FIDELITY D & D BANCORP INC [FDBC] Filings

 

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2024

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________to______________________

 

Commission file number: 001-38229

 

FIDELITY D & D BANCORP, INC.

 

STATE OF INCORPORATION:	IRS EMPLOYER IDENTIFICATION NO:
Pennsylvania	23-3017653

 

Address of principal executive offices:

Blakely & Drinker St.

Dunmore, Pennsylvania 18512

TELEPHONE: 570-342-8281

 

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

 

Title of each class	Trading Symbols(s)	Name of each exchange on which registered
Common stock, without par value	FDBC	The NASDAQ Stock Market, LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subjected to such filing requirements for the past 90 days. ☒ Yes ☐ No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

Non-accelerated filer ☒

Accelerated filer ☐

Smaller reporting company ☒

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

 

The number of outstanding shares of Common Stock of Fidelity D & D Bancorp, Inc. on October 31, 2024 the latest practicable date, was 5,736,025 shares.

 

 

 

FIDELITY D & D BANCORP, INC.

 

Form 10-Q September 30, 2024

 

Index

 

Part I. Financial Information		Page
Item 1.	Financial Statements (unaudited):
	Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	3
	Consolidated Statements of Income for the three and nine months ended September 30, 2024 and 2023	4
	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023	5
	Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2024 and 2023	6
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	8
	Notes to Consolidated Financial Statements (Unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	53
Item 4.	Controls and Procedures	58
Part II. Other Information
Item 1.	Legal Proceedings	58
Item 1A.	Risk Factors	58
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58
Item 3.	Defaults upon Senior Securities	58
Item 4.	Mine Safety Disclosures	58
Item 5.	Other Information	58
Item 6.	Exhibits	59
Signatures		61

 

 

 

(Unaudited)
(dollars in thousands)		September 30, 2024				December 31, 2023
Assets:
Cash and due from banks		$	36,302			$	28,949
Interest-bearing deposits with financial institutions			83,867				83,000
Total cash and cash equivalents			120,169				111,949
Available-for-sale securities, at fair value			334,446				344,040
Held-to-maturity securities (fair value of $203,222 in 2024; $197,176 in 2023)			225,373				224,233
Restricted investments in bank stock			3,944				3,905
Loans and leases, net (allowance for credit losses of $19,630 in 2024; $18,806 in 2023)			1,774,156				1,666,292
Loans held-for-sale (fair value $1,792 in 2024; $1,483 in 2023)			1,762				1,457
Foreclosed assets held-for-sale			440				1
Bank premises and equipment, net			36,057				34,232
Leased property under finance leases, net			1,004				1,173
Right-of-use assets			8,869				7,771
Cash surrender value of bank owned life insurance			57,672				54,572
Accrued interest receivable			9,802				9,092
Goodwill			19,627				19,628
Core deposit intangible, net			949				1,184
Other assets			21,663				23,630
Total assets		$	2,615,933			$	2,503,159
Liabilities:
Deposits:
Interest-bearing		$	1,792,796			$	1,622,282
Non-interest-bearing			549,710				536,143
Total deposits			2,342,506				2,158,425
Allowance for credit losses on off-balance sheet credit exposures			1,169				944
Finance lease obligation			1,039				1,201
Operating lease liabilities			9,782				8,549
Short-term borrowings			25,000				117,000
Secured borrowings			6,323				7,372
Accrued interest payable and other liabilities			22,853				20,189
Total liabilities			2,408,672				2,313,680
Shareholders' equity:
Preferred stock authorized 5,000,000 shares with no par value; none issued			-				-
Capital stock, no par value (10,000,000 shares authorized; shares issued and outstanding; 5,736,025 at September 30, 2024; and 5,703,636 at December 31, 2023)			119,112				117,695
Retained earnings			136,601				128,251
Accumulated other comprehensive loss			(48,452	)			(56,467	)
Treasury stock, at cost (24 shares at September 30, 2024 and 38 shares at December 31, 2023)			-				-
Total shareholders' equity			207,261				189,479
Total liabilities and shareholders' equity		$	2,615,933			$	2,503,159

 

(Unaudited)		Three months ended								Nine months ended
(dollars in thousands except per share data)		September 30, 2024				September 30, 2023				September 30, 2024				September 30, 2023
Interest income:
Loans and leases:
Taxable		$	22,719			$	19,766			$	64,940			$	56,760
Nontaxable			1,317				736				3,745				2,463
Interest-bearing deposits with financial institutions			216				60				1,032				212
Restricted investments in bank stock			88				59				244				240
Investment securities:
U.S. government agency and corporations			1,423				1,461				4,372				4,456
States and political subdivisions (nontaxable)			1,093				1,152				3,301				3,529
States and political subdivisions (taxable)			443				444				1,329				1,335
Total interest income			27,299				23,678				78,963				68,995
Interest expense:
Deposits			11,297				8,488				31,697				19,713
Secured borrowings			101				123				342				352
Other short-term borrowings			470				428				1,433				1,784
Total interest expense			11,868				9,039				33,472				21,849
Net interest income			15,431				14,639				45,491				47,146
Provision for credit losses on loans			675				525				1,075				1,380
Net provision (benefit) for credit losses on unfunded loan commitments			135				(275	)			225				(100	)
Net interest income after provision for credit losses			14,621				14,389				44,191				45,866
Other income:
Service charges on deposit accounts			1,021				1,039				2,923				2,962
Interchange fees			1,202				1,169				3,691				3,588
Service charges on loans			392				244				977				826
Fees from trust fiduciary activities			924				783				2,657				2,197
Fees from financial services			300				169				863				618
Fees and other revenue			469				349				1,205				1,701
Earnings on bank-owned life insurance			394				335				1,100				980
Gain (loss) on write-down, sale or disposal of:
Loans			281				315				752				721
Available-for-sale debt securities			-				-				-				(1	)
Premises and equipment			(4	)			(78	)			(1	)			(243	)
Total other income			4,979				4,325				14,167				13,349
Other expenses:
Salaries and employee benefits			7,173				6,258				21,233				19,203
Premises and equipment			2,224				2,276				6,555				6,653
Data processing and communication			707				765				2,164				2,141
Advertising and marketing			493				461				1,637				1,831
Professional services			1,032				950				3,286				2,949
Automated transaction processing			472				434				1,383				1,339
Office supplies and postage			162				165				555				543
PA shares tax			389				261				804				553
Loan collection			28				45				82				105
Other real estate owned			3				3				(10	)			6
FDIC assessment			314				282				914				843
Other			843				884				2,543				2,900
Total other expenses			13,840				12,784				41,146				39,066
Income before income taxes			5,760				5,930				17,212				20,149
Provision for income taxes			793				590				2,252				2,407
Net income		$	4,967			$	5,340			$	14,960			$	17,742
Per share data:
Net income - basic		$	0.87			$	0.94			$	2.61			$	3.13
Net income - diluted		$	0.86			$	0.93			$	2.59			$	3.11
Dividends		$	0.38			$	0.36			$	1.14			$	1.08