CHICAGO, Oct. 19 /PRNewswire/ -- Fidelity Bancorp, Inc. (Nasdaq: FBCI),
the parent company of Fidelity Federal Savings Bank, today reported earnings
of $3.8 million or $1.33 per diluted share for the year ended September 30,
1998. The company also announced its board of directors declared a quarterly
dividend of $0.10 per share, payable November 13, 1998 to stockholders of
record as of October 30, 1998.
Compared with 1997 results, when net income was $925,000, or $0.33 per
diluted share, net income was up $2.9 million, or $1.00 per diluted share.
The company's 1997 results were affected by a loss on impairment of investment
securities. Earnings for 1997 without this non-operating loss would be
$3.9 million or $1.41 per diluted share. Compared with earnings before the
loss, 1998 net income was down $165,000. The decline in earnings was
primarily due to lower yields on earning assets caused in part by record
mortgage refinance activity in the first half of the fiscal year.
For the fourth quarter ended September 30, 1998, the company's net income
was $909,000, or $0.33 per diluted share. Compared with 1997 fourth quarter
earnings without the security loss, net income was down $173,000. The
decrease in earnings for the quarter ended September 30, 1998 was primarily
due to an increase in operating expenses and lower net interest income.
"Our efforts in the fiscal year to improve the company's return on equity
were frustrated by the effects of record high repayments on mortgage loans,"
said Raymond S. Stolarczyk, chairman and chief executive officer. "However,
we mark the end of the fiscal year with some significant accomplishments,
including a measurable increase in the number of higher yielding niche loans
in our mortgage mix. And even though we were operating in a period of a
relatively flat U.S. treasury yield curve and a refinance market, our net
interest margin was fairly stable throughout the year," he said.
Loans
For the year ended September 30, 1998, loans receivable, net of allowance
for loan losses, increased $37.3 million, or 9.6 percent, to $425.6 million
from $388.3 million at September 30, 1997. For the year, principal repayments
totaled $106.8 million. New loans closed during the year showed a sharp
increase, totaling $142.8 million, up $45.0 million or 46.0 percent from 1997.
During the fourth quarter of 1998, new loans closed totaled $38.1 million.
Interest income was $36.1 million for the year ended September 30, 1998,
compared with $35.9 million in 1997. While interest income from loans
receivable was up $1.8 million or 6.2 percent, to $30.2 million for the year,
income from investment and mortgage-backed securities was down $1.4 million.
At September 30, 1998, total assets were $513.6 million, up $17.9 million
or 3.6 percent from 1997.
"Our loan originations for the year were outstanding, especially in the
second half," Stolarczyk said. "You can see the effect of mortgage repayments
when you consider that it took $143 million in new loans to increase our loans
receivable just $37 million. However, loan demand remains strong and I'm
pleased that loan quality continues to be excellent."
Asset Quality
As a result of loan growth, the company made a provision for loan losses
totaling $181,000 for the year, bringing the allowance to $591,000, or 71.1
percent of total non-performing loans. Non-performing assets fell to $962,000
at September 30, 1998, from $2.0 million in 1997. The high quality of the
bank's loans was reflected in its asset quality ratios, which showed
improvement. The ratio of non-performing assets to total assets declined to
0.19 percent at September 30, 1998, from 0.41 percent in 1997.
Deposits
Deposits were stable for the year, increasing $7.2 million to $330.7
million at September 30, 1998. Borrowed funds increased $8.0 million to $121.4
million in the same period, to fund loan growth. Interest expense was $21.8
million, compared with $21.5 million in 1997.
"We continue to focus on replacing higher-yielding certificates of deposit
with transaction accounts," said Thomas E. Bentel, president and chief
operating officer.
Operating Ratios
The company's operating expense ratio was stable for the year. The ratio
of operating expenses to average assets was 1.87 percent for the year ended
September 30, 1998, compared with 1.91 percent in 1997.
"One of our chief accomplishments this year was that we originated and
closed nearly 50 percent more loans than last year without adversely affecting
our operating costs," Bentel said.
The company's book value per share was $18.76 at September 30, 1998, up
$1.01 per share from 1997.
Stock Repurchase Plan
On August 28, 1998, the company announced a plan to repurchase up to
270,000 shares, or ten percent of its common stock. There are 158,000 shares
remaining to be repurchased in the current plan. The company's board of
directors looks at stock repurchases as a capital strategy for building
stockholder value.
Annual Meeting Announced
The company also announced the date of its annual meeting of stockholders.
The meeting will be held at 10:00 a.m., Wednesday, January 27, 1999 at the
company's headquarters, located at 5455 W. Belmont Avenue in Chicago.
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 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 through PR Newswire's
Company News On-Call fax service. For a menu of Fidelity Bancorp's news
releases, or to receive a specific release, call (800) 758-5804, ext. 107861,
or at http://www.prnewswire.com on the Internet. The company's SEC filings are
available electronically on the Internet at
http://www.sec.gov/cgi-bin/srch-edgar?0000912219.
FIDELITY BANCORP and SUBSIDIARY
Consolidated Statements of Financial Condition
Dollars in thousands
Assets 1998 1997
Cash and due from banks $ 1,320 436
Interest-earning deposits 555 2,314
Federal funds sold 100 100
Investment in dollar-denominated mutual funds,
at fair value -- 3,154
FHLB of Chicago stock, at cost 6,510 5,700
Mortgage-backed securities held to maturity,
at amortized cost (approximate fair value of
$11,513 and $17,124 at September 30, 1998 and 1997) 11,177 16,875
Investment securities available for sale,
at fair value 58,979 70,297
Loans receivable, net of allowance for loan
losses of $591 and $460 at September 30, 1998
and 1997 425,608 388,262
Accrued interest receivable 3,547 3,445
Real estate in foreclosure 131 215
Premises and equipment 4,401 3,593
Deposit base intangible 66 107
Other assets 1,169 1,136
$ 513,563 495,634
Liabilities and Stockholders' Equity
Liabilities
Deposits 330,670 323,443
Borrowed funds 121,400 113,400
Advance payments by borrowers for taxes
and insurance 6,919 2,197
Other liabilities 5,977 6,977
Total liabilities 464,966 446,017
Stockholders' Equity
Preferred stock, $.01 par value; authorized
2,500,000 shares; none outstanding -- --
Common stock, $.01 par value; authorized
8,000,000 shares; issued 3,782,350 shares; 2,701,784
and 2,794,978 shares outstanding at September 30, 1998
and 1997, respectively 38 38
Additional paid-in capital 38,117 37,494
Retained earnings, substantially restricted 30,646 27,939
Treasury stock, at cost (1,080,566 and 987,372 shares
at September 30, 1998 and 1997, respectively) (19,210) (13,855)
Common stock acquired by Employee Stock
Ownership Plan (1,092) (1,662)
Common stock acquired by Bank Recognition
and Retention Plans (242) (471)
Unrealized gain on investment securities available
for sale, less applicable taxes 340 134
Total stockholders' equity 48,597 49,617
$ 513,563 495,634
FIDELITY BANCORP and SUBSIDIARY
Consolidated Statements of Earnings
Dollars in thousands (except for earnings per share)
Three Months Ended Year Ended
September 30 September 30
1998 1997 1998 1997
Interest Income:
Loans receivable $ 7,764 7,308 30,231 28,468
Investment securities 1,157 1,388 4,759 5,813
Mortgage-backed securities 212 312 1,018 1,387
Interest-earning deposits 13 25 80 60
Federal funds sold 1 8 22 19
Investment in dollar-denominated
mutual funds -- 44 17 168
9,147 9,085 36,127 35,915
Interest Expense:
Deposits 3,894 4,109 15,936 15,929
Borrowed funds 1,739 1,400 5,900 5,541
5,633 5,509 21,836 21,470
Net interest income before provision
for loan losses 3,514 3,576 14,291 14,445
Provision for loan losses 30 10 181 64
Net interest income after provision
for loan losses 3,484 3,566 14,110 14,381
Non-interest Income:
Fees and commissions 88 54 332 341
Insurance and annuity commissions 200 218 717 700
Other 14 17 58 62
302 289 1,107 1,103
Non-interest Expense:
General and administrative expenses:
Salaries and employee benefits 1,398 1,350 5,682 5,366
Office occupancy and equipment 364 300 1,293 1,203
Data processing 134 125 524 482
Advertising and promotions 64 47 263 515
Federal deposit insurance premiums 57 58 221 325
Other 284 312 1,216 1,346
Total general and administrative
expenses 2,301 2,192 9,199 9,237
Amortization of deposit base
intangible 9 12 41 51
Loss (recovery of) on impairment
of investment securities
available for sale -- 2,978 (22) 2,978
2,310 5,182 9,218 12,266
Income (loss) before income taxes 1,476 (1,327) 5,999 3,218
Income tax expense 567 611 2,219 2,293
Net income (loss) $ 909 (1,938) 3,780 925
Earnings per share -- basic $0.34 ($0.73) $1.41 $0.35
Earnings per share -- diluted $0.33 ($0.69) $1.33 $0.33
FIDELITY BANCORP and SUBSIDIARY
Financial Highlights (unaudited)
Dollars in thousands (except for book value and earnings per share)
September 30,
1998 1997
Selected Financial Highlights:
Total assets $ 513,563 495,634
Interest-earning assets 502,929 486,702
Loans receivable, net(A) 425,608 388,262
Deposits 330,670 323,443
Borrowed funds 121,400 113,400
Non-performing assets 962 2,023
Non-performing loans 831 1,808
Allowance for loan losses 591 460
Stockholders' equity 48,597 49,617
Book value per share 18.76 17.75
Shares outstanding -- actual number 2,701,784 2,794,978
Asset Quality Ratios:
Non-performing loans to loans receivable, net(B) 0.20% 0.47%
Non-performing loans to total assets(B) 0.16% 0.36%
Non-performing assets to total assets(B) 0.19% 0.41%
Allowance for loan losses to total
non-performing loans(B) 71.12% 25.44%
Allowance for loan losses to loans
receivable, net 0.14% 0.12%
Three Months ended Year ended September 30,
September 30,
1998 1997 1998 1997 1997
ACTUAL Adjusted
(C) w/o
Security
Selected Operating Activities (annualized):
Return on average assets 0.71% (1.57%) 0.76% 0.19% 0.81
Return on average equity 6.96% (14.85%) 7.30% 1.82% 7.78%
Net interest rate spread
during period 2.22% 2.33% 2.38% 2.45% 2.45%
Net interest margin 2.83% 2.96% 2.98% 3.03% 3.03%
Net interest income to
operating expenses 152.12% 162.25% 154.90% 155.52% 155.52%
Operating expenses to
average assets 1.81% 1.78% 1.87% 1.91% 1.91%
Basic earnings
per share $0.34 ($0.73) $1.41 $0.35 $1.49
Diluted earnings
per share $0.33 ($0.69) $1.33 $0.33 $1.41
(A) The loans receivable portfolio includes $30,000 and $408,000 of
Bennett Funding Group commercial equipment leases at September 30,
1998 and September 30, 1997.
(B) The non-performing loans include Bennett Funding Group commercial
equipment leases.
(C) The adjusted annual ratios reflect the Company's results excluding the
non-operating loss on impairment of investment security.
SOURCE Fidelity Bancorp, Inc.
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Company News On-Call:
http://www.prnewswire.com/comp/107861.html or fax,
800-758-5804, ext. 107861
CONTACT:
Raymond S. Stolarczyk, Chairman & CEO, or
Thomas E. Bentel, President & COO, or Jim Kinney, Sr. VP & CFO of
Fidelity Bancorp, 773-736-4414
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