PITTSBURGH, PA, January 20, 2012 -- Fidelity Bancorp, Inc. of Pittsburgh, Pennsylvania (NASDAQ: FSBI), the holding company for Fidelity Bank reported net income for the three-month period ended December 31, 2011 of $565,000 or $0.15 per share (diluted), compared to a net loss of $135,000 or ($0.08) per share (diluted) in the prior year quarter. The $700,000 increase in net income primarily reflects an increase in other income of $1.1 million and a decrease in operating expenses of $115,000, partially offset by a decrease in net interest income of $86,000, an increase in the provision for loan losses of $50,000, and an increase in income tax provision of $367,000. Included in other income for the three months ended December 31, 2011 were other-than-temporary impairment charges (“OTTI”) of $52,000 compared to $1.1 million recognized in the prior year period. Annualized return on assets was 0.34% and return on equity was 4.46% for the fiscal 2011 period, compared to (0.08%) and (1.09%), respectively, for the same period in the prior year. 

The Company's net interest income before provision for loan losses decreased $86,000 or 2.3% to $3.6 million for the quarter ended December 31, 2011, compared to $3.7 million in the prior year period. The decrease reflects a decrease in net interest-earning assets, partially offset by an increase in the interest rate spread. The Company’s tax equivalent interest rate spread increased to 2.23% for the three months ended December 31, 2011 compared to 2.14% in the prior year. 

The provision for loan losses was $350,000 for the quarter ended December 31, 2011, compared to $300,000 for the prior year quarter. The provision for loan losses is charged to operations to bring the total allowance for loan losses to a level that reflects management’s best estimates of the losses inherent in the portfolio. When determining the provision for loan losses, the Company considers a number of factors some of which include specific credit reviews, non-performing, delinquency and charge-off trends, concentrations of credit, loan volume trends and broader local and national economic trends. Net charge-offs for the three-months ended December 31, 2011 were $1.4 million compared to $156,000 in the prior year period. Non-performing assets and foreclosed real estate were 2.19% of total assets at December 31, 2011, and the allowance for loan losses was 67.4% of non-performing loans and 1.35% of gross loansat that date. Non-performing assets and foreclosed real estate were 1.49% of total assets at September 30, 2011, and the allowance for loan losses was 84.5% of non-performing loans and 1.64% of gross loans at that date. Non-performing assets increased $4.6 million from September 30, 2011, primarily due to four commercial real-estate loans totaling $4.7 million that were performing at September 30, 2011, however, were non-performing at December 31, 2011. Non-performing assets and foreclosed real estate were 1.89% of total assets at December 31, 2010, and the allowance for loan losses was 48.8% of non-performing loans and 1.62% of gross loansat that date. 

Total assets were $660.9 million at December 31, 2011, a decrease of $6.0 million or 0.90% compared to September 30, 2011, anda decrease of $33.5 million or 4.8% compared to December 31, 2010. Net loans outstanding increased $1.7 million or 0.50% to $348.0 million at December 31, 2011 as compared to September 30, 2011, anddecreased$13.1 million or 3.6% as compared to December 31, 2010. Deposits increased $9.4 million or 2.1% to $455.5 million at December 31, 2011 as compared to September 30, 2011, and increased $10.7 million or 2.4% as compared to December 31, 2010. There were no short-term borrowings outstanding at December 31, 2011 and at September 30, 2011 compared to $537,000 at December 31, 2010. Long-term debt decreased to $65.0 million at December 31, 2011 as compared to $80.0 million at September 30, 2011 and at December 31, 2010. Stockholders’ equity was $51.4 million at December 31, 2011, compared to $50.5 million at September 30, 2011 and $49.0 million at December 31, 2010.

The Company’s filings with the Securities and Exchange Commission are available on-line through the Company’s Internetwebsite at www.fidelitybancorp-pa.com.

Fidelity Bancorp, Inc. is the holding company for Fidelity Bank, a Pennsylvania-chartered, FDIC-insured savings bank conducting business through thirteen offices in Allegheny and Butler counties.

Statements contained in this news release which are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by Fidelity Bancorp, Inc. with the Securities and Exchange Commission from time to time.