205 DATURA STREET
WEST PALM BEACH, FL 33401
(561)803-9900
PRESS RELEASE
FOR IMMEDIATE RELEASE
Fidelity Bankshares Q3 Net Income up 41% to $6.2 Million, EPS $0.41; Assets
Reach $3.4 Billion, Deposits $2.69 Billion
- --------------------------------------------------------------------------------
West Palm Beach, FL, October 19, 2004 - Fidelity Bankshares, Inc. (Nasdaq: FFFL)
the holding company for Fidelity Federal Bank & Trust, announced today the
company's net income for the quarter ended September 30, 2004 was $6.2 million
or $.42 basic and $.41 diluted earnings per share. This compared with $4.4
million or $.30 basic and diluted earnings per share for the quarter ended
September 30, 2003.
For the nine months ended September 30, 2004, the company's net income was $17.6
million or $1.20 basic and $1.16 diluted earnings per share. This compared with
$14.4 million net income and $1.00 basic and $.99 diluted earnings per share for
the nine months ended September 30, 2003.
For the third quarter, the company's net interest income, before provision for
loan losses, increased by 31.7% to $27.7 million compared to the same quarter in
2003. This was a direct result of growth in the company's earning assets and the
company's margin expansion to 3.46% compared to 3.10% for the quarter ended
September 30, 2003. Compared to September 30, 2003, the company's net loans
receivable grew 22.6% to $2.56 billion and investments or assets available for
sale increased by 23.4% to $650.3 million.
This growth was primarily funded by an increase in lower costing core deposits
of 14.2%, together with an increase in borrowings from the Federal Home Loan
Bank and more efficient use of cash on deposit with FHLB. The company's results
also included approximately $250,000 in estimated damages from two hurricanes in
September. In addition, the results included approximately $200,000 for
consultant fees associated with revenue enhancements and Sarbanes-Oxley 404
compliance.
Chairman and CEO Vince Elhilow said, "This was an event-filled quarter for us.
We were hit in September by an unprecedented two hurricanes, Frances and Jeanne.
Our people moved quickly and expertly to keep service open in branches where we
had electricity. As power was restored, we promptly resumed operations.
Thankfully, financial damage to the bank was minimal. We heard from a number of
our customers thanking us for our service during a very difficult period for
many of them. I am proud of the way that many of our employees reached out to
help those less fortunate in need of assistance. Also, in the quarter we
announced the acquisition of First Community Bancorp, which has assets of $163
million and operates five branches in Palm Beach county. This will be an
excellent fit with our current 43 branches. We continue to be on track to close
<page>
this transaction in the first quarter of 2005, subject to appropriate regulatory
approvals and First Community shareholder approval."
Core deposits, consisting of checking, savings and money market accounts
increased by $24.3 million during the quarter and now comprise 76.3% of the
company's deposits. Certificates of deposit represented the remaining 23.7%. At
September 30, 2004, the company's deposits totaled $2.69 billion.
In September, the board of directors approved 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 September 30, 2004, was distributed on
October 15, 2004.
Fidelity Bankshares, Inc., through its subsidiary Fidelity Federal Bank & Trust,
has assets of $3.44 billion and deposits of $2.69 billion and operates in
Florida through 43 offices in Palm Beach, Martin and St. Lucie counties.
An investment profile on Fidelity Bankshares may be found on the website
www.hawkassociates.com/fffl/profile.htm.
Financial statements for the quarter 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, e-mail:
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:
www.hawkassociates.com.
Forward-Looking Statements. When used in this report, the words or phrases "will
likely result," "are expected to," "will continue," "is anticipated,"
"estimate," "project" or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain risks and
uncertainties, including, among other things, changes in economic conditions in
the company's market area, changes in policies by regulatory agencies,
fluctuations in interest rates, demand for loans in the company's market area
and competition that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. The company
wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The company
wishes to advise readers that the factors listed above could affect the
company's financial performance and could cause the company's actual results for
future periods to differ materially from any opinions or statements expressed
with respect to future periods in any current statements.
<page>
Fidelity Bankshares, Inc.
Financial Highlights
(Unaudited)
Three Months Three Months Nine Months Nine Months Year
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, December 31,
2004 2003 2004 2003 2003
FOR THE PERIOD (In Thousands)
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Interest income $42,986 $35,428 $120,139 $106,595 $143,683
Interest expense 15,246 14,371 43,901 43,067 57,164
Net interest income 27,740 21,057 76,238 63,528 86,519
Chargeoffs 149 245 248 318 322
Recoveries - - 25 1 1
Gain on sale of loans 134 118 391 3,731 4,159
Gain (loss) on sale of mortgage-backed
and investment securities 82 - 1,135 - (2,364)
Net income 6,182 4,385 17,557 14,433 17,921
PER COMMON SHARE
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Net income:
Basic EPS $0.42 $0.30 $1.20 $1.00 $1.24
Diluted EPS 0.41 0.30 1.16 0.99 1.22
Dividends declared 0.10 0.10 0.30 0.30 0.40
Book value 13.37 11.97 13.37 11.97 12.28
Stock price:
High 38.80 27.72 38.80 27.72 32.47
Low 33.41 21.57 30.62 17.24 17.20
Close 37.19 26.57 37.19 26.57 31.40
AVERAGE FOR THE PERIOD (In Thousands)
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Assets $3,430,108 $2,899,313 $3,285,858 $2,738,664 $2,798,378
Loans receivable, net 2,501,748 2,069,732 2,365,363 2,007,061 2,037,993
Mortgage-backed securities 498,839 482,695 468,492 372,268 399,898
Investments 209,950 163,062 228,878 175,499 174,896
Deposits 2,691,603 2,327,024 2,618,154 2,176,154 2,235,207
Borrowed funds 460,146 332,227 404,414 335,645 335,832
Stockholders' equity 197,062 178,726 192,764 174,871 176,477
SELECTED RATIOS
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Return on average assets 0.72% 0.60% 0.71% 0.70% 0.64%
Return on average equity 12.55% 9.81% 12.14% 11.00% 10.15%
Interest rate spread on average assets for the period 3.42% 3.06% 3.29% 3.28% 3.28%
Net yield on average interest earning assets for the period 3.46% 3.10% 3.32% 3.32% 3.31%
Net yield on interest earning assets at end of period 3.45% 2.96% 3.45% 2.96% 3.30%
Interest rate spread at end of period 3.38% 2.92% 3.38% 2.92% 3.29%
Ratio of interest earning assets to interest bearing
liabilities at end of period 103.83% 101.86% 103.83% 101.86% 100.49%
Ratio of non performing assets to total assets 0.19% 0.19% 0.19% 0.19% 0.37%
Ratio of valuation allowances to non performing assets 204.99% 184.36% 204.99% 184.36% 99.12%
Ratio of valuation allowances to loans receivable, net 0.51% 0.48% 0.51% 0.48% 0.51%
Stockholders' equity as a percentage of assets 5.87% 6.14% 5.87% 6.14% 6.05%
PERIOD END (In Thousands)
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Total assets $3,444,565 $2,929,388 $3,444,565 $2,929,388 $3,048,222
Interest earning cash and investment securities 187,538 134,830 187,538 134,830 156,528
Mortgage-backed and corporate debt securities 474,118 501,098 474,118 501,098 471,228
Loans receivable, net 2,555,173 2,083,513 2,555,173 2,083,513 2,191,696
Federal Home Loan Bank Stock 19,263 13,645 19,263 13,645 13,322
Real estate owned and held for investment - 45 - 45 -
Loan loss reserve 13,069 10,042 13,069 10,042 11,119
All other assets 208,473 196,257 208,473 196,257 215,448
Borrowed funds 475,386 325,211 475,386 325,211 358,970
Common shares outstanding, net of treasury shares 15,131,946 15,020,202 15,131,946 15,020,202 15,024,648
Stockholders' equity 202,239 179,844 202,239 179,844 184,509
Certain amounts in prior year have been reclassified to conform with the
September 30, 2004 presentation.
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Fidelity Bankshares Inc.
Selected Unaudited Operating Data
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
------------------------------------ ------------------------------------
(In Thousands) (In Thousands)
Selected Operating Data:
Interest income $42,986 $35,428 $120,139 $106,595
Interest expense 15,246 14,371 43,901 43,067
--------------- --------------- --------------- ---------------
Net interest income before
provision for loan losses 27,740 21,057 76,238 63,528
Provision for loan losses 783 558 2,174 2,041
--------------- --------------- --------------- ---------------
Net interest income after
provision for loan losses 26,957 20,499 74,064 61,487
--------------- --------------- --------------- ---------------
Other income
Fees on deposit accounts 2,740 2,957 8,374 7,061
Fees for other banking services 2,830 2,555 8,499 7,412
All other income 675 357 2,992 4,427
--------------- --------------- --------------- ---------------
Total other income 6,245 5,869 19,865 18,900
--------------- --------------- --------------- ---------------
Operating expense
Compensation and benefits 13,110 11,235 37,576 33,635
Occupancy and equipment 4,403 3,703 12,356 10,534
All other operating expense 5,564 4,207 15,158 12,522
--------------- --------------- --------------- ---------------
Total operating expense 23,077 19,145 65,090 56,691
--------------- --------------- --------------- ---------------
Income before taxes 10,125 7,223 28,839 23,696
Provision for income taxes 3,943 2,838 11,282 9,263
Net income $6,182 $4,385 $17,557 $14,433
=============== =============== =============== ===============
Earnings per share:
Basic $ .42 $ .30 $ 1.20 $ 1.00
=============== =============== =============== ===============
Diluted $ .41 $ .30 $ 1.16 $ .99
=============== =============== =============== ===============
Certain amounts in prior year have been reclassified to conform with the
September 30, 2004 presentation.
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Fidelity Bankshares Inc.
Selected Unaudited Financial Data
September 30, December 31,
2004 2003
------------------------------------------------
(In Thousands)
Assets
Cash and interest earning deposits $ 76,587 $ 109,887
Assets available for sale 650,330 593,959
Loans:
Residential mortgage 1,734,258 1,509,249
Commercial mortgage 914,106 753,890
Consumer 215,634 185,450
Commercial business 133,764 131,292
----------------- -----------------
Gross loans 2,997,762 2,579,881
Less:
Loans in process 426,928 374,974
Deferred costs (income) 2,592 2,092
Allowance for loan losses 13,069 11,119
----------------- -----------------
Loans, Net 2,555,173 2,191,696
----------------- -----------------
Office properties and equipment 77,158 70,663
FHLB stock 19,263 13,322
REO - -
All other assets 66,054 68,695
----------------- -----------------
Total assets $ 3,444,565 $ 3,048,222
================= =================
Liabilities and Equity
Liabilities:
Deposits:
Checking, savings and money
market accounts $ 2,054,888 $ 1,774,222
Certificates of deposit 638,638 685,879
----------------- -----------------
Total deposits 2,693,526 2,460,101
Repurchase agreements 37,816 42,089
Borrowings from FHLB 385,250 264,561
Subordinated debentures I 29,639 29,639
Subordinated debentures II 22,681 22,681
All other liabilities 73,414 44,642
----------------- -----------------
Total liabilities 3,242,326 2,863,713
----------------- -----------------
Stockholders' equity 202,239 184,509
----------------- -----------------
Total liabilities and equity $ 3,444,565 $ 3,048,222
================= =================
Certain amounts in prior year have been reclassified to conform with the
September 30, 2004 presentation.