Fidelity 205 DATURA STREET
Bankshares WEST PALM BEACH, FL 33401
(561) 803-9900
Fidelity Bankshares Q2 Net Income $8.7M; EPS $0.34
Company Reports Assets of $4.2B; Deposits $3.4B
West Palm Beach, FL, July 18, 2006 - Fidelity Bankshares, Inc. (Nasdaq: FFFL)
announced today that net income for the second fiscal quarter ended June 30,
2006 was $8.7 million or $0.35 basic and $0.34 diluted earnings per share. This
compared with net income of $8.6 million, or $0.35 basic and diluted earnings
per share for the second quarter of 2005.
During the quarter, the company terminated certain leases of office properties.
This resulted in a pre tax charge against income of $243,000 for early
termination of a lease and write-off of unamortized leasehold improvements.
Net income for the six months ended June 30, 2006 was $16.5 million, or $0.67
basic and $0.65 diluted earnings per share, compared to $15.5 million or $0.64
basic and $0.63 diluted earnings per share for the six months ended June 30,
2005.
The net interest margin for the quarter ended June 30, 2006 was 3.67%, compared
to 3.83% for the quarter ended June 30, 2005. On a consecutive-quarter basis,
the net interest margin for the quarter ended March 31, 2006 was 3.49% and for
the quarter ended December 31, 2005 was 3.68%.
Fidelity Bankshares Chairman and CEO Vince Elhilow said, "During the quarter our
deposits decreased by $310.1 million from March 31, 2006. We were able to
partially offset this with an increase of $113.5 million in our repurchase
agreements or collateralized sweep accounts, which are used by our commercial
customers. Therefore, in the aggregate, our customer accounts declined by a net
of $196.6 million. Of this net decline, $63.4 million was attributable to a
decrease in certificates of deposit. During the quarter, we opened our 52nd
branch in Boca Raton and we are moving ahead with plans to open four new offices
by the end of the year.
"Due to the relatively high market rates for certificates of deposit, money
market and savings deposits, we are going to continue to use short-term
borrowings from the Federal Home Loan Bank to fund loan growth and operations,
pending the opening of the four new branches. These short-term borrowings will
be repaid from deposits generated by the new branch openings. Our core deposits,
which exclude all certificates of deposit as well as the sweep accounts
mentioned above, were 77.4% of total deposits at the end of the quarter, up from
74.5% of total deposits at the end of last year. At the end of the second
quarter a year ago, core deposits were 75.8% of total deposits. This is good
progress," Elhilow said.
The company's board of directors declared a cash dividend of $0.08 per share for
stockholders of record on June 30, 2006. This distribution was paid on July 14,
2006.
At June 30, 2006, Fidelity Bankshares, Inc., through its subsidiary Fidelity
Federal Bank & Trust, had assets of $4.2 billion and deposits of $3.4 billion
and operates in Florida through 52 offices in Palm Beach, Broward, Martin and
St. Lucie counties.
An investment profile on Fidelity Bankshares may be found on
http://www.hawkassociates.com/fffl/profile.php .
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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 . 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 .
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, December31,
2006 2005 2006 2005 2005
FOR THE PERIOD (In Thousands)
- -----------------------------------------------------------------------------------------------------------------------------------
Interest income $ 64,621 $ 50,076 $ 126,286 $ 95,400 $ 206,551
Interest expense 28,703 17,093 56,141 32,344 76,211
Net interest income 35,918 32,983 70,145 63,056 130,340
Chargeoffs 7 96 97 97 330
Recoveries 2 -- 2 -- 1
Gain on sale of loans 109 121 224 473 728
Net income 8,651 8,647 16,527 15,463 32,082
PER COMMON SHARE
- -----------------------------------------------------------------------------------------------------------------------------------
Net Income:
Basic EPS $ 0.35 $ 0.35 $ 0.67 $ 0.64 $ 1.32
Diluted EPS 0.34 0.35 0.65 0.63 1.28
Dividends declared 0.08 0.08 0.16 0.16 0.32
Book value 11.66 10.95 11.66 10.95 11.34
Stock price:
High 33.81 26.98 35.05 28.85 34.20
Low 30.79 22.27 30.79 22.27 22.27
Close 31.82 26.52 31.82 26.52 32.70
AVERAGE FOR THE PERIOD (In Thousands)
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets $ 4,211,354 $ 3,685,764 $ 4,205,581 $ 3,595,145 $ 3,762,083
Loans receivable, net 3,245,922 2,609,769 3,177,984 2,559,305 2,723,586
Securities available for sale 374,635 489,232 390,478 492,040 467,603
Securities held to maturity 233,627 276,790 236,656 228,736 242,217
Deposits 3,487,591 3,080,406 3,575,957 2,950,947 3,132,413
Borrowed funds 353,653 292,771 279,823 320,175 294,572
Stockholders' equity 293,140 267,856 291,069 261,392 270,217
SELECTED RATIOS
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Return on average assets 0.82% 0.94% 0.79% 0.86% 0.85%
Return on average equity 11.80% 12.91% 11.36% 11.83% 11.87%
Interest rate spread on average assets for the period 3.62% 3.81% 3.54% 3.74% 3.70%
Net yield on average interest earning assets for the perioD 3.67% 3.83% 3.58% 3.77% 3.74%
Ratio of interest earning assets to interest bearing
liabilities at end of period 117.01% 115.68% 117.01% 115.68% 114.89%
Ratio of non performing assets to total assets 0.25% 0.16% 0.25% 0.16% 0.22%
Ratio of valuation allowances to non performing assets 159.28% 258.10% 159.28% 258.10% 176.94%
Ratio of valuation allowances to loans receivable, net 0.51% 0.57% 0.51% 0.57% 0.53%
Stockholders' equity as a percentage of assets 6.95% 7.23% 6.95% 7.23% 6.98%
PERIOD END (In Thousands, except for share data)
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Total assets $ 4,234,980 $ 3,797,288 $ 4,234,980 $ 3,797,288 $ 4,082,611
Interest earning cash 26,269 5,207 26,269 5,207 39,283
Securities available for sale 349,473 467,764 349,473 467,764 410,473
Securities held to maturity 263,600 270,278 263,600 270,278 242,497
Loans receivable, net 3,272,228 2,718,696 3,272,228 2,718,696 3,036,710
Federal Home Loan Bank stock 20,365 12,847 20,365 12,847 11,398
Foreclosed assets, net 1 7 1 7 1,793
Loan loss reserve 16,703 15,519 16,703 15,519 16,171
All other assets 303,044 322,489 303,044 322,489 340,457
Deposits 3,357,367 3,197,784 3,357,367 3,197,784 3,540,874
Borrowed funds 514,903 255,129 514,903 255,129 200,085
Common shares outstanding 25,247,626 25,097,604 25,247,626 25,097,604 25,114,716
Stockholders' equity 294,467 274,478 294,467 274,478 284,768
Certain amounts in prior year have been reclassified to conform with the June
30, 2006 presentation.
Fidelity Bankshares Inc.
Selected Unaudited Operating Data
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
----------- ----------- ----------- -----------
(In Thousands, except for (In Thousands, except for
share and per share data) share and per share data)
Selected Operating Data:
Interest income $ 64,621 $ 50,076 $ 126,286 $ 95,400
Interest expense 28,703 17,093 56,141 32,344
----------- ----------- ----------- -----------
Net interest income before
provision for loan losses 35,918 32,983 70,145 63,056
Provision for loan losses 186 422 626 994
----------- ----------- ----------- -----------
Net interest income after
provision for loan losses 35,732 32,561 69,519 62,062
----------- ----------- ----------- -----------
Other income
Service charges on deposit accounts 3,099 2,799 6,116 5,300
Fees for other banking services 2,491 2,342 4,777 4,575
Net gain on sale of loans 109 121 224 473
Other income 435 457 849 844
----------- ----------- ----------- -----------
Total other income 6,134 5,719 11,966 11,192
----------- ----------- ----------- -----------
Operating expense
Compensation and benefits 14,967 13,814 30,465 27,422
Occupancy and equipment 4,297 3,461 8,069 6,811
Data processing 1,733 1,568 3,572 3,006
All other operating expense 6,868 5,503 12,619 11,043
----------- ----------- ----------- -----------
Total operating expense 27,865 24,346 54,725 48,282
----------- ----------- ----------- -----------
Income before taxes 14,001 13,934 26,760 24,972
Provision for income taxes 5,350 5,287 10,233 9,509
----------- ----------- ----------- -----------
Net income $ 8,651 $ 8,647 $ 16,527 $ 15,463
=========== =========== =========== ===========
Earnings per share:
Basic $ 0.35 $ 0.35 $ 0.67 $ 0.64
=========== =========== =========== ===========
Diluted $ 0.34 $ 0.35 $ 0.65 $ 0.63
=========== =========== =========== ===========
Shares used for EPS computations:
Basic 24,681,186 24,436,475 24,649,759 24,139,049
=========== =========== =========== ===========
Diluted 25,329,066 24,995,395 25,305,543 24,176,758
=========== =========== =========== ===========
Fidelity Bankshares Inc.
Selected Unaudited Financial Data
June 30, December 31,
2006 2005
-----------------------
(In Thousands)
Assets
Cash and interest earning deposits $ 121,798 $ 189,940
Securities available for sale 349,473 410,473
Securities held to maturity 263,600 242,497
Loans:
Residential mortgage 1,669,488 1,523,740
Commercial mortgage 1,167,675 1,082,719
Consumer 308,909 295,622
Commercial business 146,083 153,916
---------- ----------
Gross loans 3,292,155 3,055,997
Less:
Deferred fees (costs), net 3,224 3,116
Allowance for loan losses 16,703 16,171
---------- ----------
Loans, net 3,272,228 3,036,710
---------- ----------
Office properties and equipment 93,888 91,164
FHLB stock 20,365 11,398
Foreclosed assets, net 1 1,793
Goodwill 14,256 14,256
Core deposit intangible 6,147 6,528
All other assets 93,224 77,852
---------- ----------
Total assets $4,234,980 $4,082,611
========== ==========
Liabilities and Equity
Liabilities:
Deposits:
Checking, savings and money
market accounts $2,599,742 $2,638,794
Certificates of deposit 757,625 902,080
---------- ----------
Total deposits 3,357,367 3,540,874
Repurchase agreements 190,613 54,113
Borrowings from FHLB 270,682 92,364
Subordinated debentures 53,608 53,608
All other liabilities 68,243 56,884
---------- ----------
Total liabilities 3,940,513 3,797,843
---------- ----------
Stockholders' equity 294,467 284,768
---------- ----------
Total liabilities and equity $4,234,980 $4,082,611
========== ==========