Fidelity Bancorp, Inc. of Pittsburgh, Pennsylvania (the "Company")
(NASDAQ: FSBI), the holding company for Fidelity Bank, reported net
income for the year ended September 30, 2012 of $806,000 or $.13
per diluted share, compared to net income of $1.535 million or $.37
per diluted share for the prior year. The $729,000 decrease in
earnings for fiscal 2012 primarily reflects a decrease in net
interest income of $925,000, an increase in the provision for loan
losses of $375,000 and an increase in operating expenses of
$832,000, partially offset by an increase in other income of $1.03
million (excluding impairment charges), and an increase in income
tax benefit of $347,000. Other Than Temporary Impairment ("OTTI")
charges were $1.5 million for both the fiscal years ended September
30, 2012 and 2011.
Net loss of $51,000 was recorded for the three-month period
ending September 30, 2012, or $.05 per diluted share, compared to
net income of $597,000, or $.16 per diluted share for the same
period in the prior year. The $648,000 decrease in net income for
the fourth quarter of fiscal 2012 primarily relates to a decrease
in net interest income of $435,000 and an increase in operating
expenses of $537,000, partially offset by an increase in other
income of $150,000 and an increase in income tax benefit of
$174,000. Operating expenses were impacted by merger related costs
associated with the proposed merger agreement with WesBanco, Inc.
announced on July 19, 2012.
Net interest income before provision for loan losses decreased
to $13.9 million for the year ended September 30, 2012, compared to
$14.8 million in the prior year. The decrease in net interest
income before provision for loan losses for the fiscal year
reflects lower net earning assets during the period, resulting in a
decrease in the net interest spread caused by the average yield on
interest-earning assets decreasing more than the average rate paid
on interest-bearing liabilities. The Company's tax equivalent
interest rate spread decreased to 2.32% for the year ending
September 30, 2012 compared to 2.39% in the prior year.
Net interest income before provision for loan losses was $3.3
million for the three-months ended September 30, 2012, compared to
$3.7 million in the prior year period. The decrease reflects lower
net earning assets during the period, as well as a decrease in the
net interest rate spread resulting from the average yield on
interest-earning assets decreasing more than the average rate paid
on interest-bearing liabilities.
The Company recorded a $1.575 million provision for loan losses
for the year ended September 30, 2012, compared to $1.2 million in
the prior year period, an increase of $375,000. For both the
three-months ended September 30, 2012 and 2011, the Company
recorded a $300,000 provision for loan losses. The provision for
loan losses is charged to operations to bring the total allowance
for loan losses to a level that reflects management's best estimate
of the losses inherent in the portfolio. When determining the
provision for loan losses, the company considers a number of
factors some of which include specific credit reviews,
non-performing, delinquency and charge-off trends, concentrations
of credit, loan volume trends and broader local and national
economic trends. Net charge-offs for fiscal 2012 were $2.8 million
compared to $1.3 million for fiscal 2011. Non-performing loans
increased to $7.3 million at September 30, 2012 compared to $6.8
million at September 30, 2011. Non-performing assets and foreclosed
real estate were 2.23% of total assets at September 30, 2012
compared to 1.49% at September 30, 2011. The allowance for loan
losses was 61.55% of non-performing loans and 1.37% of net loans at
September 30, 2012, compared to 84.51% and 1.64%, respectively, at
September 30, 2011.
Other income, excluding OTTI charges, increased $1.0 million or
22.0% to $5.7 million for the year ended September 30, 2012,
compared to $4.7 million for the same period last year. Other
income, excluding OTTI charges, was $1.7 million for the
three-month period ended September 30, 2012, compared to $1.2
million in the prior year. The increase for the current fiscal year
primarily reflects an increase in the gain on sales of loans of
$512,000, an increase in loan service charges and fees of $204,000
and an increase in other income of $294,000. Partially offsetting
these increases were decreases in deposit service charges and fees
of $72,000. The increase for the three months ended September 30,
2012, as compared to the same period in the prior year, excluding
OTTI charges, primarily reflects an increase in loan service
charges and fees of $113,000, an increase in realized gain on sale
of securities of $230,000, an increase in gain on sale of loans of
$203,000 and an increase in other income of $61,000, partially
offset by a decrease in deposit service charges and fees of
$38,000.
OTTI charges recorded during the three-month period ending
September 30, 2012 were $525,000, compared to $91,000 in the prior
year period. The quarterly 2012 charges related to one corporate
obligation. OTTI charges were $1.5 million during both the
twelve-month periods ending September 30, 2012 and 2011. The
impairment charges for the current fiscal year relate to the
Company's holdings of a private label mortgage-backed security, a
pooled trust preferred security, a corporate obligation and three
common stocks of local financial institutions. The impairment
charges in the prior year period related to the Company's holdings
of five pooled trust preferred securities ("trups"), a single issue
preferred security, a private label mortgage-backed security, and
common stock of a local financial institution. The impairment
charges on pooled trups for both periods resulted from several
factors, including a downgrade in their credit ratings, failure to
pass their principal coverage tests, indications of a break in
yield, and the decline in the net present value of their projected
cash flows. Management of the Company has deemed the impairment on
the trups to be other-than-temporary based upon these factors and
the duration and extent to which the market value has been less
than cost, the inability to forecast a recovery in market value,
and other factors concerning the issuers in the pooled securities.
At September 30, 2012, the Company had holdings in 13 different
trust preferred offerings, with a book value of $13.9 million. The
cumulative net unrealized loss on these securities amounted to $5.8
million at September 30, 2012.
Operating expenses for the year ended September 30, 2012,
increased $832,000 or 5.5% to $16.0 million compared to $15.1
million for the prior year. For the final three-month period in
this fiscal year, operating expenses were $4.3 million compared to
$3.8 million in the prior year period. The increase in operating
expenses for the year ended September 30, 2012 is attributed to an
increase in compensation and benefits expense of $190,000, an
increase in office occupancy and equipment expense of $18,000, an
increase in professional fees of $241,000, an increase in service
bureau expense of $23,000 and an increase in other operating
expenses of $605,000, partially offset by a decrease in
depreciation and amortization of $35,000, a decrease in advertising
expense of $55,000, and a decrease in federal deposit insurance
premiums of $155,000. The increase for the three-month period ended
September 30, 2012, as compared to the same period in the prior
year, primarily reflects an increase in compensation and benefits
of $97,000, an increase in professional fees of $249,000, and an
increase in other expenses of $130,000. Operating expenses in
fiscal 2012 were impacted by merger related costs associated with
the proposed merger agreement with WesBanco, Inc. announced on July
19, 2012.
The Company had an income tax benefit of $211,000 for the fiscal
year ended September 30, 2012, compared to a tax provision of
$136,000 in the prior fiscal year. For the three months ended
September 30, 2012, the Company had an income tax benefit of
$29,000, compared to a tax expense of $145,000 for the same period
last year. The tax benefits for the prior periods were
significantly impacted by the impairment charges during the
respective periods. The OTTI charges recorded in the prior periods
caused pre-tax income to be lower than tax-exempt income; therefore
a tax benefit was recorded.
Total assets at September 30, 2012 were $647.1 million, a
decrease of $19.8 million as compared to assets of $666.9 as of
September 30, 2011. Net loans outstanding decreased $13.6 million
or 3.9% to $332.7 million at September 30, 2012, compared to
September 30, 2011. The decline in the loan portfolio in fiscal
2012 resulted, to a large extent, from the decision to sell
residential mortgage loans originated that did not meet certain
interest rate levels, rather than retaining them in the portfolio.
Savings and time deposits increased $14.6 million to $460.7 million
at September 30, 2012 compared to $446.1 million at September 30,
2011. Borrowed funds were $127.9 million at September 30, 2012, a
decrease of $36.5 million as compared to September 30, 2011.
Stockholders' equity was $53.1 million at September 30, 2012
compared to $50.5 million at September 30, 2011.
The Company's filings with the Securities and Exchange
Commission are available on-line through the Company's Internet
website at www.fidelitybancorp-pa.com.
Fidelity Bancorp, Inc. is the holding company for Fidelity Bank,
a Pennsylvania-chartered, FDIC-insured savings bank conducting
business through thirteen offices in Allegheny and Butler
counties.
Statements contained in this news release which
are not historical facts are forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors, which
include, but are not limited to, factors discussed in documents
filed by Fidelity Bancorp, Inc. with the Securities and Exchange
Commission from time to time.
Fidelity Bancorp, Inc. and Subsidiaries
Income Statement for the Three Months and Year Ended
September 30, 2012 and 2011 (unaudited)
(In thousands, except per share data)
Three Months Ended Year Ended
September 30, September 30,
2012 2011 2012 2011
------------ ----------- ----------- -----------
Interest income $ 5,563 $ 6,493 $ 23,603 $ 26,710
Interest expense 2,250 2,745 9,712 11,894
------------ ----------- ----------- -----------
Net interest income 3,313 3,748 13,891 14,816
Provision for loan losses 300 300 1,575 1,200
------------ ----------- ----------- -----------
Net interest income after
provision for loan
losses 3,013 3,448 12,316 13,616
Noninterest income 1,221 1,071 4,232 3,176
Noninterest expense 4,314 3,777 15,953 15,121
------------ ----------- ----------- -----------
Income (loss) before
income taxes (80) 742 595 1,671
Income tax provision
(benefit) (29) 145 (211) 136
------------ ----------- ----------- -----------
Net income (loss) (51) 597 806 1,535
Preferred stock dividend (88) (88) (350) (350)
Amortization of preferred
stock discount (15) (15) (60) (60)
------------ ----------- ----------- -----------
Net income (loss)
available to common
stockholders $ (154) $ 494 $ 396 $ 1,125
============ =========== =========== ===========
Basic earnings (loss) per
common share $ (0.05) $ 0.16 $ 0.13 $ 0.37
Diluted earnings (loss)
per common share $ (0.05) $ 0.16 $ 0.12 $ 0.37
Net interest margin (tax
equivalent) 2.24% 2.47% 2.32% 2.39%
Annualized return on
average assets 0.12% 0.36% 0.22% 0.22%
Annualized return on
average equity 1.55% 4.69% 3.06% 3.06%
Balance Sheet Data
(unaudited)
(In thousands, except
share data)
September September
30, 2012 30, 2011
------------ -----------
Total assets $ 647,077 $ 666,915
Cash and cash equivalents 38,429 24,856
Total investment
securities 236,405 259,386
Loans receivable, net 332,676 346,285
Deposits 460,715 446,102
Borrowed funds (includes
subordinated debt) 127,923 164,407
Stockholders' equity 53,080 50,491
Book value per common
share $ 15.03 $ 14.24
Average equity to average
assets 7.86% 7.34%
Allowance for loan losses
to loans receivable 1.37% 1.64%
Non-performing assets to
total assets 2.23% 1.49%
Non-performing loans to
total loans 2.17% 1.97%
Contact: Mr. Richard G. Spencer President and Chief
Executive Officer (412) 367-3303 ext. 3121 E-mail: Email
Contact
Fidelity Bancorp (NASDAQ:FSBI)
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