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Mar 31, 2020
Fidelity D & D Bancorp Q1 2020 Earnings Report
Fidelity D & D Bancorp reported a decrease in net income due to an increase in non-interest expenses, which included nonrecurring merger-related expenses, but achieved growth in average interest-earning assets funded by increases in average deposits and shareholders’ equity.
Key Takeaways
Fidelity D & D Bancorp, Inc. reported a net income of $2.6 million, or $0.69 diluted earnings per share, for the quarter ended March 31, 2020. This represents a decrease compared to the $2.8 million, or $0.73 diluted earnings per share, reported for the same quarter in 2019. The reduction in net income was primarily due to an increase in non-interest expenses, including merger-related expenses.
Net income decreased by 6% due to increased non-interest expenses, including $0.3 million in merger-related expenses.
Excluding merger-related expenses, adjusted net income would have increased by 3% compared to Q1 2019.
Average interest-earning assets increased by 5%, funded by growth in average deposits and shareholders’ equity.
Company provided hardship relief to 1,324 customers with balances totaling $165 million through March 31, 2020, in response to the pandemic's economic impact.
Forward Guidance
Fidelity Bank is preparing for the successful integration of Merchants Bank during the 2nd quarter of 2020 and is well positioned to navigate through the current economic uncertainties.
Positive Outlook
- Strong balance sheet
- Strong capital
- Successful integration of Merchants Bank during the 2nd quarter of 2020
- Well positioned to navigate through the current economic uncertainties
Challenges Ahead
- Economic conditions particularly with regard to the negative impact of severe and wide-ranging disruptions caused by the spread of Coronavirus Disease 2019 (COVID-19) 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 or changes in existing laws and regulations, including the Tax Cuts and Jobs Act and Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations promulgated there under
Historical Earnings Impact
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Avg. Return Before/After Earnings
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