<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
450 FIFTH STREET, N.W.
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of
1934.
For the fiscal year ended December 31, 1997
-------------------------
OR
[ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the transition period from _______________ to __________________
COMMISSION FILE NUMBER 01-29040
-----------------------
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Savings Plan for Employees of Fidelity Federal Savings Bank of Florida
B: Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Fidelity Bankshares, Inc.
218 Datura Street
West Palm Beach, Florida 33401
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees and Participants of the Savings Trust for Employees of
Fidelity Federal Savings Bank of Florida:
We have audited the accompanying statements of net assets available for benefits
of the Savings Trust for Employees of Fidelity Federal Savings Bank of Florida
(the "Plan") as of December 31, 1997 and 1996, and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1997 and 1996, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan's management. Such
schedules have been subjected to the auditing procedures applied in our audit of
the basic 1997 financial statements and, in our opinion, are fairly stated in
all material respects when considered in relation to the basic financial
statements taken as a whole.
Deloitte & Touche, LLP
West Palm Beach, Florida
July 6, 1998
<PAGE>
SAVINGS TRUST FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
ASSETS:
Cash 30,603
Investments at fair value:
Fidelity Bankshares, Inc. common stock
(cost - $2,443,663 in 1997 and $2,007,301 in 1996) $6,576,115 $3,328,782
Mutual funds (cost -$1,865,234 in 1997
and $1,039,681 in 1996) 1,795,273 1,146,576
Charles Schwab Money Funds
(at cost which approximates market) 353,106
Merrill Lynch CMA Money Fund
(at cost which approximates market) 8,517
Participants' Notes Receivable 269,107 240,492
Investments at contract value:
Merrill Lynch Retirement Preservation Trust 450,425
Contributions receivable from employer 26,702
Accrued income receivable 45,527 37,600
---------- ---------
Total assets 9,069,731 5,239,094
---------- ---------
NET ASSETS AVAILABLE FOR BENEFITS $ 9,069,731 $ 5,239,094
------------ ------------
</TABLE>
See notes to financial statements.
-2-
<PAGE>
SAVINGS TRUST FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1997 AND 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
ADDITIONS:
Investment income:
Dividends and income $ 336,820 $ 258,816
Net appreciation in fair value of investments 3,018,800 352,482
---------- ----------
Total investment income 3,355,620 611,298
---------- ----------
Contributions:
Participants 471,153 435,492
Matching from employer 184,676 169,994
---------- ----------
Total contributions 655,829 605,486
---------- ----------
Total additions 4,011,449 1,216,784
DEDUCTIONS:
Benefit payments 180,812 205,256
---------- ----------
INCREASE IN NET ASSETS 3,830,637 1,011,528
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 5,239,094 4,227,566
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $9,069,731 $5,239,094
========== ==========
See notes to financial statements.
</TABLE>
-3-
<PAGE>
SAVINGS TRUST FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996
- -----------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Savings Trust for Employees of Fidelity
Federal Savings Bank of Florida (the "Plan") provides only general
information. Participants should refer to the Plan agreement for a more
complete description of the provisions.
GENERAL - The Plan was established, effective January 1, 1988, by the Board
of Directors of Fidelity Federal Savings Bank of Florida. The purpose of the
Plan is to receive, hold and administer all monies and properties and to
implement the provisions relating to the Plan.
The Plan was formed for substantially all employees ("Participants") of
Fidelity Federal Savings Bank of Florida and subsidiaries (the "Employer").
The Plan was established as a defined contribution plan exempt from income
taxes under Section 401(k) of the Internal Revenue Code and has received a
favorable determination of exempt status from the U.S. Treasury Department.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA"). Membership in the Plan is voluntary for
employees who have attained age 21 and have earned one year of vesting
service.
CONTRIBUTIONS - Prior to January 1, 1998 employees could contribute between
1% and 10% of their base compensation to the Plan ("Participants'
Contributions") during the year. Beginning January 1, 1998 the maximum
percentage was increased to 15%, subject to certain limitations. The
Participants' Contributions are not subject to state or federal income taxes
until withdrawn in the future. For all Participants actively employed at the
end of each calendar quarter during the year, the Employer provides a
matching contribution equal to 50% of the Participant's contribution for that
year, up to the lesser of the Participant's contribution, 6% of base salary,
or $10,000. Contributions in excess of six percent of the Participant's
annual compensation are not eligible for Employer matching contributions.
PARTICIPANT ACCOUNTS - Beginning October 1, 1997 the Employer changed
trustees of the plan from Merrill Lynch Trust Company to the Charles Schwab
Trust Company. Prior to this date the Plan provided for Participant directed
accounts into an employer stock fund and several Merrill Lynch Trust and Fund
Accounts. With this change, the Merrill Lynch Trust and Fund accounts have
been replaced with several other mutual funds and Charles Schwab Money Funds.
Each Participant's account is credited with the Participant's contribution
and an allocation of (a) the Company's contribution, (b) Plan earnings, and
(c) forfeitures of terminated Participants' nonvested accounts. Allocations
are based on Participant earnings and account balances, as defined. The
benefit to which a Participant is entitled is the benefit that can be
provided from the Participant's vested account.
-4-
<PAGE>
INVESTMENTS - Prior to October 1, 1997, participants could direct that their
contributions be invested in increments of one percent of the total in one of
six funds, including Fidelity Bankshares, Inc. common stock, Merrill Lynch
Growth Fund for Investment and Retirement, Merrill Lynch Federal Securities
Trust, Merrill Lynch Capital Fund, Merrill Lynch Global Allocation Fund, and
Merrill Lynch Retirement Preservation Fund. The Merrill Lynch CMA Money Fund
was used by the Plan as a temporary holding account for monies received by
the Plan prior to distribution to the six available participant-directed
funds. As stated in the previous paragraph, the Merrill Lynch funds were
replaced with the following nine funds: Oakmark Fund, Heartland Value Fund,
Janus Worldwide Fund, Janus Flexible Income Fund, Kaufmann Fund, Safeco
Equity Fund, Schwab Value Advantage Money Fund, Vanguard Wellington Fund and
Vanguard Index Trust 500 Portfolio. The Schwab U.S. Treasury Money Fund
replaced the Merrill Lynch CMA Money Fund and is now the temporary holding
account for monies received by the plan awaiting distribution to the other
funds.
PARTICIPANTS' NOTES RECEIVABLE - Participants may borrow from their accounts
a minimum of $1,000 and a maximum equal to the lesser of $50,000 or 50
percent of their account balance. Loan transactions are treated as a
transfer to (from) the investment fund from (to) the Participants' note fund.
Loan terms range from one to five years, unless for the purchase of a primary
residence, in which case the term may extend to 15 years. The loans are
secured by the balance in the Participant's account and bear interest at
prime rate plus one-half percent at the beginning of the quarter the loan is
made. Principal and interest are paid ratably through payroll deductions.
At December 31, 1997, 40 participants had outstanding loans classified as
notes receivable totaling $269,107 at interest rates ranging from 8.30% -
9.50%. At December 31, 1996, 34 participants had outstanding loans
classified as notes receivable totaling $240,492 at interest rates ranging
from 8.74% - 9.50%.
ADMINISTRATION - The Administrative Committee, as appointed by the Board of
Directors of the Employer, is the Plan's governing body and is responsible
for administration of the Plan and all questions concerning the
interpretation and application of the Plan. The Employer pays the costs of
operating the Plan.
DISTRIBUTIONS - Distributions of Participant account balances are made upon
attainment of normal or early retirement age, termination of employment,
total and permanent disability, or death. Terminated Participants with less
than sixty months of service receive the value of their contributions and
their vested percentage of employer matching contributions; the balance of
the account is forfeited and applied to the Employer's matching contribution
for all other Plan Participants in that year.
VESTING - Participants' own contributions to the Plan and their related
investment earnings are fully vested at all times. Participants become
vested in Employer matching contributions and their related investment
earnings according to the following schedule:
<TABLE>
<CAPTION>
VESTED
YEARS OF SERVICE PERCENT
<S> <C>
Less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years or more 100%
</TABLE>
-5-
<PAGE>
Years of service for vesting are calendar years in which Participants are
credited with at least 1,000 hours of service, counted from date of
employment. Employer matching contributions automatically become fully
vested upon retirement at age 65, or death or disability prior to age 65.
PLAN TERMINATION - The Plan may be amended or terminated at any time. In the
event of termination, all account balances become fully vested.
RECLASSIFICATIONS For comparative purposes, certain amounts in the 1996
financial statements have been reclassified to conform to the presentation
for 1997.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies:
BASIS OF PRESENTATION - The accompanying financial statements are presented
on the accrual basis of accounting.
USE OF ESTIMATES The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts in the financial
statements. Actual results could differ from those estimates.
INVESTMENTS - Investments are carried at fair value. Gains or losses on
sales of investments are determined by the specific identification method and
are recognized as of the trade date. The cost of the temporary investment
accounts - Merrill Lynch CMA Money Fund and Schwab U.S.Treasury Money Fund,
along with the Schwab Value Advantage Money Fund approximates fair value due
to their liquid nature. The fair values of the mutual funds and common stock
were determined using closing market quotations at year end. Participant
loans are recorded at the loan balance, which approximates fair value.
The Merrill Lynch Retirement Preservation Trust, which was sold during 1997,
held certain Guaranteed Investment Contracts ("GICs") and Synthetic GICs as
investments. These GICs were fully benefit responsive and were reported in
the trust at contract value, which approximated fair value. The fair value
of the Merrill Lynch Retirement Preservation Trust at December 31, 1996 was
$450,425.
Gain or loss on sales of investments is based on specific identification and
is included in the net appreciation (depreciation) of investments. Dividend
income is recorded on the ex-dividend date. Interest income is recorded as
earned on an accrual basis. Benefits are recorded when paid.
INCOME TAXES The Internal Revenue Service has determined and informed the
Bank by a letter dated August 27, 1996, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue Code
(IRC). The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's tax counsel believe that the
Plan is designed and is currently being operated in compliance with the
applicable requirements of the IRC.
BENEFITS PAYABLE - As of December 31, 1997 and 1996, benefits of $26,604 and
$13,300, respectively, were due to Participants who have withdrawn from
participation in the Plan.
FORFEITURES - During the years ended December 31, 1997 and 1996, participants
who were not fully vested and incurred a break in service forfeited nonvested
benefits. Forfeited amounts totaled $1,156 and $4,497 for the years ended
December 31, 1997 and 1996, respectively. These forfeitures were used to
reduce employer contributions.
3. INVESTMENTS
Investments in excess of five percent of net assets available for benefits at
December 31, 1997 and 1996, valued at fair value, are as follows:
-6-
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION 1997 1996
<S> <C> <C>
Fidelity Bankshares, Inc. common stock $6,576,115 $3,328,782
Merrill Lynch Retirement Preservation Money Fund 450,425
Merrill Lynch Growth Fund for Investment
and Retirement 402,587
Merrill Lynch Global Allocation Fund 459,462
</TABLE>
-7-
<PAGE>
4. FUND INFORMATION
Information on a by-fund basis as of December 31, 1997 is as follows:
<TABLE>
<CAPTION>
MERRILL
LYNCH
MERRILL MERRILL GROWTH MERRILL FIDELITY
LYNCH LYNCH MERRILL FUND FOR LYNCH BANKSHARES,
RETIREMENT FEDERAL LYNCH INVESTMENT GLOBAL INC.
PRESERVATION SECURITIES CAPITAL AND ALLOCATION STOCK
TRUST TRUST FUND RETIREMENT FUND FUND
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments at fair value $ - $ - $ - $ - $ - $6,576,115
============ ========== ========= ========== ========== ===========
ADDITIONS TO NET
ASSETS:
Participant contributions $ 55,787 $ 9,805 $ 31,714 $ 51,989 $ 69,432 $ 176,580
Employer contributions 21,400 3,983 12,291 19,144 26,643 71,772
Interest/dividend income 21,058 2,919 10,443 2,119 8,614 174,171
Loan disbursements (11,060) (1,133) (2,936) (18,518) (10,792) (66,007)
Loan repayments 13,218 1,690 6,895 6,704 12,911 61,369
Net appreciation/(depreciation)
in fair value of investments - 1,071 21,621 92,823 39,670 2,933,885
Transfers from other funds - - - - - -
------------ ---------- --------- ---------- ---------- -----------
Total additions to net assets 100,403 18,335 80,028 154,261 146,478 3,351,770
------------ ---------- --------- ---------- ---------- -----------
DEDUCTIONS FROM
NET ASSETS:
Benefits paid to
participants 16,436 457 11,252 8,406 18,756 102,657
Transfers to other funds 534,392 86,316 284,865 548,442 587,184 1,780
------------ ---------- --------- ---------- ---------- -----------
Total deductions from
net assets 550,828 86,773 296,117 556,848 605,940 104,437
------------ ---------- --------- ---------- ---------- -----------
Net increase/(decrease) (450,425) (68,438) (216,089) (402,587) (459,462) 3,247,333
BEGINNING OF YEAR 450,425 68,438 216,089 402,587 459,462 3,328,782
------------ ---------- --------- ---------- ---------- -----------
END OF YEAR $ - $ - $ - $ - $ - $6,576,115
============ ========== ========= ========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
SCHWAB
VALUE JANUS
ADVANTAGE HEARTLAND FLEXIBLE JANUS
MONEY VALUE INCOME WORLDWIDE KAUFMANN OAKMARK
FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments at fair value $352,032 $119,090 $49,817 $359,629 $200,782 $172,468
========= ========= ======== ========= ========= =========
ADDITIONS TO NET
ASSETS:
Participant contributions $ 22,376 $ 4,914 $ 1,392 $ 10,934 $ 5,061 $ 5,629
Employer contributions 9,010 2,017 569 4,142 1,770 2,117
Interest/dividend income 4,551 15,401 1,550 24,730 6,132 9,325
Loan disbursements (7,500) - (3,500) - - (1,000)
Loan repayments 4,719 1,477 969 1,471 316 823
Net appreciation/(depreciation)
in fair value of investments - (20,234) (513) (26,112) (10,901) (2,229)
Transfers from other funds 341,724 115,515 49,350 344,464 198,404 157,803
--------- --------- -------- --------- --------- ---------
Total additions to net assets 374,880 119,090 49,817 359,629 200,782 172,468
--------- --------- -------- --------- --------- ---------
DEDUCTIONS FROM
NET ASSETS:
Benefits paid to
participants 22,848 - - - - -
Transfers to other funds - - - - - -
--------- --------- -------- --------- --------- ---------
Total deductions from
net assets 22,848 - - - - -
--------- --------- -------- --------- --------- ---------
Net increase/(decrease) 352,032 119,090 49,817 359,629 200,782 172,468
BEGINNING OF YEAR - - - - - -
--------- --------- -------- --------- --------- ---------
END OF YEAR $352,032 $119,090 $49,817 $359,629 $200,782 $172,468
========= ========= ======== ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
VANGUARD
SAFECO INDEX VANGUARD
EQUITY TR 500 WELLINGTON NOTES
FUND PORTFOLIO FUND RECEIVABLE OTHER TOTAL
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments at fair value $160,411 $354,051 $379,025 $ 269,107 $77,204 $9,069,731
========= ========= ========== ========== ======== ===========
ADDITIONS TO NET
ASSETS:
Participant contributions $ 4,850 $ 11,462 $ 9,228 $ - $ - $ 471,153
Employer contributions 1,917 4,417 3,484 - - 184,676
Interest/dividend income 7,003 4,117 24,781 19,906 - 336,820
Loan disbursements - - (4,000) 126,446 - -
Loan repayments 770 2,695 1,710 (117,737) - -
Net appreciation/(depreciation)
in fair value of investments (2,637) 8,043 (15,687) - - 3,018,800
Transfers from other funds 148,508 323,317 359,509 - 4,385 2,042,979
--------- --------- ---------- ---------- -------- -----------
Total additions to net assets 160,411 354,051 379,025 28,615 4,385 6,054,428
--------- --------- ---------- ---------- -------- -----------
DEDUCTIONS FROM
NET ASSETS:
Benefits paid to
participants - - - - - 180,812
Transfers to other funds - - - - - 2,042,979
--------- --------- ---------- ---------- -------- -----------
Total deductions from
net assets - - - - - 2,223,791
--------- --------- ---------- ---------- -------- -----------
Net increase/(decrease) 160,411 354,051 379,025 28,615 4,385 3,830,637
BEGINNING OF YEAR - - - 240,492 72,819 5,239,094
--------- --------- ---------- ---------- -------- -----------
END OF YEAR $160,411 $354,051 $379,025 $ 269,107 $77,204 $9,069,731
========= ========= ========== ========== ======== ===========
</TABLE>
-8-
<PAGE>
Information on a by-fund basis as of December 31, 1996 is as follows:
<TABLE>
<CAPTION>
MERRILL
LYNCH
MERRILL MERRILL GROWTH MERRILL
LYNCH LYNCH MERRILL FUND FOR LYNCH
RETIREMENT FEDERAL LYNCH INVESTMENT GLOBAL
PRESERVATION SECURITIES CAPITAL AND ALLOCATION
TRUST TRUST FUND RETIREMENT FUND
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments at fair value $450,425 $68,438 $216,089 $402,587 $459,462
============ ========== ========= ========== ==========
ADDITIONS TO NET
ASSETS:
Participant contributions $ 76,562 $12,157 $ 43,239 $ 64,116 $ 84,911
Employer contributions 29,480 5,018 16,379 22,914 32,235
Interest/dividend income 22,494 4,419 18,196 28,959 40,159
Loan repayments 28,141 1,273 4,168 3,041 12,275
Net appreciation/(depreciation)
in fair value of - (1,291) 3,086 52,842 861
investments
Transfers from other funds 37,671 - - 18,883 15,829
------------ ---------- --------- ---------- ----------
Total additions to net 194,348 21,576 85,068 190,755 186,270
assets ------------ ---------- --------- ---------- ----------
DEDUCTIONS FROM
NET ASSETS:
Benefits paid to
participants 87,972 11,222 8,389 14,834 20,347
Loan disbursements 34,974 1,261 4,713 11,364 10,968
Transfers to other funds - 7,039 16,160 - -
------------ ---------- --------- ---------- ----------
Total deductions from
net assets 122,946 19,522 29,262 26,198 31,315
------------ ---------- --------- ---------- ----------
Net increase/(decrease) 71,402 2,054 55,806 164,557 154,955
BEGINNING OF YEAR 379,023 66,384 160,283 238,030 304,507
------------ ---------- --------- ---------- ----------
END OF YEAR $450,425 $68,438 $216,089 $402,587 $459,462
============ ========== ========= ========== ==========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
BANKSHARES,
INC. PARTICIPANT'S
STOCK NOTES
FUND RECEIVABLE OTHER TOTAL
<S> <C> <C> <C> <C>
ASSETS:
Investments at fair value $3,328,782 $ 240,492 $ 72,819 $5,239,094
=========== ========= ======== ==========
ADDITIONS TO NET
ASSETS:
Participant contributions $ 154,507 - - $ 435,492
Employer contributions 63,968 - - 169,994
Interest/dividend income 128,965 $ 15,624 - 258,816
Loan repayments 39,154 (88,052) - -
Net appreciation/(depreciation)
in fair value of 296,984 - - 352,482
investments
Transfers from other funds - - - 72,383
----------- ------------- -------- -----------
Total additions to net 683,578 (72,428) - 1,289,167
assets ---------- ---------- -------- -----------
DEDUCTIONS FROM
NET ASSETS:
Benefits paid to
participants 62,492 - - 205,256
Loan disbursements 88,983 (152,263) - -
Transfers to other funds 6,885 - $ 42,299 72,383
---------- ---------- -------- -----------
Total deductions from
net assets 158,360 (152,263) 42,299 277,639
---------- ------------- -------- -----------
Net increase/(decrease) 525,218 79,835 (42,299) 1,011,528
BEGINNING OF YEAR 2,803,564 160,657 115,118 4,227,566
---------- ------------- -------- -----------
END OF YEAR $3,328,782 $ 240,492 $ 72,819 $5,239,094
========== ============= ======== ===========
</TABLE>
5. RELATED PARTY TRANSACTIONS
At December 31, 1997, the Plan owned 202,342 shares of common stock of
Fidelity Bankshares, Inc. which had a cost and fair value of $2,443,663 and
$6,576,115, respectively. During the years ended December 31, 1997 and 1996,
dividend income of $174,171 and $128,965, respectively, was earned on these
investments.
-9-
<PAGE>
SAVINGS TRUST FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES CURRENT
IDENTITY OF ISSUER DESCRIPTION HELD COST VALUE
<S> <C> <C> <C> <C>
* Fidelity Bankshares, Inc. Common stock 202,342 $2,443,663 $6,576,115
------------- ---------- ----------
Heartland Value Fund Mutual fund 3,516 139,329 119,090
Janus Flexible Income Fund Mutual fund 5,047 50,353 49,817
Janus Worldwide Fund Mutual fund 9,519 385,740 359,629
Kaufmann Fund Mutual fund 31,520 211,615 200,782
Oakmark Fund Mutual fund 4,268 174,519 172,468
Safeco Equity Fund Mutual fund 8,209 163,048 160,411
Vanguard Index Trust 500 Portfolio Mutual fund 3,931 346,008 354,051
Vanguard Wellington Fund Mutual fund 12,870 394,622 379,025
---------- ----------
Total mutual funds 1,865,234 1,795,273
---------- ----------
Schwab U. S. Treasury Money Fund Money funds 1,074 1,074 1,074
Schwab Value Advantage Money Fund Money funds 352,032 352,032 352,032
---------- ----------
Total money funds 353,106 353,106
---------- ----------
Loan Fund Participants' Notes 269,107 269,107
Receivable ---------- ----------
Total investments $4,931,110 $8,993,601
========== ==========
* Party-in-interest
</TABLE>
-10-
<PAGE>
SAVINGS TRUST FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
ITEM 27d - SUPPLEMENTAL SCHEDULE OF INDIVIDUAL TRANSACTIONS INVOLVING SECURITIES
OF THE SAME ISSUE IN EXCESS OF FIVE PERCENT OF THE FAIR VALUE OF PLAN ASSETS AT
THE BEGINNING OF THE PLAN YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROCEEDS AT
DESCRIPTION PURCHASE MATURITY/ NET GAIN/
IDENTITY OF PARTY INVOLVED OF ASSET PRICE SALE COST OF ASSET (LOSS)
<S> <C> <C> <C> <C> <C>
Schwab US Treasury Money Fund Money Fund 2,069,740
Schwab US Treasury Money Fund Money Fund 2,069,740 2,069,740 -
Schwab Value Advantage Money Fund Money Fund 675,151
Schwab Value Advantage Money Fund Money Fund 302,349 302,349 -
Vanguard Index Trust 500 Portfolio Mutual Fund 311,268
Vanguard Wellington Fund Mutual Fund 300,758
Merrill Lynch Growth Fund - Class B Mutual Fund 551,994 390,537 161,457
Merrill Lynch Global Allocation Mutual Fund 588,172 526,315 61,857
Fund - Class B
Merrill Lynch Capital Fund - Class B Mutual Fund 286,652 253,908 32,744
Merrill Lynch Retirement Money Fund 533,693 533,693 -
Preservation Trust
</TABLE>
-11-
<PAGE>
SAVINGS TRUST FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
ITEM 27d - SUPPLEMENTAL SCHEDULE OF SERIES TRANSACTIONS INVOLVING SECURITIES OF
THE SAME ISSUE IN EXCESS OF FIVE PERCENT OF THE FAIR VALUE OF PLAN ASSETS AT
THE BEGINNING OF THE PLAN YEAR ENDED DECEMBER 31, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL PROCEEDS AT
DESCRIPTION NUMBER OF NUMBER OF PURCHASE MATURITY/ COST NET GAIN/
IDENTITY OF PARTY INVOLVED OF ASSET TRANSACTIONS SHARES/UNITS PRICE SALE OF ASSET (LOSS)
<S> <C> <C> <C> <C> <C> <C>
* Fidelity Bankshares, Inc. Common 73 23,525 504,696
stock
Merrill Lynch Retirement
Preservation
Money Fund Money funds 35 639,637 639,637 639,637
Merrill Lynch CMA Money Fund Money funds 71 658,055 658,055 658,055
Merrill Lynch CMA Money Fund Money funds 60 632,821 632,821
Schwab U. S. Treasury Fund Money Funds 1 2,069,740 2,069,740 2,069,740
Schwab U. S. Treasury Fund Money Funds 3 2,070,815 2,070,815
Merrill Lynch Growth Fund for
Investment
and Retirement Mutual Fund 31 20,043 593,914 422,474 171,440
Merrill Lynch Global Mutual Fund 33 40,470 630,802 564,596 66,206
Allocation Fund
Merrill Lynch Capital Fund Mutual Fund 25 9,183 308,135 272,459 35,676
Janus Worldwide Fund Mutual Fund 15 9,519 385,740
</TABLE>
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<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
SAVINGS PLAN FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
Date: July 13, 1998 By: /s/ Richard D. Aldred
----------------------------------------------
Title: Administrative Trustee
