Financial Performance - The Company generated $20.8 million in net income for 2024, representing a 14% increase from $18.2 million in 2023, with diluted earnings per share rising from $3.19 to $3.60[120] - Net income for the year ended December 31, 2024, was $20.8 million, a 14% increase from $18.2 million in 2023, driven by a $7.6 million increase in non-interest income[226][227] - Net interest income for 2024 was $61.9 million, slightly down from $62.1 million in 2023, due to interest expense growing faster than interest income[228] - Non-interest income for the year ended December 31, 2024, amounted to $19.0 million, a $7.6 million, or 67%, increase compared to $11.4 million in 2023, primarily driven by a $6.5 million loss on the sale of securities in 2023[242] - Total other operating expenses for the year ended December 31, 2024, were $55.5 million, an increase of $3.6 million, or 7%, compared to $51.9 million in 2023[243] Asset and Liability Management - Total assets increased by $81.5 million, or 3%, to $2.6 billion as of December 31, 2024, primarily due to growth in the loan portfolio[129] - Total assets increased by $81.5 million, or 3%, to $2.58 billion as of December 31, 2024, compared to $2.50 billion in 2023[130] - Total liabilities of the Company were reported at $2,380,647 thousand as of December 31, 2024[284] - The Company maintained $83.4 million in cash and cash equivalents and $333.5 million in investments AFS and loans HFS as of December 31, 2024[273] - The Company had approximately $733.2 million available borrowing capacity from the FHLB, $20.0 million from correspondent banks, and $157.3 million from the FRB, totaling $1.7 billion in liquidity, representing 66% of total assets[273] Loan Portfolio - The Company had gross loans and leases totaling $1.8 billion as of December 31, 2024, an increase of $113.6 million, or 7%, compared to $1.7 billion at December 31, 2023[160] - The Company originated a total of $303.4 million in loans in 2024, a decrease of $34.2 million compared to 2023, with consumer loans down by $37.3 million to $33.0 million[166] - Total loans, including loans held-for-sale, increased to $1.8 billion in 2024 from $1.7 billion in 2023[208] - The commercial portfolio grew by $121.4 million, or 13%, due to various loan originations totaling $17 million in commercial & industrial loans and $39 million in commercial real estate loans[161] - Non-owner occupied commercial real estate loans increased by $56.5 million, or 17%, from $337.7 million in 2023 to $394.2 million in 2024[178] Deposits and Funding - Total deposits rose by $182.4 million, or 8%, to $2.34 billion as of December 31, 2024, from $2.16 billion in 2023[133] - Certificates of deposit (CDs) increased by $125.9 million, or 59%, primarily due to promotional rates and a transfer of approximately $45 million from interest-bearing checking accounts[133] - Money market accounts grew by $110.4 million, driven by competitive rate offers for new accounts[133] - As of December 31, 2024, total uninsured deposits were estimated at $883.6 million, or 38% of total deposits[135] Credit Quality - Non-performing assets rose to 0.30% of total assets as of December 31, 2024, up from 0.13% at the end of the previous year[125] - The allowance for credit losses increased by $0.9 million, or 5%, to $19.7 million from $18.8 million at December 31, 2023[194] - Net charge-offs for the year ended December 31, 2024, totaled $465 thousand, a decrease of $113 thousand, or 20%, from $578 thousand in 2023[199] - The commercial real estate loan portfolio comprised 45% of the total allowance for credit losses as of December 31, 2024, down 2 percentage points from the previous year[202] Interest Rate and Margin - The overall cost of interest-bearing liabilities increased to 2.60% for the twelve months ended December 31, 2024, up from 1.93% for the same period in 2023[229] - The Company's net interest spread decreased to 2.02% for the twelve months ended December 31, 2024, down 23 basis points from 2.25% in 2023[229] - The net interest margin decreased by 9 basis points to 2.72% for the twelve months ended December 31, 2024, from 2.81% for the same period in 2023[229] - The Company expects to improve net interest margin in 2025 compared to 2024, despite pressures from higher costs of funds[128] Capital and Regulatory Compliance - The Company's risk-based capital ratio was 14.78% as of December 31, 2024, exceeding the minimum requirement[292] - The Company’s capital resources are subject to regulatory capital requirements, and it is currently considered a small bank holding company, not subject to these requirements[260] - The effective income tax rate for 2024 was approximately 12.9%, up from 10.1% in 2023, due to a $3.6 million increase in income before taxes[246] - The Company’s dividend payout ratio was 42.96% for the year ended December 31, 2024, compared to 46.06% in 2023, indicating a strategy to retain more earnings to strengthen capital[262] Strategic Initiatives - The company opened a new Easton Branch and remodeled the Main Branch in Dunmore, PA, contributing to a $1.7 million increase in premises and equipment[219] - The company is in the process of constructing a new corporate headquarters, with total costs expected to range from $20 million to $22 million[220] - The Company plans to evaluate its branch network for potential consolidation and explore opportunities for market expansion[221]
Fidelity D & D Bancorp(FDBC) - 2024 Q4 - Annual Report