EXHIBIT 99.1
[LOGO 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: January 18, 2005
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 December 31, 2004 of $176,000 or $0.02 per share on a
basic and fully diluted basis. The results are compared to net income of $30,000
or $0.00 per share on a basic and diluted basis for the quarter ended December
31, 2003. For the year ended December 31, 2004, the Company reported net income
of $472,000, or $0.04 per share on a basic and fully diluted basis compared to
net income of $214,000 or $0.02 per share on a basic and fully diluted basis for
the year ended December 31, 2003.
Net interest income for the Company increased by $175,000 or 18% during the
fourth quarter of 2004, compared to the fourth quarter last year. For the year
ended December 31, 2004, net interest income increased by $1.7 million or 59%
compared to the year ended December 31, 2003. The Company's net interest margin
for the fourth quarter of 2004 was 2.49%, compared to 2.61% for the fourth
quarter of 2003. For the year ended December 31, 2004, net interest margin was
2.51% compared to 2.15% for the year ended December 31, 2003.
Capital ratios at the Bank remain well above regulatory "well-capitalized"
minimums. Risk-based capital at December 31, 2004 was 14.48%, compared to 13.62%
at December 31, 2003. The increase in the Bank's capital ratios resulted
primarily from net income for the year, and a $1 million capital infusion in the
first quarter of 2004. The Bank's ratio of core capital to assets was 7.24% at
December 31, 2004 compared to 7.00% at December 31, 2003. The Bank's Tier 1
risk-based capital to assets was 10.52% at December 31, 2004, compared to 9.16%
at December 31, 2003.
Non-interest expense also decreased approximately 13% to $1.4 million for the
fourth quarter of 2004 compared to $1.6 million for the fourth quarter of 2003.
For the year ended December 31, 2004, non-interest expense decreased by
approximately $574,000, or approximately 9% to $6.1 million compared to $6.7
million in 2003. The decrease from last year is primarily due to a reduction in
human resource costs and expenses incurred in connection with its automobile
loan origination program that was terminated in the third quarter of 2004, and a
reduction in corporate insurance rates.
Total classified assets decreased by approximately 6% to $1.6 million at
December 31, 2004 compared to $1.7 million at December 31, 2003. The allowance
for loan loss and valuation allowance for letters of credit to total loans and
letters of credit at December 31, 2004 and 2003 was 0.74% and 0.80%,
respectively. Non-performing assets as a percentage of total assets was 0.70% at
December 31, 2004 compared to 0.87% at December 31, 2003.
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Non-interest income decreased approximately 13% to $555,000 for the fourth
quarter of 2004 compared to $640,000 for the fourth quarter of 2003. This
decrease was primarily due to gains on sales of foreclosed assets in the fourth
quarter of 2003, and in consumer loan fees, which resulted primarily from the
termination of the Bank's automobile loan origination program in the third
quarter of 2004. Non-interest income for the year ended December 31, 2004
decreased approximately 36% to $2.5 million compared to $3.9 million for the
year ended December 31, 2003.
For the fourth quarter of 2004, return on average assets and average equity were
0.35% and 4.28%, respectively, compared to 0.07% and 0.89% for the fourth
quarter of 2003. For the year ended December 31, 2004, return on average assets
and average equity were 0.24% and 3.09%, respectively, compared to 0.14% and
1.69% for the year ended December 31, 2003.
President and CEO Donald R. Neel noted, "Fourth quarter 2004 results reflect
continued improvements in net interest income, asset quality, and reduced
non-interest expense. These improvements were partially offset by a decline in
income from the termination of indirect automobile lending activities earlier in
the year." Neel further noted, "Expected increases in interest rates may
contribute to an increase in cost of funds during 2005, and could negatively
impact mortgage loan volume. However, interest rate increases to date have not
impacted commercial loan demand as originations increased substantially in the
fourth quarter of 2004, a trend expected to continue in the coming year."
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 and the
Bank, overall loan demand, and increased competition in the financial services
industry which could negatively impact the Company's ability to increase total
earning assets, and retention of key personnel. 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, closed on January 18, 2005 at
$1.84
Information on FFED is available on the Internet at
http://www.unitedfidelity.com
-- END --
[LOGO OF FIDELITY FEDERAL BANCORP]
FINANCIAL HIGHLIGHTS
(DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
(Unaudited) (Unaudited)
OPERATIONS: 2004 2003 2004 2003
- --------------------------- ---------- ---------- ---------- ----------
Interest income $ 2,203 $ 1,836 $ 8,483 $ 6,650
Interest expense 1,048 856 4,004 3,827
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Net interest income 1,155 980 4,479 2,823
Provision for loan losses 105 36 448 13
Non-interest income 555 640 2,495 3,878
Non-interest expense 1,409 1,613 6,120 6,694
---------- ---------- ---------- ----------
Income (loss) before income tax 196 (29) 406 (6)
Income taxes 20 (59) (66) (220)
---------- ---------- ---------- ----------
Net income (loss) $ 176 $ 30 $ 472 $ 214
========== ========== ========== ==========
PER SHARE:
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Basic net income $ 0.02 $ 0.00 $ 0.04 $ 0.02
Diluted net income 0.02 0.00 0.04 0.02
Book value at period end 1.48 1.39
Market price (bid) at period end 1.86 1.62
Average common and common
equivalent shares outstanding 11,002,609 9,618,658 10,493,187 8,932,084
AVERAGE BALANCES:
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Total assets $ 201,471 $ 166,889 $195,959 $ 149,577
Total earning assets 184,189 149,063 178,274 131,080
Total loans (including held for sale) 115,544 98,666 111,819 83,126
Total deposits 131,330 119,538 128,238 111,888
Total stockholders' equity 16,350 13,335 15,274 12,668
FHLB advances 39,073 24,605 37,650 15,172
Borrowings 12,915 7,397 12,776 7,611
PERFORMANCE RATIOS:
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Return on average assets 0.35% 0.07% 0.24% 0.14%
Return on average equity 4.28% 0.89% 3.09% 1.69%
Net interest margin 2.49% 2.61% 2.51% 2.15%
LOAN QUALITY RATIOS:
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Net charge-offs to average loans and letters of credit 0.39% 0.18% 0.31% 0.10%
Allowance for loan and letter of credit losses to total
loans and letters of credit at end of period 0.74% 0.80%
Non-performing loans to total loans 0.91% 1.48%
Non-performing assets to total assets 0.70% 0.87%
SAVINGS BANK CAPITAL RATIOS:
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Tangible equity to assets at end of period 7.24% 7.00%
Risk-based capital ratios:
Tier 1 capital 10.52% 9.16%
Total capital 14.48% 13.62%
AT PERIOD END:
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Total assets $ 200,558 $ 175,390
Total earning assets 183,978 158,111
Total loans (including held for sale) 111,527 101,174
Total deposits 127,701 120,680
Total stockholders' equity 16,261 13,367
FHLB Advances 44,090 31,550
Borrowings 10,460 8,077
Common shares outstanding 10,999,871 9,618,658