DUNMORE, Pa., July 22, 2026 (GLOBE NEWSWIRE) -- Fidelity D & D Bancorp, Inc. (NASDAQ: FDBC) and its banking subsidiary, The Fidelity Deposit and Discount Bank, announced its unaudited, consolidated financial results for the three and six-month periods ended June 30, 2026.
Unaudited Financial Information
Net income for the quarter ended June 30, 2026 was $7.8 million, or $1.33 per diluted share, compared to $6.9 million, or $1.20 per diluted share, for the quarter ended June 30, 2025. The $0.9 million, or 13%, increase in net income resulted primarily from a $2.9 million increase in net interest income coupled with a $0.1 million increase in non-interest income. This was partially offset by a $1.3 million increase in non-interest expense and a $0.4 million increase in the provision for credit losses due to the growth of loans and unfunded commitments.
For the six months ended June 30, 2026, net income was $15.3 million, or $2.63 diluted earnings per share, compared to $12.9 million, or $2.23 diluted earnings per share, for the six months ended June 30, 2025. The $2.4 million, or 19%, increase in net income stemmed from the $5.2 million increase in net interest income and $0.4 million increase in non-interest income. This was partially offset by a $1.9 million increase in non-interest expense and a $1.0 million increase in the provision for credit losses on loans and unfunded commitments.
“We delivered an outstanding second quarter, driven by strong revenue growth and favorable credit performance,” said Daniel J. Santaniello, President and Chief Executive Officer. “Our continued execution on key strategic initiatives propelled total assets to nearly $3.0 billion. These results reflect the strength of our franchise, the dedication of our bankers, and their unwavering commitment to the client experience. I am deeply grateful for their contributions and remain confident in our momentum and our ability to build on this success throughout the remainder of 2026.”
Consolidated Second Quarter Operating Results Overview
Net interest income was $20.8 million for the second quarter of 2026, representing a 16% increase over the $17.9 million earned for the second quarter of 2025. The $2.9 million increase in net interest income resulted from the increase of $1.9 million in interest income primarily due to a $113.1 million increase in the average balance of interest-earning assets and a 9 basis points increase in fully-taxable equivalent ("FTE") (non-GAAP measurement) yields. The loan portfolio had the most significant impact, producing a $3.2 million increase in FTE interest income from $208.2 million in higher quarterly average balances and an increase of 5 basis points in FTE loan yields. The increase in interest income was coupled with a $0.8 million decrease in interest expense on deposits due to a 28 basis points decrease in rates paid on interest-bearing deposits which more than offset the increase from $82.1 million in higher average balances compared to the second quarter of 2025.
The FTE yield on interest-earning assets was 4.86% for the second quarter of 2026, an increase of 9 basis points from 4.77% for the second quarter of 2025. The overall cost of interest-bearing liabilities was 2.24% for the second quarter of 2026, a decrease of 28 basis points from the 2.52% for the second quarter of 2025. The cost of funds decreased 22 basis points from 1.95% to 1.73% for the second quarters of 2025 and 2026, respectively. The Company’s FTE net interest spread was 2.62% for the second quarter of 2026, an increase of 37 basis points from 2.25% recorded for the second quarter of 2025. FTE net interest margin increased to 3.22% for the three months ended June 30, 2026 from 2.92% for the same period of 2025.
For the three months ended June 30, 2026, the provision for credit losses on loans was $400 thousand and the provision for credit losses on unfunded commitments was $340 thousand, compared to a $300 thousand provision for credit losses on loans and a $20 thousand provision for credit losses on unfunded commitments for the three months ended June 30, 2025. For the three months ended June 30, 2026, the increase in the provision for credit losses on loans compared to the prior year period was due to more funded loan growth. For the three months ended June 30, 2026, the increase in the provision for credit losses on unfunded commitments compared to the prior period was primarily due to higher commercial construction commitments and loan originations within the portfolio.
Total non-interest income increased $0.1 million, or 2%, to $5.5 million for the second quarter of 2026 compared to $5.4 million for the second quarter of 2025. The increase in non-interest income was primarily attributed to an increase of $0.4 million in wealth management revenue. This increase was partially offset by a $0.2 million in BOLI death benefit recognized during the second quarter of 2025.
Non-interest expenses increased $1.3 million, or 9%, for the second quarter of 2026 to $16.0 million from $14.7 million for the same quarter of 2025. The increase in non-interest expenses was attributed to added salaries and benefits expense of $0.8 million primarily due to an increase in the number of bankers quarter-over-quarter. Additionally, the Company experienced an increase of $0.2 million in professional services expenses and $0.1 million in premises and equipment expenses primarily due to costs for software and subscriptions. These increases were partially offset by a decrease of $0.2 million in advertising costs.
The provision for income taxes increased $0.3 million during the three months ended June 30, 2026 compared to the same period in 2025 primarily due to a $1.3 million increase in income before taxes.
Consolidated Year-To-Date Operating Results Overview
Net interest income was $40.2 million for the six months ended June 30, 2026 compared to $35.0 million for the six months ended June 30, 2025. The $5.2 million increase in net interest income resulted from the increase of $4.1 million in interest income primarily due to a $136.8 million increase in the average balance of interest-earning assets and a 7 basis points increase in FTE yield. The largest contributor to interest income growth was the loan portfolio which produced $5.2 million in interest income from an increase of 5 basis points in FTE loan yields on $170.7 million in higher average balances. The increase in interest income was partially offset by a decrease of $1.0 million in interest earned on the investment portfolio due to decreases of 17 basis points in yield and $49.9 million in average balances. Additionally, the Company experienced a decrease of $1.1 million in interest expense on deposits due to a 25 basis points decrease in rates paid on interest-bearing deposits which more than offset the increase from $109.9 million in higher average balances during the first half of 2026.
The overall cost of interest-bearing liabilities was 2.25% for the six months ended June 30, 2026 compared to 2.51% for the six months ended June 30, 2025. The cost of funds decreased 19 basis points to 1.75% for the six months ended June 30, 2026 from 1.94% for the same period of 2025. The FTE yield on earning assets was 4.82% for the six months ended June 30, 2026, an increase of 7 basis points from the 4.75% year-to-date June 30, 2025. The Company’s FTE net interest spread was 2.57% for the six months ended June 30, 2026, an increase of 33 basis points from the 2.24% recorded for the same period of 2025. FTE net interest margin increased by 24 basis points to 3.15% for the six months ended June 30, 2026 from 2.91% for the same 2025 period primarily due to the decrease on rates paid on interest-bearing deposits coupled with a slight increase on yields earned from loans and leases.
For the six months ended June 30, 2026, the provision for credit losses on loans was $1.3 million and the provision for credit losses on unfunded commitments was $430 thousand compared to a $755 thousand provision for credit losses on loans and a $65 thousand benefit for credit losses on unfunded commitments for the six months ended June 30, 2025. For the six months ended June 30, 2026, the increase in the provision for credit losses on loans compared to the prior year period was due to higher loan growth. For the six months ended June 30, 2026, the increase in the provision for unfunded commitments compared to the prior period was due to growth in originations within the portfolio, specifically in commercial construction commitments.
Total non-interest income for the six months ended June 30, 2026 was $10.7 million, an increase of $0.4 million, or 3%, from $10.3 million for the six months ended June 30, 2025. The increase was primarily due to $0.7 million growth in wealth management revenue. Additionally, the Company saw an increase of $0.2 million in commercial loan late fees due to two substandard loans that were paid off and $0.4 million increase in fees from commercial loans with interest rate hedges during the first half of 2026. Partially offsetting the increase in non-interest income was a decrease of $0.7 million in gains from sold loans primarily due to a $0.5 million gain on the sale of a commercial loan during the first half of 2025.
Non-interest expenses increased to $31.2 million for the six months ended June 30, 2026, an increase of $1.9 million, or 7%, from $29.3 million for the six months ended June 30, 2025. Salaries and benefits expense increased $1.2 million due to an increase in bankers in the first half of 2026, compared to the same period in 2025. Additionally, the Company experienced an increase of $0.3 million in professional services expense. Premises and equipment expense increased $0.2 million primarily due to new technology and higher software costs.
The provision for income taxes increased $0.2 million during the six months ended June 30, 2026 compared to the same period in 2025 primarily due to a $2.6 million increase in income before taxes. Partially offsetting the increase in the provision for income taxes was a $0.5 million discount recognized in the provision from utilizing/applying purchased renewable energy tax credits.
Consolidated Balance Sheet & Asset Quality Overview
The Company’s total assets had a balance of $3.0 billion as of June 30, 2026, an increase of $223.1 million from December 31, 2025. The increase resulted from $174.9 million of net growth in the loans and leases portfolio as of June 30, 2026 compared to December 31, 2025. Cash and cash equivalents increased $59.6 million over the same period. Asset growth was offset by a decrease of $14.9 million in the investment portfolio primarily due to $10.5 million in paydowns and the sale of $5.8 million in available-for-sale securities.
During the same time period, total liabilities increased $209.1 million, or 8%. Deposit growth of $91.3 million and short-term borrowings of $119.8 million were utilized to fund loan growth and increase interest-bearing cash balances. The Company experienced an increase of $30.3 million in non-interest-bearing checking accounts. For interest-bearing deposit accounts, the Company experienced increases of $77.7 million in money market deposits and $7.0 million in savings and clubs; these increases were partially offset by decreases of $20.9 million in time deposits and $2.8 million in interest-bearing checking accounts. As of June 30, 2026, the ratio of insured and collateralized deposits to total deposits was approximately 72%.
Shareholders’ equity increased $14.0 million, or 6%, to $252.9 million at June 30, 2026 from $238.9 million at December 31, 2025. The increase was caused by $10.3 million higher retained earnings from net income of $15.3 million plus a $2.9 million, after tax, improvement in accumulated other comprehensive income, partially offset by $5.0 million in cash dividends paid to shareholders. An additional $0.9 million was recorded from the issuance of common stock under the Company’s stock plans and restricted stock activity. At June 30, 2026, there were no credit losses on available-for-sale and held-to-maturity debt securities. Accumulated other comprehensive income (loss) is excluded from regulatory capital ratios. The Company remains well capitalized with Tier 1 capital at 9.51% of total average assets as of June 30, 2026. Total risk-based capital was 14.29% of risk-weighted assets and Tier 1 risk-based capital was 13.17% of risk-weighted assets as of June 30, 2026. Tangible book value per share was $40.08 at June 30, 2026 compared to $37.88 at December 31, 2025. Tangible common equity decreased to 7.89% of total assets at June 30, 2026 compared to 8.01% at December 31, 2025 due to an 8% increase in total tangible assets compared to a 7% increase in tangible common equity.
Asset Quality
Total non-performing assets were $1.8 million, or 0.06% of total assets, at June 30, 2026, compared to $2.2 million, or 0.08% of total assets, at December 31, 2025. Past due and non-accrual loans to total loans were 0.22% at June 30, 2026 compared to 0.26% at December 31, 2025. Net charge-offs to average total loans were 0.01% at June 30, 2026 compared to 0.03% at December 31, 2025.
About Fidelity D & D Bancorp, Inc. and The Fidelity Deposit and Discount Bank
Fidelity D & D Bancorp, Inc. has built a strong history as trusted financial advisor to the clients served by The Fidelity Deposit and Discount Bank (“Fidelity Bank”). Fidelity Bank continues its mission of exceeding client expectations through a unique banking experience. It operates 21 full-service offices throughout Lackawanna, Luzerne, Lehigh and Northampton Counties and a Fidelity Bank Wealth Management Office in Schuylkill County. Fidelity Bank provides a digital banking experience online at www.bankatfidelity.com, through the Fidelity Mobile Banking app, and in the Client Care Center at 1-800-388-4380. Additionally, the Bank offers full-service Wealth Management & Brokerage Services, a Mortgage Center, and a full suite of personal and commercial banking products and services. Part of the Company’s vision is to serve as the best bank for the community, which was accomplished by having provided over 6,190 hours of volunteer time and over $1.5 million in donations to non-profit organizations directly within the markets served throughout 2025. Fidelity Bank's deposits are insured by the Federal Deposit Insurance Corporation up to the full extent permitted by law.
Non-GAAP Financial Measures
The Company uses non-GAAP financial measures to provide information useful to the reader in understanding its operating performance and trends, and to facilitate comparisons with the performance of other financial institutions. Management uses these measures internally to assess and better understand our underlying business performance and trends related to core business activities. The Company’s non-GAAP financial measures and key performance indicators may differ from the non-GAAP financial measures and key performance indicators other financial institutions use to measure their performance and trends. Non-GAAP financial measures should be supplemental to GAAP used to prepare the Company’s operating results and should not be read in isolation or relied upon as a substitute for GAAP measures. Adjusted non-interest income used in the calculation of certain non-GAAP performance measures excludes gains and losses on securities sales in order to enhance comparability between reporting periods. Reconciliations of non-GAAP financial measures to GAAP are presented in the tables below.
Interest income was adjusted to recognize the income from tax exempt interest-earning assets as if the interest was taxable, fully-taxable equivalent ("FTE"), in order to calculate certain ratios within this document. This treatment allows a uniform comparison among yields on interest-earning assets. Interest income was FTE adjusted, using the corporate federal tax rate of 21% for 2026 and 2025. FTE adjustments affect interest income and related ratios only and do not impact reported GAAP net income.
Forward-looking statements
Certain of the matters discussed in this press release constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” and similar expressions are intended to identify such forward-looking statements.
The Company’s actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation:
■local, regional and national economic conditions and changes thereto; ■the short-term and long-term effects of inflation, and rising costs to the Company, its customers and on the economy; ■the risks of changes and volatility of interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities and interest rate protection agreements, as well as interest rate risks; ■securities markets and monetary fluctuations and volatility; ■ disruption of credit and equity markets; ■impacts of the capital and liquidity requirements of the Basel III standards and other regulatory pronouncements, regulations and rules; ■governmental monetary and fiscal policies, as well as legislative and regulatory changes; ■effects of short- and long-term federal budget and tax negotiations and their effect on economic and business conditions; ■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 laws and regulations concerning taxes, banking, securities and insurance and their application with which the Company and its subsidiaries must comply; ■the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters; ■the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating locally, regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the internet;The Company cautions readers not to place undue reliance on forward-looking statements, which reflect analyses only as of the date of this release. The Company has no obligation to update any forward-looking statements to reflect events or circumstances after the date of this release.
For more information please visit our investor relations web site located through www.bankatfidelity.com.
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands) At Period End: June 30, 2026 December 31, 2025 Assets Cash and cash equivalents $207,660 $148,060 Investment securities 509,032 523,946 Restricted investments in bank stock 9,464 4,373 Loans and leases 2,088,893 1,911,724 Allowance for credit losses on loans (21,314) (20,168)Premises and equipment, net 45,929 48,950 Life insurance cash surrender value 60,189 59,396 Goodwill and core deposit intangible 20,126 20,242 Other assets 51,245 51,535 Total assets $2,971,224 $2,748,058 Liabilities Non-interest-bearing deposits $582,920 $552,581 Interest-bearing deposits 1,975,732 1,914,772 Total deposits 2,558,652 2,467,353 Short-term borrowings 119,802 20 Secured borrowings 4,767 5,995 Other liabilities 35,098 35,830 Total liabilities 2,718,319 2,509,198 Shareholders' equity 252,905 238,860 Total liabilities and shareholders' equity $2,971,224 $2,748,058
Unaudited Condensed Consolidated Statements of Income
(dollars in thousands)
Three Months Ended Six Months Ended Jun. 30, 2026 Jun. 30, 2025 Jun. 30, 2026 Jun. 30, 2025 Interest income Loans and leases $28,475 $25,328 $55,093 $49,924 Securities and other 3,242 4,437 7,084 8,149 Total interest income 31,717 29,765 62,177 58,073 Interest expense Deposits (10,887) (11,738) (21,868) (22,925)Borrowings (73) (98) (146) (186) Total interest expense (10,960) (11,836) (22,014) (23,111) Net interest income 20,757 17,929 40,163 34,962 Provision for credit losses on loans (400) (300) (1,275) (755)Net (provision) benefit for credit losses on unfunded loan commitments (340) (20) (430) 65 Non-interest income 5,483 5,359 10,672 10,332 Non-interest expense (15,992) (14,710) (31,183) (29,264) Income before income taxes 9,508 8,258 17,947 15,340 Provision for income taxes (1,659) (1,337) (2,638) (2,428)Net income $7,849 $6,921 $15,309 $12,912
Unaudited Condensed Consolidated Balance Sheets
(dollars in thousands)
At Period End: Jun. 30, 2026 Mar. 31, 2026 Dec. 31, 2025 Sep. 30, 2025 Jun. 30, 2025 Assets Cash and cash equivalents $207,660 $154,995 $148,060 $142,161 $165,495 Investment securities 509,032 512,308 523,946 529,263 545,821 Restricted investments in bank stock 9,464 4,482 4,373 4,301 4,240 Loans and leases 2,088,893 2,023,671 1,911,724 1,914,893 1,837,477 Allowance for credit losses on loans (21,314) (20,942) (20,168) (20,218) (19,976)Premises and equipment, net 45,929 52,738 48,950 45,422 40,097 Life insurance cash surrender value 60,189 59,792 59,396 58,995 58,849 Goodwill and core deposit intangible 20,126 20,181 20,242 20,303 20,364 Other assets 51,245 52,040 51,535 41,630 46,208 Total assets $2,971,224 $2,859,265 $2,748,058 $2,736,750 $2,698,575 Liabilities Non-interest-bearing deposits $582,920 $574,808 $552,581 $539,118 $558,074 Interest-bearing deposits 1,975,732 2,001,686 1,914,772 1,927,795 1,877,254 Total deposits 2,558,652 2,576,494 2,467,353 2,466,913 2,435,328 Short-term borrowings 119,802 10 20 20 10 Secured borrowings 4,767 4,825 5,995 6,059 6,134 Other liabilities 35,098 33,284 35,830 34,511 39,191 Total liabilities 2,718,319 2,614,613 2,509,198 2,507,503 2,480,663 Shareholders' equity 252,905 244,652 238,860 229,247 217,912 Total liabilities and shareholders' equity $2,971,224 $2,859,265 $2,748,058 $2,736,750 $2,698,575
Selected Financial Ratios and Other Financial Data
Three Months Ended Jun. 30, 2026 Mar. 31, 2026 Dec. 31, 2025 Sep. 30, 2025 Jun. 30, 2025 Selected returns and financial ratios Basic earnings per share $1.34 $1.29 $1.38 $1.27 $1.20 Diluted earnings per share $1.33 $1.28 $1.37 $1.27 $1.20 Dividends per share $0.43 $0.43 $0.43 $0.40 $0.40 Yield on interest-earning assets (FTE)* 4.86% 4.77% 4.83% 4.83% 4.77%Cost of interest-bearing liabilities 2.24% 2.27% 2.42% 2.55% 2.52%Cost of funds 1.73% 1.77% 1.88% 1.98% 1.95%Net interest spread (FTE)* 2.62% 2.50% 2.41% 2.28% 2.25%Net interest margin (FTE)* 3.22% 3.08% 3.04% 2.95% 2.92%Return on average assets 1.11% 1.08% 1.14% 1.08% 1.04%Pre-provision net revenue to average assets* 1.45% 1.36% 1.36% 1.30% 1.28%Return on average equity 12.68% 12.41% 13.45% 13.25% 13.02%Return on average tangible equity* 13.80% 13.53% 14.73% 14.60% 14.40%Efficiency ratio (FTE)* 59.19% 58.53% 58.35% 60.17% 61.17%Expense ratio 1.49% 1.36% 1.36% 1.39% 1.40%
* Non-GAAP Financial Measures - see reconciliations below
Reconciliations of Non-GAAP Financial Measures to GAAP
Reconciliations of Non-GAAP Measures to GAAP Three Months Ended (dollars in thousands) Jun. 30, 2026 Mar. 31, 2026 Dec. 31, 2025 Sep. 30, 2025 Jun. 30, 2025 FTE net interest income (non-GAAP) Interest income (GAAP) $31,717 $30,460 $31,084 $30,682 $29,765 Adjustment to FTE 777 784 800 785 760 Interest income adjusted to FTE (non-GAAP) 32,494 31,244 31,884 31,467 30,525 Interest expense (GAAP) 10,960 11,054 11,804 12,253 11,836 Net interest income adjusted to FTE (non-GAAP) $21,534 $20,190 $20,080 $19,214 $18,689 Efficiency Ratio (non-GAAP) Non-interest expenses (GAAP) $15,992 $15,191 $14,921 $14,632 $14,710 Net interest income (GAAP) 20,757 19,406 19,280 18,429 17,929 Plus: taxable equivalent adjustment 777 784 800 785 760 Non-interest income (GAAP) 5,483 5,189 5,122 5,105 5,359 Loss (Gain) on sales of securities - 577 371 (3) - Net interest income (FTE) plus adjusted non-interest income (non-GAAP) $27,017 $25,956 $25,573 $24,316 $24,048 Efficiency ratio (non-GAAP) (1) 59.19% 58.53% 58.35% 60.17% 61.17%(1) The reported efficiency ratio is a non-GAAP measure calculated by dividing non-interest expense by the sum of net interest income, on an FTE basis, and adjusted non-interest income. Tangible Book Value per Share/Tangible Common Equity Ratio (non-GAAP) Total assets (GAAP) $2,971,224 $2,859,265 $2,748,058 $2,736,750 $2,698,575 Less: Intangible assets (20,126) (20,181) (20,242) (20,303) (20,364)Tangible assets 2,951,098 2,839,084 2,727,816 2,716,447 2,678,211 Total shareholders' equity (GAAP) 252,905 244,652 238,860 229,247 217,912 Less: Intangible assets (20,126) (20,181) (20,242) (20,303) (20,364)Tangible common equity 232,779 224,471 218,618 208,944 197,548 Common shares outstanding, end of period 5,808,518 5,805,180 5,771,110 5,767,288 5,767,490 Tangible Common Book Value per Share $40.08 $38.67 $37.88 $36.23 $34.25 Tangible Common Equity Ratio 7.89% 7.91% 8.01% 7.69% 7.38% Pre-Provision Net Revenue to Average Assets Income before taxes (GAAP) $9,508 $8,439 $9,211 $8,592 $8,258 Plus: Provision for credit losses 740 965 270 310 320 Total pre-provision net revenue (non-GAAP) 10,248 9,404 9,481 8,902 8,578 Total (annualized) (non-GAAP) $41,103 $38,139 $37,615 $35,316 $34,404 Average assets $2,829,501 $2,809,513 $2,757,902 $2,708,126 $2,681,194 Pre-Provision Net Revenue to Average Assets (non-GAAP) 1.45% 1.36% 1.36% 1.30% 1.28%
Contacts:
Daniel J. SantanielloSalvatore R. DeFrancesco, Jr.President and Chief Executive OfficerTreasurer and Chief Financial Officer570-504-8035570-504-8000