Le Lézard
Classified in: Business
Subject: ERN

Fidelity Southern Corporation Reports Earnings For First Quarter Of $6.1 Million


ATLANTA, April 18, 2019 /PRNewswire/ -- Fidelity Southern Corporation ("Fidelity" or the "Company") (NASDAQ: LION), holding company for Fidelity Bank (the "Bank"), today reported net income of $6.1 million, or $0.22 per diluted share, for the first quarter of 2019, compared with $9.9 million, or $0.36 per diluted share, for the fourth quarter of 2018, and $11.8 million or $0.43 per diluted share for the first quarter of 2018.

FIRST QUARTER 2019 HIGHLIGHTS:

BALANCE SHEET

Total assets increased by $56.1 million, or 1.2%, during the quarter to $4.8 billion at March 31, 2019, primarily due to an increase in investments of $33.7 million and an increase in loans held for sale of $24.4 million.  The increase in loans held for sale was primarily in mortgage loans, which increased $26.9 million, as seasonal production began to increase. The Bank continues to increase its available-for-sale investments portfolio as part of its strategy to reposition the balance sheet to higher yielding assets. Other assets also increased by $18.4 million, mainly due to the right of use lease asset of $15.5 million recorded during the quarter as a result of the implementation of the new lease standard.

Loans

Total loans increased by $15.7 million, or 0.4%, compared to December 31, 2018, as loans held for sale increased by $24.4 million, offset by an overall decrease in loans held for investment of $8.7 million. Loan growth in loans held for investment was experienced in all loan categories, excluding indirect auto, specifically in commercial, SBA and construction of $76.3 million and $31.3 million in mortgage. These increases were offset by a reduction of $114.5 million in indirect loans.

Asset Quality

Asset quality remained strong as nonperforming assets, excluding the guaranteed portion of government loans and acquired loans ("adjusted NPA's", a non-GAAP measure), remained flat during the quarter. Credit quality trend performance remains consistent and strong as net charge-offs were 0.10% of average loans for the quarter.

Fair Value Adjustments

Loan servicing rights decreased by $3.7 million, or 3.0%, during the quarter to $116.7 million at March 31, 2019, compared to $120.4 million at December 31, 2018. Mortgage servicing rights ("MSRs"), the primary component of loan servicing rights, contributed the majority of the change, decreasing by 2.7% to $108.4 million at March 31, 2019. The current estimated fair market value of MSRs was $113.6 million at March 31, 2019.

At March 31, 2019, fair value adjustments recorded on the balance sheet for loans held for sale, interest rate lock commitments ("IRLCs"), and hedge items were $12.4 million, a $3.7 million, or 42.1% increase, from December 31, 2018. The gross pipeline of interest rate lock commitments was $132.0 million higher at quarter end, compared to December 31, 2018, due to an increase in seasonal production.

Deposits

Core deposits decreased by $19.3 million during the quarter to $3.0 billion with decreases in money market and savings of $30.6 million and noninterest bearing demand deposits of $11.4 million, offset by increases in interest-bearing demand deposits of $22.7 million. The decrease in core deposits was offset by an increase in time deposits of $20.2 million during the quarter, mainly due to an increase of $30.0 million in brokered deposits, resulting in an increase in total deposits of $955,000, or 0.02%.

INCOME STATEMENT

Net Income

Net income was $6.1 million, or a $3.8 million decrease over the previous quarter, primarily due to  a decrease in noninterest income of $7.1 million driven by MSRs impairment of $4.8 million during the quarter. Net income was $5.7 million lower compared to the same quarter a year ago, due to a $13.2 million decrease in noninterest income, primarily mortgage banking activities, offset by an increase in net interest income of $3.4 million, a decrease in noninterest expense of $1.3 million and a decrease in income tax expense of $1.7 million.

Interest Income

Interest income of $47.0 million was lower by $1.2 million, compared to the prior quarter, driven by a decrease in loan income of $1.4 million. Average loan balances decreased by $105.5 million for the quarter, $86.3 million of this was due to a decrease in lower yielding indirect loans, which were partially replaced in the portfolio mix with higher yielding commercial and SBA loans. Average mortgage loans also decreased by $35.0 million for the quarter. These decreases were offset by an increase in average investment securities of $40.6 million and in the average balances of commercial, SBA and construction loans. The yield on total average interest-bearing assets also increased 7 basis points from the previous quarter.

Interest Expense

Interest expense of $8.9 million increased slightly by $186,000, or 2.1%, for the quarter, primarily due to a 6 basis points increase in deposit costs although average balances for total interest-bearing deposits decreased by $24.5 million. As compared to the first quarter of the prior year, interest expense increased by $2.1 million, or 31.0%. Rising market rates paid on money market deposits and CD's drove the increase.

Net Interest Margin

The net interest margin was 3.56% for the quarter compared to 3.54% in the previous quarter, a slight  increase of 2 basis points. The yield on total average interest-bearing liabilities increased by only 6 basis points while the yield on total average interest-earning assets increased by 7 basis points from 4.32% to 4.39%. Average loans decreased by $105.5 million, of which $86.3 million was a decrease in lower yielding indirect auto loans. Higher yielding investment securities increased by $40.6 million as the Bank's strategy to reposition its balance sheet continues to occur.

Average total interest-bearing liabilities decreased by $41.3 million as average deposits decreased by $24.5 million and average borrowings decreased by $16.8 million.

As compared to the same period a year ago, the net interest margin for the quarter increased by 27 basis points to 3.56% from 3.29%, primarily due to a 46 basis point increase in the yield on total average interest-earning assets of $4.4 billion, offset by an increase of 29 basis points in the yield on total average interest-bearing liabilities of $3.0 billion. Average earning assets increased by $62.7 million, primarily due to an increase in average investment securities over the year, offset by a decrease in average loans, primarily indirect auto loans. Average interest-bearing liabilities decreased by $42.9 million, primarily driven by a decrease in average borrowings of $74.4 million, offset by an increase in average interest-bearing deposits of $31.4 million.

Noninterest Income

On a linked-quarter basis, noninterest income decreased by $7.1 million, or 23.0%, largely due to a decrease of $4.9 million, or 22.6%, in mortgage banking activities, primarily due to the previously mentioned MSRs impairment of $4.8 million for the quarter.  SBA lending activities also decreased by $2.1 million as gains on SBA sales were seasonally lower for the quarter due to lower sales.

Compared to the same period a year ago, noninterest income for the quarter decreased by $13.2 million, primarily due to a decrease in mortgage banking activities stemming from a change in MSRs impairment of $9.4 million.

Noninterest Expense

On a linked-quarter basis, total noninterest expense decreased by $2.6 million, or 4.7%, mainly due to  a decrease in other expenses of $1.5 million, of which $1.2 million were merger related expenses, from the previous quarter. Salaries and employee benefits also decreased by $1.1 million, or 3.9%. Compared to the prior year quarter, noninterest expense of $53.5 million decreased slightly by $1.3 million, or 2.3%. Lower commissions accounted for  $534,000 of the decrease due to lower mortgage production in the current quarter compared to the first quarter of 2018.

Income Taxes

On a linked-quarter basis, income tax expense decreased by $2.3 million, primarily due to a decrease of $6.1 million in pre-tax income during the quarter. The effective tax rate also decreased to 20.4% from 28.0%. Compared to the first quarter of 2018, income tax expense decreased by $1.7 million.

OTHER NEWS

On March 15, 2019, Fidelity opened a new branch in Macon, GA, which brings the total number of retail branches to 70.

On May 6, 2019, Fidelity will hold a special shareholders meeting to vote on a proposal to approve the merger with Ameris Bancorp previously announced in December 2018.

ABOUT FIDELITY SOUTHERN CORPORATION

Fidelity Southern Corporation, through its operating subsidiaries, Fidelity Bank and LionMark Insurance Company, provides banking services and Wealth Management services and credit-related insurance products through branches in Georgia and Florida, and an insurance office in Atlanta, Georgia. Indirect auto loans are provided in Georgia and Florida and mortgage loans are provided throughout the South, while SBA loans are originated nationwide. For additional information about Fidelity's products and services, please visit the website at www.FidelitySouthern.com.

NON-GAAP FINANCIAL MEASURES

This release contains certain "non-GAAP" financial measures. The "GAAP TO NON-GAAP RATIO RECONCILIATION" tables included below reconcile GAAP to non-GAAP ratios. The non-GAAP ratios contain financial information determined by methods other than in accordance with GAAP. Management uses these non-GAAP financial measures in its analysis of the Company's performance. Management believes that presentation of these non-GAAP financial measures provides useful supplemental information that allows better comparability with prior periods, as well as with peers in the industry and provides a greater understanding of the asset quality of the Company's loan portfolio exclusive of the indirect auto, government-guaranteed and acquired loan portfolios. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

SAFE HARBOR

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 2018 Annual Report filed on Form 10-K with the Securities and Exchange Commission ("SEC"). Additional information and other factors that could affect future financial results are included in Fidelity's subsequent filings with the SEC.

IMPORTANT ADDITIONAL INFORMATION

Ameris filed a registration statement on Form S-4 with the SEC on March 22, 2019, to register the shares of Ameris Common Stock that will be issued to Fidelity's shareholders in connection with the Merger.  The registration statement, which became effective on March 25, 2019, includes a joint proxy statement/prospectus and other relevant materials in connection with the transaction.  BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER.  Investors and security holders may obtain free copies of these documents and other documents filed with the SEC on its website at http://www.sec.gov.  Investors and security holders may also obtain free copies of the documents filed with the SEC by Fidelity on its website at www.FidelitySouthern.com and by Ameris on its website at http://www.AmerisBank.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.  Before making any voting or investment decision, investors and security holders of Fidelity and Ameris are urged to read carefully the entire registration statement and joint proxy statement/prospectus, including any amendments thereto, because they contain important information about the Merger.  Free copies of these documents may be obtained as described above.

Participants in the Solicitation

Fidelity and Ameris, and certain of their respective directors, executive officers and other members of management and employees, may be deemed to be participants in the solicitation of proxies from Fidelity's shareholders and Ameris's shareholders in respect of the Merger.  Information regarding such persons who may be deemed participants in the solicitation of proxies from Fidelity's shareholders and Ameris's shareholders is included in the joint proxy statement/prospectus for Fidelity's meeting of shareholders and Ameris's meeting of shareholders, which was filed by Ameris on Form S-4 on March 22, 2019 and declared effective on March 25, 2019.  Information about Fidelity's directors and executive officers and their ownership of Fidelity Common Stock can also be found in Part III of Fidelity's 2018 Annual Report on Form 10-K filed on March 13, 2019, and other documents subsequently filed by Fidelity with the SEC.  Information about Ameris's directors and executive officers and their ownership of Ameris Common Stock can also be found in Ameris's definitive proxy statement filed in connection with its 2019 annual meeting of shareholders on April 1, 2019, and other documents subsequently filed by Ameris with the SEC. Information regarding the interests of such participants is included in the joint proxy statement/prospectus and other relevant documents regarding the Merger filed with the SEC.

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (UNAUDITED)



As of or for the Quarter Ended

($ in thousands, except per share data)

March 31,
 2019


December 31,
 2018


March 31,
 2018

INCOME STATEMENT DATA:






Interest income

$

47,041



$

48,271



$

41,562


Interest expense

8,899



8,713



6,794


Net interest income

38,142



39,558



34,768


Provision for loan losses

936



745



2,130


Noninterest income

23,946



31,079



37,133


Noninterest expense

53,475



56,113



54,742


Net income before income taxes

7,677



13,779



15,029


Income tax expense

1,564



3,855



3,262


Net income

6,113



9,924



11,767


PERFORMANCE:






Earnings per common share - basic

$

0.22



$

0.36



$

0.44


Earnings per common share - diluted

0.22



0.36



0.43


Total revenues

62,088



70,637



71,901


Book value per common share

16.61



16.36



15.19


Tangible book value per common share(1)

16.22



15.95



14.75


Cash dividends paid per common share

0.12



0.12



0.12


Dividend payout ratio

54.55

%


33.33

%


27.27

%

Return on average assets

0.53

%


0.82

%


1.03

%

Return on average shareholders' equity

5.49

%


9.05

%


11.83

%

Equity to assets ratio

9.58

%


9.43

%


8.54

%

Net interest margin

3.56

%


3.54

%


3.29

%

END OF PERIOD BALANCE SHEET SUMMARY:






Total assets

$

4,789,945



$

4,733,796



$

4,811,659


Earning assets

4,418,194



4,381,616



4,466,249


Loans, excluding loans held-for-sale

3,676,805



3,685,478



3,714,308


Total loans

3,940,528



3,924,780



4,139,608


Total deposits

3,982,533



3,981,578



3,900,407


Shareholders' equity

459,014



446,241



410,744


Assets serviced for others

10,134,717



10,283,727



10,367,564


ASSET QUALITY RATIOS:






Net charge-offs to average loans

0.10

%


0.08

%


0.11

%

Allowance to period-end loans

0.85

%


0.85

%


0.83

%

Adjusted allowance to adjusted period end loans(1)

1.11

%


1.12

%


1.15

%

Nonperforming assets to total loans, ORE and repossessions

2.11

%


1.93

%


2.04

%

Adjusted nonperforming assets to loans, ORE and repossessions(2)

0.92

%


0.92

%


1.14

%

Allowance to nonperforming loans, ORE and repossessions

0.40x



0.44x



0.41x


SELECTED RATIOS:






Loans to total deposits

92.32

%


92.56

%


95.23

%

Average total loans to average earning assets

89.59

%


90.21

%


92.71

%

Noninterest income to total revenue

38.57

%


44.00

%


51.64

%

Leverage ratio

9.60

%


9.18

%


8.74

%

Common equity tier 1 capital

9.80

%


9.54

%


8.41

%

Tier 1 risk-based capital

10.90

%


10.64

%


9.47

%

Total risk-based capital

13.47

%


13.24

%


11.98

%

Mortgage loan production

$

580,645



$

626,438



$

613,314


Total mortgage loan sales

511,677



686,153



496,484


Indirect automobile production

60,040



94,407



258,560


Total indirect automobile sales

?



?



86,000








(1)   Non-GAAP financial measure. See non-GAAP reconciliation table for the comparable GAAP.

(2)  Excludes acquired loans and net of government guarantees. See non-GAAP reconciliation table for the comparable GAAP.

 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


($ in thousands)


March 31,
 2019


December 31,
 2018


March 31,
 2018

ASSETS







Cash and cash equivalents


$

202,921



$

212,293



$

200,496


Investment securities available-for-sale


285,518



251,602



124,576


Investment securities held-to-maturity


19,925



20,126



21,342


Loans held-for-sale


263,723



239,302



425,300









Loans


3,676,805



3,685,478



3,714,308


Allowance for loan losses


(31,155)



(31,151)



(30,940)


Loans, net of allowance for loan losses


3,645,650



3,654,327



3,683,368









Premises and equipment, net


94,393



93,699



88,624


Other real estate, net


8,504



8,290



7,668


Bank owned life insurance


71,894



71,510



72,284


Servicing rights, net


116,736



120,390



119,553


Other assets


80,681



62,257



68,448


Total assets


$

4,789,945



$

4,733,796



$

4,811,659









LIABILITIES







Deposits







Noninterest-bearing demand deposits


$

1,203,173



$

1,214,534



$

1,156,588


Interest-bearing deposits







Demand deposits


497,097



474,441



489,576


Money market and savings deposits


1,334,686



1,365,275



1,375,016


Time deposits


947,577



927,328



879,227


Total deposits


3,982,533



3,981,578



3,900,407









Short-term borrowings


162,453



139,760



337,795


Subordinated debt, net


120,733



120,707



120,620


Other liabilities


65,212



45,510



42,093


Total liabilities


4,330,931



4,287,555



4,400,915









SHAREHOLDERS' EQUITY







Common stock


238,330



230,841



219,234


Accumulated other comprehensive income (loss), net


4,637



985



(631)


Retained earnings


216,047



214,415



192,141


Total shareholders' equity


459,014



446,241



410,744


Total liabilities and shareholders' equity


$

4,789,945



$

4,733,796



$

4,811,659


 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)




For the Quarter Ended

($ in thousands, except per share data)


March 31,
 2019


December 31,
 2018


March 31,
 2018

INTEREST INCOME







Loans, including fees


$

43,865



$

45,233



$

39,849


Investment securities


2,444



2,142



1,175


Other


732



896



538


Total interest income


47,041



48,271



41,562


INTEREST EXPENSE







Deposits


6,266



6,058



4,313


Other borrowings


935



990



910


Subordinated debt


1,698



1,665



1,571


Total interest expense


8,899



8,713



6,794


Net interest income


38,142



39,558



34,768


Provision for loan losses


936



745



2,130


Net interest income after provision for loan losses


37,206



38,813



32,638


NONINTEREST INCOME







Service charges on deposit accounts


1,785



1,797



1,472


Other fees and charges


2,309



2,374



2,235


Mortgage banking activities


16,735



21,612



28,562


Indirect lending activities


706



689



2,148


SBA lending activities


1,324



3,440



1,157


Trust and wealth management services


655



589



532


Other


432



578



1,027


Total noninterest income


23,946



31,079



37,133


NONINTEREST EXPENSE







Salaries and employee benefits


27,812



28,941



27,561


Commissions


6,972



7,858



7,506


Occupancy and equipment


5,095



4,683



4,932


Professional and other services


4,366



3,894



4,798


Other


9,230



10,737



9,945


Total noninterest expense


53,475



56,113



54,742


Income before income tax expense


7,677



13,779



15,029


Income tax expense


1,564



3,855



3,262


NET INCOME


$

6,113



$

9,924



$

11,767









EARNINGS PER COMMON SHARE:







Basic


$

0.22



$

0.36



$

0.44


Diluted


$

0.22



$

0.36



$

0.43


Weighted average common shares outstanding-basic


27,493



27,283



27,011


Weighted average common shares outstanding-diluted


27,693



27,376



27,121


 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

LOANS BY CATEGORY

(UNAUDITED)


($ in thousands)


March 31,
 2019


December 31,
 2018


September 30,
 2018


June 30,
 2018


March 31,
 2018

Commercial


$

958,080



$

904,160



$

940,430



$

938,203



$

897,297


SBA


166,841



156,612



163,147



146,508



140,308


Total commercial and SBA loans


1,124,921



1,060,772



1,103,577



1,084,711



1,037,605













Construction loans


291,522



279,409



262,048



269,330



265,780













Indirect automobile


1,454,748



1,569,274



1,588,419



1,698,879



1,719,670


Installment loans and personal lines of credit


25,246



28,170



29,260



31,807



28,716


Total consumer loans


1,479,994



1,597,444



1,617,679



1,730,686



1,748,386


Residential mortgage


625,431



594,095



571,081



555,636



512,673


Home equity lines of credit


154,937



153,758



152,568



152,523



149,864


Total mortgage loans


780,368



747,853



723,649



708,159



662,537


Loans


3,676,805



3,685,478



3,706,953



3,792,886



3,714,308













Loans held-for-sale:











Residential mortgage


252,238



225,342



328,090



399,630



355,515


SBA


11,485



13,960



18,229



20,056



19,785


Indirect automobile


?



?



25,000



25,000



50,000


Total loans held-for-sale


263,723



239,302



371,319



444,686



425,300


Total loans


$

3,940,528



$

3,924,780



$

4,078,272



$

4,237,572



$

4,139,608













 

 

DEPOSITS BY CATEGORY

(UNAUDITED)



For the Quarter Ended


March 31, 2019


December 31, 2018


September 30, 2018


June 30, 2018


March 31, 2018

($ in thousands)

Average
Amount


Rate


Average
Amount


Rate


Average
Amount


Rate


Average
Amount


Rate


Average
Amount


Rate

Noninterest-bearing demand deposits

$

1,185,199



?

%


$

1,239,403



?

%


$

1,244,640



?

%


$

1,172,298



?

%


$

1,120,562



?

%

Interest-bearing demand deposits

462,980



0.12

%


458,350



0.12

%


463,292



0.13

%


489,051



0.14

%


461,614



0.14

%

Money market and savings deposits

1,343,178



0.76

%


1,380,472



0.74

%


1,415,868



0.70

%


1,349,447



0.61

%


1,345,905



0.55

%

Time deposits

934,110



1.57

%


925,913



1.43

%


918,668



1.30

%


906,133



1.16

%


901,394



1.04

%

Total average deposits

$

3,925,467



0.65

%


$

4,004,138



0.60

%


$

4,042,468



0.55

%


$

3,916,929



0.49

%


$

3,829,475



0.46

%

 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

NONPERFORMING AND CLASSIFIED ASSETS

(UNAUDITED)


($ in thousands)

March 31,
 2019


December 31,
 2018


September 30,
 2018


June 30,
 2018


March 31,
 2018

NONPERFORMING ASSETS










Nonaccrual loans (2)(6)

$

61,469



$

54,746



$

53,173



$

58,027



$

58,706


Loans past due 90 days or more and still accruing

6,464



6,746



8,858



8,278



7,728


Repossessions

1,363



1,696



1,271



1,303



1,853


Other real estate (ORE)

8,504



8,290



8,031



6,834



7,668


Nonperforming assets

$

77,800



$

71,478



$

71,333



$

74,442



$

75,955












ASSET QUALITY RATIOS










Loans 30-89 days past due

$

17,100



$

24,738



$

6,858



$

6,514



$

15,695


Loans 30-89 days past due to loans

0.47

%


0.67

%


0.19

%


0.17

%


0.42

%

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

0.18

%


0.18

%


0.24

%


0.22

%


0.21

%

Nonperforming loans as a % of loans

1.85

%


1.67

%


1.67

%


1.75

%


1.79

%

Nonperforming assets to loans, ORE, and repossessions

2.11

%


1.93

%


1.92

%


1.96

%


2.04

%

Adjusted nonperforming assets to adjusted loans, ORE and repossessions(8)

0.92

%


0.92

%


0.92

%


0.99

%


1.14

%

Nonperforming assets to total assets

1.62

%


1.51

%


1.48

%


1.52

%


1.58

%

Adjusted nonperforming assets to total assets(8)

0.68

%


0.69

%


0.68

%


0.73

%


0.84

%

Classified Asset Ratio(4)

19.67

%


19.95

%


19.60

%


21.84

%


21.70

%

ALL to nonperforming loans

45.86

%


50.66

%


50.23

%


47.69

%


46.57

%

Net charge-offs, annualized to average loans

0.10

%


0.08

%


0.09

%


0.17

%


0.11

%

ALL as a % of loans

0.85

%


0.85

%


0.84

%


0.83

%


0.83

%

Adjusted ALL as a % of adjusted loans(7)

1.11

%


1.12

%


1.14

%


1.16

%


1.15

%

ALL as a % of loans, excluding acquired loans(5)

0.88

%


0.88

%


0.88

%


0.87

%


0.88

%











CLASSIFIED ASSETS










Classified loans(1)

$

84,382



$

82,786



$

80,176



$

87,688



$

83,867


ORE and repossessions

9,867



9,986



9,302



8,137



9,521


Total classified assets(3)

$

94,249



$

92,772



$

89,478



$

95,825



$

93,388












(1) Amount of SBA guarantee included in classified loans

$

5,085



$

3,561



$

5,254



$

4,870



$

2,879


(2) Amount of repurchased government-guaranteed loans, primarily
residential mortgage loans, included in nonaccrual loans

$

35,460



$

29,057



$

27,218



$

27,220



$

26,091


(3) Classified assets include loans having a risk rating of substandard or worse, both accrual and nonaccrual, repossessions and ORE, net of purchase discounts

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

(5) Allowance calculation excludes the recorded investment of acquired loans, due to valuation calculated at acquisition

(6) Excludes purchased credit impaired (PCI) loans which are not removed from their accounting pool

(7) Excludes indirect and acquired loans. See non-GAAP reconciliation table for a reconciliation to the comparable GAAP measure

(8) Excludes acquired loans and net of government guarantees. See non-GAAP reconciliation table for a reconciliation to the comparable GAAP measure

  

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

INCOME FROM INDIRECT LENDING ACTIVITIES

(UNAUDITED)














For the Quarter Ended

(in thousands)


March 31,
 2019


December 31,
 2018


September 30,
 2018


June 30,
 2018


March 31,
 2018

Loan servicing revenue


$

1,172



$

1,642



$

1,581



$

1,690



$

1,769


Gain on sale of loans


?



?



53



22



442


Gain on capitalization of servicing rights


?



?



124



196



569


Ancillary loan servicing revenue


152



170



162



166



183


    Gross indirect lending revenue


1,324



1,812



1,920



2,074



2,963


Less:











Amortization of servicing rights, net


(618)



(1,123)



(800)



(804)



(815)


Total income from indirect lending activities


$

706



$

689



$

1,120



$

1,270



$

2,148


         

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

ANALYSIS OF INDIRECT LENDING

(UNAUDITED)


















As of or for the Quarter Ended

($ in thousands)


March 31,
 2019


December 31,
 2018


September 30,
 2018


June 30,
 2018


March 31,
 2018

Average loans outstanding(1)


$

1,516,484



$

1,602,826



$

1,673,014



$

1,771,665



$

1,784,982


Loans serviced for others


$

622,859



$

705,555



$

838,574



$

932,915



$

1,018,743


Past due loans:











     Amount 30+ days past due


2,480



3,197



2,659



2,407



2,257


     Number 30+ days past due


241



299



258



217



197


30+ day performing delinquency rate(2)


0.17

%


0.20

%


0.16

%


0.14

%


0.13

%

Nonperforming loans


1,204



1,324



1,490



1,526



1,539


Nonperforming loans as a percentage of period end loans(2)


0.08

%


0.08

%


0.09

%


0.09

%


0.09

%

Net charge-offs


$

1,066



$

779



$

1,069



$

864



$

1,147


Net charge-off rate(3)


0.29

%


0.19

%


0.26

%


0.20

%


0.27

%

Number of vehicles repossessed during the period


142



126



139



132



140


Quarterly production weighted average beacon score


766



773



769



779



781




(1)     Includes held-for-sale

(2)     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

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

          

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

ANALYSIS OF INDIRECT LENDING

(UNAUDITED)


















As of or for the Quarter Ended

($ in thousands)


March 31,
 2019


December 31,
 2018


September 30,
 2018


June 30,
 2018


March 31,
 2018

Production by state:












Alabama (2)


$

?



$

?



$

50



$

9,920



$

12,239



Arkansas (2)


?



?



?



4,488



20,322



North Carolina (2)


?



?



97



15,580



23,383



South Carolina (2)


?



?



?



11,065



12,322



Florida


35,485



60,006



51,620



52,645



65,786



Georgia


24,555



34,401



35,034



38,322



38,288



Mississippi (2)


?



?



?



22,605



24,785



Tennessee (2)


?



?



?



11,098



13,509



Virginia (2)


?



?



?



?



3,620



Louisiana (2)


?



?



?



17,952



44,306




Total production by state


$

60,040



$

94,407



$

86,801



$

183,675



$

258,560















Loan sales


$

?



$

?



$

18,614



$

29,275



$

86,000


Portfolio yield (1)


3.43

%


3.46

%


3.08

%


3.02

%


2.98

%



(1)

Includes held-for-sale

(2)

Fidelity exited the Alabama, Arkansas, North Carolina, South Carolina, Mississippi, Tennessee, Virginia, and Louisiana markets in 2018

       

 


FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

INCOME FROM MORTGAGE BANKING ACTIVITIES

(UNAUDITED)


















As of or for the Quarter Ended

(in thousands)


March 31,
 2019


December 31,
 2018


September 30,
 2018


June 30,
 2018


March 31,
 2018

Marketing gain, net


$

15,205



$

14,129



$

16,427



$

20,330



$

17,575


Origination points and fees


3,572



4,227



4,707



5,495



3,647


Loan servicing revenue


6,298



6,326



6,360



6,206



6,221


Gross mortgage revenue


$

25,075



$

24,682



$

27,494



$

32,031



$

27,443


Less:











MSR amortization


(3,504)



(3,116)



(3,369)



(3,331)



(3,426)


MSR (impairment)/recovery, net


(4,836)



46



(605)



683



4,545


Total income from mortgage 
     banking activities


$

16,735



$

21,612



$

23,520



$

29,383



$

28,562
















 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

ANALYSIS OF MORTGAGE LENDING

(UNAUDITED)


















As of or for the Quarter Ended

($ in thousands)


March 31,
 2019


December 31,
 2018


September 30,
 2018


June 30,
 2018


March 31,
 2018

Production by region:












Georgia


$

326,194



$

385,672



$

436,889



$

545,951



$

368,739



Florida


99,054



87,360



120,230



136,990



109,034



Alabama/Tennessee


?



992



748



2,433



2,709



Virginia/Maryland


94,601



95,226



130,728



148,970



91,842



North and South Carolina


60,796



57,188



59,449



74,410



40,990



Total production by region


$

580,645



$

626,438



$

748,044



$

908,754



$

613,314














% for purchases


89.3

%


90.2

%


90.6

%


91.6

%


85.1

%


% for refinance loans


10.7

%


9.8

%


9.4

%


8.4

%


14.9

%












Portfolio Production:


$

54,977



$

59,191



$

56,108



$

75,990



$

44,554













Funded loan type (UPB):












Conventional


63.0

%


62.8

%


64.3

%


63.8

%


65.9

%


FHA/VA/USDA


21.9

%


20.4

%


21.5

%


20.7

%


22.1

%


Jumbo


15.1

%


16.8

%


14.2

%


15.5

%


12.0

%














Gross pipeline of locked loans to be 
     sold (UPB)


$

357,742



$

225,698



$

289,065



$

354,735



$

382,386


Loans held for sale (UPB)


$

244,130



$

218,494



$

322,722



$

389,858



$

348,797















Total loan sales (UPB)


$

511,677



$

686,153



$

771,058



$

800,084



$

496,484



Conventional


69.2

%


67.5

%


66.6

%


70.7

%


69.1

%


FHA/VA/USDA


23.2

%


19.6

%


24.5

%


21.3

%


27.2

%


Jumbo


7.6

%


12.9

%


8.9

%


8.0

%


3.7

%














Average loans outstanding(1)


$

804,407



$

839,430



$

877,890



$

913,430



$

725,444















(1) Includes held-for-sale










FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

THIRD PARTY MORTGAGE LOAN SERVICING

(UNAUDITED)


















As of or for the Quarter Ended

($ in thousands)


March 31,
 2019


December 31,
 2018


September 30,
 2018


June 30,
 2018


March 31,
 2018

Loans serviced for others (UPB)(1)


$

9,243,136



$

9,009,506



$

8,687,984



$

9,450,326



$

9,097,869


Average loans serviced for others (UPB)(1)


$

9,198,871



$

9,407,723



$

9,279,843



$

9,244,175



$

9,038,568













MSR book value, net of amortization


$

115,207



$

113,368



$

108,876



$

119,372



$

113,217


MSR impairment


(6,790)



(1,954)



(2,000)



(4,590)



(5,274)


MSR net carrying value


$

108,417



$

111,414



$

106,876



$

114,782



$

107,943













MSR carrying value as a % of period end UPB


1.17

%


1.24

%


1.23

%


1.21

%


1.19

%














Delinquency % loans serviced for others


1.23

%


1.30

%


1.28

%


1.28

%


1.24

%














MSR revenue multiple(2)


4.28



4.6



4.49



4.52



4.31


(1) Balances for September 30, 2018 exclude the UPB of loans temporarily sub-serviced as a result of the August 30, 2018 MSRs sale. Servicing transferred to the 
     Purchaser on October 1, 2018 and October 16, 2018.

(2) MSR carrying value (period end) to period end loans serviced for others divided by the ratio of annualized mortgage loan servicing revenue to average

     mortgage loans serviced for others.

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

AVERAGE BALANCE AND YIELDS

(UNAUDITED)



For the Quarter Ended


March 31, 2019


December 31, 2018


March 31, 2018


Average


Yield/


Average


Yield/


Average


Yield/

($ in thousands)

Balance


Rate


Balance


Rate


Balance


Rate

Assets












Interest-earning assets:












  Commercial

$

939,337



5.01

%


$

932,523



4.95

%


$

864,992



4.83

%

  SBA

173,003



7.98

%


170,162



7.97

%


153,732



8.08

%

  Construction

282,827



7.09

%


272,481



6.95

%


258,072



6.54

%

  Indirect automobile

1,516,483



3.43

%


1,602,826



3.46

%


1,784,982



2.98

%

  Installment loans and personal lines of credit

29,410



5.25

%


34,263



2.87

%


41,468



2.95

%

  Residential mortgage

803,697



4.32

%


838,691



4.23

%


724,684



3.99

%

  Home equity lines of credit

154,862



5.69

%


154,175



5.83

%


149,398



4.92

%

Total loans, net of unearned income (1)

3,899,619



4.57

%


4,005,121



4.48

%


3,977,328



4.07

%

Investment securities (1)

299,712



3.31

%


259,152



3.31

%


155,920



3.11

%

Other earning assets

153,393



1.94

%


175,495



2.02

%


156,751



1.39

%

Total interest-earning assets

4,352,724



4.39

%


4,439,768



4.32

%


4,289,999



3.93

%

Noninterest-earning assets:












Cash and due from banks

41,867





37,672





36,370




Allowance for loan losses

(31,117)





(31,278)





(30,002)




Premises and equipment, net

94,594





92,050





88,732




Other real estate

8,317





8,079





7,606




Other assets

248,788





238,042





233,677




Total noninterest-earning assets

362,449





344,565





336,383




Total assets

$

4,715,173





$

4,784,333





$

4,626,382




Liabilities and shareholders' equity












Interest-bearing liabilities:












Demand deposits

$

462,980



0.12

%


$

458,350



0.12

%


$

461,614



0.14

%

Money market and savings deposits

1,343,178



0.76

%


1,380,472



0.74

%


1,345,905



0.55

%

Time deposits

934,110



1.57

%


925,913



1.43

%


901,394



1.04

%

Total interest-bearing deposits

2,740,268



0.93

%


2,764,735



0.87

%


2,708,913



0.65

%

Other short-term borrowings

161,107



2.35

%


177,955



2.21

%


235,519



1.57

%

Subordinated debt

120,720



5.70

%


120,694



5.47

%


120,604



5.29

%

Total interest-bearing liabilities

3,022,095



1.19

%


3,063,384



1.13

%


3,065,036



0.90

%

Noninterest-bearing liabilities and shareholders' equity:







Demand deposits

1,185,199





1,239,403





1,120,562




Other liabilities

56,181





46,638





37,336




Shareholders' equity

451,698





434,908





403,448




Total noninterest-bearing liabilities and 
  shareholders' equity

1,693,078





1,720,949





1,561,346




Total liabilities and shareholders' equity

$

4,715,173





$

4,784,333





$

4,626,382




Net interest spread



3.20

%




3.19

%




3.03

%

Net interest margin



3.56

%




3.54

%




3.29

%













(1)

Interest income includes the effect of taxable-equivalent adjustments using a 21% tax rate.

 

 

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

GAAP TO NON-GAAP RATIO RECONCILIATION

(UNAUDITED)



For the Quarter Ended

($ in thousands)

March 31,
 2019


December 31,
 2018


September 30,
 2018


June 30,
 2018


March 31,
 2018











Reconciliation of nonperforming assets to adjusted nonperforming assets:

Nonperforming assets (GAAP)

$

77,800



$

71,478



$

71,333



$

74,442



$

75,955


Less: repurchased government-guaranteed mortgage loans included on nonaccrual

(35,460)



(29,057)



(27,218)



(27,220)



(26,091)


Less: SBA guaranteed loans included on nonaccrual

(4,000)



(3,561)



(4,049)



(3,639)



(1,541)


Less: Nonaccrual acquired loans

(5,573)



(6,120)



(7,388)



(7,648)



(7,890)


Adjusted nonperforming assets, excluding acquired loans and government-guaranteed loans (non-GAAP)

$

32,767



$

32,740



$

32,678



$

35,935



$

40,433












Reconciliation of total loans, ORE and repossessions to total loans, ORE and repossessions, less acquired loans:

Loans, excluding Loans Held-for-Sale

$

3,676,805



$

3,685,478



$

3,706,953



$

3,792,886



$

3,714,308


Add: ORE

8,504



8,290



8,031



6,834



7,668


Add: repossessions

1,363



1,696



1,271



1,303



1,853


Total loans, ORE, and repossessions (GAAP)

3,686,672



3,695,464



3,716,255



3,801,023



3,723,829


Less: acquired loans

(132,984)



(141,198)



(150,763)



(165,303)



(178,496)


Adjusted loans, ORE, and repossessions, less acquired loans (non-GAAP)

$

3,553,688



$

3,554,266



$

3,565,492



$

3,635,720



$

3,545,333


Nonperforming assets to loans, ORE, and repossessions (GAAP)

2.11

%


1.93

%


1.92

%


1.96

%


2.04

%

Adjusted nonperforming assets to adjusted loans, ORE, and repossessions (non-GAAP)

0.92

%


0.92

%


0.92

%


0.99

%


1.14

%

Nonperforming assets to total assets (GAAP)

1.62

%


1.51

%


1.48

%


1.52

%


1.58

%

Adjusted nonperforming assets to total assets (non-GAAP)

0.68

%


0.69

%


0.68

%


0.73

%


0.84

%











Reconciliation of allowance to adjusted allowance:










Allowance for loan losses (GAAP)

$

31,155



$

31,151



$

31,157



$

31,623



$

30,940


Less: allowance allocated to indirect auto loans

(7,652)



(8,669)



(8,556)



(9,210)



(9,888)


Less: allowance allocated to acquired loans

(284)



(284)



(134)



(134)



(134)


Adjusted allowance for loan losses (non-GAAP)

$

23,219



$

22,198



$

22,467



$

22,279



$

20,918












Reconciliation of period end loans to adjusted period end loans:

Loans, excluding Loans Held-for-Sale

$

3,676,805



$

3,685,478



$

3,706,953



$

3,792,886



$

3,714,308


Less: indirect auto loans

(1,454,748)



(1,569,274)



(1,588,419)



(1,698,879)



(1,719,670)


Less: acquired loans

(132,984)



(141,198)



(150,763)



(165,303)



(178,496)


Adjusted total loans (non-GAAP)

$

2,089,073



$

1,975,006



$

1,967,771



$

1,928,704



$

1,816,142


Allowance to total loans (GAAP)

0.85

%


0.85

%


0.84

%


0.83

%


0.83

%

Adjusted allowance to adjusted total loans (non-GAAP)

1.11

%


1.12

%


1.14

%


1.16

%


1.15

%











Reconciliation of book value per common share to tangible book value per common share:

Shareholders' equity

$

459,014



$

446,241



$

432,098



420,962



$

410,744


Less: intangible assets

(10,933)



(11,197)



(11,474)



(11,751)



(12,028)


Tangible shareholders' equity

$

448,081



$

435,044



$

420,624



$

409,211



$

398,716


End of period common shares outstanding

27,629,860



27,279,729



27,260,681



27,191,787



27,034,255


Book value per common share (GAAP)

$

16.61



$

16.36



$

15.85



$

15.48



$

15.19


Tangible book value per common share (non-GAAP)

16.22



15.95




15.43




15.05



14.75


  

 

Contacts:

Martha Fleming, Charles D. Christy


Fidelity Southern Corporation (404) 240-1504

 

SOURCE Fidelity Southern Corporation


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