205 DATURA STREET
WEST PALM BEACH, FL 33401
(561) 803-9900
PRESS RELEASE
FOR IMMEDIATE RELEASE
Fidelity Bankshares Third Quarter Net Income Up 34% to $8.3M or $0.33 Diluted
EPS; Core Deposits Increase 18% Annualized
West Palm Beach, FL, October 18, 2005 -- Fidelity Bankshares, Inc. (Nasdaq:
FFFL), the holding company for Fidelity Federal Bank & Trust, announced today
that net income for the third quarter ended Sept. 30, 2005 was $8.3 million or
$0.34 basic and $0.33 diluted earnings per share. This compared with $6.2
million or $0.28 basic and $0.27 diluted earnings per share in the third quarter
of 2004. The increase of $2.1 million represented a 34% improvement in net
income compared to the same quarter in 2004.
Net income for the nine months ended Sept. 30, 2005 was $23.7 million or $0.98
basic and $0.95 diluted earnings per share. This compared to $17.6 million or
$0.80 basic and $0.78 diluted earnings per share for the comparable nine months
in 2004. This was an increase of $6.2 million or 35% compared to the same period
in 2004.
The company experienced mild net interest margin compression during the quarter.
The net interest margin declined five basis points, from 3.64% at June 30, 2005
to 3.59% at Sept. 30, 2005.
Fidelity Bankshares Chairman and CEO Vince A. Elhilow said, "Our core deposits
excluding CDs were up 17.9% on an annualized basis, or $108.4 million for the
quarter and $350.1 million for the first nine months. This was consistent with
our target of 15% to 20% annual expansion of deposits and loans. At the end of
September, core deposits represented 76.3% of our deposits and CDs were 23.7%.
Our branch expansion program is continuing. We expect to open two new branches
late in the fourth quarter, and an additional branch will open early in the
first quarter of 2005.
"Our loan demand continues to be strong," Elhilow continued. "Through the end of
September, loan production rose 18.7% for commercial loans, 18.9% for consumer
loans and 13.9% for residential mortgage loans compared to the same nine-month
period in 2004."
The company's board of directors approved a cash dividend of $0.08 per share for
stockholders of record on Sept. 30, 2005. This distribution was paid on Oct. 14,
2005.
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At Sept. 30, 2005, Fidelity Bankshares, Inc., through its subsidiary Fidelity
Federal Bank & Trust, had assets of $3.94 billion and deposits of $3.32 billion
and operates in Florida through 48 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.
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Fidelity Bankshares, Inc.
Financial Highlights
(Unaudited)
Three Months NineeMonths Nine Months Year
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, December 31,
2005 2004 2005 2004 2004
FOR THE PERIOD (In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
Interest income $53,983 $42,986 $149,384 $120,139 $164,664
Interest expense 20,311 15,246 52,906 43,901 59,864
Net interest income 33,672 27,740 96,478 76,238 104,800
Chargeoffs 168 149 266 248 252
Recoveries - - - 25 25
Gain on sale of loans 170 134 643 391 619
Gain (loss) on sale of mortgage-backed
and investment securities - 81 - 1,134 407
Net income 8,259 6,182 23,722 17,557 22,897
PER COMMON SHARE
- ------------------------------------------------------------------------------------------------------------------------------------
Net Income: (1)
Basic EPS $0.34 $0.28 $0.98 $0.80 $1.04
Diluted EPS 0.33 0.27 0.95 0.78 1.01
Dividends declared (1) 0.08 0.07 0.24 0.20 0.28
Book value (1) 11.14 8.91 11.14 8.91 10.29
Stock price: (1)
High 33.07 25.87 33.07 25.87 28.85
Low 26.21 22.27 22.27 20.41 20.41
Close 30.55 24.79 30.55 24.79 28.51
AVERAGE FOR THE PERIOD (In Thousands)
- -----------------------------------------------------------------------------------------------------------------------------------
Assets $3,880,869 $3,430,108 $3,689,239 $3,285,858 $3,336,797
Loans receivable, net 2,805,926 2,501,748 2,642,416 2,365,363 2,424,354
Mortgage-backed securities 657,055 498,839 653,088 468,492 466,035
Investments 140,148 209,950 125,273 228,878 227,328
Deposits 3,277,983 2,691,603 3,061,221 2,618,154 2,665,929
Borrowed funds 257,149 460,146 298,935 404,414 400,498
Stockholders' equity 277,408 197,062 266,436 192,764 199,273
SELECTED RATIOS
- ------------------------------------------------------------------------------------------------------------------------------------
Return on average assets 0.85% 0.72% 0.86% 0.71% 0.69%
Return on average equity 11.91% 12.55% 11.87% 12.14% 11.49%
Interest rate spread on average assets for the period 3.69% 3.42% 3.72% 3.29% 3.33%
Net yield on average interest earning assets for the
period 3.74% 3.46% 3.76% 3.32% 3.36%
Net yield on interest earning assets at end of period 3.59% 3.45% 3.59% 3.45% 3.59%
Interest rate spread at end of period 3.55% 3.38% 3.55% 3.38% 3.53%
Ratio of interest earning assets to interest bearing
liabilities at end of period 101.64% 103.83% 101.64% 103.83% 100.12%
Ratio of non performing assets to total assets 0.10% 0.19% 0.10% 0.19% 0.19%
Ratio of valuation allowances to non performing assets 405.94% 204.99% 405.94% 204.99% 211.85%
Ratio of valuation allowances to loans receivable, net 0.54% 0.51% 0.54% 0.51% 0.53%
Stockholders' equity as a percentage of assets 7.10% 5.87% 7.10% 5.87% 7.24%
PERIOD END (In Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets $3,939,945 $3,444,565 $3,939,945 $3,444,565 $3,470,539
Interest earning cash and investment securities 96,697 187,538 96,697 187,538 106,238
Mortgage-backed securities 635,537 474,118 635,537 474,118 529,640
Loans receivable, net 2,896,565 2,555,173 2,896,565 2,555,173 2,556,700
Federal Home Loan Bank Stock 12,694 19,263 12,694 19,263 17,399
Real estate owned and held for investment 1,793 - 1,793 - -
Loan loss reserve 15,655 13,069 15,655 13,069 13,628
All other assets 296,659 208,473 296,659 208,473 260,562
Borrowed funds 265,070 475,386 265,070 475,386 350,560
Common shares outstanding 25,100,515 22,697,919 25,100,515 22,697,919 24,425,050
Stockholders' equity 279,617 202,239 279,617 202,239 251,283
___________
(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 September
30, 2005 presentation.
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Fidelity Bankshares Inc.
Selected Unaudited Operating Data
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
---------------------------------------- ---------------------------------------
(In Thousands) (In Thousands)
Selected Operating Data:
Interest income $53,983 $42,986 $149,384 $120,139
Interest expense 20,311 15,246 52,906 43,901
------------------- ------------------- ------------------- -------------------
Net interest income before
provision for loan losses 33,672 27,740 96,478 76,238
Provision for loan losses 304 783 1,298 2,174
------------------- ------------------- ------------------- -------------------
Net interest income after
provision for loan losses 33,368 26,957 95,180 74,064
------------------- ------------------- ------------------- -------------------
Other income
Fees on deposit accounts 2,972 2,740 8,272 8,374
Fees for other banking services 3,250 2,830 9,371 8,499
Gain on sale of loans 170 134 643 391
Gain on sale of securities - 81 - 1,134
All other income 540 460 1,384 1,467
------------------- ------------------- ------------------- -------------------
Total other income 6,932 6,245 19,670 19,865
------------------- ------------------- ------------------- -------------------
Operating expense
Compensation and benefits 15,073 13,110 43,237 37,576
Occupancy and equipment 5,484 4,403 15,301 12,356
All other operating expense 6,432 5,564 18,029 15,158
------------------- ------------------- ------------------- -------------------
Total operating expense 26,989 23,077 76,567 65,090
------------------- ------------------- ------------------- -------------------
Income before taxes 13,311 10,125 38,283 28,839
Provision for income taxes 5,052 3,943 14,561 11,282
Net income $8,259 $6,182 $23,722 $17,557
=================== =================== =================== ===================
Earnings per share: (1)
Basic $ .34 $ .28 $ .98 $ .80
=================== =================== =================== ===================
Diluted $ .33 $ .27 $ .95 $ .78
=================== =================== =================== ===================
Shares used for EPS computations: (1)
Basic 24,538,667 22,066,215 24,273,719 21,994,416
=================== =================== =================== ===================
Diluted 25,257,742 22,717,519 24,910,007 22,634,965
=================== =================== =================== ===================
_______________
(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
September 30, 2005 presentation.
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Fidelity Bankshares Inc.
Selected Unaudited Financial Data
September 30, December 31,
2005 2004
----------------------------------------------------
(In Thousands)
Assets
Cash and interest earning deposits $ 145,866 $ 149,409
Assets available for sale 439,257 505,629
Assets held to maturity 255,878 89,167
Loans:
Residential mortgage 1,826,197 1,715,636
Commercial mortgage 1,192,313 972,546
Consumer 285,749 231,333
Commercial business 151,857 125,791
------------------- -------------------
Gross loans 3,456,116 3,045,306
Less:
Loans in process 540,058 472,324
Deferred costs (income) 3,838 2,654
Allowance for loan losses 15,655 13,628
------------------- -------------------
Loans, Net 2,896,565 2,556,700
------------------- -------------------
Office properties and equipment 90,977 83,439
FHLB stock 12,694 17,399
REO 1,793 -
All other assets 96,915 68,796
------------------- -------------------
Total assets $ 3,939,945 $ 3,470,539
=================== ===================
Liabilities and Equity
Liabilities:
Deposits:
Checking, savings and money
market accounts $ 2,532,082 $ 2,182,020
Certificates of deposit 785,669 632,650
------------------- -------------------
Total deposits 3,317,751 2,814,670
Repurchase agreements 90,693 46,097
Borrowings from FHLB 120,769 250,855
Subordinated debentures 53,608 53,608
All other liabilities 77,507 54,026
------------------- -------------------
Total liabilities 3,660,328 3,219,256
------------------- -------------------
Stockholders' equity 279,617 251,283
------------------- -------------------
Total liabilities and equity $ 3,939,945 $ 3,470,539
=================== ===================
Certain amounts in prior year have been reclassified to conform with the
September 30, 2005 presentation.