FIDELITY SOUTHERN CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - FIDELITY SOUTHERN CORP	lionqe930158k-earnings.htm

FOR IMMEDIATE RELEASE

Contacts: Martha Fleming, Steve Brolly

Fidelity Southern Corporation (404) 240-1504

FIDELITY SOUTHERN CORPORATION EARNS $9.2 MILLION

IN THIRD QUARTER

ATLANTA, GA (October 15, 2015) – Fidelity Southern Corporation (“Fidelity” or the “Company”) (NASDAQ: LION), holding company for Fidelity Bank (the “Bank”), today reported financial results for the quarter and nine months ended September 30, 2015.

KEY RESULTS


•	Net income of $9.2 million and $32.4 million, or $0.39 and $1.42 per diluted share, for the quarter and nine months ended September 30, 2015


•	Return on Average Assets of 1.07% and 1.33% for the quarter and nine months ended September 30, 2015


•	Loan portfolio increased by $96.1 million, or 3.3%, during the quarter and $583.2 million, or 24.3%, year over year, to $3.0 billion


•	Loans serviced for others grew by $485.3 million, or 6.7%, during the quarter and $1.5 billion, or 23.9%, year over year, to $7.8 billion


•	Total deposits increased by $272.8 million or 10.3%, during the quarter and $452.7 million, or 18.4%, year over year, to $2.9 billion


•	In September 2015, the Bank acquired eight branches from First Bank, a Missouri bank, in the Sarasota-Bradenton, Florida area with total deposits of $151.3 million and loans of $30.2 million


•	Subsequent to quarter end, the Bank acquired approximately $255 million in assets, including $162 million in loans, and assumed approximately $280 million in customer deposits of The Bank of Georgia under an FDIC assisted transaction in October 2015

Fidelity's Chairman, Jim Miller, said, "We continue to earn our way in a zero interest rate environment focused on a good rate of return for our shareholders and on making credit more widely available. We opened branches in Berkeley Lake and Snellville and eight offices in Sarasota-Bradenton, then in October purchased from the FDIC The Bank of Georgia and its seven offices. The run up in mortgage and indirect gave us spectacular income last quarter but slowed in the third quarter. However, our mortgage platform appears uniquely attractive in the industry. Significant producers joined us in Virginia, the Carolinas, and Florida and production will continue to expand year over year. Fidelity’s strategy of steady sustainable growth and superior income continues."

BALANCE SHEET

Total assets at September 30, 2015, grew to $3.5 billion, an increase of $124.5 million, or 3.7%, compared to June 30, 2015, and $637.9 million, or 22.3%, compared to September 30, 2014. These increases are primarily attributable to an increase in loan production, mainly in indirect and mortgage loans held for investment.

The acquisition of eight branches in Florida in September 2015 from First Bank, a Missouri bank, increased the deposit base by $151.3 million and added loans of $30.2 million. The cash from the acquired deposits was used to decrease other borrowings, which decreased $166.3 million during the quarter.

Loans

Total loans held for investment at September 30, 2015, grew to $2.6 billion, an increase of $230.7 million, or 9.6%, compared to June 30, 2015, and $568.0 million, or 27.4%, compared to September 30, 2014.

Continued strong auto sales and overall mortgage volume were the main drivers of the growth in indirect and mortgage loans. Indirect loans grew by $118.0 million and $312.2 million, or 9.2% and 28.7%, respectively, and mortgage loans increased by $59.9 million and $164.0 million, or 20.1% and 84.6%, respectively, compared to June 30, 2015 and September 30, 2014.

Servicing rights showed steady growth as well, growing to $82.7 million at September 30, 2015, an increase of $5.0 million, or 6.5%, compared to June 30, 2015, and $20.5 million, or 32.9%, compared to September 30, 2014.

The following table summarizes average loans by category, excluding loans acquired in FDIC-assisted transactions, for the periods presented.



	For the Quarter Ended
($ in thousands)	September 30, 2015		June 30, 2015		September 30, 2014
Commercial	$	554,242	$	532,431	$	532,466
SBA	148,961		150,117		150,078
Construction	151,280		141,914		111,477
Indirect automobile	1,483,378		1,405,266		1,200,523
Installment	13,758		13,162		15,739
Residential mortgage	510,814		450,173		285,743
Home equity lines of credit	93,675		85,053		74,872
Total average loans (including HFS)	$	2,956,108	$	2,778,116	$	2,370,898

Deposits

Total deposits at September 30, 2015, of $2.9 billion increased $272.8 million, or 10.3%, compared to June 30, 2015, and $452.7 million, or 18.4%, compared to September 30, 2014.

The year over year net increase occurred primarily due to organic growth of $263.2 million, as well as the acquisition of deposits from eight branches in Florida during September 2015 of $151.3 million, and one branch in Florida during January 2015 of $38.2 million.

Time deposits increased by $72.7 million, or 8.6%, during the quarter and $186.4 million, or 25.6%, year over year. The change occurred primarily due to $43.2 million in time deposits acquired during the third quarter of 2015. Brokered deposits increased $20.0 million for the quarter and $78.2 million year over year, which were generally used to fund loan growth. The remaining increase is due to organic growth in time deposits.

Average core deposits, including noninterest-bearing demand deposits, grew by $71.6 million, or 4.0%, during the quarter and $261.8 million, or 16.3%, year over year, particularly in commercial accounts and through the acquisition of branch deposits discussed above.

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



	For the Quarter Ended
	September 30, 2015						June 30, 2015						September 30, 2014
($ 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	$	677.0	—	%	24.8	%	$	650.5	—	%	24.8	%	$	574.8	—	%	25.4	%
Interest-bearing deposits	881.5		0.25	%	32.3	%	843.2		0.24	%	32.1	%	712.1		0.24	%	31.5	%
Savings deposits	308.5		0.34	%	11.3	%	301.6		0.33	%	11.5	%	318.3		0.34	%	14.1	%
Time deposits	864.5		0.94	%	31.6	%	829.1		0.94	%	31.6	%	657.5		0.95	%	29.0	%
Total average deposits	$	2,731.5	0.42	%	100.0	%	$	2,624.4	0.41	%	100.0	%	$	2,262.7	0.40	%	100.0	%

Borrowings

Other borrowings decreased by $166.3 million, or 54.8%, during the quarter and increased $60.8 million, or 79.6%, year over year. The quarterly decrease occurred due to the cash received in the acquisition of First Bank deposits used to pay off other borrowings, and the year over year increase occurred primarily to fund growth in loans noted above.

Subordinated debt increased by $74.0 million year over year due to the issuance of $75 million in subordinated notes, net of issuance costs, during May 2015. The additional subordinated debt was issued to support general corporate purposes and potential future acquisitions.

INCOME STATEMENT

Interest Income

Interest income was $29.6 million and $83.6 million for the quarter and nine months ended September 30, 2015, respectively, an increase of $3.7 million and $8.6 million, or 14.3% and 11.4%, respectively, as compared to the same periods in 2014. The increase was primarily due to a year over year increase in average loans of $589.7 million, or 26.7%, mainly in the indirect and mortgage portfolios, partially offset by a decrease in the yield on loans of 31 basis points, as new loans, on average, were originated at lower yields over the previous twelve months.

On a linked-quarter basis, interest income increased by $2.1 million, primarily due to a $178.0 million increase in average loans.

Interest Expense

Interest expense was $4.5 million and $10.9 million for the quarter and nine months ended September 30, 2015, an increase of $1.7 million and $2.7 million, or 63.5% and 32.9%, respectively, as compared to the same periods in 2014. These increases occurred primarily due to an increase in average other borrowings of $49.2 million and $115.0 million for the quarter and nine months ended September 30, 2015, compared to the same periods in 2014, used to fund growth in average loans, as well as an increase in average subordinated debt due to the addition of $75 million in subordinated debt in May 2015.

On a linked-quarter basis, interest expense increased by $958,000, or 27.4%, primarily due to the increase in the average balance of subordinated debt of $47.1 million for the quarter.

Net Interest Margin

The net interest margin was 3.16% and 3.25% for the quarter and nine months ended September 30, 2015, compared to 3.56% and 3.67% for the same periods in 2014. The decrease was primarily attributable to a decrease in the yield on total loans as new loans were originated at lower yields in 2015. Although the net interest margin decreased year over year, net interest income rose to $25.2 million and $73.0 million for the quarter and nine months ended September 30, 2015, compared to $23.3 million and $67.0 million for the same periods in 2014. These increases were due primarily to an increase of 22.0% and 22.9% in interest earning assets for the quarter and nine months ended September 30, 2015 compared to the same periods in 2014.

On a linked-quarter basis, the net interest margin remained relatively consistent, with a change of 8 basis points for the quarter.

Noninterest Income

Noninterest income was $30.6 million and $99.4 million for the quarter and nine months ended September 30, 2015, an increase of $2.7 million and $28.7 million, or 9.7% and 40.7%, respectively, as compared to the same periods in 2014. The increases were primarily related to increases in gains on the sale of mortgage loans as compared to the prior year.

Noninterest income from mortgage banking activities increased by $4.7 million and $26.4 million for the quarter and nine months, respectively, as gains on mortgage loan sales were $5.5 million and $23.4 million higher, for the quarter and nine months, respectively as compared to the same periods in 2014. Mortgage loan production for the quarter increased by $167.5 million, or 31.2%, to $703.6 million while mortgage loan sales for the quarter increased by $208.1 million, or 38.8%, to $744.6 million, as compared to the same period in 2014. Mortgage loan servicing revenue increased by $848,000 and $2.3 million to $4.1 million and $11.5 million for the quarter and nine months, respectively, as compared to the same periods in 2014, as the mortgage servicing portfolio grew to $6.4 billion at September 30, 2015.

Noninterest income from indirect lending activities was $4.0 million and $15.0 million for the quarter and nine months, a decrease of $2.3 million and increase of $0.4 million, respectively, as compared to the same periods in 2014. Gains on sales of indirect loans decreased by $2.6 million and $806,000 for the quarter and nine months, respectively, compared to the same periods in 2014 as demand for loan sales decreased as compared to the prior year. Indirect servicing fee income increased by $522,000 and $1.7 million for the quarter and nine months, as compared to the same periods in 2014, as the indirect servicing portfolio grew to $1.1 billion at September 30, 2015.

On a linked-quarter basis, noninterest income decreased by $6.1 million, or 16.6%, primarily attributable to a decrease in income from mortgage banking activities of $3.8 million, a decrease in income from indirect lending activities of $1.0 million, and a decrease of $1.5 million in other income, primarily due to a change in the gain on sale of real estate owned of $1.0 million. This decrease in noninterest income occurred primarily due to mortgage servicing rights impairment of $2.2 million at September 30, 2015 compared to a recovery of $2.6 million at June 30, 2015. See "Analysis of Mortgage Lending" tables below.

Noninterest Expense

Noninterest expense was $40.0 million and $119.8 million for the quarter and nine months ended September 30, 2015, an increase of $4.3 million and $17.7 million, or 12.2% and 17.4%, respectively, as compared to the same periods in 2014.

During the quarter, Fidelity Bank continued its strategy of increasing its footprint across a larger geographic area, and increasing production as well. This was the primary reason for increased noninterest expense in many areas. Salaries, benefits and commissions for the quarter and nine months increased $2.7 million and $14.0 million, or 11.99% and 22.03%, compared to the same periods in 2014. Occupancy expense for the quarter and nine months increased $816,000 and $1.7 million, or 23.2% and 18.2%, compared to the same periods in 2014. Other noninterest expense for the quarter and nine months ended September 30, 2015 increased by $731,000 and $1.7 million, or 8.2% and 6.5%, compared to the same periods in 2014.

On a linked-quarter basis, noninterest expense decreased by $1.1 million, or 2.7%, primarily due to a $2.4 million decrease in salaries, benefits and commissions, primarily due to decreased mortgage loan production, partially offset by an increase of $816,000 in occupancy costs and an increase of $479,000 in other expenses.

ABOUT FIDELITY SOUTHERN CORPORATION

Fidelity Southern Corporation, through its operating subsidiaries Fidelity Bank and LionMark Insurance Company, provides banking services and trust and wealth management services and credit-related insurance products through branches in Georgia and 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 web site 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 2014 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.

-end-

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS

(UNAUDITED)



	As of or for the Quarter Ended									As of or for the Nine Months Ended
($ in thousands, except per share data)	September 30, 2015			June 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
INCOME STATEMENT DATA:
Interest income	$	29,597		$	27,516		$	25,891		$	83,599		$	75,034
Interest expense	4,460			3,502			2,727			10,907			8,208
Net interest income	25,137			24,014			23,164			72,692			66,826
Provision for loan losses	1,328			(182		)	1,859			1,254			(25		)
Noninterest income	30,619			36,695			27,908			99,352			70,609
Noninterest expense	40,049			41,165			35,710			119,849			102,109
Net income	9,217			12,451			8,802			32,358			22,823
PERFORMANCE:
Earnings per common share - basic	$	0.41		$	0.58		$	0.41		$	1.48		$	1.07
Earnings per common share - diluted	0.39			0.54			0.38			1.42			0.97
Book value per common share	$	12.83		$	12.90		$	12.10		$	12.83		$	12.10
Tangible book value per common share	12.55			12.70			11.92			12.55			11.92
Cash dividends paid per common share	$	0.10		$	0.10		$	0.09		$	0.29		$	0.21
Return on average assets	1.07		%	1.55		%	1.26		%	1.33		%	1.15		%
Return on average shareholders' equity	12.69		%	17.97		%	13.79		%	15.56		%	12.46		%
Net interest margin	3.16		%	3.24		%	3.56		%	3.25		%	3.67		%
END OF PERIOD BALANCE SHEET SUMMARY:
Total assets	$	3,499,465		$	3,374,938		$	2,861,569		$	3,499,465		$	2,861,569
Earning assets	3,237,110			3,118,065			2,652,462			3,237,110			2,652,462
Loans, excluding Loans Held-for-Sale	2,641,814			2,411,143			2,073,803			2,641,814			2,073,803
Total loans	2,981,465			2,885,410			2,398,245			2,981,465			2,398,245
Total deposits	2,912,038			2,639,248			2,459,291			2,912,038			2,459,291
Shareholders' equity	295,286			285,946			258,163			295,286			258,163
Assets serviced for others	7,777,854			7,292,561			6,275,893			7,777,854			6,275,893
DAILY AVERAGE BALANCE SHEET SUMMARY:
Total assets	$	3,423,373		$	3,228,867		$	2,797,766		$	3,251,132		$	2,646,238
Earning assets	3,176,957			2,980,741			2,593,380			3,013,603			2,449,236
Loans, excluding Loans Held-for-Sale	2,516,582			2,361,146			2,045,464			2,392,970			1,955,314
Total loans	2,956,109			2,778,117			2,370,899			2,798,024			1,924,265
Total deposits	2,731,407			2,624,412			2,262,679			2,629,670			2,207,149
Shareholders' equity	288,220			277,961			253,211			277,993			244,899
Assets serviced for others	7,521,391			7,104,630			6,013,788			7,125,599			5,622,007
ASSET QUALITY RATIOS:
Net charge-offs/(recoveries), annualized to average loans	0.05		%	(0.03		)%	0.40		%	0.10		%	0.24		%
Allowance to period-end loans	0.94		%	0.97		%	1.36		%	0.94		%	1.36		%
Nonperforming assets to total loans, ORE and repossessions	1.86		%	2.01		%	3.08		%	1.86		%	3.08		%
Allowance to nonperforming loans, ORE and repossessions	0.50x			0.48x			0.44x			0.50x			0.44x
SELECTED RATIOS:
Loans to total deposits	90.72		%	91.36		%	84.33		%	90.72		%	84.33		%
Average total loans to average earning assets	93.05		%	93.20		%	91.08		%	92.85		%	78.57		%
Noninterest income to total revenue	50.85		%	57.15		%	51.87		%	54.31		%	48.48		%
Leverage ratio	9.41		%	9.77		%	10.64		%	9.41		%	10.64		%
Common equity tier 1 capital	8.78		%	8.96		%	N/A			8.78		%	N/A
Tier 1 risk-based capital	10.21		%	10.46		%	11.84		%	10.21		%	11.84		%
Total risk-based capital	13.37		%	13.71		%	12.99		%	13.37		%	12.99		%
Average equity to average assets	8.42		%	8.61		%	9.05		%	8.55		%	9.25		%

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)



($ in thousands)	September 30, 2015			June 30, 2015			September 30, 2014
ASSETS
Cash and cash equivalents	$	87,373		$	80,716		$	91,565
Investment securities available-for-sale	155,749			140,878			156,331
Investment securities held-to-maturity	12,816			11,484			7,588
Loans held-for-sale	339,651			474,267			324,442
Loans	2,641,814			2,411,143			2,073,803
Allowance for loan losses	(24,750		)	(23,425		)	(28,297		)
Loans, net of allowance for loan losses	2,617,064			2,387,718			2,045,506
Premises and equipment, net	69,356			65,485			59,650
Other real estate, net	14,707			16,070			26,999
Bank owned life insurance	66,008			65,511			34,279
Servicing rights	82,659			77,614			62,196
Other assets	54,082			55,195			53,013
Total assets	$	3,499,465		$	3,374,938		$	2,861,569

LIABILITIES
Deposits
Noninterest-bearing demand deposits	$	722,771		$	646,340		$	639,471
Interest-bearing deposits
Demand and money market	956,149			850,314			778,645
Savings	317,766			299,905			312,183
Time deposits	915,352			842,689			728,992
Total deposits	2,912,038			2,639,248			2,459,291
Other borrowings	137,186			303,521			76,402
Subordinated debt	120,289			120,277			46,297
Other liabilities	34,666			25,946			21,416
Total liabilities	3,204,179			3,088,992			2,603,406

SHAREHOLDERS' EQUITY
Preferred stock	—			—			—
Common stock	166,989			164,835			161,527
Accumulated other comprehensive income, net	2,702			2,472			2,367
Retained earnings	125,595			118,639			94,269
Total shareholders’ equity	295,286			285,946			258,163
Total liabilities and shareholders’ equity	$	3,499,465		$	3,374,938		$	2,861,569

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)



	For the Quarter Ended							For the Nine Months Ended
($ in thousands, except per share data)	September 30, 2015		June 30, 2015			September 30, 2014		September 30, 2015		September 30, 2014
INTEREST INCOME
Loans, including fees	$	28,462	$	26,382		$	24,690	$	80,133	$	71,282
Investment securities	1,108		1,120			1,183		3,413		3,676
Federal funds sold and bank deposits	27		14			18		53		76
Total interest income	29,597		27,516			25,891		83,599		75,034
INTEREST EXPENSE
Deposits	2,866		2,683			2,282		8,041		7,098
Other borrowings	179		161			163		517		276
Subordinated debt	1,415		658			282		2,349		834
Total interest expense	4,460		3,502			2,727		10,907		8,208
Net interest income	25,137		24,014			23,164		72,692		66,826
Provision for loan losses	1,328		(182		)	1,859		1,254		(25		)
Net interest income after provision for loan losses	23,809		24,196			21,305		71,438		66,851
NONINTEREST INCOME
Service charges on deposit accounts	1,230		1,195			1,141		3,508		3,209
Other fees and charges	1,327		1,274			1,140		3,767		3,160
Mortgage banking activities	20,799		24,617			16,135		66,734		40,292
Indirect lending activities	4,037		5,031			6,303		15,047		14,610
SBA lending activities	1,494		1,364			1,479		3,788		3,682
Bank owned life insurance	496		500			313		1,488		1,369
Securities gains	—		—			—		—		—
Other	1,236		2,714			1,397		5,020		4,287
Total noninterest income	30,619		36,695			27,908		99,352		70,609
NONINTEREST EXPENSE
Salaries and employee benefits	17,800		19,668			17,022		56,290		49,080
Commissions	7,270		7,794			5,363		21,224		14,443
Occupancy	4,270		3,454			3,467		11,206		9,477
Communication	1,083		1,102			963		3,133		2,829
Other	9,626		9,147			8,895		27,996		26,280
Total noninterest expense	40,049		41,165			35,710		119,849		102,109
Income before income tax expense	14,379		19,726			13,503		50,941		35,351
Income tax expense	5,162		7,275			4,701		18,583		12,528
NET INCOME	$	9,217	$	12,451		$	8,802	$	32,358	$	22,823

EARNINGS PER SHARE:
Basic earnings per share	$	0.41	$	0.58		$	0.41	$	1.48	$	1.07
Diluted earnings per share	$	0.39	$	0.54		$	0.38	$	1.42	$	0.97
Weighted average common shares outstanding-basic	22,604		21,456			21,318		21,818		21,302
Weighted average common shares outstanding-diluted	23,562		23,082			23,463		22,733		23,446

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

LOANS BY CATEGORY

(UNAUDITED)



($ in thousands)	September 30, 2015		June 30, 2015		March 31, 2015		December 31, 2014		September 30, 2014
Commercial	$	579,319	$	533,853	$	519,062	$	524,145	$	524,419
SBA	138,078		138,819		138,198		134,766		143,302
Total commercial and SBA loans	717,397		672,672		657,260		658,911		667,721
Construction loans	154,335		146,778		134,456		123,994		108,823
Indirect automobile	1,399,932		1,281,978		1,251,044		1,219,232		1,087,710
Installment	12,236		11,661		12,209		13,372		15,647
Total consumer loans	1,412,168		1,293,639		1,263,253		1,232,604		1,103,357
Residential mortgage	248,697		210,777		180,424		158,348		119,292
Home equity lines of credit	109,217		87,277		82,188		79,449		74,610
Total mortgage loans	357,914		298,054		262,612		237,797		193,902
Loans	2,641,814		2,411,143		2,317,581		2,253,306		2,073,803

Loans held-for-sale:
Residential mortgage	218,308		310,792		241,974		181,424		161,775
SBA	11,343		13,475		13,543		12,511		17,667
Indirect automobile	110,000		150,000		150,000		175,000		145,000
Total loans held-for-sale	339,651		474,267		405,517		368,935		324,442
Total loans	$	2,981,465	$	2,885,410	$	2,723,098	$	2,622,241	$	2,398,245

Noncovered loans	$	2,617,990	$	2,385,489	$	2,287,284	$	2,218,493	$	2,036,097
Covered loans	23,824		25,654		30,297		34,813		37,706
Loans held-for-sale	339,651		474,267		405,517		368,935		324,442
Total loans	$	2,981,465	$	2,885,410	$	2,723,098	$	2,622,241	$	2,398,245

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

(UNAUDITED)



	As of or for the Quarter Ended
($ in thousands)	September 30, 2015			June 30, 2015			September 30, 2014
Balance at beginning of period	$	23,425		$	23,758		$	28,912
Net charge-offs/(recoveries):
Commercial and SBA	(111		)	(10		)	1,337
Construction	(291		)	(291		)	(41		)
Indirect automobile and installment loans	604			494			614
Mortgage	98			(3		)	4
Covered	14			(298		)	77
Acquired, noncovered	(1		)	(52		)	52
Total net charge-offs/(recoveries)	313			(160		)	2,043
Provision for loan losses ⁽¹⁾	1,328			(183		)	1,859
Increase/(decrease) in FDIC loss share receivable	310			(310		)	(431		)
Balance at end of period	$	24,750		$	23,425		$	28,297

Net charge-offs/(recoveries), annualized to average loans	0.05		%	(0.03		)%	0.40		%
Average loans	$	2,516,582		$	2,361,146		$	2,045,464
Allowance for loan losses as a percentage of loans	0.94		%	0.97		%	1.36		%

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

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

NONPERFORMING AND CLASSIFIED ASSETS

(UNAUDITED)



($ in thousands)	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014
NONPERFORMING ASSETS
Nonaccrual loans	$	29,374		$	30,756		$	32,432		$	34,856		$	36,489
Loans past due 90 days or more and still accruing	3,968			836			1,006			827			—
Repossessions	1,435			1,041			1,002			1,183			1,210
Other real estate (ORE)	14,707			16,070			19,988			22,564			26,999
Nonperforming assets	$	49,484		$	48,703		$	54,428		$	59,430		$	64,698
NONPERFORMING ASSET RATIOS
Loans 30-89 days past due	$	7,018		$	3,653		$	3,934		$	4,565		$	2,885
Loans 30-89 days past due to loans	0.24		%	0.15		%	0.17		%	0.20		%	0.14		%
Loans past due 90 days or more and still accruing to loans	0.13		%	0.03		%	0.04		%	0.04		%	—		%
Nonperforming assets to loans, ORE, and repossessions	1.86		%	2.01		%	2.33		%	2.61		%	3.08		%

ASSET QUALITY RATIOS
Classified Asset Ratio ⁽³⁾	17.56		%	18.59		%	20.45		%	21.49		%	25.36		%
Nonperforming loans as a % of loans	1.26		%	1.31		%	1.44		%	1.58		%	1.76		%
ALL to nonperforming loans	74.23		%	74.15		%	71.05		%	71.32		%	77.55		%
Net charge-offs/(recoveries), annualized to average loans	0.05		%	(0.03		)%	0.29		%	0.50		%	0.40		%
ALL as a % of loans	0.94		%	0.97		%	1.03		%	1.13		%	1.36		%

CLASSIFIED ASSETS
Classified loans ⁽¹⁾	$	47,906		$	49,561		$	52,684		$	53,415		$	61,161
ORE and repossessions	12,750			13,209			14,508			17,218			21,287
Total classified assets ⁽²⁾	$	60,656		$	62,770		$	67,192		$	70,633		$	82,448

⁽¹⁾ Amount of SBA guarantee included	$	3,970		$	5,256		$	5,802		$	5,271		$	7,590
⁽²⁾Classified assets include loans having a risk rating of substandard or worse, both accrual and nonaccrual, repossessions and ORE, net of loss share.
⁽³⁾ Classified asset ratio is defined as classified assets as a percentage of the sum of Tier 1 capital plus allowance for loan losses.



FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
ANALYSIS OF INDIRECT LENDING
(UNAUDITED)

			As of or for the Quarter Ended
($ in thousands)			September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014
Average loans outstanding ⁽¹⁾			$	1,486,077		$	1,407,848		$	1,389,570		$	1,329,306		$	1,204,314
Loans serviced for others			$	1,117,721		$	1,091,644		$	1,025,569		$	902,823		$	863,931
Past due loans:
	Amount 30+ days past due		$	1,381		$	1,098		$	1,222		$	1,547		$	1,573
	Number 30+ days past due		170			128			132			143			136
30+ day performing delinquency rate ⁽²⁾			0.10		%	0.08		%	0.09		%	0.11		%	0.13		%
Nonperforming loans			$	810		$	527		$	778		$	715		$	795
Nonperforming loans as a percentage of period end loans ⁽²⁾			0.06		%	0.04		%	0.06		%	0.05		%	0.06		%
Net charge-offs			$	605		$	495		$	866		$	901		$	612
Net charge-off rate ⁽³⁾			0.17		%	0.16		%	0.36		%	0.30		%	0.23		%
Number of vehicles repossessed during the period			120			106			134			128			136
Average beacon score of portfolio			755			755			755			753			751
Production by state:
	Alabama		$	20,886		$	18,831		$	22,056		$	26,780		$	27,845
	Arkansas		46,704			39,174			35,786			41,912			47,894
	North Carolina		21,484			20,536			21,809			25,059			29,781
	South Carolina		13,339			16,021			16,273			16,132			22,189
	Florida		98,087			91,725			96,688			102,465			128,729
	Georgia		54,497			52,735			60,402			69,288			72,423
	Mississippi		23,424			21,281			19,537			23,736			30,525
	Tennessee		16,946			19,295			19,479			22,880			28,684
	Virginia		14,829			16,349			16,919			18,590			20,903
	Texas		37,673			35,739			41,527			50,987			49,868
	Louisiana		24,490			24,095			21,042			13,531			12,597
		Total production by state	$	372,359		$	355,781		$	371,518		$	411,360		$	471,438
Loan sales			$	142,132		$	177,820		$	219,784		$	121,973		$	244,556
Portfolio yield ⁽¹⁾			2.75		%	2.79		%	2.88		%	3.07		%	3.10		%


⁽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 MORTGAGE LENDING
(UNAUDITED)

			For the Quarter Ended
($ in thousands)			September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014
Average loans outstanding ⁽¹⁾			$	511,317		$	449,097		$	337,122		$	300,652		$	286,407
Loans serviced for others			$	6,393,874		$	5,942,063		$	5,622,102		$	5,413,781		$	5,173,282
% of loan production for purchases			81.40		%	73.95		%	58.82		%	74.93		%	82.25		%
% of loan production for refinance loans			18.60		%	26.05		%	41.18		%	25.07		%	17.75		%
Production by region:
	Georgia		$	424,554		$	468,795		$	342,121		$	311,846		$	316,359
	Florida/Alabama		53,815			58,607			51,590			42,485			31,642
	Virginia/Maryland		147,387			182,850			158,289			126,151			127,721
	North and South Carolina ⁽²⁾		11,398			8,002			3,858			—			—
	Total retail		637,154			718,254			555,858			480,482			475,722
	Wholesale		66,490			70,169			57,125			34,961			60,393
		Total production by region	$	703,644		$	788,423		$	612,983		$	515,443		$	536,115
Loan sales			$	744,621		$	665,738		$	552,085		$	475,930		$	536,490



INCOME FROM MORTGAGE BANKING ACTIVITIES
(UNAUDITED)

			For the Quarter Ended
(in thousands)			September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014
Marketing gain, net			$	17,573		$	17,099		$	19,746		$	12,076		$	12,108
Origination points and fees			3,871			3,726			2,757			2,744			2,943
Loan servicing revenue			4,059			3,762			3,646			3,473			3,211
MSR amortization and impairment adjustments			(4,704		)	30			(4,830		)	(2,804		)	(2,127		)
Total mortgage banking activities			$	20,799		$	24,617		$	21,319		$	15,489		$	16,135


Noncash items included in income from mortgage banking activities:
Capitalized MSR, net			$	6,461		$	5,829		$	4,429		$	3,333		$	4,062
Valuation on MSR			(2,215		)	2,611			(2,469		)	(709		)	(156		)
Mark to market adjustments			(1,028		)	(1,098		)	3,967			588			(1,747		)
Total noncash items			$	3,218		$	7,342		$	5,927		$	3,212		$	2,159

⁽¹⁾ Includes held-for-sale
⁽²⁾ Expanded into North and South Carolina in January 2015

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

AVERAGE BALANCE, INTEREST AND YIELDS

(UNAUDITED)



	For the Quarter Ended
	September 30, 2015							September 30, 2014
	Average			Income/		Yield/		Average			Income/		Yield/
($ in thousands)	Balance			Expense		Rate		Balance			Expense		Rate
Assets
Interest-earning assets:
Loans, net of unearned income ⁽¹⁾	$	2,956,109		$	28,509	3.83	%	$	2,370,899		$	24,732	4.14	%
Investment securities ⁽¹⁾	163,523			1,150		2.79	%	177,811			1,237		2.76	%
Federal funds sold and bank deposits	45,265			27		0.24	%	44,670			18		0.16	%
Total interest-earning assets	3,164,897			29,686		3.72	%	2,593,380			25,987		3.98	%
Noninterest-earning assets:
Cash and due from banks	15,101							10,881
Allowance for loan losses	(23,830		)					(28,570		)
Premises and equipment, net	66,709							52,790
Other real estate	15,866							25,384
Other assets	184,630							143,901
Total assets	$	3,423,373						$	2,797,766
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Demand deposits	$	881,456		$	548	0.25	%	$	712,121		$	432	0.24	%
Savings deposits	308,503			266		0.34	%	318,261			272		0.34	%
Time deposits	864,472			2,052		0.94	%	657,527			1,578		0.95	%
Total interest-bearing deposits	2,054,431			2,866		0.55	%	1,687,909			2,282		0.54	%
Other borrowings	254,558			179		0.28	%	205,377			163		0.31	%
Subordinated debt	120,279			1,415		4.67	%	46,297			282		2.42	%
Total interest-bearing liabilities	2,429,268			4,460		0.73	%	1,939,583			2,727		0.56	%
Noninterest-bearing liabilities and shareholders' equity:
Demand deposits	676,976							574,763
Other liabilities	28,909							30,209
Shareholders’ equity	288,220							253,211
Total liabilities and shareholders’ equity	$	3,423,373						$	2,797,766
Net interest income/spread				$	25,226	2.99	%				$	23,260	3.42	%
Net interest margin						3.16	%						3.56	%

⁽¹⁾ Interest income includes the effect of taxable-equivalent adjustment using a 35% tax rate.

FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES

AVERAGE BALANCE, INTEREST AND YIELDS

(UNAUDITED)



	For the Nine Months Ended
	September 30, 2015							September 30, 2014
($ in thousands)	Average Balance			Income/ Expense		Yield/ Rate		Average Balance			Income/ Expense		Yield/ Rate
Assets
Interest-earning assets:
Loans, net of unearned income⁽¹⁾	$	2,798,024		$	80,270	3.84	%	$	2,208,317		$	71,404	4.32	%
Investment securities⁽¹⁾	162,568			3,551		2.92	%	177,169			3,741		2.82	%
Fed funds sold and interest-bearing deposits	42,017			53		0.17	%	57,061			76		0.18	%
Total interest-earning assets	3,002,609			83,874		3.73	%	2,442,547			75,221		4.12	%
Noninterest-earning assets:
Cash and due from banks	14,996							13,991
Allowance for loan losses	(24,282		)					(31,049		)
Premises and equipment, net	63,191							50,028
Other real estate	18,786							26,759
Other assets	175,833							143,973
Total assets	$	3,251,133						$	2,646,249

Liabilities and shareholders’ equity
Interest-bearing liabilities:
Demand deposits	$	846,090		$	1,495	0.24	%	$	701,740		$	1,405	0.27	%
Savings deposits	306,495			768		0.34	%	314,025			862		0.37	%
Time deposits	832,423			5,778		0.93	%	661,931			4,831		0.98	%
Total interest-bearing deposits	1,985,008			8,041		0.54	%	1,677,696			7,098		0.57	%
Other borrowings	236,213			517		0.29	%	121,208			276		0.30	%
Subordinated debt	80,193			2,349		3.92	%	46,297			834		2.40	%
Total interest-bearing liabilities	2,301,414			10,907		0.63	%	1,845,201			8,208		0.59	%
Noninterest-bearing liabilities and shareholders' equity:
Demand deposits	644,662							529,450
Other liabilities	27,064							26,697
Shareholders’ equity	277,993							244,901
Total liabilities and shareholders’ equity	$	3,251,133						$	2,646,249
Net interest income/spread				$	72,967	3.10	%				$	67,013	3.53	%
Net interest margin						3.25	%						3.67	%

⁽¹⁾ Interest income includes the effect of taxable-equivalent adjustment using a 35% tax rate.

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