CHICAGO, April 15 /PRNewswire-FirstCall/ -- Fidelity Bancorp, Inc.
(Nasdaq: FBCI), the parent company of Fidelity Federal Savings Bank, today
reported fiscal second quarter earnings of $0.59 per diluted share for the
period ended March 31, 2002. The company also announced its board of
directors declared a quarterly dividend of $0.09 per share, payable May 15,
2002 to stockholders of record as of April 30, 2002. All figures reported for
earnings per share and dividends have been adjusted to reflect the company's
three-for-two stock split, which occurred February 28, 2002.
Earnings per diluted share for the quarter ended March 31, 2002 were up
$0.26 per share, or 79%, from $0.33 per share for the same period in 2001.
Net income for the quarter ended March 31, 2002 was $1.9 million, compared
with $1.0 million for the same quarter in 2001, up 79%. Earnings per share
and net income for the quarter were up from the previous year's results due to
an improved net interest margin and increased non-interest income.
For the first six months of the fiscal year, earnings per diluted share
were $1.20, up $0.59 per share from $0.61 per diluted share in the first six
months of 2001. Net income for the first six months of 2002 was $3.8 million,
which is double the net income reported for the same period in 2001.
"Continued improvements in our net interest margin contributed to our
excellent results this quarter," said Raymond S. Stolarczyk, chairman and
chief executive officer. "With the balance sheet initiative that we began six
months ago as the Federal Reserve lowered short-term interest rates, we
achieved three things. We produced substantial increases in non-interest
income, stabilized earning asset levels and laid the groundwork for future
revenue streams. However, with the current, more stable interest environment,
management's attention is now directed to stabilizing the company's net
interest rate margin and expanding the mix of lower cost deposits."
The bank's net interest margin increased from 2.22% for the six months
ended March 31, 2001 to 3.15% in 2002. Net interest income, after provision
for loan losses, was $10.0 million, compared with $6.8 million in the prior
six-month period, up $3.1 million or 46%.
The increase in the company's net interest income was primarily due to the
Federal Reserve's action to lower short-term interest rates. However,
management's initiatives to improve the deposit mix also positively impacted
the bank's interest rate spread and sensitivity.
Total interest expense for the six months ended March 31, 2002 was
$12.0 million, down $4.6 million, or 28%, from $16.6 million in 2001.
Interest expense on borrowed funds declined 30%, to $4.6 million for the six
months ended March 31, 2002, from $6.7 million in 2001 as high priced borrowed
funds matured. The effect of $25 million in higher cost borrowings maturing
in the third quarter of this fiscal year, the extension of maturities on
certain FHLB advances by management, and a moderate improvement in the mix of
core deposits, should produce flat to moderately decreased interest expense
for the remainder of this fiscal year. Borrowed funds increased slightly to
$196.1 million at March 31, 2002, compared with $187.3 million at
September 30, 2001.
For the six months ended March 31, 2002, interest expense on deposits was
$7.4 million, down $2.6 million or 26% from $10.0 million in 2001. In the
coming quarter, the company will have approximately $12 million in high-rate
certificate of deposit maturities, which will provide another opportunity for
interest cost reduction. Through deposit retention efforts and the addition of
a wholesale jumbo certificate of deposit program, deposits for the six-month
period grew 9% or $34.3 million to $434.0 million from $399.6 million at
September 30, 2001. The wholesale CD program generated deposits with terms of
between 12 and 24 months that were generally longer in term and lower in rate
than certificates generated from the bank's retail customers.
While changes in the interest rate environment helped contribute to
significant interest expense reduction, the company's balance sheet
initiatives undertaken in the same interest rate environment helped preserve
interest income. Total interest income was $22.2 million for the quarter ended
March 31, 2002, compared with $23.6 million for the same period in 2001, down
$1.4 million or 6%. Interest income from loans receivable was $16.0 million
for the quarter ended March 31, 2002, compared with $20.3 million in 2001.
Income from loans receivable fell primarily as a result of a decline in the
average balance of loans outstanding due to the sales of loans during the past
three quarters.
Net loans receivable at March 31, 2002 were $426.8 million, compared with
$423.0 million at September 30, 2001. Solid demand for loan products,
especially higher-yielding multi-family mortgages, lead to the loan growth,
despite heavy repayments from refinance activity. The company plans to
continue its focus on generating multi-family loans and is anticipating
continued strong loan demand. The company has recently seen a resurgence in
the purchase market after a long period of refinance activity. New loans
closed, including multi-family and commercial mortgages and loans secured by
commercial leases, totaled $93.8 million for the six months ended March 31,
2002. Loan repayments totaled $92.9 million for the six months ended
March 31, 2002, compared with $62.4 million for the same period in 2001.
"The restrictions on loan pre-payments that we put in place in the first
quarter of the fiscal year have not adversely affected mortgage demand," said
Thomas E. Bentel, president and chief operating officer. "We're finding that
80% of loan applicants are accepting the pre-payment restrictions."
Non-interest income was up $814,000 to $1.7 million for the six month
period ended March 31, 2002 from $897,000 in the year earlier period. The
increase was primarily the result of a $961,000 before tax gain on the sale of
loans and securities. Insurance and annuity commissions contributed $430,000
for the six months, up $27,000 or 7% from $403,000 in 2001. However, without
the gain on the sale of loans and securities, non-interest income for the six-
month period in 2002 was essentially unchanged from 2001.
Non-interest expense increased to $5.6 million for the six months ended
March 31, 2002, compared with $4.8 million in the same period in 2001, up 16%.
Employee benefits, including higher group health insurance premiums,
accelerated depreciation for obsolescence in the company's computer hardware
and software and increased advertising expenses contributed to the increase.
The company's asset quality remained excellent, although the weakened
economy was reflected in an up tick in the company's ratio of non-performing
assets to total assets. At March 31, 2002, the ratio of non-performing assets
to total assets was 0.22%, compared with 0.10% at September 30, 2001.
"The company's non-performing assets ratio continues to be significantly
better than our national and regional peers," said Bentel. "With an allowance
for loan losses to total non-performing loans ratio of more than 135% we feel
comfortable that our loan loss allowance is sufficient."
Book value per share at March 31, 2002 was $15.70, compared with $16.30 at
September 30, 2001. The decrease in book value per share was due to an
unrealized decline in market value in the securities available for sale
portfolio.
The company saw a significant improvement in return on equity, as well as
certain other measures. The company's return on average equity increased to
15.14% for the six months ended March 31, 2002, compared with 8.61% for the
period ended March 31, 2001.
The company will host a telephone conference call to discuss the quarter
and six month results on Tuesday, April 16, 2002 at 9:30 a.m. (CST). To
participate in the call, dial (800) 388-8975 and reference
Reservation #R45813.
Fidelity Bancorp, Inc. is the holding company for Fidelity Federal Savings
Bank, which provides retail banking services through five full-service
locations in Chicago, Franklin Park and Schaumburg. Established in 1906 and
headquartered in northwest Chicago, the bank is primarily in the business of
attracting retail deposits from the general public and investing those funds
in mortgages and consumer loans. The bank also provides investments that are
not FDIC insured through its insurance agency and Invest Financial
Corporation. Fidelity's common stock is traded on The Nasdaq Stock Market
under the symbol "FBCI."
Fidelity Bancorp Inc.'s news releases are available by mail or fax by
contacting the company. News releases are also available on the Internet by
visiting http://www.prnewswire.com and clicking on "Today's News" and then "Company
News" from the pull down menu. The company's SEC filings are available
electronically on the Internet at http://www.sec.gov/cgi-bin/srch-edgar?0000912219 .
This document (including information incorporated by reference) contains,
and future oral and written statements of the Company and its management may
contain, forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 with respect to the financial
condition, results of operations, plans, objectives, future performance and
business of the Company. Forward-looking statements, which may be based upon
beliefs, expectations and assumptions of the Company's management and on
information currently available to management, are generally identifiable by
the use of words such as "believe," "expect," "anticipate," "plan," "intend,"
"estimate," "may," "will," "would," "could," "should" or other similar
expressions. Additionally, all statements in this document, including
forward-looking statements, speak only as of the date they are made, and the
Company undertakes no obligation to update any statement in light of new
information or future events.
A number of factors, many of which are beyond the ability of the Company
to control or predict, could cause actual results to differ materially from
those in its forward-looking statements. These factors include, among others,
the following: (i) the strength of the local and national economy; (ii) the
economic impact of September 11th; (iii) changes in state and federal laws,
regulations and governmental policies concerning the Company's general
business; (iv) changes in interest rates and prepayment rates of the Company's
assets; (v) increased competition in the financial services sector and the
inability to attract new customers; (vi) changes in technology and the ability
to develop and maintain secure and reliable electronic systems; (vii) the loss
of key executives or employees; (viii) changes in consumer spending; (ix)
unexpected results of acquisitions; (x) unexpected outcomes of existing or new
litigation involving the Company; and (xi) changes in accounting policies and
practices. These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements. Additional information concerning the Company and its business,
including additional factors that could materially affect the Company's
financial results, is included in the Company's filings with the Securities
and Exchange Commission.
FIDELITY BANCORP and SUBSIDIARY
Consolidated Statements of Financial Condition
Dollars in thousands (except per share data)
Assets March 31, September 30,
2002 2001
Cash and due from banks $4,695 $7,107
Interest-earning deposits 858 1,397
Federal funds sold 100 100
Cash and cash equivalents 5,653 8,604
FHLB of Chicago stock, at cost 14,194 18,055
Mortgage-backed securities available for sale 179,970 127,685
Securities available for sale 49,872 42,006
Loans held for sale 84 41,219
Loans receivable, net of allowance for loan
losses of $1,477 at March 31, 2002 and $1,236
at September 30, 2001 426,811 422,980
Accrued interest receivable 4,076 3,650
Premises and equipment 3,778 3,850
Other assets 1,223 657
$685,661 668,706
Liabilities and Stockholders' Equity
Liabilities
Deposits 433,953 399,619
Borrowed funds 196,130 187,345
Advance payments by borrowers for taxes
and insurance 2,204 7,193
Due to broker - 14,918
Other liabilities 4,992 10,247
Total liabilities 637,279 619,322
Stockholders' Equity
Preferred stock - -
Common stock 57 38
Additional paid-in capital 38,450 38,636
Retained earnings, substantially restricted 44,239 40,926
Treasury stock, at cost (30,932) (31,540)
Common stock acquired by Bank Recognition
and Retention Plans (170) (178)
Accumulated other comprehensive income (loss) (3,262) 1,502
Total stockholders' equity 48,382 49,384
$685,661 668,706
FIDELITY BANCORP and SUBSIDIARY
Consolidated Statements of Earnings
Dollars in thousands (except for earnings per share)
Three Months Ended Six Months Ended
March 31, March 31,
2002 2001 2002 2001
Interest Income:
Loans receivable $7,794 10,059 16,064 20,293
Securities 1,088 1,527 2,004 3,159
Mortgage-backed securities 1,950 53 4,145 106
Other interest income 8 17 18 31
10,840 11,656 22,231 23,589
Interest Expense:
Deposits 3,537 4,962 7,359 9,977
Borrowed funds 2,110 3,121 4,645 6,659
5,647 8,083 12,004 16,636
Net interest income before
provision for loan losses 5,193 3,573 10,227 6,953
Provision for loan losses 110 40 250 110
Net interest income after
provision for loan losses 5,083 3,533 9,977 6,843
Non-interest Income:
Fees and commissions 157 115 300 233
Insurance and annuity
commissions 210 257 430 403
Gain on sale of securities 223 125 295 125
Gain on sale of loans 125 - 666 -
Other 11 15 20 136
726 512 1,711 897
Non-interest Expense:
General and administrative
expenses:
Salaries and employee
benefits 1,576 1,393 3,275 2,804
Office occupancy and
equipment 506 379 876 753
Data processing 130 143 262 277
Advertising and promotions 156 49 314 204
Other 444 390 856 755
2,812 2,354 5,583 4,793
Income before income taxes 2,997 1,691 6,105 2,947
Income tax expense 1,119 642 2,282 1,035
Net income $1,878 $1,049 3,823 1,912
Earnings per share -
basic (A) $0.61 $0.35 1.25 0.63
Earnings per share -
diluted (A) $0.59 $0.33 1.20 0.61
(A) Adjusted for the February 28, 2002 3-for-2 stock split which was
effected in the form of a stock dividend.
FIDELITY BANCORP and SUBSIDIARY
Financial Highlights (unaudited)
Dollars in thousands (except for book value and earnings per share)
March 31, September 30,
2002 2001
Selected Financial Highlights:
Total assets $685,661 668,706
Interest-earning assets 670,931 653,502
Loans receivable, net 426,895 422,980
Deposits 433,953 399,619
Borrowed funds 196,130 187,345
Non-performing assets 1,536 677
Non-performing loans 1,089 677
Allowance for loan losses 1,477 1,236
Stockholders' equity 48,384 49,384
Book value per share (A) 15.70 16.30
Shares outstanding - actual number (A) 3,081,490 3,030,490
Asset Quality Ratios:
Non-performing loans to loans receivable, net 0.26% 0.16%
Non-performing loans to total assets 0.16% 0.10%
Non-performing assets to total assets 0.22% 0.10%
Allowance for loan losses to total
non-performing loans 135.63% 182.57%
Allowance for loan losses to loans
receivable, net 0.35% 0.29%
Three Month ended Six Months ended
March 31, March 31,
2002 2001 2002 2001
Selected Operating
Activities (annualized):
Return on average assets 1.14% 0.66% 1.15% 0.60%
Return on average equity 14.90% 9.29% 15.14% 8.61%
Net interest rate spread
during period 2.85% 1.81% 2.75% 1.76%
Net interest margin 3.23% 2.29% 3.15% 2.22%
Net interest income to
non-interest expense 184.67% 151.78% 183.18% 145.07%
Operating expenses to
average assets 1.71% 1.49% 1.68% 1.51%
Efficiency ratio 48.41% 58.20% 47.77% 61.93%
Basic earnings per
share (A) $0.61 $0.35 $1.25 $0.63
Diluted earnings per
share (A) $0.59 $0.33 $1.20 $0.61
(A) Adjusted for the February 28, 2002 3-for-2 stock split which was
effected in the form of a stock dividend.
SOURCE Fidelity Bancorp, Inc.
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Company News On-Call:
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CONTACT:
Raymond S. Stolarczyk, Chairman & CEO, or
Thomas E. Bentel, President & COO, or Elizabeth A. Doolan, Sr.
Vice President & CFO, all of Fidelity Bancorp, Inc.,
+1-773-736-4414
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