SECURITIES AND EXCHANGE COMMISSION
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 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 1999
---------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
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>
SAVINGS TRUST FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
Financial Statements for the Years Ended December 31, 1999
and 1998 and Supplemental Schedule for the Year Ended
December 31, 1999 and Independent Auditors' Report
<PAGE>
<TABLE>
<CAPTION>
SAVINGS TRUST FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
TABLE OF CONTENTS
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Page
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999 AND 1998 AND FOR THE YEARS THEN
ENDED:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available
for Benefits 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 1999 AND FOR THE YEAR THEN ENDED:
Item 27a - Supplemental Schedule of Assets Held for Investment Purposes 8
</TABLE>
Schedules not filed herewith are omitted because of the absence of conditions
under which they are required.
<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, 1999 and 1998, 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 auditing standards generally accepted
in the United States of America. 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 at December 31, 1999
and 1998, and the changes in net assets available for benefits for the years
then ended in conformity with accounting principals generally accepted in the
United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule listed in the
Table of Contents is presented for the purpose of additional analysis and is not
a required part of the basic financial statements, but is 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. This schedule is the responsibility of the Plan's management. Such
schedule has been subjected to the auditing procedures applied in our audit of
the basic 1999 financial statements and, in our opinion, is fairly stated in all
material respects when considered in relation to the basic financial statements
taken as a whole.
DELOITTE & TOUCHE LLP
Certified Public Accountants
Fort Lauderdale, Florida
June 21, 2000
<PAGE>
<TABLE>
<CAPTION>
SAVINGS TRUST FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
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1999 1998
ASSETS:
<S> <C> <C>
Cash $ 358 $ 57,424
Investments at fair value:
Fidelity Bankshares, Inc. common stock
(cost - $3,806,560 in 1999 and $3,284,721 in 1998) 3,505,783 5,065,287
Mutual funds (cost - $3,172,681 in 1999
and $2,492,540 in 1998) 3,681,940 2,606,255
Charles Schwab Money Funds
(at cost which approximates fair value) 193,572 165,895
Participants' Notes Receivable 370,877 382,283
Accrued income receivable 62,049 55,764
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Total assets 7,814,579 8,332,908
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NET ASSETS AVAILABLE FOR BENEFITS $ 7,814,579 $ 8,332,908
============ ===========
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
SAVINGS TRUST FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------------------------------------------------
1999 1998
ADDITIONS:
Investment income (loss):
<S> <C> <C>
Dividends and interest $ 469,043 $ 386,476
Net depreciation in fair value of investments (1,562,260) (1,916,654)
------------ -----------
Total investment loss (1,093,217) (1,530,178)
------------ -----------
Contributions:
Participants 939,700 727,424
Matching from employer 297,699 222,693
-------- -------
Total contributions 1,237,399 950,117
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Total 144,182 (580,061)
DEDUCTIONS:
Benefit payments 662,511 156,762
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DECREASE IN NET ASSETS (518,329) (736,823)
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 8,332,908 9,069,731
---------- ---------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 7,814,579 $ 8,332,908
============ ===========
</TABLE>
See notes to financial statements.
<PAGE>
SAVINGS TRUST FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
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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 - Employees may contribute between 1% and 15% of their base
compensation to the Plan ("Participants' Contributions") during the year,
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 - The Plan provides for Participant directed accounts
into an employer stock fund and several 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' non-vested
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.
Investments - Participants may elect that their contributions be invested
in increments of one percent of the total in one of twelve funds,
including Fidelity Bankshares, Inc. common stock, Oakmark Fund, Heartland
Value Fund, Janus Worldwide Fund, Janus Flexible Income Fund, Janus Twenty
Fund, Kaufmann Fund, Safeco Equity Fund, Schwab Value Advantage Money
Fund, Schwab U S Treasury Money Fund, Vanguard Wellington Fund and
Vanguard Index Trust 500 Portfolio. The Schwab U.S. Treasury Money Fund is
the temporary holding account for monies received by the Plan awaiting
distribution to the other funds.
<PAGE>
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, 1999, 57 participants had outstanding
loans classified as notes receivable totaling $370,877 at interest rates
ranging from 8.25% - 9.50%. At December 31, 1998, 47 participants had
outstanding loans classified as notes receivable totaling $382,283 at
interest rates ranging from 8.25% - 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>
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 1998
financial statements have been reclassified to conform to the presentation
for 1999.
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 amounts reported in the
financial statements and accompanying notes. 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 - Schwab U.S.Treasury Money Fund and 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.
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 Employer 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, 1999 and 1998, benefits of $79,323
and $272,290, respectively, were due to Participants who have withdrawn
from participation in the Plan.
Forfeitures - During the years ended December 31, 1999 and 1998,
participants who were not fully vested and incurred a break in service
forfeited non-vested benefits. Forfeited amounts totaled $4,997 and
$12,336 for the years ended December 31, 1999 and 1998, 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, 1999 and 1998, valued at fair value, are as follows:
<TABLE>
<CAPTION>
Description 1999 1998
<S> <C> <C>
Fidelity Bankshares, Inc. common stock $ 3,505,783 $ 5,065,287
Janus Worldwide fund 902,737 567,006
Vanguard Index Trust 500 Portfolio 859,218 614,593
Vanguard Wellington Fund 576,897 482,581
</TABLE>
During 1999 and 1998, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
depreciated in value by $1,562,260 and $1,916,654, respectively, as
follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Fidelity Bankshares, Inc. common stock $ (2,037,620) $ (2,108,191)
Mutual funds 475,360 191,537
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$ (1,562,260) $ (1,916,654)
============= =============
</TABLE>
<PAGE>
4. RELATED PARTY TRANSACTIONS
At December 31, 1999, the Plan owned 248,197 shares of common stock of
Fidelity Bankshares, Inc. which had a cost and fair value of $3,806,560
and $3,505,783, respectively. During the years ended December 31, 1999 and
1998, dividend income of $241,222 and $194,378, respectively, was earned
on these investments.
5. FUND INFORMATION
In September 1999, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of
Position 99-3("SOP 99-3"), Accounting for and Reporting of Certain Defined
Contribution Benefit Plan Investments and Other Disclosure Matters, which,
upon adoption, eliminates the requirement to disclose information about
significant components of the changes in net assets for each
participant-directed investment fund option. The Plan retroactively
adopted SOP 99-3 on January 1, 1999.
<PAGE>
<TABLE>
<CAPTION>
SAVINGS TRUST FOR EMPLOYEES OF
FIDELITY FEDERAL SAVINGS BANK OF FLORIDA
ITEM 27a - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
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Shares Current
Identity of Issuer Description Held Cost Value
<S> <C> <C> <C> <C>
* Fidelity Bankshares, Inc. Common stock 248,197 $ 3,806,560 $ 3,505,783
-------- ------------ -----------
Heartland Value Fund Mutual fund 4,407 153,558 160,838
Janus Flexible Income Fund Mutual fund 11,071 108,582 103,511
Janus Twenty Fund Mutual fund 3,101 218,217 258,738
Janus Worldwide Fund Mutual fund 11,811 547,939 902,737
Kaufmann Fund Mutual fund 48,137 285,621 286,415
Oakmark Fund Mutual fund 7,687 287,656 209,088
Safeco Equity Fund Mutual fund 13,509 294,101 324,498
Vanguard Index Trust 500 Portfolio Mutual fund 6,349 655,471 859,218
Vanguard Wellington Fund Mutual fund 20,633 621,536 576,897
-------- -------
Total mutual funds 3,172,681 3,681,940
---------- ---------
Schwab U. S. Treasury Money Fund Money funds 22,077 22,077 22,077
Schwab Value Advantage Money Fund Money funds 171,495 171,495 171,495
-------- -------
Total money funds 193,572 193,572
-------- -------
Loan Fund Participants' Notes Receivable 370,877 370,877
-------- -------
Total investments $ 7,543,690 $ 7,752,172
============ ===========
* Party-in-interest
</TABLE>
<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
CHARLES SCHWAB TRUST COMPANY
TRUSTEE
Date: June 23, 2000 By: /s/ Jacqueline Joe
------------------
Name: Jacqueline Joe
Title: Senior Trust Administrator
