 DUNMORE, PA , July 30, 2020 GLOBE NEWSWIRE -- Fidelity D D Bancorp, Inc. NASDAQ: FDBC and its banking subsidiary The Fidelity Deposit and Discount Bank, announced its most recent dividend declaration and unaudited, consolidated financial results for the three and six month periods ended June 30, 2020. Dividend DeclaredThe Board of Directors of Fidelity D D Bancorp, Inc. the Company announced their declaration of the Companys third quarter dividend of 0.28 per share. The dividend is payable September 10, 2020 to shareholders of record at the close of business on August 20, 2020.Unaudited Financial InformationNet income for the quarter ended June 30, 2020 was 0.3 million, or 0.05 diluted earnings per share, compared to 3.0 million, or 0.79 diluted earnings per share, for the quarter ended June 30, 2019. The 2.7 million, or 92, reduction in net income resulted from 1.9 million in merger-related expenses, 1.6 million in salaries and employee benefits, a 1.6 million increase in the provision for loan losses, 0.5 million in professional services, and a 0.5 million FHLB prepayment penalty which more than offset the 3.0 million increase in net interest income. Second quarter diluted earnings per share was reduced by 0.34 per share due to 1.6 million in non-recurring merger-related expenses, net of tax. As previously announced, the Company acquired MNB Corporation MNB and its wholly-owned subsidiary, Merchants Bank of Bangor effective May 1, 2020. The fair value of total assets added 451 million in assets, 395 million in deposits and 245 million in loans to the Companys balance sheet. The reported results include provisional estimates of the accounting for the acquisition of MNB which are subject to revision in future periods when the application of the accounting guidance for business combinations is finalized. Based on the closing price on April 30, 2020, the merger valuation was 45.4 million. Merger-related costs totaled 2.2 million on a gross basis through June 30, 2020.Daniel J. Santaniello, President and Chief Executive Officer commented, During the current pandemic, the Fidelity Bankers have continued to be focused on the execution of the strategic initiative of building long-term relationships through organic and inorganic growth. While the first half of 2020 financial results have been adversely impacted with the anticipated and nonrecurring expenses associated with the acquisition of MNB Corporation, the Board of Directors and Management are pleased with the Banks core operating results. We believe the addition of the Lehigh Valley Bankers and the acquired strong balance sheet will continue to build long-term shareholder value.Mr. Santaniello also commented, In addition, the companys financial results for the 2nd quarter of 2020 have been materially impacted by COVID-19. During these unprecedented times, the Company has taken the necessary steps to ensure the health and welfare of the Fidelity Bankers, Clients, and Community. Through the collective efforts of the Fidelity Bankers, several initiatives were undertaken to partner with clients and assist them through the current economic crisis. The Company originated 1,439 Paycheck Protection Program Loans totaling 157 million, provided 1,429 loan deferments to clients, and strengthened the allowance for loan losses. With both a strong balance sheet and capital, we believe the Company is well positioned to navigate through the current economic uncertainties.The Company began proactive initiatives in March 2020 to assist clients, Fidelity Bankers and communities impacted by the effects of the novel coronavirus pandemic. Management activated its established pandemic contingency plan response in March 2020 to ensure business continuity while assuring the health, safety and well-being of bankers, clients and the community. Special measures included: Opening branch lobbies by appointment only while drive-thru locations remained open for transactions until June 1st when all branch lobbies fully reopened. Installing proper social distancing signs and markers, to include safety barriers for both bankers and clients that encourage proper separation as recommended by the CDC. Expanding use of online, mobile, telephone banking, night drop and ATMs to meet clients banking needs. Adding resources to the Customer Care Center to manage increased call and chat volume. Activating telecommunications capabilities to enable Fidelity Bankers to work-from-home, as appropriate. Providing Fidelity Bankers personal protective equipment and disinfectant supplies when working on-site. Scheduling in-person meetings by appointment only, observing the guidelines of social distancing and personal safety as recommended by health and safety officials. Enhancing EPA approved cleaning and disinfecting protocols implemented at all locations, including utilizing ionization machines when required. Increasing the fresh air intake and using anti-viral filters in all HVAC units, above OSHA regulations. Conducting meetings virtually, including the Special and Annual Shareholder Meetings.To address the pandemics economic impact on its clients, the Company provided hardship relief requested by 1,429 clients with balances totaling 202 million through June 30, 2020. This short-term relief was offered in the form of loan forbearance or interest-only modifications. The Company processed 1,439 applications providing over 157 million in loans through the Small Business Administration SBA Paycheck Protection Program PPP proving the Companys commitment to support all small businesses. These PPP loans generated approximately 5.2 million of SBA processing fees, net of origination expenses, of which 0.8 million was earned in the second quarter. The 4.4 million remaining balance is expected to continue to be earned over the remaining life of the loan. However, the majority of these fees may be recognized during the second half of 2020 only if forgiven by the SBA. The Fidelity Deposit and Discount Bank is a Paycheck Protection Program Liquidity Facility PPPLF eligible depository institution that obtained an extension of credit under the PPPLF to fund originated PPP loans.Consolidated Second Quarter Operating Results OverviewNet interest income was 10.8 million for the second quarter of 2020, a 39 increase over the 7.8 million earned for the second quarter of 2019. The 3.0 million improvement in net interest income resulted from a 426.1 million larger average balance of interest-earning assets which offset the declining yields on these assets. The loan portfolio had the biggest impact, producing a 2.6 million increase in interest income from 309.9 million in higher average balances primarily from the addition of MNB loans to the balance sheet. The Company also experienced an 0.8 million increase in interest income from accretion of SBA fees recognized during the second quarter of 2020 on PPP loans. Interest income from the investment portfolio increased 0.1 million as larger average balances offset lower yields. Interest expense was 0.4 million lower due to decreases in deposit rates and lower rates paid on borrowings. The average balance of interest-bearing deposits increased 294.1 million and the rates paid on these deposits decreased 44 basis points resulting in 0.3 million less in interest expense. The interest-bearing deposits acquired from MNB had favorable rates and had the effect of reducing the Companys rate paid on interest-bearing deposits. The Company utilized 63.4 million more in average short-term borrowings, but overnight borrowings were replaced with PPPLF funding which had lower rates reducing interest expense from borrowings by 0.1 million. The overall cost of interest-bearing liabilities was 0.57 for the second quarter of 2020, a decrease of 56 basis points over the 1.13 paid for the second quarter of 2019. The cost of funds decreased 46 basis points to 0.42 for the second quarter of 2020 from 0.88 for the second quarter of 2019. The Companys fully-taxable equivalent FTE non-GAAP net interest spread was 3.20 for the second quarter of 2020, or three basis points lower than the 3.23 recorded for the same 2019 quarter. The Companys FTE non-GAAP net interest margin decreased by 20 basis points to 3.34 for the three months ended June 30, 2020 from 3.54 for the same 2019 period.The provision for loan losses was 1.9 million for the second quarter of 2020, a 1.6 million increase compared to 0.3 million for the second quarter of 2019. The substantial increase in the provision compared to the year earlier period was attributed to the qualitative factor increases stemming from the public health and economic crisis caused by the COVID-19 pandemic. This amount of provisioning reflected what management deemed necessary to maintain the allowance for loan and lease losses at an adequate level. Total non-interest income increased 0.2 million to 2.7 million for the second quarter of 2020 compared to 2.5 million for the second quarter of 2019. The increase in other income was primarily due to 0.3 million higher gains on loan sales and 0.1 million increase in service charges on loans during the second quarter of 2020 compared to the same 2019 period due to increased mortgage loan activity. The Company also recognized 0.1 million more in debit card interchange fees, generally resulting from adding MNB accounts. These increases were partially offset by 0.2 million less service charges on deposit accounts, primarily from a reduced number of overdraft transactions, and 0.1 million higher mortgage servicing right amortization.Non-interest expenses increased 4.9 million, or 76, for the second quarter of 2020 to 11.3 million from 6. 