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Fidelity Bancorp Inc. Reports Operating Results (10-Q)

August 13, 2010 | About:
10qk

10qk

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Fidelity Bancorp Inc. (FSBI) filed Quarterly Report for the period ended 2010-06-30.

Fidelity Bancorp Inc. has a market cap of $15.2 million; its shares were traded at around $4.97 with and P/S ratio of 0.5. The dividend yield of Fidelity Bancorp Inc. stocks is 1.6%.

Highlight of Business Operations:

Total assets of the Company decreased $21.9 million, or 3.0%, to $708.1 million at June 30, 2010 from $730.0 million at September 30, 2009. Significant changes in individual categories include decreases in cash and cash equivalents of $16.7 million and net loans of $27.4 million, partially offset by increases in securities available-for-sale of $6.7 million, securities held-to-maturity of $11.3 million, loans held-for-sale of $1.1 million, and other assets of $2.4 million. The decrease in cash and cash equivalents is a result of the Company repaying $26.7 million in Federal Home Loan Bank advances that matured during the current year. The decrease in net loans reflects $74.4 million of prepayments, partially offset by $42.8 million in loan originations. The increase in other assets is primarily due to the FDIC requiring all insured depository institutions to prepay their federal deposit insurance assessment through 2012. The prepayment was due on December 30, 2009 and was based on the institutions assessment base and assessment rate as of September 30, 2009 assuming a 5% annual growth in deposits and a three basis point increase in the assessment rate during years 2011 and 2012.

Total liabilities of the Company decreased $23.1 million, or 3.4%, to $659.8 million at June 30, 2010 from $682.9 million at September 30, 2009. Significant changes include a decrease in long-term debt of $26.8 million, partially offset by an increase in deposits of $2.4 million and an increase in advance payments by borrowers for taxes and insurance of $1.8 million. As mentioned above, the decrease in long-term debt was a result of the Company repaying $26.7 million in Federal Home Loan Bank advances that matured during the current year. The increase in deposits is primarily attributed to an increase in checking accounts of $8.9 million, an increase in savings accounts of $6.5 million, partially offset by a decrease in time deposits of $7.1 million and a decrease in money market accounts of $5.9 million.

Stockholders equity increased to $48.3 million at June 30, 2010, compared to $47.1 million at September 30, 2009. This result reflects net income for the nine-month period ended June 30, 2010 of $659,000; stock options exercised of $7,000; stock issued under the Dividend Reinvestment Plan of $11,000; stock-based compensation expense of $48,000; and a decrease in the accumulated other comprehensive loss of $913,000, which is a result of changes in the net unrealized losses on the available-for-sale securities, changes in non-credit losses on available-for-sale and held-to-maturity securities, and by the unrealized loss recognized on the cash flow hedge as discussed in Note 9, Derivative Instruments, on pages 22 and 23 above. Offsetting these increases were common and preferred stock cash dividends paid of $446,000. On December 12, 2008, the Company sold $7.0 million in preferred stock to the U.S. Department of Treasury as a participant in the federal governments TARP Capital Purchase Program. In connection with the investment, the Company also issued a ten-year warrant to the Treasury which permits the Treasury to purchase up to 121,387 shares of its common stock at an exercise price of $8.65 per share. The Series B Preferred Stock will pay dividends at the rate of 5% per annum until the fifth anniversary of issuance and, unless redeemed earlier, at the rate of 9% thereafter. Until the third anniversary of the issuance of the Series B Preferred Stock or its earlier redemption or transfer by the Treasury Department to an unaffiliated holder, the Company may not increase the dividend on the common stock or repurchase any shares of common stock. Approximately $3.4 million of the balances in retained earnings as of June 30, 2010 and September 30, 2009 represent base year bad debt deductions for tax purposes only, as they are considered restricted accumulated earnings.

The Company recorded a net loss for the three months ended June 30, 2010 of $52,000 and a net loss available to common stockholders of $155,000 or $(0.05) per diluted common share compared to net income of $238,000 and net income available to common stockholders of $135,000 or $0.04 per diluted common share for the same period in fiscal 2009. The decrease in earnings reflects a decrease in net interest income of $23,000, or 0.6%, an increase in the provision for loan losses of $230,000, a decrease in other income (excluding other-than-temporary impairment OTTI charges) of $614,000, or 38.8%, and a decrease in income tax benefit of $327,000, partially offset by a decrease in OTTI charges on certain investment securities of $489,000 and a decrease in operating expenses of $415,000, or 10.3%.

The Company recorded net income for the nine months ended June 30, 2010 of $659,000 and net income available to common stockholders of $351,000 or $0.12 per diluted common share compared to net income of $1.8 million and net income available to common stockholders of $1.6 million or $0.52 per diluted common share for the same period in fiscal 2009. Factors contributing to the decrease include a decrease in net interest income of $2.1 million, or 16.2%, and an increase in operating expenses of $391,000, or 3.7%, partially offset by a decrease in the provision for loan losses of $45,000, a decrease in OTTI charges on certain investment securities of $678,000, an increase in other income (excluding OTTI charges) of $614,000, or 18.2%, and an increase in income tax benefit of $41,000.

The Companys net interest income decreased $23,000 or 0.6% to $3.8 million, for the three-month period ended June 30, 2010, as compared to the same period in 2009. The Companys net interest income decreased $2.1 million or 16.2% to $11.0 million, for the nine-month period ended June 30, 2010, as compared to $13.1 million in the same period in 2009. Interest income decreased $1.2 million or 13.9% to $7.3 million and decreased $5.1 million or 18.4% to $22.5 million, for the three and nine-month periods ended June 30, 2010, respectively, as compared to $8.5 million and $27.6 million in the same periods in 2009. The decrease for both periods reflects both a decrease in the average balance of interest earning assets and a decrease in the yields earned on these assets. Interest expense decreased $1.2 million or 24.8% to $3.5 million and decreased $3.0 million or 20.4% to $11.6 million, for the three and nine-month periods ended June 30, 2010, respectively, as compared to $4.7 million and $14.6 million in the same periods in 2009. The decrease for both periods reflects both a decrease in the average balance of interest- bearing liabilities and a decrease in the interest rates paid on interest-bearing liabilities. For the three months ended June 30, 2010 and 2009 the ratio of average interest-earning assets to average interest-bearing liabilities was 111.8% and 110.8%, respectively. For the nine months ended June 30, 2010 and 2009 the ratio of average interest-earning assets to average interest-bearing liabilities was 110.2% and 109.6%, respectively.

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