Core Insights - Fidelity D & D Bancorp, Inc. reported strong financial results for the third quarter and year-to-date periods, with net income increasing significantly compared to the previous year [4][2][3]. Financial Performance - For the quarter ended September 30, 2025, net income was $7.3 million, or $1.27 per diluted share, a 48% increase from $5.0 million, or $0.86 per diluted share, in the same quarter of 2024 [2][4]. - Year-to-date net income for the nine months ended September 30, 2025, was $20.3 million, or $3.50 per diluted share, compared to $15.0 million, or $2.59 per diluted share, for the same period in 2024, marking a 35% increase [3][4]. Revenue Growth - The increase in net income for the third quarter was primarily driven by a $3.0 million increase in net interest income and a $0.5 million decrease in provision for credit losses [2][4]. - For the nine months ended September 30, 2025, net interest income rose by $7.9 million, attributed to a $9.8 million increase in interest income [3][11]. Interest Income and Expenses - Net interest income for the third quarter of 2025 was $18.4 million, a 19% increase from $15.4 million in the same quarter of 2024 [5][11]. - The overall cost of interest-bearing liabilities decreased to 2.55% for the third quarter of 2025, down from 2.70% in the same quarter of 2024 [6][12]. Asset Quality - Total non-performing assets decreased to $3.0 million, or 0.11% of total assets, as of September 30, 2025, compared to $7.8 million, or 0.30% of total assets, at December 31, 2024 [21]. - The provision for credit losses on loans was $200 thousand for the third quarter of 2025, down from $675 thousand in the same quarter of 2024, reflecting improved asset quality [7][13]. Balance Sheet Highlights - Total assets increased to $2.7 billion as of September 30, 2025, up by $152.1 million from December 31, 2024, driven by growth in loans and leases [18][20]. - Shareholders' equity rose to $229.3 million, a 12% increase from $204.0 million at December 31, 2024, supported by retained earnings from net income [20][18]. Non-Interest Income and Expenses - Total non-interest income for the third quarter of 2025 was $5.1 million, a slight increase of 3% from $5.0 million in the same quarter of 2024 [8][14]. - Non-interest expenses increased by $0.8 million, or 6%, to $14.6 million for the third quarter of 2025, primarily due to higher salaries and benefits [9][15].

Core Viewpoint - Fidelity D & D Bancorp, Inc. announces the retirement of Director Richard Hotchkiss effective September 16, 2025, highlighting his significant contributions to the company during his tenure [1][5]. Company Overview - Fidelity D & D Bancorp, Inc. is the parent company of The Fidelity Deposit and Discount Bank, a community bank headquartered in Dunmore, PA, and operates 21 full-service offices across several counties [1][6]. - The bank offers a range of services including personal and commercial banking products, wealth management, and digital banking options [6]. Director's Background - Richard Hotchkiss joined the Fidelity Bank Board of Directors on May 5, 2020, following a merger and has held various leadership roles, including Chair of the Credit Administration Committee [2][3]. - Prior to his role at Fidelity Bank, he had a long career in administration and internal affairs at MNB Corporation and Merchants Bank of Bangor, where he was elected Chairman of the Board in 1997 [3]. Leadership Acknowledgment - The President & CEO of Fidelity Bank, Daniel J. Santaniello, expressed gratitude for Hotchkiss's leadership and the lasting impact he made on the organization [5]. - The Chairman of the Board, Brian J. Cali, acknowledged Hotchkiss's commitment to shaping the bank's governance and organizational structure [5]. Community Engagement - Fidelity Bank emphasizes its commitment to the community, having provided over 5,960 hours of volunteer time and over $1.3 million in donations to non-profit organizations in 2024 [6].

Here's the structured report outline in Markdown format, following all your requirements: PART I – Financial Information This section provides the unaudited financial information for Fidelity D & D Bancorp, Inc. [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements and related notes for Fidelity D & D Bancorp, Inc. for periods ended June 30, 2025, and December 31, 2024 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section details the company's financial position at specific dates, presenting assets, liabilities, and equity Consolidated Balance Sheets (dollars in thousands) | (dollars in thousands) | June 30, 2025 | December 31, 2024 | | 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[Executive Summary & Performance Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Performance%20Highlights) Fidelity D & D Bancorp, Inc. reports strong Q2 and year-to-date 2025 financial performance, with significant growth in net income and EPS [Second Quarter 2025 Financial Highlights](index=1&type=section&id=1.1%20Second%20Quarter%202025%20Financial%20Highlights) Q2 2025 net income rose 40% to $6.9 million, with diluted EPS at $1.20, driven by increased net interest and non-interest income Q2 2025 Financial Performance Summary | Metric | Q2 2025 | Q2 2024 | Change ($M) | Change (%) | | :--------------------- | :------ | :------ | :---------- | :--------- | | Net income | $6.9 M | $4.9 M | $2.0 M | 40% | | Diluted EPS | $1.20 | $0.86 | $0.34 | 39.5% | - The increase in net income was primarily driven by a **$2.8 million** increase in net interest income and a **$0.8 million** increase in non-interest income[3](index=3&type=chunk) - Partially offsetting factors included a **$1.1 million** increase in non-interest expense and a **$0.6 million** increase in the provision for income tax[3](index=3&type=chunk) [Year-to-Date 2025 Financial Highlights](index=1&type=section&id=1.2%20Year-to-Date%202025%20Financial%20Highlights) Year-to-date 2025 net income increased 29% to $12.9 million, with diluted EPS at $2.23, reflecting strong interest and non-interest income growth Year-to-Date 2025 Financial Performance Summary | Metric | YTD 2025 | YTD 2024 | Change ($M) | Change (%) | | :--------------------- | :------- | :------- | :---------- | :--------- | | Net income | $12.9 M | $10.0 M | $2.9 M | 29% | | Diluted EPS | $2.23 | $1.73 | $0.50 | 28.9% | - The year-to-date net income increase stemmed from a **$4.9 million** increase in net interest income and a **$1.1 million** increase in non-interest income[4](index=4&type=chunk) - These gains were partially offset by a **$2.0 million** increase in non-interest expense and a **$1.0 million** increase in the provision for income tax[4](index=4&type=chunk) [CEO Commentary](index=1&type=section&id=1.3%20CEO%20Commentary) CEO Daniel J. Santaniello lauded strong Q2 and YTD performance, crediting disciplined loan growth, enhanced yields, and robust capital position - Second quarter 2025 net income increased **40%** over last year's second quarter to **$6.9 million**, with diluted earnings per share rising to **$1.20**[5](index=5&type=chunk) - Performance was driven by a **19%** increase in net interest income, reflecting disciplined loan portfolio expansion and enhanced yields, as well as a **16%** rise in non-interest income[5](index=5&type=chunk) - Year-to-date, net income grew **29%** to **$12.9 million**, supported by a strong relationship-based deposit strategy and prudent expense management[6](index=6&type=chunk) Shareholders' equity increased **7%**, strengthening the capital position for future growth[6](index=6&type=chunk) [Consolidated Second Quarter Operating Results](index=1&type=section&id=Consolidated%20Second%20Quarter%20Operating%20Results) This section details Fidelity D & D Bancorp's Q2 2025 operating results, covering net interest income, credit loss provisions, and non-interest items [Net Interest Income](index=1&type=section&id=2.1%20Net%20Interest%20Income) Q2 2025 net interest income grew 19% to $17.9 million, driven by higher interest income from increased assets and improved FTE yield Q2 Net Interest Income Performance | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change ($M) | Change (%) | | :---------------------- | :----------- | :----------- | :---------- | :--------- | | Net interest income | $17.9 | $15.1 | $2.8 | 19% | | Interest income | $29.8 | $26.0 | $3.7 | 14.2% | | Interest expense | $11.8 | $10.9 | $0.9 | 8.3% | - The increase in interest income was primarily due to a **$213.6 million** increase in the average balance of interest-earning assets and a **19 basis point** increase in FTE yield[8](index=8&type=chunk) - FTE net interest margin increased to **2.92%** for Q2 2025 from **2.71%** for Q2 2024, mainly driven by growth in higher yielding taxable commercial loans[9](index=9&type=chunk) [Provision for Credit Losses](index=2&type=section&id=2.2%20Provision%20for%20Credit%20Losses) Q2 2025 loan loss provision increased to $300 thousand due to higher charge-offs, while unfunded commitment provision decreased Q2 Provision for Credit Losses | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | Change ($ thousands) | | :-------------------------------------- | :-------------------- | :-------------------- | :------------------- | | Provision for credit losses on loans | $300 | $275 | $25 | | Provision for unfunded commitments | $20 | $140 | ($120) | - The increase in loan loss provision was due to **$155 thousand** in higher net charge-offs and a higher average total loan balance[10](index=10&type=chunk) - The decrease in provision for unfunded commitments was due to lower levels of unfunded commitments during the quarter, specifically commercial construction commitments, due to increased utilization[10](index=10&type=chunk) [Non-Interest Income](index=2&type=section&id=2.3%20Non-Interest%20Income) Total non-interest income for Q2 2025 rose 16% to $5.4 million, driven by higher trust fees, BOLI benefits, and service charges Q2 Non-Interest Income Performance | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change ($M) | Change (%) | | :-------------------- | :----------- | :----------- | :---------- | :--------- | | Total non-interest income | $5.4 | $4.6 | $0.8 | 16% | - Key contributors to the increase included **$0.2 million** in trust fees, a **$0.2 million** BOLI death benefit, **$0.2 million** in loan service charges, and **$0.1 million** in interchange fees[11](index=11&type=chunk) [Non-Interest Expenses](index=2&type=section&id=2.4%20Non-Interest%20Expenses) Non-interest expenses increased 8% to $14.7 million in Q2 2025, primarily due to higher salaries, premises, and advertising costs Q2 Non-Interest Expenses | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change ($M) | Change (%) | | :------------------ | :----------- | :----------- | :---------- | :--------- | | Non-interest expenses | $14.7 | $13.6 | $1.1 | 8% | - Primary increases were in salaries and benefits expense (**$0.8 million**), premises and equipment expense (**$0.2 million**), and advertising expense (**$0.2 million**)[12](index=12&type=chunk) - These increases were partially offset by a **$0.2 million** decrease in professional services[12](index=12&type=chunk) [Provision for Income Taxes](index=3&type=section&id=2.5%20Provision%20for%20Income%20Taxes) Q2 2025 income tax provision increased by $0.6 million, directly correlating with a $2.6 million rise in pre-tax income - Provision for income taxes increased by **$0.6 million** in Q2 2025 compared to Q2 2024[13](index=13&type=chunk) - This increase was primarily due to a **$2.6 million** increase in income before taxes[13](index=13&type=chunk) [Consolidated Year-To-Date Operating Results](index=3&type=section&id=Consolidated%20Year-To-Date%20Operating%20Results) This section details Fidelity D & D Bancorp's year-to-date 2025 operating results, covering key income and expense components [Net Interest Income](index=3&type=section&id=3.1%20Net%20Interest%20Income) Year-to-date net interest income increased $4.9 million to $35.0 million, driven by higher interest income and improved FTE yield Year-to-Date Net Interest Income Performance | Metric | YTD 2025 ($M) | YTD 2024 ($M) | Change ($M) | Change (%) | | :---------------------- | :------------ | :------------ | :---------- | :--------- | | Net interest income | $35.0 | $30.1 | $4.9 | 16.3% | | Interest income | $58.1 | $51.7 | $6.4 | 12.4% | | Interest expense | $23.1 | $21.6 | $1.5 | 6.9% | - Interest income growth was primarily due to a **$181.0 million** increase in average interest-earning assets and a **20 basis point** increase in FTE yield[14](index=14&type=chunk) - FTE net interest margin increased by **21 basis points** to **2.91%** for YTD 2025, as yields earned on loans and leases outpaced rates paid on interest-bearing deposits[15](index=15&type=chunk) [Provision for Credit Losses](index=3&type=section&id=3.2%20Provision%20for%20Credit%20Losses) Year-to-date loan loss provision rose to $755 thousand due to higher charge-offs, while unfunded commitment provision became a net benefit Year-to-Date Provision for Credit Losses | Metric | YTD 2025 ($ thousands) | YTD 2024 ($ thousands) | Change ($ thousands) | | :-------------------------------------- | :--------------------- | :--------------------- | :------------------- | | Provision for credit losses on loans | $755 | $400 | $355 | | Provision for unfunded commitments | ($65) (net benefit) | $90 | ($155) | - The increase in loan loss provision was due to **$215 thousand** in higher net charge-offs and a higher average total loan balance[16](index=16&type=chunk) - The decrease in provision for unfunded commitments was due to lower growth in unfunded commitments from increased utilization, specifically commercial construction commitments[16](index=16&type=chunk) [Non-Interest Income](index=3&type=section&id=3.3%20Non-Interest%20Income) Year-to-date non-interest income increased 12% to $10.3 million, driven by higher fees and a BOLI death benefit, despite securities losses Year-to-Date Non-Interest Income Performance | Metric | YTD 2025 ($M) | YTD 2024 ($M) | Change ($M) | Change (%) | | :-------------------- | :------------ | :------------ | :---------- | :--------- | | Total non-interest income | $10.3 | $9.2 | $1.1 | 12% | - Key drivers included **$0.3 million** higher fees from trust fiduciary activities, **$0.2 million** more in interchange fees, a **$0.2 million** BOLI death benefit, and an increase of **$0.2 million** in service charges on commercial loans[17](index=17&type=chunk) - Gains of **$0.5 million** on the sale of a commercial loan and **$0.3 million** from the sale of a property were offset by **$0.8 million** in losses recognized on the sale of securities[17](index=17&type=chunk) [Non-Interest Expenses](index=3&type=section&id=3.4%20Non-Interest%20Expenses) Year-to-date non-interest expenses rose 7% to $29.3 million, primarily due to increased salaries, advertising, and premises costs Year-to-Date Non-Interest Expenses | Metric | YTD 2025 ($M) | YTD 2024 ($M) | Change ($M) | Change (%) | | :------------------ | :------------ | :------------ | :---------- | :--------- | | Non-interest expenses | $29.3 | $27.3 | $2.0 | 7% | - Salaries and benefits expense increased **$1.3 million** due to an increase in bankers, group insurance costs, and banker incentives[18](index=18&type=chunk) - Other increases included **$0.5 million** in advertising and marketing expenses and **$0.5 million** in premises and equipment expense[18](index=18&type=chunk) - These increases were partially offset by **$0.3 million** less in professional services expense[18](index=18&type=chunk) [Provision for Income Taxes](index=3&type=section&id=3.5%20Provision%20for%20Income%20Taxes) Year-to-date income tax provision increased $1.0 million, driven by higher pre-tax income and reduced tax credits - Provision for income taxes increased by **$1.0 million** during YTD 2025 compared to YTD 2024[19](index=19&type=chunk) - This was primarily due to a **$3.9 million** increase in income before taxes and **$0.2 million** less in tax credits[19](index=19&type=chunk) [Consolidated Balance Sheet & Asset Quality Overview](index=3&type=section&id=Consolidated%20Balance%20Sheet%20%26%20Asset%20Quality%20Overview) This section provides an overview of Fidelity D & D Bancorp's balance sheet, capital adequacy, and asset quality as of June 30, 2025 [Balance Sheet Changes](index=3&type=section&id=4.1%20Balance%20Sheet%20Changes) Total assets grew $114.0 million to $2.7 billion, funded by a $100.0 million increase in liabilities, primarily from deposit growth Balance Sheet Summary at Period End | Metric | June 30, 2025 ($B) | Dec 31, 2024 ($B) | Change ($M) | Change (%) | | :-------------------- | :----------------- | :---------------- | :---------- | :--------- | | Total assets | $2.7 | $2.6 | $114.0 | 4.4% | | Total liabilities | $2.48 | $2.38 | $100.0 | 4.2% | | Total deposits | $2.44 | $2.34 | $94.5 | 4.0% | - Asset growth resulted from **$82.1 million** in cash and cash equivalents and **$37.9 million** in the loans and leases portfolio[20](index=20&type=chunk) - Deposit growth of **$94.5 million** was utilized to fund loan growth and increase interest-bearing cash balances, with increases across money market, interest-bearing checking, time deposits, savings, and non-interest-bearing checking accounts[21](index=21&type=chunk)[22](index=22&type=chunk) [Shareholders' Equity and Capital Adequacy](index=4&type=section&id=4.2%20Shareholders%27%20Equity%20and%20Capital%20Adequacy) Shareholders' equity increased 7% to $217.9 million, driven by retained earnings and improved AOCI, maintaining a strong capital position Shareholders' Equity Summary | Metric | June 30, 2025 ($M) | Dec 31, 2024 ($M) | Change ($M) | Change (%) | | :-------------------------- | :----------------- | :---------------- | :---------- | :--------- | | Shareholders' equity | $217.9 | $204.0 | $13.9 | 7% | - The increase was caused by **$8.3 million** higher retained earnings from net income and a **$4.9 million** (after tax) improvement in accumulated other comprehensive income, partially offset by **$4.7 million** in cash dividends[23](index=23&type=chunk) - The Company remains well capitalized, with **Tier 1 capital at 9.16%** of total average assets, **total risk-based capital at 14.72%**, and **Tier 1 risk-based capital at 13.57%** as of June 30, 2025[23](index=23&type=chunk) [Asset Quality](index=5&type=section&id=4.3%20Asset%20Quality) Asset quality improved significantly, with non-performing assets decreasing to 0.13% of total assets, despite a slight rise in net charge-offs Asset Quality Ratios | Metric | June 30, 2025 | Dec 31, 2024 | Change (bps) | | :---------------------------------- | :------------ | :----------- | :----------- | | Total non-performing assets to total assets | 0.13% | 0.30% | -17 | | Past due and non-accrual loans to total loans | 0.41% | 0.71% | -30 | | Net charge-offs to average total loans | 0.05% | 0.03% | +2 | [Company Information](index=5&type=section&id=Company%20Information) This section provides an overview of Fidelity D & D Bancorp, Inc., its operations, services, and community engagement [About Fidelity D & D Bancorp, Inc.](index=5&type=section&id=5.1%20About%20Fidelity%20D%20%26%20D%20Bancorp%2C%20Inc.) Fidelity D & D Bancorp, Inc. operates 21 full-service offices, offering comprehensive banking and wealth management services, with strong community involvement - Operates **21 full-service offices** across Lackawanna, Luzerne, Lehigh, and Northampton Counties, and a Wealth Management Office in Schuylkill County[25](index=25&type=chunk) - Provides digital banking (online, mobile app, Client Care Center), Wealth Management & Brokerage Services, a Mortgage Center, and a full suite of personal and commercial banking products[25](index=25&type=chunk) - Demonstrated community commitment in 2024 with over **5,960 hours** of volunteer time and over **$1.3 million** in donations to non-profit organizations[25](index=25&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the Company's use of non-GAAP financial measures to provide supplementary insights into its operating performance [Explanation and Use](index=5&type=section&id=6.1%20Explanation%20and%20Use) Non-GAAP measures, like FTE adjustments, provide supplementary insights into operating performance and trends, used internally but not replacing GAAP - Non-GAAP financial measures are used to provide information useful in understanding operating performance and trends, and to facilitate comparisons with other financial institutions[26](index=26&type=chunk) - Management uses these measures internally to assess and better understand underlying business performance and trends related to core business activities[26](index=26&type=chunk) - Interest income is adjusted to a fully-taxable equivalent (FTE) basis, using a **21%** corporate federal tax rate, to allow for uniform comparison among yields on interest-earning assets[27](index=27&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section outlines the forward-looking statements disclaimer, detailing various risks and uncertainties that could impact actual financial results [Disclaimer and Risk Factors](index=5&type=section&id=7.1%20Disclaimer%20and%20Risk%20Factors) Forward-looking statements are subject to known and unknown risks, including economic conditions, interest rate volatility, and regulatory changes - The press release contains forward-looking statements that may involve known and unknown risks, uncertainties, and other factors which may cause actual results to differ materially[28](index=28&type=chunk) - Risk factors include local, regional, and national economic conditions, inflation, interest rate volatility, securities markets and monetary fluctuations, regulatory changes (e.g., Basel III), governmental policies, litigation, accounting policy changes, and competition[29](index=29&type=chunk) - Additional risks include technological changes, cybersecurity breaches, acquisitions, assumptions underlying loan loss reserves, acts of war or terrorism, and the potential for incorrect analyses or unsuccessful strategies[32](index=32&type=chunk) [Financial Statements and Supplementary Data](index=7&type=section&id=Financial%20Statements%20and%20Supplementary%20Data) This section presents unaudited consolidated financial statements, including balance sheets, income statements, key ratios, and non-GAAP reconciliations [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=8.1%20Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Unaudited condensed consolidated balance sheets detail financial positions, assets, liabilities, and equity at period ends and average year-to-date Condensed Consolidated Balance Sheets (Period End) **At Period End (dollars in thousands):** | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $165,495 | $83,353 | | Investment securities | $545,821 | $557,221 | | Loans and leases | $1,837,477 | $1,800,856 | | Total assets | $2,698,575 | $2,584,616 | | Non-interest-bearing deposits | $558,074 | $533,935 | | Interest-bearing deposits | $1,877,254 | $1,806,885 | | Total deposits | $2,435,328 | $2,340,820 | | Total liabilities | $2,480,663 | $2,380,647 | | Shareholders' equity | $217,912 | $203,969 | Average Year-to-Date Balances **Average Year-To-Date Balances (dollars in thousands):** | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total assets | $2,645,679 | $2,493,659 | | Total deposits | $2,393,215 | $2,225,354 | | Shareholders' equity | $210,757 | $196,558 | [Unaudited Condensed Consolidated Statements of Income](index=8&type=section&id=8.2%20Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) Unaudited condensed consolidated income statements detail revenues, expenses, and net income for quarterly and year-to-date periods Condensed Consolidated Statements of Income (Three Months Ended June 30) **Three Months Ended June 30 (dollars in thousands):** | Metric | Jun. 30, 2025 | Jun. 30, 2024 | | :-------------------------------------- | :------------ | :------------ | | Total interest income | $29,765 | $26,039 | | Total interest expense | ($11,836) | ($10,922) | | Net interest income | $17,929 | $15,117 | | Provision for credit losses on loans | ($300) | ($275) | | Non-interest income | $5,359 | $4,615 | | Non-interest expense | ($14,710) | ($13,616) | | Net income | $6,921 | $4,935 | Condensed Consolidated Statements of Income (Six Months Ended June 30) **Six Months Ended June 30 (dollars in thousands):** | Metric | Jun. 30, 2025 | Jun. 30, 2024 | | :-------------------------------------- | :------------ | :------------ | | Total interest income | $58,073 | $51,665 | | Total interest expense | ($23,111) | ($21,604) | | Net interest income | $34,962 | $30,061 | | Provision for credit losses on loans | ($755) | ($400) | | Non-interest income | $10,332 | $9,188 | | Non-interest expense | ($29,264) | ($27,306) | | Net income | $12,912 | $9,993 | [Selected Financial Ratios and Other Financial Data](index=10&type=section&id=8.3%20Selected%20Financial%20Ratios%20and%20Other%20Financial%20Data) This section presents key financial ratios and performance indicators, including EPS, profitability, efficiency, and asset quality metrics Selected Returns and Financial Ratios (Three Months Ended June 30) **Selected Returns and Financial Ratios (Three Months Ended June 30):** | Metric | Jun. 30, 2025 | Jun. 30, 2024 | | :---------------------------------- | :------------ | :------------ | | Diluted earnings per share | $1.20 | $0.86 | | Dividends per share | $0.40 | $0.38 | | Yield on interest-earning assets (FTE)* | 4.77% | 4.58% | | Cost of interest-bearing liabilities | 2.52% | 2.58% | | Net interest margin (FTE)* | 2.92% | 2.71% | | Return on average assets | 1.04% | 0.81% | | Return on average equity | 13.02% | 10.44% | | Efficiency ratio (FTE)* | 61.17% | 66.47% | Selected Returns and Financial Ratios (Six Months Ended June 30) **Selected Returns and Financial Ratios (Six Months Ended June 30):** | Metric | Jun. 30, 2025 | Jun. 30, 2024 | | :---------------------------------- | :------------ | :------------ | | Diluted earnings per share | $2.23 | $1.73 | | Dividends per share | $0.80 | $0.76 | | Yield on interest-earning assets (FTE)* | 4.75% | 4.55% | | Cost of interest-bearing liabilities | 2.51% | 2.54% | | Net interest margin (FTE)* | 2.91% | 2.70% | | Return on average assets | 0.98% | 0.82% | | Return on average equity | 12.35% | 10.57% | | Efficiency ratio (FTE)* | 61.42% | 67.01% | Other Financial Data (Period End) **Other Financial Data (At period end, dollars in thousands except per share data):** | Metric | Jun. 30, 2025 | Dec. 31, 2024 | | :-------------------------------------- | :------------ | :------------ | | Tangible book value per share* | $34.25 | $31.98 | | Tangible common equity ratio* | 7.38% | 7.16% | | Non-performing assets to total assets | 0.13% | 0.30% | | Total risk-based capital ratio | 14.72% | 14.78% | | Leverage ratio | 9.16% | 9.22% | [Reconciliations of Non-GAAP Financial Measures to GAAP](index=12&type=section&id=8.4%20Reconciliations%20of%20Non-GAAP%20Financial%20Measures%20to%20GAAP) Detailed reconciliations of non-GAAP financial measures to GAAP are provided for transparency, covering FTE net interest income and efficiency ratio - Detailed reconciliations are provided for FTE net interest income, efficiency ratio, tangible book value per share/tangible common equity ratio, and pre-provision net revenue to average assets[43](index=43&type=chunk) - These reconciliations show the adjustments from GAAP interest income to FTE interest income, and how non-interest expenses are divided by adjusted net interest income (FTE) plus adjusted non-interest income for the efficiency ratio calculation[43](index=43&type=chunk)

Core Insights - Fidelity D & D Bancorp, Inc. reported strong financial results for the second quarter and first half of 2025, with net income increasing by 40% year-over-year for the quarter and 29% for the year-to-date period [2][3][4]. Financial Performance - For the quarter ended June 30, 2025, net income was $6.9 million, or $1.20 diluted earnings per share, compared to $4.9 million, or $0.86 diluted earnings per share, for the same quarter in 2024, marking a $2.0 million increase [2][4]. - Year-to-date net income for the six months ended June 30, 2025, was $12.9 million, or $2.23 diluted earnings per share, up from $10.0 million, or $1.73 diluted earnings per share, for the same period in 2024, reflecting a $2.9 million increase [3][5]. Revenue Breakdown - The increase in net income for the second quarter was primarily driven by a $2.8 million increase in net interest income and a $0.8 million increase in non-interest income [2][4]. - For the six months ended June 30, 2025, net interest income rose by $4.9 million, attributed to a $6.4 million increase in interest income, driven by a $181.0 million increase in the average balance of interest-earning assets [13][14]. Expense Management - Non-interest expenses increased by $1.1 million, or 8%, for the second quarter of 2025, primarily due to higher salaries and benefits [11][17]. - Year-to-date non-interest expenses rose to $29.3 million, an increase of $2.0 million, or 7%, compared to the same period in 2024 [17]. Asset Quality - Total non-performing assets decreased to $3.5 million, or 0.13% of total assets, at June 30, 2025, down from $7.8 million, or 0.30% of total assets, at December 31, 2024 [22]. - The provision for credit losses on loans was $755 thousand for the six months ended June 30, 2025, compared to $400 thousand for the same period in 2024 [15]. Balance Sheet Highlights - As of June 30, 2025, total assets were $2.7 billion, an increase of $114.0 million from December 31, 2024, driven by growth in cash and cash equivalents and the loans and leases portfolio [19][21]. - Shareholders' equity increased by $13.9 million, or 7%, to $217.9 million at June 30, 2025, from $204.0 million at December 31, 2024 [21]. Capital Position - The company remains well-capitalized, with Tier 1 capital at 9.16% of total average assets and total risk-based capital at 14.72% of risk-weighted assets as of June 30, 2025 [21].

Core Points - Fidelity D & D Bancorp, Inc. has declared a third quarter dividend of $0.40 per share, payable on September 10, 2025, to shareholders of record as of August 15, 2025 [1] 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] Investor Relations - Additional information can be found on the company's investor relations website at www.bankatfidelity.com [3]

Financial Performance - For the three months ended March 31, 2025, net income was $6.0 million, or $1.03 diluted earnings per share, an 18% increase compared to $5.1 million, or $0.88 diluted earnings per share, for the same period in 2024[138]. - Net interest income increased by $2.1 million, contributing to the overall increase in net income, while non-interest income rose by $0.4 million[150]. - The efficiency ratio improved to 61.67% for the three months ended March 31, 2025, compared to 67.56% for the same period in 2024[144]. - Return on average assets (ROA) increased to 0.93% in Q1 2025 from 0.83% in Q1 2024, while return on average shareholders' equity (ROE) rose to 11.66% from 10.71%[151]. - Total non-interest income rose by $0.4 million (9%) to $5.0 million in Q1 2025, driven by increases in wealth management fees and interchange fees[167]. - Non-interest expenses increased by $0.9 million (6%) to $14.6 million in Q1 2025, primarily due to higher salaries and benefits expenses[168]. - The effective tax rate increased to 15.4% in Q1 2025 from 12.1% in Q1 2024, influenced by a $1.3 million increase in income before taxes[169]. - Total shareholders' equity increased by $7.7 million, or 4%, primarily due to a net income of $6.0 million and an improvement in accumulated other comprehensive income[267]. Asset and Liability Management - The total assets as of March 31, 2025, were $2,711,310, compared to $2,468,896 as of March 31, 2024[145]. - The Company maintained $211.2 million in cash and cash equivalents and had a total available borrowing capacity of $1.8 billion, representing 67% of total assets[266]. - The Company has $185.0 million in unpledged securities as of March 31, 2025, to manage seasonal deposit volatility[262]. - The Company had no FHLB advances as of March 31, 2025, with the ability to borrow up to $752.5 million if needed[258]. - The Company executed a $100 million interest rate swap to hedge against rising interest rates, with $1.2 million recorded in accrued interest payable as of March 31, 2025[176]. - The Asset Liability Management (ALM) team is actively addressing interest rate risk and developing strategies to enhance net interest income performance[157]. - The company utilizes computerized net interest income simulation modeling to quantify interest rate risk exposure[284]. Loan Portfolio and Credit Quality - Gross loans and leases totaled $1.8 billion as of March 31, 2025, reflecting an increase of $17 million, or 1%, compared to December 31, 2024[192]. - The commercial portfolio increased by $24.9 million, or 2%, to $1.0 billion, driven by growth in commercial and industrial loans and commercial real estate loans[196]. - The composition of the loan portfolio included $510.8 million in residential real estate loans, accounting for 28.1% of total gross loans as of March 31, 2025[195]. - The allowance for credit losses increased by $0.3 million, or 2%, to $20.0 million from $19.7 million, based on a provisioning of $0.5 million partially offset by net charge-offs of $0.1 million[220]. - The net charge-offs for the three months ended March 31, 2025, were $104, compared to $465 for the same period in 2024[218]. - Non-performing assets decreased to $6,102 thousand as of March 31, 2025, down 22% from $7,805 thousand at December 31, 2024, primarily due to a decline in non-accrual loans[233]. - The commercial real estate loan portfolio accounted for 46% of the total allowance for credit losses as of March 31, 2025, up 1 percentage point from December 31, 2024[226]. Interest Income and Rates - Net interest income for Q1 2025 was $17.0 million, a 14% increase from $14.9 million in Q1 2024, driven by a $2.7 million rise in interest income[152]. - The FTE yield on interest-earning assets increased to 4.73% in Q1 2025, up 21 basis points from 4.52% in Q1 2024[153]. - The net interest spread (FTE) improved to 2.24% in Q1 2025, an increase of 23 basis points from 2.01% in Q1 2024[154]. - The net interest margin (FTE) rose to 2.89% in Q1 2025, compared to 2.69% in Q1 2024, due to growth in the loan and lease portfolio[154]. - The cost of interest-bearing liabilities decreased to 2.49% in Q1 2025 from 2.51% in Q1 2024, aided by a reduction in average short-term borrowings[155]. - The company expects to operate in a moderately declining interest rate environment for the remainder of 2025, with anticipated rate cuts of 50 to 75 basis points[154]. - A simulation of a 200 basis points increase in interest rates could lead to a 2.4% increase in net interest income and a 5.9% increase in net income[291]. Economic Environment - The unemployment rate in the primary market area was 4.6% in March 2025, an increase of 0.8 percentage points from December 2024[137]. - Median home values in the Scranton-Wilkes-Barre-Hazleton metro and Allentown-Bethlehem-Easton metro increased by 7.1% and 4.5%, respectively, from a year ago[137]. - The Company continues to focus on diversifying earning assets and increasing relationship core deposits, particularly in commercial lending and ancillary business products[136]. Deposits and Funding - Total deposits increased by $116.6 million, or 5%, to $2.5 billion as of March 31, 2025, compared to $2.3 billion at December 31, 2024[249]. - Money market accounts grew by $54.1 million, driven by existing account balance growth and targeted marketing efforts[249]. - Interest-bearing checking accounts rose by $27.6 million, primarily due to increases in existing account balances[249]. - As of March 31, 2025, total uninsured deposits were estimated at $959.1 million, or 39% of total deposits[251]. - Approximately 69% of the certificates of deposit (CDs) are scheduled to mature in 2025, with a weighted-average interest rate of 4.25%[254].

Group 1 - The Board of Directors of Fidelity D & D Bancorp, Inc. declared a second quarter dividend of $0.40 per share, payable on June 10, 2025, to shareholders of record as of May 20, 2025 [1] - Fidelity D & D Bancorp, Inc. operates 21 full-service community banking offices across Lackawanna, Luzerne, Northampton, and Lehigh Counties, and offers digital banking services through its Online Banking and Fidelity Mobile Banking app [2] - The company provides wealth management services through its Fidelity Bank Wealth Management Minersville Office located in Schuylkill County [2] Group 2 - For further information, Fidelity D & D Bancorp, Inc. directs interested parties to visit their investor relations website at www.bankatfidelity.com [3]

Financial Performance - Net income for Q1 2025 was $6.0 million, or $1.03 diluted earnings per share, an 18% increase from $5.1 million, or $0.88 per share in Q1 2024 [3]. - Net income for the three months ended March 31, 2025, was $5,991 thousand, up 18.5% from $5,057 thousand for the same period in 2024 [25]. - Basic earnings per share rose to $1.04 for the three months ended March 31, 2025, compared to $1.02 for the previous quarter, reflecting a 1.96% increase [29]. - Income before taxes (GAAP) for Q1 2025 was $7,082,000, compared to $6,661,000 in Q4 2024, marking an increase of 6.30% [32]. Assets and Equity - Total assets reached $2.7 billion as of March 31, 2025, an increase of $126.7 million from December 31, 2024 [11]. - Total assets increased to $2,711,310 thousand as of March 31, 2025, up from $2,584,616 thousand at December 31, 2024, representing a growth of 4.9% [23]. - Shareholders' equity increased by $7.7 million, or 4%, to $211.7 million at March 31, 2025, from $204.0 million at December 31, 2024 [13]. - Shareholders' equity increased to $211,674 thousand as of March 31, 2025, up from $203,969 thousand at December 31, 2024, reflecting a growth of 3.4% [23]. Income and Expenses - Net interest income was $17.0 million for Q1 2025, a 14% increase from $14.9 million in Q1 2024, driven by a $2.7 million increase in interest income [5]. - Total non-interest income rose by $0.4 million, or 9%, to $5.0 million in Q1 2025 compared to $4.6 million in Q1 2024 [8]. - Non-interest expenses increased by $0.9 million, or 6%, to $14.6 million in Q1 2025 from $13.7 million in Q1 2024 [9]. - Total interest expense for the three months ended March 31, 2025, was $11,275 thousand, compared to $10,682 thousand for the same period in 2024, an increase of 5.5% [25]. Credit Quality - The provision for credit losses on loans was $455 thousand in Q1 2025, compared to $125 thousand in Q1 2024, reflecting higher loan growth and net charge-offs [7]. - The allowance for credit losses on loans was $20,019 thousand as of March 31, 2025, compared to $19,391 thousand at December 31, 2024, indicating a slight increase in provisions [23]. - Total non-performing assets decreased to $6.1 million, or 0.23% of total assets, down from $7.8 million, or 0.30% at December 31, 2024 [14]. - Non-performing assets to total assets decreased to 0.23% as of March 31, 2025, down from 0.30% at December 31, 2024, reflecting improved asset quality [30]. Capital Ratios - The company maintains a Tier 1 capital ratio of 9.22% of total average assets as of March 31, 2025, indicating strong capitalization [13]. - The total risk-based capital ratio remained stable at 14.74% as of March 31, 2025, compared to 14.78% in the previous quarter, indicating strong capital adequacy [30]. - Tangible common equity ratio was 7.11% in Q1 2025, slightly down from 7.16% in Q4 2024, indicating a minor decrease in capital efficiency [32]. Efficiency and Management - The efficiency ratio (FTE) improved to 61.67% in Q1 2025, down from 65.48% in Q4 2024, indicating better cost management [29]. - Efficiency ratio (non-GAAP) improved to 61.67% in Q1 2025 from 65.47% in Q4 2024, showing a positive trend in operational efficiency [32]. - Total pre-provision net revenue (non-GAAP) reached $7,452,000 in Q1 2025, up from $6,826,000 in Q4 2024, a growth of 9.15% [32]. Deposits and Loans - Total deposits rose to $2,457,459 thousand as of March 31, 2025, compared to $2,340,820 thousand at December 31, 2024, reflecting an increase of 5.0% [23]. - Interest income from loans and leases increased to $24,596 thousand for the three months ended March 31, 2025, compared to $22,133 thousand for the same period in 2024, marking a growth of 11.1% [25].

Core Insights - Fidelity D & D Bancorp, Inc. reported a net income of $6.0 million for Q1 2025, an increase of 18% from $5.1 million in Q1 2024, driven by higher net interest income and non-interest income [2][3][4] - The company achieved total assets of $2.7 billion as of March 31, 2025, reflecting a growth of $126.7 million from the previous quarter [3][10] - The outlook for the year remains positive, supported by effective expense management and healthy credit metrics [3] Financial Performance - Net interest income rose to $17.0 million in Q1 2025, a 14% increase from $14.9 million in Q1 2024, primarily due to a $2.7 million increase in interest income [4][5] - Non-interest income increased by 9% to $5.0 million, attributed to growth in wealth management and interchange fees [7] - Non-interest expenses grew by 6% to $14.6 million, with salary and benefits expenses being the main contributors [8] Asset Quality - Total non-performing assets decreased to $6.1 million, or 0.23% of total assets, down from 0.30% at the end of 2024 [14] - The provision for credit losses on loans was $455 thousand, reflecting higher loan growth and net charge-offs compared to the previous year [6][14] Balance Sheet Highlights - Total liabilities increased by $119.0 million, or 5%, driven by deposit growth of $116.6 million [11] - Shareholders' equity rose by 4% to $211.7 million, supported by retained earnings from net income [12][13] - The company maintains a strong capital position with a Tier 1 capital ratio of 9.22% as of March 31, 2025 [13] Key Ratios - The FTE yield on interest-earning assets was 4.73%, up 21 basis points from the previous year [5][30] - The net interest margin increased to 2.89% from 2.69% year-over-year, indicating improved efficiency in generating income from assets [5][30] - Return on average assets was 0.93%, while return on average equity was 11.66% for the quarter [30]