Fidelity D & D Bancorp Raises Dividend 7.0% to $0.46

Fidelity D & D Bancorp, Inc. raised its quarterly dividend 7.0% to $0.46 per share from $0.43. The next ex-dividend date is November 13, 2026, and payment is scheduled for December 10, 2026.

Why the dividend changed

Fidelity did not attribute the increase to a single transaction or balance-sheet event. Its latest operating results provide the clearest context: earnings increased, lending expanded and funding costs declined during the third quarter. The increase is a regular quarterly dividend, not a special distribution connected to a split, merger or spinoff.

The regional bank reported third-quarter net income of $8.9 million, or $1.53 per diluted share, compared with $7.3 million, or $1.27 per diluted share, a year earlier. Net interest income increased $3.4 million as higher average loan balances, improved loan yields and lower funding costs offset higher expenses and credit provisions. The fully taxable-equivalent net interest margin widened to 3.30% from 2.95%.

Loan and lease balances increased $261.7 million during the first nine months of 2026, while deposits increased $142.9 million. Fidelity also added $132.7 million of short-term borrowings. The additional borrowing is relevant because rapid loan growth can place demands on liquidity even when earnings are increasing.

Credit costs also rose with the loan portfolio. The company recorded a $1.1 million provision for credit losses on loans in the third quarter, compared with $200,000 a year earlier. Asset quality remained stable, with nonperforming assets equal to 0.08% of total assets at September 30, 2026. Fidelity remained well capitalized, reporting total risk-based capital of 14.10% of risk-weighted assets.

Chief Executive Daniel J. Santaniello said the bank delivered record quarterly earnings and continued executing strategic initiatives, including opening its new corporate center in downtown Scranton. “We remain confident in our position as we enter the fourth quarter and look ahead to 2027,” he said.

Dividend track record

The increase extends Fidelity’s dividend-growth streak to 11 consecutive years. Its five-year dividend growth rate is 7.4% annual growth, close to the pace of the latest 7.0% increase.

Recent payments show a consistent step-up pattern. Fidelity paid $0.40 per share for the ex-dividend dates from November 15, 2024, through August 15, 2025. It increased the payment to $0.43 beginning with the November 14, 2025, ex-dividend date and maintained that rate for the first three payments of 2026. The new $0.46 rate represents the next step in that sequence.

Full-year totals have also advanced steadily. The annual dividend rose from $1.14 per share in 2020 to $1.23 in 2021, $1.35 in 2022, $1.46 in 2023, $1.54 in 2024 and $1.63 in 2025. Annual growth moderated from 9.8% in 2022 to 8.2% in 2023, 5.5% in 2024 and 5.8% in 2025, showing continued increases at a more measured pace.

Is the dividend covered?

The dividend consumes 32% of earnings. That leaves most earnings available for retained capital, lending and other corporate purposes, providing a substantial buffer between profit and the cash distributed to shareholders.

SmarterDividends rates the dividend A with a safety score of 97. The grade means very safe, defined as a score of 80-100. It reflects the low earnings payout ratio, the 11-year growth record and a recent operating backdrop of higher earnings and net interest income. The rating describes current coverage rather than guaranteeing future payments.

For a bank, capital and credit quality are also central to dividend capacity. Fidelity’s well-capitalized regulatory position and low level of nonperforming assets support the coverage assessment, while higher credit provisions and increased short-term borrowings are the principal counterweights to monitor.

Yield and valuation

Fidelity’s forward yield is 2.65%, below the Financial Services sector median forward yield of 5.84%. The lower yield means the shares provide less current dividend income than the sector median, although Fidelity’s payout uses a comparatively modest portion of earnings.

The annual dividend per share is $1.72, equal to $172.00 of annual income for every 100 shares. The shares are priced at $64.26 after a 47.3% gain over one year.

SmarterDividends estimates fair value at $75.40 and classifies the shares as undervalued, representing 17% upside to fair value. That valuation is separate from the dividend safety assessment and depends on the assumptions underlying the fair-value estimate.

What to watch

The immediate calendar items are the November 13, 2026, ex-dividend date and the December 10, 2026, payment date. Investors must own shares before the ex-dividend date to receive the scheduled payment.

Fidelity’s next operating update will provide evidence on whether loan growth continues to lift net interest income without materially weakening liquidity or credit quality. The main measures to track are deposit growth, short-term borrowings, funding costs, net interest margin and provisions for credit losses. The results will also show how expenses associated with staffing, technology and the new Scranton corporate center affect earnings coverage.