Fidelity Southern Corporation Earned $3.9 Million In Fourth Quarter

PR Newswire

ATLANTA, Jan. 23, 2014 /PRNewswire/ -- Fidelity Southern Corporation ("Fidelity" or the "Company") (LION), holding company for Fidelity Bank (the "Bank"), today reported financial results for the three months and year ended December 31, 2013.

KEY RESULTS

  • Earned $3.9 million in fourth quarter and $27.6 million for the year
  • Return on Average Assets of 0.61% for the quarter and 1.09% for the year
  • Increased Tangible Book Value by $1.51 to $11.00 per share or 15.9%, year over year
  • Commercial loan growth for the quarter of 3.5% and 4.2% year over year
  • Core deposit growth for the quarter of 5.6% and 8.0% year over year
  • Net charge off ratio annualized was 0.06% for the fourth quarter, compared to 0.27% for the third quarter, and 0.81% for the fourth quarter 2012
  • Reduction in Nonperforming asset ratio of 43% at 3.93% from 6.88% year over year
  • Classified assets decreased $12.4 million or 9.5% for the quarter and $37.8 million or 24.2% for the year
  • Funded closed Mortgage production of $425.7 million for the quarter and $2.5 billion for the year

Fidelity's Chairman, Jim Miller, said, "Fourth quarter mortgage  production shadowed a stellar performance of the Bank for the year. Nevertheless, the mortgage numbers  show we have built a solidly profitable mortgage business.  We expanded mortgage into Alabama in the quarter with plans for future growth. We were active in retail branching and in electronic delivery in 2013 and  will be in 2014. Trust powers were applied for in the quarter which will permit us to offer family office  services.  In sum, every area of the bank is performing well, our growth is all organic, and we continue to build for the future."



Three Months Ended


Year Ended



December 31,
2013


September 30,
2013


December 31,
2012


December 31,
2013


December 31,
2012



($ in thousands, except per share data)

Net Income


$

3,863



$

7,851



$

5,439



$

27,638



$

25,327













Basic EPS


$

0.18



$

0.33



$

0.31



$

1.35



$

1.48


Diluted EPS


$

0.16



$

0.30



$

0.27



$

1.20



$

1.31













Asset Quality
The following table provides a comparison of the activity affecting the allowance for loan loss:



For the Quarter Ended


Year Ended December 31



December 31,
2013


September 30,
2013


December 31,
2012


2013


2012



($ in thousands)

Net charge-offs


$

260



$

1,199



$

3,670



$

6,832



$

10,342


Net charge-off ratio, annualized


0.06

%


0.27

%


0.81

%


0.38

%


0.60

%

Provision for loan losses


$

273



$

1,122



$

5,243



$

5,441



$

13,420


The allowance for loan losses at December 31, 2013, was $33.7 million, or 1.78% of total loans, compared to an allowance of $33.3 million, or 1.83% of total loans, at September 30, 2013, and $34.0 million, or 1.92% of total loans, at December 31, 2012.

The following table presents certain credit quality metrics of the Bank's loan portfolio, inclusive of covered loans. Nonperforming assets include nonaccrual loans, net repossessions and other real estate ("ORE"). Classified assets include loans having a risk rating of substandard or worse, both accrual and nonaccrual, net repossessions and other real estate. Classified asset ratio is classified assets as a percentage of Tier 1 capital plus allowance.



December 31,
2013


September 30,
2013


December 31,
2012





($ in thousands)



Nonperforming assets


$

75,629




$

97,132




$

125,062



Classified assets


$

118,390




$

130,795




156,238



Allowance for loan losses as a percentage of total loans


1.78

%



1.83

%



1.92

%


Classified asset ratio


29.81

%



33.33

%



44.17

%


Nonperforming assets ratio


3.93

%



5.20

%



6.88

%


ORE, net of reserves, decreased $3.5 million to $31.0 million at December 31, 2013, compared to $34.5 million at September 30, 2013. During the fourth quarter of 2013, $4.8 million of ORE assets were sold while $1.3 million were added.

Nonperforming loans and classified assets have continued to decline due in part to improved credit factors as well as loans moving to ORE and subsequently being sold.

Deposits
Total deposits of $2.2 billion at December 31, 2013, have increased $132.7 million from $2.1 billion as of December 31, 2012, due primarily to a $104.7 million increase in noninterest-bearing demand deposits as the Company continues to focus on core-deposit growth.



December 31,
2013


September 30,
2013


December 31,
2012


$


%


$


%


$


%


($ in millions)





Core deposits(1)

$

1,800.0



81.7

%


$

1,742.7



79.1

%


$

1,666.0



80.4

%

Time Deposits > $100,000

335.2



15.2

%


352.1



16.9

%


346.7



16.8

%

Brokered deposits

67.4



3.1

%


74.5



4.0

%


56.9



2.8

%

Total deposits

$

2,202.6



100.0%


$

2,169.3



100.0%


$

2,069.6



100.0%

Quarterly rate on deposits

0.48%


0.48%


0.52%













(1)  Core deposits are transactional, savings, and time deposits under $100,000.



NET INTEREST MARGIN
Net interest margin in the fourth quarter of 2013 was 3.59% consistent with the third quarter of 2013 result of 3.59%.  In spite of the four basis point decline in the net interest margin from the fourth quarter of 2012, taxable equivalent net interest income was up $621,000 over the same quarter prior-year and $592,000 when compared to the three months ended September 30, 2013. The improvement is attributable primarily to declining average balances of and rates on interest-bearing liabilities as discussed in more detail in the Interest Expense section below. Excluding the accretion of the loan discount on purchased loans, the net interest margin was 3.53% for the fourth quarter of 2013 compared to 3.53% for the third quarter of 2013 and 3.62% for the fourth quarter of 2012.

Net interest margin was 3.59% for the year ended December 31, 2013, compared to 3.77% for the same period in 2012. Although the net interest margin decreased by eighteen basis points, taxable equivalent net interest income for the year ended December 31, 2013, increased $3.1 million, or 3.8%, to $84.1 million  compared to $81.0 million  for the same period in 2012 aided by a year over year 9.2% increase in average loan balances. Excluding the accretion of the loan discount on purchased loans, the net interest margin was 3.47% for the year ended December 31, 2013, and 3.68% for the same period in 2012.

INTEREST INCOME
Total interest income for the fourth quarter of 2013 decreased a small amount to $23.8 million from $24.3 million compared to the fourth quarter of 2012. In a linked-quarter comparison, interest income decreased $1.2 million largely attributable to a decrease in interest income from decreased loans held for sale production volume during the fourth quarter of 2013 as compared to the fourth quarter of 2012.

For the year ended December 31, 2013, total interest income remained flat at $97.6 million compared to the same period in 2012.

INTEREST EXPENSE
Interest expense for the fourth quarter of 2013 decreased $1.1 million, or 27.5%, compared to the same period in 2012 due to a reduction of $600,000 in subordinated debt expense for the fourth quarter of 2013 from the repayment of $20.5 million in subordinated debt in the third quarter of 2013. On a linked-quarter basis, interest expense decreased $480,000 or 14.1% primarily attributable to a decrease in subordinated debt interest expense of $430,000  from the payoff of $20.5 million of subordinated debt in the third quarter of 2013.

For the year ended December 31, 2013, interest expense decreased $3.1 million, or 18.3%, to $14.0 million compared to $17.1 million for the same period in 2012. The decrease is primarily the result of a reduction in interest expense on time deposits expense of $1.0 million from a reduction in interest rates on time deposits, together with a decrease of $1.5 million in subordinated debt expense due to rate changes and the subordinated debt pay-offs.

NONINTEREST INCOME
For the quarter ended December 31, 2013, noninterest income was $17.8 million compared to $26.2 million in the fourth quarter of 2012. This decrease is primarily attributable to a $7.8 million decrease in noninterest income from mortgage banking activities primarily due to decreased production volume for the fourth  quarter of 2013 compared to the fourth quarter of 2012.

For the year ended December 31, 2013, noninterest income increased $8.9 million, or 10.1%, to $96.9 million compared to $88.0 million for the same period in 2012. The increase is attributable to a $10.2 million increase in noninterest income from mortgage banking activities and a $2.6 million increase in noninterest income from indirect lending net of a slight decrease in other noninterest income of $2.5 million for 2013.

Mortgage Banking Activities

Since long term interest rates began to climb in the second half of 2013, significant contraction in refinance volume has continued to occur as the industry returns to a more normalized seasonal closed loan production model. Closed Mortgage loan fundings were $2.5 billion in 2013 vs. $2.2 billion in 2012 representing a 10% increase which compares favorably to the National Mortgage Bankers Association ("MBA") industry estimate of a 23% decline year over year. 

Furthermore, the MBA expects to see $1.2 trillion in mortgage originations during 2014, a 32% decline from 2013. While the MBA expects purchase originations to increase 9%, it expects refinance originations to fall 57%.  To address the current industry challenges, the Bank's mortgage banking division will continue prudent production mortgage office growth, maintain tight expense controls and continue the focus of maintaining current revenue per loan benchmarks.

Mortgage banking margins were relatively flat for the quarter ended December 31, 2013 or 286 basis points on funded production of $425.7 million, after adjusting for the quarterly MSR  impairment, compared to 285 basis points on funded production of $619.6 million for the previous quarter after adjusting for the prior quarter MSR impairment. Comprehensive revenue and expense measures continue to be made by management to maximize operational efficiency and target margin optimization.

Positive mortgage production trends were evident as new purchase loans (vs. refinances) accounted for 79% of total funded loan production in the fourth quarter of 2013. The Company continues to evaluate opportunities to increase market share and enter new markets where future growth is expected. During the fourth quarter of 2013, new mortgage offices were opened in Alabama, Maryland, and Georgia, with plans for further expansion expected to take place during the first quarter of 2014. The new mortgage offices have key management in place with twelve experienced loan officers hired with more coming soon, and it is anticipated that these locations will make a significant contribution in 2014.

NONINTEREST EXPENSE
Noninterest expense for the fourth quarter of 2013 was $32.5 million compared to $32.7 million for the same period in 2012 and remained relatively flat.  On a linked quarter basis, noninterest expense decreased $1.6 million from $34.1 million for the third quarter of 2013 to $32.5 million for the fourth quarter of 2013 primarily attributable to a decrease in commission expense of $1.7 million from the reduced mortgage production for the fourth quarter of 2013. 

For the year ended December 31, 2013, noninterest expense was $132.3 million compared to $115.4 million for the same period in 2012. The increase is largely attributable to an increase of $9.8 million in salaries and employee benefits and $2.8 million in higher commissions, both due to increased personnel primarily in the mortgage banking business.

ABOUT FIDELITY SOUTHERN CORPORATION
Fidelity Southern Corporation, through its operating subsidiaries Fidelity Bank and LionMark Insurance Company, provides banking services and credit-related insurance products through 32 branches in Atlanta, Georgia, a branch in Jacksonville, Florida, and an insurance office in Atlanta, Georgia. SBA, indirect automobile, and mortgage loans are provided through employees located in eleven Southern and Mid-Atlantic states. For additional information about Fidelity's products and services, please visit the website at www.FidelitySouthern.com. 

This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled "Forward Looking Statements" from Fidelity Southern Corporation's 2012 Annual Report filed on Form 10-K with the Securities and Exchange Commission.

Contacts:

Martha Fleming, Steve Brolly


Fidelity Southern Corporation (404) 240-1504

 

FIDELITY SOUTHERN CORPORATION

FINANCIAL HIGHLIGHTS

(UNAUDITED)



Three Months Ended


Twelve Months Ended


December 31,
2013


September 30,
2013


June 30,
2013


March 31,
2013


December 31,
2012


December 31,
2013


December 31,
2012


($ in thousands, except per share data)

RESULTS OF OPERATIONS














Net Interest Income

$

20,858



$

21,529



$

20,133



$

21,075



$

20,239



$

83,595



$

80,484


Provision for Loan Losses

273



1,122



570



3,476



5,243



5,440



13,420


Non-Interest Income

17,753



25,844



28,240



25,047



26,186



96,885



87,969


Non-Interest Expense

32,538



34,102



33,159



32,524



32,654



132,325



115,397


Income Tax Expense

1,937



4,298



5,211



3,631



3,089



15,077



14,309


Net Income

3,863



7,851



9,433



6,491



5,439



27,638



25,327


Preferred Stock Dividends



(817)



(823)



(823)



(823)



(2,463)



(3,292)


Net Income Available to Common Shareholders

$

3,863



$

7,034



$

8,610



$

5,668



$

4,616



$

25,175



$

22,035
















PERFORMANCE














Earnings Per Share - Basic (1)

$

0.18



$

0.33



$

0.52



$

0.37



$

0.31



$

1.35



$

1.48


Earnings Per Share - Diluted (1)

$

0.16



$

0.30



$

0.46



$

0.33



$

0.27



$

1.20



$

1.31


Return on Average Assets

0.61

%


1.20

%


1.47

%


1.07

%


0.88

%


1.09

%


1.08

%

Return on Average Equity

6.54

%


12.04

%


17.40

%


13.57

%


11.36

%


12.20

%


14.19

%















NET INTEREST MARGIN














Interest Earning Assets

4.09

%


4.15

%


4.05

%


4.55

%


4.35

%


4.18

%


4.56

%

Cost of Funds

0.64

%


0.72

%


0.77

%


0.84

%


0.86

%


0.74

%


0.94

%

Net Interest Spread

3.45

%


3.43

%


3.28

%


3.71

%


3.49

%


3.44

%


3.62

%

Net Interest Margin

3.59

%


3.59

%


3.42

%


3.77

%


3.63

%


3.59

%


3.77

%















CAPITAL














Cash Dividends Per Share

$

0.04



$

0.02



$



$



$



$

0.06



$


Dividend Payout Ratio

5.56

%


1.52

%


%


%


%


4.44

%


%

Tier 1 Risk-Based Capital

12.71

%


12.97

%


15.62

%


12.22

%


12.06

%


12.71

%


12.06

%

Total Risk-Based Capital

13.96

%


14.23

%


16.88

%


13.48

%


13.43

%


13.96

%


13.43

%

Leverage Ratio

11.02

%


10.53

%


12.96

%


10.51

%


10.18

%


11.02

%


10.18

%















AVERAGE BALANCE SHEET














Loans Held for Sale

$

192,851



$

317,445



$

359,519



$

295,018



$

192,851



$

241,446



$

135,263


Loans, Net of Unearned Income

1,868,507



1,812,251



1,791,398



1,801,532



1,852,124



1,868,130



1,796,450


Investment Securities

173,422



175,230



170,362



161,861



174,810



170,265



200,208


Earning Assets

2,320,811



2,393,062



2,379,048



2,281,648



2,230,918



2,343,871



2,148,428


Total Assets

2,524,207



2,599,578



2,578,033



2,468,538



2,454,244



2,543,144



2,345,176


Deposits

2,150,545



2,148,659



2,079,569



2,031,877



2,022,445



2,103,465



1,933,473


Borrowings

113,528



166,261



259,616



256,616



211,385



189,995



207,035


Shareholders' Equity

234,314



258,672



217,491



194,559



190,426



226,457



178,517
















STOCK PERFORMANCE














Market Price:














     Closing (1)

$

16.61



$

15.34



$

12.28



$

11.33



$

9.31



$

16.61



$

9.31


     High Close (1)

$

17.87



$

15.98



$

13.06



$

11.63



$

9.93



$

15.98



$

9.93


     Low Close (1)

$

15.27



$

12.56



$

10.73



$

9.31



$

8.54



$

9.31



$

5.43


Daily Average Trading Volume

53,979



90,413



52,693



30,591



16,474



58,118



28,166


Book Value Per Common Share (1)

$

11.11



$

10.94



$

10.66



$

9.99



$

9.62



$

11.11



$

9.62


Price to Book Value

1.50



1.40



1.15



1.13



0.97



1.50



0.97


Tangible Book Value Per Common Share (1)

11.00



10.83



10.54



9.82



9.46



11.00



9.46


Price to Tangible Book Value

1.51



1.42



1.17



1.15



0.98



1.51



0.98























(1) Adjusted for stock dividends and retroactive application on shares outstanding.

 

FIDELITY SOUTHERN CORPORATION

FINANCIAL HIGHLIGHTS continued

(UNAUDITED)



Three months ended


Year ended


December 31,
2013


September 30,
2013


June 30,
2013


March 31,
2013


December 31,
2012


December 31, 2013


December 31, 2012


($ in thousands, except per share data)

ASSET QUALITY














Total Non-Performing Loans

$

43,427



$

61,458



$

72,388



$

81,740



$

83,681



$

43,427



$

83,681


Total Non-Performing Assets

$

75,629



$

97,132



$

114,492



$

123,597



$

125,062



$

75,629



$

125,062


Loans 90 Days Past Due and Still Accruing

$



$



$



$

141



$



$



$


Including Covered Loans:















Non-Performing Loans as a % of Loans

3.25

%


3.95

%


4.60

%


4.60

%


5.07

%


3.25

%


5.07

%


Non-Performing assets as a % of Loans Plus ORE

3.93

%


5.20

%


6.32

%


6.80

%


6.88

%


3.93

%


6.88

%


ALL to Non-Performing Loans

77.56

%


54.77

%


46.01

%


41.49

%


40.61

%


77.56

%


40.61

%


ALL as a % of Loans, at End of Period

1.78

%


1.83

%


1.86

%


1.86

%


1.92

%


1.78

%


1.92

%

Excluding Covered Loans:















Non-Performing Loans as a % of Loans

2.21

%


2.08

%


2.47

%


3.00

%


3.40

%


2.21

%


3.4

%


Non-Performing assets as a % of Loans Plus ORE

3.54

%


3.56

%


4.14

%


4.37

%


4.74

%


3.54

%


4.74

%


ALL to Non-Performing Loans

83.11

%


82.63

%


72.82

%


4.37

%


54.37

%


83.11

%


54.37

%


Net Charge-Offs During the Period to Average Loans, annualized 

0.06

%


0.27

%


0.40

%


0.86

%


0.81

%


0.38

%


0.60

%


ALL as a % of Loans, at End of Period

1.80

%


1.93

%


1.96

%


1.95

%


2.01

%


1.80

%


1.91

%















OTHER INFORMATION














Non-Interest Income to Revenues

45.98

%


54.55

%


58.38

%


54.31

%


56.40

%


53.68

%


52.22

%

End of Period Shares Outstanding (1)

21,257,519



21,325,339



21,146,297



15,191,887



15,122,948



21,257,519



15,122,948


Weighted Average Shares Outstanding - Basic (1)

21,384,732



21,341,695



16,509,686



15,171,012



15,052,787



18,626,312



14,895,044


Weighted Average Shares Outstanding - Diluted (1)

24,118,225



23,716,869



18,555,821



17,193,697



17,072,756



20,956,408



16,793,178


Full-Time Equivalent Employees

889.9



865.1



843.1



806.0



774.2



889.9



774.2
















(1) Adjusted for stock dividends and retroactive application on shares outstanding.

 

FIDELITY SOUTHERN CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)




Three Months Ended


Year Ended



December 31,
2013


September 30,
2013


June 30,
2013


March 31,
2013


December 31,
2012


December 31,
2013


December 31,
2012



($ in thousands, except per share amount)

INTEREST INCOME















Loans, including fees


$

22,639



$

23,900



$

22,949



$

23,944



$

23,121



$

93,432



$

92,485


Investment securities


1,095



977



910



1,028



1,141



4,010



5,044


Federal funds sold and bank deposits


43



53



15



3



5



114



33


Total interest income


23,777



24,930



23,874



24,975



24,267



97,556



97,562


INTEREST EXPENSE















Deposits


2,590



2,601



2,600



2,627



2,722



10,418



11,073


Short-term borrowings


37



73



263



404



425



777



1,306


Subordinated debt


282



716



868



867



881



2,733



4,242


Other long-term debt


10



11



10



2





33



457


Total interest expense


2,919



3,401



3,741



3,900



4,028



13,961



17,078


Net interest income


20,858



21,529



20,133



21,075



20,239



83,595



80,484


Provision for loan losses


273



1,122



570



3,476



5,243



5,440



13,420


Net interest income after provision for loan losses


20,585



20,407



19,563



17,599



14,996



78,155



67,064


NONINTEREST INCOME















Service charges on deposit accounts


1,119



1,075



1,020



949



1,122



4,163



4,694


Other fees and charges


1,012



997



975



887



883



3,871



3,360


Mortgage banking activities


10,798



17,809



20,158



17,795



18,653



66,560



56,332


Indirect lending activities


2,030



2,583



2,781



1,646



1,477



9,040



6,414


SBA lending activities


492



647



1,417



1,084



715



3,640



4,944


Bank owned life insurance


308



326



326



313



323



1,273



1,307


Securities gains


188





1







189



307


Other


1,806



2,407



1,562



2,373



3,013



8,149



10,611



Total noninterest income


17,753



25,844



28,240



25,047



26,186



96,885



87,969


NONINTEREST EXPENSE















Salaries and employee benefits


14,660



14,424



14,278



14,282



13,341



57,645



47,832


Commissions


4,288



6,019



7,979



6,390



7,545



24,676



21,817


Net occupancy


2,799



2,844



2,291



2,407



2,400



10,342



9,253


Communication


856



754



805



760



647



3,175



2,646


Other


9,935



10,061



7,806



8,685



8,721



36,487



33,849



Total noninterest expense


32,538



34,102



33,159



32,524



32,654



132,325



115,397


Income before income tax expense


5,800



12,149



14,644



10,122



8,528



42,715



39,636


Income tax expense


1,937



4,298



5,211



3,631



3,089



15,077



14,309


NET INCOME


3,863



7,851



9,433



6,491



5,439



27,638



25,327


Preferred stock dividends and discount accretion




(817)



(823)



(823)



(823)



(2,463)



(3,292)


Net income available to common equity


$

3,863



$

7,034



$

8,610



$

5,668



$

4,616



$

25,175



$

22,035

















EARNINGS PER SHARE: (1)















Basic earnings per share


$

0.18



$

0.33



$

0.52



$

0.37



$

0.31



$

1.35



$

1.48


Diluted earnings per share


$

0.16



$

0.30



$

0.46



$

0.33



$

0.27



$

1.20



$

1.31


Weighted average common shares outstanding-basic


21,384,732



21,341,695



16,509,686



15,171,012



15,052,787



18,626,312



14,895,044


Weighted average common shares outstanding-diluted


24,118,225



23,716,869



18,555,821



17,193,697



17,072,756



20,956,408



16,793,178

















(1) Adjusted for stock dividends and retroactive application on shares outstanding

 

FIDELITY SOUTHERN CORPORATION

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)




December 31,
2013


September 30,
2013


June 30,
2013


March 31,
2013


December 31,
2012







($ in thousands)





ASSETS











Cash and cash equivalents


$

116,559



$

140,871



$

158,837



$

40,262



$

49,020


Investment securities available-for-sale


168,865



170,338



163,764



153,285



154,367


Investment securities held-to-maturity


4,051



4,468



4,978



5,523



6,162


Investment in FHLB stock


4,994



6,119



8,594



7,919



7,330


Loans held-for-sale


187,366



216,736



355,017



325,941



304,094


Loans


1,893,037



1,831,708



1,775,972



1,817,263



1,777,031


Allowance for loan losses


(33,684)



(33,661)



(33,309)



(33,910)



(33,982)


Loans, net of allowance for loan losses


1,859,353



1,798,047



1,742,663



1,783,353



1,743,049


FDIC indemnification asset


14,136



17,103



16,542



16,535



20,074


Premises and equipment, net


44,555



41,964



41,843



38,508



37,669


Other real estate, net


30,982



34,493



40,882



38,951



39,756


Bank owned life insurance


33,855



33,575



33,276



32,978



32,693


Deferred tax asset, net


19,384



20,886



22,401



21,248



21,145


Servicing rights


53,202



52,048



44,734



36,529



30,244


Other assets


26,866



30,834



41,702



31,217



31,688



Total Assets


$

2,564,168



$

2,567,482



$

2,675,233



$

2,532,249



$

2,477,291













LIABILITIES











Deposits:











Noninterest-bearing demand deposits


$

488,224



$

448,087



$

433,565



$

384,869



$

383,559


Interest-bearing deposits:


1,714,228



1,721,188



1,721,482



1,673,132



1,686,165


Total deposits


2,202,452



2,169,275



2,155,047



2,058,001



2,069,724


Federal Funds Purchased


35,000



60,000



115,000



100,000



88,500


Short-term borrowings


14,233



18,422



18,641



76,051



37,160


Subordinated debt


46,393



46,393



67,527



67,527



67,527


Other long-term debt


10,000



10,000



10,000



10,000




Other liabilities


19,860



30,092



35,916



21,369



21,492



Total Liabilities


2,327,938



2,334,182



2,402,131



2,332,948



2,284,403













SHAREHOLDERS' EQUITY











Preferred stock






47,785



47,564



47,344


Common stock


158,153



156,156



153,107



84,777



82,499


Accumulated other comprehensive gain, net of tax


968



1,723



1,475



3,376



3,545


Retained earnings


77,109



75,421



70,735



63,584



59,500



Total shareholders' equity


236,230



233,300



273,102



199,301



192,888



Total Liabilities and Shareholders' Equity


$

2,564,168



$

2,567,482



$

2,675,233



$

2,532,249



$

2,477,291


Book Value Per Common Share


$

11.11



$

11.04



$

10.81



$

10.22



$

9.95


Shares of Common Stock Outstanding (1)


21,257,519



21,139,712



20,839,642



14,847,848



14,633,836













(1) Adjusted for stock dividends and retroactive application on shares outstanding

 

FIDELITY SOUTHERN CORPORATION

LOANS, BY CATEGORY

(UNAUDITED)




December 30,
2013


September 30,
2013


June 30,
2013


March 31,
2013


December 31,
2012



($ in thousands)

Commercial


$

530,977



$

512,875



$

507,188



$

517,203



$

509,243


SBA loans


134,823



133,867



131,771



126,435



121,428


Total Commercial and SBA Loans


665,800



646,742



638,959



643,638



630,671


Construction


101,698



99,379



100,986



94,651



89,924


Indirect loans


975,223



942,217



904,098



959,471



930,232


Installment loans


13,473



14,270



15,557



13,824



18,774


Total Consumer Loans


988,696



956,487



919,655



973,295



949,006


First Mortgage Loans


60,928



51,807



41,815



38,501



37,785


Second Mortgage Loans


75,915



77,293



74,557



67,178



69,645



Total Mortgage Loans


136,843



129,100



116,372



105,679



107,430



Loans


1,893,037



1,831,708



1,775,972



1,817,263



1,777,031













Loans Held-For-Sale:











Residential Mortgage


127,850



174,409



309,175



281,839



253,108


SBA


9,517



7,327



10,842



14,102



20,986


Indirect Auto


50,000



35,000



35,000



30,000



30,000


Total Loans Held-For-Sale


187,367



216,736



355,017



325,941



304,094


Total Loans


$

2,080,404



$

2,048,444



$

2,130,989



$

2,143,204



$

2,081,125













Non-Covered Loans


$

1,834,675



$

1,768,384



$

1,691,258



$

1,743,092



$

1,699,892


Covered Loans


58,362



63,324



84,714



74,171



77,139


Loans Held-For-Sale


187,367



216,736



355,017



325,941



304,094


Total Loans


$

2,202,452



$

2,048,444



$

2,130,989



$

2,143,204



$

2,081,125


 

FIDELITY SOUTHERN CORPORATION

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

(UNAUDITED)





Three Months Ended


Year Ended




December 31,
2013


September 30,
2013


June 30,
2013


March 31,
2013


December 31,
2012


December 31,
2013


December 31,
2012




($ in thousands)

Balance at Beginning of Period

$

33,661



$

33,309



$

33,910



$

33,982



$

31,476



$

33,982



$

27,956


Net Charge-Offs (Recoveries):






















Commercial, Financial, and Agricultural

(207)



335



164



2,416



421



2,708



1,090



SBA

10



108



559



56



271



733



455



Real Estate Construction

(291)



(241)



40



118



(78)



(374)



2,798



Real Estate Mortgage

41



67



27



393



30



528



632



Consumer Installment

707



930



931



669



3,026



3,237



5,367




Total Net Charge-Offs

260



1,199



1,721



3,652



3,670



6,832



10,342


Provision for Loan Losses

273



1,122



570



3,476



5,243



5,441



13,420


Indemnification - Covered Loans

10



429



550



104



933



1,093



2,948


Balance at End of Period

$

33,684



$

33,661



$

33,309



$

33,910



$

33,982



$

33,684



$

33,982

























Ratio of Net Charge-Offs during the Period to Average Loans Outstanding, Net, annualized

0.06

%


0.27

%


0.40

%


0.86

%


0.81

%


0.38

%


0.60

%

Allowance for Loan Losses as a Percentage of Loans

1.78

%


1.83

%


1.86

%


1.86

%


1.92

%


1.78

%


1.80

%

Allowance for Loan Losses as a Percentage of Loans Excluding Covered Loans

1.80

%


1.93

%


1.96

%


1.95

%


2.01

%


1.80

%


1.91

%

 

NONPERFORMING ASSETS

(UNAUDITED)



December 31,
2013


September 30,
2013


June 30,
2013


March 31,
2013


December 31,
2012


($ in thousands)

Non-Covered Nonperforming Assets










Nonaccrual Loans

$

40,531



$

36,711



$

41,757



$

52,220



$

57,713


Repossessions

1,220



1,181



1,222



975



1,625


Other Real Estate

24,021



26,016



28,342



24,048



22,429



Total Non-Covered Nonperforming Assets

$

65,772



$

63,908



$

71,321



$

77,243



$

81,767


*** Includes SBA Guaranteed Amounts of Approximately

$

7,869



$

13,115



$

14,379



$

16,668



$

12,085


Non-Covered Loans Past Due 90 Days or More and Still Accruing

$



$



$



$

141



$


Non-Covered Loans 30-89 Days Past Due

$

5,618



$

7,915



$

6,197



$

12,152



$

5,028


Ratio of Non-Covered Loans Past Due 90 Days or More and Still Accruing to Total Non-Covered Loans

%


%


%


0.01

%


%

Ratio of Non-Covered Loans 30-89 Days Past Due to Total Non-Covered Loans

0.31

%


0.45

%


0.37

%


0.70

%


0.30

%

Ratio of Non-Covered Nonperforming Assets to Total Non-Covered Loans, ORE, and Repossessions

3.54

%


3.56

%


4.14

%


4.37

%


4.74

%

Covered Nonperforming Assets










Nonaccrual Loans

$

2,896



$

24,747



$

30,631



$

29,520



$

25,968


Other Real Estate

6,961



8,477



12,540



16,834



17,327



Covered Nonperforming Assets

$

9,857



$

33,224



$

43,171



$

46,354



$

43,295


Classified Assets










Classified Loans

$

86,188



$

95,121



$

101,919



$

112,036



$

114,857


ORE and Repossessions

32,202



35,674



42,104



41,857



41,381



Total Classified Assets

$

118,390



$

130,795



$

144,023



$

153,893



$

156,238


 

FIDELITY SOUTHERN CORPORATION

ANALYSIS OF INDIRECT LENDING

(UNAUDITED)


















Three Months Ended



December 31,
2013


September 30,
2013


June 30,
2013


March 31,
2013


December 31,
2012



($ in thousands)


Average loans outstanding


$

1,010,229



$

957,737



$

947,351



$

953,722



$

966,082


Past due loans:












$ amount of indirect loans past due


$

1,561



$

929



$

1,360



$

1,159



$

1,262



# of indirect loans past due


130



130



173



162



197


Net charge-offs


$

703



$

908



$

909



$

667



$

989


# of repossessed vehicles


207



177



181



151



181


Non-performing loans


$

806



$

925



$

594



$

872



$

982


30+ day performing delinquency rate


0.15

%


0.11

%


0.14

%


0.12

%


0.14

%

Net charge-off rate


0.33

%


0.34

%


0.33

%


0.28

%


0.37

%

Average beacon score


741



752



755



742



747


Production by State:












Alabama


$

19,798



$

22,599



$

16,576



$

16,847



$

14,322



Arkansas


16,352



13,757



7,728



4,760



3,514



North Carolina


18,731



19,292



18,750



15,226



11,828



South Carolina


13,302



10,322



10,180



7,550



6,356



Florida


76,253



77,873



72,676



67,243



59,782



Georgia


43,064



44,171



38,203



42,218



34,484



Mississippi


20,341



23,292



19,626



20,148



16,990



Tennessee


13,674



17,122



19,347



14,858



8,674



Virginia


11,040



11,877



10,339



8,601



6,241



Texas



5,045
















Total production by State


$

237,600



$

240,305



$

213,425



$

197,451



$

162,191


Outstanding by State:












Alabama


8.92

%


8.93

%


8.89

%


9.22

%


9.29

%


Arkansas


3.24

%


2.37

%


1.42

%


0.81

%


0.52

%


North Carolina


8.27

%


8.30

%


8.37

%


8.31

%


8.41

%


South Carolina


3.73

%


3.34

%


3.26

%


2.99

%


2.94

%


Florida


32.62

%


32.80

%


33.07

%


33.41

%


33.40

%


Georgia


23.22

%


24.38

%


25.76

%


27.11

%


28.45

%


Mississippi


8.41

%


8.48

%


7.92

%


7.50

%


6.81

%


Tennessee


7.42

%


7.87

%


8.19

%


7.95

%


7.85

%


Virginia


3.77

%


3.53

%


3.12

%


2.70

%


2.33

%


Texas


0.40

%


%


%


%


%



Total outstanding serviced by State


100.00

%


100.00

%


100.00

%


100.00

%


100.00

%

Loan sales


$

88,153



$

93,602



$

152,418



$

58,073



$

48,166


Yield



3.65

%


3.71

%


3.85

%


4.00

%


4.06

%












































INDIRECT LENDING ACTIVITIES

(UNAUDITED)



















Three Months Ended





December 31,
2013


September 30,
2013


June 30,
2013


March 31,
2013


December 31,
2012





(in thousands)

Servicing income, net


$

1,237



$

1,186



$

1,012



$

834



$

926


Marketing gain, net


793



1,397



1,769



812



551


Total indirect lending activities


$

2,030



$

2,583



$

2,781



$

1,646



$

1,477















 

FIDELITY SOUTHERN CORPORATION

ANALYSIS OF MORTGAGE LENDING

(UNAUDITED)


















Three Months Ended



December 31,
2013


September 30,
2013


June 30,
2013


March 31,
2013


December 31,
2012



($ in thousands)


Average loans outstanding


$

194,626



$

328,038



$

297,024



$

284,910



$

257,740


Average servicing outstanding


$

4,221,134



$

3,953,760



$

3,239,672



$

2,817,771



$

2,425,493


% of loan production for purchases


78.72

%


74.13

%


58.30

%


36.78

%


34.45

%

% of loan production for refinance loans


21.28

%


25.87

%


41.70

%


63.22

%


65.55

%

Production by State:












Georgia


$

259,289



$

353,187



$

427,815



$

392,749



$

498,542



Florida


19,724



17,807



24,025



15,862



36,193



Virginia


91,494



151,573



167,099



111,126



126,901




Total retail


370,507



522,567



618,939



519,737



661,636



Wholesale


55,149



96,773



165,022



136,508



150,648




Total production


$

425,656



$

619,340



$

783,961



$

656,245



$

812,284


Loan sales


$

467,932



$

753,196



$

756,224



$

634,074



$

701,018


Yield


4.08

%


4.38

%


3.15

%


3.43

%


3.58

%








































MORTGAGE BANKING ACTIVITIES

(UNAUDITED)


















Three Months Ended





December 31,
2013


September 30,
2013


June 30,
2013


March 31,
2013


December 31,
2012









($ in thousands)





Marketing gain, net


$

8,568



$

12,785



$

13,916



$

12,684



$

13,909


Origination points and fees


2,474



3,806



4,212



3,452



3,879


Loan Servicing Revenue


2,609



2,402



2,021



1,760



1,604


MSR amortization and impairment adjustments.


(2,853)



(1,184)



9



(101)



(739)


Total mortgage banking activities


$

10,798



$

17,809



$

20,158



$

17,795



$

18,653




























Non-cash items from mortgage banking activities:











Capitalized MSR, net


$

3,992



$

7,367



$

5,934



$

4,467



$

4,991


Valuation on MSR


(1,360)



138



1,551



1,609



702


Mark to market adjustments


344



2,605



(6,634)



(2,345)



(3,810)


Total non-cash items


$

2,975



$

10,110



$

851



$

3,731



$

1,883









































 

FIDELITY SOUTHERN CORPORATION

AVERAGE BALANCE, INTEREST AND YIELDS

(UNAUDITED)



Year Ended


December 31, 2013


December 31, 2012


Average


Income/


Yield/


Average


Income/


Yield/


Balance


Expense


Rate


Balance


Expense


Rate


($ in thousands)


Assets












Interest-earning assets:












Loans, net of unearned income:












  Taxable

$

2,101,913



$

93,184



4.43

%


$

1,926,904



$

92,347



4.79

%

Tax-exempt (1)

7,662



383



4.99

%


4,810



207



4.30

%


Total loans

2,109,575



93,567



4.44

%


1,931,714



92,554



4.79

%

Investment securities:












  Taxable

154,108



3,350



2.17

%


181,489



4,255



2.34

%

Tax-exempt (2)

16,157



1,016



6.29

%


18,719



1,200



6.41

%


Total investment securities

170,265



4,366



2.56

%


200,208



5,455



2.72

%

Interest-bearing deposits

62,411



114



0.18

%


15,583



32



0.21

%

Federal funds sold

1,620



1



0.05

%


923



1



0.06

%


Total interest-earning assets

2,343,871



98,048



4.18

%


2,148,428



98,042



4.56

%

Noninterest-earning:












Cash and due from banks

15,505







24,862






Allowance for loan losses

(33,512)







(28,699)






Premises and equipment, net

40,830







33,982






Other real estate

37,469







37,172






Other assets

138,982







129,431







Total assets

$

2,543,145







$

2,345,176






Liabilities and shareholders' equity












Interest-bearing liabilities:












Demand deposits

$

648,734



$

1,807



0.28

%


$

581,577



$

1,610



0.28

%

Savings deposits

317,845



1,319



0.41

%


342,806



1,169



0.34

%

Time deposits

719,205



7,293



1.01

%


679,940



8,294



1.22

%


Total interest-bearing deposits

1,685,784



10,419



0.62

%


1,604,323



11,073



0.69

%

Federal funds purchased

23,071



174



0.75

%


29,003



228



0.79

%

Securities sold under agreements to repurchase

15,470



21



0.14

%


13,007



28



0.22

%

Other short-term borrowings

82,446



582



0.71

%


78,769



1,050



1.33

%

Subordinated debt

60,926



2,733



4.49

%


67,527



4,242



6.28

%

Long-term debt

8,082



33



0.41

%


18,729



457



2.44

%


Total interest-bearing liabilities

1,875,779



13,962



0.74

%


1,811,358



17,078



0.94

%

Noninterest-bearing:












Demand deposits

417,681







329,150






Other liabilities

23,228







26,151






Shareholders' equity

226,457







178,517







Total liabilities and shareholders' equity

$

2,543,145







$

2,345,176






Net interest income/spread



$

84,086



3.44

%




$

80,964



3.62

%

Net interest margin





3.59

%






3.77

%













(1) Interest income includes the effect of taxable-equivalent adjustment for 2013 and 2012 of $134,000 and $70,000, respectively, using a 35% tax rate.

(2) Interest income includes the effect of taxable-equivalent adjustment for 2013 and 2012 of $358,000 and $410,000, respectively, using a 35% tax rate.

 

FIDELITY SOUTHERN CORPORATION

AVERAGE BALANCE, INTEREST AND YIELDS

(UNAUDITED)



Three Months Ended


December 31, 2013


December 31, 2012


Average


Income/


Yield/


Average


Income/


Yield/


Balance


Expense


Rate


Balance


Expense


Rate


($ in thousands)


Assets












Interest-earning assets:












Loans, net of unearned income:












  Taxable

$

2,052,977



$

22,569



4.36

%


$

2,040,253



$

23,086



4.50

%

Tax-exempt (1)

8,381



108



5.12

%


4,722



52



4.45

%


Total loans

2,061,358



22,677



4.36

%


2,044,975



23,138



4.50

%

Investment securities:












  Taxable

158,547



939



2.35

%


156,489



946



2.42

%

Tax-exempt (2)

14,875



239



6.38

%


18,321



297



6.70

%


Total investment securities

173,422



1,178



2.70

%


174,810



1,243



2.85

%

Interest-bearing deposits

83,358



43



0.20

%


10,058



5



0.22

%

Federal funds sold

2,673





0.06

%


1,075





0.05

%


Total interest-earning assets

2,320,811



23,898



4.09

%


2,230,918



24,386



4.35

%

Noninterest-earning:












Cash and due from banks

16,717







29,818






Allowance for loan losses

(33,704)







(31,519)






Premises and equipment, net

42,571







37,030






Other real estate

32,814







44,363






Other assets

144,998







143,634







Total assets

$

2,524,207







$

2,454,244






Liabilities and shareholders' equity












Interest-bearing liabilities:












Demand deposits

$

693,000



$

507



0.29

%


$

605,309



$

425



0.28

%

Savings deposits

307,463



301



0.39

%


317,336



353



0.44

%

Time deposits

701,193



1,782



1.01

%


730,381



1,944



1.06

%


Total interest-bearing deposits

1,701,656



2,590



0.60

%


1,653,026



2,722



0.66

%

Federal funds purchased

424



1



0.58

%


40,864



76



0.75

%

Securities sold under agreements to repurchase

17,089



5



0.13

%


13,809



8



0.22

%

Other short-term borrowings

39,622



31



0.31

%


89,185



341



1.52

%

Subordinated debt

46,393



282



2.41

%


67,527



881



5.19

%

Long-term debt

10,000



10



0.41

%






%


Total interest-bearing liabilities

1,815,184



2,919



0.64

%


1,864,411



4,028



0.86

%

Noninterest-bearing:












Demand deposits

448,889







369,419






Other liabilities

25,820







29,988






Shareholders' equity

234,314







190,426







Total liabilities and shareholders' equity

$

2,524,207







$

2,454,244






Net interest income/spread



$

20,979



3.45

%




$

20,358



3.49

%

Net interest margin





3.59

%






3.63

%













(1) Interest income includes the effect of taxable-equivalent adjustment for 2013 and 2012 of $38,000 and $17,000, respectively.

(2) Interest income includes the effect of taxable-equivalent adjustment for 2013 and 2012 of $83,000 and $102,000, respectively.

 

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