EX-99.1 2 ex99-1.txt [LOGO OF FIDELITY FEDERAL BANCORP] Contacts: Donald R. Neel, President and CEO (812) 429-0550, ext. 3301 Mark A. Isaac, VP and CFO (812) 429-0550, ext. 3319 For Immediate Release: July 21, 2004 FIDELITY FEDERAL BANCORP REPORTS INCREASED EARNINGS (Evansville, IN) Fidelity Federal Bancorp (the "Company") (NASDAQ: FFED), the holding company of United Fidelity Bank, fsb (the "Bank"), reported net income for the quarter ended June 30, 2004 of $110,000 or $0.01 per share on a basic and diluted basis. The results are compared to net income of $103,000, or $0.01 per share on a basic and diluted basis for the quarter ended June 30, 2003. For the year-to-date period ended June 30, 2004, the Company reported net income of $175,000, or $0.02 on a basic and diluted basis compared to $158,000, or $0.02 for the same period last year. Return on equity was 2.82% for the quarter ended June 30, 2004, compared to 3.06% for the same period ended June 30, 2003. Return on assets for the quarter ended June 30, 2004 was 0.23% compared to 0.29% for the same period ended June 30, 2003. The Company's net interest margin for the quarter was 2.42%, compared to 1.99% last year, due primarily to an increase in consumer and commercial loans outstanding during the quarter, as well as a lower cost of funds. For the year-to-date period ended June 30, 2004, the net interest margin was 2.48% compared to 1.78% for the same period last year. Non-interest income decreased 40.4% to $659,000 for the quarter from $1.1 million last year primarily due to non-recurring events last year such as gains on sales of foreclosed assets, and the significant increase in mortgage loan volume. Non-interest income for the first half of 2004 decreased 41.5% to $1.4 million compared to $2.3 million in 2003. Non-interest expense decreased 3.4% to $1.6 million for the second quarter of 2004 compared to $1.7 million last year. For the year-to-date period, non-interest expense decreased 6.8% to $3.2 million in 2004 compared to $3.4 million in 2003. Capital ratios at the Bank remain well above regulatory "well-capitalized" minimums. Risk-based capital at June 30, 2004 was 13.85%, compared to 12.50% at June 30, 2003. The Bank's ratio of tangible equity to assets was 7.03% at June 30, 2004 compared to 7.63% at June 30, 2003. The Bank's Tier 1 risk-based capital to assets was 9.82% at June 30, 2004, compared to 10.17% at June 30, 2003. Total classified assets decreased by 45% to $1.1million at June 30, 2004 compared to $2.0 million at June 30, 2003. The reduction in classified assets was primarily due to the liquidation of two problem loans at book value. The allowance for loan loss and valuation allowance for letters of credit to total loans and letters of credit at June 30, 2004 and 2003 was 0.74% and 0.93%, respectively. Non-performing assets as a percentage of total assets declined by 53.1% to 0.53% at June 30, 2004 compared to 1.13% at June 30, 2003. -Next Page- President and CEO Donald R. Neel noted, "Second quarter 2004 results reflect continuing loan and asset growth, improvements in net interest margin, asset quality and non-interest expense, which largely served to offset the reduction in non-interest income compared to the second quarter of 2003. Neel also noted, "While rising interest rates resulted in reduced mortgage loan originations during the quarter, the Bank saw an increase in commercial lending activity, and an increase in automobile lending. Neel stated finally, "The Company's asset quality ratios improved sharply over last year due to the liquidation at book value of approximately $1.0 million in two non-accrual loans during the first half of 2004." This news release contains forward-looking statements that are based upon the Company's current expectations, but are subject to certain risks and uncertainties that may cause actual results to differ materially. Among the risks and uncertainties that could cause actual results to vary materially are economic conditions generally and in the market areas of the Company, the Bank, overall loan demand, increased competition in the financial services industry, retention of key personnel, and the impact of the Bank's Supervisory Agreement with the Office of Thrift Supervision. Actions by the Federal Reserve Board and changes in interest rates, loan prepayments by, and the financial health of, the Bank's borrowers, and other factors described in the reports filed by the Company with the Securities and Exchange Commission could also impact current expectations. The Company is a unitary savings and loan holding company based in Evansville, Indiana. Its savings bank subsidiary, United Fidelity Bank, fsb, maintains five locations, four in Evansville and one in Warrick County. The Company's stock, which is quoted on NASDAQ under the symbol FFED, most recently traded at $1.69. Information on FFED is available on the Internet at http://www.unitedfidelity.com -- END -- [LOGO OF FIDELITY FEDERAL BANCORP] FINANCIAL HIGHLIGHTS (DOLLARS IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, (Unaudited) (Unaudited) OPERATIONS: 2004 2003 2004 2003 ----------------------------------------- ------------ ------------ ------------ ------------ Interest income $ 2,050 $ 1,596 $ 4,091 $ 3,199 Interest expense 977 980 1,958 2,139 ------------ ------------ ------------ ------------ Net interest income 1,073 616 2,133 1,060 Provision for loan losses 39 (18) 209 (122) Non-interest income 659 1,106 1,361 2,325 Non-interest expense 1,602 1,658 3,189 3,420 ------------ ------------ ------------ ------------ Income before income tax 91 82 96 87 Income taxes (19) (21) (79) (71) ------------ ------------ ------------ ------------ Net income $ 110 $ 103 $ 175 $ 158 ============ ============ ============ ============ PER SHARE: ----------------------------------------- Basic net income $ 0.01 $ 0.01 $ 0.02 $ 0.02 Diluted net income 0.01 0.01 0.02 0.02 Book value at period end 1.42 1.43 Market price (bid) at period end 1.47 1.30 Average common and common equivalent shares outstanding 10,335,466 9,618,659 9,979,430 8,234,129 AVERAGE BALANCES: ----------------------------------------- Total assets $ 196,174 $ 143,225 $ 191,055 $ 139,363 Total earning assets 178,380 124,287 173,193 120,214 Total loans 110,328 73,816 108,292 73,047 Total deposits 130,079 107,367 127,223 108,124 Total stockholders' equity 15,744 13,554 14,562 11,659 FHLB advances 36,292 12,153 35,782 8,038 Borrowings 11,695 7,723 11,143 9,092 PERFORMANCE RATIOS: ----------------------------------------- Return on average assets 0.23% 0.29% 0.18% 0.23% Return on average equity 2.82% 3.06% 2.42% 2.74% Net interest margin 2.42% 1.99% 2.48% 1.78% LOAN QUALITY RATIOS: ----------------------------------------- Net charge-offs to average loans and letters of credit 0.22% 0.11% 0.35% 0.06% Allowance for loan and letter of credit losses to total loans and letters of credit at end of period 0.74% 0.93% Non-performing loans to total loans 0.84% 1.88% Non-performing assets to total assets 0.53% 1.13% SAVINGS BANK CAPITAL RATIOS: ----------------------------------------- Tangible equity to assets at end of period 7.03% 7.63% Risk-based capital ratios: Tier 1 capital 9.82% 10.17% Total capital 13.85% 12.50% AT PERIOD END: ----------------------------------------- Total assets $ 192,757 $ 147,928 Total earning assets 174,884 130,645 Total loans 107,803 77,294 Total deposits 120,401 110,342 Total stockholders' equity 15,578 13,747 FHLB Advances 39,900 17,000 Borrowings 15,367 4,302 Common shares outstanding 10,999,871 9,618,658