EXHBIT 99.1
[LOGO OF FIDELITY FEDERAL BANCORP]
Contacts: Donald R. Neel, President (812) 429-0550, ext. 3301
Mark A. Isaac, VP and CFO (812) 429-0550, ext. 3319
For Immediate Release: April 26, 2004
FIDELITY FEDERAL BANCORP REPORTS INCREASED FIRST QUARTER RESULTS
(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 March 31, 2004 of $65,000 or $0.01 per share on a basic
and diluted basis. The results are compared to net income of $55,000, or $0.01
per share on a basic and diluted basis for the quarter ended March 31, 2003.
The Company's net interest margin for the quarter increased to 2.54%, up from
1.55% in last year's first quarter. The net interest margin was positively
impacted in the first quarter of 2004 by a 47% increase in average loans
outstanding compared to the first quarter of 2003.
Non-interest income declined to $701,000 for the quarter, down from $1.2 million
in the first quarter of last year, due primarily to decreases in gains on
securities and loan sales. In addition, in the first quarter last year, the
Company received approximately $125,000 in income from the Company's active
participation in affordable housing activities, which ended in late 2002.
Non-interest expense decreased by 10%, to $1.6 million in the first quarter of
2004, compared to the first quarter last year. The decline in non-interest
expense for the quarter resulted from decreases in salaries and benefits costs
and office supplies expense. In addition, the Company experienced a decline in
its corporate insurance expense due to continued improvements in financial
condition.
Return on equity was 1.96% for the quarter ended March 31, 2004, compared to
2.30% for the same period last year. Return on assets for the quarter ended
March 31, 2004 was 0.14% compared to 0.16% for the same period ended March 31,
2003.
Capital ratios at the Bank remain well above regulatory "well-capitalized"
minimums. Risk-based capital at March 31, 2004 was 14.19%, compared to 12.82% at
March 31, 2003. The Bank's ratio of tangible equity to assets was 7.05% at March
31, 2004 compared to 7.98% at March 31, 2003. The Bank's Tier 1 risk-based
capital to assets was 9.94% at March 31, 2004, compared to 10.34% at March 31,
2003.
The Company recently completed a rights offering to shareholders in the amount
of $2.3 million of 9% debentures, the proceeds of which were utilized to retire
a portion of the Company's 10% debentures and were contributed as additional
capital to the Company's savings bank subsidiary. An equity rights offering in
the amount of $2.5 million is currently underway and is expected to expire on
May 14, 2004. The Company expects to receive at least $2.0 million from this
offering, and contribute a portion of the proceeds as additional capital to its
savings bank subsidiary. The Company also expects to retire the remaining 10%
debentures.
Total classified, or problem assets declined by 77% to $1.5 million at March 31,
2004 compared to $6.4 million at March 31, 2003. The allowance for loan loss and
valuation allowance for letters of credit to total loans and letters of credit
at March 31, 2004 and 2003 was 0.78% and 1.20%, respectively. Non-performing
assets as a percentage of total assets declined significantly to 0.63% at March
31, 2004, compared to 2.43% at March 31, 2003.
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President and CEO Donald R. Neel noted, "Net income in the first quarter was
primarily the result of improvements in net interest margin and non-interest
expense which offset reduced levels of gains on sales of loans and investments
in the first quarter of 2004. Increases in our net interest income and margin
resulted from the substantial increase in loans outstanding compared to last
year, as well as a reduced cost of funds." Neel also noted, "Total assets have
increased by $48 million, or 34%, in the last twelve months. Continued
improvements in asset quality, as well as additional capital raised for our bank
subsidiary during the last year, have facilitated the growth in the Company's
balance sheet, including our loan portfolio, during the last twelve months.
Although rising interest rates appear to have contributed to lower mortgage loan
volume, we do not believe that interest rate changes have impacted our
commercial and consumer lending activity."
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 $1.78.
Information on FFED is available on the Internet at
http://www.unitedfidelity.com
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FINANCIAL HIGHLIGHTS
(DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
THREE MONTHS ENDED
MARCH 31,
OPERATIONS: 2004 2003
- -------------------------------------- ----------- -----------
Interest income $ 2,042 $ 1,602
Interest expense 982 1,158
----------- -----------
Net interest income 1,060 444
Provision for loan losses 170 (104)
Non-interest income 701 1,218
Non-interest expense 1,586 1,761
----------- -----------
Income before income tax 5 5
Income taxes (60) (50)
----------- -----------
Net income $ 65 $ 55
=========== ===========
PER SHARE:
- --------------------------------------
Basic net income $ 0.01 $ 0.01
Diluted net income 0.01 0.01
Book value at period end 1.62 1.40
Market price (bid) at period end 1.90 1.50
Average common and common
equivalent shares outstanding 9,623,350 6,834,216
AVERAGE BALANCES:
- --------------------------------------
Total assets $ 185,934 $ 135,488
Total earning assets 168,006 116,127
Total loans 106,256 72,302
Total deposits 124,368 108,885
Total stockholders' equity 13,381 9,665
FHLB advances 35,271 3,878
Borrowings 10,590 10,583
PERFORMANCE RATIOS:
- --------------------------------------
Return on average assets 0.14% 0.16%
Return on average equity 1.96% 2.30%
Net interest margin 2.54% 1.55%
LOAN QUALITY RATIOS:
- --------------------------------------
Net charge-offs to average loans 0.63% 0.03%
Allowance for loan and letter of credit losses to total
loans and letters of credit at end of period 0.78% 1.20%
Non-performing loans to total loans 0.84% 1.89%
Non-performing assets to total assets 0.63% 2.43%
SAVINGS BANK CAPITAL RATIOS:
- --------------------------------------
Tangible equity to assets at end of period 7.05% 7.98%
Risk-based capital ratios:
Tier 1 capital 9.94% 10.34%
Total capital 14.19% 12.82%
AT PERIOD END:
- --------------------------------------
Total assets $ 189,830 $ 142,085
Total earning assets 172,798 123,192
Total loans 106,098 70,821
Total deposits 129,270 113,076
Total stockholders' equity 15,586 9,596
FHLB Advances 34,000 6,000
Borrowings 6,802 10,579
Common shares outstanding 9,618,658 6,840,883