Fidelity Bankshares Q1 Net Income $558,000 Or $.09 EPS Includes One-Time Charge of $1.1 Million

Apr 20, 2001, 01:00 ET from Fidelity Bankshares, Inc.

    WEST PALM BEACH, Fla., April 20 /PRNewswire Interactive News Release/ --
 Fidelity Bankshares, Inc. (Nasdaq:   FFFL), the holding company for Fidelity
 Federal Bank & Trust, announced today the company's net income for the first
 quarter ended March 31, 2001 was $558,000 or $.09 basic earnings per share.
 This compared with $2,975,000 or $.46 basic earnings per share in the
 comparable quarter of 2000.  As described in the company's annual report, the
 first quarter 2001 results included a one-time charge against income of
 approximately $1.1 million relating to the company's planned computer upgrade.
 Net income for the quarter ended March 31, 2000 included non-recurring income
 of approximately $2.4 million, which resulted from the receipt of common stock
 in connection with the demutualization of the John Hancock Insurance Company.
     Interest income for the quarter rose 13.5% to $34.6 million, compared with
 $30.5 million for the same quarter ended March 31, 2000.  Other income,
 excluding non-recurring income in both periods, rose 37.8% to $2.6 million,
 compared with $1.9 million in the first quarter of 2000.
     In the quarter ended March 31, 2001, the company also incurred additional
 specific loan loss provisions of $280,000 relating to a non-performing
 commercial loan credit.  This was partially offset by a gain of $241,000 on
 the sale of $34 million in mortgage loans.  The company experienced yield
 compression during the first quarter of 2001, as the yield on the bank's
 earning assets declined by 26 basis points, while the cost of interest bearing
 liabilities declined by 20 basis points, compared to the quarter ended
 December 31, 2000.  Most notable in the yield compression was the decline in
 yield of 48 basis points for the company's investment in mortgage-backed
 securities, which includes an investment in trust preferred securities.  The
 Company holds an investment of approximately $40 million in investment grade,
 adjustable rate, trust preferred securities which adjust monthly.  As a
 result, in periods of rapidly declining rates, such as experienced at the
 beginning of the quarter, the yield on these assets decline rapidly, while the
 Company's certificate of deposit liabilities reprice as the deposit
 instruments mature.  Predominately, the bank's certificates of deposit have
 maturities of one year or less.
     Vince Elhilow, president of Fidelity Bankshares, Inc., said, "The bank
 continued to experience healthy deposit growth with an increase in the first
 quarter of $54.9 million.  Of this amount, 78.9% were core deposits, rather
 than certificates of deposit.  As a result, the company's deposit composition
 as of March 31, 2001 was 40.8% core deposits and 59.2% certificates of
 deposit, a significant improvement when compared to 35.9% core and 64.1%
 certificates as of March 31, 2000.
     "The $1.1 million computer upgrade charge is related to an investment in
 expanding and enhancing our depository and lending products and services for
 individuals and businesses including Internet banking opportunities.  We
 expect this project to be completed during the fourth quarter," Elhilow said.
     In March, the company's board of directors approved the payment of a
 quarterly cash dividend of $.25 per share on the company's common stock to its
 stockholders.  The dividend was paid to stockholders of record as of March 30,
 2001 and was distributed on April 13, 2001.
     Financial highlights, selected unaudited financial data and selected
 unaudited operating data are below.
     Fidelity Bankshares Inc., through its wholly owned subsidiary Fidelity
 Federal Bank & Trust, has assets of $2.0 billion and deposits of nearly
 $1.6 billion and operates in Florida through 36 offices in Palm Beach, Martin
 and St. Lucie counties.  The bank offers traditional banking products as well
 as trust, investment and insurance services, a full line of mortgage and
 commercial loans and business banking services including loans and lines of
 credit.
     For more information contact President and CEO Vince A. Elhilow or Chief
 Financial Officer Richard D. Aldred at (561) 659-9900 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.fidfed.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.
 
            Fidelity Bankshares, Inc. Unaudited Financial Highlights
 
                                        Three Months Ended        Year Ended
                               March 31, 2001   March 31, 2000   Dec. 31, 2000
 
     FOR THE PERIOD (In Thousands)
     Interest income                 $34,598         $30,476      $132,580
     Interest expense                 22,778          19,089        85,671
     Net interest income              11,820          11,387        46,909
     Net income                          558           2,975         8,521
 
     PER COMMON SHARE
     Net income:
      Basic EPS                        $0.09           $0.46         $1.31
      Diluted EPS                       0.08            0.46          1.31
     Dividends declared                 0.25            0.25          1.00
     Book value                        14.33           12.93         14.08
     Stock price:
      High                             28.50           16.75         20.75
      Low                              19.75           13.38         13.38
      Close                            28.38           13.75         19.63
 
     AVERAGE FOR THE PERIOD
      (In Thousands)
     Assets                       $1,957,692      $1,755,034    $1,849,957
     Loans receivable, net         1,379,215       1,193,410     1,272,362
     Mortgage-backed securities      319,510         368,162       349,498
     Investments                     124,248          71,360       100,667
     Deposits                      1,512,984       1,361,619     1,400,130
     Borrowed funds                  327,262         286,083       336,065
     Stockholders' equity             92,546          82,490        85,461
 
     SELECTED RATIOS
     Return on average assets          0.11%           0.68%         0.46%
     Return on average equity          2.41%          14.43%         9.97%
     Interest rate spread on
      average assets
      for the period                   2.64%           2.84%         2.77%
     Net yield on average
      interest earning assets
      for the period                   2.59%           2.79%         2.72%
     Net yield on interest
      earning assets
      at end of period                 2.67%           2.82%         2.74%
     Interest rate spread
      at end of period                 2.71%           2.88%         2.78%
     Ratio of interest
      earning assets to
      interest bearing
      liabilities at
      end of period                   99.21%          98.81%        98.94%
     Ratio of non performing
      assets to total assets           0.26%           0.20%         0.26%
     Ratio of valuation
      allowances to
      non performing
      assets                         105.68%         102.67%        98.41%
     Ratio of valuation
      allowances to
      loans receivable, net            0.39%           0.31%         0.36%
     Stockholders' equity as
      a percentage of assets           4.64%           4.67%         4.77%
 
     PERIOD END (In Thousands)
     Total assets                 $2,011,313      $1,799,390    $1,922,897
     Investments                     171,509          86,349       105,163
     Loans receivable, net         1,387,077       1,222,459     1,361,232
     Mortgage-backed securities      316,852         365,471       322,223
     Deposits                      1,552,680       1,399,534     1,497,818
     Borrowed funds                  337,660         293,139       310,005
     Stockholders' equity             93,346          84,034        91,651
 
           Fidelity Bankshares Inc. Selected Unaudited Operating Data
 
                                                     Three Months Ended
                                            March 31, 2001      March 31, 2000
                                                      (In thousands)
     Selected Operating Data:
     Interest Income                            $34,598            $30,476
     Interest expense                            22,778             19,089
 
      Net interest income                        11,820             11,387
     Provision for loan losses                      580                201
      Net interest income after
       provision for loan losses                 11,240             11,186
 
     Other income                                 2,856              4,312
     Operating expense                           13,175             10,681
 
     Income before taxes                            921              4,817
     Provision for income taxes                     363              1,842
 
     Net income                                    $558             $2,975
 
     Basic EPS                                     $.09               $.46
     Diluted EPS                                   $.08               $.46
 
 
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SOURCE Fidelity Bankshares, Inc.
    WEST PALM BEACH, Fla., April 20 /PRNewswire Interactive News Release/ --
 Fidelity Bankshares, Inc. (Nasdaq:   FFFL), the holding company for Fidelity
 Federal Bank & Trust, announced today the company's net income for the first
 quarter ended March 31, 2001 was $558,000 or $.09 basic earnings per share.
 This compared with $2,975,000 or $.46 basic earnings per share in the
 comparable quarter of 2000.  As described in the company's annual report, the
 first quarter 2001 results included a one-time charge against income of
 approximately $1.1 million relating to the company's planned computer upgrade.
 Net income for the quarter ended March 31, 2000 included non-recurring income
 of approximately $2.4 million, which resulted from the receipt of common stock
 in connection with the demutualization of the John Hancock Insurance Company.
     Interest income for the quarter rose 13.5% to $34.6 million, compared with
 $30.5 million for the same quarter ended March 31, 2000.  Other income,
 excluding non-recurring income in both periods, rose 37.8% to $2.6 million,
 compared with $1.9 million in the first quarter of 2000.
     In the quarter ended March 31, 2001, the company also incurred additional
 specific loan loss provisions of $280,000 relating to a non-performing
 commercial loan credit.  This was partially offset by a gain of $241,000 on
 the sale of $34 million in mortgage loans.  The company experienced yield
 compression during the first quarter of 2001, as the yield on the bank's
 earning assets declined by 26 basis points, while the cost of interest bearing
 liabilities declined by 20 basis points, compared to the quarter ended
 December 31, 2000.  Most notable in the yield compression was the decline in
 yield of 48 basis points for the company's investment in mortgage-backed
 securities, which includes an investment in trust preferred securities.  The
 Company holds an investment of approximately $40 million in investment grade,
 adjustable rate, trust preferred securities which adjust monthly.  As a
 result, in periods of rapidly declining rates, such as experienced at the
 beginning of the quarter, the yield on these assets decline rapidly, while the
 Company's certificate of deposit liabilities reprice as the deposit
 instruments mature.  Predominately, the bank's certificates of deposit have
 maturities of one year or less.
     Vince Elhilow, president of Fidelity Bankshares, Inc., said, "The bank
 continued to experience healthy deposit growth with an increase in the first
 quarter of $54.9 million.  Of this amount, 78.9% were core deposits, rather
 than certificates of deposit.  As a result, the company's deposit composition
 as of March 31, 2001 was 40.8% core deposits and 59.2% certificates of
 deposit, a significant improvement when compared to 35.9% core and 64.1%
 certificates as of March 31, 2000.
     "The $1.1 million computer upgrade charge is related to an investment in
 expanding and enhancing our depository and lending products and services for
 individuals and businesses including Internet banking opportunities.  We
 expect this project to be completed during the fourth quarter," Elhilow said.
     In March, the company's board of directors approved the payment of a
 quarterly cash dividend of $.25 per share on the company's common stock to its
 stockholders.  The dividend was paid to stockholders of record as of March 30,
 2001 and was distributed on April 13, 2001.
     Financial highlights, selected unaudited financial data and selected
 unaudited operating data are below.
     Fidelity Bankshares Inc., through its wholly owned subsidiary Fidelity
 Federal Bank & Trust, has assets of $2.0 billion and deposits of nearly
 $1.6 billion and operates in Florida through 36 offices in Palm Beach, Martin
 and St. Lucie counties.  The bank offers traditional banking products as well
 as trust, investment and insurance services, a full line of mortgage and
 commercial loans and business banking services including loans and lines of
 credit.
     For more information contact President and CEO Vince A. Elhilow or Chief
 Financial Officer Richard D. Aldred at (561) 659-9900 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.fidfed.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.
 
            Fidelity Bankshares, Inc. Unaudited Financial Highlights
 
                                        Three Months Ended        Year Ended
                               March 31, 2001   March 31, 2000   Dec. 31, 2000
 
     FOR THE PERIOD (In Thousands)
     Interest income                 $34,598         $30,476      $132,580
     Interest expense                 22,778          19,089        85,671
     Net interest income              11,820          11,387        46,909
     Net income                          558           2,975         8,521
 
     PER COMMON SHARE
     Net income:
      Basic EPS                        $0.09           $0.46         $1.31
      Diluted EPS                       0.08            0.46          1.31
     Dividends declared                 0.25            0.25          1.00
     Book value                        14.33           12.93         14.08
     Stock price:
      High                             28.50           16.75         20.75
      Low                              19.75           13.38         13.38
      Close                            28.38           13.75         19.63
 
     AVERAGE FOR THE PERIOD
      (In Thousands)
     Assets                       $1,957,692      $1,755,034    $1,849,957
     Loans receivable, net         1,379,215       1,193,410     1,272,362
     Mortgage-backed securities      319,510         368,162       349,498
     Investments                     124,248          71,360       100,667
     Deposits                      1,512,984       1,361,619     1,400,130
     Borrowed funds                  327,262         286,083       336,065
     Stockholders' equity             92,546          82,490        85,461
 
     SELECTED RATIOS
     Return on average assets          0.11%           0.68%         0.46%
     Return on average equity          2.41%          14.43%         9.97%
     Interest rate spread on
      average assets
      for the period                   2.64%           2.84%         2.77%
     Net yield on average
      interest earning assets
      for the period                   2.59%           2.79%         2.72%
     Net yield on interest
      earning assets
      at end of period                 2.67%           2.82%         2.74%
     Interest rate spread
      at end of period                 2.71%           2.88%         2.78%
     Ratio of interest
      earning assets to
      interest bearing
      liabilities at
      end of period                   99.21%          98.81%        98.94%
     Ratio of non performing
      assets to total assets           0.26%           0.20%         0.26%
     Ratio of valuation
      allowances to
      non performing
      assets                         105.68%         102.67%        98.41%
     Ratio of valuation
      allowances to
      loans receivable, net            0.39%           0.31%         0.36%
     Stockholders' equity as
      a percentage of assets           4.64%           4.67%         4.77%
 
     PERIOD END (In Thousands)
     Total assets                 $2,011,313      $1,799,390    $1,922,897
     Investments                     171,509          86,349       105,163
     Loans receivable, net         1,387,077       1,222,459     1,361,232
     Mortgage-backed securities      316,852         365,471       322,223
     Deposits                      1,552,680       1,399,534     1,497,818
     Borrowed funds                  337,660         293,139       310,005
     Stockholders' equity             93,346          84,034        91,651
 
           Fidelity Bankshares Inc. Selected Unaudited Operating Data
 
                                                     Three Months Ended
                                            March 31, 2001      March 31, 2000
                                                      (In thousands)
     Selected Operating Data:
     Interest Income                            $34,598            $30,476
     Interest expense                            22,778             19,089
 
      Net interest income                        11,820             11,387
     Provision for loan losses                      580                201
      Net interest income after
       provision for loan losses                 11,240             11,186
 
     Other income                                 2,856              4,312
     Operating expense                           13,175             10,681
 
     Income before taxes                            921              4,817
     Provision for income taxes                     363              1,842
 
     Net income                                    $558             $2,975
 
     Basic EPS                                     $.09               $.46
     Diluted EPS                                   $.08               $.46
 
 
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 SOURCE  Fidelity Bankshares, Inc.