-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DCEdP1aexlsij4/mMS6TFsFfpCEsrp30Km8npARhXq+Cn8q1POqvHLveF+oAXn4O xXqSogf8NXdxHoH5tNq2GQ== 0000926274-97-000013.txt : 19970222 0000926274-97-000013.hdr.sgml : 19970222 ACCESSION NUMBER: 0000926274-97-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970214 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY FEDERAL BANCORP CENTRAL INDEX KEY: 0000910492 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 351894432 STATE OF INCORPORATION: IN FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-22880 FILM NUMBER: 97536372 BUSINESS ADDRESS: STREET 1: 18 N W FOURTH ST STREET 2: P O BOX 1347 CITY: EVANSVILLE STATE: IN ZIP: 47706-1347 BUSINESS PHONE: 8124240921 MAIL ADDRESS: STREET 1: 18 NW FOURTH ST STREET 2: PO BOX 1347 CITY: EVANSVILLE STATE: IN ZIP: 47706-1347 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended December 31, 1996 FIDELITY FEDERAL BANCORP ------------------------------------------------------ (Exact name of registrant as specified in its charter) Indiana 0-22880 35-1894432 ---------------------------- ---------- ------------------- (State of other jurisdiction Commission (IRS Employer of Incorporation of File No. Identification No.) Organization) 700 S. Green River Road, Suite 2000 Evansville, Indiana 47715 ----------------------------------------------------- (Address of principal executive offices) (Zip Code) (812) 469-2100 -------------------------------------------------- Registrant's telephone number, including area code Indicate by checkmark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months and (2) has been subject to such filing requirements for the past 90 days. YES X NO ----- ----- As of February 11, 1997, there were 2,498,279 shares of the Registrant's common stock, $1 stated value, issued and outstanding. Exhibit Index is on page 21. FIDELITY FEDERAL BANCORP AND SUBSIDIARIES Index Page PART I - FINANCIAL INFORMATION ITEM 1--Financial Statements: Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . 3 Consolidated statement of income . . . . . . . . . . . . . . . . . 4 Consolidated statement of changes in stockholders' equity . . . . 5 Consolidated statement of cash flows . . . . . . . . . . . . . . . 6 Notes to consolidated financial statements . . . . . . . . . . . . 7 ITEM 2--Management's Discussion and Analysis of Financial Results of Operations and Condition . . . . . . . . . . . . . . . 10 Capital Resources and Capital Requirements . . . . . . . . . . . . 17 Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . 19 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 EXHIBIT INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS FIDELITY FEDERAL BANCORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (UNAUDITED)
DECEMBER 31, JUNE 30, 1996 1996 - ---------------------------------------------------------------------------------------------------- ASSETS Cash and due from banks $ 922,428 $ 1,111,737 Short-term interest-bearing deposits 7,368,593 4,101,143 Federal funds sold 5,000,000 5,000,000 -------------- -------------- Total cash and cash equivalents 13,291,021 10,212,880 Interest-bearing deposits 5,493 5,370 Securities available for sale 17,160,849 17,458,474 Loans 211,858,261 217,221,244 Allowance for loan losses (1,835,743) (1,058,894) -------------- -------------- Net loans 210,022,518 216,162,350 Premises and equipment 6,375,588 5,559,322 Federal Home Loan Bank of Indianapolis stock, at cost 3,919,500 3,919,500 Other assets 9,396,344 8,897,813 -------------- -------------- Total assets $ 260,171,313 $ 262,215,709 ============== ============== Liabilities Deposits Non-interest bearing $ 5,793,331 $ 5,099,938 Interest-bearing 182,439,815 176,602,082 -------------- -------------- Total deposits 188,233,146 181,702,020 Borrowings 55,052,211 62,984,689 Advances by borrowers for taxes and insurance 716,953 859,110 Other liabilities 3,564,000 2,374,915 -------------- -------------- Total liabilities 247,566,310 247,920,734 STOCKHOLDERS' EQUITY Preferred stock, no par or stated value Authorized and unissued - 5,000,000 shares Common stock, $1 stated value Authorized - 5,000,000 shares Issued - 2,499,072 and 2,495,040 shares Outstanding 2,489,072 and 2,495,040 shares 2,499,072 2,495,040 Capital surplus 8,812,761 8,785,148 Treasury stock - 10,000 shares at cost (101,500) Stock warrants 264,000 265,500 Retained earnings, substantially restricted 1,162,711 2,888,866 Net unrealized losses on securities and mortgage- backed securities available for sale (32,041) (139,579) -------------- -------------- Total stockholders' equity 12,605,003 14,294,975 -------------- -------------- Total liabilities and stockholders' equity $ 260,171,313 $ 262,215,709 ============== ==============
See notes to consolidated financial statements. NOTE: The consolidated balance sheet at June 30, 1996 has been derived from the audited financial statements. 3 FIDELITY FEDERAL BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, 1996 1995 1996 1995 ------------------------ -------------------------- INTEREST INCOME Loans $4,732,394 $5,127,179 $ 9,487,145 $10,051,578 Loans held for sale - 4,032 - 7,642 Securities available for sale 280,263 294,039 565,705 572,071 Federal funds sold 1,669 6,653 18,658 56,660 Interest-bearing deposits 45,515 8,918 62,712 39,322 Other interest and dividend income 77,342 70,240 154,683 133,511 ---------- ---------- ---------- ----------- Total interest income 5,137,183 5,511,061 10,288,903 10,860,784 ---------- ---------- ---------- ----------- INTEREST EXPENSE Deposits 2,584,575 2,678,950 5,056,884 5,379,659 Federal Home Loan Bank advances 544,336 948,180 1,196,923 1,818,822 Federal funds purchased 9,191 77,946 48,992 81,890 Other interest expense 372,206 315,877 781,298 678,639 ---------- ---------- ---------- ----------- Total interest expense 3,510,308 4,020,953 7,084,097 7,959,010 ---------- ---------- ---------- ----------- NET INTEREST INCOME 1,626,875 1,490,108 3,204,806 2,901,774 Provision for loan losses 5,000 60,000 855,000 170,000 ---------- ---------- ---------- ----------- Net interest income after provision for loan losses 1,621,875 1,430,108 2,349,806 2,731,774 ---------- ---------- ---------- ----------- NON-INTEREST INCOME Fee income-real estate development and management 92,681 1,220,145 171,491 2,627,139 Service charges on deposit accounts 76,922 42,662 146,468 73,066 Gain on sale of Real estate loans 33,742 220,518 61,790 331,866 Premises and equipment 146 75 614 718,765 Letter of credit fees 169,768 85,946 323,973 176,934 Real estate mortgage banking fees 460,750 282,295 463,250 313,645 Other income 403,067 309,003 677,589 576,514 ---------- ---------- ---------- ----------- Total non-interest income 1,237,076 2,160,644 1,845,175 4,817,929 ---------- ---------- ---------- ----------- NON-INTEREST EXPENSE Salaries and employee benefits 1,148,419 1,042,216 2,270,047 2,117,341 Net occupancy expense 119,555 115,485 231,703 238,204 Equipment expense 95,385 91,363 179,348 189,419 Data processing expense 79,952 76,172 152,979 141,488 Deposit insurance expense 107,153 109,417 1,257,881 200,396 Legal and professional fees 61,635 99,445 184,091 159,575 Other expense 542,425 608,983 1,161,127 1,134,028 ---------- ---------- ---------- ----------- Total non-interest expense 2,154,524 2,143,081 5,437,176 4,180,451 ---------- ---------- ---------- ----------- Income before income tax 704,427 1,447,671 (1,242,195) 3,369,252 Income tax expense 189,283 533,724 (512,945) 1,314,153 ---------- ---------- ---------- ----------- NET INCOME $ 515,144 $ 913,947 (729,250) 2,055,099 ========== ========== ========== =========== PER SHARE: Primary net income $ 0.19 $ 0.33 (0.27) 0.75 Fully diluted net income 0.19 0.33 (0.27) 0.73 Average common and common equivalent shares outstanding 2,692,865 2,814,890 2,710,652 2,812,260
See notes to consolidated financial statements. 4 FIDELITY FEDERAL BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, 1996 1995 1996 1995 ------------------------- -------------------------- BEGINNING BALANCES $12,545,764 $13,389,593 $14,294,975 $12,405,369 Net income 515,144 913,947 (729,250) 2,055,099 Net change in unrealized gain (loss) on securities available for sale 84,647 56,011 107,538 21,061 Cash dividends (497,802) (564,028) (996,905) (893,100) Purchase of treasury stock (69,250) - (101,500) - Exercise of stock warrants 26,500 373,938 28,219 533,202 Exercise of stock options - 61,318 1,926 109,148 ----------- ----------- ----------- ----------- BALANCES, DECEMBER 31 $12,605,003 $14,230,779 12,605,003 14,230,779 =========== =========== =========== ===========
See notes to consolidated condensed financial statements. 5 FIDELITY FEDERAL BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED DECEMBER 31, 1996 1995 -------------------------------- OPERATING ACTIVITIES Net income $ (729,250) $ 2,055,099 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 855,000 170,000 Loss on sale of premises and equipment 7,201 57,371 Gain on sale of premises and equipment (2,401) (718,675) Net decrease in real estate loans held for sale 1,923,099 Depreciation 188,859 173,275 Investment securities amortization, net 4,873 7,879 Amortization of net loan origination fees and points (2,807) (108,388) Changes in: Interest receivable and other assets (498,531) (7,000,586) Interest payable and other liabilities 1,135,350 (168,714) ------------ ------------ Net cash provided by operating activities 958,294 (3,609,640) ------------ ------------ INVESTING ACTIVITIES Net change in interest-bearing deposits (123) (127) Purchases of investment securities available for sale (2,015,033) (3,421,702) Proceeds from investment securities available for sale, sales and maturities 2,470,259 2,677,249 Net changes in loans 5,287,639 (15,959,527) Purchases of premises and equipment (1,012,725) (865,063) Proceeds from sale of premises and equipment 2,800 1,000,000 Purchases of FHLB of Indianapolis stock - (828,400) ------------ ------------ Net cash used by investing activities 4,732,817 (17,397,570) ------------ ------------ FINANCING ACTIVITIES Net change in: Noninterest-bearing, NOW, savings and money market deposits 335,296 3,244,168 Certificates of deposit 6,195,830 1,803,141 Net increase in federal funds purchased - 4,650,000 Proceeds from borrowings 7,682,254 2,743,239 Repayment of borrowings (6,106,686) (9,325,868) Proceeds from FHLB advances 7,600,000 16,556,000 Repayment of FHLB advances (17,108,046) (13,691,458) Net change in advances by borrowers for taxes and insurance (142,157) 144,222 Purchase of treasury stock (101,500) - Cash dividends (998,106) (598,684) Proceeds from exercise of stock warrants 28,219 533,202 Proceeds from exercise of stock options 1,926 109,148 ------------ ------------ Net cash provided by financing activities (2,612,970) 6,167,110 ------------ ------------ Net change in Cash and Cash Equivalents 3,078,141 (14,840,100) Cash and Cash Equivalents, beginning of year 10,212,880 16,432,965 ------------ ------------ Cash and Cash Equivalents, December 31 $13,291,021 $ 1,592,865 ============ ============ Additional Cash Flows and Supplementary information Cash paid for income taxes, net of refunds $ 470,000 $ 1,521,000 Cash paid for interest 7,161,066 7,913,462 Other real estate transfers - 25,795 Reclassification of real estate loans held for sale - 37,397,604
See notes to consolidated financial statements. 6 FIDELITY FEDERAL BANCORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ACCOUNTING POLICIES The significant accounting policies followed by Fidelity Federal Bancorp (the "Company") and its wholly owned subsidiaries for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. All adjustments which are necessary for a fair presentation of the results for the periods reported, consist only of normal recurring adjustments, and have been included in the accompanying unaudited consolidated condensed financial statements. The results of operations for the six months ended December 31, 1996 are not necessarily indicative of those expected for the remainder of the year. NET INCOME PER SHARE Primary and fully diluted earnings per share have been computed based on the weighted average common and common equivalent shares outstanding during the periods. Common stock options and warrants are considered to be common equivalent shares to the extent they are dilutive. STOCKHOLDERS' EQUITY Stockholders' equity has been adjusted to reflect the 10% stock dividend distributed on May 27, 1996. All per share and average share data have been adjusted to reflect the stock dividend. In connection with the Company's second debt and equity rights offering completed January 31, 1995, the Company has reserved 346,500 shares of its common stock for issuance upon exercise of 1,500 outstanding warrants. Each warrant represents the right to purchase 231 shares of common stock. The warrants were valued at $100 per warrant, carry an exercise price of $8.93 per share, and expire on January 31, 2005. At December 31, 1996, a total of 39,732 of the shares originally reserved had been issued and 306,768 remained reserved and unissued. In connection with the Company's first debt and equity rights offering completed on April 30, 1994, the Company has reserved 415,500 shares of its common stock for issuance upon exercise of 1,500 outstanding warrants. Each warrant represents the right to purchase 277 shares of common stock. The warrants were valued at $100 per warrant, carry an exercise price of $6.22 per share, and expire on April 30, 2004. At December 31, 1996, a total of 52,076 of the shares originally reserved had been issued and 363,424 remained reserved and unissued. CASH DIVIDEND On November 20, 1996, the Board of Directors of the Company declared a dividend of $0.20 per share payable on January 6, 1997 to stockholders of record on December 2, 1996. 7 COMPANY SUBSIDIARIES United Fidelity Bank, fsb ("Savings Bank") and Village Securities Corporation are two subsidiaries of the Company. The Savings Bank is a federally chartered savings bank, and is regulated by the Office of Thrift Supervision. Village Securities Corporation was formed in December, 1994, but is presently inactive. The Savings Bank's subsidiaries, Village Housing Corporation, Village Management Corporation and Village Community Development Corporation, and Fidelity Federal Capital Corporation (the "Affordable Housing Group") are involved in various aspects of financing, owning, developing, building, renting and managing affordable housing projects. The Company has found that it may be advantageous for the Affordable Housing Group to finance, develop, build, rent and manage many types of housing, including IRS Section 42 housing, condominiums, market-rate multifamily housing, and others. Another subsidiary of the Savings Bank, Village Insurance Corporation, is engaged in the business of selling various insurance products. Fidelity Federal Capital Corporation ("FFCC") is a mortgage banking company. On December 31, 1995, the Company transferred ownership of FFCC to the Savings Bank for a nominal amount. The transaction had the effect of increasing bank capital and regulatory capital ratios. FFCC will continue to be the mortgage banking arm of the Company in the financing of real estate, including holding and placing debt and equity interests in real estate. While loans packaged by FFCC to date have been referred to the Savings Bank for origination and/or participation to other lenders, management anticipates that FFCC may arrange for financing directly from other lenders, if the opportunity arises. The proposed activities of Village Securities Corporation include full-service or discount brokerage services, private placements of securities and other securities-related activities. Village Securities Corporation is anticipating providing such services during the third quarter of fiscal 1997. ACCOUNTING FOR MORTGAGE SERVICING RIGHTS Effective July 1, 1995, the Company adopted Statement of Financial Accounting Standard (SFAS) No. 122, Accounting for Mortgage Servicing Rights. SFAS No. 122 requires the Company to recognize as separate assets, mortgage servicing rights for loans originated with the intent to sell as well as purchased servicing rights. The adoption of SFAS No. 122 did not have a significant impact on the Company's operating results. Loan servicing costs are amortized in proportion to, and over the period of, estimated new servicing revenues. Fair values of mortgage servicing rights are based on the present value of estimated future cash flows. Impairment of mortgage servicing rights is assessed based on the fair value of those rights. When participating interests in loans sold have an average contractual interest rate, adjusted for normal servicing fees, that differs from the agreed yield to the purchaser, gains or losses are recognized equal to the present value of such differential over the estimated remaining lives of such loans. The resulting asset or liability is amortized over the estimated servicing period using a method approximating the interest method. 8 SEGMENT INFORMATION The Company operates principally in two industries, banking and real estate development and management. The Savings Bank offers traditional banking products, such as checking, savings, and certificates of deposit, as well as mortgage, consumer, and commercial loans. Through the Affordable Housing Group, the Company is involved in various aspects of financing, owning, developing, building, renting and managing affordable housing projects. Operating profit is total revenue less operating expenses. In computing operating profit, income taxes have been deducted. Identified assets are principally those used in each segment. Real estate development and management activities conducted by the Company are not asset intensive. The assets in this segment primarily include cash received in the form of fees and land to be used for future developments. Presented below is condensed financial information relating to the Company's business segments:
(IN THOUSANDS) THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, 1996 1995 1996 1995 ------------------------ --------------------- REVENUE: Banking $ 6,183 $ 6,118 $ 11,806 $ 12,678 Real estate development and management 191 1,554 328 3,001 -------- -------- -------- -------- Total consolidated $ 6,374 $ 7,672 $ 12,134 $ 15,679 ======== ======== ======== ======== OPERATING PROFIT: Banking $ 455 $ 284 $ (335) $ 774 Real estate development and management 60 630 (394) 1,281 -------- -------- -------- -------- Total consolidated $ 515 $ 914 $ (729) $ 2,055 ======== ======== ======== ======== IDENTIFIABLE ASSETS: Banking $247,601 $264,873 $247,601 $264,873 Real estate development and management 12,570 12,653 12,570 12,653 -------- -------- -------- -------- Total consolidated $260,171 $277,526 $260,171 $277,526 ======== ======== ======== ======== DEPRECIATION AND AMORTIZATION: Banking $ 87 $ 69 $ 158 $ 137 Real estate development and management 17 18 31 36 -------- -------- -------- -------- Total consolidated $ 104 $ 87 $ 189 $ 173 ======== ======== ======== ======== CAPITAL EXPENDITURES: Banking $ 584 $ 531 $ 947 830 Real estate development and management 60 61 61 69 -------- -------- -------- -------- Total consolidated $ 644 $ 592 $ 1,008 $ 899 ======== ======== ======== ========
9 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS The net income for the three months ended December 31, 1996 was $515,000, compared to $914,000 in net income for the same period last year. Fully diluted net income per share was $.19 per share for the three months ended December 31, 1996, compared to net income of $.33 per share for the same period in 1995. The net loss for the six months ended December 31, 1996 was $719,000, compared to $2,055,000 in net income for the same period last year. Fully diluted net loss per share was $0.27 for the six months ended December 31, 1996, compared to net income of $0.73 per share for the same period in 1995. The federal legislation resolving the FDIC insurance funding issue signed by President Clinton in September required thrifts to pay a one-time assessment of approximately $.66 per $100 of deposits within 60 days of September 30, 1996. As a result, the Company recorded a charge of $1,040,000 during the first quarter of fiscal 1997. The legislation provisions include a reduction of the ongoing insurance premiums thrifts pay from $.23 - $.31 per $100 of deposits to approximately $.06 per $100, as well as the ultimate merger of the funds by the year 2000. In anticipation of this and as a result of continued consolidation and standardization of the bank and thrift industries, the Company, in an ongoing effort to more closely resemble a commercial banking operation, set aside $850,000 in loan loss allowances during the first quarter. The Company's fee income from real estate development and management was down from $2,627,000 last year to $171,000 in the first six months of fiscal 1997. These fees, which are transaction-based, are volatile in nature. There is no assurance that individual transactions, once initiated, will be completed. While the Company may continue to participate in development activities, it was shifted its focus to financing multifamily real estate for non-affiliated borrowers. The Company announced on January 21, 1997 an expense reduction plan calling for $1 million in after tax savings. The plan calls for the Company to work towards achieving optimum efficiency within its banking and real estate management, development, and financing units by eliminating duplicative and less profitable activities. The Company's long term plan originally called for rapid internal growth to $500 million in assets. Management mobilized for the ambitious goal by appropriately staffing the Company to meet the increased demands of a larger organization. Recently, management determined that a more conservative growth plan would allow the Company to grow profitably without straining its capital resources. As such, some infrastructure that has been developed will not be required in the short run. NET INTEREST INCOME. Net interest income, the Company's largest component of income, represents the difference between interest and fees earned on loans, investments and other interest earning assets, and interest paid on interest bearing liabilities. It also measures how effectively management has balanced and allocated the Company's interest rate-sensitive assets and liabilities. Net interest income for the three months ended December 31, 1996 was $1,627,000 compared to $1,490,000 for the three month period ending December 31, 1995, an increase of $137,000 or 9.2%. For the six months ended December 31, 1996 the net interest income increased $303,000 over the six months ending December 31, 1995, an 10.4% increase. The Company's net interest margin for the quarter increased from 2.21% at December 31, 1995 to 2.69% at December 31, 1996. The average yield on interest earning assets increased 34 basis points to 8.50% at December 31, 1996 compared to 8.16% at December 31, 1995. The average yield on interest bearing liabilities decreased 15 basis points from December 31, 1995 to 5.81% at December 31, 1996. The yield decrease was primarily in certificates of deposits, agent-acquired deposits and other borrowings. The agent-acquired funds previously acquired were at varying terms but at higher rates than would have been paid in the retail market. As a result of the Company's plan to reduce the rapid growth rate, the balance of agent-acquired funds has decreased $21,131,000 from December 31, 1995. The Company sold over $57,000,000 of its fixed-rate mortgage loan portfolio during the latter part of fiscal 1996, thus allowing the Company the flexibility to let the agent acquired funds, which typically bear a higher rate, to mature or rollover at the prevailing rate, creating a favorable impact on the Company's net interest margin. Interest income for the quarter ended December 31, 1996, was $5,137,000 compared to $5,511,000 for the quarter ended December 31, 1995, a decrease of $374,000. These decreases are primarily due to the interest income lost from the above mentioned loan sale. Interest expense for the quarter ended December 31, 1996 decreased $511,000 over the corresponding period in 1995. This is the result of paying off FHLB advances and allowing agent acquired funds mature or rollover at the prevailing rate. The Company year-to-date margin increased 44 basis from 2.18% at December 31, 1995 to 2.62% at December 31, 1996. The Company is continuing to monitor the net interest margin which has been an area of increased concentration this year. 10 NON-INTEREST INCOME. Non-interest income for the quarter ended December 31, 1996, was $1,237,000 compared to $2,161,000 for the same period in 1995, a decrease of $924,000.
NON-INTEREST INCOME - --------------------------------------------------------------------------------------------------------- SIX MONTHS ENDED DECEMBER 31, INCREASE 1996 1995 (DECREASE) ---------- ---------- ------------ Net income from real estate development and management $ 171,491 $2,627,139 $(2,455,648) Letter of credit fees 323,973 176,934 147,039 Service charges on deposit accounts 146,468 73,066 73,402 Net gain on sale of loans 61,790 331,866 (270,076) Gain on sale of fixed assets 614 718,765 (718,151) Loan servicing rights net of amortization 47,568 241,198 (193,630) Dividend income 4,031 87,245 (83,214) Real estate mortgage banking fees 463,250 313,645 149,605 Agent fee income 179,284 - 179,284 Servicing fees on loans sold 89,184 18,113 71,071 Other loan fees 83,674 15,650 68,024 Other 273,848 214,308 59,540 ---------- ---------- ------------ Total non-interest income $1,845,175 $4,817,929 $(2,972,754) ========== ========== ============
Non-interest income for the six months ended December 31, 1996, decreased by $2,973,000 as compared to the six months ended December 31, 1995. Net income from real estate development and management decreased by $2,456,000 as compared to the prior year. The Affordable Housing Group has begun to encounter increased competition in the financing and development of multifamily housing. The IRS Section 42 tax credit program has been used by the Company to develop affordable housing for individuals with low to moderate incomes. The Company has provided financing for other developers which began utilizing the program. Since the IRS Section 42 tax credit program was created in 1986, competition has consistently increased in this area. As a result of the increase in the number of competitors in this industry, the Company has noted a reduction in the amount of fees it has been able to collect on individual transactions. The Company continues to develop new and innovative housing-related products to supplement its Section 42 activity. However, there is no assurance that those new products will be able to replace any loss of income from current activities. The Company has recognized $324,000 in letter of credit fees compared to $177,000 in fiscal 1996, as an integral part of the Affordable Housing Group's real estate activities. Mortgage banking fees increased $150,000 to $463,000 for the six months ended December 31, 1996 as the Company continues to increase its multifamily housing transactions completed by the Savings Bank subsidiary, FFCC. The Company's savings bank subsidiary sold a parcel of real estate during the first quarter of fiscal 1996 resulting in a gain of $719,000. The Company has no plans at this time to sell additional real estate. Gain on sale of real estate loans decreased $270,000 as the volume of loans sold has decreased from the prior year. Also, a decrease in loan servicing rights of $194,000 was impacted by the decrease in loans sold, but it partially was offset by the increase in servicing fees on loans sold of $71,000 as the Company's servicing portfolio continues to grow. Service charges on deposit accounts increased $73,000 over the prior fiscal year as the Company's deposit base continues to grow. During the first six months of fiscal 1996, the Company's savings bank subsidiary received $87,000 in dividend income on the stock the Savings Bank holds with its data processing co-operative, compared to $4,000 in fiscal 1997. Agent fee income increased $179,000 over December 31, 1995 as a result of the Company originating auto loans as agent for another institution. Other loan fees increased $68,000 over the prior year due to prepayment penalties received on multifamily loans. Other non-interest income increased $60,000 from the prior year as dealer interest recapture increased $23,000 and title fee income increased $25,000. PROVISION FOR LOAN LOSSES. The provision for loan losses for the current quarter decreased $55,000 compared to the quarter ended December 31, 1995. The provision for loan losses increased $685,000 to $855,000 for the six months ended December 31, 1996 compared to $170,000 for the same period in 1995. As a result of the continued consolidation and standardization of the bank and thrift institutions, the Company, in an ongoing effort to more closely resemble a commercial banking operation, set aside $850,000 in loan loss allowance for the first quarter of fiscal 1997. The increase in the provision for the current year does not result from the identification of any particular problem credit or credits, but does reflect the increase of multifamily construction and commercial loans in the Company's loan portfolio. 11 NON-INTEREST EXPENSE. Non-interest expense for the quarter ended December 31, 1996, was $2,155,000 compared to $2,143,000 for the same period in 1995, an increase of only $12,000 as the Company continues to work toward controlling non-interest expense items.
NON-INTEREST EXPENSE - --------------------------------------------------------------------------------------------------------- SIX MONTHS ENDED DECEMBER 31, INCREASE 1996 1995 (DECREASE) ---------- ---------- ----------- Salaries and employee benefits $2,270,047 $2,119,222 $ 150,825 Legal and professional 184,091 159,575 24,516 Occupancy expense 231,703 238,204 (6,501) Equipment expense 179,348 189,462 (10,114) Deposit insurance 1,257,881 200,396 1,057,485 Data processing expense 152,979 141,488 11,491 Advertising 126,895 146,042 (19,147) Loan participation expenses 44,639 (44,639) Printing and supplies 107,871 121,322 (13,451) Travel and lodging 29,966 74,829 (44,863) Telephone 56,303 63,780 (7,477) Postage 50,559 57,999 (7,440) Abandoned projects 145,136 59,614 85,522 Loss on investment 114,555 31,356 83,199 Other operating expense 529,842 532,523 (2,681) ---------- ---------- ----------- Total non-interest expense $5,437,176 $4,180,451 $1,256,725 ========== ========== ===========
Non-interest expense for the six months ended December 31, 1996, was $5,437,000 compared to $4,180,000 for the same period in 1995, an increase of $1,257,000. Of the $1,257,000 increase, $1,044,000 was associated with the BIF-SAIF special assessment during the first quarter of fiscal 1997. Salaries and employee benefits increased by $151,000 as staffing level increases associated with the Company's loan diversification strategy, were the primary reasons for this increase. Legal and professional fees increased $25,000 over prior year due to activity in the Company's housing subsidiaries. Occupancy and equipment expense decreases of $7,000 and $10,000, respectively, were primarily a result of decreases in repairs and maintenance expense compared to the six months ending December 31, 1995. Data processing expense increased $11,000 over prior year due to the increased activity and volume associated with the growth of the Company. Advertising expense decreased $19,000 due to a decrease in promotions. Loan participations expenses were zero in the current year to date compared to last year when the Company had several large affordable house projects that closed last year required loan participations, therefore creating the brokerage expenses. Printing and supplies also decreased $13,000 from the prior year. Travel and lodging decreased $45,000 as travel demand to various affordable housing projects in the construction and closing phase has decreased from prior the year. The Company's housing subsidiaries continue to search for new sites to develop and/or finance, but sometimes expenses are incurred on potential sites that do not materialize and are expensed as abandoned projects. Abandoned projects expense was $145,000 compared to $60,000 in the prior year. The Company accounts for its investment in various affordable housing partnerships on the equity method. Currently the Company has written down its investment in various developments by $115,000 for the year-to-date compared to the prior year of $31,000. Other operating expenses decreased $3,000 from the prior year. INCOME TAX EXPENSE. Income tax expense decreased $1,827,000 for the six months ended December 31, 1996 compared to the same period in 1995, due to the taxable net loss for the current year compared to the previous year's taxable net income. 12 FINANCIAL CONDITION Total assets decreased by $2,045,000 from June 30, 1996 to approximately $260,171,000 at December 31, 1996. The decrease is the result of the Company continuing to sell current fixed 1-4 family mortgage and passing through various consumer loans to another institution that meet certain criteria and the normal reduction in assets due to paydowns and payoffs. LOANS. The following table shows the composition of the Company's loan portfolio as of December 31, 1996 and June 30, 1996, excluding loans held for sale.
LOANS OUTSTANDING - ------------------------------------------------------------------------------------------------------- (in thousands) DECEMBER 31, JUNE 30, 1996 1996 ------------ -------- Real estate mortgage loans First mortgage loans Conventional $101,510 $106,288 Construction 37,037 36,938 Commercial 23,763 18,267 Multifamily loans 10,702 15,420 First mortgage real estate loans purchased 2,772 7,612 Real estate contracts 44 56 Commercial loans - other than secured by real estate 12,802 9,393 Consumer and home equity loans 23,099 23,062 Loans to depositors secured by savings 129 185 -------- -------- Total loans 211,858 217,221 ======== ======== Total assets $260,171 $262,216 ======== ======== Total loans to total assets 81.4% 82.8% ======== ========
Total loans decreased by $5.4 million or 2.5% to $211.9 million at December 31, 1996, compared to June 30, 1996. Beginning in fiscal 1996, the Company opted to sell new loan production, recognize the gain or loss on the sale, and use the proceeds to fund new loan production. The Savings Bank is continually offering new and competitive first mortgage and multifamily loan products. The Company's construction loan category, which includes approximately $29.5 million in commercial and multi-family loans and $7.5 million in 1-4 family real estate loans, has increased slightly since June 30, 1996, while commercial real estate loans have increased $5.5 million. The Company has also experienced commercial loan growth of $3.4 million as the Company continues to expand the commercial loan operations to further diversify its loan portfolio. 13 NON-PERFORMING LOANS. The Company discontinues the accrual of interest income on loans when, in the opinion of management, there is reasonable doubt as to the timely collectibility of interest or principal. Non-accrual loans are returned to an accrual status when, in the opinion of management, the financial position of the borrower indicates that there is no longer any reasonable doubt as to the timely payment of principal and interest. Management believes that loans now current where there are reasonable doubts as to the ability of the borrower to comply with the present loan repayment terms are immaterial. The Company adopted SFAS Nos. 114 and 118, Accounting by Creditors for Impairment of a Loan and Accounting by Creditors for Impairment of a Loan-Income Recognition and Disclosures on July 1, 1995. The adoption of SFAS Nos. 114 and 118 did not have a material impact on the Company's financial position or results of operations. The Company has not experienced any impaired loans since the adoption of SFAS Nos. 114 and 118. NON-PERFORMING LOANS - ---------------------------------------------------------------------- (IN THOUSANDS) DECEMBER 31, JUNE 30, 1996 1996 ------------ -------- Nonaccrual loans $389 $342 Restructured 90 days or more past due 121 43 ---- ---- Total $510 $385 ==== ==== Percent of total loans 0.24% 0.18% ==== ==== The ratio increased from 0.18% at June 30, 1996, to 0.24% at December 31, 1996 as non performing loans increased $125,000. Management is not aware of any loans that have not been disclosed that represent or result from trends or uncertainties which may have a material impact on the Company's future operating results, liquidity or capital resources. ANALYSIS OF ALLOWANCE FOR LOAN LOSSES. The Company establishes its provision for loan losses and evaluates the adequacy of its allowance for loan losses based on management's evaluation of its loan portfolio and changes in loan activity. Such evaluation, which includes a review of all loans for which full collectiblity may not be reasonably assured, considers among other matters, the estimated fair value of the underlying collateral, economic conditions, historical loan loss experience, the composition of the loan portfolio and other factors that warrant recognition in providing for an adequate loan loss allowance. This evaluation is performed on a monthly basis and is designed to ensure that all relevant matters affecting loan collectibility will consistently be identified in a detailed loan review and that the outcome of the review will be considered in a disciplined manner by management in determining the necessary allowance and the provision for loan losses. The amounts actually reported in each period will vary with the outcome of this detailed review. The following table sets forth an analysis of the allowance for loan losses for the six months ended December 31, 1996, and the year ended June 30, 1996. ALLOWANCE FOR LOAN LOSSES - ------------------------------------------------------------------------- (IN THOUSANDS) DECEMBER 31, JUNE 30, 1996 1996 ----------------------------- Allowance for loan losses: Balances, beginning of year $1,059 $ 713 Provision for losses 855 455 Loans charged off (85) (140) Recoveries on loans 7 31 ------ ------ Balances, end of quarter $1,836 $1,059 ====== ====== As of December 31, 1996, net loan charge-offs were $78,000, or 0.07% (annualized) of average loans for the period, compared to $109,000 or 0.05% of average loans as of June 30, 1996. The provision for loan losses increased $400,000 for the six months ended December 31, 1996 compared to the previous year end as the Company set aside $850,000 in loan loss allowance in the first quarter in an ongoing effort to more closely resemble a commercial banking operation. Management considers the allowance for loan losses adequate to meet losses inherent in the loan portfolio as of December 31, 1996. 14 INVESTMENT SECURITIES. The Savings Bank's investment policy is annually reviewed by its Board of Directors and any significant changes to the policy must be approved by the Board. The Board has an asset/liability management committee which is responsible for keeping the investment policy current. As of December 31, 1996, the investment portfolio represented 6.6% of the Company's assets compared to 6.7% at June 30, 1996, and is managed in a manner designed to meet the Board's investment policy objectives. The primary objectives, in order of priority, are to further the safety and soundness of the Company, to provide the liquidity necessary to meet day to day funding needs, cyclical and long-term changes in the mix of our assets and liabilities, and to provide for diversification of risk and management of interest rate and economic risk. At December 31, 1996, the entire investment portfolio was classified as available for sale, in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investment in Debt and Equity Securities". The net unrealized loss at December 31, 1996 was $32,000, which was comprised of gross gains of $71,000, gross losses of $140,000, and a tax benefit of $37,000. The decrease of $108,000 over June 30, 1996 was caused by market interest rate changes during the period. Although the entire portfolio is available for sale, management has not identified investments for sale in future periods. The following table sets forth the components of the Savings Bank's securities available for sale as of the dates indicated.
DECEMBER 31, JUNE 30, 1996 1996 ------------ -------- (IN THOUSANDS) Securities available for sale: U.S. Treasury securities $ 1,000 $ 504 Federal agencies securities 3,433 4,365 Federal Home Loan Mortgage Corporation mortgage-backed securities 6,073 6,727 Federal National Mortgage Association mortgage-backed securities 1,680 1,697 Government National Mortgage Association mortgage-backed securities 3,938 4,165 Municipal revenue bonds 1,037 ------- ------- Total securities available for sale $17,161 $17,458 ======= =======
The Savings Bank's total investment securities portfolio decreased by $297,000 at December 31, 1996, from June 30, 1996. The Savings Bank receives payments of principal and interest on its mortgage-backed securities on a monthly basis. These certificates represent ownership of pools of one-to-four family mortgage loans. As interest rates decline, principal of the underlying mortgage loans typically is returned more quickly in the form of payoffs and refinancings. FUNDING SOURCES DEPOSITS. The Savings Bank attracts both short-term and long-term deposits from the retail market by offering a wide assortment ofaccounts with different terms and different interest rates. These deposit alternatives include checking accounts, regular savings accounts, money market deposit accounts, fixed rate certificates with varying maturities, variable interest rate certificates, negotiable rate jumbo certificates ($100,000 or more), and variable rate IRA certificates. Average deposits decreased by $263,000 during the first six months of fiscal 1997. Most of the decreases were due to certificates of deposit acquired through agents, which decreased $13.4 million to $74.0 million at December 31, 1996 and money market accounts which decreased $1.7 million as a shift was seen to new products associated with NOW accounts. These decreases were offset by increases in demand and NOW accounts of $1.3 million and $9.9 million, respectively. The Company's savings bank subsidiary began to market new NOW account products during the second quarter of fiscal 1996, which has significantly contributed to the $9.9 million increase in NOW accounts. Retail certificate deposits have also increased $3.4 million since June 30, 1996 as the Savings Bank continues to grow its core deposits. 15 The following table sets forth the average balances of and the average rate paid on deposits by deposit category for the year ended June 30, 1996 and for the six months ended December 31, 1996.
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, 1996 JUNE 30, 1996 ------------------- --------------------- AVERAGE AVERAGE BALANCE RATE BALANCE RATE ------- ---- ------- ---- (DOLLARS IN THOUSANDS) Average Deposits Demand $ 5,200 $ 3,898 Now accounts 20,009 4.25% 10,092 3.95% Money market accounts 4,381 2.72 6,066 2.97 Savings accounts 5,498 2.55 5,346 2.90 Certificates of deposit 74,798 5.67 71,337 5.77 Agent-acquired certificates of deposit 73,956 6.33 87,366 6.52 -------- -------- Total $183,842 5.44% $184,105 5.73% ======== ========
BORROWINGS. The following table summarizes the Company's borrowings as of December 31, 1996, and June 30, 1996.
DECEMBER 31, JUNE 30, 1996 1996 ------------ -------- (IN THOUSANDS) Note payable, 7% adjusted annually, payable $16,943 per month, including interest, due April 1, 2009, secured by specific multifamily mortgages $ 2,255 $ 2,266 Note payable, 7.75% adjusted annually, payable $7,272 per month, including interest, due September 14, 2010, secured by specific multifamily mortgages 1,013 1,015 Note payable, 7.75% adjusted annually, payable $11,119 per month, including interest, due September 22, 2010, secured by specific multifamily mortgages 1,549 1,552 Junior subordinated notes, 9 1/8%, interest paid semi-annually, due April 30, 2001, unsecured 1,479 1,485 Junior subordinated notes, 9 1/4% interest paid semi-annually, due January 31, 2002 unsecured 1,494 1,500 Senior subordinated notes, 10%, interest paid semi- annually, due June 1, 2005, unsecured 7,000 7,000 Guaranteed investment contracts, interest rates ranging from 5% to 5.63%, interest paid monthly, secured by qualifying first mortgage loans in an amount equal to 120% of the amount outstanding, due at various dates during 1997 or on demand 7,151 5,564 Treasury tax and loan note option 145 129 Federal Home Loan Bank advances 32,966 42,474 ------- ------- Total $55,052 $62,985 ======= =======
Borrowings decreased $7.9 million to $55.1 million at December 31, 1996. Borrowings have been slower or reduced during fiscal 1997 as the Company has continued selling its fixed rate 1-4 family loan production. This allows the Company to use the proceeds from the sale of loans to fund new loan originations and ease the need for additional borrowings in the future. 16 CAPITAL RESOURCES AND CAPITAL REQUIREMENTS The ratio of stockholders' equity to total assets for the Savings Bank, was 6.45% at December 31, 1996, compared to 7.05% at June 30, 1996. The net loss for the period, dividends paid and declared on common stock, and the purchase of treasury stock decreased theratio, while a decrease in the unrealized loss on available for sale investments and the exercise of stock warrants and options partially offset the decrease. The Company's book value per share at December 31, 1996 was $5.06 as compared to $5.54 at June 30, 1996, as adjusted for the 10 percent stock dividend distributed on May 27, 1995. The OTS has adopted capital standards under which savings associations must maintain (i) "core capital" in an amount not less than 3% of total assets, (ii) "tangible capital" in an amount not less than 1.5% of total adjusted assets, and (iii) a level of risk-based capital equal to 8.0% of risk-weighted assets. The capital standards established by the OTS for savings associations must generally be no less stringent than those applicable to national banks. Under OTS regulations "core capital" includes common stockholders' equity, noncumulative perpetual preferred stock and related surplus, and minority interests in the equity accounts of consolidated subsidiaries, less intangible assets other than certain qualifying supervisory goodwill and certain purchased mortgage servicing rights. In determining compliance with the capital standards, a savings association must deduct from capital its entire investment in and loans to any subsidiary engaged in activities not permissible for a national bank, other than subsidiaries (i) engaged in such non-permissible activities solely as agent for their customers; (ii) engaged in mortgage banking activities; or (iii) that are themselves savings associations, or companies the only investment of which is another insured depository institution, acquired prior to May 1, 1989. In determining total risk-weighted assets for purposes of the risk based requirement, (i) each off-balance sheet asset must beconverted to its on-balance sheet credit equivalent amount by multiplying the face amount of each such item by a credit conversion factor ranging from 0% to 100% (depending upon the nature of the asset), (ii) the credit equivalent amount of each off-balance sheet asset and the book value of each on-balance sheet asset must be multiplied by a risk factor ranging from 0% to 100% (again depending upon the nature of the asset), and (iii) the resulting amounts are added together and constitute total risk-weighted assets. Total capital, for purposes of the risk-based capital requirement, equals the sum of core capital plus supplementary capital (which, as defined, includes, among other items, perpetual preferred stock not counted as core capital, limited life preferred stock, subordinated debt, and general loan and lease loss allowances up to 1.25% of risk-weighted assets) less certain deductions including the savings association's interest-rate risk component. The amount of supplementary capital that may be counted towards satisfaction of the total capital requirement may not exceed 100% of core capital. At December 31, 1996, actual and required minimum levels of regulatory capital for the Savings Bank were as follows:
(Dollars in Thousands) Required Amount Percent Amount Percent Excess ------------------------------------------------------------------------ Core $16,262 6.45% $ 7,563 3.0% $ 8,699 Tangible $16,262 6.45% $ 3,782 1.5% $12,480 Risk-based $22,897 11.04% $16,598 8.0% $ 6,299
Pursuant to HOLA of 1933, as amended, the OTS is required to issue capital standards that are no less stringent than those applicable to national banks. In April 1991, the OTS proposed to amend its capital regulations to reflect amendments made by the OCC to the leverage ratio capital requirement for national banks. The proposal would establish a core capital leverage ratio (core capital to adjusted total assets) of 3% for savings associations rated composite 1 under the OTS MACRO rating system. For all other savings associations, the minimum core capital leverage ratio would be 3% plus at least an additional 100 to 200 basis points. Under the proposal, the OTS may impose higher regulations for individual savings associations. The OTS has not adopted this regulation in final form. The prompt corrective action regulation adopted by the OTS provides that a savings association that has a leverage capital ratio of less than 4% will be considered "undercapitalized" and may be subject to certain restrictions. At December 31, 1996 the Savings Bank had a core capital leverage ratio (as defined in the proposal) of 6.45%. The OTS adopted a final regulation adding an interest-rate risk component to its risk-based capital rule. A savings association's interest-rate risk is generally defined as the change that occurs to its net portfolio value as a result of a 17 hypothetical two hundred basis point increase or decrease in market interest rates. A "normal level" of interest-rate risk is defined as any decline in net portfolio value of up to 2% of the institution's assets. If the 2% threshold is exceeded, a savings association will be required to deduct from its capital, for purposes of determining whether the institution meets its risk-based capital requirements,an amount equal to one-half of the difference between the measured risk and 2% of assets. Capital requirements higher than the generally applicable minimum requirement may be established for a particular savings association if the OTS determines that the institution's capital was or may become inadequate in view of its particular circumstances. Individual minimum capital requirements may be appropriate where the savings association is receiving special supervisory attention, has a high degree of exposure to interest rate risk, or poses other safety or soundness concerns. LIQUIDITY Liquidity for a savings bank represents its ability to accommodate growth in loan demand and/or reduction in deposits. The Savings Bank liquidity ratio was 9.12% on December 31, 1996, down from 10.64% on June 30, 1996. Management believes that this level of liquidity is sufficient to meet any anticipated requirements for the Bank's operations. Federal regulations have historically required the Bank to maintain minimum levels of liquid assets. The required percentage has varied from time to time based on economic condition and savings flows, and is currently 5% of net withdrawable savings deposits and borrowings payable on demand or in one year or less during the preceding calendar month. 18 PART II -- OTHER INFORMATION ITEM 1 LEGAL PROCEEDINGS: ------------------ There are no material pending legal proceedings, other than ordinary routine litigation incidental to the Registrant's business, to which the Registrant or its subsidiaries are a party of or which any of their property is the subject. ITEM 2 CHANGES IN SECURITIES: ---------------------- Not applicable. ITEM 3 DEFAULTS UPON SENIOR SECURITIES: -------------------------------- Not applicable. ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: ---------------------------------------------------- None ITEM 5 OTHER INFORMATION: ------------------ None ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K: --------------------------------- a. The following exhibit is submitted herewith: 27 Financial Data Schedule Reports on Form 8-K a. Report on Form 8-K was filed on January 21, 1997. The Company reduced the cash dividend from twenty cents per share to ten cents per share in order to facilitate additional capital formation. b. Report on Form 8-K was filed on January 24, 1997. The Board of Directors of Fidelity Federal Bancorp announced the approval of an expense reduction plan for the Company. The plan calls for the Company to work towards achieving optimum efficiency within its banking and real estate management, development, and financing units by eliminating duplicative and less profitable activities. The Company is attempting to find after tax cost savings of approximately $1,000,000 or $0.36 per share. 19 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 thereunto duly authorized. FIDELITY FEDERAL BANCORP Date: FEBRUARY 14, 1997 By: /s/ M. BRIAN DAVIS --------------------------------- M. Brian Davis President and CEO By: /s/ DONALD R. NEEL --------------------------------- Donald R. Neel, Executive Vice President, CFO and Treasurer (Principal Financial Officer) 20 Exhibit Index Reg. S-K Exhibit No. Description of Exhibit Page - --------------------------------------------------------------------- 27 Financial Data Schedule 22 21 EX-27 2
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FIDELITY FEDERAL BANCORP'S CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31,1996 AND THE CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS JUN-30-1997 JUL-01-1996 DEC-31-1996 922 7,369 5,000 0 17,161 0 0 211,858 1,836 260,171 188,233 7,296 4,281 47,756 0 0 2,499 10,106 260,171 9,487 647 155 10,289 5,057 2,027 7,084 855 0 5,437 (1,242) (1,242) 0 0 (729) (.27) (.27) 2.62 510 121 0 0 1,059 85 7 1,836 1,836 0 0
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