Welcome to the 2021 Fidelity D and D Bancorp, Inc. Annual Meeting of Shareholders. I would now like to introduce the first presenter, Brian J. Cali, Chairman of the Board.
Thank you. I call to order the 2021 Annual Meeting of Shareholders of Fidelity D and D Bancorp Inc. My name is Brian Kelly. I'm Chairman of the Board of this corporation, and it's my privilege and honor to serve as the Chairperson of this Annual Meeting. The Annual Meeting is hopefully our last virtual only meeting.
Participation in the annual meeting, including voting shares and submitting questions will be limited to the shareholders. If a shareholder has a question about one of the matters set forth in the company's proxy statement to be voted on at the annual meeting, the question may be submitted in the field provided in the web portal at or before the time the matters are before the Annual Meeting for consideration. We will answer questions on any matters set forth in the company's proxy statement to be voted on by shareholders at the Annual Meeting before voting is closed. During this period, the Company will not permit discussions or questions that are not relevant or pertinent to the agenda matter that has been and is being discussed as determined by the Chair in his reasonable judgment. Following adjournment of the formal business of the Annual Meeting, the Company will address appropriate general questions from the shareholders regarding the Company.
Mr. Secretary, will you please read the notice of the annual meeting and the business to be conducted at this meeting of shareholders.
Notice of the annual meeting of the shareholders to be held on May 4, 2021. To the shareholders of Fidelity D and D Bancorp, Inc. Notice is hereby given that Fidelity D and D Bancorp, Inc. Will hold its annual meeting of shareholders virtually via live webcast on Tuesday, May 4, 2021 at 3 pm Daylight Saving Time. The meeting will be held online only to consider and vote upon the following proposals.
1, to elect 4 Class A Directors to serve for a 3 year term and until their successors are elected and qualified 2, to ratify the selection of an independent public accounting firm for the corporation for the year ending December 31, 2021 and 3, to transact such other businesses may properly come before the Annual Meeting and any adjournment or postponement thereof. Shareholders of record at the close of business on March 10, 2021 are entitled to notice of the meeting and may vote during the virtual meeting or by proxy. Management welcomes your attendance at the live webcast of the annual meeting. We ask you to promptly fill out the proxy by the following means online, by telephone or sign and date and return in the accompanying posted page envelope. The prompt return of your proxy will save expenses and further communication.
Even if you return a proxy, you may vote during the live webcast at www.virtualshareholdermeting.com/f dbc2021. Properly returning your completed proxy will ensure that your shares are voted in accordance with your wishes and will guarantee the presence of a quorum. The Board of Directors is distributing this proxy form form a proxy and Fidelity D and E Bank Corp. Annual Report on March 24, 2021. Your vote is important.
Please vote online by telephone or complete and sign and date return your proxy. An affidavit distribution of distribution executed by Joanne Vogel and notarized by a notary public and and by the County of Suffolk and the State of New York has been placed in the corporation's minute book affirming the mailing of the notice of the annual meeting and the proxy materials on March 24, 2021, to the shareholders of record as of the record date of March 10, 2021.
To the shareholders, voting is now open. I welcome you to the 2021 Annual Meeting of the Fidelity D and D Bancorp Inc. Also present today are the members of our Board of Directors, our Vice Chairman, Michael J. McDonald our Secretary, John T. Cogmedy Assistant Secretary, Mary E.
McDonnell and Directors, Richard M. Hotchkiss, William J. Joyce, Richard J. Latiri, Kristin D. O'Donnell Alan Silverman Helen Beth Visek and our President and CEO, Daniel J.
Santadella. From our management and our executive team, Chief Financial Officer, Salvatore R. DiFrancesco Chief Operating Officer, Eugene J. Walsh Chief Lending Officer, Timothy P. O'Brien Chief Business Development Officer, Michael J.
Pacina. Our proxy holders for today are our Directors, Mary E. McDonald and Kristin D. O'Donnell. Present from RSMUS LLP, our independent auditors is Rich Kowalewski from Bible Rutledge LLP, our Special Counsel, Nick Bible and Eric Gerhardt.
Mr. Secretary, do we have a quorum present?
Mr. Chairman, at least 70.25 percent of the outstanding shares of Fidelity DNB Bancorp, Inc.
Forum is present by person and proxy in accordance with the bylaws of the corporation and the law for the transaction of business at the 2021 Annual Meeting. I will entertain a motion at this time to waive the reading of the minutes of the 2020 Annual Meeting of Shareholders and to approve such minutes. Mr. Chairman, I hereby move to waive the reading of the minutes of the 2020 Annual Meeting of Shareholders and approve such minutes. Mr.
Chairman, I hereby second the motion. We'll now have a voice vote to waive the reading of the minutes and approve the minutes. All in favor, say yes.
Yes.
All opposed, say no. The motion carries. A notary public in and for the County of Lackawanna has been given the vote for the Judge of Election, who was previously appointed by the Board of Directors in accordance with the bylaws of the corporation and law. Our Judge of Election today is Richard Sabato. Mr.
Secretary, please file the oath of the judge of election with the minutes of this meeting. In accordance with the articles of incorporation and the bylaws, the shareholders at the Corporation's 2021 Annual Meeting of Shareholders shall elect 4 Class A Directors. The nominees for Class A Directors, each to serve for a 3 year term until 2024 Annual Meeting of Shareholders and until their successors are duly elected and qualified are John C. Cognexi, Richard J. Latiri, Michael J.
McDonnell, Helen Beth G. Wilczek. Do we have a motion to nominate the 4 named nominees and to close the nomination?
Mr. Chairman, I hereby inform you to nominate the 4 named directors and close nominations.
Is there a second on the motion?
I hereby second the motion.
Are there any questions regarding this motion? In order to answer any questions on the motion submitted by the web portal, if there is any, we will try to answer them. Hearing none, if you have previously voted by proxy, there is no need for you to vote by ballot. Your votes will be cast by the proxy holders in the manner you have previously directed. The polls are now open to vote if you have not done so by proxy.
Now for those shareholders who have not previously voted by proxy, please vote via the web portal for the election of Class A Directors. The last matter today is the ratification of the selection by the Board of Directors of RSM US LLP as Fidelity D and D Bancorp, Inc. Independent auditors for the fiscal year ending December 31, 2021. Mr.
Chairman, I hereby move that the selection of RSM US LLP as Fidelity D&D Bancorp, Inc. Independent auditor for the year ending December 31, 2021 be ratified by the shareholders.
Is there a second on the motion?
I hereby second the motion.
Are there any questions regarding this motion? Again, to answer any questions on the motion, we submitted through the web portal, if any. Hearing none, if you have previously voted by proxy, there is no need for you to vote by ballot. Your votes will be cast by the proxy holders in the manner you have previously directed. For those shareholders who have not previously voted by proxy, please vote via the web portal for the ratification of the selection of RSMUS LLP as Fidelity D and D Bancorp Inc.
Independent auditor for the year ending December 31, 2021. Voting is now closed. The Judge of Election will tabulate the results. While the Judge of Election is tabulating the votes, I will now turn the floor over to our President and CEO, Daniel James Antonella, to review the business and affairs of the bank for the fiscal year 2020 and answer any appropriate questions posted via the web portal. Dan?
Well, thank you, Brian. I appreciate it. And it's great to see so many directors here in person today. Hopefully next year we have an opportunity to bring all the shareholders together as we typically do. And first of all, special thanks to the Board and to all of the Fidelity Bankers for their continued support through these unprecedented times.
As you'll see through the presentation, really extraordinary efforts by many and really still have a successful 2020 and strong start to 2021. And one thing that I feel very proud of is our continued support of our vision statement and living to our vision statement throughout these unprecedented times. And so we'll walk through 2020 in a review. And one of the things that was most material to our bank was when the merger of Fidelity Bank and Merchants. Again, what it did is brought 2 great community banks together to join forces here and really to bring an extraordinary experience to our clients, even better than previously.
At $1,700,000,000 in asset size, we now have over 300 bankers and really covering the northeastern part of Pennsylvania as well as the Lehigh Valley. And so, it really has been a great experience for us and it continues to provide dividends when we see the financial performance. Again, one of the other things we continue to do and focus on strategically is to build and make acquisitions throughout our wealth management division. Again, Jonestown Bank and Trust, we partnered with them and we're able to bring in 120 new relationships consisting of approximately 100 and 60 accounts. Our annual revenue is projected to be approximately $300,000 reoccurring on an annual basis.
How can we forget COVID-nineteen? Again, really, when you think about what happened, it was March of last year when Pennsylvania was shut down, really didn't know what to expect. I think we all had visions of 2,008, 2,009 all over again. With the collaboration of our examiners, with the collaboration of our bankers, really extraordinary effort and extraordinary results were achieved. But one of the things that we made sure happened that we continue to live our vision.
Again, all COVID precautions were taken. We closed our lobbies twice to appointment only because of some COVID spiking. And one of the things that the Board and the executive management are most proud of is every banker was retained and were paid at a minimum of 100% of their salary. We actually had a hero's bonus for the frontline that still is in place today for some of our bankers. Again, our focus was making sure we protected our bankers as well as our clients.
When you walk into our branches, our clients making sure our clients feel safe and that was the utmost importance and priority to us. Again, one of the things we make sure we continue to focus on being the best bank for our community. Again, in these unprecedented times, it was never more important to making sure that we continue to give back to our community, making a better place, live and work. And you can see here our financial commitment was significant in 2020, dollars 1,360,000 donated back to our community. You can see here on the presentation where those dollars went and how we were able to allocate them.
So again, very proud of our efforts in making sure that we give some of our treasure back to the community. And not only in the way of dollars, but also our bankers giving back with their time and talent. And you can see here on the slide, 1400 volunteer hours down from the previous year, but again, think about what a challenging market or marketplace was to get out there and to help. And again, our bankers, without a doubt, got out there and provided volunteer hours and made our community a better place to live. When we talk about best bank for our clients to bank, again, one of the things that we're most proud of is the experience that we provide our clients, right?
The experience starts well before the banker or the client arrives at our facilities. Today, we've got to make sure that our online experience is the utmost focus as well as in branch experience. And again, you can see here our success locally here with the Scranton Times. We have 8 out of the last 9 years Readers Choice Best Bank. So again, very proud of those efforts and really thank the Fidelity bankers for their continued focus on the client.
In 2020, for the 7th consecutive year, we were in top 200 community banks in the country. We ranked 79th out of over 500 community banks in the country. Again, very proud of that. And the other thing with the merger of merchants, brought us some wineries down in the Lehigh Valley, some great clients. And you can see here, Wine Business Magazine as one of the top PPP lenders in the country.
One of the things that we never stopped doing is making sure that our clients on the consumer side have a vehicle for mortgage lending. Again, home acquisition, lowering their debt payment, again, was one of the things we focused on. 11th consecutive year, number 1 mortgage lender in Northeastern Pennsylvania. Record year for us as far as originations. We did over 1400 mortgage loans in 2020 $233,000,000 Really an incredible year.
I really need to thank the mortgage originators, many of them for their extraordinary efforts as well as the support groups, the underwriters, the closers, the whole group of bankers down there, again, just incredible efforts. I mean, a lot of long hours and really focus on clients. And so again, thank you to those folks. And all of that's done with by providing an extraordinary client experience when you think about that volume, right? And how do we deliver to our clients and making sure that we met their expectation, but really exceed their expectation.
And you can see here on this slide here, the industry norm in mortgage lending is a net promoter score of 27. But we achieved much higher than the 27. We have a 77 net promoter score. Again, not only do we deliver in volume, but we deliver in experience. Again, on the retail side of the bank, our retail bankers as well delivering an extraordinary client experience.
And again, you think about 2020, branches, lobbies went to appointment only, challenging environment, again, living up to that client experience in 2020. And you can see here on the retail side, the industry scores is a 27, what we scored is 62. Again, I thank all of the Fidelity bankers. Let's not forget about PPP. Again, when we think about go back to March of last year, not knowing what was going to happen, The federal government launched a PPP program.
I can tell you it was an incredible experience, not one that I choose to live again. But nevertheless, it really provided a lot of fruitful efforts on our bankers' time. Again, there was many, many evenings that we spent processing these PPP loans. The first round was fast and furious, making sure that there was enough dollars to meet our clients' needs. And one of the things I'd tell you, the bankers never flinch.
They continue to push forward, put long hours in, and you can see these extraordinary efforts when you think about it. 2,541 PPP loans in round 1 and 2, dollars 235,500,000 worth of loans, incredible volume. When you think about that, put that in perspective of an average loan size of $92,000 that's a lot of work, a lot of hard effort, a lot of meeting clients' expectations. When we look at how many employees were impacted overall, well in excess of 36,000 employees were able to keep their jobs locally here through the PPP program. Again, not something I choose to live again, but nevertheless the efforts were incredible.
And really when you look at it in number 1 PPP lender in Lackawanna County, we did 801 loans worth of 46.2 $1,000,000 So the number of loans, we exceeded all other banks in PPP lending. What was interesting about it was the number of clients that could not be where their needs could not be met at some of the larger financial institutions. And our bankers reached out proactively and we're able to bring in 298 new clients through the PPP program. And you look here at the dollars and deposits we're able to gain through those relationships, really extraordinary. And again, thank our bankers for their effort, really extraordinary efforts.
One of the things that, again, I'm most proud of, as you folks know, very active in the community here with the Greater Spain Chamber of Commerce. And when you think about we just recently received a business of the year, not bank of the year, business of the year really up against some great competition and really come out ahead on that was really remarkable. And that really speaks to the Board's continued support of the bankers as well as the bankers' extraordinary efforts. And to be able to do that in unprecedented times is really, really pretty amazing. And then let's not forget about our shareholders.
That's who we're here today to talk to. And so again, one of the things we need to make sure is we're always providing a great return to our shareholders and making sure we do that in a safe and sound manner. And there's as many of your folks know, Bauer Financial is an independent bank rating agency that looks at safety and soundness of banks. And it's great to say that for 27 consecutive quarters since the Q2 of 2014, we've maintained the highest rating, which is a 5 star rating with Bauer Financial. And so, to be able to do it in a safe and sound manner, but also be able to provide an extraordinary return to our shareholders is really remarkable.
And this slide here talks about the extraordinary return to our shareholders, again in comparison to the outperforming NASDAQ Composite Index as well as the S and L Bank Index. And in 2020, Fidelity Bank was number 3 in the nation of all publicly traded banks. Again, number 3 in the nation of all publicly traded banks with a 5 year average return to shareholders of 2 17%. Again, remember that safe and sound manner, but also be able to provide an above average return to our shareholders. And let's look at some of the financial highlights that drove some of those returns.
First of all, assets. So, total assets for 1 year increased by a remarkable $690,000,000 or 68 percent in 2020. The fair value of the assets acquired through the merchants was $451,400,000 or 45 percent as of Twelvethirty Onenineteen. So again, a lot of additional organic growth above and beyond the acquisition. And then that organic growth continued in the Q1 of 2020.
Total assets increased by 1.9 $1,000,000 or 13%. Loans and leases. Again, in 2020, loans and leases increased by $390,000,000 or 52 percent when compared to 2019. The acquisition of M and B Econ for 240 $5,000,000 of those assets and the PPP loans made up $132,100,000 of the total loans and leases as of Twelvethirtytwenty. Deposits, I think this is a pretty incredible graph when you look at it.
In 2020, deposits increased by $674,000,000 or 81% when compared to 2019. M and V accounted for 396,000,000 dollars And one of the things that I like to take great pride in is how much of that growth or how much of that deposit base actually comes in the way of relationships. And the way we look at relationship from the deposit side is checking accounts. And again, when you look at this $453,900,000 in interest bearing checking and $407,500,000 in non interest bearing checking account or in total comprising of 57 percent of our total deposit base of $1,500,000,000 Again, that pace of growth continued in the Q1 of 2021. Total deposits increased by $1,000,000 to $1,700,000 dollars or 14%.
Our shareholders' equity continued to see some incredible growth. In 2020, shareholder equity increased by $60,000,000 or a 56% increase over 2019. Dollars 45,400,000 of that came from the issuance of common stock for the acquisition of Merchants. The financial motor on Fidelity Bank is wide and deep as Sal DiFrancesco often tells us in our management meetings. Q1 of 2020, shareholder equity decreased by 3,100,000 dollars or 2%, primarily caused by the interest rate environment of $7,800,000 after tax reduction and net unrealized gain from the investment portfolio.
Net income. In 2020, net income increased $1,500,000 or 13% over 2019. Excluding merger related expenses, net income would have been $15,100,000 On the Q1 of 2021, net income was 5,700,000 dollars or a 115% increase. The other thing that we take a lot of great pride in is the continuous growth of our dividends. And for the 6th year in a row, we were able to increase our dividends.
And you can see here on this chart, dividend per share, dollars 1.14.20, 8% increase over the year, but you can see here the continuous growth in dividends back to our shareholders. And again, earnings per share, this is one of the metrics that I pay and we pay most attention to because again, as we continue to grow, we issue more shares through acquisition. We need to make sure that we continue to grow earnings per share and produce greater returns for our shareholders on a per share basis. In 2020, earnings per share decreased by $0.21 or 7 percent over 2019, primarily due to the merger related expenses of $2,000,000 and a Federal Home Loan Bank prepayment penalty of $400,000 and that's net of tax. In the Q1, as I said, we're off to a real strong start.
Earnings per share was $1.13 or an increase of 64%. So just a quick look forward. Again, I'm sure many of our shareholders already know, we are now looking towards the acquisition of Landmark Community Bank, which again strategically gives us a real strong foothold in the Luzerne County market, which has been a market that we've had strategically identified as growth opportunity for us. And so they immediately give us an increased market share. As a matter of fact, in our MSA, the Springs, Wilkes Barre, Hazelton MSA will be number 2 in deposit market share.
Again, really looking forward to that. And again, the increased size and scale putting us at $2,100,000,000 will give us the opportunity to continue to invest in technology. As we all know, technology is playing a bigger part in our industry every day. So, at a greater scale, gives us the opportunity to continue to invest in that. Again, really looking forward to that.
The timeline for that we're looking at is to close the acquisition in sometime early in Q3, hopefully July 1, and then looking for a system conversion late September. Again, really looking forward to that. And one of the areas I'll quickly highlight, I'd like to do this at the end of meetings, pick one area and really the Wealth Management division. It's really an area of continued focus. So for you shareholders out there that haven't done any business with our Wealth Management division, I would really encourage you folks to look at that.
And you can see the expertise that we bring to the table. And as Nick Friese mentioned to the Board the other day, 16 bankers in the wealth management division. Again, we've invested a lot of time and resources and we feel really confident about the talented team we have in there to again be able to capture some of the opportunity out there in the marketplace. And you can see here, dollars 587,000,000 now under management in the Wealth Management division, producing $2,500,000 of revenue on an annual basis. You can just see the continuous growth there on this graph where we just year over year just continue to grow and really have a great team there.
I would encourage all of you to reach out and get an appointment with them. And really when you talk about what they do, I mean the wealth management team really does a great job with financial planning, investment management, brokerage and insurance services, personal trust and fiduciary services, a great corporate trust area, individual retirement accounts, 401 plans, estate administration services and private banking. Again, I really would encourage you all to have that experience. You get a chance to talk to some of our advisors and wealth management folks. And again, that's all I have.
And I will just say again, thank you and look forward to next year, hopefully seeing everybody face to face. And I'll open the floor up. We'll pause for a minute, see if we get any questions come in that we'll be glad to answer. Give it a minute.
To all the shareholders, it's been an exciting, challenging 2020. How many of us would have thought that in March of 2020 or a little earlier that a year later, we'd be still going through COVID. It's brought a lot of personal changes, a lot of sadness in many people's lives because of the disease and it's brought a lot of intuitive and energetic workers at the Fidelity Bank who continue to work very hard in a very difficult time. We've had many changes in the last year in this bank. I'm happy to be here today, obviously, with all of you who are able to be here and welcome all of my fellow Board of Directors.
We have since 2020 added new Board of Directors. We have new faces and new energetic people who have now joined our Board. From our great and successful merchants acquisition and merger, We have Dick Hotchkiss and we have Helen Beth Thiesig. We've been very, very blessed to have 2 exceptional trained Board of Directors, seasoned individuals who have brought to this bank the knowledge and information that we need in the Lehigh Valley. They've been wonderful additions.
We also added Bill Joyce from Luzerne County to this Board and Alan Silverman here. They've been exceptional members of our new Board and our new faces. We're very happy to have all of you here and I thank you for all of your participation over this last year. It has been a challenge. There's been no question.
On behalf of all of the Board of Directors, to all of the Fidelity bankers, you have been exceptional. You've worked diligently. You worked very hard. As Dan has indicated, the results of our success this year for not only our earnings, for our shareholders, our great acquisition of merchants and our future acquisition of Landmark. Just think of it, during COVID, exceptional earnings, a transition in a new purchase and a new acquisition that went relatively seamless.
It's hard to believe that we were capable of really accomplishing all of that in such a difficult time. But it's because of all of the workers, all of the bank people, all of our bankers at Fidelity Bank. On behalf of all of this Board, we thank you. We're very proud of you and we're happy to be a part of you. I can't I would be remiss if I didn't say to the executive management team, you guys have been sensational.
You don't work the old banker hours. I know that from my own knowledge of all of you. You worked very hard. You worked exceptional time, exceptional hours, and you've given us exceptional performance during this year. Without this team, without your willing to work together, which we know you do, we would not have the success.
You've been outstanding. You really have demonstrated your passion, your devotion to Fidelity Bank. And believe me, we're all proud of you and very thankful for having all of you a part of this bank. For our shareholders, we've made changes. We have now we are in the Lehigh Valley.
That was the first big move for our bank over 113 years. It was our first time that we reached out. But as I said, it was a great merger. It was a great opportunity for all of us and the success is here. We've moved in a very short time to do another acquisition and that is Landmark.
We've seen that we're working fast and we're taking opportunity, but I assure the shareholders that this Board always has the same vision. We're not going to act unless it's appropriate for the shareholders, for this bank. We do it after a lot of thought and consideration, and we do not do it if it does not and will not serve the best interest of this institution. I assure you going forward that all of the decisions that we make, we make diligently, we make with passion for the Fidelity bankers and the shareholders, and we do it with the consideration of always moving this institution positively forward. Again, on behalf of all of us in the Board, we thank all of the shareholders for your loyalty.
We thank our bankers. And on behalf of myself, I thank all of you to being the great participants in this institution that you have been. It's been absolutely a pleasure working with you. Before I end, I just want to make a couple of comments about this year. Our former Chairman, and I hope he's at home listening to this, stepped down as a Board member, and that's Pat Dempsey.
And Pat was an institution in this institution. He provided all of us with his leadership and the premise for all of us to go forward. We wish him well. We hope he is listening today because we don't have meetings. Those of us who have shared this with our prior meetings don't think of Pat's wisdom every time that we move forward in this institution.
He truly embodies the true spirit of this Fidelity Bank. And again, Pat, if you're listening, we wish you well. We miss you. We'll see you soon because we're all going to have dinner together and you're coming. The other individual who we lost this year was David Tresler.
David Tresler was a member of this Board for a long time. He was an active banker of Northeastern Pennsylvania for so many years, a wonderful banker, a wonderful human being and a wonderful Board member at Fidelity. Dave passed after we all thought that Dave had maybe more than 9 lives because he has been sick. He always attended and always participated and is always here. He provided a wonderful wisdom to all of us who didn't know the industry like he knew it since he lived it for his whole life.
On behalf of all of us, we wish his family well. David, we miss you and Godspeed. Again, thank all of you for this participation. I'm hoping and praying this is the last virtual only meeting that we will have and that we'll all be together next year. Are there any questions, Dan?
No questions, Mr. Chairman. If there are no questions, the judge of election will now read the results of the voting. Richard?
Proposal number 1, election of 4 Class A Directors for a 3 year term and until the successors are elected and qualified. John T. Cognexi, 95.98 percent for 4.02% withhold Richard J. Latiri, 97.25 percent for 2.75% withhold Michael J. McDonald, 95.86 percent or 4.14% with coal Helen Vetschy Vilcek, 96.09 percent for 3.91% withhold.
Proposal number 2, ramifications of the selection of RSM US LLP as the independent registered public accountant firm for 2021, 3,000,004,000 524,000 for
81,468
against 19,280 abstained. Thank you, Chairman.
The shareholders have elected John C. Cognexi, Richard J. Latiri, Michael J. McDonnell and Helen Beth G. Vilsack to serve as the Class A Directors of the Corporation.
The shareholders have ratified the selection of RSM US LLP as the corporation's independent auditors for the fiscal year ending December 31, 2021. Having no other business before this Board today and the Annual Meeting of the Shareholders, I hereby adjourn the 2021 Annual Meeting of Shareholders. Thank all of you for attending and be well.