UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 20 , 2004
Fidelity Bankshares, Inc.
(Exact name of registrant as specified in its charter)
Delaware 000-29040 65-0717085
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(State or other jurisdiction (SEC File Number) (I.R.S. Employer
of incorporation) Identification No.)
205 Datura Street, West Palm Beach, Florida, 33401
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(Address of principal executive offices)
Registrant's telephone number, including area code: (561) 803-9900
Not Applicable
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(Former name or former address, if changed since last report)
CURRENT REPORT ON FORM 8-K
Item 7. Financial Statements and Exhibits
(a) No financial statements of businesses acquired are required.
(b) No pro forma financial information is required.
(c) Attached as an exhibit is Fidelity Bankshares, Inc.'s (the "Company")
news release announcing its March 31, 2004 earnings.
Item 12. Results of Operations and Financial Condition
The Company announced its March 31, 2004 financial results by release.
The press release is included as an exhibit.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
Fidelity Bankshares, Inc.
DATE: April 20, 2004 By: /s/ Vince A. Elhilow
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Vince A. Elhilow
Chairman of the Board
and Chief Executive Officer
EXHIBIT INDEX
99.1 News release dated April 20, 2004 announcing March 31, 2004 earnings.
EXHIBIT 99.1
205 DATURA STREET
WEST PALM BEACH, FL 33401
(561) 803-9900
PRESS RELEASE
FOR IMMEDIATE RELEASE
Fidelity Bankshares Q1 Net Income $5.7 Million, EPS $0.38.
Assets Reach $3.24 Billion. Deposits $2.64 Billion.
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West Palm Beach, FL, April 20, 2004 - Fidelity Bankshares, Inc. (NASDAQ: FFFL)
the holding company for Fidelity Federal Bank & Trust, announced today the
company's net income for the first fiscal quarter ended March 31, 2004 rose
11.1% to $5.7 million or $.39 basic and $.38 diluted earnings per share from
$5.1 million or $.36 basic and $.35 diluted earnings per share in the quarter
ended March 31, 2003.
The company sold $114.8 million of securities in the first quarter of 2004
resulting in a gain of approximately $587,000 ($358,000 or $.02 per share after
tax). There were no such comparable sales of securities in the quarter ended
March 31, 2003. In the quarter ended March 31, 2003, however, the company sold a
$50 million pool of loans that resulted in a gain of $1.5 million ($925,000 or
$.06 per share after tax). The company sold no comparable pool of loans in the
quarter ended March 31, 2004.
As a result of the securities sales, the company's net interest margin at March
31, 2004 was 3.09%, compared to 3.30% at December 31, 2003 and 3.43% at March
31, 2003. The proceeds from the first quarter 2004 securities sales were on
deposit with the FHLB earning .95%. The company expects its net interest margin
to improve upon reinvestment of these proceeds.
The purpose of the securities sales was to improve the bank's ability to manage
interest rate risk in the event interest rates increase. At December 31, 2003,
the company had a positive one-year repricing gap to assets of 16.07%. At March
31, 2004, this positive repricing gap had further improved to 24.29%.
Fidelity Bankshares Chairman and CEO Vince Elhilow said, "In addition to
prudently positioning ourselves to benefit from possible interest rate
increases, we continued to enhance the value of our franchise by increasing core
deposits. We experienced net deposit growth during the quarter of $181.2
million. Core deposits, consisting of checking, savings and money market
accounts now comprise 74.4% of our company's deposits, while certificates of
deposit represent the remaining 25.6%. A year ago, core deposits, which exclude
all certificates of deposit, made up 64.4% of our deposits. At the end of the
first quarter, deposits totaled $2.64 billion, an increase of $513.2 million or
24.1% compared to a year ago."
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Fidelity Bankshares
Page 2 of 5
In March, the Board of Directors declared payment of a quarterly dividend to
stockholders of $.10 per share on the company's common stock. The dividend,
payable to stockholders of record as of March 31, 2004, was paid on April 15,
2004.
Fidelity Bankshares, Inc., through its subsidiary Fidelity Federal Bank & Trust,
has assets of $3.24 billion and deposits of $2.64 billion and operates in
Florida through 41 offices in Palm Beach, Martin, Broward, Indian River and St.
Lucie counties.
An investment profile on Fidelity Bankshares may be found on the website
www.hawkassociates.com/fffl/profile.htm.
Financials are attached.
For more information contact Chairman and CEO Vince A. Elhilow or Chief
Financial Officer Richard D. Aldred at (561) 803-9900 or Frank Hawkins or Julie
Marshall, Hawk Associates, Inc. at (305) 852-2383. Email:
info@hawkassociates.com. Information about Fidelity Bankshares, Inc. can be
found on the website www.fidelityfederal.com. Copies of Fidelity Bankshares
press releases, SEC filings, current price quotes, stock charts and other
valuable information for investors may be found on the website:
http://www.hawkassociates.com.
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<page>
Fidelity Bankshares, Inc.
Financial Highlights
(Unaudited)
Three Months Three Months Year
Ended Ended Ended
March 31, March 31, December 31,
2004 2003 2003
FOR THE PERIOD (In Thousands)
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Interest income $38,062 $34,831 $143,683
Interest expense 14,149 14,046 57,164
Net interest income 23,913 20,785 86,519
Chargeoffs 67 71 322
Recoveries 4 - 1
Gain on sale of loans 105 2,559 4,159
Net income 5,687 5,117 17,921
PER COMMON SHARE
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Net income:
Basic EPS $0.39 $0.36 $1.24
Diluted EPS 0.38 0.35 1.22
Dividends declared 0.10 0.10 0.40
Book value 12.79 11.59 12.28
Stock price:
High 38.45 19.75 32.47
Low 31.25 17.20 17.20
Close 36.67 18.32 31.40
AVERAGE FOR THE PERIOD (In Thousands)
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Assets $3,127,984 $2,569,884 $2,798,378
Loans receivable, net 2,227,308 1,954,221 2,037,993
Mortgage-backed securities 467,053 211,236 399,898
Investments 208,358 204,177 174,896
Deposits 2,507,224 2,000,362 2,235,207
Borrowed funds 357,119 340,313 335,832
Stockholders' equity 189,084 170,908 176,477
SELECTED RATIOS
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Return on average assets 0.73% 0.80% 0.64%
Return on average equity 12.03% 11.98% 10.15%
Interest rate spread on average assets for the period 3.27% 3.48% 3.28%
Net yield on average interest earning assets for the period 3.30% 3.51% 3.31%
Net yield on interest earning assets at end of period 3.09% 3.43% 3.30%
Interest rate spread at end of period 3.09% 3.41% 3.29%
Ratio of interest earning assets to interest bearing
liabilities at end of period 99.88% 100.81% 100.49%
Ratio of non performing assets to total assets 0.32% 0.22% 0.37%
Ratio of valuation allowances to non performing assets 112.97% 150.82% 99.12%
Ratio of valuation allowances to loans receivable, net 0.51% 0.46% 0.51%
Stockholders' equity as a percentage of assets 5.95% 6.40% 6.05%
PERIOD END (In Thousands)
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Total assets $3,240,786 $2,699,347 $3,048,222
Interest earning cash and investment securities 348,518 160,453 169,850
Mortgage-backed and corporate debt securities 360,961 384,199 471,228
Loans receivable, net 2,280,624 1,957,426 2,191,696
Real estate owned and held for investment 17 726 -
Loan loss reserve 11,652 9,036 11,119
All other assets 250,666 196,543 215,448
Borrowed funds 352,256 337,825 358,970
Common shares outstanding, net of treasury shares 15,070,258 14,899,818 15,024,648
Stockholders' equity 192,684 172,640 184,509
Certain amounts in prior year have been reclassified to conform with the March
31, 2004 presentation.
<page>
Fidelity Bankshares Inc.
Selected Unaudited Operating Data
Three Months Ended
March 31,
2004 2003
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(In Thousands)
Selected Operating Data:
Interest income $38,062 $34,831
Interest expense 14,149 14,046
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Net interest income before
provision for loan losses 23,913 20,785
Provision for loan losses 596 790
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Net interest income after
provision for loan losses 23,317 19,995
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Other income
Fees on deposit accounts 2,839 1,902
Fees for other banking services 2,672 2,294
Gain on sale of loans 105 2,559
Gain (loss) on sale of investments 587 -
All other income 260 256
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Total other income 6,463 7,011
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Operating expense
Compensation and benefits 11,944 11,096
Occupancy and equipment 4,010 3,416
All other operating expense 4,512 4,148
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Total operating expense 20,466 18,660
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Income before taxes 9,314 8,346
Provision for income taxes 3,627 3,229
Net income $5,687 $5,117
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Earnings per share:
Basic $ .39 $ .36
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Diluted $ .38 $ .35
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Certain amounts in prior year have been reclassified to conform with the March
31, 2004 presentation.
<page>
Fidelity Bankshares Inc.
Selected Unaudited Financial Data
March 31, December 31,
2004 2003
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(In Thousands)
Assets
Cash and interest earning deposits $ 301,909 $ 109,887
Assets available for sale 504,254 593,959
Loans:
Residential mortgage 1,545,088 1,509,249
Commercial mortgage 785,814 753,890
Consumer 190,984 185,450
Commercial business 133,174 131,292
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Gross loans 2,655,060 2,579,881
Less:
Loans in process 360,507 374,974
Deferred costs (income) 2,277 2,092
Allowance for loan losses 11,652 11,119
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Loans, Net 2,280,624 2,191,696
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Office properties and equipment 72,236 70,663
FHLB stock 13,055 13,322
REO 17 -
All other assets 68,691 68,695
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Total assets $ 3,240,786 $ 3,048,222
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Liabilities and Equity
Liabilities:
Deposits:
Checking, savings and money
market accounts $ 1,963,873 $ 1,774,222
Certificates of deposit 677,449 685,879
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Total deposits 2,641,322 2,460,101
Repurchase agreements 38,829 42,089
Borrowings from FHLB 261,107 264,561
Subordinated debentures I 29,639 29,639
Subordinated debentures II 22,681 22,681
All other liabilities 54,524 44,642
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Total liabilities 3,048,102 2,863,713
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Stockholders' equity 192,684 184,509
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Total liabilities and equity $ 3,240,786 $ 3,048,222
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Certain amounts in prior year have been reclassified to conform with the March
31, 2004 presentation.