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FIRST FIDELITY BANCORP. PREFERRED RAISED TO 'BBB+', OFF FITCHALERT -- FITCH FINANCIAL WIRE --

 NEW YORK, March 11 /PRNewswire/ -- First Fidelity Bancorp.'s ("FFB") preferred stock is raised to "BBB+" from "BBB-" by Fitch. Fidelity Bank, N.A.'s ("Fidelity") 7.75 percent subordinated capital debentures due 1996 are upgraded to "A" from "BBB+". Both issues are removed from FitchAlert. In addition, Fitch assigns "A-" ratings to FFB's 9.625 percent subordinated notes due 1999 and 9.75 percent subordinated notes due 1995. Commercial paper issued by First Fidelity, Inc., is rated "F-1". Long- and short-term certificates of deposit of First Fidelity Bank, N.A., New Jersey, and Fidelity, the company's principal banking subsidiaries, are rated "A+/F-1". The ratings reflect FFB's improved asset quality, strong core earnings, operating efficiency and capital, and solid management team. The credit trend is improving.
 Armed with capital provided by the 1991 agreement with Banco Santander, S.A., FFB aggressively confronted its loan quality problems and improved the profitability of its core franchise, emerging as a key player in Northeast banking. At year end, FFB operated 567 offices in three states and had total assets of $31.5 billion. The company added to its franchise in 1992 by acquiring the Howard Savings Bank and deposits of five American Savings Bank branches from the FDIC. In December, FFB agreed to acquire Northeast Bancorp, Inc. ("NBIC"), a troubled $3 billion commercial bank in Connecticut. The transaction has been structured to shield FFB's balance sheet from substantial asset risk by requiring the prior sale of a majority of NBIC's nonperforming assets (NPAs). In February, FFB agreed to acquire Village Financial, an $800 million commercial bank in Westchester County, N.Y.
 For FFB, 1992 was a watershed year in recovering from the real estate loan problems that plagued the company and many other Northeast banks. NPAs declined 25 percent to $696 million, or 3.75 percent, from 1991's $929 million, or 5.29 percent. More impressive was progress in improving the core profitability of the banking franchise. FFB's focus on lowering its noninterest expenses and increasing fee-based income has added approximately 23 basis points (bp) to FFB's after-tax return on average assets since 1989.
 FFB's improved earnings, solid capital position, and access to additional capital from the investment agreement with Banco Santander have positioned it well for the expected banking industry consolidation. These factors, combined with Fitch's expectation that FFB's nonperforming assets will continue to decline relative to assets, and that loan demand will be stimulated by an improving economy, should enable FFB to reach new performance targets.
 -0- 3/11/93
 /CONTACT: Scott J. O'Donnell, 212-908-0531, or Christopher M. Siedman, 212-908-0524, both of Fitch/
 (FFB)


CO: First Fidelity Bancorp. ST: New York IN: FIN SU: RTG

GK -- NY022 -- 5031 03/11/93 10:05 EST
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Publication:PR Newswire
Date:Mar 11, 1993
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