Fidelity Federal Bancorp Closes Private Placement Offering of  $30 Million in Subordinated Notes

Fidelity Federal Bancorp (“Company”), parent company of Evansville-based United Fidelity Bank, fsb (“Bank”), announced today it has completed a $30 million private placement of fixed-to-floating rate subordinated notes. The Company intends to use the capital to lend to affiliate entities, support bank-level capital ratios, and for general corporate purposes, including supporting the Company’s ongoing acquisitions strategy, the Bank’s continued growth in affordable housing activities, and to redeem existing holding company obligations.

The subordinated notes will bear interest at 6.875% for 5 years and then the interest rate will reset quarterly at three-month LIBOR + 379 basis points for the remaining 5 years. Unless redeemed earlier, the notes will mature on October 15, 2028. The Company may, at its option beginning October 2023, redeem the notes. Proceeds from the notes meet the requirements to qualify as regulatory Tier 2 capital for the Company and as regulatory Tier 1 capital for the portion of the net proceeds that are invested in the Bank. The offering was originally established at $20 million, but was upsized by $10 million due to investor demand. Prior to marketing the notes, the Company received an A- rating from Egan-Jones Rating Service.

Donald R. Neel, President and CEO of the Company and Bank, commented, “We are pleased with the high level of interest in our offering and that investors share in our belief in Fidelity’s business model. We believe this new capital will allow Fidelity Federal Bancorp to continue to meet the needs of the markets we serve and position the Company for continued profitable growth.”

Sandler O’Neill + Partners, L.P. acted as sole placement agent and was represented by Vedder Price P.C. SmithAmundsen LLC served as legal counsel to the Company in the offering.

About the Bank and Company

United Fidelity Bank, founded in 1914, is the federally-chartered, FDIC-insured savings bank subsidiary of Fidelity Federal Bancorp. With $790 million in assets and 18 locations in Indiana, Ohio, Illinois, Colorado, Florida, and the US Virgin Islands, United Fidelity is committed to helping build prosperous communities through innovative financial solutions, and affordable housing-related activities. For more information, you can visit United Fidelity Bank online.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of such term in the federal securities laws. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking statements presented in this press release are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by such forward-looking statements. Any forward-looking statements presented herein are made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.