<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
Commission file number 0-22826
Fidelity Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware 36-3915246
(State of Incorporation) (I.R.S. Employer Identification No.)
5455 W. Belmont, Chicago, Illinois, 60641
(Address of principal executive offices)
(773) 736-4414
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all the reports to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
The number of shares outstanding of each of the issuer's classes of common
stock, was 2,786,578 shares of common stock, par value $.01, outstanding as of
January 17, 1997.
===============================================================================
<PAGE>
FIDELITY BANCORP, INC.
FORM 10-Q
INDEX
Part I. FINANCIAL INFORMATION PAGE(S)
Item 1. Financial Statements
Consolidated Statements of Financial Condition
as of December 31, 1996 (unaudited) and September 30, 1996 1
Consolidated Statements of Earnings for the three
months ended December 31, 1996 and 1995 (unaudited) 2
Consolidated Statements of Changes in Stockholders'
Equity for the three months ended December 31, 1996
and 1995 (unaudited) 3
Consolidated Statements of Cash Flows for the three
months Ended December 31, 1996 and 1995 (unaudited) 4
Notes to Unaudited Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-9
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signature Page 11
<PAGE>
FIDELITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
ASSETS December 31, September 30,
1996 1996
(unaudited)
<S> <C> <C>
Cash and due from banks $ 2,109 3,848
Interest-bearing deposits 673 225
Federal funds sold 200 200
Investment in dollar-denominated mutual funds, at
fair value 3,147 3,146
FHLB of Chicago stock 5,795 5,795
Mortgage-backed securities held to maturity, at
amortized cost (approximate fair value of $21,243
at December 31, 1996 and $21,766 at September 30, 1996) 20,989 21,673
Investment securities available for sale, at fair value 77,519 78,104
Loans receivable, net of allowance for loan losses of $847
at December 31, 1996 and $810 at September 30, 1996 365,509 354,255
Accrued interest receivable 3,032 3,199
Real estate in foreclosure 86 97
Premises and equipment 3,691 3,780
Deposit base intangible 144 158
Other assets 1,212 1,382
------- -------
$ 484,106 475,862
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits 327,441 302,934
Borrowed funds 97,600 115,300
Advance payments by borrowers for taxes and insurance 4,131 1,953
Other liabilities 5,698 6,847
------- -------
Total liabilities 434,870 427,034
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; authorized 2,500,000
shares; none outstanding - -
Common stock, $.01 par value; authorized 8,000,000 shares;
issued 3,782,350 shares; 2,786,578 and 2,866,108 shares
outstanding at December 31, 1996 and September 30, 1996 38 38
Additional paid-in capital 37,109 37,079
Retained earnings, substantially restricted 28,517 27,851
Treasury stock, at cost (995,772 and 916,242 shares at
December 31, 1996 and September 30, 1996, respectively) (13,973) (12,619)
Common stock acquired by Employee Stock Ownership Plan (1,662) (2,078)
Common stock acquired by Bank Recognition and Retention Plans (644) (708)
Unrealized loss on investment securities available for sale,
less applicable deferred income tax benefit (149) (735)
------- -------
TOTAL STOCKHOLDERS' EQUITY 49,236 48,828
Commitments and contingencies
$ 484,106 475,862
======= =======
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
FIDELITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per sahre data)
<TABLE>
<CAPTION>
Three months ended December 31, 1996 and 1995
1996 1995
(unaudited)
<S> <C> <C>
Interest Income:
Loans receivable $ 6,966 5,473
Investment securities 1,505 1,429
Mortgage-backed securities 376 458
Interest earning deposits 10 22
Federal funds sold 3 22
Investment in mutual funds 42 3
------ ------
8,902 7,407
Interest Expense:
Deposits 3,874 3,462
Borrowed funds 1,472 766
------ ------
5,346 4,228
Net interest income before provision for loan losses 3,556 3,179
Provision for loan losses 39 -
------ ------
Net interest income after provision for loan losses 3,517 3,179
Non-Interest Income:
Fees and commissions 112 96
Insurance and annuity commissions 101 134
Other 12 7
------ ------
225 237
Non-Interest Expense:
General and administrative expenses:
Salaries and employee benefits 1,279 1,219
Office occupancy and equipment 296 299
Data processing 114 110
Advertising and promotions 165 131
Federal deposit insurance premiums 158 161
Other 364 283
------ ------
Total general and administrative expenses 2,376 2,203
Amortization of intangible 14 16
------ ------
2,390 2,219
Income before income taxes 1,352 1,197
Income tax expense 518 465
------ ------
Net income $ 834 732
====== ======
Earnings per share $ .30 .23
====== ======
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
FIDELITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in thousands)
<TABLE>
<CAPTION>
Three months ended December 31, 1996 and 1995
Unrealized
Loss on
Common Common Investment
Additional Stock Stock Securities
Common Paid-In Retained Treasury Acquired Acquired Available
Stock Capital Earnings Stock by ESOP by BRRP's For Sale Total
--- ------ ------- ------- ------ ------ ---- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
September 30, 1995 $ 38 36,795 26,449 (5,978) (2,494) (963) (55) $ 53,792
Net income - - 732 - - - - 732
Purchase of treasury stock
(157 000 shares) - - - (2,448) - - - (2,448)
Cash dividends ($.04 per
share) - - (195) - - - - (195)
Amortization of award of
BRRP's stock - - - - - 64 - 64
Cost of ESOP shares released - - - - 416 - - 416
Market adjustment for
committed ESOP shares - 51 - - - - - 51
Change in unrealized loss
on investment securities
available for sale - - - - - - 224 224
--- ------ ------- ------- ------ ------ ---- -------
Balance at
December 31, 1996 $ 38 36,846 26,986 (8,426) (2,078) (899) 169 $ 52,636
=== ====== ======= ====== ====== ====== ==== =======
Balance at
September 30, 1996 38 37,079 27,851 (12,619) (2,078) (708) (735) 48,828
Net income - - 834 - - - - 834
Purchase of treasury stock
(82,030 shares) - - - (1,389) - - - (1,389)
Cash dividends ($.06 per
share) - - (168) - - - - (168)
Amortization of award of
BRRP's stock - - - - - 64 - 64
Cost of ESOP shares released - - - - 416 - - 416
Exercise of stock options
and reissuance of treasury
shares (2,500 shares) - (10) - 35 - - - 25
Tax benefit related to
stock options exercised - 3 - - - - - 3
Market adjustment for
committed ESOP shares - 37 - - - - - 37
Change in unrealized loss
on investment securities
available for sale - - - - - - 586 586
--- ------ ------- ------- ------ ----- ------- -------
Balance at
December 31, 1996 $ 38 37,109 28,517 (13,973) (1,662) (644) (149) $ 49,236
=== ====== ======= ======= ====== ===== ======= =======
</TABLE>
See accompanying notes to unaudited consolidated financial statements.<PAGE>
<PAGE>
FIDELITY BANCORP, INC.
Consolidated Statements of Cash Flows
(Dollars in thousands)
<TABLE>
<CAPTION>
Three months ended December 31, 1996 and 1995
1996 1995
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 834 732
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation 89 94
Provision for loan losses 39 -
Net amortization and accretion of premiums and discounts 2 148
Amortization of cost of stock benefit plans 64 64
Principal payment on ESOP loan 416 416
Market adjustment for committed ESOP shares 37 51
Deferred loan fees, net of amortization (169) (206)
Amortization of deposit base intangible 14 16
Decrease in accrued interest receivable 167 219
Decrease in other assets 169 221
Increase in current taxes and other liabilities (1,515) 9
-------- ------
Net cash provided by operating activities 147 1,764
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of investment securities - 13,000
Purchase of mutual funds (1) (2)
Purchase of investment securities - (10,000)
Loans originated for investment (22,939) (27,975)
Purchase of premises and equipment - (49)
Principal repayments collected on loans receivable 11,827 13,521
Principal repayments collected on investment securities 1,543 2,062
Principal repayments collected on mortgage-backed
securities 679 930
-------- ------
Net cash used in investing activities (8,891) (8,513)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 24,507 16,699
Increase (decrease) in FHLB advances (17,700) (4,032)
Net increase (decrease) in advance payments
by borrowers for taxes and insurance 2,178 (1,485)
Purchase of treasury stock (1,389) (2,448)
Payment of common stock dividends (168) (195)
Proceeds from exercise of stock options 25 -
-------- ------
Net cash provided by financing activities 7,453 8,539
-------- ------
Net change in cash and cash equivalents (1,291) 1,790
Cash and cash equivalents at beginning of period 4,273 4,115
-------- ------
Cash and cash equivalents at end of period $ 2,982 5,905
======== ======
CASH PAID DURING THE PERIOD FOR:
Interest $ 5,036 4,132
Income taxes 200 170
NON-CASH INVESTING ACTIVITIES-
Loans transferred to real estate in foreclosure $ - 69
======== ======
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
FIDELITY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles (GAAP) for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by GAAP for complete financial statements. In the opinion
of management, all adjustments (consisting of only normal recurring accruals)
necessary for a fair presentation have been included.
The results of operations and other data for the three months ended December
31, 1996 are not necessarily indicative of results that may be expected for the
entire fiscal year ended September 30, 1997.
The unaudited consolidated financial statements include the accounts of
Fidelity Bancorp, Inc. (the "Company") and its wholly-owned subsidiary,
Fidelity Federal Savings Bank and subsidiaries (the "Bank"). All material
intercompany accounts and transactions have been eliminated in consolidation.
(2) Earnings Per Share
Earnings per share of common stock for the quarter ended December 31, 1996 has
been determined by dividing net income by 2,788,414, the weighted average
number of shares of common stock and common stock equivalents outstanding.
Earnings per share of common stock for the quarter ended December 31, 1995 has
been determined by dividing net income by 3,122,190, the weighted average
number of shares of common stock and common stock equivalents outstanding.
Stock options are regarded as common stock equivalents and are therefore
considered in the earnings per share calculations. Common stock equivalents
are computed using the treasury stock method.
(3) Commitments and Contingencies
At December 31, 1996, the Company had outstanding commitments to originate
loans of $2.7 million, of which $188,000 were fixed rate, with rates ranging
from 8.00% to 8.625%, and $2.5 million were adjustable rate commitments.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
GENERAL
The Company's results of operations are dependent on net interest income which
is the difference between interest earned on its loan and investment
portfolios, and its cost of funds, consisting of interest paid on deposits and
borrowed money. The Company also generates non-interest income such as
transactional fees, loan servicing fees, and fees and commissions from the
sales of insurance products and securities through its subsidiary. Operating
expenses primarily consist of employee compensation, occupancy expenses,
federal deposit insurance premiums and other general and administrative
expenses. The results of operations are also significantly affected by general
economic and competitive conditions, particularly changes in market interest
rates, government policies and actions of regulatory authorities.
<PAGE>
LIQUIDITY & CAPITAL RESOURCES
Liquidity management is both a daily and long-term function of management's
strategy. The Company's primary sources of funds are deposits and borrowings,
amortization and prepayment of loan principal and mortgage-backed securities,
maturities of investment securities and operations. While maturing
investments and scheduled loan repayments are relatively predictable, deposit
flows and loan prepayments are greatly influenced by interest rates, floors and
caps on loan rates, general economic conditions and competition. Management
generally manages the pricing of its deposits to be competitive and increase
core deposit relationships, but has from time to time decided not to pay
deposit rates that are as high as those of its competitors and, when necessary,
to supplement deposits with FHLB advances.
Federal regulations require the Bank to maintain minimum levels of liquid
assets. This requirement, which may be varied at the direction of the OTS
depending upon economic conditions and deposit flows, is based upon a
percentage of deposits and short-term borrowings. The current required ratio
is 5.0%. The Bank has historically maintained its liquidity ratio for
regulatory purposes at levels in excess of those required. At December 31,
1996, the Bank's liquidity ratio was 7.90%.
The Company's cash flows are comprised of three classifications: cash flows
from operating activities, cash flows from investing activities, and cash flows
from financing activities. Cash flows from operating activities, consisting
primarily of interest and dividends received less interest paid on deposits. A
one-time special assessment charge of $1.6 million was recorded on September
30, 1996 as the result of legislation passed regarding the Savings Association
Insurance Fund (SAIF). During the three months ended December 31, 1996,
Fidelity paid the SAIF special assessment, thereby reducing the net cash
provided by operating activities to $147,000. Net cash used in investing
activities consisted primarily of disbursements for loan originations and
amortization payments. Net cash used was $8.9 million for the three months
ended December 31, 1996. Net cash provided by financing activities, consisting
of net increases in deposit activity and advance payments of taxes by
borrowers, offset by the paydown of advances and purchase of treasury stock,
amounted to $7.5 million for the three months ended December 31, 1996.
At December 31, 1996, the Company had outstanding loan commitments of $2.7
million. Management anticipates that it will have sufficient funds available
to meet its current loan commitments. Certificates of deposit scheduled to
mature in one year or less from December 31, 1996 totalled $166.9 million.
Management believes that a significant portion of such deposits will remain
with the Bank, and that their maturity and repricing will not have a material
adverse impact.
The Bank's Tangible and Leverage Capital ratio at December 31, 1996 was 8.39%.
This exceeded the Tangible Capital requirement of 1.5% of adjusted assets and
the Core ("Leverage") Capital requirement of 3% of adjusted assets by $32.9
million and $25.7 million, respectively. The Bank's Risk-based Capital ratio
was 15.2% at December 31, 1996 which exceeds the Risk-based Capital requirement
of 8% of Risk-weighted assets by $22.4 million.
CHANGES IN FINANCIAL CONDITION
Total assets at December 31, 1996 increased $8.2 million to $484.1 million from
$475.9 at September 30, 1996. Net loans receivable totalled $365.5, a 3.2%
increase over the balance at September 30, 1996. Loan originations in the
<PAGE>
first quarter amounted to $22.9 million.
Total deposits increased $24.5 million to $327.4 million at December 31, 1996
compared to the balance of $302.9 million at September 30, 1996 due to planned
efforts to grow the Company's retail franchise. Fidelity's two newest offices,
in Chicago and Schaumburg, contributed nearly 50% of the increased deposits.
Book value per share on December 31, 1996 increased to $17.67, a $0.63 increase
over $17.04 at September 30, 1996.
ASSET QUALITY
As of December 31, 1996, the Company had non-performing assets of $3.1 million.
Classified loans of $1.1 million were categorized as substandard, consisting of
3 residential mortgage loans, 2 commercial loans, and 3 unsecured lines of
credit. In addition to the mortgage and consumer portfolio, the Company
classified its investment in commercial leases as substandard. There were no
assets classified as doubtful.
From October 1994 through January 1995, the Company purchased 454 full-payout
commercial equipment leases located in various parts of the country with
original aggregate outstanding principal balances of $3.0 million. Since that
time normal lease payments had reduced the aggregate outstanding balance to
$2.0 million at February 29, 1996. These leases were all originated by,
serviced by, and financially guaranteed by Bennett Funding Group of Syracuse,
New York ("BFG"). On March 29, 1996 it was reported that BFG was the target of
a civil complaint filed by the Securities and Exchange Commission. On that
same date, BFG filed a Chapter 11 bankruptcy petition in the Northern District
of New York and halted payments on the lease agreements. The Bankruptcy
Trustee is currently collecting the lease payments from the lessees and holding
them in escrow pending the outcome of the litigation concerning BFG, its
creditors, and related issues. This disruption of payment flows from the
servicer, BFG, has caused the Company to classify all the leases as
substandard, place them on non-accrual status and to categorize them as non-
performing and impaired.
The Company is vigorously pursuing available legal remedies in an attempt to
protect and collect amounts due under the terms of the underlying leases. The
substance of the Company's claims center on the assertion that it has a
perfected security interest in the leases and the proceeds thereof. The
Trustee disagrees. The opinion of the Company's bankruptcy counsel at this
time is that the Company's position should ultimately prevail. There can be no
assurance, however, of the actual results of this legal process or the extent
of the Company's recovery, if any.
Management has estimated what is believed to be the realizable value of the
leases and established a valuation allowance of $406,000. In the event that
the outcome of the litigation is not favorable, i.e. the Company's status is
that of an unsecured creditor, the recovery may be substantially smaller. Any
recovery by the Company of less than the net book value of the leases will
cause additional losses to the Company.
STOCK REPURCHASE
On November 26, 1996, the Company completed its sixth repurchase program. As a
component of its strategy to build shareholder value, the Company has repur-
chased 1,002,472 shares, at an average cost of $14.03 through December 31,
1996.
<PAGE>
AVERAGE BALANCE SHEET
The following table sets forth certain information relating to the Company's
average balance sheet and reflects the average yield on assets and average cost
of liabilities for the periods indicated. Such yields and costs are derived by
dividing income or expense by the average balance of assets or labilities,
respectively, for the periods shown. Average balances are derived from average
daily balances. The yields and costs include fees, which are considered
adjustments to yields.
<TABLE>
<CAPTION>
Three months ended December 31,
At December 31, 1996 1996 1995
Average Average
Yield/ Average Int- Yield/ Average Int- Yield/
Balance Cost Balance erest Cost Balance erest Cost
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans, net $ 365,509 7.75% 359,777 6,966 7.74% 271,908 5,473 8.05%
Mortgage-backed securities 20,989 7.18% 21,359 376 7.04% 26,115 458 7.02%
Interest-bearing deposits 673 5.59% 778 10 5.14% 1,531 22 5.75%
Investment securities,
mutual funds, and
federal funds sold 86,661 7.07% 86,860 1,549 7.13% 85,722 1,454 6.78%
-------- ----- ------- ----- ---- ------- ----- -----
Total interest-earning assets 473,832 7.60% 468,774 8,901 7.60% 385,276 7,407 7.69%
Non-interest earning assets 10,274 11,936 12,727
-------- ------- -------
Total assets $ 484,106 480,710 398,003
======== ======= =======
Interest-bearing liabilities:
Deposits:
Savings account 88,064 3.42% 69,448 524 3.02% 79,762 596 2.99%
Money market accounts 33,304 3.35% 32,631 281 3.44% 34,014 319 3.75%
Certificate accounts 201,387 5.83% 211,693 3,069 5.80% 164,868 2,547 6.18%
-------- ----- ------- ----- ---- ------- ----- -----
Total deposits 322,755 4.92% 313,772 3,874 4.94% 278,644 3,462 4.97%
Borrowed funds 97,600 6.01% 103,645 1,472 5.68% 51,525 766 5.95%
-------- ----- ------- ----- ---- ------- ----- -----
Total interest-bearing
liabilities 420,355 5.17% 417,417 5,346 5.12% 330,169 4,228 5.12%
Non-interest bearing deposits 4,686 4,530 4,695
Other liabilities 9,829 9,462 9,876
-------- ------- -------
Total liabilities 434,870 431,409 344,740
Stockholders' equity 49,236 49,301 53,263
-------- ------- -------
Total liabilities and
stockholders' equity $ 484,106 480,710 398,003
Net interest income/interest
rate spread (1) 2.43% 3,555 2.48% 3,179 2.57%
Net earning assets/net
interest margin (2) $ 53,477 51,357 3.03% 55,107 3.30%
Ratio of interest-earning
assets to interest-bearing
liabilities 1.13x 1.12x 1.17x
</TABLE>
(1) Interest rate spread represents the difference between the average rate on
interest-earning assets and the average cost of interest bearing
liabilities.
(2) Net interest margin represents net interest income divided by average
interest-earning assets.<PAGE>
<PAGE>
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31, 1996
AND DECEMBER 31, 1995
GENERAL. Net income for the three months ended December 31, 1996 was $834,000,
an increase of 13.9% from the net income of $732,000 for the same period last
year. The increase in earnings this quarter was primarily the result of higher
interest income on loans receivable, which was $7.0 million for the quarter.
INTEREST INCOME. Total interest income increased 20.2% or $1.5 million to $8.9
million for the quarter ended December 31, 1996. The average balance of loans
increased 32.3% to $359.8 million compared to the average for the first quarter
one year ago. The yield on loans, including non-performing commercial lease of
$2.0 million, decreased 31 basis points. The increase in loan interest income
was primarily a result of higher loan volumes.
INTEREST EXPENSE. In addition to significant increase in loans, the Bank's
average interest-bearing deposits rose 12.6% to $313.8 million from $278.6 one
year ago. Interest cost has remained stable at 4.9%. Interest expense on
deposits increased from $3.5 million to $3.9 million for the three months ended
December 31, 1996 compared to the same quarter in fiscal 1996. The Bank
reduced its FHLB of Chicago advances during the quarter, however the average
advances outstanding has more than doubled compared to the same quarter one
year ago. The Bank's ability to borrow utilizing FHLB Community Investment
Program advances helped lower the average cost of advances by 27 basis points
to 5.68% in fiscal 1997.
PROVISION FOR LOAN LOSSES. The Company recorded an $39,000 provision for loan
losses in the first quarter of 1997, as compared to no provision in its
comparable period of fiscal 1996. The provision for the loan losses reflects
management's on-going evaluation of losses on loans and the adequacy of the
allowance for loan losses based on all pertinent considerations, including
current market conditions.
NON-INTEREST INCOME. Non-interest income remained stable at approximately
$230,000. The $33,000 decrease in insurance and annuity commissions is due to
a general slow-down of activity transacted through INVEST financial
corporation. The Bank's insurance subsidiary offers a variety investment
products to our customers through INVEST.
NON-INTEREST EXPENSE. Non-interest expense for the first quarter 1997 rose
$171,000 to $2.4 million as a result of franchise expansion. Despite the
significant growth in the Company's balance sheet, general and administrative
costs have only modestly increased. Operating expenses as a percent of average
assets for the quarters ended December 31, 1996 and 1995 decreased to 1.99%
from 2.23%. Slight increases were noted in other general and administrative
expenses.
INCOME TAXES. Income taxes increased $53,000 for the three months ended
December 31, 1996 to $518,000 versus $465,000 for the prior year due to a 12.9%
increase in pre-tax income.<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Bank is involved in legal proceedings regarding the Bennett Funding Group
("BFG") bankruptcy proceedings, in which the Bank has an investment in
commercial leases guaranteed by BFG. The Bankruptcy Trustee has filed an
adversary complaint against the Bank for claimed violations of the automatic
stay provisions of the bankruptcy code with respect to post-petition collection
efforts of the Bank. The monies collected by the Bank, aggregating
approximately $60,000, have since been remitted to the Trustee's escrow account
after obtaining assurances from the court that the funds would be protected
pending the outcome of the litigation. The Trustee's claim for $10 million for
sanctions and actual damages based on the Bank's post-petition collection
activity is also being vigorously contested. The Trustee has also filed an
adversary proceeding against 60 banks, including the Bank, asserting various
causes of action. The results of these adversary proceeding are not expected
to have a material adverse impact on the Company.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
On October 21, 1996, the Company announced under Item 5 of Form 8-K that its
1997 annual meeting of shareholders will be held on January 29, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Fidelity Bancorp, Inc.
Dated: January 22, 1997 /s/ RAYMOND S. STOLARCZYK
---------------- --------------------------
Raymond S. Stolarczyk
Chairman and Chief Executive Officer
Dated: January 22, 1997 /s/ JAMES R. KINNEY
---------------- --------------------------
James R. Kinney
Sr. V. P. and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Condition at December 31, 1996 (unaudited) and the
Consolidated Statement of Earnings for the three months ended December 31, 1996
(unaudited) and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> DEC-31-1996
<CASH> 2109
<INT-BEARING-DEPOSITS> 673
<FED-FUNDS-SOLD> 200
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 80666
<INVESTMENTS-CARRYING> 26784
<INVESTMENTS-MARKET> 27038
<LOANS> 366356
<ALLOWANCE> 847
<TOTAL-ASSETS> 484106
<DEPOSITS> 327441
<SHORT-TERM> 59600
<LIABILITIES-OTHER> 9829
<LONG-TERM> 38000
0
0
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