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Fidelity Southern Corporation
Reports 2008 First Quarter Profit
ATLANTA, April 17 /PRNewswire-FirstCall/ -- Fidelity Southern
Corporation ("Fidelity" or "the Company") (
NASDAQ:LION
) reported basic and diluted earnings per share for the first quarter of
2008 of $.12 compared to $.28 for the same period in 2007 and to $.03 in
the last quarter of 2007. Net income was $1,109,000 for the first quarter
of 2008 compared to $2,564,000 for the same quarter in 2007, a decrease of
$1,455,000.
Significant year-over-year and first quarter 2008 compared
to first quarter 2007 developments include:
-- Net interest income grew 4.1%
-- Noninterest income grew 27.1%
-- Equity grew 4.4%
-- Total loans grew 7.7%
-- Total assets grew 7.1%
-- Allowance for loan losses grew 37.9% or $5.2 million, to 1.34%
-- Net interest margin was 2.94%
-- Net charge-offs were .60%
The Company benefited in the first quarter of 2008 from a
gain of $1,252,000 on the mandatory redemption of 29,267 shares of Visa,
Inc. common stock upon Visa's successful initial public offering. The
Company reversed a $567,000 litigation expense accrual recorded in the
fourth quarter of 2007 to recognize the Company's proportional share of
Visa litigation settlements and litigation reserves. Fidelity now owns
33,168 shares of restricted Visa stock as a result of the initial public
offering, with a zero cost basis.
Chairman James B. Miller, Jr. said, "Our
quarter-over-quarter increase in earnings reflects our early effort to
handle emerging real estate credit problems. However, we see little
improvement for real estate in the next two quarters, as the unwinding by
banks of real estate loans continues. There will be more bank owned houses
and lots on the market with the drag that implies. In the midst of these
difficulties, houses are still being built, sold, and mortgaged and our
share of this good business, we believe, is growing.
"Similarly, we continue to have double digit
increases in the number of transaction accounts, which broadens our
deposit share and, we believe, increases our market share.
"Commercial and SBA lending continue to have strong
loan demand but pricing competition continues to be unreasonably fierce.
"Indirect Lending has continued to have strong demand
and relatively strong credit quality. Because loan demand has been so
strong, we have selectively reduced the number of dealers we buy from to
appropriately control our volume. Loan sales to other institutions
continue strong. We currently see few signs that the financial and real
estate contagion has spread to the consumer, but we are planning for that
nevertheless."
Net interest income for the first quarter of 2008
increased $456,000, or 4.1%, when compared to the same period in 2007. The
increase was primarily a result of higher average interest-earning assets.
The net interest margin decreased only eight basis points to 2.94% in the
first quarter of 2008 when compared to the same period in 2007. The
decline in net interest margin in the first quarter of 2008 was due
primarily to reductions in the prime rate and an increase in nonperforming
loans.
Total interest income for the first quarter of 2008
increased $72,000, or .3%, compared to the same period in 2007. The
increase in interest income for the first quarter of 2008 was the result
of a decrease of 45 basis points in the yield on average interest-earning
assets, more than offset by the growth in average interest-earning assets,
which increased $88.7 million or 5.8%.
Interest expense for the first quarter of 2008, decreased
$384,000, or 2.4%, compared to the same period in 2007. The decrease in
interest expense was attributable to an increase in average
interest-bearing liabilities of $102.1 million, more than offset by a 49
basis point decrease in the cost of interest-bearing liabilities.
The provision for loan losses for the first quarter of
2008 was $4.6 million compared to $500,000 for the same period in 2007,
due to adverse credit trends in the construction loan portfolio and to a
lesser extent in the consumer loan portfolio. Net charge-offs increased
$1.2 million to $2.1 million for the first quarter of 2008 when compared
to the same period in 2007. The ratio of net charge-offs to average loans
outstanding was .60% for the first quarter of 2008, compared to .27% for
the same period of 2007. However, the allowance for loan losses as a
percentage of loans increased from 1.19% at December 31, 2007, to 1.34% at
March 31, 2008, compared to 1.04% at March 31, 2007. Nonperforming assets
increased to $37.0 million at the end of the first quarter of 2008
compared to $9.1 million at the end of the first quarter of 2007 and $24.2
million at the end of 2007. The increase in nonperforming assets was
primarily driven by increases in nonaccrual loans and other real estate.
Management believes it has identified and placed on nonaccrual, charged
down, and charged off these nonperforming assets timely and appropriately.
Noninterest income increased $1.2 million or 27.1% to $5.7
million in the first quarter of 2008, compared to the same period in 2007.
This increase was primarily due to the $1.3 million securities gain from
the mandatory redemption of 29,267 shares of Visa, Inc. common stock. Visa
distributed the stock proceeds on March 28, 2008. Indirect lending
revenues increased $213,000, or 15.5%, to $1.6 million during the first
quarter of 2008 when compared to the same period last year due to an
increase in the number and volume of indirect loans sold and increases in
servicing and other fees from indirect loans serviced. Revenue from SBA
lending activities decreased $230,000, or 35.7%, to $414,000 for the first
quarter of 2008, when compared to the same period in 2007. The decrease in
SBA revenue in the first quarter was a result of fewer sales and lower
gains on sales compared to the same quarter in 2007 due to the liquidity,
credit and economic concerns prevalent in the market. Service charges on
deposit accounts increased $45,000, or 4.0%, to $1.2 million due to the
growing number of transaction accounts resulting from the transaction
account acquisition program to broaden the base of transaction accounts.
Noninterest expense for the first quarter of 2008
decreased $150,000, or 1.3%, to $11.4 million when compared to the same
period in 2007. This decrease was primarily related to the reversal of the
fourth quarter 2007 Visa litigation accrual of $567,000. Offsetting in
part the accrual reversal were increases in salaries and benefits expense
of $437,000, or 6.8%, to $6.9 million. The increases in salaries and
benefits expenses were primarily due to the addition of seasoned loan
production and branch operations staff, including SBA, indirect
automobile, and commercial lenders to increase lending volume, and staff
for the three branches opened in 2007.
idelity Southern Corporation, through its operating
subsidiaries Fidelity Bank and LionMark Insurance Company, provides
banking services and a credit related insurance product through 23
branches in Atlanta, Georgia, a branch in Jacksonville, Florida, and an
insurance office in Atlanta, Georgia. Automobile loans and SBA loans are
provided through employees located throughout the Southeast. For
additional information about Fidelity's products and services, please
visit the website at
www.FidelitySouthern.com
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FIDELITY SOUTHERN CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER YEAR-TO-DATE
SHARE DATA) MARCH 31,
2008 2007
INTEREST INCOME
LOANS, INCLUDING FEES $25,715 $25,453
INVESTMENT SECURITIES 1,716 1,847
FEDERAL FUNDS SOLD AND BANK
DEPOSITS 42 101
TOTAL INTEREST INCOME 27,473 27,401
INTEREST EXPENSE
DEPOSITS 13,319 14,139
SHORT-TERM BORROWINGS 747 511
SUBORDINATED DEBT 1,408 1,105
OTHER LONG-TERM DEBT 285 388
TOTAL INTEREST EXPENSE 15,759 16,143
NET INTEREST INCOME 11,714 11,258
PROVISION FOR LOAN LOSSES 4,600 500
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 7,114 10,758
NONINTEREST INCOME
SERVICE CHARGES ON DEPOSIT ACCOUNTS 1,163 1,118
OTHER FEES AND CHARGES 464 456
MORTGAGE BANKING ACTIVITIES 70 121
BROKERAGE ACTIVITIES 161 237
INDIRECT LENDING ACTIVITIES 1,586 1,373
SBA LENDING ACTIVITIES 414 644
SECURITIES GAINS, NET 1,264 -
BANK OWNED LIFE INSURANCE 303 287
OTHER OPERATING INCOME 252 229
TOTAL NONINTEREST INCOME 5,677 4,465
NONINTEREST EXPENSE
SALARIES AND EMPLOYEE BENEFITS 6,856 6,419
FURNITURE AND EQUIPMENT 777 684
NET OCCUPANCY 1,039 971
COMMUNICATION EXPENSES 388 399
PROFESSIONAL AND OTHER SERVICES 907 916
ADVERTISING AND PROMOTION 156 244
STATIONERY, PRINTING AND SUPPLIES 179 174
INSURANCE EXPENSES 102 70
OTHER OPERATING EXPENSES 983 1,660
TOTAL NONINTEREST EXPENSE 11,387 11,537
INCOME BEFORE INCOME TAX EXPENSE 1,404 3,686
INCOME TAX EXPENSE 295 1,122
NET INCOME $1,109 $2,564
EARNINGS PER SHARE:
BASIC EARNINGS PER SHARE $0.12 $0.28
DILUTED EARNINGS PER SHARE $0.12 $0.28
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING-BASIC 9,375,915 9,296,933
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING-FULLY DILUTED 9,375,915 9,306,052
FIDELITY SOUTHERN CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(DOLLARS IN THOUSANDS) MARCH 31, DECEMBER 31, MARCH 31,
ASSETS 2008 2007 2007
CASH AND DUE FROM BANKS $28,641 $23,442 $23,604
FEDERAL FUNDS SOLD 13,788 6,605 23,700
CASH AND CASH EQUIVALENTS 42,429 30,047 47,304
INVESTMENTS AVAILABLE-FOR-SALE 118,386 103,149 111,569
INVESTMENTS HELD-TO-MATURITY 27,978 29,064 32,074
INVESTMENT IN FHLB STOCK 6,632 5,665 4,090
LOANS HELD-FOR-SALE 58,094 63,655 36,838
LOANS 1,417,722 1,388,358 1,333,251
ALLOWANCE FOR LOAN LOSSES (19,046) (16,557) (13,809)
LOANS, NET 1,398,676 1,371,801 1,319,442
PREMISES AND EQUIPMENT, NET 19,239 18,821 18,421
OTHER REAL ESTATE 8,200 7,307 342
ACCRUED INTEREST RECEIVABLE 8,490 9,367 8,723
BANK OWNED LIFE INSURANCE 26,957 26,699 25,942
OTHER ASSETS 20,612 20,909 16,120
TOTAL ASSETS $1,735,693 $1,686,484 $1,620,865
LIABILITIES
DEPOSITS:
NONINTEREST BEARING DEMAND $130,594 $131,597 $141,297
INTEREST BEARING DEMAND/
MONEY MARKET 283,454 314,067 295,212
SAVINGS 218,483 216,442 196,269
TIME DEPOSITS, $100,000
AND OVER 301,009 285,497 297,454
OTHER TIME DEPOSITS 468,954 458,022 471,518
TOTAL DEPOSIT LIABILITIES 1,402,494 1,405,625 1,401,750
FEDERAL FUNDS PURCHASED 27,000 5,000 -
OTHER SHORT-TERM BORROWINGS 79,348 70,954 25,151
SUBORDINATED DEBT 67,527 67,527 46,908
OTHER LONG-TERM DEBT 45,000 25,000 37,000
ACCRUED INTEREST PAYABLE 7,070 6,760 7,138
OTHER LIABILITIES 6,157 5,655 6,066
TOTAL LIABILITIES 1,634,596 1,586,521 1,524,013
SHAREHOLDERS' EQUITY
COMMON STOCK 46,300 46,164 45,159
ACCUMULATED OTHER COMPREHENSIVE
INCOME (LOSS) 522 (804) (1,361)
RETAINED EARNINGS 54,275 54,603 53,054
TOTAL SHAREHOLDERS' EQUITY 101,097 99,963 96,852
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,735,693 $1,686,484 $1,620,865
BOOK VALUE PER SHARE $10.78 $10.67 $10.41
SHARES OF COMMON STOCK OUTSTANDING 9,380,812 9,368,904 9,304,573
FIDELITY SOUTHERN CORPORATION
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
(UNAUDITED)
(DOLLARS IN THOUSANDS) YEAR-TO-DATE YEAR ENDED
MARCH 31, DECEMBER 31,
2008 2007 2007
BALANCE AT BEGINNING OF PERIOD $16,557 $14,213 $14,213
CHARGE-OFFS:
COMMERCIAL, FINANCIAL AND
AGRICULTURAL 14 - 200
SBA - - -
REAL ESTATE-CONSTRUCTION 535 161 1,934
REAL ESTATE-MORTGAGE 11 6 82
CONSUMER INSTALLMENT 1,869 952 5,301
TOTAL CHARGE-OFFS 2,429 1,119 7,517
RECOVERIES:
COMMERCIAL, FINANCIAL AND
AGRICULTURAL - 10 257
SBA 56 3 -
REAL ESTATE-CONSTRUCTION - - 190
REAL ESTATE-MORTGAGE 13 1 78
CONSUMER INSTALLMENT 249 201 836
TOTAL RECOVERIES 318 215 1,361
NET CHARGE-OFFS 2,111 904 6,156
PROVISION FOR LOAN LOSSES 4,600 500 8,500
BALANCE AT END OF PERIOD $19,046 $13,809 $16,557
RATIO OF NET CHARGE-OFFS DURING
PERIOD TO AVERAGE LOANS
OUTSTANDING, NET 0.60% 0.27% 0.45%
ALLOWANCE FOR LOAN LOSSES AS A
PERCENTAGE OF LOANS 1.34% 1.04% 1.19%
NONPERFORMING ASSETS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
MARCH 31,
2008 2007
NONACCRUAL LOANS $26,415 $7,549
REPOSSESSIONS 2,341 1,187
OTHER REAL ESTATE 8,200 342
TOTAL NONPERFORMING ASSETS $36,956 $9,078
LOANS PAST DUE 90 DAYS OR MORE AND
STILL ACCRUING $125 $-
RATIO OF LOANS PAST DUE 90 DAYS OR
MORE AND STILL ACCRUING TO TOTAL LOANS -% -%
RATIO OF NONPERFORMING ASSETS TO
TOTAL LOANS AND REPOSSESSIONS 2.50% 0.66%
FIDELITY SOUTHERN CORPORATION
LOANS, BY CATEGORY
(UNAUDITED)
(DOLLARS IN THOUSANDS) PERCENT CHANGE
Mar. 31, Mar. 31,
2008/ 2008/
MAR. 31, DEC. 31, MAR. 31, Dec. 31, Mar. 31,
2008 2007 2007 2007 2007
COMMERCIAL, FINANCIAL
AND AGRICULTURAL $119,163 $107,325 $111,726 11.03 % 6.66 %
TAX-EXEMPT COMMERCIAL 9,014 9,235 16,626 (2.39)% (45.78)%
REAL ESTATE MORTGAGE
- COMMERCIAL 186,961 189,881 178,435 (1.54)% 4.78 %
TOTAL COMMERCIAL 315,138 306,441 306,787 2.84 % 2.72 %
REAL ESTATE
- CONSTRUCTION 287,248 282,056 288,754 1.84 % (0.52)%
REAL ESTATE
- MORTGAGE 97,980 93,673 91,703 4.60 % 6.84 %
CONSUMER INSTALLMENT 717,356 706,188 646,007 1.58 % 11.04 %
LOANS 1,417,722 1,388,358 1,333,251 2.12 % 6.34 %
LOANS HELD-FOR-SALE:
ORIGINATED RESIDENTIAL
MORTGAGE LOANS 2,121 1,412 381 50.21 % 456.69 %
SBA LOANS 29,973 24,243 11,457 23.64 % 161.61 %
INDIRECT AUTO
LOANS 26,000 38,000 25,000 (31.58)% 4.00 %
TOTAL LOANS
HELD-FOR-SALE 58,094 63,655 36,838 (8.74)% 57.70 %
TOTAL LOANS $1,475,816 $1,452,013 $1,370,089 1.64 % 7.72 %
FIDELITY SOUTHERN CORPORATION
AVERAGE BALANCE, INTEREST AND YIELDS
(UNAUDITED)
YEAR-TO-DATE
March 2008
Average Income/ Yield/
(dollars in thousands) Balance Expense Rate
Assets
Interest-earning assets:
Loans, net of unearned income
Taxable $1,462,829 $25,603 7.04%
Tax-exempt (1) 9,095 168 7.45%
Total loans 1,471,924 25,771 7.04%
Investment securities
Taxable 128,666 1,604 4.99%
Tax-exempt 10,762 173 6.37%
Total investment securities 139,428 1,777 5.10%
Interest-bearing deposits 1,499 12 3.23%
Federal funds sold 3,609 30 3.42%
Total interest-earning assets 1,616,460 27,590 6.86%
Cash and due from banks 21,448
Allowance for loan losses (18,114)
Premises and equipment, net 18,985
Other real estate owned 7,873
Other assets 55,633
Total assets $1,702,285
Liabilities and shareholders' equity
Interest-bearing liabilities:
Demand deposits $304,212 $2,179 2.88%
Savings deposits 218,081 1,886 3.48%
Time deposits 754,181 9,254 4.94%
Total interest-bearing deposits 1,276,474 13,319 4.20%
Federal funds purchased 17,703 154 3.50%
Securities sold under agreements to
repurchase 26,887 187 2.80%
Other short-term borrowings 42,549 406 3.83%
Subordinated debt 67,527 1,408 8.36%
Long-term debt 29,396 285 3.90%
Total interest-bearing liabilities 1,460,536 15,759 4.33%
Noninterest-bearing:
Demand deposits 127,542
Other liabilities 15,062
Shareholders' equity 99,145
Total liabilities and
shareholders' equity $1,702,285
Net interest income / spread $11,831 2.54%
Net interest margin 2.94%
YEAR-TO-DATE
March 2007
Average Income/ Yield/
(dollars in thousands) Balance Expense Rate
Assets
Interest-earning assets:
Loans, net of unearned income
Taxable $1,357,148 $25,231 7.54%
Tax-exempt (1) 15,855 330 8.43%
Total loans 1,373,003 25,561 7.55%
Investment securities
Taxable 144,449 1,823 5.05%
Tax-exempt 2,474 37 3.93%
Total investment securities 146,923 1,860 5.03%
Interest-bearing deposits 1,312 17 5.23%
Federal funds sold 6,550 84 5.23%
Total interest-earning assets 1,527,788 27,522 7.31%
Cash and due from banks 23,551
Allowance for loan losses (13,856)
Premises and equipment, net 18,900
Other real estate owned 8
Other assets 48,364
Total assets $1,604,755
Liabilities and shareholders' equity
Interest-bearing liabilities:
Demand deposits $272,471 $2,337 3.48%
Savings deposits 188,436 2,080 4.48%
Time deposits 763,566 9,722 5.16%
Total interest-bearing deposits 1,224,473 14,139 4.68%
Federal funds purchased 9,578 132 5.57%
Securities sold under agreements to
repurchase 18,653 134 2.91%
Other short-term borrowings 21,856 245 4.55%
Subordinated debt 46,908 1,105 9.56%
Long-term debt 37,000 388 4.26%
Total interest-bearing liabilities 1,358,468 16,143 4.82%
Noninterest-bearing:
Demand deposits 136,783
Other liabilities 14,672
Shareholders' equity 94,832
Total liabilities and
shareholders' equity $1,604,755
Net interest income / spread $11,379 2.49%
Net interest margin 3.02%
(1) Interest income includes the effect of taxable-equivalent
adjustment for 2008 and 2007 of $57,000 and $109,000 respectively.
Contacts: Martha Fleming, Rod Marlow
Fidelity Southern Corporation (404) 240-1504
Source: Fidelity Southern Corporation
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