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| 8-K - 8-K - FIDELITY SOUTHERN CORP | lionqe1231188k-earnings.htm |
FOR IMMEDIATE RELEASE
Contacts: Martha Fleming, Charles D. Christy
Fidelity Southern Corporation (404) 240-1504
FIDELITY SOUTHERN CORPORATION REPORTS EARNINGS
FOR FOURTH QUARTER OF $9.9 MILLION
ATLANTA, GA (January 17, 2019) – Fidelity Southern Corporation (“Fidelity” or the “Company”) (NASDAQ: LION), holding company for Fidelity Bank (the “Bank”), today reported net income of $9.9 million, or $0.36 per diluted share, for the fourth quarter of 2018, compared with $12.7 million, or $0.47 per diluted share, for the third quarter of 2018, and with $12.4 million or $0.46 per diluted share for the fourth quarter of 2017. For the year to date ended December 31, 2018, the Company reported net income of $43.8 million, or $1.61 per diluted share, compared with $39.8 million, or $1.49 per diluted share, for the same period in 2017.
Fidelity's Chairman, Jim Miller, and President Palmer Proctor noted, “Our team is doing a great job of implementing our balance sheet transformation that contributed to our net interest margin expansion during a period where many in the industry are experiencing the opposite. We are working diligently to ensure our announced merger with Ameris Bancorp will be smooth and successful. Our organization is very excited about the $16 billion regional bank we are building that will position us as a premier banking franchise in the Southeast.”
BALANCE SHEET
Total assets decreased by $78.3 million, or 1.6%, during the quarter, to $4.7 billion at December 31, 2018, primarily due to a decrease of $153.5 million in total loans. This decrease was primarily due to a decrease in loans held for sale of $132.0 million, as well as a decrease of $21.5 million in loans held for investment. The decrease in loans held for sale was primarily in mortgage loans, which decreased $102.7 million, as seasonal production decreased. Other assets also decreased by $3.0 million.
Offsetting these decreases, investments increased by $42.2 million as the Bank continues to increase its investments available-for-sale portfolio as part of its strategy to reposition the balance sheet to higher yielding assets. Cash balances also increased by $29.6 million for the quarter. Loan servicing assets also increased by $3.4 million.
Total assets grew by $156.9 million, or 3.4%, to $4.7 billion at December 31, 2018, compared to $4.6 billion at December 31, 2017. Primary drivers for the year over year growth were an increase in cash of $26.0 million and an increase in investments available-for-sale of $131.5 million as the Bank repositioned its balance sheet to higher yielding investments over the year.
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Loans
Total loans, including loans held for sale, decreased during the quarter by $153.5 million, or 3.8%, to $3.9 billion at December 31, 2018. This reduction was primarily due to a decrease in loans held for sale of $132.0 million, primarily mortgage loans held for sale, which accounted for $102.7 million of the decrease.
Total loans decreased by $13.9 million, or 0.4%, compared to December 31, 2017, as loans held for sale decreased by $118.5 million, offset by an increase in loans held for investment of $104.5 million. Loans held for sale decreased due to lower sales of mortgage loans and indirect auto loans. The growth in loans was primarily in commercial and mortgage loans, while average indirect auto loans for the quarter decreased by $70.2 million.
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), increased slightly during the quarter by $62,000. Credit quality trend performance remains consistent and strong as net charge-offs were 0.08% of average loans for the quarter.
Compared to 2017, the provision for loan losses for the year increased by $1.2 million, or 29.1%, mainly due to increases in commercial loan balances.
Fair Value Adjustments
Loan servicing rights increased by $3.4 million, or 2.9%, during the quarter to $120.4 million at December 31, 2018, compared to $117.0 million at September 30, 2018. MSRs, the primary component of loan servicing rights, contributed the majority of the change, increasing by 4.2% to $111.4 million at December 31, 2018.
At December 31, 2018, fair value adjustments recorded on the balance sheet for loans held for sale, interest rate lock commitments ("IRLCs"), and hedge items were $8.8 million, a $3.0 million, or 25.8% decrease, from September 30, 2018. The gross pipeline of interest rate lock commitments was $63.4 million lower at quarter end, compared to September 30, 2018, due to slower seasonal production.
Deposits
Core deposits decreased by $86.6 million during the quarter to $3.1 billion with seasonal decreases in all categories. Noninterest bearing deposits decreased by 2.8% as escrow deposits decreased seasonally as escrow balances were paid down during the quarter. Also, the escrow accounts for mortgage servicing rights sold in the previous quarter were transferred to the purchaser. This decrease was offset by an increase in time deposits of $18.2 million during the quarter, mainly due to a increase of $29.6 million in brokered deposits, resulting in a decrease in total deposits of $68.4 million, or 1.7%.
Year over year, deposits grew by $114.4 million or 3.0%, primarily due to growth in non-interest bearing demand deposits and money market accounts.
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INCOME STATEMENT
Net Income
Net income was $9.9 million, or a $2.8 million decrease over the previous quarter, primarily due to a decrease in noninterest income of $2.6 million. Other noninterest income decreased by $2.8 million mainly due to a $2.6 million death benefit received from cash surrender value life insurance policies during the previous quarter. Net income was $2.5 million lower compared to the same quarter a year ago, primarily due to a $4.4 million increase in income tax expense.
Net income year to date was $43.8 million, or a $4.0 million increase compared to same period in the prior year. The increase was primarily driven by higher net interest income of $14.3 million, higher noninterest income of $3.9 million, offset by higher noninterest expense of $14.4 million, primarily salaries and employee benefits and commissions.
Interest Income
Interest income of $48.3 million was higher by $1.4 million, compared to the prior quarter, driven by moderate increases in loan, investment and Fed Funds income. Although average loans decreased by $105.5 million for the quarter, $70.2 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. An increase in average investment securities of $57.5 million and an increase in average Fed Funds and bank deposit balances of $33.7 million also contributed to higher interest income. The yield on total average interest-bearing assets also increased 14 basis points from the previous quarter.
As compared to the same period in the prior year, interest income increased by $6.6 million as average loans increased by $172.7 million and the yield on total average interest-bearing assets increased by 35 basis points, as market interest rates rose year over year.
Interest income was $181.4 million for the year, an increase of $23.5 million compared to the same period in the prior year, primarily due to an increase of 21 basis points in the yield on loans and an increase of $324.7 million in average loans.
Interest Expense
Interest expense of $8.7 million increased slightly by $588,000, or 7.2%, for the quarter as average FHLB borrowings increased by $8.8 million. As compared to the fourth quarter of the prior year, interest expense increased by $2.9 million. Rising market rates paid on money market deposits and CD's drove the increase, as well as increased volume and rates for short term borrowings.
Year to date, interest expense increased by $9.2 million, or 40.3%, compared to previous year, as market rates and deposit balances increased over the past twelve months.
Net Interest Margin
The net interest margin was 3.54% for the quarter compared to 3.45% in the previous quarter, an increase of 9 basis points. Loan coupon yields, excluding fees, SBA discount accretion, and accretable yields, increased faster than deposit and borrowing costs during the quarter.
The yield on total average interest-bearing liabilities increased by only 9 basis points while the yield on total average interest-earning assets increased by 14 basis points from 4.18% to 4.32%. Average loans decreased by $105.5 million, of which $70.2 million was a decrease in lower yielding indirect auto loans. Higher yielding investment securities increased by $57.5 million as the Bank's strategy to reposition its balance sheet continues to occur.
Average total interest-bearing liabilities decreased by $24.2 million, average deposits decreased by $33.1 million, offset by an increase in average borrowings of $8.8 million in order to help fund loan production.
As compared to the same period a year ago, the net interest margin for the quarter increased by 12 basis points to 3.54% from 3.42%, primarily due to a 35 basis point increase in the yield on total average
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interest-earning assets of $4.4 billion, offset by an increase of 35 basis points in the yield on total average interest-bearing liabilities of $3.1 billion. Average earning assets increased by $271.6 million, primarily due to an increase in average loans over the year. Average interest-bearing liabilities increased by $117.8 million, primarily driven by an increase in average borrowings of $146.7 million, offset by a decrease in average interest-bearing deposits of $29.0 million.
Noninterest Income
On a linked-quarter basis, noninterest income decreased by $2.6 million, or 7.7%, largely due to a decrease in other noninterest income of $2.8 million, primarily due to the $2.6 million death benefit received from life insurance policies during the previous quarter. Mortgage banking activities decreased by $1.9 million, or 8.1%, as gross mortgage revenue decreased by $2.8 million and mortgage production also decreased by $121.6 million. These decreases were offset by an increase in SBA lending activities of $2.5 million, mainly due to a large SBA loan sale in December, as well as an increase in SBA loan closings during the quarter.
Compared to the same period a year ago, noninterest income for the quarter increased by $2.2 million, primarily due to a $2.9 million increase in SBA banking activities, as SBA loan sales were higher in the current quarter as discussed above.
Year to date, noninterest income increased by $3.9 million as all sources of noninterest income increased, except for indirect lending activities, which decreased by $7.3 million, as indirect loan sales and production decreased significantly during the year.
Noninterest Expense
On a linked-quarter basis, total noninterest expense increased by $528,000, or 0.9%, mainly due to an increase in other expenses of $2.4 million, of which $1.2 million were merger related expenses. This increase was offset by a decrease in commissions expense of $1.7 million from lower mortgage loan originations for the quarter.
Compared to the prior year quarter, noninterest expense of $56.1 increased by $3.2 million, or 6.1%. Salaries and employee benefits increased by $3.2 million, or 12.4%, compared to the same quarter in 2017, primarily due to $2.6 million of merger related expenses.
Year to date, total noninterest expense increased $14.4 million compared to the previous year, of which $10.2 million was due to an increase in salaries and benefits. Salaries increased by $3.8 million, partially due to a $2.7 million increase in employee incentives due to performance and related to the balance sheet strategies implemented earlier in the year, and from a comparison perspective, no executive incentives were paid in 2017. Other expense increased by $2.8 million, of which $1.2 million was merger related expenses.
Income Taxes
On a linked-quarter basis, income tax expense remained relatively flat. The effective tax rate increased to 28% from 23% due to a $2.6 million tax-free death benefit received from life insurance policies in the previous quarter.
Year to date income tax expense decreased by $1.5 million as the effective tax rate decreased from 28% to 24% primarily as a result of the Tax Cuts and Jobs Act enacted on December 22, 2017, which included, among other things, a reduction in the federal corporate income tax rate from 35% to 21% from the beginning of the tax year 2018 going forward.
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RECENT EVENTS
As previously disclosed, on December 17, 2018, Fidelity entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ameris Bancorp ("Ameris"). The Merger Agreement provides that, upon the terms and subject to the conditions set forth, Fidelity will merge with and into Ameris (the “Merger”), in an all-stock transaction, with Ameris surviving the Merger. Immediately following the Merger, the Bank will merge (the “Bank Merger”) with and into Ameris’s wholly owned bank subsidiary, Ameris Bank. Ameris Bank will be the surviving entity in the Bank Merger. The Merger Agreement was unanimously approved by the board of directors of each of Fidelity and Ameris. The closing of the transactions contemplated by the Merger Agreement is subject to the approval of Fidelity's shareholders, regulators, and certain other customary closing conditions.
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 2017 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 intends to file a registration statement on Form S-4 with the SEC to register the shares of Ameris Common Stock that will be issued to Fidelity’s shareholders in connection with the Merger. The registration statement will include 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 WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER. Investors and security holders may obtain free copies of these
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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 when they become available, including any amendments thereto, because they will 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 the directors and executive officers of Fidelity and Ameris and other persons who may be deemed participants in the solicitation of Fidelity’s shareholders and Ameris’s shareholders will be included in the joint proxy statement/prospectus for Fidelity’s meeting of shareholders and Ameris’s meeting of shareholders, which will be filed by Ameris with the SEC. Information about Fidelity’s directors and executive officers and their ownership of Fidelity Common Stock can also be found in Fidelity’s definitive proxy statement in connection with its 2018 annual meeting of shareholders, as filed with the SEC on April 3, 2018, 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 in connection with its 2018 annual meeting of shareholders, as filed with the SEC on April 2, 2018, and other documents subsequently filed by Ameris with the SEC. Additional information regarding the interests of such participants will be included in the joint proxy statement/prospectus and other relevant documents regarding the Merger filed with the SEC when they become available.
-end-
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FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (UNAUDITED)
As of or for the Quarter Ended | As of or for the Twelve Months Ended | |||||||||||||||||||
($ in thousands, except per share data) | December 31, 2018 | September 30, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | |||||||||||||||
INCOME STATEMENT DATA: | ||||||||||||||||||||
Interest income | $ | 48,271 | $ | 46,872 | $ | 41,653 | $ | 181,445 | $ | 157,978 | ||||||||||
Interest expense | 8,713 | 8,125 | 5,779 | 31,900 | 22,730 | |||||||||||||||
Net interest income | 39,558 | 38,747 | 35,874 | 149,545 | 135,248 | |||||||||||||||
Provision for loan losses | 745 | 360 | — | 5,521 | 4,275 | |||||||||||||||
Noninterest income | 31,079 | 33,662 | 28,888 | 138,851 | 134,952 | |||||||||||||||
Noninterest expense | 56,113 | 55,585 | 52,910 | 225,292 | 210,870 | |||||||||||||||
Net income before income taxes | 13,779 | 16,464 | 11,852 | 57,583 | 55,055 | |||||||||||||||
Income tax expense | 3,855 | 3,722 | (592 | ) | 13,760 | 15,259 | ||||||||||||||
Net income | 9,924 | 12,742 | 12,443 | 43,823 | 39,796 | |||||||||||||||
PERFORMANCE: | ||||||||||||||||||||
Earnings per common share - basic | $ | 0.36 | $ | 0.47 | $ | 0.46 | $ | 1.61 | $ | 1.50 | ||||||||||
Earnings per common share - diluted | 0.36 | 0.47 | 0.46 | 1.61 | 1.49 | |||||||||||||||
Total revenues | 70,637 | 72,409 | 64,762 | 288,396 | 270,200 | |||||||||||||||
Book value per common share | 16.36 | 15.85 | 14.86 | 16.36 | 14.86 | |||||||||||||||
Tangible book value per common share(1) | 15.95 | 15.43 | 14.41 | 15.95 | 14.41 | |||||||||||||||
Cash dividends paid per common share | 0.12 | 0.12 | 0.12 | 0.48 | 0.48 | |||||||||||||||
Dividend payout ratio | 33.33 | % | 25.53 | % | 26.09 | % | 29.81 | % | 32.00 | % | ||||||||||
Return on average assets | 0.82 | % | 1.05 | % | 1.10 | % | 0.92 | % | 0.89 | % | ||||||||||
Return on average shareholders’ equity | 9.05 | % | 11.87 | % | 12.57 | % | 10.43 | % | 10.51 | % | ||||||||||
Equity to assets ratio | 9.43 | % | 8.98 | % | 8.78 | % | 9.43 | % | 8.43 | % | ||||||||||
Net interest margin | 3.54 | % | 3.45 | % | 3.42 | % | 3.38 | % | 3.26 | % | ||||||||||
END OF PERIOD BALANCE SHEET SUMMARY: | ||||||||||||||||||||
Total assets | $ | 4,733,796 | $ | 4,812,056 | $ | 4,576,858 | $ | 4,733,796 | $ | 4,576,858 | ||||||||||
Earning assets | 4,381,616 | 4,448,875 | 4,242,218 | 4,381,616 | 4,242,218 | |||||||||||||||
Loans, excluding loans held-for-sale | 3,685,478 | 3,706,953 | 3,580,966 | 3,685,478 | 3,580,966 | |||||||||||||||
Total loans | 3,924,780 | 4,078,272 | 3,938,721 | 3,924,780 | 3,938,721 | |||||||||||||||
Total deposits | 3,981,578 | 4,049,969 | 3,867,200 | 3,981,578 | 3,867,200 | |||||||||||||||
Shareholders’ equity | 446,241 | 432,098 | 401,632 | 446,241 | 401,632 | |||||||||||||||
Assets serviced for others(2) | 10,283,727 | 10,882,832 | 10,242,742 | 10,283,727 | 10,242,742 | |||||||||||||||
ASSET QUALITY RATIOS: | ||||||||||||||||||||
Net charge-offs to average loans | 0.08 | % | 0.09 | % | 0.11 | % | 0.11 | % | 0.12 | % | ||||||||||
Allowance to period-end loans | 0.85 | % | 0.84 | % | 0.83 | % | 0.85 | % | 0.83 | % | ||||||||||
Adjusted allowance to adjusted period end loans(1) | 1.12 | % | 1.14 | % | 1.16 | % | 1.12 | % | 1.16 | % | ||||||||||
Nonperforming assets to total loans, ORE and repossessions | 1.93 | % | 1.92 | % | 1.76 | % | 1.93 | % | 1.76 | % | ||||||||||
Adjusted nonperforming assets to loans, ORE and repossessions(3) | 0.92 | % | 0.92 | % | 1.06 | % | 0.92 | % | 1.06 | % | ||||||||||
Allowance to nonperforming loans, ORE and repossessions | 0.44x | 0.44x | 0.47x | 0.44x | 0.47x | |||||||||||||||
SELECTED RATIOS: | ||||||||||||||||||||
Loans to total deposits | 92.56 | % | 91.53 | % | 92.60 | % | 92.56 | % | 92.60 | % | ||||||||||
Average total loans to average earning assets | 90.21 | % | 92.29 | % | 91.95 | % | 92.02 | % | 90.20 | % | ||||||||||
Noninterest income to total revenue | 44.00 | % | 46.49 | % | 44.61 | % | 48.15 | % | 49.95 | % | ||||||||||
Leverage ratio | 9.18 | % | 8.96 | % | 8.85 | % | 9.18 | % | 8.85 | % | ||||||||||
Common equity tier 1 capital | 9.54 | % | 9.15 | % | 8.86 | % | 9.54 | % | 8.86 | % | ||||||||||
Tier 1 risk-based capital | 10.64 | % | 10.24 | % | 10.00 | % | 10.64 | % | 10.00 | % | ||||||||||
Total risk-based capital | 13.24 | % | 12.78 | % | 12.65 | % | 13.24 | % | 12.65 | % | ||||||||||
Mortgage loan production | $ | 626,438 | $ | 748,044 | $ | 669,733 | $ | 2,896,550 | $ | 2,776,010 | ||||||||||
Total mortgage loan sales | 686,153 | 771,058 | 602,171 | 2,753,779 | 2,588,842 | |||||||||||||||
Indirect automobile production | 94,407 | 86,801 | 345,032 | 623,443 | 1,167,373 | |||||||||||||||
Total indirect automobile sales | — | 18,614 | 59,681 | 133,889 | 431,227 | |||||||||||||||
(1) Non-GAAP financial measure. See non-GAAP reconciliation table for the comparable GAAP. | ||||||||||||||||||||
(2) Balances for September 30, 2018 include approximately $1.1 billion of sub-serviced loans as a result of the August 30, 2018 MSRs sale. Servicing on these loans transferred to the Purchaser on October 1, 2018 and October 16, 2018. | ||||||||||||||||||||
(3) Excludes acquired loans and net of government guarantees. See non-GAAP reconciliation table for the comparable GAAP. | ||||||||||||||||||||
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FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
($ in thousands) | December 31, 2018 | September 30, 2018 | December 31, 2017 | |||||||||
ASSETS | ||||||||||||
Cash and cash equivalents | $ | 212,293 | $ | 182,672 | $ | 186,302 | ||||||
Investment securities available-for-sale | 251,602 | 209,180 | 120,121 | |||||||||
Investment securities held-to-maturity | 20,126 | 20,383 | 21,689 | |||||||||
Loans held-for-sale | 239,302 | 371,319 | 357,755 | |||||||||
Loans | 3,685,478 | 3,706,953 | 3,580,966 | |||||||||
Allowance for loan losses | (31,151 | ) | (31,157 | ) | (29,772 | ) | ||||||
Loans, net of allowance for loan losses | 3,654,327 | 3,675,796 | 3,551,194 | |||||||||
Premises and equipment, net | 93,699 | 91,359 | 88,463 | |||||||||
Other real estate, net | 8,290 | 8,031 | 7,621 | |||||||||
Bank owned life insurance | 71,510 | 71,092 | 71,883 | |||||||||
Servicing rights, net | 120,390 | 116,982 | 112,615 | |||||||||
Other assets | 62,257 | 65,242 | 59,215 | |||||||||
Total assets | $ | 4,733,796 | $ | 4,812,056 | $ | 4,576,858 | ||||||
LIABILITIES | ||||||||||||
Deposits | ||||||||||||
Noninterest-bearing demand deposits | $ | 1,214,534 | $ | 1,249,391 | $ | 1,125,598 | ||||||
Interest-bearing deposits | ||||||||||||
Demand deposits | 474,441 | 477,477 | 478,428 | |||||||||
Money market and savings deposits | 1,365,275 | 1,413,960 | 1,339,028 | |||||||||
Time deposits | 927,328 | 909,141 | 924,146 | |||||||||
Total deposits | 3,981,578 | 4,049,969 | 3,867,200 | |||||||||
Short-term borrowings | 139,760 | 163,562 | 150,580 | |||||||||
Subordinated debt, net | 120,707 | 120,680 | 120,587 | |||||||||
Other liabilities | 45,510 | 45,747 | 36,859 | |||||||||
Total liabilities | 4,287,555 | 4,379,958 | 4,175,226 | |||||||||
SHAREHOLDERS' EQUITY | ||||||||||||
Common stock | 230,841 | 226,605 | 217,555 | |||||||||
Accumulated other comprehensive income (loss), net | 985 | (2,270 | ) | 383 | ||||||||
Retained earnings | 214,415 | 207,763 | 183,694 | |||||||||
Total shareholders’ equity | 446,241 | 432,098 | 401,632 | |||||||||
Total liabilities and shareholders’ equity | $ | 4,733,796 | $ | 4,812,056 | $ | 4,576,858 | ||||||
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FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the Quarter Ended | For the Year Ended | ||||||||||||||||||||
($ in thousands, except per share data) | December 31, 2018 | September 30, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | ||||||||||||||||
INTEREST INCOME | |||||||||||||||||||||
Loans, including fees | $ | 45,233 | $ | 44,746 | $ | 40,065 | $ | 172,673 | $ | 150,998 | |||||||||||
Investment securities | 2,142 | 1,646 | 1,015 | 6,317 | 4,404 | ||||||||||||||||
Other | 896 | 480 | 573 | 2,455 | 2,576 | ||||||||||||||||
Total interest income | 48,271 | 46,872 | 41,653 | 181,445 | 157,978 | ||||||||||||||||
INTEREST EXPENSE | |||||||||||||||||||||
Deposits | 6,058 | 5,655 | 4,219 | 20,849 | 15,722 | ||||||||||||||||
Other borrowings | 990 | 818 | 18 | 4,530 | 928 | ||||||||||||||||
Subordinated debt | 1,665 | 1,652 | 1,542 | 6,521 | 6,080 | ||||||||||||||||
Total interest expense | 8,713 | 8,125 | 5,779 | 31,900 | 22,730 | ||||||||||||||||
Net interest income | 39,558 | 38,747 | 35,874 | 149,545 | 135,248 | ||||||||||||||||
Provision for loan losses | 745 | 360 | — | 5,521 | 4,275 | ||||||||||||||||
Net interest income after provision for loan losses | 38,813 | 38,387 | 35,874 | 144,024 | 130,973 | ||||||||||||||||
NONINTEREST INCOME | |||||||||||||||||||||
Service charges on deposit accounts | 1,797 | 1,690 | 1,530 | 6,427 | 6,019 | ||||||||||||||||
Other fees and charges | 2,374 | 2,464 | 2,342 | 9,522 | 8,402 | ||||||||||||||||
Mortgage banking activities | 21,612 | 23,520 | 20,932 | 103,077 | 98,797 | ||||||||||||||||
Indirect lending activities | 689 | 1,120 | 2,566 | 5,227 | 12,533 | ||||||||||||||||
SBA lending activities | 3,440 | 914 | 581 | 6,728 | 4,540 | ||||||||||||||||
Trust and wealth management services | 589 | 588 | 434 | 2,283 | 1,288 | ||||||||||||||||
Other | 578 | 3,366 | 503 | 5,587 | 3,373 | ||||||||||||||||
Total noninterest income | 31,079 | 33,662 | 28,888 | 138,851 | 134,952 | ||||||||||||||||
NONINTEREST EXPENSE | |||||||||||||||||||||
Salaries and employee benefits | 28,941 | 28,805 | 25,745 | 113,522 | 103,366 | ||||||||||||||||
Commissions | 7,858 | 9,523 | 8,447 | 36,129 | 34,573 | ||||||||||||||||
Occupancy and equipment | 4,683 | 4,654 | 4,793 | 18,810 | 18,164 | ||||||||||||||||
Professional and other services | 3,894 | 4,243 | 4,620 | 17,570 | 18,343 | ||||||||||||||||
Other | 10,737 | 8,360 | 9,305 | 39,261 | 36,424 | ||||||||||||||||
Total noninterest expense | 56,113 | 55,585 | 52,910 | 225,292 | 210,870 | ||||||||||||||||
Income before income tax expense | 13,779 | 16,464 | 11,852 | 57,583 | 55,055 | ||||||||||||||||
Income tax expense | 3,855 | 3,722 | (591 | ) | 13,760 | 15,259 | |||||||||||||||
NET INCOME | $ | 9,924 | $ | 12,742 | $ | 12,443 | $ | 43,823 | $ | 39,796 | |||||||||||
EARNINGS PER COMMON SHARE: | |||||||||||||||||||||
Basic | $ | 0.36 | $ | 0.47 | $ | 0.46 | $ | 1.61 | $ | 1.50 | |||||||||||
Diluted | $ | 0.36 | $ | 0.47 | $ | 0.46 | $ | 1.61 | $ | 1.49 | |||||||||||
Weighted average common shares outstanding-basic | 27,283 | 27,229 | 26,904 | 27,155 | 26,602 | ||||||||||||||||
Weighted average common shares outstanding-diluted | 27,376 | 27,337 | 27,011 | 27,259 | 26,722 | ||||||||||||||||
9
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
LOANS BY CATEGORY
(UNAUDITED)
($ in thousands) | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | |||||||||||||||
Commercial | $ | 904,160 | $ | 940,430 | $ | 938,203 | $ | 897,297 | $ | 811,199 | ||||||||||
SBA | 156,612 | 163,147 | 146,508 | 140,308 | 141,208 | |||||||||||||||
Total commercial and SBA loans | 1,060,772 | 1,103,577 | 1,084,711 | 1,037,605 | 952,407 | |||||||||||||||
Construction loans | 279,409 | 262,048 | 269,330 | 265,780 | 248,317 | |||||||||||||||
Indirect automobile | 1,569,274 | 1,588,419 | 1,698,879 | 1,719,670 | 1,716,156 | |||||||||||||||
Installment loans and personal lines of credit | 28,170 | 29,260 | 31,807 | 28,716 | 25,995 | |||||||||||||||
Total consumer loans | 1,597,444 | 1,617,679 | 1,730,686 | 1,748,386 | 1,742,151 | |||||||||||||||
Residential mortgage | 594,095 | 571,081 | 555,636 | 512,673 | 489,721 | |||||||||||||||
Home equity lines of credit | 153,758 | 152,568 | 152,523 | 149,864 | 148,370 | |||||||||||||||
Total mortgage loans | 747,853 | 723,649 | 708,159 | 662,537 | 638,091 | |||||||||||||||
Loans | 3,685,478 | 3,706,953 | 3,792,886 | 3,714,308 | 3,580,966 | |||||||||||||||
Loans held-for-sale: | ||||||||||||||||||||
Residential mortgage | 225,342 | 328,090 | 399,630 | 355,515 | 269,140 | |||||||||||||||
SBA | 13,960 | 18,229 | 20,056 | 19,785 | 13,615 | |||||||||||||||
Indirect automobile | — | 25,000 | 25,000 | 50,000 | 75,000 | |||||||||||||||
Total loans held-for-sale | 239,302 | 371,319 | 444,686 | 425,300 | 357,755 | |||||||||||||||
Total loans | $ | 3,924,780 | $ | 4,078,272 | $ | 4,237,572 | $ | 4,139,608 | $ | 3,938,721 | ||||||||||
DEPOSITS BY CATEGORY
(UNAUDITED)
For the Quarter Ended | ||||||||||||||||||||||||||||||||||
December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||||||||||
($ in thousands) | Average Amount | Rate | Average Amount | Rate | Average Amount | Rate | Average Amount | Rate | Average Amount | Rate | ||||||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 1,239,403 | — | % | $ | 1,244,640 | — | % | $ | 1,172,298 | — | % | $ | 1,120,562 | — | % | $ | 1,124,759 | — | % | ||||||||||||||
Interest-bearing demand deposits | 458,350 | 0.12 | % | 463,292 | 0.13 | % | 489,051 | 0.14 | % | 461,614 | 0.14 | % | 453,714 | 0.11 | % | |||||||||||||||||||
Money market and savings deposits | 1,380,472 | 0.74 | % | 1,415,868 | 0.70 | % | 1,349,447 | 0.61 | % | 1,345,905 | 0.55 | % | 1,381,207 | 0.53 | % | |||||||||||||||||||
Time deposits | 925,913 | 1.43 | % | 918,668 | 1.30 | % | 906,133 | 1.16 | % | 901,394 | 1.04 | % | 958,790 | 0.94 | % | |||||||||||||||||||
Total average deposits | $ | 4,004,138 | 0.60 | % | $ | 4,042,468 | 0.55 | % | $ | 3,916,929 | 0.49 | % | $ | 3,829,475 | 0.46 | % | $ | 3,918,470 | 0.43 | % | ||||||||||||||
10
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
NONPERFORMING AND CLASSIFIED ASSETS
(UNAUDITED)
($ in thousands) | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | ||||||||||||||
NONPERFORMING ASSETS | |||||||||||||||||||
Nonaccrual loans (2)(6) | $ | 54,746 | $ | 53,173 | $ | 58,027 | $ | 58,706 | $ | 47,012 | |||||||||
Loans past due 90 days or more and still accruing | 6,746 | 8,858 | 8,278 | 7,728 | 6,313 | ||||||||||||||
Repossessions | 1,696 | 1,271 | 1,303 | 1,853 | 2,392 | ||||||||||||||
Other real estate (ORE) | 8,290 | 8,031 | 6,834 | 7,668 | 7,621 | ||||||||||||||
Nonperforming assets | $ | 71,478 | $ | 71,333 | $ | 74,442 | $ | 75,955 | $ | 63,338 | |||||||||
ASSET QUALITY RATIOS | |||||||||||||||||||
Loans 30-89 days past due | $ | 24,738 | $ | 6,858 | $ | 6,514 | $ | 15,695 | $ | 22,079 | |||||||||
Loans 30-89 days past due to loans | 0.67 | % | 0.19 | % | 0.17 | % | 0.42 | % | 0.62 | % | |||||||||
Loans past due 90 days or more and still accruing to loans | 0.18 | % | 0.24 | % | 0.22 | % | 0.21 | % | 0.18 | % | |||||||||
Nonperforming loans as a % of loans | 1.67 | % | 1.67 | % | 1.75 | % | 1.79 | % | 1.49 | % | |||||||||
Nonperforming assets to loans, ORE, and repossessions | 1.93 | % | 1.92 | % | 1.96 | % | 2.04 | % | 1.76 | % | |||||||||
Adjusted nonperforming assets to adjusted loans, ORE and repossessions(8) | 0.92 | % | 0.92 | % | 0.99 | % | 1.14 | % | 1.06 | % | |||||||||
Nonperforming assets to total assets | 1.51 | % | 1.48 | % | 1.52 | % | 1.58 | % | 1.38 | % | |||||||||
Adjusted nonperforming assets to total assets(8) | 0.69 | % | 0.68 | % | 0.73 | % | 0.84 | % | 0.79 | % | |||||||||
Classified Asset Ratio(4) | 19.95 | % | 19.60 | % | 21.84 | % | 21.70 | % | 20.70 | % | |||||||||
ALL to nonperforming loans | 50.66 | % | 50.23 | % | 47.69 | % | 46.57 | % | 55.83 | % | |||||||||
Net charge-offs, annualized to average loans | 0.08 | % | 0.09 | % | 0.17 | % | 0.11 | % | 0.11 | % | |||||||||
ALL as a % of loans | 0.85 | % | 0.84 | % | 0.83 | % | 0.83 | % | 0.83 | % | |||||||||
Adjusted ALL as a % of adjusted loans(7) | 1.12 | % | 1.14 | % | 1.16 | % | 1.15 | % | 1.16 | % | |||||||||
ALL as a % of loans, excluding acquired loans(5) | 0.88 | % | 0.88 | % | 0.87 | % | 0.88 | % | 0.88 | % | |||||||||
CLASSIFIED ASSETS | |||||||||||||||||||
Classified loans(1) | $ | 82,786 | $ | 80,176 | $ | 87,688 | $ | 83,867 | $ | 77,679 | |||||||||
ORE and repossessions | 9,986 | 9,302 | 8,137 | 9,521 | 10,013 | ||||||||||||||
Total classified assets(3) | $ | 92,772 | $ | 89,478 | $ | 95,825 | $ | 93,388 | $ | 87,692 | |||||||||
(1) Amount of SBA guarantee included in classified loans | $ | 3,561 | $ | 5,254 | $ | 4,870 | $ | 2,879 | $ | 2,930 | |||||||||
(2) Amount of repurchased government-guaranteed loans, primarily residential mortgage loans, included in nonaccrual loans | $ | 29,057 | $ | 27,218 | $ | 27,220 | $ | 26,091 | $ | 19,478 | |||||||||
(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 (for periods prior to 2018) | |||||||||||||||||||
(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 | |||||||||||||||||||
11
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
INCOME FROM INDIRECT LENDING ACTIVITIES | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
For the Quarter Ended | ||||||||||||||||||||
(in thousands) | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | |||||||||||||||
Loan servicing revenue | $ | 1,642 | $ | 1,581 | $ | 1,690 | $ | 1,769 | $ | 2,158 | ||||||||||
Gain on sale of loans | — | 53 | 22 | 442 | 532 | |||||||||||||||
Gain on capitalization of servicing rights | — | 124 | 196 | 569 | 406 | |||||||||||||||
Ancillary loan servicing revenue | 170 | 162 | 166 | 183 | 247 | |||||||||||||||
Gross indirect lending revenue | 1,812 | 1,920 | 2,074 | 2,963 | 3,343 | |||||||||||||||
Less: | ||||||||||||||||||||
Amortization of servicing rights, net | (1,123 | ) | (800 | ) | (804 | ) | (815 | ) | (777 | ) | ||||||||||
Total income from indirect lending activities | $ | 689 | $ | 1,120 | $ | 1,270 | $ | 2,148 | $ | 2,566 | ||||||||||
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||
ANALYSIS OF INDIRECT LENDING | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
As of or for the Quarter Ended | ||||||||||||||||||||||
($ in thousands) | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | |||||||||||||||||
Average loans outstanding(1) | $ | 1,602,826 | $ | 1,673,014 | $ | 1,771,665 | $ | 1,784,982 | $ | 1,748,179 | ||||||||||||
Loans serviced for others | $ | 705,555 | $ | 838,574 | $ | 932,915 | $ | 1,018,743 | $ | 1,056,509 | ||||||||||||
Past due loans: | ||||||||||||||||||||||
Amount 30+ days past due | 3,197 | 2,659 | 2,407 | 2,257 | 3,423 | |||||||||||||||||
Number 30+ days past due | 299 | 258 | 217 | 197 | 283 | |||||||||||||||||
30+ day performing delinquency rate(2) | 0.20 | % | 0.16 | % | 0.14 | % | 0.13 | % | 0.19 | % | ||||||||||||
Nonperforming loans | 1,324 | 1,490 | 1,526 | 1,539 | 1,916 | |||||||||||||||||
Nonperforming loans as a percentage of period end loans(2) | 0.08 | % | 0.09 | % | 0.09 | % | 0.09 | % | 0.11 | % | ||||||||||||
Net charge-offs | $ | 779 | $ | 1,069 | $ | 864 | $ | 1,147 | $ | 798 | ||||||||||||
Net charge-off rate(3) | 0.19 | % | 0.26 | % | 0.20 | % | 0.27 | % | 0.19 | % | ||||||||||||
Number of vehicles repossessed during the period | 126 | 139 | 132 | 140 | 107 | |||||||||||||||||
Quarterly production weighted average beacon score | 773 | 769 | 779 | 781 | 783 | |||||||||||||||||
(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 | |||||||||||||||||||||
12
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||
ANALYSIS OF INDIRECT LENDING | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
As of or for the Quarter Ended | ||||||||||||||||||||||
($ in thousands) | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | |||||||||||||||||
Production by state: | ||||||||||||||||||||||
Alabama (2) | $ | — | $ | 50 | $ | 9,920 | $ | 12,239 | $ | 19,216 | ||||||||||||
Arkansas (2) | — | — | 4,488 | 20,322 | 30,732 | |||||||||||||||||
North Carolina (2) | — | 97 | 15,580 | 23,383 | 28,912 | |||||||||||||||||
South Carolina (2) | — | — | 11,065 | 12,322 | 16,559 | |||||||||||||||||
Florida | 60,006 | 51,620 | 52,645 | 65,786 | 87,750 | |||||||||||||||||
Georgia | 34,401 | 35,034 | 38,322 | 38,288 | 45,571 | |||||||||||||||||
Mississippi (2) | — | — | 22,605 | 24,785 | 32,141 | |||||||||||||||||
Tennessee (2) | — | — | 11,098 | 13,509 | 17,635 | |||||||||||||||||
Virginia (2) | — | — | — | 3,620 | 6,495 | |||||||||||||||||
Louisiana (2) | — | — | 17,952 | 44,306 | 60,021 | |||||||||||||||||
Total production by state | $ | 94,407 | $ | 86,801 | $ | 183,675 | $ | 258,560 | $ | 345,032 | ||||||||||||
Loan sales | $ | — | $ | 18,614 | $ | 29,275 | $ | 86,000 | $ | 59,681 | ||||||||||||
Portfolio yield (1) | 3.46 | % | 3.08 | % | 3.02 | % | 2.98 | % | 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 | |||||||||||||||||||||
13
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||
INCOME FROM MORTGAGE BANKING ACTIVITIES | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
As of or for the Quarter Ended | ||||||||||||||||||||||
(in thousands) | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | |||||||||||||||||
Marketing gain, net | $ | 14,129 | $ | 16,427 | $ | 20,330 | $ | 17,575 | $ | 16,683 | ||||||||||||
Origination points and fees | 4,227 | 4,707 | 5,495 | 3,647 | 3,482 | |||||||||||||||||
Loan servicing revenue | 6,326 | 6,360 | 6,206 | 6,221 | 5,851 | |||||||||||||||||
Gross mortgage revenue | $ | 24,682 | $ | 27,494 | $ | 32,031 | $ | 27,443 | $ | 26,016 | ||||||||||||
Less: | ||||||||||||||||||||||
MSR amortization | (3,116 | ) | (3,369 | ) | (3,331 | ) | (3,426 | ) | (3,609 | ) | ||||||||||||
MSR recovery/(impairment), net | 46 | (605 | ) | 683 | 4,545 | (1,475 | ) | |||||||||||||||
Total income from mortgage banking activities | $ | 21,612 | $ | 23,520 | $ | 29,383 | $ | 28,562 | $ | 20,932 | ||||||||||||
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||
ANALYSIS OF MORTGAGE LENDING | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
As of or for the Quarter Ended | ||||||||||||||||||||||
($ in thousands) | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | |||||||||||||||||
Production by region: | ||||||||||||||||||||||
Georgia | $ | 385,672 | $ | 436,889 | $ | 545,951 | $ | 368,739 | $ | 423,876 | ||||||||||||
Florida | 87,360 | 120,230 | 136,990 | 109,034 | 103,490 | |||||||||||||||||
Alabama/Tennessee | 992 | 748 | 2,433 | 2,709 | 4,609 | |||||||||||||||||
Virginia/Maryland | 95,226 | 130,728 | 148,970 | 91,842 | 106,398 | |||||||||||||||||
North and South Carolina | 57,188 | 59,449 | 74,410 | 40,990 | 31,360 | |||||||||||||||||
Total production by region | $ | 626,438 | $ | 748,044 | $ | 908,754 | $ | 613,314 | $ | 669,733 | ||||||||||||
% for purchases | 90.2 | % | 90.6 | % | 91.6 | % | 85.1 | % | 82.9 | % | ||||||||||||
% for refinance loans | 9.8 | % | 9.4 | % | 8.4 | % | 14.9 | % | 17.1 | % | ||||||||||||
Portfolio Production: | $ | 59,191 | $ | 56,108 | $ | 75,990 | $ | 44,554 | $ | 66,236 | ||||||||||||
Funded loan type (UPB): | ||||||||||||||||||||||
Conventional | 62.8 | % | 64.3 | % | 63.8 | % | 65.9 | % | 62.0 | % | ||||||||||||
FHA/VA/USDA | 20.4 | % | 21.5 | % | 20.7 | % | 22.1 | % | 21.5 | % | ||||||||||||
Jumbo | 16.8 | % | 14.2 | % | 15.5 | % | 12.0 | % | 16.5 | % | ||||||||||||
Gross pipeline of locked loans to be sold (UPB) | $ | 225,698 | $ | 289,065 | $ | 354,735 | $ | 382,386 | $ | 203,896 | ||||||||||||
Loans held for sale (UPB) | $ | 218,494 | $ | 322,722 | $ | 389,858 | $ | 348,797 | $ | 262,315 | ||||||||||||
Total loan sales (UPB) | $ | 686,153 | $ | 771,058 | $ | 800,084 | $ | 496,484 | $ | 602,171 | ||||||||||||
Conventional | 67.5 | % | 66.6 | % | 70.7 | % | 69.1 | % | 64.3 | % | ||||||||||||
FHA/VA/USDA | 19.6 | % | 24.5 | % | 21.3 | % | 27.2 | % | 25.0 | % | ||||||||||||
Jumbo | 12.9 | % | 8.9 | % | 8.0 | % | 3.7 | % | 10.7 | % | ||||||||||||
Average loans outstanding(1) | $ | 839,430 | $ | 877,890 | $ | 913,430 | $ | 725,444 | $ | 701,932 | ||||||||||||
(1) Includes held-for-sale | ||||||||||||||||||||||
14
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||
THIRD PARTY MORTGAGE LOAN SERVICING | ||||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||||
As of or for the Quarter Ended | ||||||||||||||||||||||
($ in thousands) | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | |||||||||||||||||
Loans serviced for others (UPB)(1) | $ | 9,009,506 | $ | 8,687,984 | $ | 9,450,326 | $ | 9,097,869 | $ | 8,917,117 | ||||||||||||
Average loans serviced for others (UPB)(1) | $ | 9,407,723 | $ | 9,279,843 | $ | 9,244,175 | $ | 9,038,568 | $ | 8,896,305 | ||||||||||||
MSR book value, net of amortization | $ | 113,368 | $ | 108,876 | $ | 119,372 | $ | 113,217 | $ | 110,497 | ||||||||||||
MSR impairment | (1,954 | ) | (2,000 | ) | (4,590 | ) | (5,274 | ) | (9,818 | ) | ||||||||||||
MSR net carrying value | $ | 111,414 | $ | 106,876 | $ | 114,782 | $ | 107,943 | $ | 100,679 | ||||||||||||
MSR carrying value as a % of period end UPB | 1.24 | % | 1.23 | % | 1.21 | % | 1.19 | % | 1.13 | % | ||||||||||||
Delinquency % loans serviced for others | 1.30 | % | 1.28 | % | 1.28 | % | 1.24 | % | 1.87 | % | ||||||||||||
MSR revenue multiple(2) | 4.60 | 4.49 | 4.52 | 4.31 | 4.29 | |||||||||||||||||
(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. | ||||||||||||||||||||||
15
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE AND YIELDS
(UNAUDITED)
For the Quarter Ended | ||||||||||||||||||||
December 31, 2018 | September 30, 2018 | December 31, 2017 | ||||||||||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||||||
($ in thousands) | Balance | Rate | Balance | Rate | Balance | Rate | ||||||||||||||
Assets | ||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Commercial | $ | 932,523 | 4.95 | % | $ | 949,747 | 5.27 | % | $ | 801,343 | 4.96 | % | ||||||||
SBA | 170,162 | 7.97 | % | 166,467 | 8.07 | % | 149,918 | 10.23 | % | |||||||||||
Construction | 272,481 | 6.95 | % | 255,302 | 6.61 | % | 246,567 | 6.68 | % | |||||||||||
Indirect automobile | 1,602,826 | 3.46 | % | 1,673,014 | 3.08 | % | 1,748,179 | 2.98 | % | |||||||||||
Installment loans and personal lines of credit | 34,263 | 2.87 | % | 36,764 | 3.55 | % | 37,906 | 3.76 | % | |||||||||||
Residential mortgage | 838,691 | 4.23 | % | 877,080 | 4.14 | % | 701,083 | 3.84 | % | |||||||||||
Home equity lines of credit | 154,175 | 5.83 | % | 152,231 | 5.29 | % | 147,448 | 4.83 | % | |||||||||||
Total loans, net of unearned income (1) | 4,005,121 | 4.48 | % | 4,110,605 | 4.32 | % | 3,832,444 | 4.15 | % | |||||||||||
Investment securities (1) | 259,152 | 3.31 | % | 201,696 | 3.29 | % | 142,494 | 2.86 | % | |||||||||||
Other earning assets | 175,495 | 2.02 | % | 141,748 | 1.34 | % | 193,186 | 1.18 | % | |||||||||||
Total interest-earning assets | 4,439,768 | 4.32 | % | 4,454,049 | 4.18 | % | 4,168,124 | 3.97 | % | |||||||||||
Noninterest-earning assets: | ||||||||||||||||||||
Cash and due from banks | 37,672 | 39,508 | 39,173 | |||||||||||||||||
Allowance for loan losses | (31,278 | ) | (31,581 | ) | (30,579 | ) | ||||||||||||||
Premises and equipment, net | 92,050 | 91,232 | 88,124 | |||||||||||||||||
Other real estate | 8,079 | 7,221 | 8,631 | |||||||||||||||||
Other assets | 238,042 | 242,360 | 232,055 | |||||||||||||||||
Total noninterest-earning assets | 344,565 | 348,740 | 337,404 | |||||||||||||||||
Total assets | $ | 4,784,333 | $ | 4,802,789 | $ | 4,505,528 | ||||||||||||||
Liabilities and shareholders’ equity | ||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Demand deposits | $ | 458,350 | 0.12 | % | $ | 463,292 | 0.13 | % | $ | 453,714 | 0.11 | % | ||||||||
Money market and savings deposits | 1,380,472 | 0.74 | % | 1,415,868 | 0.70 | % | 1,381,207 | 0.53 | % | |||||||||||
Time deposits | 925,913 | 1.43 | % | 918,668 | 1.30 | % | 958,790 | 0.94 | % | |||||||||||
Total interest-bearing deposits | 2,764,735 | 0.87 | % | 2,797,828 | 0.80 | % | 2,793,711 | 0.60 | % | |||||||||||
Other short-term borrowings | 177,955 | 2.21 | % | 169,128 | 1.92 | % | 31,253 | 0.22 | % | |||||||||||
Subordinated debt | 120,694 | 5.47 | % | 120,667 | 5.43 | % | 120,571 | 5.07 | % | |||||||||||
Total interest-bearing liabilities | 3,063,384 | 1.13 | % | 3,087,623 | 1.04 | % | 2,945,535 | 0.78 | % | |||||||||||
Noninterest-bearing liabilities and shareholders’ equity: | ||||||||||||||||||||
Demand deposits | 1,239,403 | 1,244,640 | 1,124,759 | |||||||||||||||||
Other liabilities | 46,638 | 44,538 | 42,486 | |||||||||||||||||
Shareholders’ equity | 434,908 | 425,988 | 392,748 | |||||||||||||||||
Total noninterest-bearing liabilities and shareholders’ equity | 1,720,949 | 1,715,166 | 1,559,993 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 4,784,333 | $ | 4,802,789 | $ | 4,505,528 | ||||||||||||||
Net interest spread | 3.19 | % | 3.14 | % | 3.19 | % | ||||||||||||||
Net interest margin | 3.54 | % | 3.45 | % | 3.42 | % | ||||||||||||||
16
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
GAAP TO NON-GAAP RATIO RECONCILIATION
(UNAUDITED)
For the Quarter Ended | |||||||||||||||||||
($ in thousands) | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | ||||||||||||||
Reconciliation of nonperforming assets to adjusted nonperforming assets: | |||||||||||||||||||
Nonperforming assets (GAAP) | $ | 71,478 | $ | 71,333 | $ | 74,442 | $ | 75,955 | $ | 63,338 | |||||||||
Less: repurchased government-guaranteed mortgage loans included on nonaccrual | (29,057 | ) | (27,218 | ) | (27,220 | ) | (26,091 | ) | (19,478 | ) | |||||||||
Less: SBA guaranteed loans included on nonaccrual | (3,561 | ) | (4,049 | ) | (3,639 | ) | (1,541 | ) | (1,652 | ) | |||||||||
Less: Nonaccrual acquired loans | (6,120 | ) | (7,388 | ) | (7,648 | ) | (7,890 | ) | (6,242 | ) | |||||||||
Adjusted nonperforming assets, excluding acquired loans and government-guaranteed loans (non-GAAP) | $ | 32,740 | $ | 32,678 | $ | 35,935 | $ | 40,433 | $ | 35,966 | |||||||||
Reconciliation of total loans, ORE and repossessions to total loans, ORE and repossessions, less acquired loans: | |||||||||||||||||||
Loans, excluding Loans Held-for-Sale | $ | 3,685,478 | $ | 3,706,953 | $ | 3,792,886 | $ | 3,714,308 | $ | 3,580,966 | |||||||||
Add: ORE | 8,290 | 8,031 | 6,834 | 7,668 | 7,621 | ||||||||||||||
Add: repossessions | 1,696 | 1,271 | 1,303 | 1,853 | 2,392 | ||||||||||||||
Total loans, ORE, and repossessions (GAAP) | 3,695,464 | 3,716,255 | 3,801,023 | 3,723,829 | 3,590,979 | ||||||||||||||
Less: acquired loans | (141,198 | ) | (150,763 | ) | (165,303 | ) | (178,496 | ) | (196,567 | ) | |||||||||
Adjusted loans, ORE, and repossessions, less acquired loans (non-GAAP) | $ | 3,554,266 | $ | 3,565,492 | $ | 3,635,720 | $ | 3,545,333 | $ | 3,394,412 | |||||||||
Nonperforming assets to loans, ORE, and repossessions (GAAP) | 1.93 | % | 1.92 | % | 1.96 | % | 2.04 | % | 1.76 | % | |||||||||
Adjusted nonperforming assets to adjusted loans, ORE, and repossessions (non-GAAP) | 0.92 | % | 0.92 | % | 0.99 | % | 1.14 | % | 1.06 | % | |||||||||
Nonperforming assets to total assets (GAAP) | 1.51 | % | 1.48 | % | 1.52 | % | 1.58 | % | 1.38 | % | |||||||||
Adjusted nonperforming assets to total assets (non-GAAP) | 0.69 | % | 0.68 | % | 0.73 | % | 0.84 | % | 0.79 | % | |||||||||
Reconciliation of allowance to adjusted allowance: | |||||||||||||||||||
Allowance for loan losses (GAAP) | $ | 31,151 | $ | 31,157 | $ | 31,623 | $ | 30,940 | $ | 29,772 | |||||||||
Less: allowance allocated to indirect auto loans | (8,669 | ) | (8,556 | ) | (9,210 | ) | (9,888 | ) | (10,258 | ) | |||||||||
Less: allowance allocated to acquired loans | (284 | ) | (134 | ) | (134 | ) | (134 | ) | (209 | ) | |||||||||
Adjusted allowance for loan losses (non-GAAP) | $ | 22,198 | $ | 22,467 | $ | 22,279 | $ | 20,918 | $ | 19,305 | |||||||||
Reconciliation of period end loans to adjusted period end loans: | |||||||||||||||||||
Loans, excluding Loans Held-for-Sale | $ | 3,685,478 | $ | 3,706,953 | $ | 3,792,886 | $ | 3,714,308 | $ | 3,580,966 | |||||||||
Less: indirect auto loans | (1,569,274 | ) | (1,588,419 | ) | (1,698,879 | ) | (1,719,670 | ) | (1,716,156 | ) | |||||||||
Less: acquired loans | (141,198 | ) | (150,763 | ) | (165,303 | ) | (178,496 | ) | (196,567 | ) | |||||||||
Adjusted total loans (non-GAAP) | $ | 1,975,006 | $ | 1,967,771 | $ | 1,928,704 | $ | 1,816,142 | $ | 1,668,243 | |||||||||
Allowance to total loans (GAAP) | 0.85 | % | 0.84 | % | 0.83 | % | 0.83 | % | 0.83 | % | |||||||||
Adjusted allowance to adjusted total loans (non-GAAP) | 1.12 | % | 1.14 | % | 1.16 | % | 1.15 | % | 1.16 | % | |||||||||
Reconciliation of book value per common share to tangible book value per common share: | |||||||||||||||||||
Shareholders' equity | $ | 446,241 | $ | 432,098 | 420,962 | 410,744 | $ | 401,632 | |||||||||||
Less: intangible assets | (11,197 | ) | (11,474 | ) | (11,751 | ) | (12,028 | ) | (12,306 | ) | |||||||||
Tangible shareholders' equity | $ | 435,044 | $ | 420,624 | $ | 409,211 | $ | 398,716 | $ | 389,326 | |||||||||
End of period common shares outstanding | 27,279,729 | 27,260,681 | 27,191,787 | 27,034,255 | 27,019,201 | ||||||||||||||
Book value per common share (GAAP) | $ | 16.36 | $ | 15.85 | $ | 15.48 | $ | 15.19 | $ | 14.86 | |||||||||
Tangible book value per common share (non-GAAP) | 15.95 | 15.43 | $ | 15.05 | $ | 14.75 | 14.41 | ||||||||||||
17