FIDELITY D & D BANCORP INC (FDBC)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered solid operating momentum: diluted EPS rose to $1.03 (+17% YoY; +2% QoQ), with net income of $6.0M as net interest income (NII) and non-interest income improved while efficiency materially tightened to 61.7% (vs 65.5% in Q4) .
• Margin trajectory improved: FTE net interest margin expanded to 2.89% (Q4: 2.78%; Q3: 2.70%) as earning-asset yields increased and funding costs eased; FTE spread widened to 2.24% (YoY +23 bps) .
• Balance sheet growth was healthy: deposits +$116.6M QoQ, loans +$16.3M QoQ, assets +$126.7M QoQ to $2.71B; insured/collateralized deposits ~75% and checking remained >50% of deposits .
• Credit remained benign: NPAs/Assets improved to 0.23% (Q4: 0.30%), non-accruals/loans 0.33%, and NCOs/avg loans 0.02% .
• No formal numeric guidance; dividend held at $0.40 per share (Q1 and Q2 declarations), supporting a steady capital-return signal amid margin recovery .

What Went Well and What Went Wrong

• What Went Well

  • Net interest margin and spread expanded: FTE NIM rose to 2.89% (Q4: 2.78%) and FTE spread to 2.24% (YoY +23 bps) on higher loan balances/yields and slightly lower funding costs .
  • Strong funding and balance sheet growth: deposits +$116.6M QoQ with broad-based increases (money market +$54.1M; interest-bearing checking +$27.6M; time deposits +$7.9M; savings +$5.3M; non-interest-bearing checking +$21.7M), supporting asset growth to $2.71B .
  • Positive tone from management: “Highlights… include achieving total assets of $2.7 billion, along with strong net income primarily driven by accelerated loan and deposit growth and improvement in net interest margin… outlook for the year is positive…” — Dan Santaniello, President & CEO .

• What Went Wrong

  • Operating expense pressure persisted: non-interest expense rose $0.9M YoY to $14.6M on higher staffing, insurance, incentives, and marketing, partially offset by PA tax credits .
  • Higher credit provisioning: provision for credit losses on loans increased to $455K (vs $125K a year ago) reflecting loan growth and slightly higher net charge-offs, partially offset by an $85K benefit on unfunded commitments .
  • Securities restructuring drag: non-interest income included an ~$0.8M loss on securities sales that offset gains from a commercial loan sale ($0.5M) and a property sale ($0.3M) .

Financial Results

Balance sheet and asset quality (period-end):

Selected KPIs:

Notes: FTE NIM/spread and efficiency ratio are non-GAAP measures; see reconciliations in exhibits .

Guidance Changes

Management reiterated a positive outlook qualitatively but did not issue formal numeric guidance for revenue, margin, expenses, or tax rate .

Earnings Call Themes & Trends

No earnings call transcript was available via our document and news searches; themes below reflect comparative press releases.

Management Commentary

• “Highlights of our first quarter results include achieving total assets of $2.7 billion, along with strong net income primarily driven by accelerated loan and deposit growth and improvement in net interest margin… our outlook for the year is positive, reflecting rigorous expense management, healthy credit metrics and ongoing successful execution of our strategic plan.” — Dan Santaniello, President & CEO .
• On drivers of NII: increase of $2.7M in interest income driven by $148.0M higher average earning assets and +21 bps FTE yield; loan portfolio produced +$2.5M FTE interest income from $116.4M higher average balances and +26 bps yield .
• On funding costs: overall cost of interest-bearing liabilities decreased to 2.49% (vs 2.51% a year ago) with deposit rates up only 6 bps YoY, partially offset by lower average short-term borrowings .

Q&A Highlights

• We found no published earnings call transcript for Q1 2025 across our document databases and news sources; therefore, no Q&A details were available to extract [ListDocuments showed none; Internet search returned only press release reposts] .

Estimates Context

• We attempted to retrieve S&P Global consensus for Q1 2025 EPS and revenue; published consensus was unavailable for both metrics at the time of query (coverage appears limited). Actual results were: diluted EPS $1.03 and net income $6.0M (see Financial Results) .
• Without published S&P Global consensus, we cannot characterize a beat/miss vs Street; near-term estimate revisions may bias upward on NIM expansion and operating leverage evident in the lower efficiency ratio .

Key Takeaways for Investors

• NIM expansion and spread widening are the core upside drivers; continued reinvestment and loan growth should support further incremental margin gains if funding costs remain contained .
• Funding momentum and deposit mix quality (checking >50% of deposits; ~75% insured/collateralized) are supportive of liquidity and rate sensitivity into potential policy easing scenarios .
• Asset quality remains a non-event: NPAs/Assets 0.23% and NCOs 0.02% keep credit costs modest against improving pre-provision earnings power .
• Expense discipline is improving efficiency (61.7%), but headcount/incentives and marketing remain structural costs; watch for sustained operating leverage as NII grows .
• Capital stays robust (CET1 13.57%; leverage 9.22%) enabling a steady $0.40 quarterly dividend and optionality for growth initiatives .
• With no formal guidance and limited Street coverage, the narrative catalyst is execution: further NIM gains, deposit growth durability, and stable credit should be stock-supportive on prints .

Sources: Q1 2025 8-K/press release and exhibits -; Q1 2025 press release distribution and tables -; Q4 2024 full-year press release and tables -; Q3 2024 8-K press release and tables -; Q1 and Q2 2025 dividend press releases .