Yahoo Finance Fidelity D & D Bancorp Inc Reports First Quarter 2024 Earnings Amid Rising Interest Costs
Net Income: $5.1M for Q1 2024, down from $7.0M in Q1 2023, a decline of 27.6%.
Diluted Earnings Per Share: $0.88 in Q1 2024 versus $1.24 in Q1 2023.
Net Interest Income: Decreased by 12% to $14.9M in Q1 2024 from $17.0M in Q1 2023.
Non-Interest Income: Increased slightly by 2% to $4.6M in Q1 2024 from $4.5M in Q1 2023.
Non-Interest Expenses: Rose by 6% to $13.7M in Q1 2024 from $12.9M in Q1 2023.
Total Assets: Decreased to $2.5B as of March 31, 2024, down from $2.5B as of December 31, 2023.
Shareholders Equity: Increased slightly by 1% to $191.6M at the end of Q1 2024 from $189.5M at the end of 2023.
Fidelity D & D Bancorp Inc (NASDAQ:FDBC), the parent company of The Fidelity Deposit and Discount Bank, disclosed its financial results for the first quarter of 2024 on April 24, 2024. The company reported a decrease in net income, primarily due to increased interest expenses. The detailed financial outcomes can be explored in their recent 8-K filing.
Company Overview
Fidelity D & D Bancorp Inc operates through its wholly-owned subsidiary, The Fidelity Deposit and Discount Bank, offering a broad range of traditional banking services. The bank operates 21 full-service branches across several Pennsylvania counties, providing personal and corporate banking services, asset management, and insurance products. Its primary financial offerings include various deposit accounts and comprehensive loan services to both retail and commercial customers.
Financial Performance Analysis
The first quarter of 2024 saw Fidelity D & D Bancorp Inc earning a net income of $5.1 million, or $0.88 per diluted share, a decline from $7.0 million, or $1.24 per diluted share, in the same quarter of the previous year. This 27% decrease in net income was largely driven by a significant rise in interest expenses, which surged by $5.4 million due to higher rates on interest-bearing deposits and increased short-term borrowings. Despite these challenges, the bank managed to grow its interest income by $3.3 million, aided by an $87.0 million increase in the average balance of loans and leases and higher yields on these assets.
Daniel J. Santaniello, President and CEO, commented on the results, stating,
Our performance in the first quarter of 2024 demonstrates our resilience and adaptability in navigating through challenging economic conditions. Despite the decline in net income related to the interest rate environment, our ongoing commitment to delivering value to our clients, our shareholders, our bankers, and the communities we serve has provided tremendous value."
Detailed Financial Metrics
The company's net interest income fell by 12% to $14.9 million, down from $17.0 million in the prior year's quarter. The net interest margin also decreased to 2.69% from 3.13% year-over-year. However, non-interest income showed a slight improvement, increasing by 2% to $4.6 million, mainly due to higher trust income. Conversely, non-interest expenses rose by 6% to $13.7 million, with notable increases in salaries and insurance costs.
The provision for income taxes saw a reduction, decreasing by $0.5 million due to lower operating income. Asset quality remained strong with non-performing assets comprising only 0.15% of total assets, and the bank maintained its well-capitalized status, with Tier 1 capital at 9.15% of total average assets.
Balance Sheet and Asset Quality
As of March 31, 2024, total assets were reported at $2.5 billion, a slight decrease from $2.503 billion at the end of 2023. The bank experienced a reduction in cash and cash equivalents and a modest decline in its investment portfolio. However, loans and leases saw an increase of $11 million during the quarter. Shareholders equity also grew by $2.1 million to $191.6 million, reflecting retained earnings and common stock issuances.
In summary, Fidelity D & D Bancorp Inc faced a challenging interest rate environment in the first quarter of 2024, impacting its net income negatively. However, the bank's strategic management of assets and expenses, along with its robust asset quality, positions it well for navigating future economic fluctuations. Investors and stakeholders may find reassurance in the bank's adaptive strategies and solid financial footing despite the prevailing headwinds.
Explore the complete 8-K earnings release (here) from Fidelity D & D Bancorp Inc for further details.
This article first appeared on GuruFocus.
