EXHIBIT 99.1
[LETTERHEAD OF FIDELITY FEDERAL BANCORP]
Contacts: Donald R. Neel, President and CEO (812) 429-0550, ext. 3301
Mark A. Isaac, VP and CFO (812) 429-0550, ext. 3319
For Immediate Release: July 18, 2003
FIDELITY FEDERAL BANCORP REPORTS INCREASED EARNINGS
(Evansville, IN) Fidelity Federal Bancorp (the "Company") (NASDAQ: FFED), the
holding company of United Fidelity Bank, fsb (the "Bank"), reported net income
for the quarter ended June 30, 2003 of $103,000 or $0.01 per share on a basic
and diluted basis. The results are compared to net income of $44,000, or $0.01
per share on a basic and diluted basis for the quarter ended June 30, 2002. For
the year-to-date period ended June 30, 2003, the Company reported net income of
$158,000, or $0.02 on a basic and diluted basis compared to $130,000, or $0.02
for the same period last year.
Return on equity was 3.06% for the quarter ended June 30, 2003, compared to
1.42% for the same period ended June 30, 2002. Return on assets for the quarter
ended June 30, 2003 was 0.29% compared to 0.10% for the same period ended June
30, 2002. The Company's net interest margin for the quarter was 1.99%, compared
to 2.41% last year, due primarily to a reduction in consumer loans outstanding
during the quarter. During the second half of 2002, the Company completed a loan
securitization transaction resulting in a sale of loans. These loans have not
yet been replaced on the balance sheet. For the year-to-date period ended June
30, 2003, the net interest margin was 1.78% compared to 2.62% for the same
period last year.
Non-interest income increased 34.9% to $1.1 million for the quarter from
$820,000 last year primarily due to gains on sales of foreclosed assets, and
significant increase in mortgage loan volume. Non-interest income for the first
half of 2003 increased 32.9% to $2.3 million compared to $1.8 million in 2002.
Non-interest expense decreased to 5.5% $1.7 million for the second quarter of
2002 compared to $1.8 million last year. For the year-to-date period,
non-interest expense decreased 6.0% to $3.4 million in 2003 compared to $3.6
million in 2002.
Capital ratios at the Bank remain well above regulatory "well-capitalized"
minimums. Risk-based capital at June 30, 2003 was 12.50%, compared to 12.70% at
June 30, 2002. The Bank's ratio of tangible equity to assets was 7.63% at June
30, 2003 compared to 7.78% at June 30, 2002. The Bank's Tier 1 risk-based
capital to assets was 10.17% at June 30, 2003, compared to 9.97% at June 30,
2002.
Total classified assets decreased by 68.8% to $2.0 million at June 30, 2003
compared to $6.4 million at June 30, 2002. The Company and Bank sold $4.4
million in classified assets in the second quarter of 2003 at or above book
value. The allowance for loan loss and valuation allowance for letters of credit
to total loans and letters of credit at June 30, 2003 and 2002 was 0.93% and
1.42%, respectively. The decrease was due to the elimination of required
reserves for assets that were sold. Non-performing assets as a percentage of
total assets was 1.13% at June 30, 2003 compared to 1.66% at June 30, 2002.
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President and CEO Donald R. Neel noted, "Second quarter 2003 results reflect
substantial improvements in non-interest income and asset quality, which largely
offset the reduction in net interest margin from the second quarter of 2002. The
second quarter also saw the maturity of approximately $21 million in
certificates of deposit with an average rate of around 6.0%, which has recently
improved the Bank's overall cost of funds." Neel also noted, "Origination fees
from mortgage lending and gains on asset sales drove the increase in
non-interest income. In addition, the second quarter saw increased commercial
lending and stable consumer lending activity for the Bank." Neel stated finally,
"The Company's asset quality improved sharply with the sale of $4.4 million in
classified assets, which were sold in excess of book value."
This news release contains forward-looking statements that are based upon the
Company's current expectations, but are subject to certain risks and
uncertainties that may cause actual results to differ materially. Among the
risks and uncertainties that could cause actual results to vary materially are
economic conditions generally and in the market areas of the Company, the Bank,
overall loan demand, increased competition in the financial services industry,
retention of key personnel, and the impact of the Bank's Supervisory Agreement
with the Office of Thrift Supervision. Actions by the Federal Reserve Board and
changes in interest rates, loan prepayments by, and the financial health of, the
Bank's borrowers, and other factors described in the reports filed by the
Company with the Securities and Exchange Commission could also impact current
expectations.
The Company is a unitary savings and loan holding company based in Evansville,
Indiana. Its savings bank subsidiary, United Fidelity Bank, fsb, maintains five
locations, four in Evansville and one in Warrick County. The Company's stock,
which is quoted on NASDAQ under the symbol FFED, most recently traded at $1.50.
Information on FFED is available on the Internet at
http://www.unitedfidelity.com
-- END --
FIDELITY FEDERAL BANCORP
FINANCIAL HIGHLIGHTS
(DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
(Unaudited) (Unaudited)
OPERATIONS: 2003 2002 2003 2002
- ----------------------------- ----------- ----------- ----------- -----------
Interest income $ 1,596 $ 2,510 $ 3,199 $ 5,083
Interest expense 980 1,630 2,139 3,232
----------- ----------- ----------- -----------
Net interest income 616 880 1,060 1,851
Provision for loan losses (18) -- (122) --
Non-interest income 1,106 820 2,325 1,750
Non-interest expense 1,658 1,754 3,420 3,640
----------- ----------- ----------- -----------
Income before income tax 82 (54) 87 (39)
Income taxes (21) (98) (71) (169)
----------- ----------- ----------- -----------
Net income (loss) $ 103 $ 44 $ 158 $ 130
=========== =========== =========== ===========
PER SHARE:
- -----------------------------
Basic net income (loss) $ 0.01 $ 0.01 $ 0.02 $ 0.02
Diluted net income (loss) 0.01 0.01 0.02 0.02
Book value at period end 1.43 2.06
Market price (bid) at period end 1.30 2.40
Average common and common
equivalent shares outstanding 9,618,659 6,071,627 8,234,129 6,047,163
AVERAGE BALANCES:
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Total assets $ 143,225 $ 168,580 $ 139,363 $ 164,037
Total earning assets 124,287 146,692 120,214 142,545
Total loans 73,816 102,801 73,047 103,003
Total deposits 107,367 123,861 108,124 120,044
Total stockholders' equity 13,554 12,297 11,659 12,137
FHLB advances 12,153 16,996 8,038 16,140
Borrowings 7,723 12,532 9,092 12,433
PERFORMANCE RATIOS:
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Return on average assets 0.29% 0.10% 0.23% 0.16%
Return on average equity 3.06% 1.42% 2.74% 2.16%
Net interest margin 1.99% 2.41% 1.78% 2.62%
LOAN QUALITY RATIOS:
- -----------------------------
Net charge-offs to average loans and letters of credit 0.11% -1.91% 0.06% 1.05%
Allowance for loan and letter of credit losses to total
loans and letters of credit at end of period 0.93% 1.42%
Non-performing loans to total loans 1.88% 0.74%
Non-performing assets to total assets 1.13% 1.66%
SAVINGS BANK CAPITAL RATIOS:
- -----------------------------
Tangible equity to assets at end of period 7.63% 7.78%
Risk-based capital ratios:
Tier 1 capital 10.17% 9.97%
Total capital 12.50% 12.70%
AT PERIOD END:
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Total assets $ 147,928 $ 164,972
Total earning assets 130,645 145,229
Total loans 77,294 103,569
Total deposits 110,342 125,546
Total stockholders' equity 13,747 12,464
FHLB Advances 17,000 13,157
Borrowings 4,302 11,747
Common shares outstanding 9,618,658 6,063,914