CHICAGO, Dec. 11 /PRNewswire/ -- Fidelity Bancorp, Inc. (the Company)
(Nasdaq: FBCI) announced today that it took a one-time $3 million charge
against earnings for the fourth quarter and fiscal year ended September 30,
1997 and has restated its previously reported preliminary results of
operations.  In the announcement of its unaudited year-end results, issued in
a press release on October 20, 1997, the Company reported net income was $3.9
million or $l.38 per fully diluted share for the year ended September 30,
1997, compared with $2.1 million or $0.72 per fully diluted share in 1996.
Restated, the Company's net income for 1997 was $925,000 or $0.32 per fully
diluted share.  Complete financial statements are included with the Company's
Form 10-K, filed today with the SEC.
    The one-time, $3 million charge taken by the Company was based on its
determination that certain subordinated notes held in its investment portfolio
are other than temporarily impaired and have no readily discernible market
value.  The notes were acquired by the Company in 1994 from Cole Taylor
Financial Group, Inc., when Cole Taylor was the parent company for both a
consumer finance company and a Chicago-area bank.  Earlier this year, Cole
Taylor's bank subsidiary was "spun-off" to certain Cole Taylor shareholders in
exchange for stock and certain assets.  The notes remained as obligations of
the surviving company, which is now known as Reliance Acceptance Group, Inc.
(RACC) and is the parent company for the consumer finance company.
    As reported in the Company's November 21, 1997 press release, the notes
have a par value and cost basis of $3 million, and were estimated to have a
value of $2.25 million when the Company issued its October 20, 1997 press
release announcing preliminary earnings for the quarter and fiscal year ended
September 30, 1997.  At the time, this reduction in value had not been charged
against earnings because, based on then available information and generally
accepted accounting principles, the notes were considered to be temporarily
impaired.
    On November 14, 1997, RACC filed a Form 10-Q with the SEC in which RACC
reported, among other things, substantial additions to its loan loss reserves,
increasing delinquencies and repossession losses, a severe decline in its net
interest margin, continuing defaults under senior credit agreements, a lack of
future funding sources, and the imposition of substantial restrictions by
senior lenders.  In addition, RACC reported that it is seeking a buyer and
that bankruptcy is likely under certain circumstances.  Duff & Phelps Credit
Rating Co. thereafter downgraded its rating on RACC's subordinated notes to
CCC (Triple C).
    The Company has evaluated currently available information about RACC's
present circumstances and future prospects in an effort to assess impairment
and to place a value on the notes in the context of a possible RACC
liquidation, sale and/or bankruptcy.  The Company has concluded that the
impairment is other than temporary, and that a complete write-down of the
notes is appropriate, because of RACC's worsening condition, the fact that the
notes are subordinate to the senior debt and are structurally subordinate to
the other obligations of RACC's finance company subsidiary, and the
substantial uncertainties that exist regarding ultimate realization of the
asset.
    According to Raymond S. Stolarczyk, the Company's chairman and chief
executive officer, "There is no reason to believe, based upon currently
available information, that the Company will obtain any near term recovery on
the principal balance of the notes in the context of a liquidation, sale
and/or bankruptcy of RACC."  He added that "a buyer for RACC has not surfaced,
and RACC appears to be in a liquidation mode now, having reported that it has
no present ability to originate new receivables, and is limited to using its
net cash flow to pay down its senior lenders and to spending under a weekly
budget preapproved by its senior lenders."
    "Under these circumstances," Stolarczyk said, "the Company decided that
the most appropriate course of action is to assign no value to the notes,
prepare a tax plan to realize as much tax benefit from the charge as possible
and work with other subordinated debenture holders to closely monitor
developments concerning RACC.  We will also continue to explore and pursue
alternatives for realizing a recovery on this investment," he said.
    "Clearly we are disappointed that this investment has blemished an
otherwise record year," Stolarczyk added.  "In any case, this is a very unique
situation.  We initially invested in a bank holding company and through events
beyond our control, we now have instead an investment in a leveraged finance
company.  I am confident that this event will not affect our core operations
or our ability to build earnings and shareholder value for our investors."
    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.  Fidelity's stock is
traded on the Nasdaq National Market System 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, or to receive a specific release, call
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