Fidelity Southern Corporation Earns $8.0 Million In Second Quarter Of 2014

PR Newswire

ATLANTA, July 17, 2014 /PRNewswire/ -- Fidelity Southern Corporation ("Fidelity" or the "Company") ( LION ), holding company for Fidelity Bank (the "Bank"), today reported financial results for the three and six months ended June 30, 2014.

KEY RESULTS

  • Net Income of $8.0 million and $14.0 million in the three and six months ended June 30, 2014, respectively, or $0.34 and $0.60 per diluted share for the same periods
  • Return on average assets of 1.22% and 1.10% for the three and six months ended June 30, 2014, respectively
  • Increased tangible book value by $1.12 to $11.66 per share or 10.6%, year over year
  • Core deposit growth for the second quarter of 2014 and year over year of $40.1 million or 2.6% and $180.1 million or 12.9%, respectively
  • Net interest margin increased 36 basis points compared to the first quarter of 2014
  • Loan portfolio increased during the second quarter of 2014 and year over year by $120.5 million or 6.5% and $192.6 million or 10.8%, respectively, to almost $2.0 billion
  • Funded closed mortgage production of $561.4 million for the second quarter and $882.2 million so far in 2014
  • Sold $579.2 million in indirect, mortgage and SBA loans during the second quarter and $1.1 billion so far in 2014
  • Increased gross revenue by 16.3% during the second quarter of 2014 to $49.4 million and generated $91.8 million so far in 2014

Fidelity's Chairman, Jim Miller, said, "This was a strong quarter. Significantly, mortgage banking activity has increased during the year after the refinance boom ended to what is now a sustainable level and mortgage servicing also benefits from this. Overall, organic loan growth was strong, led by commercial, indirect automobile lending, and by single family construction lending, which will expand into Orlando this month.

"Trust and wealth management began operations in July and a substantial volume of trust assets is in process of being booked. Key personnel already hired will be supplemented by professionals in Georgia and Florida where offices in Savannah and Ponte Vedra are planned for this year.

"The nine newly acquired retail branches already reported should open now through December and we will seek further locations and deposits. As always, we remain focused on building long-term share value for our shareholders and on current return to them as well."

BALANCE SHEET

Total assets at June 30, 2014 were $2.7 billion, an increase of $180.9 million, or 7.1%, compared to March 31, 2014. This increase is primarily attributable to an increase in loan production for the second quarter of 2014, which resulted in a decrease of cash and cash equivalents of $108.9 million during the second quarter of 2014 and an increase in other borrowings of $144.1 million compared to March 31, 2014.

Loans

Total loans held for investment at June 30, 2014 increased by $120.5 million, or 6.5% compared to March 31, 2014, and $192.6 million, or 10.8% compared to June 30, 2013. This growth occurred largely due to an increase in indirect loans of $72.0 million, or 7.8%, compared to March 31, 2014 and an increase in mortgage loans of $26.4 million, or 18.6% compared to March 31, 2014. This increase is primarily due to mortgage and indirect lending increasing production and opening loan production offices in new market areas.

Loans held for sale also increased as of June 30, 2014 by $159.2 million, or 88.2%, compared to March 31, 2014. This increase was primarily attributable to growth in residential mortgage and indirect loans held for sale of $79.5 million, or 70.8% and $80.0 million, or 133.3%, respectively, compared to March 31, 2014.

Asset Quality

Asset quality trends continued to be favorable during the second quarter of 2014.

  • Net charge-off ratio, annualized of 0.42% for the second quarter of 2014 and 0.20% year to date 2014, compared to 0.40% for the second quarter of 2013 and 0.63% year to date 2013
  • Nonperforming asset ratio of 3.71% at June 30, 2014, a decrease from 4.39% and 6.30% at March 31, 2014, and June 30, 2013, respectively
  • Decrease in classified assets of $8.0 million or 7.4% for the second quarter and decrease of $45.0 million,or 31.3% year over year

Deposits

Total deposits of $2.2 billion at June 30, 2014 increased by $25.0 million, or 1.1%, and $70.4 million, or 3.3%, from March 31, 2014 and June 30, 2013, respectively. The quarterly and year-over-year increases were due primarily to growth of $35.1 million, or 6.7%, and $127.4 million, or 29.4%, during the second quarter of 2014 and year-over-year in noninterest-bearing demand deposits which comprised almost 25% of total average deposits in the second quarter of 2014 compared to just over 19% in the second quarter of 2013.

Core deposits, including noninterest-bearing demand deposits, increased by $40.1 million, or 2.6%, and $180.1 million, or 12.9%, during the second quarter of 2014 and year-over-year, respectively. The Bank has continued to strategically focus on core deposit growth and realized continued benefits from the transaction account acquisition initiative, particularly in business accounts, which has continued into 2014.

These increases in noninterest-bearing demand deposits were partially offset by a decrease in time deposits on a linked-quarter and year-over-year basis. Time deposits, including brokered deposits, decreased by $15.1 million, or 2.3%, during the second quarter of 2014 and $109.7 million, or 14.5%, year-over-year and comprised less than 30% of average deposits for the second quarter of 2014, down from over 35% of average deposits for the second quarter of 2013.

The following table summarizes average deposit composition and average rate paid for the periods presented.

































For the Three Months Ended


June 30, 2014


March 31, 2014


June 30, 2013

($ in millions)

Average Amount


Rate


Percent of
Total
Deposits


Average
Amount


Rate


Percent of
Total
Deposits


Average Amount


Rate


Percent of
Total
Deposits

Noninterest-bearing demand deposits

$

534.5



%


24.3

%


$

478.0



%


22.2

%


$

402.9



%


19.4

%

Interest-bearing demand deposits

694.1



0.27

%


31.6

%


698.8



0.29

%


32.3

%


627.9



0.27

%


30.2

%

Savings deposits

314.9



0.37

%


14.3

%


308.8



0.39

%


14.3

%


318.8



0.41

%


15.3

%

Time deposits

653.4



0.96

%


29.8

%


675.0



1.01

%


31.2

%


730.0



1.02

%


35.1

%

Total average deposits

$

2,196.9



0.43

%


100.0

%


$

2,160.6



0.47

%


100.0

%


$

2,079.6



0.50

%


100.0

%



















INCOME STATEMENT

Net Interest Margin

Net interest margin was 3.92% and 3.75% for the three and six months ended June 30, 2014, respectively, compared to 3.42% and 3.59% for the same periods in 2013. The increase from 2013 to 2014 was primarily attributable to declines in subordinated debt expense. See "Average Balance, Interest and Yields" below. On a linked-quarter basis, net interest margin increased 36 basis points compared to 3.56% for the first quarter of 2014. This increase is primarily attributable to a 29 basis point increase in yield for total loans. The linked-quarter increase in yield on total loans is primarily attributable to accretion of the loan discount discussed in "Interest Income" below.

Excluding the accretion of the loan discount, the net interest margin was 3.63% and 3.59% for the three and six months ended June 30, 2014, respectively, compared to 3.34% and 3.42% for the same periods in 2013. The improvement in net interest margin for both periods from 2013 to 2014 is related to the decline in subordinated debt expense discussed above. See further discussion of accretion of the loan discount in "Interest Income" below. On a linked-quarter basis, net interest margin, excluding the accretion of the loan discount, declined 16 basis points from 3.47% for the first quarter of 2014 as new loans were originated in 2014 at lower market yields.

Interest Income

Interest income was $26.1 million and $49.1 million for the three and six months ended June 30, 2014, an increase of $2.2 million and $293,000, or 9.2% and 0.6%, respectively, as compared to the same periods in 2013. The increase in interest income for the three months ended June 30, 2014 was primarily attributable to the increase in accretion of the loan discount of $1.3 million due to improvements in cash flows on acquired loans and favorable resolution of covered assets.

On a linked-quarter basis, interest income increased by $3.0 million, or 12.9%. This increase occurred primarily due to the increase in accretion of the loan discount noted above and the increase in mortgage loans held for sale production volume during the second quarter of 2014 compared to the first quarter of 2014. This increase was partially offset by a slight decrease in loan yields as new loans were originated at lower market yields.

Interest Expense

Interest expense was $2.7 million and $5.5 million for the three and six months ended June 30, 2014, a decrease of $1.1 million and $2.2 million, or 28.5% and 28.3%, respectively, as compared to the same periods in 2013. The decrease from 2013 to 2014 for both periods occurred primarily due to a reduction of $591,000 and $1.2 million in subordinated debt expense from the repayment of $21.5 million in subordinated debt in the third quarter of 2013. On a linked-quarter basis, interest expense was flat, decreasing by just $131,000, or 4.7%.

Noninterest Income

Noninterest income was $23.3 million and $42.7 million for the three and six months ended June 30, 2014, a decrease of $4.9 million and $10.6 million, or 17.4% and 19.9%, respectively, as compared to the same periods in 2013. The decrease in noninterest income recorded for 2014 compared to 2013 was primarily attributable to decreases in noninterest income from mortgage banking activities of $6.6 million and $13.8 million for the same periods. Closed mortgage loan funding was $561.4 million and $882.2 million for the three and six months ended June 30, 2014, respectively, compared to $784.0 million and $1.4 billion for the same periods in 2013. The decrease in mortgage banking income was partially offset by increases in noninterest income from indirect lending activities of $850,000 and $3.9 million for the same periods, primarily due to higher volume of loans sold to investors.

On a linked-quarter basis, noninterest income increased by $3.9 million, or 20.3%. This increase was primarily attributable to an increase in noninterest income from mortgage banking activities of $3.0 million or 28.2%. Closed mortgage loan funding increased by $240.6 million, or 75.0%, during the second quarter of 2014 as compared to the first quarter of 2014.

Noninterest Expense

Noninterest expense was $33.7 million and $66.4 million for the three and six months ended June 30, 2014, an increase of $584,000 and $716,000, or 1.8% and 1.1%, respectively, as compared to the same periods in 2013. These increases are largely attributable to increases in salaries and benefits of $1.7 million and $3.5 million and net occupancy expenses of $1.1 million and $1.3 million, respectively, for the same periods due to the increased number of employees in our retail and mortgage divisions added to support organic growth and expansion of our branch network. These increases were partially offset by a reduction in commissions expense of $2.4 million and $5.3 million for the same periods due to lower mortgage banking volume from 2013 to 2014.

On a linked-quarter basis, noninterest expense increased $1.1 million, or 3.3%. This increase was primarily attributable to an increase in commissions expense of $2.1 million, or 61.7%, due to higher mortgage banking volume for the second quarter of 2014 as compared to the first quarter of 2014. See "Noninterest Income" above for further discussion of mortgage banking volume. This increase was partially offset by a decrease in write-downs on other real estate of $1.2 million or 85.2%.

ABOUT FIDELITY SOUTHERN CORPORATION

Fidelity Southern Corporation, through its operating subsidiaries Fidelity Bank and LionMark Insurance Company, provides banking and wealth management services and credit-related insurance products through branches in Atlanta, Georgia, and in Jacksonville, Florida, and an insurance office in Atlanta, Georgia. SBA, indirect automobile, and mortgage loans are provided throughout the South. 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 2013 Annual Report filed on Form 10-K with the Securities and Exchange Commission. Additional information and other factors that could affect future financial results are included in Fidelity's filings with the Securities and Exchange Commission.

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(UNAUDITED)






























As of or for the Three Months Ended


As of or for the Six Months Ended

($ in thousands, except per share data)

June 30,
2014


March 31,
2014


December 31,
2013


September 30,
2013


June 30,
2013


June 30,
2014


June 30,
2013

RESULTS OF OPERATIONS














Net interest income

$

23,391



$

20,271



$

20,858



$

21,529



$

20,134



$

43,662



$

41,209


Provision for loan losses

566



(2,450)



273



1,122



570



(1,884)



4,046


Noninterest income

23,318



19,383



17,753



25,844



28,239



42,701



53,286


Noninterest expense

33,743



32,656



32,538



34,102



33,159



66,399



65,683


Income tax expense

4,442



3,385



1,937



4,298



5,211



7,827



8,842


Net income

7,958



6,063



3,863



7,851



9,433



14,021



15,924
















PERFORMANCE














Earnings per share - basic (1)

$

0.37



$

0.28



$

0.18



$

0.33



$

0.52



$

0.66



$

0.90


Earnings per share - diluted (1)

0.34



0.26



0.16



0.30



0.46



0.60



0.80


Return on average assets

1.22

%


0.97

%


0.61

%


1.20

%


1.47

%


1.10

%


1.27

%

Return on average equity

13.09

%


10.36

%


6.54

%


12.04

%


17.40

%


11.75

%


15.58

%

Yield on interest earning assets

4.37

%


4.05

%


4.09

%


4.15

%


4.05

%


4.21

%


4.25

%

Cost of funds

0.60

%


0.63

%


0.64

%


0.72

%


0.77

%


0.61

%


0.81

%

Net interest margin

3.92

%


3.56

%


3.59

%


3.59

%


3.42

%


3.75

%


3.59

%















CAPITAL














Cash dividends paid per common share

$

0.08



$

0.04



$

0.02



$



$



$

0.12



$


Dividend payout ratio (4)

21.62

%


14.29

%


11.11

%


%


%


18.18

%


%

Tier 1 risk-based capital

12.12

%


13.21

%


12.71

%


12.97

%


15.62

%


12.12

%


15.62

%

Total risk-based capital

13.34

%


14.46

%


13.96

%


14.23

%


16.88

%


13.34

%


16.88

%

Leverage ratio

11.14

%


11.21

%


11.02

%


10.53

%


12.96

%


11.14

%


12.96

%















BALANCE SHEET SUMMARY














Loans held for sale

$

339,719



$

180,550



$

187,366



$

216,736



$

355,017



$

339,719



$

355,017


Loans

1,968,614



1,848,092



1,893,037



1,831,708



1,775,972



1,968,614



1,775,972


Allowance for loan losses

(28,912)



(30,797)



(33,684)



(33,661)



(33,309)



(28,912)



(33,309)


Total assets

2,737,742



2,556,887



2,564,168



2,567,482



2,675,233



2,737,742



2,675,233


Total deposits

2,225,419



2,200,389



2,202,452



2,169,275



2,155,047



2,225,419



2,155,047


Shareholders' equity

250,775



242,391



236,230



233,300



273,102



250,775



273,102
















STOCK PERFORMANCE














Market price:














Closing (1)

$

12.99



$

13.97



$

16.54



$

15.21



$

12.19



$

12.99



$

12.19


High close (1)

14.44



16.57



17.80



15.84



12.96



16.57



12.96


Low close (1)

12.80



13.63



13.32



12.47



10.65



12.80



9.35


Daily average trading volume

56,991



53,851



54,195



92,997



58,307



55,446



41,749


Shares of common stock outstanding (1)

21,318



21,277



21,343



21,240



21,147



21,318



21,147


Book value per common share  (1)

$

11.76



$

11.39



$

11.07



$

10.98



$

10.65



$

11.76



$

10.65


Tangible book value per common share  (1)

11.66



11.28



10.96



10.87



10.54



11.66



10.54


Price to book value

1.10



1.23



1.49



1.39



1.14



1.10



1.14


Price to tangible book value

1.11



1.24



1.51



1.40



1.16



1.11



1.16


ASSET QUALITY














Total nonperforming loans

$

46,132



$

56,600



$

59,582



$

61,458



$

72,388



$

46,132



$

72,388


Total nonperforming assets (2)

74,130



82,545



91,783



97,132



114,492



74,130



114,492


Nonperforming Asset Ratio (3)

3.71

%


4.39

%


4.77

%


5.05

%


6.30

%


3.71

%


6.30

%

OTHER INFORMATION














Noninterest income to gross revenue (5)

47.22

%


45.65

%


42.75

%


50.90

%


54.19

%


49.44

%


56.39

%

Full-Time equivalent employees

968.3



927.8



889.9



865.1



843.1



968.3



843.1




(1)  

Historical periods prior to December 31, 2013 adjusted for stock dividends

(2)

Nonperforming assets include nonaccrual loans, repossessions and ORE .

(3)

Nonperforming asset ratio is defined as nonperforming assets over gross total loans held to maturity, repossessions and ORE

(4)  

Calculated using Dividends Paid divided by Basic EPS

(5)  

Gross revenue is calculated as interest income plus non-interest income

 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)






























For the Three Months Ended


For the Six Months Ended

(in thousands, except per share data)

June 30,
2014


March 31,
2014


December 31,
2013


September 30,
2013


June 30,
2013


June 30,
2014


June 30,
2013

INTEREST INCOME














Loans, including fees

$

24,801



$

21,791



$

22,639



$

23,900



$

22,949



$

46,592



$

46,893


Investment securities

1,244



1,249



1,095



977



911



2,493



1,939


Federal funds sold and bank deposits

20



38



43



53



15



58



18


Total interest income

26,065



23,078



23,777



24,930



23,875



49,143



48,850


INTEREST EXPENSE














Deposits

2,328



2,488



2,590



2,601



2,600



4,816



5,227


Other borrowings

69



44



47



84



273



113



679


Subordinated debt

277



275



282



716



868



552



1,735


Total interest expense

2,674



2,807



2,919



3,401



3,741



5,481



7,641


Net interest income

23,391



20,271



20,858



21,529



20,134



43,662



41,209


Provision for loan losses

566



(2,450)



273



1,122



570



(1,884)



4,046


Net interest income after provision for loan losses

22,825



22,721



20,585



20,407



19,564



45,546



37,163


NONINTEREST INCOME














Service charges on deposit accounts

1,059



1,009



1,119



1,075



1,020



2,068



1,969


Other fees and charges

1,100



920



1,012



997



975



2,020



1,862


Mortgage banking activities

13,570



10,587



10,798



17,809



20,158



24,157



37,953


Indirect lending activities

3,631



4,676



2,030



2,583



2,781



8,307



4,427


SBA lending activities

1,359



844



492



647



1,417



2,203



2,501


Bank owned life insurance

755



301



308



326



326



1,056



639


Securities gains





188










Other

1,844



1,046



1,806



2,407



1,562



2,890



3,935


Total noninterest income

23,318



19,383



17,753



25,844



28,239



42,701



53,286


NONINTEREST EXPENSE














Salaries and employee benefits

15,973



16,085



14,660



14,424



14,278



32,058



28,560


Commissions

5,610



3,470



4,288



6,019



7,979



9,080



14,369


Net occupancy

3,407



2,603



2,799



2,844



2,291



6,010



4,698


Communication

977



972



856



754



805



1,949



1,565


Other

7,776



9,526



9,935



10,061



7,806



17,302



16,491


Total noninterest expense

33,743



32,656



32,538



34,102



33,159



66,399



65,683


Income before income tax expense

12,400



9,448



5,800



12,149



14,644



21,848



24,766


Income tax expense

4,442



3,385



1,937



4,298



5,211



7,827



8,842


NET INCOME

7,958



6,063



3,863



7,851



9,433



14,021



15,924


Preferred stock dividends and discount accretion







(817)



(823)





(1,646)


Net income available to common equity

$

7,958



$

6,063



$

3,863



$

7,034



$

8,610



$

14,021



$

14,278
















EARNINGS PER SHARE: (1)














Basic earnings per share

$

0.37



$

0.28



$

0.18



$

0.33



$

0.52



$

0.66



$

0.90


Diluted earnings per share

$

0.34



$

0.26



$

0.16



$

0.30



$

0.46



$

0.60



$

0.80


Weighted average common shares outstanding-basic

21,301



21,279



21,332



21,290



16,567



21,274



15,917


Weighted average common shares outstanding-diluted

23,427



23,439



23,533



23,428



18,582



23,417



17,883
















(1)

Historical periods prior to December 31, 2013 adjusted for stock dividends

 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)





















($ in thousands)

June 30,
2014


March 31,
2014


December 31,
2013


September 30,
2013


June 30,
2013

ASSETS










Cash and cash equivalents

$

55,139



$

166,952



$

116,559



$

140,871



$

158,837


Investment securities available-for-sale

164,190



163,803



168,865



170,338



163,764


Investment securities held-to-maturity

7,851



3,795



4,051



4,468



4,978


Loans held-for-sale

339,719



180,550



187,366



216,736



355,017


Loans

1,968,614



1,848,092



1,893,037



1,831,708



1,775,972


Allowance for loan losses

(28,912)



(30,797)



(33,684)



(33,661)



(33,309)


Loans, net of allowance for loan losses

1,939,702



1,817,295



1,859,353



1,798,047



1,742,663


Premises and equipment, net

50,419



48,937



44,555



41,964



41,843


Other real estate, net

26,930



24,547



30,982



34,493



40,882


Bank owned life insurance

33,995



34,127



33,855



33,575



33,276


Servicing rights

57,526



55,281



53,202



52,048



44,734


Other assets

62,271



61,600



65,380



74,942



89,239


Total assets

$

2,737,742



$

2,556,887



$

2,564,168



$

2,567,482



$

2,675,233












LIABILITIES










Deposits:










Noninterest-bearing demand deposits

$

560,932



$

525,853



$

488,224



$

448,087



$

433,565


Interest-bearing deposits:










Demand and money market

704,778



700,268



701,556



685,437



653,172


Savings

314,795



314,282



325,133



317,997



313,716


Time deposits

644,914



659,986



687,539



717,754



754,594


Total deposits

2,225,419



2,200,389



2,202,452



2,169,275



2,155,047


Other borrowings

187,815



43,685



59,233



88,422



143,641


Subordinated debt

46,393



46,393



46,393



46,393



67,527


Other liabilities

27,340



24,029



19,860



30,092



35,916


Total liabilities

2,486,967



2,314,496



2,327,938



2,334,182



2,402,131












SHAREHOLDERS' EQUITY










Preferred stock









47,785


Common stock

160,586



159,654



158,153



156,156



153,107


Accumulated other comprehensive gain, net of tax

2,804



1,606



968



1,723



1,475


Retained earnings

87,385



81,131



77,109



75,421



70,735


Total shareholders' equity

250,775



242,391



236,230



233,300



273,102


Total liabilities and shareholders' equity

$

2,737,742



$

2,556,887



$

2,564,168



$

2,567,482



$

2,675,233






















 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
LOANS BY CATEGORY
(UNAUDITED)





















($ in thousands)

June 30,
2014


March 31,
2014


December 31,
2013


September 30,
2013


June 30,
2013

Commercial

$

536,435



$

525,347



$

530,977



$

512,875



$

507,188


SBA

136,946



138,331



134,823



133,867



131,771


Total commercial and SBA loans

673,381



663,678



665,800



646,742



638,959


Construction loans

113,873



101,443



101,698



99,379



100,986


Indirect automobile

997,117



925,101



975,223



942,217



904,098


Installment

15,892



15,932



13,473



14,270



15,557


Total consumer loans

1,013,009



941,033



988,696



956,487



919,655


First mortgage

93,453



68,546



60,928



51,807



41,815


Second mortgage

74,898



73,392



75,915



77,293



74,557


Total mortgage loans

168,351



141,938



136,843



129,100



116,372


Loans

1,968,614



1,848,092



1,893,037



1,831,708



1,775,972












Loans held-for-sale:










Residential mortgage

191,666



112,195



127,850



174,409



309,175


SBA

8,053



8,355



9,516



7,327



10,842


Indirect automobile

140,000



60,000



50,000



35,000



35,000


Total loans held-for-sale

339,719



180,550



187,366



216,736



355,017


Total loans

$

2,308,333



$

2,028,642



$

2,080,403



$

2,048,444



$

2,130,989












Noncovered loans

$

1,923,088



$

1,796,256



$

1,834,675



$

1,768,384



$

1,691,258


Covered loans

45,526



51,836



58,362



63,324



84,714


Loans held-for-sale

339,719



180,550



187,366



216,736



355,017


Total loans

$

2,308,333



$

2,028,642



$

2,080,403



$

2,048,444



$

2,130,989


 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
(UNAUDITED)






















As of or for the Three Months Ended

($ in thousands)

June 30,
2014


March 31,
2014


December 31,
2013


September 30,
2013


June 30,
2013

Balance at beginning of pe... riod

$

30,797



$

33,684



$

33,661



$

33,309



$

33,910


Net charge-offs/(recoveries):










Commercial and SBA

1,467



364



(147)



406



695


Construction

14



(1,680)



(250)



(241)



40


Indirect automobile and installment loans

623



743



696



930



941


Mortgage

83



35



102



67



27


Covered

(161)



448



(57)



37



8


Acquired, noncovered

(1)



(15)







10


Total net charge-offs/(recoveries)

2,025



(105)



344



1,199



1,721


Provision for loan losses (1)

566



(2,450)



273



1,122



570


(Decrease)/increase in FDIC loss share receivable

(426)



(542)



94



429



550


Balance at end of period

$

28,912



$

30,797



$

33,684



$

33,661



$

33,309












Net charge-offs/(recoveries), annualized to average loans

0.42

%


(0.02)

%


0.06

%


0.27

%


0.40

%

Total Average Loans

$

2,179,846



$

2,070,909



$

2,070,909



$

2,061,358



$

2,150,917


Allowance for loan losses as a percentage of loans

1.47

%


1.67

%


1.78

%


1.83

%


1.86

%











(1) Net of benefit attributable to FDIC loss share receivable


 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
NONPERFORMING AND CLASSIFIED ASSETS
(UNAUDITED)





















($ in thousands)

June 30,
2014


March 31,
2014


December 31,
2013


September 30,
2013


June 30,
2013

NONCOVERED NONPERFORMING ASSETS










Nonaccrual loans

$

35,283



$

40,983



$

40,944



$

36,711



$

41,757


Repossessions

1,068



1,398



1,219



1,181



1,222


Other real estate (ORE)

19,855



19,573



24,791



26,016



28,342


Noncovered nonperforming assets

$

56,206



$

61,954



$

66,954



$

63,908



$

71,321


NONCOVERED NONPERFORMING ASSET RATIOS










Loans 30-89 days past due

$

2,874



$

4,045



$

5,132



$

6,576



$

5,764


Loans past due 90 days or more and still accruing

$



$

488



$



$



$


Loans 30-89 days past due to total loans

0.15

%


0.23

%


0.28

%


0.37

%


0.34

%

Loans past due 90 days or more and still accruing to total loans

%


0.03

%


%


%


%

Nonperforming assets to total loans, ORE, and repossessions

2.89

%


3.41

%


3.60

%


3.56

%


4.14

%











COVERED NONPERFORMING ASSETS










Nonaccrual loans

$

10,849



$

15,617



$

18,638



$

24,747



$

30,631


Other real estate

7,075



4,974



6,191



8,477



12,540


Covered nonperforming assets

$

17,924



$

20,591



$

24,829



$

33,224



$

43,171












ASSET QUALITY RATIOS










Classified Asset Ratio (3)

30.98

%


34.04

%


36.85

%


41.30

%


39.15

%

Including covered loans:










Nonperforming loans as a % of loans

2.34

%


3.06

%


3.15

%


3.36

%


4.08

%

Nonperforming assets as a % of loans plus ORE

3.71

%


4.39

%


4.77

%


5.05

%


5.05

%

ALL to nonperforming loans

62.67

%


54.41

%


56.53

%


54.77

%


46.01

%

Net charge-offs/(recoveries), annualized to average loans

0.42

%


(0.02)

%


0.06

%


0.27

%


0.40

%

ALL as a % of loans

1.47

%


1.67

%


1.78

%


1.83

%


1.86

%

Excluding covered loans:










Nonperforming loans as a % of loans

1.83

%


2.28

%


2.23

%


2.08

%


2.47

%

Nonperforming assets as a % of loans plus ORE

2.89

%


3.41

%


3.60

%


3.56

%


4.14

%

ALL to nonperforming loans

81.94

%


75.15

%


74.09

%


3.56

%


75.74

%

Net charge-offs/(recoveries), annualized to average loans

0.46

%


(0.12)

%


0.09

%


0.27

%


0.40

%

ALL as a % of loans

1.50

%


1.71

%


1.84

%


1.90

%


1.97

%











CLASSIFIED ASSETS










Classified loans (1)

$

71,022



$

81,037



$

82,625



$

91,450



$

101,957


ORE and repossessions

27,998



25,945



32,201



35,674



42,104


Total classified assets (2)

$

99,020



$

106,982



$

114,826



$

127,124



$

144,061












(1) Amount of SBA guarantee included

$

6,462



$

8,506



$

7,869



$

13,115



$

14,379


(2) Classified assets include loans having a risk rating of substandard or worse, both accrual and nonaccrual, repossessions and ORE.



(3) Classified asset ratio is defined as classified assets as a percentage of Tier 1 capital plus allowance for loan losses.





 

 

























FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

ANALYSIS OF INDIRECT LENDING

(UNAUDITED)

















As of or for the Three Months Ended


($ in thousands)

June 30,
2014


March 31,
2014


December 31,
2013


September 30,
2013


June 30,
2013


Average loans outstanding (4)

$

1,075,657



$

1,032,592



$

1,010,229



$

957,737



$

979,279



Past due loans:












Amount 30+ days past due

$

1,363



$

1,117



$

1,561



$

1,277



$

1,697




Number 30+ days past due

125



109



130



130



173



30+ day performing delinquency rate (1)

0.12

%


0.11

%


0.15

%


0.13

%


0.18

%


Nonperforming loans

$

743



$

772



$

806



$

925



$

594



Nonperforming loans as a percentage of period end loans (1)

0.07

%


0.08

%


0.08

%


0.09

%


0.06

%


Net charge-offs

$

614



$

733



$

703



$

908



$

886



Net charge-off rate (2)

0.27

%


0.31

%


0.29

%


0.39

%


0.38

%


Number of vehicles repossessed during the period

126



143



198



199



168



Average beacon score of portfolio

745



752



740



739



739



Production by state:












Alabama

$

28,530



$

22,155



$

19,798



$

22,599



$

16,576




Arkansas

36,572



22,183



16,352



13,757



7,728




North Carolina

24,069



18,980



18,731



19,292



18,750




South Carolina

23,139



14,657



13,302



10,322



10,180




Florida

110,940



76,829



76,253



77,873



72,676




Georgia

54,592



45,154



43,064



44,171



38,203




Mississippi

28,569



23,941



20,341



23,292



19,626




Tennessee

22,196



15,746



13,674



17,122



19,347




Virginia

16,017



11,458



11,040



11,877



10,339




Texas (3)

39,320



15,429



5,045








Louisiana (3)

$

2,595













Total production by state

$

386,539



$

266,532



$

237,600



$

240,305



$

213,425



Loan sales

$

118,344



$

195,027



$

88,153



$

93,602



$

152,418



Portfolio yield (4)

3.26

%


3.39

%


3.48

%


3.57

%


3.68

%















(1) 

Calculated by dividing loan category as of the end of the period by period-end loans including held for sale for the specified loan portfolio

(2) 

Calculated by dividing annualized net charge-offs for the period by average loans held for investment during the period for the specified loan category

(3) 

Expansion into Texas began in October of 2013. Expansion into Louisiana began in May of 2014

(4) 

Includes held-for-sale

 

 

























FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES


ANALYSIS OF MORTGAGE LENDING


(UNAUDITED)


















For the Three Months Ended


($ in thousands)

June 30,
2014


March 31,
2014


December 31,
2013


September 30,
2013


June 30,
2013


Average loans outstanding (1)

$

228,298



$

170,988



$

194,626



$

328,038



$

297,024



Average servicing outstanding

$

4,691,759



$

4,473,027



$

4,221,134



$

3,953,760



$

3,239,672



% of loan production for purchases

86.18

%


78.48

%


78.72

%


74.13

%


58.30

%


% of loan production for refinance loans

13.82

%


21.52

%


21.28

%


25.87

%


41.70

%


Production by region:











Georgia

$

328,936



$

181,667



$

259,289



$

353,187



$

427,815



Florida/Alabama

26,383



20,816



19,724



17,807



24,025



Virginia/Maryland

132,816



73,471



91,494



151,573



167,099



Total retail

488,135



275,954



370,507



522,567



618,939



Wholesale

73,252



44,862



55,149



96,773



165,022



Total production by region

$

561,387



$

320,816



$

425,656



$

619,340



$

783,961



Loan sales

$

446,176



$

328,145



$

467,932



$

753,196



$

756,224



Portfolio yield (1)

4.07

%


4.26

%


4.10

%


3.84

%


3.59

%









































INCOME FROM MORTGAGE BANKING ACTIVITIES


(UNAUDITED)


















For the Three Months Ended


($ in thousands)

June 30,
2014


March 31,
2014


December 31,
2013


September 30,
2013


June 30,
2013


Marketing gain, net

$

10,954



$

7,991



$

8,568



$

12,785



$

13,916



Origination points and fees

3,148



1,787



2,474



3,806



4,212



Loan servicing revenue

2,998



3,005



2,609



2,402



2,021



MSR amortization and impairment adjustments

(3,530)



(2,196)



(2,853)



(1,184)



9



Total mortgage banking activities

$

13,570



$

10,587



$

10,798



$

17,809



$

20,158





























Noncash items included in income from mortgage banking activities:











Capitalized MSR, net

$

3,693



$

2,170



$

3,992



$

7,367



$

5,934



Valuation on MSR

(1,838)



(619)



(1,360)



138



1,551



Mark to market adjustments

1,609



1,362



344



2,605



(6,634)



Total noncash items

$

3,464



$

2,913



$

2,976



$

10,110



$

851
















(1) Includes held-for-sale















 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE, INTEREST AND YIELDS
(UNAUDITED)
























For the Six Months Ended


June 30, 2014


June 30, 2013


Average


Income/


Yield/


Average


Income/


Yield/

($ in thousands)

Balance


Expense


Rate


Balance


Expense


Rate

Assets












Interest-earning assets:












Loans, net of unearned income:












Taxable

$

2,116,931



$

46,445



4.42

%


$

2,116,925



$

46,785



4.46

%

Tax-exempt (1)

8,747



227



5.23

%


6,959



167



4.84

%

Total loans

2,125,678



46,672



4.43

%


2,123,884



46,952



4.46

%

Investment securities:












Taxable

161,846



2,182



2.72

%


148,940



1,594



2.16

%

Tax-exempt (2)

14,997



478



6.43

%


17,195



529



6.20

%

Total investment securities

176,843



2,660



3.03

%


166,135



2,123



2.58

%

Federal funds sold and bank deposits

61,633



58



0.19

%


41,642



18



0.09

%

Total interest-earning assets

2,364,154



49,390



4.21

%


2,331,661



49,093



4.25

%

Noninterest-earning assets:












Cash and due from banks

17,298







14,107






Allowance for loan losses

(32,309)







(33,462)






Premises and equipment, net

48,624







39,515






Other real estate

27,458







38,899






Other assets

144,103







134,409






Total assets

$

2,569,328







$

2,525,129






Liabilities and shareholders' equity












Interest-bearing liabilities:












Demand deposits

$

696,464



$

973



0.28

%


$

624,179



$

841



0.27

%

Savings deposits

311,871



589



0.38

%


324,552



706



0.44

%

Time deposits

664,169



3,254



0.99

%


721,348



3,680



1.03

%

Total interest-bearing deposits

1,672,504



4,816



0.58

%


1,670,079



5,227



0.63

%













Other borrowings

78,427



113



0.29

%


173,399



679



0.79

%

Subordinated debt

46,393



552



2.40

%


67,527



1,735



5.18

%

Total interest-bearing liabilities

1,797,324



5,481



0.61

%


1,911,005



7,641



0.81

%

Noninterest-bearing:












Demand deposits

506,418







386,460






Other liabilities

24,912







20,532






Shareholders' equity

240,674







206,088






Total liabilities and shareholders' equity

$

2,569,328







$

2,524,085






Net interest income/spread



$

43,909



3.60

%




$

41,452



3.44

%

Net interest margin





3.75

%






3.59

%













(1)

Interest income includes the effect of taxable-equivalent adjustment for 2014 and 2013 of 79,500 and $58,000, respectively, using a 35% tax rate.

(2) 

Interest income includes the effect of taxable-equivalent adjustment for 2014 and 2013 of $167,000 and $185,000, respectively, using a 35% tax rate.

 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE, INTEREST AND YIELDS
(UNAUDITED)
























For the Three Months Ended


June 30, 2014


June 30, 2013


Average


Income/


Yield/


Average


Income/


Yield/

($ in thousands)

Balance


Expense


Rate


Balance


Expense


Rate

Assets












Interest-earning assets:












Loans, net of unearned income:












Taxable

$

2,170,978



$

24,725



4.57

%


$

2,142,852



$

22,883



4.28

%

Tax-exempt (1)

8,868



116



5.25

%


8,065



102



5.07

%

Total loans

2,179,846



24,841



4.57

%


2,150,917



22,985



4.29

%

Investment securities:












Taxable

162,435



1,089



2.69

%


153,860



745



1.94

%

Tax-exempt (2)

15,073



239



6.36

%


16,502



253



6.15

%

Total investment securities

177,508



1,328



3.00

%


170,362



998



2.35

%

Federal funds sold and bank deposits

46,838



20



0.17

%


57,769



15



0.10

%

Total interest-earning assets

2,404,192



26,189



4.37

%


2,379,048



23,998



4.05

%

Noninterest-earning assets:












Cash and due from banks

15,615







14,250






Allowance for loan losses

(30,767)







(33,264)






Premises and equipment, net

48,767







41,126






Other real estate

26,133







39,014






Other assets

144,804







137,859






Total assets

$

2,608,744







$

2,578,033






Liabilities and shareholders' equity












Interest-bearing liabilities:












Demand deposits

$

694,144



$

466



0.27

%


$

627,892



$

423



0.27

%

Savings deposits

314,890



294



0.37

%


318,804



329



0.41

%

Time deposits

653,423



1,568



0.96

%


729,995



1,848



1.02

%

Total interest-bearing deposits

1,662,457



2,328



0.56

%


1,676,691



2,600



0.62

%

Other borrowings

93,374



69



0.30

%


192,089



273



0.57

%

Subordinated debt

46,393



277



2.39

%


67,527



868



5.16

%

Total interest-bearing liabilities

1,802,224



2,674



0.60

%


1,936,307



3,741



0.77

%

Noninterest-bearing liabilities and shareholders' equity:












Demand deposits

534,492







402,878






Other liabilities

28,124







21,357






Shareholders' equity

243,904







217,491






Total liabilities and shareholders' equity

$

2,608,744







$

2,578,033






Net interest income/spread



$

23,515



3.77

%




$

20,257



3.28

%

Net interest margin





3.92

%






3.42

%













(1)

Interest income includes the effect of taxable-equivalent adjustment for 2014 and 2013 of $40,500 and $36,000, respectively.

(2)

Interest income includes the effect of taxable-equivalent adjustment for 2014 and 2013 of $84,000 and $88,000, respectively.

 

Contacts:

Martha Fleming, Steve Brolly                 



Fidelity Southern Corporation (404) 240-1504


 

 

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