added securities; funded from the $15.9 million increase in interest-bearing deposits, $9.2 million additional non-interest-bearing deposits and $3.7 million more short-term borrowings with repurchase customers, plus a $1.8 million increase in shareholders’ equity.

Fidelity D & D Bancorp, Inc. serves Lackawanna and Luzerne Counties through The Fidelity Deposit and Discount Bank’s 11 community banking office locations, including wealth management assistance through providing fiduciary activities with the Bank’s full trust powers; as well as offering a full array of asset management services.  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 impact of new laws and regulations, including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations promulgated there under;

·

impacts of the new 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 banking 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 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, 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;

·

volatility 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

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

At Period End:

March 31, 2014

December 31, 2013

Assets

 

 

 

 

  Total cash and cash equivalents

$

32,099 

$

13,218 

  Investment securities

 

102,213 

 

97,423 

  Federal Home Loan Bank Stock

 

2,176 

 

2,640 

  Loans and leases

 

484,015 

 

479,061 

  Allowance for loan losses

 

(8,899)

 

(8,928)

  Premises and equipment, net

 

14,410 

 

13,602 

  Life insurance cash surrender value

 

10,485 

 

10,402 

  Other assets

 

17,930 

 

16,407 

 

 

 

 

 

     Total assets

$

654,429 

$

623,825 

 

 

 

 

 

Liabilities

 

 

 

 

  Non-interest-bearing deposits

$

132,096 

$

122,919 

  Interest-bearing deposits

 

422,670 

 

406,779 

      Total deposits

 

554,766 

 

529,698 

  Short-term borrowings

 

12,327 

 

8,642 

  Long-term debt

 

16,000 

 

16,000 

  Other liabilities

 

3,487 

 

3,425 

     Total liabilities

 

586,580 

 

557,765 

 

 

 

 

 

  Shareholders' equity

 

67,849 

 

66,060 

 

 

 

 

 

     Total liabilities and shareholders' equity

$

654,429 

$

623,825 

 

 

 

 

 

 

 

 

 

 

Average Year-To-Date Balances:

March 31, 2014

December 31, 2013

Assets

 

 

 

 

  Total cash and cash equivalents

$

24,831 

$

19,703 

  Investment securities

 

103,197 

 

103,563 

  Loans and leases, net

 

471,738 

 

452,898 

  Premises and equipment, net

 

13,674 

 

13,852 

  Other assets

 

27,651 

 

28,756 

 

 

 

 

 

     Total assets

$

641,091 

$

618,772 

 

 

 

 

 

Liabilities

 

 

 

 

  Non-interest-bearing deposits

$

127,736 

$

126,149 

  Interest-bearing deposits

 

410,185 

 

396,411 

      Total deposits

 

537,921 

 

522,560 

  Short-term borrowings and long-term debt

 

32,503 

 

31,524 

  Other liabilities

 

3,595 

 

3,803 

     Total liabilities

 

574,019 

 

557,887 

 

 

 

 

 

  Shareholders' equity

 

67,072 

 

60,885 

 

 

 

 

 

     Total liabilities and shareholders' equity

$

641,091 

$

618,772 

 


 

 

FIDELITY D & D BANCORP, INC.

Unaudited Condensed Consolidated Statements of Income

(dollars in thousands)

 

.

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

Mar. 31, 2014

Mar. 31, 2013

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

 

 

 

 

  Loans and leases

$

5,407 

$

5,469 

 

 

 

 

 

 

  Securities and other

 

595 

 

499 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Total interest income

 

6,002 

 

5,968 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

  Deposits

 

489 

 

515 

 

 

 

 

 

 

  Borrowings and debt

 

218 

 

220 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Total interest expense

 

707 

 

735 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Net interest income

 

5,295 

 

5,233 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Provision for loan losses

 

300 

 

550 

 

 

 

 

 

 

  Other income

 

1,738 

 

2,068 

 

 

 

 

 

 

  Other expenses

 

4,785 

 

4,880 

 

 

 

 

 

 

  Provision for income taxes

 

492 

 

477 

 

 

 

 

 

 

     Net income

$

1,456 

$

1,394 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Mar. 31, 2014

 

Dec. 31, 2013

 

Sep. 30, 2013

 

Jun. 30, 2013

 

Mar. 31, 2013

Interest income

 

 

 

 

 

 

 

 

 

 

  Loans and leases

$

5,407 

$

5,438 

$

5,455 

$

5,456 

$

5,469 

  Securities and other

 

595 

 

581 

 

499 

 

456 

 

499 

 

 

 

 

 

 

 

 

 

 

 

     Total interest income

 

6,002 

 

6,019 

 

5,954 

 

5,912 

 

5,968 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

  Deposits

 

489 

 

530 

 

525 

 

511 

 

515 

  Borrowings and debt

 

218 

 

223 

 

223 

 

221 

 

220 

 

 

 

 

 

 

 

 

 

 

 

     Total interest expense

 

707 

 

753 

 

748 

 

732 

 

735 

 

 

 

 

 

 

 

 

 

 

 

     Net interest income

 

5,295 

 

5,266 

 

5,206 

 

5,180 

 

5,233 

 

 

 

 

 

 

 

 

 

 

 

  Provision for loan losses

 

300 

 

950 

 

450 

 

600 

 

550 

  Other income

 

1,738 

 

4,514 

 

1,908 

 

2,051 

 

2,068 

  Other expenses

 

4,785 

 

4,989 

 

4,644 

 

4,606 

 

4,880 

  Provision for income taxes

 

492 

 

1,131 

 

515 

 

512 

 

477 

     Net income

$

1,456 

$

2,710 

$

1,505 

$

1,513 

$

1,394 

 


 

 

FIDELITY D & D BANCORP, INC.

Unaudited Condensed Consolidated Balance Sheets

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At Period End:

 

Mar. 31, 2014

 

Dec. 31, 2013

 

Sep. 30, 2013

 

Jun. 30, 2013

 

Mar. 31, 2013

Assets

 

 

 

 

 

 

 

 

 

 

  Total cash and cash equivalents

$

32,099 

$

13,218 

$

35,885 

$

15,266 

$

20,730 

  Investment securities

 

102,213 

 

97,423 

 

103,111 

 

96,466 

 

99,496 

  Federal Home Loan Bank Stock

 

2,176 

 

2,640 

 

2,160 

 

3,214 

 

2,238 

  Loans and leases

 

484,015 

 

479,061 

 

464,008 

 

465,351 

 

450,677 

  Allowance for loan losses

 

(8,899)

 

(8,928)

 

(8,405)

 

(8,296)

 

(8,236)

  Premises and equipment, net

 

14,410 

 

13,602 

 

13,709 

 

13,802 

 

13,876 

  Life insurance cash surrender value

 

10,485 

 

10,402 

 

10,316 

 

10,231 

 

10,146 

  Other assets

 

17,930 

 

16,407 

 

19,510 

 

19,141 

 

19,244 

 

 

 

 

 

 

 

 

 

 

 

     Total assets

$

654,429 

$

623,825 

$

640,294 

$

615,175 

$

608,171 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

  Non-interest-bearing deposits

$

132,096 

$

122,919 

$

134,114 

$

127,268 

$

122,855 

  Interest-bearing deposits

 

422,670 

 

406,779 

 

410,716 

 

392,255 

 

391,611 

      Total deposits

 

554,766 

 

529,698 

 

544,830 

 

519,523 

 

514,466 

  Short-term borrowings

 

12,327 

 

8,642 

 

14,197 

 

16,199 

 

13,593 

  Long-term debt

 

16,000 

 

16,000 

 

16,000 

 

16,000 

 

16,000 

  Other liabilities

 

3,487 

 

3,425 

 

3,471 

 

3,550 

 

4,333 

     Total liabilities

 

586,580 

 

557,765 

 

578,498 

 

555,272 

 

548,392 

 

 

 

 

 

 

 

 

 

 

 

  Shareholders' equity

 

67,849 

 

66,060 

 

61,796 

 

59,903 

 

59,779 

 

 

 

 

 

 

 

 

 

 

 

     Total liabilities and shareholders' equity

$

654,429 

$

623,825 

$

640,294 

$

615,175 

$

608,171 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Quarterly Balances:

 

Mar. 31, 2014

 

Dec. 31, 2013

 

Sep. 30, 2013

 

Jun. 30, 2013

 

Mar. 31, 2013

Assets

 

 

 

 

 

 

 

 

 

 

  Total cash and cash equivalents

$

24,831 

$

17,177 

$

18,296 

$

13,554 

$

29,939 

  Investment securities

 

103,197 

 

104,729 

 

102,617 

 

102,335 

 

104,582 

  Loans and leases, net

 

471,738 

 

462,528 

 

456,479 

 

450,684 

 

441,632 

  Premises and equipment, net

 

13,674 

 

13,692 

 

13,841 

 

13,838 

 

14,042 

  Other assets

 

27,651 

 

29,173 

 

29,622 

 

28,441 

 

27,761 

 

 

 

 

 

 

 

 

 

 

 

     Total assets

$

641,091 

$

627,299 

$

620,855 

$

608,852 

$

617,956 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

  Non-interest-bearing deposits

$

127,736 

$

126,200 

$

124,794 

$

122,805 

$

130,864 

  Interest-bearing deposits

 

410,185 

 

404,633 

 

400,305 

 

390,392 

 

390,113 

      Total deposits

 

537,921 

 

530,833 

 

525,099 

 

513,197 

 

520,977 

  Short-term borrowings and long-term debt

 

32,503 

 

30,058 

 

31,263 

 

31,199 

 

33,616 

  Other liabilities

 

3,595 

 

3,848 

 

3,892 

 

3,657 

 

3,811 

     Total liabilities

 

574,019 

 

564,739 

 

560,254 

 

548,053 

 

558,404 

 

 

 

 

 

 

 

 

 

 

 

  Shareholders' equity

 

67,072 

 

62,560 

 

60,601 

 

60,799 

 

59,552 

 

 

 

 

 

 

 

 

 

 

 

     Total liabilities and shareholders' equity

$

641,091 

$

627,299 

$

620,855 

$

608,852 

$

617,956 

 


 

 

FIDELITY D & D BANCORP, INC.

Selected Financial Ratios and Other Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Mar. 31, 2014

 

Dec. 31, 2013

 

Sep. 30, 2013

 

Jun. 30, 2013

 

Mar. 31, 2013

Selected returns and financial ratios

 

 

 

 

 

 

 

 

 

 

  Basic earnings per share

$

0.61 

$

1.15 

$

0.64 

$

0.64 

$

0.60 

  Diluted earnings per share

$

0.61 

$

1.14 

$

0.64 

$

0.64 

$

0.60 

  Dividends per share

$

0.25 

$

0.35 

$

0.25 

$

0.25 

$

0.25 

  Yield on interest-earning assets (FTE)

 

4.27% 

 

4.27% 

 

4.26% 

 

4.37% 

 

4.36% 

  Cost of interest-bearing liabilities

 

0.65% 

 

0.69% 

 

0.69% 

 

0.70% 

 

0.70% 

  Net interest spread

 

3.62% 

 

3.58% 

 

3.57% 

 

3.67% 

 

3.66% 

  Net interest margin

 

3.79% 

 

3.76% 

 

3.74% 

 

3.84% 

 

3.84% 

  Return on average assets

 

0.92% 

 

1.71% 

 

0.96% 

 

1.00% 

 

0.91% 

  Return on average equity

 

8.80% 

 

17.19% 

 

9.85% 

 

9.98% 

 

9.49% 

  Efficiency ratio

 

67.89% 

 

67.48% 

 

64.51% 

 

61.90% 

 

66.17% 

  Expense ratio

 

2.06% 

 

2.02% 

 

1.83% 

 

1.69% 

 

1.92% 

 

 

 

 

 

 

 

 

 

 

 

Other financial data

 

 

 

 

 

 

 

 

 

 

 

 

Mar. 31, 2014

 

Dec. 31, 2013

 

Sep. 30, 2013

 

Jun. 30, 2013

 

Mar. 31, 2013

  Book value per share

$

28.13 

$

27.62 

$

26.06 

$

25.42 

$

25.52 

  Equity to assets

 

10.37% 

 

10.59% 

 

9.65% 

 

9.74% 

 

9.83% 

  Allowance for loan losses to:

 

 

 

 

 

 

 

 

 

 

     Total loans

 

1.84% 

 

1.86% 

 

1.81% 

 

1.78% 

 

1.83% 

     Non-accrual loans

 

2.40x

 

1.58x

 

1.37x

 

1.24x

 

0.85x

  Non-accrual loans to total loans

 

0.77% 

 

1.18% 

 

1.32% 

 

1.44% 

 

2.16% 

  Non-performing assets to total assets

 

1.07% 

 

1.44% 

 

1.82% 

 

2.03% 

 

2.47%