Financial Performance - For the nine months ended September 30, 2024, net income was $15.0 million, or $2.59 diluted earnings per share, compared to $17.7 million, or $3.11 diluted earnings per share for the same period in 2023, representing a decrease of 15.3% in net income and 16.7% in earnings per share [173]. - Net income for Q3 2024 was $5.0 million, or $0.86 diluted earnings per share, down from $5.3 million, or $0.93 diluted earnings per share in Q3 2023, reflecting a 5.7% decline [186]. - For the nine months ended September 30, 2024, net income was $15.0 million, or $2.59 diluted earnings per share, compared to $17.7 million, or $3.11 diluted earnings per share for the same period in 2023, a decrease of 15% [186]. - Total non-interest income for the third quarter of 2024 increased by $0.7 million, or 15%, to $5.0 million, primarily due to higher service charges and fees from trust fiduciary activities [213]. - Total non-interest income for the nine months ended September 30, 2024 was $14.2 million, an increase of $0.8 million, or 7%, from the same period in 2023 [214]. Asset Growth - Total assets as of September 30, 2024, were $2.615 billion, an increase from $2.477 billion as of September 30, 2023, representing a growth of 5.6% [181]. - The Company reported a total interest expense of $33,472 thousand for the nine months ended September 30, 2024, up from $21,849 thousand in the same period of 2023 [204]. - The Company’s total assets increased to $2.6 billion as of September 30, 2024, up by $0.1 billion from December 31, 2023, primarily due to a $107.9 million growth in the loans and leases portfolio [219]. - Total assets increased to $2,469,627 thousand as of September 30, 2024, compared to $2,405,100 thousand in the previous year [204]. - The carrying value of investment securities amounted to $559.8 million, or 21% of total assets, as of September 30, 2024, down from $568.3 million, or 23% of total assets, as of December 31, 2023 [224]. Loan Portfolio - Total loans and leases reached $1,763,254 thousand in September 2024, an increase from $1,640,411 thousand in September 2023, marking a growth of 7.48% [200]. - The commercial portfolio increased by $113 million, or 13%, to $1.0 billion compared to the December 31, 2023 balance of $0.9 billion [245]. - For the nine months ended September 30, 2024, commercial and industrial loans increased $16.0 million, or 10%, from $152.6 million at December 31, 2023 to $168.6 million [247]. - Municipal loans increased $18.6 million, or 20%, from $94.7 million on December 31, 2023, to $113.3 million at September 30, 2024 [249]. - The total loans, including loans held-for-sale, amounted to $1,795,548 thousand as of September 30, 2024, an increase from $1,686,555 thousand at December 31, 2023 [283]. Interest Income and Margin - Interest income adjusted to fully-taxable equivalent (non-GAAP) for the nine months ended September 30, 2024, was $81.235 million, up from $71.181 million for the same period in 2023, marking a growth of 14.2% [178]. - Net interest income for Q3 2024 increased by 5% to $15.4 million from $14.6 million in Q3 2023, driven by a $3.6 million increase in interest income [189]. - The net interest margin improved to 2.70% in September 2024, compared to 2.63% in September 2023 [202]. - The overall cost of interest-bearing liabilities was 2.70% for Q3 2024, up 53 basis points from 2.17% in Q3 2023 [191]. - The FTE yield on interest-earning assets was 4.68% for Q3 2024, an increase of 50 basis points from 4.18% in Q3 2023 [191]. Efficiency and Expenses - The efficiency ratio (non-GAAP) for the nine months ended September 30, 2024, was 66.44%, compared to 62.33% for the same period in 2023, indicating a decline in operational efficiency [180]. - Non-interest expenses for the third quarter of 2024 rose by $1.0 million, or 8%, to $13.8 million, mainly due to increased salaries and benefits expenses [215]. - Non-interest expenses for the nine months ended September 30, 2024 increased to $41.1 million, up by $2.0 million, or 5%, compared to the same period in 2023 [216]. Credit Quality - The provision for credit losses is adjusted based on management's estimates of expected credit losses in the loan portfolio, reflecting ongoing analysis and review by the Special Assets Committee [207]. - Non-performing assets increased to $7,584 thousand as of September 30, 2024, representing 0.29% of total assets, compared to 0.13% at December 31, 2023 [284]. - The allowance for credit losses increased by $0.8 million, or 4%, to $19.6 million from $18.8 million on December 31, 2023 [269]. - The net charge-offs for the nine months ended September 30, 2024, were $0.3 million, reflecting a decrease from previous periods [269]. - Loans past due 90 days or more accruing totaled $66 thousand as of September 30, 2024, compared to $14 thousand at December 31, 2023 [286]. Capital and Liquidity - The company's risk-based capital ratio was 14.56% as of September 30, 2024, exceeding the 10% guideline [326]. - The Company had approximately $704.4 million available borrowing capacity from the FHLB, representing 64% of total assets [337]. - The dividend payout ratio was 44.2% for the nine months ended September 30, 2024 [338]. - As of September 30, 2024, total uninsured deposits were estimated to be $926.8 million, or 40% of total deposits [303]. - The Company incurred $5.7 million in costs for the corporate headquarters building, with remaining costs estimated to range from $19 million to $22 million [293]. Market and Economic Conditions - The local unemployment rates as of September 30, 2024, were 3.4% in the northern market area and 3.1% in the southern market area, both showing a decrease from 3.5% and 3.2% respectively at December 31, 2023 [172]. - The median home values in the Scranton-Wilkes-Barre-Hazleton metro and Allentown-Bethlehem-Easton metro increased by 7.0% and 5.8% year-over-year, respectively, with expected growth of 1.0% and 2.0% in the next year [172]. - The company expects to operate in a moderately declining interest rate environment through the end of 2024 and into fiscal year 2025 [194]. - The company expects the trend of cash usage due to inflation and competitive interest rates to continue throughout the remainder of 2024 [300]. - The company maintains strict underwriting principles to mitigate the impact of economic conditions on its loan portfolio [261].
Fidelity D & D Bancorp(FDBC) - 2024 Q3 - Quarterly Report