Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2025 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. Commonwealth of Pennsylvania I.R.S. Employer Identification N ...

Core Insights - Fidelity Bank has appointed Peter A. Gray as Executive Vice President, Chief Lending Officer, and Market President for the Lehigh Valley, bringing over 20 years of experience in community banking and lending [1][2]. Group 1: Leadership and Experience - Peter A. Gray previously served as Senior Executive Vice President and Chief Operating Officer at another financial institution, focusing on strategic initiatives for efficiency [2]. - Earlier in his career, Gray guided commercial and retail growth across Northeast Pennsylvania [3]. - Gray holds an MBA in Corporate Finance and a BS in Business Management, showcasing a strong educational background [4]. Group 2: Community Engagement - Gray is actively involved in the community, serving on the Board of the Pocono Mountains United Way and the State Theatre of Easton, and has previously contributed to the Lehigh Valley Economic Development Corporation [4]. Group 3: Company Strategy and Vision - Fidelity Bank aims to enhance its commercial lending activities under Gray's leadership, ensuring compliance with regulatory requirements and strategic objectives [5]. - The bank operates 21 full-service offices and emphasizes a unique banking experience, having contributed over 4,500 hours of volunteer time and $1.5 million in donations to local non-profits in 2025 [6].

Financial Performance - Net income for the year ended December 31, 2025, was $28.2 million, a 36% increase from $20.8 million in 2024, with diluted earnings per share rising to $4.86 from $3.60[3] - Net interest income for 2025 was $72.7 million, up $10.8 million or 17% from $61.9 million in 2024, driven by a $181.6 million increase in average interest-earning assets[6] - Total non-interest income for 2025 was $20.6 million, an increase of $1.6 million or 8% from $19.0 million in 2024, primarily due to growth in wealth management revenue and service charges[9] - Non-interest expenses rose to $58.8 million in 2025, a 6% increase from $55.5 million in 2024, mainly due to higher salaries and benefits expenses[10] - Net income for the twelve months ended December 31, 2025, reached $28,198 thousand, a significant increase of 35.5% from $20,794 thousand in 2024[34] - Non-interest income for the twelve months ended December 31, 2025, was $20,559 thousand, up from $19,013 thousand in 2024, reflecting a growth of 8.1%[34] - Total pre-provision net revenue increased to $9,481 thousand for the quarter ended December 31, 2025, compared to $6,826 thousand in the same quarter last year, a growth of 39.0%[42] - Income before taxes increased to $9,211 thousand for the quarter ended December 31, 2025, compared to $6,661 thousand in the same quarter last year, reflecting a growth of 38.5%[42] Asset Quality - The provision for credit losses on loans was $1.1 million for 2025, down from $1.3 million in 2024, reflecting improved asset quality[8] - Total non-performing assets decreased to $2.2 million, or 0.08% of total assets, down from $7.8 million or 0.30% in 2024, showing significant improvement in asset quality[22] - The allowance for credit losses on loans was $20,168 thousand as of December 31, 2025, compared to $19,666 thousand in 2024, indicating a slight increase of 2.55%[32] - The company reported a provision for credit losses on loans of $1,055 thousand for the twelve months ended December 31, 2025, down from $1,325 thousand in 2024, indicating improved credit quality[34] - Non-performing assets to total assets decreased to 0.08% as of December 31, 2025, down from 0.30% a year earlier, indicating improved asset quality[40] Capital and Equity - Shareholders' equity increased by $34.9 million or 17% to $238.9 million at December 31, 2025, driven by higher retained earnings and improvements in accumulated other comprehensive loss[21] - The Company remains well capitalized with Tier 1 capital at 9.34% of total average assets as of December 31, 2025[21] - Total risk-based capital ratio remained stable at 14.78% as of December 31, 2025, consistent with the previous year[40] - Book value per share rose to $41.39, reflecting an increase of 16.1% from $35.56 a year ago[40] - Tangible common equity ratio improved to 8.01% as of December 31, 2025, compared to 7.16% a year earlier[40] Deposits and Loans - Total assets increased to $2.7 billion as of December 31, 2025, a $163.4 million rise from the previous year, with loans and leases growing by $110.4 million[19] - Total deposits rose to $2,467,353 thousand as of December 31, 2025, compared to $2,340,820 thousand in 2024, marking an increase of 5.4%[32] - Loans and leases totaled $1,911,724 million as of December 31, 2025, slightly down from $1,914,893 million in the previous quarter[36] - Total deposits reached $2,467,353 million as of December 31, 2025, slightly up from $2,466,913 million in the previous quarter[36] Operational Efficiency - Efficiency ratio (FTE) improved to 58.35% for the quarter ended December 31, 2025, compared to 60.17% in the prior quarter[38] - Efficiency ratio (non-GAAP) improved to 58.35% for the quarter ended December 31, 2025, down from 65.48% a year earlier, indicating enhanced operational efficiency[41] Community Engagement - The company provided over 6,190 hours of volunteer time and donated over $1.5 million to non-profit organizations in 2025, emphasizing its commitment to community service[23] Other Financial Metrics - Basic earnings per share rose to $1.38 for the quarter ended December 31, 2025, compared to $1.27 in the prior quarter[38] - Return on average equity improved to 13.45% for the quarter ended December 31, 2025, up from 13.25% in the previous quarter[38] - Net interest margin (FTE) increased to 3.04% for the quarter ended December 31, 2025, compared to 2.95% in the prior quarter[38] - Cost of interest-bearing liabilities decreased to 2.42% for the quarter ended December 31, 2025, down from 2.55% in the prior quarter[38] - Dividends per share increased to $0.43 for the quarter ended December 31, 2025, compared to $0.40 in the previous quarter[38] - Average assets grew to $2,757,902 thousand as of December 31, 2025, up from $2,565,232 thousand a year earlier, representing an increase of 7.5%[42] - Assets under management increased to $1,058,881 thousand as of December 31, 2025, up from $955,647 thousand a year earlier, representing a growth of 10.8%[40] - Net interest income adjusted to FTE reached $20,080 thousand for the quarter ended December 31, 2025, up from $17,138 thousand in the same quarter last year, marking a growth of 17.0%[41]

Core Viewpoint - Fidelity D & D Bancorp, Inc. reported strong financial results for the year and fourth quarter ended December 31, 2025, with significant increases in net income and earnings per share, driven by growth in net interest income and non-interest income [2][4]. Financial Performance Overview - For the year ended December 31, 2025, net income was $28.2 million, a 36% increase from $20.8 million in 2024, with diluted earnings per share rising to $4.86 from $3.60 [2][4]. - In the fourth quarter of 2025, net income reached $7.9 million, up from $5.8 million in the same quarter of 2024, with diluted earnings per share increasing to $1.37 from $1.01 [3][4]. Net Interest Income - Net interest income for the year was $72.7 million, an increase of $10.8 million from $61.9 million in 2024, attributed to a $12.8 million rise in interest income [5][6]. - For the fourth quarter, net interest income was $19.3 million, an 18% increase from $16.4 million in the fourth quarter of 2024 [12][4]. Non-Interest Income - Total non-interest income for the year was $20.6 million, an 8% increase from $19.0 million in 2024, driven by growth in wealth management revenue and service charges [9][4]. - In the fourth quarter, non-interest income increased to $5.1 million, a 6% rise from $4.8 million in the same quarter of 2024 [15][4]. Non-Interest Expenses - Non-interest expenses for the year rose to $58.8 million, a 6% increase from $55.5 million in 2024, primarily due to higher salaries and benefits [10][4]. - For the fourth quarter, non-interest expenses increased to $14.9 million, up 3% from $14.4 million in the same quarter of 2024 [17][4]. Asset Quality - Total non-performing assets decreased to $2.2 million, or 0.08% of total assets, down from $7.8 million, or 0.30%, at the end of 2024, indicating improved asset quality [22][4]. - The provision for credit losses on loans for the year was $1.1 million, down from $1.3 million in 2024, reflecting better asset quality [7][4]. Balance Sheet Highlights - Total assets increased to $2.7 billion as of December 31, 2025, up $163.4 million from the previous year, driven by growth in loans and leases [19][4]. - Shareholders' equity rose to $238.9 million, a 17% increase from $204.0 million at the end of 2024, supported by higher retained earnings [21][4]. Capital Ratios - The Company maintained a strong capital position with Tier 1 capital at 9.34% of total average assets and total risk-based capital at 14.78% of risk-weighted assets as of December 31, 2025 [21][4].

Core Viewpoint - Fidelity D & D Bancorp, Inc. has declared a first quarter dividend of $0.43 per share for 2026, representing a 7.5% increase from the previous year's dividend of $0.40 per share [1] Group 1: Dividend Announcement - The dividend is scheduled to be paid on March 10, 2026, to shareholders of record as of February 13, 2026 [1] Group 2: Company Overview - Fidelity D & D Bancorp, Inc. operates through The Fidelity Deposit and Discount Bank, serving Lackawanna, Luzerne, Northampton, and Lehigh Counties with 21 full-service community banking offices [2] - The company also offers a digital banking experience through its Online Banking and Fidelity Mobile Banking app [2]

Core Viewpoint - Fidelity D & D Bancorp, Inc. (FDBC) has experienced a modest stock price increase of nearly 1% since the last analysis, with total shareholder returns (TSR) rising by approximately 2%, which lags behind the performance of the SPDR S&P 500 ETF [1] Summary by Relevant Sections - Stock Performance - FDBC's stock price has risen nearly 1% [1] - Total shareholder returns (TSR) have increased by roughly 2% [1] - Comparative Analysis - The performance of FDBC has not kept pace with the SPDR S&P 500 ETF [1]

Core Viewpoint - Fidelity D & D Bancorp, Inc. (FDBC) has experienced a modest stock price increase of nearly 1% since the last analysis, with total shareholder returns (TSR) rising by approximately 2%, which lags behind the performance of the SPDR S&P 500 ETF [1] Summary by Relevant Sections - Stock Performance - FDBC's stock price has risen nearly 1% [1] - Total shareholder returns (TSR) have increased by roughly 2% [1] - Comparative Analysis - The performance of FDBC has not kept pace with the SPDR S&P 500 ETF [1]

Core Insights - Fidelity Bank has appointed James Clemente and Rocco DelVecchio to its Board of Directors, enhancing its leadership team with experienced professionals in accounting and financial services [1][2]. Group 1: Appointments - James Clemente has been elected as a director of Fidelity D & D Bancorp, Inc. until the 2028 annual meeting of shareholders, while Rocco DelVecchio will serve until the 2026 annual meeting [2]. - Clemente brings over 45 years of experience in accounting and consulting, specializing in taxation and business acquisitions, and has previously served as a director for another local community bank [3]. - DelVecchio has extensive leadership experience in financial services, having held senior roles at another bank and most recently served as a consultant for Fidelity Bank [4]. Group 2: Leadership Statements - Brian J. Cali, Chairman of the Board, emphasized Clemente's expertise in accounting and community involvement as vital for guiding Fidelity Bank's strategic direction [5]. - Cali also highlighted DelVecchio's leadership and banking experience as significant assets for the Board, reflecting the values of Fidelity Bank [5]. - Daniel J. Santaniello, President & CEO, expressed confidence that the new directors' expertise will contribute to building long-term value for clients and communities [5]. Group 3: Company Overview - Fidelity Bank operates 21 full-service offices across several counties and offers a digital banking experience [6]. - The bank has a commitment to community service, having provided over 5,960 hours of volunteer time and over $1.5 million in donations to non-profit organizations in 2024 [6].

Financial Performance - For the nine months ended September 30, 2025, net income was $20.3 million, or $3.50 diluted earnings per share, a 35% increase compared to $15.0 million, or $2.59 diluted earnings per share for the same period in 2024[136] - Net income for Q3 2025 was $7.3 million, a 48% increase from $5.0 million in Q3 2024, resulting in earnings per diluted share of $1.27 compared to $0.86[148] - For the nine months ended September 30, 2025, net income was $20.3 million, a 35% increase from $15.0 million in the same period of 2024, with earnings per diluted share rising from $2.59 to $3.50[149] - Net interest income for Q3 2025 was $18.4 million, a 19% increase from $15.4 million in Q3 2024, driven by a $3.4 million increase in interest income[151] - For the nine months ended September 30, 2025, net interest income was $53.4 million, up from $45.5 million in the same period of 2024, reflecting a $9.8 million increase in interest income[153] - Total non-interest income for the nine months ended September 30, 2025 was $15.4 million, an increase of $1.2 million, or 9% from $14.2 million for the same period in 2024[172] - Non-interest expenses increased to $43.9 million for the nine months ended September 30, 2025, an increase of $2.8 million, or 7% from $41.1 million for the same period in 2024[174] Asset and Equity Growth - As of September 30, 2025, tangible common book value per share was $36.23, up from $32.55 as of September 30, 2024, primarily due to an increase in retained earnings from net income[137] - The tangible common equity ratio as of September 30, 2025, was 7.69%, up from 7.19% as of September 30, 2024[143] - Shareholders' equity rose to $219,925, up from $198,794, reflecting a growth of 10.6% year-over-year[161] - Total assets as of September 30, 2025, were $2.736 billion, an increase from $2.616 billion as of September 30, 2024[143] - The Company’s total assets increased by $152.1 million to $2.7 billion as of September 30, 2025, driven by a $113.5 million growth in the loans and leases portfolio[180] Loan Portfolio and Credit Quality - The total loan portfolio increased to $1,915.6 million, up from $1,800.7 million at December 31, 2024, representing a growth of 6.4%[204] - The growth in the loan portfolio was attributed to a $130.0 million increase in the commercial portfolio, including significant loans to a single borrower totaling $30.6 million[202] - The allowance for credit losses reflects management's best estimate of expected credit losses, with a formal review conducted quarterly[222] - The total non-performing assets decreased by $4.8 million, or 61%, to $3.02 million as of September 30, 2025, from $7.8 million on December 31, 2024[244] - Non-accrual loans amounted to $2.6 million as of September 30, 2025, down from $7.3 million on December 31, 2024[245] Interest Income and Rate Management - Interest income adjusted to fully-taxable equivalent (FTE) for the nine months ended September 30, 2025, was $91.071 million, compared to $81.235 million for the same period in 2024, reflecting a growth of 12.7%[141] - The FTE yield on interest-earning assets was 4.83% for Q3 2025, up 15 basis points from 4.68% in Q3 2024, while the overall cost of interest-bearing liabilities decreased to 2.55% from 2.70%[152] - The Company's FTE net interest spread increased to 2.28% in Q3 2025, a 30 basis point improvement from 1.98% in Q3 2024[152] - The FTE net interest margin increased to 2.92% for the nine months ended September 30, 2025, up 22 basis points from 2.70% in the same period of 2024[154] - The Company expects to operate in a moderately declining interest rate environment, with anticipated federal funds rate cuts of 25 basis points in December 2025 and an additional 50 basis points by the end of 2026[156] Operational Efficiency - The efficiency ratio for the nine months ended September 30, 2025, improved to 61.00% from 66.44% for the same period in 2024, indicating better cost management[142] - The Company continues to focus on growing its core business of retail and business lending while maintaining strong asset quality and controlling operating expenses[134] - The Company plans to grow its loan portfolio by utilizing excess cash holdings and managing deposit costs to maintain a reasonable spread[156] Deposits and Funding - Total deposits grew by $126.1 million, which was utilized to fund loan growth and maintain excess in interest-bearing cash[180] - As of September 30, 2025, total deposits increased by $126.1 million, or 5%, to $2.5 billion from $2.3 billion at December 31, 2024[259] - Total uninsured deposits were estimated at $961.7 million, or 39% of total deposits, as of September 30, 2025[261] Interest Rate Risk Management - The Company has established procedures and policy guidelines to manage interest rate risk effectively[290] - The Asset/Liability Committee (ALCO) meets quarterly to monitor interest rate risk and ensure compliance with internal policies[291] - Interest rate risk is monitored using static gap analysis, earnings at risk simulation, and economic value at risk simulation[292] - The Company has a derivative policy in place for managing interest rate risks, with quarterly monitoring by the ALCO Committee[304]

Core Insights - Fidelity Bank has appointed Charles Hangen as Senior Vice President and Chief Risk Officer, emphasizing the importance of risk management in the current financial landscape [1][2][3] Company Overview - Fidelity Bank operates 21 full-service offices across Lackawanna, Luzerne, Lehigh, and Northampton Counties, along with a limited production commercial office and a Wealth Management Office [5] - The bank aims to exceed client expectations through a unique banking experience and has contributed over 5,960 hours of volunteer time and over $1.5 million in donations to non-profit organizations in 2024 [5] Leadership and Expertise - Charles Hangen brings extensive expertise in risk management and strategic leadership, with a strong background in regulatory frameworks [2][3] - Hangen's role will focus on enhancing the enterprise risk management framework and adapting policies to meet evolving financial challenges [2][3] Community Engagement - Hangen is actively involved in his community, serving as an assistant coach for local sports teams, reflecting the bank's commitment to community service [4]