U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report - July 29, 2004
(Date of earliest event reported)
FIDELITY D&D BANCORP, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 333-90273 23-3017653
(State or other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification Number)
Blakely and Drinker Streets, Dunmore, PA 18512
(Address of principal executive offices) (Zip Code)
(570) 342-8281
(Registrant's telephone number including area code)
Not Applicable
(Former name or former address, if changed since last report)
Item 7. Financial Statement, Pro Forma Financial Information And Exhibits.
(c) Exhibits.
Exhibit Number
99.1 Press Release, dated July 29, 2004, issued by Fidelity D&D Bancorp, Inc.
Item 12. Results of Operations and Financial Condition.
On July 29, 2004, Fidelity D&D Bancorp, Inc. announced it's results of operations for the quarter ended
June 30, 2004. A copy of the related press release is being furnished as Exhibit 99.1 to this Form 8-K.
The information in this Item 12 is being furnished and shall not be deemed "filed" for the purposes of
Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liabilities
of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933
or the Exchange Act, regardless of any general incorporation language in such filing.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized.
FIDELITY D&D BANCORP, INC.
(Registrant)
Dated: July 29, 2004 /s/ Salvatore R. DeFrancesco, Jr.
Salvatore R. DeFrancesco, Jr.
Treasurer and Chief Financial Officer
EXHIBIT INDEX
PAGE NO. IN
MANUALLY
SIGNED
EXHIBIT NO. ORIGINAL
99.1 Press Release dated July 29, 2004. 5
Exhibit 99.1
PRESS RELEASE
FIDELITY D&D BANCORP, INC.
DATE: July 29, 2004
Contacts:
Daniel J. Santaniello Salvatore R. DeFrancesco, Jr. Steven C. Ackmann
Vice President and Treasurer and President and
Chief Operating Officer Chief Financial Officer Chief Executive Officer
Fidelity D&D Bancorp, Inc. Fidelity D&D Bancorp, Inc. Fidelity Deposit & Discount Bank
570-504-8000 570-346-4156 570-342-7305
FIDELITY D & D BANCORP, INC.
REPORTS SECOND QUARTER 2004 FINANCIAL RESULTS
Dunmore, PA - Fidelity D&D Bancorp, Inc., (OTC Bulletin Board: FDBC), parent company of The Fidelity Deposit and
Discount Bank, announced net income for the quarter ended June 30, 2004 of $921,000, comparable to the net income
of $923,000 for the same quarter of 2003. Earnings per share were $0.50 for each of the quarters ended June 30,
2004 and 2003. Net income for the six months ended June 30, 2004 was $1,546,000, or $0.84 per share, a $264,000
decrease compared to net income of $1,810,000, or $0.99 per share, for the same period in 2003.
Total interest income declined by $333,000, or 4.7%, from $7,146,000 to $6,813,000 with total interest expense
decreasing by $996,000, or 26.8%, from $3,718,000 to $2,722,000 for the quarters ended June 30, 2003 and 2004,
respectively. Lower rates paid on deposits continue to decrease interest expense as yields on earning assets,
though down from the second quarter of 2003, improved throughout the current quarter. As a result, net interest
income increased to $4,091,000 for the quarter ended June 30, 2004, an overall increase of $662,000, or 19.3%,
over the $3,429,000 recorded during the same quarter of 2003.
During the second quarter of 2004, the provision for loan losses was $400,000 compared to $460,000 in the second
quarter of 2003. The ratio of allowance for loan losses to total loans was 1.54%, 1.28% and 0.98% at June 30,
2004, December 31, 2003 and June 30, 2003, respectively.
Other operating income recorded for the quarter ended June 30, 2004 was $1,071,000 compared with $1,261,000 for
the same quarter in 2003. Although service charges and other fee income improved in 2004, the overall decline in
total other income resulted from net gains recorded on sales of investment securities and loans of $489,000 in
the second quarter of 2003, whereas $71,000 was recorded during the same period in 2004.
Total other expenses increased $525,000, or 17.4%, from $3,014,000 to $3,539,000 for the quarters ending June 30,
2003 and 2004. This operating increase is primarily from the addition of skilled personnel along with the
initial expense recognition from an executive severance package obligation.
The Company's balance sheet continues to restructure and decline in total assets from $575,215,000 at December
31, 2003 to $540,621,000 at June 30, 2004. The overall decrease in assets resulted principally from time deposit
run-off, along with a decline in NOW non-personal account balances. The Company's continued focus on core
deposits resulted in nominal gains in noninterest-bearing account and savings account deposit balances as of June
30, 2004. Total deposits decreased $24,139,000 to $377,304,000 on June 30, 2004, a decline of 6.0% from
$401,443,000 at December 31, 2003.
Investment securities were down $17,991,000, or 12.5%, to $126,416,000 while net loans declined $9,954,000, or
2.5%, primarily from sales of mortgage loans, to $376,891,000 at June 30, 2004. Total borrowings were paid down
$9,942,000, or 7.9%, throughout the current period to total $116,691,000 at June 30, 2004.
Shareholders' equity at June 30, 2004 decreased to $43,440,000 from $43,932,000 at December 31, 2003. The decline
in shareholders' equity of $492,000 resulted primarily from $1,543,000 net unrealized holding losses on
available-for-sale securities recorded within other comprehensive loss, offset by the retention of net income
after dividends paid and an increase in common stock through the dividend reinvestment and employee stock
purchase plans. Dividends declared by the Company during the second quarter of 2004 were $402,000, of which
$125,000 was reinvested through the dividend reinvestment plan. Total capital to asset ratio was 8.04% at June 30,
2004.
The Fidelity Deposit and Discount Bank operates twelve community banking offices and twenty-one ATM locations in
Lackawanna and Luzerne Counties.
For more information please visit our web site at www.the-fidelity.com .
This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform
Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to
various factors. These factors include the possibility that increased demand or prices for the company´s
financial services and products may not occur, changing economic, interest rate and competitive conditions,
technological developments and other risks and uncertainties, including those detailed in the company´s filings
with the Securities and Exchange Commission.
Fidelity D&D Bancorp, Inc.
Selected Financial Data
Balance sheet data: June 30, December 31, June 30,
2004 2003 2003
Total assets $ 540,620,844 $ 575,215,466 $ 585,780,767
Total investment securities 126,416,025 144,407,374 144,158,745
Net loans 375,629,645 366,981,640 354,033,147
Loans available-for-sale 1,261,808 19,863,577 29,352,040
Total deposits 377,303,920 401,442,546 432,597,612
Total borrowings 116,690,776 126,633,012 64,060,547
Total shareholders' equity 43,439,568 43,931,899 45,644,230
For the For the
Operating data: three months ended six months ended
June 30, June 30,
2004 2003 2004 2003
Total interest income $ 6,813,190 $ 7,146,836 $ 13,776,515 $ 14,784,582
Total interest expense 2,722,025 3,717,696 5,752,405 7,523,475
Net interest income 4,091,165 3,429,140 8,024,110 7,261,107
Provision for loan losses 400,000 460,000 1,250,000 760,000
Other income 1,070,885 1,260,598 2,017,302 2,217,583
Other expense 3,538,708 3,014,120 6,813,735 6,309,046
Provision for income taxes 302,449 292,647 431,877 599,373
Net income $ 920,893 $ 922,971 $ 1,545,800 $ 1,810,271
Selected financial ratios and other data:
For the For the
three months ended six months ended
June 30, June 30,
Selected returns and fianacial ratios 2004 2003 2004 2003
Net income per share - basic $ 0.50 $ 0.50 $ 0.84 $ 0.99
Net income per share - diluted $ 0.50 $ 0.50 $ 0.84 $ 0.99
Dividends per share $ 0.22 $ 0.22 $ 0.44 $ 0.44
Net interest margin 3.23% 2.65% 3.23% 3.12%
Return on average assets 0.67% 0.65% 0.55% 0.64%
Return on average equity 8.39% 8.06% 7.01% 7.99%
Efficiency ratio 61.78% 71.10% 63.55% 70.34%
Expense ratio 1.61% 1.58% 1.63% 1.66%
Other data June 30, December 31, June 30,
2004 2003 2003
Book value per share* $ 23.71 $ 24.10 $ 25.14
Equity to assets 8.04% 7.64% 7.79%
Allowance for loan losses to loans 1.54% 1.28% 0.98%
*Based on actual shares outstanding.