Fidelity D & D Bancorp, Inc. · NASDAQ:FDBC
Fidelity D & D Bancorp — Investor Presentation (December 2022)
30 slides from Fidelity D & D Bancorp's investor presentation, Dec 7, 2022
Slide 1: Investor Presentation December 7, 2022
NASDAQ: FDBC INVESTOR PRESENTATION DECEMBER 7, 2022
Slide 2: Forward-looking statements
Forward-looking statements Certainof themattersdisussed inthis presentation may constitute forward-looking statements for purposes ofthe SecuritiesAct of 1933, as amended, andtheSecurtiesExchangeAct of 1934, as amendea, andas such may imoheknownandurknownisks, uncertaieies and other factors which ma
Slide 3: Who We Are
Who We Are Vision Statement: Fidelity bankers are passionate about success and committed to building strong relationships through exceptional client experiences. Fidelity Bank will be the best bank for our bankers to work, our clients to bank, our shareholders to invest, and for our community to pro
Slide 4: Fidelity D & D Bancorp, Inc. Overview
| Fidelity D & D Bancorp, Inc. Overview Company Overview Headquarters Dunmore, PA Ticker / Exchange FDBC/ NASDAQ Market Capitalization $234m *Outstanding Shares 5,694,103 Year Established 1902 Branches a Financial Overview Total Assets $2,435,768 LTM ROAA 1.27% Gross Loans $1,524,735 LTMROAE 16.38%
Slide 5: Key Highlights
Key Highlights * High performing community-focused bank with a proven track record of strong organic growth in a low growth legacy market. + Low-cost core deposits with strong market share in legacy market. * Eight consecutive years of increased dividend payout. Estimated 2022 dividend payout ratio
Slide 6: Making our Move
| Making our Move $1 Billion attained totalassets Jof$1 billion through organicgrowth. Forbes Namedoneofthe top3 banksin PA for client experience, Fidelity wan Acqi of bothin-branch Sn ean to Zz and online. jack Mountain. Currently $38 million LANDMARK Future Corporate Headquarters T Scranton €lectr
Slide 7: Deposit Market Share
Deposit Market Share Lackawanna, PA Luzerne, PA Northampton, PA
Slide 8: Your Fidelity Bank Team
Slide 9: Investment Thesis
Investment Thesis High Performing Community Bank © Above peer group average total return to shareholders. Strong organic and inorganic growth since 2017: Assets: 182% Gross Loans: 135% Deposits: 208% Net Income (2022 YTD annualized): 250% Well Diversified Balance Sheet Loans mix is 54.4% commercial
Slide 10: Acquisition of MNB Corporation
Acquisition of MNB Corporation + Extended Fidelity Bank franchise into Lehigh Valley markets with strong demographics and economic growth. + Lowrisk, mature franchise with long-term relationships. * Organization had excellent credit quality. * Core EPS accretion of 17% in 2021. + Was marginally accr
Slide 11: Lehigh Valley
Lehigh Valley Total L Growth Since Acquisition ital May 1, 2020 44% Loan Growth 29% Growth in Deposits $509 ee Total Deposits Million $42.8 Million of Asset Under Represents 23% of Management and the Bank’s total loans Administration and 23% of total deposits
Slide 12: Lehigh Valley Expansion
Lehigh Valley Expansion Why Lehigh Valley? * Large financial institutions dominate market share. * Organic growth opportunity with 1,695 bank branches per household. * Opportunity for community focused bank with a differentiated client experience (voted Best Bank in the Lehigh Valley by the readers
Slide 13: Acquisition of Landmark Bancorp, Inc.
Acquisition of Landmark Bancorp, Inc. Materially increased Fidelity Bank’s market share in Luzerne County. Superior cost saves and rightsizing Landmark’s profitability will drive attractive EPS accretion of 13.6% in 2022. Defended against a competitor entering Luzerne and Lackawanna Counties. Mature
Slide 14: Wealth Management
Wealth Management Through a client centric approach, Wealth Management non-interest income increased from $1.6 million in 2017 to $3.4 million as of September 30, 2022, or 15.76% CAGR. Fidelity V BANK Team Based Model + Planning Focused Trust Planning Administ te Planning Retirement Planning Investm
Slide 15: Strategy & Initiatives
Strategy & Initiatives Continue to execute on long-term rategy Enhance revenue opportunities created by whole-bank acquisitions our Wealth Management sine Optimize Branch Network ital evolutions Continue Opportunistic acquisitions of whole-banks Continued organic growth in legacy and acquired market
Slide 16: Paycheck Protection Program
Paycheck Protection Program Originated over $236 million in 2,573 PPP loans, generating $10.3 million in gross fees including $1.3 million unearned. - First Round - $159 million in 1,051 loans ($5.6 million in fees earned) - Second Round - $77 ion in 1,022 loans ($3.4 ion earned, $1.3 million unearn
Slide 17: Financial Performance & Highlights
| Financial Performance & Highlights [mas 2019 2020 2021 9/30/2022 Balance Sheet Total Assets $981,102 $1,009,927 $1,699,510 $2,419,104 $2,435,768 Total NetLoans $724,024 $745,306 $1,135,236 $1,449,231 $1,507,549 Total Deposits $770,183 $835,737 $1,509,505 $2,169,865 $2,253,233 Total Equity $93,557
Slide 18: Balance Sheet Mix
Balance Sheet Mix Loan Portfolio Commercial& Industrial 14.60% CommerciaiR/€ Owner 16.80% CommercialR/E/ Non Owner 22.40% \ N testers 11.30% * Gross loans of $1.5 in which includes $1.6 million of PPP loans * 4.32% loan yield year to date 9/30/2022 * 53.8% of loans are C&l and CRE Loans, excluding P
Slide 19: Balance Sheet Mix
Balance Sheet Mix Deposit Base MMA Interest Bearing Checking 32.40% Savings 10.90% Non-interest Bearing 27.40% * Total Deposits of $2.2 billion + 59.8% of deposits are transaction accounts Cost of Total Deposits was 0.38% up 15 bps from prior quarter. Cost of Interest-Bearing Liabilities was 0.40% u
Slide 20: Yield & Cost Trends
| Yield & Cost Trends 350% 470% snl [oe ian hee 4.60% 250% 218% asing eh a ae ine _ am Gok 430% 050% 420% a | 0.0% 4.105 wie = 20192020 9/30/2022 zie 20192020 20m——9/ 30/2022 Cost of Funds Net Interest Margin 2.00% 370% 359% 0.80% 00% 352% 350% 0.50% 340% aoe el 332% 040% on 3.30% 3.23% uJ 320% oon
Slide 21: Profitability Trends
Profitability Trends Return on Average Assets 140% ia 1.20% = 118% — 100% 087% 0.20% 2018 2019 2020 2021 9/30/2022 Net Income $25,000 Salat $22,875 $15,000 $13,035 $11,006 $11,575 2018 2019 2020 2021 9/30/2022 pt lelity BANK
Slide 22: Credit Quality Trends
| Credit Quality Trends = 070% 0.6455, 136% 1.29% 12756 — 0.50% 120% 109% 110% aso cei 090% _ ozs ia 039% 20% 030% a1 aco 0.00% er ee eT wis ms, mmo (9/20/2022 Net Charge-Offs (Recoveries) / Average Loans _ 015% 03% 02% o0e% oe 00% 0.08% oe oO oO 000% wis 2092000 mark 30/2022 lelity BANK
Slide 23: Shareholder Value
| Shareholder Value Net Income & EPS $428 $30,000 ga03 $5.00 75 $4.00 20000 $290 $303 sap ¢ $3.00 $15,000 saxo 511,576 S29 $10,000 aie an | 3100 so soo zis 201920202021 9/30/2022 sme etincome ——ePs Tangible Book Value Per Share $40.00 $35.00 Bin See $2820 $30.00 52483 525.00 suas $20.00 $15.00 10.00
Slide 24: Capital Strength
| Capital Strength 18% 169% 14% 12% 10.56% 10% 8% 6% 4% 2018 2019 2020 2021 YTD Q3 2022 —Total Capital Ratio ——Tier 1 Leverage Ratio © ——=Tangible Equity/Tangible Assets pt idelity BANK
Slide 25: Net Interest Income & Net Interest Margin
| Net Interest Income & Net Interest Margin Net Interest Income ($ in thousands) and Net Interest In Margin (%) Quarterly Highlights 000 370% 361,829 $60,000 3.60% $53,947 $50,000 $40,000 3.40% $30,457 831.715 3.32% $20,000 3.30% 000 3.2086 $10,000 3.10% 30 3.00% 4 Interestincome ©——Net interest Mar
Slide 26: Stock Market Performance
Stock Market Performance myo oxy
Slide 27: Digital Alignment and Culture Engagement
| Digital Alignment and Culture Engagement (2) Senior Leadership + Strong Senior + Empower * Digital Culture + Enhance governance Leadership to ‘employees to changeisalllines expectations for to embrace the move forward. look atexisting _—_of business and intuitive, digital realities. processes and
Slide 28: Digital Roadmap
| Digital Roadmap Digital Banking, Payments Home Lending Indirect Lending App Business Intelligence and Reporting Online interbank Transter Financial Crime Management Solution Human Resource Information ‘System Online Account Opening Commercial Loan Origination Consumer Loan Application
Slide 29: Digital Adoption Rates
Digital Adoption Rates a) Cis 14% increase in 94% increase in Card 7% increase in 20% increase in mobile dollars Manager (formerly Business Online Fidelity Bank Business deposited Card Valet) users Banking users App users = Ce) 15% increase in 16% increase in 2% increase in 183% increase in online c
Slide 30: Community Involvement & Accolades
Community Involvement & Accolades 57 hours donated by Bankers since 2018 to community organizations through the Volunteer Time Off program. $1.8 million given in philanthropic support to organizations, groups and schools throughout the community in 2021 Ranked one of the "Top 200 Community Banks" in
Fidelity D & D Bancorp — Investor Presentation (December 2022) on 6ix