While many banks nationwide are reporting record earnings for 1997, Fidelity National Corp. is just happy to be in the black.

The Atlanta-based bank reported net income of $646,000 for 1997, after a net loss of $5.7 million in 1996.

"This was a turnaround year for us," said Larry D. Peterson, president and chief executive officer of the $657 million-asset bank. "We are happy we are profitable, but we know it is not the level of profits our shareholders expect."

The loss in 1996 stemmed from unexpectedly high credit card chargeoffs during the third and fourth quarters, the bank said. Those chargeoffs caused Fidelity to raise its provision for loan losses to $25.1 million that year, from $8 million in 1995.

Before 1996, Fidelity was growing at a healthy pace. The bank had $525 million of assets at yearend 1995, up from $238 million at the end of 1991.

The growth stopped when the credit card problems hit. The bank has still not opened three of six branches it bought from NationsBank Corp. and First Union in 1996. Mr. Peterson, who has been with Fidelity only since September, said the branches have sat dormant for more than a year because the bank could not get regulatory approval to open them.

Regulators did not impose cease-and-desist orders on Fidelity, but they did map out goals. Mr. Peterson said the bank has met those goals, which included keeping a level of capital 100 basis points higher than the minimum a bank needs to be classified as well-capitalized.

Fidelity has gotten back on track thanks in large part to a stock offering of more than 3.4 million shares that was completed in December. The bank raised about $25 million from the sale.

Analysts say the bank is now poised to be a good performer.

"Once you stop the pain, you begin to feel pretty good," said Richard X. Bove, senior vice president at Raymond James & Associates of Saint Petersburg, Fla. "They have gotten control of the losses from their credit card program. They are now a well-capitalized bank, and stand to benefit from that position."

Fidelity's loan loss provision for 1997 dropped 43%, to $14.4 million. With its capital level up and its credit card losses falling, Fidelity should be able to open its three vacant branches, Mr. Bove said, and hold on to loans it otherwise would sell.

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