SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarterly Period Ended June 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
Commission File Number: 0-26196
FIDELITY FINANCIAL BANKSHARES CORPORATION
(exact name of registrant as specified in its charter)
Virginia 54-1746028
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation)
2809 Emerywood Parkway, Suite 500, Richmond, VA 23294_
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number - (804) 756-0200
Indicate the number of shares outstanding of each of the issuer's classes of
capital stock, as of the latest practicable date:
Common Stock, Par Value $1.00 per share,
2,291,681 shares outstanding as of August 8,
1996
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceeding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirement for the past 90 days.
Yes X No
--------------------
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION
INDEX
PART I - FINANCIAL INFORMATION
Page Number
ITEM 1 Consolidated Financial Statements
Consolidated Statements of Financial Condition 3
Consolidated Statements of Earnings 4-5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7-9
ITEM 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 10 - 12
PART II - OTHER INFORMATION
ITEM 1 Legal Proceedings 13
ITEM 2 Changes in Securities 13
ITEM 3 Defaults Upon Senior Securities 13
ITEM 4 Submission of Matters to a Vote of Security Holders 13
ITEM 5 Other Information 14
ITEM 6 Exhibits and Reports on Form 8-K 14
SIGNATURES
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except share data)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------------- ---------------
ASSETS (unaudited)
<S> <C> <C>
Cash and due from banks $ 4,170 $ 5,067
Investment securities available-for-sale 32,103 36,649
Investment securities held-to-maturity 4,482 6,462
Mortgage-backed securities available-for-sale 8,382 4,871
Loans receivable, net 259,005 247,194
Loans receivable held-for-sale 7,429 4,147
Real estate acquired in settlement of loans, net 953 822
Premises and equipment, net 4,648 4,681
Accrued interest receivable 2,156 2,108
Prepaid expenses and other assets 2,486 2,412
-------------- ---------------
$ 325,814 $ 314,413
============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $ 245,359 $ 239,121
Advances from the Federal Home Loan Bank 46,451 37,210
Securities sold under agreements to repurchase 2,915 8,115
Advance payments by borrowers for taxes and insurance 564 867
Other liabilities 2,515 2,263
-------------- ---------------
Total Liabilities 297,804 287,576
-------------- ---------------
STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value per share (1,000,000
shares authorized; none issued) - -
Common stock, $1.00 par value per share
(4,000,000 sharesauthorized; 2,291,681 and
2,276,992 shares issued andoutstanding at
June 30, 1996and December 31, 1995,respectively) 2,292 2,277
Additional paid-in capital 9,635 9,632
Retained earnings 16,342 14,912
Net unrealized gain(loss) on securities
available-for-sale (259) 16
------------- --------------
Total Stockholders' Equity 28,010 26,837
-------------- -------------
$ 325,814 $ 314,413
============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
(Dollars in thousands, except per share data)
Three Months Ended
June 30,
--------------------------
1996 1995
------------- --------------
(unaudited) (unaudited)
<S> <C> <C>
Interest Income
Real estate loans $ 4,925 $ 4,854
Other loans 914 897
Mortgage-backed securities 157 96
Investment securities 254 269
Other investments 326 273
----------- -----------
Total interest income 6,576 6,389
----------- -----------
Interest Expense
Deposits 2,925 2,764
Short-term borrowings 293 367
Long-term borrowings 330 373
----------- -----------
Total interest expense 3,548 3,504
----------- -----------
Net Interest Income 3,028 2,885
Provision for loan losses 75 87
----------- -----------
Net Interest Income After Provision for Loan Losses 2,953 2,798
----------- -----------
Noninterest income
Gain (loss) on loans and mortgage-backed
securities, net 26 (16)
Gain on sale of investment securities
available-for-sale, net - -
Operations of real estate acquired in
settlement of loans (11) (2)
Other 190 175
----------- -----------
Total noninterest income 205 157
----------- -----------
Noninterest expense
Compensation and employee benefits 1,030 977
Occupancy and equipment 340 320
FDIC insurance premiums 136 120
Data processing services 75 109
Professional services 37 31
Marketing 22 18
Other 170 118
----------- -----------
Total noninterest expense 1,810 1,693
----------- -----------
Earnings Before Income Tax Expense 1,348 1,262
Income tax expense 493 461
----------- -----------
Net Earnings $ 855 $ 801
=========== ===========
Net Earnings Per Share $ .38 $ .37
=========== ===========
Dividends Declared Per Share $ .05 $ .04
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------------
1996 1995
------------- ------------
(unaudited) (unaudited)
<S> <C> <C>
Interest Income
Real estate loans $ 9,740 $ 9,340
Other loans 1,824 1,837
Mortgage-backed securities 257 193
Investment securities 555 542
Other investments 657 529
---------- ----------
Total interest income 13,033 12,441
---------- ----------
Interest Expense
Deposits 5,858 5,255
Short-term borrowings 550 617
Long-term borrowings 727 774
---------- ----------
Total interest expense 7,135 6,646
---------- ----------
Net Interest Income 5,898 5,795
Provision for loan losses 160 195
---------- ----------
Net Interest Income After Provision for Loan Losses 5,738 5,600
---------- ----------
Noninterest income
Gain (loss) on loans and mortgage-backed
securities, net 68 (64)
Gain on sale of investment securities
available-for-sale, net 26 -
Operations of real estate acquired in
settlement of loans (12) (2)
Other 346 338
---------- ----------
Total noninterest income 428 272
---------- ----------
Noninterest expense
Compensation and employee benefits 2,046 1,982
Occupancy and equipment 673 640
FDIC insurance premiums 271 239
Data processing services 194 232
Professional services 80 69
Marketing 31 47
Other 291 241
---------- ----------
Total noninterest expense 3,586 3,450
---------- ----------
Earnings Before Income Tax Expense 2,580 2,422
Income tax expense 945 886
---------- ----------
Net Earnings $ 1,635 $ 1,536
========== ==========
Net Earnings Per Share $ .72 $ .69
========== ==========
Dividends Declared Per Share $ .09 $ .08
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
Six Months Ended
June 30,
-----------------------------------
1996 1995
-------------- ------------
<S> <C> <C> <C> <C> <C> <C>
(unaudited) (unaudited)
Operating activities
Net income $ 1,635 $ 1,536
Adjustments to reconcile net income to
net cash absorbed by operating activities:
Provision for loan losses 160 195
Depreciation and amortization 235 236
Originations of loans held-for-sale (20,542) (6,360)
Purchase of mortgage-backed securities (3,815) -
Proceeds from sale of loans held-for-sale 2,149 1,924
Proceeds from sale of mortgage-backed
securities available for sale 11,480 -
(Increase) decrease in prepaid expenses
and other assets (131) 219
Decrease in excess servicing 9 33
Increase in deferred loan fees 70 49
Increase in other liabilities 252 221
Other, net 22 (19)
------------ ------------
Net cash absorbed by operating activities (8,476) (1,966)
------------ ------------
Investing activities
Maturities of investment securities 2,000 -
Purchase of investment securities (2,000) -
Proceeds from sales of investment securities 3,000 -
Loan and mortgage-backed securities principal
repayments 72,252 51,476
Loan disbursements (80,627) (62,601)
Loans purchased - (3,445)
Redemption of stock in FHLB - 127
Purchase of premises and equipment, net of disposals (194) (145)
------------ ------------
Net cash absorbed by investing activities (5,569) (14,588)
------------ ------------
Financing activities
Cash dividends paid (182) (177)
Exercise of stock options 18 155
Net increase in deposits 6,238 16,495
Net increase (decrease) in short-term borrowings (5,200) 8,434
Proceeds from FHLB advances 38,441 36,615
Repayment of FHLB advances (29,200) (41,050)
Decrease in advance payments by borrowers for
taxes and insurance (303) (207)
------------ ------------
Net cash provided by financing activities 9,812 20,265
------------ ------------
Increase (decrease) in cash and cash equivalents (4,233) 3,711
Cash and cash equivalents at beginning of period 31,558 19,671
------------ ------------
Cash and cash equivalents at end of period $ 27,325 $ 23,382
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
1. Consolidated Financial Statements
The accompanying consolidated financial statements include the accounts
of Fidelity Financial Bankshares Corporation and its wholly-owned
subsidiary, Fidelity Federal Savings Bank and its wholly-owned,
subsidiary Fidelity Service Corporation (collectively "the
Corporation"). All significant intercompany balances and transactions
have been eliminated in consolidation.
The reorganization of Fidelity Federal Savings Bank ( the "Bank") into
the holding company form of ownership was completed effective May 26,
1995, following regulatory and stockholder approval. The financial
statements presented are the unaudited consolidated financial
statements of the Corporation as if the reorganization had already
taken place.
Earnings per share of common stock are computed based on the weighted
average number of shares outstanding for the period. The weighted
average number of shares outstanding were 2,287,238 and 2,252,695 for
the three months ended June 30, 1996 and 1995, respectively. For the
six months ended June 30, 1996 and 1995 the weighted average number of
shares outstanding were 2,283,097 and 2,245,776, respectively.
2. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
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 generally accepted
accounting principles for complete financial statements.
In the opinion of management of the Corporation, all adjustments (which
include only normal recurring accruals) necessary for a fair
presentation of the consolidated financial statements have been
included. The results of operations for the three month and six month
periods ended June 30, 1996 are not necessarily indicative of the
results which may be expected for the entire year. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Corporation's annual report for the
year ended December 31, 1995.
3. Stockholders' Equity and Dividend Restrictions
Payment of dividends to the Corporation by the Bank is limited by
federal regulations. See Note 13 in Notes to Consolidated Financial
Statements of the 1995 annual report for information regarding payment
of cash dividends.
On April 30, 1996, the Bank paid to stockholders of record April 16,
1996, a quarterly cash dividend of $.04 per share. On June 24, 1996,
the Board of Directors declared a quarterly cash dividend of $.05 per
share, payable July 31, 1996 to stockholders of record July 17, 1996.
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
4. Supplemental Disclosures of Cash Flow Information
Total interest paid for the three months ended June 30, 1996 and 1995
was $3,608,000 and $3,492,000, respectively. For the six months ended
June 30, 1996 and 1995, total interest paid was $7,195,000 and
$6,638,000, respectively.
Total income taxes paid for the three months ended June 30, 1996 were
$739,000 as compared to $796,000 for the three months ended June 30,
1995. Total income taxes paid for the six months ended June 30, 1996
and June 30, 1995 were $739,000 and $796,000, respectively.
Loans receivable exchanged for mortgage-backed securities totaled
$5,088,000 and none for the three months ended June 30, 1996 and 1995,
respectively. For the six months ended June 30, 1996 and 1995, loans
receivable exchanged for mortgage-backed securities totaled $10,647,000
and none, respectively.
Real estate acquired in settlement of loans during the three months and
six months ended June 30, 1996 was none and $132,000 as compared to
none for both comparable periods in 1995.
For purposes of reporting cash flows, cash and cash equivalents include
cash, adjustable rate mortgage mutual funds, FHLB overnight funds, and
federal funds.
5. Loans Receivable
<TABLE>
June 30, December 31,
----------------------------------
(Dollars in thousands) 1996 1995
------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
(unaudited)
Real estate loans
First mortgage conventional
One to four family $ 113,481 $ 107,103
Multifamily 12,788 12,240
Nonresidential 47,678 46,415
Construction and development 68,816 61,103
Second mortgage conventional 862 750
---------- -----------
Total real estate loans 243,625 227,611
Less
Loans in process 21,184 17,467
Deferred loan fees, net 836 754
Allowance for loan losses 1,698 2,032
---------- -----------
Net real estate loans 219,907 207,358
---------- -----------
Other Loans
Consumer and installment 16,535 16,991
Commercial 23,811 23,723
---------- -----------
Total other loans 40,346 40,714
Less
Deferred loan fees, net (164) (152)
Allowance for loan losses 1,412 1,030
---------- -----------
Net other loans 39,098 39,836
---------- -----------
$ 259,005 $ 247,194
========== ===========
</TABLE>
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
6. Impaired Loans
As of January 1, 1995, the Corporation adopted Statement of Financial
Accounting Standards (SFAS) No. 114 Accounting by Creditors for
Impairment of a Loan, as amended by SFAS No. 118. Under the new
standard, a loan is considered impaired, based on current information
and events, if it is probable that the Corporation will be unable to
collect the scheduled payments of principal or interest when due
according to the contractual terms of the loan agreement. The
measurement of impaired loans is generally based on the present value
of expected future cash flows discounted at the historical effective
interest rate, except that all collateral-dependent loans are measured
for impairment based on the fair value of the collateral.
As of June 30, 1996 the Corporation's recorded investment in loans for
which impairment has been recognized in accordance with SFAS No. 114
totaled $650,000, as compared to none for the same period in 1995. For
the quarters ended June 30, 1996 and 1995, the average recorded
investment in impaired loans was $650,000 and none, respectively. For
the six months ended June 30, 1996 and 1995, the average recorded
investment in impaired loans was $434,000 and none, respectively. For
the quarter and six months ended June 30, 1996, interest income
recognized on impaired loans totaled $13,000 and $17,000, respectively,
as compared to none for the two comparable periods in 1995.
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JUNE 30, 1996
Fidelity Financial Bankshares Corporation was incorporated in Virginia in 1995
to serve as the holding company of the Bank. The stockholders of the Bank
approved the Plan of Reorganization at the Annual Meeting on April 25, 1995, and
the reorganization was consummated on May 26, 1995 with the Bank becoming the
wholly-owned subsidiary of Fidelity Financial Bankshares Corporation. The Bank,
incorporated in 1986, is a federally chartered capital stock savings bank with
its principal offices in Richmond, Virginia.
This Management's Discussion and Analysis should be read in conjunction with
Management's Discussion and Analysis contained in the Corporation's annual
report to stockholders, which focuses upon relevant matters occurring during the
year commencing January 1, 1995 and ending December 31, 1995. The ensuing
discussion focuses upon material matters as of and for the three months and six
months ended June 30, 1996.
FINANCIAL CONDITION AND CAPITAL ADEQUACY
FINANCIAL CONDITION
Assets of the Corporation were $325.8 million at June 30, 1996, an increase of
4% over assets of $314.4 million at December 31, 1995. Loans receivable and
mortgage-backed securities totaled $274.8 million at June 30, 1996, an increase
of 7% over loans receivable and mortgage-backed securities of $256.2 million at
December 31, 1995. Deposits increased 3% from $239.1 million at December 31,
1995, to $245.4 million at June 30, 1996. Stockholders' equity totaled $28.0
million at June 30, 1996, which represents a book value of $12.22 per share.
Loan disbursements increased sharply during the three and six months ended June
30, 1996 as compared to the same period in 1995. Closings were $60.3 million for
the quarter ended June 30, 1996, as compared to $44.5 million for the same
period of 1995. For the six months ended June 30, 1996, loan disbursements
totaled $107.8 million, increasing from $74.7 million for the comparable period
of 1995. Such increase resulted from stronger loan demand in several areas.
Deposit growth has occurred as the Bank has aggressively priced its six month
and longer certificates of deposit. Of the $6.2 million growth in deposits for
the six months, the nine month and longer certificates increased $5.3 million,
while certificates under nine months and transaction accounts and money market
deposit accounts collectively increased $.9 million.
CAPITAL ADEQUACY
The following regulatory capital requirements of the Bank are based on analysis
of the applicable regulations, but interpretative guidance may alter the Bank's
analysis. Based upon the following levels of regulatory capital the Bank
continues to meet the regulatory definition of "well capitalized." This
classification is determined solely for the purposes of applying certain
regulations and may not constitute an accurate representation of the Bank's
overall financial condition.
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JUNE 30, 1996
CAPITAL ADEQUACY, (Continued)
At June 30, 1996, the Bank's tangible capital totaled $26,077,000, (8.01% of
adjusted assets) which exceeded the regulatory requirement of $4,883,000, (1.50%
of adjusted assets) by $21,194,000.
The Bank's core capital at June 30, 1996, totaled $26,077,000, (8.01% of
adjusted assets) which exceeded the regulatory requirement of $9,766,000 (3.00%
of adjusted assets) by $16,311,000.
The risk-based capital of the Bank was $28,435,000 (12.35% of risk-weighted
assets) at June 30, 1996, which exceeded the regulatory requirement of
$18,426,000 (8.00% of risk-weighted assets) by $10,009,000.
RESULTS OF OPERATIONS
Net earnings for the quarter ended June 30, 1996, increased 7% to $855,000 or
$.38 per share as compared to $801,000 or $.37 per share for the comparable
period in 1995. Net earnings for the six months ended June 30, 1996 increased 6%
to $1,635,000, or $.72 per share as compared to $1,536,000 or $.69 per share for
the same period in 1995.
Net interest income increased 5% from $2,885,000 in the second quarter of 1995
to $3,028,000 in the comparable period of 1996. Such increase occurred because
the net interest margin increased from 3.93% in the second quarter of 1995 to
3.95% in the second quarter of 1996, and average interest-earning assets
increased from $294.7 million in the second quarter of 1995 to $308.0 million in
1996. For the six months ended June 30, 1996, net interest income increased 2%
from $5,795,000 in 1995 to $5,898,000 in 1996, due to the increase in average
interest earning assets from $288.8 million in 1995 to $305.5 million in 1996,
which more than offset a decrease in the net interest margin from 4.05% in 1995
to 3.88% in 1996. The net interest margin is expected to increase slightly
during the remainder of 1996, primarily because of adjustable rate loans
originated below the fully indexed rate, adjusting to higher levels.
Nonperforming assets increased to $3.6 million or 1.11% of assets at June 30,
1996 from $2.9 million or .91% of assets at December 31, 1995; however,
nonperforming assets decreased slightly from the March 31, 1996 level of $3.7
million of 1.16% of assets. These nonperforming assets consist of real estate
acquired in settlement of loans of $1.0 million and nonperforming loans of $2.6
million.
The provision for loan losses was $75,000 for the second quarter of 1996, as
compared to $87,000 for the comparable period in 1995. During the second quarter
of 1996, there were net loan chargeoffs totaling $115,000 as compared to none
for the second quarter of 1995. For the six months ended June 30, 1996, the
provision for loan losses was $160,000 as compared to $195,000 for the same
period in 1995. Net loan charge-offs for the six months ended June 30, 1996 were
$112,000 compared to $82,000 in 1995. The total allowance for loan losses at
June 30, 1996 was $3,110,000 or 1.15% of loans receivable, as compared to
$3,062,000 or 1.20% of loans receivable at December 31, 1995. The total
allowance for loan losses amounted to 86% of nonperforming assets and 117% of
nonperforming loans at June 30, 1996.
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
JUNE 30, 1996
RESULTS OF OPERATIONS, (Continued)
Noninterest income for the quarter ended June 30, 1996 was $205,000, compared to
$157,000 for the second quarter of 1995. For the quarter ended June 30, 1996,
gains on the sale of loans and mortgage-backed securities were $26,000 compared
to a loss of $16,000 in 1995. For the six months ended June 30, 1996, gains on
sale of loans and mortgage-backed securities totaled $68,000 as compared to a
loss of $64,000 in 1995. For the six months ended June 30, 1996, the Bank had
gains on sale of investment securities of $26,000, compared to none during the
same period of 1995.
Noninterest income for the quarter ended June 30, 1996 was $205,000 increasing
from $157,000 for the quarter ended June 30, 1995. The primary reason for such
increase was a gain on the sale of loans and mortgage-backed securities of
$26,000 in 1996, compared to a loss of $16,000 in 1995.
Noninterest income for the six months ended June 30, 1996 was $428,000
increasing from $272,000 for the same period in 1995. The primary reason for
such increase was the gain on sale of loans and mortgage-backed securities of
$68,000 in 1996, compared to a loss of $64,000 in 1995. In addition, the gain on
sale of investment securities was $26,000 in 1996 compared to none in 1995.
Noninterest expenses were $1,810,000 for the three months ended June 30, 1996,
increasing 7% from $1,693,000 for the same period in 1995. Noninterest expenses
for the six months ended June 30, 1996 were $3,586,000, increasing 4% from
$3,450,000 in 1995.
Income tax expense for the quarter ended June 30, 1996 was $493,000 or an
effective rate of 36.6% as compared to $461,000 or an effective rate of 36.5%
for the comparable period in 1995. For the six months ended June 30, 1996,
income tax expense was $945,000 or an effective rate of 36.6%, compared to
$886,000 or an effective rate of 36.6% for the same period in 1995.
LIQUIDITY
Liquidity represents the Bank's ability to fund loans and withdrawals of
deposits. Total assets qualifying as regulatory liquidity as of June 30, 1996
were $21.4 million. This is $7.9 million in excess of the regulatory required
liquidity amount of $13.5 million. The Bank is in compliance with all regulatory
liquidity requirements at June 30, 1996.
The Bank increased its advances from the FHLB and other borrowings by $4.0
million from December 31, 1995 to June 30, 1996. Such increase in borrowings was
used to fund the growth in loans receivable and mortgage-backed securities.
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is not engaged in any material legal proceedings at the present
time.
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
(a) On April 23, 1996, the Corporation held its annual meeting of
stockholders.
(b) At the annual meeting, Messrs. Clements, Evins, Laughon and Smith were
elected as directors for a term of three years. The nominees and the votes cast
in connection with such nominees were as follows:
----------------------------- -------------------- -------------------------
Votes For Votes Withheld
1. Clements 1,795,454 5,378
2. Evins 1,795,425 5,407
3. Laughon 1,794,883 5,949
4. Smith 1,794,787 6,045
----------------------------- ------------------------- --------------------
Directors Blankenship, Crawford, Farmer, Martin,
November, Pollard, Ward, and Watts continued in their
terms as directors.
(c) In addition to the election of directors, the stockholders approved
certain other proposals. These proposals and the votes cast in connection with
such proposals were as follows:
Votes Votes
Votes For Against Abstained
----- -------------------------------- --------------- ------------ ----------
----- -------------------------------- --------------- ------------ ----------
1. Ratification of the
appointment of KPMG Peat
Marwick LLP to be
independent auditors for 1996.
1,793,948 3,627 3,257
----- -------------------------------- --------------- ------------ ----------
<PAGE>
FIDELITY FINANCIAL BANKSHARES CORPORATION AND SUBSIDIARY
PART II - OTHER INFORMATION
ITEM 5. Other Information
Not Applicable
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits Are Not Applicable
(b) No form 8-K filed during the quarter ended June 30, 1996
<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 FINANCIAL BANKSHARES CORPORATION
/s/ Barry D. Crawford
Barry D. Crawford
President, Principal Executive Officer
and a Director
DATE: August 9, 1996
/s/ Gerald L. Martin
Gerald L. Martin
Executive Vice President, Principal
Financial Officer, Treasurer and a
Director
DATE: August 9, 1996
/s/ William S. Miller, Jr.
William S. Miller, Jr.
Principal Accounting Officer
DATE: August 9, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Jun-30-1996
<CASH> 4,170
<INT-BEARING-DEPOSITS> 233,373
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 40,485
<INVESTMENTS-CARRYING> 4,482
<INVESTMENTS-MARKET> 4,497
<LOANS> 266,434
<ALLOWANCE> 3,110
<TOTAL-ASSETS> 325,814
<DEPOSITS> 245,359
<SHORT-TERM> 21,356
<LIABILITIES-OTHER> 3,079
<LONG-TERM> 28,010
0
0
<COMMON> 2,292
<OTHER-SE> 25,718
<TOTAL-LIABILITIES-AND-EQUITY> 325,814
<INTEREST-LOAN> 11,564
<INTEREST-INVEST> 1,469
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 13,033
<INTEREST-DEPOSIT> 5,858
<INTEREST-EXPENSE> 7,135
<INTEREST-INCOME-NET> 5,898
<LOAN-LOSSES> 160
<SECURITIES-GAINS> 26
<EXPENSE-OTHER> 3,586
<INCOME-PRETAX> 2,580
<INCOME-PRE-EXTRAORDINARY> 2,580
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,635
<EPS-PRIMARY> 0.72
<EPS-DILUTED> 0.72
<YIELD-ACTUAL> 3.88
<LOANS-NON> 2,668
<LOANS-PAST> 0
<LOANS-TROUBLED> 650
<LOANS-PROBLEM> 1,376
<ALLOWANCE-OPEN> 3,062
<CHARGE-OFFS> 139
<RECOVERIES> 27
<ALLOWANCE-CLOSE> 3,110
<ALLOWANCE-DOMESTIC> 3,110
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
