On October 23, 2024, Fidelity D & D Bancorp Inc (FDBC, Financial) released its 8-K filing detailing the financial results for the third quarter of 2024. Fidelity D & D Bancorp Inc, a bank holding company, operates through its subsidiary, The Fidelity Deposit and Discount Bank, offering a comprehensive range of traditional banking services in Pennsylvania.
Performance Overview
Fidelity D & D Bancorp Inc reported a net income of $5.0 million for the third quarter of 2024, a slight decrease from $5.3 million in the same period of 2023. This decline was primarily due to a $1.0 million increase in non-interest expenses and a $0.4 million rise in the provision for credit losses on unfunded loan commitments. However, these were partially offset by a $0.8 million increase in net interest income and a $0.7 million boost in non-interest income.
For the nine months ended September 30, 2024, net income was $15.0 million, down from $17.7 million in the previous year. The decrease was attributed to higher non-interest expenses and a reduction in net interest income.
Financial Achievements and Challenges
Despite the decline in net income, Fidelity D & D Bancorp Inc achieved a 5% increase in net interest income for the third quarter, reaching $15.4 million. This was driven by a $3.6 million increase in interest income, primarily from a $71.0 million rise in the average balance of interest-earning assets and a 50 basis point increase in fully-taxable equivalent yield.
However, the company faced challenges with rising interest expenses, which increased by $2.8 million due to higher rates on interest-bearing deposits and a significant increase in average deposit balances. The overall cost of interest-bearing liabilities rose to 2.70%, up from 2.17% in the previous year.
Key Financial Metrics
Fidelity D & D Bancorp Inc's total assets increased to $2.6 billion as of September 30, 2024, from $2.5 billion at the end of 2023. This growth was primarily due to a $107.9 million increase in the loans and leases portfolio. Shareholders' equity also rose by $17.8 million, reflecting improved retained earnings and a reduction in unrealized losses in the investment portfolio.
Asset quality remained stable, with non-performing assets at 0.29% of total assets, up from 0.13% at the end of 2023. The provision for credit losses on loans was $0.7 million for the third quarter, reflecting growth in the loan portfolio.
Commentary and Strategic Focus
Our third quarter results reflect strong balance sheet growth, increased capital levels, liquidity, and non-interest income," stated Daniel J. Santaniello, President and Chief Executive Officer. "We remain focused, disciplined and thoughtful as we execute on our strategic plan."
The company continues to focus on strategic growth, maintaining strong capital levels and liquidity, and enhancing non-interest income. Despite the challenges posed by rising interest expenses, Fidelity D & D Bancorp Inc is well-positioned for future growth and remains committed to serving its clients and communities.
Conclusion
Fidelity D & D Bancorp Inc's third quarter results highlight both achievements and challenges. While the company has demonstrated strong growth in interest income and asset quality, it faces pressures from rising interest expenses. The strategic focus on balance sheet growth and capital management positions the company for continued success in the competitive banking industry.
Explore the complete 8-K earnings release (here) from Fidelity D & D Bancorp Inc for further details.
