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): July 21, 2005
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FIDELITY BANKSHARES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 000-29040 65-1101656
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(State or Other Jurisdiction) (Commission File No.) (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) (Zip Code)
Registrant's telephone number, including area code: (561) 803-9900
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Not Applicable
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Financial Condition and Results of Operations
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On July 18, 2005 the Company reported earnings for the three and
six months ended June 30, 2005. A press release is included as an
exhibit.
Item 8.01 Other Events
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Item 9.01 Financial Statements and Exhibits
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(a) Financial Statements of businesses acquired. Not Applicable.
(b) Pro forma financial information. Not Applicable.
(c) Attached as an exhibit is Fidelity Bankshares, Inc.'s (the
"Company") press release announcing its June 30, 2005
earnings.
The following Exhibit is attached as part of this report:
99.1 Press release dated July 18, 2005 announcing the
Company's financial results. The press release is
included as an exhibit.
SIGNATURES
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: July 21, 2005 By: /s/ Vince A. Elhilow
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Vince A. Elhilow
Chairman of the Board, President and
Chief Executive Officer
EXHIBIT INDEX
Exhibit No. Description
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99.1 Press release dated July 18, 2005 announcing
June 30, 2005 earnings.
205 DATURA STREET
WEST PALM BEACH, FL 33401
(561) 803-9900
PRESS RELEASE
FOR IMMEDIATE RELEASE
Fidelity Bankshares Second Quarter Net Income Up 52%, Net
Interest Rate Spread Widens for Fifth Consecutive Quarter
West Palm Beach, FL, July 18, 2005 -- Fidelity Bankshares, Inc. (Nasdaq: FFFL),
the holding company for Fidelity Federal Bank & Trust, announced today that net
income for the second quarter ended June 30, 2005 rose 52% to $8.6 million or
$0.35 basic and diluted earnings per share, compared with $5.7 million or $0.26
basic and $0.25 diluted earnings per share for the quarter ended June 30, 2004.
Net income for the six months ended June 30, 2005 rose 36% to $15.5 million or
$0.64 basic and $0.63 diluted earnings per share, compared to $11.4 million or
$0.52 basic and $0.50 diluted earnings per share for the six months ended June
30, 2004.
The company's net interest rate spread increased for the fifth consecutive
quarter. On June 30, 2005, the company's net interest rate spread was 3.63%.
This represented an improvement of 54 basis points since March 31, 2004 and was
the primary reason for the company's improvement in net income for the quarter
and six months ended June 30, 2005, compared to the quarter and six months ended
June 30, 2004.
Core deposits, excluding all certificates of deposit, increased by $152.6
million in the second quarter and $241.6 million for the six months ended June
30, 2005. Of these increases, $117.2 million was attributable to the acquisition
of First Community Bancorp, which closed on April 1, 2005. Certificate of
deposit balances increased by $177.6 million for the quarter and $141.5 million
for the first six months of 2005. Compared to the first quarter, total deposits
have increased by $330.2 million, of which $137.7 million resulted from the
acquisition of First Community. At June 30, 2005, core deposits comprised 75.8%
of the bank's deposits, while certificates of deposit comprised 24.2%.
Through June 30, 2005, the company's loan production increased by 9.3%, compared
to the same six-month period in 2004. Consumer loan production, which includes
home equity lines of credit, with rates tied to the prime rate, increased by
19.6% for the six months ended June 30, 2005, compared to the six months ended
June 30, 2004.
Fidelity Bankshares Chairman and CEO Vince A. Elhilow said, "We are pleased with
the financial performance of First Community Bancorp during its initial quarter
as part of Fidelity. As anticipated, the addition of First Community
strengthened our balance sheet and our position in the western part of Palm
Beach County. We had expected to incur as much as $1 million in expenses
relating to the acquisition and integration of First Community. These expenses,
largely severance, retention and stay bonuses for employees of First Community,
did not materialize as that company, prior to closing, reduced employees through
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attrition, with the results that Fidelity absorbed all remaining employees. All
other acquisition costs were minimal."
The board approved a cash dividend of $0.08 per share for stockholders of record
on June 30, 2005. This distribution was paid on July 15, 2005.
On June 30, 2005, Fidelity Bankshares, Inc., through its subsidiary Fidelity
Federal Bank & Trust, had assets of $3.8 billion and deposits of $3.2 billion
and operates in Florida through 47 offices in Palm Beach, Martin and St. Lucie
counties.
An investment profile on Fidelity Bankshares may be found on
http://www.hawkassociates.com/fffl/profile.htm.
Financial statements for the quarter follow.
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) 451-1888, e-mail:
info@hawkassociates.com. Information about Fidelity Bankshares, Inc. can be
found on http://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 http://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 Six Months Six Months Year
Ended Ended Ended Ended Ended
June 30, June 30, June 30, June 30, December 31,
2005 2004 2005 2004 2004
FOR THE PERIOD (In Thousands)
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Interest income $50,076 $39,091 $95,400 $77,153 $164,664
Interest expense 17,344 14,506 32,595 28,655 59,864
Net interest income 32,732 24,585 62,805 48,498 104,800
Chargeoffs 96 32 97 99 252
Recoveries - - - 25 25
Gain on sale of loans 121 151 473 257 619
Gain (loss) on sale of mortgage-backed
and investment securities - 467 - 1,053 407
Net income 8,647 5,688 15,463 11,375 22,897
PER COMMON SHARE
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Net Income: (1)
Basic EPS $0.35 $0.26 $0.64 $0.52 $1.04
Diluted EPS 0.35 0.25 0.63 0.50 1.01
Dividends declared (1) 0.08 0.07 0.16 0.13 0.28
Book value (1) 10.96 8.33 10.96 8.33 10.29
Stock price: (1)
High 26.98 24.73 28.85 25.63 28.85
Low 22.27 20.41 22.27 20.41 20.41
Close 26.52 23.63 26.52 23.63 28.51
AVERAGE FOR THE PERIOD (In Thousands)
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Assets $3,685,764 $3,317,404 $3,595,145 $3,220,109 $3,336,797
Loans receivable, net 2,609,769 2,365,533 2,559,305 2,296,421 2,424,354
Mortgage-backed securities 692,585 439,250 651,071 453,152 466,035
Investments 113,669 268,536 117,712 238,446 227,328
Deposits 3,080,406 2,654,778 2,950,947 2,581,122 2,665,929
Borrowed funds 292,771 395,366 320,175 376,242 400,498
Stockholders' equity 267,856 191,213 261,392 189,786 199,273
SELECTED RATIOS
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Return on average assets 0.94% 0.69% 0.86% 0.71% 0.69%
Return on average equity 12.91% 11.90% 11.83% 11.99% 11.49%
Interest rate spread on average assets for the period 3.81% 3.19% 3.74% 3.23% 3.33%
Net yield on average interest earning assets for the period 3.83% 3.20% 3.77% 3.25% 3.36%
Net yield on interest earning assets at end of period 3.64% 3.33% 3.64% 3.33% 3.59%
Interest rate spread at end of period 3.63% 3.32% 3.63% 3.32% 3.53%
Ratio of interest earning assets to interest bearing
liabilities at end of period 100.63% 100.41% 100.63% 100.41% 100.12%
Ratio of non performing assets to total assets 0.16% 0.31% 0.16% 0.31% 0.19%
Ratio of valuation allowances to non performing assets 258.10% 117.09% 258.10% 117.09% 211.85%
Ratio of valuation allowances to loans receivable, net 0.57% 0.51% 0.57% 0.51% 0.53%
Stockholders' equity as a percentage of assets 7.24% 5.56% 7.24% 5.56% 7.24%
PERIOD END (In Thousands)
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Total assets $3,797,106 $3,402,619 $3,797,106 $3,402,619 $3,470,539
Interest earning cash and investment securities 70,024 192,278 70,024 192,278 106,238
Mortgage-backed securities 673,226 503,254 673,226 503,254 529,640
Loans receivable, net 2,718,696 2,448,022 2,718,696 2,448,022 2,556,700
Federal Home Loan Bank Stock 12,847 19,905 12,847 19,905 17,399
Real estate owned and held for investment 7 7 7 7 -
Loan loss reserve 15,519 12,436 15,519 12,436 13,628
All other assets 322,306 239,153 322,306 239,153 260,562
Borrowed funds 255,129 474,650 255,129 474,650 350,560
Common shares outstanding, net of treasury shares (1) 25,097,604 22,695,039 25,097,604 22,695,039 24,425,050
Stockholders' equity 275,019 189,113 275,019 189,113 251,283
(1) Reflects 3 for 2 stock split distributed in form of a stock dividend paid
on January 14, 2005 to stockholders of record on December 31, 2004. Certain
amounts in prior year have been reclassified to conform with the June 30,
2005 presentation.
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Fidelity Bankshares Inc.
Selected Unaudited Operating Data
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
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(In Thousands) (In Thousands)
ected Operating Data:
Interest income $50,076 $39,091 $95,400 $77,153
Interest expense 17,344 14,506 32,595 28,655
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Net interest income before
provision for loan losses 32,732 24,585 62,805 48,498
Provision for loan losses 422 794 994 1,391
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Net interest income after
provision for loan losses 32,310 23,791 61,811 47,107
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Other income
Fees on deposit accounts 2,799 2,795 5,300 5,634
Fees for other banking services 3,226 2,997 6,122 5,669
Gain on sale of loans 121 151 473 257
Gain on sale of securities - 467 - 1,053
All other income 457 747 844 1,007
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Total other income 6,603 7,157 12,739 13,620
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Operating expense
Compensation and benefits 14,215 12,521 28,164 24,466
Occupancy and equipment 5,029 3,943 9,817 7,953
All other operating expense 5,735 5,083 11,597 9,594
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Total operating expense 24,979 21,547 49,578 42,013
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Income before taxes 13,934 9,401 24,972 18,714
Provision for income taxes 5,287 3,713 9,509 7,339
Net income $8,647 $5,688 $15,463 $11,375
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Earnings per share: (1)
Basic $ .35 $ .26 $ .64 $ .52
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Diluted $ .35 $ .25 $ .63 $ .50
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Shares used for EPS computations: (1)
Basic 24,436,475 21,995,924 24,139,048 21,958,122
================== ================== ================= ==================
Diluted 24,995,395 22,714,866 24,716,758 22,699,404
================== ================== ================= ==================
(1) Reflects 3 for 2 stock split distributed in the form of a stock dividend
paid on January 14, 2005 to stockholders of record on December 31, 2004.
Certain amounts in prior year have been reclassified to conform with the
June 30, 2005 presentation.
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Fidelity Bankshares Inc.
Selected Unaudited Financial Data
June 30, December 31,
2005 2004
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(In Thousands)
Assets
Cash and interest earning deposits $ 139,816 $ 149,409
Assets available for sale 467,764 505,629
Assets held to maturity 270,278 89,167
Loans:
Residential mortgage 1,715,212 1,715,636
Commercial mortgage 1,102,415 972,546
Consumer 275,010 231,333
Commercial business 133,327 125,791
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Gross loans 3,225,964 3,045,306
Less:
Loans in process 488,688 472,324
Deferred costs (income) 3,061 2,654
Allowance for loan losses 15,519 13,628
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Loans, Net 2,718,696 2,556,700
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Office properties and equipment 91,543 83,439
FHLB stock 12,847 17,399
REO 7 -
All other assets 96,155 68,796
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Total assets $ 3,797,106 $ 3,470,539
=================== ====================
Liabilities and Equity
Liabilities:
Deposits:
Checking, savings and money
market accounts $ 2,423,638 $ 2,182,020
Certificates of deposit 774,146 632,650
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Total deposits 3,197,784 2,814,670
Repurchase agreements 77,358 46,097
Borrowings from FHLB 124,163 250,855
Subordinated debentures 53,608 53,608
All other liabilities 69,174 54,026
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Total liabilities 3,522,087 3,219,256
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Stockholders' equity 275,019 251,283
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Total liabilities and equity $ 3,797,106 $ 3,470,539
=================== ====================
Certain amounts in prior year have been reclassified to conform with the June
30, 2005 presentation.