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| 8-K - 8-K - FIDELITY SOUTHERN CORP | lionqe331178k-earnings.htm |
FOR IMMEDIATE RELEASE
Contacts: Martha Fleming, Steve Brolly
Fidelity Southern Corporation (404) 240-1504
FIDELITY SOUTHERN CORPORATION REPORTS EARNINGS
FOR FIRST QUARTER OF $10.5 MILLION
ATLANTA, GA (April 20, 2017) – Fidelity Southern Corporation (“Fidelity” or the “Company”) (NASDAQ: LION), holding company for Fidelity Bank (the “Bank”), today reported financial results for the quarter ended March 31, 2017.
KEY RESULTS
• | Net income of $10.5 million, or $0.40 per diluted share, an increase of $6.0 million, or 131.8%, year over year |
• | Total revenues of $75.0 million, an increase of $15.8 million, or 26.8%, year over year |
• | Loans, net of held-for-sale, grew by $52.7 million, or 1.6% |
• | Total assets of $4.5 billion increased by $141.4 million, or 3.2% |
• | Total deposits of $3.8 billion increased by $124.5 million, or 3.4% |
• | Loans serviced for others of $9.6 billion grew by $346.8 million, or 3.8% |
• | Tangible book value increased to $13.58, or 2.4% |
Fidelity's Chairman and CEO, Jim Miller, said, “The current economy seems to be taking a pause, as reflected in interest rate volatility, though we still anticipate a gradual economic improvement given the worldwide economic environment. That means our effort to expand mortgage lending, particularly in Florida, will stay on track. Similarly our robust growth in Wealth Management’s sales force means that department will be a net contributor to earnings by year end. Wealth Management also plans to offer life insurance products through a third party this year. Construction lending is also robust while lending to business is still very competitive and depends on taking market share.
“As we approach the $five billion mark for assets on our books and the $10 billion mark for assets serviced for others, our attention is really focused on having the right systems, training, and personnel in place to best serve our customers.
“We are all gratified to have Palmer Proctor’s leadership and look forward to his official start date of April 27 as the Bank’s CEO.”
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BALANCE SHEET
Total assets of $4.5 billion at March 31, 2017, represent an increase of $141.4 million, or 3.2%, compared to December 31, 2016. The increase in total assets was driven by an increase in cash and cash equivalents which grew $200.8 million, or 134.1%, leading to an increase in total deposits of $124.5 million, or 3.4%, compared to December 31, 2016. Total assets were also impacted by a decrease of $104.2 million, or 22.4%, in loans held-for-sale due to fluctuations in the pipeline of loans to be sold. Loans held-for-investment increased $52.7 million, or 1.6%, due to new loan production during the quarter, as described below.
Loans
Total loans held for investment of $3.4 billion at March 31, 2017, represented an increase of $52.7 million, or 1.6%, compared to December 31, 2016, primarily in the residential mortgage and commercial portfolios, resulting in increases of $32.4 million, or 8.4%, and $18.2 million, or 2.3%. The Bank continues to generate organic new business as well as leverage its expansion through past acquisitions.
Loan Servicing Rights
Gross servicing rights increased by $5.7 million, or 5.8%, to $105.0 million at March 31, 2017. Cumulative production and sales of residential mortgage, SBA, and indirect auto loans continued to grow and generate a net increase of servicing rights.
Deposits
Total deposits at March 31, 2017, of $3.8 billion increased by $124.5 million, or 3.4%, during the quarter. Noninterest bearing demand deposits increased $40.5 million, or 4.2%, during the quarter. An increase in interest bearing deposits of $107.6 million, or 8.9%, in the demand and money market category was partially offset by decreases of $18.0 million and $5.5 million, in savings and time deposits, respectively. Deposit balances continue to grow with successful marketing efforts and the expansion of our geographical footprint.
INCOME STATEMENT
Net Income
Net income was $10.5 million for the quarter, an increase of $6.0 million, or 131.8%, compared to the first quarter of 2016. The primary driver of the increase in net income was an increase of $12.5 million, or 50.2%, in noninterest income, stemming from an additional $11.1 million of income from mortgage banking activities. In addition, the year over year increase in average earning assets of $430.9 million, or 11.8%, contributed an additional $2.9 million, in net interest income. These increases in net income were partially offset by an increase in the provision for loan losses of $1.6 million and an increase in noninterest expense of $4.0 million, due to increased salaries and employee benefits and commissions.
On a linked-quarter basis, net income decreased by $4.5 million, or 30.1%, as total revenue decreased by $10.4 million, or 12.2%, led by a $11.6 million, or 30.9%, decrease in noninterest income from mortgage banking activities, from less MSR impairment recovery and lower mortgage production, than the previous quarter. This decrease was partially offset primarily by a decrease of $3.6 million, or 6.6%, in noninterest expense. A decrease in net income, on a linked-quarter basis, was expected due to seasonality of home mortgage production and automobile purchases, as well as higher payroll related taxes.
Interest Income
Interest income was $37.6 million for the quarter, an increase of $3.4 million, or 9.8%, compared to the same period in the prior year. Average loans for the quarter increased by $347.6 million, or 10.3%, compared to the same quarter a year ago, which was the primary reason for the increase in interest income.
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On a linked-quarter basis, interest income decreased by $645,000, or 1.7%. The decrease in interest income was primarily driven by a decrease of $56.7 million, or 1.5%, in average loans.
Interest Expense
Interest expense was $5.4 million for the quarter, an increase of $410,000, or 8.2%, compared to the same quarter a year ago, as a combination of organic growth and deposits added through the March 2016 AEB acquisition resulted in a year over year increase of $257.2 million, or 10.6%, in average interest-bearing deposits.
The increase in interest expense due to larger average deposit balances was partially offset by a decrease in the rate paid on interest-bearing accounts, primarily time deposits, of 7 basis points as compared to the same quarter a year ago.
On a linked-quarter basis, interest expense was relatively flat, increasing by $56,000, or 1.0%, due to an increase in average interest-bearing deposits of $100.1 million, or 3.7%.
Net Interest Margin
Net interest income (tax equivalent) rose to $32.4 million for the quarter, or 10.1%, as compared to $29.4 million for the same period in 2016, primarily due to a year over year increase of $430.9 million, or 11.8%, in average earning assets. This increase occurred primarily from organic loan growth, partially offset by an increase in interest expense from growth in average interest-bearing deposits which increased by $257.2 million or 10.6%.
The net interest margin was 3.21% for the quarter, a decrease of 3 basis points, compared to 3.24% for the same period in 2016.
On a linked-quarter basis, the net interest margin decreased by 4 basis points. These decreases in the net interest margin occurred primarily as a result of mix in interest earning assets with an increase in cash held at March 31, 2017 resulting from the deposit campaigns as well as late quarter sales of loans.
Provision for Loan Losses
The provision for loan losses was $2.1 million for the quarter, an increase of $1.6 million, as compared to the same period in 2016. The primary reason for the increase in the provision was the increase in net charge-offs for the quarter, primarily in the indirect auto loan portfolio, as compared to the same period in 2016.
On a linked-quarter basis, the provision for loan losses decreased by $385,000, as net charge-offs decreased compared to the previous quarter, mostly due to seasonal fluctuations, mainly in the level of net charge-offs of commercial and HELOC loans. Asset quality remained strong; the trend in low net charge-offs continued for most of our portfolio, with the exception of indirect automobile, which experienced an increase of $196,000, or 15.0% , over the prior quarter.
Noninterest Income
Noninterest income was $37.4 million for the quarter, an increase of $12.5 million, or 50.2%, as compared to the same period in 2016. The increase is primarily due to a net increase in noninterest income from mortgage banking activities of $11.1 million, or 75.6%, as compared to the same period in 2016.
Mortgage production income was $21.7 million for the quarter, a $3.5 million, or 19.4%, increase over the same period in 2016, due to increased loan originations on new loans and sales.
Mortgage servicing revenue increased by $849,000, or 18.9%, for the quarter, as compared to the same period in 2016, due to continued loan originations and sales, as the portfolio of mortgage loans serviced for others increased from $6.9 billion to $8.1 billion, or 17.0%, year over year.
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The increase in market interest rates resulted in a net recovery of MSR impairment of $2.0 million during the quarter as compared to net MSR impairment of $4.7 million for the same period in 2016, driving $6.7 million of the increase in noninterest income from mortgage banking activities.
On a linked-quarter basis, noninterest income decreased by $9.8 million, or 20.7%, largely due to a net decrease in income from mortgage banking activities of $11.6 million, or 30.9%. The decrease was largely driven by an $11.2 million swing in MSR impairment recovery as a large net recovery of MSR impairment was recorded during the previous quarter due to an increase in interest rates, offset by higher noninterest income for indirect and SBA lending activities.
Noninterest Expense
Noninterest expense was $50.6 million for the quarter, an increase of $4.0 million, or 8.6%, as compared to the same period in 2016, mostly due to increased expenses associated with organic growth as well as the AEB acquisition. Increases were noted in salaries and employee benefits, commissions, and other noninterest expense, as discussed below.
Salaries and employee benefits increased by $2.4 million, or 10.3%, for the quarter, as compared to the same period in 2016. The approximate growth in the FTE count of 51 or 4.0%, at March 31, 2017, as compared to March 31, 2016, drove the majority of the increase in salaries. Also included in the increase is $683,000 of employer taxes and employee benefits, primarily resulting from the increase in both number of employees and the increased cost of employer-paid benefits, mainly medical premiums.
Commissions increased by $900,000, or 13.6%, for the quarter, as compared to the same period in 2016, primarily due to an increased tiered commission rates program, an increase in retail mortgage production, and an increase in guaranteed commissions paid to new mortgage loan originators.
Other noninterest expense increased by $646,000, or 5.7%, for the quarter, as compared to the same period in 2016. The majority of this increase occurred due to increases in normal operating costs, ORE carrying costs, and services provided by third party vendors.
On a linked-quarter basis, total noninterest expense decreased by $3.6 million, or 6.6%, for the quarter. Decreases in commissions expense of $2.0 million, or 21.2%, due to lower mortgage loan production, decreases in occupancy expense of $733,000, or 15.0%, as lower amounts for hardware and software maintenance costs, real property taxes, and utility expenses were incurred, and decreases in other noninterest expense of $648,000, or 5.1%, primarily due to FDIC indemnification assets adjustments, accounting for the majority of the differences on a linked-quarter basis.
ABOUT FIDELITY SOUTHERN CORPORATION
Fidelity Southern Corporation, through its operating subsidiaries, Fidelity Bank and LionMark Insurance Company, provides banking services and Wealth Management services and credit-related insurance products through branches in Georgia and Florida, and an insurance office in Atlanta, Georgia. SBA, indirect automobile, and mortgage loans are provided throughout the South and parts of the Midwest. For additional information about Fidelity's products and services, please visit the web site at www.FidelitySouthern.com.
This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled “Forward Looking Statements” from Fidelity Southern Corporation’s 2016 Annual Report filed on Form 10-K with the Securities and Exchange Commission. Additional information and other factors that could affect future financial
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results are included in Fidelity's filings with the Securities and Exchange Commission.
-end-
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FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(UNAUDITED)
As of or for the Quarter Ended | |||||||||||||||||||
($ in thousands, except per share data) | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | ||||||||||||||
INCOME STATEMENT DATA: | |||||||||||||||||||
Interest income | $ | 37,642 | $ | 38,287 | $ | 39,898 | $ | 36,806 | $ | 34,292 | |||||||||
Interest expense | 5,408 | 5,352 | 5,135 | 4,963 | 4,998 | ||||||||||||||
Net interest income | 32,234 | 32,935 | 34,763 | 31,843 | 29,294 | ||||||||||||||
Provision for loan losses | 2,100 | 2,485 | 2,118 | 3,128 | 500 | ||||||||||||||
Noninterest income | 37,370 | 47,143 | 39,325 | 29,971 | 24,886 | ||||||||||||||
Noninterest expense | 50,571 | 54,170 | 52,167 | 48,125 | 46,558 | ||||||||||||||
Net income | 10,527 | 15,065 | 12,515 | 6,645 | 4,541 | ||||||||||||||
PERFORMANCE: | |||||||||||||||||||
Earnings per common share - basic | $ | 0.40 | $ | 0.57 | $ | 0.48 | $ | 0.26 | $ | 0.19 | |||||||||
Earnings per common share - diluted | 0.40 | 0.57 | 0.48 | 0.26 | 0.18 | ||||||||||||||
Total revenues | 75,012 | 85,430 | 79,223 | 66,777 | 59,178 | ||||||||||||||
Book value per common share | 14.09 | 13.78 | 13.32 | 13.17 | 12.96 | ||||||||||||||
Tangible book value per common share | 13.58 | 13.26 | 12.78 | 12.60 | 12.40 | ||||||||||||||
Cash dividends paid per common share | 0.12 | 0.12 | 0.12 | 0.12 | 0.12 | ||||||||||||||
Dividend payout ratio | 30.00 | % | 21.05 | % | 25.00 | % | 46.15 | % | 63.16 | % | |||||||||
Return on average assets | 0.97 | % | 1.37 | % | 1.15 | % | 0.64 | % | 0.46 | % | |||||||||
Return on average shareholders' equity | 11.78 | % | 16.90 | % | 14.58 | % | 8.07 | % | 5.90 | % | |||||||||
Equity to assets ratio | 8.19 | % | 8.26 | % | 7.91 | % | 7.84 | % | 8.04 | % | |||||||||
Net interest margin | 3.21 | % | 3.25 | % | 3.45 | % | 3.30 | % | 3.24 | % | |||||||||
END OF PERIOD BALANCE SHEET SUMMARY: | |||||||||||||||||||
Total assets | $ | 4,531,057 | $ | 4,389,685 | $ | 4,395,611 | $ | 4,281,927 | $ | 4,101,499 | |||||||||
Earning assets | 4,192,919 | 4,059,414 | 4,074,834 | 3,972,492 | 3,779,885 | ||||||||||||||
Loans, excluding Loans Held-for-Sale | 3,354,926 | 3,302,264 | 3,332,311 | 3,190,707 | 3,092,632 | ||||||||||||||
Total loans | 3,716,043 | 3,767,592 | 3,783,928 | 3,649,736 | 3,489,511 | ||||||||||||||
Total deposits | 3,755,108 | 3,630,594 | 3,538,908 | 3,569,606 | 3,421,448 | ||||||||||||||
Shareholders' equity | 371,302 | 362,647 | 347,770 | 335,870 | 329,778 | ||||||||||||||
Assets serviced for others | 9,553,855 | 9,207,070 | 8,926,574 | 8,699,107 | 8,336,541 | ||||||||||||||
DAILY AVERAGE BALANCE SHEET SUMMARY: | |||||||||||||||||||
Total assets | $ | 4,409,492 | $ | 4,368,579 | $ | 4,329,974 | $ | 4,207,171 | $ | 3,942,683 | |||||||||
Earning assets | 4,082,544 | 4,051,164 | 4,020,453 | 3,891,966 | 3,651,635 | ||||||||||||||
Loans, excluding Loans Held-for-Sale | 3,320,992 | 3,323,513 | 3,266,511 | 3,161,676 | 3,023,312 | ||||||||||||||
Total loans | 3,718,260 | 3,774,939 | 3,718,341 | 3,590,929 | 3,370,645 | ||||||||||||||
Total deposits | 3,644,047 | 3,561,713 | 3,573,131 | 3,470,966 | 3,212,691 | ||||||||||||||
Shareholders' equity | 362,321 | 354,542 | 341,393 | 331,056 | 308,952 | ||||||||||||||
Assets serviced for others | 9,382,261 | 9,043,167 | 8,807,270 | 8,480,382 | 8,162,343 | ||||||||||||||
ASSET QUALITY RATIOS: | |||||||||||||||||||
Net charge-offs to average loans | 0.16 | % | 0.29 | % | — | % | 0.25 | % | (0.20 | )% | |||||||||
Allowance to period-end loans | 0.91 | % | 0.90 | % | 0.89 | % | 0.88 | % | 0.86 | % | |||||||||
Nonperforming assets to total loans, ORE and repossessions | 1.52 | % | 1.57 | % | 1.54 | % | 1.66 | % | 2.03 | % | |||||||||
Allowance to nonperforming loans, ORE and repossessions | 0.59x | 0.57x | 0.58x | 0.53x | 0.42x | ||||||||||||||
SELECTED RATIOS: | |||||||||||||||||||
Loans to total deposits | 89.34 | % | 90.96 | % | 94.16 | % | 89.39 | % | 90.39 | % | |||||||||
Average total loans to average earning assets | 91.08 | % | 93.18 | % | 92.49 | % | 92.27 | % | 92.31 | % | |||||||||
Noninterest income to total revenue | 49.82 | % | 55.18 | % | 49.64 | % | 44.88 | % | 42.05 | % | |||||||||
Leverage ratio | 8.48 | % | 8.58 | % | 8.48 | % | 8.46 | % | 8.88 | % | |||||||||
Common equity tier 1 capital | 8.37 | % | 8.35 | % | 8.19 | % | 8.18 | % | 8.25 | % | |||||||||
Tier 1 risk-based capital | 9.51 | % | 9.46 | % | 9.31 | % | 9.35 | % | 9.47 | % | |||||||||
Total risk-based capital | 12.20 | % | 12.11 | % | 11.97 | % | 12.06 | % | 12.21 | % | |||||||||
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FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
($ in thousands) | March 31, 2017 | December 31, 2016 | March 31, 2016 | |||||||||
ASSETS | ||||||||||||
Cash and cash equivalents | $ | 350,502 | $ | 149,711 | $ | 125,289 | ||||||
Investment securities available-for-sale | 139,071 | 144,310 | 167,574 | |||||||||
Investment securities held-to-maturity | 15,977 | 16,583 | 15,248 | |||||||||
Loans held-for-sale | 361,117 | 465,328 | 396,879 | |||||||||
Loans | 3,354,926 | 3,302,264 | 3,092,632 | |||||||||
Allowance for loan losses | (30,455 | ) | (29,831 | ) | (26,726 | ) | ||||||
Loans, net of allowance for loan losses | 3,324,471 | 3,272,433 | 3,065,906 | |||||||||
Premises and equipment, net | 87,222 | 87,915 | 87,993 | |||||||||
Other real estate, net | 11,284 | 14,814 | 19,482 | |||||||||
Bank owned life insurance | 70,587 | 70,151 | 66,536 | |||||||||
Servicing rights, net | 105,039 | 99,295 | 82,879 | |||||||||
Other assets | 65,787 | 69,145 | 73,713 | |||||||||
Total assets | $ | 4,531,057 | $ | 4,389,685 | $ | 4,101,499 | ||||||
LIABILITIES | ||||||||||||
Deposits | ||||||||||||
Noninterest-bearing demand deposits | $ | 1,005,372 | $ | 964,900 | $ | 885,319 | ||||||
Interest-bearing deposits | ||||||||||||
Demand and money market | 1,321,936 | 1,214,383 | 1,130,050 | |||||||||
Savings | 381,751 | 399,754 | 355,858 | |||||||||
Time deposits | 1,046,049 | 1,051,557 | 1,050,221 | |||||||||
Total deposits | 3,755,108 | 3,630,594 | 3,421,448 | |||||||||
Short-term borrowings | 239,466 | 243,351 | 189,278 | |||||||||
Subordinated debt, net | 120,488 | 120,454 | 120,355 | |||||||||
Other liabilities | 44,693 | 32,639 | 40,640 | |||||||||
Total liabilities | 4,159,755 | 4,027,038 | 3,771,721 | |||||||||
SHAREHOLDERS' EQUITY | ||||||||||||
Preferred stock | — | — | — | |||||||||
Common stock | 206,589 | 205,309 | 195,200 | |||||||||
Accumulated other comprehensive income, net | 699 | 692 | 2,841 | |||||||||
Retained earnings | 164,014 | 156,646 | 131,737 | |||||||||
Total shareholders’ equity | 371,302 | 362,647 | 329,778 | |||||||||
Total liabilities and shareholders’ equity | $ | 4,531,057 | $ | 4,389,685 | $ | 4,101,499 | ||||||
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FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the Quarter Ended | ||||||||||||
($ in thousands, except per share data) | March 31, 2017 | December 31, 2016 | March 31, 2016 | |||||||||
INTEREST INCOME | ||||||||||||
Loans, including fees | $ | 36,083 | $ | 36,935 | $ | 32,945 | ||||||
Investment securities | 1,208 | 1,241 | 1,280 | |||||||||
Other | 351 | 111 | 67 | |||||||||
Total interest income | 37,642 | 38,287 | 34,292 | |||||||||
INTEREST EXPENSE | ||||||||||||
Deposits | 3,449 | 3,382 | 3,265 | |||||||||
Short term borrowings | 392 | 474 | 294 | |||||||||
Subordinated debt | 1,567 | 1,496 | 1,439 | |||||||||
Total interest expense | 5,408 | 5,352 | 4,998 | |||||||||
Net interest income | 32,234 | 32,935 | 29,294 | |||||||||
Provision for loan losses | 2,100 | 2,485 | 500 | |||||||||
Net interest income after provision for loan losses | 30,134 | 30,450 | 28,794 | |||||||||
NONINTEREST INCOME | ||||||||||||
Service charges on deposit accounts | 1,455 | 1,608 | 1,370 | |||||||||
Other fees and charges | 1,871 | 1,902 | 1,666 | |||||||||
Mortgage banking activities | 25,869 | 37,464 | 14,735 | |||||||||
Indirect lending activities | 4,426 | 3,466 | 4,264 | |||||||||
SBA lending activities | 1,818 | 1,330 | 1,234 | |||||||||
Bank owned life insurance | 439 | 458 | 454 | |||||||||
Securities gains | — | — | 82 | |||||||||
Other | 1,492 | 915 | 1,081 | |||||||||
Total noninterest income | 37,370 | 47,143 | 24,886 | |||||||||
NONINTEREST EXPENSE | ||||||||||||
Salaries and employee benefits | 25,438 | 25,808 | 23,055 | |||||||||
Commissions | 7,498 | 9,514 | 6,598 | |||||||||
Occupancy, net | 4,163 | 4,896 | 4,384 | |||||||||
Communication | 1,434 | 1,265 | 1,128 | |||||||||
Other | 12,039 | 12,687 | 11,393 | |||||||||
Total noninterest expense | 50,572 | 54,170 | 46,558 | |||||||||
Income before income tax expense | 16,932 | 23,423 | 7,122 | |||||||||
Income tax expense | 6,405 | 8,358 | 2,581 | |||||||||
NET INCOME | $ | 10,527 | $ | 15,065 | $ | 4,541 | ||||||
EARNINGS PER COMMON SHARE: | ||||||||||||
Basic | $ | 0.40 | $ | 0.57 | $ | 0.19 | ||||||
Diluted | $ | 0.40 | $ | 0.57 | $ | 0.18 | ||||||
Weighted average common shares outstanding-basic | 26,335 | 26,230 | 24,273 | |||||||||
Weighted average common shares outstanding-diluted | 26,477 | 26,342 | 24,841 | |||||||||
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FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
LOANS BY CATEGORY
(UNAUDITED)
($ in thousands) | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | |||||||||||||||
Commercial | $ | 802,905 | $ | 784,737 | $ | 789,674 | $ | 791,698 | $ | 791,633 | ||||||||||
SBA | 149,727 | 149,779 | 145,890 | 144,083 | 137,220 | |||||||||||||||
Total commercial and SBA loans | 952,632 | 934,516 | 935,564 | 935,781 | 928,853 | |||||||||||||||
Construction loans | 249,465 | 238,910 | 228,887 | 223,156 | 205,550 | |||||||||||||||
Indirect automobile | 1,565,298 | 1,575,865 | 1,631,903 | 1,512,406 | 1,463,005 | |||||||||||||||
Installment loans and personal lines of credit | 31,647 | 33,225 | 34,181 | 29,725 | 27,843 | |||||||||||||||
Total consumer loans | 1,596,945 | 1,609,090 | 1,666,084 | 1,542,131 | 1,490,848 | |||||||||||||||
Residential mortgage | 418,941 | 386,582 | 370,465 | 368,706 | 347,336 | |||||||||||||||
Home equity lines of credit | 136,943 | 133,166 | 131,311 | 120,933 | 120,045 | |||||||||||||||
Total mortgage loans | 555,884 | 519,748 | 501,776 | 489,639 | 467,381 | |||||||||||||||
Loans | 3,354,926 | 3,302,264 | 3,332,311 | 3,190,707 | 3,092,632 | |||||||||||||||
Loans held-for-sale: | ||||||||||||||||||||
Residential mortgage | 201,661 | 252,712 | 291,030 | 299,616 | 232,794 | |||||||||||||||
SBA | 9,456 | 12,616 | 10,587 | 9,413 | 14,085 | |||||||||||||||
Indirect automobile | 150,000 | 200,000 | 150,000 | 150,000 | 150,000 | |||||||||||||||
Total loans held-for-sale | 361,117 | 465,328 | 451,617 | 459,029 | 396,879 | |||||||||||||||
Total loans | $ | 3,716,043 | $ | 3,767,592 | $ | 3,783,928 | $ | 3,649,736 | $ | 3,489,511 | ||||||||||
Noncovered loans | $ | 3,345,667 | $ | 3,286,336 | $ | 3,315,448 | $ | 3,171,138 | $ | 3,071,452 | ||||||||||
Covered loans | 9,259 | 15,928 | 16,863 | 19,569 | 21,180 | |||||||||||||||
Loans held-for-sale | 361,117 | 465,328 | 451,617 | 459,029 | 396,879 | |||||||||||||||
Total loans | $ | 3,716,043 | $ | 3,767,592 | $ | 3,783,928 | $ | 3,649,736 | $ | 3,489,511 | ||||||||||
DEPOSITS BY CATEGORY
(UNAUDITED)
For the Quarter Ended | ||||||||||||||||||||||||||||||||||
March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | ||||||||||||||||||||||||||||||
($ in thousands) | Average Amount | Rate | Average Amount | Rate | Average Amount | Rate | Average Amount | Rate | Average Amount | Rate | ||||||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 961,188 | — | % | $ | 978,909 | — | % | $ | 1,004,924 | — | % | $ | 932,448 | — | % | $ | 786,993 | — | % | ||||||||||||||
Interest-bearing demand deposits | 1,244,955 | 0.31 | % | 1,179,837 | 0.25 | % | 1,151,152 | 0.26 | % | 1,129,179 | 0.26 | % | 1,051,221 | 0.27 | % | |||||||||||||||||||
Savings deposits | 387,007 | 0.36 | % | 350,885 | 0.33 | % | 370,011 | 0.35 | % | 355,801 | 0.32 | % | 358,481 | 0.34 | % | |||||||||||||||||||
Time deposits | 1,050,897 | 0.83 | % | 1,052,082 | 0.89 | % | 1,047,044 | 0.86 | % | 1,053,538 | 0.84 | % | 1,015,996 | 0.90 | % | |||||||||||||||||||
Total average deposits | $ | 3,644,047 | 0.38 | % | $ | 3,561,713 | 0.38 | % | $ | 3,573,131 | 0.37 | % | $ | 3,470,966 | 0.37 | % | $ | 3,212,691 | 0.41 | % | ||||||||||||||
9
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
NONPERFORMING AND CLASSIFIED ASSETS
(UNAUDITED)
($ in thousands) | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | ||||||||||||||
NONPERFORMING ASSETS | |||||||||||||||||||
Nonaccrual loans (2) (6) | $ | 38,377 | $ | 35,358 | $ | 32,796 | $ | 33,435 | $ | 29,611 | |||||||||
Loans past due 90 days or more and still accruing | — | — | — | — | 1,671 | ||||||||||||||
Repossessions | 1,654 | 2,274 | 1,747 | 1,067 | 1,751 | ||||||||||||||
Other real estate (ORE) | 11,284 | 14,814 | 16,926 | 18,621 | 19,482 | ||||||||||||||
Nonperforming assets | $ | 51,315 | $ | 52,446 | $ | 51,469 | $ | 53,123 | $ | 52,515 | |||||||||
NONPERFORMING ASSET RATIOS | |||||||||||||||||||
Loans 30-89 days past due | $ | 10,734 | $ | 7,090 | $ | 5,821 | $ | 6,705 | $ | 8,180 | |||||||||
Loans 30-89 days past due to loans | 0.32 | % | 0.21 | % | 0.17 | % | 0.21 | % | 0.26 | % | |||||||||
Loans past due 90 days or more and still accruing to loans | — | % | — | % | — | % | — | % | 0.05 | % | |||||||||
Nonperforming assets to loans, ORE, and repossessions | 1.52 | % | 1.58 | % | 1.54 | % | 1.65 | % | 1.69 | % | |||||||||
ASSET QUALITY RATIOS | |||||||||||||||||||
Classified Asset Ratio(4) | 20.97 | % | 21.21 | % | 21.47 | % | 21.79 | % | 23.71 | % | |||||||||
Nonperforming loans as a % of loans | 1.14 | % | 1.07 | % | 0.98 | % | 1.05 | % | 1.01 | % | |||||||||
ALL to nonperforming loans | 79.36 | % | 84.37 | % | 90.68 | % | 83.86 | % | 85.44 | % | |||||||||
Net charge-offs/(recoveries), annualized to average loans | 0.16 | % | 0.31 | % | — | % | 0.25 | % | (0.02 | )% | |||||||||
ALL as a % of loans | 0.91 | % | 0.90 | % | 0.89 | % | 0.88 | % | 0.86 | % | |||||||||
ALL as a % of loans, excluding acquired loans(5) | 0.98 | % | 0.99 | % | 0.98 | % | 0.97 | % | 0.96 | % | |||||||||
CLASSIFIED ASSETS | |||||||||||||||||||
Classified loans(1) | 71,082 | 68,128 | 67,826 | 62,120 | 71,877 | ||||||||||||||
ORE and repossessions | 12,938 | 17,088 | 16,792 | 16,396 | 17,009 | ||||||||||||||
Total classified assets(3) | $ | 84,020 | $ | 85,216 | $ | 84,618 | $ | 78,516 | $ | 88,886 | |||||||||
(1) Amount of SBA guarantee included in classified loans | $ | 5,213 | $ | 7,735 | $ | 8,665 | $ | 5,007 | $ | 5,226 | |||||||||
(2) Amount of repurchased government-guaranteed loans, primarily residential mortgage loans, included in nonaccrual loans | $ | 12,287 | $ | 7,771 | $ | 4,648 | $ | 2,388 | $ | — | |||||||||
(3) Classified assets include loans having a risk rating of substandard or worse, both accrual and nonaccrual, repossessions and ORE, net of loss share and 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 | |||||||||||||||||||
10
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||
ANALYSIS OF INDIRECT LENDING | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
As of or for the Quarter Ended | ||||||||||||||||||||||
($ in thousands) | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | |||||||||||||||||
Average loans outstanding(1) | $ | 1,756,958 | $ | 1,702,006 | $ | 1,726,342 | $ | 1,642,829 | $ | 1,419,389 | ||||||||||||
Loans serviced for others | 1,197,160 | 1,130,289 | 1,152,636 | 1,219,909 | 1,171,453 | |||||||||||||||||
Past due loans: | ||||||||||||||||||||||
Amount 30+ days past due | 2,223 | 2,972 | 1,585 | 1,588 | 1,087 | |||||||||||||||||
Number 30+ days past due | 200 | 252 | 135 | 129 | 113 | |||||||||||||||||
30+ day performing delinquency rate(2) | 0.13 | % | 0.17 | % | 0.09 | % | 0.10 | % | 0.07 | % | ||||||||||||
Nonperforming loans | $ | 1,778 | $ | 1,278 | $ | 1,231 | $ | 887 | $ | 797 | ||||||||||||
Nonperforming loans as a percentage of period end loans(2) | 0.10 | % | 0.07 | % | 0.07 | % | 0.05 | % | 0.05 | % | ||||||||||||
Net charge-offs | $ | 1,502 | $ | 1,306 | $ | 895 | $ | 751 | $ | 797 | ||||||||||||
Net charge-off rate(3) | 0.39 | % | 0.32 | % | 0.23 | % | 0.20 | % | 0.21 | % | ||||||||||||
Number of vehicles repossessed during the period | 154 | 164 | 145 | 120 | 127 | |||||||||||||||||
Average beacon score | 758 | 758 | 758 | 756 | 756 | |||||||||||||||||
Production by state: | ||||||||||||||||||||||
Alabama | $ | 14,452 | $ | 11,613 | $ | 18,296 | $ | 21,820 | $ | 19,971 | ||||||||||||
Arkansas | 33,602 | 32,789 | 48,143 | 44,548 | 34,340 | |||||||||||||||||
North Carolina | 15,858 | 13,734 | 21,874 | 25,159 | 19,660 | |||||||||||||||||
South Carolina | 15,020 | 11,953 | 14,146 | 17,031 | 16,471 | |||||||||||||||||
Florida | 65,053 | 56,432 | 71,530 | 77,108 | 81,638 | |||||||||||||||||
Georgia | 36,178 | 29,150 | 43,948 | 51,253 | 47,141 | |||||||||||||||||
Mississippi | 21,370 | 17,784 | 26,260 | 28,414 | 27,233 | |||||||||||||||||
Tennessee | 14,143 | 12,963 | 18,661 | 21,683 | 17,529 | |||||||||||||||||
Virginia | 10,282 | 6,063 | 8,937 | 12,546 | 11,580 | |||||||||||||||||
Texas | 32,902 | 24,942 | 31,851 | 32,522 | 35,445 | |||||||||||||||||
Louisiana | 56,046 | 49,849 | 57,039 | 60,557 | 38,430 | |||||||||||||||||
Oklahoma | 1,635 | 1,780 | 945 | 1,238 | 1,796 | |||||||||||||||||
Total production by state | $ | 316,541 | $ | 269,052 | $ | 361,630 | $ | 393,879 | $ | 351,234 | ||||||||||||
Loan sales | $ | 192,435 | $ | 97,916 | $ | 64,793 | $ | 175,991 | $ | 171,834 | ||||||||||||
Portfolio yield(1) | 2.87 | % | 2.88 | % | 2.81 | % | 2.77 | % | 2.72 | % | ||||||||||||
(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 | |||||||||||||||||||||
11
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||
INCOME FROM MORTGAGE BANKING ACTIVITIES | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
For the Quarter Ended | ||||||||||||||||||||||
(in thousands) | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | |||||||||||||||||
Marketing gain, net | $ | 18,677 | $ | 19,364 | $ | 25,240 | $ | 22,734 | $ | 15,162 | ||||||||||||
Origination points and fees | 3,021 | 3,786 | 3,911 | 4,101 | 3,014 | |||||||||||||||||
Loan servicing revenue | 5,341 | 5,088 | 4,896 | 4,631 | 4,492 | |||||||||||||||||
Gross mortgage revenue | $ | 27,039 | $ | 28,238 | $ | 34,047 | $ | 31,466 | $ | 22,668 | ||||||||||||
Less: | ||||||||||||||||||||||
MSR amortization | (3,158 | ) | (3,918 | ) | (4,414 | ) | (3,610 | ) | (3,272 | ) | ||||||||||||
MSR recovery (impairment), net | 1,989 | 13,144 | 458 | (8,569 | ) | (4,661 | ) | |||||||||||||||
Total income from mortgage banking activities | $ | 25,870 | $ | 37,464 | $ | 30,091 | $ | 19,287 | $ | 14,735 | ||||||||||||
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||
ANALYSIS OF MORTGAGE LENDING | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
As of or for the Quarter Ended | ||||||||||||||||||||||
($ in thousands) | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | |||||||||||||||||
Production by region: | ||||||||||||||||||||||
Georgia | $ | 395,404 | $ | 532,177 | $ | 580,170 | $ | 526,446 | $ | 341,074 | ||||||||||||
Florida | 46,365 | 46,140 | 44,849 | 45,339 | 35,257 | |||||||||||||||||
Alabama/Tennessee(2) | 3,600 | 5,485 | 7,307 | 8,892 | 7,155 | |||||||||||||||||
Virginia/Maryland | 81,901 | 139,283 | 160,959 | 160,644 | 112,769 | |||||||||||||||||
North and South Carolina | 25,727 | 33,783 | 31,332 | 33,497 | 27,567 | |||||||||||||||||
Total retail | 552,997 | 756,868 | 824,617 | 774,818 | 523,822 | |||||||||||||||||
Wholesale | — | — | 3,507 | 40,233 | 46,905 | |||||||||||||||||
Total production by region | $ | 552,997 | $ | 756,868 | $ | 828,124 | $ | 815,051 | $ | 570,727 | ||||||||||||
% for purchases | 80.9 | % | 61.3 | % | 66.7 | % | 76.8 | % | 71.5 | % | ||||||||||||
% for refinance loans | 19.1 | % | 38.7 | % | 33.3 | % | 23.2 | % | 28.5 | % | ||||||||||||
Portfolio Production | $ | 51,061 | $ | 38,907 | $ | 45,586 | $ | 47,847 | $ | 36,462 | ||||||||||||
Funded loan type (UPB): | ||||||||||||||||||||||
Conventional | 63.9 | % | 68.9 | % | 68.9 | % | 65.9 | % | 66.1 | % | ||||||||||||
FHA/VA/USDA | 24.2 | % | 21.6 | % | 22.2 | % | 23.3 | % | 21.7 | % | ||||||||||||
Jumbo | 11.9 | % | 9.5 | % | 8.9 | % | 10.8 | % | 12.2 | % | ||||||||||||
Gross pipeline of locked loans to be sold (UPB) | $ | 374,739 | $ | 211,921 | $ | 394,773 | $ | 387,777 | $ | 370,497 | ||||||||||||
Loans held for sale (UPB) | $ | 195,772 | $ | 250,094 | $ | 281,418 | $ | 288,734 | $ | 226,327 | ||||||||||||
Total loan sales (UPB) | $ | 566,003 | $ | 758,775 | $ | 796,379 | $ | 712,712 | $ | 547,614 | ||||||||||||
Conventional | 69.9 | % | 72.8 | % | 70.0 | % | 70.5 | % | 66.7 | % | ||||||||||||
FHA/VA/USDA | 23.0 | % | 22.6 | % | 24.0 | % | 23.0 | % | 21.4 | % | ||||||||||||
Jumbo | 7.1 | % | 4.6 | % | 6.0 | % | 6.5 | % | 11.9 | % | ||||||||||||
Average loans outstanding(1) | $ | 592,537 | $ | 634,511 | $ | 635,529 | $ | 598,403 | $ | 495,209 | ||||||||||||
(1) Includes held-for-sale | ||||||||||||||||||||||
(2) Tennessee added in Q1 2017 | ||||||||||||||||||||||
12
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||
THIRD PARTY MORTGAGE LOAN SERVICING | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
As of or for the Quarter Ended | ||||||||||||||||||||||
($ in thousands) | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | |||||||||||||||||
Loans serviced for others (UPB) | $ | 8,067,426 | $ | 7,787,470 | $ | 7,489,954 | $ | 7,200,540 | $ | 6,894,083 | ||||||||||||
Average loans serviced for others (UPB) | $ | 8,013,761 | $ | 7,625,384 | $ | 7,337,291 | $ | 7,022,718 | $ | 6,781,135 | ||||||||||||
MSR book value, net of amortization | $ | 98,550 | $ | 95,282 | $ | 90,982 | $ | 87,652 | $ | 84,111 | ||||||||||||
MSR impairment | (7,163 | ) | (9,152 | ) | (22,295 | ) | (22,753 | ) | (14,184 | ) | ||||||||||||
MSR net carrying value | $ | 91,387 | $ | 86,130 | $ | 68,687 | $ | 64,899 | $ | 69,927 | ||||||||||||
MSR carrying value as a % of period end UPB | 1.13 | % | 1.11 | % | 0.92 | % | 0.90 | % | 1.01 | % | ||||||||||||
Delinquency % loans serviced for others | 0.53 | % | 0.69 | % | 0.76 | % | 0.55 | % | 0.54 | % | ||||||||||||
MSR revenue multiple(1) | 4.25 | 4.14 | 3.44 | 3.42 | 3.83 | |||||||||||||||||
(1) 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 | ||||||||||||||||||||||
13
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE, INTEREST AND YIELDS
(UNAUDITED)
For the Quarter Ended | |||||||||||||||||||||
March 31, 2017 | March 31, 2016 | ||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||
($ in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||
Assets | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||
Loans, net of unearned income (1) | $ | 3,718,260 | $ | 36,130 | 3.94 | % | $ | 3,370,645 | $ | 32,976 | 3.93 | % | |||||||||
Investment securities (1) | 171,853 | 1,279 | 3.02 | % | 210,428 | 1,337 | 2.56 | % | |||||||||||||
Other earning assets | 192,431 | 351 | 0.74 | % | 70,562 | 67 | 0.38 | % | |||||||||||||
Total interest-earning assets | 4,082,544 | 37,760 | 3.75 | % | 3,651,635 | 34,380 | 3.79 | % | |||||||||||||
Noninterest-earning assets: | |||||||||||||||||||||
Cash and due from banks | 38,578 | 28,530 | |||||||||||||||||||
Allowance for loan losses | (29,788 | ) | (27,052 | ) | |||||||||||||||||
Premises and equipment, net | 87,792 | 82,559 | |||||||||||||||||||
Other real estate | 14,147 | 19,894 | |||||||||||||||||||
Other assets | 216,219 | 187,117 | |||||||||||||||||||
Total noninterest-earning assets | 326,948 | 291,048 | |||||||||||||||||||
Total assets | $ | 4,409,492 | $ | 3,942,683 | |||||||||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||
Demand deposits | $ | 1,244,955 | $ | 944 | 0.31 | % | $ | 1,051,221 | $ | 694 | 0.27 | % | |||||||||
Savings deposits | 387,007 | 344 | 0.36 | % | 358,481 | 304 | 0.34 | % | |||||||||||||
Time deposits | 1,050,897 | 2,161 | 0.83 | % | 1,015,996 | 2,267 | 0.90 | % | |||||||||||||
Total interest-bearing deposits | 2,682,859 | 3,449 | 0.52 | % | 2,425,698 | 3,265 | 0.54 | % | |||||||||||||
Other short-term borrowings | 245,262 | 392 | 0.65 | % | 251,359 | 294 | 0.47 | % | |||||||||||||
Subordinated debt | 120,472 | 1,567 | 5.28 | % | 120,337 | 1,439 | 4.81 | % | |||||||||||||
Total interest-bearing liabilities | 3,048,593 | 5,408 | 0.72 | % | 2,797,394 | 4,998 | 0.72 | % | |||||||||||||
Noninterest-bearing liabilities and shareholders' equity: | |||||||||||||||||||||
Demand deposits | 961,188 | 786,993 | |||||||||||||||||||
Other liabilities | 37,390 | 49,344 | |||||||||||||||||||
Shareholders’ equity | 362,321 | 308,952 | |||||||||||||||||||
Total noninterest-bearing liabilities and shareholders’ equity | 1,360,899 | 1,145,289 | |||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 4,409,492 | $ | 3,942,683 | |||||||||||||||||
Net interest income/spread | $ | 32,352 | 3.03 | % | $ | 29,382 | 3.07 | % | |||||||||||||
Net interest margin | 3.21 | % | 3.24 | % | |||||||||||||||||
14